Building wealth: James Blair says budgeting and automatic payments beat shortcuts – The Prosperity Project
Kiwis are being warned not to waste time searching for clever financial shortcuts – boring basics are more likely to build wealth.
“The longer you take trying to find a shortcut, the longer it will take you to get to the outcome” Lighthouse financial wealth direct James Blair told Nadine Higgins on The Prosperity Projectpodcast.
Blair says many people substantially underestimate what they spend, even when they believe they have a good handle on their finances.
“It’s death by a thousand cuts. It’s all the little things that add up.”
Spending such as subscriptions, extra supermarket trips or Uber Eats can look insignificant individually – but annualised, look quite different.
“What happens a lot of the time is people go like, ‘Oh. Oh, I didn’t know it was that amount’. You just want to get an idea of where the money is going and go, ‘Does it add value to my life?’.”
Blair recommends prioritising two things: “Budget and automatic payments”.
Automation can do a lot of the heavy lifting of sticking to a budget, with money directed automatically towards bills, emergency savings and longer-term goals before it gets spent.
“Structure is really the answer ... Essentially you want to make sure that you really have to make no decisions.”
That benefit of having structure isn’t just about what it achieves immediately, but that one good financial action can make the next one easier.
“We talk a lot about compounding returns, but my experience is we don’t talk enough about compounding actions,” Blair says.
To avoid being overwhelmed, he suggests “just start really small, do one thing, and it’s amazing what you can build to”.
Watch or listen to the full episode of The Prosperity Project for more.
The Prosperity Project is hosted by Nadine Higgins, an experienced broadcaster and financial adviser.
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