What did you do with your tax refund? Do you remember? With every dollar, we have only four choices; spend, save, invest, or to give it away. So where did it all go?
A couple of months ago, I saw an article with the headline, “How to Best Spend Your Tax Refund.” This is a perfect example of how we’ve been programmed to think. The messages that bombard us all day focus on only one of the four choices, to spend. See everything we see tells us that we’ll be happier if we spend our money.
Here’s another example. I teach financial planning classes at multiple colleges throughout the year and I always ask, “What can you do with your money?” 95% of those attending answer “spend” as their 1st response.
What if we could change our paradox… change our thinking about money? See, if we can retrain ourselves so the first choice for our money is to invest, rather than spend, I think we could quadruple the number of millionaires in the United States in our lifetime.
But how do we do that? We create new habits.
I’ve heard that if you do something 21 times, it’s harder to stop that action or habit than to keep doing it. So this would mean that the next 21 times you are presented with a decision on what to do with your money, you choose to invest or save over spend. It doesn’t have to be the entire amount either.
One of my rules as a financial coach (also referred to as “Wayne’s Rules”) is to take half of any excess money that you receive and invest it, then take the other half and have fun with it! Just by following this one rule, I believe I could help every 24-year-old retire 10 years sooner than their friends with substantially more choices.
So the next time you come into excess cash, either by paying off some debt, getting a pay raise, or receiving a gift, be conscious of your mind’s natural inclination to think about how to spend it, and refocus on how to invest it! Hopefully with practice, investing will become your natural first response.
Yes, our society relies on you to be a moneyholic but, I believe we can change. I believe we can create positive habits that will lead to a more successful life. So repeat and remember Wayne’s Rule #5:
Every time I get excess dollars, I will take half of it and invest it towards my long-term goals and then I’ll take the other half and go have fun!
This will change your life, and give me a sense of accomplishment in affecting you, your family and those you love in a positive way. Good luck with winning the battle for your future success!
Investing involves risk including potential loss of principle.