Clients often tell me they don't have enough money to begin saving. The truth is they just haven't overcome Parkinson's Law. Whether we earn $25,000 or $250,000 per year the result is the same, there is seldom money left over to save. To overcome Parkinson's Law we must live below our means; why not start today? Take control of your financial life and reap the rewards that result from consistently saving and building wealth.
I suggest that our inability to save more or to save at all is caused by a lack of efficiency within our current budget. I am not suggesting we purchase cheaper laundry detergent or give up our daily lattes, but rather begin to align our goals with our actions as efficiently as possible.
Ultimately, this requires work with a competent planner or trusted advisor, but we can all begin today by working on steps 1-4 of my simple 5 step process.
Step 1:
Write down five goals you wish to accomplish. For inspiration, think about what bothers you most at night and what that little voice in your head nags you about. Your goals may be related to retirement savings, your children's education, retiring debt, purchasing a home, or helping the next generation. However, don't let my examples drive your thought process. Write down whatever comes to mind. Brainstorm. Now go back and number them in order of importance.
Step 2:
Take your first goal and ask yourself why this is important to you. Write down three benefits you hope to realize by reaching your goal. Visualize the benefits and work to understand how reaching your goal will make you feel. Then ask yourself if those benefits are worthy of your efforts. Repeat this process for your four remaining goals. You'll know you've developed a worthy goal when just the possibility of success provides the necessary motivation needed to overcome Parkinson's Law.
Step 3:
Review your number one goal, the goal you're committed to reaching, and the goal to which you will apply efficiency planning. Ask yourself this question: Am I willing to reconsider my spending/ investment strategy in order to reach my goal? Why or why not? Write down your answer.
Step 4:
Now develop a time frame for reaching your goal. Be realistic and be specific. Some goals will be ongoing and will require the development of benchmarks, others will have a very clear fixed timetable where benchmarks may or may not be as important.
Step 5:
In my opinion, this is where a qualified professional must be part of the process, and the sooner the better. Certainly at this point you'll benefit from that expertise. You'll need to develop a specific plan for attaining your goal. Be prepared for solutions that may not have been obvious to you in the past. Don't be surprised if solutions contradict your previous beliefs. Be open to this. The reason I suggest you speak to a professional (besides the fact that I am one), is that so often individuals don't consider the big picture and therefore develop strategies in a piecemeal fashion, which may lead to inefficiencies and potential loss of wealth.
If what you know to be true about your personal financial situation and how it affects your ability to accumulate wealth turned out not to be true, when would you want to know?
I have developed a worksheet to aid us in this process. You can get your free copy via email. Please type “5-step worksheet” in the subject line.
—Stephen Bossio is the principle of Magnum Financial
(Smart Money + Good Thinking) and can be reached by phone at 707-996-9664 or sbossio@sammonsrep.com.
Stephen offers securities through Sammons Securities Company, LLC Member NASD and SPIC. |
“To overcome Parkinson's Law
we must live
below our means;
why not
start today?”
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