A staggering 63% of Americans have less than $500 in their savings account for emergencies. In theory, they are just one paycheck away from disaster. Why is this? Why can’t we seem to make ends meet anymore?
If you polled a hundred people in your city and asked them why they’re broke, they’d probably all give you the same reasons:
- the economy is still struggling
- they can’t live on minimum wage these days
- medical bills are keeping them down
- the cost of rent is skyrocketing
Are these legitimate reasons for being broke? Forgive my lack of compassion, but I think all these reasons are bull.
You’re Broke and Your Paycheck Isn’t the Problem
There are two main reasons why people are still struggling to make ends meet today and they have nothing to do with the minimum wage or the state of the economy. Here comes a shocking truth. Are you ready??
People are broke today because:
- They self-medicate with stuff, and
- They lack self-confidence
I know I’m going to get a lot of hate mail for this, but I (along with many of my PF blogger friends) think it’s as simple as this. People spend money they don’t have – not for survival, but for a sense of belonging – ie. to keep up with the Joneses.
Before you get all red-faced and start screaming at your laptop or smartphone, hear me out for a minute.
Self-Medicating With Stuff
We live in a world where everyone’s a winner. Every kid receives a trophy (even if they don’t finish the race!) because we want them to feel just as special as the kid that wins by a mile.
That’s great and all, but what happens when these kids grow up and face the real world? Suddenly, just participating isn’t good enough. Simply showing up won’t get them a better job and it certainly won’t earn them a raise. Real life is painful and can beat you down if you aren’t taught how to win at an early age.
With constant suffering (due to your own inadequacy) comes the self-medicating stuff. Because you feel down in the dumps about your not-so-great life, you decide to perk yourself up with a treat…things like:
- Going out to eat
- Buying the latest iPhone
- Buying designer clothing
- Going on trips
While these “medications” make you feel good for a moment (or at the most…3 days or so), they aren’t long lasting. And, they actually put you in a deeper hole than where you were just days before, which ultimately makes you feel worse.
When you step back and look at this crazy cycle, it’s clearly debilitating, but people just can’t seem to help themselves. And, it’s one of the main reasons broke people stay broke. In short, self-medicating with stuff is clearly not the answer.
Feeding Low Self-Confidence
It seems to me like the more America evolves, the fewer people can comfortably stand on their own two feet. By this, I don’t mean that they have trouble surviving without the help of others (although this is probably true…achhem, credit cards…). What I mean is that they simply aren’t comfortable in their own skin anymore.
America is bombarding her citizens with an explosion of technology – tablets, smartphones, television, radio, Facebook, Twitter, SnapChat, Pinterest, YouTube… We are more connected today than we’ve ever been before. But do you know what that means?? Increased competition.
A hundred years ago you maybe knew 100 people and saw 5 of them on a consistent basis (ie. your farming neighbors). Most of the time, nothing changed. Same plow, same horses, same vegetables…cool. Once in a blue moon (or longer) would your neighbor buy a new horse so he could properly tend to his field. It made you a bit jealous, but you soon got over it and didn’t think about it for another five years.
Today, we are flashed with everyone’s greatness ALL.THE.TIME.
*ding* – A picture of Sally in Paris
*ding* – Carlos sporting his new rims
*ding* – Jim and Alice are touring Australia
*ding* – Becky and Dave have the cutest house ever…and made YET ANOTHER IMPROVEMENT
ding…..ding….ding…. When will it be your turn to blow up someone’s phone with your awesomeness?! It seems like FOREVER since you’ve done anything cool.
It’s time for you to be confident in yourself again. You know what would help that? A brand new car (P.S. This is your thinking, not mine).
You can picture it now….
** It’s 8:15am (why you’re always late, you’re not quite sure) and you pull into the parking lot at your work. The music is thumping and your hair is absolutely perfect. You swing in between those yellow lines like you own the joint.
…and then the slow motion begins…
The door swings open slowly and your left foot strikes the pavement. You rise up from your seat – sunglasses firmly stating your coolness factor – you rise fully, plant the other foot and pause. This ride is yours and you are unstoppable. Nothing can stand in your way. **
…And then you head inside to flip burgers like always. Truly, nothing has changed. You just got sucked into the life of the Joneses and are now worse off for it.
Your quest for confidence lead you to buy more stuff. You tried to build yourself up by making others jealous, but instead you just constructed a mask. Everything beneath that mask is still exactly the same – insecurity, vulnerability, and stagnancy.
How to Become Rich
Millions – heck, maybe even billions – of people are interested in becoming rich these days. When they pose the question to others, they want to hear advice like:
- Invest $1,000 in penny stock XYZ – it’s a sure winner
- Find a super easy job that pays big bucks
- Invest in this certain start-up company – they’re going to be big
In other words, they want to know how to become rich with very little effort. This just doesn’t happen. If you want to become rich, don’t set out to do it by accident (ie. the lottery or a crazy penny stock investment). Set out to think and act like the rich. Only then will the piles of money find you.
I wrote a post just over a year ago titled: “9 Things the Rich Do That The Poor Do Not“. It was a huge hit – mainly because it speaks truth. If you want to become rich:
- serve others
- find opportunities, not obstacles
- network with other wealthy people
- understand your worth and believe in yourself
- learn and grow (and never stop)
Becoming rich takes time and effort, and you might have to change yourself (ie. become better!) before you get there. But, if you’re done making excuses while staying broke, then I suggest taking the first step toward your future riches… Step 1: Understanding that you’re the problem. 🙂
Are you sick of your broke habits? Are you ready to start on the road to riches?
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.