We all know the pains of transitioning from a student to a full-time adult. The process commonly termed as ‘adulting’ can be a scary process. You find yourself gasping for air as your job and other commitments submerge you in waters. We feel too tired to even entertain social outings after work hours, who would ever want to have to think about the daunting yet impending reality of financial planning? Most of us are probably only ready to think about where and when our next vacation will be.
We can’t be blamed. Twenty-four hours does seem like a short time, especially since time management is something that many of us struggle with. The question then arises, are we putting first things first? Or are we simply spending the bulk of our time on redundancy that does not reap significant impacts on our lives? We may be focusing on our careers, but that does not mean that we should neglect to build the bigger picture.
Being busy may not necessarily be a good thing. It is important to know the difference between being busy with what’s urgent and being busy with what’s important. Urgent tasks are those that require immediate attention whereas important tasks are those that gear you towards your long term goals. Take a look at the example in the table below. Which quadrant have you been focusing on?Quadrant 2 revolves around building relationships, embarking on opportunities that are aligned with your goals as well as planning and creating contingency plans. These are tasks that we know are important, but have been putting off because of its lack of urgency. Quadrant 1, 3 and 4 are activities that we should prioritise less. Mainly because they are unlikely to bring us closer to where we would like to be 5, 10 or even 15 years down the road.
According to Stephen Covey, the author of the best selling business and self-help book ‘The 7 Habits of Highly Effective People’, where you’re headed is more important than how fast you’re going. In order to follow this piece of advice, it is crucial that you figure out what lies in our very own version of quadrant 2 and prioritise those things in life, all while continuing to develop a vision for the future.
‘ The secret of our success is found in our daily agenda’ – Tag Short
Many of us are guilty of being caught in our daily routines that we neglect the tasks that truly matter to us. Needless to say, planning your finances to ensure you can reach your goals is an important task that many may overlook and put off. It’s no secret that we would all love to achieve financial freedom someday. Imagine never having to worry about money! You could then focus on the things that you truly want to do, instead of getting stuck in that 9-5 job that you’re obligated to do to pay the bills.
Let’s take Anne Scheiber for example. Nobody knew about her until she left her entire estate to Yeshiva University’s Stern College for Women and the Albert Einstein School of Medicine. Over the course of her life, she managed to accumulate a net worth of $22 million, all with a mere $4000 annual salary. How did she do it?
The answer is one day at a time.
Anne even managed to retire at the age of 50. She obtained her net worth through investing in stocks with intention of holding them for as long as she could. Despite the increase or decrease in stock value, she did not cash them out. She also reinvested her ever-growing dividends into additional stocks. She invested for the long-haul and time was the important ingredient for building up her value. No, I am not asking you to be a miser and refrain from the pleasures in life! What I’m saying is that planning for financial success is, in fact, doable if you are serious about it.
Contrary to beliefs, financial planning does not have to be a difficult task as long as you follow systems and processes. Often, the lack of knowledge and expertise lead to inaction. In the case of planning for your financials, inaction causes us to miss out on the great success factor: ‘time’. The more time you have, the easier it is to reach your goals and youth is something that we could take advantage of. So take a step back, re-evaluate what’s important to you and start working towards your goals.
Andy & Planners Inc have been working with graduates over the years with our Financial Waterfall & the Affluence Program, a principled approach which is easy to follow and implement.
Why not consider setting an hour this month to find out more?