A few weeks ago, I listened to the audiobook of Winning by Jack Welch (read my earlier thoughts on Winning). For those unaware, Winning is a book on management practices and career development by Jack Welch, the CEO of General Electric during their big growth years in the 1980s and 1990s.
In the book, Welch seemed to keep coming back to one big thing: passion is what makes a winner. He kept coming at this central tenet from different angles with different examples, but as the book went on, it was clear that with example after example, passion did set people apart from the crowd. I can say that in my life, every time I simply followed what made me passionate, things went well, and when I resisted following my passions, things were rough.
So what does that have to do with personal finance? Well, first of all, the first steps of following your passion is usually a financial disaster. It usually means the cost of education, the cost of leaving a job, or the cost of starting a business. These are painful costs and are usually enough to keep people from following their dreams.
Second, passion is extremely hard to quantify and evaluate. I’m passionate about blogging, but I confess that I had no idea whether I would be successful or not when I started this blog. I thought it would go well, but it has gone far better than I had expected. Simply put, I could not rely on the simple fact of my passion to carry me through. You can have all the passion in the world, but it doesn’t guarantee you a dime.
Does it sound like I’m trying to convince you not to follow your passions? I’m not. In fact, here are five rules I encourage you to live by so that you can balance your passions with the necessity for healthy personal finance.
Understand what you’re really passionate about. When do you feel happiest? What do you do that you enjoy, that you can do well? You’d be amazed at what people can find. I know a person who really found what he was passionate about: hunting for morel mushrooms. And he was good at it, so good that he only really works one month a year in the spring, following the morel growing season, and picking sixty to one hundred pounds of them a day to sell to restaurants. Yes, wandering in the woods and picking mushrooms off the ground. It’s his passion and he followed it with his whole heart.
Don’t kill yourself for any job you’re not passionate about. If you hate what you’re doing and it seems to consume your life, but you desperately need the money to survive, stop letting it consume your life. It’s not worth it to keep running like a maniac for a job that’s killing you. If it’s time to quit, you have a pile of stuff on your desk, and you’d rather be dead than continue to work on it, get up and leave. I’m not advocating not doing your job; I’m advocating not sacrificing your life for something that doesn’t fuel your fire.
Understand exactly how you can make money from your passion. How do people make money doing what you love to do? I watched blogs and experimented in various ways for a long time before starting The Simple Dollar just so I understood how I could take a passion for blogging and sharing ideas and make something sustainable out of it.
Formulate a plan that doesn’t involve abandoning your current job. What can you do to follow that dream that doesn’t cause you to abandon another major income stream? My solution was to set aside a block of time each day during which I can blog – it starts after I put my son to sleep in the evening, usually stops for an hour so I can spend time with my wife, then continues again until I go to bed. That adds up to about three hours a day or so, and it’s enough time for me to manage The Simple Dollar and also plan other opportunities.
Execute that plan and let yourself be surprised. Passion is apparent to others, and it’s also infectious. If you’re doing something you love, others will come along for the ride just by the sheer magnetism of it. It happens over and over again: if you truly love something and can pour part of yourself into it, people will come. If they’re not coming, then it’s either not a true passion for you or you haven’t figured out exactly how to do it yet.