How to achieve Financial Success?

“Rich people believe ‘I create my life.’ Poor people believe ‘Life happens to me.’” — T. Harv Eker, Secrets of the Millionaire Mind: Mastering the Inner Game of Wealth

When we talk about financial success, one thing comes to mind — money. And while most of us might think that having loads of money means financial success, it’s not necessarily true. Financial success could be different from one person to another. To a young professional who just got out of college, financial success could mean buying all the latest gadgets while to an employee, it could mean finally paying off all of their loans and being debt-free or purchasing the house of their dreams.

However, even though the definition of financial success varies from person to person, there is a common denominator to it — it takes effort to get there because there are certain things in our lives that keep us from achieving it. Debts, bad spending habits, and lack of financial literacy are some of these things. In this article, we will address how to counter these things that prevent us from achieving financial success.

• Assess and acknowledge

Listing down all the things that you own and owe is our first small step. The things that you own are your assets and those that you owe are your liabilities. This exercise would help you gauge your current financial situation because we need to become aware of the money that we are in control of.

One such example of these challenges would be debts. If your goal is financial success, then start being debt-free. Having debt-free in your wealth will provide more opportunities to purchase investments such as equities, bonds, etc.

Another challenge that Filipinos have a hard time grappling with is bad spending habits. If you have them, acknowledge them. Acknowledging that you have poor money management skills is tough but then at some point, you have to realize it’s tougher to go broke. Building commitment and discipline is a step forward to excel in your spending habits.

• Change your mindset about money

According to a Forbes article, there are two mindsets regarding money — the scarcity and the abundance mindset. If you’re living paycheck to paycheck or when you’re either afraid to spend money or spending most of it the minute you have it, you have the scarcity mindset. You don’t want that and if you want to be financially successful, you’re gonna have to shift from that to the abundance mindset. When you have this mindset, you take into account your financial situation before you make a decision that involves money. A person with this mindset thinks big and works hard for the things that they want to have in life.

Financial success is a process and it doesn’t happen without the proper mindset. When you incorporate this mindset in your life, your finances flow towards the energy you give it, so if you’re intent on being financially successful, then it will be your outcome.

• Know your why

Saving for saving’s sake is not the way to financial success, you have to know why. Are you saving up for a new gadget? Your dream house? A retirement plan? Whatever it is, I’m sure it could either be a short-term, mid-term, or long-term goal. Short-term financial goals are to be accomplished in one year or less, mid-term in one to five years, and long-term in five years or more. Goals provide us with a sense of direction, strong motivation, and a clear focus. Your goals should be SMART – Specific, Measurable, Achievable, Realistic, and Timely because they’re a surefire way to your financial success.

People who have already achieved financial success have done it for a reason. Saving and investing makes a lot more sense when you have a solid reason why you do it.

• Set a realistic plan to achieve your why and stick to it

There’s a saying that goes, “By failing to prepare, you’re preparing to fail” and it is no different when it comes to financial success. After you’ve identified why you want to be financially successful, the next thing you’re gonna have to do is to design a game plan for it. This is essential because creating a plan for your money allows you to prioritize your spending and how much you wanna save and invest. And remember, your plan is only helpful if you follow it. Being able to properly manage your finances is not a skill that we’re born with, it’s something that comes as a result of consistent work and strong commitment. My dear reader, do you want financial success? Then work for it.

Being financially successful means so much more than having lots of money in your bank accounts. How much you have doesn’t matter when your money is controlling you instead of you controlling it. And it also doesn’t happen overnight. There’s a lot of work involved but fortunately, you don’t have to be an expert in personal finance to achieve financial success. Perhaps, Registered Financial Consultants can help you with that. Every bit of effort you put into it will be all worth it when you know you’re comfortable and able to provide for your needs and wants and secured for life. Dear reader, in our future articles, we will discuss the character traits that one must have to achieve financial success.

Disclaimer: Just a reminder, dear reader, that the content in this column is my opinion only and should not be construed as investment advice because I am not your financial adviser, neither did I take into consideration your personal objectives, financial situation, needs or circumstances as your fiduciary. This column is mainly for your entertainment and education only.