ANYBODY can reach financial freedom. It’s a matter of wanting it badly enough. You don’t need high levels of income, have more than 168 hours in a week to work, or be the smartest person in the room. The difference between a rich person and an average person are choices. It’s YOU who decides whether you have a great future or a mediocre one. The best part? You control it.
You control your own destiny through the choices that you make. It’s not dependent on external factors, or a significant amount of luck (although it does help and I believe that it is necessary in life to have a little bit of luck), but internal factors such as your outlook on life, mindset, and decisions.
What’s Holding You Back?
I want you to ask yourself one question right now. Are you financially independent? If yes, that’s fantastic and you deserve a pat on the back for achieving it! Now it’s time to maintain that position in perpetuity.
If not, are you going towards it? Did your net worth go up last year? Are you saving to the point where it hurts? Are you letting the social effect get in the way of your success? If you are not satisfied with your answers to these questions, then you need to do something different than what you are doing right now.
The Social Effect
Is the social effect holding you back? The social effect is when you go out with your buddies, let’s say to a restaurant, and you let the social pressure direct your purchases because others at the table are buying an expensive appetizer, main course, and the salted caramel chocolate tart for dessert.
As humans, we are a social creature. We subconsciously love the company of others so we may mimic other’s actions. You can defend your purchases by saying “that looked really good on the menu” or “that is what I want” but sometimes, it’s not because of that but because of the fact that we are biologically programmed to live socially.
The key thing is to be cognizant and recognize the real reason behind your choices. The next time you are about to make a purchase, catch yourself and ask the reasons behind spending money. “Is this a necessity?” “Is my life going to be materially better tomorrow as a result of this purchase?” “Am I buying this to increase my utility and if so, will the utility be lasting or short-lived?”
The Problem with This Approach
This approach is effective at making sure your purchases aren’t detrimental. However, no one’s used to asking questions or being cognizant of every moment of their lives. It takes a while to change a habit and to form a new one. Why is this? People have other priorities. There are a million thoughts going through one’s brain throughout the day.
Thoughts such as “did I lock the door?,” “I have to prepare for my meeting tomorrow,” or “what should I pack for lunch tomorrow?” take precedence over something new because of familiarity and priority. It takes a long time and a lot of brainpower for a new habit to form, especially one that requires you to be cognizant and aware of your actions.
Even though it’s hard, the first step is recognition. Recognizing to be cognizant throughout the day and keeping it in the back of your mind will allow you to change any of your habits that you want to change. Changing your mindset to one that is more geared towards your goals will get you to a point of success.
What’s Your Story?
The social effect is one of the many avenues that could be holding you back from your goals. Ask yourself what’s holding you back and once you figure out the answer, do something about it. A lot of common excuses that I hear are that they can’t afford to save, the premium priced product that they are buying enhances their lives, or that they don’t have a lot of income coming in.
If this is the case you do something about it. Skip the office lunches and pack a sandwich for work, work a second job or get a second source of income, learn a new skill to get ahead and get noticed by your boss.
If you’re living in a developed country, you’ve won the lottery! What’re you going to do with your winnings? Use every opportunity given to you to their full potential. Instead of complaining that you’re not getting ahead why not do something about it and adjust?
A friend of mine’s dad came from Malaysia with absolutely nothing. His dad could afford one plane ticket and he used the money to come to the United States. He worked 70+ hours a week in shady gas stations and saved enough money to attend college then still worked a full time job during college to make it work.
Take a step back and think about the hours and the effort that he put in. What do these hours look like? These hours are like an IB Associate who is trying to make VP in the 1-2 years. Or a lawyer who’s trying to make partner. Yes, these hours are gruesome, tiresome, and even stressful at times.
The upside? He avoided poverty. The opportunities in a developed world are there for someone willing to have a great work ethic to avoid poverty. Poverty sucks. My grandparents aren’t very wealthy as they don’t own a computer, have a toilet that doesn’t run on sewage, and are at a point where they worry about making the medical bills that they are racking up and are thinking of going back to work.
I use this story not to criticize my grandparents because they have given and risked everything they had for their children but so we can collectively learn from this.
Poverty should be your life-long enemy. Yes, sometimes the hours and the effort it takes to evade it are very gruesome but there’s upsides and downsides to it. I would much rather trade a social commitment for a stress-free life of abundance and security. I don’t make this trade every single time, and I see my friends multiple times throughout the week. It’s that I put in more hours to work towards financial independence.
With the will to succeed and the preparation it takes to reach your goals, there’s no telling what you can accomplish!
Readers, is there anything that’s holding you back? Are you meeting your financial goals? Why or why not? Leave a comment below!
My goal is to enable your success in personal finance so that you can realize the American dream. The first step is starting today!
Read more about me here.