Childhood Memories

My friend Carl Richards has a podcast by the name of 50 Fires. It’s a podcast about money and meaning. He gets deep into the topic with his guests, going back into childhood and he asks questions about money that people have never thought about before. It’s a fascinating insight into just how complicated we humans are when it comes to our relationship with money.

I have listened to one of his recent conversations more than once. Carl interviewed Greg McKeown. Greg is the author of two best selling books; Essentialism and Effortless.

Here’s a question. Does something ever come up in life that takes you back to something in your childhood, something that you haven’t thought about for a really long time?

This happened for me whilst listening to Greg and Carl’s conversation. Carl asked Greg about his earliest memory of money. Greg talked about doing a paper round when he was a kid. He described the struggle of carrying all the papers in a bag that was bigger than him, somehow putting it on his back whilst riding a bike. In the UK it’s not like you see in the movies – you can’t throw the paper onto the lawn. You have to get off the bike, go to the front door and try and squeeze the paper through the letterbox. Not too hard during the week, but much harder with the weekend papers.

Boy, this conversation took me back.

My family

When I was, I guess 11 or 12, my parents found themselves in financial difficulty. Severe financial difficulty that ended up with the repossession of our beautiful family home and a period of around three months where we had nowhere to live. You may have heard me tell this story before. It was a combination of leverage and really unlucky timing that led to the debt collectors turning up at our home. And it was a beautiful home – we had a tennis court and a swimming pool and acres of land (this was not a common thing in our neighborhood). When I was in primary school our entire class came to our house for a school trip! We went from that to literally being homeless. I mean, we weren’t living on the streets – we were blessed with an amazing network of family and friends that put me, my four siblings and parents up in various different places. But we weren’t together and we didn’t have a home. I think that counts as being homeless?

My parents are remarkable people and somehow they made it all seem completely normal, even an adventure. But looking back, it was clearly a defining event in my childhood.

During that time, we had a family paper round. In fact, we had quite a few paper rounds. I am one of five siblings so maybe we had one or two each. I am sure my brother or one of my sisters will correct me here if they remember.

Sometimes we did them alone, sometimes we did them together. When the weather was bad, my truly wonderful Dad would get up with us at the crack of dawn and we would all jump out of the car at various points with the papers in our arms and run them into the houses. What a sight it must have been!

My paper round was the start of earning my own money. From then on, I always had a job. I worked in a cafe, a shop, I babysat, I ironed the shirts for working men in the neibourhood, and then when I was 18 I worked in a local investment management firm during the holidays, which was the start of my interest in money and markets.

Money wasn’t easy for me. I didn’t know what to do with it. I had my own, but we had none as a family. And like most families back then, I don’t remember conversations about money. It wasn’t talked about.

I was at a State Grammar School and I used to go to the school office in the morning and claim my lunch credit. It was a plastic coin that I could use in the school canteen. I never wanted my friends to see it. But if I wanted something, some new clothes, or I wanted to go somewhere, I could get it or do it, because I would just earn it. I always found a way to make money.

Looking back, it was confusing.

In my younger years I never wanted to say, ‘I can’t afford to do that’. I had a deep revulsion to those words. I would do it and then resolve to figure it out later. That didn’t work out so well when I was in my late teens and early 20s. On my gap year I ran out of money whilst travelling alone across Canada. I couldn’t bring myself to call home. I remember having, like literally, $5 to last 3 days. I went to the supermarket and bought a loaf of bread and I think, cream cheese. I figured that would provide enough nutrition to keep me going. I can’t remember how I managed to pay (or not pay) for my hostel. That was a low point.

I ended up in a lot of credit card debt when I started working in London. Again, money couldn’t be the limiting factor for me. I went out, did the thing, and then paid for it later.

It took me many years to figure money out – what it is for, what it can do and what it can’t do.

It couldn’t be more clear to me now. For me, money is now all about relationships. It’s an enabler to spend time with the people I love, doing cool things and having adventures. Having money removes a huge amount of stress. If something breaks, we can replace it. We can buy back our time by paying for help, giving us more time together. We can eliminate hassle when we travel by choosing the best, not the cheapest, flight plans. We can rent houses when we travel that are big enough to invite our family to come and stay. We can take long, extended breaks over the summer. It’s about being together and being able to escape.

It’s also about health, about being able to stay healthy and active. Personal training sessions, supplements, gadgets that make me more productive when I work out or help me sleep better and recover quicker. Those things have become elevated in their importance as I clearly reach middle age (there’s no denying it).

These things really matter to me. To me.

There are lots of things that don’t matter to me. Cars, fancy jewellery, handbags or designer stuff.

When I look back at the events that shaped my childhood, I am so grateful. The struggle is what makes us. It gives us our drive. It builds resilience. I sometimes wonder what person I would be if my father had not been unlucky, if his success had continued. Would I be entitled and spoiled? Possibly. Would I have the deep sense of satisfaction that comes from knowing that everything we have, we have worked for and built ourselves? Probably not.

I also realise how it has shaped my relationship with debt. Howard Marks articulated the  danger of debt on a recent podcast. He said, “anytime you hear about someone getting into financial trouble – someone or a hedge fund – it’s invariably related to debt. You can’t meltdown, you can’t be foreclosed and you can’t be forced into bankruptcy if you don’t have debt outstanding, if you haven’t used debt in your financial affairs.”

Morgan Housel says, “the more debt you have the narrower the range of bad outcomes you can survive”.

This is exactly what happened to my Dad. Had the recession of the early 1990s not happened, he would have endured, his business venture would have been a success and no doubt it would be a very different story. But the unforeseen bad outcome hit. It came out of nowhere. At exactly the wrong time. And he had too much debt.

As I came to understand the story of my childhood – what had happened and how it happened – I actively worked to reduce debt, and now have a dislike of debt. I uttered to my husband recently that maybe we had been too conservative in our use of debt, but then, I listened to Howard Marks and Morgan Housel, and realised, no, we’ve done it the right way. We have built ourselves to be, not just financially resilient, but antifragile.

Here’s the thing. Everything that matters comes out of nowhere. The next crisis will come out of nowhere. The key is to make sure we can endure.

So there’s my story. And here’s how it has impacted me. This is not the piece I intended on writing when I started. But here it is. Therapy in action right here. Try it. Take yourself back to your childhood. What was your first memory of money? What beliefs about money did you learn from your parents? How are those beliefs serving you now?

Drop me a line. I would love to hear from you.

Georige

georgie@libertywealth.ky