December 21, 2021 | Business Minded

Success like a Raptor

As we come down off a week long celebration of the basketball prowess of our very own Toronto Raptors, we should take a moment to reflect on the lessons learned along the journey. Without overwhelming ourselves with basketball commentary, we can relate the NBA Championship back to the basic principles of success.

Where did this victory start?

Asking ourselves how we got anywhere is an excellent start to dissecting our successes. And while some may argue that the championship started at the beginning of the season, or even when we traded for Kawhi Leonard, the steps leading to success began long before.

When was the first step?

Each player on the Raptors started with the same first step, at some point in their basketball career. That first step is identifying the right staircase(s) to traverse. This is the identification of the skills that would be needed to take their basketball game from the scrimmages in local parks before the lights were turned off for the evening. The skills that would lead to the bright stadium spotlights that never cease to shine. For our local heroes, these skills can be identified as fitness, shooting ability, and game knowledge.

And the Next Steps:

Identifying what we need to focus on to be successful puts us a long way ahead of our competitors, but it's still only the first step. The long road of success is filled with early mornings in the gym, late nights shooting free-throw after free-throw, and countless hours reviewing game footage. Those next steps, they’re a daily pursuit. Every day our Raptors earn their success in the gym, on the court, and in the screening room. Every day. Not just game days. Every. Single. Day.

The sweet celebrations of hoisting that NBA Championship Trophy, that is the culmination of countless successes along the road. Those daily successes of lacing up and putting in the time practicing, even when exhaustion is setting in. Especially when exhaustion is setting in. That is how to earn Success like a Raptor.

What are the lessons?

As we look at the championship trophy being hoisted high in the air amid the cheers of the crowds, we can take away some success lessons from these Championship ring-bearing professionals.

Learn what critical elements drive success. The skills you devote yourself to will determine the direction of your success. With a clear goal, you can identify which skills help you on your journey.

The second lesson’s importance cannot be overstated: action. Success is a daily discipline. To realize success like a Raptor, you need to devote yourself to mastery of your chosen skills every day.

With the right direction, and consistent action, you will achieve Success like a Raptor. You will be a champion.

Money Mindset: A dollar saved…

Is a dollar earned.

How many times have we heard the sage advice; “A dollar saved is a dollar earned.” This cliche money tip is the cornerstone for frugal spenders, and as a popular belief, has its’ own space in the Money Mindset section. As a result of this phrases popularity, we would be remiss if we did not take this opportunity to dissect this ingrained philosophy.

What does A Dollar Saved is a Dollar Earned mean?

The idea behind this philosophy is that income is fixed in the short term, and so to have more leftover, you need to cut back on where you spend. Holding the fixed income assumption constant, this is sound advice. The issue arises when taking this philosophy too far.

What are the benefits of this Money Mindset?

The benefits of living frugally can be best seen in the judicious cuts in your expenses. Asking yourself whether the purchase is necessary can be a very good way to curb erroneous spending. The benefits are especially prevalent if you are carrying credit card debt, or on the borderline of living paycheck to paycheck. Regardless of income, spending all that you make causes difficulties, especially when the unexpected occurs. A healthy dose of spending skepticism provides the necessary focus to trim the fat on your purchasing habits.

Another benefit of this Money Mindset, especially for those who are not independently wealthy (yet). Frugality is often seen as an accomplishment, and provides a sense of satisfaction. We’ve all heard those conversations, likely even allowed ourselves a humble brag when talking about a deal we just received at the outlet malls. Saving money is a good feeling, which allows us to conclude; a dollar saved is a dollar earned has some merit in the personal finance realm.

What are the risks of this Money Mindset?

A dollar saved is a dollar earned. This focus on frugality, while at times has its own merits, can be taken too far. If money worries aren’t constricting you, it is probable that you need some discretionary spending to help you live life to its fullest. There should be an allowance in everyone’s spending patterns that allow you to safely spend on luxury purchases. The limits to the Money Mindset: A dollar saved is a dollar earned are hence put to the test. Luxury purchases are, applying this philosophy literally, causing feelings of guilt for the “loss” of money.

The other risk of this Money Mindset is when we take the bargain chasing too far. Often times the sticker price is taken as the final cost, and we neglect to consider the extra time and energy that went into securing that bargain. Spending time browsing online shopping sites, flipping through paper flyers searching for a lower price, has an opportunity cost on that time, on those efforts.

Where do we draw the line between a good deal and a waste of time and energy?

As we try, in Business Minded fashion to apply a formula to these topics of finance and success, we may consider the following equation to find the break even:

Break Even =

Satisfaction of Saving Money + Money Saved = Opportunity cost of (Time + Energy)

As long as we receive more joy than the efforts that the bargain took, i.e. bargain hunting. The efforts we put out, and the cost associated with our time and energy, were worth it. Taking this philosophy too far might be seen when we spend an hour finding a deal that saves us 10 cents. Assuming our hour is worth more than 10 cents, we have lost if we spend those efforts.

