How to fail financially

Question:

My wife and I are in our early 40's. We both work hard and make good money, yet we can’t seem to get ahead financially. In fact, I think we’re worse off now than 10 years ago. Are we alone in our struggle? How do people get ahead today?

Answer:

To answer this question appropriately, I interviewed Martin Hurlburt, CFS, a local financial planner. He explained to me that most people struggle financially because they don’t understand the basic principles that create wealth. Hurlburt says that you need to learn the following five steps to financial failure and learn to do the opposite. The following information comes from him.

How to be a financial failure:

1. Don’t invest in yourself. Don’t get a good education. Don’t improve your skills by reading books, taking self-improvement courses, work with a life coach, or learn all you can about your profession. Do the minimal to get by rather than making an effort to excel.
2. Spend everything you make. If you earn $25,000 then spend $25,000. If you make $250,000 then spend $250,000. Develop an attitude of, “I deserve to enjoy myself now, the future will take care of itself.”
3. Refuse to take responsibility for yourself. Blame your employer, the economy, the high cost of living, the expense of raising children and government taxes. Be creative as you justify your spending habits and lack of savings. Soon you’ll actually begin to believe your excuses.
4. Wait for the best time to begin saving. When you are in school, wait until you graduate. When you graduate, wait until you buy your first home. When you buy your first home, wait until you get the place fixed up. By that time you’ll have kids in little league and dance school. Before you know it, they will be in college. Finally, you’ll be in your 50's with little or no money. That’s when you’ll move on to the last step.
5. Ignore sound financial principles and try and catch up by gambling what little savings you have by investing in high-risk ventures. Be sure to pay thousands of dollars to attend seminars where “experts” will teach you the “inside secrets” for amassing wealth. Ignore the fact that one well known “expert” lost more than $800,000 in 1998 trading stocks but made $110,000,000 selling books and seminars on how to invest.

To be a financial success, invest in yourself, spend less than you make, take responsibility, start saving now and use sound financial principles.

Successful people spend less than they make. They take a portion of everything they earn and put it into their business or other investments. Successful people realize that it will never get any easier to save money. They know that earning interest rather than paying interest is a key component to their success. Successful people apply sound financial principles. They constantly strive to increase their income. They have adequate protection, maintain an emergency reserve, and invest systematically for the future.

Hurlburt also told me about a flight attendant named José he met on a recent trip to California:

"The plane had been delayed for five hours and rude passengers were making it a long day for him. While we were waiting, I gave him a copy of an article outlining these five steps. As he read it, a smile appeared on his face. He no longer looked tired and frustrated.

"He told me that he had broken most, if not all, of the steps. Twelve years earlier he was a 27-year-old divorcee. His ex-wife left him with a mortgage, two car payments and $15,000 in revolving debt. He felt depressed and overwhelmed. But something inside him awoke. He promised himself that he would get out of debt, take control of his life and become a financial success.

"With determination, sacrifice and focus, José began to eliminate his revolving debt. He stopped going out to eat and gave up vacation time to earn extra money. He was laid off from several jobs but took responsibility for himself and found employment elsewhere. He worked hard and did whatever it took to accomplish his goals.

"Today, he no longer has revolving debt. He saves 38 percent of his income for retirement. He takes nice vacations, eats out and is enjoying life much more than he did 12 years ago. If José can make a change and begin to apply all five steps in his life, anyone can. It may not be easy, but it’s definitely worth it.

"Without exception, those who succeed financially in the long run use these principles. I challenge anyone to prove me wrong. But rather than waste your time looking for an exception to the rules, why not put your time and energy into applying them?

"It’s your money. It’s your future. Take charge.”

I highly recommend Hurlburt's advice and think all of us, as a nation, need to take heed. Simple principles of truth can solve our financial problems. 

Martin Hurlburt has written several books on financial health and is available to speak to groups along the Wasatch Front. [email protected] or visit www.TM-Wealth.com - Kim Giles is a life coach and speaker with www.claritypointcoacing.com