A few weeks ago, I cataloged the difference between successful people and unsuccessful people. Based on my reading (and personal experience), I compiled a list of 61 habits that foster wealth and success.
While writing that article, I found one critical difference was mentioned again and again. Every author and expert on the subject shared some form of the following. Generally speaking: Successful people believe they control their destiny and unsuccessful people do not.
Rich people believe: “I create my life.” Poor people believe: “Life happens to me.”
This message comes up time and again when discussing the difference between those who succeed and those who don't. Successful people are proactive, they take responsibility for their future, they have an internal locus of control. Unsuccessful people believe they are victims of fate or circumstance.
Let's look at why many folks feel like they're not in control of their lives — and how it's possible to learn to be proactive (even if you're old like me and set in your ways).
Permission and Control
As children, we're conditioned to ask permission whenever we want to do something. You need permission from your parents to leave the dinner table or to go outside and play. You need permission from your teacher to use the bathroom.
Even as adults, we feel compelled to request permission. You need permission from your boss to leave work early. You need permission from your spouse to grab drinks with your friends instead of weeding the garden. You need permission from the city to build a shed in the backyard.
As a result, most of us have developed an external locus of control.
In personality psychology, the term locus of control describes how people view the world around them, and where they place responsibility for the things that happen in their lives. Though this might sound complicated, the concept is actually rather simple.
- If you have an internal locus of control, you believe that the quality of your life is largely determined by your own choices and actions. You believe that you are responsible for who you are and what you are.
- If you have an external locus of control, you believe that the quality of your life is largely determined by your environment, by luck, by fate. You believe that others are responsible for who you are and what you are.
This isn't an either-or proposition, obviously. Locus of control exists on a continuum. But many people tend to favor one side of the continuum over the other.
Julian B. Rotter developed the locus of control concept in 1954 as part of his social-learning theory of personality. Stephen R. Covey popularized the idea in 1989 with his best-selling The Seven Habits of Highly Effective People. He urged readers to become proactive.
Covey believes that we filter our experiences before they reach our consciousness. “Between stimulus and response,” he writes, “man has the freedom to choose.” Our self-awareness, imagination, conscience, and free will all give us the power to select how we'll respond to each situation in life.
Covey says there are two types of people: proactive and reactive.
- Proactive people recognize that they're responsible for how they respond to outside stimuli. They have an internal locus of control. They don't blame circumstances, conditions, or conditioning for their state. They believe their existence is largely a product of personal choice derived from personal values.
- Reactive people believe their condition is a product of their physical and social environments. They have an external locus of control. Their moods are based on the moods of others, or upon the things that happen to them. They allow the outside world to control their internal existence.
To illustrate the difference between proactive and reactive people, Covey discusses how we focus our time and energy.
We each have a wide range of concerns: our health, our family, our jobs, our friends; world affairs, the plight of the poor, the threat of terrorism, the state of the environment. All of these fall into what Covey calls our Circle of Concern.
Within our Circle of Concern, there's a subset of things over which we have actual, direct control: how much we exercise, what time we go to bed, whether we get to work on time; what we eat, where we live, with whom we socialize. These things fall into what Covey calls our Circle of Influence, which sits inside our Circle of Concern.
According to Covey, proactive people focus their efforts on their Circle of Influence. They spend their time and energy on things they can change. This has two effects. First, proactive people actually do affect change in their lives; and as they do so, their Circle of Influence expands.
On the other hand, reactive people tend to focus on their Circle of Concern. They spend their time and energy on things they're unable to influence (or can influence only with great difficulty). They try to change other people, to correct social injustices, to shift thought patterns of states or nations. Their efforts are largely frustrating and futile. What's more, as they focus on their Circle of Concern, their Circle of Influence begins to shrink from neglect.
Any time you shift your attention from your Circle of Influence to your Circle of Concern, you allow outside forces to control you. You sacrifice your freedom. You place your happiness and well-being in the hands of others. If you don't act for yourself, you're doomed to be acted upon.
But what about about luck? Aren't there times when we really are at the mercy of the world around us? Of course. But our responses are always our own. Eleanor Roosevelt said, “No one can hurt you without your consent.” Covey agrees:
It's not what happens to us, but our response to what happens to us that hurts us. Of course, things can hurt us physically or economically and can cause sorrow. But our character, our basic identity, does not have to be hurt at all. In fact, our most difficult experiences become the crucibles that forge our character.
Successful people believe they're in control of their destiny and unsuccessful people do not. Let me give you some specific examples.
- I know a woman who owns a business. The business is always on the brink of collapse. She believes her store struggles because of onerous city codes and an unresponsive landlord. Yet, other businesses around her thrive despite similar circumstances. She doesn't see that the problem could be with the way she runs the place: the store's odd hours, its poor condition, the way she treats her customers.
- My youngest brother has had his share of financial struggles. Within a one-year span, he lost two homes to foreclosure and declared bankruptcy. At first, he didn't own any of this as his fault. He viewed it as bad luck, as if he and his wife were simply victims of circumstance. They thought they were screwed by stupid people and a bad economy. A decade later, Tony has a different view. I spoke with him recently, and it was refreshing to hear him take some responsibility for what happened.
- For years, my own locus of control was primarily external. I was overweight, in debt, and unhappy. On some level, I knew that my state was a result of my choices, but most of my time was spent rationalizing reasons I couldn't change: I didn't have time to exercise, my car broke down, I didn't get the job I wanted. Nothing good ever happened to me. (Notice that phrase: “happened to me.”) I thought most things were outside of my control.
