Every martial arts movie is the same. From Kung Fu Panda to The Karate Kid, it’s a story of a student seeking fighting prowess. Instead, the wise teacher offers a simple lesson on something obvious and overlooked. Usually, it’s a lesson that doesn’t even seem connected to the goal in mind. The student becomes frustrated being taught how to calm the mind rather than throwing a roundhouse kick to the face. Only later does the student understand why the fundamentals being taught are the key to unlocking his/her fighting spirit. The connection was there all along.
So it is with money (and life). We often think results require the mastery of complicated moves or strategies. We get frustrated seeking progress by bouncing from one thing to the next. Some are stuck not even knowing where to start. We tend to forget that often the basic, unnoticed, and overlooked fundamentals are the foundation of success. Sometimes the principles we overlook don’t seem directly connected to money. But they can be what unlocks our mastery of it.
Here are five non-money habits that will make you better with money (and life):
Get Some Sleep
Sleep is easily the most basic and overlooked of all the things on this list. I’m confident that most issues in life would immediately be improved with more sleep.
I agree with JoJo Jensen when she said,
“Without enough sleep, we all become tall two-year-olds.”
America has long had the ‘push through or sleep when you’re dead’ mentality. You may argue there is a direct connection to hard work and better results. So why not push through and sacrifice sleep for better results? That may work. Until it doesn’t. There’s a point where the hard work reaches an upper limit and starts to have an inverse relationship with results. When you start to trade in sleep for work you get burnout. That’s when results dwindle. A study done in 2017 found the United States missed out on $411 billion (yes, billion!) in productivity due to lack of sleep.
Another study found that sleep deprivation leads to risky financial behavior. Lack of sleep impacts our motivation, productivity at work, and our money decisions. You don’t realize sleep’s effect until you start to get more of it. Before working more hours for an extra buck or thinking about which meme stock to buy next, start investing more time on your pillow.
Make Room For Reflection
Aristotle said it best:
“Knowing yourself is the beginning of all wisdom.”
To know yourself—your desires, fears, priorities—requires reflection. Reflection helps us draw an internal map of our life. Without it, you’re sure to get lost. Many money mistakes come from our failure to connect our values with our money. The first step to value/money alignment is to create space to pause and think about what you want and why. This will lead to making more thoughtful, less reactive choices with money. Also, our views, goals, and drivers are always changing. What I thought was an ideal life when I was single and 20 is vastly different 15 years later with a wife and two kids. Creating space to regularly reflect is critical to making money matter.
You need to find what works for you. But I’ve found spending a few minutes journaling in the morning and evening has helped my approach to life and money. I also think it’s critical to make time for reflection with your spouse/partner and family. Have conversations regularly about what brings you joy. Discuss what you enjoy spending money on and what you don’t. Talk about priorities in the short and long term. Being on the same page with priorities will make it easier when making choices about tradeoffs. Reflect often on whether your actions are aligning with what you tell people you value. Oftentimes you’ll uncover a misalignment somewhere.
Expressing gratitude helps bring more joy for the things you have—relieving stress about things you don’t. I’m not talking about complacency. It’s okay to want more. Gratitude is simply smoothing out the road on the way to more. But there is a fine line between wanting more and the syndrome of never enough. One is about creating an intentional lifestyle built around our unique values and goals. The other is about wanting what other people have. Envy and comparison are thieves of joy. They are a disease of the mind and soul. Gratitude is the antidote.
Being grateful also helps us stay optimistic and positive—two critical characteristics of successful long-term investors. Humans tend to have a bias toward pessimism. Surely that helped our ancestors survive the dangers of the savannah. But negative bias leads to more mistakes in investing than almost anything else. Building a habit of gratitude helps us to counteract our skeptic tendencies and brings about an optimistic mindset. Being grateful doesn’t mean being naive either. It simply shifts and narrows your focus on the things you have and the things you can control. It helps you see opportunity in every obstacle. Gratitude stifles the cynical mind and opens you up to a more positive mindset.
Where do I start? Don’t overthink it. Start or end your day by writing down a few things you’re grateful for. See what happens.
Turn Off The News
You might be thinking, if I don’t watch the news, how do I stay informed? The news is in the business of keeping your attention—not keeping you informed. Especially the financial media. News outlets tend to mislead—not because they’re trying to harm you but because the truth doesn’t sell. The truth is most people get up every day to improve their lives. We are driven by getting more tomorrow than we have today. Some are creators. All are consumers. The result is companies and people produce new goods and services. They are either accommodating our desire for more or solving a problem. Some companies fail—others pop up to take their place. The market in which companies live gets more valuable over time. Progress is methodical, slow, and often boring. Clearly, it’s not linear but in many ways, it’s that simple. The world is slowly getting better as the human desire for improvement never stops. Investing in markets over time is a way of cashing in on the never-ending cycle of human progress.
But financial media outlets have different incentives than you do. They’re playing a different game. They’re not pitching the long term, stay the course story. They’re playing on human emotions to keep you coming back. The easiest solution is to just turn off the (financial) news. But if you insist, at least consume it with a critical eye. Realize the conflict between where the media wants your attention versus where it should be.
Charlie Munger once said:
“In my whole life, I have known no wise people who didn’t read all the time—none, zero.”
Reading is a window to the world outside us. There is no better way to get a broader perspective than reading. Some will leave you in awe. Others will disappoint. Some will drive you to make a change. The next one will help you realize you’re doing just fine. But all books teach. Reading brings understanding and perspective—two things that are vital in making solid choices with money and in life.
If you don’t read now and have a hard time creating the habit, I’d say start reading something that interests you. Read what you like until you like to read. Start small. Five pages a day. Then go from there. You’ll be amazed at the impact it can have.
Here is my ‘improve my money mindset, knowledge, and habits’ starter pack:
1. The Psychology of Money by Morgan Housel
2. Atomic Habits by James Clear
3. The Laws of Wealth by Daniel Crosby
4. Thinking in Bets by Annie Duke
5. The Book of Joy by The Dalai Lama, Desmond Tutu, and Douglas Abrams
Make Your Own List
This is my list. These are things I’ve overlooked at one time or another. I’m constantly needing to remind myself to come back to these things. My mind goes elsewhere. I get distracted. I’m always needing a reset. But when I focus my attention on these habits I notice a big difference in my life.
I think this list would improve anyone’s approach to money and life. But maybe you have a different list. That’s good. Make your own list and keep coming back to it. Change it as you grow and change—because we all have things we’re overlooking. At times, each one of us is seeking success in the wrong places. Sometimes we just need a reminder to reset and focus on the things overlooked. I hope this helps with that.
Here’s to making money matter!