Ever since Malcolm Gladwell’s book, Outliers: The Story of Success, hit the shelves in 2008, parents (especially in my home town) have incorporated his findings religiously to give their children a boost on their path to becoming successful later in life. Do his suggestions work? Given the examples he provides in the book, they appear to. Whether the patterns he uncovered will continue to be predictors of success going forward, nobody knows. Time will tell. More importantly, though, do his conclusions make sense? Definitely.
Key takeaways from the book
So let’s back up a second. For those of you who haven’t read Outliers, let me give you the “tldr” (too long, didn’t read) version:
Opportunity knocks for some and not for others. Often times, it’s not something you can control – i.e., when you were born, being in the right place at the right time, etc. Sometimes, though, you can help to create the right opportunity for yourselves, like getting access to the best coaches. The successful take advantage of any opportunity available to them and use it as fuel on their way to greatness.
One fascinating example that Gladwell describes is around professional hockey players. The vast majority of them were born in the beginning of the year. Simply by having an early birthday, they were a little bit older and a little further along physically than their teammates or opponents. This meant they tended to be faster, stronger, and better at their sport, so they got better coaching early on. Better coaching translated to them being better at the next level, so they continued to get more attention and the better coaching each step of the way!
Mastery takes time and practice. Successful people tend to put in at least 10,000 hours toward the mastery of their craft. By pursuing something that they consider to be meaningful work, they are making it easier on themselves to put in the necessary number of mastery hours. It’s so much easier to do something regularly when you enjoy it!
Upbringing matters. And that does not mean privileged children become the successful ones. Actually, what matters most are the level of involvement from the parents in the lives of their kids and the values that they pass down to their children.
How can you apply these takeaways to your life so you can become a financial outlier?
I can understand if you feel like Gladwell’s predictors of success are all about luck or circumstance and that there’s nothing you can do to change them. And maybe the ship has sailed when it comes to you becoming a professional hockey player. When it comes to becoming a financial outlier, though, I believe it is never too late to begin building the right foundation. Here are a few things you can do now to give yourself the best odds of finding success with your personal finances.
You can create your own opportunity, or at least tip the odds in your favor, by learning basic financial principles and maintaining the discipline necessary to stick to those principles – things like spending less than you make, saving early, and the power of compounding. By gaining this knowledge and sticking to a plan, you will be further along in your financial journey than the vast majority of the US population.
As Gladwell points out, mastery takes time. 10,000 hours equates to about 5 years, assuming you are working 2,000 hours per year (essentially full-time), so start now! Learning those financial principles might not happen immediately, but it also won’t happen at all if you don’t begin taking the time to understand them. Here are some great resources to get that education started:
In developing the right money values, watching the good habits of your parents can certainly help. It is not the end-all, be-all, though, so if your parents did not have the best habits, don’t worry. The right behaviors can be learned at any age. Find a teacher or mentor and begin learning from them. A side benefit of doing this is that you will be able to pass on those values to your kids (if you have them).
Seeking help, if you need it…
Like the hockey players described above, having a great coach can help push you to higher levels than you might be able to reach on your own. Even more important, you don’t need to be born early in the year to team up with a financial master!
To find a good financial coach, look for a fee-only CERTIFIED FINANCIAL PLANNER™ (CFP®) who is willing to teach and mentor you, regardless of how much money you have. Admittedly, I’m a little biased in this matter, since that is what my company does. However, there are lots of great ones out there, and some valuable resources to help you find the right one for you: