When it comes to money, there are (unfortunately) many things that a college, a formal education, or even a business book will never teach you. Money management is an essential life skill, yet many people are flying blind when it comes to finances.
The financial industry can tend to make all things money-related very complicated, but you can go a long way if you follow these 4 simple (yet effective) lessons.
Lesson 1: Play the long game
Today, more than ever, many people are distracted by short-term outcomes.
Everyone is looking for an angle, hack, get-rich scheme, and building their lives on temporary solutions that may appear helpful but are really the newest shiny objects that don’t stand the test of time. It’s rare to see anyone seeking to delay gratification. But if you choose to focus on long-term gains and ignore the instant gratification of a short-term win, you can build more than you can ever imagine.
All of life’s greatest returns come from compound interest. Whether you’re compounding money, relationships, or skills–time is your best force multiplier. And that means you want to play the long game. You want to delay gratification now so you can get more later. It may appear tedious and challenging, but I promise you—it works. Successful businesses, investors, wealth creators, and entrepreneurs all play the long game to maximize returns.
When it comes to money, you can do this by investing your money now instead of spending your money now. Warren Buffett is worth about $86 billion. Most of his wealth (99.7% of it) was created after his 52nd birthday. This is because of the power of compound interest. You’ll find the most significant gains at the end of the compounding period.
Don’t allow short-term satisfaction to be more important than the outcome you want for your life. Do the things that are hard now but good for you later, and your life will get easier and easier over time. And you can start small. Perhaps you can begin to cook a couple more times a week instead of eating out or consider stopping the expensive cable subscription that you barely use. Your ability to give up something in the short term will benefit your savings account and show you how much you actually want it.
The long game applies to more than money. It also applies to relationships. The goal is to find and stick with the people you want to work with for decades. Building trust and deeps relationship takes time—in business or otherwise.
Playing the long game means taking the necessary steps to set yourself up for long-term success. When building wealth, scaling a business, or creating success in any area of life, you need to play the long game if you want to hedge it in your favor.
Lesson 2: Show up consistently
Show up when you have no idea what to do, when you don’t want to, and when the cameras are off. Your commitment to figuring it out and your dedication to being resilient will play a massive role in your success in any area of life.
A common saying indicates that 80% of success in life comes from just showing up. By consistently showing up, you’re also committing to the things in your life that matter most. For example, the idea of showing up daily for your financial goals, regularly for your family and friends, or your dreams creates the habit and builds the practice of staying consistent.
The best practice to develop is one that commits to taking even the smallest step forward—because just like investing, those small steps forward compound into larger returns.
Lesson 3: Accept that nothing is owed to you
This will likely not be a very popular section, but it needs to be said. The world is unfair, and no one owes you perfect parents, perfect health, or a life without pain and problems.
There’s massive value in acknowledging and accepting that life owes you nothing, and there is great power in knowing that you can change your reality regardless of anything life has thrown at you. Yes, there will be things beyond your control, and you might find yourself in situations where everything seems stacked against you. But when it comes to your finances, the best thing you can do is focus on what you can control and work with what you’ve got right now.
Lesson 4: Learn the power of gratitude
Even though life doesn’t owe you anything, it’s essential to look at what you do have.
Having gratitude for everything you have, even when you don’t yet have everything you want yet, is one of the core fundamentals of success, creating wealth, and designing the life of your dreams.
Two crucial neurotransmitters—dopamine and serotonin—are responsible for our emotions. Expressing gratitude releases these neurotransmitters, and right away, they enhance our mood and make us feel good. The brain can’t process pain and gratitude at the same time, just as it can’t feel entitled and grateful simultaneously.
You can help strengthen the feel-good neural pathways by intentionally exercising gratitude daily, activating its long-term effect on the brain. Gratitude significantly impacts body functions and reduces psychological conditions like stress, anxiety, and depression.
Let’s be honest—if you aren’t first grateful for the $5,000 paycheck, you’re on a slippery slope. Because when that paycheck becomes $50,000, you’ll be wishing it’s $100,000; when it’s $100,000, you’ll want it to be $1,000,000.
The most common mistake people make on this one is not appreciating where they are while they are on their way to getting what they want. It inevitably keeps you stuck right where you are because if you focus on what you don’t have, you’ll never have enough. But if you focus on what you do have (and are grateful for it) you’ll end up having so much more.
Taking care of your finances doesn’t need to be a daunting endeavor. Ultimately, it comes down to building (and sticking to) a few essential habits and being patient in the process. Just remember these four lessons, and your future self will thank you.
Adapted with permission from the publisher, Wiley, from Wealth Habits: Six Ordinary Steps to Achieve Extraordinary Financial Freedom by Candy Valentino. Copyright © 2023 by John Wiley & Sons, Inc. All rights reserved. This book is available wherever books and eBooks are sold.
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