“It doesn’t matter how many times you fail, you only have to be right once.”
What Are Your Chances Of Reaching Financial Success?
100%! (If you want it!)
Growing up, I heard snippets like “do the best you can,” “apply yourself,” “be productive,” and “accomplish things daily.” Sounds so easy. If I follow this advice, I will be successful. But, successful at what? Ah, that was the hard part! You need to define your own strategic goals in your field, finances, and life. Make sure they are reasonable and achievable.
Table of Contents
You Don’t Need Mark Cuban’s Wealth To Be Successful
Being rich is not necessarily a sign of success. Understand what you want in life. Set and align your strategic goals with a plan to achieve specific results. For example, if you plan to reduce or eliminate credit card debt or student loans, getting to a lower balance is quite an accomplishment, and then set your sights on a zero balance.
Setting Yourself Up For Financial Success
To grow your potential for financial success, understand the basics of a financial plan based on your goals. This plan is a roadmap that can help keep you disciplined when managing money. You can do a financial plan on your own or choose a financial advisor to help map your goals. Personal Capital is an alternative way to manage finances through their free comprehensive financial management tools, including an excellent free budget app.
You can manage changes to your plans but consider having reasonable rules you can live by.
1. Live within your means by spending less than you earn so you can use these savings for investing in the market.
2. Pay your credit card balances in full so you don’t accumulate high-cost debt that will outpace your ability to handle it.
3. Set aside money for an emergency fund that can support your basic living needs for six months. Unexpected costs for a lost job, a pet’s surgery, or car damage happen to people all the time.
4. Establish your retirement savings account at work, and earn their match contribution if they offer that as part of plan. Open a Roth IRA account, and plan to automate savings from your paycheck. You can start with small contributions at first, increasing amounts as your compensation grows.
5. Grow your investment and retirement accounts like a garden, paving your path to wealth and financial security.
6. Consider your loved ones as you buy the insurance you need to protect the assets you are building.
Have A Good Mindset Starting Out
My college students feel great when they are able to get better grades in the hopes they will be able to complete their degree and get a good job. Today, I often guide my college students in picking the “best” majors, careers, and how to succeed at work. L look forward to my students becoming college grads.
Rather than share my successes, I enlighten them by sharing my failures. Failure is a likely outcome of taking risks but worth a try. People at the top of their fields have often failed many times before achieving financial success. We need to learn from our mistakes. Having an abundance mindset enables you to live in a world filled with optimism.
How To Grow Your Potential For Success:
Take Risks Early In Life And In Your Career
When you are young, take risks that will add to your portfolio. Step out of your comfort zone. What is easiest is not necessarily a good choice. Seek challenges to expose yourself to different environments. In the early stages of your career, build character, skills, and experience. That matters more than how many “A’s” you had on your transcript.
Employers will ask you about the greatest risks you have taken. How did it work out? Working hard is simply the minimum. They want to know how you dealt with challenges and failure. Failure is acceptable if you learned from it. Those experiences provide valuable benefits. There are no linear courses to success but learn how to deal with obstacles.
Don’t Feel Locked Into One Major And Career If Not Suitable
Many successful people have changed career paths. I was a liberal art major. It was a safe choice for someone who was 16 years old at the time. I didn’t explore any other areas of study until I went for an MBA several years later. Even then, I chose an accounting major, but I added finance and investments to my studies. My business career went through some modifications. Then I became an equity analyst at an investment bank, which I enjoyed for many years.
Pursuing one field shouldn’t stop you from exploring peripheral or different areas. Michael Jordan was among the greatest scorers in NBA history, winning a record ten scoring titles and averaging 30.1 points per game. Then, at age 30, he retired and pivoted to professional baseball. He signed with Chicago White Sox’s minor league system for a short time.
Could Jordan have succeeded as a professional baseball player? Many experts believe he was promising and had the potential to remain, but he returned to the NBA a year later. We will never know. At least he challenged himself by making a career move.
Love What You Do
It is easier to work hard and find success if you enjoy what you do for your career. Steve Jobs said, “The only way to do great work is to love what you do. If you haven’t found it yet, keep looking. Don’t settle. As with all matters of the heart, you’ll know when you find it.” Finding purpose and meaning in your job increases motivation, engagement, and self-worth.
