Oftentimes a good remodel can be a catalyst for positive change. My wife and I recently did a ‘refresh’ of part of our house and it’s remarkable how good this makes you feel once the work is done. Yes, this involves a lot of planning, preparation and decisions along the way, but the end result can be very positive.
What if you engaged in a remodel of your financial life? What would it look like? What needs to be changed? What needs to be fixed? How do you start?
Laying The Foundation For Change
The beginning of any remodeling project, of course, is to assess where you are today and what you want in the future. You likely have some components of your investment and financial life that need change. Maybe some of your investments are old and outdated; Maybe your savings rate is insufficient; Maybe you don’t have a good concept of how much risk you need to sustain your lifestyle after retirement. All of these are existing foundations that can become the start of positive change.
This stage of planning is where inertia begins to take hold. Often the sheer volume of choices, (sometimes called the ‘choice paradox’), can make the next steps of the remodel challenging. People become stuck where they are even though this is not where they want to be. It’s easy to ‘kick the can down the road’ and leave everything just as it is now. Remodeling your financial life requires choices and effort. Focus on the first step in the process and then the next step that follows in order to break the strong grip of inertia. Don’t become overwhelmed by the sheer magnitude of the entire financial remodeling project.
The Control Addiction
The most pervasive problem in any type of remodel is believing that you control everything in the process. Author David Allen says “control is the ultimate addiction.” I fully agree. We are addicted to the errant belief that we are in control.
Substantive progress can’t be made until we understand what we control and what we don’t.
Within the investment realm, you have no control over interest rates, the overall economy, politics, or day-to-day market volatility. You do have control over your actual savings rate, your investment policy, and most important of all…your behavior.
Ultimately, you need to take good care of your money so that your money can one day take good care of you. Start there.
Related: What’s the Price of Admission to the Stock Market?