Financial Success & Failure

Financial Success & Failure

Over the last decade, one thing I’ve become fascinated by is what differentiates financially successful people from those that are less successful?

Do we drive this behavior on our own, or are we a product of our circumstances?  Is it how much money we make, or the college we went to?

I think it goes a lot deeper than that considering we’ve all seen people making tons of money that are broke.  We’ve also seen people with degrees from amazing universities that are broke.

So, I decided to make a list of things that tend to separate the two groups.  Not everything below is accurate for everyone, but they all seem to be pretty consistent.  FSP = Financially Successful People & NFSP = Not Financial Successful People.  Here goes:

FSPs look for additional dollars that can be saved.  NFSPs look for additional dollars to spend.

FSPs pay down their debts.  NFSPs never seem to get out of debt.

FSPs only carry collateralized debt (home and cars).  NFSPs carry credit card debt.

FSPs maximize their 401k contributions.  NFSPs often aren’t even taking advantage of their employer’s matching program or have loans against their 401k.

FSPs embrace the markets.  NFSPs are scared of the markets.

FSPs value education and guidance from their financial advisor or take the time to properly educate themselves.  NFSPs rarely want to discuss things outside of what to do with the little amount of money they’ve accumulated.  And, oh, by the way, they expect to double their money every year.

FSPs save before they spend.  NFSPs save after spending.

FSPs learn from their mistakes.  NFSPs make the same ones over and over again.

FSPs are positive about the future.  NFSPs tend to blame their financial situation on outside factors.

FSPs spend time evaluating their finances.  NFSPs rarely pay attention to their finances.

FSPs purchase homes and cars that comfortably fit in their budget.  NFSPs purchase homes and cars that often stretch their budget.

FSPs spend time reading.  NFSPs spend more time watching TV.

FSPs are interested in the best long term value.  NFSPs are interested in the lowest price or the cool factor.

FSPs have a formal/informal mentor of some sort in their life.  NFSPs rarely seek out mentors.

FSPs are often involved in giving back to their community.  NFSPs rarely give back to their community.

FSPs often have some sort of schedule that they keep.  NFSPs rarely have any schedule.

Before I start getting hate emails for lack of sympathy, this is not a way of saying that NFSPs are bad people or that FSPs are good people.  The traits above are in no way exclusive.

But in thinking through the differences noted above, we are all products of the choices that we’ve made in life.  There is no doubt that some people have been given more of a leg-up than others.

But, it’s nonetheless interesting how many similarities there are among the financially successful and those that are less successful.  One of my all-time related quotes is, “We’re not responsible for the cards that we’re dealt, but we are responsible for how we play our hand.”

 

 

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