Big Change Starts Small
March 10, 2021
By Matt Miner, MBA, CFP®
A key theme in last week’s interview with Blair Sheppard was that to achieve sustainable and successful change, each of us must lead, follow, and serve locally in a way that, if carried through or expanded, benefits the world.
This idea brought Steven Covey’s circle of influence and circle of concern to my mind.
Today’s show ties Blair Sheppard’s “Local First” recommendation to Covey’s Circle of Influence model, and then ties both ideas back to financial planning.
Local First
When we interact with big ideas like those Blair presents in Ten Years to Midnight, it’s easy to spin out. None of us can fix business (let alone the world) on our own. Still, there are many things you and I can change much closer to home that make the world a better place in some way.
For example, as time passed, I’ve shaped my career to be more local, more sustainable, and to deliver greater control over how I dispose of my time. At times this has been culturally difficult and financially painful, but this effort has brought greater alignment between my values and my daily work over the last couple decades.
It started with the decision to focus on only one spouse’s career – this gave my wife total control over her time to use that to benefit our family. She has done this especially in her career as a homeschool mom. What’s a better ROI than investing time in our children?
When we came out of business school, we chose the corporate route rather than consulting or banking because we thought it would be better for our marriage and kids. This was a way of managing the demands of my job, at least to some extent.
From my early twenties to my mid-thirties I was focused on growing a corporate career including moving our family all over, traveling for work, and ceding control of my day from 7:30 am to 5:30 pm to someone else’s agenda. During this time, a mentor took me aside and told me that whatever I might achieve in my career, the significance of those accomplishments would pale compared to what I could achieve much closer to home. Kensill’s exact words were, “If you’re really going to make a difference, it’s gonna be in your family and your church.”
With that advice ringing in my ears, I departed my Fortune 100 firm to join a medium-sized private business in Raleigh. With that choice, we, the Miners, planted a flag as it relates to place: We were done moving around. We were ready to deepen our roots in NC.
Five year later I left that medium-sized firm and joined PLC Wealth. With that transition I gained near-total control of my own work schedule, with the tradeoff that I am increasingly responsible for generating my own income.
This is an example of crafting a career in service of family – your family will look different, and in hindsight I can see dozens of ways we could have done it better. Nevertheless, all the decisions were made in alignment with values, so even if they didn’t all deliver the results we hoped for, there’s no regret (or at least there shouldn’t be).
How has it worked out? Despite the fact that being my wife is no picnic, Charity and I are still faithfully married after almost 20 years. Our teenage kids, though imperfect like their parents, are cheerful, loving, productive members of their family, church, and community. Their homeschool educations are vastly superior to my own primary and secondary education.
My career path benefitted the four people I care the most about. This set of hyper-local choices changed the world for our family.
Case Study: The Smallbatch Homeschool Roaster
Josh Miner, the Smallbatch Homeschool Roaster, sells a lot of coffee here in Oak Park Neighborhood. He also supplies my coffee at a rate of about three pounds per month. Before Josh got into the coffee business, I bought from a roaster out in California. By shifting my coffee purchases to my son, a few things happened:
We keep the capital right here in the family. Profits from my coffee drinking will be a couple thousand dollars by the time Josh leaves the house
I no longer incur 2700 miles of shipping to have roasted beans delivered to my door
By committing a minimum order to Josh, he gained confidence to make the capital outlay of about $600 for beans and equipment to get started in his business.
By launching his business Josh gained an additional piece of his personal identity, and an incredible end-to-end business experience impossible to come by outside of entrepreneurship:
Purchasing: He selects and orders green coffee beans.
Financing and working capital: He ties up his own money in equipment and coffee inventory.
Receiving and material handling: He receives shipments of beans 50 pounds at a time from La Bodega.
Manufacturing and quality control: He has to carefully control his roasts or risk roasting an under-roasted or burned product. He absorbs any losses of this kind through his own PnL. It happens seldom.
