Read Time: 4-minutes
Happy Saturday,
Here is this week’s edition of 6-Point Saturday — financial insights to help you make smarter money decisions.
Table of Contents*
*Clickable in the online version.
Point #1 — The Common Denominator of Success
“At the National Association of Life Underwriters annual convention in 1940, a man named Albert Gray delivered a speech titled ‘The Common Denominator of Success.’
Gray began looking for the common denominator years earlier when he became a supervisor. For the first time, he had a team of people under him, each trying to achieve success. ‘I was brought face to face,’ Gray said, ‘with the disturbing realization that I was trying to supervise and direct [their] efforts…without knowing myself what the secret of success really was.’
So he voyaged through biographies and autobiographies, dissertations and the latest research. ‘The common denominator of success,’ Gray came to understand, ‘the secret of success of every man who has ever been successful—lies in the fact that he formed the habit of doing things that failures don’t like to do.’
What are the things that failures don’t like to do? ‘The very things that you and I and other human beings, including successful men, naturally don’t like to do. In other words, we’ve got to realize right from the start that success is something which is achieved by the minority of men, and is therefore unnatural and not to be achieved by following our natural likes and dislikes nor by being guided by our natural preferences and prejudices.’
You’ve probably wondered, Gray continues, why it is that those who are the best at what they do seem to like to do the things that you don’t like to do. ‘They don’t! … then why do they do them? Because by doing the things they don’t like to do, they can accomplish the things they want to accomplish.’
Gray suggests that having a strong “Why” is what enables individuals to succeed. Then he introduces an interesting topic — though one where my view is more nuanced:
"Many people with whom I have discussed this common denominator of success have said at this point, “But I have a family to support and I have to make a living for my family and myself. Isn’t that enough of a purpose?”
No, it isn’t. It isn’t a sufficiently strong purpose to make you form the habit of doing the things you don’t like to do for the very simple reason that it is easier to adjust ourselves to the hardships of a poor living than it is to adjust ourselves to the hardships of making a better one. If you doubt me, just think of all the things you are willing to go without in order to avoid doing the things you don’t like to do. All of which seems to prove that the strength which holds you to your purpose is not your own strength but the strength of the purpose itself."
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But in making your purpose practical, be careful not to make it logical. Make it a purpose of the sentimental or emotional type. Remember needs are logical while wants and desires are sentimental and emotional. Your needs will push you just so far, but when your needs are satisfied, they will stop pushing you. If, however, your purpose is in terms of wants and desires, then your wants and desires will keep pushing you long after your needs are satisfied and until your wants and desires are fulfilled.”
Where I don’t necessarily agree is whether supporting a family is a strong enough purpose, which is highly individualized.
Regardless, a strong why has been shown [Aidan. Smyth et al., 2020] to increase goal achievement.
Which means if you’re looking to build habits or change your beliefs around money, like saving, investing, or retiring early, it can be beneficial to identify a strong purpose.
So, let's look at a 4-part, science-backed approach to measure the strength of your ‘Why. ‘
Point #2 — Your 4-Part Purpose Score
So you need a powerful purpose. Here's the problem: many people think they have one when they don't.
You've probably told yourself something like:
"I need to stop living paycheck-to-paycheck"
"I should save more"
"I should prioritize pay off this credit card debt"
Technically, those are reasons—but according to psychological research, they're actually not strong motivators.
Self-Determination Theory (more in Point #4) includes what scientists call "self-concordant goals"—goals that align closely with your intrinsic interests and values, driving "autonomous motivation."
Here's the distinction that changes everything:
Autonomous Reasons (Strong):
"I want to" (Intrinsic)
"I deeply believe it's important" (Identified)
Controlled Reasons (Weak):
"I have to" (External pressure/Extrinsic)
"I'd feel guilty if I didn't" (Introjected)
Motivations can be viewed on a continuum, ranging from purely external pressure (left) to fully internalized desire (right):
Studies show that people pursuing self-concordant goals don't just achieve better results—they achieve them with less effort. One study [Werner, Kaitlyn et al., 2016] found that "individuals who pursue self-concordant goals do not have to consciously think about decisions related to their goals because responding is more automatic, therefore buffering against potential distractions."
Think about that. The right "why" makes saving money feel easier, not harder.
