With NCAA College Basketball’s March Madness in full swing, and Northern Iowa’s ousting of number one seed Kansas over the weekend, I thought a post about “Cinderellas” would be particularly appropriate. I’m not referring to the Cinderella, the step-daughter turned Disney princess. I am referring to a dark-horse team, usually from a small conference, that knocks off the top seeds to make a run at the Final Four.
Photo by Stu Seeger
There are No Cinderellas
I would argue that there is no such thing as a Cinderella team. The label is frequently used to slight their accomplishments by insinuating “they got lucky.” Sometimes luck plays a part in it, but most Cinderellas pull off the upset because they out-worked, out-hustled, out-coached, and out-played their opponent. The pinnacle moment in their sports careers comes as a result of hours of preparation, workouts, practice, and film study.
How does this apply to finances? Many of the wealthiest people in our country are also some of the most envied. Sure, we all would like to be Bill Gates for a day, but why do so many people speak ill of successful people like Gates? Is it jealousy? Or is it the realization that they don’t have the fortitude, the work ethic, the determination to be as successful as those in the wealthy class.
“Well it is easy to build wealth if you receive an inheritance.” Believe it or not, most millionaires are self-made, first-generation rich. They do not stand to inherit a large sum of money like Paris Hilton. They did not strike it rich in the lottery, or win a giant lawsuit. They worked every single day for many, many years at their craft. They built multi-million dollar businesses from card tables in their garages or dorm rooms.
They led large corporations of hundreds of employees. They spent hundreds of hours writing, editing and marketing their book ideas to anyone who would listen. These self-made millionaires did not become overnight successes.
How to Become a Financial “Cinderella?”
- Get out of debt. Carrying around debt is like trying to climb Mt. Everest with a hundred pound weight tied to your back. It is just impossible to become a financial success while carrying around debt.
- Don’t mortgage away your future. When you get pre-approved for a mortgage your lender will likely provide a maximum mortgage that’s way out of your price range. Ignore their number. I personally wouldn’t tie up more than 20% of my take-home pay in housing. Doing so would mean less to save and invest, and that’s a trade off I’m not willing to make to enjoy a little extra square footage.
- Stop trying to impress strangers at a red light. The average new car payment in America is approaching $500 a month. Sell that sporty new car, buy an older, reliable, used car with cash and drive it until the wheels fall off. Keep driving used cars the remainder of your life and deposit that $500 into a mutual fund every single month. In thirty years you will become a millionaire.
- Turn off the television and read to learn something. Knowing the last five winners of American Idol won’t make you a success. Studying the habits of highly successful people will.
- Practice frugality in all areas of your life. Buy clothes on sale; and only when you need them. Avoid paying for name brands when quality alternatives, or homemade solutions, exist. Be a frugal grocery shopper. Eat at home; it is healthier and less expensive. Invest in yourself; you will live longer and pay less for it in medical bills and insurance premiums.
Finally, after a couple decades of sacrifice, determination, and dedication you could become an overnight success, and be called a financial “Cinderella” yourself.
*This post appeared in the Carnival of Personal Finance – Blogthority.com Relaunch Edition