Category: mindset

Money principle #1

Pay yourself first…make sure that you have automatic payments set up to invest in yourself. Ideally, you want this set up going to a low fee index fund. Time and compound interest will be your best friends. The earlier you can start regularly contributing to this fund, the better off you’ll be. The best part about having it automatically set up is that you don’t have to remember to keep investing every month. If you want to invest more, you can. But here, it’s basically like a subscription model (set it and forget it).

If you’re saving up for a specific purchase like a vacation, a new car, a house, etc, set up a separate account and automatically transfer money to that account. Have it set up for every paycheck. If you don’t “see the money” in your regular checking account then you’ll be far less likely to spend it. This will help you actually hit your saving goals and then you won’t have to use credit to purchase your consumer goods.

A hedgehog or a fox?

Are you a hedgehog or a fox? This is based on Stephen Covey’s writing…

While it is naturally appealing to be a fox (to be good at many things, but not world class in anything), should our goal be to become a hedgehog (be laser focused on mastering one thing, being world class at it, and benefitting from it)?

The idea here is to go deep in one particular subject. Read about it, write about it, talk with others who have already done it (mentors), talk with others who are on the same path (mastermind), listen to books and podcasts, and teach it (to those “behind” you on the path and to those who are not yet traveling on that path).

Learn even more by experiencing it yourself…You’ll make mistakes along the way, but as long as you take the time to figure out what went wrong (or what you think went wrong) and then get back up and try again – you’ll be better for it. In fact, some people think failing quickly and failing often is the key to success.

Because we are amateurs when we first set out to do anything, we don’t know what we don’t know. Nothing will ever be perfect and if we wait for perfection to get started then we’ll never get started. There is no perfect time. The “perfect” time to get started is right now…

If we do finally decide to take action, despite all of our preparation (aka procrastination), we will still make mistakes. So it’s best to get those mistakes out of the way and “fail” quickly! Because, in reality, it’s only a failure if you give up. Otherwise it’s only a bump in the road.

Go deep. Master one subject then try to expand to other related areas after you’ve truly grasped one. If you spread yourself too thin, you might be able to become a Jack of all trades and a master of none. But that will take a long time. If you focus on one (like a laser), you can “quickly” master it and move onto another subject if your heart desires.

Leadership and development

The way to develop the best that is in a person is by appreciation and encouragement.
“The way to develop the best that is in a person is by appreciation and encouragement.” – Charles Schwab

If you want to bring out the best in people, you must work on how you communicate with them. Here are some quick tips:

Be firm, but fair.

Be gracious.

When they do something good, reinforce that behavior by praising them for their effort.

Show your appreciation for them and provide encouragement.

Help them develop a growth mindset, not a fixed mindset.

If they haven’t done something right, it’s a learning experience, not a failure.

They can get to where we need them to be with the right attitude, practice, and learning from their mistakes (and the mistakes of others).

Occasionally, you may need to push them a little. People like their comfort zone. But if they want to reach their full potential, they will need to go outside of it.

Hold them accountable. If they say they’re going to do something, check in with them to make sure they’re on track to complete it. If they need help, you can help them brainstorm, but don’t just give them the answer. If you do this then they will always bring their problems to you and not try to think of solutions on their own.

Not all readers are leaders, but all leaders are readers

“Not all readers are leaders, but all leaders are readers.” – Harry Truman

Why do you think this is? Well, it’s because if you’re taking the time to read, you’re doing the following:

⁃ Working on self-improvement/learning…books are condensed versions of life lessons taught by others more experienced than yourself (or at least with different experiences than yourself). If you can read about someone else’s failures, you do not have to suffer that same hardship and can propel yourself to greater heights more quickly.

⁃ Making your mind work…a lazy mind will not go far in life. Reading is to the mind what exercise is to the body.

⁃ Dedicated enough to read when you could be doing something easier (like watching tv or napping). Those with enough dedication, determination, and will-power to do what they know will help take them to where they want to go are far more likely to succeed.

– NOT all readers are leaders partially because it also depends on what you’re reading. If you’re reading romance novels, that is less likely to translate to a position of leadership compared to if you’re reading a book on business, relationships, leadership, parenting, etc.

SMART Goals for 2022

Have a SMART goal in mind.

S.M.A.R.T. is an acronym standing for specific, measurable, attainable, relevant, and time-based. These goals are designed to keep you on track and motivated to achieve what you want in life. They work because instead of just having a general idea of what you want (i.e., “I want to retire early”), they make you think about the path of how to actually get there.

For example, if you want to retire early, how early? Does retiring early mean retiring at 60? 55? 45? You need to set an end date to create a sense of urgency. This will also help you reverse engineer your goal to see if it’s realistic/attainable. You’ll need to figure out how much you need to live off of per month or per year and then can use cool tools like the 4% rule to see how much money you need invested to hit your retirement goal. Are you ok living off of $40,000 per year ($3,333 per month) or do you need $80,000 or more? What expenses will you have when you retire? In addition to basic living (food, water, transportation, cell phone), will you still have a mortgage payment? Don’t forget you’ll likely need to pay for healthcare. Using the 4% rule, you’ll need $1,000,000 invested if you want to live off a $40,000/year income.

The good news is that if you’re young, you have a lot of time to make good financial decisions and allow those good decisions to compound over time. The bad news is, it’s a long time to stay focused on a goal. So Instead of taking a straight line to where you want to go, it might be more of a winding road.

How do you stay focused for 20 years? To do this, you have break it down into more manageable chunks (having “milestones” to look forward to), celebrate the wins once you achieve those milestones, review your goals regularly, have an accountability partner to make sure you’re not straying too far off your path, understanding that sometimes you’ll have to delay gratification, not worry about what others think and stop comparing your life to theirs, and have a strong reason for wanting what you are stating is your goal. Do you want to retire early only so you can sit in front of the tv all day or do you want to enjoy life with others? If it’s the latter, who’s to say you can’t do that now?