How to Kick the Training Wheels, Financially

Never stop pedaling, never let go of the handlebars, and always keep the wheel pointed forward. These are the three rules that my dad gave me when he was teaching me how to ride a bike without training wheels for the first time. He told me as we stood in front of our house one early morning, that if I didn’t concentrate on these three rules, I would crash my brand new bike, with a sweet red and yellow flame paint job, into the curb and fall into the bushes. Although there were so many exciting tricks that I wanted to learn how to do on a bike like how to do a wheelie or how to jump a speed bump, I had to master these three rules, before I could even dream of doing anything else. After practicing relentlessly and encountering several harsh falls into the bushes, I realized that the more I rode my bike, the more natural it became and I didn’t have to concentrate on the three rules anymore.  Even though those three rules were what kept me from crashing, my muscle memory eventually took over so that my mind could concentrate on all the other thrilling adventures and new places I could go with my new source of big kid transportation.

What I have found is that gaining financial stability is not much different from learning how to ride a bike. You first have to start with the basics and master them before you can kick the training wheels, financially.

Just as “never stop pedaling” can be equated to your cash flow, you must first learn how to both manage (budgeting) and protect (disability and life insurance) your income. You have to make sure that you have a set budget and you know where all of your money is going before you can make further decisions about what you can or can’t afford to do. That stream of income is the engine that is moving this whole thing forward. If you stop pedaling because you’re sick or injured and can’t work, or you aren’t around to provide that income for your family, the entire financial strategy “crashes”. Protect your ability to keep pedaling since it is your most valuable asset.

Never let go of the handlebars” is the same as taking control of your financial situation. Either you have to hold onto the handlebars or you have to get some one to hold on to them for you. With that said, it is your financial future, so you have to take ownership. Keep a grip on your investments, insurance needs, and future goals or consider hiring someone else that you trust to help do this for you. You can’t expect to have no one holding onto the handlebars and have a successful financial future. Often time’s people don’t have the time nor desire to hold onto their financial handlebars, but I can assure you that many of the successful people out there have someone helping them steer!

Always keep the wheel pointed forward” in your financial situation means always having clearly articulated goals. If you don’t set goals and work towards them, you won’t likely achieve what you really want and you may end up on the other side of happy. It’s pretty interesting to see that what you track, typically grows. If you track the amount of reps that you do on a particular lift at the gym and you go back the next week and are able to do one more rep, you feel pretty good about your self. Small win after small win you might be doing double the reps in just a few months. Same goes for your finances. If you’re able to track where you are against your goals, you may be able to hit them well before most of the population.

Successful people make a habit of what most people don’t do now so that they can do what most people can’t do later on. Keep pedaling, don’t let go of the handlebars, keep that wheel pointed forwards, and go take the training wheels off of your financial situation before the other kids realize they need to after it’s too late.

Michael Foley, CFP®, CSLP®

Author: Michael Foley, CFP®, CSLP®

Michael works with professionals to establish harmony in their lives through tailoring comprehensive financial plans, while also providing a variety of investment and insurance services.

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