Defining What Financial Success Means to You

Debbie Dragon — Mon, 25 Jun 2012 10:24:08 +0000

There is an old story about a young boy who is asked by an adult what he wants to be when he grows up. Not one to waste time as a fireman or an astronaut, the young boy gets right to the point and announces that when he grows up, he wants to be rich. (See also: Do You Really Want to Be Rich?)

The boy’s ambition is one you likely share. After all, how many people do you know who aspire to become poorer as they get older? But what does it mean to be “rich”? While some people might define financial success as achievement of a particular net worth, that may be the wrong way to think about it. As Adrian J. Cartwood, author of the soon-to-be-available book “Share Your Number” and the financial blog 7 Million in 7 Years, explains, "People, even rich people, are often dissatisfied with their level of financial success because they have failed to make the one true connection: that your life isn't about money, rather your money is there to support your life."

Instead of thinking about financial success as a mere number, Cartwood suggests that the best way to achieve monetary fulfillment is to first understand how you want to spend your money — only then can you figure out how much you will need to finance your dreams. "It's only when you find your life's true purpose and calculate how much money you need in order to support the life of your dreams — whether that be $100,000 or $100 million — will you really know what financial success means to you," he explains.

So how does one do this?

1. Take a Closer Look at Your Life

Start by asking yourself questions about what you enjoy doing. This will help you create a clearer picture of your goals for your future and give you a starting point for figuring out what that future will cost. Ask:

What are your favorite activities, interests, and hobbies right now?
Do you think you will want to continue doing them in the future?
Is it feasible to continue some of the things you enjoy now as you get older, or do you anticipate stopping some of them?

2. Dream Big

If money was not an object, what would you love to do? Sail around the world? Build a tropical vacation home? Start your own business? Simply be able to fish every day in the pond near your home? Do not be afraid to name your dreams out loud, no matter how far-fetched they seem. The more specific you can be about your goals for your life, the easier it will be to develop a plan to reach them.

3. Figure Out the Costs

Once you know what you would love to do with your life, you can start to determine how much money you need to pay for your dream future. Depending on your plans, this might be as simple as looking up the cost of buying and maintaining a recreational vehicle or as complicated as estimating how much money it would take to open a restaurant in your neighborhood. Either way, you will need to have an idea of how much money you are going to need to finance your desires and still pay for your day-to-day living expenses.

4. Develop a Savings Plan

Finally, you need to figure out how you are going to earn and/or save the money you need to reach true financial success. The amount may not be enormous; after all, if your dreams are inexpensive, then your personal definition of financial success will be modest. Of course, if you have grand plans for your future, you will need to figure out a way to put enough money away to be able to live the life you desire. And more importantly, you will want to start living that life as soon as possible. Consider your current earnings, how much you are likely to earn in the future, and how much money you can put away on a regular basis. Talk to an investment advisor to help develop a plan to make your savings grow.

It may take hard work and planning, but having the money available to give you the life you truly desire is a worthwhile and reachable goal — and it's the true measure of financial success.

This article is from Debbie Dragon of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

2 ways to find your dream amidst life's chaos

Sarah Winfrey — Mon, 09 Apr 2007 16:47:31 +0000

A couple of weeks ago, I wrote a post about my husband's and my choice to take some risks and follow our dreams. A couple of my commenters (both Kiwi's...coincidence?) were interested in my thoughts on identifying a dream, and I had too much to say to fit into the comments.

Childhood dreams

Some people (the lucky or unlucky few, depending on your perspective) just know what they are going to do with their time on earth. I doubt they're actually born with it, but it sure seems like it. These are the kids who know they want to be astronauts when they're 5, structure their high school experience so they have a good chance of getting into the Air Force Academy, get in, go through, get all the extra training they need, and eventually pilot a space shuttle to the moon. It's like something grabs ahold of them and never lets them go.

Most of us don't experience that. I know I didn't. I have done so much mucking around trying to figure out what I was actually good at and what I actually like doing. I've worked three "real jobs," all very different. I have a BA and an MA, in very different fields. If you ask me what I want to learn in life, I'll give you a list ranging from obscure and difficult languages (Euskera and Arabic) to sailing to learning to playing a stringed instrument (violin or cello top the list). Clearly, I am not a naturally focused person, at least as far as my vocation goes. However, now that I'm at least a little more focused, I've discovered that the two things I want to focus my life on are things that have been central to me since childhood: writing and relationships.

So the first word that I have for people looking for their dream is this: what have you loved since childhood? Even if you haven't done it in years, this can point you to your dream.

When we're young, we edit ourselves a lot less, so often the things we loved then are the things we still love but have forgotten about, or talked ourselves out of.

What saves you?

When I'm down, there are certain things that almost always lift me up. They don't always make the whole situation better, but they do make it all more manageable and help me know what I want or need to do next. These are things that I seem to do naturally. I don't have to sit around and think, "Wow, things are hard right now. What can I do that would make them better?" They are things I just do, because they're truly part of me.

One of these things is writing. Another is talking deeply with my close friends and family. Do you see the pattern? When I looked at my childhood, I saw that writing and relationships were the things I loved then. When I look at the things that help get me out of a hole, they're the same two things.

When we're down, particularly when we're really hurting or have suffered a serious loss, we tend to crawl to the things that mean the most to us, no matter what they are. Even if they are things that we haven't done since childhood, or things we aren't aware of loving, we go to them and do them when we hurt. Sometimes, this doesn't work. We've all seen people go into destructive spirals when bad things start to happen in life. Clearly, getting drunk and passing out are not dreams. But when we're aware of the pain and trying to care for ourselves in it, the things we do will often pinpoint where our dreams and desires really are, because they are the things that truly fulfill us.

What comes next?

In themselves, writing and relationships are not productive dreams. They are not going to be things that I can focus myself on unless I can find a way to make them productive (specifically, financially productive), or unless I can find other, easy ways to make money that will allow me to focus on my dreams. Pathetically practical? Maybe. But also realistic. Whether I like it or not, my rent must be paid.

Thus, my next article in this wandering series on dreams will cover how to take what you love to the this level.