Is Financial Failure Due to Lack of Motivation? Why Money Issues Run Rampant

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I’ll never forget the moment when I made that mental leap — that sudden and forever fateful change in mindset in which I finally and abruptly understood that my financial future is in my control — that working until 70 is an option, not a fact of life.

Financial freedom existed for me in that moment… and not before. I’m sure that many readers here on BiggerPockets can recall similar moments. It’s a life changing shift in mindset.

That change doesn’t happen by accident. For me, it was the culmination of years of study and focus on financial well-being. The very concepts of investing, interest, reinvesting, and compounding had to be beaten into my head dozens or hundreds of times before things “clicked.”

But why don’t things click for everybody? Why is it that friends, family, and most of society can’t seem to see what I see?

The answer is this:

No one is born to be an investor. We learn to invest. Our motivation is derived from what we learn.

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Motivation to Succeed Financially is Not a Natural Urge

Unfortunately, children are not born innately desirous of snowballing into millionaires or billionaires over the course of 50 years by harnessing the power of compound interest. Yes, some children are born with the will to win, some are competitive, and some are natural leaders. But no child is naturally born with the inclination to hoard something as intangible and (from a practical perspective) useless as money over the decades.

I’d invite you to try explaining the concept of the time value of money to someone who is financially illiterate. I do it all the time with an organization that helps locals in financial crisis here in Denver.

It is my judgement that these folks lack a compelling reason to intelligently manage their finances. For them, the concept of “investing” doesn’t register. It’s just not something that is readily comprehensible to these people without a background on the subject. It’s not that people are unmotivated in general — do you think that these famous athletes who declared bankruptcy all lacked the desire to be successful? If you do, why don’t you just go ahead and tell Mike Tyson about how you have more of a desire to succeed than he does… just make sure you film it!

Related: 4 Ways to Build a Strong Real Estate Investing Financial Education Today

Folks simply don’t understand how to be successful with money. They don’t know the basic rules of the game of finance, and therefore, they are unable to see that there is a way out of their cycle of debt and poverty, that there is a way out of leaving their financial destinies in the control of their employers, and that the way out is not that hard. I’ll repeat that: They just don’t understand.

What Difference Does Motivation Make?

Isn’t it as simple as “earn, save, invest?” you might ask.

We all know that basic finance comes down to three things: earning, saving, and investing. But that’s just not enough.

When someone with low financial literacy thinks of saving money, they do so with a very simple purpose in mind: to use that money to buy something.

On the other hand, when I think of saving money, I think of doing so with the explicit purpose of investing those savings to perpetually generate cash-flow and wealth for me forever.

The motivating force behind my savings rate and interest in investing is far different and far more powerful than the motivation of someone unable to grasp the concepts of investing and compound interest over a long period of time. Of course I have more discipline and control with my spending and investing — I’m saving for financial freedom, security for myself and my family, and the ability to direct my time in whatever manner I choose!

As soon as that concept is understood, motivation kicks in. It’s easy to behave correctly after that. It’s a no-brainer. It’s obvious.

I hate to break it to you, but just being on BiggerPockets doesn’t make you any more of a naturally competitive person than your neighbor down the block. You aren’t smarter, and you weren’t born with more self-control. The truly powerful difference in your accumulation of wealth over the long term is the reason behind why you invest. You understand that in a surprisingly small number of years, you can buy back your time, take control over your day, and have infinitely more opportunity by saving, investing, and reinvesting.

I’m lucky. I made a study of finance almost immediately after graduating college and had my moment of revelation as I began my working career. But the problem with finance is that you either get it or you don’t. It’s not obvious to everyone. It can’t be taught in an afternoon. It took me years to fully grasp the basics of earn, save, invest, reinvest.

Why Doesn’t Everyone “Get it?”

Now, I’m not excusing the grown men and women that I’ve worked with — or those professional athletes mentioned earlier — from their responsibility to manage their own lives and finances. A lot of those folks made decisions that directly resulted in hard times.

Those choices were probably their fault.

But how about the fact that folks are unable to grasp the totally unintuitive and complicated system of earning, saving, investing, and reinvesting that we all know and love here on BiggerPockets? Why don’t they understand that it is possible and that it can even be an automatic process to harness the financial forces that can allow one to “escape the rat race,” “retire early,” “FIRE,” etc.? Why don’t these folks feel the need to invest?

