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Once you start tracking your life, your attention will be focused on the smallest things you are doing right, as well as the smallest things you are doing wrong, says Darren Hardy in ‘ The Compound Effect: Multiplying your success, one simple step at a time ' (Vanguard). And, when you choose to make even the smallest course corrections consistently, over time, you will begin to see amazing results, he assures.
The ‘small' course corrections are the truly invisible ones, the author clarifies. He reminds, therefore, that there may not be any immediate fanfare, applause, congratulations card or a trophy for the littlest disciplines you may adopt; but the payoff over time can be exceptional. For instance, “The real cost of a four-dollar-a-day coffee habit over 20 years is $51,833.79. That's the power of the Compound Effect.” Assuming an interest rate of 8 per cent, he computes that every time you spend a buck today, it is like taking five dollars out of your future pocket.
Looking back, the author traces how he learned the power of tracking the hard way, after he had acted like a colossal idiot about his finances. “Back in my early twenties, when I was making a lot of money selling real estate, I met with my accountant. ‘You owe well over $100,000 in taxes,' he said. ‘What!' I said. ‘I don't have that kind of cash just lying around.' More sobering was the advice the accountant had to offer, thus: “You're spending money like a drunken fool, and you don't even know how to account for it. That's stupid. Stop it. You are now seriously in the hole. You have to earn more money that you'll owe additional taxes on just to pay for your back taxes. Continue this, and you'll dig your financial grave with your own wallet.”
Money log for thirty days
The author's reformation began with a small notepad in the back pocket, to write down every single cent spent for thirty days, be it a thousand dollars for a new suit or fifty cents for air to fill up the tires. Keeping a money log for 30 days straight cemented a new awareness within, and created a completely new set of choices and disciplines around spending, recounts Hardy. He avers that tracking is his go-to transformation model for everything that ails him. “Over the years I've tracked what I eat and drink, how much I exercise, how much time I spend improving a skill, my number of sales calls, even the improvement of my relationships with family, friends, or my spouse. The results have been no less profound than my money-tracking wake-up call.”
How do casinos make so much money, reads another question posed by Hardy. Because they track every table, every winner, every hour, he replies. So, too, Olympic trainers who get paid top dollar track every workout, every calorie, and every micronutrient for their athletes, he adds. “All winners are trackers. Right now I want you to track your life with the same intention: to bring your goals within sight.”
Make the correct choice every day, every week for many years, and you can quickly see how you can become financially abundant, he urges.
Instructive study that highlights the value of intelligent book-keeping.
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