I apologize but it is time for me to rant just a little. Bear with me.
I love books. In fact I probably already have enough unread books I have purchased to keep me reading for the next 10-15 years. I admit that my book addiction might be just a little bit of a sickness.
At any rate, I get several daily e-mails listing free or nearly free Kindle book selections. The other day one of the books that appeared in one of those e-mails was one purporting to reveal the “secrets” of the new rich.
I have nothing against the author and it might be a fine book filled with great ideas. I didn’t buy it. Trying to be a little more selective in my purchases since I have that 15 year backlog.
My issue is the word secrets. I did a quick search of personal finance and found more than 1100 books promising to reveal the secrets to various financial topics.
What concerns me is I have known people who truly believe that success really is a secret. The rich know something that the poor don’t know. These people spend a lifetime looking for that secret. They are always searching. Late night cable TV infomercials, scouring the internet, the tips from uncle Joey, you name it. They are always searching for the answer. If only they could find that secret that only the rich know, then they’d be on the road to easy street.
And so they bounce from one scam to the next. Always surprised when things don’t work out, but convinced that the next scheme will work for sure.
It makes me sad when I see this in action. Partly, because it is often driven by frustration and hopelessness. Always searching and never finding. Sadly, with most of these scams the only person who is actually making money is the one selling the secret.
In the Message version of the Bible, Proverbs 28:20 says:
Committed and persistent work pays off; get-rich-quick schemes are ripoffs.
The secret to wealth is not really a secret, and it is not what many people want to hear. In fact for the most part it is common sense.
Most often those who are doing well also work really hard.
There are some folks who arrive to work late, leave early, and do as little as possible while they are there, then they wonder why they get passed by for promotions.
Generally speaking the one who is successful is the one who works hard. The one who is willing to tackle the undesirable tasks that most try to avoid. The one who is trustworthy and honest.
Are there exceptions? Sure. Some bosses are just jerks. But as a general rule, success comes to those who are willing to work hard.
Spend less than you make
It would seem like common sense, but evidently it isn’t so common. If you want to build wealth, you simply have to spend less than you make.
I think one of the biggest reasons people fail to do this is because they have no plan. The truth is they really have little idea what they spend or even sometimes what they make. Money comes and money goes and when it runs out there is always plastic to get you by. This is the path to poverty.
It might seem counter-intuitive that the path to wealth includes generosity. Consider Proverbs 11:24-25
One person gives freely, yet gains even more; another withholds unduly, but comes to poverty. A generous person will prosper; whoever refreshes others will be refreshed.
If you hold your money with a tightly clenched fist then you may not lose any wealth, but it is also very difficult for more to get in. But when you hold what you have with an open hand, sure some may escape, but you open the door for more to come in.
Think of it this way. If you were God, who would you be more likely to bless? The one who is greedy and will hoard those blessings for themselves, or the one who has shown themselves to be compassionate and faithful and who will use those blessings to help those in need? I don’t know about you but I know who I would bless.
One of the keys to avoiding debt is having savings. Life happens to all of us. Things break and usually at the worst possible time. If you have no emergency savings, then when things break it means debt. This is how I lived for many years. I’d work hard, make some progress paying off my debts, then just when I thought I was getting somewhere something would break and I would be back to where I started. That’s a lousy way to live.
When you have an emergency fund and something breaks, you just fix it. No stress. No drama. And most importantly, no debt.
Investing is different from saving. Savings are for shorter term goals or emergencies and should be kept in something that is easily accessible like a simple savings account.
Investing is for long-term goals. Because investing is for many years, I don’t really care what the market is today or even next week or next month. I care what it will be 20 or 30 or 40 years from now. Because of that I’m not that concerned about whatever the crisis of the day may be. 40 years from now that crisis will be irrelevant and forgotten.
The key to investing is time and consistency. The earlier you start the better. If you put a little bit of your paycheck aside from a young age and continue to do that consistently over the course of a lifetime, it really isn’t that hard to retire some day with a 7 figure nest egg.
This might be the most important key to success and it is really hard in our current society. Everywhere you turn there are commercials and ads. All of these are designed to make you feel like if only you had their product then you would be happy or life would be better.
Chasing happiness through stuff is a hopeless goal. It isn’t there. The problem is happiness isn’t found in stuff, because there is always something bigger, better, shinier, or newer. You may feel happy when you take that item home, but that happiness won’t last especially when the bills arrive.
In many ways I think contentment is the secret sauce that makes all of the above possible.
Do this for a lifetime
Now here is the disappointing and boring part. The real “secret” to building wealth and having financial success is simply doing the above steps and doing them and doing them. You do these over and over again for the course of a lifetime.
The problem is we live in a microwave society. I want it and I want it now. But wealth building is a crock pot not a microwave. It is done slowly by making wise decisions day after day.
I’ve known so many people who are constantly looking for the big breakthrough. The “secret” isn’t really a secret. There is no magic. The magic comes from hard work and wise choices.
The good news though is that anybody can do it! If there really was some secret to financial success then by definition that means most us would have no hope of gaining wealth. That is part of why this is such a pet peeve of mine. The idea that there is some secret path to wealth that only the privileged few know, leads to hopelessness and a victim mindset. That is a sad place to live.
But the real path to wealth is a path that is open to all. It requires patience and diligence, but it is a path filled with hope.
OK, I’m done ranting. Back to our regularly scheduled programming next week.