Marie Kondo has blown up thanks to showing off her KonMari method in the new Netflix show Tidying Up With Marie Kondo. The organizing consultant is traveling from home to home to help people tidy their lives. While Marie Kondo is focusing on homes, you can easily apply her methods to your finances as well.
Applying the KonMari method will save you money by buying less stuff, time by managing less stuff, and will also improve your investing returns by cutting losers that are dragging your portfolio.
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6 Rules of The KonMari Method
Marie Kondo shared the KonMari method in her best-selling book The Life-Changing Magic of Tidying Up. You can apply the rules from Marie Kondo to your lifestyle and finances just as easily as tidying up:
- Commit yourself to tidying up
- Imagine your ideal lifestyle
- Finish discarding first
- Tidy by category, not by location
- Follow the right order
- Ask yourself, “Does it spark joy?”
She finally recommends saying thank you to each item you dispose. This will make you feel better about the decision you made, and will also give you more gratitude towards the stuff you keep.
You should practice the same gratitude with investments as well. Executives and employees are working to maximize your return as a shareholder. Being appreciative of their work will make investing more fulfilling, and will remove the short term thinking that is pervasive in Wall Street.
How Marie Kondo Can Improve Your Finances
Marie Kondo became famous for tidying up, but her rules can be applied to your finances and investments as well.
Applying her methods will accelerate your savings, save wasted time and money from owning and managing too much stuff, and will improve your investing returns.
Save Money by Buying Less Stuff
Moving is a painful reminder that you own too much stuff. Unfortunately, the average American only moves 11 times in their lifetime, so the stuff piles up without anybody noticing.
The KonMari method will help. Every deep clean will remind you how much stuff you own, and you’ll have second thoughts the next time you’re ready to buy more.
Any money you don’t spend will go straight to your savings, which will further accelerate your net worth’s growth.
Save Time By Managing Less Stuff
One lesson from the Millionaire Next Door is to allocate your time and energy towards building wealth. Whether you like it or not, your stuff is sucking up time that could be used for building wealth.
You may have to clean the stuff, maintain it, or the stuff is simply in your way. This problem compounds for every new thing you buy, and over time you can get overwhelmed.
To summarize, owning less stuff is an easy way to be frugal without looking cheap, and it will give you back time you never knew you were losing.
Optimize Your Investments
You can apply the KonMari method by Marie Kondo to your finances just as easily as your stuff.
Commit yourself to tidying up your investments, and then scrutinize each stock, bond, and real estate holding you have. Similar to asking whether it sparks joy, ask where you see this investment in 5 years.
Do you believe this company or real estate holding will go up in value in 5 years? Why do you think that? Finally, what could cause the company to go sideways?
Are you paying too much in fees? Mutual funds are probably ripping you off, and you could save a killing by moving that money to an ETF.
Inertia is a painful drag on investments, and it happens to all of us. One of my colleagues is an absolute genius, and held most of his net worth in his former company for nearly 10 years. He does not like the company, does not believe in them over the long term, and the company’s declining stock price showed he was right.
Despite all of these red flags, he held on to the company for 10 years! Finally, that company was acquired in mid 2018 for cash. When I asked him 6 months later what he did with that money, he said it was still sitting in cash. Even though inflation is eating his savings away, he isn’t doing anything about it.
To summarize, inertia can happen to the best of us. Apply the Konmari method by Marie Kondo to your finances to ensure your money isn’t attached to losers.
Marie Kondo & Your Finances – The Bottom Line
Marie Kondo became famous for cleaning, and you can apply her methods to clean your finances as well.
Her KonMari method saves you money by buying less stuff, saves you time by owning less stuff, and can improve your investments by focusing on winners and cutting losers.
This mindset will make a huge impact on your finances over time. More money will go towards your investments, and more time will be focused on building wealth. Both of these will compound over time and will make a dramatic impact to your life.
To conclude, the trick is to start now. Apply the KonMari method by Marie Kondo to your lifestyle and finances – the sooner you start, the sooner you’ll reap the rewards.