Product names and branding
Packaging
And that’s just the back-end stuff. Josh also solicits orders, acknowledges orders, thanks his customers, manages a simple CRM, and engages his customers with email campaigns! Wow. All because we decided to be local-first with our coffee.
Though the impacts are minor on a global scale, Josh’s coffee business reduces emissions, keeps capital close to home, provides an invaluable experience for Josh that can’t be replicated working at Wal-Mart or Chik-Fil-A, and he delivers delicious coffee that’s always roasted fresh.
Josh and I also coached one other homeschool kid in Virginia about how to do the same thing, so whatever these benefits are in the world, they’ve already doubled.
Homeschooling, Homesteading, Hunting, and Veggies
Other encouraging signs of a local-first mindset include the growth in homeschooling, the homesteading movement, raising one’s own veggies for fun and profit, and the surge in hunting during the pandemic (WSJ paywall alert) – all these offer greater local connection and meaning to daily needs and tasks.
It Matters to This One
Changing gears a bit, you may have heard the story (or Studio C’s amusing twist) about the boy walking on the beach at low tide, picking up starfish lying in the baking sun, and hurling them into the ocean to save their lives.
A passerby asks the boy why he bothers – there are so many beached starfish, his efforts can’t possibly make a difference.
The boy looks at the crustacean in his hand, throws it into the cool ocean water, turns to the man and says, “It makes a difference to this one.”
I’m the first to admit there are a few problems with the story.
It’s a little cheesy.
Also, I love oysters and starfish eat them, so I’m not in favor of rescuing starfish.
But it makes a good point. We can’t fix the world, or society. We can’t even fix our own neighborhood singlehandedly. But we can take local actions that make the world better for someone.
In the Miner family we know many families involved in adoption and fostering. Individually these families make no difference to statistics about single motherhood, child poverty, abandonment, or homelessness – but what a difference to each child who finds a home!
Circle of Influence, Circle of Concern
Steven Covey popularized an idea he called Circle of Influence and Circle of Concern. We all have things we influence. They exist on a continuum, starting closest to us and ranging out.
Imagine three concentric circles. The center circle is labeled Circle of Control, the second circle labeled Circle of Influence, and the outer circle is your Circle of Concern.
Within our circle of control are:
How we speak, think, and act
Sleeping, eating, drinking, and exercise
Spending time with the most important people in our lives – spouses, children, friends, and extended family – improves the quality of those relationships.
Within our circle of influence we find:
Things that happen in our work, choices other people make, and our reputation in the world. These things can be influenced, but not totally controlled.
In our circle of concern are things like the economy, taxes, emissions, elections, and global pandemics.
Covey’s advice is to focus our time, attention, energy, and resources in our circle of control and circle of influence, and to devote no resources to things only in our circle of concern.
The big ah-ha is, if we focus enough on those items in our circle of control and circle of influence, we find those circles expanding outward to encompass items formerly only in our circle of concern.
For example, if you care for your health, you’ll have strength to work in your career or business. If you do well in your career or business, you’ll find yourself with more to do, and more influence over more things. Over time you’ll be in a position to influence larger and larger decisions with ever greater effects in the world, potentially bringing some of what started in your circle of concern into your circle of influence.
Covey calls this a proactive focus.
The reverse is also true. If we spend our time fretting over what’s in our circle of concern, we starve those pursuits within our circle of control or circle of influence. If you spend the whole morning worried about an election outcome, you may not have enough energy in the afternoon to go for a run!
To the extent we focus on our circle of concern we shrink our circle of influence. Covey calls this a reactive focus.
Connection to Financial Planning
Starting with a local-first approach builds the kind of foundation where income and wealth can be most enjoyably put to work. We enjoy income and wealth best in the context of meaningful relationships to family, friends, and the broader community.