The good news is that people can change. If you have an external locus of control, you can develop an internal locus of control. If you're reactive, you can become proactive. I know because I've done it myself.
In time, I realized that if I wanted something more from life, it was up to me to obtain it. Gradually, my locus of control shifted from an external focus to an internal focus. I decided that I am responsible for my own destiny and my own happiness. It's up to me to live a life I love.
I am responsible for my own well-being, and you are responsible for yours.
If you're unhappy, nobody else can make things better for you. You must make things better for yourself. Focus on the things you can control, and use that control to fix the other things that are broken. In this way, you'll gradually gain confidence and greater control of your future well-being.
Since I've become aware of this distinction — between folks who believe they're in control of their lives and those who don't — it's been like breaking free from the matrix. I can't help but see the patterns everywhere I go.
I hate to admit it, but it's often tough to talk with folks who have an external locus of control, people whose Circle of Concern far exceeds their Circle of Influence. It's hard to watch friends repeatedly make poor choices. On the other hand, it's refreshing to spend time with people who don't let life get them down.
My girlfriend, Kim, is a great example of somebody proactive. She never lets anyone or anything hold her back. If something goes wrong, she finds another way to achieve her goals. She takes complete and total responsibility for building the future she wants.
This manifests in lots of little ways:
- If she doesn't understand something, Kim asks questions.
- If she has a problem with a company, she calls to explain (not complain about) the problem.
- If something is broken, she figures out how to fix it.
- Kim never waits for things to get better but actively seeks ways to improve her situation.
Here's a great example of Kim's proactive nature in action.
During our 15-month RV trip across the United States, we paused for six months to rent a condo in Savannah, Georgia. Kim could have spent those six months relaxing and seeing the sites, but instead decided she wanted to seize the opportunity to make some money.
The moment we knew we'd be wintering in Georgia, Kim started the process of getting her dental hygiene license. It took several weeks for all of the paperwork to process. Rather than wait and wonder, Kim made polite calls every week to make sure there were no problems.
The day she received her license in the mail, Kim hit the pavement. She scoured the city, dropping off résumés and speaking with doctors. Within a couple of days, she started getting calls asking her to do fill-in work while other hygienists were sick or on vacation. She also got a couple of offers for a long-term positions. During the six months we were in Georgia, Kim had as much work as she wanted.
When we returned home to Portland, she applied the same technique here. She pounded the pavement, putting her name out there as a potential fill-in hygienist. For a few months, she tried various offices. Eventually, she found two practices where she fit in perfectly. Now she has steady work — and constant offers from the other places she filled in.
Simply being around Kim and observing her strong internal locus of control has helped me become more proactive! I'm still not as good as she is, but I'm getting better.
You Are the Boss of You
Shifting from an external locus of control to an internal locus of control isn't just important for happiness, but also for making meaning in your life, for obtaining personal (and financial) freedom. Freedom comes from focusing not on your Circle of Concern, but exclusively on your Circle of Influence. As long as you allow yourself to dwell on the things you can't control, you are not free.
Obviously, shit happens. But you know what? Shit happens to everyone. Ultimately, who we are and what we become is determined not by what sort of shit happens to us, but by how we respond to that shit.
Victor Frankl was an Austrian psychiatrist who survived the Nazi death camps during World War II. The extreme suffering and harsh conditions caused many inmates to lose their will, to choose death.
To be sure, prisoners often had no control over whether or not they died. But Frankl observed:
A man can, even under such circumstances, decide what shall become of him — mentally and spiritually. He may retain his human dignity even in a concentration camp.
In the classic Man's Search for Meaning, he wrote:
Everything can be taken from a man but one thing: the last of human freedoms — to choose one's attitude in any given set of circumstances, to choose one's own way.
Even with a severely restricted Circle of Influence, prisoners still had control of how chose to approach their destiny.
Accepting responsibility for your own fate and attitudes can be uncomfortable and intimidating. There's a kind of solace when you can attribute your situation to the winds of fate, the will of god, or the workings of the universe.
But recognizing that you're a free agent can also be liberating. When you take matters into your own hands, you shed your fears, create your own certainty, and discover that you're freer than you ever imagined possible.
You are the boss of you. You don't need anybody's permission to get out of debt or to buy a house or to ask for a raise. And nobody's going to come to you out of the blue to explain investing or health insurance or your credit card contract. Take charge yourself.
Focus on the things you can control. Use that control to remove constraints and complications from your life. Strengthen and stretch your Circle of Influence. This is the only path to changing your Circle of Concern. You have no control over the hand you're dealt, but you can choose how to play the cards.
Here's a simple exercise from The Seven Habits of Highly Effective People: For thirty days, commit to working only on your Circle of Influence. How? Keep your commitments, to yourself and others. Don't judge or criticize other people, but turn your attention inward. Don't argue. Don't make excuses. When you make a mistake, accept responsibility and fix it. Don't blame or accuse. When you catch yourself thinking “I have to…” or “If only…”, stop yourself and choose to reframe the thought in a more positive light. As far as possible, accept responsibility for your circumstances, actions, and feelings.
Author: J.D. Roth
In 2006, J.D. founded Get Rich Slowly to document his quest to get out of debt. Over time, he learned how to save and how to invest. Today, he's managed to reach early retirement! He wants to help you master your money — and your life. No scams. No gimmicks. Just smart money advice to help you reach your goals.