5 Real Reasons You Won't Reach Financial Independence

Jacob Schroeder   May 17, 2021

We are not perfect, and those imperfections often manifest themselves in our finances. But never fall for the illusion that wealth is wholly dependent on your character and behavior.

To explain what I mean, let me ask: Have you met the Welfare Queen?

She is irresponsible and shameless, engaging in behavior counter-productive to financial self-reliance. She is a fraudster, gaming the system any way she can to receive tax-payer money and never work a day in her life. She is everything wrong about government largesse.         

You've never met her and never will. She is not real. She is the fictionalized version of an exaggerated incident. The Welfare Queen is a subversive trope, famously used by Ronald Reagan during his presidential campaign to criticize welfare programs. Do some people take advantage of federal programs? Absolutely. But it is disingenuous to portray some infractions as the norm.

Caricatures, like the Welfare Queen, are a way to tell a simple, clear story. They are also a way to charge the emotions of a desired group of people.

At their best, caricatures can help people easily understand complex topics. At their worst, they can advance harmful, racist ideologies. At their not worst but not good either, they can purposefully exclude important variables and create false impressions. As it is in personal finance.

Self-anointed financial gurus like to rail against their own trope: the hapless saver who will never achieve financial independence because of unaddressed character flaws and financially irresponsible behavior. It's almost a form of wealth shaming.

The reason, they say, so many people don't save enough for retirement is personal choices. Coincidentally, the solution for improving your behavior and growing rich is to buy their books, sign up for their courses and dish out loads of money to attend their conferences.

But that's not the real story any more than the Welfare Queen is. Maybe this caricature needs a royal name, too. How about the Wealth Jester? The person who is susceptible to foolish financial gestures that puts their future in jeopardy.

The truth is there are a variety of factors at play when it comes to building wealth. Certainly, personal decisions and habits make a difference. We, however, are also faced with forces that are far beyond our control. To think otherwise is to wrongfully fall for the Wealth Jester narrative.

Here are five bigger reasons people are unable to achieve financial independence.

1. Don't earn enough money

How is it all your fault if wages are set so low you can't save?

The ugly reality is that many people simply do not earn enough to become financially independent. Once the bare necessities are covered, there is little left over.

Less than 40% of American households have the means to cover an unexpected $1,000 expense -- much less build a nest egg.

To continue reading, please go to the original article here:

https://rootofall.substack.com/p/5-real-reasons-you-wont-reach-financial-independence