The Greatest Cause of Financial Failure

Our greatest cause of financial failure is a general lack of financial knowledge and awareness. We erroneously think our shoddy financial state Methods Of Finance Business Studies is the result of our “less than desirable” income, but that is merely a faulty deflection – it’s blaming the effect rather than the cause.
Most of us will carelessly and unknowinglylet a fortune slip through our hands during our lifetime.
Let me share a simple story that illustrates Valuation Of A Company how this frequently happens.
Although this incident took place over twenty years ago, I still remember it vividly. I was enjoying a beverage one afternoon at one of Kingston’s many patio bars when I couldn’t help but overhear a conversation among the three owners of the establishment. The proprietors were three brothers named Andy, Tom and Mike. They were in their late twenties or early thirties and they lacked for nothing when it came to energy or testosterone.
Andy was the oldest, and clearly the brother with the final say on many matters.
This story began with Tom excitedly entering the bar to announce that he had just scored four “free” tickets to see the Blue Jays in Toronto.
If you’re not a baseball fan you might be wondering why this would even be remotely exciting. Come to think of it, if you are a baseball fan you’re probably wondering why this would be even remotely exciting, but back then not only were the Blue Jays winning the World Series, but they played in the newly built, state-of-the-art retractable SkyDome, and tickets were next to impossible to get.
As Tom explained to Andy, these tickets were worth at least $200 and since they were free they had better make plans because the game was only two days away.
I think Andy had either quit smoking or he used it like worry beads, but he always had a plastic drinking straw in his mouth. Andy sat down at a nearby table and chewed on his drinking straw as he considered Tom’s proposal. After a couple of moments of thought Andy bluntly replied that he couldn’t go because he couldn’t afford it.
Mike, the youngest brother, was at the other end of the bar and when he heard Andy suggest that he couldn’t afford to go he almost came unglued. “What are you not understanding about free?” he shouted as he hurried over to confront his older brother. “How can you not afford free?” Mike demanded.
Andy was thoughtful. He wasn’t prone to hasty decisions. He chewed on his straw for a few more moments, while he genuinely rethought the matter. Mike and Tom hovered over Andy as he pondered his decision and then he said it again, “Nope. I can’t afford it.”
Tom threw up his hands in exasperation and said to Andy in exaggerated emphasis; “Andy, THE TICKETS ARE FREE! NO COST! FREE!”
At this point Andy could no longer contain himself. “Free? Free? Are you two nuts? What do free tickets mean anyway? Why is it so hard for you to understand that I don’t have the money right now? Look, let me break it down for you! The game starts at 1 pm right? We drive three hours each way so add $30 for a tank of gas. Parking is $25. I know that you guys will have a few drinks during the game so let’s add another $30 for beer. I also know that while you’re in Toronto, you’re going to want dinner after the game so let’s add another $200 to that. I also happen to know that after dinner you’re going to want to go to a couple of clubs so let’s add at least another $200 to the tab, and it’s a safe bet that none of us will be in any condition to drive the three hours home so let’s add another $200 for a hotel.
“Now,” continued Andy, “stop me if anything I’m saying isn’t making sense. When we finally wake up Sunday morning, you guys are going to be famished, and I know you’re going to eat breakfast at the hotel so let’s add another $30 to the total.”
Andy had been jotting his numbers down as he spoke them, so he took a moment to tally them up. When he finished his addition he threw the pencil onto the table and said, “Your free tickets will cost us $715.”
There was a moment of stunned silence. By now the rest of the patrons had tuned into the conversation so no one spoke for a few moments while Andy’s calculations sunk in.
Strangely enough it was Andy who spoke first. Breaking into a broad grin he said, “Okay, let’s go. Just don’t tell me it’s not going to cost anything because you got ‘free’ tickets!”
Me, and everyone else had a good laugh at Andy’s unexpected response, but I’ll never forget the lesson.
Andy really wanted to go to the game and clearly part of him knew he really shouldn’t go for whatever financial reasons were going on at the time. But the interesting thing is that Andy was the only one who bothered to look at the big picture.
We all make decisions and do things from time to time that we know may have some negative consequences. The important thing is that we make our decisions from knowledge and awareness. For financial reasons Andy knew he shouldn’t go to the game, and maybe he decided to over-rule those reasons because he felt it was more important to spend some time with his brothers. I never inquired why he changed his mind nor does it matter. The message is that Andy thought the problem over carefully, looked at all the ramifications and made his decision from a position of awareness.
That’s today’s simple lesson. Make whatever decision you desire, but don’t get fooled by “free” tickets, “free-coupons” and other sleight-of-hand sales tricks. Advertisers successfully use these tactics all the time. They give away little incentives or weekend getaways to get us to patronize their business and before we know it wham… we’ve spent far more money than we ever intended.
When it comes to spending, saving or investing the money you earn make certain you’re aware and that your eyes are wide open.

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