When it comes to circle-of-influence versus circle-of-concern, I work with clients in those areas in which they can exert immediate control. We don’t focus on tax policy, the economy, the direction of financial markets, or presidential elections. Instead we consider how best to navigate within the system. As Gibbon said, “The winds and waves are always on the side of the ablest navigators.”
As it relates to cash-flow: In the short term you can control your expenses and lifestyle level. In the long term you can control your income level.
As it relates to insurance: You can control having proper disability, life, health, and property and casualty insurance, or you can create a plan to be self-insured.
As it relates to taxes: You can become educated about the tax code and use it with skill for your benefit.
As it relates to investments: You can learn the strategies that work and direct your dollars accordingly.
As it relates to estate planning: You can put a plan in place that shows your love to those you leave behind by making important decisions before you die and not leaving them to the state, or asking your loved ones to guess.
Key Takeaways
Grow some veggies this spring. Next fall you can reduce methane emissions by getting a deer for your freezer.
Start a sidehustle or volunteer in a way that serves locally.
Put yourself on a strict news and social media budget. Delete the apps.
Find a child or young adult – one you don’t know, one you do know, or one of your own – to help by mentoring, teaching, fostering or adoption.
Like Paula Pant says, putting these things to work is a lifetime practice, but as a tractor-dealer friend of mine used to say, “You can’t finish unless you start!”
TRANSCRIPT
[music]
[00:00:00] Matt Miner: A key theme in last week's interview with Blair Sheppard was that, to achieve sustainable and successful change, each of us must lead, follow, and serve locally, in a way that, if carried through or expanded, benefits the world. This idea brought Stephen Covey's Circle of Influence and Circle of Concern to my mind, so the first half of this show focuses on Blair Sheppard's idea of local first. The second half focuses on Covey's Circle of Influence. Then, I tie both of these ideas back to financial planning. And be sure to stick around at the end for a shout out to recent reviewers and a preview of Friday's conversation with Gretchen Rubin's new business partner, my friend and your favorite, Anne Mercogliano.
[music]
Hey, and welcome to the Work Pants Finance Podcast. I'm Matt Miner, your money guide, and Work Pants Finance is the show for MBAs, entrepreneurs, and other professionals, who want their financial plan to work as hard as they do. Today's show is called Big Change Start Small, and you can read more at workpantsfinance.com/7.
Chapter seven of Blair's book is called Strategy: Rethinking Economic Growth-Local First. I wanted to read you a couple of excerpts from there. "The undermining of globalization has left a vacuum for a new economic development model to emerge. In my view, the optimal option for filling this void is a strategy called local first. That is self-sustaining, self-contained, continuously improving local economic ecosystems. Perhaps, the best argument for choosing a local-first strategy as an improvement on the predominant internationalist framework we've grown accustomed to, is the observation that even when globalization appears to benefit everyone, it doesn't.
Certainly, the middle-class expanded globally along with corporate profits. Operational efficiency gains were real. The net prices of most manufactured goods were held in check and more people participated in the personal technology and communication revolution. These improvements primarily captured by GDP growth, only masked the paralyzing negative effects of globalization.
For one thing, individuals who slipped through the job market, and there were large blocks of people in every country who could not compete, were invisible. They were the great underemployed, and as globalization took hold, they slipped deeper into the shadows. More broadly, GDP figures testified the global prosperity on average, while broad portions of the employed population were experiencing years of income stagnation and decline.
GDP results also papered over intangible factors, such as environmental degradation, the lack of benefits, and the insecurity associated with many jobs, as well as the diminished quality of life in some communities." Blair continues, "Before globalization became dominant and even in its earliest stages, business success was intrinsically linked to the success of the community or society within which it operated. Capital was created and primarily remained in the area that its employees and many of its customers came from, even if a portion of it was generated by sales outside the area.
