In this episode, hosts Jason K. Powers and Joe Pantozzi, adeptly unpack implications of Parkinson's Law, particularly as it relates to the expansion of work within the confines of time allocated for its completion. They contend that this principle not only applies to productivity but also to the realm of financial management, where individuals often find themselves ensnared in a cycle of procrastination and impulsive spending. By invoking the teachings of Nelson Nash's 'Becoming Your Own Banker,' the speakers emphasize that the crux of financial success lies not in the tools one utilizes, but rather in the psychological barriers that impede progress.

The discussion progresses to dissect the three tenets of Parkinson's Law: that work expands to meet the time allowed, that luxuries become necessities once experienced, and that expenses tend to rise in tandem with income. Each tenet is illustrated through vivid anecdotes and relatable scenarios, revealing how individuals often allow their financial habits to be dictated by immediate desires rather than long-term goals. The speakers advocate for a paradigm shift in mindset, urging listeners to recognize the importance of strategic financial planning and the cultivation of a family banking system as a means to counteract these tendencies. They stress the necessity of prioritizing savings and investments to create a sustainable financial future, rather than succumbing to the pressures of consumerism and debt.

In conclusion, this episode serves as an insightful examination of the behavioral dynamics that shape financial decision-making. The speakers challenge listeners to confront their financial habits and to adopt a more proactive stance towards wealth accumulation. By understanding and applying the principles of Parkinson's Law, individuals can foster a more disciplined approach to their finances, ultimately leading to increased financial freedom and empowerment.

Visit alphaomegawealth.com/podcast to schedule a time with Joe or Jason and see what Infinite Banking can do for you.

Foreign Jason K. Powers here with Joe Pantozzi.

This show is for builders and doers who want their cash flow working on purpose.

Today we are unpacking something called Parkinson's law and how beating it helps you be your own banker.

Let's jump in.

Joe, how you doing this morning?

Good morning.

How you doing?

Good to see everybody.

Never a dull moment.

Each and every day, you know, I think about what we're talking about today and actually was just thinking about, you know, my kids are home on fall break the whole week, and we're really struggling with how to divide this time up that we have available to us this week, you know, and we're like, oh, you know, the kids have things they need to do during the week, and it's really getting dragged out a little bit and trying to have fun at the same time.

And so, yeah, it's been one of those weeks as well.

You have to schedule everything you do, isn't it?

It's the American way, I think.

I think.

All right, Joe, we are talking about Parkinson's law.

This has become known to most of us through the book becoming your own banker by R. Nelson Nash, where he begins to talk about human behaviors.

And so why don't you tell us a little bit, like, where did that come from to begin with?

Who was the original idea behind Parkinson's law?

Bring us into it.

Sure.

And.

And he talks about a human problem.

This is a human problem.

And the reason why this is so important is, for me, as a financial planner, I have been coaching, counseling, pleading with people to put their human foibles in a box, to put them under control, put a muzzle on it, so to speak, and understand that the issues with building wealth have nothing to do with a product.

They have nothing to do with the rate of return.

They have nothing to do with allocating the money, asset allocation.

They have nothing to do with the.

Very little to do with the right advisor or formulas.

They have to do with overcoming the human emotions and the human problems.

And Nelson Nash calls this a human problem.

So the issues and the roadblocks to building wealth have more to do with the human problems, maybe 99% than anything else.

And when we talk about Parkinson's law, this is a huge part of it.

It's the human tendency to do things according to what our emotions draw us to.

So I give you the example of a checking account.

We'll get into that for a second.

But the human problems have to do with overcoming our tendency to want to spend the money now and to not want to delay gratification.

Because who wants to put money into any account that's allocated for 40 years from now?

Sure.

Okay.

Yep.

Well, let's.

So let's define Parkinson's Law for the listener today.

So in Nelson Nash's book Becoming youg Own Banker, he it is for those of you who have the books.

You can pull it up on page 28 on the regular publication of the book.

No idea on the Kindle versions and stuff like that.

But the human problem is Parkinson's Law.

