How To Turn Losing into Winning With Your MoneyPosted: September 25, 2012
Average Joe blogs about topics he finds entertaining at the cleverly named “Average Joe’s Money Blog.” He’s also the co-host of the relaxed money podcast Two Guys & Your Money.
I remember as a kid I was fascinated by these huge domino chains:
I’ve come to realize that part of my fascination might be what the simple act of dominos falling means to me. I love watching one positive result lead to another. Even when all doesn’t go exactly according to plan (they had to roll the marble twice AND there was a break in the chain at one point).
One positive result has a tendency to create another one. In fact, I tell my son all the time when he becomes frustrated that 90% of the time, it’s his actions that ultimately created the frustration.
– He doesn’t want to clean his room. If he’d take ten minutes in the morning to make his bed and pick up his clothes (or even hang up clothes the moment he takes them off), he wouldn’t have to do it on my schedule.
– The computer isn’t working right, and it’s eleven o’clock the night before the paper is due. Why does he wait until 11 o’clock to finish the project? If he’d finished earlier, he wouldn’t have to worry about last minute tech malfunctions.
Likewise, we all have this with our financial situations, don’t we?
– Donald Trump began investing in houses with his father at a young age. He learned the ground rules for real estate early on, which led to bigger projects and ultimately, a real estate empire.
– Warren Buffet invested in stocks as a kid. He paid attention to the numbers behind public companies. Today he can quickly evaluate a company’s business prospects and make investment decisions which beat those of nearly any other investor.
– Steve Jobs took a calligraphy class. Many people say this attention to lines and shapes helped fuel his love of style and character, which made Apple the sexiest tech company of all.
On a smaller level, I saw this with clients:
– A client began max funding his 401k starting at 22 years old. He could barely do anything else, but he socked money away. At age 28, he already had $160,000 saved toward retirement. Using the rule of 72, if that money grows at 8%, it’ll be roughly $2.56 million dollars at retirement. …better yet, that’s if he doesn’t save another dime.
Unfortunately, that’s not the only domino chain that can happen. Momentum can be your best friend or a total bitch. How about this:
How’d your stomach feeling watching that train-wreck-in-slow-motion? While this may not be familiar, the feel of negative momentum might be:
– Credit card payments become so high that just paying the interest is a chore. No matter how much you pay, it seems like you aren’t touching the principle…and when you do, something comes up that forces you to spend more money on the card.
– Student loans force you to take a second job. The second job is so exhausting you to fall asleep at your real job, and the boss decides you aren’t working as hard as others. At best you’re denied promotions and raises. At worst, you’re fired.
– You don’t have money for car repairs. Your car breaks down on the way to an important meeting. You lose out on income you would have had, if things had gone right.
Do any of these sound familiar? Does it sometimes seem like you’re rolling a boulder uphill?
Whether life is going well or poorly, you have to remember two concepts:
1) Momentum itself is neither good nor bad, but it exists. It’s just Newton’s Law: a body in motion tends to stay in motion. It’s going to be hard to create the friction to stop momentum. You’re going to have to exert a ton of effort to turn negative events around, but once you do, this momentum will work in your favor. Remember this on the days that you’re ready to give up: it’s going to be difficult to stop negative momentum. But once you do, life is going to be much, much easier….
2) Once you have positive momentum, you can then work equally as hard to continue it. Now, every good result is amplified. As your momentum increases, it creates a widening array of opportunities you never would have imagined. One good domino fuels many, many more. Have you ever wondered how Donald Trump can execute so many transactions a day? Why Warren Buffet can have a hand in so many companies? Their secret is simple, and it’s the same one in front of you now:
They started building momentum by toppling one domino.
***Editor’s comments: Thanks Joe-this is definitely helping me with my blogger burnout! And yes, I can see how I got into debt by a domino effect. Better yet, I’m getting out of it by doing the same thing–one thing at a time but in the right direction this time 🙂 Oh, and I *never* waited until the last minute to do a report and have the computer crash…..***