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Financial Habits That Breed Success


"Financial Habits That Breed Success"


You know, I was reading an article the other day that was about how to convince people to save money. Not only did I thoroughly enjoy the picture, but I thought that it was a very interesting article also (I recommend it). But it got me to thinking about some things. I thought to myself, if you can influence others to do what's right for them, then you can also influence yourself. Because after all... when it comes to personal finance, most people know what they should do, but for a variety of reasons, they don't do it.

And in most cases, it comes down to having bad habits. The truth is that most people know what good financial habits are. If you read up on this subject, you probably won't find anything new (spend less than you earn, cut coupons, stop borrowing etc). The problem is forcing yourself to do what you know you should! So I came up with some ways that I believe can help a person force themselves to adopt better financial habits.

The What and The Why

Now first and foremost, you can't do anything if you don't know what you are supposed to be doing. In order to win a game, you have to know the game that you are playing. You can't win a football game trying to play basketball. So when it comes to personal finance, what is your objective? Do you want to retire rich or with enough money to be comfortable on? And if so (to either of these) how much money is rich, and/or how much money does it take for you to live comfortably? These questions must be answered before you get started on anything. I have covered this concept in more detail in articles like Financial Freedom Boulevard and How To Go Broke

But after you get the what, you must now ascertain the why. If you don't have a reason to do what you are doing, then you won't have the motivation to do what you want to do. Do you want to leave an inheritance for your children and their children? Do you want to build a long lasting legacy? Whatever your "Why" is will keep you motivated, towards accomplishing your what. However, you must keep these things in front of you.

You see, if you want to retire (stop working) at age 65 and you are 63, staying motivated is easy! Doing the things that you need to be doing (or should have already done) is constantly on your mind. This is because your destination is near and clear. But if you want to retire at age 65 and you are 37, then staying motivated may be difficult. Twenty eight years is a long time. So, there is no since of urgency. That is one of the main blocks that keeps people from striving towards their goals and keeps people in a state of procrastination.

So now you have to do something to keep your goal vivid and in front of you, just as if it was right there. This is where the "why" comes in. Why do you want to be wealthy? Do you want to be a big shot and floss in front of your friends? Do you want to help other people? And if you do, what do you want to help people do, and why? This "Why" can keep you motivated. This "Why" may also be your life purpose (that you need to be trying to seek out). More on that later.

In Your Face

So if you want to want to live in a mansion, then maybe you can get a picture of a mansion and put it in different places around your house. Every time you see these pictures, you will be energized and motivated. If you are doing it for your children, then keep a picture of them around (most parents do), but make sure that you train yourself so that when you see those pictures, that it brings your goal to remembrance. Maybe you can leave a note (of the things you want) by your alarm clock, so that when you wake up in the morning, you'll see it.

Keeping things in front of you will keep you juiced up. Whatever you want to do, you have to keep it in front of you, so that you won't lose focus. So every time you get ready to do something that may set you back or take you away from your ultimate goal, you will now have something there to "check" you so that you won't slip out of line so easily.

Tactics To Motivate Your Your Mind

The following tactics can be used to help you achieve a better mind state to push you towards and keep you accountable to your financial goals.

Talk Stuff

Wanna be rich? Retire early? Go and tell some people! Why would you do this? Because, now you have put indirect pressure on yourself. You don't want to look like a fool in front of your friends and family... right? Tell those people to check up on you and keep you accountable! And I bet you can't wait for the exhilaration of telling them that you've done it! If you are not comfortable sharing something, you can do a journal or even start an online blog about it.

WARNING: Be careful who you tell your goals to. Because some people will try to kill them (they are just wired that way). They will try to discourage you and tell you that you can't do it (simply because they can't see THEMselves doing it). So "guard your aspirations." Make sure that you tell only positive people. Others you have to be quiet and maybe even secretive around. This leads me to...

Birds Of A Feather

Flock together! Always be mindful of the people who you surround yourself with. Be careful of those people who you can't even ask how they are doing without a gloom and doom story. Be careful of those people who are always crying out about how they have bills to pay and how they don't have what they want. Be careful of people who are always "hating" on the "rich folk" (offended by the fact that they are trying to increase their profits).

Be weary of people who always know the latest tragedy that has just happened and they have to give you full details about it. Be mindful of statements like, "Well... I'm here" and "Well... I can't complain." WHY DO YOU WANT TO COMPLAIN? You don't need negative downtrodden people (who are always "struggling") in your life. Surround yourself with positive progressive people and watch the same manifest in your life.

