Bill is a great guy.
He always goes out of his way to say hi in the grocery store.
He volunteers down at the children’s hospital.
He did murder those people a few years back. But 99% of the time he is so nice.
Uh…
You would never judge someone’s morals by what they do 99% of the time. The outlier events matter. A lot.
You could even argue the outlier events define your morals. There is no action you could do 99% of the time to overcome a horrific occasional action.
We are nothing without consistency.
Personal Finance
You can’t be a saver who occasionally buys a Ferrari.
You can’t be an long-term investor who occasionally raids the brokerage account to make a house payment.
One action can wipe out years of accumulated progress.
What you do consistently defines you.
My Day Job
I started a for-profit company in a space that has a lot of non-profits – kids coding education.
Why would I ever do that? Why wouldn’t I just volunteer a couple hours a week?
Consistency.
By starting a for-profit company, I have been able to focus on the problem for 40-50 hours a week for 6+ years. If I volunteered I would have spent a few hours a week doing it, might keep up with it for a year, then move on to something else.
Why It Matters
Enormous goals can’t be accomplished in one day. It takes consistent effort.
You need to figure out the motivation and limitations that will enable you to keep making progress at your goal.
Let’s use a common example. Everyone’s New Year’s Resolution: start working out.
Motivation
Motivation – Why is that your goal? To be healthy. Why be healthy? To live longer. Why live longer? To be there for my family.
If you ask enough whys, you will eventually get to something that is closely tied to your identity. Frequently remind yourself of this and it will give you the motivation to make steady progress.
Limitations
The gym is packed the first week of January because everyone wants to get started on their goal. Unfortunately starting too fast might actually be detrimental to the overall goal.
Instead, start with whatever is sustainable, then expand from there.
What is sustainable for you depends upon your limitations. How much time a week sounds easy to accomplish? Think about your busiest weeks – when was the down time? If you had to consistently get up 30 minutes earlier or stay up 30 minutes later, which would you prefer? If you have to do grocery shopping after work, do you do it on the way home or later?
If you know your personal limitations and preferences, you won’t be trying to fit a square peg into a round hole.
Consistency is Worth Fighting For
Life is a long journey full of impatient travelers.
We naturally compare ourselves to those around us to see who is ahead and moving fastest. It is much harder to compare consistency, so it is often overlooked.
You know your goals won’t be accomplished in one day, one week, or even one year. So don’t worry about where everyone else is and instead focus on making consistent progress.
If you want financial freedom through investing in rental properties, what is your motivation? Go deep on the whys. What are your limitations?
My motivation for rental properties is to give myself even more time freedom. I want to have cash flow that allows me to spend time where I want and an equity nest egg to have the wealth to retire decades from now.
I have a lot of limitations, especially around time. I don’t want to spend a ton of time on rentals, which is why I pay professionals to do most of the work. I realize it takes a certain amount of time to get most the benefits, so I found the sweet spot for me right now, and have the possibility to expand later on.
This article reminds me a lot of the research on building successful habits and developing grit. These are two topics that I’ve been reading a lot about over the last couple of years.
The kids and coding is a recent passion of mine. I’m now a parent of a 4-year old (and a 2 year old). I’m remembering my own experience in getting started coding back in the mid-80’s with Basic on my PCJr. I think that it helped me develop a strong sense of logic, which has served me well to this day.
Yes! It is all about habits and grit. That is why I ultimately decided to make this website about mindset – knowledge alone isn’t enough.
So many financial bloggers are engineers! I guess there is plenty of logic in personal finance. I agree that even if a kid doesn’t end up using their coding knowledge as an adult, there are huge reasoning benefits that will come out of it.
I think there are exceptions on consistency (mostly thinking about eating, and how what you eat 90% of the time matters more than whether you occasionally splurge), but absolutely believe that consistency is the key to just about every category of success in life. And the WHY is a great question to think about. I’ve always wanted to live a long life, even though we don’t have kids and my motivation has never been about other people. I just want to experience as much as possible and see where humanity goes in the future — long-term FOMO, I guess. 🙂 Thanks for this great thought-starter! Hope you guys have a wonderful Thanksgiving.
Long-term FOMO, love it! I think trying to get the most out of life is awesome too. Traveling, experiences, seeing the world.
Happy Thanksgiving!
As I am already financially independent due to my rental properties, I can attest you can have great returns and make a lot of money. It takes work, and time. Big risk for big returns, but you have control over the risk.
Great point that you have control over the risk. I think a lot of the scariness is just buying at the wrong time and seeing the price decline. But that isn’t much of a risk when you control whether or not you sell. So if you can be patient, you will eventually come out ahead.