Feb 152016
 

Complaints are Opportunities in Disguise

Picky eaters like to whine and dine. 😋 But food isn’t the only thing people complain about. Although whining isn’t productive, it’s a legitimate coping mechanism that shifts blame and responsibility to other people. But if handled correctly, complaints can be turned into opportunities.

In order for there to be a complaint, there must be something else we want that’s better than what we already have. Nobody complains about water being wet because that’s just how it is. So if we can complain about something then that probably means we also have the opportunity to change it for the better. 🙂 It’s just that most of the time we’re not willing to risk or sacrifice in order to obtain a better outcome, otherwise we’d just do it instead of complaining. 😛

So whenever a complaint arises, we should ask what it is that we want to change. What is a more favorable alternative? Then we just have to put together a plan and get to work. It may be risky, and it may require a lot of time, energy, and sacrifice. But if we can get through the hardship, then on the other side of our commitment is a reward that people who only whine and complain, but don’t take action, will never get to enjoy.

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By trying to solve a problem, it turns a negative state of mind like complaining into something positive. It switches our brains from the reactionary defensive mode to a more proactive offensive mode to make us more creative and productive.

This also works on larger scales since there are huge opportunities in addressing other people’s complaints. 40 years ago consumers complained that personal computers were too difficult to operate. Bill Gates realized that developing a more user-friendly operating system would solve this problem so he created Microsoft, and took advantage of his Windows of opportunity. 😆 Today, PCs are universally adopted and most of them run a Windows operating system. Sometimes the best opportunities express themselves in the complaints of other people. The more people complain about something the bigger the reward will be for the first person comes up with a viable solution.

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Random Useless Fact:

According to security-management company SplashData, the most popular password in 2015 was 123456.Â đŸ˜±

16-02-top-20-passwords-in-2015

#2 – “password.” Are you f*$%^ kidding me?Â đŸ˜©

 

Jan 012016
 

Year End Review – 2015

I remember 2015 like it was yesterday. 😛 I hope everyone is having a great New Year so far. Let’s review some of the biggest financial news and stories from 2015.

  • Falling commodity prices. – The Standard & Poor’s GSCI commodities index plunged 34% in 2015, down 80% from its peak. đŸ˜±Â It’s now at the lowest level since 1999. This doesn’t directly affect me since I don’t work in that field, but I like how this keeps inflation at bay. Cheaper oil, metals, and other natural resources mean I pay less for transportation, furniture, groceries, and other goods.
  • China’s slowdown. – The Dow Jones industrial average dropped 11% in August on fears that everyone had underestimated China’s troubles and their global impact. This isn’t necessarily a bad thing. High rates of growth is unsustainable. And a market correction is an opportunity to buy stocks at a discount.
  • Interest rate hike in the U.S. – The Federal Reserve raised the short-term rate by 0.25% in December. This increases the value of the U.S. dollar. Meanwhile, the ECB, Bank of Japan, and China continue to go in the reverse direction to expand their money-easing policies.
  • Slide in the Canadian dollar. – Canada’s economy was weak in 2015 due to lower oil prices and we spent half the year in a recession. So naturally our loonie’s value fell compared to the $USD. This is good news for me since I collect a lot of dividends in $USD. 🙂
  • Continuing expansion of the freelance economy. – Uber, Airbnb, Etsy, contract workers, and indie app developers have helped to create an economy where more people are working in a freelancing capacity rather than a regular job in a traditional workplace. Even old trades like construction is being effected because carpenters can sell their services on sites like Thumbtack. I like this trend of becoming a more free and open society with less red tape.
  • Massive corporate mergers. – Mergers and acquisitions worldwide totaled $4.8 trillion in 2015, a new record. This may not be a big deal to some, but it has real implications for stock investors. For example, it’s how I made a large profit when Burger King bought Tim Hortons back in 2014.
  • Lack-luster stock market returns. – According to the CBC, the Canadian stock market index was down 11%. The U.S. markets did better but both the Dow and S&P500 were down. The technology heavy Nasdaq however was up 6%.
  • 16-01-stock-return-for-2015

Personal Goals

At the start of 2015 I set 2 financial goals for myself; have a net worth of $400,000, and make at least $16,000 in passive income. 🙂 Fortunately I was able to hit both by the end of the year. I’ll post my net worth breakdown next week. My pre-tax passive income came from roughly $9K in rent, $5K in dividends, and $2K in interest.

