Momentum Series Interview – The Finance Twins: Simplifying Personal Finance For Everyday People
This marks feature #33 in the Momentum Series – an interview series to share the stories of bloggers from across the personal finance community.
The goal is to showcase their story, the wins, the losses and the actionable advice that others can take value from and insights about their blogging journey. Whether that be conquering debt, maximizing career earnings, the road to financial independence or other strategies for financial and blogging success.
This week I’m very excited to welcome Camilo, one half of duo behind the great personal finance blog The Finance Twins.
Camilo and his twin brother share content on their website aimed to simplify personal finance for everyday people. They empower readers to make smarter decisions, learn the principles of money management and build wealth.
If you want to connect with Camilo and The Finance Twins:
Ladies and gentlemen please enjoy the Momentum Series Interview – The Finance Twins: Simplifying Personal Finance For Everyday People.
Hey Everyone! I’m Camilo, Co-Founder and CEO of The Finance Twins, a personal finance media company (and blog!). Originally from Colombia, I was raised in poverty by my widowed single mom.
Against all odds, but through a few lucky breaks, a lot of late nights studying, and hard work, I was able to get my education at Wharton and then Harvard.
The Finance Twins is a site which simplifies personal finance for everyday people. I started The Finance Twins with my twin brother because we wanted to help other people learn the principles of personal finance that we wish we would have known growing up.
We learned these lessons the hard way – by making mistakes. We just didn’t have anyone at home to teach us about money.
I was fortunate to have been able to earn a Masters in Business Administration from Harvard and a Bachelor of Science in finance from the Wharton School of Business at the University of Pennsylvania.
Attending both was an incredible privilege, and seeing my mom cry happy tears when I was accepted, even though it meant me moving across the country, made all of the sacrifices worth it.
I began my career in New York City as an investment banking analyst at JP Morgan, where my team advised the largest companies in the world on complex financial transactions like mergers and acquisitions, IPOs, and other capital raising activities. Working on Wall Street immediately after the financial crisis was an incredible experience where I was able to learn and work alongside some of the brightest minds in the financial services industry.
After leaving Wall Street, I joined a thriving e-commerce start-up where I helped build the company’s finance department. I was eventually promoted to Chief of Staff, which was the role I served in prior to leaving to attend Harvard. A few years later, the startup was acquired by retail behemoth WalMart, and this was an extremely proud moment for me. I played a tiny role in building the company, and I will forever carry those memories and friendships with me. How I got so lucky to be a part of that team, I will never know.
You have a powerful story including a courageous mother and you and your brother working at a young age to support the household. What were the key financial lessons instilled in you from a young age?
Courageous is an understatement! My mom raised three boys on her own, in a foreign country, and seeing her struggle was easily the number one thing that motivated me and my brothers to work hard to excel in everything we did. She’s the reason I was able to have a successful career in New York and go to Harvard!
On days when I would be tired and didn’t want to study, or stay at work until 3 or 4 in the morning to prepare for a client meeting, I would think back to the day my mom brought us back to the US after our father passed away from cancer.
I vividly remember boarding the airplane after walking up the stairway on the tarmac, my mom leading her three sons onto the bird as if leading us to battle. Battle might have been an understatement. Shell-shocked from the death of our dad, she didn’t look back once as she sought a brighter future for her boys. Nothing would stop her, even if it meant working 3 jobs to make ends meet.
I always think that having her see me walk across the stage at my Harvard graduation was her vindication for her years of struggles and suffering.
The number one financial lesson that I learned from a young age was that nothing was going to be handed to me. From the age I was old enough to work, I never asked my mom for a single penny because I knew she didn’t have it. This gave me the keen understanding that I would need to learn and master personal finance on my own.
In high school, I worked at a car dealership cleaning used cars to prepare them for resale. As I would spend hours vacuuming, washing, and cleansing cars to restore them to like-new condition, I learned the importance of work ethic and grit. I also learned how unfair life can be because some of the hardest jobs are also some of the lowest paying.
The second lesson I learned was that it’s never too late to start to make a change. A lot of people feel like they are too old to make a dent in their debts or to save for retirement. But seeing the way my mom struggled highlighted for me that it’s never too late to start. Even if you can only save and invest for 10 years before retirement, you’ll still be able to save a lot more than if you just never got around to it. This can make a huge impact on your loved ones and help lighten the load.
As you transitioned into independence as an adult, has taking control of your money and mastering your personal finances always been your mindset?
Definitely. I’ve been lucky to know that money isn’t the most important thing in life. We grew up with very little, but we always had a lot of fun and didn’t let it define our lives. At the same time, I have met extremely wealthy people who are miserable.
