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Moves to Make for 2017

Moves to Make for 2017

November 30, 2016
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Happy Holidays!

This is the time of year when the personal financial success magazines all display catchy titles (like the title of my blog post) to get you to purchase their magazine. The reader is hoping to glean the big secret that will vault them into the stratosphere of the rich and famous. 

I’m going to give it to you here for free. Here is the big secret!

The secret is….there is no big secret.

The tactics written in these magazines are typically some iteration of the following:

  • Save 20% of your income into long-term wealth buckets like a 401(k), mutual fund account, cash accounts, etc.
  • Protect your income and your balance sheet from the threat of personal lawsuit, sickness and premature death.
  • Strive for efficiency and keep your financial costs like taxes, fees and interest on consumer debt as low as possible and reinvest the recaptured money.

This is not an exhaustive list, but these are the foundational things that make the bigger things possible.

What can be even more impactful to long-term financial success or failure are your day-to-day habits and behaviors.

EXAMPLE: In the 1990s, I had the habit of every morning stopping at Starbucks and buying a Venti Coffee and a chocolate croissant. I’d accompany my habit with the daily declarations of ‘I can’t start my day until I have my coffee’ or that ‘I needed it’.

This daily habit would give me a psychological boost in the morning. The caffeine and the sugar rush felt good. Once I arrived at the office, it would take me about 15 minutes to complete the ritual and ONLY THEN was I ready to start my day.

This behavior somehow materialized in my life over time and then became engrained in my daily routine. This continued for a number of years until I noticed some unpleasant byproducts of my behavior:

BYPRODUCT #1: I gained weight.

BYPRODUCT #2: Less effective at the office. My routine wasted 15 minutes every morning ‘getting myself ready to work’. 15 minutes x 5 days a week x 45 working weeks = 3,375 minutes over the course of the year. 3,375 minutes is the rough equivalent of 7 full workdays! That doesn’t even include the effects of the sugar crash that followed.

BYPRODUCT #3: Wasted money. At a minimum, my habit of coffee and croissant was costing me $5 a day. $5 x 5 days a week x 45 working weeks = $1,125/year. When it is daily, the ‘its only $5’ can add up to real money. If you don’t think it’s a big deal, remember this paragraph the next time you wish you had an extra $1,000.

To summarize, my daily behavior was creating these negative results in my life:

  • I was wasting money.
  • I was wasting time.
  • I was getting fat.

Once I identified that my one habit was creating three negatives in my life and I resolved to change that behavior. This allowed me reverse of the above list.

  • I was accumulating money
  • I was more effective at the office and increased my results.
  • I lost weight and became healthier.

Everyone has some habits and behaviors that create comfort in the moment, but may lead to undesirable results over the long term. By choosing good habits, we can get momentum on our side and once the new habit is engrained in us the execution becomes nearly automatic.

Action Items:

  • What are some key habits that may be leading to negative results in your money life, your health life or your relationship life? Pick one that you’d like to change and decide on a new habit to put in its place.
  • Resolve to adopt the new behavior over the next 45 days by making the commitment each day to follow the new behavior. Do not beat yourself up if you stray off the new behavior! You adopted this behavior over a long period of time, so its unrealistic to assume you will be perfect.  :)
  • Keep a journal. Whenever I change a behavior, I keep a daily journal to record my results. This is my way of holding myself accountable to the new behavior.

Challenges? Success stories? Please email me or call me! Let me know how I can help.

Thank you for reading.