Over the years, there are things you read, things people tell you or things
people do that inspire you, and sometimes they stay with you and have a huge
impact and make you want to be better. Sometimes its as simple as the right
time and the right place and it shapes you to be a better person and help others
to be better as well.
I know it was an incident when I was 4 years old that shaped me to be a very
responsible person. I know that it was something John F. Kennedy said that
inspired my pride in my country and my desire to be better for my country. FYI,
I was 5 years old when JFK made his inaugural speech so you have to wonder
how I’d even remember “Ask not what your country can do for you, ask what
you can do for your country”. Right time, right place? I have no other
explanation.
So what inspired me as an adult in the investment world? David Bach’s books – especially “The Automatic Millionaire”. I’ve read that book multiple times to keep reminding me of how well the “Pay Yourself First” concept worked. It is definitely the book I recommended the most often in my career.
It also feeds the concept that “there is no level of income that you can’t
outspend”. It wasn’t until I heard the lawyers defending Michael Jackson in his
bankruptcy case that it made sense. I don’t know all the bankruptcy laws in
Canada, let alone the states, but I know they can’t take everything you have as
you still need to be able to live. During his bankruptcy hearings, his lawyer
stated that he Michael Jackson needed $20 million dollars a year just to survive!
And that’s $20 million US, not Canadian dollars. Yikes – he obviously didn’t
shop in the same stores that I shopped in! I wouldn’t even know what to do with $20 million from now till I die, never mind each year!
But it just proves that we become accustomed to what we make and spend accordingly.
We also become accustomed to what our peers make and spend and we are
happiest if we are on the same level as them.
Fun fact – most people would prefer to make $100,000 a year if their friends are making $50,000 a year as opposed to making $200,000 a year while their friends make $300,000.
Nonsense you say – who wouldn’t prefer to make $200,000? But give that some
thought – if you are making MORE than your friends, you can not only keep up
to them, but you can actually keep ahead of them. If you are making less than
they are? Well keeping up is going to be very difficult. It doesn’t feel that good
when your friends all take a vacation that you can’t afford, or all drive newer or
more expensive vehicles than you. It’s pretty discouraging. And it’s our peers
we tend to compare ourselves too – not the rich and famous!
The rich & famous – does money buy happiness? Not really; it does make things
easier. Another interesting fact – once you’ve reached a sufficient investment
portfolio, more won’t make you happier.
So where do we go from here? Let’s talk about HABITS. When I hear habits, I
tend to think negatively – like smoking and drinking and gambling and …..
But we all have good and bad habits. We have them in our diet and our health
and yes, even our financial nest egg and our spending – everything I’ve
preached up to now is really about developing a habit to the secure the future
you! So next time around, we are going to dig a bit deeper into the “habit”
world.
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