Finding the Time

[BookClubEditor]

First, congratulations for finding the time to learn more about your financial health! People who succeed in creating wealth have the same 24 hours in a day as everyone else, but the difference is they make the time to meet with their financial advisor, or work on their finances. America's top three New Year's resolutions are "losing weight," "getting in shape," and "handling money better." No wonder 68% of fiscally unfit Americans plan to get their finances in shape "as soon as I find the time."

Opportunity Costs

Every choice, even the smallest one, has a cost involved. Here, there are two costs: the financial cost of course, but the other is often overlooked. It's the cost of not being able to do one thing because you are doing something else. This is known as the "Opportunity Cost." Analyzing your financial decisions, even the small ones, is a powerful way to improve your financial shape. Just as no calorie is "just a calorie," no dollar is "just a dollar." We make these small decisions every day with our time and money.

I want to share with you two studies. The first was done by Annamaria Lusardi, an economics professor at Dartmouth College. She studied companies that offered seminars on financial and retirement planning, and found these seminars helped their employees significantly increase their wealth. These individuals who attended a few one-hour sessions saw their wealth increase by 15 to 20 percent, regardless of their income levels! The second study was conducted by Thomas J. Stanley, author of The Millionaire Mind. He found that millionaires were more likely to agree with the statement "I have sufficient time to handle my investments." They spent 8.4 hours a month on their finances and prospered over time. Meanwhile, he found that those who weren't living up to their potential agreed with, "I never have the time to make it pay off" and still put in over 4.6 hours a month! What's fascinating is that one extra hour each week made all the difference!

Work Out Like a Millionaire

Care to work out like a millionaire? Commit to spending two hours every week. If you feel like you can't do that now, then commit to at least one hour a week and add 10 minutes each week to your weekly "financial hour." So, what shall you do with that time? I would recommend you start with organization and education. You can begin to get your financial life in order and gain new knowledge by finding out what tools are out there to help you. Here are some suggestions for what you can do during these sessions:

• Organize your bank and credit card statements.
• Check the performance of your retirement accounts and obtain a Morningstar Report for the funds you are in. (Go to Morningstar.com).
• Research what a Roth IRA is and see if it makes sense for your situation.
• Call your bank and see if they have a program to accelerate your mortgage payments.
• Research how much life and disability insurance you and your spouse have and what it costs.

But, don't forget to pace yourself and only spend the time you've assigned to yourself. My one request is that you refrain from spending all your time researching a stock or two. There's a misconception that building financial wealth is about picking that next Microsoft or Google at $10 a share. It's important that, at this stage, you use this time to focus on organization and educating yourself on broader topics.

Go For the "Flow"

"Flow" defines those times in your life when your concentration is so strong that you're completely absorbed in the activity. You feel alert, in effortless control, and at the peak of your abilities. It's the reward of your up-front commitment of time and energy. In order to achieve flow, you need to be willing to work through initial stress. Stress is what helps every athlete perform better. Cutting ourselves off from stress can make us apathetic and financially flabby. When you're tackling your finances, it will usually take 10 to 15 minutes to get organized and start, and about the same to finish up. Here are some things that might crop up in the first 15 minutes:

• Lost passwords or login information. Hint: Keep a spreadsheet with all your passwords in one place, and make sure it's just a paper copy.
• The status of health care or other insurance claims. Hint: Use folders to separate claims that are filed and not filed to smooth this process.

Life-Long Changes Happen Slowly

It takes time to change habits and attitudes that have developed over your lifetime. Keep your expectations realistic and manageable. If your goals are overly ambitious, then you set yourself up to fail. And that sense of failure can turn your feelings from optimism to guilt. When you're sitting down to work on your finances concentrate on the topic at hand. If it's your checking account, focus just on that. Before you know it you'll look back and be amazed at what you've accomplished! Now, set aside one or two hours of your time for financial planning and get started!

Discussion

1. After starting to organize and educate yourself, do you feel more in control of your money? Why is that?
   
   
2. Were you frustrated at any point, and if so, why?
   
   
3. Imagine you're an efficiency expert watching a recording of yourself in your office or wherever it occurs. How's your paperwork? Can you find things easily? Is your workspace free of clutter and interruptions? How do you spend your financial planning time? What are your biggest time wasters?
   
   
4. Share with the group a few times that you've achieved flow in other areas of your life, and how that flow impacted your performance.
   
   
5. What would like to change about how you are handling your finances? How can you start to make those changes? What are the three biggest challenges you'll face? What are the three biggest opportunities you'll discover?