One of my favourite scenes from the movie Fight Club is the one with Tyler Durden and Raymond K. Hessel and it goes something like this:
Out of the blue, Tyler Durden puts a gun to Raymond’s head, who works in a convenient store, and says: “Listen, now, you’re going to die.”
Then Tyler Durden asks Raymond what he wanted to become when he grew up. And Raymond says: “veterinarian.” But he is not in school right now.
Durden says: “You could be in school working your ass off, Raymond Hessel, or you could be dead. You choose.”
Now, I know that life is not a novel or an excellent movie, but that doesn’t mean we can’t learn from that last quote.
Do you live life? Or do you tick off items on a list and say that you’re living? Because that’s not life, that’s doing groceries.
What I’m trying to say is that you could be doing X, but instead, you’re just picking the safe road because you think you’ve figured out life.
Job + House + Spouse + Kids + Holidays = Happiness.
Sounds solid, but here’s the thing: You can fail at anything. Safe. Unsafe. It doesn’t really matter. You could be fired from a well-paying job. You could lose your house. Your relationship could end. You could even die tomorrow.
So why not take a chance? Take a chance with love, your career, your business, your goals and your money.
Because life can’t be figured out. You will never “figure it out.” There is no one road to happiness, wealth, or success. Rarely do you ever figure anything out fully.
Life is just one long process that doesn’t always make sense.
As Raymond K. Hessel runs off to start his dream job of becoming a veterinarian, Tyler Durden says:
“Your dinner is going to taste better than any meal you’ve ever eaten, and tomorrow will be the most beautiful day of your entire life.”
That’s how life feels after you’ve made a bold move. Every now and then, shake up your life, and do something that makes you scared. That includes your money.
Too often we choose the “safe” option with our wealth building out of fear of doing the “wrong” thing. We fear loss because we lack the tools to make the bold decision.
When it comes to being good with money or doing the right thing with finances, the temptation is to think we just need to know more information, or more facts, or that the ultimate goal is to get to the objectively “right” answer.
But knowledge or information alone is rarely what stops us from enjoying the success we want or achieving our goals. And there are often many ways to get to a goal, not just a single “correct” path.
So how do you make a good financial decision if knowledge alone isn’t enough? And how do you decide on the right path for you if there is no one, single, always-the-best-thing-to-do answer?
To improve your ability to make Good Money Decisions, you simply need to do 2 things.
- Define your values and priorities, and
- Acknowledge your financial reality truthfully.
Good decisions come from understanding where these two things meet. Choices about how to use your money will be easier if you know what’s truly important to you.
What are your core values? What really matters? Why are you trying to earn more money or invest wisely?
More money on its own is not a true goal. It’s what the money allows you to do in your life that matters.
If you align your spending with what’s most important, building budgets suddenly becomes much easier; if you know what you want to save for, you can suddenly find more intrinsic motivation to contribute more to savings and investments.
You cannot ignore what the numbers tell you; that’s your financial reality. If your cash flow shows you spend more than you make, that’s a problem — regardless of what your values are.
But you also don’t need to feel obligated to always do what a spreadsheet says is “best” from a number’s perspective. In fact, doing so can leave you feeling unfulfilled and unsatisfied because you’re not considering what you actually want to do with your life.
“Right” and “Wrong” aren’t useful labels, when you’re struggling to make good financial decisions. When you apply those labels, you clutter up the situation with things that aren’t objectively true.
Who is to say that spending a year travelling is “wrong” and putting everything you have in your pension fund is “right”?
Spending a year travelling could be perfectly acceptable for your situation if, say, you’ve spent the last decade maxing out your retirement plan contributions, you saved up the amount you need to cover your travel expenses, and you have a plan for continuing to work and earn an income when you return.
On the other hand, if you are behind on saving for retirement and don’t have any cash savings built up to pay for your travels, it might not be so smart to quit your job to wander the world — but I’d argue that even here, it doesn’t help to make yourself wrong for your wants and your choices.
Instead of right and wrong, think more in terms of “does this work for me?” or “does this not work for me?” Determining what works and what doesn’t comes down to, again, your financial reality and your value-defined goals.
Going back to our examples, it probably works just fine for you to take a year of to travel when you’ve been diligently saving for both this goal and your future for the last decade.
But it does not work to continue to neglect your retirement savings because one day, you may not want (or be able) to work to earn a salary and need to rely on your nest egg instead.
What’s important is to make sure you strike a balance between what benefits you today and what you’ll need in the future.
Too often, people think in extremes — they’re either hyper-focused on today (#YOLO) or they’re overly concerned about the future (and potentially missing out on life as it happens right now).
It’s not easy to balance the needs and wants of Present You with the needs and wants of Future You because rarely do you ever figure anything out fully.
All we can do is try to live.
‘I did then what I knew how to do. Now that I know better, I do better.’ — Maya Angelou
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