What I learned about money growing up in former USSR

[Today’s article by Anton from FinancessfulUPDATE: Site recently shut down due to new information that’s come to light regarding Anton…  Sad sad stuff to hear.]

I was born in the USSR and am damn proud of it. Don’t get me wrong – I’m not a die-hard communist by any means (I’m running a business here in America, after all :)). I simply respect the country and the people who raised me and am proud of my heritage.

The USSR collapsed when I was only 3 years old, but I continued living in Russia until I was 15. The 90’s were a very turbulent time for Russia – the new government was struggling to control the country, the economy didn’t quite know how to deal with privatization and the people were constantly worried about the future.

Looking back, I think my childhood experiences and observations had a major impact on the way I am and the way I think, especially when it comes to money. They say that the habits and attitudes we develop when we are young are the most persistent and the hardest to change. For the most part, this has been true for me. The following things that I learned about life and money during my years in Russia largely define who I am today:

Every Man for Himself

One of my biggest surprises when I first came to America was how nice, friendly and helpful people are. I know it’s not like that in all parts of the US, but compared to what I experienced in Russia, it was like night and day.

When I was a kid, I learned very quickly that nobody is going to hold the door for me or help me get back up on my feet. Everybody around seemed to only worry and care for themselves (and maybe a few very close family members or friends). I couldn’t really blame them – it was a difficult time for many people and if you didn’t put yourself first, you were likely to be trampled by somebody else.

I learned to stand up for myself and be self sufficient. I didn’t expect any help and I knew that if I wanted something, I had to go out and get it. This is still very much how I think today. If I want to buy a new car or house, I’m the only one who can make that happen. If I want to be wealthy, I have to be the one purchasing more assets. I realize that you can often benefit from working together and helping each other out, but I am a believer that ultimately each of us is responsible for our own well-being.

The Government Will Not Be There for You

Just like most of the people didn’t care for my well-being, neither did the Russian government. After the collapse of the Soviet Union, the Russian executive, legislative and especially judicial systems were in ruin. There were few meaningful laws and most of them were not enforced. The cops were just as likely to help you as they were to arrest you if somebody paid them a bigger bribe. Many government programs were shut down and corruption was widespread.

I was never sent to jail (although I did get arrested once for letting off some fire crackers), but what I learned from looking at all of this is that you can’t depend on the government to help you with anything. In fact, it’s best to stay away and be cautious of government officials.

This is in stark contrast with the views of many Americans, who trust their government to maintain order and help those in need. And I’ll admit – the US government does a much better job at helping and serving its citizens than the Russian government. There will always be people who complain and protest, but it can be much, much worse, trust me.

What I do wish some people realize though, is that depending on the government financially is never a smart move. Funding for welfare programs or social security can easily dry up. Where would the people be who depend on those programs? Instead of wishing the government would help you more, help yourself – find ways to earn more money, find affordable housing, pay for your own healthcare and save for your retirement. If the government does help you – great, but don’t depend on it every time you get yourself in financial trouble.

You Don’t Buy What You Can’t Afford

I didn’t have a credit card until I was about 18 (and that was only because my mom convinced me I needed it to build credit). Things have changed now, but when I was growing up in Russia, there was practically no available credit. People didn’t have credit cards, they couldn’t get an auto loan or even a mortgage – the banking industry wasn’t developed enough to make any of this happen.

If you walked into a furniture store and asked if you could pay for a new couch over the next 12 months instead of upfront, you would’ve gotten laughed at. I learned from a young age that if you wanted something – anything – you had to have the cash to buy it. You waited until you had saved enough. There was no other way.

I’m very glad that I didn’t let the American consumerism corrupt my views on debt. These may be strong words, but I firmly believe that consumer debt is one of main causes of all financial problems people face in the US. To this day, I have never bought anything but real estate on credit. I don’t carry outstanding credit card balances and I’ve never had an auto loan. If I want something, I work hard, save and buy it in cash.

This has done wonders for my net worth – I am 26 and just short of being a millionaire. I can’t say the same for many of my peers who like buying expensive “toys” on credit.

