While there is no single quality that guarantees a person will be financially successful, there are some common traits the financially free have in common.
I believe that anyone, especially those partnering with a dedicated, trusted financial advisor, can achieve financial freedom, no matter how small or large their salaries.
There are tons of stories of people who make millions a year but still manage to retire broke. On the other side are people making under $50,000 a year who create extraordinary lives for themselves even when they no longer receive a paycheck.
So, what is it that separates a financially free person from one who is in a constant state of struggle and turmoil when it comes to money? Why is it that some families making less than average have ZERO debt, while others with high-paying jobs don’t have enough to make it through the month?
I’ve isolated a few of the characteristics that I believe separate the financially successful from those who are always anxious and stressed about money.
They are practical people. People with little to no debt tend to be very practical.
Instead of buying a luxury car to impress their neighbors, they tend to purchase vehicles for their reliability, gas mileage, and low maintenance costs. Cars aren’t status symbols for these pragmatists; they are just a means of getting from one place to another. Instead of buying the most expensive luxury home on the block, they find a house that best fits their financial situation and needs.
They understand the true meaning of debt. The financially savvy know that debt is a mortgage on their futures. They see debt as shackles that keep them from prospering and the source of anxiety and worry. That’s why they do everything possible to avoid getting saddled with unnecessary payments.
They’re goal-oriented. People in good financial shape set achievable money goals and track those goals diligently.
They are patient people. Financially successful people tend to be patient. They are willing to save for both wants and needs. They can pass up bargains and sales to achieve their monthly budget goals.
They are detail-oriented and aware. Debt-free people pay very close attention to their finances. They know how much comes in every month from all income streams. They also keep track of how much they spend and write down where every penny goes. This awareness means they are less likely to binge on unnecessary items or pay too much for things they need.
They realize debt is a threat to their futures. Debt can be a form of indentured servitude where you sacrifice future earnings at the altar of instant gratification. Financially savvy people realize that, in most cases, getting into debt is a form of self-sabotage.
They’re self-reliant. Many, if not most, folks who work hard to maintain a life of financial freedom are self-sufficient and independent. Taking great care to live within their means allows them to avoid consumer debt and put money into emergency funds and retirement accounts.
They are generous. The lack of debt and confidence of financially prosperous individuals allows them the freedom to be generous toward others. Such generosity will enable them to lead more fulfilling and meaningful lives.
They aren’t materialistic. Financially free people tend not to care much about things, focusing instead on building better relationships with friends, family, and colleagues. They value personal relationships and experiences above the acquisition of material goods.
These are just some traits of financially secure people that I have observed during my years as an advisor. Some folks seem to be pre-programmed with these qualities. But all of us have a chance to develop some of the traits that make for a better financial life.
Using a combination of education, discipline, and training, along with guidance from a seasoned financial professional, anyone can become more financially secure and debt-free, no matter how much money they make.