"Here's the deal, Pete. I'm a successful guy. I make over $200k per year, I drive a BMW, and live in a $500k house. But we can't get ahead financially. It's a constant struggle. We are actually racking up debt. What are we doing wrong?"
I get some form of this question at least twice per week. It comes in different forms, but I usually hear "why don't my high income and superior intelligence result in financial stability?" It's actually a pretty simple answer: high income and superior intelligence have nothing to do with financial stability. They can, however, provide you things that you can mistake for financial success. And this is where the party begins. And by 'party', I mean 'misery'.
I'm about to ruin a Dan Brown book for you. But if you've read one, then you've read them all. In The DaVinci Code the characters are looking for the Holy Grail (the cup used at The Last Supper). Loooooooong story short, the Holiest of Holies...wait...I think that's different. Okay, the long-sought after cup isn't actually a cup. The "big secret is different" than what the characters were expecting. (This isn't where I reveal that I am actually a descendent of Jesus Christ. Although I did grow a beard this week). My point? You can run all over the world trying to find what you are looking for, but setting your sights on the wrong prize will lead to failure every time. The same can be said for your financial life.
Take a moment and ask yourself "what does financial success look like?" Does it mean that you have the perfect job? Does it mean that you make $300k per year? Let's define success for you, and then make sure that it makes sense. Let's make sure that your definition won't actually lead you to a financial catastrophe. I think through my own journey of "success" discovery, and I shake my head in awe. I almost screwed up badly.
Over the last 12 years, I have defined my own idea of personal success in several different ways. I'm going to share these with you. I'm embarrassed by some of them, but I'm pleased with my current definition of success.
The earliest and saddest success goal that I had was to "make more money than my dad did." I shuttered having just typed those words for the first time. I've done several a-hole things over my lifetime, but trivializing my father's life's work by setting my income against his, is as bad as it gets. I truly feel shame for this. My dad reads my blog. Pops, I'm sorry. Dick move by me. Thank God my brain has continued to develop.
Next was a $1000 watch. I wanted to buy a TAG Heuer watch. Every successful person that I knew had either a Rolex or a TAG Heuer. I'm not much of a Rolex guy, so the TAG was the watch for me. I set a sales goal in the first year of my career, hit the goal, took $1100 cash into a jewelry store, and bought the watch. I was so proud. I was a success. What a dick. I'm so embarrassed by this time in my life that I can't even bring myself to wear this watch anymore.
My next definition of success was to "be able to afford whatever I wanted". Okay, that's not terrible, but it's not great. This definition had me "chasing dollars" to accomplish my goal. I have found that to be a fruitless journey. Being "able to afford whatever I want" doesn't really work because my idea of "afford" is pretty subjective. Most people get into financial trouble because they buy things that they subjectively think that they can afford, when in fact they objectively cannot.
My current definition of success has me feeling very peaceful. To me, success is not striving to have more, but constantly needing less to feel satisfied with my life. I don't want to strive to have more. I want to strive to be comfortable with less. Since I have taken on this definition, my income and wealth have grown substantially. For example, several people have complimented me on my wedding band. It cost me $12. I tell them this. Mrs. Planner gave it to me for our 10 year anniversary because it's the one I wanted. People don't believe me that it costs $12. It's a very cool looking ring. They are in even more disbelief when they see that I have no shame over wearing a $12 wedding band. This wedding band has taken on dual meanings for me. First and foremost, it's my sign of commitment to my marriage. But second, it's my daily reminder that money WILL NOT define me.
What are you striving for? Will it lead to financial ruin? My current definition of success may not work for you, but that's okay. Create your own definition.