by Sarah S. Fallaw, Ph.D., Director of Research at AMI
Success in life and in work has been consistently tied to conscientiousness: being disciplined, having plans and focusing on details. Research in psychology consistently shows a relationship between this personality characteristic and how well someone will do on the job. Likewise, the research conducted on those with high net worth over a period of 30 years also provides insight into why they are balance sheet affluent – they have a long-term, disciplined approach to saving, spending and investing. These individuals are not distracted by what others are doing (e.g., the Joneses).
As the Olympics wind down, there are numerous examples of focused discipline that prove this point. One example is Kim Rhode, who recently won her 5th medal in five consecutive Olympic games, making her the first American to do so. The New York Times reports: “her path to the record books was not a linear one.” On her way to medaling in both double trap and skeet, Ms. Rhode encountered setbacks and personal crises that impacted her path to Olympic history. No matter what the distractions and challenges, she still focused on her goals. She shoots, on average, between 500-1,000 rounds a day every week, and claims 3-million plus targets.
These stories should remind us that winning gold (or silver or bronze) is dependent upon disciplined practice and focus. What works in sports—and on the job—also works for personal and financial goals as well, as discussed in Chapter 3 of The Millionaire Next Door. Prodigious accumulators of wealth (PAWs) consistently “allocate their time, energy and money efficiently, in ways conducive to building wealth” (p. 71).
Perhaps we’re too busy “enjoying” the distractions of the day – social media posts, entertainment tragedies (Oh, Kristen and Robert!), fantasy sports – to focus on key goals such as financial independence. Maybe shooting three million targets sounds boring. However, I’m confident that five Olympic gold medals doesn’t feel boring to Ms. Rhode and that most would trade the relative excitement of distractions for financial independence.