Introduction

I started to earn my own money when I was 14 years old, back in school days. I’ve been a good student, specifically with numbers (no wonder why I decided on engineering) and had good grades in mathematics and physics.

One day, two friends approached me to help them in these subjects – the end-of-year exams were coming, and they were struggling with the Bhaskara formula. I loved that topic and decided to take the challenge.

We were in the same classroom, so it was pretty convenient for me. At the same time I was teaching, I was also studying for my exams. It was also hilarious – studying with my friends and teaching them on my way was a rewarding experience. I could explain them using my terms and vocabulary, making things much easier.

Gladly, my first clients accomplished the “Bhaskara” mission successfully.

After that, other students appeared through recommendations. My “teaching” business grew fast, and after a couple of months, I had a hectic schedule with more than six students.

My first teaching venture went on for approximately two years, and, unfortunately, I had to stop it to prepare for my university exams – They were very intense!

Lessons from making money as an adolescent

This first adventure entrepreneurial experience taught me a lot.

Even though I was only 14, I learned how to communicate, prepare lessons, and, most importantly, deal with “clients” and money.

Like every other teenager, I had my personal goals and desires, such as buying new running shoes, new gadgets, or going to my preferred band concert with friends.

Coming from a humble background and with a family with financial constraints, I had to leverage my “teaching” business and be financially diligent to achieve my teenager dreams.

As time passes, the dreams and wishes might change, but the rules to achieve them are still the same.

Even though the following tips are based on my teenager days, they are still relevant today when it comes to achieve my financial goals.

Tip #1 – Your income MUST be greater than your expenses

Even though this should be crystal clear to everyone, most of my friends do not understand/apply this in practice. If you want to achieve Financial Independence, you must respect this rule.

I am tired of seeing people with huge credit card bills and living in standards that they cannot afford – It is insane how some people can be so disorganised from a financial perspective!

I don’t have a credit card, mortgage, or debt, and my life is so good this way. Since I started working as a graduate, I set myself a rule to stick my cost of living to the maximum of 70% of my income – you can imagine how tight my budget was ten years ago – no luxury at all.

As my income grew, I entitled myself to some perks, such as having dinner out 2-3 times per week and spending money on better wines, but everything is/was under control.

The problem is that some people want to live in a standard that they cannot afford and start to “borrow” money from their credit cards to fund their dreams. More recently, companies like Afterpay have launched the BNPL (Buy now, Pay later) model – this is so dangerous for those who do not have financial control.

My advice to you – be debt-free. Avoid leveraging yourself with debts in credit cards, vehicle or house mortgages before you have a reasonable financial buffer, as I will detail below.

Tip #2 – Study finance and learn how to invest

If you have successfully applied rule #1, you should be in the stage where you are now accumulating some “diñero”. Create your financial buffer/emergency reserve – I advise having at least the equivalent of 6 times your cost of living.

While you are creating your buffer, study the secrets of finance and how to invest your money – I have already written a post on how do I invest in stocks – will soon release the second part of it.

While creating your buffer, start studying the magics of dividends and compounding interests. These are your best friends in the long term – they will provide you with outstanding levels of passive income.

Tip #3 – Learn what is value for money

As I told you in my post about how do I invest, “price is what you pay, value is what you get”. If you want to buy something, be realistic and frank with yourself. Do you really need that?

If the answer is yes, there is no problem – we also should give ourselves some gifts once in a while – my last one was a carbon bike for my triathlon training.

Before purchasing whatever you want, assess your requirements and what you to achieve with that (value) and then see the options available (price).

For example, I see many people buying the newest iPhone every year, just for the sake of buying it.

Ultimately they are doing the same that they were doing with their previous phone – sending messages, making some calls and taking some photos.

Why in the hell do you need the latest iPhone for that? The model of 2 years will do the same.

I am not saying that you should buy anything and not give yourself a gift once in a while. All I am telling you is to be critical and pragmatic, reflect on your requirements and needs, and translate them into what you are planning on buying.

I love cars, but every time that I think that my VW 2016 will take me from my home to work in the same way that a brand new Mercedes will take, I give up on the idea of buying a new one pretty soon.

Tip #4 – Keep Learning and Evolving

If you can stick to the previous rules, this one will come naturally.

You will probably have grown financially, have good savings, and created solid financial habits – that is great!

This step now is related to productivity. How can you improve your performance in steps 1, 2 and 3?

For example,

a) Is there a way that you can increase your income (i.e. have you thought about entrepreneurship or changing your jobs to make more money?)

b) b) Is there a new asset class you are interested in, and there might be an excellent opportunity to invest (i.e. crypto)?

c) Have you been reflecting on what is valuable for you (i.e. what do you value the most – more family time or more money?)

I keep asking myself these questions daily to guide my future decisions and improve as a human being. Never let yourself too long into your comfort zone.

Bottomline

These are four tips that have been helping me on my to reach my Financial Freedom, and I always tell them to my friends when they ask me for some opinion in this context.

The main point here is that I am not saying that you should have a miserable life for 10-15 years to reach financial independence, but to think strategically and live a life that you can afford.

Learning about finance and having some degree of control over your income and expenses will also help you a lot.

In the long term, if you stick to these four steps, you will change the game: Your money will work for you instead of you working for it.