What I learned from the past year is that it is harder than ever before to predict how the markets will change over the next 12 months. This is why it’s important to have financial protection in place and to diversify our investments. Canadian stocks and bonds as a whole did not perform very well last year. But according to the Real Estate Board of Greater Vancouver, the price for a detached house in Metro Vancouver climbed 22% from the previous year. The average condo price was up 14%. The stronger U.S. dollar suggests Canadians who invest in U.S. stocks should have seen some good returns as well. 🙂 So a diversified portfolio of equities, fixed-income, real estate, commodities, and other currencies would have actually performed okay last year despite the stagnant economy in most parts of the world. On average I was able to earn a double digit return in 2015 on my overall investments. I’ll make some new goals for 2016. But first, I need to do some bookkeeping. I haven’t looked at my bank account since last year. 😉

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Random Useless Fact:

16-01-lincoln-clooney-hanks-a-small-world

Dec 072015
 

Breaking Through the Mental Barriers

For most of humanity the world believed that it was not physically possible for humans to run a mile in 4 minutes or less. This was a universal belief because the challenge had been attempted by athletes across many generations throughout human history but no one had ever succeeded. 🙁

But then something miraculous happened in 1954. A man named Roger Bannister stunned the world when he ran an entire mile (1.609 km,) in 3 minutes and 59.4 seconds! 😀

Later that year during the British Empire and Commonwealth Games hosted in Vancouver, B.C., Roger Bannister and Australia’s John Landy both ran a mile in less than 4 minutes. The race’s final moment is memorialized in a statue of the two placed in front of the PNE entrance plaza.

15-12-roger-bannister-run-4-minute-mile-pne-statue-limitations

But here’s the amazing part. Since 1954, over 1,000 people, including high-school students, have successfully broken the 4 minute barrier. Nobody could run a mile in 4 minutes prior to 1954, but now new runners are joining the 4 minute club every year. So what the heck changed in the last six decades? 😕 I don’t think a bunch of people suddenly developed super-human speed and endurance, although that would be pretty cool. 😉

What actually changed was people’s beliefs. Bannister didn’t just become the first person to run a 4 minute mile. His most significant achievement was changing the world’s perception about what a person is capable of doing. Prior to 1954 a 4 minute mile was simply considered impossible. But after 1954, everyone knew it had been done, so it must be possible. The psychological barrier had at last been shattered. Everyone believed that if someone else can do it then I can do it too. If someone else can make their dream into a reality then so can I! 🙂

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The biggest barriers to financial enlightenment that most people face are not physical, but rather psychological in nature. Michelangelo once said, “the greater danger for most of us lies not in setting our aim too high and falling short; but in setting our aim too low, and achieving our mark.” This is why it’s important to set ambitious goals.

Continue reading »

Nov 162015
 

The three most common personality types for FIRE inclined bloggers are INTJ, ENTJ, INTP.

Table of Contents: 

Introduction
The importance of knowing your type
How personality affects your financial habits
How rare is your personality?
Most common types for Personal Finance Bloggers
How personality affects your income and career
In Closing and Sources

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Intro to the Myers-Briggs personality test

In order to master our finances, we have to develop a solid understanding of our personalities. The way we think dictates how we save, how we spend, and how we manage our money in general. Our temperaments can also affect our income earning potential. With a little self-discovery we can discover our financial strengths and weaknesses so we can focus on the skills and actions that we naturally excel at. 😉

One popular personality test is the Myers-Briggs Type Indicator (MBTI.) Through a series of short questions, the MBTI measures our affinity towards four pairs of personality traits. The result is a 4 trait combination, one trait from each pair, that gives us some insight on how we think and perceive the world. Here is an explanation of each pair of traits.

