Virtuous Circles

Research has proven that starting an exercise program causes people to give greater thought to their food choices. No one wants to spend an hour exercising only to spend that sweat equity on a lousy, sodium-calorie-fat laden food-bomb. Highlighted herein is what is referred to as a “virtuous cycle”, which I’m going to call a virtuous circle, I think the shape is equivalent and the imagery works better. So, as aforementioned, exercising leads to healthier food choices, and both of these have the very real potential to lead to more energy, which leads to better workouts, which leads to better sleep, and on goes this gainful circling. Within the scope of resale and financial independence, I have unlocked a variety of these virtuous circles, some of which have been touched on in previous posts, but I hope after reading this you’ll agree it was worth shaping this notion into its’ own dedicated post. Let’s continue with the exercise example and use it as a springboard into the rest.

I’ve mentioned in my post Limiting Beliefs: Ground and Pound how I didn’t feel like I had time to exercise a year and some change ago. It was just one more thing on the already too-many-to-dos of the day. However, once the concepts of financial independence had thoroughly taken root in my life (we were about two years in at this point), I could sense I had the financial means with which to reclaim a portion of my time – I could put down the incessant need to work for money and instead wrap my hands around a 30-45 minute daily time block and label it “exercise” and not feel stressed or guilty for doing so. And then it happened. This interesting virtuous circle came into existence. I found that I felt more compelled to get through what I was working on as I anticipated my exercise time and then was more refreshed when I came back to my work. I actually got more done in less time when I came back to my work. My sleep improved (it’s still no where near where I would like it to be, for the record, but exercising has helped). My diet has improved; I still love sugar and struggle to find any motivation to divest myself from it, but for now at least I try to pay close attention and stick to no more than the recommended max of 40g per day. Some days I even come in under my sugar budget (but that’s usually only when there’s nothing left in the pantry because my kids ate it all). But it’s clear to me that I care more about healthy eating than I did sans-exercise. I think the circle is fairly evident here, and I haven’t even discussed all the health improvements and stress reduction, but let’s move on to a few other virtuous circles that move into the world of wallets.

In my post Bountiful Boundaries: How to Start and Love a Budget, I discussed at length how I thought a budget would be a constraint. What I found to be true was quite the opposite. Instead, a new virtuous circle quietly unfolded. As I reflected after some years of budgeting, I came to understand that my fears were unfounded. Budgeting didn’t hold us back. It created freedom I had longed for – freedom to spend where it mattered most, freedom to save for what mattered most, freedom to say no to things that were stupid. As our savings plan materialized over months and years, the virtuous circle became larger and clearer. Budgeting created freedom, it undoubtedly reduced stress, and the wealth we built through budgeting simultaneously generated motivation to press even harder into profitable work. All of which further increased our options, speaking of which, my husband recently took a new job that represented a rather large shift in the kind of daily work he is doing – the kind of job change that might scare some people silly because you feel like an imposter for the first twelves months or so. However, this was an opportunity to immerse himself in a field he is passionate about, create countless new contacts, and wake up looking forward to work and to the prospect of unlocking hidden possibilities . That may not have felt like a safe move a few years ago. The conversation may have been “what-are-you-thinking-dear?” (said with a fake smile and clenched teeth) – just a few years ago. The truth is, we looked at it from every angle we could imagine, and at the end of the day, while there was still some trepidation that any big change ushers in, we felt confident in our financial position to the point that we knew this decision would not break us. Budgeting was the brassy key that availed us of this virtuous circle, and you are seeing just the tip of the benefits from this post. While we have the wallet widening, let’s stretch it even further.

Financial independence, meet my good friend, clothing resale! You two are going to love each other, trust me, I have a lot of practice matching up virtues. (Feel free to substitute your selling/reselling passion of choice, jewelry, electronics, fishing lures, if you are pursuing your expertise and passion when it comes to selling, that is where you are going to shine the brightest). OK, so let’s see how financial independence and resale complete each other in a stealth circle. My article Selling from Strength is a good starting place, but as always, I have no trouble coming up with more to say about a transformative subject such as this. Crucial to financial independence is answering the question “why”. Resale is one of the possible answers to the “how” of financial independence. Allow me to explain. Financial independence begs the sojourner to first zero in on the reason for such a monumental undertaking. Oversimplifying, the goal of financial independence is to save enough money so as to make work entirely optional at some (hopefully) near future point in time. You live off of the dividends, rental income, equity sell-offs, or whatever other types of passive income streams you have set up. But this takes extraordinary diligence for most people to achieve. It’s usually, at a bare minimum, a many-years’ commitment. There has to be some equally monumental reason – in other words, a really powerful goal, for anyone to take up a challenge like this. A job you really hate might be the catalyst, or a boss that micro-manages your every move, but most people seem to gravitate towards something bigger, like freedom, choices, the pursuit of cherished dreams. Once you have your “why” crystalized, the naturally following question becomes “how”? And as I said, resale is just one of many answers to “how” (See my post called The FI(ner) Things for much more on the “hows” of financial independence). Whether you make a full-time career out of reselling or use it as a side hustle, combining financial independence with resale is a formidable double punch. Financial independence gives you, most importantly, the reason why, and then additionally, the tools to know how to save as much of your earnings as possible, both through budgeting and also developing an understanding of specific savings vehicles (for example 401Ks, IRAs, HSAs, taxable/brokerage accounts, high-interest savings accounts, and so on). Having good income from resale is great, knowing the value of wisely saving and investing it is even better. That is one aspect of the virtuous circle, here’s another one.

The more money you save, the more courageous seller you will become. The strength gained by saving money will allow you to leave timid selling practices behind. Go ahead and shoot for the moon, as the saying goes, if you miss, you at least have a chance of landing on a star (or taking it further, a favorite quote read on JL Collins’ site, “If you reach for a star, you might not get one. But you won’t come up with a hand full of mud either.” Leo Burnett). The point is, when you have your personal finances well-ordered, it’s not so scary to possibly miss a sale here and there by counter-offering a low/less than optimal offer. Enough sales are completing at very desirable margins that this is OK. If you are 100% dependent on your selling/reselling for every expense in your budget every month, you may not have the courage to ask for what your merchandise is worth. You are too afraid of losing the roof over your head. If this is you, you need to first do some serious budget re-working. Get your expenses as low as possible and start saving everything you can to create a large surplus. That surplus is what you lean on if you have a slower sales month that doesn’t meet your budget. You may also want to think about getting some side hustle income if you have your budget as low as possible and there still isn’t much room to save or the savings just aren’t accumulating fast enough. If you are desperate for sales, or even just have no idea how your sales relate to your monthly budget requirements, you are likely in a destructive or sub-optimal cycle. Low dollar sales lead to low funds available for new purchases which leads to less sales – you see the potential downward spiral, right? Start following the principles of financial independence, it will lead you into a healthier relationship with money and allow you to engage the virtuous circle of FI+Resale.

So there are three examples: exercise, budgeting, and the intersection of financial independence and resale. As you saw, within each of these circles, there is not just one or two benefits rotating around, but a whole multitude that play off each other in unique and exciting ways. What virtuous circles have you encountered? If the answer is none, is it for lack of noticing them or have you yet to engage in the game?

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