PROBLEM #35: How Can We Translate Our Financial Knowledge to Real Results?
The amount of financial knowledge available to us is staggering. Check out this story about the size of the internet.
All the information needed to succeed with our finances is only a click or two away. And yet so many of us are in trouble - financially speaking. We are up to our eyeballs in debt. We have no savings or retirement investments. Is it because we don't know how to manage money? Are that many people without internet access - or access to any other financial advice? Maybe?
What has caused this seeming disconnect between knowing and actually doing? This is a PROBLEM.
More than just the segment of the population without access to financial advice, there are many more who just don't care. I've seen and heard about too many people who read an article/book about personal finance and say, "That's just not for me."
Here's a popular finance book that you should read - Dave Ramsey's TMM
"I'm not going to apply those principles, because I don't like them." - is another popular excuse. They may not say it this way, but that's what it comes down to. So how do we address this problem? How can we bridge the gap between financial knowledge and the application of that financial knowledge?
Why is this Problem so Prevalent?
The 'why' is fairly obvious. Our culture is steeped in materialism and greed. This is across all levels - from individuals rich and poor to small businesses to mega-industries. Money drives everything - and the pursuit of it. Adding to the greed is the entitlement attitude that causes those entitled to insist that they deserve nice things - without all the hard work.
For instance: The stock-market is driven by greed. Investors want results this quarter, and not returns from investments that may take up to 5 years to pay off. Those stocks "stagnate", and are generally looked at as poor investments and slow performers. It's all about 'what have you done for me lately'.
Individuals want multiple cars, fancy houses, and luxury vacations. We complain about corporate greed, while at the same time stepping on the backs of others for our own "advancement" or next job promotion.
Entitled people look around them at all the "stuff" that others have. It doesn't matter how that "stuff" was acquired. They want it too, and even worse - they think they deserve it.
And when it comes to down it - when the 'rubber meets the road' so to speak, entitled people don't want to wait or to delay gratification. Laziness rules supreme. If I can have everything that someone else has - and I don't have to work for it, why not? My finances will take care of themselves.
When these attitudes are combined (greed mingled with entitlement) any "get-rick-quick" scheme will appeal to them. It speaks to their desire to have it now - without waiting.
From credit card rewards to incentives for switching cable companies, if they think they can "earn" extra now - they seem to not care about the future ramifications. Who cares if my cable contract - that I'm locked into - will increase $75/month next year. I got my $150 bonus now.
Commercials and marketing eschew future debt or negative consequences for fulfillment right now. It's not that we don't know the results of our actions. It's that we think we are somehow exempt from those consequences. "That won't happen to me." Consumers exhibit the behavior of a spoiled, greedy brat. Just look at some of these Black Friday horror stories!
Bottom-line. We want our desires fulfilled now. And we are naturally lazy. And our finances reflect these attitudes.
The Solution - Motivation
Financial knowledge is good, but recognize that any thing that is worth doing will take time and effort. Maintaining your finances is work. It does take effort - more than just a day or two. Successful businesses don't happen in a week. It takes time and hard work. But oftentimes, this hard work is not noticed. We never see the hours of sweat and toil 'behind the scenes'. We see the successes and results - and desire the same.
But to achieve the same level of success in our finances as those we admire, we must be willing to put in the hard work. And hard work is just that . . . hard . . . work. It's not always fun and glamorous.
There are those that have great work ethics. They will always be trying something new, and sometimes failing - eventually succeeding. These are the people we admire. Their tenacity and persistence got them to the top. But you'll never get there without hard work.
He has the financial knowledge to succeed, but he lacks the motivation. To motivate him, you don't "give" him anything. He must be forced to actually work for his money and his livelihood. The will to live will usually trump other desires, and he will be forced to work in order to eat. Does that sound harsh to you?
Consequences are a great motivator. We recognize this on a large-scale, but somehow this doesn't apply on individual level. Remember the outrage over the big banks' government bailout? They made poor choices, and yet were not allowed to fully suffer the consequences. Cue the outrage.
Why do we think we as individuals are any different? Our poor money decisions have negative consequences. If we don't experience those consequences, we'll never learn. It is harsh. But it's also difficult to watch someone you love destroy their future with poor money decisions. Again, consequences are a great motivator.
Are you in this situation? If you are, and as you are cleaning up your financial mess, you will be reminded time and again how you never want to put yourself in this situation ever again. You learned your lesson by experiencing the consequences of your actions.
Greed and laziness abound. These attitudes lead to materialism, debt, and financial ruin.
If people were allowed to suffer the consequences of their money choices - they would be forced to learn. They would start applying their knowledge to clean up their messes. You see - we know what to do - we just lack sufficient motivation.
Like the old zen proverb says:
If you're ready to start cleaning up your financial messes, today is a great time to start. I'll be glad to help in any way I can.
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