The Verdict: A good tool in the toolkit.

A dollar saved is a dollar earned. This philosophy, or money mindset, really holds its merit when money is in short supply. While not an enjoyable way to live, when short term sacrifices are required to make ends meet, this philosophy can help clarify spending needs. In the long term, income is variable as a direct result of increased value. Spending on improving our skills and abilities will help move income up.

Once we have some financial control, this money mindset is useful for periodically evaluating our spending. As our value increases, the size of the discounts we get excited over also needs to increase to keep this money mindset favorable. As you achieve greater financial wealth, remember the equation for A dollar saved is a dollar earned:

Break Even =

Satisfaction of Saving Money + Money Saved = Opportunity cost of (Time + Energy)

With this tool in your tool chest, financial freedom is ever-more attainable. With your finances in check, continue your quest for success.

What Does Success Look Like?

Do you know what success looks like?

Scrolling through Instagram and other social media feeds, we soon become inundated with an endless barrage of fancy sports cars, pristine sandy beaches, yachts, high-rise patios, and the list goes on. Picture after picture, story after story, surely this is what success looks like.

But is it?

Success is not achieved by having any of the aforementioned pictures alone. Those celebratory poses, when not faked, often come with a long back story that isn’t near as glamorous. And I’m not referring to trolling city streets looking for a parked Ferrari to take a selfie with. No, I’m talking about the owner of that Ferrari's story. Success looks like the countless years of grinding, on the phone with prospects, scribbling furious notes in online courses, constantly growing, constantly grinding. The long days and late nights, sticking it out when times’ are tough. And that is only one image of success.

Success looks like the teacher who is laughing with her students, celebrating top grades across the class. Taking in the look of jubilation on those students faces, knowing that her years of study, late nights marking tests, staying after school and sacrificing lunches to help others learn. That is the image of success, because she chose to be a teacher. Because she worked hard to earn those cheers of her students.

Success looks like the glitter falling from his hair, because he defined success as being his daughter’s father and best friend. The make-up shining his cheeks to a rosy red, pink lipstick smeared across his face. The endless clean-up, driving to early morning practices, late nights listening to her first heart-break. All the behind-the-scenes care and support. No flashy picture captures that. But the laughter and memories made, that is success. That is his success. That is the success he chose.

These are the stories of success we don’t see as we scroll through the day’s social media posts. But these are the real successes. So let me ask you, what does success look like? What does success look like for you?

Seasonal Spending Woes

As the seasons start to change, we are suddenly presented with all sorts of temptations to spend more money. Billboards tower above our commutes, magazines and newspapers line the checkout shelving, all promising new fashions and recreation activities. Under the constant pressure for our attention, and our wallets, we need to be extra vigilant. The basics of financial management remain constant despite the changing seasons.

Financial management is not a lesson in frugality, although that is often talked about as a popular Money Mindset. Financial management is actually making a conscious decision about where you spend your money. That means you making the decision to purchase or not, based on your own criteria.

If making an effective financial decision relies on your own set of criteria, how do you determine if a purchase is worthwhile?

As we are each unique, we are each responsible for determining our own decision criteria. The key here is that we think about what we value first. The alternative is that we will make split second decisions that aren’t always our own, but as a result of sales pressure and marketing manipulations.

How do we maintain our individuality while deciding our own criteria? The following set of four questions is an excellent starting point that I've found helpful:

Can I afford this?
What are my core values?
Does this purchase reflect the values that I stated above?
Will I still support my decision on this purchase a month from now?

Let's look at each question.

Can I afford this?

A straight-forward question, if the answer is no, don’t purchase. Avoiding spending above our means keeps us financially stable.

What are my core values?

Understanding what you find valuable is essential to making sound purchases. For example, I place a lot of value on my health and fitness. When considering purchases, I’m more likely to splurge on goods that improve my physical health.

Does this purchase reflect the values that I stated above?

Be honest on this one. Especially when under social pressure, this question can help you refocus on what you actually value, and not what the other friends you’re hanging out with value. I am far more likely to pick up a pair of supportive running shoes than the latest boat shoes, regardless of how “cool” I would look for the next two months.

Will I still support my decision on this purchase a month from now?

Asking what your future self will think is a powerful question regardless of the situation you find yourself in. This holds especially true when facing financial decisions. Many times our current self thinks we’ll make better choices in the future. How many times have we promised ourselves we’ll save more when that next raise comes in? We’ll donate to a worthy charity when the year end bonus comes through? Or we’ll take a self-development course that helps us grow just as soon as that tax refund check clears? It’s easy to think we’ll make better choices in the future.

But what happens when we flip that script? We ask ourselves if the right now choice is what we hope our future self would do.

Thinking about ourselves in the future, reflecting on the choices made before we make them provides us the right amount of clarity that just might save us from the next magic infomercial product collecting dust in the garage.

With the latest gadgets and gimmicks “new this year” released every season, we need to keep a careful eye on our impulses. Asking yourself a few simple questions can help you steer clear of the next big dust-collecting widget.

