7 priceless lessons my dad taught me about money

by Financially Alert

Today I'd like to share with you the 7 Priceless Lessons My Dad Taught Me About Money.

As a CPA (Certified Public Accountant), my Dad dealt with money day in and day out. He built a successful solopreneur practice from scratch and operated it for35+ years. Chances are he'd still be practicing, but a series of strokes coaxed him to finally slow down. Today he's happily retired.

The funny thing about these lessons is that I had NO CLUE what he was talking about for the longest time! Nevertheless, after absorbing our conversations over many years, I've slowly begun to internalize what he was saying. There was great wisdom available all along.

1. Know Your Numbers

As a CPA, my Dad was always trying to "balance the books" for his clients. He taught me this fundamental skill one day when I finally asked him about the basics of accounting. Yes, this was a tedious lesson, but it was a critical skill I used throughout the operation of my company.

Outside of my company, knowing my numbers for my family finances is just asimportant. I want to know what my assets look like, my liabilities, and my cash flow at the end of the year. Profits are the coveted outcome. If you're not making money, you're losing it likely!

My best advice for understanding your number is to dig straight into it. Read my posts How to Budget Like a Bad Ass – Part 1 and How to Budget Like a Bad Ass – Part 2 to get started today. The sooner you lock down this skill, the easier it will become to bank your profits and know where you stand financially.

2. Live Frugally, and Give A Lot

Although my Dad was financially successful most of his life, I was one of the last ones to know about it!

He managed our cash conservatively and told us to never take credit unnecessarily. My Dad was a no-frills kind of guy. He didn't like purchasing luxury items or excess things.

In fact, I felt downright poor at times because I'd go to school in torn pants, and was picked up from school in a beaten up car. (My reality was that we were poor!)

Fast forward many decades later, and my Dad is now one of the most generousindividuals I know.

He paid for all of his children's University, gives to his church, contributes regularly to his grand children's college fund, and much more.

Furthermore, I am happy to see him finally comfortable splurging a little on entertainment for himself and my stepmom (eg. NBA Finals Tickets... and NO, I never got to experience anything like that!).

I know that I will never be as frugal as he was back in the day. Yet, he taught me the balance of living below your means first to realize a profit. Profits ultimately lead to financial freedom and a larger capacity to pay it forward throughout life.

3. Maintain Your Focus

It used to drive me a bit nuts, but my Dad would always say, "Maintain your focus!".

It was a bit nagging at the time, but the intentions were good. He ultimately knew that it's easy to get pulled in multiple directions at once.

This is the classic problem of trying to do a lot of things all at once, but never getting to master one thing.

If you travel down this path of divided attention, your focus will never be strong enough to make the impact you envision.

I'm not perfect, but I did my best to heed this lesson. Today I feel like I can really focus on a specific task at hand, take massive action, and drive a result.

I believe this is a big part of how I achieved financial freedom at an early age.

4. Become An Entrepreneur & Investor

Even though my Dad was a CPA, he also tried his hand at a few different businesses along the day. In fact, he even failed with a taco shop in the 1970's. Although it didn't work out, I admire that he tried.

Luckily as a CPA, he was exposed to different investment opportunities and became a partner or investor in several other companies. For a good decade, he also took on the role of CFO for an insurance marketing company. He also ran some family businesses and managed some rental properties out of his office.

So, I guess it was no surprise that he would encourage me to become andentrepreneur. He'd say, go out and make a "widget"! And, I'd say, okay! What's awidget??

When the time was right for me to jump out on my own at age 25, I didn't have anyfear of failing. Taking a business risk was just a part of life.

5. Find and Create Multiple Streams of Income

I didn't think of it as the time, but my Dad was really one of the first people to expose me to multiple streams of income.

As I mentioned, he made some private investments, invested in stocks, and was a part of some family businesses which owned rental properties.

I can't stress enough how important it is to plant seeds of investment along the way.

Over time, these have the potential to grow up into a solid tree and yield both "fruit" and "lumber"!

If one tree is knocked down, you can rely on several others to feed you and your family.

6. Be Creative – Money Can Bond a Family Together

Money doesn't have to be used for obvious purposes!

One pretty cool thing that my Dad did was to set up was a holding corporation for his own father (my paternal grandfather) before he passed away.

This unique approach allowed his family to continue growing his Dad's assets as his legacy, instead of the siblings taking a fractional inheritance when he passed.

With his brothers and sisters as the board members and officers, it makes them come together to make decisions together as a family unit. It's pretty neat to see.

At some point in time, this will eventually trickle down to the next generation. We'll see how it plays out, but I believe it served its greater purpose wonderfully already.

Of course, money can bond a family together in other ways too. In my case, I have the freedom to enjoy and early retirement with my little ones. The bonds I'm able to create now while they are young is truly priceless.

7. Protect Your Family's Assets with a Trust

This final lesson my Dad didn't teach me directly. But, when he had his second stroke several years ago, we thought we might lose him.

It was during this difficult time that you really begin to think about estate planning and what it would mean to pass away without one in place.

If you have a decent number of assets in your estate, you don't want to leave things up to chance when you go.

One popular strategy is to use a revocable living trust that has instructions on how to manage your assets after passing.

You're really not doing this for yourself, but rather for the people you love.

I won't go in-depth here (that's another post), but a trust can help immensely. There are many additional benefits like favorable tax treatment, avoidingprobate, and protecting your intentions for your assets in ways that a traditional will cannot do.

The truth is this can get a bit tedious. So, this is the perfect time to use an estate attorney to assist you with this process. Even we did this and I'm pretty familiar with most the process. Remember, sometimes your employer may offer these benefits or give you access to discounted legal fees, as was in our case.

Final Thoughts

It's funny thinking back to when I was a kid and remembering this slow transfer of wisdom from my Dad. I didn't understand so much of it back then, but I so appreciate it today.

God has blessed me with so much and my Dad's presence was certainly a huge part of this.

In the end, I still get to forge my own path, make my own decisions, and develop my own financial philosophy. I'm just glad I had a strong foundation from these 7 priceless lessons my Dad taught me about money.

The post 7 Priceless Lessons My Dad Taught Me About Money appeared first on Financially Alert.

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