I find this question interesting. I spend my days showing people the habits, behaviors and decision making needed to reach Financial Freedom. The path is there for those who want to follow it. Why is it that most people don't? I will spend the rest of this newsletter identifying many of the reasons why and hopefully, convincing a few people to change their ways. Share with those who need this message.
Let's begin first with many Americans who really have little to no chance of achieving wealth. Those who are mentally ill or have cognitive issues are always going to need some type of help from governments, church, or non-profits. The goal here would be to simply keep them safe and provide some degree of peace in their life. We should protect the most vulnerable.
The next group have turned a whole lot of wants into needs. A trip to Starbucks is a want, not a need. Same goes for DoorDash, a trip to Europe, a new car, streaming services, eating out, new clothes, etc. I could go on, but I think you get the point. If we expand our needs, we end up living paycheck to paycheck without saving any money. This very large group could be wealthy, but change is needed.
The next group is not willing to sacrifice in the present to create wealth in the future. Delayed gratification is required for those who want to create wealth. If someone says you can have it all now and in the future, ignore them. If you want a better future, you must sacrifice in the present. This is reality speaking for those who are willing to hear the message. Stop looking for the easy button, it doesn't exist.
The next group is tough. They make small wages. They are in survival mode. My advice to these folks is to work smarter. Working hard is not enough. Find ways to make more money with a new job, or side hustles, can bring in more money to save and invest for their future. They will probably never be wealthy, but they can be in a better place if they are able to save and invest a small portion of what they earn.
I have very little sympathy for our next group. These are the victims. They have been told by others (who are actually wealthy in many cases) they are victims and sadly, they believe it. These people won't achieve wealth because they don't take full responsibility for their lives. They blame others and that will get them nowhere. The good news is this group can change. If they don't, no wealth for you!
What about those who are trying to buy their way to wealth? They are going down the wrong path with every expensive purchase. They think that owning a lot of expensive items will make them wealthy. It doesn't, but they don't know that and so they keep buying bigger and better depreciating assets that are worth less and less. Materialism robs them of their money and their humanity. Learn more here.
The next group are those who think the more money they make, the wealthier they will be. Sadly, they learn the hard way, it doesn't work that way. It's not how much you make, it's how much you keep from what you make. These people tend to think if they only made "fill in the blank" they will be wealthy. If their lifestyle goes up with the income, they end up no better off. Wealth eludes them.
I feel the pain of this next group. They are saving and investing their money just like they were told (by the financial services industry). They do not end up achieving wealth because the industry continually drains their account of fees, making the financial industry wealthy. This is how I got started. I got lucky. I found John Bogle and index funds. So can you. Learn more from John Bogle here.
The next group is on the right track, but they are missing a very important piece. This group are great savers, but they fail to invest the money in risky assets like stocks. It is virtually impossible to create wealth by saving money into a bank account. Inflation will eat up that money, making it worth much less in the future. We must become a great saver AND a great investor in those stock index funds.
This next group ends up worse off in many cases. They chase wealth in the short run, trying to get rich fast. Picking individual stocks, throwing all their money into bitcoin, gold, silver, the lottery, etc is a good way to lose money, not create wealth. Wealth is created over time, usually 15 to 20 years of doing it right. This group's odds are not much better than walking into the casino. Getting rich fast doesn't work.
The next group is an interesting lot. They wait on wealth. What does that mean? They are waiting on their parents to pass to inherit wealth. Nobody told them, if they don't know what to do with money, they won't have it very long. It's also kind of sick and twisted to be waiting on someone to die. These folks need a swift kick in the butt to get them out of the basement and into the world of work and purpose.
The next group needs a lot of therapy. They have a bad relationship with money as they see wealth as a bad thing. They don't understand that wealth creates opportunities, jobs, and freedom for more than just them. They hate successful, wealthy people instead of learning from them. Unless they change their perspective, they are destined to end up struggling with money and full of hate.
The next group involves many people. They are waiting for someone to come in and save them. Apathy has taken over as they look to politicians, governments, the lottery, etc. to change their life for the better and make them wealthy. That doesn't work and sadly, they learn that, way too late in the game. Decades later, their situation is no better and many times worse, struggling to simply survive.
In America, you have the opportunity to achieve wealth, however you want to define it. Opportunity does not equal guarantee. It is difficult and full of ups and downs along the way. Risk is required. So is hope, goal setting, developing systems that are easily repeatable and something called resilience. We must learn from the wealthy and be patient with the process. They leave clues. Read this.