That is due to a lack of education.

Do you think I would be investing in Real Estate if I hadn’t learned about the concepts of compound interest and passive income? No way! I’d be spending every cent I earned living it up! Without the education I’ve accumulated with respect to personal finance, I’d be displaying a very different set of behaviors with my money. I’d still be my super competitive self in every other aspect of life, but it’s impossible to compete in a game if you aren’t even aware of its existence!

Conclusion

Financial success is not the result of innate motivation to succeed. Motivation must always have a source.  Concepts must be learned, reinforced, and ultimately believed.

Related: The (Totally Unfair) Secret Advantage of the 1% — and How to Level the Field

That’s the power of BiggerPockets. Here, we teach, repeat, and inspire. It was because of BiggerPockets that I took action and invested in Real Estate. And it’s because of BiggerPockets that I was exposed to free, high quality education on one of the most important topics in our society today.

But often, we on BiggerPockets forget that we are too educated on matters of finance to relate to the people who just can’t get by. Their situation is unfathomable to us because we forget that we’ve grasped fundamental financial concepts that are so far over most Americans’ heads that it is incomprehensible to us that they spend too much, go broke, and can’t hold a job. We’ve got a ridiculously unfair advantage over most of the population when it comes to long-term wealth accumulation. We forget that we’ve got the ultimate reason to accumulate wealth — and not to spend it!

How many others have realized that it’s possible to control their own destinies because of BiggerPockets? Is it possible that they became motivated after they learned it was possible? Is it likely that the knowledge they gained from BiggerPockets encouraged them to take action to succeed financially?

I think it is wonderful that it is our job to inspire and teach as many people as possible. And I hope that with this piece, I can encourage at least a few of you to join us in pursuit of that goal.

What has your journey in financial education looked like? Have you ever had the opportunity to teach someone the basics?

Leave me a comment, and let’s discuss.

About Author

Scott Trench

A longtime fan of BiggerPockets and a Real Estate Investor managing his first property, Scott is the company’s Director of Operations. BiggerPockets is a BIG website, and Scott’s background in finance and big data analysis will be instrumental in the next phases of company growth and in helping to bring the resources of BiggerPockets to more investors worldwide. Scott is passionate about helping others build wealth and serving his community in whatever ways he can. In his spare time, Scott enjoys skiing, biking, and cooking, and he is a lifelong rugger.

16 Comments

  1. David Dachtera

    Hi, Scott,

    In your conclusion, you state, “Concepts must be learned, reinforced, and ultimately believed.”

    The challenge I have with it is that belief without proof is called “religion”.

    What can we – as educators – do to reinforce concepts with evidence of HOW they work, rather than simply stating THAT they work? Is there any thing more concrete and relatable than just anecdotal evidence which we can provide to help people “picture the process”?

    Every real estate education program I’ve ever seen has, almost without exception, always suffered from the same syndrome: they’re all REAL big on what to do and why to do it, but when it comes to “how” to do it, they all fall flat.

    Can you expand a bit on your concluding statement to perhaps make it a bit more obvious what the next steps should be?

    • Scott Trench

      David – thanks for the comment.

      The “How” is what we do all day, every day here on BiggerPockets! We have an ultimate beginner’s guide to REI, dozens of “how-to” guides, hundreds of podcasts, thousands of blog posts, and over a million forum posts regarding every conceivable thought on “how-to” get started in REI, the ultimate tool, in my opinion, for ensuring long-term financial well-being for most people.

      My intention with this article wasn’t quite to focus on the “how”, it was meant to inspire those of us who do have financial know-how to spread the good word to those who don’t have the ability to see the light at the end of the tunnel (to play on the religion metaphor).

      In THAT regard – you’re right, I’ve failed to mention next steps beyond my vague request for readers to “inspire and teach as many people as possible”.

