In his best-selling book and viral TED talk, Simon Sinek challenged business leaders to “Start with Why”.
He shared his Golden Circle theory which, in a business context, helps leaders differentiate their value proposition. The neuroscience behind this theory is that we respond best when messages communicate with the parts of our brain that control emotions and behaviour.
He says there are three parts to the golden circle:
He starts in the centre with Why (our purpose) then How (the process) and What (the result).
Whilst his theory is aimed at businesses and leaders, this is also a very powerful personal money skill.
Your Why is your purpose and in this context, your purpose & motivation for having, increasing, channelling or growing your money.
Your Why will be deeply personal and it is this that will drive and motivate what you do.
Think about what your money goal is; for example an early retirement.
Ask yourself Why.
Is it more time!? Maybe with family, friends or travel. Is it freedom, is it the choice?
To create memories, to be present and connected to those you love, for the joy of exploring new and different cultures.
Spend some time asking yourself Why? Peeling back the layers with more questions until you’ve moved from the What (in this example, an early retirement) to the reasons and motivation you have for this.
Your Why is emotional, it is not about the money, but your money becomes the tool to help you achieve it.
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The How is the process, the set of steps and actions you need to take to realise your Why.
There can be many How’s with money which adds to its seeming complexity. But knowing your Why helps to filter out ones that will support that you purpose.
Let’s take the same example. To make work a choice before retirement.
In order for you have that choice you will need to create the income needed for your future, sooner.
How you do that could be a combination of increasing income, generating passive income, reducing spending, cost cutting & significantly Increasing savings, in particular investments.
You may prefer to work more now, spend significantly less for the freedom to make choices later. Behind this How will be the practical money skills and management required to support this process, for example eg budgeting, investing & utilising your pension.
The What is simply the results.
So in this example, the freedom to choose an early retirement with the financial means in place with which to achieve it.
Where there’s a Why, there’s a Way
Without a purpose, money can easily come and go. We may miss the opportunity to save or invest with intention, may spend without intention or miss chances to ask, or create, a higher income.
With a clear (Money) Why, you will find a way and the How will become the vehicle for your Why to drive.
Don’t know your (Money) Why?
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