Have you ever wondered what separates the best from the rest? It doesn’t matter the field, what does the elite possess that the majority does not? The easy answer is talent, but Geoff Colvin debunked that myth. He doesn’t say that talent is irrelevant, just that it’s overrated.
So if it isn’t talent that separates them, what is it? If you analyze the lives of the top people in any field, you will find that they are remarkably consistent in their approach to their vocation. They have mapped out a plan to get to the top and they don’t let life’s daily problems knock them off track.
Well that’s the problem that plagues most of us, staying on track. So following a regimen that keeps us on track would be very helpful, and here is one such plan. In the article I read, it was attributed to Jerry Seinfeld and since the article was on the internet, it must be true, right?
The first step is to do one thing every day that will move you toward your goal. It should be a task that is meaningful enough to make a difference, but simple enough that you will do it. For example, if you are out of shape and want to do something about it, you could commit to walking a mile every day. That’s all well and good, but we all know what will happen on the first rainy day.
Well Seinfeld’s (supposed) method consists of buying a large wall calendar and a red marker, and putting an X through the day that you accomplish the task. After a few consecutive days of red X’s, you’ll have a chain, and your only job is to not break the chain. Pretty simple, no? Simple, yes. Easy, no. But the longer the chain gets, the more you will want to keep it going.
Consistency is a key to success in any field, and personal finance is no exception. I counsel young people that consistently spending less than they earn will have a tremendous effect over the long term. Initially, what to do with the excess earnings is not complicated (although some people will try to make it so): contribute to your company’s 401(k) plan, if they offer one. If not, contribute to an IRA. Insure your income and your life, as necessary. Start a liquid savings account. That list will probably take care of the surplus earnings, at least initially.
Part of the reason for lack of success is that we make it too hard on ourselves by not taking advantage of the available tools. The entire aforementioned list can be automated, with the payments coming directly out of our paychecks or checking accounts. Trying to do them manually not only takes more time, but also increases the chance of failure.
For example, industry studies show that the least persistent mode of paying life insurance premiums is quarterly. That is, policies paid on a quarterly basis have a higher lapse rate than policies paid on an annual, semi-annual or monthly basis. And yet many people will try to defy the odds by paying quarterly.
It is easier today than ever before to learn from the best. And there are also tools available to automate certain tasks that can save us time and keep us on track. While consistently doing the right thing will virtually guarantee success, it will not be easy until it becomes a habit. Which requires consistency