Only 5% of people achieve financial independence in their life. If only a small minority achieve financial success, why do the same things day in and day out everyone else? Doesn’t it make sense to try something a little different, even if it can be considered a little weird?
The following 5 habits, might at first sound a little weird, but they have potential to help you build meaningful wealth in your life.
Habit # 1 – Set BHAG
BHAG or Big Hairy Audicious Goals is an acronym from a must read book, Good to Great, by Jim Collins.
In profiling companies who went from good to great, Collins found that the businesses who become very successful all set big hairy audacious goals. Although they didn’t realize it at the time, their competition were all setting similar ti each other, that they thought would be easy to achieve. However, since every company was chasing these same goals, they become harder to achieve. There was less competition if they choose to go after bigger goals.
I have seen a similar pattern for those who succeed in personal finances. They are not setting goals such as saving 10% of their income or buying a new car. They set BHAG such as taking three months off to travel the world, retire by 35, or pay off their mortgage in 5 years.
BHAG get you up in the morning and keep you up at night. They motivate you to make a budget and inspire you to stop eating out, even if you think have nothing in the fridge.
Habit # 2 – Keep your Goals in Front On You at All Times
Before Jim Carrey was a successful actor, he wrote himself a check for $20 million and kept it in his wallet. This was a way to remind himself that to keep working hard, to keep practicing distorting his body in front of a mirror, to not take the rejection letter like it’s the end of the world.
Myself, I made a collage in Google Picasa with my goals and put it on my desktop. This reminds me each day what I’m working for.
There are endless ways you can remind yourself each day of your goals. How about changing the desktop on your phone, taping a picture to your fridge or bathroom mirror, or even keeping a picture in your wallet? If that fails, try writing yourself a check for $20 million dollars.
Habit # 3 – The 30 Day Wait List
I find myself at Amazon.com way to often. I can easily spend $50 on books in a few minutes.
Therefore, I made a rule to control my spending. Before I buy anything on Amazon, I put it on a waiting list for 30 days. If after 30 days, I still want that item, I can go ahead and purchase it.
What usually happens is this – I wait 30 days and forget I even wish listed the book. In the meantime I find the book at the library, get the book through Paper Back Swap, or even forget the reason I wanted to read the book in the first place.
Habit # 4 – Meditate or Journal To Your Future Self
A great way to solve one of life’s big or small dilemmas is to simply just ask your future self aka yourself in ten years. I prefer to open up a blank word document or a notebook and just start writing.
Here’s an example:
Q: Dear RJ in ten years, should I take out a loan to buy a new car or buy a car with savings?
A: So young, so much to learn young RJ. Remember, you made a no debt pledge? Plus, you said to yourself that you will never spend over 8% of income on a car because a new car isn’t that important to you. Trust me, with the savings you get to take that dream vacation to New Zealand and hike the Milford Track. This is way more important than having an MP3 hook up in your car.
Habit # 5 – Always Ask Why?
Why do you save 10%? Why not save 20%? Why save only 5% and spend more now?
Why do you work 9-5? Why do you invest? Why do live where you live? Why are you going to college or grad school? Why did you just spend $50 on Amazon, when you have a bookshelf full of books you haven’t read?
You get the idea.
Closing
These small habits make a small but meaningful impact for me. Even though they are a little uncommon, they have the potential to build meaningful wealth in your life.
I know these habits have helped me build wealth in my life, what habits do you have that are a little unconventional that have worked for you?
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{ 7 comments… read them below or add one }
Twitter: Suburbandollar
May 11, 2010 at 7:39 am
I like the Big Hairy Goals one. Setting a big goal to reach is like personally challenging yourself to do something you don’t think is possible. When you reach that goal it is such an achievement that you have nothing to do but set a bigger, hairier, goal.
Kyle C.´s last blog ..Holy Crap, I Suck… Or Not
@Kyle – Exactly. It would be a great feeling knowing that you will reach your goal no matter how hard it is.
Indeed! This works.
For financial independence, I had in addition to those above
6) I knew my net worth and cash flow from investments at all times.
7) I had a projection of net worth and cash flow from investments for future years also pretty much mentally ingrained.
To wit, when my DW asks me what I’m thinking about when I’m otherwise not doing anothing, in 1/3 of cases, the answer will something related to money in a macro sense, how to keep it, how to make the yield better, etc.
Early Retirement Extreme´s last blog ..Choices, desires, and satisfaction
@ERE – I have to admit, I have no clue what my cash flow from investments are. I just don’t look at my investments very often to know. I can see how this would help someone whose main goal is to become financially independent. Maybe I should give it a try.
I used to multiply my net worth by 4%. Simple as that. It was only much later that I began to track individual dividends.
Early Retirement Extreme´s last blog ..Stepping off the Beaten Path by Saying No!
Great post RJ.
Setting and tracking goals is huge. I have been tracking mine since 1991 and there is no doubt that I wouldn’t be anywhere near where I am today now without them. I had a tape from Zig Ziglar about goals and I used to listen to it in my car, on the way to work.
Another thing I recommend is the visualization. I learned to visualize my perfect life in five years from a book called The Type Z Guide to Success with Ease. It reinforces that your goals are possible and it gives you some motivation to reach them.
God, I remember listening to Good to Great in my Dad’s car while I was still a freshman in high school. Great great book.
And I too like the BHAG idea. If you set your goals low, who knows what potential you’re missing?