Posts Tagged Financial Success
The Law of Time Perspective
Posted by davev in Start Thinking, Take Action on February 3, 2011
The most successful people in any society are those who take the longest time period into consideration when making their day-to-day decisions. This insight comes from the pioneering work on upward financial mobility in America conducted by Dr. Edward Banfield of Harvard University in the late 1950′s and early 1960′s. After studying many of the factors that were thought to contribute to individual financial success over the course of a person’s lifetime, he concluded that there was one primary factor that took precedence over all the others. He called it “time perspective.”
Plant Trees
What Banfield found was that the higher a person rises in any society, the longer the time perspective or time horizon of that person. People at the highest social and economic levels make decisions and sacrifices that may not pay off for many years, sometimes not even in their own lifetimes. They “plant trees under which they will never sit.”
Doctors
An obvious example of someone with a long time perspective is the man or women who spends ten or twelve years studying and interning to become a doctor. This person takes extraordinarily long time to lay down the foundation for a lifetime career. And partially because we know how long it takes to become a doctor, we hold doctors in the highest esteem of any professional group. We appreciate and admire the sacrifices that they have made in order to be able to practice a profession that is so important to so many of us. We recognize their long time perspectives.
Long Time Perspectives
People with long term perspectives are willing to pay the price of success for a long, long time before they achieve it. They think about the consequences of their choices and decisions in terms of what they might mean in five, ten, fifteen, and even twenty years from now.
Short Time Perspectives
People at the lowest levels of society have the shortest time perspectives. They focus primarily on immediate gratification and often engage in behaviors that are virtually guaranteed to lead to negative consequences in the long term. At the very bottom of the social ladder, you find hopeless alcoholics and drug addicts. These people think in terms of the next drink or the next fix. Their time perspective is often less than one hour.
Delayed Gratification is the Key to Financial Success
Your ability to practice self-mastery, self-control, and self-denial, to sacrifice in the short term so you can enjoy greater rewards in the long term, is the starting point of developing a long time perspective. This attitude is essential to financial achievement of any kind.
Action Exercise
Practice a long term perspective in every area of your life, especially in your financial life but also with your family and your health. Think of where you would ideally like to be in five years and begin today to take steps in that direction.
Think Like a Millionaire
Posted by davev in Start Thinking, Take Action on August 18, 2010
Attitude is Everything
The most important attitude for financial success is long-term thinking. Successful people think a long way into the future and they adjust their daily behaviors to assure they achieve their long-term goals. In a longitudinal study done at Harvard University in the 50s and 60s, they studied the reasons for upward socio-economic mobility. They were looking for factors that would predict whether or not an individual or family was going to move upward and be wealthier in the future than in the present.
They studied factors like education, intelligence, being born into the right family, or having the right connections. In every case, they found individuals who had been born with every blessing in life who did poorly. They also found individuals who had been born or come to this country with no advantages at all who had been extremely successful. What was the distinguishing factor?
They finally determined that there was only one key attitude that mattered. They called it “Time Perspective.” Time perspective refers to the amount of time that you take into consideration when planning your day to day activities and when making important decisions in your life.
Time Perspective
People with long-time perspective invariably move up economically in the course of their lifetimes. When you spend weeks, months and years developing your skills and ability and expanding your experience in order to be successful, you have long-time perspective. The average professional person has a time perspective of 10, 15 and 20 years.
Begin to see that everything that you are doing today is part of a long-time continuum, at the end of which you are going to be financially independent or financially unfortunate. People with short-time perspective think only about fun and pleasure in the short term. They have what economists call “The inability to delay gratification.” They have an irresistible tendency to spend every single penny they earn and everything that they can borrow.
When you develop long-time perspective, you develop the discipline to delay gratification and to save your money rather than spending it. The combination of long-time perspective and delayed gratification puts you onto the high road to financial independence.
Action Exercises
Now, here are two things you can do to develop the attitudes of financially successful people:
First, think long-term about your financial life. Decide exactly how much you want to be worth five years, ten years and twenty years from today. Write it down. Make a plan. Take action on your plan every single day.
Second, develop the ability to delay gratification. Instead of buying something on impulse, put off buying decisions for a day, a week or even a month. Decide in advance to “think it over” before you buy anything. This can change the way you spend money almost immediately.
The Causes of Money!
