Getting back to work and into the grove (or rut) from vacation this week, I feel compelled to import some of what I’m experiencing at work into my blog today.
I’ll set the scene…
You’re asked to work on a new project, it’s high-profile and you’re the project manager. You’ll be given resources, although there are limits. You’ll be given time to complete the project, although there is a due-date down the road. You’ll be given scope to work within, although you’ve got some wiggle room to manoeuvre. You’re excited and you want to get going. That’s great because there’s a natural tendency to dive right into the work – do this; do that; full steam ahead. From my perspective, that’s the last thing you’d want to do. Enthusiasm and keenness are great attributes for a project but you’ll have fun soon enough. Successful projects require effective management from the very beginning; creating objectives, plans and communication of your approach to name a few.
Is your personal finance journey any different than a long-term project? Not in my opinion…
According to the Project Management Institute (PMI) project management is the application of knowledge, skills, tools and techniques to project activities in order to meet or exceed stakeholder needs and expectations of a project. Technical, I agree, but I live this stuff everyday. In plain language, project management is a toolkit for folks to get work done effectively and efficiently.
At work, you might be responsible for implementing a new product or service. In your personal finance journey, the product is you. You’re the long-term project deliverable, financial independence is your outcome. At a very high-level, I don’t see many differences between project management principles and the personal finance journey, I’ll explain:
1.Both need clear objectives – The most successful projects have clearly defined objectives from the outset. Wouldn’t this apply to your financial journey?
2.Both need good plans – A carefully thought-out project plan serves two purposes. First, it allows everyone involved to understand and perform their part in the project. Second, it serves as a monitoring tool allowing you or others to take action if something doesn’t go the way you thought it would. Written plans are always the best. I would argue your financial plan is simply a long-term project in disguise.
3.Both need lots of communication – Your projects at work are a collaborative effort between all of the individuals involved, even if it’s just you and your boss. Your personal finance project is probably not so personal, it likely affects your spouse, your kids, maybe even your parents. Everyone needs to be on the proverbial same page at home, just like work, if the journey is to be a successful one and all successful ventures begin and end with effective communication.
4.Both need controlled scope – Just like work, numerous issues will arise during your project and not all these changes will help you achieve your objectives. There will be setbacks, there will be changes, it’s inevitable. At work, it’s important to stay focused on your objectives. I don’t see your personal financial journey being any different. In my opinion, it doesn’t matter if your financial objectives are 100% GICs or 100% stocks – managing your scope and staying true to your plan is absolutely necessary.
5.Both need sponsorship and support – Projects typically involve several stakeholders, folks who invest time, resources and have a vested interest in the project. If the project is you, you need to remain invested and vested. That can also mean, getting support when necessary, from your spouse, kids, parents, friends or a financial professional when you need it. Rarely can anyone achieve success (financial or otherwise) without help from others. While it may be a personal finance journey, the journey isn’t taken in isolation.
I could go on. I think there’s tons of parallels between the project management world many of us experience everyday and the personal finance journey. In the end, good management is simply that, at work or at home.
What do you think? Do you see any of the same parallels I see?