From Here to Financial Happiness

Day Twenty Five Be Kind to Your Future Self

The secret to financial success is no secret at all: We need great savings habits. Yes, we can bolster our wealth by investing wisely and hurt it with foolishness. But without great savings habits, investment prowess – or lack thereof – is immaterial. After all, if we have just $1,000 invested, it doesn't much matter whether we earn 2% over the next year or 20%. In dollar terms, that would mean $20 in gains or $200 – hardly the stuff of which comfortable retirements are made.

Look at the folks you listed yesterday and the characteristics that made them successful. They may have earned handsome salaries, invested astutely or built their own business. But the reason any of those financial advantages turned into significant wealth was because they were good savers.

Consider adopting these folks as your role models. You might ask them about their success and use their stories to motivate you. You might even tell them about your financial goals. That could further motivate you, as you strive to look good in their eyes.

Indeed, financial success is as much about mindset as anything else. To be a good saver, we obviously need an income – and the higher that income, the easier it'll be to save. But there are five other attributes we also need:

• Low fixed costs. Why do many families fail to save? As I alluded to on day 23, often they simply can't, because they have boxed themselves in with a litany of monthly fixed costs, everything from ...