Foundation 2: The Value of Pre-Decisions

Today, we want to introduce you to a young entrepreneur named Joe. She had dreams of launching her own business, but felt overwhelmed by the daunting task ahead. She got stuck in crafting her pitch for potential investors. Joe found herself procrastinating, never making progress on her pitch, and then never getting investors. Then an unexpected opportunity arose, a chance to present her idea on a platform resembling Shark Tank, but with a tight deadline of just one week.

Suddenly, Jo's mindset shifted. With the clock ticking, she focused her energy, working tirelessly day and night to refine her pitch. In the process, Jo discovered the power of what's known as Parkinson's Law. She started applying it not just in business, but also in life itself. She realized that when faced with constraints, she could accomplish far more than she ever imagined. This revelation seeped into her approach to money as well.

She learned to prioritize what truly mattered, allocating her resources using percentages rather than flat amounts. Um, and as her income grew, she embraced this idea of making predecisions, ensuring that any increase in earnings would be channeled towards securing her financial future. Through determination and strategic planning, Joe not only succeeded in her business venture. But also found peace and abundance in life and in her financial journey.

As she stood before the investors, she knew that no matter the outcome, she had already won by mastering the art of making every moment count. Want to be like Joe? Keep watching. In a world where chaos seems to reign supreme, where uncertainty lurks around every corner, and financial markets are now more unpredictable, there's one place you can turn to to find clarity and control. Welcome to the Wealth Wisdom Financial Podcast. Hey, I'm Brandon.

Join us as we dive deep in the world of personal and business finance to assist you in navigating through the chaos and building the financial future you deserve. We believe when conventional financial thinking doesn't get you where you want to go, you need wealth wisdom. So if you're ready to take control of your financial destiny, tune in to the Wealth Wisdom Financial Podcast. Because in a chaotic world, your money shouldn't be. Subscribe now! And never miss an episode.

So we're doing a series on 12 principles that come out of this book, the book, Five Smooth Stones. And really in this Five Smooth Stones book, we talk about moving from chaos to financially still, which isn't being still, but it's being intentional. And today we're going to talk about Law and if you missed last week, uh, go back, uh, and watch it. And we talk a lot about the principles of the first on last weeks. That is the next section. But today is the value of pre deciding.

Yeah. So this is foundation number two. You missed foundation one, go back and watch it. Like Brandon was just saying, also remember.

You might have already heard of Parkinson's law. A lot of people have heard about it. It's pretty famous. Rather than saying, I know this already, think how could you apply this to your situation better? And we hope you get some tips, some ideas, some fresh inspiration today so that you can use Parkinson's law to better your financial future, your business future, your life future, however you want to improve. Let's go.

Okay. So kind of like Joe, if you had one month to create a new business, write a pitch to gain your first customer, how long would it take you? Um, a long, the whole month or yeah. If you were told in one week, you had to present. How long would it take you? Probably one week. Yeah. Um, no way you're passing up that opportunity. This is what's known as Parkinson's Law. So a little history here.

Parkinson's Law is a concept that originated as the first sentence of a humorous essay published in The Economist magazine on November 19th, 1955. So is it new? Parkinson's Law is new? It's new work, right? Um, the essay was written by Cyril Northcote Parkinson. Um, he was a British naval historian and author. So Parkinson's Law is often stated as, Work expands to fill the time available for its completion.

In other words, this law suggests that the amount of time it takes to complete a task is the amount of time you allow to complete it. Yep. Um, it's, uh, Yep. Yep. rather than like the complexity or the workload or all those kind of things. When we apply Parkinson's law to money, we find that there are two main opportunities. Before we dig into those opportunities, anything you'd add there, history of Parkinson's law, what it means in general?

I mean, not so much what it means, but I, but I think if you're a business owner, and usually if you're a successful business owner and you get things done early, people will say, Oh, you're good at that. I'm going to give you more information. More stuff to do. Yeah, if you want something done, ask a busy person. Yeah, yeah. And then, um, the busy person just knows how to batch or do other things, which is, uh, something I think about. Uh, I am not as good at Parkinson's law as you are.

