Busting the myths

When you think of financial success, do you think of Lamborghinis and mansions? Or do you think of a nice portfolio that will pay you half your salary every year. Sure, if you run into a million dollars you can buy yourself a nice car. How are you going to pay to maintain that car? Once you run out of money you won’t be able to afford the upkeep and insurance for it. This is why lottery winners go broke. You need to build a foundation with the money, then buy nice things when your assets can pay for your liabilities.

What defines financial success?

This is a question that has multiple answers. To some the answer can be as simple as if you can afford to pay all your bills on time and have some extra to save. If you make more than you spend, this can be defined as a form of financial success. What about savings? A person who saves 20k but only makes 20k a year has a years worth of savings, but to the person making 60k it’s only 4 months of savings. This is why the answer always changes. It can even change for yourself as you change career or life paths.

Lifestyle inflation

Sometimes when we get a raise we think that we deserve a nicer car, or maybe a bigger home. This can really affect your goals and what determines financial success. It can even be small lifestyle creep that affects your goals. You might increase your expenses slowly to catch up to your salary, but not increase your savings. This can throw you off in the case of an emergency, and reset you to the cycle of living paycheck to paycheck.

Understanding and accepting

Once you can call yourself financially successful you might not immediately show it but you will feel it. Being able to value your time more. Less stress about paying bills on time. A big cash cushion to keep you safe in case of an emergency. This might not be what the media calls financial success, but to some being in this spot is the dream.

Thank you for reading and I’ll see you next Sunday,
– Pablo