What I learned about finance from T.Harv Ecker, Brian Tracy, and my Son - miworld

What I learned about finance from T.Harv Ecker, Brian Tracy, and my Son

If only I had more money I could…..

I don’t know how many times I’ve heard that, considered that and reflected on how different life would be today if only…. And I’m sure you’re the same.

But when we look back on our life, on all the things we’ve done, all the stuff we’ve bought and those moments of impulse spending, we can see how much we have wasted by being unorganised, unplanned and extravagant, (nothing wrong with being extravagant every once in a while) and maybe, it’s just me who sees the waste and inefficiency.

James Hunter, in his book, The Servant, writes about unhappy staff and how the request for more pay is often really a cry for recognition, community and about being heard, rather than the money itself. However money is tangible and is something we can point to as a signifier of our value.

I find his work really interesting however in this piece, I want to focus the practicality of money and some best management practices of it.

I have three resources to share with you. Each of which has their own unique wisdom and situation for use.

1. My Son

We were having a conversation about money, about how much money qualified one to be rich or poor. Our discussion evolved to equating money with the quality of a person’s life and what habits rich people have vs those of less well heeled. Then I said something that has stayed with both of us throughout the years:

‘Rich people save and poor people spend’

It’s not about the amount of money you have, it’s far more about what you do with it. If you spend your wages in the pub on a Friday night then you are poor, if you leave it in the bank you are rich! Because savings gives you options, with money in the bank you have the choice of how to spend it. You can spend it many times in your head and yet never touch the capital. Once it’s spent, it’s gone and all your options with it.

2. T Harv Ecker (from Secrets of the millionaire mind)

I used to think that the management of money would be deterred until I was in possession of money to manage. I’ve always saved a little but I never though I needed a strategy for the amount of money I had. Mr Ecker totally changed my thought and behaviour on this.

This book covers so much more than finance, and I recommend it highly. I’m only pulling out a tiny piece of its wisdom to share with you today.

Harv recommends learning to manage our money, regardless of the amount, because then we will be better able to manage it when we are in possession of a larger amount

Like me, I’m sure you’ve read of people who win the lottery, it used to be the football pools, and within a short time, they’re back to being broke again. All of it spent on things they have always wanted to own with no thought to the future.

If people learn to manage the small amount of money they have, they could perhaps handle a large windfall like a lottery win in such a way as to enable them to consistently live a more comfortable life.

There’s so more to this in the book, but the outline of the secret to money management is:

  • Use 50% of your income to live, to provide the essentials in your life
  • Split the other 50% by 5, so
    • 10% – long term savings (Pension, investments and not for spending)
    • 10% – Short term savings (Holiday, car, new boiler)
    • 10% -Luxury (to balance the savings and treat yourself, guilt free)
    • 10% – Learning (in order for us to continue to grow, we must learn)
    • 10% – Tithing (giving a contribution to a worthy cause)

If you say there’s no way I can live on half of my income, teach this philosophy to your kids so that when they start working, and before they have fallen into the trap of spending what they earn, they can manage their money to build affluence. And maybe look at a 90/10 % split to start off with for yourself and work towards this ideal for how you manage your finances.

I started with a liking for the Luxury money portion– buying something for myself without feeling guilty. I also started a fun event with my son, where I introduced what we called “silly money” days– we’d have a day where we would buy something because we can, usually a game and we’d play it together that day. We didn’t do it often but I look back at the times we did with fond memories and laughter galore.

My favourite memory of this book was when I recommended it to a friend, who said, if it has the word secret or millionaire in it, I’ve read it. This reminded me of the struggle and searching we do for peace of mind around our finances and our ongoing search for financial freedom.

3. Brian Tracy

I have admired the work of Mr Tracy for many years and love the way he summarised his clever focus on money. Its four simple strategies:

  1. Earn as much as you can
  2. Spend as little as you can
  3. Save for a rainy day
  4. Insure against unexpected events

That’s it, some simple strategies for managing the money in your world, regardless of the amounts you have. This gives you some options to consider.

Of course, if you are having financial difficulties, please discuss your financial goals with a professional adviser, there’s no shame in that. I did it.

Money is one of the two most common excuses we use as to why we can’t something, why we’re not where we want to be. None of these strategies will change your financial situation overnight, but consistent application and the law of compound interest will change it over time.

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