What defines financial success? Of course, many people believe that all their financial problems would disappear if they made more money. But high incomes can’t guarantee financial freedom; there are countless examples of people who earn millions and yet still end up bankrupt. The common thread among folks who get into financial trouble — no matter how much they earn — is their inability to spend less than they earn.
The bottom line: So what does define financial success? Financially savvy people know that it’s not measured by the size of their paycheck. Rather, it’s measured by the money left in their pocket each month after paying all their obligations.
Photo Credit: Manuel Iglesias
Maybe people will flip the script… “My money problems would magically disappear if I had less debt!”. Revolution?
Is that a drum and fife corps I hear in the background?
Good thought PKamp3, I never thought of approaching the problem like that.
Success is not only monetary. Look at all the celebrities out there who have tons of money and are not content. I’d rather be broke, debt free and have the Lord than have all the money in the world without contentment. “Godliness with contentment is great gain.” — 1 Timothy 6:6
Great sentiment, Jon.
I am on that same train. Thanks
Thanks for the reminder.
Len, Well Put!!! I am fascinated by high earners who can’t live on their salaries!!!! It’s perplexing!
Me too. It really boggles the mind how these folks have it in their power to be set for life based on a single year’s income if they’d only live within their means and make wise use of their disposable income — and then blow their chance only because they can’t seem to control themselves. Sad, isn’t it? (But interesting to read about, I agree.)
Yep. I too have lots of disposal income and, you’re right — the key to financial freedom is how wisely it’s used.
Let ’em boost our economy. I sure as hell can’t do it on my own! 😉
I have numerous more failures than successes, period. Come to think of it, I have no success at all if I keep worrying about money.
Perhaps Charles Dickens had it right in David Copperfield:
“Annual income twenty pounds, annual expenditure nineteen pounds, nineteen shillings and six pence, result happiness.
Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery.”
Precisely.
We were always pretty much a two income household, and manage to live pretty much on one income, save/invest the rest. That served us well.
Even today in retirement, wife has a school teacher’s pension (and in Tennessee, not California !) + social security, and I have only a small social security check.
We still manage to save 35% of that combined yearly income.
As long as the system holds together, Andy, I will continue to collect on my private-company pension as well — the fund is well-funded, so fingers crossed it remains solvent. That will serve me until the financial system finally goes belly-up — then it’s on to my savings with no-counterparty risk!
Welcome back, Andy! Been missing thee.
I guess financial success can be judged by a variant of J.P.Morgan’s famous comment. when asked by a friend how much it cost to keep up a yacht: “If you have to ask such a question, you can’t afford it.”
Variant: “If I have to ask if I’m a financial success, I’m not.”
We had a long time very successful customer at a flying company I worked at….years ago. He was a big logging contractor, had his own plane, but used our charter company for regular crew moves for insurance purposes. One day we were talking about finances and he said, “I don’t care what anyone owns, it is what they have paid for”. A short time later I was in getting a new mortgage. We got to the point where the officer was asking about all my stuff….assets….and the only thing I had was my house. (I was 35). I didn’t have a boat, a new vehicle, a camper, any of the stuff everyone else did on my street. When she saw I looked uncomfortable she quickly told me that all those high paid folks with the toys owed out the ying yang and that were were in much better shape. There is a lot of conspicuous consumption out there and who knows why people think they need to buy whatever so and so buys? never figured that one out.
That makes two of us, Paul!