When you first start your financial journey, there is so much excitement about the path to becoming financially independent. But it’s also very easy to get stuck along the way. Here are three things to learn on the path to financial wellness.
Stay Clear of the Busy Trap
Many of us are so busy that we can’t focus on the things that would really help us get further. We are consumed with things like household chores, emails, and long commutes. Here’s the honest truth: if you’re serious about building wealth to gain freedom, you need to limit the amount of time spent on busy work.
What is busy work? Busy work is anything that doesn’t create new value, is easily replicable, and/or is more draining than energizing.
Let’s say you’ve got 5 recurring bills (*numbers below are estimates):
- Cable + Internet: ~$130.00
- Electric: ~$50.00
- Rent/Mortgage: ~$1,000.00
- Cell Phone: ~$50.00
- Water/Gas/Trash: ~$40.00
Each bill is due on separate days of the month and you don’t want to be overcharged one cent! So each time a bill comes up, you review the charges to make sure that everything looks ok. Sound efficient? You might think that you are being responsible and staying on top of your bills, but there are better ways to handle this.
The reality is that you’re losing precious focus energy by dedicating it to the mundane task of remembering to check your statements on different days of the month. Each month, you’ve got to remember what day each bill is due, check the statement, make the payment, then do it all over again a few days later. If this sounds crazy, this is how I was living! I thought I was doing the right thing.
A better way
This is what busy work does. It gives you the false sense that you are somehow being responsible because you are committed to checking every detail. But what we don’t realize is that it is also sucking up a lot of our precious energy.
With this example, it would help to set up some sort of automation. Here’s a system I’ve started to use for automating busy work:
1.) What part needs your unique attention?
Since it’s my money, I’ve decided that only I can review the monthly statements to avoid overcharge.
2.) Can you automate how and when you give attention to this?
Yep, I can work with the service providers to make my bills fall on the same day. This should take only a 1 – 2 hours tops, and I’d only need to do this once. Then once the bills fall on the same day, I could schedule some time once a month to reviewing all of the bills; this should take less than 30 mins per month.
3.) Can you automate the task(s) that need to be fulfilled?
Yep, the actual act of paying each bill doesn’t need to be done by me! I only need to make sure that everything looks ok. Once I’ve done step 2, I can allow autopay to take care of the rest.
Takeaway
I know, using autopay is really simple and this example might be a little contrived, but it wasn’t until I got serious about financial success that I realized that I really need to streamline things in order to focus on the big wins.
It’s hard to focus on the big picture when you’re constantly interrupted by small stuff.
Here are a few suggestions to help you reduce the busy work in your life:
- Order your groceries online with Instacart
- Make cooking easier and faster with Greenchef, Hello Fresh, or Blue Apron
- Automate tracking your finances with Personal Capital
- Automate your Investing with Wealthfront
Bet on Yourself & Build Multiple Income Streams
Now that I’ve let go of busy work, I’m starting to get more focused on the big stuff, like betting on myself and building multiple income streams. But recently its become harder to pass up other opportunities.
Storytime
Aside from blogging, I work full-time as a software engineer and recently got an offer for nearly $15,000+ my current salary. I passed on this opportunity. Why?
One of the biggest keys to the F.I.R.E. movement is to create a side hustle that can become a business. This makes sense, since creating a business is one of the best ways to secure you’re financial future. In fact, 80% of millionaires in America became so by starting a business. Considering that, changing jobs for $15,000 more per year would have been actually have been a distraction to becoming financially independent. In the long-term I’d:
1. Still be trading hours for dollars
2. Have only one income source
3. Have less time to focus on Mind Smart Money.
Besides those minuses, one of the pluses of my current job is that I have an established rhythm and know the work demands. I don’t have the hassle of trying to figure out the office culture/politics while trying to find time to write this blog. Once I come home, I’m free to dedicate as much time as I want to providing you all with quality content.
As you start to work on your financial journey, here are a couple of questions to help you determine if an opportunity moves you closer to independence:
- Does this opportunity help me build multiple income streams?
- Can I scale this opportunity? Or will I always have to trade my hours for dollars?
- If the job doesn’t scale, does it give me enough starting capital to chase bigger goals?
Here are some awesome ideas to build multiple income streams:
- Create a blog
- Create an online store
- Build a video course
- Create an Instagram following and start getting paid to advertise
Decide To Win
If the last two points were about what to do, this final point is about how to be. You’ve got to know where you’re going and decide that you will get there.
I picked this up from a story I read in Jen Sincero’s book You are a Badass At Making Money. In it she describes a client named Kelly, who went from making about $4,500/month to nearly $35,000/month.
Kelly had her own T-shirt company and was frustrated by the fact that she was barely getting by. She wanted to grow her business, but knew she couldn’t handle more without extra help. Her problem was that when business was good, she felt she too busy to train someone. On other days when business was slow, she told herself she couldn’t afford to hire and train someone because business was slow. She continued in this loop for years.
How many times have we been like Kelly?
We go through a cycle of growing and shrinking back. The truth is, we have to decide to pursue our financial goals in order to win.
The story goes on to explain how Kelly decided to make the hire. “It totally terrified me, but also totally motivated me. I knew immediately I’d made the right decision because once he started working for me, the floodgates opened and all the business I was psychically pushing away started coming toward me.” Within the first week of making the hire, she made $26,000!! Decide to win!
At the end of the day, being on the path to wealth can be challenging. But, avoiding the busy trap, focusing on multiple sources of income, and deciding to win can keep you focused and ready to learn more. What are you guys learning on your journey? Let me know in the comments below!
