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Personal Journal – Day 17: Wealth Management
10 years ago
If you do not have enough money, there is one primary reason. You have not conditioned yourself for wealth. This will be a topic of focus for today and tomorrow.
Money is an emotionally charged issue. I either see one of two things: A drive and passion to actually acquire these little slips of paper with deceased notables on them, or a contempt and general hatred of it, something to avoid at all costs. It is the latter which baffles me.
Wealth Management: Conditioning for financial abundance.
Money is nothing more than a representation of value; a means to measure the exchange of value between people. There are financial opportunities which surround us at just about every moment; yet most don’t create the abundance we deserve. The primary reason for this is that we associate a negative emotion to excess money (after reading the previous, it should be obvious by now, right?)
Most people would PROBABLY be arguing this point now. Going to say this now, though: If you don’t have it, then naturally, you’ll want it…but clearly, we don’t want it badly enough. But how can I say this? Well, while we might want it, there’s also all the negative associations that surround it. Otherwise, we would have already formed a plan to make the money we desire, executed it, and would have the financial wealth we desire.
In relation to this (and something I’ve been waiting to quote now for a few days) “If you're not enough without them, then you won't be enough with them.” In other words, living in a world of lack does not bring out the best in people, but if we are not capable of being at our best in such a situation, then we can’t achieve what we want.
Those in a world of lack tend to focus on themselves and simple survival. Those in a world of abundance stop focusing on survival and start focusing on the bigger picture or put simply, contribution. Meaning: When we live in a world of lack naturally our focus is on survival; of ourselves and our so called “needs.” Again; people don’t seek money itself, it’s the idea of what it will provide.
Some main issues that occur when trying to become financially stable or financially independent:
First, people don’t make having an abundance of money a “must.” Instead, we only wish to make “enough.” In order to fix this, we must make money a priority and make sure that we prioritize an abundance of money, not just enough. We must also come up with a specific figure you will hold yourself to.
Most people suffer from never developing an effective strategy of building wealth in the first place. If all it took to acquire something were a passion and drive, we’d all have what we really want…but that’s not enough. Similar to trying to watch a sunset looking east…doesn’t really matter how passionate you might be about seeing one, it’ll never happen, the sun does not set in the east, after all.
We must develop a strategy for the following areas:
1: Creating initial income.
2: Investing our money to make more.
3: How we will be able to share our wealth (no matter how much or how little we may have).
Now, one may ask: How does one go about this…? The answer; modeling. There are those who have an excess of money: people who have built their wealth from little or nothing. So what are they doing that we aren’t? First off; if they are maintaining their financial abundance, then they didn’t just get lucky (obviously). They’re doing something that we aren’t.
Remember how I quoted Charles Munger a while back? “To get what you want, you have to deserve what you want. The world is not yet a crazy enough place to reward a whole bunch of undeserving people.” Well, these people who have that financial abundance obviously have a much higher ‘deserve-it’ factor than most others.
There are plenty of strategies that work. (Perhaps I’ll post another study at a later date specifically dealing with this since it seems to be such an insanely huge issue with everyone around me.) The one thing that each of these individuals does the same, is invest. So if we choose to copy these individuals, we should copy what they do. Invest. How we invest is different, but we should all invest in some form or fashion.
If you’re interested in developing EFFECTIVE plans, starting from a small investment and building significant wealth, then find those who have what you want, find out what they’re doing that you’re not, and then “steal” their habits, so to speak. “Good artists copy, great artists steal.” ~Picasso (I’ll have to put together a journal full of quotes at some point and explain them I think). If you can make earning money and the development of wealth fun and enjoyable, then you can imagine what’ll happen as a result.
Once you’ve developed your plan the only thing more you need is to get a good vehicle (No…not a car) for your plan. In other words, we need to figure out how to develop something so that even while we’re sleeping, we’re earning money.
But let’s say we’ve done that already. Let’s say we’ve got a nice plan of action, and we’re ready to execute this plan. There’s yet another big pitfall that we need to be aware of, and not consistently following your plan once it’s setup. In order to actually make this plan work, we must take action and follow through. If we cannot follow our plan and take the little actions every day, then we will not successfully execute our plan. It will fall through instead.
Another thing people do is rely on experts. Don’t rely on experts, rely on YOURSELF. What I’m saying here is to learn. You are held accountable for your investments, not someone else you might entrust with your finances. This doesn’t mean ‘don’t listen to experts’ by any stretch. Listen to them, consider what they’re saying, but in the end we all have to understand that what we choose to do is our decision, not the decision of someone else.
