Focusing On Your Circle of Financial Influence

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In an effort at personal development, I am currently reading the long-time bestseller The 7 Habits of Highly Effective People: Powerful Lessons in Personal Change by Stephen R. Covey. I got the book years ago from some sort of corporate team-building workshop but never finished reading it.

I think that many ideas within the book have applications to personal finance. The first habit is to Be Proactive. This is not the same as simply going out and doing many things – that’s being active. Instead, think of proactive as the opposite of reactive. One should consciously choose how they respond to external events. Even being angry is a choice. “Nobody can hurt your feelings unless you let them.”

Circle of Concern vs. Circle of Influence
The Circle of Concern is everything we might be concerned with – from world peace to lunchtime. The Circle of Influence is what we can actually do something about.

Where do you think you should focus your energy? Consider these “if only” thoughts:

  • If only I didn’t lose my job due to downsizing.
  • If only gas wasn’t so expensive.
  • If only my house didn’t plummet in value.
  • If only I had a great pension plan like my parents had.
  • If only someone could teach me how to invest.

Getting sucked into such thoughts is to dwell on the Circle of Concern; It is a waste of energy and won’t help you at all. The only thing that can help you is to focus on your Circle of Influence. Spend as much time each day on finding a new job as you spent working at your old one. Examine your habits and consume less. Borrow some books on investing. Move forward with a business idea. Then, you might be able to expand your Circle of Influence:

I know, it’s a bit cheesy. But if you listen to yourself carefully, I think you might catch some of these “if only” thoughts popping into your mind. I know I do. There is a very applicable prayer from Alcoholics Anonymous:

God, grant me the serenity to accept the things I cannot change, courage to change the things I can, and the wisdom to know the difference.

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Comments

  1. This list reminds me of something I said to my kids repeatedly as they were growing up: The pain of discipline is far less than the pain of regret.

    This applies in all aspects of life, incuding financial planning.

  2. I have seen this book numerous times at Barnes & Noble and I always consider buying it. Thanks for sharing, I may actually buy it next time.

  3. "Mo" Money says

    I have this book in my library, but have never read it. But I will certainly put it on my reading list now. I like the ideas in your post.

  4. Very interesting. You can make an interesting relationship between the ratio of your circle of concern to circle of influence and how risk averse you are. If you are the type of person who focuses on aspects of the circle of concern I imagine you are not very suited to a risky investment style, but if you are able to let things slide and only focus on aspects in your circle of influence, I imagine you would be very suited for a risky investment style.

  5. I have always been very focused on my circle of influence but I know people who are literally crippled by their massive circle of concerns…and it makes them very hard to deal with.

  6. @ Jessica — nay, don’t buy it! It’s really quite readily available in most libraries, or get started with http://www.paperbackswap.com! I’ve already swapped out dozens of books, and in these inflationary times, having a book be worth another book in the future is great! (There’s also the shipping cost for you to send your books out, but you don’t pay shipping for the book to come to you.) For less than $100 postage outlay over the last couple of years, I’ve been able to enjoy lots of hard-to-find books as they enter paperbackswap’s circulation.

  7. IF ONLY i had read this posting sooner!!!! (haha)

  8. ^someones seen Mr. Brooks lol!

  9. Dr Covey has put together one of the best works ever. The key word in the title is “habits”, no thinking about, setting goals to do something, swishing or anchoring yourself, but actually developing habits and actually doing it.

    I’ve read this book several times and I get something new out of it every time. To me, this book is not only “not over rated”, I believe that it is grossly under rated and arguably is the best self development book on the book racks right now!

  10. Tom Lutzenberger says

    I think this falls into the same category as “The Secret.” Both of these books are emphasizing increased awareness of what is really important to you and then positively working towards that. There is some truth to aligning your focus and energy on what is productive. It’s the same thing we look for in the office with synergies among teams, and in individuals in terms of high performance. And it starts with the mental approach.

  11. I’ll never forget the first time I read this book …
    I was a waitress while still in school.
    This business woman was a frequent customer and one day she left me a hard cover copy of it along with my tip.
    Off the top of my head I can’t remember what she wrote inside …
    But it was definitely something inspiring & motivating.
    I thought that was the coolest thing ever –
    Practically a stranger …
    She took the time to see potential in me!
    I remember that I read the entire book that evening.
    Years later …
    I paid it forward like she did for me!

  12. “Even being angry is a choice.” I think this is absolutely correct. You may feel a certain emotion, but it is a choice in how, if at all, you express it. Though this is a generalization, I feel like some (most) people feel they are entitled to express how they feel and thus do so without any foresight into how their actions will affect their environment and thus their own selves.

  13. Ernie Ayres says

    If you only read one “self-help” book, make this it. Dr. Covey is a genius and doesn’t make himself sound like it like a lot of self-help authors do.

    As you’re reading it, keep a pencil and paper handy. He’s got lots of graphs and charts. As I was reading it, I copied a lot of these down to index cards and carried them around until I got used to the overall idea. Now I just know that “this” is a Q2 action and “that” is a Q4 (don’t do).

    I also highly recommend the 8th habit once you’re finished with the first 7. 🙂

  14. I am a huge fan of the 7 habits and read it for the first time last year. And by the way, I love this blog!

  15. This book was required reading for me about eight years ago for a management position I was vying for. I actually read it twice.

    Since that time, I have found people either love this book or hate it. I’m in the latter. There is wisdom to be found in these pages but the ever existent theme of “naval gazing” wore on me. And, for me, his suggestions for influencing others by creating an “emotional bank account” seemed rather manipulative and designed to fool people into believing they were part of a “synergistic” team. The concept works but the leader benefits the most. Of course, that is life. Covey simply makes it more palatable for people.

    Some critics have spoken a great deal about the religious theme of the book. It did not bother me but it is there.

    I would suggest those who have not read the book don’t buy it, borrow it. If you love it, you will buy a copy, make copious notes, highlighting important passages and dog-earing your favorite pages. (I’m not making fun; this is a good thing). If you don’t like it you will be glad you didn’t waste the money.

    Having said all that, I did get the management position.

    And by the way, I agree with Mr. Sweetman. I love this blog, too.

  16. Cheesy or not, I just love how positive your blog is. 🙂 Others I’ve read seem either so bitter or so iron-fisted about money that they bring me down. But reading your always inspires me to do something. THANKS!!!

  17. Taylor Baldwin says

    Great post! It is extremely empowering to learn that you can affect your circumstances, choose your future.

  18. Ray The Money Man says

    Some people let their Circle Of Influence drag them down. For the most part the principal is true.

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