A number of readers have reached out to me saying, essentially… “like the blog but have no idea how to apply it.” Today, I’ll explain how I allocate time.
The two most precious things in my life are time and personal freedom. I wonder how many more times I’ll have the chance to rake leaves and enjoy Thanksgiving dinner with Monica. I also realize that life could strip away everything I have at short notice. With these thoughts in my head, it can be tempting to live in the moment. That’s a good thing right? I’m not so sure. The human condition gives too much weight to the present. My life today is enjoyable because I’ve made a habit of enjoying (today) preparing for tomorrow.
Yesterday I thought about the five things that had the greatest impact on my financial life.
- A childhood habit to save a portion of everything I earned
- Selling my best investments early – never squeezing the last dollar
- Consistent bad luck with gambling – early negative feedback on speculation
- Good luck – starting my career with one of the most successful investment teams in history
- A 20-year cycle of declining interest rates
Education, peer group, personal network and work ethic had an impact as well. I guess that’s a list of nine items.
How do we use daily action to create our life situation? The #1 thing for me is optimizing where I spend my time. I have a very low tolerance for things that don’t advance my personal agenda. Sounds a bit cold but our agenda can be anything (world peace, matrimonial success, helping our kids). It need not (and probably should not) be optimizing our bank account.
The paradox of financial stability is people that are the most uncomfortable with wealth have the most to gain from improving their relationship with their Financial Funnel. What’s the funnel? I drew mine for you above.
The graphic that I produced is an example of comparing reach (people) vs financial relationship (in dollars). It will change across our lives and well as through the natural ups and downs of our financial situation.
I also think that it would be insightful to add a fourth column that shows where we spend our time on a daily/weekly/annual basis. Your time is valuable and you increase your return per hour by focusing on the narrow end of your funnel.
Consider where the following fit:
- Facebook, Twitter, YouTube
- Social obligations
- Chat forums
- Television, video, internet
I often make a list of the key people in my life and make sure that I am responsive to them. This is very hard to do consistently! The wide end of the funnel is an easy place to spend low-value reactive time – rather than proactive action at the valuable end. I could easily spend my entire life on a legacy of chat forum posts and sent mail – while my young family lives downstairs from my home office.
Once in a lifetime…