Budget Sense

Do you have a “why”? You know, the thing that gets you up in the morning and pushes you to your limit, no matter what life throws at you. It is that goal in life that propels you to work hard and have a hope for a better future. Some people may have one default and universal “why”, while others may have a different why depending on their different life domain; one for career, another for their finances and so on.

Personally speaking, the topic of my “why” has been a fascinating and compelling one for me ever since I started getting into the whole personal development journey. While different people may have a different “why”, it is almost universally accepted that freedom or financial freedom is one of those that many strive for. We all aspire to enjoy financial security, while having enough time to spend with family and friends and pursuing different passions and interests. For me, financial freedom is huge. While this may not necessarily mean retiring at an early age, I want to be able to have a sizeable passive income that can sustain me, even if I decided to quit my job or lost my job on day.

This brings us back to the topic of your why and how it fuels us. Although my life is in a very good position at the moment in terms of career, family and finances, I still find myself faced with situations that cause frustration and some hard decisions. But instead of letting them get to me, I use them as fuel to leap forward. As I mentioned in the title, every life frustration is a stepping stone towards my ultimate financial freedom future. For instance, our family car, despite its age, is usually reliable. However, it recently required several costly repairs. This got me thinking that my next car, hoping not anytime soon, will hopefully be as reliable and as financially efficient as possible. Same goes for any unexpected expense, rather than allowing it to affect me negatively, I use such chances to fire me up to work harder and harder towards achieving my ultimate financial why.

Do you have a strong ‘why’ in your life that drives you, even during the toughest moments when you feel like giving up and doing nothing? If so, that’s fantastic. Having a compelling ‘why’ is a powerful motivator, especially when it comes to achieving financial freedom, as is the case with my own ‘why,’ which helps me overcome many of life’s frustrating moments. When life throws you a fast curveball, having a strong “why” will help you

When life throws you a fast curveball, having a strong “why” will help you stay focused and resilient, enabling you to adapt and keep moving forward with determination and purpose.

What does going to GYM and personal development in general have to do with your money and wealth building? Surprisingly a lot more than you think! If you work out or are into personal development, you will notice that doing these things translates into other domains of your life, where you want to do things more perfectly and with discipline. That of course includes how you manager your money and build wealth.

But some may not be aware of this connection or don’t feel it. In this case, there are a few things to keep in mind to make a connection between the two: personal development and wealth building are more intricately linked than you can imagine. In fact, there is even research and study after study that prove this link.

Mindset Connection

It all starts with having the right mindset in order to make positive changes towards a better future you. There is a mindset shift that often accompanies personal development, and a positive mindset can influence financial decision-making and wealth-building strategies. You can’t expect to be financially free in a number of years, if you are not willing to set goals and make some sacrifices in the present. This means adopting a set of beliefs, attitudes, and habits that promote financial well-being and success.

Enhancing Skills and Setting Goals

Personal development often involves acquiring new skills and knowledge, which can enhance your employability, earning potential, and entrepreneurial capabilities. For example, improving your communication, leadership, or technical skills can open up better job opportunities or enable you to run a successful business. Personal development also encourages individuals to set clear goals and work toward them. This goal-oriented mindset is crucial for financial success, as it helps individuals plan for their future, save, invest, and make informed financial decisions.

Discipline and Consistency

Discipline and consistency developed through personal development practices contribute to financial success, such as consistent saving and investment habits. The more you get good at the former, the more you see results from the latter. In fact, the opposite is true as well. When it comes to financial well-being and wealth building, there is no substitute for being disciplined and consistent. For example, it is vitally important that you pay yourself fist and on a consistent basis, before you start spending your money on other things, be it needs or wants.

Financial Literacy

One of the aspects of personal development is to learn new things and get deep into different domains. This includes financial mastery and getting the most out your money. As become more literate in managing your money and finances, your life gets better and can start to enjoy it more and stress less. While money may not bring happiness, it can certainly help withe eliminating a lot of the stresses in life. Got a leaky roof? need to put your kids in a daycare? want to replace your old clunky car? These are all things that can cause stress in life but can also be dealt with using money. In other words, there is a strong link between stress reduction techniques learned in personal development and making sound financial decisions under pressure.

