- You know its true
- And the secret is in the word ‘extra’
- What we do know about creating prosperity
- A good goal for this year is …
- Once upon a time (and other fairy tales)
- How to create wealth (the way they don't tell you)
- Creating wealth requires of you personally
- Creating wealth requires outside help
- Where to start? (or how to restart your thinking about getting ahead financially)
- 1. Find your worthy purpose or cause
- 2. Write your Money Goals down
- 3. Recognise the common obstacles you’ll face
- 4. Questions you'll face on your wealth creation journey
- 5. Recognise old habits never take you to new places
- The bottom line
You know its true
In the same way a gym membership doesn’t automatically lead to an unusually low level of body fat (and a complimentary 6 pack of abdominals), neither does working a 9-5 job automatically lead to financial prosperity and future wealth - both require extra work that may not be naturally what you're used to.
Making just another 'New Year Resolution to become wealthy' is probably a bad idea.
Why don't you just commit to creating some good habits about better understanding your money matters, instead?
And the secret is in the word ‘extra’
This is the time of year when newspapers regularly contact my office asking for comment or articles on ‘Your Best New Year Resolutions Ever’.
Reporters and Bloggers alike chase me for my ‘7 Quick tips to financial happiness’ and Podcasters ask me to provide ‘an engaging summary of how to make 2020 your best money year ever’ - all in under 8 minutes - because that's best for their SEO statistics.
What nobody wants to hear, let alone talk about is this: Creating, managing and protecting wealth, is actually a lot of extra hard work.
Apparently that’s not an easy message to sell to the newspaper advertisers so you’re reading this on my blog because it never made the Weekend Money section of the tabloids.
What we do know about creating prosperity
- Both personal and financial fulfillment appears to be at the edge of a person's current capacity and always requires more learning.
- Purpose driven plans have a better chance of sustainability and success.
- If your financial goals are not written down somewhere, they’re more likely to remain just a ‘wish’ rather than become a reality.
- Secure people live bigger lives - so a backup plan makes more than just good sense.
A good goal for this year is …
We humans seem to work better when we have a goal to work towards and a purpose to get out of bed.
Regardless of what your personal goals are this year, make sure you have one for your money also - write it down, and be honest about what you need to do to get there.
Once upon a time (and other fairy tales)
The Disney storybook idea about how people acquire wealth is that it's a glamorous journey recognisable by driving the latest cars, regularly drinking Moët Champagne and photos of people with abnormally low body fat ratios - usually on a boat, with designer handbags and children.
How to create wealth (the way they don't tell you)
But the reality is, it's a journey of sacrifice and inconvenience, backed by a purposeful cause more important than our personal comfort level.
If you're honest, a 9-to-5 job is not a personal sacrifice; it's just a requirement to live and probably not enough alone to get far ahead financially.
Creating wealth requires of you personally
We know from experience that creating wealth requires;
- lots of overtime and probably your free time
- uncommon frugality of living
- using the power of delayed gratification
- learning more about creating and prioritising goals
- learning more than they teach you in school about managing money
- learning more about managing your emotions and energy levels as investment returns can rise and fall like your bank balance
Creating wealth requires outside help
Creating wealth can be accelerated by learning how to use financial tools and how to take financial advice (we all just don't have time to learn everything ourselves by trial and error).
You can fast track your learning by using the expertise of a financial adviser (who thinks about this stuff all-day every-day) to help fill the gaps in your knowledge and help keep you on track.
Where to start? (or how to restart your thinking about getting ahead financially)
1. Find your worthy purpose or cause
Get some clarity around your purpose for your life (and why you work so hard).
A meaningful purpose, (better defined as a goal or aim), is essential if you want to create wealth.
- Usually, the best ones transcend selfish aims and see wealth as a means to an end or a tool to get a purpose done.
- Put another way, knowing why (or finding your why) you get out of bed in the morning is important if you want to create wealth because it requires sustained effort.
- Admittedly, it might not be overly fun waking up to go to work each day, but it gives you a routine upon which to hang the goals of your life and a basis for creating wealth.
If the truth be known, I'm personally not just that excited about financial freedom alone.
But I am excited about what freedom brings to my abilities and my life, the freedom to provide for who I love and care for, the freedom to spoil grandchildren, family friends, share amazing travel experiences and leave a legacy that creates an impact bigger than my life.
Now wouldn’t that be a compelling reason to get out of bed each day?
A purpose beyond hoarding wealth is needed to sustain the effort required to obtain it
We all hear stories of frugal people living on baked beans and dying with large amounts of money stashed under the proverbial mattress.
But money hoarded for no reason other than fear of loss, is actually never put to work where it can grow exponentially and nor are the skills needed to do that ever learned by the hoarder.
2. Write your Money Goals down
Develop the routine of writing down your financial goals and purposes and put them on the fridge (or wherever the family focus is) as a constant reminder.
Write your purpose and goals down in detail and add a timeline to it. (Use our free downloadable resource you can print out to help kick start that process).
3. Recognise the common obstacles you’ll face
It's no surprise, most advertising is about enticing you to spend all your money as soon as possible.
Some financial products would like you to completely rely upon them for all your money management rather than building your own money skills.
- One of the biggest mistakes our parents' generation may have taught us was that ‘it's rude to talk about money’. This has resulted in a generation of many adults with a child's view of money without the ability to have meaningful conversations about money.
- The rise of the 'buy now pay later credit services' like payday loans and AfterPay - with interest-free payments where the only fees are for late payments - can destroy your ability to learn the skill of planning, saving and delayed gratification.
- Uber Eats Delivered, while masquerading as a mild-mannered home delivery service for surplus cash and take away food, can train our children to habitually spend all surplus cash on discretionary purchases rather than learning the skill of saving and investing for later.
If we want our families to do better, we need to do better.
4. Questions you'll face on your wealth creation journey
If you're committed to creating wealth, sooner or later you’ll have to be ready for those who find your choices unpalatable.
Here are the most common money questions I’m asked by friends, family and others.
- Why are you working so hard?
- Why are you going without today when you could easily afford to buy it now?
- Why don’t you buy a new car every few years - you can afford it?
- When are you going to update your home, your car (your wardrobe)?
- (or the less flattering) ‘Why are you such a tight ass?
5. Recognise old habits never take you to new places
Here are four of my own money habits I use to help keep me moving forward to creating and better managing my wealth.
- I deliberately read financial and investing articles at least once a week, even if they sometimes boar me and when I could be reading other things.
- I carefully write down family financial goals and together we stretch to save towards them, (when we could be using surplus cash for Uber Eats, or Friday night home-delivered pizza because I'm too tired to cook or learn how to do so.)
- I allocate an annual percentage of my wage to pay for insurance so I don't have to personally carry the massive financial loss if my house burns down, my car crashes into a Mercedes-Benz showroom, or if I get sick or injured and can't work and continue to earn my income.
- I manage my spending habits (mostly) so I can still save every month, regardless of how I feel, even in the face of what amazing sales are at IKEA and Bunnings Hardware. (And yes I still find this hard to do).
The bottom line
We seem to be wired to seek a life of purpose and forward direction.
Admittedly, life becomes harder when we’re living for others, but it also becomes happier. Isn't it paradoxical that a cause outside of ourselves can create a sense of personal fulfillment?
And while we're always learning, it's time to acknowledge the truth:
- Creating wealth and prosperity requires substantial inconvenience and being driven by causes greater than personal comfort (and more than just holding money for hoarding money sake).
We all have to find a way to make peace with ourselves (and our inner consumer) to sometimes go without today, so we'll have more financial resources later.
That's probably a useful New Year Resolution.