So while I have always been focused on taking control and mastering personal finances, it has never been the most important part of my life. Family is always first.
But that doesn’t mean that money doesn’t matter. Money makes a huge impact on our everyday lives, and not having enough of it can cause a tremendous amount of stress. Life is all about balance, and personal finance is no exception.
What strategies and tactics have you implemented in your to life to best set you up for financial success?
The number one thing that I have done to set myself up for success is to get a world-class education. The easiest way to build wealth is to save as much of your income as you can. Therefore, having a solid income is critical.
I have always been able to leverage my degrees to further my career and grow my income. Growing up, my mother always told me that the one thing no one can take from you is an education. I knew school would be my ticket out of poverty, so I was always very driven to excel academically. My twin brother and I would do homework and study until 2 or 3 in the morning throughout high school.
As a result, I have been extremely lucky to have degrees from two of the top universities in the world. This has allowed me to get high paying jobs, which is an incredible blessing.
The 2nd thing I have done is to live within my means. I grew up spending very little money, so I am very comfortable focusing on the things that matter most and spending on those, and then cutting back in areas that I know are less important to me.
Research has shown that experiences bring more sustained long-term happiness than physical products, so I’d rather spend less on everyday material goods and invest that money on fun experiences with my family. The fun memories you create will be with you long after you’ve thrown away those high-end shoes.
Have you made any major financial mistakes? If so, what was the outcome and what did you learn from these mistakes?
If you ever meet anyone who claims to have never made a financial mistake, you’ll know they aren’t trustworthy.
For me, a big mistake was to move into a studio in NYC by myself after a year of investment banking. I had gotten accustomed to the fat paychecks and thought I could afford to pay $2,300 a month.
I STILL think about the tens of thousands of dollars I could have saved by staying with my roommates. Prior to moving into the studio, I lived with two roommates and paid $1,050 per month to live in a makeshift bedroom in the living room. Not bad for a convenient apartment in the heart of Manhattan.
Another financial mistake that I made was not having term life insurance. Most people don’t know the difference between term life vs whole life insurance, and for many people it can make the difference between financial security and disaster for their loved ones.
Is there an area or area(s) of your own personal finances that you’re still looking to better master and improve?
These days, I am focused on achieving my own version of true financial freedom. I will reach this when I will no longer need to work for money. I am lucky that I love the work I do for The Finance Twins, so it doesn’t feel like work, but at the end of the day, I still don’t have enough saved for retirement.
I also want to make sure that I don’t lose sight of the things that matter most to me. The truth is that we live in a hyper-consumerist environment and there are constant temptations around me. It isn’t always easy to stay focused on the finish line, but I am lucky to see eye-to-eye with my wife.
On top of that, I am fortunate that I have the knowledge and recipe to reach my financial goals.
If you could send a memo to every 18-22 year old in North America about better managing their finances and understanding money but it could only be 3 sentences long, what would that memo be?
When it comes to buying things, you’ll eventually see that less is more, and that quality beats quantity. Live within your means and start saving for retirement. But remember, there are more important things than money, so don’t neglect them.
What are some of the most influential resources that have shaped your money mindset or financial situation?
So many people that I talk to tell me that they keep all of their money in a checking account because they don’t understand how to invest and don’t want to make a mistake. Or that they think investing seems too complicated.
For that reason, the #1 book that I have read that has shaped my personal finance investing mindset is The Little Book Of Common Sense Investing by John Bogle. It does an AMAZING job of explaining why a simple index fund investment strategy is not only the easiest, but the best way to save and invest your money. After reading this book, you’ll never want to pick and buy individual stocks again. And that’s a good thing.
As I personal finance enthusiast, I am constantly reading personal finance sites online. Here are just a few of my favorites:
Based on your experiences in the Ivy League and on Wall Street, can you share some of the examples of lifestyle inflation you witnessed?
Lifestyle inflation refers to the slow incremental increase in spending as your income rises. It increases so gradually that you hardly notice. But years later you can’t seem to understand why you can’t save more money, even though your income has doubled.
One easy way to get caught up in lifestyle creep is to get used to the perks and benefits offered by corporate employers. Imagine this: you get invited on your first work trip and you’re excited. You get to spend a day outside of the office and still get paid. Even better, the company provides you free transportation to and from the airport. Better yet, they may even fly you on an upgraded fare class. But then the real fun begins as you step into the lobby of an amazing posh hotel.
When I would travel for work at J.P. Morgan, we wouldn’t stay at a Motel 6. No, we’d be staying at upscale hotels like the W, Ritz, or Intercontinental. All of a sudden, when you are booking your family vacation, staying at the Holiday Inn just doesn’t seem as fun. Even though you will hardly spend any time at all in the hotel room, you suddenly find that your vacation budget now barely covers the hotel, let alone the food and activities you’ll be doing.