Investing in Yourself

Darren Hardy, a well-known author, speaker, and personal development coach, often shares a story from his early days in personal development, while attending a seminar by Brian Tracey. He was told by Brian Tracey that one of the best things he can do to supercharge his life and take it to the next level is to invest 10% from every dollar made back into personal development. It is not rocket science, investing in oneself through education, skill development, and personal growth activities can pay dividends in various aspects of life, including finances. Attending seminars, taking courses, buying books are all things that cost money but will return you many times more money than what they cost you. It goes without saying though, it is not so much about the act of doing these things, but to learn from them and apply these lessons in real life, your business or career.

In conclusion, the fascinating link between personal development and wealth building goes beyond mere coincidence; it’s a well-documented connection backed by research and a myriad of studies. At its core, it all begins with the right mindset—a mindset shift that accompanies personal development. This positive mindset becomes the driving force behind financial decision-making and wealth-building strategies. The journey is marked by the enhancement of valuable skills, the establishment of clear goals, and the cultivation of discipline and consistency. Personal development leads to financial literacy, equipping you with the knowledge to make savvy financial decisions and ultimately reduce the stress that life’s challenges can bring. Remember, one of the best investments you can make is in yourself. Just as Darren Hardy learned from the esteemed Brian Tracy, dedicating a portion of your earnings to personal development is a proven method to supercharge your life and financial prospects. So, invest in your personal growth, and watch how it transforms your path to wealth and a brighter future.

Thanks to James Clear’s extremely popular book, ‘Atomic Habits’, the study of habits has become a very popular topic in the last few years. Podcasts, blogs and the personal development field in general have all picked up on it and made it into a trendy topic to dissect and discuss. Personally, and despite having been in what seem to be a minority who have yet to read the aforementioned book, I been increasingly using the power of habit formation to solidify different health and money aspects into my life recently and they have become second nature. Some of these include:

Walking for half hour daily , for a min of 5 days a week: ever since Covid lockdowns were imposed in March 2020, I stopped going to the gym and never been back since. I replaced that with walking, and hiking in the summer. My walks have been such an integral part of my life, that I currently have an amazing 1,000+ day move streak on my Apple Watch! I couldn’t have set such an amazing streak without the power of habit formation, where something becomes almost automatic and not much effort or thought goes into starting it.

Flossing at night : while I have always took great care of my teeth, including period visits to the dentist, flossing is something I was never consistent with. No more. After coming across this article, and applying what I know regarding habit formations, flossing has now become a daily thing since Jan 1st of this year and I have never skipped a day.

Doing 15 push-ups a day: this actually started last year, where I started with 10 pushups a day, and increasing it by 1 every month, so that by December, I was going 22 pushups a day. This made it into a daily habit, so for 2023, I have been a daily count of 15 pushups and I have yet to skip a day.

Applying the power of habit formation to further our finances

The power of habit, once automated, is a force to be reckoned with, . Habits are the actions we take every day, whether we realize it or not. They can either push us forward or hold us back. When it comes to finances and money, habits can be the difference between living paycheck to paycheck and building wealth for the long term.

To start, one of the most important habits to cultivate is saving money. Saving money can be difficult, especially when we live in a culture that encourages us to constantly splurge and spend. However, by making saving a habit, we can set ourselves up for financial success. But how? One way to do this is by automating our savings. Most if not all banks nowadays offer automatic savings plans that allow us to set aside a certain amount of money each month. By doing this, we don’t have to rely on our willpower to save money. It becomes a habit, and before we know it, we have a substantial amount of money saved.

Another important habit is tracking our spending. It can be easy to lose track of where our money is going, but by keeping track of our expenses, we can identify areas where we can cut back. This can be as simple as using a budgeting app or writing down expenses in a notebook, but the latter is not as popular these days due to the advent of apps which makes tracking easier.

