There are over 20 million millionaires in the U.S. That’s about 8% of the adult population. If you aren’t a millionaire, odds are you know one.
There are thousands of ways to become a millionaire but only one way to stay there. The key to remaining in the millionaire club is survival.
To survive and thrive for the long-term you need a replicable decision-making process for maintaining financial prosperity.
How To Survive and Thrive
Think about Tampa Bay Buccaneers quarterback Tom Brady. If ever there’s been a role model for long-term survival, it’s Brady.
Tom Brady was drafted by New England as the 199th pick, (out of 254), in the 2000 draft. He only appeared in one game during his rookie year. Three games into his second season, however, Brady got an opportunity to start in place of injured Drew Bledsoe. New England won the contest, although Brady’s stats weren’t overly impressive (13 for 23 and 168 yards passing).
The rest is history. At age 44, Tom Brady is now in his second season with Tampa Bay fresh off a Super Bowl victory last season (his seventh overall). Clearly, Tom Brady is a survivor!
Practicing financial survival requires humility and understanding that many things in life are outside your control.
Most millionaires attempt to stay millionaires either by making financial decisions without guidance or by relying on deeply conflicted “advice” from large brokerage firms or banks.
The reason some millionaires approach investing this way can be summed up in a single word...control. Do-it-yourself investors can’t imagine ceding any control over their decision-making process to someone else. On the other hand, investors who follow the large financial firm path think they are finding a source of control in these institutions.
Both of these are illusions. Unfortunately, these investors believe that they have more control over events than they do.
Why You Need to Be Unbreakable
The Psychology of Money author Morgan Housel puts it this way: “More than I want big returns, I want to be financially unbreakable.” If you’re durable or unbreakable, you are able to stay around long enough so that time works to your advantage.
An equally important financial survival skill is recognizing the limits of what you can control. Effective financial planning anticipates reality getting in the way. Your plans won’t work out exactly as planned.
Good financial planning doesn’t avoid uncertainty; it builds in space for making mistakes. Having room for error increases your chance of staying in the game for the long term. Developing a philosophy toward uncertainty is a critical survival mindset.
The feeling of control is an emotion and relying on emotions for financial decisions is a fool's errand. Human emotions are genetically scripted for processing immediate threats. Emotions are notably unreliable as a basis for making good money choices.
Most financial fortunes are born out of risk-taking. Maintaining your financial wealth, however, relies more on risk management. What’s the decision-making process you need to survive and thrive? Start there. Ready for a real conversation?