You are the boss of you: How to find success with life and money

“What do you think is the difference between successful people and unsuccessful people?” an interviewer asked me earlier this week.

“Well, I don’t like to make generalizations,” I said, “but I’ve thought about this question a lot. While there are certainly exceptions, I’d say that successful people believe they control their destiny and unsuccessful people do not.”

“What do you mean?” asked the interviewer. And from there, we delved into a deep discussion about fate, responsibility, and locus of control.

Locus of Control

The term “locus of control” sounds complicated but the concept is actually easy to understand. Locus of control refers to how you ascribe responsibility for the things that happen to you.

  • 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.

For years, my 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.

It wasn’t until my locus of control became more internal that my life began to improve. Once I realized that nobody cares more about my money than I do, I was able to get out of debt, start a business, and save for retirement. Once I realized that the only way to get fit was to, well, get fit, I began to do the hard work of eating right and exercising every day.

And that’s the thing: Accepting that you’re in control of your own life is hard work. It takes time, and it takes effort. Most of all, it takes owning your decisions and admitting your mistakes. Ultimately, however, the rewards are worth it.

Bad Examples

In my interview last week, I made a generalization: “Successful people believe they’re in control of their destiny and unsuccessful people do not.” Let me give you some specific examples. (Since I’ll be discussing friends and family, I’m changing details in the anecdotes that follow.)

  • One of my friends owns three vehicles. Last Monday, he had an appointment. He couldn’t go. One car was out of gas, another had a flat tire, and his mother had borrowed the third. So, he missed the appointment. To hear him talk, this was outside his control — as if he couldn’t have walked to the nearest gas station or installed a spare tire. (A few months ago, the same friend considered renting a car to drive to the beach because his car’s tires were worn and he couldn’t afford new ones.)
  • Another friend has no health insurance. One of his clients works at a clinic and offered to provide some free medical care to his family. He accepted. But then he and his family didn’t make the appointment because “something came up.” Now, one of the kids is sick with a condition that could have been caught and treated several months ago. This friend too blames forces beyond his control.
  • I also know a woman who owns a nearby 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.

This list could go on and on. 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 waking from the Matrix. I can’t help but see the patterns everywhere I go. (And can’t help but see the same pattern in my past life.)

I hate to admit it, but it’s often tough to talk with folks who have an external locus of control. Nobody wants to lecture (or be lectured by) their friends, yet sometimes 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. She never lets anyone or anything hold her back. If something goes wrong, she finds another way to achieve her goals. She had several thousand dollars saved to buy a new car, for instance. But then her health insurance didn’t cover all of her shoulder surgery, she received an unexpected tax bill, and her boyfriend (a.k.a. me) decided to take her on a three-week trip to Europe. Her savings vanished.

Rather than complain about the situation, she got to work. She picked up extra hours at the office. She offered to help me sell my comic books (in exchange for a cut of the proceeds). And she’s in the middle of starting her own business. Already, she’s recovered a good chunk of the money she lost. Kim has a strong internal locus of control.

Turning Anger Into Possibility

On Monday, Mr. Money Mustache responded to some complaints about an earlier article on his site. “You can spare us both the outrage,” he wrote. He continued:

It’s almost a law of the Internet these days: if somebody comes up with an idea or does something, there will be an immediate nationwide chorus of whining and rattling keyboards as a large number of people hasten to complain and express outrage about what they’ve just read.


Instead of boiling up a pot of anger based on your perceived inability to do something, why not throw it on the other burner — the one that gets you fired up about new possibilities about which you knew nothing before?

I dashed off an email praising the article, and I mentioned the notion of locus of control. In his reply, Pete pointed out that he first heard of this concept nearly 20 years ago in the classic Seven Habits of Highly Effective People.

Long ago, when the world was young, I also read Seven Habits, but I remember almost nothing of it. Based on Pete’s comment, I picked up a copy from the public library. Sure enough. The very first habit is “be proactive. Essentially, to take control of your own life, to be the be your own boss:

BE PROACTIVE. Between stimulus and response in human beings lies the power to choose. Productivity, then, means that we are solely responsible for what happens in our lives. No fair blaming anyone or anything else.

Yes, yes, a thousand times yes. You are responsible for your own health. You are responsible for your own wealth. You are responsible for your own happiness. You are responsible for all of it, big and small.

Note: For those unaware, Mr. Money Mustache and I will be two of four presenters at a retreat in Ecuador next month. (Okay, officially this is a “chautauqua” and not a “retreat.” Po-tay-to, po-tah-to.) There’ve been a few last-minute cancellations. If you’d like to come hang out with us for a week, go here. I’ve already had fun getting to know some of the other 20 attendees.

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. End of story.

This idea isn’t original to me, obviously. (Nor to Stephen Covey.) It’s been around for centuries. It was eloquently expressed by Victor Frankl in the classic Man’s Search for Meaning. Frankl was a Jewish psychiatrist who survived the Nazi death camps. The experience served as a crucible for his theory of personal development, which he called logotherapy. Frankl’s philosophy, in a nutshell, is that:

Everything can be taken from a man but one thing: the last of the human freedoms — to choose one’s attitude in any given set of circumstances, to choose one’s own way.

This may seem like a lot of highfalutin’ talk for a financial blog. Some of you might not see how any of this is related to saving and investing. But it is. In fact, I’d say this concept — the idea of agency, of personal responsibility — is the root of financial success.

Yes, bad things happen. Be ready for them (have an emergency fund, take out adequate insurance, save for retirement), and when bad things happen look for ways to overcome them instead of letting circumstances overcome you. Remember Reinhold Niebuhr’s famous “serenity prayer“:

God grant me the serenity to accept the things I cannot change, the courage to change the things I can, and the wisdom to know the difference.

Simple — but powerful too.

You Are the Boss of You

Here’s the bottom line: 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. Instead, you need to take charge of that stuff yourself.

I spent yesterday morning with my friend Andrew, whom I’ve known since first grade. For an hour, he and I sat in the park watching his 3-year-old son swing and slide.

“Isaiah’s not afraid to take charge,” I said.

“Yeah,” agreed Andrew. “He’s strong-willed. As a parent, that can be frustrating. But his pediatrician pointed out that it’s a good quality for a kid to have, especially in the long run. Independent kids aren’t afraid to try new things, and they don’t let things bring them down. ‘I wouldn’t have made it through medical school if I’d let all the crap get me down,’ he told us.”

To achieve financial success, you can’t let the crap get you down. You must be independent, must develop an internal locus of control.

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