When you think about your money and your goals, do you feel you have ownership of them?
Many of us feel like we’re living on someone else’s terms, and someone else’s rules. And life is both too short, and too long to do that. You and I have enough time to do most anything we want. But we don’t have time to waste.
We each have 52 Saturdays a year, and it’s wise to make the most of every single one. But how do we do it? Big changes are hard to make. It’s my goal to help you figure out how you want your financial life to look, and to make any necessary changes.
Over the course of my 20+ years as a financial advisor, I’ve helped countless people start living how they want. I’m honored to be named to Investopedia’s list of the top 100 financial advisors many years running.
Here’s what we’ll cover:
- The cost of waiting
- What is true?
- Financial first principles
- Challenging your assumptions
- Rebuild your financial life
- Goals exercise
Let’s get started.
The cost of waiting
Money has time value. The longer we wait to pursue our financial goals, the harder it is to reach them. Here’s an illustration of that using three people. One saves for retirement at 35, one at 40, and one at 45:
- Person A
- Age 35
- Saving $10,000 a year
- $1,140,396 at 65
- Person B
- Age 40
- Saving $10,000 a year
- $724,492 at 65
- Person C
- Age 45
- Saving $10,000 a year
- $443,942 at 65
You already knew it’s smart to save money earlier than later. But did you know how profound the differences were?
And it’s true of everything else in life. As you get older, have you found it’s easier or harder to lose weight? When you have a drink, do you feel better or worse the next day?
More than that, every year you wait to pursue the things YOU want, the harder they become to get. We need to stop living on someone else’s terms, and start living on ours. The best time to plant a tree was 30 years ago. The next best time is today.
What is true?
What do you want? It’s a big question.
We’ve only got one crack at life, so why not live it the way you want? Sure, maybe it won’t be possible to do everything you want, but what if it were?
What would you change? How would your life look? That’s what we’re going to explore.
Financial first principles
A first principle is a foundational proposition or assumption that stands alone. We cannot deduce first principles from any other proposition or assumption. When Elon Musk disrupts an industry (or create a new one), he uses first principles thinking.
What is true of money? What are the financial first principles?
- Spend less than you make
- Don’t run out of money
- Maximize your income
- Pay yourself first
- Play for emergencies/stay insured
- Build your credit
- Save for retirement
- Risks requires a reward
- Money has time value
- Market prices are generally right
- Don’t borrow what you can’t repay
While this may not be a complete list, it’s a good start. The next step is to think about what systems or assumptions you’re currently living under.
Challenging your assumptions
We’ve all got systems and assumptions we’re living under. Many are passed on from family, our peer group, our social circle, and our professional environments.
Some of them are great, and some limit us. Once you’ve identified yours, I want you to decide which are serving you, and which you need to move on from. Here are some common assumptions:
- This is what we spend money on, this is what we don’t
- This is the career we have
- This is how we invest
- We take risks, we don’t don’t take risks
- We don’t change jobs
- We start our own businesses
Which of those resonated with you? What assumptions would you add?
Did you find any you know you need to move on from?
Rebuild your financial life
Once you’ve decided on your financial first principles and identified the assumptions you’re living under, it’s time to rebuild your financial life. Again, maybe it won’t be possible to make every change you’d like to make, but it’s just the two of us talking…
What do you want your money and career life to look like?
If you could do anything for work, what would you do?
How will you spend and invest your money differently?
Don’t hold back, just write what your heart tells you.
One of my favorite human superpowers is our ability to create a vision for our future, make plans, and to put those plans into action.
I’ve developed a framework for goal setting that I think you’ll find valuable. It goes through everything you need to do to bring your vision to life. You can access the Goals course for free.
When you take the time to write out your goals, your odds of realizing them grow exponentially.
You’re someone who can have the life you want. We’re talking about your money and your goals. The more clarity you can get around them, the better.
Again, you have enough time to do just about anything you want. But you don’t have time to waste. Get to work.
If you’re ready to take control of your financial life, check out our DIY Financial Plan course.
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