Spender, Saver, Wealth Creator

Your financial personality type determines your financial position in life.  Let’s say there is a zero financial line that represents a position where you owe nothing and have nothing.  Perhaps you can remember those days getting started on your own.

So, let us assume you just graduated from college and you’re one of the lucky few who graduated at the zero line, you owe nothing.  Pretty amazing considering that in 2013, the debt on student loans exceeded all credit card debt owed in America.  But fortunately, you made it out free and clear to the zero line.


You get out of school and get a job. The first thing you need is a brand new car. Zero Line - Car Loan - Smart Sexy Money

You’re a “Spender” so you go to the showroom and pick one out.  With your job and the car as collateral, you get a car loan and you drop below the zero line.  You lifestyle gets more and more expensive and since you are a ‘Spender” you probably take on credit card debt to help finance your lifestyle desires.  You are constantly working your way back to becoming a zero, financially speaking.

Then, you get married and now there are two in debt working their way back to zero. Eventually, children come along, and the odds of being able to put away enough money to pay your debt and interest and live on the top side of the zero line are becoming virtually impossible.  Unfortunately, many Americans live in this position with little or no chance of ever living debt free.


A smaller amount of the population, called “Savers”, have learned to do without until they have the money to pay for what they want.
Zero Line - Cash Flow - Smart Sexy Money

When something comes along that requires their savings, they must deplete their funds in order to avoid paying interest and then they must start saving again for their next expense.  They are constantly returning to the zero line.




Zero Line - Compounding Interest - Smart Sexy Money

There is another segment of people called “Wealth Creators” who save and invest some of their current cash flow for their future lifestyle. 

The money they have accumulated is compounding interest, giving them uninterrupted growth.  Having access to capital allows them to negotiate more favorable loans by collateralizing against their accounts rather than depleting them.  They make payments to the lending institution with dollars from their current cash flow, protecting the growth of the money they have saved and invested for their future. Saving and investing with uninterrupted compounding is an important wealth concept for moving further and further away from the zero line.