Todd Polke argues most people struggle with money decisions not because they're bad with numbers, but because nobody taught them how. He calls out lazy money—cash sitting idle, eroding wealth—and says you need a system where every dollar has a job, the way you'd run a business.
Every single day you might be making hard decisions in every other area of your life, in work and in business, around money, around risk, around people, around capital. Why is it then that when it comes to making decisions around your own investments and your own personal wealth, do things feel like they get a heck of a lot harder? Now, if you go back to your current environment where you might be succeeding really, really well in life already, it could be in a professional role at work or it could be in a business. You know the environment you're playing in. You understand the people, you understand the outcome you're moving towards. You might have a budget you're working within. You know how to create operational efficiency in there. You just know your game in that area of your life. But the question is, do you have that same level of competence and confidence when it comes to investing in personal wealth? And if you're like most people, the answer is no. But you know what? It's not your fault. We're just never taught anything about this. Like, whoever teaches how to build finance and investment systems in any type of educational system or any type of workplace environment? The answer is No one. But when it comes to your own money, the system just seems to disappear. You're not sure what you should be buying, where you should be investing your capital. Should I be paying down debt? Should I buy more property? What is the market conditions telling me to actually do? What am I actually optimizing for in terms of creating financial freedom or what financial success really actually is? And when it comes to money, it also becomes intensely personal because in the end, it's your family. It's how you're putting food on the table. It's the future that you're setting up to be able to create. And in the end, you're the one that has to live with if something goes wrong. Now that behavior starts to make a lot more sense. This is why a lot of people know how to earn really well, but they don't know how to compound that into actually growing real wealth. And the problem with that is this, is that you wind up stuck in this loop, going to work, exchange time for money, earning more money, earning more money, earning more money, earning more money, rather than actually getting your money working hard for you. What we know to be true is that You're not lazy. You're not incapable of making decisions. You're even probably okay with risk. The problem is, is that you just don't know how to make decisions in this particular area of your life. Other areas, you might be incredible with it. But when it comes to wealth, are you making decisions in the structure that you understand? And for most people, the answer is no. So then what is the result? The result is that you often have capital, which is idle, sitting there doing a whole lot of nothing. And if you're anything like me, that probably pisses you off a little bit. It's one of the banes of my existence. I hate lazy money. You hold these standards in these other areas of your life, but are you living the same standards in your finances and your wealth? Most people I meet in this arena are not. They have money sitting in offset accounts potentially for years doing a whole lot of nothing, simply saving you a few percent in interest. They have trapped equity which could be out working for you a heck of a lot harder than what it actually is doing right now and compounding your wealth and moving it towards the financial direction and future you want to. You might have splattered a little bit of investments here and a little bit there, but there's no cohesive system which is bringing everything together so you can actually start compounding your returns and compounding your results. The biggest problem is if your wealth is only based on how much you're earning and how much work you put in, then you wind up being trapped, a slave to money for the rest of your life. Now, don't get me wrong, I love to work. I retired twice before, got bored out of my mind in a couple of weeks. And this is what I find with a lot of successful people. It's not about stopping work and doing nothing. Whoever said that's what life was about? But we painted this picture as that is the place we should be moving towards. Rather, to me, I just expect my money to be working bloody hard for me, much harder for me than I actually work hard for my money. Sitting there looking at capital doing a whole lot of nothing, you know what? It's like a nightmare to me. And that's the way you need to be thinking about the money in your own portfolio. Now, of course, you need some safe money sitting there to be able to make sure you've got capital sitting there if something goes wrong. You know, the inevitable shit happens that actually occurs in life. But every other dollar other than that, it has to have a plan, it has to have a purpose, and it has to have a job. You think about your work, you make decisions within a system and a structure all about creating operational efficiency. How efficient is the wealth business that you're running right now? And without that structure, what often feels safest is the pathway of doing Nothing. The big shift that you have to make is how are you going to build the structural understanding or the structural system, the same one that you have in other areas of your life? How are you going to set that up for your personal wealth? That's the big shift that actually needs to occur right now. So next week we're going to be talking about exactly this. How do you get your returns compounding year after year after year and make sure you're not making some of the critical mistakes that a lot of investors make when they're simply left renting their returns?
