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The Immigrant Money Mentality


Life on the frontier — whether yesterday’s prairie or today’s San Francisco — requires ingenuity, hard work, thriftiness and more than a little intestinal fortitude. This melting pot nation of ours has been made great by successive waves of ambitious immigrants. Each new generation brought hungry, determined folk seeking to build a better life using nothing more than their brains and brawn.

But as our nation has prospered (and success made easier for many), that immigrant mentality has eroded. Today, we’re likelier to be mired in the sorts of bad money habits many of our predecessors rightfully shunned. We’ve identified the habits of settlers that made America great – the core features of the “immigrant money mentality” that you can use to improve your finances today.

Immigrant Money Habits

  1. Be Hungry:It goes without saying that immigrants are hungry people. Whether your ancestors arrived on the Mayflower or crossed the Rio Grande, odds are they had a concrete vision for their future and ambition to match.Today, many of us only vaguely know what we want to do, and our ambitions are thus unspecific. Start by trying to formulate clear goals for smaller objectives (you don’t have to map your entire life plan at once). The day laborer you see mowing someone’s lawn may not appear on first glance to have as much ambition as an astronaut — but look closer and you’ll see a deep drive. That ambition is usually specific -i.e.- buying a home or sending enough money back home to support his kids. The entire enterprise of moving to the U.S. reflects a willingness to do what it takes to reach those specific goals. Are your goals clear enough? Do you know exactly what you want – and are you willing to do what it takes to get it?
  2. A Day Job Won’t Cut It:  A 9-5 is great, but odds are that your immigrant ancestors worked longer hours (and for good reason – their entire lives depended on it). Immigrating to a new country means hard work building a life with limited resources, and our ancestors often put in twelve hour days, with only Sundays off. Even today, you’ll often find immigrants working two jobs to get ahead. It’s that sort of anything-it-takes mentality that enables them to save more money than many of us with cushy office jobs. That doesn’t mean, of course, that you should work yourself to death or neglect family and other important responsibilities. But it does mean you should try to find additional sources of income — whether it’s by freelancing a bit on the side, babysitting, or even selling your hobby crafts on The bonus: Each additional dollar you make is a dollar more than you spend to maintain your current lifestyle. That means it can be readily saved or used to pay off debt.
  3. Debt? What Debt?:  The Pilgrims didn’t have credit cards, mortgages, or car notes — neither do most recent immigrants, for that matter. They lived without debt by necessity, and managed to secure most of their needs successfully. Today’s immigrants often don’t have access to as much credit as long-time U.S. citizens, do either, yet they still manage to get by. Stop thinking of debt as an option, and it won’t be there to tempt you.
  4. Build it Yourself: Whether it’s building a home with your own bare hands or starting a successful new tech start-up, immigrants often understand the need to be enterprising and resourceful. The recent recession, too, has taught us that access to support structures (such as jobs, pensions, scholarships,etc.) isn’t always there, and that we need to rely on ourselves. Working for someone else can be a good way to make a living, but your livelihood will always depend on others if you choose this path. Not all of us can be entrepreneurs, but we can seek ways to become more self-reliant, whether by building a second income stream, planting our own vegetable gardens, or not depending on loans or credit.
  5. Pool Resources: Have you ever noticed that the South Asian family who owns several small businesses in the area collaborates on just about everything? Immigrants who don’t have access to credit will often pool resources to get ahead. Mother, father, uncle, brother, and sister all work tending shop or pitching in their savings to buy a new business. The power of many amplifies your drive and helps make your ambition a reality. Consider pooling resources with family and close friends or accessing crowd-funding options, such as, rather than taking on debt.

One final caveat: As the daughter of immigrants, I saw my parents work two jobs each in order to save, pay for cars in cash, and help fund our future. Unfortunately, I too, got seduced by the promise of debt as “leverage”, over-consumption, and other poor financial habits of modern America and thought my parents’ ways were a result of provincial attitudes — of not knowing better. Now I know better, and try to emulate their immigrant money attitudes; when combined with the opportunities this great country affords us, it’s a powerful combination.

Do you have any successful immigrant money habits or stories to share? Post them below!

Need More Money? Surprise! You Already Have It

walletWhenever people think of saving money, they think in terms of restriction. “Oh, that’s a dollar less I’ll have toward buying what I want,” they’ll say. On the other hand, when they earn more money, they think in terms of additional freedom — how that extra dollar will allow them to buy more of what they want. What they’re failing to realize is that both saving a dollar and earning an extra one can have the same overall effect on your well-being and ability to access the things you really desire. Both can buy you the same freedom. So, why do people prefer to make more instead of saving more?

Let’s think of it in these terms: Say you want to buy a new car, but need $3500 toward a down payment. To get the money, you can either work harder(either longer hours or by asking for a raise/promotion), or you can cut back on your expenses to save the same amount of money. (The third — and incidentally, worst — way to get the extra $3500 is through a loan.)

What would happen under each of these scenarios?

For convenience’s sake, let’s say you make $20/hr, or about $800/week(that’s about 41K – close to the US average income). To make the extra $3500, you’d need to work an additional 175 hours that year.

Alternatively, you could save that $3500 by saving about $10/day. If you’re aggressive and put the money you’re saving in the stock market, you could even have hundreds of dollars more at the end of twelve months (providing, of course, that stock market returns are near historical averages – we all know down markets happen sometimes). Even if you’re risk-averse and prefer to just sock it away in a high-yield bank account or a 1-year CD, you’ll still have about $30 above what you’d need. And you didn’t have to work any harder for it — the money was there, in your pockets, all along.

The worst possible scenario, of course, involves you taking out a $3500 loan for the downpayment. Assuming a 10% interest rate and three-year repayment term, you’re going to pay close to $1000 more. Yep, that’s right. You’ll pay about $4500, instead of $3500 — all because you didn’t just cut back, instead.

Of course, we can’t always afford to save every dollar we need. Sometimes, we’ll have to forestall making important purchases or make do with less. But saving at least part of what you need makes a huge difference in your bottom line over time.

What’s the best possible scenario, you ask? A combination of 1 and 2: Work a little harder to make more dough PLUS save what you need for the car. If you cut back $10/day and put that money in a savings account for a year, you’ll have your $3500, plus an extra $30, or so. Add the extra $3530 you got from your raise or longer hours(remember, you’re earning interest on that money, too), and you’re up to nearly $3600 in savings PLUS you’ve got the original $3500 for your car.

How’s that for making cents?