Posted: 05 May 2008 08:26 PM CDT
My walk to the oasis
As I wander the deserts in search of my oasis of financial freedom, I have come to realise that the journey has revealed some interesting insights. The more books I read about personal finance, investing and towards achieving financial freedom, the more I come to the conclusion that once we have set our own goals and targets and have developed and sustained a strong desire towards these outcomes, our daily processes start to evolve towards where we cast our focus.
Processes are habits
In your excellence journey towards financial freedom, the processes are the means by which you work towards your actions that bring you closer to financial freedom. Processes are nothing more complicated than habits. Build up good habits or ways of living your life that is condusive to financial freedom and you are on your way towards that goal.
How do you develop habits that help you become more effective in financial freedom?
You are guided by the principles of living within your means, saving and investing, growing your means and protecting your means. To make these into habits, you first need to keep them in
mind. When I write this blog, open up my Excel worksheet every morning, I put up my financial freedom goals in front of me. It serves to keep in sight and keep in mind what’s at stake for the financial decisions I will make towards financial freedom. It works on a conscious and sub-conscious level.
Let’s take an example. My current mobile phone is a Treo 650 portable digital assistant (PDA) phone. It has served me well for the past 2 years or so. I want to upgrade it because it does not have wi-fi nor is it 3.5G compatible.
In order to maximise value-for-money, I have been shopping around for about a year now for a new pda phone and have eyed the Nokia E61 as well as the newly introduced Samsung i780. Based on technical features and price-point, the Samsung i780 would be a better deal. Given the availability of number portability in June 2008, I have decided the best time to upgrade would be to wade into the price/package wars to be fought during that time as telcos give promotions to retain customers and to attract customers whose contracts have ended with their existing telcos.
This is an example of delaying purchases and shopping around for value. I am not so frugal as to deny myself even the small luxury of a useful and fun gadget that is both utilitarian and entertaining. But I don’t go and grab what I see but do my research slowly and overtime technology sometimes catches up at a better price point. My 6 year old CRT Sony TV is still going strong and I have seen in these 6 years how LCD TV prices have dropped drastically as economies of scale and maturing technologies led to more affordable prices for consumers.
Your role models in developing habits
Habits are developed over time and by modelling others behaviour. My parents are my closest models when it comes to being more cost and value conscious. My peer groups of kakis (close friends) come in a close second as we share tips on managing our family budgets and practicing value-for-money habits.
Another way to develop good financial habits are to read widely books on financial freedom and put into practice something new weekly or monthly. My personal networth Excel worksheet has something new each month or so as I add new charts or put in new ways of conditional formatting to make it more useful to me.
Habits become our destiny
Our habits are the processes that drive us each day towards actions that take us nearer or away from our goal of financial freedom. If you truly want to achieve financial freedom, you have to muster the courage and conviction to chase after your dream by developing one habit at a time.
Be well and prosper.