Matthew McConaughay’s acceptance speech at the Oscars is one of the most well-articulated, insightful, and logical pieces of wisdom that one could consider when it comes to defining a mantra for oneself. He defines his philosophy as an infinite asymptotic chase of his hero- always striving to reach his level of excellence.
Here is an excerpt from his speech-
When I was 15 years old, I had an important person in my life come to me and ask me, “Who is your hero?” to which I replied, “I don't know. I have to think about that. Give me a couple weeks.”
I returned after two weeks and the same person came up to me and asked, “Who's your hero?” this time I replied, “I thought about it, you know who it is? It's me in 10 years."
So I turn 25, 10 years later, and that same person comes up to me and asks, “So, are you finally a hero?” to which I took some time and then replied, “Not even close. Not right now. My hero is me at 35.”
You see every day, every week, every year of my life my hero is always 10 years away. I'm never gonna be my hero, I'll never attain that. I know I'm not, and that's just fine with me, because, that gives me the motivation to keep striving to be better" he said.
Establishing a strong philosophy is fundamental to success, indiscriminate of the domain that you work in. This can be applied to life, finance or otherwise. Here at Dezerv, we believe that a strong foundation in good habits has a strong correlation with building wealth. You will find that the economic value you generate is a function of the strength and quality of the habits you create.
Be like McConaughay. Define the best version of yourself and continuously update your ideals as you grow.
Here are the 6 commandments you could incorporate as a starting point for your Personal Finance Philosophy:
1) Adjust your lifestyle- This is the easiest short-term hack to increase returns. Moreover, you’ll be surprised as to the long-term impact it can have on your net-worth. Our very own Rakesh Jhunjhwala has the following spending rule:
Cut out unnecessary expenditure wherever possible. Evaluate each expense when you pull your card out to swipe. For example, which will give you more utility- the Rs 10,000 to spend today on this bag? Or the compounded value at Rs 1,02,451 to spend 27 years later at retirement. (assuming a 9% CAGR)
2) Don’t fall prey to social signalling when making purchases- We often misconstrue society’s value on our material possessions. People care far less about the flamboyant purchases than you think they do. Not only are are these not giving you the intended benefit, you’re also making significant dents in your wealth.
3) Create your financial plan for the long term- The easiest way to stagnate your wealth creation process is by trying to find shortcuts. Investing is not a video game where you can find cheat codes. Compounding is quite literally a cascading effect that works most effectively over time, don’t force it.
4) Build an emergency fund- Make sure you’ve hedged your risks against unforeseeable events. Everyone is susceptible to factors such as fraud, job instability, losing one’s house to a divorce, natural calamities, accidents and others. However, from a psychological standpoint, people that consider themselves “wealthy” or “smart” label these as instances that happen to regular people. Don’t be complacent and be a victim of your own biases. It can happen to anyone, touchwood that it doesn’t happen to you. But, even if it does, you’ll be prepared for it.
5) Make room for flexibility in your investment strategy- In the rapidly changing climate of today, a big blunder that you could make is a rigid devotion to your approach. Don’t get attached to your method and be open to views which could help refine them.
6) Don’t be in denial of your emotional shortcomings- Accept them and build a plan that incorporates adjusting to them. We’re all as vulnerable to fluctuating serotonin and endorphin levels. Don’t make important decisions when you know you’re on a high or a low. It could significantly impact your future. Always get a second perspective of someone you look up to and can trust.
Assess your emotional flaws, your goals, your weaknesses and holistically define your plan. Try to cultivate this manifesto in the form of habits in your everyday life, and iterate on it as you grow. In another multiverse, your future self has already reaped the benefits of this and is thanking you for it.
Pen down your plan and be your own hero. We're rooting for you.
Author: Team dezerv.
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