Today I am flying to India. I am very excited and looking forward to visiting what is my second home now.
As the long flight from US started very early this morning, a few thoughts on personal finance hovered around my mind.
Before the flight takes off, there are a number of events that take place more like items in a checklist. As the plane’s technicians go through their routine yet stricter checks, as a passenger we too go through some disciplined steps like reaching the airport on time, checking in, clearing though security and finally boarding in a queue. All of these steps are important and must be done in sequence.
Then as I put on the seat belt and the plane takes off, the mind switches off from the low level sequence to a higher level composure. The plane rises above the clouds and I can see the world top down.
Personal finance is also the same. As you go through the low level details of controlling your expenditures, paying your credit card on time, automating a few bills on the way, you slowly but steadily reach the state of composure as if your financial life has taken off the grounds.
You no longer worry about petty coupons and discounts, or avoiding the crave for that latte, or even recording each transaction in your budget app.
Instead, now your systems are automated and you have a pretty good idea of how much is spent every month and how much you can invest.
Now your focus shifts to the clouds and you need to only take a top down view of the financial landscape. You start learning more about various investments, real estate, taxes and start strategizing on how to grow all areas of your personal and financial life.
You can now see personal finance is not just about money but when managed well, can allow you to cruise in other areas of your life as an aircraft in a turbulence free sky.
For example, this holiday is completely planned and paid for and I do not need to stress about credit card balance to afford the cost of the trip.
Complete the ground steps in a defined sequence as the suggested posts below, and then focus on the bigger clouds.
Budget – Grow the tree upside-down
Investing in the High Five portfolio
The clouds that you can focus on once done with above are:
- Taxes and how to find tax efficient investments
- Estate planning and wills
- Passive income generation
- Career goals
- Your potential for earning more
- Having fun
From time to time you do need to come down and go through the low level steps again, as I am in transit now in JFK airport.
I will be flying to my destination in a couple of hours again.
At the end the sequence matters. You can imagine how chaotic it would be to rush through security without checking in your bags first.
The cruise comes later when you are a disciplined traveler and follow the steps.