January is the time we set our new year’s resolutions which typically includes our relationships, money or health & fitness. Why then, by the time the Australian Open rolls around, have we broken our resolutions?
I’ve been reading a great book lately called The Slight Edge by Jeff Olson and the answer lies in the mundane. Let me explain.
Take money as an example. I’ve never met a client who has told me they wish to be financially destitute in retirement! They all want to be financially independent.
To become financially independent requires two things. A change in philosophy towards money and doing the small things often. For example, save $50 per week.
Such a simple thing to do right? Wrong! Often the simplest tasks are the hardest to achieve. This is because it’s just as easy not to do them as it is to do them.
Take the act of buying your coffee each day. What difference is $4 going to make during the day or the week? It’s easy to make your coffee, but it’s just as easy to buy it. So, as creatures of habit, we buy the coffee. After all, it’s only $4 and it’s easy? It’s no big deal. It doesn’t matter. But over time, when you add up the cost of those little decisions and the compounding effect they have, it makes a huge difference to your long-term retirement savings.
As humans we often put off to tomorrow what we can do today. We’ll say things like “I’ll worry it about that later”, or “I’ll start my diet tomorrow” or “I’ll start saving towards my retirement later”. But guess what? Later Eventually Arrives! And it arrives sooner than we think!
Changing your philosophy towards money is difficult because it’s just as easy to say “what I do doesn’t matter” rather than “what I do DOES matter”.
My role as a financial adviser is to coach my clients in making smart, long-term financial decisions, which includes helping them change their philosophy towards money and getting them to do the small things often, even if it’s boring, mundane and monotonous.
So, let’s get excited about the mundane! The boring, the dreary! Because it is in the mundane that magic happens.
If you wish to know more about this or have any questions, please feel free to call my office on 03 9480 1144.
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