February 20, 2014

Defining financial success based on your rising income is a mistake. Why? How should you track your financial progress?

4 thoughts on “February 20, 2014”

  1. Alex Lee Christianson says:

    Defining financial success as rising income is a mistake because even people with a lot of money can wind up in a lot of liabilities and even bankruptcy.It is not how much you can gain in a given time but it is having the discipline to retain. Spending diminishes wealth on the most part, and having surplus cash around ensures that if any sticky situation comes up you will be financially able to handle it.

  2. Garrett Haag says:

    Just because you are getting paid more doesnt mean that you are not still spending more than you make, you could make a 6 digit income and still be in debt up to your eye balls. You should pay attention to your net worth and how much debt you have, you may not be making much at this time but if you have a pretty good savings and have no debt you are more than likely better off then someone making more money than you who is in a lot of debt, some day that debt will come due and they will be left short when it comes time to pay. Savings and your spending habits reflect what type of person you are more than how much you make and how much nice “stuff” you have.

  3. Daniel Yehieli says:

    There are a couple of points I wanted to add. Rising income means very little in regards to financial success. It is never about how much someone makes, it is about how much someone can save and put away for a rainy day and the future.

    Many people identify their success simply by an income that comes in per year. The true measure should be how much is in savings and placed in investments. There are many doctors, lawyers, celebrities, and successful individual people (in terms of income) that are flat out broke. Why is that? These individuals spend every last cent and live only for today but not the satisfaction of tomorrow. There are also many middle income workers who have higher net worths than people who make 5 times their salary.

    Some high income workers can’t put any money away for the future. Income is usually not a guarantee, nor a promise. Everyone has to prepare for the future ahead, it’s always unknown and unpredictable despite what the media me be trying to predict or say about the future horizon.

    In summary, financial progress and happiness should come from no debt owed, living within your means, savings, investments, and knowing the feeling of enough. That feeling of enough can also lead to a feeling of satisfaction and financial happiness. Everyone internally craves that feeling, whether they admit it or not.

  4. Mike Finley says:

    You gentlemen did a great job of identifying the issue and what you can do about it. Well done! Let’s review.

    It’s not how much money you make that counts, it’s how much you end up keeping and saving and investing that really matters. Income levels and “stuff” are common ways for many people to gauge their financial success. This might explain why so many people have financial problems. Don’t be one of them!

    Hit on the Net Worth tab on this website and start down the path of tracking your financial success. Do this one time each year and work at improving the situation as the year goes on. This means reducing your debt, limiting your purchases depreciating assets (stuff), and buying appreciating assets (stocks, bonds, and real estate) at the lowest possible cost as you grow your money over long periods of time via that amazing thing called compound interest. Start TODAY!

Leave a Reply

Your email address will not be published. Required fields are marked *

The Crazy Man in the Pink Wig