Here’s the answer: “Do what you already know.” That’s the secret. Your already know everything you need to know to be rich. The problem is, even though you know, you probably aren’t going to do it.
Let’s be brutally honest. Anyone who is writing about personal finance will be writing about something that you already know (but probably aren’t doing) 90% of the time. There will be a small chunk of knowledge here and a new service there that you may not have heard about, but for the most part, personal finance really is straight forward and easy to understand. You don’t believe me? Here is the formula to get rich:
1. Start saving early
2. Spend a minimum of 10% less than you make.
3. Invest the money you don’t spend.
That’s it. No secret formulas or hidden gems. If you want to be rich, it’s as simple as that. Of course, there is some tweaking that you have to do. You can’t invest in any old thing, but even that isn’t difficult to figure out and you already know where you should invest the money (401k with matching funds, Roth IRA and stock index funds being the most obvious – see, you knew that too).
In reality, I shouldn’t have a job (and I would gladly look for another one if everyone would do what they already know they should do) helping people with their finances. Somehow I don’t think I’ll have to worry about changing professions in the future. While it is easy to understand how you become rich and you know what you should be doing to achieve that wealth, it most certainly isn’t easy for a lot of people to actually follow what they know they should be doing.
I blame it all on the lottery attitude. If you aren’t rich (or aren’t moving in that direction), it’s simply because you have decided to ignore what you already know in favor of pursuing easy money. The problem is that even though some people do get lucky and win the lottery, the odds are better that you will die from a flesh eating bacteria than you will striking it rich that way. You have decided to go after the quick buck because you aren’t willing to put in the work that you know needs to be done. You may think you have a valid reason for this, but it’s nothing more than an excuse.
So there you have the secret. Once again you know exactly what you need to do to become wealthy. Odds are that you will once again ignore the obvious and see if there is an easier way, but I’m hoping that you prove me wrong…