Beware of the mysterious drones hovering over eight cities! They're causing quite a stir. However, what if a drone mentality to financial success truly existed?
We probably wouldn't mind.
Not long ago, Jeff Bezos, the CEO of Amazon, made big media headlines by suggesting that drones will be used to deliver light packages in the future, as opposed to the normal, albeit boring, methods we know now.
What the heck is a drone? It seems obvious, but the official definition is an unmanned aerial vehicle. The flight is controlled either by computer or remote control of a pilot from a remote location. Some can fly as high as fifty thousand feet and go supersonic.
Wow.
It got me thinking.
Consequently, financial security is also automated from fifty thousand feet above your wallet. Cutting out that extra latte will not make you wealthy; placing as many good money habits as possible on autopilot is the key to financial stability.
So, here are some ideas for achieving financial success with a drone mentality.
1. Budget on autopilot to build a drone mentality for financial success.
Budgeting daily is strict. It feels too much like dieting, dating, or getting a root canal. Keeping track of expenses manually is admirable. However, you'll inevitably give up because you're human. You have a busy life. I do believe using pen and paper is the most effective way to build intimacy with your money. I'm big on micro budgeting, especially as an exercise for freshly minted retirees.
Even if you're proficient at manual tracking, you won't be able to interpret your long-term spending habits meaningfully. Analyzing longer-term patterns (at a higher altitude) exposes where you need genuine improvement.
Our planning software at RIA uses a triple-bank encrypted aggregation tool that updates daily so clients and advisors can follow spending and portfolios holistically in real time. Clients establish spending categories by connecting checking accounts. Within each category, a user may establish spending boundaries. The software then tracks expenditures, which allows clients and their advisors to uncover errant purchasing patterns easily.
Your advisor or broker should provide access to an aggregation tool. For those who use credit cards for most of their daily expenditures, end-of-year statements or reports provide valuable insight into spending trends for the year.
Consider a meeting with an objective financial partner. Create a game plan to cut expenses that negatively impact your bottom line.
Finally, go ahead and enjoy your fancy coffee—for now. An aggregation tool can track your addiction! A drone mentality to financial success requires ongoing monitoring of your flight path to wealth.
2. Pay yourself first.
Don't roll your eyes!
You've heard this one. Right?
The best financial rule (and I'm critical of most financial rules of thumb), is easy to follow and from a higher altitude, or for the long term, will result in substantial positive impact to your bottom line.
Before expenses are paid, before you treat yourself to the latest movie release, it is crucial to pay yourself first for emergencies and longer-term goals.
How?
First, set savings on auto-flight - Pay yourself first by initiating instructions to move three percent or more into a company retirement account every pay period. Ask your HR department how to accomplish this simple task. Do the same by setting up instructions to transfer a specific dollar amount automatically, say fifty bucks a month, from your pay or checking account into a high-yield savings account from an FDIC-insured online bank such as Marcus.
Last, go stealth on a savings target—Every three months, increase the dollars directed to savings by ten bucks. Select an amount that works for you. Think under-the-radar increases. They are barely noticeable, but this tiny habit has resulted in significant changes (and dollars) over the years.
You'll look forward to saving because you'll realize how painless it is!
Furthermore, forget about buying stuff you don't need by drone delivery.
Now's the time to establish your small army of financial drones. Heck, the government won't even notice.
Finally, if you already follow these financial basics, share this post with your friends, children, or grandchildren who may not be savvy financial drone pilots like you.
The post Use Drone Mentality to Financial Success. appeared first on RIA.
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