I’m going to start off in a strange place for an article on Money360. I’m going to talk about professional basketball. Please, bear with me; there’s a very key point to where I’m going with this. (Also, if you’re an NBA fan, be aware that I’m simplifying a few aspects of this story to keep it from turning into many, many pages of text.)
In 2013, the Philadelphia 76ers, an NBA team, hired Sam Hinkie to be their general manager. A general manager’s job is to decide what players are going to play on the team. They decide what trades to make, what players coming out of college to add to the team, what players to sign to contracts, and so on.
Theoretically, the goal of a general manager is to use those moves to put the best team on the floor this year or, maybe, try to get players that will be good in a year or two. They want fans to come to the arena and have fun watching their team win, and they want to sell some jerseys of their best players.
Hinkie and the 76ers decided to take a very different approach, one that was informally dubbed “the process.” Hinkie believed that you needed to have a very good foundation in order to win a championship, and if you weren’t close to winning a championship, you should have a laser focus on building that foundation at all costs.
For Hinkie, a very good foundation consisted of a roster full of very solid young players from which one or two true superstars would emerge, surrounded by a bunch of skilled supporting players (I’m summarizing a number of principles all together in one sentence here, but that’s essentially “the process” in a nutshell.) He took the idea that “a bird in the hand is worth two in the bush” to an extreme level in terms of getting those young players. He realized that many teams would rather have a decent player now than the rights to pick a potentially great player out of college two or three years from now.
So, he proceeded to trade away everything he possibly could for those “two years from now” or “three years from now” assets.
What this meant in practice was that in 2013 and 2014 and 2015, the Philadelphia 76ers were historically bad. They stunk up the place. In Hinkie’s third season, they won only 10 out of 82 games, which was very close to the worst record in NBA history. They had traded away almost every decent player they possibly could for more and more “two years from now” and “three years from now” assets and, for the time being, made their team up of extremely marginal players.
Halfway through that third season, the owners gave up patience. What kind of general manager spends three years “building” a team that could only win ten games? The owners brought in someone to “oversee” Hinkie, and at the end of the season, he was basically pushed out the door. He resigned, but it was pretty clearly no longer his team to run.
But a funny thing happened along the way. All of those “two years from now” and “three years from now” assets started to pay off in bunches. Right now, the Philadelphia 76ers are an incredibly young and incredibly exciting team. They have a team absolutely loaded to the brim with young, intriguing players, all of which were Hinkie’s “two years from now” or “three years from now” assets.
As I write this, the team has won half of their games on the back of a roster that’s almost entirely made up of incredibly talented first year and second year players that are just learning how to play the NBA style game. If the playoffs started today, they’d make it. A year or two from now, barring a big rash of catastrophic injuries or inept trades, this team will be an absolute monster.
The entire focus of the team in 2013 and 2014 and 2015 was to build the best team for 2018 and 2019 and 2020 and beyond. I can’t say if it worked yet or not, but the 2018 team is absurdly talented, young, exciting, and very fun to watch.
When you watch a 76ers game right now, you’ll hear the crowd sometimes break out in a chant of “trust the Process” – here’s . The poster child of “the Process,” an extremely talented player named Joel Embiid (don’t worry, if you haven’t heard of him, you will unless he gets hurt), sometimes leads the crowd in the chant, waving at them and encouraging the chants.
Trust. The. Process
Right now, the 76ers can legitimately look at themselves as contenders. They’re probably not going to win a championship this year, but they will definitely be a team that no one wants to face in the playoffs because of their giant flashes of brilliance. They are good enough to beat anybody right now and, with some experience, they’ll know how to turn it on to win a lot of games. I would not bet against an NBA championship coming to Philadelphia in the next three years or so.
But what would that team look like without “the Process”? In all honesty, they’d probably be a mediocre, average team, one without a big hope for the future. They would have been far better in 2013 and 2014 and 2015, but today? I think almost anyone would choose “the Process” 76ers today and for the next decade or so.
So let’s bring this back home to me and you.
When I hit my financial rock bottom several years ago, I looked around my life and I saw two choices.
I could either keep bubbling along as I was, barely keeping my head above water, slowly paying down debt, having a life with a lot of little treats in it but never making those big life steps that I wanted to make. It would have been a pleasant life, year in and year out, but it wasn’t the life I wanted. It was a life without any of the big dreams, a life that was always tinged with stress about money, a life where I feared the prospect of a job loss.
My other option, the one I took, was one where I said, “All right, I’m spending a lot of money on stuff that doesn’t really mean anything to me. It doesn’t build the life I want. It just makes today a little more pleasant in a forgettable way.”
I took that second option. My wife and I dove hard into frugality. We started cooking exclusively at our apartment. We started buying everything store brand. We started intentionally seeking out free activities and entertainment. We started using the library for movies and books. We cut out a lot of bills and negotiated a lot of other ones. I could go on and on here.
In the short term, our lives lost a lot of immediate pleasures. We simply didn’t have as many daily “treats” in our life, and many of the ones that stayed around changed a little.
I like to think of this as being almost exactly like “the process” of the 76ers. Those first few lean years during our financial turnaround was a lot like 2013 and 2014 and 2015 for the 76ers. We decided to focus entirely on the future and, for a little while, we chose a pretty mediocre life.
Not only did we still have the stress of living paycheck to paycheck and facing a lot of debt, we also didn’t have the treats that we were using to make life comfortable. It wasn’t very fun – or, more accurately, it was about as fun as going to a 2014 Philadelphia 76ers game.