So the author was Parkinson, and he really was the one who pointed this out.

But it's three parts.

The first part is work expands to meet the time envelope allowed.

Work expands to meet the time envelope allowed.

The second part is a luxury, once enjoyed becomes a necessity.

And the third part is expenses rise to equal income.

Okay.

So work expands to meet the time envelope.

Loud.

Luxury, once enjoyed becomes a necessity.

And expenses rise equal income.

We're going to break each of these down today in a short time for you, so you can understand kind of what we're talking about.

And then once we've told you what the problem is, maybe we'll tell you a solution.

Sure.

All right.

All right, let's take that first one.

So here you go.

To fill the time.

Work expands to fill the time.

So I go back into the 18th century when I was in school, and we would be given a project by our teacher or professor.

And you've got 30 days to turn this paper in.

We used to use blue books that were filled up with essays and so forth.

And you got 30 days.

When would I start to do the research?

When would I start to write?

When would I start to draft?

When would I start to outline?

Three days before the project's due.

Now, the work didn't necessarily expand, but that procrastination element comes into play also.

Well, I got 30 days to take care of it.

I certainly don't need 30 days.

Maybe I'll think about it for 27 days.

I'll start actually doing the work three days before it's due.

Because that should be enough.

Yeah.

Yeah.

And any of us sitting here listening to this with kids know exactly what you're talking about.

I do that.

I'm like, finding out for my kid two days, a day before it's due.

And I'm going, wait a minute.

Really?

How long have you known about this?

Really?

Right.

It starts really young.

Here's the thing, a practical issue.

I've come across clients or prospective clients who say to me, you know, I kind of think I should start thinking about retirement, planning for retirement and putting some money aside for retirement.

Great.

Happy to help you with that.

How old are you?

56.

Yeah.

Or older.

Wait a minute.

You knew this time was coming?

Yes.

And you didn't get there.

So now that we're here, we better triple up.

Yep.

Okay.

And that's an interesting point too, because I talk to clients all the time and we have this conversation, right?

And that comes up or not even clients, just people out and about, talking to friends or whatever.

We're at dinner, somebody mention something and it's this, I need to save for retirement.

I need to start figuring something out for retirement.

Now, certain sectors of people aside, like real estate investors, the conversation.

If I were to ask, well, how are you going to do that?

9.9 out of 10 say, well, they mentioned some qualified retirement account account.

I, I've got to start putting more money into my 401k or my Roth or my IRA, okay?

Because that's the only thing that most people know and I love the industry we are in, teaching people there is other ways also, this is not the only way.

And it's a big deal.

And it's a, it, it's eye opening for people who had never knew that.

The first time I heard about the infinite banking concept, for example, I didn't have any idea you could do things like this and certainly no idea that you could use it as a supplement or other or retirement.

So it's great.

Now I mentioned real estate investing.

I was going to talk about real quick.

One example, Another example is of work expands to meet the time envelope allowed in real estate investing.

If you've ever done that or if you've ever hired a contractor to do construction work for you of any kind.

So if you've got a duplex, imagine you've got a duplex and you've got two bathrooms, one in each bath, one in each unit.

You have to remodel exact same size, exact same remodel.

First remodel contractor went in there and he did the full remodel in two weeks, let's say.

And you're like, great, that's awesome.

We got it done in two weeks.

The next one, you don't really need to rent out for another month.

And you let him know this, we've got a month do it.

But you assumed, well, he already did it in two weeks one time so he can do it two weeks, another time.

But you just gave him a month.

How long do you think he's going to take to do it?

He's going to take a month to do it.

Right.

That's just what happens.

And that's just human nature.

Right.

This is human behavior, which we're talking about today.

Just human behavior.

We do it all the time in all kinds of areas in our life.

So one, one element which I think comes into play here, because people tend to procrastinate with everything in life.

They also maybe assume or presume that the magic 10% will work.

Well, if I start saving 10% of my income, what'll that do for me?

I have no idea.

Maybe if you started saving 10% when you were 15 years old, maybe that would be enough.