Raise Your Self Esteem

I spoke on the topic of self love in my article on "What's Love Got To Do Wit It" There is an article on Financially Fit called The Top 5 Tips To Build Wealth and Success. This article exposed how Warren Buffet lives in the same house that he bought in 1958 for $31,500. Aint that interesting. A lot of people who have a lot less than Warren would feel the "need" to live in something more luxurious than this. Why? Well, so and so lives in THIS house! I have to keep up with the Joneses. I have to display my material items and distract people away from the real me. Because, I'm just not...

Raise your self esteem and your incidences of "buying things you don't need to impress people you don't like" will greatly decline. And besides, after the due diligence when you reach your goal, plenty of accolades will come your way.

P.S. I'm not against living in a nice house or even a mansion (doing so is a beautiful thing), and I certainly am not implying that one should live poorly. I'm just using the above illustration to make a point. If you've got it, flaunt it. If you don't, then go somewhere, sit down and be financially quiet. Be real with yourself and your future retirement plans!

Some Good Financial Habits

The following are some good financial habits that are often not talked about.

Never Stop Looking For Value

The Financially Fit article that I referenced above also speaks on the story of John Paulson, a billionaire hedge fund manager, who bought his Hamptons "dream house" at a bargain basement price. The last statement from Tammy Gates in this article was very powerful. "Paying top dollar when you don't have to doesn't make sense."

It's easy to look for value when you only have $5 in your checking account. However, there will come a time during your journey to financial independence that you start to accumulate more money. And while you have to spend money to make money (the current must keep flowing), being frivolous can lead you back into a hole.

Always Look To Improve

Unfortunately, 99.9% of the financial information that is available to the public from financial gurus, planners, etc. is teaching people how to build wealth by cutting back and saving money. This is a good financial habit, but what about increasing your income? Why not venture out and try to do something else, and make more? One thing that you will learn from the wealthy is that they are always looking to increase what they have. They don't get complacent. If you're not growing, you're dying.

Be Efficient

The shortest distance between two points is always a straight line. How does that apply to your financial goals? Consider this. Let's say that you make $200 per month. :) Now, after each month you have $50 dollars extra (25%, that is pretty good). And let's say that you have a $50 dollar per month debt (that will be paid off in 4 years) and your end goal is to save $1000. Now, you have a couple of choices. You can take the extra $50 per month and put it towards your debt, or you can put away that $50 towards your $1000. Now, I guarantee you this. Whatever way that you want to calculate this, you will get to $1000 dollars faster by putting the $50 towards the $1000 (you'd be there in 20 months) than you would be if you put all of that $50 towards paying off your debt and then trying to accumulate the $1000 afterwards (regardless of what the debt is).

Once again, the shortest distance between to points is the straight line. If you want to save money... then save money! Now, I'm not saying that getting out of debt is not important because it certainly is. Nobody wants the psychological weight of constantly owing someone money. But just keep in mind, if you spend extra money (if you have it) on paying off your debt earlier, it is for the benefit of feeling debt free (which is great), but not for the benefit of having a lot of money. Never take your focus OFF being financially independent and put it on JUST being debt free. You can be debt free and homeless. Wealth is king!

In my humble opinion, people have become more preoccupied with being debt free than they are with becoming financially independent. Yes, I understand, debt can be a burden. But if you have a ton of money and a house payment, you aren't in bad shape. But if you have a paid off house and NO money (because you spent it all paying off there house and now they can only put up their house for collateral to get it back), then you ARE in bad shape. Don't fall for the "equity is net worth" oke-doke that I speak on in "The Conspiracy of Home Loanership." The following is a great article from The Frugal Dad of the very subject of being debt free and happy. Hence the expression, "pay yourself first." The "Mann" will be there when you get done. And last but not least...

Get Busy

Sam Baker stated in his article , "20 Ways To Get Rid Of Your Debt", that "An idle mind is a devil’s work shop and a retailer's dream." Now aint that the truth! If you are busy, you don't have time to go "shopping" everyday and if you do shop, you certainly aren't in the store ALL day. You don't have time to watch TV all day long and fall prey to constant advertisements (that are easy to fall prey to when you have low self worth).

Get busy doing what? Well... if you know your talents, life purpose etc, then you will always be busy. If you don't, then finding out these things may be what you need to be busy doing. As a matter of fact, if you do this, everything else (wealth, health, eventual prosperity etc) will fall into place.

Hope this article was helpful,

So until next time,

Free Your Mind... Online

Matt Mason

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