With the Right Approach, the Sky is the Limit

In the 90’s, the Russian economy was pretty much in disarray. The government was selling factories, industrial complexes and mining operations for pennies on the dollar (in the USSR there was almost no private industry). The laws and economic conditions were constantly changing. There were armed conflicts, riots, assassinations and bombings.

And despite all of this, almost all of the Russian millionaires and billionaires made their fortune during this time. They had the right mindset and approach to take advantage of their current situation and prosper as a result. They didn’t wait for things to get better or for the perfect opportunity to come along. They acted, probably failed a bunch of times, learned from their mistakes and eventually succeeded.

Although their methods were often questionable, I always respected their ambition and perseverance. They taught me that if you have a strong desire to succeed and learn to adapt to your environment, you can have all the wealth you desire. The key is to act, seize the moment, learn from your mistakes and never give up.

These principles have proved invaluable when I worked on establishing my financial foundation, when I was first investing in stocks and real estate and when I was creating and growing my business.

My childhood may seem tough to some, but for the most part, I had a great time and was a happy kid. I am thankful for the lessons I learned because they help me every day of my life. Who knows where I would be had I grown up somewhere else…

What about you? What has your childhood taught you about money or life ?

Anton Ivanov is a financial writer, a personal finance & investing coach, an investor and an entrepreneur. He is extremely passionate about helping others become financially independent and shares his financial knowledge at Financessful.com.

[Top photo cred: freestock.ca // Others courtesy of Anton]

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  1. Justin @ RootofGood October 3, 2013 at 8:59 AM

    Very compelling story. What doesn’t kill you makes you stronger, right? A little adversity when you are younger makes you appreciate things more, and puts material wealth in perspective.

    Some have said the American Dream is dead. Maybe it is for those that lay down and refuse to work hard. Glad to see you kept on your feet and made something for yourself!

    1. Anton Ivanov October 3, 2013 at 12:30 PM

      I don’t think the American Dream is dead at all. Or any dream, for that matter. There are successful people in every place of the world. The conditions are all different, but if your are willing to put in the hard work, learn what works best in your environment and a have a strong desire, you will be successful.

      1. Justin @ RootofGood October 3, 2013 at 12:35 PM

        Very true! It can be disheartening to see articles about Generation Y or Millennials being the failed generation or the lost generation. The world I see is so full of opportunities that if you do manage to fail, there’s another opportunity waiting to be pursued right around the corner. Failure is temporary. Giving up is permanent.

        1. J. Money October 3, 2013 at 11:20 PM


  2. John S @ Frugal Rules October 3, 2013 at 9:42 AM

    “These may be strong words, but I firmly believe that consumer debt is one of main causes of all financial problems people face in the US.” I could not agree more Anton and the crazy thing is that it also flows down from us by the government. So, not only do we do it to ourselves, but we also see it modeled to us. That said, I was not taught much about finances growing up but have learned a lot through teaching myself.

    1. Aimee October 3, 2013 at 10:58 AM

      I agree with this quote as well. I spent about 2 hours last Friday trying to explain to my brother what the $100k+ of student debt he’s getting himself into means. He seemed to accept some of what I said, but expensive colleges sell a mortgage sized “experience” to young adults without explaining what that price actually translates to in terms of your lifestyle after you graduate. My brother is a walking brochure for his college and it scares me! He kept telling me “you don’t understand, I can’t move back home after I’ve been on my own at college for 5 years”. Well, Brother, when your student loan payments ring in at $1,500 per month you won’t have enough left over for rent, food, and transportation. “Oh, don’t worry Aimee, I’ll be making $70k!” I sure hope so!

      1. Anton Ivanov October 3, 2013 at 12:40 PM

        I hope so too, for your brother’s sake, but you are right to be cautious. Expensive college degrees are not what they are hyped up to be and for many disciplines they can actually be a waste of money.

      2. Freckles October 3, 2013 at 6:03 PM

        I also agree with this quote wholeheartedly. And I don’t think they were “strong words” either; most of us need a much stronger kick in the pants or given a good shaking. Spend less than you earn, and determining wants versus needs are two very basic concepts that seem to have fallen by the wayside.

