There's a saying about hairdressers and their money, "most hairdressers are either wearing their money or driving it."  The variable here is if the hairdresser is a single parent, they may be spending money, all their money, on their kids. But, there are 3 things I know all my friends of financial means have in common.  I define financial means as the amount of money needed to have food, shelter, security with daily financial worry, currently that is approximately somewhere between $50,000 - $75,000. 

What I am talking about is the tipping point where it can be proven that up to $50-70K actually does buy happiness, but above that point, money does not buy happiness.  In fact, above the tipping point of financial means, money can actually start to lead to increases in depression and even suicide.  So there is even a point where money can start to lead to unhappiness or as Biggie Smalls said, "more money, more problems."  So this is the keys to achieving financial means, not financial independence.

So the 3 Things All My Friends of Financial Means Have in Common are...

1. They Understand There Is Only 100 Pennies In Every Dollar

This may sound funny or "like who doesn't know that there are 100 pennies in every dollar?"  But the truth is for people that are purchasing things and then making payments on a credit card will need 115 or 128 pennies or more for every dollar they spend because of interest on top of the purchase.  And friends that don't wait for sales, use coupons or use sites like E-Bates are also spending 100 pennies every time they spend their money!  So the key here is make ever penny count and make money by watching pennies

1. They Understand the Difference Between an Expense and an Investment, Including the Difference Between Good Debt and Bad Debt.

The difference between an expense and an investment sometimes can be the timing or the company.  Like I shared last month, one of my friends only flies first class, and pays for it himself, because as a consultant, "all his clients are sitting in first class," so his tickets are a business expense that can be written off, and it gets him new clients by marketing himself while flying.  A mortgage or rent in a prime location for a business is an investment, whereas an $800 a month student loan might be a life long expense! The problem with $1 worth of debt that is an expense is that it costs way more than $1 to pay it off after taxes, expenses and time. And $1 worth of good debt that is an investment can save you as much as 28%+ by using pretax dollars for business expenses and by making capital investments into things that make business more efficient, effective and visible for growth.

1. They Understand You Can't Live on Tomorrow, But You Can Build on Today

So when I said the words above I thought who said that?  And after I googled it I found out I did!  Too many people have plans on how they are going to "make money", tomorrow or better yet "hit it big" or maybe win the lottery.  And they live their lives at the financial edge of having challenges, waiting for that to happen.  There are examples of people who were never what would be considered to be on any financial means, like Ronald Reed, who was a janitor his whole life and left the $6 million to a local library and hospital when he died.  And Margaret Southern, who was a school teacher that left $8.4 million to a local community foundation that benefited children and animals.  They both never made a lot, but they knew putting even a little bit away every week and investing their money to make more money works, way better than hitting the lottery.

I have been lucky, I started saving young, investing as young as 14 in the stock market, purchased my first house at 26, never making more than $30,000 (which also helped me get a reduced loan) and I have always had a mortgage, have never paid credit card debt and made the maximum 401k investment I could. At 50 years old, married with 2 children, I can tell you this worked for me and my family.