But now, since you waited till you were 48 years old or 58 years old, maybe the number isn't 10%.

Maybe it's 45%.

And so when I mention some number that's completely crazy, they'll say, well, that's impossible.

Sure, that's impossible, because you've allowed other elements of Parkinson's Law to creep in.

And that 10% has no relevance to you whatsoever when it comes to achieving a goal that you're going to need or a critical mass of dollars you're going to need in an account by the time you hit Independence Day.

And so clients have looked at me, or people have looked at me and said, you put how much in your family banking system?

And I tell them, and I love the word that one client mentioned to me about 35, 40 years ago.

He said, that's obscene.

Yes, I am putting obscene amounts of money into my family banking system.

And now it's growing to the point where I'm earning much more in annual credits to my system that I'm actually putting in.

And as Nelson taught us, your system is going to get better every single year, and there's nothing you can do about it.

And that goes to the attributes of a life insurance policy, which we'll get into.

Yeah, well, and I think it's important, too, that you could put obscene amounts into your family banking system.

But a lot of people we think of it's an either or scenario because we're used to, we can only put our money into qualified retirement accounts.

We're coming from that vantage point.

Once it's in there, it's locked up, and you're like, I can't sacrifice 20%, 30% of my income to put in there.

Now, obviously, if you've never read becoming your own banker.

It's still a head scratcher for you, I'm sure.

Go read the book becoming your own banker by R. Nelson Ash and you'll understand it better.

Call me.

Call Joe and you'll understand it even better.

And it's understanding.

It's a both and system.

It's not an either or system.

We don't have to put away X amount, whatever that amount is, into our family banking system and it's locked up until retirement.

It's not like that.

So think about that.

Let's move on to the second point real quick.

The second one was expenses.

No, a second one was a luxury once enjoyed becomes a necessity.

I know Joe's example.

He loves his certain features in his vehicle.

I'll let you tell it, Joe.

My truck.

I love my truck.

It's my first truck ever.

And when I was moving from the desert to the mountainous, forested country, I was counseled by my pastor to get a truck.

If you're going to buy a truck, you can only have a Ram truck.

So I have a Ram truck.

I'm sure there's lots of other nice trucks out there.

Mine's a Ram and I love it.

And it came as a package with a heated steering wheel.

And because I live in an area surrounded by trees and forest and lots of snow during the winter, I love my heated steering wheel and I could not live without it.

It is a luxury that I might have imagined 15 years ago.

But now when I get in that truck, the first thing I do is turn on the heated steering wheel.

It's a necessity for me because my hands are cold in the wintertime.

So that's something that I now consider a necessity.

And I wouldn't imagine buying a vehicle without that element in it.

And I'm willing to pay because in my life it's a necessity.

Okay, now you can expand that and multiply that in any direction you like, but look at all the things around you that 50 years ago did not even exist.

Yep.

Right.

I don't move from one room to another without this necessity attached to my hip, which is my iPhone.

It's a necessity now.

And I can't even fathom having a vehicle with heated steering.

It's funny, but someday I'll probably be sitting in your shoes going, you guys, everybody needs this.

I do think about.

I spent about 14 years, not quite 14 years in a house with no air conditioning, and it became the norm for me originally out of absolute necessity.

What choice did I have?

You know, now looking Back.

I think I will probably do everything in my power to avoid that situation again.

Right.

It is now a luxury.

I have it.

I understand.

I appreciate my air conditioning unit way more now than I did before, but now it's like, absolutely not.

I'm not even, you know, look at a place that doesn't already have AC unit, you know, built into the house.

I'm not going to do it.

And there's so many examples.

Right.

Could I just give an example?

I think is so, so practical and hit me in my gut in a good way.

A friend of mine had his birthday yesterday and we texted back and forth, and he's in, in the north of Montana hunting elk with his sons, you know, at this time of his life.

That is a luxury.

And you're never going to be able to enjoy a luxury that you choose, whatever that is, unless you fulfill the necessity to fill up your bucket with reserves, with funds, with money, with investments.

