Crossfit. P90x. Insanity. Body building competitions. Look anywhere around you and you’ll see that pursuing physical excellence is all the rage these days. From fitness groups to online workout plans to personal trainers, there is no shortage of people trying to sell you on a plan to help you get in shape, look fit, and feel great. There are so many options to choose from, how can you know what’s best? The secret is, every plan or program shares characteristics in common. Building wealth works the same way.
When it comes to being in terrific shape, ask anyone who’s in it. It requires an extremely dedicated effort to both eating well and exercising hard. For maximum results, it takes a concentrated, dedicated, and consistent effort. Most of us can understand this, but assume that it’s the intensity that makes the biggest difference. Working out hard is necessary to bust through plateaus, but when it comes to maintaining fitness, nothing beats consistency.
Over the years, I’ve learned it’s better to have two months of going to the gym and eating clean consistently than it is to have one month of superhuman effort followed by a month of slacking. That’s just the way the universe works. Muscles need to be continuously used or they break down and get soft. Our body adapts to whatever we fuel it with and will crave whatever type of food we feed it. Consistent choices become habits, and habits determine lifestyle. For best results, solid consistency over sustained periods of times leads to the best results.
Building wealth works the same way. It’s not enough to have a great week of saving and sticking to a budget if you’re only going to blow it the next week by splurging on something frivolous. If you think of the money you spend like the food you eat, spending money on empty calories that bring no meaning to your life and do no help you achieve your goals is a huge waste. Now, lets be honest. Most of us are more concerned with how we look than how our bank accounts look because that’s what other people see. Our account statements aren’t posted on Facebook like our double chins would be, so it’s much easier to struggle in that area than in the physical. But is it any safer?
Being broke leads to stress. Very few things can have a negative impact on your overall well-being than not knowing where the money is going to come from for the new tire you need or the credit card bill that’s coming do. When we carry extra weight around, it becomes harder and harder to complete that run. This makes us less likely to run the next time. Saving money works the same way. Paying interest on money we borrow to pay the bills makes it that much harder to save money for the next month. It’s very easy to fall into the spiral where the money you would be saving is going towards the interest on your credit cards, and before you know it you’re so discouraged you give up all together. But don’t stress! So many people have been in this very situation and found a way out. You can too.
When it comes to building wealth, most people assume it starts with earning more money. They look for opportunities to earn more and get discouraged when they don’t work out. This is all backwards. The number one rule to building wealth is capital preservation. I say again, if you want to turn your balance sheet around, you need to start with the money you are already making. THIS is where you are going to get the most bang for your buck. Cutting out the unnecessary Starbucks, fast food, tv channels, car payment, etc. just as good if not better than earning more money at work. Extra money earned at work is taxed by the government and comes at the expense of your time. Money saved is affected by neither.
If you’re taxed at 25%, $100 earned in extra income is really only $75. If you save an extra $100, you keep it all. See how that works? You also save the time it takes to make that money. So if you’re earning $20 an hour, it cost you 5 hours to make $100, of which you kept $75. If you save $100, it costs you zero hours and you keep the entire $100. This is a no brainer, and it’s where you really need to turn your attention.
Unfortunately, most of us avoid this because it takes discipline. Just like with exercise, I would rather go to the gym more than change my diet. The problem is I’m not going to get results this way. If I start eating healthy first, I’ll have much more energy to workout harder and be more inclined to do so. The workouts result in a natural buzz and make it easier to eat healthy. This, my friends, is the positive spiral of fitness. One side effects the other positively and the two work synergistically to improve results better than either would achieve alone. This is the secret those crazy gym animals have figured out that enable them to achieve superhuman results. I’m here to share with you that the same works for building wealth.
When you actually keep more of the money you make, you have more to invest. Your investments in turn make you more money, which increases the amount you’re able to save. When you focus on saving more rather than earning more, you in turn have more time available at your disposal. This valuable time can be used to start-up side businesses, look for investments, or educate yourself on new strategies you otherwise wouldn’t have thought of. The best investment you’ll ever make is in yourself, and time can be a precious commodity in helping to do just that.
Saving also forces you to focus on what’s really important to you. It will inherently turn your mind away from frivolous pursuits and onto your long-term goals. As your subconscious is trained to search for paths to your wealth building goals, you’ll start to notice more and more opportunities you used to miss when all you could think about was this Friday’s trip to the bar (and the $60 tab coming with it). You’ll find that the more focused you become, the more opportunities you’re able to take advantage of. The more opportunities you take advantage of the more confident you’ll grow. The more confident you grow, the easier it will get to save. You are now entering the positive spiral of wealth. Your good habits have increased your desire to save and the two are now working in synergy to increase your results-just like eating healthy and working out always compliment the other.
Before long you’ll be making great choices, educating yourself more and more, and getting really excited about new opportunities. Then it’s only a matter of time before old opportunities are creating new ones and that laser sharp focus on saving can be turned to more fruitful endeavors like asset acquisition.
Whether its getting in shape physically or financially, it’s not an easy road when you first start. Consistency is the key and that requires a combination of time and dedication. Do yourself the favor of making it easier for yourself rather than enduring an uphill climb. Financial freedom, just like physical fitness, is available to all of us. Apply the principles from one in the pursuit of the other and soon enough you’ll have both.