What Traffic Can Teach You About Money

Yesterday I was stuck I traffic for two hours.   I decided to make good use of my time and jot down some thoughts for the article that you are now reading.  I once read a blog about how writers find inspiration from every day experiences and then turn it into content that is relevant to the subject at hand.  Yes, I got financial inspiration from traffic jam. I guess I was where I was meant to be at that particular point in time.  These are the lessons I drew from that experience and the many traffic jams I have been in.

1. It is OK to be still.  Sometimes we have a problem with not doing anything for a while. We want to rush in and be at the centre of all activity.  In traffic jams you have no option but to stay still unless your car can fly.  Even with money, it is OK to not do anything for a while.  Many people have rushed into investments or financial products without taking time to understand what they really want and what they are getting themselves into. Sometimes we feel like we are playing catch up and want to sign on to the first thing that comes along our way.  This is especially true for those who have received a financial lump sum of some sort.  This could be a bonus, investment payout, sale of an asset etc.  If you don’t know what to do with it, don’t let someone else rattle you with your opinions.  Be still.  Take time to do the research and learn.  This doesn’t mean you necessarily keep the funds in your bank account.  You can be clever and earn some interest as you think.  Put the funds in a deposit account with your bank, a money market fund or even a short term Treasury bill.  These instruments will keep your money safe and earn you some interest.  More importantly the money will be out of your transactional account where you might get tempted to spend it. It’s better to take three months to do the right investment than do it in one week and regret it later.
2. I took that particular route and found myself in the traffic jam. I had to accept that there was absolutely nothing I could do about it then.  How often have you wished that you had taken a different route? Do you chide yourself for not having thought of that before?  Have you made mistakes in the past?  Do wish you had started investing earlier?  Do you wish that you hadn’t taken all that debt?  Do wish you spent less last month?  We can’t reverse the process.  There is absolutely nothing you can do about what you have already done prior to the current second so don’t get stuck in the “I wish it was different” game. This acceptance brings a lot of peace. Let it go and just start doing something different now. Invest now, spend less, pay down debt, learn more etc.
3. The fact that there was a traffic jam on a busy road at 4 pm really should not be a surprise. I could have planned my time better and left earlier.  We have financial traffic jams and we will get stuck if we continue treating them like a surprise.  The holiday you want to go for in December is not a surprise. School fees is not a surprise. Plan for them early. Save up some money every month to be able to cater for these expenses that are coming up in the future.  Otherwise you will literally find yourself in a jam and get tempted to borrow for them.
4. Don’t overlap no matter how excruciatingly slow you are moving. Someone did overlap (like the rest of us obeying traffic laws are ill informed) and up ahead a policeman stopped them.  Many of us want to do financial overlapping.  We want the spoils (getting to the destination) without the process.  Instant gratification is a form of overlapping. Borrowing for unnecessary consumption is overlapping.  Getting a big loan to buy the same car that someone else who has been investing faithfully for years is overlapping. Spending on creating a perception of wealth rather than truly becoming wealthy through a process is overlapping.  At some point the policeman will stop us.  We may accumulate debt that we cannot service.  We may lose a job and realise we built nothing that can actually sustain our lifestyles. Accept process and the time it takes to build wealth.
5. Lastly there are no guarantees. I’ve found myself in traffic, turned back and used a different route.  Sometimes it was the right choice to have made.  Other times it was the wrong choice and it put me in an even worse position. I made the choices with the information at hand at the time coupled with a gut instinct.  Do not become a serial investment analyst who never actually invests.  If you’ve done your best to understand the information and risks go ahead.  There is no guarantee.  You will learn along the way.  Losing money sometimes brings you closer to making money. You will know not to use that route again.  You learn to invest by actually investing.