Be Awesome, Not Broke!
Broke? Can’t afford to be awesome and do the things we’d love to do? With a little bit of hard work, we can be awesome and not broke.
“There goes the neighbour in his new Mercedes Benz. Since I was a kid I’ve always dreamed about owning one of those, but how on earth can I ever afford it when I’m struggling to make it from pay cheque to pay cheque?” It doesn’t have to be a Mercedes: it can be any big and amazing thing we want to do. The fact is we’re broke…right now. Being broke is temporary. It is possible to escape it. We can do it. It’s going to take some hard work, but we can move from being broke to being awesome.
1: Identify our awesome (goals)
There are so many things to do, things to buy and places to go: How on earth do we ever choose?
George Kinder and Warren Buffett have a few ideas.
George Kinder suggests three questions to identify your goals:
30 years from now, looking back: what are you the proudest of having achieved?
If you had all the money in the world right now what would you do with it?
The doctor tells you: you have 5-10 year to live, you’ll never be in pain or suffer, but you could die at any time with no warning. What would you do with that time?
Warren Buffett suggests writing down the 25 things we most want to do/achieve in our lives. He then suggests selecting the top 5 from these 25 and forgetting about the rest until you’ve achieved the top 5.
From there we need to quantify the goals: how much are they going to cost? Thankfully this is the internet age and we have thousands of resources at our finger tips. Once we have an idea of what our awesome is going to cost: we must add 20%-50% on top. This will get us passed the Planning fallacy. As human beings we are naturally optimistic when it comes to money: we believe things will cost less than they actually do, and we believe that we will have more money than we actually do: This is called the planning fallacy. It’s better to have provided a little bit too much than too little.
2. Identify where we are
So, we’re broke. Why? What’s holding us back? Where are we spending our money each month and what are we spending it on?
The most honest and best way of assessing this is taking three months of bank statements and credit card statements and tracking where we’ve spent all our money over the last three months. This is our starting point. As a famous comedian once said when referring to his performance, “The video tape doesn’t lie”. Once we are confronted with where we actually spend our money and how much we are actually spending: there is nowhere to hide.
We can represent this information graphically to give ourselves a bird’s eye view of our spending each month. We are spending most of our money each month, that is for sure, but are we providing for our awesome? If the answer is no: then something must change. If the answer is yes: great! But are we providing enough? No? Something must change. What is holding us back from achieving our awesome? We need to do something about it.
3. Start moving from broke to awesome
Having narrowed down our list of awesome stuff we’d like to do, identified why we’re broke and identified whether we’re providing for our awesome or not: We can now formulate a plan of how to start/provide more for our awesome stuff. It starts with moving away from the things that have made us broke. Let every step we take (rand we save) be a step (rand) towards our awesome. It is going to take a focussed approach. Slowly attacking the source of our broke-ness: whether that pesky credit card debt or overspending/impulse buying at the supermarket.
There is a major incentive waiting for us. Those big, amazing and seemingly impossible things we’ve always wanted to achieve are within our grasp. We are the masters of our financial destiny and we can spend our money with intention each month. If we want to make our awesome happen: we need to reduce our spending in other areas. Simple as that. But simple isn’t easy.
We must always remember that we do not have to do this alone. There are professionals out there who would like to assist us in identifying our awesome, identifying where we are and to start moving from broke to awesome. All we have to do is reach out.
Thank you for reading. You can reach me on brendand@verso-wealth.co.za if you have any questions or if you would just like to chat.
The title of this blogpost is inspired by Garrett Philbin and his financial coaching business https://www.beawesomenotbroke.com/.