However, whatever it takes to get to the point where one day in your life you can go hunting with your kids or whatever that scenario looks like for you.

Now that he's able to enjoy because he did the obscene things, which was over saving, they're related.

The luxury is never going to exist without the necessity of putting money away and making hard decisions, making sacrificial deposits into some account.

Okay.

Yep.

And I think the application for this is, we would call it like the upgrade spiral.

You know, you're constantly doing little upgrades here and there throughout your life, or day to day, month to month, year over year.

And these little upgrades eat away at your finances.

These constant, continual, small upgrades.

Subscriptions.

Oh, I need this subscription.

I need that subscription.

I need this plan.

I need that plan.

It's a good deal.

It's a good deal.

It's a good deal.

And it constantly eats away at your income.

So just being able to get your head wrapped around that and see what's going on, to identify it and then decide, would it be worth not taking advantage of this said deal at the moment?

Okay.

The third one is expenses rise to equal income.

Now we've just alluded to that a little bit.

Expenses rise to equal income.

Most people, it's normal.

Throughout your careers, as you continue to get raises, what do you do next?

The average person isn't saying, oh, great, I can save more.

The average person is usually going, okay, now we can buy that next house, that next car, we could upgrade this, upgrade that, et cetera.

And it's.

That's.

There's nothing implicitly wrong with that.

You know, it's just understanding what it's doing.

It's this.

How do we find boundaries around planning?

Maybe would be a good way to ask it.

How do we find, you know, raises and bonuses, for example, get eaten up right away, usually in some facet.

So how do we find ways to take control of that situation?

And when you go and when you go back and you kind of reverse engineer this whole thing, I want to be able to enjoy new inventions, new luxuries, new things to make my life and my family's life more comfortable.

And on the one hand, I can go into debt to obtain those things.

I can spend my seed corn, I can spend my capital to go directly into luxuries, or I can do it the way Nelson is teaching us, which is you use your family banking system, funded with whole life policies and other things to capitalize.

Invest in cash flowing assets which will produce additional income.

And that income, maybe passive income, will now fund your necessities so you'll have multiple assets.

You'll have the assets that are capital assets, real estate, other accounts, new businesses, new entrepreneurial opportunities.

Creating passive income in addition to your earned income so you can fund the necessities that are necessities to you because they're new luxuries.

You want to increase your lifestyle, you can do that if you start to invest in cash flowing opportunities as opposed to taking your earned income and going directly to liabilities.

Let the new income that you're creating fund your liabilities and your enjoyments and your extra vacations, etc.

Yep.

Well, and I think there's a difference between budgeting and allocating increases before they arrive.

So there's a difference between budgeting and pre allocating increases before they arrive.

And understanding the subtle difference and going, well, I'm budgeting, right?

That's your monthly expenses going.

All my money is going here and there, there.

But what am I going to do with influxes and windfalls and raises and bonuses and tax returns?

If you're doing that and so forth, where is this money definitely going to go?

That may advantage me.

Yes, maybe you have some debts you need to address, but can you allocate a percentage of that?

You say, well, whatever comes back x percent is going to be put away towards a good asset, growing asset, that is private banking system or some other vehicle paper like that.

And again, that goes back to the, the concept that you and I have been talking about, which we'll talk I think in another session.

The funnel we're talking about going back to the, to Beginning and preparing mentally for windfalls that will come in by having a financial model that, that allows for you being paid first before anything else.

You're not going to be paid last at the end of the month.

You're not going to be paid last at the end of all your expenses being paid.

You hardwire you're being paid first at some high level and start thinking about, start imagining dream building, putting out 20%, 30%, 40% of your gross income into some kind of a savings vehicle or a saving system or a methodology that's going to allow you to be a millionaire, to use a crash term, allow you to be a millionaire at some point in the future.

And so gee, God forbid I over saved, forbid I wound up at Independence Day and I have a couple of million dollars extra I really didn't plan for and don't really need.

Well, we have a list of a couple of thousand charitable causes that you can start to get involved with now and pick your own.

There's plenty of need, needy worthy causes.

