One of my favorite motivational metaphors is that of the trim tab. While I discovered it through one of Stephen Covey’s books, Buckminster Fuller is actually credited as the first and most famous case of applying the trim tab metaphor to personal leadership (And he was an architect, which makes him 100% cooler!).
What’s a Trim Tab? Glad you asked…
The simplest explanation for a trim tab is an appendage to a ship’s steering mechanism. Imagine a giant oil tanker or a cruise ship—the rudder on one of those vessels probably weighs more than my house! Well, attached to that rudder is a small “plate” that stays parallel with the rudder during normal travel.
When the ship wants to turn, instead of turning the rudder, the ship’s controls turn the much smaller and easier to control trim tab. The positive and negative pressures (as if I know!) somehow create enough push or pull to move the giant rudder in the direction you want to go, and therefore turning the ship.
It’s a lengthy explanation, but I’m sure you can see the application that Fuller and Covey found in this powerful little metaphor! By making small, deliberate changes, we can affect forces that cause larger, significant changes.
Applying Trim Tabs to Money
The concept of trim tabs is to find small changes that have awesome effects. Many people can also identify with using leverage, or focusing on the most important 20% of tasks, which are both closely related to the concept of trim tabs.
These are more than just sub-tasks of a larger financial project or goal. Because they cause a cascading and amplifying effect, their implementation takes a small amount of effort and translates it into a significant result.
It’s not a free lunch (didn’t anyone tell you there’s no such thing?). But if you want big changes with optimized effort, look for those financial tasks that are trim tabs.
Let’s Look for Examples
Let’s look for examples of trim tabs from the perspective of end goals. In other words, let’s look at some of the common financial things people want to accomplish, and identify potential trim tabs that could leverage us toward those goals.
Listed below are seven examples of financial goals with what I believe could be corresponding trim tabs:
- I want to save $20,000 for a home purchase. Are there alternatives to your home purchase strategy that would enable you to put less money down? Could you take an hour out of your day and find these?
- I want to make $75,000 per year in income. Are there any passive income strategies you could start up that require little up-front work and capital? How about a part-time job like pizza delivery?
- I want to pay off all of my debt. Why not start by making a one-time bonus payment from your savings? This would reduce interest payments on all subsequent credit cards and loans!
- I need to save $1,000,000 for my retirement. Research ways to increase the interest you earn on your investments, even if it’s a very small percentage. Even tiny changes in the average interest earned make huge changes when compounding is applied.
- I need $100,000 to pay for my kid’s education. If you don’t have a college savings account, why not take the time to open one? The tax benefits alone of such an account could help it grow so much faster!
- I need $3,000 to start a home business. Are there alternative sources of start-up capital you haven’t explored? Could you call someone you know who would be interested in helping you start a business and asking for money?
- I want to be financially independent. Could you start to define what “financial independence” means to you? Just making sure that you’re headed in the right direction is critical to the success of your plan.
Think of a financial goal or project that you are working on right now. Maybe it’s been on your “goal shelf” for a few years, you’re just starting out, or you’ve been in the thick of it for years and there’s no end in sight.
Try to think of trim tabs that apply in your situation. Maybe you already have a list of steps that your goal requires for completion. Do any of those qualify as trim tabs?
Photo by skittzitilby