College Central®

Ask around. The Network works.®

Personal Finance
The Main Causes of Personal Financial Crises

Josiah Harry -- When it comes to achieving financial success, it means that you are the generator of income, not your job. Whether you're a workforce newbie or industry careerist, you are the boss, and each morning you get up to sell your brand, or your labor, while following some basic guidelines.

In order to become wealthy, you must change the way you think about money. This is to say that you must treat money like a living thing.

When it comes to making money, you are the primary generator of income, not your job. You are the boss, and each morning you get up, you are selling your brand, or your labor.

Think of it this way. Each dollar is an operative (an employee) in your business. Each dollar should have the same goal as you do, and that is to make enough money to earn more money.

So, before you hand over that dollar, ask yourself, how much profit is that dollar going to bring in. If you must, give each dollar a name. No kidding.

Once you get to the point where each dollar is bringing in more dollars, then you no longer have to sell your labor. Your goods and services, which are now an extension of your labor, will automatically generate more dollars for you.

At the end of the day, remember, cash is king, and having lots of it is a good thing.

The importance of budgeting

The all-important first step in creating wealth starts with having a written budget. Most millionaires will tell you that systematic budgeting played a key role in them becoming millionaires.

Here are three items to consider when creating a budget. First, determine how much income you have. Second, estimate all of your expenses. And third, subtract the expense total from the income.

Spend less than you earn

Avoid debt

Debt is a destabilizing force that exponentially increases risk and the probability of fatal failure.[1]

Debt is something you should avoid like the plague. Yet, many people believe that debt is a prerequisite to wealth-building. That belief is absolutely asinine, entirely misguided, fashionably speculative, and mired in utter ignorance.

The key to wealth-building is to avoid debt. If you do assume debt, let it be towards something that generally increases in value, like a real estate. The one exception for assuming debt is purchasing a home. Even then, pay down 20% in cash, and assume no more than a 15-year fixed rate mortgage for the balance.

Each time you borrow, you are in essence making yourself a slave to the lender. The master (i.e., lender) has total and absolute discretion over the funds and the high-status artifacts (e.g., car, house) that were purchased with the borrowed funds.

Study the lives of winners

One of the purposes of studying the lives of winners is to get an insider's perspective on the values and characteristics, strengths and limitations, and other variables that helped shape these individuals into winners.

Studying the lives of winners does not mean basing all of your decisions on their accomplishments. Studying the lives of winners is ultimately learning about oneself.

Income and education

One of the highest correlating factors with income is education. Someone with post secondary education has a higher earning potential than someone with only a high school education.

The work-life earning (minus investing) for someone with a high school diploma is around $1.2 million, versus someone with a professional degree who would have earned $4.4 million.[2]

While education neither guarantees success, nor economic security, it places you in a position to win. It should be noted that during the Great Recession of 2009, we saw a record number of college graduates in the unemployment line.

Nonetheless, in a crowded field of applicants, the college graduate continues to be given top priority. Research also suggests that investors prefer to stake their interest in persons with post secondary education. The essence of education is about reaching your full potential.

The importance of education is seen in every facet of our daily lives, from personal financial security, to the way businesses are ran, how societies interact, stabilization of governments, and the manner by which technology advances.

Putting it all together

Achieving financial success is not as difficult as you might imagine. It is like cleaning and maintaining a swimming pool.

I remember sharing in the excitement with my family after we secured a house with a pool. I thought of the pool parties my children would get to enjoy from the comfort of their own backyard.

The time came to get the pool ready for the summer. With my supreme confidence in one hand, and pool supplies in the other, I began preparing the pool. On day one, I raked the bottom of the pool and removed as many leaves and debris as possible. Day two, I shocked the water. By day three, the water was starting to turn, but remained cloudy.

Day eleven came and the water was still cloudy, and I was ready to quit. That was until I came across a blogger who offered the following advice. He said, "Repeat after me: 'Shock, run filter, brush, vacuum. Shock, run filter, brush, vacuum.'" I thought, "what the heck." I implemented the steps, and to my surprise, it worked.

So, do you want to achieve financial success? Then repeat after me: "Make money, pay yourself, spend less than you earn, invest, avoid new debt, repeat."


1. Ramsey, D. (2011). EntreLeadership. New York, NY: Howard Books.


Josiah Samuel Harry currently serves as an adjunct professor and teaches subjects ranging from world cultures to psychology. Josiah's research interests are in spiritual philosophy, counterculture, and humanistic psychology. His published works include: Awakening Humanity's Collective Spirit, and Winning: Essentials for Achieving Relational Intimacy. Josiah was born and raised in St. Croix, U.S. Virgin Islands. He was educated at Loyola University New Orleans. An original thinker and truth-seeker, Josiah invites each individual inward toward a deeper reality that unveils the fundamental purpose of life, which is to ultimately find truth in our own lives and live in relationship with others.

© 2015 Josiah Harry

Return to top

The views and opinions expressed in these articles do not necessarily reflect those of College Central Network, Inc. or its affiliates. Reference to any company, organization, product, or service does not constitute endorsement by College Central Network, Inc., its affiliates or associated companies. The information provided is not intended to replace the advice or guidance of your legal, financial, or medical professional.