Um, which is, which is true, and, but also I know I, if I have a deadline of like, I don't know, continuing education, having to do all that stuff, I'll get it done, uh, and oftentimes, if I know it's way off, I'll wait. Yeah. Which is, Literally, I'm like, Oh, I shouldn't be doing this, but I need to combat Parkinson's law. Yeah. This is a great thing. A lot of people don't like discipline and deadlines and those kinds of things.

But when you look at what it can do in terms of helping you get something done faster and easier, so you have more time to relax, right. Or the discipline that actually gives you the freedom. Um, that's what we're talking about here. The deadline that actually lets you relax instead of dragging that task on and on the importance of deadlines. Very good. Okay.

So with money, um, it talks about like prioritizing what really matters, doing that first, giving yourself deadlines and disciplines on that. We talked a little bit about that with the principle of the first last week and we are in foundation one. A common rule of thumb is after you've kind of done the first things that giving saving is often put bills and other required obligations next.

So if you have a hundred percent of income and you gave a percentage, you saved a percentage, Then you cover the items that are required or else you're going to have some kind of penalty, a late fee, those kind of things. like your rent or mortgage, your utilities, your debt payments, your insurance premium, cell phone bill, et cetera. The rule of thumb is that these bills should be no more than 30 percent of your income, which for some people are like, whoa, whoa, whoa, whoa, whoa.

These are like 110 percent of my income right now. Okay. Deep breaths. It's going to be okay. Um, don't panic at this point. You're just becoming more aware of what they are, what percentage of your income they make up. Awareness is essential before change can happen. Don't move too quickly from awareness to change. Stay here with us. Let's say you get to the point where you're giving a 10%, you're saving 10% for the long term, and your regular obligations are 30%. That's 50%.

What do you do with the other 50%? All kinds of other cool things, right? Um, by car to simplify, oversimplify, maybe it doesn't matter. , um, really? Yes. Too many people get so caught up in doing the quote unquote right thing. with the other 50 percent that they feel really way too restricted and constrained with their financial story and the adventure that's unfolding. At this point, give yourself permission to, um, you know, work out the first 50%, right?

And let the other 50 percent take care of itself. We'll craft more of that later. We'll see what can come up. Um, just, just, um, Parkinson's law, like, constrain, well you can constrain, and uh, it's okay to let the rest kind of be okay for now, and we'll come back and dig into more of it as we get through more principles. So it's number one. Anything you'd add to that before we move to number two?

Uh, I mean not really, but except that um, Redeciding is really important because again, I've said this many times, if you don't have a plan, someone else does have a plan. Yeah, so that is number two. It's about pre decision. Actually, before we get to number two, with number one, if you are having more than 50 percent of your income going to regular obligations, even debt payments, we want to talk to you.

There is often leaks that we can find in terms of interest payment, taxes, inefficiencies, that without feeling like you're spending more, that you can be able to shift more to giving, to saving, to bettering your financial future. So if you want to find out what that is, we've got a special offer for you. Ready to take the next step towards securing your financial future?

Whether you're planning for retirement, saving for your dream home, or you just want to make your money work harder for you, the team at Wealth Wisdom Financial are ready to assist you. And now, it's easier than ever to see how we might give you a boost on your financial journey. Schedule a 15 minute discovery call with one of us today, and let's discuss your questions and your financial goals together. Don't wait any longer. Your financial freedom awaits. Schedule your discovery call at www.

wealthwisdomfp. com slash call. Now back to number two.

Yeah, so I also want to think about this from a business perspective, right? You know, we, we're running a business and we, we've kind of done the, uh, profit first model. And, but yet we have staff, we have other things coming where we're really busy. How do we use that pre decision? As a business owner. Yeah. So the flip side of Parkinson's law is what happens when your income increases, when you have more revenue or real revenue in profit first language.

What most of the time happens is that people's expenses expand to that increase, right? Your operating expenses get bigger. Um, if you're not fully implementing profit first, you forget to add more to your profit or your tax account, those kinds of things. But when you are using percentages and you, if you're following profit first to a T, all those percentages just get bigger. So you do have more for staff.

Um, but also if you do have a decline, then you're You gotta remember that you have to make adjustments. You can't keep going in the same exact place. Same with personal income. What happens to some people is they've got a certain level of pay and then they get laid off for a season or maybe they have a contract and their contract doesn't get renewed and they're gonna lower contract next, you know, however that works.