Posted by davev in Start Thinking, Take Action on July 30, 2010
Never Worry About Money Again
You must aim to reach the point where you have enough money so that you never have to worry about money again. The good news is that financial independence is easier to achieve today than it has ever been before. We live in the richest country at the richest time in all of human history. We are surrounded by more wealth and affluence than ever before. Your job is to get your fair share.
Financial Success Is Not An Accident
The Law of Cause and Effect applies to money as much as to any other subject. This law says that financial success is an effect. As such, it proceeds from certain, specific causes. When you identify these causes and implement them in your own life and activities, you will get the same effects that hundreds of thousands, and even millions of others have gotten. You can achieve whatever level of affluence you really want if you will just do what others have done before you to achieve the same results. And if you don’t, you won’t. It is as simple as that.
Your Beliefs Determine Your Success
There is perhaps no other area where universal laws are more in evidence than in the acquiring and keeping of money. In America today, there are several million men and women who have started with nothing, or deeply in debt, and achieved financial independence. Their attitudes and behaviors have been studied in great depth. We now know the keys to wealth creation better than ever before. And what we know is that your most cherished beliefs on the subject of money will be the primary determinants of how much you acquire and how much you keep over the course of your working lifetime.
Your Primary Aim in Life
Your primary aim in life should be the achievement of your own happiness. However, happiness is something that exists naturally in the absence of fears, doubts and negative emotions. One of the factors that most deprives you of happiness is worry about money. And, by the way, when we talk about money worries, we’re not referring to your having too much. The problem is virtually always that people feel that they have too little money and their lives are suffering as a result.
Build a Financial Fortress
Perhaps the greatest single fear, the one that causes you more distress and unhappiness than anything else, is the fear of failure. In the area of money, you experience this as the fear of poverty and the fear of loss. Since one of the deepest needs of human nature is security, any threat to your security, real or imaginary, can cause you tremendous stress.
You can only free yourself from the fears of poverty and failure by achieving a specific level of financial worth and then by building a fortress around it so that you are safe and impregnable. This achievement of financial independence is a key responsibility of adult life. No one else will do it for you.
Action Exercises
Here are two things you can do immediately to implement the Law of Cause and Effect in your financial life:
First, begin today to implement the causes of financial success in our society. This requires that you spend less, save more, invest carefully and strive toward financial independence.
Second, study other people who are financially successful who have started from little or nothing. Find out what they did to become financially independent and discipline yourself to do the same things.
Think Like a Millionaire
Posted by davev in Start Thinking on July 15, 2009
Attitude is Everything
The most important attitude for financial success is long-term thinking. Successful people think a long way into the future and they adjust their daily behaviors to assure they achieve their long-term goals. In a longitudinal study done at Harvard University in the 50s and 60s, they studied the reasons for upward socio-economic mobility. They were looking for factors that would predict whether or not an individual or family was going to move upward and be wealthier in the future than in the present.
They studied factors like education, intelligence, being born into the right family, or having the right connections. In every case, they found individuals who had been born with every blessing in life who did poorly. They also found individuals who had been born or come to this country with no advantages at all who had been extremely successful. What was the distinguishing factor?
They finally determined that there was only one key attitude that mattered. They called it “Time Perspective.” Time perspective refers to the amount of time that you take into consideration when planning your day to day activities and when making important decisions in your life.
Time Perspective
People with long-time perspective invariably move up economically in the course of their lifetimes. When you spend weeks, months and years developing your skills and ability and expanding your experience in order to be successful, you have long-time perspective. The average professional person has a time perspective of 10, 15 and 20 years.
Begin to see that everything that you are doing today is part of a long-time continuum, at the end of which you are going to be financially independent or financially unfortunate. People with short-time perspective think only about fun and pleasure in the short term. They have what economists call “The inability to delay gratification.” They have an irresistible tendency to spend every single penny they earn and everything that they can borrow.
When you develop long-time perspective, you develop the discipline to delay gratification and to save your money rather than spending it. The combination of long-time perspective and delayed gratification puts you onto the high road to financial independence.
Action Exercises
Now, here are two things you can do to develop the attitudes of financially successful people:
First, think long-term about your financial life. Decide exactly how much you want to be worth five years, ten years and twenty years from today. Write it down. Make a plan. Take action on your plan every single day.
Second, develop the ability to delay gratification. Instead of buying something on impulse, put off buying decisions for a day, a week or even a month. Decide in advance to “think it over” before you buy anything. This can change the way you spend money almost immediately.