In addition to saving and tracking our spending, investing is another habit that can lead to greater wealth. Investing can be intimidating for those who have never done it, but by starting small and consistently investing a portion of our income, we can build a portfolio that will grow over time. What matters is taking that first step, automating it, and then forgetting about it for the most part, other than an annual or semi-annual review and making adjustments if needed.

It’s important to note that building wealth through habits is a long-term process, requiring patience, and not something that will happen overnight. But what is virtually guaranteed is that by consistently practicing good financial habits, we can set ourselves up for success in the future.

One example of the power of habit in action is the story of Warren Buffett. Buffett is known for his incredible wealth, but what many people don’t realize is that he built his fortune through consistent, disciplined habits.

Of course, developing good financial habits is easier said than done. It can be difficult to break old habits and develop new ones. However, there are a few strategies that can make the process easier.

One strategy is to start small. Trying to completely revamp our financial habits overnight is a recipe for failure. Instead, we should focus on developing one habit at a time. For example, we could start by automating our savings and then move on to tracking our spending. Another strategy is to find accountability. Whether it’s a friend, family member, or even a financial advisor, having someone to hold us accountable can make a big difference. These can help us stay on track and offer support when we need it. Last but not least, it’s important to recognize that this requires patience. Developing new habits takes time, effort and dedication. We will likely make mistakes along the way, but it’s important to stay focused on our long-term goals.

In conclusion, the power of habit is a powerful tool when it comes to building wealth and be financially independent. By developing good financial habits, such as saving, tracking our spending, and investing, we can set ourselves up for financial success. While it may be difficult to break old habits and develop new ones, with time, effort, and patience, we can build the habits that will lead us to a more secure financial future.

Image this: your wealth is in excess of $100 billion, but instead of enjoying your money and travelling from country to country, hopping from island to island, you instead spend most of your time reading books. 500 pages minimum to be exact! If you haven’t guessed it yet, we are talking about Warren Buffet, who believes that knowledge, just like money, compounds everyday. If you care about building your wealth and being financially free, then reading it vital. Reading helps you connect the dots, generate new ideas and unlock potential that you didn’t think was possible. And if you are already into reading, there are always better and more efficient ways to get the most of out books, so that what you read will be retained and useful for a long time in the future. We have all read books and may not remember much from them. We need to change that and it starts by following these tips below:

Use a Kindle or any other E-Reader for easier referencing and note taking
Using an E-Reader like Amazon Kindle makes your reading much easier, and in a number of ways. First off, it makes it much easier to search, something that is done manually and takes a long time on a paper book. E-Readers also help you make highlights and your own notes to important passages in the book, and easily refer back to them later. E-Readers have other benefits and we have already wrote about that in a previous article.

Take at least one idea from a book and set an intention to apply it
While reading a book, you will come across different ideas, advise, tips, hacks and techniques. As it may be hard to remember or apply all of them, set an intention to focus on one good idea and apply it to your life. For example, after reading the book “Own the Day, Own Your Life” by Aubrey Marcus, I took 3 ideas and started applying them for a better start to my morning: drink water, get natural sunlight and do some movement. I have been applying those daily and they help a lot, considering that I work from home most of the time. Alternatively, before starting a book, determine what you want to learn from the book and what you hope to gain. This will help you stay focused and identify the most relevant information.

Read other people’s reviews and compare notes to spot common themes
One of the things I do when reading a certain book – either before or after I finished reading it – is to read online comments and book reviews to gain insights and common themes from other readers and compared to yours. If you see a common theme repeated by other readers, then take some time to focus on that and expand on it to gain more insights. You can also use online resources to seek clarity on concepts in the book you are not sure about to see how they define or approach it. And last but not least, you can get entire book summaries and key points by searching through Google images or Pinterest.

One done, Reflect and summarize
After finishing the book, take some time to reflect on what you’ve learned. Think about how the information can be applied to your situation and how it can help you reach your goals. For example, if this was a finance book, summarize the key points in your own words and what you can do to apply it to your situation. If the book is stressing the importance of regular payroll contributions to a saving or investment program and this is something you don’t already do, then start taking the first step to make that reality. One simple decision taken based on what you read, could provide huge returns and benefits in the future.

