Are You the Financial Horse or the Rider?

It’s pretty obvious that we’re living in a very different world to previous generations when it comes to our financial and career worlds.

Post-World War II generations got conditioned to the idea of having secure careers, a guaranteed pension and the ability to buy a house if they wanted to. In some countries, such as the UK, there was even universal state-funded education system. Not bad conditions for financial planning.

True, this wasn’t the case for everyone but there was a decent assumption that if you behaved yourself, kept your head down and applied yourself you would be well positioned for a decent lifestyle.

That was then. This is now.

Thanks, Financial Crisis. Where Does That Leave Us Now?

The fallout from the global financial crisis is an obvious focal point for why things changed. Billions of dollars worth of asset value disappeared in a puff of smoke. So too did a great many jobs. But, in fact, the seeds for a shift were sown long before then.

For one thing, companies were increasingly less open to the idea of “defined benefit” pension schemes, where rain or shine you knew what you were going to be getting to retire on.

For example, in 2006, IBM announced a ffinancial masterreeze on its defined-benefit plan and stopped funding the plan. The freeze was the first step toward the elimination of the plan.

Soon after, Verizon, Lockheed Martin and Motorola took similar steps. And the path was set. They were bigger fans of “defined contribution”, where they essentially defined how much they would put into the pension pot.

If it didn’t grow as was hoped you would have to make up the rest.

Also, medical breakthroughs in recent decades have meant that more seniors are able to live longer and more active lives, which has put additional pressure on social security systems around the world. And, of course, technology advancement has been a massive enabler for all of us.

Be Careful What You Wish For

But great as it is that we can walk around with so much computing power in the palm of our hands, the breakthroughs that led to this has also resulted in companies needing fewer of us to do the work.

So big changes in the relationship between workers and employers were underway long before the banking system collapsed and dragged us all down with it.

But along with that shift has come a change in responsibility. Back in the day, your employer was only too happy to take you on when you left school, train you, promote you, send you on business trips, give you pay raises,  and look after you all the way through to you collecting your carriage clock on your day of retirement.

Where Does That Leave Us?

Now the onus is on us. We have to take control of our working lives, and in turn our financial lives. Let’s face it, we may well be on the verge of another financial crisis. And who will look after us then?

Most of us know this intellectually. But how many of you are actually taking responsibility for those parts of your lives? How many of you still default back to your company, the government and some other external party as the sole driver of your career and financial well beings?

Borrowing from success guru Napoleon Hill, you’ve got to ask yourself whether you are a “rider” or a “horse”. As he put it in his book ‘The Master Keys to Riches’:

You either ride life or it rides you. Your mental attitude determines who is ‘rider‘ and who is ‘horse’.

You are Increasingly What You Think

How many of you are “riders” and fully dictate where you want to be going? Or how many are “horses” and will go in the direction of where you are being steered?

Becoming aware of where you are currently is a first step. Maybe you are fully on top of your career and money stories. And that’s great.

But if you are more aligned with our four-legged friends, then doing something about your situation is the next step.

Maybe that means upgrading your skills, expanding your value-adding network, or refocusing your strategies and goals. Very often, improving your financial capital is closely aligned with increasing your human capital.

If you do become aware that you may be a victim of circumstance and are letting the environment dictate your future, have a good look at how you can do something about it. Not your boss, not your financial advisor, and certainly not the government. You.

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