How Do You Define Financial Success?

How Do You Define Financial Success?

As a society, we tend to view financial success in rather cut and dry ways. Some of the things that we tend to get hung up on when we try for financial success include: big house, nice car, and high-paying job. But are these things that are really going to make you happy in the long run? And is success really just about the money? Before you look around at your neighbors and wonder why you don’t have the same “success,” stop and think about what would make you feel successful in your life and with your finances.


Photo by PT Money

Financial Success is More about Lifestyle than Dollar Amounts

To me, financial success is more about lifestyle than it is about a laundry list of things that you have or don’t have. I think it’s important to look at the kind of lifestyle that you want, and then base your financial decisions on whether or not they are helping you achieve that lifestyle.

If your idea of a great lifestyle is a fancy sports car, then plan accordingly. Make your lifestyle and financial decisions in a way that will help you reach that goal at some point. Really think about what you want your life to look like, and then make your plans based around your desired lifestyle.

My desired lifestyle is fairly simple. I want to be able to save up for retirement, help others, and go out to eat and travel without having to worry about pinching pennies. My husband wants to be able to buy whatever collectibles he wants without having to worry about whether or not their purchase will result in an inability to buy groceries.

As a result of our rather modest version of financial success (cover our needs and help others, prepare for the future, and be able to have some fun now), we live in a relatively small house, and we don’t buy a lot of designer clothing. We don’t have a big TV, and we don’t spend a lot of money on cable movie packages or making sure that we have the latest version of the iPhone. (We don’t even have smart phones at our house; it’s strictly pay as you go.)

Instead, we have a 50-gallon fish tank, because my husband finds it soothing. We also go out to eat when we want, and see movies on occasion. We have a rather extensive collection of Lord of the Rings action figures, and I go on a trip or two every year. That’s the lifestyle we want, and since we get to live it, we feel successful.

Money Isn’t Everything

Financial success doesn’t have to be about money, either. My husband likes teaching as an adjunct. He doesn’t make very money, but he teaches graduate classes — something he wouldn’t be able to do as the new guy in a department — and he gets to work at a university he really likes. While he would like a full-time job as a college professor, right now this works. He only goes in three days a week, and we has a reasonable degree of control over his schedule.

The money isn’t as important as the fact that he is doing something that he enjoys. I feel this as well. Sometimes it’s not about how much someone is paying me, but more about how much I like writing for the client, as well as the flexibility involved. I’ve turned down several high paying gigs in favor of gigs that I just enjoy more.

However, money isn’t the only consideration in success. What about family and friends? What about your health? Do you really need more money when you have good health and loved ones around you? Would replacing your time with your family with more work so you can earn money truly be success? For some people, it would be. And that’s fine. But I would rather have the flexibility to spend time with family and friends than worry about working more just to have a little more money.

Before you decide whether or not you are successful, take a step back. First, define your own version of success. Then see what you can do to achieve it. You might be surprised to realize that you are more successful than you think.

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7 thoughts on “How Do You Define Financial Success?”

  1. For me health, family and friends will always be priority, however we do need money to live in this world and often it is only those that have plenty that go on to speculate about the importance of money in life…. But not always. Great article… Certainly got me thinking ­čÖé

  2. I think financial success is being able to not have to worry about money for yourself and to be able to support those around you and various charities without worry.

  3. Money isn’t everything, as you stated. It’s interesting how our society doesn’t incorporate a balance. So much of our lives are tied to money and so many people feel their lives would be better if only they had more money. For some people this is the case and for others it’s not.

    One solution is to create a financial plan. In the very beginning it has nothing to do with numbers. Rather, create a simple of plan of where you want to be in 1,2, and 5 years. In order for you to reach your goal, what is holding you back? Debt? Lack of savings? Or maybe you are a creative, entrepreneur looking to start your own business and the goal is to have it up and running in 5 years. Your financial success is no longer determined by your personal finance but also by your business plan and marketing.

    • I agree with that statement, but up to a point. For example, I think the marginal utility of going form $2-3B is less than the marginal utility of achieving $1M. The latter provides much more units of freedom vs. the former in my opinion. What are your thoughts?

  4. Financial freedom to me is when my investments are earning more than my salary. Then working is just an option… and I just work because I love doing what I am doing.

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