No, I'm not a bankruptcy attorney. I'm simply a man who remembers savoring those delicious sugar-stuffed treats as a boy. But at the same time, I'm reflecting on two critical financial lessons I learned chasing my chocolate high.
Ding Dongs taught me a few things that Twinkies never could. You see, I was entranced by those little hockey puck cakes. I would do anything to down a dozen or two of those babies... and I often did. And therein lies the financial wisdom provided by the late great Hostess International.
My parents tried hard to conceal those fine delicacies of the gods. But no place was beyond my reach. I had the time and the motivation to find and then liberate my Ding Dongs from this worldly hell into my chubby stomach -- so I did.
At some point, I realized that I could apply that concept to other endeavors. I learned that with enough effort and commitment I could achieve more than I otherwise thought I could.
How can you apply this lesson?
What financial goal eludes you? Are you trying to get out of debt or build an investment account? You probably consider yourself committed. But if you aren't getting the results you want and you can't figure out why, the problem may be that you aren't as committed as you think you are.
Be bold. Imagine that you have a friend trying to overcome the same challenge you face now. What advice would you give her? What other step does she need to take in order to reach her goal? My guess is that the answer is plain as day.
My experience tells me that lack of knowledge isn't the main reason why we don't end up where we want to be financially. The problem is lack of willingness to do what it takes. This sounds cold and harsh I know. But it is true for both you and me.
This is not to say that you must achieve every goal you think up. It's no problem to decide that the prize isn't worth the effort. But it is important to be conscious of this dynamic. By being aware of the reason for your circumstances you can make better decisions. No more feeling stuck and hopeless. No more victimhood. Enough said. Let's move on to the second genius concept those Ding Dongs provided.
It took me about 25 minutes to devour a dozen Ding Dongs when I was in my prime. That includes removing the goodies from their protective silver foil wrapping. In other words, I was able to eliminate half a box in less time that it took to watch a Batman episode.
Unfortunately there was a distinct downside to my dirty Ding Dong deeds. First, I would get grounded -- a fate worse than death for a pudgy 11-year-old who needed the exercise. Second, within about 30 minutes, my stomach would let me know that my behavior was simply unacceptable. Let's leave it at that.
While I never really applied that lesson to my chocolate sugar habit, I did recognize and use this principle in other aspects of my life -- especially in finance. Let's look at three applications of these principles:
Most bright and shiny objects are our enemy. Of course you should enjoy life. And if that means buying a toy that you can afford by all means do so. But think about the trade-offs and spend responsibly.
The litmus test I use for spending is simple. Does trading money for a product or service bring my family closer or further away from our most important financial goals? If the answer is that this outlay is consistent with our mission, out comes the credit card. If it doesn't I just keep walking. The short-term pleasure just ain't worth the cost.
Long-term investing requires long-term thinking. I would love to see my investment accounts rise in value every day. Unfortunately that isn't possible. If I want to achieve my long-term goals I need to forgo short-term certainty. I need to deploy my investments in growth funds and ETFs. Those investments rise and fall in value on a daily basis. There is no getting around this.
If I want short-term certainty I have to forgo my long-term goals. I recognize that and invest accordingly.
I update my financial plan every year. It's a pain and it takes a little work. I'd much rather be out stock piling soon-to-be-extinct Hostess desserts. But the price I pay if ignore this all important financial act is just too great. And although I update the plan every year, the plan itself projects out many decades. I update it only because the situation on the ground rarely works out as forecast.
My focus is to take daily action that is consistent with my long-term goals. Over the years this tactic has really paid off. I am not a gazillionaire but I am far better off than I would have been had I not approached my finances with these two principles.
Little did I know as a rotund pre-teen that my precious lovely Ding Dongs were providing crucial money lessons as I munched. I learned that perseverance and hard work are the secret sauce to achievement. And I learned that it always makes sense to pause and consider the trade-offs before making most decisions.
Did you learn similar lessons from your favorite kiddie snacks? What were they?
Neal Frankle wrote this post. He is a Certified Financial Planner in Los Angeles and blogs over at WealthPilgrim.com. He writes to help others make smarter financial decisions so they can enjoy their lives more. He's been in financial services business since 1986 and has been interviewed by the Wall Street Journal, Investors Business Daily, Business Insider, Consumer Reports, Smart Money, The Chicago Tribute, The Los Angeles Times, Forbes and TheStreet.com.