You don’t have to be a high school kid to feel the pressure to be popular. Cliques are formed in high school, in college, on the job, and even at your local church. What is it within us that drives us to want to be popular, to want to be mainstream, and to not want to be different? Is it our internal desire to be accepted? Perhaps. We all have a desire to be loved and accepted. However, when does that desire to be accepted affect your money? That’s the question we want to answer.
No one wants to be viewed as odd or different. There’s an unwritten law that says to be cool and accepted, you have to follow the herd and do what everyone else is doing. I think psychologists even refer to this as the “herd mentality,” where as long as everyone else is doing it, then it must be ok and worse yet, it must be in your best interest. What if everything you and “the herd” were doing with you and their money turned out to be the worst financial mistake you had ever made, when would you want to know?
I want to challenge you to dare to be different, to be bold and to try your best to avoid the herd mentality when it comes to your money because what might be good for the goose isn’t necessarily good for your gander. And, if you and the rest of the herd’s financial ladder is leaning on the wrong wall, then every step each of you take will only lead you to the wrong financial place faster.
If you’ve listened to the news, you’ve probably heard some discussions about tax policy and how the president wants to change tax policies on the top income earners, which for our exercise we’ll call the top 10% of income earners. You may have also heard $250,000 thrown around in discussions by the politicians as folks who fit this definition of the top 10% of income earners. As such, you may have rightfully concluded that the top 10% of income earners are those that make $250,000 or more. If what you thought to be true about the top 10% of income earners turned out not to be true, when would you want to know?
The fact of the matter is that to be included in the top 10% of income earners only requires a household income of $112,124. To be in the top 5% of income earners only requires a household income of $154,643. Collectively, the top 10% of all income earners are responsible for 70.5% of all income tax revenues received by our government. These figures are based off the 2009 income tax data as provided by the Tax Foundation.
So now that you know how much income it takes to be in the top 10% of income earners, where do you fall? If you fall in the top 10% of income earners, here’s the question I want you to ask yourself: Is your income popular (i.e. common) on unpopular (i.e. uncommon)? If you find that you’re income is unpopular or uncommon and you are using popular or common strategies to plan for your future, don’t be surprised if you end up with “popular results,” which I doubt is where you’d want to be financially speaking!
Here’s the fact of the matter: Uncommonly successful people do things that most everyone else won’t do and they take financial paths that most everyone else isn’t taking. Unpopular income demands unpopular strategies. You can’t use the common strategies that 90% of the population is using to address your uncommon income. Uncommon income or uncommon wealth demands uncommon planning strategies. So the obvious question is what are some uncommon planning strategies you should be utilizing? Here are a few that my clients and myself appropriate:
- Refusing to settle for average rates of return but instead demanding real rates of return on your money.
- Refusing to only get one use of your investment dollars but instead investing your money in such a way that you get multiple uses out of the same investment dollar.
- Refusing to believe that the stock market and mutual funds are the only place to earn double digit returns but instead accepting the fact that there are other places to earn double digit returns that may even carry less risk than stocks and mutual funds.
- Refusing to believe that the only way to be debt free is by having all your debts pad off but instead realizing that you can have more wealth and be more debt free by learning how to properly utilize good debt.
- Refusing to believe that your home is your biggest investment and accepting the fact that it’s just a place to live, it’s really a lousy investment and probably one of the riskiest investments you might own.
- Refusing to believe that a 15 year mortgage is the quickest way to pay off your mortgage and realizing that you can do so much quicker with a 30 year mortgage.
If after reading this article you realize that your income isn’t as popular as maybe you once were in high school, don’t feel bad. It’s a good thing to have unpopular income! What’s bad is trying to use popular or common strategies to deal with unpopular or uncommon income. We help clients everyday to appropriate uncommon and unpopular strategies like the ones referenced above to deal with their uncommon income, so they can continue to grow their uncommon wealth and reap the benefits of being unpopular. For once, it’s actually cool and profitable to be unpopular. Don’t you want to be unpopular too?