To achieve financial success, there are only a few basic steps you need to reach your goals. But it always surprises me how many people don’t use these basic steps to create financial success over their lifetime.
In fact, the majority of people tend to ignore one or more of these basic steps. This ends up short circuiting the process of becoming financially successful.
You may be one of those people. But hey, you weren’t born with the innate knowledge that you need to be financially successful. None of us were. But just the fact that you’re reading this article shows that you’re willing to learn and seek out a solution for how you can achieve financial success in your own life.
So kudos to you for that!
In this article I want to introduce you to some of the basic steps that I’ve been teaching and using for many years to help me and others become financially successful.
I’ll even show you some excellent resources to help you implement the four basic steps to financial success.
What’s Your Definition of Financial Success?
First, a word of warning: these are not tips for getting rich quickly.
Building wealth and creating financial success in your life takes time. It’s a lifelong marathon that you have to continually work through, even when you hit a wall, which happens to all of us at one time or another.
Also, you have to know what your definition of financial success is. Is it becoming so wealthy that your diamonds are encrusted with more diamonds? Is it being able to have enough money to live a comfortable life in your later years? Or maybe it’s to be independently wealthy enough so you can leave generational wealth to your family or a charitable foundation.
How you define financial success is up to you, but you must have at least some idea of the end game of what financial success means to you in order to reach that goal someday.
4 Basic Steps to Achieve Financial Success
So now that you have an idea (hopefully) of what financial success means to you, let’s take a look at the four basic steps it will take to get you there. Of course, these are four general steps you should follow, there will be many more sub-steps involved in the process.
Step #1- Be a Goal Setter
This goes hand in hand with knowing what your definition of financial success is. Once you know where you want to end up, you can start putting together a list of what it will take to get you there.
One of the best ways to set goals is to first write down your long term goal(s). By long term goals, I’m talking about 5 years or longer, even up to 30-40 years out.
Once you know what those long term goals are, then you can work backwards to define several intermediate goals that will ultimately help you achieve that long term goal. Then break down those intermediate goals into a few short term goals that allow you to achieve the intermediate ones.
This stepwise process is one of the best things you can do to achieve the financial success you’re looking for.
Remember, financial success is a marathon, and it’s run one step at a time.
Step #2- Spend Less Than You Make
Spending less than you make is an extremely obvious part of achieving financial success, but it’s absolutely stunning that more people don’t recognize that fact, much less put it into practice.
I was totally shocked when I read a recent study stating that 1 in 3 adults have at least one debt that is currently in collections.
Most of those people wound up as part of that statistic because they didn’t follow this simple principle.
You might even be one of them.
That’s ok as long as you recognize the problem and start doing something about it. We all have to start somewhere.
The two best things you can do to stop spending more than you make are:
- Keep Track of Your Money- Do a zero based budget so that you have a plan for every single dollar. Use cash only to fund your life so it will be impossible to spend more than you make.
- Get Out of Debt and Stay Out- I preach this constantly, and it’s the primary message throughout this entire website. Being in debt means you’re wasting money on the interest and fees that come with it. It’s also a good indicator that you’re spending more than you make.
In Thomas Stanley’s book “The Millionaire Next Door”, Stanley’s research shows that most millionaires believe in staying out of debt, and believe that’s one of the primary reasons they are financially successful.
I’ve written an entire series of posts on how to get out of debt that you can find here.
Step #3- Be a Giver
Giving of yourself, your finances, your resources, and your time brings the law of reciprocity into full effect in your life. When you give, you receive more in return. It’s a basic truth established by God at the beginning of time. You can find it throughout the Bible, as well as most any book about wealth and success you'll ever read.
I can tell you from the results I’ve seen in my own life, giving works!
“Give to him and do so without a grudging heart; then because of this the Lord your God will bless you in all your work and in everything you put your hand to.” –Deuteronomy 15:10
Step #4- Invest
Becoming successful financially always involves some form of investment. Actually, it usually takes many types of investment to achieve financial success. I’m not only talking about investing your money into stocks, bonds, real estate, and businesses, which is highly important to financial success, I’m also talking about other necessary investments such as:
- Knowledge and Skills- Increasing your knowledge and skill set will always serve you well, and usually allow you to earn more money during your career.
- Health- Healthy habits allow you to have more energy, think better, and work more efficiently. The healthier you are, the better you can attack and achieve your goals.
- Relationships- Investing in good relationships with your family, friends, and business associates always pays off in the long run. When you invest in relationships your family will love you, your friends will care for you, and business people will bend over backwards to do business with you. It’s all about connection.
Financial Success Takes Work
So that’s it, it only takes 4 basic steps to achieve financial success! Of course I don’t want to make it sound too easy. Becoming a financial success can take a lot of time, patience, and work.
But when you fully understand the basics, then you can work hard to get a deeper understanding and achieve whatever definition of financial success that fits you the best.
Remember, Lebron, Michael, and Kareem had to learn to dribble before they became incredible basketball players. It took them a lot of work to become the best.
And it will for you too, so get to work!
Question: Have you used any of these basic steps to bring about financial success in your life? Leave a comment and let me know.