A frequent assumption made by people is that the more intelligent someone is, the more success they will have in life. Whether you agree with that or not, it’s a commonly held belief. Financial success is no different. When someone is seen as obtaining any level of financial success greater than our own, they are looked at as smarter, more perceptive, shrewder, etc.
However, as a financial planner for almost a decade, I’ve had the privilege of talking to people all over the country about money. I’ve found that the correlation between wealth and IQ is often disconnected. Knowing this, I created “5 Things I Wish More People Knew About Money,” in hopes of bridging the gap between intelligence and financial success.
These 5 statements are not technical in nature. I’m not about to take you on a deep dive into bond convexity and its relationship with price and interest rates. Yawn. Instead, these statements are meant to serve as foundational pillars for any person looking to improve their financial future. So, without further ado, here are my top 5 things I wish more people knew about money.
Your habits will always overpower your budget.
Budgets make you feel in control. They are a staple in most American households attempt at financial organization. However, I’ve been on the record for a long time saying they don’t work. Budgets create a false sense of progress, but don’t positively affect your long-term financial success. Our habits and subconscious decisions will always be the driver of decisions and outcomes. Don’t rely on a budget to produce financial security. Instead, change your habits around money. That is how you win long-term.
Everything finance related moves in cycles.
If you’ve ever taken an Econ 101 class, you’ve probably been taught that our economy moves in a cycle. Expansion, Peak, Contraction (recession), Recovery. However, it’s not just our economy that moves in a cycle. Everything else does too. Interest rates, investment markets, behaviors, preferences, etc. all move in cycles. Some just take a lot longer to complete than others. When it comes to your money, if you miss an opportunity, be patient. Chances are, it’ll present itself again for those who are ready for it.
The grass IS greener on the other side.
Financial success comes to those who are prepared to receive it. Sometimes that success comes in a form that is totally unexpected. One of my favorite quotes sums it up perfectly, “luck is when preparation meets opportunity.” The people who create goals, have a plan, take action, and make adjustments along the way will find themselves far better off than their counterparts. Regardless of what stage of life you’re in, this applies.
You are your biggest obstacle.
There is so much unnecessary complexity in our financial world today. The jargon, fear mongering, and unsolicited “expert” advice doesn’t make things any easier. Fortunately, there is a simple equation anyone can follow that leads to prosperity. Psychology + Math = Success. Most of the time, people chase riches in an attempt to obtain some level of security. They’re not wrong for doing so, but the underlying driver of that focus will never be satisfied until it becomes in alignment with our deeply held core values. Doing so leads to achieving the toughest financial obstacle we will ever face, which is personal contentment. When our mind, heart, and pocketbook are aligned, it only takes some simple math to get us across the financial success finish line.
Wealth is boring.
The most financially successful people I have ever met have 1 thing in common. Their wealth is extremely boring. There is never one single flashy investment or go for broke gamble that produced it. Very rarely are there ever any entertaining stories or accounts of instant opulence. Focused discipline and some foresight, spread over a long period of time, is the magic elixir. Don’t let social media skew your perception. Becoming wealthy is painstakingly boring.
Wherever it is you find yourself in life, know that greater financial peace and prosperity are within reach. You don’t have to be the smartest person in the room to be the most financially successful!