The 7 Steps to Personal Financial Success

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I have had the opportunity to help many people gain personal financial success over the last quarter decade. It’s been a great ride, and I continue to be inspired by their achievements. How did they do it? I think these seven steps were a key part of their success!

  1. Take Responsibility: Take ownership of your situation, good or bad, it is what it is. A change in attitude should start with gratitude. One in five people in our world live on less than $1.50 per day in complete financial hopelessness. Successful people understand this and are thankful for the financial options available to them. 
    Action: Make a list of the things you are grateful for and THEN make a list of financial challenges.
  2. Share Information:  Success comes from sharing information with a spouse, advisor, or close friend.  Financial problems rarely sound as bad out loud as they do bouncing around aimlessly in your mind. Action: After taking financial worries out of your mind and onto paper, share them with another person.
  3. Seek Advice: There is a lot of free information out there, but what most people really need when it comes to personal finances is advice. Unfortunately, advice is not free: you either pay for it directly or indirectly every time. Successful people know this so they avoid financial salespeople and hire fee-only fiduciary advisors. Action: Fire your financial salesman and hire a fee-only advisor.  
  4. Prioritize: I have yet to meet a client who has the financial resources to accomplish all of their financial goals. We ALL have to prioritize according to our values and make financial decisions accordingly. Remember, alignment must be achieved with YOUR values, not your advisor's values, or values you perceive to be the “right” ones. Action: Set priorities.
  5. Simplify: Once you have your priorities lined out, focus on the important stuff first and knock it out step by step, piece by piece. Push through complicated and difficult issues by simplifying your actions with the understanding that a perfect solution rarely exists. Change requires action so we MUST simplify our steps to eliminate procrastination and indecision from the process. Action: List out simple steps.
  6. Automate: Automation goes hand-in-hand with simplification. Try to make financial decisions once instead of monthly. Automate your loan payments and savings to save time and insure you stay on track. Just about every bank has some type of automated bill pay and transfer capability that can be customized to your needs. Action: Set up automation of your savings, investing, and debt payments.
  7. Evaluate: I like to re-evaluate with my clients every six months. Quarterly is too often and I believe valuable momentum is lost between annual reviews. A solid evaluation includes a look at the progress made, updated financial statements, and a plan for what needs to be accomplished over the next six months. Action: Evaluate, adjust, and go!

These steps are taken over and over again in my office and they work. Question: which of these steps do you find to be most challenging? I would love to hear your thoughts!