Motivational posts are a big thing on social media. Type in hashtags like “motivation,” “inspiration,” “hustle,” “grind,” “quoteoftheday,” and so on, and a plethora of slick memes will show up with quotes from business leaders and motivational speakers through the ages. You will find many quotes from Jim Rohn, Robert Kiosaki and Tony Robbins, to name a few, extolling the virtues of persistence, focus, planning, how to build wealth, and the like. Entrepreneurship has exploded as the internet has made education more accessible than it has ever been. Technology has lowered barriers to entry for many industries in terms of knowledge as well as start-up capital. In theory the playing field of capitalism is far more level than it has ever been before. My inbox and social media accounts are flooded with offers to take a look at some idea to build wealth using the wonders of modern technology, usually with a rags-to-riches testimony.
Now we can “monetize” just about anything. Industries are growing for motivational speakers, business coaches and trainers, for which clever entrepreneurs will provide instruction on how to tap into the market, for fees small and large. Usually potential clients are lured into listening to the sales pitch with a free webinar or ebook download. Somewhere within the material, usually at the end, there is a sales pitch – an up-sell – to turn the free information into a revenue stream through memberships, subscriptions or further coaching. That sales pitch usually includes at least one quote from a “guru”, such as those mentioned above, to imply that the person shares that winning mentality; they have the thing that you don’t think you have. It is a very effective tactic as it taps into the deep-seeded self-doubt many of us live with; our desire to be perceived as and feel successful; and guilt over not achieving our full potential. When I was in network marketing we were taught to always search for the NEED and posit the product as the solution. The need that motivates many people to pour hundreds to tens of thousands of dollars into these trainings is freedom from the imprisonment of financial struggle.
But even with the abundance of opportunity at our fingertips there is still a pervasive sense of lack in our society. Increasing abundance of opportunity has not resulted in increasing satisfaction or happiness. Why is that?
Ecclesiastes 5:11
As goods increase, so do those who consume them. And what benefit are they to the owners except to feast their eyes on them?
I decided to call this blog The Financial Fashionista in part because I recognized that I myself had a conflict between my desire to acquire things and my desire to establish a solid financial foundation. I have an economics degree and experience in high and low finance. (That’s a joke.) In my head I have a very clear understanding of how money works: the concept of compound interest, investing in the financial markets, financial products and services, saving, interest expense, depreciation, the difference between cost and value. In college my focus was mortgage-backed securities, the same product that brought down the world financial markets. But when it comes to personal finance emotion is almost inextricably linked. This is why most people pull their money out of the market during a correction, as happened in 2008, marriages fail, and even cause business owners to make poor management decisions.
I am now looking very closely at the ‘why’ in my spending habits and attitude toward money in general. What lessons from my past must I un-learn? How do I bridge the gap between my rational understanding and my emotions? I have rooms full of “stuff” that I never have to look at or touch for the rest of my life. The older I get the more I realize that it is all meaningless. Whatever satisfaction I receive from purchasing a new dress or some other thing is absolutely fleeting. And as such the process must perpetuate to reach the same high.
What motivates us to do this? I know I’m not alone.
Ecclesiastes 4:4
And I saw that all toil and all achievement spring from one person’s envy of another. This too is meaningless, a chasing after the wind.
Chasing after the wind.
Another thing that social media brings to the forefront is the deep desire to be simultaneously approved and envied by others. We lament the unrealistic standards of beauty and lifestyle promoted on the medium but those who do it best gain the most followers, by which they are able to creative highly lucrative businesses. Posts and hashtags about grinding and hustling extol the value of pushing to reach goals and measurable achievements; we respect most the people who seem to be accomplishing big goals and dreams and the wealth that comes with it. But that value system is based on outward signs of a success that can disappear even faster than it came; not character or the virtues of community, humility, patience, temperance and generosity. It is inherently inauthentic. No wonder it cannot bring forth lasting satisfaction and happiness.
Motivation in this day and age is temporary because it tends to be based on comparing ourselves to others and wanting what they have. Inspiration is more authentic and long-lasting because it is based on the vision and purpose that is uniquely suited to the individual. As the saying goes, “chase your passion and the money will follow.”
It is not hard to find advice on managing money. There are print publications, websites, gurus, apps, non-profits, licensed professionals and people we know who give us their ideas on money: saving it, investing it, making more of it and how to spend it.
A disheartening consequence of having unmanageable “bad” debt is delay in attaining goals and dreams. Bad debt is debt acquired for things that have no real value. (Good debt is that which is acquired for things that we can use to increase our net worth today that could also continue to provide resources in the future; for example, a home mortgage.) Money diverted toward paying the monthly interest on balances carried forward on credit cards represents an opportunity cost both in the moment and the near future. This is especially true for entrepreneurs. Access to capital is essential to start and grow a business. Many entrepreneurs will apply for a bank loan and solicit investors for this purpose. After loan officers and investors read the business plan, they will want to assess the owner’s financial credibility. They may look at the credit report and bank accounts among other things, and usually require that the owner have some “skin in the game” to share in the risk (a certain percentage of the loan amount.) The amount of his/her own cash and/or assets that the owner is expected to have invested in the business could be sizable. Besides that, business owners always need a cushion for unforeseen hits to their budgets. Even the most motivated entrepreneur with the best ideas can have trouble getting their business off the ground due to perpetual financial constraints. An entrepreneur can spin his wheels for years and years, missing out on opportunities and delaying plans, due to large amounts of avoidable debt.
Redundancy: