I recently read ‘The Difference’ by Jean Chatzky. The book focuses on the differences between the four financial classes of people – Wealthy, Financially Comfortable, Paycheck to Paycheck, and Further into Debt.
Merrill Lynch and Harris Interactive conducted a study of 5,000 people and created a list of the very specific characteristics that define each financial group of people. Chatzky emphasized that most wealthy people are not wealthy because of an inheritance or because life ‘gave them all the breaks’, they are wealthy because of their decisions and attitudes. For example, wealthy folks are generally socially connected, married, competitive, hardworking, physically fit, optimistic, have good attitudes about finances, and believe in risk.
Yeah, sure Jean, those are super easy qualities to come by.
Don’t worry, she doesn’t leave you on the ledge. Chatzky gives you daily exercises to help you change the way you think and even the way you feel. The book is 50% financial information and 50% motivational material.
I listened to this book on CD but I recommend you rent the actual book from the library. Some of the exercises would be far easier to do without pushing pause after each chapter.
I enjoyed this book and if nothing else, felt encouraged about my path.
Beks is a full-time government employee who enjoys blogging late into the night after her four kids have gone to sleep. She’s been married to Chris, her college sweetheart, for 15 years. In 2017, after 3 long years working the Dave Ramsey Baby Steps, they paid off more than $70K and became debt free. When she’s not working or blogging, she’s exploring the great outdoors.
That sounds like a great book. I am going to see if our library has it! I recently found your blog and I am enjoying it! You have motivated me and I have pulled out our old envelope system. I get paid tomorrow and I am going to start using it again. If you can do it with your job losses and all, so can we! Thank you for being so open and honest.
“wealthy folks are generally socially connected, married, competitive, hardworking, physically fit, optimistic, have good attitudes about finances, and believe in risk.
Yeah, sure Jean, those are super easy qualities to come by.”
I’m not going to say that I consider myself “wealthy,” but my naive-self believes that these qualities are not impossible to change into. The critical trait needed is perogative and ambition which I guess falls into competitive / hardworking.
For example, I grew up in an extreme risk adverse family (my mother is a teacher) who believe in money in savings, not in the market, where my father was the type of money hand = money spent. I could have easily fallen into either of those categories, but early in my career, educated myself to understand investments and risk. The married part came well after my financial education (still continuing to educate myself today).
Early on, I knew well enough to stay away from unsecured debt (read credit card), which is likely the critical difference. I have since learned that I should seek alternate income streams (besides my day job), such as my playing poker, selling arbitraged ebay goods (i.e. slickdeals -> ebay, etc.), and investing.
It is my belief that anyone can become “wealthy” by those measures if they devote themselves to doing so. It is my opinion that if you did not have the debt you currently carry, you would be well on your way to wealth albeit much more slowly.
While you’re in your negative net worth situation, you should be taking the time to read motley fool and any other handful of personal finance education sites such that you can be fully prepared to go positive net worth with force. Good luck.
Thanks for the recommendation – this looks like a book I’d enjoy. I just put it on hold at the library.
It sounds like some of these qualities come over time if you have a few of them to begin with. A hardworking person will probably also have a good attitude and, most likely, eventually get married and start to make the social connections that help them financially later on.
Thanks for the recommendation Beks, I’ll have to check it out!