I grew up in a poor family. At meal times, each of us was given a bowl of rice and a few pieces of pork. Our mother was very skillful with the knife, so they all came in one size: thin and small. She loved salt, so she always added some extra. Sometimes I thought that she could have mistaken the salt for sugar because I drank water like a camel preparing for a long trip over the Sahara after a few bites. To finish my meals, I always ate the rice first because I was afraid that I would run out of the meat. After years of training, I became very good at eating only rice, and I saved the meat for last. One day, my older sister caught me eating meat by itself, so she complained to my mother that I was given more meat. I diplomatically explained to her that the reason why I had meat left was because I saved it until the end. And, while I was talking, she snatched the meat from my bowl and ate it as she was running away. We fought. And, we both got spanked by our mother. After the incidence, I always watched my meat. I ate it right away when I felt that my sister’s eyes were on it. Over the years, it has become a habit because at present time my wife sometimes asks me why I always leave the good food in my bowl at the end of a meal. My answer to her is: It is a survival instinct from my childhood.

Now, I do not have to save food anymore when I eat. However, the saving mentality has become very beneficial to me because it reminds me of “saving” when I make financial decisions. For example, after I finished my schooling, I had to make a choice between living in California and moving to another state. I chose to leave the Golden State because I did not want to purchase a house and then spend my whole life working to pay it off. Despite what my friends told me–”once you leave California, you will never be able to come back because the housing price will keep going up”–I left California. I left, not because I was able to foresee the current financial crisis, but because my survival instinct told me that “something is not right financially if I stay”. Had I stayed in California, I would not have had any extra money to save or invest for the future because most of my take-home money would have gone to the mortgage lender’s pocket. I wanted to protect my meat. Six years later, I realized that it was one of the best decisions I have made. Let us compare the two scenarios:

California Scenario: Mortgage Amount = $500,000, Mortgage Term = 30 years, Interest = 6.25. My monthly payment is $3078.

Current Scenario: Mortgage Amount = $150,000, Mortgage Term = 30 years, Interest = 6.25. My monthly payment is $923.

Based on the above calculations, I have been saving about $2000 per month in the last six years. The total saving is $144,000 ($2000 per month x 12 months per year x 6 years).

Poverty taught me to prepare for the worst. However, for many, it is not a good way to live one’s life because according to them one must enjoy life now because no one knows what is going to happen tomorrow. In my view, these people do not know how to control their lives, so they adopt the easy way out: “no one can control life’s unpredictability, so why do I have to try?” We all know that things happen in life and that no one can predict the future, but we must be responsible for our actions. For example, one must know that it is wrong to spend money that does not belong to himself. If one takes out money from one’s home equity to finance one’s lavish lifestyle, then one must know that it is irresponsible. Hopefully, the current recession has forced us to re-learn the evolutionary survival instinct: We must save our resources for rainy days.