$1,000 decisions are important. Managing your cash flow is important. If ignored, they can add up to much larger concerns. $100,000 decisions are even more important. Because they are often less obvious, more abstract, beyond conventional thinking, and push our comfort zone – they capture less of our attention. The 80/20 rule is almost always a good rule of thumb. Put 80% of your energy into $100,000 decisions. 20% of your energy into $1,000 decisions.
20% of your energy:
- Buying a ‘hot stock’ because you like the company
- Buying coffee throughout the year
- Eating out for lunch
- Peloton or bike outside? Or Pelton outside?
- BMW or the Honda?
- Apple laptop or HP?
- Lawn care or DIY
- Cleaning service or DIY
- Searching for cheaper gas
- Public transportation or cab?
80% of your energy:
- Paying down your mortgage too fast or paying cash
- See my thoughts on mortgages: Long Mortgage? Anyone?
- Your investment fees
- Sticking to your investment strategy: Philosophy
- Reducing your tax bill (for most people, this is their largest household expense – think of it this way!)
- Planning for higher taxes in the future
- Providing your heirs estate liquidity
- How can you make more money? Revenue is unlimited. Cost cutting is finite.
- Filing for Social Security at the right time
This is not advocating to ignore $1,000 concerns. Shift your energy to the bigger issues that contribute to true wealth creation and preservation. Take an honest inventory of what you concern yourself the most with on these lists.
Stay calm. Stay invested.
Thanks for reading,