        As for my childhood lessons … I learned that money equals freedom, security, and stability. Growing up with chaos and domestic violence in the house and family made me realize that I did not ever want to be stuck in any situation, whether it be a bad relationship or a terrible job with a terrible boss, because my financial shortcomings dictated that I must stay in that bad environment. As long as I have enough money to live and work in a calm, safe environment and decide what I do when I want to do it, it doesn’t matter to me one bit that I drive a used vehicle, buy secondhand clothing, and have a 10-year-old TV.

        I enjoyed your post, very much! Interesting reading.

        1. Anton Ivanov October 3, 2013 at 6:30 PM

          It sounds like your had a pretty rough time when you were a kid…

          You are spot-on about the things you can get with money (freedom, security, stability). To me, financial freedom is one of the most important achievements anyone can accomplish, because it gives you the power to do anything it is you want (or were meant to do) in your life.

        2. J. Money October 3, 2013 at 11:26 PM

          Way to overcome Freckles!!!

    2. Anton Ivanov October 3, 2013 at 12:37 PM

      Very true. The US government debt has gone out of control and that doesn’t exactly present a good role model for the US citizens.

  3. Brian October 3, 2013 at 10:11 AM

    Good read. My childhood did not teach me enough about money and now 25 years later Ive learned better ways.I ‘m paying off all of my consumer debt and teaching my children how to manage money.

    1. Anton Ivanov October 3, 2013 at 12:32 PM

      Better late than never, my friend!

  4. Jake @ Ca$h Funny October 3, 2013 at 12:19 PM

    These are some great life lessons to learn at a young age. I’ve learned very similar lessons here in the US and it definitely has made me think about my future in a different way.

    1. Anton Ivanov October 3, 2013 at 12:31 PM

      I’m glad to see that you actually realized what you’ve learned. I think many people go through a lot of things, but then just keep making the same mistakes over and over again.

  5. Josh October 3, 2013 at 12:41 PM

    Great insights Anton. You are completely right, if you do not look out for yourself, no one else will. Similarly, like they say you have to love yourself before you can be loved. Persistence pays off, and you are a great example of that.

    There are infinite excuses to fail, and it is so easy to fall back on one of those. It’s the persistence to find excuses to succeed that made the difference for those who came out on top while Russia was crumbling around them.

    1. Anton Ivanov October 3, 2013 at 2:45 PM

      Very true – many people use excuses when they fail and don’t try again. Or even use excuses why they should never try at all.

  6. dojo October 3, 2013 at 1:06 PM

    I was born/raised pretty near your country (in Romania), and we kinda shared the same Communist regime. Everything you learned is what I found out from a pretty young age ;)

    1. Anton Ivanov October 3, 2013 at 2:46 PM

      Ya, I would imagine the conditions were pretty similar in all former Eastern Block republics.

  7. Simon Elstad October 3, 2013 at 1:32 PM

    This are definitely powerful lessons to learn at such a tender age, does make me wish I’d learn some of them earlier on like steering clear of consumer debt. I guess thats the anchor holding many back from their financial independence. Your experiences reminds me of this quote by J Marriott:

    Good timber does not grow with ease; the stronger the wind, the stronger the trees.
    Guess I have some catching up to do :)

    1. Anton Ivanov October 3, 2013 at 2:47 PM

      Thank you and awesome quote!

  8. Evan October 3, 2013 at 2:10 PM

    I wonder what it would have been like to get a post like this before the breakdown of Soviet Russia. Especially the gov’t programs being better here than there.

    1. Anton Ivanov October 3, 2013 at 2:49 PM

      Haha, ya that would have been crazy. Especially if the author was still living there.

  9. Stefanie @ The Broke and Beautiful Life October 3, 2013 at 4:10 PM

    I visited Moscow last year and definitely felt everything you described. St Petersburg on the other hand was lovely, though I’m sure living there on a day to day basis under Kremlin rule is very different.

