FREE NEWSLETTER

Once Upon a Dime

Kelechi Iwuaba

AS A RELATIVE newcomer to the wonderful world of personal finance and investing, I’m quickly learning that there’s more to money than numbers. I’m discovering from my own experiences, as well as that of others, that psychology plays a huge role in how we handle our finances.

We’re human beings, not machines. We aren’t completely logical. Yes, logic helps the process, but logic isn’t how we regularly process and digest information. Instead, we’re driven primarily by our emotions. That’s why stories are often the best way to share information.

Our brains are wired to create stories. It’s how we understand the world around us. But it isn’t always a good, positive, Disney-esque story that our minds create. Some stories are destructive and inhibiting.

Recently, I realized I’d been telling myself a story—and it wasn’t a good one.

The realization came when I watched a YouTube video. The speaker in the video told a story about trying to lose weight. No matter how much he worked out, he didn’t make any progress. One day, someone mentioned his obsession with chocolate—which, of course, he denied.

But then he tracked his spending. He was shocked to find out just how much chocolate he was buying each month. He went on to explain that this revelation changed everything for him. He was able to determine what caused his chocolate buying sprees and then make adjustments.

I was struck by how the way he used money told a story about him—and by how his brain somehow chose to ignore reality. I wanted to know what stories my money told about me. I already tracked my expenses, so it wasn’t hard to see if anything was out of whack. I was sure there wouldn’t be anything unusual in my spending.

Our Free Newsletter

And I was right. Everything was as it was supposed to be. Except for one section: transfers and investments. The number of transfers I’d been making seemed excessive. I dug deeper and found that I had made several transfers to invest in Fundrise and DiversyFund, two sites designed to help folks make real estate investments.

But I couldn’t remember my rationale for making those transfers, so I used a strategy I learned while working at a lumbermill. It’s called the “five whys.” The notion: You keep asking why until you find the root cause of a decision.

  • Why did I originally choose to invest in Fundrise and DiversyFund? My sister had asked me about DiversyFund. Meanwhile, I’d heard of Fundrise from various sources.
  • Why did I want to invest? They seemed like a good way to get into real estate. I had cash for a house down payment, and I was getting frustrated waiting to find an affordable house.
  • Why was I frustrated? It felt like I’d missed my opportunity to buy a house. It was frustrating to see the real estate market go up and up and up.
  • Why do I want to buy a house? I’m tired of living under someone else’s rules. I want “my own kingdom.”
  • Why do I want a kingdom? After moving around for much of my 20s, I want a place I can finally call home. I’m ready to be part of a community. I want a place where my younger siblings can come when they need to get away from everyday life. I want a place where I can house friends and family who are going through a rough patch—something I saw my parents do. Most important, I want a place where I can raise a family with my future bride.

I realized I’d been telling myself a negative story. I began believing that homeownership was unobtainable. I didn’t think through all the possibilities, including the possibility that property prices might stop skyrocketing. All I could see were the challenges. With this mindset, the only option became platforms like Fundrise and DiversyFund, which allowed me to tell myself, “Well, at least I have some real estate investment exposure.”

Yet, when I think about owning a house, I’ve never cared about the investment potential. That was never my goal. But my mind had decided that these investable assets were somehow a substitute for what I really wanted—a place I could call home. I realized my investments were ways to pacify myself, to make me feel a little bit better in the short term. But in the long term, they didn’t achieve what I truly want.

Money isn’t just dollars and cents. It can be a way to look at ourselves from the outside. What story does your money say about you? Try taking a closer look. You might be surprised at what you learn.

Kelechi Iwuaba is an engineer, a Nigerian-American and a self-taught finance nerd who lives in Atlanta. He loves talking about all things finance to anyone willing to listen. In his free time, Kelechi creates finance videos, records the “Rambling Mind” podcast and writes a blog. He loves volunteering at his local church and playing soccer at every opportunity. Follow him on Twitter @KelechIwuaba.

Do you enjoy HumbleDollar? Please support our work with a donation. Want to receive daily email alerts about new articles? Click here. How about getting our newsletter? Sign up now.

Browse Articles

Subscribe
Notify of
9 Comments
Inline Feedbacks
View all comments
Marla Mccune
Marla Mccune
3 months ago

Very interesting. I realized that sometimes it takes years to uncover our faulty reasoning for the choices we make. I am getting better at it in my later years and congratulations to you for learning this early on! Great article.

Andrew Forsythe
Andrew Forsythe
4 months ago

Kelechi, thanks for a good article. Your insightful self-analysis is something few of us attempt—probably because we don’t really want to know the results!

Kelechi Iwuaba
Kelechi Iwuaba
4 months ago

Thank you. I’m glad you found it helpful.

AKROGER SHOPPER
AKROGER SHOPPER
4 months ago

Kelechi thanks for your observations. It is a life learning experience that can only be taken one small step at a time when home ownership is chosen over renting. Not only having a roof over your head, but it broadens your skill set in meeting other people, learning about insects, and preservation of your asset against decay. Too many intangible items to put a dollar value on. Keep up the good work Kelechi!

Kelechi Iwuaba
Kelechi Iwuaba
4 months ago

Thank you and you totally right. The maintenance of a home is one a whole different level. Never think about it until you have to do it. Thanks for the kind words.

wtfwjtd
wtfwjtd
4 months ago

The experience of possessing a home is indeed a worthy and worthwhile pursuit, and I believe you will thoroughly enjoy it. Like yourself, I’ve always wanted a home to be part of my life’s story, and it’s one possession that we’ve very much come to appreciate. May good fortune be with you as you write your own story that includes home ownership.

Kelechi Iwuaba
Kelechi Iwuaba
4 months ago
Reply to  wtfwjtd

Amen. Thank you!!

Rick Connor
Rick Connor
4 months ago

Nice article Kelechi. I especially like your 5th point on why you want a home- “wanting a place to call home”. Your desire to have a place to share with family, friends and community is admirable. Good luck finding the right place. I look forward to reading about your next steps.

Kelechi Iwuaba
Kelechi Iwuaba
4 months ago
Reply to  Rick Connor

Thank you. I actually found it a while back and it’s been a heck of an experience. But it’s been a bit of a haven already which has been a blessing. Thanks for the kind words.

Free Newsletter

SHARE