We MUST learn to properly manage our money to make money. If we don’t know how to invest, we can’t invest well. If we don’t know about our taxes, we will overpay instead. We should study these topics, make sure we understand what is happening with our wealth.
Another huge pitfall that can be a trap for many of us is complacency. When we get complacent we stop doing things that are necessary to create success. “Whatever you fail to use, you lose.” Think of it this way…If you’ve been out of high school for a number of years and took geometry back then, but haven’t used it since, think you could possibly calculate the volume of a sphere? How’s about telling me what the hypotenuse of a triangle with a side of 13 and a degree of 100? What about a musical instrument or game? If we don’t practice our instrument or play the game often enough, then we will lose our skill in these areas (As has been displayed tonight with my terrible plays pulled in starcraft 2, a game I hadn’t touched in nearly two years).
Let me put this simply…If someone is going to say “I don’t have enough,” then the only thing I can think of is “You don’t have enough NOT to.” Ever heard of compound interest? Well, that’s something you can make work for you quite simply. Those of you who know the bible might know the story of the three servants, right? One of them receives five coins (I know this isn’t what it was called, but I’m calling it this because I don’t remember the story exactly), another receives 2, and the last receives 1. They are then left to take care of these coins for a time. When their master returns, he checks in on each of them to see how they did. The first doubled his coins to ten, the second also doubled to four, but the last didn’t make any headway at all, instead burying what he had to protect it. In the end, this servant with only one coin had it taken from him and given to the servant with ten. It’s a simple thing and has been shown time and again throughout history. Burying what you have will NOT make you more. All it will do is let life take away what little you have left.
I’m sure we’ve all experienced this to some extent. We may have started a savings account too early and it ended up costing us money instead of making us money. Think about it; if we have a return of 0.1% and we put away $100, we only get $0.10, but because we are unable to meet the requirements of the savings account, there is a fee of say, $5…that’s 50x more than what it made us. That’s NOT a smart investment and in the end hurt us more than it helped. This is the same thing that can happen with investments, but on a much larger scale.
The last major pitfall is allowing financial crisis to turn INTO financial ruin. This means allowing a financial crisis of some sort, whether it’s car troubles, medical bills, or even the stock market crash, to ruin our financial future. If something has happened before, then we should analyze it, learn what went wrong, and avoid the same mistakes in the future, but that doesn’t mean we should avoid it entirely. Like work; what would happen if we gave up after losing our job? Well, we’d never get another one that’s for sure. If we’ve grown wealth once, then we can do it again.
Money is an emotionally charged issue. I either see one of two things: A drive and passion to actually acquire these little slips of paper with deceased notables on them, or a contempt and general hatred of it, something to avoid at all costs. It is the latter which baffles me.
Wealth Management: Conditioning for financial abundance.
Money is nothing more than a representation of value; a means to measure the exchange of value between people. There are financial opportunities which surround us at just about every moment; yet most don’t create the abundance we deserve. The primary reason for this is that we associate a negative emotion to excess money (after reading the previous, it should be obvious by now, right?)
Most people would PROBABLY be arguing this point now. Going to say this now, though: If you don’t have it, then naturally, you’ll want it…but clearly, we don’t want it badly enough. But how can I say this? Well, while we might want it, there’s also all the negative associations that surround it. Otherwise, we would have already formed a plan to make the money we desire, executed it, and would have the financial wealth we desire.
In relation to this (and something I’ve been waiting to quote now for a few days) “If you're not enough without them, then you won't be enough with them.” In other words, living in a world of lack does not bring out the best in people, but if we are not capable of being at our best in such a situation, then we can’t achieve what we want.
Those in a world of lack tend to focus on themselves and simple survival. Those in a world of abundance stop focusing on survival and start focusing on the bigger picture or put simply, contribution. Meaning: When we live in a world of lack naturally our focus is on survival; of ourselves and our so called “needs.” Again; people don’t seek money itself, it’s the idea of what it will provide.
Some main issues that occur when trying to become financially stable or financially independent:
First, people don’t make having an abundance of money a “must.” Instead, we only wish to make “enough.” In order to fix this, we must make money a priority and make sure that we prioritize an abundance of money, not just enough. We must also come up with a specific figure you will hold yourself to.
Most people suffer from never developing an effective strategy of building wealth in the first place. If all it took to acquire something were a passion and drive, we’d all have what we really want…but that’s not enough. Similar to trying to watch a sunset looking east…doesn’t really matter how passionate you might be about seeing one, it’ll never happen, the sun does not set in the east, after all.
We must develop a strategy for the following areas:
1: Creating initial income.
2: Investing our money to make more.
3: How we will be able to share our wealth (no matter how much or how little we may have).