Myers-Briggs Personality Traits

Extraversion (E)
-Outgoing
-People's person
-Feel comfortable and enjoy working in groups
-Sometimes jump too quickly into an activity without thinking
Introversion (I)
-Reflective and somewhat reserved
-Feel comfortable and like doing things alone
-Prefer to know just a few people well
-Sometimes spend too much time thinking, and not take action quickly enough
Sensing (S)
-Remembers details based on facts and physical reality
-Works through facts to understand problems
-Pragmatic and looks at the bottom line
-Start with facts to form a larger picture
-Trusts experience over words and symbols
Intuition (N)
-Remembers events by reading between the lines to find their meaning.
-Leaps between different ideas and possibilities to solve problems
-Focuses on the big picture first before finding out the detailed facts
-Trusts impressions and metaphors more than actual experiences
Thinking (T)
-Logical, calculated, not emotional
-Notices inconsistencies
-Looks for logical explanations or solutions to problems
-Sometimes seen by others as too task-oriented, uncaring, or indifferent
Feeling (F)
-People or communications oriented
-Concerned with harmony and care about what other people think is important
-compassionate, make decisions with the heart
-Sometimes seen by others as too idealistic, indirect, or mushy
Judging (J)
-Prefers to have things planned out in advance
-Likes to be task oriented
-Likes to make lists of things to do
-Likes to get work done before playing

(note: Judging has nothing to do with being judgemental in this context.)
Perceiving (P)
-Prefers to go with the flow
-Likes to keep opportunities open to respond to new circumstances
-Appears to be loose and casual
-Keeps planning to a minimum
-Works in bursts of energy
-Tends to rush projects at the last minute

Each pair of traits is a spectrum because personality is not binary. For example, nobody is purely introverted or extroverted. The resulting trait is whichever one the person has a stronger tendency towards. So if someone’s temperament reflects Introversion, Sensing, Thinking, and Judging, then his MBTI personality type would be ISTJ for short. There are 16 possible outcomes for the Myer’s-Briggs personality test.

15-11-myers-briggs-4x4-all-possibilities

If you don’t know your personality type you can take a free test here.

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Why It’s Important to Know your MBTI

Increasing our financial self-awareness strengthens our relationship with money, so we can prioritize what’s important to us. For example, there are two primary ways to save more money for retirement. ENTJs are better at increasing their incomes, while ISTJs tend to have an easier time cutting back on spending and being frugal. Understanding our natural tendencies lets us choose financial management strategies that suit our needs. 😉 Once we know our 4-letter personality type we can do a lot of practical and useful things with it, including the following.

  • Discover new career opportunities or side hustles to make more money.
  • Narrow down which financial experts or famous investors to follow based on how similar their personalities are to our own.
  • Better understand where gender stereotypes in society comes from.
  • Find personal finance bloggers that think like us and learn vicariously through their stories and experiences.

 

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What your Personality says about your Financial Habits

The 16 MBTI types can be grouped into 4 general personality categories. This gives a broad overview of how the personality types can affect someone’s financial behavior.

  • Protectors (SJ)

    ESTJ, ESFJ, ISTJ, ISFJ
    These people all have the Sensing and Judging (SJ) traits. They are known as protectors because those who fall into this category are more financially conservative and want to protect their principal investment regardless of opportunity costs. They see wealth preservation as the main priority. Most protectors make average income or higher. As natural planners, they are good at saving for emergencies and for retirement, but sometimes have trouble accepting some calculated risk with their investments. Protectors generally have high savings rates to make up for their conservative risk tolerance on their portfolios.

