Do you want to succeed financially? How about physically, mentally, and spiritually? The very thought of succeeding in each one of these categories can be daunting, and can often stress people right out of trying before they even get started! The truth though, is that becoming a success in each one of these categories does not have to be difficult. In fact, becoming financially, physically, mentally, and spiritually fit can actually be quite simple!
Our Tendency to Over-complicate Life
If you want to succeed at shedding 20 pounds of extra weight, what is often the advice of the experts? Many of them will point to a specific 90-day exercise program that will require 1.5 hours of your life every day, not to mention a strict rationing of foods defined on a one-page list. With this method, you must completely change your life in order to accommodate this new workout schedule and eating pattern. With such a radical, complex change, the chances of success are actually quite minimal.
The same often happens with our financial investments. In order to succeed financially, we often think that we need to find the next hot stock or some special formula that will allow us to beat the market. Believe it or not, all of this effort typically leads to under-performance in the market and leaves us with minimal gains after years of investing!
Avoid the Short-term Financial Traps
You may or may not realize it, but there are many short-term traps that might seem financially beneficial, but are actually hindering our ability to become wealthy. As an example, here is a short list of items that are killing our ability to succeed financially:
- House Hopping – There are many of us that believe a bigger, more expensive house is our ticket to a huge net worth. This is simply not true, and I’ve already proven that on this site. The best way to wealth is to stay in the home you own today, pay off the mortgage, and then use that cash flow for heavy investing for your future.
- Bank Jumping – I have many friends that switch banks every six months just so they can earn an extra $100 from that new bank. In my opinion, this is just a distraction from the big financial picture that we should be focusing on, and totally not worth the $100.
- Credit Card Rewards – Yes, credit card rewards are nice, but should they really be the central focus of our spending from month to month? More often than not, we are probably overspending by hundreds of dollars just so we can earn ourselves a $20 reward.
- Individual Stock Investing – Some believe that the only way to earn a decent investment income is by picking and choosing those amazing companies that seem to grow their share price month after month. The truth is, many have lost their shirts with this mentality.
The Beauty of Keeping It Simple
I have recently heard stories of highly successful CEOs that just seemed to just drip with success everywhere they went. What everyone else considered to be extremely complex and difficult, these individuals often made it look unbelievably simple. And, more importantly, they often had unexplainable success with this simplicity.
When one of these CEOs was asked how he turned the company around after a seemingly dire situation, he was happy to share his methodology, and it went something like this:
- Get a customer
- Make them happy
- Get a referral
How simple is that? By keeping his objectives simple and concise, this CEO was able to succeed greatly. In order to succeed in any area of life, simplicity is often the best answer.
Simplify Your Investments
Personal finance does not need to be complicated either. This should be your big picture focus:
- Get out of debt
- Invest in Index funds within your company 401(k) or Roth IRA
- Invest a portion of your money into your business or real estate
- Reinvest your earnings
That’s it. Stop focusing on making an extra hundred bucks with your credit card or with a new bank. In the grand scheme of things, the effort just isn’t worth it. Instead, if you want to succeed in personal finance, just keep your efforts simple! If you want to succeed financially, just get yourself out of debt and stay out of debt. Then, use that extra cash flow to invest and when you start earning more returns, invest that money too. Honestly, the whole process is super simple and has generated countless millionaires. Use this simplicity as your guide, and you will be very likely to succeed as well!
What do you think of this simple approach? Is it working for you?
My name is Derek, and I have my Bachelors Degree in Finance from Grand Valley State University. After graduation, I was not able to find a job that fully utilized my degree, but I still had a passion for Finance! So, I decided to focus my passion in the stock market. I studied Cash Flows, Balance Sheets, and Income Statements, put some money into the market and saw a good return on my investment. As satisfying as this was, I still felt that something was missing. I have a passion for Finance, but I also have a passion for people. If you have a willingness to learn, I will continue to teach.