The 4 Horsemen of Personal Finance: Number 1

Hello and welcome back to Wallet Sense!

On each of the next 4 days, I will be posting what I consider to be my four most basic, fundamental pillars of personal finance.  Much like the 4 horsemen of the Bible (or Notre Dame football lore… don’t worry though, I’m not a Notre Dame fan), these common-sense principals will lay waste to any financial challenge presented before them.  Keep reading for number 1…

If you have spent any time at all researching personal finance (and I’m guessing you have if your reading this blog) you will have learned that opinions on personal finance are like… (censored – remember no profanity here on Wallet Sense!), everyone has one.

Although these opinions run the gamut from being overly simplified to hopelessly complex, common (sense) parallels can easily be found amongst those who actually have experience building and maintaining wealth.  To many, the word “wealth” in itself can be intimidating.  Some assume that in order to create wealth you need a special underground room with reinforced concrete walls and an armed security guard with an automatic weapon to stands guard as you empty daily duffel bags packed full of $100 stacks.  Although in theory you could create significant wealth this way, there are other options.

Creating wealth is the very simple act of setting money aside after you’ve met all your financial obligations with the intention of not spending it (ie, saving it).   Anyone can do this, making any amount of money.  If you make $1000/ month and after paying all your bills (and eating, drinking, living life, etc.) you have $50 left over to go into your cookie jar, you are creating wealth.  Do it for a year and you have $600, at which point I would suggest putting it somewhere safer than the cookie jar.

Simply put, you don’t need to be a number 1 draft pick to create wealth (although that is a pretty decent way to do it quickly).  To create wealth, you first need to want to become wealthy, which brings me to my first pillar…

  1. Attitude is everything

So you want to be rich?  Great!  After all, who doesn’t?  My question to you then, is what are you doing to  move closer to that goal each and every day?  You see, everyone wants to be rich, but most people never actually take the time to think, plan, and commit to a strategy that will allow them to get there.

Most people who just say that want to be rich are the same types that assume that everyone else in life who has been successful in creating wealth has benefited from someone handing it to them.  The sharp-dressed business executive being interviewed about their companies most recent quarterly sales figures on TV?  

“Must have come from rich parents who paid for a top tier ivy league school then called in a favor with some fellow members of their golf club to get a cushy job right out of school.”

The professional athlete who dominates the daily sports highlights and perhaps appears on your TV hawking the latest product or service hourly?

“Obviously, they were simply born with so much God-given athletic talent their lives were set from the day they exited the womb.”

The pop signer with the lame single that as much as you hate to admit it has been stuck in your head for a week?

“Well they clearly had the best producers and the best writers that basically spoon fed them a song that anyone could do.”

WRONG.  People like this are successful in their pursuits because throughout the course of many years, they have fought, scratched, and persevered to get to where they wanted to be.  The repeatedly set lofty goals (click for my post on goal setting) and exceeded them.  How many people start out in business but dont reach the executive level?  How many people born with natural athletic abilities dont have multi-million dollar contracts?  How many talented musicians have never sold out Madison Square Garden?  The answer is… alot.

We live in a country where every day people who came from nothing are offered the opportunity to become whoever they want.  According to Dr. Thomas Stanley, author of “The Millionaire Next Door” about 80% of millionaires are first generation.  First generation!  That means that the business executive must have done some things differently to separate themselves from their peers (that didn’t involve his parents).  The 1st round draft pick must have been out practicing when others were partying.  The pop signer was busy embarrassing themselves singing on street corners while others make fun of them in the clsoe company of their friends. 

Whether its deciding that you want to provide a more secure future for yourself and your family, or deciding you want to complete your first marathon, you have to get your head right and believe that you can do it.  If you want to give yourself a financial makeover from head to toe, you can, but only you can convince yourself of that.  Instead of looking at those who have achieved wealth and success and immediately thinking negative thoughts, be excited about the fact that they are once again proving what is possible for anyone who is willing to put in the work.  Self-improvement only comes from within.  After all, if you can’t believe in yourself, then who will!!??