What are your chances of financial security and success?

A while back I was reading the Miracle Morning by Hal Elrod in an attempt to overcome my unbelievably ridiculous inability to get up early in the morning.  I actually began reading the book a second time immediately following the first time because it still hadn’t sunk in.

But that’s a topic for a different day.

In the book he quotes a study that I haven’t been able to get out of my head.

It was a study performed by the Social Security Administration.  I also found similar statistics on statistic brain.

It goes like this:

If you take any 100 people at the age of 25 and follow them until age 65 (40 years)  this is what you will find:

  • 1 will be wealthy
  • 4 will be financially secure
  • 3 will still be working
  • 29 will be dead
  • 63 will be dependent on social security, friends, relatives and charity

You might need to read those again!

66 out of 100 people will be either working in retirement or dependent on someone else during it.

If we assume we aren’t one of the 29 dead ones, that leaves just a 5% chance of reaching our goals by the time we retire!

What’s most disturbing to me about the study is that everybody sets out with the mindset to become the 5%.

But the best laid plans of mice and men often go awry.

This doesn’t just relate to money though.  No one sets out to get divorced, or end up in a job they hate, or get addicted to that drug.  The list goes on.

Intention is not enough.  The link between intention and behavior is too often broken.

Why?

There are likely a few reasons.  But one that comes to mind, at least for me, is my short-sightedness and desire for instant gratification.  I want what I want and I want it now.  It is very difficult to delay gratification on anything for a period of time, especially 40 years.

So, we fore go long term goals for short term satisfaction and gain.

That’s all interesting.  But what can we do about it?

Well, understanding may be one step.  But accountability is likely another.  Putting people in your life (such as a fee-only RIA for your investments) to speak the truth and help you remember the long term benefits when all you want to do is experience the short term reward.  This takes the ability to be wrong and to listen to others and to swallow some pride.

But we would probably all agree those are all steps in the right direction anyway.

Please note: I reserve the right to delete comments that are offensive or off-topic.

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