There is no one way to wealth. Financial success isn’t about picking the right stocks or buying into the right financial philosophy. There are many a great financial mind that has written a book or given a seminar on how to get rich. To succeed financially you have to know what works for you. If you take someone else’s road to wealth you may never get there.
These are some questions you need to ask yourself to know who you are financially.
Are you an entrepreneur or do you prefer to work for someone else?
People often tell me I should start my own business. I have no desire to be an entrepreneur. The whole idea of it is stressful to me. I like working for other people. I enjoy finding a company or organization I believe in and working to make them better. I don’t want my own company. I’m happy other people do. I’m just not one of them. They can start their own business and I’ll come work for them.
I’ve had others tell me I should go into real estate or banking. I look at them and say, “Are you kidding me? Me, trying to sell something? I’d be talking people out of buying houses and financial products!” I’m not a sales person or an entrepreneur. I need to recognize that if I’m going to make it anywhere in life.
If you have an entrepreneurial spirit, start your own business and give it everything you’ve got. If you’d rather work for someone else, find a company that matters to you and work your way up the ranks with them.
What is your passion?
Finding your passion in life is a great way to find financial security. There are exceptions to this including the starving artist and the hobby that costs more than it produces. If you can find something you love and you can get paid for, you are well ahead in life. You may never want to retire if you love what you do and do it well.
What level of risk are you really comfortable with?
Leveraged investing makes me break out in hives. It is simply past the level of risk I’d ever be comfortable with. I don’t like debt. Period. Even if it’s ‘good’ debt. I prepay my mortgage. I pay for cars with cash even if they offer 0% financing. I pay off my credit cards every month.
I don’t try to talk other people into living by my level of risk. I’ve read the books. I know that higher risk investments do better over the long term. I can take some level of risk but not a lot.
Knowing what level of risk you are truly comfortable with enables you to sleep better at night know you’ve made sound financial choices that align with your particular level of risk. Don’t invest in something beyond your level of risk just because someone else thinks it’s a good idea.
What are your true goals in life?
Some people have a goal to be rich. Great. In fact the whole goal of this blog is the Million Dollar Journey. The goal is right in the title. My goal isn’t to get rich. My goal is to have balance in life, to live well now and have enough financial security not to have to depend on social services in my future. Knowing that for me, the goal isn’t about the bottom line but about finding balance helps me make choices in life.
Just recently I was offered two jobs within days of each other. Making that decision was one of the most difficult choices I’ve had to make in a long time. One was a full time position with great pay and benefits but with the expectation of a lot of overtime hours. The other was a part time position that paid less, didn’t come with benefits but was with a company I believed in and wanted to be a part of. I chose the part time position. I work from 8:30 – 3:00. I’m home in time to meet the kids after school. It still gives me time to write in the evenings and pursue other hobbies and interests. Knowing my goals helped me make a difficult choice.
What gives you financial peace of mind?
I’ll admit, it’s boring. What gives me financial peace of mind is a fully funded emergency fund, a paid off car, an ever decreasing mortgage and retirement funds that grow month after month. I’m not into get rich quick schemes. I have no hope of coming in to a big inheritance or winning the lottery. I’m the turtle, slowly and incrementally saving for a secure future. Boring perhaps, but I sleep well at night. For others financial peace of mind is something entirely else. That’s ok too. What’s important is that you know what brings you security and you strive towards that in your financial goals.
Many financial writers claim they’ve found the right way to financial success. There are many ways that work and even more ways to define success.
How has knowing yourself helped you succeed financially in life?
Kathryn has been a staff writer for MDJ since January 2009. During the day she works in an office. In her off hours, she volunteers as a financial coach helping ordinary Canadians with the basics of money management. Kathryn, along with her husband and two children live in Ontario.