I'm going to teach you where to focus your attention when managing your finances, but first I'm going to help you duplicate the success of baseball legend Ken Griffey Jr.
If you're not already 6'3" tall, you need to grow or shrink to meet that exact height. Make sure your father is a professional baseball player so you inherit elite genetics and grow up knowing the highest levels of the game. Spend several hours per day practicing baseball, lifting weights, and conditioning. And remember - to become the face of the sport for a decade or more, you need to build throngs of loving fans. So, work on that megawatt smile in the mirror. Do these things, and you'll be a superstar in no time.
Identifying lack of control
You and I both know you can't just do what I say and become a Hall of Fame ballplayer... but why? It's because you don't have full control over everything I suggested. Let's assume you have full control over how much you practice and exercise. If that's the case, you could probably improve as a baseball player with consistent efforts (although it's unlikely that you'd yield Junior's results even with the exact same effort). Next, can your charisma build a city full of people who want to have a beer with you? Maybe. That's because you can do things to influence the way people feel about you, but you ultimately don't control who cheers you on. And as far as changing your height and genetics, you have no control. If body type was controllable, I wouldn't by five inches shorter than my brothers.
In summary, the more control you have, the more you can actually progress. Obsessing over getting taller isn't going to help you rob a home run like The Kid, but there are skills you can work on to improve your chances.
The Hierarchy of Control
The same concepts discussed above apply in life and finance: you have different levels of control over different situations, and you'll make the most progress by focusing efforts on where you have the most control. I call this the Hierarchy of Control, and cut it into three levels:
Full control
Some influence
No control
Full control means it's all up to you, kind of like how a baseball player can choose how they practice and train. Full control doesn't mean you choose the results, but that you're in full control of your attitudes, behaviors, and choices (ABCs).
Some influence means that you can have an impact on results, but there are other factors that aren't up to you. Kind of like how you can be friendly and social, but in the end it's up to other people to decide if they enjoy your vibe.
No control means that you don't really impact results; however, that doesn't mean you can't participate. It's like how an athlete has no control over their height, but can find ways to perform well with what's available to them.
Hierarchy of Control - Financial Health
The graphic below depicts the Hierarchy of Control in personal finance. Review the graphic and then we will walk through some examples.
Examples: Financial Control
Career
Full control: career field, job acceptance, willingness to relocate
Some influence: hiring decisions (your interview/networking), salary (performance and negotiations)
No control: labor market conditions, market salaries, job availability
Investing
Full control: investment selections/strategies, budgeting to create flexible income, the frequency of investment
No control: market performance, interest rates, economic conditions
Spending
Spending is so broad that it's harder to bucket, but in general you have full control over nonessential spending, some influence over essential spending, and no control over inflation and market prices. Essential spending is anything that directly supports your Four Circles of Health. Nonessential spending doesn't directly support your Four Circles but should add value to your life in some other way - and if it doesn't, then stop wasting your money!
Wrapping up
Let me know in the comments which other scenarios you'd like to run through the Hierarchy of Control framework. Anything related to the Four Circles of Health (physical, mental, social, financial) is a good place to start. For example, where do you have control and influence with things like weight loss, stress, or your work relationships?
If you're looking for a well rounded and entertaining way to make your finances a healthy and positive part of your life, please check out my book (link below). If you found this post valuable, please also subscribe to the blog and follow me on social media.
Your best life is a healthy life. Go get it. Thank you!
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