ABOUT POVERTY

Those not familiar with my personal history may have the perception that I am unsympathetic to those who may have personal struggles with money. Nothing could be further from the truth.

I was a runaway from age 15.  As a runaway, I have eaten out of dumpsters, slept in parks, and have stolen food to survive.  As a young adult I’ve failed at business, been fired from jobs, and been evicted from my apartment.  I know what it is like to have money problems of just about every type.  I’ve had to choose between food and rent.

It is because of these past failures that I became obsessed with educating myself regarding finance.  Because of the experience gained through my past failures and my unquenchable thirst for knowledge, I’ve brought myself out of poverty and created quite a comfortable life for myself.  Here are a few of the things I’ve learned along the way regarding poverty and escaping its clutches:

1.  TAKE RESPONSIBILITY

The biggest difference between those who succeed and those who fail is the DESIRE to take responsibility.  Those who fail always blame somebody else.  They blame the corporations, the government, the IRS, the deadbeat dads, and the weather for their woes.  Those who succeed will always blame themselves for their problems, and then work on finding a solution.  If you are blaming somebody else (ANYBODY ELSE!) for your problems, then you are giving control of your life away.  If you accept blame then you accept control, and when you control for something then you have the power to change it.

2.  LONG TERM VS. SHORT TERM THINKING

Thinking in the short-term creates money problems.  You buy toys, see concerts, and eat out instead of paying bills because it creates a sense of immediate satisfaction. When you switch to thinking long term, you will start saving money, investing, and paying bills first, then spending for pleasure with whatever is left over.  You start seeing how such actions will create a fortune for you in the future and you would RATHER do these things than see that concert or buy that toy.  There is no struggle because you stop seeing it as a struggle between saving $30 and seeing that concert.  You see it as having a fortune vs. seeing a concert.  The choice becomes a no brainer. 

3.  SCARED MONEY NEVER WINS

The more worried you are about money, the less chances you should take with it.  As in dating, desperation leads to terrible decisions.  If you are broke, you need to build a foundation of financial security before you take chances.  Be teaching yourself to walk away from high risk situations now, you will also be training yourself to better evaluate risk in the future.

4.  FIND MORE INCOME

Most self-finance books focus on saving and cutting spending.  Though these things are important, they are secondary to raising income.  Before you even consider saving or cutting expenses, you have to have income.  And you need to do whatever you can to make sure that your income is high enough to cover your expenses.  To do this you need to evaluate your skills and education and then search for a job you qualify for that pays well enough to accomplish you needs.

This is where I often hear things like, “well, I don’t have much of an education or many job skills”, or “the job market sucks right now,” or “whine, bitch, cry, and moan.”  If something along these lines popped into your head when reading this, I’d like to refer you back to point #1.  The fact is, there are well paying jobs that require very little education and very little skill.  Furthermore, if you know the job you want requires a higher education or specific skills, the GO GET THEM!  And if none of that works, then create a product and sell it.  In short, if you do not have an income that is high enough to meet your expenses, then your sole priority should be doing whatever is required to do so.

5.  PUT YOUR MONEY OUT OF REACH

Investment accounts not only allow you to (drum roll here) invest money, but they also have the advantage of taking about two weeks between withdrawing money from them and actually receiving it so you can spend it.  If accessible money tends to burn a hole in your pocket (as it does to my pockets), then make it inaccessible!  I never think about spending my savings or investment money because it takes too much time and too much effort for me to get to it.  In short, I simply don’t allow myself to make stupid decisions with my money.  I’ve found this system is wonderful for circumnavigating the short circuits found in our human psychology. 

There are of course a number of other things I’ve learned about investing and personal finance that I will likely share over the months and years to come.  But these five simple things will by far produce the greatest results.