The thing is, we trusted the process. We knew that as time went on, our daily stress about money would fade as we paid down debt. We knew that as time went on, we’d discover lots of fulfilling things that didn’t cost an arm and a leg. We knew that as time went on, we’d start having the financial assets in place to handle the big things we wanted, like three children and a family home, a goal we both desired.
We trusted the process.
Flash forward to today and we have a fully paid for family home, zero debt, strong retirement savings, a very healthy emergency fund, and money put aside to buy our next cycle of vehicles and for our children’s college educations, too. We have enough budget flexibility to do a lot of things that we enjoy doing without sacrificing an inch of that security or undoing any of that progress toward a fairly early and nicely secure retirement for us and college for our kids.
We are the 76ers right now. We have a ton of great pieces for the future. We don’t have to worry about each day, as we don’t have any debt and lots of good things in our life. We might not be championship caliber yet, but we’re heading for something like it via early retirement and a nice step forward into the future for our kids.
“The process” translates beautifully to personal finance, in other words.
All you have to do is stop for a moment, examine what you’re doing on a daily basis, and ask yourself what the payoff is for each of those moves.
Is it something that’s going to help you to have a great day today but have a cost further down the road? Then you should think very carefully about whether you should be doing it. If you’re spending money on a splurge, is it really, really worth it?
Or, is it something that’s not going to make today any better (or maybe even make it a bit tougher) but will really pay off down the road? In that case, you should strongly consider the idea that this is the best option. Are you contributing money to your retirement savings? Are you paying down debt?
Start looking at all of your actions that way. Is this something that makes today better at the cost of tomorrow? Or is this something that makes tomorrow better at the cost of today?
“The process” is about choosing that second option most of the time, far more than you’re probably doing right now.
The thing is, for a while under “the process,” your day-to-day life might not be incredibly fun. You were used to going to an average NBA game, but now you’re going to a 2014 Philadelphia 76ers game – a much less fun experience.
Sure, it’s an okay life, but it’s not up to the standards of the recent past. You’re still watching an NBA team, but now it’s a team capable of winning only 10 games rather than 35.
The thing is, your choices are based on the process, and you trust the process. You can go to bed each and every night trusting the process and knowing that your life is headed on a better trajectory than it would have been had you just kept doing the same old thing.
If you go to bed each night with that idea in your head and you get up each morning with that idea in your heart, you find that it’s actually pretty refreshing and inspiring. You’re driven to find value in things like preparing your own meals and learning how to cook. You start really looking in earnest into things like what’s available at the library.
I found myself excited to take on tasks like renegotiating bills because I knew that it was building to something.
The key thing, though, is that you have to give the process time to work. You can’t expect to commit to that kind of forward thinking and then assume that everything will be peachy tomorrow.
If you’re evaluating your choices through the lens of what’s going to be better three years or five years from now, you can’t be frustrated about the lack of results a month from now. You have to truly trust the process. You have to wait for the results.
The 76ers started going down this road in 2013, and it wasn’t until 2017 that you could really see dividends from it.
It took about two years for really clear benefits from our own process start to emerge. I started to feel less worried about money at the six month mark or so, and then at the two year mark it was clear that we were now basically debt free and bringing in far more than we earned.
However, it took about five years in total for it to really, really pay off. We paid off our house in full a little over five years after we started “the process” living in a tiny apartment. In that time, we went from tons of consumer debt, no home, and very little retirement savings to a very, very healthy financial foundation.
All along the way, we trusted the process, and that’s what you’ve got to do, too. A healthy financial foundation isn’t built in a month or two.
Furthermore, you need to seek out financial routines that cut a lot of spending, but they need to be sustainable. If you’re feeling miserable, then you’ve made a cut too far and you need to restore it, or else you’ll make a rash move and kill the process before it can ever pay off.
The process isn’t about tomorrow, or next week, or next month, or even next year. It’s about the rest of your life, and it starts today.
It starts with a willingness to understand that an average day isn’t filled with perks and treats. An average day is a very low cost day. Perks and treats should wait for special occasions, with a little bit of anticipation to heighten the pleasure.
It continues with an understanding that there is a lot of contentment, pleasure, and joy to be mined from those ordinary days. There are a lot of things in your life that you find yourself overlooking if you steadily commit to a nonstop flow of treats and perks. Eating nothing but takeout denies you the pleasure of a simple meal you made for yourself on your own time and your own terms. Having 500 channels and feeling like there’s nothing on denies you the pleasure of finding a single show on DVD at the library and watching it from beginning to end.
It also continues with understanding that a lot of moves just don’t pay off today. Time you invest in building your professional skills won’t pay off today or tomorrow, but in a year or two, they’ll pay off with a good chance at a better job and a higher salary. The same is true for time and effort invested in building a strong professional and personal network. It’s also present when you’re looking at paying off debt, or putting money aside in an emergency fund – those things aren’t likely to change your life today or tomorrow or next week, but there will come a day when they’re life changing.
That’s the process.
Inspiration is a funny thing. I’ve watched basketball for many years – it’s a sport I enjoy watching occasionally because it flows so well when it’s played at a high level – but I never really found inspiration in it for how to live my life.
Now, when I watch a 76ers game and I see Joel Embiid on the court waving his hands in the air and getting the crowd to chant “TRUST THE PROCESS,” I do feel inspired. I’ve seen The Process work with the 76ers, and I’ve seen a similar process work in my own life. I know very well it can work in your life, too.
All you have to do is trust the process.