Shawshank Redemption has been called one of the greatest films in history. Not only a great film, but a pretty darn good personal finance lesson too. Compare the journey of Andy Dufresne's (Tim Robbins) to your own personal finance journey. Basically, Andy dug his way out of prison with a rock hammer (tiny little hammer that fits in the palm of your hand) and about 20 years of perseverance. A great illustration of moving a mountain with a spoon (it takes a long time, but it can be done)! If you haven't seen the film, here's a great summary from Wikipedia. Andy obviously had some hardships in his life that led him to prison. While he was in prison he had even more hardships with the life in prison and he devised and enacted a plan.
Similarly, many of us have found ourselves, to varying degrees, stuck in a financial prison and taking the hard knocks that life’s lessons can dish out. At some point we've realized that we need to dig our way out. I believe all of us can track our memories back to a point when we had an epiphany in our financial education. Some point when we finally realized we need to have a plan to attain some kind of financial goal in life.
Throughout our financial education we've realized even more epiphanies where more and more aspects of personal finance become ever clearer. These are great moments in our lives that lead to a new level of prosperity. Like realizing that not investing in a 401K is like giving money away to Uncle Sam and your employer. Realizing that having a mortgage vs. renting can allow you to save money, build for retirement, and build equity. Learning how your fico score affects getting a great mortgage. Learning how to invest that 401K money in index funds. Learning how to attack credit card and other debt. The lessons are endless and multi-faceted depending on each of our individual situations.
One of my great epiphanies was learning that I have the best chance of achieving my goals, by breaking my action plan down into manageable tasks. Before that, I would shotgun attack the problems at every angle. We can all probably feel the similar realization of our goals when we've made strides in our own personal finance education. The strides were likely made when you implemented little lessons one at a time in bite size fashion. This serves several purposes. First, we avoid being overpowered by the problem. Second, it allows us to realize progress and be encouraged to continue the journey.
Whenever I realize I need to learn something or grow in a particular area, I'll research online and in the bookstore to learn more. Then I'd look for a good place to take that first step. There are many little teaspoons of wisdom that I've tasted over the years that have helped me realize my financial and life goals. I hope to blog on each of these in more detail soon.