Think of the world Adam Smith occupied when he wrote Wealth of Nations. If business leaders didn't pay attention to people's needs in their own backyard, they would be lambasted on Sunday in church, they would be ostracized at local town meetings, and they would be shamed into reinvesting their profits into the area and its people. In some fashion, everyone from Henry Ford to Andrew Carnegie, to Werner Von Siemens to Kiichiro Toyoda, to Jamsetji Tata, began there ultimately vast business empires locally, and maintained an intimate connection with their local communities even as their markets grew further and further away.
Small and medium sized businesses have been even more essential to the economic development in their midst. Indeed, it could be said that without small and medium-sized companies bolstering jobs expansion and innovation in one circumscribed region after another, countries like Germany, the UK and the United States would never have enjoyed their leadership position in global markets.
Of course, their rights, this is not to say that being a global competitor is a losing strategy in all instances, cities like Barcelona, Moscow or New York, which uniquely have concentrated educated workforces, excellent universities, deep investment channels, global infrastructure and governments that support business development, are still in a good position to enjoy gains for the people and cultures of their communities from many facets of globalization. But mid-tier cities have no chance to beat these larger urban areas at their own game and must begin to be more self-conscious about their economic development strategies.
Looking inward more than they have for many decades. In fact, when giant cities use their existing competitiveness to absorb global resources, they often ruin smaller cities and their countries by pulling more attention, investment, and human capital away from those places."
I would just note that if what Blair writes is that all true of mid-sized cities, it is even more true of small cities, towns, neighborhoods or even families. Here's the deal, I can't single-handedly fix business, but I can do a few things myself and in my family that changed the world for the better, starting right where I'm at.
First, as time has passed, I've shaped my career to be more local, more sustainable, and to deliver a greater control over how I dispose of my time. This has been culturally difficult and financially painful, but it aligns with how we want to live. It began with the decision to focus on only one spouse's career. This gave my wife, Charity, total control over her time to use that to benefit our family. She has done this especially in her career as a homeschool mom. What's a better ROI than investing time in our children?
Then, when we came out of business school, we chose the corporate route rather than consulting or banking, because we thought it would be better for our marriage and kids. This was a way of managing the demands of my job to some extent. From my early-20s to my mid-30s, I was focused on growing a corporate career, including moving our family all over the country, potentially, the world, traveling for work, and seeding control of my day from 7:30 AM to 5:30 PM to someone else's agenda.
During this time, a mentor took me aside and told me that whatever I might hope to achieve in my career, the significance of those accomplishments would pale compared to what I could achieve much closer to home. Ken Sole’s exact words were, "If you're really going to make a difference, it's going to be in your family and in your church." Would that advice ringing in my ears, I departed my Fortune 100 firm to join a medium-sized private business in Raleigh.
With that choice, we, the Miners, planted a flag as it relates to place. We were done moving around. We were ready to deepen our roots in North Carolina. Five years later, I left that medium-sized firm and joined PLC Wealth. With that transition, I gained near total control of my own work schedule, with the trade-off that I am increasingly responsible for generating my own income.
This is an example of crafting a career in service of family. Your family is different, and in hindsight, I can see dozens of ways that we could've done it better. Nevertheless, all these decisions were made in alignment with values. Even if they didn't deliver all the results we hope for, there is no regret, or at least there shouldn't be.
Now, how has this worked out? Despite the fact that being my wife is no picnic, Charity and I are still faithfully married after almost 20 years. Our teenage kids, though imperfect like their parents, are cheerful, loving, productive members of the family, church, and community. Their homeschool educations are vastly superior to my own primary and secondary education.
My career path directly benefited the four people that I care the most about. This set of hyperlocal choices changed the world for Charity, Lucy, Josh, Ben and me. Now, here's a very close to home case study. Josh Miner, the small batch homeschooled roaster sells a lot of coffee right here in the Oak Park neighborhood. He also supplies my coffee at a rate of about three pounds per month.
Before Josh got into the coffee business, I bought from a roaster out in California. By shifting my coffee purchases to my son a few things happened. We keep the capital right here in the family. Profits from my coffee drinking will be a couple thousand dollars by the time Josh leaves the house. I no longer incur 2,700 miles of shipping to have roasted beans delivered to my door.
