Small Steps, Big Results

   How much do you need to set away to reach your financial goals?

   For many of us, reaching those big financial goals will take many, many years. And looking up now, it seems the mountain top is well beyond your reach. When even the climbers well ahead of you look a long way off from the top, and even they are hardly pin-pricks against the enormity of the mountain.

   It would be all too easy to be overwhelmed, standing there at the bottom. All too easy to throw the towel in. All too easy to just sit down.

   But every successful hiker knows, there is no shortcut to the top. Sure, there’s easier and harder routes to take. But no matter what path you travel, the only way to make any progress is to just take a step. And then another. And another. 

   Do that, just one step at a time, and soon enough when you look back, you’ll hardly even believe where you are, and how far you’ve come.

   We can apply this mentality to all of our goals. Breaking each momentous task down into just the next step.

   You don’t set out to write a book, you just need to write a sentence. 

   You don’t run a marathon, you just run around the next corner. 

   And you certainly don’t lay down on a mattress made of cash. You just set a small piece away. When you do that today, and tomorrow, and the next day, and every day from now on, one day you’ll look out from your own mountain, shocked by how far you’ve come.

How Big A Step?

   How far do you need to stride each day to make it to the top of the mountain?

   Of course, the answer depends on the size of your mountain. And how long you have to climb it. 

   But no matter how big your mountain is, you’ll only reach the top by putting one foot in front of the other.

   To help you decide on the size of the step you need to take each day, take a look at the chart below:

Latte Factor Table

A Game of Inches

   The above chart shows how much you need to set aside each day, with the assumption you contribute those funds on a monthly basis, earning 6.5% after-tax annually.

   This type of analysis, popularized as the “Latte Factor”, shows that saving a small amount each day will help you reach your financial goals.

   The key here is, take a small step each day. Don’t get hung up on cutting coffee from your life, or some other equally trivial excuse. This has nothing to do with your morning cup of Jo. 

   But for those who are already tapped out, those who can’t find an extra 2 pennies to rub together. Looking at your costs, like your latte, might provide that small step. It could also be cutting your cable. Or negotiating a discount on your phone bill.

   In the infamous words of Al Pacino (Any Given Sunday, 1999), “Your find out life is a game of inches, like football. ... The inches we need are everywhere around us.”

   Each day, find that step. Each day, take that step. Do that, and one day you’ll look up from atop your mountain, staring at the wondrous beauty of a world and a life lived on your terms. And each night you can wrap yourself tightly under that blanket of financial freedom.