    My family is from Ukraine, along the Polish border, so much different. My aunt immigrated with my grandparents here in the early 50s. A year later my mother was born and five years later my grandfather died suddenly. My grandmother who didn’t speak English was left with two young girls living in New York City. Both my aunt and my mother went on to live the American dream. They were in poverty, they relied on government assistance (a good case for why it’s important) and went on to attend Ivy League universities and graduate schools on full scholarships. They created their own success but they needed some help at the start.

    1. Anton Ivanov October 3, 2013 at 5:32 PM

      Awesome family story!

      And it’s interesting that you mentioned your recent visit to Moscow and how you felt. I’ve just been there in August and I think it’s gotten a lot better than what it used to be.

  10. Savvy Financial Latina October 3, 2013 at 4:18 PM

    I’m from Mexico, and came to the US as a child. I understand your mindset because I have a similar mindset. Mexico ranks just as highly as Russia in the Corruption Perception Index. Mexico ranks 105 compared to Russia’s 133. I don’t trust the government but I also don’t lose sleep over it.

    1. Anton Ivanov October 3, 2013 at 5:34 PM

      Ya, you definitely learn to live with it. Worrying all the time about what the future holds won’t do you any good…

  11. Martin October 3, 2013 at 4:37 PM

    I hear you. My parents grew up in Poland. Not pleasant at all. It has forced me to work my ass off and not make any excuses for anything.

    1. Anton Ivanov October 3, 2013 at 5:36 PM

      I bet it was pretty hard for them… But at least you are who you are today because of it!

  12. Ben @ The Wealth Gospel October 3, 2013 at 4:59 PM

    Great article! It’s great to see how such a horrible living situation forced you to learn to be more self-reliant and more successful. You could have chosen to live your life in pessimism and poverty, but you chose optimism and opportunity. Btw, congrats on getting in the top 100,000 in Alexa rankings!

    1. Anton Ivanov October 3, 2013 at 5:35 PM

      Well, I wouldn’t say it was horrible, but it was definitely not the ideal environment for children to grow up in.

      And thanks for the congrats!

  13. GetRichWithMe October 3, 2013 at 5:17 PM

    My wife who is Slovak has had a very similar upbringing to your own. She is great with money.
    Sadly I’m not – we’re like chalk and cheese.
    However, one thing we both notice is that in the Eastern European Cities – there is now a massive spending and credit culture.
    In the race to become “westernized” – they have fully embraced the debt culture which runs alongside modern economic consumer models.
    Sad really

    1. Anton Ivanov October 3, 2013 at 6:33 PM

      Oh, totally. Like I replied in one of the other comments, I was just visiting my family in Moscow in August. Things may look a little better, but I know that the majority of what people have is bought on credit. People may look like they are better off, but they can be 1-2 paychecks away from bankruptcy. If the economy takes a downturn (which it does fairly regularly in any country), those people not only will lose their jobs, but their entire lives.

    2. J. Money October 3, 2013 at 11:30 PM

      Chalk and cheese??? Haha… that is hilarious. Especially as I literally just ate a piece :) Of cheese that is…

  14. Micro October 3, 2013 at 7:28 PM

    I spent my youth working on my family farm. It helped me youth working jobs to completion and not working based on time. I think that really led me to develop my work habit. I couldn’t just stretch a job out to fill hours when I was younger because there was no stop time. Work was ongoing until a job was finished. That is the same mentality I take for work now.

    1. Anton Ivanov October 3, 2013 at 10:03 PM

      I think that’s an excellent mentality to have. Working hard, until the job is finished, can do wonders for your career or business. I’m a huge fan of hard work that pays off myself.

  15. Christine @ ThePursuitofGreen October 3, 2013 at 9:16 PM

    I’m a first generation here and my parents raised me teaching me how to be frugal. I didn’t realize it back then, but my family was poor and have now worked up to middle class. Both my parents worked very hard and did as best as they could to make sure we had everything we needed. Following their example I work hard at everything and am pretty frugal myself.

