Americans are notoriously bad with debt. One of the side effects of living in a country built around consumerism I suppose. The only thing Americans may love more than buying things and debt are celebrities.
Celebrities are such a part of our culture that their opinion on matters are treated as actual news. Dave Chappelle once hilariously described an encounter with this phenomenon he witnessed.
“I remember right around September 11th Ja Rule was on MTV. They said “We got Ja Rule on the phone. Let’s see what Ja’s thoughts are on this tragic….
WHO GIVES A F$%^ WHAT JA RULE THINKS AT A TIME LIKE THIS. This is ridiculous”
Given the intersection of these three American culture staples is it any wonder that our celebrities may be even worse than we are with debt?
Johnny Depp, Nicholas Cage, Mike Tyson, and basically every sports star have all amassed fortunes that were still outpaced by their debt. We admire these people and let their poor choices influence our behavior.
Debt and the interest associated with it are incredibly detrimental to our financial pictures. Today let’s look at where you’re bleeding and figure out how to patch the wound.
WHERE AM I BLEEDING?
I’m a bit of a planner. I like to map out my day, weeks, and months around large events in my life. It helps me prepare mentally for the type of energy I am going to need for that day. One of the worst things is when I have not planned for something and get blindsided by a commitment.
For any of my real-world friends who are reading this I hope this explains why I didn’t come to your event or showed up with all the peppiness of Eeyore.
I tend to be a pretty social person but that comes with a decent amount of mental preparation and careful planning. Without these steps no one will believe the crazy story you told them about me when they meet your friend who is standing in the corner all evening. They’re not meeting the real me after all.
I can’t be alone in this. Just picture getting home after a long day. Changing into your comfiest lounging clothes and discovering a new Netflix series to binge. Feels good right?
That is until you get the FaceBook notification about that event you forgot was tonight. Now you have to rush through getting ready and try to show up no more than fashionably late. Do you think the person who makes it there will be the best version of you?
As much as we hate that feeling we get when something we forgot pops up we seem to love to treat out money that way. People hate making or following a budget so much that they treat their money like some unexpected event pop up. They have a general idea of what they have planned but there is always something they missed. It’s shocking how few people know their own spending.
Where’s My Money Going?
Offense sells tickets but Defense wins championships.– Bear Bryant
Defense is the most underrated factor for success in any arena. Every team, business organization, and financially successful person has to have defense to succeed. Your offense is what helps push you forward but the defense keeps you from falling back!
If you’re climbing the treacherous mountain towards your success vision it is important to be able to focus on making progress. Your defense allows you to maintain that singular focus. Without it for every inch you climb forward there is a shift in the gravel that causes you to slip down a few inches or even a whole foot. Once you slip on that climb two things happen:
- The ground you were holding on to is now weaker. This makes slipping again more likely. Every time you slip it becomes more likely that you will slip again and fall further each time.
- You begin to doubt your ability to pull through. Once you begin slipping you overly focus on slipping again. This derails your ability to make progress and leaves you exposed to making another mistake and slipping again.
If you’re not careful these two factors will build upon one another and your feet will be back on the ground in no time.
When you see climbers they give a great deal of thought to their defense. The goal isn’t solely to not fall off the mountain. It’s to maintain the progress they have already earned! This is where your financial defense comes in.
How’s My Defense?
Has any one heard of Jeff Bezos? What about Warren Buffet? Bill Gates? Oprah? I could continue but this isn’t Forbes and I can only fight the money envy for so long. These people are considered by Forbes as the richest of the rich.
Of the four people I listed guess how many inherited a significant portion of their money?
These four incredibly wealthy people made their money in one lifetime and could spend the rest of that lifetime trying to spend it to limited success. But how do they judge their wealth? Is there some comedic sized money counter hidden in a secret layer that works non-stop (presumably powered by nuclear fission)? Furthermore, how is some magazine finding this out? It’s hard to imagine Warren Buffet bragging about his wealth while munching on an Egg McMuffin.
How did you get in here?
Forbes and everyone with an internet connection knows these astronomical numbers because they are not tracking their cash; they are tracking their Net Worth. By tracking their purchases of appreciating assets they can track their estimated Net Worth. Net Worth is the single most important number in your financial picture! It’s the financial scoreboard that lets you know how you’re doing. Seems important right? Than why do so few people even know their number!?!?!
Do you know yours?
Where Am I today?
Have you ever watched a commercial for prescription drugs? There are usually two kinds. The cold clinical kind that spells out all the benefits of the drug they are advertising and the other kind. I want to talk about the other kind for a second.
The other prescription drug commercial shows people before and after they take this revolutionary drug. It opens with people miserable. They’re sitting in some non-descript room staring longingly out the window wishing they could enjoy the day. Then suddenly the hard to pronounce wonder drug is introduced to them by their doctor (who definitely is not paid to recommend this branded product). All of the sudden they’re kite surfing and running with the bulls. They’re finally living the life they always dreamed of! If you haven’t seen one of these here’s an example
While I have no pills or a medical license I do want you to get to the after just like in the drug commercials. In Stop 1 we decided what that “after” looks like. Now let’s choose when we reach that magical world.
How Long Do I Want to Have to Work?