Anytime we see a decrease in income, We need to immediately be thinking, what do I need to decrease my expenses? How can I decrease? What does that look like? And too many people don't do that and they end up in severe credit card debt. That is hard, really hard to get out of. And once you get into it. So, um, but what's, um, a really amazing triple underscore here is when you're working with percentages, it really, really helps.

So let's say you have a hundred percent of what you're making and you put, you know, 10 percent to saving, 10 percent to giving, 30 percent your obligations and then the other 50 percent you can use for, you know, groceries, clothes, whatever, you know, it doesn't matter at this point. Um, if all of a sudden your 100 percent gets cut in half, then all of those things get cut in half, but you still have a lot of obligations, right?

Your rent's not going to get cut in half just because your income got cut in half. So that's when you've got that cushion to use some of that other part that's going to the fund to help meet those obligations. All right. Um, but also you're giving and you're saving also cuts, so then it's easier to make that happen.

The same when you're doing profit first, because we're using percentages, as you get increases, your expenses aren't increasing with those, and then when you have decreases, you're able to see that decrease and make adjustments more quickly. So, um, what we're going to invite you to do is just start with dreaming a little bit of what you would do if you saw an increase of your income. Make the commitment that you're going to give more, you're going to save more, um, what that increase would do.

Imagine what you're able to accomplish as you increase your income. every area of your financial life. What I've seen happen time and time again for myself and for other people is that with more vision, that increase actually comes. It increases the odds of that inflow coming in. And we create our own luck, right? Somewhat like that. And the confidence that you can get, maybe that's what does it. Maybe it's a universe. Who knows? I don't care. I've just seen it happen too many times.

So, um, The invitation here is actually, we've got this amazing five smooth stones. Yes, we're the authors of it. Week two is the value of pre decisions. So we've got some amazing questions in here that you can answer to um, increase that expectation, create that vision. What will you do as your income increases? Make those pre decisions. You can get your very own copy of this, whether the paper, physical version, or the Kindle version at wealthwisdomfp. com slash shop.

Brandon, I've been talking a lot. What do you want to add?

Um, what I want to add is, you know, just doing this, just getting the book again, I mentioned this in the last episode, um, isn't wisdom. It's actually wisdom. Uh, doing the steps and then deciding, pre deciding what you want to do. And then if you want a big car or whatever, you've already pre decided, Hey, I really value a nice fancy watch, right? Or whatever. You pre decided that and is, if that's in the 50 percent bucket and you can do it. Go for it. It's great. Whatever.

Um, and then if you decide, Hey, I really put that on my vision board. You pre decided for that. And then you have the money and you're like, eh, I don't really care anymore. That's okay too. But you have to pre decide what that is. Again, I did an episode on this a few weeks back. Most people are, are putting their head in the sand when it comes to this, but we want to give you the power to pre decide your future, not just binge on whatever the next show, um, I did suits last time.

I don't know, um, House Hunters International. I don't know. Whatever it is. Yeah. So, um, this, I, this idea of creating a vision, pre deciding what you're going to do with an inflow is super important if say. You have older parents who may be leaving you an inheritance. Being able to have an idea of what you're going to do with that when it lands and you can start researching and learning and all those kind of things.

There's going to be a ton of wealth transferred over the next couple decades as the baby boomer ages. And you know, as kids of the baby boomers, we're going to be receiving, hopefully, I don't know about us, but hopefully you are receiving inheritance. This is a great opportunity to dive into it, explore it, but also apply those lessons to the next bonus you get, the next pay increase, the next deal that you close, whatever that may be in your future. Again, wealthwisdomfp. com slash shop.

Brandon, take us home. Yeah, I do want to say on the flip side, um, That, you know, I'm also a caretaker, right, and some of the, uh, family members who have been on the other end, who we might have to be taking care of them, and we're seeing that they didn't make those pre decisions, um, you want to be not like that, if that's the case. I thought we were going to end on a positive note. So, so, pre decide. what you want to do, uh, as well.

Like, both positive and negative, um, from our, um, backgrounds to move forward. So. Okay. We hope you live long and profit. Hit subscribe so you don't miss, um, foundation number three coming to you next week here on the Wealth Wisdom Financial Podcast. The topics presented in this podcast for general information only and not for the purpose of providing legal advice. Accounting or investment advice on such matters. Please consult a professional who knows your specific situation