And why not create a financial system in your life where you can create a footprint and leave a footprint that's bigger than the one that you consumed and occupied yourself.

So as opposed to working toward the minimal, work toward the optimal.

Start thinking about giving yourself permission to save way more than you ever imagined you'd need to save.

Forget about need.

If I wanted to deal with need, I wouldn't need two vehicles.

You can get along with one.

It's not about need.

Americans don't have to deal with need.

Let's think about the optimal that we could do not only for ourselves, but maybe in the community, in the world at large.

Start thinking bigger and you'll start seeing the reason to not be so indebted and enslaved by lending institutions and toxic debt that's caused you to be in the position that you might be in right now.

That's right.

That's right.

So Joe, you have a fourth, let's call it law that you like to talk about about as well.

Tell us about that.

Sure.

So one of the items that Nelson didn't spend too much time about in the book.

In, in the book, Parkinson's law is the law of triviality.

And I kind of got a tickle about this because we do sometimes as human beings major in the minors.

So as a business owner, you know, I really don't know whether I should buy a box of paper clips of 50 in the box or whether I should buy a carton of 12 boxes because I'm always going to need Paperclips.

I know it's a ridiculous example, but that's what we do as human beings.

We tend to major in the minors.

We worry, and we agonize about ridiculously minor things.

Don't major in the minors.

He says.

The rule is the time spent on any item on the agenda will be an inverse proportion to the sum involved.

So, yeah, should we.

Should I get floor mats for my truck?

And what color should they be?

And what color.

What company should I buy them from?

I need them at all.

You know, I'm really more concerned about the truck being safe.

Good tires, new tires, great brakes, engine that works.

I want the truck to drive a million miles.

Not too concerned about floor mats.

And we spend too much time worrying, agonizing about the things that really don't matter that much.

Well, and that makes me think of how much time people actually don't spend even looking at finances, considering their finances, considering even just a budget.

Okay, we need to take this Parkinson's Law, these constant.

These little things that constantly suck away at your income streams, that constantly suck away at your savings that you may have, and start considering how can we reposition ourselves into a positive.

Like, we change the flow of our money.

And when I first heard about the infinite banking concept, that was the biggest conversation, was, how can we just change the flow of our money?

Parkinson's Law, of all the laws mentioned in that book, was the biggest one for me.

And like Nelson Nash says, if we can whip Parkinson's Law into shape, we will win.

And I'll stand by that.

You know, it's true.

If we could whip it into shape, we will win.

And I think there's no accident he used that phrasing because it is not as easy as flipping a switch.

For most of us.

It is a tough thing.

We live in a consumer culture.

We live in right now, an environment where things are getting very expensive in most areas of the country.

And how do we keep ahead?

I understand there's struggles, but how do we intentionally put our money into areas that are going to help us rather than hurt us over time?

And that's why I think infinite banking is one of the greatest vehicles out there to help you do that along the way.

And before it's a vehicle, it's a concept.

That's right.

It's got to grow and take root and.

And room ruminate and season and simmer, and it's got to get excited in your mind.

It's a concept.

You have to own the concept.

And one of the ways that I encourage people to, to think about it is not spending too much time on this, but look backwards, right?

The devil owns the past.

So really don't spend too much time it.

Spend a second or two or three and think about all the money that has slipped through your fingers for whatever reason and just coach yourself and say, I'm going to do things differently in order to get a different result.

That's right, Joe.

I don't think we can wrap with any better statement than that.

And I think I want our listeners to make sure you've read becoming your own banker.

I think that's the best place to start when it comes to this concept.

Reach out to myself or Joe.

You can reach us@alphaomegawealth.com podcast.

You can see previous episodes, subscribe on your favorite channels and share this with someone who needs to hear it.

We kind of kid, we're like, you know, it's like evangelizing Infinite banking.

It's telling the 10% as we say, getting the word out.

More people need to know about this because it's for their own good, right?

So reach out to us.

Thank you guys for listening today and catch us@alphaomegawealth.com podcast.

See you on the next good day.