What would your obituary say? I know it’s a strange question to ask, but bear with me for a minute. Would it say you led a full life, filled with love and passionate accomplishments, because you did what you love? Or would you just be like the majority of people, never having accomplished much in your life? Most people, including yours truly, spent the majority of our lives tiptoeing from the cradle to the grave, hoping to make it there safely in one piece.
This includes using money as an excuse to block myself from investing in and improving myself. For example, I would use money as an excuse on why I should not get things which would help me to build up my skills working with my hands. Or, I would deny myself experiences which would enrich my life, all in the name of being “wise with money.”
In other words, I have had many hang-ups about money, which makes it hard for me to spend money. I wish that I could say I’m free of these hang-ups. They still sneak up on me like thief in the night. I could spend days or weeks without realizing I’m doing this, using money as an excuse.
You will face similar blocks in your life, if you’re not already. Being aware is the key. Of course, you’re not always aware or you would have caught this much early in the process. Even if you did catch it, you may not have the experiences or wherewithal to deal with the situation and make corrections.
How Much Is Enough?
In some recent surveys, Millennials were asked how much they think is enough for retirement. The answer is surprising in that they didn’t really know and simply guessed. Most guessed $300,000 is needed in retirement. Baby Boomers came in at $500,000, which is less surprising as they are closer to retirement and have a better idea how much they need.
In case you’re wondering how to come up with your number, you can do this one of several ways. You can take 75% of your current salary. This is how much you would need every year in retirement. Likewise, you can also take your monthly expenses, multiply it by 12, then by 25 to come up with how much you need saved. Twenty-five (25) is the approximate number of years you’ll spend in retirement.
Of course, these methodologies can be problematic. You may be young in your career, making just $75,0000 a year. Five years from now, you’re likely to be making more. So, which number do you use?
Likewise, you monthly expenses 5 years from now may be more or less. Again, which number do you use? As with anything in life, it depends.
That’s why personal finance is just that: Personal. What works for me will not work for you. What I can do is give you guidance. Your financial picture evolves as you evolve. It pays to visit your financial goals on a regular basis.
Most people’s expenses do tend to go down. In the above scenarios, you could very well be saving more than you need at some point in your life. It’s better to have too much money than not enough. After all, have you ever heard someone complain about having too much money?
Doing What You Love
To get to your magical number, there’s plenty of advice out in the financial planning space that involves the same principles:
- Earn
- Save
- Invest
That’s the basic principle behind building a nest egg for your retirement years.
It’s also very boring. The advice encourages you to spend within your means and avoid the clown cars, like a Lexus, Mercedes, or Audi. You’re encouraged to once again tiptoe to the grave safely in one piece. You are also delaying gratification for many years down the line.
Here’s an interesting question for you: What happens when you reach your magic number and go into retirement? Well, that’s a dumb question, you’re probably thinking. I’m going to enjoy retirement and actually do the things I’ve always talked about.
Think about the question another way: What happens after 20 or 30 years of reinforcing the same habits and thoughts? You pretty much become a living Ebenezer Scrooge (A Christmas Carol). You’ve made it a habit to live this way. It will be hard to change these habits after reinforcing them for the past 20 to 30 years. So, why would you expect things to be different in retirement, now that you’ve “made it?”
Of course, if this is your goal, then this is perfectly fine. What I’m proposing is to live life with more enjoyment, purpose, and passion. And to do it now instead of waiting decades. Why is it wrong to do what you want, even if it may seem “impractical”?
Keep Taking Action By Doing What You Love
This is one of the secrets of the Law of Attraction: You have to take action today to get what you want tomorrow or years down the line. It may not seem like that action is productive or fruitful, but it does something important. It reinforces your emotions and emote you to keep moving forward towards your goals.
You may not be able to live where you want at this moment, but nothing stops you from visiting the area to capture the feeling of being there. This in turn cause you to keep taking action.
In a similar vein, someone said something to me that I’ll never forget when I was shopping for a new car. I thought that I might just go for what’s practical, like a Toyota Corolla or a Honda Accord. I thought that I might go for something that’s economical on gas and low-in-cost to service and repair.
Yet, he posed the question in simplest terms: Benson, when you are 65 will you look back and say you did what’s practical? Or would you say you did what you wanted? That’s why I got the BMW. You only live once.
Grief Is the Price We Pay to Do What We Love
One thing I failed to mention on purpose as part of the earn, save, and invest model is running your own business. I don’t mention this because a lot of people have hang-ups about running a business. For example, I have a friend who said that salespeople manipulate you into buying things. I thought that was an interesting choice of words, manipulate. I refuted by saying salespeople convey their values onto others through marketing. That’s in essence what business does, to solve other people’s problems.
If you think sales is manipulating people, then you won’t do what you need to market your business because you are manipulating people. Reframe this to instead thinking about how you’re transferring your value system to potential clients. Do convey your value system, and you’re much more likely to market your business.
A big part of why we’re afraid to do what we love and chase after our desires is pain. Grief is the price we pay when we love someone. When that person leaves us, especially through death, the grieving process is often intense. We vacillate between periods of being okay with things to extreme sadness. This could happen in the span of seconds. Missing someone and knowing we can never ever talk to them or walk alongside them again, we will do almost everything we can to avoid these feelings. Oftentimes, this means never starting meaningful relationships. Or not knowing how to maintain relationships. Some of us sabotage relationships and choose a lifetime of loneliness, all to avoid the pain.
Ultimately, We Are Afraid
Because of these intense emotions, most of us are afraid of chasing after what we love. We are afraid of the criticism in getting the car we want. We are afraid of the trolls when we finally write that book, compose that musical piece, or create that piece of art. We want to help people through a business but are afraid of what they will say and think. What if they are right and my dreams dies? I can’t handle the grief. Yet, grief is the price we pay for love.
Of course, intense grief is what we feel when we lose someone. It doesn’t have to be this way with ideas and movements. The losses are fleeting and temporary. We can always work to get it back. So, grief isn’t necessarily the price we pay for love. Sometimes we get lucky and fall madly in love. Then we do what we want, when we want, and hopefully for as much and as long as we want.
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The best financial advice in the world will fail you if you have bad mindsets around money. What are some examples of bad money mindsets? Investing is only for the rich. I can never afford that. Money is the root of all evil.
I had many of the same money mindsets that you may now have. Through a concentrated effort, I was able to change most of these around. In the process, I transformed from a clueless guy–feeling like he’s barely making it–to someone who’s achieved a measure of financial freedom.
I invite you to get your free gift, 7 Money Mindsets Preventing You From a Positive Cashflow, today.
Discover the 7 most common myths (false beliefs) around money that’s keeping you from having more money!