"Knowledge is a process of piling up facts; wisdom lies in their simplification." Martin H. Fischer

It should be no secret that content is king in today's society. Unfortunately, because it’s the currency of the digital era to often content creators make the simple complex to stay relevant.

In the personal finance content space, the new normal is clicking on articles like 17 Budgeting Tips or 25  Personal Finance Hacks, reading them, then being overwhelmed to the point of inaction.

For this reason, I would argue that it’s time to get back to the basics of personal finance, which is understanding that it’s not how much you make but how you manage what you make.

“Compound interest is the eighth wonder of the world and the most powerful thing I have ever encountered.” ― Albert Einstein

In high school, my neighbor took on the glorious task of growing his front lawn. Having seen at least 3 prior tenants attempt to tame the unconquerable beast, I was convinced that it was a lost cause.

Despite my lack of faith, every evening I saw him water the grass and about halfway through the summer, the lawn had transformed. This is the power of compounding.

Any action we perform consistently over an extended period of time has the compounding effect. Whether it be working out, brushing your teeth, or watering the grass; good or bad, results are produced through consistent action.

Recently in a conversation with a friend, this concept of compounding came up. The example that emerged was brushing your teeth. He mentioned how the effect of not brushing for a day is minor and likely unnoticeable, however, after a year the effect is apparent in look and smell, and the damage is serious.

Too often we look at the result and not the process. Like not brushing your teeth, good money management habits aren’t apparent after a couple days but after a few decades, the difference is clear.

Hence, my belief that the wealth gap is created in our 20s. Similar to April for my neighbor attempting to grow his grass, our 20s is where the seeds are planted. Unfortunately, how often we water our grass and how well we manage it is not apparent initially.

However, in due time we are all exposed. The habits we had in our 20s will be brought to light in our 30s and 40s. Those who planted seeds and watered them consistently throughout the decades will have healthy green grass and the rest will have crabgrass.

Consider these two statistics on the wealth gap between white families and blacks families on a basic level:

  • “Higher income does not close the wealth gap. Blacks in the top one-fifth of the income distribution still have less than one-third the wealth of whites in the same income distribution level.” Although this statistic has layers to it that I don’t want to discount, when you consider it at a basic level it emphasizes that the ability to manage your money effectively is ultimately more important than your ability to make it. Therefore practicing good financial habits is key and, based on the next stat, has significant long-term implications.
  • “White families accumulate more wealth over their lives than black or Hispanic families do, widening the wealth gap at older ages. In their 30s, whites have an average of $147,000 more in wealth than blacks (three times as much). By their 60s, whites have over $1.1 million more in average wealth than blacks (seven times as much).” This stat at a basic level demonstrates the effect of compounding. Good financial habits do not have a major effect initially, as seen in the 30s where the gap is 3x but by the 50s the gap becomes significant at 7x.

Getting back to the basics means implementing the formula that is tried and true: give first, save/invest second, live on the rest. Despite the simplicity of this formula please understand that executing won’t be so easy.

THE FORMULA: GIVE (10%) - SAVE/INVEST (20%-40%) = LIVE (70% - 50%)


The plan was to get rich then start helping people. But with a grandmother like mine, a godly woman with a heart for giving, it’s hard to argue that you need money to be generous.

In fact, Andy Stanley said it best, “rich people are rich, and generous people are generous.”

Wanting to begin developing a HABIT of giving / generosity, in addition to tithing - 10% of my income, I began giving each of my little cousins a birthday gift because I knew that if I couldn’t give $500 away now than I won’t be able to give away $10,000 in the future. Because more money makes you more of who you already are.

My initial reluctance to give was based on my misunderstanding of the word greed. I thought greed meant wanting what others have when it actually means keeping/holding onto everything I have.

Living with my aunt in NYC, where I have limited space for my belongings, revealed this to me. In the past, I only donated/gave away clothes and shoes that I was certain I didn’t want anymore. I liked holding on to things “just in case” I needed it.

But when my just in case clothes went from being in the back of my closet to being in another state, it became clear that I was holding on to them out of greed. Little by little I started giving stuff away even some of my prized possessions and it was extremely rewarding because there is more happiness in giving away than keeping.

“Numerous studies have shown that people benefit from spending on others, not on themselves. When people give money away, they experience a significant hedonic boost. In one study, the best prediction of people’s happiness was not how much they devoted to personal spending, but instead how much they gave to others. Giving has been found to be associated with improved health.”

What I do with my finances has a direct connection to who I am as a person. For example, similar to my inability to let go of certain prized possessions in my sneaker collection, I also struggle with letting go of the tragedies in life that cut the deepest.

It’s easy for me to give away the kicks I no longer want just like it’s not so hard to dust-off my shoulders when I’m faced with the pettiness of life. I say that to say, life is connected! My financial habits are just an outward expression of who I am on the inside. In other words, my mindset had to change.  

The inability to give demonstrates a fixed mindset. Greedy people operate in lack, believing that my supply is limited so I must keep it all for myself. Giving away money was about changing your mindset because I’ve never met a greedy person that didn’t hold grudges.

