What Motivates You??

Hello all !! Before I start this blog post I want to point out that I’ve added a loan repayment tool in the Free Tools section of the site. This tool is different than many in that it’ll let you define a constant extra payment every month, or you can go to the amortization table and enter a single extra payment on any given month. I’ve gotten a lot of questions from people that revolved around, “how would a single $1,000 extra principal payment (tax refund) affect my loan in the long run?” This tool will tell you. For example, in the case of a $200,000 loan at 4%, an extra $1,000 in the first month would shorten the loan by 3 months and reduce total interest by almost $2,300. Feel free to check it out.

Now on to today’s topic. It’s been an extremely busy summer so far. With multiple travels for work, kids sporting schedules, and somehow fitting a family vacation into all of that, It's been very hard to maintain track of financial goals, make progress on investing studies, read (I try to read a book a month), or even write blog posts. Fortunately, I spent this last week in Lake Tahoe, getting a little rest from the working / responsibility world. This was our first trip to Tahoe and to say it was beautiful was an understatement.

The crisp cool air, blue water, and smells of pine made for the ultimate relaxing getaway. Spending this kind of quality time with the family is more than worth the expense, and it reminded me why I'm striving so hard, and am so motivated to reach financial independence.

We hiked to Eagle Lake, which was probably my favorite part of the trip. Although my knees felt like they were going to explode by the time we got back. Yes, apparently I've got the knees of an 80 year old. Look at that picture!

 We traveled over to Emerald Bay, another required visit if you’re in Tahoe. The ruins of a small stone building known as the “Tea House” sit atop Fannette Island, within Emerald Bay. The history is fascinating.

And of course, no vacation on the lake is complete with burning up the quads in a paddle boat with four people on it. Seriously surprised we didn't sink that thing.

As we basked, or rather baked, our pale skin in the sun each day, there was that little knot in the stomach that kept getting stronger with each day. You know that impending dread of an ending vacation, of having to get back to the real world, of having to go to work? That knot is what motivates me to achieve financial independence. To reach the point in which we’re free to enjoy our lives on our terms. To enjoy nature not just one or two weeks a year, when the boss allows it, but to enjoy it every day if that’s our choice.

It reminds me of the quote by Seth Godin.

“Instead of wondering when your next vacation is, maybe you should set up a life you don’t need a vacation from.”

I think that statement is so powerful, and I think it’s an idea that we tend to lose track of as we age from teens to adults. If I asked you when you were just graduating high school, “do you want to work 40-50 hours per week, every week, of every year, from the time you’re 18 to 65 years old, but you’ll get a week or two off each year to vacation”, would you think that sounds like a rewarding life? Is that something you’d jump out of your seat for?

To me, that sounds like torture and I would guess most people would agree. Yet, the majority of American’s do just that. They slave away at their jobs during what is likely the healthiest and strongest part of their lives, hoping that by the time they’re 65 they’ve saved enough money to retire, and finally do the traveling they’ve longed for. The problem is, many will no longer have their health, and those travels will become a pipe dream. Don’t be one of them!

The alternative is so much more rewarding. So how does any one of us get there? How do we turn the typical American lifestyle on end, and manage to reach financial independence in our 30’s or 40’s, rather than 60’s or never? As with anything, it takes goals, motivation to achieve those goals, and determination.

Sit down for 10 minutes and just think about what motivates you. Scribble your thoughts on a piece of paper. This method is useful in achieving any of your goals, whether it’s weight loss, running a marathon, or in this example, reaching financial independence.

Any time I start to feel like I’m not making progress, I’ll do this. An example is shown below.

Yes, the chicken scratch isn’t the most legible. In summary, my thoughts were:

My Motivations:
 -the idea of being debt free
 -the idea of being able to spend more time with my family
-the idea of being in control of my life
-Ambition
-tracking and seeing progress towards goals
-being part of a group (as in other Financial Independence / Retire Early   blogs)
-developing ways to simplify my life
-seeing others who have achieved early retirement
-being able to teach others what I’ve learned
-making a difference

As I wrote down my ideas, I tried to follow the college brainstorming technique - write down everything you come up with and analyze it later. In reviewing the short list, the first three were just broad ideas. They’re good, but pretty useless without a plan of action. They’re more like daydreaming.
 
However, as I continued I started getting more detailed. I noted the importance of setting goals and having a way to measure they’re success, of joining communities of people that have similar interests and goals, of being able to simplify my life in ways that will increase the probability of achieving my goals.
 
As an example, I love analyzing stocks, however it can be extremely time consuming. Therefore, I developed an analysis tool that automates the information gathering process for a stock and presents it in easy to use spreadsheets. In the past it would take hours to go through the financials of a company, try to get a feel for the long term trends, calculate the ratio’s that are important, etc. The tool saved me hours of analyzing time per stock, while increasing the likelihood of finding undervalued companies. Those types of accomplishments are extremely motivating to me. I love coming up with ways to make my life easier.

In the end, knowing what drives you can help you accomplish your goals in a shorter time period. You’ll also enjoy it more. Once you’ve identified what makes you tick, cater your actions to stroke those personal motivations to achieve your goals.
 
If you love social comradery, join clubs or groups that will both challenge you to reach your goals, and serve as a place to hold yourself personally accountable. If you’re like me and never feel like you have enough time to analyze budgets, calculate net worth, analyze stocks, etc, then develop spreadsheets that automate the calculations so you only have to insert the inputs. You’re welcome to use the spreadsheets I’ve developed. If you’re goal is to get out of debt, trying printing out the balance of all of your debts, and tape them to the wall above your computer (yes, I did this, see the pic), scratching out the old balance and writing in the new each month. Having your debts out there to constantly see keeps them on top of your mind, and helps track performance in achieving your pay off goals.

Don’t let distractions or discouragement derail your progress. For me, charting my progress is the ultimate motivation. I have charts showing my net worth increase over time, my portfolio values, my exponential decrease it debts, etc. Keeping track of even the smallest progress can mean the difference between achieving your goals and giving up.
 
Read books written by or about experts in the field. There are tons of books written involving leadership, motivation, achieving goals, personal accomplishment, etc. They’re great in helping to adapt your mindset to the ideas of setting goals, motivations, progress, etc. They’ll help you in all aspects of life, not just money management.
 
Maybe it’ll take a little trial and error to find what really motivates you. That’s fine, just go through the motions, play around with ideas, and keep moving forward. Remember, this isn’t a fad, this is a lifestyle change. It’ll impact all aspects of your life. You’ll get people trying to discourage you or say what you’re attempting isn’t possible. This is where your motivations have to overpower your uncertainty. Don’t give up, and feel free to share what motivates you.
 
Good Luck!