Working on my next book titled HABIT FOR WEALTH. The book, HABIT FOR WEALTH will propel you to create wealth and build lasting success, I expounded on habits and wisely elaborate on the concept of forming good habits and breaking bad ones.
Habits are the small decisions you make and actions you perform every day. According to Duke University Researchers, habits account for 80% of our behaviours on any given day.
This is to say; “your life today is essentially the sum total of your habits.”
How in shape or out of shape you are – A result of your habits.
How happy or unhappy you are – A result of your habits.
How successful or unsuccessful you are – A result of your habits.
How rich or poor you are – A result of habits.
One of the things I spoke about in my book, HABIT FOR WEALTH is to AUTOMATE, which is the second alphabet in the word HABIT.
To automate means to operate by automation; to convert to largely automatic process, or to undergo automation.
Now let us define automation or automatic. Automation is the technology by which a process or procedure is performed with minimal human assistance.
Automatic is when something is done or occurring spontaneously, without conscious thought or attention. Automatic is instinctive, involuntary, unconscious, reflex, knee-jerk, reflexive, instinctual, subconscious, unconditioned, spontaneous, impulsive, unthinking, unintended, unbidden, unwitting, inadvertent, mechanical, gut, and habitual.
To automate is when your mode of operation, in which a particular function is performed automatically rather than manually.
To create wealth and build lasting success, you need to automate. Most of your positive and wealth creation habits should be automatic. It should happen without “repetitive conscious thought”. It should be “consistently–habitual.”
You will agree with me that, to create and build lasting success, financial planning plays an important role. Moreover, finance is also a complex topic with numerous moving parts, and many aspects of it are best tackled with a professional by your side. However, there are also many simple but powerful things you can do yourself to improve your financial situation quite dramatically over time.
Our biggest enemy when it comes to creating and building wealth is often ourselves. Every day, we are faced with decisions on whether to spend or save; go out to the hot new expensive restaurant or stay in? Buy something when our favourite store emails us a 30% off coupon, or transfer some money to a savings account instead of leaving it in our bank (checking) account? While these seem like minor actions, these small choices accumulate and create our financial situation which prevents us from building lasting success.
It is easy to spend money these days – thanks to the internet. Retailers offer us endless ways to automate our purchasing. They show us products we have looked at, and they offer one-click purchasing and send emails reminding us that we have left something behind in a cart.
Fortunately, we can use that same powerful tool called automation to help ourselves. How do we do it?
You can use automation to help you with what really is the most important part of planning for the future; consistently saving and investing. Putting money aside regularly, on a consistent schedule, is a requirement to building wealth.
“Mind your coin; you may never know when.” –Ernest Agyemang Yeboah
While it seems simple, doing it is much difficult than talking about it. There always seems to be a reason to start next month instead of this month. Or you just forget to put money away after paying bills. Or maybe you think that it is not a good time to invest, so you hold off on putting any money into savings at all. Whatever the reason, by not following through, you are shortchanging yourself.
This is where automation can be your financial saving grace. Find an amount you can commit to and have it automatically deducted from your bank account or directly from your paycheck. You won’t have to do it yourself, and it would require more action to reverse this automatic withdrawal than to just lrt it continues every week or month. Because it will be easier to just let it continue, you are likely to keep these contributions going.
Don’t stop at just your retirement account. Most banks allow you to set up automatic transactions, so you can use this feature to save in your taxable accounts or for college or another purpose.
Saving is important, but investing is critical to building wealth. Most at times, people save with the intention to spend in the future, but people invest with the intention to earn in future.
How many wealthy people do you know who become wealthy by investing in savings accounts? Investing is a key habit of creating and building lasting success.
When investing, we are frequently tempted to time the market. You may think the market is too high, and decide to wait to buy anything, but find yourself waiting too long and missing out on further gains. Or if stocks fall into a longer bear market, where prices keep falling, you may stop buying altogether.
Unfortunately, it is easy to fall victim to natural human biases and emotions that make investing challenging for everyone. While some professionals can get an advantage with studying market behaviour, even most experts can’t do more than match the market.
Don’t try to time the market. Instead, commit to investing the same amount consistently, month in and month out. This way you are automatically buying more when the market is low and buying less when the market is high.
Cost averaging is a simple strategy and a great way to build wealth without stress. While it is not perfect, it takes your biases and emotions out of the equation. You can usually automate that entire process in your retirement account.
Automate bill paying
Another aspect of building wealth is not incurring wasteful fees. Here you can use automated bill pay features for your credit cards and other payments, or use the bank bill pay feature, mobile money pay feature to make sure your utility bills, water bills, or other payment are never late.
You will also free up your own time each month, since paying your bills will be automated.
Finally, remove automation from spending. When improving our finances, a key is to buy what we need and not what we simply want. After all, most of us already have far too many shirts, shoes, and suits in our closet that we rarely wear but that we really wanted when we bought them. With online shopping it can be especially difficult to avoid impulse purchases.
Here again, automation can help us. We just need to do the opposite of what all the retailer want us to do;
- Unsubscribe from all retailer mailing lists so you aren’t notified of sales or special offers. Out of sight, out of mind.
- If you use Amazon or similar online shopping platform, be sure to turn “one-click ordering” off. This feature just makes impulse buying too easy. It is designed that way.
- Do not save any credit card information online any websites. If you have already done this, remove those cards from those sites. This way, you will have to manually type in your card information every time you make a purchase, which should give you the opportunity to rethink whether it is a purchase you really want to make.
Written by Peter Kwadwo Asare Nyarko| Financial Literacy Advocate| Financial Educator | Author
Organization: Center for Financial Literacy Education, Africa
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