Moreover, the ability to give without the expectation of something in return, even if that something is appreciation, is one of life’s sweet-spots and I aspire to one day achieve that level of peace.    

NOTE: In prior articles, like Draft Day I’ve discussed some of the problems with giving, especially when it’s done carelessly to family and friends. Here I am not saying who or what you should give to, rather a portion of your income should be set aside for others.

Personally, I believe in giving away at least 10%. And as a student of the game, regardless if the person was tithing or not, most would recommend 10%. However, if you can only do 3% now, that’s fine. The key is to start and progress over time to giving at least 10%.


“Money problems are consistently among most Americans’ top worries when it comes to their personal lives, but a new poll shows that people’s personal financial issues are impacting their professional lives to a significant degree. Workplace Options, a leading global provider of integrated employee well-being services, found that 45 percent of working Americans aged 18 -29 believe financial stress has impacted their ability to do their job.”

Growing up I heard the cliche that the average millionaire has 7 streams of income but until recently I didn’t realize that it was deeper than money.

In a video I recently came across, Paul Brunson said that having 10 sources of income reduces his overall stress because no income stream makes up more than 10% - 15% of his total income. So if he loses 1 or 2 streams the quality of his life is not drastically impacted creating a sense of peace.

In the world of consulting where I occasionally find myself on the bench - getting paid despite not being on a project, or in other words getting paid to do nothing, I sometimes find myself participating in the financial funk with the other 45% of Americans aged 18 - 29.  

Most would think that getting paid to do nothing is the wave but at times it can be stressful. Sometimes the excess time to think can create a paranoia of getting fired which often leads to me wondering if I have enough money saved to sustain myself financially just in case I was to get laid off.

I’ve seen it time and time again with myself and my peers, after a few weeks of being on the bench, the paranoia arises not because we have this extreme desire to do work rather the fear of being fired and not having enough financial stability to survive until the next opportunity comes.

For this reason, I can see how financial worries contribute to job performance because in the past when I’ve been on the bench for too long I find it difficult to write articles despite having all day.

Recently, I was listing to a podcast and the guest was a current Chicago police officer that has a multi-millionaire dollar real estate portfolio, owns 2 daycare centers, and has a security firm.

Job security as a police officer is not a major concern for him as his monthly combined earnings from his investments pay him more than his yearly salary as an officer. I’d imagine that his stress levels are a lot lower than his co-workers because every day he makes a choice to remain a police officer.

True joy and love come from having a choice, not from necessity. Which is why I don’t believe anyone can truly say they love their job until they’re in a place where they don't have to go to work to pay the bills.

I’m not saying everyone needs to quit their job and become a full-time entrepreneur. Rather you need to save/invest regardless of your career choice to become financially free as it will enhance your careers fulfillment because every decision you make won’t be based on the financial implications.

In the Art of Savings article, I detailed my thought on saving, the different types of savers, and my approach to saving what I refer to as The Uninterrupted Compounding Interest Saver. Here I want to emphasize that the impact of saving is deeper than finances because life is connected.


The true currency of life is time, not money, and we've all got a limited stock of that. ― Robert Harris

I shifted from a consumers mindset, gaining control of my finances when I made the decision to give and save before spending. By stepping out of the matrix I could see clearly. What I once perceived as one in the same became distinctive, my life vs. my lifestyle.

Concluding that the quality of my life was connected to my time and having enough control over it to do what’s important to me, whether that be spending time with family, working out, or writing. Whereas, the quality of my lifestyle is determined by my income.

I assumed my quality of life would improve as my income did, but it didn’t. Yes, now I can buy cold pressed orange juice instead of Tampico but in the grand scheme of things, my life is still the same.

One day while in the office, I was looking around me, and finally everything clicked. I noticed the people I was supposed to aspire to be like had superior lifestyles but a similar life. Compensating for the dissatisfaction with their life by improving their lifestyle, hoping it would fill the gaps, creates a never-ending cycle of consumption.

As long as you associate an improved lifestyle with a better life you will stay in the consumption matrix. Many people ask me about my vacation plans, including my mother. And when I say I don’t have any they question why, I mean what happened to Self Love Perro? Lol.

It’s not that I am against vacation or don’t love myself enough to take one. My ideal life is vacationing for 2 months out the year. It’s actually that I love myself so much that I want to focus on improving my life before my lifestyle.

“Instead of wondering when your next vacation is, maybe you should set up a life you don't need to escape from.” ― Seth Godin

I don’t want to live a life where a vacation is a form of escapism. I’d rather make the sacrifices today by using the PTO (paid time off) and extra money to make strides at changing my life.

This doesn’t mean that I don’t celebrate or take time off to recharge, because I certainly do. It’s just that I’d rather delay taking a 10-day trip to Dubai for the next few years to get my life in order but best believe one day Perro will be in Dubai.  

In conclusion, although initially, this may require some sacrifice/living below your means, however, I want to emphasize that this is NOT the goal. The goal is to increase your income to a level where what you have left over can affords you the lifestyle you desire.