(function(i,m,p,a,c,t){c.ire_o=p;c[p]=c[p]||function(){(c[p].a=c[p].a||[]).push(arguments)};t=a.createElement(m);var z=a.getElementsByTagName(m)[0];t.async=1;t.src=i;z.parentNode.insertBefore(t,z)})('https://utt.impactcdn.com/P-A2740498-ea13-4839-a720-add07b72f9e31.js','script','impactStat',document,window);impactStat('transformLinks');impactStat('trackImpression');
top of page
  • Writer's pictureBen LeFort

People Who Have Experienced Financial Hardship Make the Best Money Managers

Updated: Jun 12, 2020

A man covering his face with his hands

Reflecting on my experience with money, I have come to a simple conclusion that I believe to be true; resilience is the most important characteristic for great money managers.

Anyone who has lived through financial hardship can tell you that resilience is the most important characteristic you need if you want to be great at managing money.

Let's review why resilience is so important and what living through financial hardship can teach you about money that you could never learn in a classroom or in a book.

My experience learning with financial education

I've had a lot of formal financial education and training in my life. I completed a 4-year undergraduate degree where I majored in Economics. After that, I spent 2 years working in the financial services industry where I completed various investing and insurance designations. Once I decided that I did not like the financial products I was forced to sell, I completed a graduate degree in Economics & Finance.

During that time I learned lots of technical knowledge. I can calculate Present Value and run lots of fancy regressions and display them in an eye-catching chart. I am glad I invested the time and money in my education as it has helped me advance in my career.

However, almost everything I know about managing money I learned from 2008-2014. This was a time of great financial difficulty for myself and my family. These were also very formative years that spanned from when I was 19 to 25 years old.

When I contrast what I have learned about managing money from formal education compared to life AKA "The school of hard knocks" I come to a simple conclusion. People who have experienced financial hardship and come out on the other side, make the best money managers. The reason for this is simple; financial hardship forces you to build up your resiliency and teaches you things that formal education never can.

The value of a dollar

I don't believe it is possible to fully appreciate the value of money unless you have lived without enough of it for an extended period of time.

I lived through such a period of time in the wake of the financial crisis. I was in my 3rd year of University when the financial crisis hit. My parents were a successful husband-wife, realtor team. They were personable people which allowed them to sell a lot of houses. Since they sold a lot of houses I worked under the assumption that their financial situation was strong.

It wasn't until the financial crisis hit and they were not selling a lot of houses anymore did I realize that their financial situation was not strong. In fact, it was quite bleak. They had very little saved and a growing pile of debt.

What do you get when you have very little savings a growing pile of debt and no more money coming in every month? You get wiped out.

That crystallized a simple truth. Making money & managing money are totally different skill sets.

The next several years involved me taking on multiple jobs that I hated and taking on debt to help pay the bills. When you work all day at a job you don't like and still need to take out loans to help keep you and your family off the street, you learn to appreciate what a dollar is worth.

Here's what a typical day in the life looked like for me when I was broke

I would start by breaking up a few bills into pennies, nickels, dimes and quarters. Here is a good tip if you need to take the bus everywhere you go but you can't afford the bus fare. Most bus drivers don't have the time to count every coin in your hand. If the fare was $2.25 I would use about $1.15 worth of nickles and dimes and hope for the best. Nine times out of ten it worked.

I was a "financial advisor" at the time. It was an empty title. What I really was was a salesman, pushing high-cost mutual funds and permanent life insurance. I'd take several buses around town (each time employing my nickel and dime scam) to meet various clients to try and sell either an insurance policy or set them up with an investment account (in 2009-2010 not many people had the money or the stomach to invest anything).

At lunch, I would head to the bank and try and extend my line of credit to help my family pay rent and other bills.

I would then spend a few nights a week bussing tables to bring in extra cash.

This period of life crystalized another truth. Managing money is nothing more than a simple math problem. This math problem only has two variables:

1. Money coming in.

2. Money going out.

Managing money can be simplified to the point of solving for "X". Where "X" is the difference between money coming in and money going out. My only goal was finding ways to minimize the money going out and find new ways to have more money coming in.

While it is a simple math problem, solving it is exceedingly difficult when you are 21 and entering the worst job market in a century. However, this period of my life was not about thriving it was about surviving. If your goal is simply to survive, solving for "X" gets a little easier.

I talk a lot about simple strategies to "solve for X" in the 30-Day blueprint.


I spent a lot of time in this period imagining what I would do when I had money one day. Anyone who has gone long stretches of time without enough money knows what I am talking about. Who hasn't spent time daydreaming what you would do if you won the lottery or had a ton of money drop in your lap?

While some people dream of living in a mansion or buying a fancy car, I only dreamed of buying one thing: financial security.

You don't have to be a finance major to realize that the wealthiest people in society are the most financially secure. I also realized that the wealthiest people in society had a ton of assets like stocks and real estate.

That's when the final essential truth about managing money was crystallized for me. The more assets I could acquire, the more financial security I could buy.

Financial hardship made me a great money manager

By the time I finished graduate school and started having more money coming in, I was obsessed with increasing "X".

  • Remember, "X" is the difference between money coming in and money going out.

  • When I was experiencing financial hardship, "X" was a negative number. I was experiencing a budget shortfall.

  • Once I started having more money coming in, "X" became a positive number. I had a budget surplus.

  • I knew the only way to acquire more assets (remember assets= financial security) was to increase my budget surplus and use that surplus to invest.

  • If I kept my money going out as low as possible and continued to increase my money coming in, my budget surplus and thus the amount I had to invest increased.

I had spent so many years daydreaming of the day when I would have more money coming in that I knew exactly what to do with that money when I had it.

They don't teach you to "solve for X" in school. It is something that I learned from a prolonged period of financial hardship. That is why people who have experienced financial hardship make the best money managers.

What do you think? Do you agree that those who have struggled with money early in their life make better money managers than those who grew up comfortably never having to worry about money? Let me know in the comments, I'd love to hear your thoughts.


This article is for informational purposes only, it should not be considered Financial or Legal Advice. Not all information will be accurate. Consult a financial professional before making any major financial decisions.

180 views0 comments


bottom of page