Who wants to be a millionaire?!

So, 2016 is one month down, and how many kg’s down are you? How many cigarettes have you cut out and how much money have you saved? Thought so!

People don’t like change. This is a well-known fact. Nonetheless come January each year we all jump on the “New Year, new you” bandwagon, uncharacteristically excited and overly optimistic about the many changes we’ll effect with our fresh start.

International Business Times recently published an article outlining the most popular resolutions for 2016 and how to achieve them. These were as follows:

1. Shape up and lose weight
2. Become better organised
3. Save money and still have fun
4. Enjoy time with loved ones
5. Stop smoking

Their suggestions on how to realise these goals follow the traditional approach: eat less and exercise more; spend less and save more; and try really hard to find the willpower to quit smoking.

The problem with this tactic is that it seldom works. Willpower and enthusiasm weaken. Complacency settles in and temptation strikes. Next thing you know, the good old you is back along with all those horrible habits and kg’s you just can’t seem to shake.

A watched pot never boils

Adequately saving and investing for one’s future is a noble and critical exercise. Many people fall short, however, because they start with the end top-of-mind.

The familiar story plays out something like this:

• I want to be a millionaire.
• I start by making R1,000.
• Piece of cake! Up it to R10,000.
• Done. Let’s try R100,000.
• Tall order, but made it! Shall we make it R1,000,000?

Thing is, it’s a couple of years down the line and you’re out of energy and ideas. It was a lot harder than you thought. You didn’t earn as much as you wanted as quickly as you wanted. So you buy yourself a nice car (on credit) to make yourself feel better and the repayments hinder you from saving and investing as you used to. Next thing you know, you’re stuck.

The kicker is that we focus on the wrong thing. Rather than concentrate on the goal, you should concentrate on establishing the habits you need to realise the goal. As the old adage states: a watched pot never boils.

This is how the wealthy set approach the challenge:

• I want to be financially independent.
• I start out making R1,000.
• I soundly invest the capital in skills and assets until I make R10,000.
• I soundly invest the capital in skills and assets until I make R100,000.
• I soundly invest the capital in skills and assets until I make R1,000,000.
• I keep going…

This kind of accumulator mindset views money as a means to making more money rather than something to be spent. Money doesn’t burn a whole in their pockets which they plug with credit. To accumulators, money is an elevator they ride to the top.

Goals are clearly defined and exciting. Who doesn’t want to be a millionaire with washboard abs and buns of steel? By comparison, habits are vague and boring. Going to gym three times a week seems a whole lot less exciting than working towards a model physique.

In the same way, working, saving and investing, month in and month out, over the course of your working life doesn’t sound like much fun either. The fact remains, however, that you are more likely to realise your goals by implementing healthy habits like these than by focusing on the goals themselves.

Change isn’t easy. It’s too uncomfortable and it takes too long. However, once entrenched, healthy habits simply become a new way of life.