Tuesday, February 2, 2010
5 Obstacles To Financial Success
1) Lack of knowledge/education - You don't need to register for Personal Finance 101 to get familiar with concepts related to money. If you can't pick up a book at the library, the internet is a vast resource you can use. Knowledge = power when it comes to realizing your financial dreams. Setting up this site and interacting with seasoned PF bloggers is one way I'm making sure I learn about personal finance.
2) Lack of motivation - Living paycheck to paycheck or drowning in debt should inspire you to take control of your finances. But sadly it has the opposite effect on some people and they continue on their downward spiral. If getting out of your rut is a problem, picturing why or for whom you're trying to regain financial control will help motivate you. It is also important to come up with a plan on how you will be proceeding step by step towards achieving your financial goals.
3) Lack of time - This is really an excuse. Unless you were born with a silver spoon, everyone needs to put in some measure of time to achieve their dreams. Start off by limiting or getting rid of time killers like TV. Then dedicate an appropriate amount of time towards your goals like learning about finance or a setting up a side-business. I find time to read or draft a post for this site during my daily commute.
4) Lack of role models - This is something I'm struggling with. From the time I can remember, everyone I knew who was employed had a nine-to-five job. Success was defined as getting a raise or promotion or a better paying job. The few in my family who had tried their hand at being self-employed had failed and therefore, being an entrepreneur had a negative connotation for me. Forget about investments - no one I knew invested in the stock market. This single-salary mindset is a huge obstacle I am having a hard time overcoming.
5) Risk aversion or lack of it - I must have been born without the 'risk-taking' gene. I simply loath risk and try to avoid it as much as possible. This is why I am not yet 'prosperous' even though I have no debt. Being risk-averse has its advantages: when everyone else was buying houses via sub-prime loans, we were saving up for a 20% deposit and avoided the negative effects of the recent housing bust. But while it's healthy to an extent, you don't get huge payoffs without taking big risks either. On the other hand, as any gambler can attest, taking on too much risk is detrimental to financial success. Therefore, the goal is to find a healthy medium. My plan to overcome risk aversion is by starting with baby steps. I'll get my feet wet in the stock market with a minimal amount and see where it takes me.
What other obstacles have you found impeding your success? How did you go about overcoming them?
image by technotr