Can I afford this? Is this important to me? Will this be important to me a month from now?

In this way, we can spend on what we value, and save on those other impulse purchases marketed to us. We can make the most of the changing seasons, without suffering from seasonal spending woes.

Checking the Rearview

At Business Minded we talk a lot about where we’re going - mapping out our direction and taking consistent action to reach our planned destination. Small consistent wins are the only way to achieve the highest Return on Your Investment possible. That forward focus is essential to drive to the right destination, as picked by you.

How do you know you're on the right track?

To stay on track for our success, we also need to remember to check the rearview every once in a while. This is essential for several reasons. The main reason is to appreciate the distances we’ve come. Reflecting on our accomplishments is a good way to appreciate the efforts that we’ve put in to get to where we are, and to remind us that we can, we will, achieve our goals through consistent action.

This action of reaffirming why we started, where we’re going, and where we came from helps us stay grounded in our pursuits. And while our past doesn’t need to define our future, we shouldn’t forget the trials and tribulations that made us who we are.

Checking the rearview also assists us in our future goal setting and plans. As a quote from Matthew Kelly in his book The Long View:

“Most people overestimate what they can do in a day, and underestimate what they can do in a month. We overestimate what we can do in a year, and underestimate what we can accomplish in a decade.”

- Matthew Kelly, The Long View

When checking the rearview, we can see the level of investment that has provided the current returns. If we want to accomplish more, we can gauge the increased investment required to hit those larger, more inspiring goals.

So look up, glance at that rearview and remember why you started. Remember how far you’ve come. And remember what it took to get there.

Now draw on the strength built in your accomplishments, and more accurately plan out your goals, knowing what it took to get here. Decide what level of investment you need to hit the next milestone in your life, and take action. That new lofty goal ahead of you, that will soon be a map-point in the rearview as well.

Money Mindset: Pay Yourself First

What is the most important money mindset that differentiates people with financial abundance from those without? Financially successful people know this principle: pay yourself first.

Understanding this Money Mindset of personal finance and financial achievement provides us the building block for all future financial successes.

What does Pay yourself first mean?

"Pay yourself first." Put simply, it means that every dollar you earn, you put some aside for your future before you pay anyone else. This philosophy of money ensures that you will always have the means to take care of yourself and what is important to you without relying solely on your paycheck. If you pay yourself enough first, you will even achieve financial abundance, the monetary means to pursue whatever passions you have.

Why does this Money Mindset matter?

With all the demands on our wallets in our hectic lives, it is only too easy to fall into a reactive mindset, burdened with excuses for why you can’t save enough.

The tax man takes too much. Rent is too high. My mortgage costs too much. Have you seen the price of food? Don’t even get me started on the cost of gasoline!

Internalizing these devastating excuses will leave you at the end of each month with hardly a scrap to put towards your future. And while there are other money mindsets that have developed in response to these excuses, you’ll always be trying to play catch up at the cost of your happiness. With millions of people in North America alone living paycheck to paycheck, trying to save for our future after we’ve spent our earnings seems futile. Not paying ourselves first leads to a vicious cycle of pinching pennies on our morning coffee, buying the cheaper ingredients, wearing our shoes down until we have holes in the soles, and holes in our souls.

How do we apply this Money Mindset?

Changing how we view money is hard, but there is a silver lining. While this Money Mindset of paying ourselves first is the most important, it is also the easiest to implement. Many employers are able to split our paycheck and send funds into an investment account before we even receive our monies. Holding back a portion of our earnings, and investing them before they even touch our bank account is the embodiment of the principle; Pay yourself first. If the source of our pay isn’t as regular, or the option to divert your earnings into a separate account isn’t available, we can set up our own system to pay ourselves first. With the advent of electronic banking, it is relatively simple to set up multiple accounts, and have automatic transfers regularly scheduled. All this can be accomplished within 30 minutes, and possibly even as quickly as 5 minutes.

What if you are a freelancer and don’t have regular paychecks? While more manual, you still need to pay yourself first. While you are putting aside money for taxes (I hope you’re at least doing that!), send some extra dollars into your investment accounts for the future. This way, whatever is left is what you have for living and spending.

How much should you save?

As with all other savings, the more you put away now, the faster you’ll reach financial freedom. George S. Clason suggests in The Richest Man in Babylon that 10% is a good number. Although that depends greatly on age, current savings, planned uses of the money, etc. Economists trying to give a single number for everyone range from the 10% number to 20%, or even higher. But before you get overwhelmed by the magnitude of that ask, just put aside a dollar. Then another dollar. Then another.

We don’t need to change our thinking right away, the right system takes care of our financial future for us. But before long, as you start to realize the financial goals you have are attainable, you’ll certainly appreciate, and maybe even advocate, this essential Money Mindset. Adopting the Money Mindset of Paying yourself first will ensure that you are taking care of your future self as well as your today’s self. And that simple action starts your journey towards financial freedom.