Just take the first step – to your financial independence

Automation, compounding, Fear, Financial Independence, Human Brain

Before I actually started on my financial freedom journey, I had been a lot of times to banks to see what were the options for saving, but the interest rates were so low that I thought I would need huge sums of money to hit my goals. Since I didn’t have that kind of money, I just gave up.

I also visited a lot of mutual fund presentations where they spoke about depositing money and how it could grow over a period of time. To cut the long story short, whenever I saw the amount of money needed and the time it would possibly take to get there, my brain would show resistance and I would not invest anything.

If I had invested a little more during those early years when I was just getting started in life, the magic of compounding would have played its role and even that small amount would have become gigantic in the last 25 years. I have mentioned earlier in my posts how my accidental discovery of a statement of a minor Rs2000 (about USD70) which I had invested in 1995 and forgotten, had become more than Rs100000/-(USD2000 approx) that I got shaken out of may slumber.

Our brain gives us a lot of resistance (fear) at anything new. It will throw up a lot of arguments as to how you will manage with $50 less every month. And then life just passes. Before you realise it you are nearing 50 and then it seems as if there’s no future.

But if you just take that first step of automating the process of investment so that even if only $50 goes out of your account every month and you don’t bother about it…..in a few years the magic of compounding will take over and you will be well on your journey towards financial freedom. You will also realise that you don’t even notice the reduction of the $50/- every month after sometime because our brain adapts to the new lifestyle.

If you have hit 50 and you think you are late in this journey, you are wrong. You can make the magic of compounding and the concept of Hemachandra Fibonacci numbers work in conjunction. This way what you have lost in terms of time in the compounding equation can be brought in by the additional principal that you keep investing every month. Most mutual funds have the concept of increasing the contribution in your Systematic Investment Plans . So if in the first two years you have invested $500 each, in the third year invest $1000, then in the fourth year invest $2000 and the fifth $5000. Just keep adding the previous two years and increase your investments.

Its all about taking the first step to convince your brain that it can be done. After that its just the process. But its the brain which will put up all the resistance and you need to reassure it, that there’s no danger by taking the first step. Once it realises there’s no danger then you can keep moving without a problem. So just take the first step and get started on your journey for financial independence.

Till next time then.

Carpe Diem!!!

Delegation to automated systems

Automation, Delegation

I don’t know who said it but its true we waste our life in days not years, we waste our lives in hours not days and we waste our life in minutes not hours.

So our life passes us by every minute of the day if we are not mindful about it.

There have been times in my life, a lot actually when I was wandering aimlessly not knowing what to do and wondering why the day was not ending. When I look back, it seems so stupid that I would do something like that.

Another thing where I used to end up spending a lot of small amounts of time was in paying bills. The electricity bill would come on a different date and the telephone bills on different dates and so on. Every weekend, every month I would find myself busy paying out bills.

Then I heard from Tony Robbins about batching jobs to improve productivity. I tried that and did succeed to a certain extent but since there were different dates o be monitored, the onus was still on me to figure out when to make the payment, before the last date.

My bank then started the facility of doing automated payments for all my utilities. That has created a major difference because now I don’t even have to think about paying of the bills. The bank monitors the last dates and makes the payments. Since my mind now knows that there’s nothing for it to do it just does not bother. So the Zeigarnik effect does not come into play.

When you delegate to people, you have to keep track and monitor. You cannot absolve yourself of the responsibility of the result that has to be achieved eventhough you have delegated the work to someone.

Bu when you delegate to automated systems, you just don’t have to monitor. That’s the advantage of computers. Once programmed they will keep doing the work repeatedly until the system itself gets spoilt, which is very rare.

Amazon, Bigbasket and other similar shopping sites do a similar activity when they prompt you in your monthly grocery shopping, so that you don’t have to remember individual items.

Once you get these small things which eat up the “minutes” in your life every month, you are able to save so much time. However if you end up spending those free minutes just moving around aimlessly then you have lost the advantage.

Till next time then.

Carpe Diem!!!