  • Creators (SP)

    ESTP, ESFP, ISTP, ISFP
    Sometimes also called players, creators like to live in the moment because they are Sensing and Perceiving (SP.) They like to work hard and play hard. Many creators are entrepreneurs and they tend to take bigger risks with their money than other groups.

  • Intellectuals (NT) 

    ENTJ, ENTP, INTJ, INTP
    Intellectuals embody the traits Intuition and Thinking (NT.) Also known as planners, intellectuals like to look at the big picture and plan for the future. They are willing to accept thought-out risks in order to achieve their long term financial goals. Similar to protectors, intellectuals are avid savers. But sometimes they focus so much on the future that they miss out on short-term opportunities to splurge or have fun in the present.

  • Visionaries (NF)

    ENFJ, ENFP, INFJ, INFP
    This group of people tend to be emotional around money. They possess the Intuition and Feeling (NF) traits. Visionaries view lending money to or borrowing money from friends and family members as a very personal matter. They often see money as an extension of who they are. Most visionaries earn average income or lower. Their spending habit revolves more around emotions, relationships, compassion, and ideas, rather than strict pragmatism.

 

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How Rare is your MBTI Personality Type

Most people are Sensing so they prefer to deal with detailed facts and physical reality rather than big-picture ideas and abstractions. Men tend to be slightly more aligned towards introversion while women lean slightly towards extroversion.

15-11-personality-type-distribution-population-by-gender

Almost 1 out of 5 females in the world are ISFJs. This supports the studies that claim women tend to be more risk-averse than men when they invest. Meanwhile INTJs and ENTJs are the rarest personality types among females. More than half of all females identify with the traits Sensing and Feeling (SF.) This combination lends itself very favorably to working in careers that require a sympathetic approach to people. They are commonly found in the clergy, teaching, health care, child care, sales and office administration work, and personal services.

2 out of 5 males are Introverted Sensors (IS.) They are good at remembering stored memories of previous sensory experiences. This allows them to carry out tasks such as quality assurance because they can compare new products with memories of existing products. Introverted Sensors tend to be good at remembering details. They can easily recall specific things they are interested in, such as names of actors or football players, numbers, percentages, specifications, stock prices, and sports scores.

 

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What Personality Types are Personal Finance Bloggers?

With so many PF blogs out there it’s not always easy to find compatible bloggers who we can relate with. I cover stocks and the financial markets. But what about readers who want to learn about lower risk investment options, or how to get out of debt?

Well earlier this year I surveyed over 100 bloggers to find out about their Myers-Briggs personality types. 🙂 The data has been compiled in the following graph.

15-11-mbti-personality-distribution-pf-bloggers

Discover which PF bloggers have the same personality traits as you, so you can narrow down which blogs might be more relatable to you.🌟

For a detailed explanation of each personality type, please see the “MBTI Personality Types for PF Bloggerstable below. The types are numbered to make them easier to find. They are roughly placed in order from most common to least common in the blogging community.

1 INTJ the strategist15-11-myer-briggs-personalty-types
2 ENTJ the chief
3 ISTJ the examiner
4 ESTJ the overseer

5 INFJ the confidant
6 ISFJ the defender
7 ENFJ the mentor
8 ENFP the advocate

9 ESFJ the supporter
10 INTP the engineer
11 ENTP the originator
12 INFP the dreamer
13 ISFP the artist
14 ISTP the craftsman
15 ESFP the entertainer
16 ESTP the persuader

Continue reading »

Jun 222015
 

“It is not the strongest or the most intelligent who will survive but those who can best manage change.”― Leon C. Megginson

Change is inevitable, unless the vending machine is broken. 😀 When things don’t go quite the way we want them to it’s tempting to want to change the system. But it’s often more favorable to just change ourselves than the circumstances.

If we don’t like our surroundings or the people around us, it’s usually easier to change our habits, or our mindsets to adapt to the environment around us, than it is to convince the rest of the world that they should change.

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Continue reading »