Remember: Use Whatever Motivates You Financially

I’m at Disney World this week. As a result, today’s thought is going to be shorter than usual. I want to save the deeper articles for a time when I can go into them in detail. It turns out that when you pay a lot of money to go to Disney, the desire to spend that time blogging greatly wanes. I probably wouldn’t be publishing this if I had a normal amount of sleep or active brain cells.

Before I get to the personal finance thought though, I feel like I need to get some stuff out there… perhaps to clear those few working brain cells to carry the day.

I looked at the news a few times and it seems like this vacation is “part two” of the one my wife I and took to Australia in 2009. You might remember that month of September as the one when the financial markets collapsed. Perhaps more personally devastating to me, Tom Brady was injured for the season just a few months into it.

I won’t get too political here, but I do have to say a few things just like I did back then when the financial markets were collapsing. It looks like the game of musical chairs continues with the top positions in our government. It feels like it should accompany circus music or that music from Benny Hill. I’m pretty sure my 5-year old is next in line for a cabinet position. My 4-year old seems to understand school systems better than the Secretary of Education.

That 4-year had an active shooter drill in his preschool class last week. I don’t know how to process that. I’m surely not capable of explaining it it to him. I completed college without a drill or even a thought about gun violence. I understand that times change… hey I just made a Benny Hill reference. It’s just that I don’t know how we can normalize teaching “sorting beads by color” at the same time as what to do when an active shooter is around. It seems like dozens of advanced countries have solved this problem, so I don’t see how it is complex here in America.

In other news, Stephen Hawking died on Pi Day. Ugh. I’m sure that there will conspiracy theories that Bill Belichick killed him because the Patriots gave Stephen Hawking a jersery with the number Pi on it. And to round out the Patriots stuff, they’ve lost some of their best and my favorite players in free agency: Malcolm Butler, Nate Solder, Danny Amendola, and Dion Lewis. That’s a lot of talent leaving the team. So far it doesn’t look like they are replacing that talent with any proven talent. (Update: Yay, Jason McCourty signing! All is good again.)

Phew, imagine how I’d feel about all the above if I wasn’t in such good mood while at Disney World? Yikes!

That’s a lot a of words that don’t have a core focus on personal finance. (However, there’s a lot of hidden non-personal financial motivation in all the above.)

Let’s get to that personal finance thought.

While I was in some line for some ride, I read an article from Our Next Life suggesting that we shouldn’t get discouraged by slow initial progress when looking towards financial freedom.

I couldn’t agree more.

There are some personal finance bloggers out there who have net worths of more than $2 million dollars which mean they have sizable investments. Their monthly reports can show gains of $25,000 very easily if the stock market is moving in the right direction. If you are just starting out, $25,000 a month seems impossible. It’s worth noting that for most of these people, this money is just stuff on paper. They are typically in retirement accounts that are difficult (but not impossible) to access until they are nearly 60 without penalty.

It might also seem impossible to get to $2 million dollars. I think that depends on your own circumstances such as education, income, and financial obligations. Everyone is going to be different when it comes to that.

Rather than focus on those big, difficult-to-relate-to numbers, I suggest you do something different. Focus on growing your net worth in terms of percentage rather than actual dollars.

One of the (few) great things about having a low net worth is that it’s easier to high percentage gains. If your net worth is $20,000 and you save $7000 in a year, that’s more than 33% net worth growth. That’s amazing! Embrace that as a big win!

Those people who have $2,000,000 in net worth usually can’t hold a candle to those kind of percentage gains. They’d have to grow their net worth more than $650,000 to match your 33% growth in net worth.

Sometimes a little change in perspective can be the motivation that you need.