Chapter 1.
Why Financial Success Is So Elusive

In October 2005, Lara and Roger Griffith bought a lottery ticket and won the equivalent of $3.6 million in today’s dollars. Roger worked as an information technology manager, and Lara was a performing arts teacher at a local college. While both were well-educated, neither of them had any idea how to manage such a large sum of money.

In an interview published in theDaily Mail years later, Lara said, “We were so desperate not to mess it up, and it’s very difficult when you have advisers coming to you in their shiny suits and flashy cars saying, ‘I’ll look after you, trust me.’ Who do you trust?”

She then added, “We were told not to put all our eggs in one basket, so we decided to invest in property and business. We thought we were doing everything right.” They invested in two rental properties, the stock market, and a beauty salon.

However, after Roger quit his job, they bought their dream home for about $1.6 million, along with a brand-new convertible Porsche and Lexus SUV. They enrolled their two daughters in private school at a combined cost of $40,000 per year. They also started going on shopping sprees for jewelry and designer clothes, and they embarked on lavish first-class vacations to Dubai, Monaco, and Rome.

Five years later, in 2010, as the economy was just starting to recover from the global financial crisis, their beauty salon was still hemorrhaging money. Then, their dream home was devastated by a fire. Because they were underinsured, they had to pay for temporary accommodations for the seven months it took to repair it.

Their poor investment decisions, overspending, and failure to manage risk resulted in them losing every penny of the $3.6 millionwithin six years.

In many of the “riches to rags” lottery stories we hear, we often assume that the people who lose their lottery winnings are unsophisticated or uneducated. However, this story illustrates how anyone is vulnerable to those losses.

Lara and Roger were intelligent, educated, and were (at least initially) sincerely committed to making the money last. They should have been set for life. How could a couple with all of those advantages fail so spectacularly after receiving such a windfall?

This leads us to the larger question: if we all say we want financial success, why do so few of us ever actually achieve it?

Unfortunately, this disconnect exists for numerous reasons, including consumer culture, the media, and social media. It’s also challenging to overcome instant gratification and lifestyle creep in an era when pensions are going away and we are increasingly responsible for our own retirement savings. These factors, especially when combined with our own financial self-limiting beliefs, can sabotage our financial success.

Programmed to Consume

The fact is, we are practically programmed from birth to consume at, if not beyond, our means. All media, including newspapers, radio, magazines, and television, have business models built on advertising. This business model only works if they can draw more viewers, digital marketing impressions, and viewing hours, and if those viewers then buy the advertised products. Buying more and more is good for the media, their advertisers, and the brands themselves—but it’s not good for your net worth or financial well-being.

This is all powerfully reinforced by television and film consistently correlating your self-esteem with how much stuff you accumulate and the prestige of fancy homes, racy cars, exotic travel, and other luxury goods.

Consumerism is also emphasized through endless testimonials and endorsements by celebrities we admire, as is routinely seen in advertising and social media.

In the newest iteration, social media influencers drive their followers to consume. The primary qualification of these influencers is often simply their follower counts.