By committing a minimum order to Josh, he gained confidence that he needed to make the capital outlay of about $600 for beans and equipment to get started in his coffee business. By launching his business, Josh gained an additional piece of his personal identity, and an incredible end-to-end business experience, impossible to come by outside of entrepreneurship.
Josh is involved in purchasing. He selects and orders green coffee beans. He's involved in financing and working capital. He invests his own money in equipment and coffee inventory. He's involved in receiving and materials handling. He gets shipments of 50-pound bags of beans at a time. They show up on our doorstep from La Bodega. He's in charge of manufacturing and quality control.
He has to carefully control his roasting process or risk creating an under roasted or a burned product. He absorbs any losses of this kind, though, they have been very infrequent. He had to come up with product names and branding for his products. He packages his product, and that's just the backend part. Josh also solicits orders, acknowledges orders, thanks customers, manages a simple CRM, and engages his customers with email campaigns. Wow, and all because we decided to be local-first with our coffee.
To sum up, though the impacts are minor on a global scale, Josh's coffee business reduces emissions, keeps capital close to home, provides an invaluable experience for Josh that can't be replicated working at Walmart or Chick-fil-A, all while delivering delicious coffee that's always roasted fresh. Besides that, Josh and I also coached one other homeschool kid in Virginia on how to do the same thing. Whatever these benefits are in the world, they've already been doubled.
Other encouraging signs of a local-first mindset taking hold, include the growth in homeschooling, the homesteading movement, raising one's own veggies, and the surge in hunting during the pandemic. All of these offer great local connection and meaning to daily tasks.
Changing gears a bit. You may have heard the story about the boy walking on the beach at low tide, picking up starfish, baking in the sun, and hurling them into the ocean to save their lives. A passer-by asks the boy why he bothers. There are so many beach starfish. His efforts can't possibly make a difference. The boy looks at the crustacean in his hand, throws it into the cool ocean water and turns to the man and says, "It makes a difference to this one."
Now, I'm the first to admit, there are a few problems with this story. It's a little cheesy. Also, I love oysters and starfish eat them. I'm not in favor of rescuing starfish. I'm in favor of eating oysters, but the story makes a good point.
We can't fix "the world or society". We can't even fix our own neighborhoods single-handedly, but we can take local actions that make the world better for someone. In the Miner family, we know many families involved in adoption and fostering. Individually, these families make no difference to statistics about single motherhood, child poverty, abandonment, or homelessness, but what a difference to each child who finds a home.
[music]
Go to workpantsfinance.com/resources, to find ways you can make a difference for your children with the Bank of Dad spreadsheet and video. While you're there, check out the Emergency Fund Whitepaper, and my latest publication, Hacking the Grocery Bill.
Stephen Covey popularized an idea he called, Circle of Influence and Circle of Concern. We all have things we influence. They exist on a continuum, starting closest to us and ranging out. You can imagine three concentric circles. The center circle is labeled "circle of control". The second circle is labeled "circle of influence", and the outer circle is your circle of concern.
Within our circle of control are how we speak, think, and act, sleeping, eating, drinking, and exercise. Spending time with the most important people in our lives, our spouses, our children, calling our mom, having friends for dinner, getting together with extended family. All of these improves the quality of those relationships. Going out from there within our circle of influence, we find things that happen in our work, choices other people make, and our reputation in the world. These are things that we can influence but can't totally control.
Finally, at the outside in our circle of concern are things like the economy, taxes, emissions, elections, and global pandemics. Covey's advice is to focus our time, energy, attention and resources in our circle of control and our circle of influence, and to devote no resources at all to things that are only in our circle of concern. Covey's big "Aha" is, if we focus enough on those items in our circle of control and circle of influence, we find those circles expanding outward to encompass items we couldn't reach at first.
