Is the money you are saving costing you a fortune?

May 1

We often make choices to save money because we perceive that spending it negatively affects our security. What if that perception is all wrong?

When trying to decide whether to leave a job with a steady salary to step out on your own, you most likely view the steady salary as strong incentive to stay. Likewise, if you already own a business, the straight dollar cost to implement a new idea or training program may be the single biggest reason that you choose not to move forward.

Our natural reference point is where I am now. So we ask the question: How much does it cost to make the change?

Change the reference point to where I could be. Then ask the question: How much does it cost to NOT make the change?

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18 years ago Bob was weighing the decision whether to say goodbye to his salary and start his own business. Stuck in where I am now thinking, Bob thought that his biggest risk was that he would not be able to replace his salary over the next few years. How would he feed his family and provide security?

He knew the worst-case costs of moving forward. But he never considered the worst-case costs of NOT moving forward. Now Bob knows that if he hadn’t made the change, it would have cost him hundreds of times that salary that so concerned him back then.

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Step forward 3 years and Bob was weighing the decision whether to spend $12k on a program that he hoped would improve his business. $12k was a lot, and he couldn’t get over the cost. He almost didn’t do it. Still stuck in where I am now thinking, Bob thought that his biggest risk was $12,000 - the cost of moving forward.

Bob took the plunge and now estimates that the program added 5-10% to his company growth rate. The return on investment over 15 years? Well over $5,000,000 – the cost of not moving forward.