      I’m still working on that – I try to use my data analysis skills to spread the reach of BiggerPockets farther and wider every day in my attempt to inspire and teach others. Beyond that, I do the following (these might be some of those next steps that readers can take):

      1) Reach out to your local community through organizations that help those in financial need – seek to teach, then aid. I do this through a Catholic organization called the Society of St. Vincent de Paul.
      2) Write, post, educate, and refer others to quality information that can help them self-educate – I (biased of course) refer my friends to BiggerPockets.

      I also hope to soon become involved in lobbying for developing and implementing financial curriculums in public schools, though I haven’t taken as much action as I should have in that area.

  2. Christopher Moran

    You’ve done it again! I keep liking your posts! Damn you. 😉

    Thanks to your last post, I have been riding my bicycle to work, even when it is cold.

    And now, thanks to this one, I am spending today taking a long hard look at… my reasons WHY.

    As you point out in this post, once you have a powerful reason why, the motivation is easier.

    Like for bicycling, my why is… to stay healthy and vibrant until I am 120 years old.

    For spending so much of my free time on my rentals, my why is… to have freedom and choices. I think your why is pretty similar to mine; basically, freedom. Owning your own time.

    Whenever I am tempted to spend money on b.s. like the latest iPhone, in my mind, I think of this picture…

    http://s804.photobucket.com/user/crbinvestments/media/Punta%20Cana/Moneytoassetsnotstuff.png.html?sort=6&o=29

    Am I buying an asset, or just more stuff?

    That question has helped me focus more on assets and less on stuff. In ten years, I would much rather own more property, than a pile of useless stuff. I just cleaned out my basement, and it is a good reminder of all the crap I wasted my money on. I would easily have enough for a down payment just from the crap I just cleaned out. It makes me sick, but at least I buy less stuff now, and have been for many years now.

    • Scott Trench

      Christopher – thanks a ton for the support – I really appreciate it! I have the same mindset as you and when I moved out of my rental property and into my duplex, I dumped a ton of items that I no longer needed as well. I totally agree with your view of accumulating assets instead of things and understanding the “why” behind what you are doing.

      The “Why” really helps you see the end goal, and more than working towards that end goal, knowing your “why” helps you do something that can be far more important:

      It let’s you eliminate the things that are pointless or distract from what you really want.

  3. Minh Le

    Financial illiterate? I’d say “you don’t know what you don’t know” is a better way to describe it. Some people are born to be leaders. Most are born to be followers.

    People want financial freedom, but most are unwilling to make the sacrifice. EVERYTHING IN LIFE HAS A PRICE. The top 1%ers are where they are now for a reason.

    Biggerpockets is no doubt a top free on-line real estate resource. However, people have to seek it out, learn and take action. Otherwise, it will be like water under the bridge.

    • Scott Trench

      Minh – It’s easy to argue that people are unwilling to make the sacrifice to take control of their finances. It’s hard to empathize with them.

      I believe that the reason that people aren’t motivated to take control of their own finances is because they fail to see the “why” behind taking control. How can you become motivated to save, invest, reinvest, etc when you don’t understand what that cycle of financial behavior will lead to?

      The lack of sacrifice is due to a lack of REASON to sacrifice, in my view. And that lack of REASON is due to a lack of UNDERSTANDING. My article isn’t a call to take control of your own financial future, it is a call to reach out to others and instill that knowledge, desire, and vision in them.

  4. Bruce I Dixon

    Great article Scott,

    I remember that aha! moment realizing that working until retirement at 65-70 was optional, and I could make moves in just a few years that would redefine my life. It is weird to consider that this form of thinking is absolutely second nature now. Thank you for reminding to be grateful for this heart/mind change.

    • Scott Trench

      Thanks Bruce! The goal is for us to help others have that moment. It’s easy to dismiss people as unmotivated and lazy – “they just don’t WANT it enough…”. I feel that this is simply not true, and that so many more people stuck in their spot in life can achieve great things by just unlocking their ability to conceive of financial freedom.

  5. Walker Hinshaw

    Hi Scott, really enjoyed the article. I did not grow up around a lot of wealth, but was lucky enough to have friends in college that came from families with lots of money. Looking back, I realize that even though I was motivated and ambitious upon entering college, until I saw what was possible it never registered that there were any options besides get a job, work hard, and slowly climb the ladder until I’m 60. Thanks for reminding me of how far I’ve come and how much I can help others by spreading the investor mindset.

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