No, this is not turning into a food blog. But this post is all about food. And it’s also not all about food. It might be a forced metaphor. But that’s OK. It rings true in my warped little world. And since it’s my blog, I get to talk about whatever the heck I want. Here I go:
Microwave or Slow Cooker (or something in between)? What’s your way? What does each of these say about your money? And what’s the best way? When was the last time you ate from a slow cooker? If it’s been too long than you might not know the right answer: Of course it’s the slow cooker! Those things make delicious food. And the slow-cooker method to personal finance makes for a yummy balance sheet too…
To be clear, this bold conclusion is based on a whim, not on any data. It’s my opinion. But, to me, it’s a no-brainer. Maybe there’s a study out there, but I haven’t seen it – if you have, send it over.
The point of this post is just to make you think a bit about money through comparing it to something we can all relate to - food – something we feel (or taste) every day. Slow and steady is something people who haven’t achieved financial freedom (like me) - people who aren’t “there” yet - have trouble grasping.
Perhaps if you compare it to cooking, it will change at least one person’s philosophy – and game plan.
So, do you have a slow cooker sitting on your counter? I do. And it just hit me (not literally, thank God). I rarely use it (probably because I rarely cook). But when I do I almost always think two things: (1) wow, that tastes great; and (2) that wasn’t as tough to make as I expected – I’m glad I used it.
Slow cooking requires a similar planning, attention to detail and patience as proper money management. The slow-cooker method of cooking will result in a better tasting meal virtually every time. The slow cooker method of personal finance will result in a better financial picture virtually every time. It will also involve less risk, build a solid foundation and will almost certainly be less stressful and involve less personal time, effort and attention. You “set it and forget it” (not 100%, but compared to the microwave method, it might feel that way). It is slow, steady investing, avoiding of debt, automating savings and budgeting. It requires initial planning (i.e. getting the right ingredients, setting the slow cooker to the right setting and following the right recipe for the right amount of time), patience and a trust in the plan.
The microwave method of cooking will result in edible, but soggy, dry or bland food almost every time. Sometimes the food will not even be edible. Other times it could be great (but that’s probably more lucky than good – and it’s also probably with highly processed, unnatural foods). But you never really know how it’s going to turn out. Personal finance equivalents are no-money down plans programs, 90-day same-as-cash plans programs, risky investments like options trading and other things like that. If it works right, it works well. But if it doesn’t, and it doesn’t most of the time, it can hurt you fast and cause a lot of damage.
So next time you’re considering an investment, insurance product, loan or even a purchase think back at the last slow cooker meal you had. Remember how good it tasted and how, once the ingredients were in the slow cooker, how easy and delicious it was! Sure you probably went over and opened the top once or twice to sneak a taste (my wife hates when I do that – patience is probably the toughest part of slow cooking and slow-cooking financial planning). But when it was done, it was worth it. And with the personal finance equivalent, checking in on your plan is important. You can’t completely ignore your progress and check in. It’s only significantly less hands on. There’s no complete auto-pilot financial plan that I know about that does not include a lot of risk or very, very low returns.
Now that you have that delicious slow-cooker meal making you drool, ask yourself whether there’s a slow-cooker alternative way of doing things to achieve a similar result in your personal financial planning (i.e. planning and automating a slow and steady, but less risky, alternative – mutual funds v. options, saving up to pay cash for something instead of financing it, etc.). If there is, that could be a much better choice.
Now I’m hungry.
Until next time, put your credit card down and slowly step away from the mall!
Image: photostock / FreeDigitalPhotos.net
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