The Money Snowball Effect
Visualize you’re on top of a snowy hill.
You reach down and grab a handful of newly fallen snow and ball it up. You grab a little more snow. Pack it down, making it bigger. At this point, it’s getting big enough where you can’t easily wrap your hands around it, so what do you do? You put it on the ground and you start rolling it around.
It’s starting to get a little tiring. So you get an idea. Rather than manually rolling it around, you decide to just roll it down the side of the hill. It starts slow, so at first, you help it out by nudging it now and then with your foot. But then again, you’re on a slope, so eventually it builds enough momentum that it starts rolling down the hill. By itself. You’re now just watching at this point. As your snowball barrels down the hill, getting bigger and bigger and bigger.
Your money is that snow ball.
But here’s the kicker: Are you manually balling up your snow ball? Are you literally putting it on the ground and rolling it around, picking it up, padding it, doing this over and over again, day after day? Sound familiar? The daily grind?
Maybe at some point you get some help. Because it’s too hard to do it by yourself. A partner. Someone to help you through life, building your little snow ball. Maybe he or she gets silly and throws the ball. Either at you or just throwing it against the tree or the side of a building to see it splat. It’s entertaining for a while, but you’re not really getting anywhere. Not too conducive to building a snow ball, if you’re always having to start from scratch.
So this is where the hill comes into play. Get the hill to do the work for you. Maybe you’re saying to yourself, but I don’t even have a snow ball to start with. I have snow dust. Snow dust is what I have. Or maybe your snow ball is just way too small. You put it down on the ground and it doesn’t even roll. In fact it’s so small that it can’t even fight itself through the snow.
First build a snow ball. You need to start somewhere. You can’t roll a flat snow pancake down a hill. You need a snow ball. So in your current job, in your current circumstances, you need to start somewhere. If you need to do a side hustle, drive for Uber, work part time somewhere in the evenings or on the weekends. Something. You need to start with some snow. Doesn’t have to be a whole lot but you have to have a source of snow.
It’s not about how much money you make. It’s about how much money you keep. Can you make a snow ball with half an inch of snow? Will it be easier with 4″ of snow? Sure! More snow always helps (everyone wants more snow). But point is, snow is snow. Just like money is money. A rich person’s money isn’t different than a poor person’s money. One just has more than the other. But get this: even if you’re fortunate enough to have a lot of snow, but you spend most of your time making snow angels on the ground you’re not getting any closer to building a decent snow ball.
Use the slope of the hill. Use gravity. Don’t build your snowball on flat ground. Stuffing money in a mattress or leaving it in your checking account are not the most efficient ways of growing your snowball. What does this mean? You need to put your money to work for you. You can’t spend your whole life manually using your hands to ball up your snowball. There’s very little growth potential, and at some point you’re hands are gonna start cramping up, your arms and back’s gonna get tired.
Rather, you need to do something that will help your snowball grow over time. Stocks, bonds, a business idea. Some sort of investment that, over time, will generate a return for you. There are no guarantees in life, but you know what’s even more of a guarantee? Not doing anything. There’s nothing more guaranteed to get you nowhere, than not doing anything.
This is the last principle. The sooner you start, the better. Life itself is actually kind of like starting on top of the hill. None of us start at the bottom of the hill, we all start at the top. But every day you’re walking down the hill. So the longer you’re walking down the hill, without building a snow ball. The less “HILL” you have to work with. You can spend 40 years walking down the hill, to later realize; MAN! everyone’s building a snow ball. I really should start. But guess what, you’re already 3/4’s of the way down the hill. There’s just not much “HILL” left anymore.
In other words, inaction is a choice as well. By putting it off, you’re choosing inaction.
And that’s it. Four money principles you can start living by.
Now go build your snow ball!