When I was 16 my dad bought me my first car. It was a Mercedes. Sounds nice right? Well… the car was 13 years old, built like a tank, had a broken turbo diesel engine (meaning the car when from 0 - 60 in about the time it takes for paint to dry), had a broken stereo, no defrost, a left blinker that regularly popped out of its “socket” and hung from the front bumper. Oh, and the bumper was also falling off, but no need to fear, the car was silver, so dad would grab a roll of duct tape, slap it around the bumper and… voila! Good as new. He bought the car for under $3000 and ended up keeping it for 6 years with minor repairs. As long as the wheels didn’t fall off, or the engine block didn’t drop, that was my car.
Of course, being 16 years old with one hand out the window in February scraping off ice as I drove down the road while being honked at for not moving fast enough was among the more embarrassing experiences of my childhood. I derided my dad for being so cheap.
But what my dad understood was the value of a dollar. And he knew better than anyone that in order to make money, you’ve got to start saving and investing it.
Who hasn’t dreamed of being financially independent? Once you make it you’ll have luxury cars, big villas, five star dining, grandiose vacations.
But if this is your idea of being financially independent, then you’ll never make it. Only 4% of Americans retire financially independent. You cannot expect to spend money on luxury items and build financial independence. If you believe making “it” means spending it, then you’ll always be chasing that carrot on a stick.
If you want to grow rich, it would be wise to stop living like you’re rich and start living like a millionaire.
In his book, The Millionaire Next Door: The Surprising Secrets of America's Wealthy, Thomas J. Stanley shows that the average millionaire has mastered the art of saving money. They aren’t driving the fanciest cars or taking tons of vacations. They’re saving and investing money.
My dad got this. We rarely had fancy dinners. Our bonding time was heading to Costco Saturday afternoon to grab $1.50 hot dog and soda. We always had money for the important stuff, and money was never an issue in our household. But that’s because my dad was careful with money.
If you want to grow rich, it would be wise to stop living like you’re rich and start living like a millionaire. But it’s easier said than done. Our beliefs about money, and its value are ingrained from a young age. If you grew up in a household where money was always tight, there was never enough of it and money was a constant source of stress - why on earth would you ever want to hold onto money? If you only ever learn to associate money with bad times, stress and trouble, it makes sense that you would do whatever you could to make sure you don’t have it in your life.
And so we spend, spend, spend. We never have enough and treat dreams of financial independence like a fantasy that is beyond our reach. In the meantime, take the luxury trip and put it on the credit card. You’ll never actually be able to afford it, so fuck it. Right?
And as women, wealth creation is especially crucial. How many women rely on a man to “take care of it”. And for young women in the workforce, millennial women are making 93% of what their male counterparts make, but only half of them are saving. And of those who are saving, they are saving only 5.7% towards retirement, compared to millennial men who 1) make more and 2) save 7.3%.
I have yet to find the store where women pay less for goods and services than men, so it is absolutely critical that women learn to up their savings and investments.
The good news is that our beliefs about money can be changed.
1. The first key is uncovering the beliefs that are subconsciously holding us back from being rich.
2. The second key is seeing how saving and investing money can help to fulfill the things that are most important to you in life.
When the reasons for saving and investing are compelling enough, a newfound appreciation for what it takes to become financially independent seems less like a pipe dream and more like an achievable goal.
Want to learn more? If you’re in the Detroit area, please join me for on July 18th for the workshop, “The Healthy, Wealthy Woman: Six Steps to Financial Abundance”.
Laura Khalil is an advisor to some the world's largest brands on marketing strategy and leadership. Her work has been inducted into the Viral Marketing Hall of Fame and her clients have been featured at TED.
She also works as a female empowerment coach, leading workshops, talks and 1:1 coaching to help women empower themselves in all areas of their life.
Learn more at http://laurak.co