In another example, it’s extremely easy to look at your peers at work and try to emulate them. After all, if you want to eventually be promoted, it makes sense to see what your superiors do and copy them. If that means owning a vacation home, driving an Audi, or wearing a certain kind of suit, then so be it.
All of a sudden you seem to be living paycheck to paycheck even though you are making 6 figures. I saw this ALL OF THE TIME. Talk about first world problems. Problems that can so easily be avoided, yet it’s so easy to fall into that trap. This illustration shows it perfectly.
Did you get caught up in this lifestyle creep at all? What were some of the negative impacts you noticed in your colleagues and contemporaries from this shift in lifestyle?
My example about moving into the studio in NYC is actually a perfect example of lifestyle inflation. I thought it was a good idea to live on my own, even though there was no reason for it. No one is immune to it, so you have to be super careful.
One thing that doesn’t get enough coverage is the impact that personal finance can have on your emotional wealth. Having a high income doesn’t insulate you from this pressure either. From the outside, it looks like you have this dream life. Nice cars, big house, kids in private schools.
The reality is that you’ve created a mess of your personal finances and barely have anything saved for retirement. You figure you can start saving later, even though deep-down you know you’re losing extremely valuable investment years. It just seems easier to avoid thinking about it and pretending everything is okay.
And this doesn’t only apply to my colleagues from Wall Street. Growing up, I saw my mom go through the same thing even though she always lived near or below the poverty line. Pretending it isn’t happening is sometimes the only way to cope with it, and I get that. I wish I had the answer for people in that vicious cycle.
What advice would you give to readers who are starting to grow their income to help them avoid lifestyle inflation?
The first thing I would say is that you need to track your monthly personal savings rate. If there’s only one thing you take away from this interview, let it be this: track your monthly personal savings rate and put away at least 20% of your income, if not more.
If you do this and still want to drive that fancy car, then go for it. As long as you are saving for the future, you can spend as you see fit. But if you don’t save for retirement, then you shouldn’t be spending each additional penny you earn.
One easy life hack is to save and invest 50% of every raise that you get.
When did you first start blogging? Was there a specific launching off point or what influenced you to go down that path?
I started The Finance Twins in February of 2018 because I started to get so many questions from friends and loved ones about their personal finance situation. Not having enough money is a major epidemic facing an increasing number of people.
Growing income inequality means that fewer people own more of the wealth and that more and more people are struggling financially.
Is there a mission statement or underlying purpose to what you intend to accomplish with The Finance Twins?
We started The Finance Twins to help people make smart financial decisions so that they can feel confident managing their money. For years, money has been a taboo subject. Friends and family don’t know what each other earns at work or if they are experiencing financial setbacks. There’s just a lot of shame involved when it comes to money.
But we are reaching a point where people are starting to realize that their money situation doesn’t define who they are as a person. And they are becoming more open about money and their lack of understanding. This opens the avenue to help educate people about personal finance. We want to be there to help people get started on that journey of financial discovery.
Do you have any specific goals with your blog over the next 12 months? What tactics are you planning to leverage to accomplish these?
Our goals are to help as many people as possible. Our Instagram channel is a key part of that strategy because we’ve been able to quickly reach thousands of people and give them quick snippets to help them learn about personal finance. This one highlights the importance of understanding the difference between being rich vs wealthy.
If you could recommend 3 of your blog posts for Making Momentum readers to check out, what would those be?
- The Money Lessons Learned Going From Poverty To The Ivy League – This article highlights the lessons I learned going from being raised in poverty to an Ivy League University. It was eye opening to go from barely having enough money for food to riding on a friend’s private jet in less than a year.
- Easy Retirement Calculator – This is a calculator I built to help you determine how much you should be saving for retirement on a monthly basis. It’s helpful to know how much you need to save so that you can set a goal and work toward it.
- How To Negotiate A Car Lease – Leasing a car is rarely a great financial move. But I know a lot of you will do it, so we created the best step-by-step guide to leasing a car. If you are set on leasing, you may as well get the best lease deal possible.
Any final pieces of advice or recommendations?
The first thing I will say is that your financial situation doesn’t define you. If you are doing your best to provide for yourself, your loved ones, and your future, then you should be proud of yourself. Getting started is the hardest part, but learning how to make a budget is the first step. You can do it.
Any special shoutouts?
I want to give a special shoutout to my family. This includes my wife, son, mom, and brothers. Without them, none of my work would matter, and I hope they realize how profoundly they have made an impact on me at every stage of my life.