For example, if you care for your health, you'll have strength to work in your career or business. If you do well in your career or business, you'll find yourself with more to do and more influence over more things. In fact, over time, you'll be in a position to influence larger and larger decisions with ever greater effects in the world, potentially, bringing some of what started in your circle of concern into your circle of influence. Covey calls this a proactive focus.
The reverse is also true. If we spend our time fretting over what's in our circle of concern, we starve those pursuits within our circle of control or our circle of influence. If you spend the whole morning worried about COVID-19, you may not have enough energy in the afternoon to go for a run. To the extent we focus on our circle of concern, we shrink our circle of influence. Covey calls this a reactive focus.
Here's the connection to financial planning: starting with a local-first approach builds the foundation where income and wealth can most enjoyably be put to work. We enjoy income and wealth best in the context of meaningful relationships to family, friends, and a broader community. When it comes to circle of influence versus circle of concern, I start my work with clients in those areas, in which they can exert immediate control.
We don't focus our efforts in a planning relationship on tax policy, the economy, the direction of financial markets or interest rates, or even presidential elections, instead, we consider how best to navigate within the system. As Gibbon said, "The winds and waves are always on the side of the ablest navigators." As it relates to cashflow, in the short-term, you can control your expenses and lifestyle. In the long-term, you can control your income.
As it relates to insurance, you can control buying proper disability, life, health, property, and casualty insurance, or you can plan to be self-insured in one or more of these areas. As it relates to taxes, you can become educated about the tax code, and use it with skill and to your advantage. As it relates to investments, you can learn the strategies that work and direct your dollars accordingly. As it relates to estate planning, you can put a plan in place that shows your love to those you leave behind by making important decisions before you die, and not leaving them to the state or asking your loved ones to guess.
If you ever wonder about the scope of my work as a financial advisor, check out my recommendations from today. First, grow some veggies this spring, then next fall, reduce methane emissions by getting a deer for your freezer. Second, start a side hustle or volunteer in a way that serves locally. Third, put yourself on a strict news and social media budget. Delete the apps from your phone. Fourth, find a child or young adult, one you don't know, one you do know, or one of your own to help with mentoring, teaching, fostering or adoption. Like Paula Pant says, "Putting these things to work is a lifetime practice." As a tractor dealer friend of mine used to say, "You can't finish unless you start."
[music]
Now, as promised, big thanks to my reviewers. Jtwhitford, Operaisfun. Tludwig89, TimRamey, mtokudome and spinningthruthemeadow. Thank you all so much for taking time to rate and review the show. If you're listening to this, and haven't already done so, please leave a rating and review.
Next up, Anne Mercogliano returns to the show on Flashback Friday as Work Pants Finance travels through time to highlight just how much Anne got done in 2020. She left the corporate job, hunkered down with family through the summer, and launched a business with one of my favorite creators, Gretchen Rubin. She also began a construction project, but I don't think you can hear it on the audio. Thank you so much for sharing your time with me today. Until next time, this is Matt Miner reminding you to make a financial plan that works as hard as you do.
[00:17:13] Speaker 2: Matt miner is a fee-only fiduciary financial advisor and founder and CEO of Minor Wealth Management, a North Carolina registered investment advisor, where Matt provides personalized unconflicted advice to clients for a fee. He's also my dad, so please be nice when you talk to him. Matt is a Certified Financial Planner professional and holds a Series 65 securities license.
He earned his Bachelor's degree in Finance from Arizona State University, and his MBA from Duke University's Fuqua School of Business. Work Pants Finance is Matt's financial media business, where he talks about work, entrepreneurship, kids and money, taxes, investing, and other personal finance topics. Workpantsfinance.com exists to share wisdom and provide general financial information. It is not financial tax or legal advice. You are an individual and probably need personal advice for your specific situation. You should consider building relationships with helpful, caring, and competent professionals who understand your unique context, and can provide advice that is tailored to your needs.
[00:18:09] [END OF AUDIO]