In building goals for myself, I am not only digging into my capabilities, but I am also looking around how others are doing too! If an average American makes $35,000 per year and works for 40 years [reference Tammy Chambless], they will have made $1.4 million in their lifetime. Sounds like a good amount of money, but in reality- it is not enough for most. As we already know, most people live above their means and this is obviously a problem. How do we fix this issue? I believe reckless spending is ruining our economy over an extended period of time.
It all comes back to goal setting! Most of us want to make as much money as possible without over-sacrificing. We eventually find ourselves sacrificing our goals and allowing ourselves mediocrity. Near the last years of our life, we quickly realize we could have done more. This is not a position I want to find myself in. I want to know I did as much as I can and fulfilled all my dreams. On top of it all, I want to make sure I support my family as best as I possibly can.
As tempting as it is to purchase a new car, even if you have the money- does not mean you necessarily have to purchase a new car. If you already have a car in perfectly good working condition, then try to extend use because cars are almost always a poor investment. Similarly, a boat is another poor investment choice that typically does not help you advance in life. These are just two examples of unnecessary purchases you can save tons of money on. Think about other things you are tempted to purchase, yet can live without.
If you think about buying a car for $30,000. You may also be spending $10,000 on interest and other fees. The value of this car will significantly decrease by the time you pay it off (if you do pay it off). If you have a mortgage, this was $40,000 you could have used in further paying off your mortgage. We cannot just think about the original $30,000 sale price because you have interest and fees you need to pay ($10,000 or so). You also have the loss of saved interest you could have saved on paying your mortgage off faster. All of these things add up overtime and when you live the right way and make the right financial decisions, you really start to see it paying off.
Patience and managing expectations is a huge piece of it all. Too many people do not seem to get this and it often leads them to failure. Everyone wants everything immediately and nobody wants to wait it out. Try waiting it out because it is the right thing to do. Don’t go crazy making huge purchases because it feels good. If you are living the same paycheck-to-paycheck lifestyle you’ve been living for years, it is time to change. Push harder to stay discipline and know things take time. Good things take time and great things take even more time. I can talk for days on this because there are endless examples out there we can pick from. What is your example?