How far forward do you plan?
Some very smart people insist that five year and ten-year goal setting is not realistic. That there is no way to project that far and know what will happen with the economy, your industry, or even the state of the world.
I see their point, but they are wrong. And one thing proves it: these same people are happy to sign a seven-year loan on a new car.
See the irony?
The car loan idea is an easy way to wrap your head around the goal of growth.
Let’s pretend you buy a new car. As a wine sales rep, how much more would you have to sell to see $300 more per month in your pocket? What if there was no option, that you simply had to make another $300 per month to keep your life sustainable? Failure is not an option. What would you change in your workflow to achieve that extra $300 a month?
$300 a month, at 10% growth, compounded monthly, earns you $11,387.50 of interest income over the course of the seven years, for a total of $36,587 in the bank. Makes buying that new car look kinda foolish, uh?
Then hold that money for twenty more years, never putting another dime in. At 10% compounded monthly, you now have $268,000 in the bank.
So anybody who says you can’t plan five or ten years out needs to realize something: we talk in these timeframes all the time regarding car loans. Start to shift your thinking to saving money instead, realize the power of compound interest, then start planning five or ten years out. Makes going to work more fun. It’s also a good spur in your side to make that one extra sales call at the end of the day.
Trust me, in 35 years you’ll appreciate it. Why 35? Because that’s when the $300 a month you saved for seven years a long time ago turns you into a millionaire (specifically $1,194,166.62 in the bank).