The 3 most important questions (MIQ’s) is an exercise that can really help you to cut through the noise and focus on what’s important in your life.
These questions are not in and of themselves complex, but they are profound in their application.
- What do you want to experience in life?
- How do you want to grow and develop yourself?
- How do you want to contribute to the world?
I’ve applied these questions to my financial outlook and in fact, I believe that this simple finance idea is the reason why I have been able to grow so quickly as a professional.
But how do you apply it from a basic financial perspective?
That is, even though you know what’s important to your life, how do you make sure you’re able to properly allocate your money to it?
I’ve been playing around with the idea and have developed something that works great.
It merges T. Harv’s basic finance idea of a jar system with Vishen Lakhiani’s 3 Most Important Questions concept, giving you a simple finance framework to manage your money in everyday life while likewise striving to achieve your end goals.
This system uses 5 buckets, as follows:
Bucket 1: Your Daily Expenses
For the majority of us, we will need a minimum amount of money to sustain ourselves from day to day.
Having a budget for your daily expenses is the foundation of making this a simple finance concept to implement. By having a budget for your daily expense, it ensures that you will continue to be able to make ends meet.
Common items that you will probably have in your daily expenses are:
- Rent / mortgage
- Utility bills
- Mobile plans
- Home internet
- Minimum payments for any outstanding debt
Bucket 2: Play
Where your daily expenses are what is required for you to make ends meet, your play account is meant to give your soul a sense of joy.
There was a time when I had thought that play was not necessary, that I would be able to continue hustling without giving the body, mind, and soul a break.
Because of that, I had seriously burnt out and wrecked not only my social life but all my relationships as well. In the end, I had sabotaged myself.
Since then, I have learned to always keep some time for play.
That said, here are some of the more common things that should be accounted for under the play bucket:
- Eating out
- Nights out with friends
- Buying new clothes
Note the difference between groceries and eating out. On one hand, groceries is what is required for you to maintain your health, whereas eating out is a higher end version of maintaining your health (and more importantly, a way to socialize).
You may notice that some other people would suggest having multiple buckets for different types of events, but in the world of simple finance, keeping it all under one bucket makes it much easier to track.
Bucket 3: Personal And Professional Growth
A real popular question that gets asked a lot is. “What should I invest in to grow my wealth?” My answer for most people would be to invest in yourself and your professional growth.
The reason is that if you can improve your ability to produce value, you will naturally be able to command a higher pay or have your business bring in additional revenue.
And if we were to look at this over the course of a year, the chances are that your marginal gain through this type of investment will be more than 10% (which is way higher than the compounded annual growth rate of the S&P 500.
That said, great ways to invest in yourself and your skills are:
- Conferences where your ideal clients are or where people you want to learn from gather
- Programs that improve your skills
- Programs that improve you as a person (Superbrain is a great example)
Bucket 4: Your Retirement
Typically when people talk about retirement, they literally talk about the day you stop having to do your full-time job. I find that upsetting because that kind of implies that what you do day to day drains you of energy.
So instead of that type of retirement, let’s redefine it as being clear on what it is you would love to be able to spend as much time as possible doing. And once you have examples of that, finding ways to do that as soon as possible.
By doing this type of exercise now, you will have much better clarity as to the life you want to live, which will also help with reducing the temptation of spending on things that might not push you towards that ideal life.
And if you haven’t noticed, this is where you can start testing a bunch of your potential answers to the MIQs. So instead of it being a guess as to what you may want to try, or do, or be, you’ll have the ability to test it now using this simple finance bucket.
Bucket 5: Checking Off Your Life Goals
Where retirement money is focused on your more long term life experiences, this 5th bucket is focused on checking off as many of your life goals (ie MIQs) as fast as possible.
For example, one of the things I really wanted to experience when I first did my MIQ was to go skydiving in New Zealand. I continued to put money aside in the life goal bucket and once I had enough, I booked my flights and made it happen.
Of course, I also connected a bunch of other things I had wanted to do while there (ie road trip) which made it such a fulfilling experience.
Tying It All Together
In the past, there may have been a disconnect between your 3 most important questions and your financial situation, but using this
simple finance framework outlined here, you will be able to continue to move both things forward in a healthy manner.
As for how you want to allocate your budget to each of these 5 categories depends highly on where you are in life and what your main focuses are. Though I would recommend 70% for daily expenses and your play combined, and 10% for each of the other 3 buckets.
Now that you have this basic finance framework, what’s the first thing you want to experience on your MIQ that you can make happen in the next year?