The more I learn about managing my own money, the more I’ve come to realize that improving your financial picture consists of two things:
- You need a plan.
- You need your plan to be simple (as automatic as possible).
And, while the photography-related quote I’ve chosen for this post reverses the order, it demonstrates the concept quite well.
f/8: Keep It Simple and Automate if Possible
I would be willing to say that, despite the fact that our cellphones allow us to take more pictures than ever before, most people have no idea what f/8 means to photography. That would be because most people these days point their phone at something and touch the screen (or the volume up button) to snap a picture. Even if you have a fancy, stand-alone camera with buttons and dials on it, chances are you use a mode on your camera called “Auto”. That’s kind of the idea behind what the “f/8” part means.
f/8 is a setting on our cameras known as aperture, and basically controls the amount of light that passes through the camera’s lens. The larger the number, the less light is allowed to pass through the lens and reach your camera’s sensor (or the film, for the purists) to make your photo.
An aperture of f/8 is very specific; it’s not necessarily the right setting for a particular situation, and it may not suit an individual photographer’s specialty or style. While some environments may require some special tweaks apart from what we would normally do, not everyone is shooting photos of the Milky Way or photographing rare wildlife. For most of us, a simple setting on the camera, or letting the camera adjust for us, lets us capture most of the memories we care about. In fact, the best way to miss a shot (other than not having a camera in the first place) is to make changes to your camera settings when the action is happening around you.
Our money works in much the same way. We don’t really need a lot of fancy investment vehicles and constant tweaks to achieve most of our goals. For most of us, picking a financial strategy (how much we save and what investments we choose) and going with it will get us to our destination. Direct deposits and money transfers can automate how much we save and when. And, just like our cameras can adjust for us via the Auto setting, many types of financial accounts offer automation by way of rebalancing features and robo-advisor algorithms. As for what types of investments and how much of each, I’ll touch on that a little in another post.
Be There – Part 1: Do What Others Will Not
There are a couple of aspects of “being there” that I think apply to how we handle our money. The first has to do with what it takes to be there in some photography-related situations. In photography circles, what is considered the best light occurs around sunrise and sunset (often referred to as the “Golden Hour”); a landscape photographer will often have to make long drives or hikes in the dark, and/or camp out overnight to be there for their desired shot. For a wildlife photographer, maybe some animals are only active in certain places at certain times of the day, requiring that individual to be in odd places at odd times. For photojournalists, maybe it’s a dangerous warzone that will get you the photos that pay your bills, meaning they sometimes risk their lives for livelihood.
In short, sometimes you make sacrifices to get the picture you want.
It’s the same concept with our financial pictures.
Unless you are independently wealthy (and, if you’re reading this, it’s likely you are not), improving our financial situation will require some sacrifices, not to mention the difficult decisions that go with those sacrifices.
No, I’m not going after your daily coffee, per se. But, the fact of the matter is that, with limited resources, getting one thing might mean giving up another. You can give up buying coffee (or some other expense) to increase your savings rate, or perhaps, you temporarily give up a little time to earn more money to make that coffee more affordable to you. Prioritizing what is important enough to keep or not, is ultimately up to you.
But, as a photographer builds up a portfolio of photos, you can build up a portfolio of financial and personal wealth that will allow you to begin adding some things back over time. (That is, if you don’t realize some of those things you gave up were never really important to begin with.)
Be There – Part 2: Taking the Shots
Imagine a photographer that never took a photo.
He (or she) has woken up at 2AM, hiked for miles in the dark over rough terrain, set up the camera and waited for the ideal moment. The sun rises, casting a perfect golden hue across the countryside. Why, even a large grizzly bear enters the shot, stares briefly toward the camera lens, and casually moves on after deciding not to kill our imaginary photographer for food.
After a few hours of waiting, our photographer packs up and heads back home with exactly zero photos to show for the journey.
Doesn’t make any sense, does it?
It doesn’t make sense when we’re talking about our money, either.
A photographer has to take the shot and make the photo look how he wants it to look. And, we have to implement our financial plans to reap the financial results.
Not all of our financial pictures will turn out the way we want them to along the way. But, we have to make the effort and implement our plan to find out what works and what doesn’t.
Thank you for visiting Finunciate. Come back soon.
For more information about this post, see the other parts of the series or email me at email@example.com with any questions you may have.