Yanely grew up in a low-income household in Brooklyn and then attended Brown University. But by the time she graduated, she had accumulated a bunch of credit card debt that she was hiding from her family.
She tried to figure out dealing with her debt on her own by reading books, listening to podcasts, and watching YouTube videos. After paying it off, she thought it was ridiculous she had never learned it in school and started her own YouTube channel to share her story. That eventually led to her landing the perfect job and a solid career path.
Growing up, there wasn't a lot of money in Yanely's household, so there weren't many conversations about money either. When there was talk about money, it was always negative and caused tension.
One thing that her father did teach her was to never have a loan or owe debt to a friend or family member and that she needed to always pay them back. Interestingly, that sense of obligation did not transfer over to institutional borrowing which she believes is a common mindset in neighborhoods like the one where she grew up.
When Yanely was accepted to Brown University, she had no idea how expensive it was going to be. Although she received a full scholarship, she discovered she still need to purchase things such as textbooks, a laptop, and other supplies. Because her father taught her not to borrow money from anyone, she wanted to figure it out on her own and applied for her first credit card.
She attributes her attempt to be resourceful using credit cards to a lack of financial literacy. She thought she was doing the right thing and on the right path at the time.
Her payment history was good since always made the minimum payment and never missed a payment on her credit cards, but her credit utilization was high as she was always close to maxing out her card limits.
With each credit card application, banks continued to give her credit cards with higher and higher credit card limits. Trying to keep up with the rich kid lifestyles of her classmates ended up getting her $15,000 in debt.
Moving from a neighborhood filled with Caribbean immigrants to an elite university was a culture shock. Yanely felt like she didn't fit in because she didn't talk or act like her fellow students. Not understanding expressions and phrases others used made her feel dumb.
Going from a top performing student in high school to feeling like being in the wrong pack may be part of the reason why it's physiologically difficult for low-income who attend prestigious universities.
Yanely says the biggest thing a low-income student can do is expose themselves to the rigorous language and vocabulary that is going to be expected of you. Students are often not prepared for how much harder they will need to work, it ends up being a shock, and they go home.
Approximately 2/3 of her credit card debt came from spending on just trying to keep up with her fellow students. Although there was no overt peer pressure, it was unspoken.
Straight A's and scholarships are not enough. Students like Yanely need to have both academic and social grit to survive in an environment that is not in their comfort zone.
Reading The Millionaire Nextdoor to help her figure out how to pay off the debt, she noticed the descriptions of poverty and generational poverty were describing the life she was living. She decided she was going to be the one to shift the trajectory of her family in terms of wealth.
Yanely had a choice to make between continuing a pursuit to fit in and look good while racking up debt, or the alternate route of smashing her debt aggressively and begin to build wealth, breaking he cycle of poverty.
The interviews of people who didn't come from wealth surprised her, opened her eyes, and completely shifted her mindset. She realized she was going to need to completely wipe her mental slate clean and start with new and fresh beliefs about money and how it works.
Thomas J. Stanley and William D. Danko, authors of The Millionaire Nextdoor devised a formula for determining if you are as wealthy as you should be. That formula is: Your Age multiplied by Your Annual Income (from all sources except inheritance) divided by 10 = Your Expected Net Worth
Growing up in a neighborhood where spending to reflect success and social status was prevalent, Yanely understands the pressure and had never imagined there was a different route.
Her beliefs were shaken to the core listening to interviews of self-made millionaires answer questions and discuss the strategic money decisions they made with a clear goal in mind. It opened her mind and made Yanely want to explore more.
Despite FI not even being in her purview a handful of years ago, Yanely just hit Coast FI after beginning to maximize everything she was doing with her investments and prioritizing tax-efficient investments before even paying her rent.
Yanely paid herself first. After learning more about 403bs, she determined her priority should be a Roth IRA. She then invested as much as she could to qualify for the company 401k match. Whatever was left after the investments was used to pay for living expenses like rent and food, and has cut down on her fun money budget.
Being obsessed and hungry for knowledge helped Yanely pick up personal finance lessons so quickly and go from being in credit card debt to maximizing her investments. Her goal was to learn everything she could and begin producing a result in 90 days.
She feels that there is an injustice that these things were never taught in her community, her family, or even at her Ivy League school.
Previously, she would have asked an expert or others for advice and take it. she no longer believes that is a good strategy for solving her problems. She thinks you need to question the experts' motivations and do your own research. This is especially true with investing.
Her goal with Coast FI was to invest enough that she's be a millionaire by the age of 65 even if she had never invested another dollar again. that meant she needed to hit $250,000.
Initially, Yanely's goal was to be an agent of change for herself. Now she wants to be an agent of change for others through her YouTube channel where she cold share her story.
As a teacher, she realized that teachers were also never taught about personal finance in school. Teachers teach students about all kinds of topics, but not about money. Financial literacy is lacking and being passed down from generation to generation.
An organization reached out to her to come on their podcast where they talk with teachers about money and personal finance to help give them the knowledge and skills to teach it in the classroom. She is know on staff doing educational outreach.
She says her impact through coaching or her YouTube Channel is limited, but seating change in the education system and reforming the way students are learning in school is the kind of change she is after.

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266 | Breaking the Cycle of Poverty | Yanely Espinal