How I Built A 6-Figure Net Worth By The Time I Was 26

It was a Tuesday afternoon; I still remember it. The mortgage broker sat on our fake leather couch with his briefcase and papers. I was 16 and was waiting to translate what he was about to say to my parents, both Indian immigrants, about the mortgage on our Vancouver home and our ability to keep up with payments. “They don’t have enough money,” he said to me.

At the time, I didn’t realize the impact those words would have on my own relationship with personal finance. While my parents were in shock, I internalized that statement to mean that not having enough money meant lack of power, control, and happiness. Even though we found a way to keep our home by renegotiating a longer-term mortgage, I vowed to become financially independent and avoid being put in the same position as my parents. Which I did: I amassed a six-figure net worth by the age of 26, and now I work to help other women of colour do the same.

So often our money struggles aren’t because of a lack of financial literacy. Examining our unique upbringings and cultural expectations around finances can help us understand why we can’t always implement the healthy spending habits we know are right for us. Building generational wealth is possible no matter what your circumstances currently are. I’ve done it —  and this is what I’ve learned along the way about how you can do it, too.

Watching my parents work two jobs each while on the constant brink of being broke taught me to associate money with safety. So, I behaved and made decisions about spending and saving that were in alignment with this financial trauma — I overworked myself and was obsessively frugal, only to get fed up and binge-spend on things I didn’t need. We all have stories like this. Maybe you watched a parent’s credit card get declined at the supermarket and you now overspend on food because you want to give yourself the abundance of groceries that didn’t exist for you as a child. Or perhaps your parents constantly argued about missed bill payments, and now you avoid talking about money with your partner because you don’t know what a healthy conversation about finances looks like.

Trauma is when our ability to respond to our environment is overwhelmed, and the actions we take in that moment to feel safe is a trauma response. Unpacking your financial trauma response is key to a healthier relationship to your bank account. By figuring out what we’re conditioned to believe about money, we can work towards improving our wealth. 

It’s an ongoing process, but start with journaling about your most painful and confusing money memory. What was it? How did it make you feel? And what message are you telling yourself around money because of it? Then, write down a contrary action you’re going to take (something you typically wouldn’t do, such as saying no to an impulse purchase or *actually* looking at your bank statement instead of putting it in your drawer) instead of resorting to your trauma response. It’ll take time and practice — the mind is conditioned to react in a way to keep it safe — but unlocking these money narratives will help you change the way you behave with your finances.

A few years ago, on the night of a cousin’s Maiyaan, an aunty came up to me and asked me what I did for work. I had no idea who she was, but I was accustomed to random aunties and their questions. When I told her, she replied, “You shouldn’t get too busy with your career, that’s what your husband will do. How can you manage a household and a business at the same time? Your responsibility is becoming a good housewife.”

Many women in traditional South Asian cultures are groomed to believe their self-worth is tied to their ability to get married and run a home. We are not empowered to think about financial independence, instead we’re taught to be dependent on a future partner. The pandemic has only increased financial challenges for women of colour, with disproportionately higher unemployment rates amongst South Asian and Black women in Canada. With a lack of job opportunities and increased responsibilities to stay at home to care for sick family members or children, financial wellbeing has never been more important for women of colour.

This is why it’s important to have easily accessible savings in the event of job loss or an unexpected event to rely on. I encourage my clients to first build up a three-month emergency fund (enough money to cover rent, utilities, food, and transportation for 90 days) before tackling debt or in some cases, investing.

So often we’re taught that to achieve financial independence, the first thing we need to do is create a restrictive budget. But doing so without knowing how you’ve been spending your money in the first place leads to an unrealistic plan that you’ll inevitably get frustrated with and abandon. (Trust me.) That’s why I recommend starting with a financial edit. In a spreadsheet, write down your monthly income, fixed monthly expenses (payments that are predictable and recurring, such as cellphone and utility bills), and then add what you spend outside of that — say, takeout or random drugstore purchases.

Next, think about your dream financial goal, whether it’s an emergency fund or a downpayment. Set a date that you’d like to accomplish this and then work backwards, dividing it by the number of paycheques you have until that date. For example, if you want to pay off $2,000 worth of credit card debt in six months, that’s about $334 per paycheque. Personally, I set an ambitious goal of saving $100,000 in four years, which I then broke down into smaller micro-goals of $2,000 a month. (I had the privilege of living at home during this time, however I do provide financially for my family when required.)

A more-realistic approach like this ensures that you won’t feel overwhelmed or strapped for cash at the end of the month. It will also help you to stay motivated and encouraged to save or pay off that debt, even if it means it’ll take longer.

If you are still struggling to save consistently, start small and build your way up (getting into the habit of saving, no matter the amount, is a win). You can always adjust your timelines and the amount of money you set aside. I also recommend storing these funds in a separate, no-fee high-interest savings account to avoid the temptation of spending.

Remember my anxiety about spending: How I would deprive myself of new things, then overspend and feel guilty about it? This is a common challenge I see with many of my clients. The thing is, money doesn’t equal happiness when you can’t enjoy it. Hoarding it made me feel miserable, even though my bank balance was rising. Yes, we all need to pay our bills, pay off our debt, and put money aside for savings. But, we need to enjoy our money, too. It’s about balance, not deprivation. I don’t care if you spend money on fancy brunch, as long as you’re taking care of your financial goals.

It’s also okay that you don’t know everything about managing your money right now. The most important thing to remember is your financial situation is not permanent. Making even the smallest changes to create healthier financial habits will give you confidence that you are capable of getting better with your money.