It’s been said that financial success is 20% head knowledge and 80% behavior.
So many are striving to learn what the keys are to achieving financial freedom. But they are often disappointed when they learn that the answers are obvious and they already know them. Listen to any financial guru and realize how many times you say, “Duh” because you already knew that, and how rarely you say “Wow” about a new revelation.
80% of financial success comes from behavior. We all pretty much have the knowledge.
How many more times do you really need to hear that you should spend less than you make?
Will it really shock you to hear that you should invest 10%-15% of your income consistently to create and build wealth?
You actually might be shocked to read that the average payment for a new car in 2023 is $780 a month? And the average length of a car payment is creeping up to six years?
It might also surprise you that $780 a month invested with a 7% growth rate would turn into just under two million dollars in 40 years time?
Some of this you might know, and some of it might be new to you. Either way, it doesn’t take too much information to get the gist of how to build a life of financial success?
Yet according to Fortune Magazine, 57% of Americans can’t afford an unexpected $1,000 expense. 68% believe they wouldn’t be able to cover a month’s worth of expenses if they lost their primary source of income.
If you read these studies and articles, you would come away thinking that there’s not much people can do about this. The rising inflation rates and the higher cost of goods leave consumers with no choice but to put these charges on a credit card to keep afloat.
Still, the average American spends more than $3,000 a year eating at restaurants.
They also spend a little more than $1,000 a year on coffee alone.
We have the knowledge. We just haven’t changed our behaviors. We get used to what we want, and then a want eventually turns into a need. That need becomes a consistent part of our monthly spending and before we know it, we have no idea where all of the money went. We see everyone around us with a new car and a big payment, so we think it’s normal to do it ourselves. The average new car payment is $780 a month, yet most can’t cover an unexpected $1,000 expense.
I have to give credit to the car companies for an incredible marketing and sales job right there. I’d imagine that some people snicker when they see the cars that Elizabeth and I drive. They are old and they are paid for. They will not impress anyone. But they do the job we need them to do, shuttling three boys to go fishing, hiking and the other dirty adventures we go on. Even though we could buy any cars we want with cash, financial success is about behavior.
We are dialed into the fact that it’s so much wiser to either invest that money in growth, our business, our family lifestyle or, gasp, not spend it at all!
But that’s become an un-American concept.
The quest for financial freedom comes from changing our behaviors.
I remember driving with my friend and we saw someone we knew jogging. This person was extremely out of shape, had a terrible diet and consumed unhealthy food on a daily basis. Yet he was determined to get out there to run every day to lose weight.
“You can’t outrun a bad diet,” my friend said quietly.
It’s the same thing with money. We are taught to focus on how much we earn. But financial success doesn’t come from how much we earn. There are endless reports of how many families earning solid six-figure incomes are living paycheck to paycheck. Financial independence comes from the behaviors we exhibit with the money we earn. There are people reading this who earn $80,000 a year and are blazing a path towards financial freedom and others making the same amount of money who sink deeper into debt each month.
Knowledge gives us the path. Our behaviors give us wealth and freedom.
Have an AMAZING week!
Vincent
