plonkee money an english-er's thoughts on personal finance

July 29, 2008

financial goals, and living your life anyway

Filed under: philosophical — Tags: , — plonkee @ 12:00 pm

Having taken up the oboe, naturally I spend some time hanging out on music student forums. From time to time, someone will post a thread asking whether they could become a professional musician. It seems to be the general consensus that with enough work and a suitable teacher, anyone sufficiently dedicated could get to the standard required for music college. In case you’re interested I’d reckon something in the region of 2,000 to 3,000 hours of proper structured practice would be required.

But it got me thinking about whether anyone could become rich. I’d say it’s the general consensus that with sufficient drive and focus, anyone sufficiently dedicated who is reading this blog could accumulate a million pounds. You’d need to put the power of compound earnings to work and so it couldn’t be done overnight. But if it’s what you really want to do, it’s not that hard – simply spend a sufficient amount less than you earn, invest the remainder and keep going for at least 10 years.

Really, most things are within the reach of most people, if they set them up as their only goal. The trick is in trying to balance competing goals. I want to travel, and have a nice house, and not worry about money on a day to day level, and wear decent clothes and save and invest a good proportion of my income. I don’t have the single-minded focus needed to accumulate a large pile of money, or pay off my mortgage within a few years.

If you have a goal that’s going to take more than 2 years to reach, I think that it’s extremely difficult to focus solely on it for the duration. To give yourself the best chance you need to make it as automatic as possible, and to allow yourself other pleasures in the mean time. There’s only so long that you can put the rest of your life on hold.

It’s much better to acknowledge these sorts of limitations, than pretend that they don’t exist. If you don’t then you won’t stay on the wagon. Instead be realistic. Cut back on things that you don’t care about, invest energy in things that make you happy. Keep your eyes on your goal, but allow other good things into your peripheral vision.

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