Updated on 01.20.11

The Fundamental Ingredients for Financial Success

Trent Hamm

In today’s reader mailbag, a reader asked me if the questions I get for the mailbag make me depressed because, frankly, many of the stories I hear from readers represent a grim financial story. I told him, quite honestly, that most of the questions actually make me happy. They fill me with hope. I think that answer may have surprised some readers, so I thought I’d elaborate on that idea a bit.

I tend to think there are five fundamental ingredients for personal finance success. And, no, having a lot of money in your pocket is not one of those ingredients.

My idea behind these three ingredients comes not only from my own experience, but from reading the success stories of a lot of Simple Dollar readers over the years. Some of them were rich and some of them were poor. Some of them had great jobs, while others were unemployed. Some of them were old and some of them were still in school. Some of them were highly educated, while others didn’t have even a GED.

All of them had a few key things in common.

A willingness to not blame others Rather than blaming society, blaming their employer, blaming their mother, or blaming their spouse, successful people look to themselves for answers. Yes, quite often other factors in their life were brutally unfair to them: a cheating spouse, a thief in the night, a cruel employer, an illness, an injury, a deceased partner, or countless other things. Yes, they realize that others sometimes get the breaks. However, they didn’t waste their energy blaming that unfairness for their problems. Instead, they looked at themselves and asked themselves, “All right, this is the situation, so what do I do to make the most of it?”

A willingness to learn Successful people know that they don’t have all the answers, so they seek help from others. They read books. They ask questions. They get lots of answers and put things together for themselves. The sheer act of writing in to the reader mailbag shows that they have a willingness to learn (at least, most of the time).

A willingness to work Successful people also know that when you want something, it’s not just handed to you. You have to work for it. You can’t just wake up one morning and have the job of your dreams. You can’t just turn over one day and find that all of your financial and personal problems are solved. You have to work for these things – and often, you have to work for a long time for these things and see failures along the way. That’s part of the equation.

A willingness to change People are creatures of habit, and changing those habits is something that we naturally resist, at least a little. If you want to be successful, though, you have to be willing to upset the apple cart. You have to be willing to walk away from personal demons and hurtful relationships. You have to be willing to completely alter your daily routines. You have to be willing to adopt new routines, even if they’re painful ones.

A goal This is the last of the five key ingredients, and it somewhat rests on the shoulders of the others. A goal means that you’ve clearly defined where you want to go. You’ve written it down, worked it out again and again in your mind, and developed a plan for reaching that goal.

No matter where you are at financially or personally, the path to where you want to be rests on top of these five things.

So why am I hopeful when I work on the Reader Mailbag? Most of the readers who write in are doing at least some of these things. They’re taking command of their own situation, learning more, and determining where they want to go. Some of them don’t have all of these pieces in place, but they usually have enough elements of this picture that I feel optimistic about where they’re heading.

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  1. Frank says:


    In order to master any form of discpline you have to start with the basics, the fundamentals. I have never looked at any of my challenges in this light. The insight that you recieved from reviewing the reader mailbag has blessed me. Thanks for sharing.

  2. Johanna says:

    As you’ve described them, I think I lack all but one of these. I must not be very financially successful. :)

  3. chuck says:

    dont feel bad Johanna. I lack all of them. but i’m working on it.

  4. Another is focus. I’ve given up looking for a job and doing about half a dozen things to create income to focus on building my website and making it successful. I feel so much better doing that, instead of slogging thru a mile long todo list, I am working full time on something I care about.

  5. Kate says:

    Interestingly, I think I have the opposite of Johanna’s problem: I have everything but a goal.

    Note to self: Get a goal, already!

  6. Josh says:

    Thanks for the post. I think one of the hardest things is to realize what you should be learning. I feel like often I have the willingness to learn but I don’t put forth enough effort to really be aware of what I need to learn or need to change.

    Success is about effort and using your full mental capacity.

  7. Chris @ BuildMyBudget says:

    I think perhaps the most difficult fundamental is taking responsibility for ones self. People seem so ready to blame others(parents, friends, etc) for their plight…which keeps them from thinking about finding a good solution. The day I said “this is all on me” was one of the most liberating days of my life.

  8. Brittany says:

    Love it. I might use this in the classroom (with a focus on overall life success, not just financial).

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