Now, one may ask: How does one go about this…? The answer; modeling. There are those who have an excess of money: people who have built their wealth from little or nothing. So what are they doing that we aren’t? First off; if they are maintaining their financial abundance, then they didn’t just get lucky (obviously). They’re doing something that we aren’t.
Remember how I quoted Charles Munger a while back? “To get what you want, you have to deserve what you want. The world is not yet a crazy enough place to reward a whole bunch of undeserving people.” Well, these people who have that financial abundance obviously have a much higher ‘deserve-it’ factor than most others.
There are plenty of strategies that work. (Perhaps I’ll post another study at a later date specifically dealing with this since it seems to be such an insanely huge issue with everyone around me.) The one thing that each of these individuals does the same, is invest. So if we choose to copy these individuals, we should copy what they do. Invest. How we invest is different, but we should all invest in some form or fashion.
If you’re interested in developing EFFECTIVE plans, starting from a small investment and building significant wealth, then find those who have what you want, find out what they’re doing that you’re not, and then “steal” their habits, so to speak. “Good artists copy, great artists steal.” ~Picasso (I’ll have to put together a journal full of quotes at some point and explain them I think). If you can make earning money and the development of wealth fun and enjoyable, then you can imagine what’ll happen as a result.
Once you’ve developed your plan the only thing more you need is to get a good vehicle (No…not a car) for your plan. In other words, we need to figure out how to develop something so that even while we’re sleeping, we’re earning money.
But let’s say we’ve done that already. Let’s say we’ve got a nice plan of action, and we’re ready to execute this plan. There’s yet another big pitfall that we need to be aware of, and not consistently following your plan once it’s setup. In order to actually make this plan work, we must take action and follow through. If we cannot follow our plan and take the little actions every day, then we will not successfully execute our plan. It will fall through instead.
Another thing people do is rely on experts. Don’t rely on experts, rely on YOURSELF. What I’m saying here is to learn. You are held accountable for your investments, not someone else you might entrust with your finances. This doesn’t mean ‘don’t listen to experts’ by any stretch. Listen to them, consider what they’re saying, but in the end we all have to understand that what we choose to do is our decision, not the decision of someone else.
We MUST learn to properly manage our money to make money. If we don’t know how to invest, we can’t invest well. If we don’t know about our taxes, we will overpay instead. We should study these topics, make sure we understand what is happening with our wealth.
Another huge pitfall that can be a trap for many of us is complacency. When we get complacent we stop doing things that are necessary to create success. “Whatever you fail to use, you lose.” Think of it this way…If you’ve been out of high school for a number of years and took geometry back then, but haven’t used it since, think you could possibly calculate the volume of a sphere? How’s about telling me what the hypotenuse of a triangle with a side of 13 and a degree of 100? What about a musical instrument or game? If we don’t practice our instrument or play the game often enough, then we will lose our skill in these areas (As has been displayed tonight with my terrible plays pulled in starcraft 2, a game I hadn’t touched in nearly two years).
Let me put this simply…If someone is going to say “I don’t have enough,” then the only thing I can think of is “You don’t have enough NOT to.” Ever heard of compound interest? Well, that’s something you can make work for you quite simply. Those of you who know the bible might know the story of the three servants, right? One of them receives five coins (I know this isn’t what it was called, but I’m calling it this because I don’t remember the story exactly), another receives 2, and the last receives 1. They are then left to take care of these coins for a time. When their master returns, he checks in on each of them to see how they did. The first doubled his coins to ten, the second also doubled to four, but the last didn’t make any headway at all, instead burying what he had to protect it. In the end, this servant with only one coin had it taken from him and given to the servant with ten. It’s a simple thing and has been shown time and again throughout history. Burying what you have will NOT make you more. All it will do is let life take away what little you have left.
I’m sure we’ve all experienced this to some extent. We may have started a savings account too early and it ended up costing us money instead of making us money. Think about it; if we have a return of 0.1% and we put away $100, we only get $0.10, but because we are unable to meet the requirements of the savings account, there is a fee of say, $5…that’s 50x more than what it made us. That’s NOT a smart investment and in the end hurt us more than it helped. This is the same thing that can happen with investments, but on a much larger scale.
The last major pitfall is allowing financial crisis to turn INTO financial ruin. This means allowing a financial crisis of some sort, whether it’s car troubles, medical bills, or even the stock market crash, to ruin our financial future. If something has happened before, then we should analyze it, learn what went wrong, and avoid the same mistakes in the future, but that doesn’t mean we should avoid it entirely. Like work; what would happen if we gave up after losing our job? Well, we’d never get another one that’s for sure. If we’ve grown wealth once, then we can do it again.