According to a Gallup Poll in March 2016, only 34% of the US workforce were engaged at work. Be committed to your work or consider changing jobs you may be happier doing. It is hard to be successful if you are spending so many hours of your week not engrossed in your work.
“Building A Cathedral”
There is an old parable about three bricklayers. It dates back to the great fire of 1666 that leveled London. Asked what they were doing, the first bricklayer said, “I’m putting one brick on top of the other,” the second bricklayer replied, “I’m building a wall,” and the third bricklayer smiled and added, “I’m building a cathedral, a House of God.” That bricklayer had found his calling.
Find meaning in your job and career. Valuing how you spend your time provides satisfaction. Successful people often tell others that they felt most happy when making contributions to society, whether in medicine, technological developments, entertainment, raising capital, teaching, crafting glass, wood or leather.
My mom told me a story about when she worked in a shoe factory. Having just arrived in America, she sat next to a woman who had sat at virtually the same sewing machine for 40 years. This woman was engaged as she put the sole, toe straps, lining, and other materials on the shoes with outright pride. Her job gave her meaning, just like Anthony Mancinelli, the world’s oldest barber at 108 years. I have spoken of Mancinelli in the past as someone who enjoyed cutting hair for decades. Spend your time working on what will make you happy.
The Evolving Workplace As An Opportunity For New Employees
Changing workplaces is happening far more rapidly than ever before. Those days of staying at the job for 40 years seem prehistoric now. The work environment is different as well. Thanks to digital technology, robots may eliminate some jobs, while other areas are emerging in digital marketing, artificial intelligence, software architects, and robotic engineering. These emerging areas may create more jobs and be a good opportunity for tech-savvy Gen Zers entering the workforce now.
Employability is a moving target. You need to stay fresh and up-to-date in your field. Keep abreast of upcoming developments in your company and industry. Make yourself invaluable by accepting challenges in your department or a neighboring one. Seize every opportunity that adds skills, knowledge, and recognition of your abilities.
Embrace Learning New Skills
Adopting new skillsets will make you more valuable. Business leaders point to growing needs in their companies that remain unfilled because they can’t find the right candidates for specific skillsets. They refer to soft skills–interpersonal communication, initiative, problem-solving, critical thinking, collaboration with others in an organization.
Developing soft skills in school and at work makes you an attractive candidate. With the rapidly changing landscape, employers recognize that prospective hires may lack the experience needed. Therefore, they are seeking potential over performance. Adapting some of these skills is a massive opportunity for young people in college, those newly entering the workforce, or people willing to adopt new skills.
Business leaders are seeking young people with soft skills to serve in their companies. It has become clear that companies are more open to looking for personal and academic characteristics with less experience than they had been in the past. The workplace needs to change to fit the macroenvironment that is digital, connected, and global.
In Deloitte’s 2016 Global Human Capital Trends report, 92% of those surveyed said reinventing the organization is a top priority. Digital technologies are disrupting business models. Companies need to be embrace innovation, greater diversity, a learning culture, and upgrade skills. Those positioned to fill these growing needs will be successful. Flaunt your strengths such as being multilingual, understanding diverse cultures, working well collaboratively, or understanding data analytics.
Age Is Not A Limiting Factor To Finding Success
Young and old, success can be rewarding. At age thirteen, Alina Morse is CEO and founder of Zollipops, a candy company with sales in the millions. The idea of lollipops started as an idea when Alina was seven years old. Alina’s early success is a far more unusual example than the press would have us to believe. Yes, in specific careers like sports, people peak at young ages due to physical limitations.
On the other hand, many have become highly successful later in life and perhaps not even in their planned careers. Stan Lee created Marvel Comics at age 39 years. Vera Wang entered the fashion industry at age 40 after failing to make the Olympic figure skating team she had targeted.
Age should not be a limit to success. How about John B. Goodenough? At age 97, he won the Nobel Prize in Chemistry and is its oldest recipient. He still works, developing new polymers in his lab. Upon winning, he said, “Don’t retire too early,”
Enjoy The Sweet Smell of Success
Sometimes we work so hard and stress about the next stage of our career. We may feel guilty, having just earned a big bonus or promotion that your co-worker hoped to get. Concerns that we won’t get that chance again worry us. How may we further preserve a good reputation that we forget to come up for air? We don’t even stop to realize that we are in that sweet spot of success. If you are at the pinnacle of achievements, learn to enjoy that moment and sustain it. Money and success can make us happy.
