I used to wait for the big moments when I would need to make crucial decisions that would irrevocably impact the direction of my life and destiny. I would wait hopefully for the auspicious occasion to arise and reveal itself.
Experience has brought me to the conclusion that it is the micro choices we make by the dozens each day that cumulatively make the most impact and are the easiest to ignore or fail to notice. The great news is you can start affecting the small daily choices ASAP. You don’t have to wait for some outside event.
Character building is the ability to influence one’s self. Our micro-decisions are how we do it.
Life is a continuous series of choices. We can make the right choices or wrong choices or no choice.
It’s the little choices, the micro-decisions that we make all day every day that accumulate into defining who we are. What we say, and what we do, are two different things. And what we say we do is the third thing. We tend to delude ourselves and conflate these three distinct elements. As I go through my day, I try to be mindful if they are aligned.
Well-being is realized by small steps, but is truly no small thing.
What we do is who we are. We are what we do.
Being mindful is all about being aware of the small actions we take and recognizing whether they align with who we intend to be. It takes honesty and discipline, and commitment to be mindful. It’s a simple concept, but it is hard to follow. It’s hard, but it’s essential to leveling up.
When we light up a cigarette, collapse on the couch to see what’s on TV, or order one more for the road, we are not answering the call of our higher selves. Tell me what you do, and I will tell you who you are. Our bodies and our destiny keep score.
Every little decision is an inflection point where we get to exercise our free will. Each choice is a branching that defines the route to our destiny. It is our moral duty to seize the day and make something of it. It is worth taking stock at the end of the day.
Winston Churchill said, “Every night, I try myself by court-martial to see if I have done anything effective during the day. I don’t mean just pawing the ground — anyone can go through the motions — but something really effective.”
Churchill held himself to a daily high standard. Ben Franklin did the same thing. It’s what we do each day that forms us.
Sometimes choices are clear, but choosing the right way is difficult. We may not want to hurt someone’s feelings or feel their wrath by our selection.
Or we may be scared of making what we know is the right choice and launching into an unknown future. Experiencing the feeling of jumping off a cliff and building our flying machine on the way down is vertiginous.
You don’t need to test the depth of the river with both feet. But you do need to take the plunge.
We fear that what we are giving up might be the best we can hope. Fear prevents us from pursuing happiness. Robert Brault eloquently said,
“We do not knowingly choose unhappiness over happiness. Rather we choose security over risk, stability over change, what seems permanent over what seems fleeting. We choose unhappiness because it has a better chance of lasting.”
Sometimes choices are hard. Both options balance out as to the pros and cons. In this case, when a decision is difficult, it doesn’t matter which option you choose. Think about it.
Sometimes we choose the wrong path. We end up having our ladder against the wrong wall. We end up working productively toward something that doesn’t need doing.
“There is nothing so useless as doing efficiently that which should not be done at all.”
Sometimes we choose the easy path, and that preempts us from following our top-level goals.
“We are kept from our goal, not by obstacles, but by a clear path to a lesser goal.”
There are two areas of life where the small choices we make add up to life-altering destinations: health and wealth.
Health and Wealth
It’s the cumulative effect of small choices that make us fit and healthy and prosperous and wealthy.
The keys to fitness and health are exercise and nutrition. Even though exercise is superficially about physical activity, the choice to just do it is mental. Nutrition and diet also depend on a series of micro decisions. And, as they say, the body keeps score.
A pound is 3500 calories. To gain a pound a year takes about 10 extra calories a day. Ten calories are one peanut M&M. Avoiding an additional ten calories per day is a micro discipline.
When it comes to personal finance, the no-choice option is the worst. Sleepwalking through getting and spending money is a great way to remain on the financial hamster wheel: furiously working and getting nowhere.
There are some remarkably simple ways to financial independence that don’t have to do with low probability events like winning the lottery, writing a hit song, creating a billion-dollar startup, or going in the first round of a pro sports draft.
Count yourself blessed if you have such gifts. You may still want to read on because its not how much money you get but how much you keep and put to work for you.
If you are not in any of those rarified circumstances, don’t bum out. There is a high percentage path to financial independence. A few clear, simple steps can make the difference between economic freedom and being a wage slave all your life.
It has to do with creating a budget that is less than your monthly income, saving the difference and investing it, and letting the mojo of compound interest do its mighty work. Time is a significant factor here, and using it to our advantage is the key.
Put time on your side. Put time to work for you. Money doesn’t sleep.
The first step is to become mindful and aware of your spending. Write down what you think you spend every week and month. This budget sketch is your estimate. It’s a guess that you will use to measure your actual expenses. This comparison will give you an idea of how mindful and aware you are about your spending.
Break your estimate into a few big categories like rent, transportation, food, clothes, and entertainment. Then take a look at your bank activity.
If you use a debit or credit card for most of your purchases and transactions, then it should be pretty straightforward to get an accurate picture of your spending over the past few months.
A credit card is an excellent way to purchase because it has consumer protections built-in. But you must pay off the balance every month. If you are not disciplined enough to do this yet, then use a debit card until you build up enough of a savings cushion where you are not living paycheck to paycheck.
Were your guesses higher or lower than your actual expenses? How about across the categories you set up?
This exercise will help you become mindful and cognoscente of your spending habits. You may find some areas that are leaky and where some attention can keep money from slipping through your fingers or burning a hole in your pocket.
I learned these lessons the hard way. I was a leaky spendthrift for years and spent in extravagantly irresponsible ways. It took me way too long to learn this lesson.
These are simple lessons that can be applied immediately to stem the bleeding and start building wealth. Simple, but not easy. As they say: all know the path, few walk it. I knew it, and I didn’t walk it. If you are reading this, you have already made the most crucial decision to get on a path to financial independence.
Remember, it’s not what you earn but what you keep.
“A penny saved is a penny earned.” Ben Franklin is attributed with saying this, but it turns out he didn’t. He did write in the 1737 Poor Richard’s Almanack: “A penny saved is two pence clear.” So close enough. Watch the seemingly little expenses that slip through your fingers.
You earn those pennies. Keep them and have them add up. They will add up to big bucks.
Saving can seem challenging, but once you start, seeing the benefits and results, will hook you. It will become a virtuous cycle where the more you see in your bank account, the more you will start to scrutinize your spending. It won’t be painful. It will become a joy.
You will be able to better sleep at night, knowing you have money to cover emergencies. And once you start making it grow through investing, you will feel on top of the world; and you will be.
Warren Buffet says, “Don’t save what is left over after spending, spend what’s left after saving.” This inversion of priorities is the critical shift in thinking to adopt and put into practice.
My Mom used to say, “if your outflow is more than you inflow, then you upkeep is your downfall.” Word.
Be cautious and bold.
Another inversion in my thinking took place that was crucial. I was always all about making more money. I thought if I could make enough, I would have a surplus that I could save. But every time I made more, I just spent more. My expenses always increased to match my income. I bet many of you can relate. It’s like chasing a mirage. You never get there. It’s a continuously receding horizon.
“Beware of little expenses; a small leak will sink a great ship.”
- Benjamin Franklin
The little things add up over time. And time is on your side.
There are two ways to increase your surplus income: make more or spend less. It wasn’t until I inverted my thinking and started to focus on my expenses that I was able to make progress on saving and investing.
The first place to apply those newfound savings is where you can make an average return of over 17% guaranteed and immediately. Pay off your credit card balances and commit to never carrying a balance again.
You don’t need to hit a grand slam on an angel investment deal to create escape velocity passive income. What you do need is a consistent program of saving and sensibly investing for the long term.
Start today. It’s your choice.