Here's the test for your money "why":
These studies formulated a way to calculate your own self-concordance score. To begin, rate these statements from 1-7 for your financial goal:
Autonomous reasons:
"I pursue this goal because I genuinely want to"
"I pursue this goal because I deeply believe it's important"
Controlled reasons:
"I pursue this goal because I'd feel guilty/ashamed if I didn't"
"I pursue this goal because others expect it or the situation demands it"
Then, to calculate your score: (Average of 1 & 2) minus (Average of 3 & 4)
Interpretation: If your score is negative, your "why" is working against you. And if it’s positive, the higher your score, the better.
Albert Gray said you need a purpose strong enough to form new habits. The research shows that purpose needs to be autonomous—coming from deep within you, aligned with your true values, not from external pressure or internal guilt.
Weak why: "I need to save because I'm 35 and I should have my act together by now."
Strong why: "I want to save because I refuse to let money stress my relationship with my future partner the way it did my parents' marriage.”
Same goal. Completely different motivation.
The strength that holds you to your purpose isn't your own strength. It's the strength of the purpose itself. And that purpose only has strength when it comes from genuine desire, not obligation.
Your Move: Take 60 seconds and score your motivation for your top financial goal. Is your 'why' working for you or against you?
Point #3 — “How do I fix bad spending habits?”
I’ve had a hard time breaking my bad spending habits. I’m not in debt, but I’m also not improving when it comes to managing my money. Basically, I spend up to the amount of my next paycheck — meaning when I get paid, the entire check just goes toward paying off what I already spent. For example, I’ll have about $1,300 in credit card balances and get paid $1,300, so I immediately pay it off but end up with nothing left to save or invest.
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What habits helped you guys control your spending? I track every purchase in an Excel sheet, but even that hasn’t helped me overcome the mental side of spending too much. I also have a lot of hobbies, which makes it really easy to overspend. How do you actually stick to a budget? I have one written out, but following it is where I’m struggling.
This individual is doing many things right: tracking their spend, not going into credit card debt, and being resourceful by asking for help. So why aren’t they improving?
This is a great example of the importance of your money psychology.
We all know we need to spend within our income, save, and invest. But actually doing it can be challenging.
The poster acknowledges they haven’t “overcome the mental side of spending too much.”
Here’s what I would tell this person:
Get clear about your “Why”: Use the scoring system above to come up with a strong why. With a clear, strong purpose, it can be easier to make better spending decisions and avoid overspending on hobbies.
Upgrade your money routine through automation: You’re already showing some restraint by only spending up to your paycheck (not taking on debt). By automating payments to savings and investment accounts, you simply adjust that amount and make good habits automatic.
For many people, the first step towards improving their finances is acknowledging the importance of the mental side of money. Then, once you have a strong “Why,” automation makes execution feel effortless.
Point #4 — Self-Determination Theory, Explained
In Point #2, I mentioned that the self-concordance research comes from Self-Determination Theory. But what is that exactly?
Self-Determination Theory (SDT) is a well-researched psychological framework for understanding human motivation. Developed by psychologists Edward Deci and Richard Ryan in the 1970s, it identifies three basic psychological needs:
Autonomy - Feeling in control of your choices
Competence - Feeling effective and capable of making progress
Relatedness - Feeling connected to others
The self-concordance scoring system in Point #2 primarily measures autonomy—whether you're pursuing a goal because you genuinely want to (high autonomy) or because you feel you "should" (low autonomy).
Bottom line: When these needs are met, Self-Determination Theory says we're motivated and perform well. When they're not, we struggle.
Point #5 — Quotes of the Week
Continuing the “Purpose” theme, which of these is your favorite?
Point #6 — My Questions of the Week
What's one money habit you’ve been telling yourself you “should” change? How could you rephrase that “should” into something you actually want?
Reply to let me know! I read every response.
Thanks for reading — I hope you found a helpful idea or two.
I’ll see you next Saturday with more.
Have a great weekend,
Benjamin Daniel, CFP®
Founder, Money Wisdom
P.S. Want to take control of your money, stop stressing about your expenses, & feel confident about your financial future? There are 2 ways I can help you:
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Disclaimer:
This material is not investment or tax advice. No responsibility for loss occasioned to any person or corporate body acting or refraining to act as a result of reading this material can be accepted by the publisher.
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