Four Habits for Financial Success

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They say it takes all kinds to make a world, but we’ve noticed four habits that most financially successful people share.

1. Put something away every payday. Researchers were surprised to learn that some top-tier earners end up broke in retirement, and some bottom-rung earners retire with considerable resources. The successful savers tended to have the habit of putting something away every payday. One client told us, “It doesn’t matter how much you make, it matters how much you keep.”

2. Take on sensible debt, and no other kind. The problem with using revolving credit to “make life better” is that revolving credit tends to make life worse. If you carry a credit card bill of $1,000 from month to month, this means that you got to spend $1,000 that you did not have. But it also means that you have $240 less to spend every year in the future until the debt is paid off. By reaching for the illusion that you could spend more, you actually will have less money overall.

3. Nurture and grow your human capital. Your skills, knowledge, habits, training, experience and education are the sources of your human capital. This is your earning power. Some of the most important parts are free: a positive attitude, sound work ethic, and a desire to be of service.

4. Improve your odds of getting where you want to go by spending some time thinking about it. As Yogi Berra once said, “If you don’t know where you are going, you’ll end up someplace else.”

Most of our readers do not need these lessons—you live them. We are writing in hopes of provoking discussions with the younger people in your life, ones who may not know what you know about money and life.

As always, if you would like help with the fine points or want to discuss some aspect of your plans or planning, please call.


The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.