2 Key Habits to Change Your Trajectory

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If I started on my wealth building journey all over, here are the first 2 things I'd start doing, right away.

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Step 1 — Track Your Expenses. Manually.

I recommend using this app: Toshl Finance.

This is my favourite app for expense tracking because you can enter your expenses on the fly.

It is quick to do but it is still manual. That's the important part. We want to be conscious of spending our money, every time.

Even if you use an automated system, I still recommend that you track your expenses manually.

Here's why:

Increase Friction

In principle, the more friction there is to any behaviour, the less likely we are to do it.

And the less friction there is to doing the same behaviour, the more likely we are to do it.

I go over how powerful the principle of friction can be for changing human behaviour in a thought experiment called Whole Food Island

Many of the world's wealthiest companies are built on this principle. The biggest tech companies have mastered the art of eliminating friction.

They are very good at eliminating friction and getting us to do what they want us to do.

Example: Scrolling on Social Media Apps

The average time that people spend on social media is 144 min per day.

That's 2 hours and 24 minutes. Every day.

If we asked people: "how much time would you like to spend on social media every single day?", the answer would probably be a much lower number.

But these apps have perfected giving us frictionless, easy access to small hits of distraction, entertainment and validation - and have turned millions of us into junkies.

The reality is that, even if you like social media, you probably still end up spending more time on it than you would normally want to.

This is not your fault.

This happens because the process of using social media is designed to be effortless and frictionless.

The same thing has happened for the process of spending your money.

It has also become frictionless.

Example: Contactless Payments

Whether it's from your debit card, credit card, cell phone, or smart watch... all you have to do is: pay with a quick tap... and then think about what to buy next.

This is great for businesses on the receiving end of your buying activity. The frictionless process encourages you to spend more and think less.

This is not in your best interest.

Because if you thought about whether or not you wanted to spend your hard earned money...

...every single time you were about to spend it...

...you might actually change your mind and decide NOT to spend it!

People who want to sell you things don't want you to do that.

They want the exact opposite: they want you to spend as fast, freely, and effortlessly as possible.

Example: Amazon's 1-Click Buy Button

Amazon patented the 1-click purchase process for websites and it was key to putting them in a very strong position in the eCommerce market.

1-click ordering was a game-changer for hassle-free online shopping.

Enter your billing details just once and from then on, a single click completes the purchase. Easy. Effortless. Frictionless.

We want to use this principle in our favour and add more friction to spending money.

We want to be mindful every time we are about to spend our money.

Manual Expense Tracking helps us do that.

Automatic expense tracking doesn't.

Automated expense tracking tells us that we spent too much money after we've already spent it.

In other words, it's a Damage Report.

Nobody ever looks at their statement with excitement wondering "ooh! I wonder how much I spent this month!"

It's almost always bad news.

The solution to all of that is to track your expenses manually.

Note: Manual Expense Tracking is a habit. Like any habit it starts out difficult and gets easier over time.

Step 2: Save 10% of Your Income

Save AT LEAST 10% of your income. Make it a habit to always put aside 10% of everything you've earned at the end of the month. This is a key habit for building wealth and it's never too early to start doing this.

In this case, we want to remove friction from the process of saving our money.

How do you do this?

This will depend on whether you have a fixed income (like a paycheck or a salary) or variable income (contracts, gig-work, business income, etc.).

Here's how we do this in both cases:

Fixed Income

  • Create a recurring payment in your bank to automatically move 10% of your income into your savings account.
  • Optional: Make it the same day you receive your salary so that the first thing you spend your income on is paying yourself.

Variable Income

  • Doing it automatically is tricky - your bank may have a feature for this, but you likely have to make payments manually.
  • Manual Solution: Set a reminder for 1 day a month where you tally up all your income sources for that month and transfer over 10% of the total.

Create Your “Personal Runway” Savings Account

No matter how you do it, create a “Personal Runway” savings account. This is a separate account to which you will transfer your 10% (or more) each month. This account is where your savings will gradually build up over time and it represents your personal runway.

What is Your Personal Runway?

If you lost all your sources of income today, how long could you live off of your savings for, before running out of money?

That's your personal runway. It's the amount of time you could sustain your current lifestyle, living just off of your savings.

The 2 ways to extend your personal runway are:

  1. Build up more savings.
  2. Lower your living costs.

I recommend that you build up a runway to be at least 6-12 months long.

Why? Because your personal runway gives you freedom. It makes you less dependent on your current sources of income. It means that even if things go horribly wrong, you have more time to find a new job or start a new business. A long runway gives you the power to make better decisions.

If you've never done anything like this before, you'll be amazed at how much better you feel when you have even a couple of months of runway saved up.

Calculating Your Personal Runway

To calculate your current runway, simply divide your total savings (in your personal runway account) by your average monthly expenditure.

This is where the manual expense tracking from step 1 comes in handy, too. Most people only have a vague idea of how much they spend each month and what they spend it on. Once you've tracked your expenses for a while, you'll know exactly what's going on and you can calculate your runway precisely.

Example: Creating a 6-Month long Personal Runway


Step 1: Figure out your average monthly expense. Let's say it's $3,000.

Step 2: Decide on how long of a runway you want. 6 in this case.

Step 3: Create your Personal Runway target. 6 x $3,000 = $18,000.


We want to use our habit of saving at least 10% of our income to build up to this amount.


Once we have $18K saved, we will have a Personal Runway of 6 months.

Action Steps:


  • Install the Toshl app (click here)
  • Start logging all your expenses
  • Create a (separate) "Personal Runway" savings account
  • Start by putting 10% of your last month's income in there

Would you like to receive reminders to finish this course? (click here)

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