    1. Anton Ivanov October 4, 2013 at 1:22 AM

      I think learning to be frugal and living below your means is a great life lesson for anybody. Many millionaires say that that’s one of the most important things that helped them succeed – while so many increase their spending when their income increases, the smart ones keep their expenses at the minimum, no matter how much they earn!

  16. JP @ Cashsnail October 4, 2013 at 3:25 AM

    My wife was also born in USSR and she doesn’t like credit nor owing money to anyone (+ the hardworker part :)). But on the other side she enjoyed much more working in Ukraine than in Europe for the atmospheare (coworkers doing more things out of work together)

    1. Anton Ivanov October 4, 2013 at 11:50 AM

      I’ve never worked in Russia, since I moved to the US when I was 15, so I’m not sure if I would like working there or not :)

  17. jim October 5, 2013 at 11:57 PM

    Very interesting article. Our son studied in Krasnodar for several months – best education he ever got. I was constantly amazed at the stories he told us about how when he and some of his American classmates socialized with their Russian classmates. It was quite an eye opening experience for him. Once when they were out on a scuba diving trip, they passed near Putin’s latest mansion so our son took a picture of it with a flash camera. OMG! The Russian students immediately and simultaneously told him NOT to do that again! And getting on a public bus to go grocery shopping – great experience for him. Hmmm – imagine the store not having everything you wanted in it – ha! Best $ we spent on his education.

    1. Anton Ivanov October 6, 2013 at 4:33 PM

      Haha, I’m glad he enjoyed it there :) Our grocery stores did used to absolutely suck and if you take pictures of the president’s mansion, you’re just asking to be arrested (no joke)!

  18. Financial Underdog October 27, 2014 at 7:03 PM

    Born and raised in USSR as well :)

    Great post. I love how you’ve described your mindset without giving into usual cliches about poor immigrants coming to America with $20 in their pocket.

    Congrats on your success, I hope to get where you are one day too.

    1. Anton Ivanov October 27, 2014 at 9:24 PM

      That’s awesome! Us former communists gota stick together, haha! I’m sure you’ll to where you want to be if you work hard enough :)

  19. Ajos October 31, 2014 at 11:35 AM

    Social finances behave very differently than personal finances. The way people mix them up makes me cringe.
    Debt is how we expand and manage our money supply. It is a basic tool of all modern economies. Without debt the economy becomes stagnant since debt reduction = destruction of money.
    This is what happened during the great depression. These concepts of macro-economic debt were not understood back then and the government did not intervene when debt was called in at massive scales. Result was a country with empty factories, with piles of coal and metal collecting dust, with parked trains, with an awesome new technology to electrify the country going idle, with investors jumping off buildings, and with healthy workers lining up at soup kitchen lines.
    The few that had some money and kept on trying to pay down their debt found themselves in the ironic situation that the more they payed the more they owed? Why? Because as debt was payed in an environment where new loans were not given, there was less money circulating, this caused deflation (each dollar is worth MORE than before), so even though the amount of dollars you owe are less, the goods and services that your debt represents are MORE than before. That is what happens when a society tries to pay its debt, it just does not work: money mechanics don’t allow it. You can pay your debt as an individual (mostly by getting lucky in the real-estate or some other money game – not by working hard), but we can’t do it as a society.
    Fortunately modern economist understanding this and the debt has allays been on the rise, along with inflation. This is the only way to keep the monetary system monster from ruining our lives. Russia’s economy today is doing well, and they have increasing debt just like all other economies.
    The outer states that he does not use debt, yet he admits to use it for real-estate. Isn’t that his biggest purchase.Doesn’t this mean that as a percentage most of his transactions have been based on debt? It is good that he works hard and has a business, but money mechanics can ruin him just like the rest of us despite how hard we work.
    At the end of the day money is not simple personal wealth management. It is much more than that. It is a living system, that when taken as a whole has key fundamental border conditions. There are better systems out-there that abandon money/barter altogether based on a new abundance derived from technological advances in energy collection and automation. Along with new discoveries in motivation showing that money holds back technical creativity (see Daniel Pinks videos), they form the cornerstones of a potentially better way of organizing ourselves. If interested look into thevenusproject.