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Critical Point Analysis March 10, 2010

Posted by shaferfinancial in Finance.

Critical Point Analysis is a concept that states that in a complex system there is a point where the least amount of work will create the maximum result.  I highly recommend folks consider using this analysis when it comes to your financial life.  Analyze your financial life and really look for this point.  It might be your spending habits [i.e. Ramsey, Orman], or it might be your investment strategies [mutual funds, 401Ks, etc.] or it might be the jobs you are doing, but I bet if you really look and think about it you will find the critical point that you can work on that will make all the difference in the world.

Not to scare you, but after you have identified this point and made your changes, then a new critical point will be formed.  So this is a long term habit that needs to be formed.

Here is the final comment on “CPA.”  If you try to change it all at once, you will fail.  That is why so many people ultimately fail in their financial lives.  They don’t identify the critical points and work on them, instead they try to change their whole live at one time.  Take the time to really do critical point analysis, and then work on that point.  It might take a whole lot of time to get that one point right.  But it will be worth it.  And even with our busy lives, if we can identify the critical point we can find the time to deal with it!


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