Selected
Article:
Building
a path to financial success
By Ike S. Trotter
Every
so often, the news will report on how the rich are getting
richer and the poor getting poorer, and how the gap between
the two is growing.
I guess it would be nice if everyone had the same financial
opportunities and lived a life of comfort and happiness
with no financial concerns. But, in my opinion, that would
never happen – regardless of our current national
tax structure or the incomes people earn. People are not
created equal in the classroom, the athletic field, with
common sense – or, with financial skills. All of us
have good and bad habits. We make good choices in life and,
occasionally, some bad ones . . . and our mistakes create
our punishment.
In America, we have more control over our future successes
than almost any other country on the face of the earth.
Now having written that, it is extremely interesting to
learn that families with annual incomes of $300,000 or more,
pay 30% of all taxes in this country. Families with annual
incomes of $90,000 or more, pay 60% of all taxes. And 50%
of all families -those with lower incomes- pay only 4% of
taxes. This bears repeating; out of 100 percent of the families
in this country, the bottom 50% are paying only 4% of the
taxes. So, why do the poor remain poor when the top 50%
are paying 96% of the taxes.
It very well may be that taxes have little to do with this
so-called “rich-vs-poor” contrast. Maybe the
poor remain poor because they haven’t been taught
the financial skills of how money works and grows.
Probably one of the most elementary, yet fundamental tenets
of financial planning says you don’t invest –
until you have adequately saved. And, unfortunately, savings
continues to be a real dilema for the average American consumer.
When I entered my business 28 years ago, I was taught a
basic financial lesson that went like this: Some people
spend their incomes each month and then save any left at
the end of the month. Other people commit to saving a certain
amount each month, and then spend the balance. What is the
lesson taught from this example?
It is –that people in the first example usually end
up working for those in the second.
Life in American today is one big financial binge that is
creating a lifetime of debts, notes and credit card backlogs.
How do we turn from this? How do we commit to a brighter
financial future – for ourselves and our children?
I think it starts with the discipline of saving first each
month. By putting ourselves at the front of the “to
pay’ list each month . . .instead of the back. Many
who invested in Wall Street first before accumulating adequate
savings have learned this painfully well the past three
years.
Begin this process by asking yourself “how much can
I put aside and pay myself first each month?” “In
order to be where I want to be in five or ten years, what
will it take to achieve that goal?” And finally, “can
I commit to this goal – and resolve to stick with
it?” It may only be $5 per week, but every great accomplishment
starts with a first step. Do you want to take that first
step that you have been saying you will get around to each
year?
To my way of thinking, the poor today are not getting poorer
because the rich are getting richer. Rather, succeeding
financially today requires skillfully setting goals and
learning the rules of how money can work –to your
advantage. Hopefully, the lessons of basic savings can help
for those who want to pull themselves up to a better financial
world for tomorrow.
The information provided in this article is general in nature
and not intended as specific financial advice. It is always
recommended that you seek advice from a qualified professional
for legal, accounting or financial answers. DBJ
(Ike
S. Trotter, CLU, ChFC of Greenville is a credentialed Financial
Consultant and a 28 year veteran of the Insurance and Financial
Services business. An active participant in several financial
organizations, he is a member of both The Society of Financial
Service Professionals and The Estate Planning Council of
Mississippi.)
