In physics, "momentum" refers to the quantity of motion that an object has, which depends on two variables: mass (how much is moving) and velocity (how fast it's going). The formula is:
Momentum (p) = mass (m) * velocity (v)
This basic formula helped me maintain discipline as my income increased. Conversely, most entrepreneurs habitually apply "Parkinson's Law" to their finances: expenses expand to fill the income available, meaning that as revenues grow, so do expenses and lifestyle.
Using the momentum equation, the mass (m) is income, and the velocity (v) is your savings rate. For example, for every $100 you make, if expenses are $90, you could save $10 (or 10 percent). But if your income increases to $110 and you maintain the same expenses, you could save $20 (or 18 percent).
The momentum formula will help you establish disciplined habits and accelerate you toward desired outcomes because it simplifies everything.
— Tom Shieh, CEO of Crimcheck