By Kent Irwin,
ChFC, CLU, CAP, co-founder and CEO of eFinplan.com,
Columbus, Ohio, U.S.A.

www.efinplan.com

Most people think financial success and happiness are connected, in a way they are right however happiness is not connected to the amount of money you make. How you think about and manage money contributes to your happiness. There are three aspects to wealth: Managing Your Finances, Managing Your Career and Managing Your Attitude

Managing Your Finances

1: Spend Less than You Earn and Save Money
This is the most obvious financial principal of all time; however, it is ignored with each swipe of the credit card. Have a budget, know where your money goes, and don't spend money on fun things until you have paid for your necessities. Someone once defined materialism as "Buying Things You Don't Need, With Money You Don't Have, to Impress People You Don't Like". Buying things never made anyone happy, and recent research has proven beyond a doubt that high income and net worth do not lead to happiness.(Roszkowski, Phd, Michael J., and John Grable, Phd, Cfp, Rfc. "How are Income and Net Worth Related to Happiness?" The Journal of Financial Services Professionals 60.1 (2007).
Accumulate money in savings accounts, retirement plans, investment portfolios, and your home equity. It is important to be prepared for difficult circumstances, such as unexpected medical expenses or a job loss. In addition, you may want to save to help your children attend college, for your own retirement, or to start a business.

2: Limit Borrowing
As a child in the 60's and 70's, we played Milton Bradley's "The Game of Life". I noticed then that players who purchased the smallest homes and who had the least amount of debt usually won the game. The reason is simple. You are better off earning interest than paying it. Try not to borrow to purchase depreciating assets such as cars and furniture. Practice patience, and learn the joy of delayed gratification.

3: Plan
Acquire a financial plan, either using software or paying a fee financial planner to write one for you. Having a plan gives you the road map to help you figure out your present location and to plan where you are going. People don't plan to fail - they fail to plan.

4: Use Advisors
Life is complex, and the only way to sort through the confusing maze is to utilize experts. Find and use trusted professional advisors: legal, tax, insurance, investment, and financial. You are the president of your personal corporation, and your advisors are on your board of directors.

Managing Your Career

5: Stay in School
Research proves that those with a higher education achieve higher incomes than those who are less educated. If you are in high school, excel and finish. Go to college, get a bachelor's and any advanced degrees you may need for your career. Whatever your chosen profession is, white or blue collar, become an expert by constantly expanding your knowledge. Every profession has classes you can take, or books and magazines you can read. Perhaps your employer will even pay for them. To stop learning is to stagnate. Our society is evolving and changing faster than you can blink an eye. You must constantly be learning in order to stay current, and perhaps to be on the cutting edge of innovation. Life of continual learning is much more interesting and fun.

Learn about financial matters. This will help you make better decisions and identify when you are being misled. Professional advisors are often better able to help those clients who have taken the time to educate themselves.

6: Work Hard and Be Engaged
If your employer has hired you to do a job, you owe them the hours for which they have hired you. Tragically, research has concluded that most people don't spend a majority of the 40-hour work week actually working. Don't look for ways to get out of work, look for projects you can take on. Create your own projects - make more work for yourself. In your spare time, turn off your TV, expand your knowledge, or possibly start a small business.

Too many people just move through life without caring about the world around them. Get involved in the things you are already a part of. You have a lot to offer.

7: Additional Sources of Income
You have heard the adage about not putting all of your eggs into one basket. Why then do we put all of our financial hopes into the basket of our employer? Your employer can and will change. Even though you were the hardest worker, with the best ideas and attitudes, you may find yourself unexpectedly filing for unemployment benefits.

Consider having additional sources of income through a small business out of your home. (Be wary, though, of home-based business and real estate schemes.) Think about the things you enjoy doing, and possibly start a small business or get a part-time job. For example, if you love to golf, consider caddying, or if you love to shop, think about a part-time job at your favorite store. You may also want to consider a second job to pay off debt.

Managing Your Attitude

8: Be Positive
Choose to see the good in everyone, everything and yourself. You may have to look hard for it. Anyone can find the things that disappoint and frustrate them. Choose to like yourself, others around you, and the wonderful blessings that fill the world. Having a positive attitude creates a state of mind for success and overall health.

"The longer I live, the more I realize the impact of attitude on life. Attitude, to me, is more important than facts. It is more important than the past, than education, than money, than circumstances, than failures, than successes, than what other people think or say or do. It is more important than appearance, giftedness, or skill. It will make or break a company ... a church ... a home. The remarkable thing is we have a choice every day regarding the attitude we will embrace for that day. We cannot change the inevitable. The only thing we can do is play on the one string we have, and that is our attitude ... I am convinced that life is 10% what happens to me, and 90% how I react to it. And so it is with you ... we are in charge of our Attitudes." – Charles Swindoll

9: Give it Away
The happiest wealthy people are those that give money away. If you don't have money to give away, give away your time. Be a friend to someone who needs you, or volunteer for your favorite charity. There are many hurting people that don't have the advantages you have had, and they need you. You will discover the biblical mystery that ‘it is better to give than to receive' (Acts 20:35).

10: Focus on Family and Higher Things
Live for good purposes outside and above yourself. Reach for the highest ideals in life. Contribute to the world around you. Leave a positive lasting affect on the world - this is a true legacy. Your family (spouse, children, parents, siblings) and close friends need you, and you need them. Make them your priority.

Summary
Being successful with the money you have is not easy or quick and there are no short cuts. Continue to educate yourself about financial matters and obtain a financial plan, Implement that plan using your team of trusted professional advisors, and monitor your plan regularly to keep track of your progress towards achievement.

Published - June 2008