We can’t claim that all successful people made it to the top by reading books. But you can also bet that most of them did. There is a famous quote that says “Not all readers are leaders, but all leaders are readers” . There is also another variation on this from one of my favorite podcasts ‘Read to Lead Podcast’ by Jeff Brown, that goes “Readers are Leaders and Leaders are Readers” and Mr. Brown has a habit of starting and ending every podcast episode with this memorable and fitting quote. So start getting into the habit of reading, and ensure you get the most out of it by applying the tips above. Before you know it, reading will be making your life better, richer, healthier and certainly wiser.

We have all heard of popular sayings and expressions like “Win Win”, “Two birds with one Stone” and other similar ones. The idea here being that we should be more efficient in life, careers, finances, by doing more with less. In other words, use one hand to do two different things and 2 hands to do 4 things and so on.

From a financial and personal growth prospective, this is about doing more in less time, thus stretching one valuable and finite resource that we all want more of: time! If we are time-stretched and since we can’t create more of it, why not do more in the same time it would take you to do one thing? In fact, we can go even further and do multiple things at once, thus making it a win-win-win proposition. Compounded over time, you are effectively freezing or even creating your own time, since the alternative would have cost you a lot more in terms of how long it will take. Some of the personal examples below may not seem as obvious as they seem simple and obvious enough, but they are powerful and add up over time. In fact, as you go over them, you will realize you may already be doing some of these.

Staying home is a win-win-win proposition for me. I save on gas. Save on eating out. Get to study or read. The alternative is driving my car, where I am not only wasting gas, but also putting my mileage on car. Of course, there are these times when you want to go out to change scenery and that is fine once in a while.

Another example is when I go out for a walk, I am also learning by listening to podcasts or audiobooks. That is, I am doing personal development and learning, while improving my health by walking. This is something millions do on a daily basis, but may not have thought about the win-win benefits they are reaping.

Multiple incomes: In his book “The 10 Pillars of Wealth” ,Alex Becker argues that we need to separate our time from income if we are to become wealthy and have a lot more money than our 9-5 job can provide us with. In other words, just because we only have 24 hours in a day (2/3 of which is spent sleeping and socializing) doesn’t mean we are limited to making money in only those 9-5 hours. We have to have our own ‘Entrepreneurial hours’ where we have to pursue secondary side income, regardless of time of the day. This can come in the form of passive income that doesn’t require a lot of our time (dividend income, rental properties, online gigs, book sales, Youtube ads etc) .

When I did Uber as a side gig a few years ago, I would use the time between rides to listen to podcasts and audiobooks. In fact, I used the the idle time to study on my E-Reader for a technology-related certificate I was working on. This is an example of exploiting the time to do one profitable endeavor in order to do something else: perfect win-win example. The alternative would have been to sit idle between rides or listen to the news, and gain nothing in the end. And in fact, I ended up obtaining that certificate and that helped me with my career development and advancement.

To some of us, when we think of win-win, we think more along the lines of business. For example, a fairly negotiated deal may create a win-win for both parties. And by the same token, win-win may work between individuals, directly or indirectly. For example, if I make a charitable donation – with the first and true intention being to help others – only will I help others, I may also get a tax deduction as a result. The tax deduction is a by-product of the act of kindness and not the main intention, but it still creates a win-win situation.

While creating these win-win situations is great, there may be some limitations we need to manage or overcome. For example, for most, it is the inability to multi-task and the need to focus on one thing at a time. In fact, I am one of those strong proponents of focusing on one task at a time to ensure it is performed to perfection and no distractions. But most of the examples above involve one active task with another passive one in the background. While one task requires our full attention (e.g listening to an audiobook) , the other task may only require passive or subconscious attention (e.g walking) .

If you always think in terms of win-win – or triple win – you will exponentially improve your life and in a lot less time than the alternative. When doing an activity or task, think about whether you can make it a win-win proposition.