Spend less than you earn.
That’s it! Such an incredibly simple strategy, yet mastered by so few. Why? Why do so many people fail to follow this common sense blueprint for success?
I compare the difficulty of staying “on budget” to the difficulties most of us have with diet. As red-blooded Americans, it seems to be our birthright to battle weight and unhealthy eating habits from the moment we taste our first Twinkie (perhaps a deep-fried Twinkie if you’re from Texas) to our final meal. This is in spite of a billion-dollar industry focused on fighting fat and promoting healthy habits. We all know there’s no rocket science necessary to lose weight (burn more calories than you consume), yet Americans spend over $40 billion a year on weight-loss programs and products. The reason…a desire for instant gratification…a short-cut…a “secret”.
We’re bombarded daily with advertising telling us, in one way or another, “Go ahead, you deserve it!” When it comes to pizza (and ranch dipping sauce and cinnamon sticks), one part of my brain is always telling me that I DESERVE IT! Thankfully, I don’t always listen to that voice, but the same thing happens in the area of personal finance. We say to ourselves, “I work hard. I deserve to be rewarded.” While there is nothing wrong with enjoying the fruits of your labor, I suggest that if you seek affirmation in material things, you will never achieve a contentment that is lasting. There will always be something new to acquire. It’s exhausting! Instead, make peace with what you have and live on less than you earn. If you would like some assistance in designing a plan that will work, give us a call.
Often, a simple concept inspires many complex tangents over time. With dieting, there seems to be an infinite supply of strategies/products, and what’s popular is usually driven by celebrity endorsements. Easy enough to dismiss. In the investment world, however, the strategy du jour is discussed on CNBC by polished-looking professionals in expensive suits who look and sound pretty smart. Don’t be fooled. There is no low-risk short-cut to financial security. There is no “secret sauce”. The surest route to financial success is no different than this simple diet/exercise advice:
1. Create an intelligent plan.
2. Work your plan daily.
3. Reward success in moderation.
4. Be accountable to someone who shares your vision/goals.