I have heard authors say they wished that their first hit novel came later in life. Young actors who get early recognition in the form of an award find it hard getting another. You can find one-hit wonders in many fields, not just in music. This refers to those who achieve mainstream popularity for one piece of work and gain momentary success.
Sometimes your brief success comes so early that you didn’t have time to be mature. Avoid the arrogance that may come with your achievements. Sustain your success by recognizing those who helped you and that you were fortunate. Keep up with learning in your field, evolving technology, and changes in demand. Keep a long-term view and be patient.
Behavioral Science: Perseverance, Resilience, And Grit
Generally, success doesn’t just appear out of the blue. You need to work at improving your skills and nurture your abilities over long periods of time. Behavioral scientists pointed to certain factors such as perseverance, resilience, and grit that lead to successful accomplishments.
Carol S. Dweck, Professor of Psychology at Stanford University, has researched the mindset psychological trait. She points out that people who believe they can develop skills through hard work are far more likely to be successful than those who don’t. They have a “growth mindset” and benefit from being “can do’s” and are often reliably great employees.
Practice Makes Perfect
Work hard and persevere despite setbacks. Endurance is reflected by those who strive to increase their abilities, who optimize performance through intense practice over the years, whether practicing an instrument or experimenting in a lab. In a 1993 study, K Anders Ericsson, a behavioral scientist, found that certain factors, such as prolonged efforts of practice propel people to reach high levels of performance.
Success usually doesn’t happen without the occurrence of failures. Achieving success usually happens to those that are more resilient. They can bounce back from disappointments or failures. The trick is knowing how to dust yourself off and move on.
Grit= Passion + Perseverance
Angela Lee Duckworth, a behavioral scientist expert, published Grit: Power of Passion and Perseverance. The definition of grit is the tendency to sustain interest and effort towards long-term goals. Grit is associated with self-control and deferring short-term gratification.
Delaying gratification was the basis of The Marshmallow Test, conducted by psychologist Walter Mischel at Stanford University in the 1960s. He studied children offering them a choice between one small reward given immediately or two rewards if they waited a short period. The reward was either a marshmallow or a pretzel stick and up to the child’s pick. Those willing to delay gratification correlated to success.
In follow-up studies decades later, Mischel found correlations between delayed gratification and competence and higher SAT scores.
Having Money Is Not Necessarily A Sign Of Success
Ayn Rand famously said, “Money is only a tool. It will take you wherever you wish, but it will not replace you as the driver.” There are countless ways of having money– earning, investing, inheriting, and winning–and losing it. Examples of poor money management, bad investments, and squandering fortunes are plentiful. They are often what derails our achievements.
Signs of success are everywhere. Most importantly, it is how you measure it and over what time frame. What did you accomplish today, this year, or in life? What did you set out to do?
There are many ways to succeed and feel satisfaction. You can feel success by publishing a book, finishing a project, paying down debt, cleaning out your garage, raising good children, or even winning the Nobel Prize at age 97 years.
Your potential for success is a matter of pursuit. While luck often plays a role in achieving success, you have some control in realizing your potential. Leverage your advantages, take risks and learn new skills. Don’t play safe just to avoid making mistakes. Find and enjoy your sweet spot of success in your field, finances, and life.
To sustain success, use sound money management as your financial engine. Sometimes we derail our achievements by overspending, delaying retirement savings, and not recognizing the importance of investing for the long term.
Put a sound financial plan in place to properly handle raises and bonuses when you realize success at work. See our post on avoiding lifestyle inflation. Spend within your means, save for retirement, and make investments, and use debt sparingly. These are all ways to stay on the path to a comfortable life. It is a good idea to measure financial success to see where you stand.
Related post: Reaching Your Goals With Better Money Habits
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With a passion for investing and personal finance, I began The Cents of Money to help and teach others. My experience as an equity analyst, professor, and mom provide me with unique insights about money and wealth creation and a desire to share with you.