Stay Out of the Financial Danger Zone of “FALSE POSITIVE”
The concept of “false positive” is, in my opinion, the most dangerous trap anyone trying to build financial wealth can fall into. It is imperative that anyone on the road success does everything in their power to stay out of false positive and, by doing this, financial success is far more attainable.
What is false positive?
False Positive occurs when you have started to gain initial financial traction in your career, and you start to look for ways to spend rather than save your money. We see examples of this everywhere. In Texas we call it “big hat…no cattle.”
Here are two perfect examples of false positive.
Example #1 – Starting from Broke: You start a new job, broke, and are terrified that you will not be able to pay the bills in the coming months. You bust your butt to meet your financial obligations and finally you start to see some success. Your confidence goes up, the commission checks start to flow and you can take your significant other out for a fancy steak dinner. DANGER… HERE COMES THE FALSE POSITIVE! You start thinking about ways spend your money. First it’s the hot car, then a better, more expensive house and finally that boat you have always had your eye on. As exciting as all those purchases are in the moment, you have yet to build financial success, you are just not broke anymore. It is important to not let yourself get caught up in this classic example of false positive thinking, it can kill the path to financial freedom.
Example #2 – You Are Already Making Money: Your career is going well and you are long past worrying about the bills getting paid. You live in a nice house, drive a nice ride and take $20,000 vacations with your family. But do you really have enough money to be doing these things? My guess is NO and here is the math to prove it: Even if you have saved $1,000,000 and you put it into tax free municipal bonds that pay you, say, 3% per year that equates to $30,000 per year or $2,500 per month. Does that sound like the ideal retirement you had hoped for? Let’s get real here, you are very possibly in false positive mode, but just do not want to believe it.
There is hope! Here is how to stay out of false positive:
In example #1, you need to do the exact opposite of what you are thinking. DO NOT BUY ANYTHING, DO NOT EVEN THINK ABOUT BUYING ANYTHING, AND DO NOT SPEND A DIME! The pressure you felt when you were broke is what I call “low level pressure.” Anyone would feel the same pressure if they were also facing tough times. Yes, you are now out of the low level pressure, but financial success is still a long way away. Focus on making more money, saving more money and spending nothing.
In example #2, you need to pick a higher income goal and push yourself to the next level. If you are making $125,000 per year, push yourself to make $250,000. If you are making $250,000 per year, push yourself to make $500,000. Determine the dollar amount your household needs to live on each month, including your date nights, vacations, etc. and SAVE the difference. Every dollar you earn above your household needs should be put into a separate bank account that is untouchable. The key is to accumulate more cash NOW! The investment type you will use for this cash is far less important than the need to simply accumulate more cash. Once you have the cash built up, something magical happens…as your net worth grows more opportunities will come to you. The key is to be in a position to take advantage of the opportunities when they show up which will be impossible if you do not have the cash built up.
You know the neighbors and friends who are caught up in false positive…it’s a very dangerous place to live. Decide now that you will not fall into the trap, your financial future depends on it.
ABOUT THE AUTHOR: Matt Manero is the Founder and President of Commercial Fleet Financing, Inc. (CFF) located in Dallas, TX. CFF is celebrating its 20th year in business and provides financing for commercial fleet vehicles such as box trucks, cargo vans, big rigs, tow trucks, dump trucks and construction equipment. With annual fundings approaching $100 million per year, CFF is the proud recipient of the 2014 Inc. 500/5000 fastest growing private companies in America. Learn more at www.cffantionwide.com, @mattmanero or call 972.247.8447 phone. #falsepositve
What's Your Reaction?
Eye opening article, while reading it I was seeing myself clearly at times living with “False Positive” behavior. The feeling that you have made it will cause you to relax and let up on the pedal, don’t let it happen to you. The writer, Matt Manero, should write a book about False Positive!
False Positives are extremely dangerous, especially when the economy is improving. In 2015, there are plenty of money-making opportunities out there – but what about in 2016, 2017 and beyond? Never count on the economy to take care of you! You need to create your own economy to take care of yourself and eliminate the false positives……..showing proof positive that you are a well-prepared and astute business person.
Fantastic article, it’s a great reminder that it’s easy for anyone to fall into a “false positive”, but there is a way out. Also great advice on spending habits, saving, etc.