Feb 132017
 

Some psychologists believe that you are the average of the 5 people you spend the most time with. Whether this is accurate or not, the truth is we are influenced by everyone around us to some degree. This is why it’s important to surround ourselves with positive and highly productive people. Our environment should work for our success, not against it. 🙂

It’s not that we should trivialize or avoid negative people. We can treat everyone with the respect they deserve. But it would be beneficial to us if we make a conscious effort to spend more time with successful people. For example, to reach my goal of becoming independently wealthy I like to surround myself with friends who have the following personality traits.

  • They can see the big picture.
  • They don’t make excuses and know it’s up to themselves to make things better if it’s important enough to them.
  • They have or plan to have lots of resources, ie: wealth.
  • They are optimistic about the future.
  • They are curious about the world.

This is just my personal list I’ve thrown together. But there are many different definitions for what a high quality or successful person is. Of course if you work in the music industry, then you should surround yourself with “creative” people. We should also be aware of our biases. Being surrounded with too many “like minded” friends may trap us in an echo chamber of similar opinions. Doing so could make it difficult for us to expand our knowledge.

Unfortunately we can’t change the cards we’ve been dealt. But we can make the most out of our situations by developing the best environment for us to thrive. Part of this means choosing the right people to surround ourselves with. We can’t control what other people think, but we can manage our social circle, and choose who to hang out with. 🙂

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Random Useless Fact:

Even though the children below are born from different parents, they are actually siblings, genetically speaking.

 

Dec 052016
 

Finding the Appropriate Work-Life Balance

Benjamin Franklin once said that “time is money.” I think he was being metaphorical. Otherwise ATMs would also be called time machines. 😄 But time is certainly like money in many ways. When we have it, we don’t know what to do with it all. And when we don’t, there’s a million things we need it for.  😀

In the corporate world we certainly treat time as money, which is why overtime means more money. 🙂 But finding the proper work/life balance can be challenging for many people. If a new mother wants to stay home to look after her baby for 3 years then she could potentially leave $500,000 or more on the table.

Consider an American who starts working at age 22 and then takes a 3 year break from her career, where her salary is $50,000. According to this marketwatch article, “that 3 year break would cost her roughly $506,000 due to a combination of lost wages ($150,000 over those three years), lost retirement and Social Security contributions ($158,000 over the life of her career, assuming she retires at 66) and lost future wage growth ($198,000).”

Studies show a household with at least 1 stay-at-home parent is the ideal environment to raise children in. Many parents also feel their kids are better off if their first 5 years are spent close to their mothers. But on the other hand, $500,000 is a lot of money to pass up. 😕 Often people face the difficult decision between making more money or spending more time with their children.

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Oct 062016
 

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Why It’s So Easy to Overspend

We are all tempted by instant gratification to some extent. And thanks to poorly implemented public policies it’s now easier than ever to live beyond our means. When we run out of savings, we can simply use credit to continue buying what we want. At least that’s what I usually do. 😉

Once upon a time people had to work almost constantly to prepare, track, hunt, build, forage, and gather resources so they would have enough food to survive the winter. But now the average American only works 34 hours per week, according to the OECD. That’s 20% of their available time. In other words, people spend 134 hours each week sleeping, eating, and doing leisurely activities that don’t involve getting paid for labour. That’s a lot of time to kill.

We have so much free time on our hands we often have trouble deciding what to do with it. Businesses use this opportunity to target our wallets, which leads us to buy things we don’t really need.

The Advantage of Distraction

In order to prevent impulse purchases we simply need to distract ourselves and do something else with our time and attention. 🙂 The best way to do this is to find free or cheap hobbies that can take up a lot of time. For example, if we are already preoccupied with reading the latest Harry Potter book, then we are less likely to think about shopping. To put it another way, we spend money when we’re bored or have nothing better to do. This is why many workaholics tend to be frugal. They’re so busy with work, they literally don’t have the time to enjoy all the money they’re making, lol.

I recently came across this Reddit thread about affordable hobbies that anyone can do. I will share the top activities mentioned in the thread and add some of my own ideas. We sometimes overspend because we don’t have the willpower to walk away from something we want. But hobbies such as the ones below can distract us so we won’t even get the chance to think about shopping in the first place, and therefore, save money. 🙂

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Aug 112015
 

Most Bosses Aren’t Rich

Some workers have a passive outlook on their salaries. They believe their income is based on what their boss can “afford” to pay them. But the irony is that employees have more control over their own salaries than their bosses do. 😉 This becomes apparent when we consider the source of all salaries. Money doesn’t come from our employers. It actually comes from the consumers who buy our goods and services. And the amount of money they pay us is directly proportional to the quality of goods or services that we give them. 🙂 So if we want a raise, we should try to please our customers, not our bosses.

Besides, most bosses aren’t that rich to begin with anyway. A 2013 study found that the average salary a small business entrepreneur makes is $68,000. Let’s say a Japanese restaurant makes $100,000 a year after expenses and employs 20 people. If the restaurant owner gives all his employees a $5,000 annual raise, then his entire profit would be wiped out! It’s a different story in large fortune 500 companies or in professional industries, such as engineering. But 70% of Canadian workers in the private labour force are employed by small businesses with fewer than 100 employees. So for most workers, asking for more money from the boss isn’t going to get them very far.

Wealth in Numbers

So if we want to earn more, we have to set our focus on the consumers. 🙂 Our customer base has an endless supply of money that we can tap into. If that Japanese restaurant mentioned earlier manages to attract just 100 more families to dine there every month then the business can easily earn $100,000 in additional sales every year. Everyone can get a raise and the business remains profitable! 😀 The boss is only one person, but hungry consumers are abundant. There truly is wealth in numbers. Instead of trying to get more money from the employer, we should be thinking about ways to work with the employer to get customers to spend more money. 😉

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But for this to work we must offer something of equal value in return to the paying customers. This means finding ways to make them more satisfied. Create additional value to our product or service. Give consumers a legitimate reason to pay us a premium over a generic competitor. Don’t work to please our boss. Work to please the customer instead. Don’t work for money. Work to solve the customer’s problems. The money will ultimately follow.

If you’ve shown that you can bring a lot of new business to the company then usually the promotion will come to you. 🙂 Talent is hard to find. Your boss knows that if you feel underpaid, you can simply leave and work for a competitor instead.

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Jul 142014
 

Somewhere in the world right now there’s a person who is working 10 hours a day doing manual labour and making minimum wage. He realizes his life could be much better so he saves what he can to build the future that he wants. He believes that he can change his circumstances in life by working hard, and having a solid plan. He tries to start his own business but fails. But he tries again and again, sacrificing his time, savings, and energy to make it work. Eventually his company turns a small profit, which grows every year, and ten years later he is a millionaire 🙂

Meanwhile just down the street from the first person lives another man who just won the lottery and becomes a millionaire over night. He doesn’t think about how to use the money wisely. He just knows he’s rich now and believes he will stay rich forever, without considering that his circumstances might change over time. He starts to buy fancy cars, make friends with other people who also like to spend lots of money. He eats out almost every meal and becomes fat and lazy. He continues to buy lottery tickets hoping he would win again, but he doesn’t. Ten years later he realizes he has spent all of his money and is now broke 🙁

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Which type of person are you? By making it on your own you can appreciate the ups of success because you’ve experienced the downs of failure. It can be tempting to immerse yourself in the bliss of good fortune, but enjoy it responsibly to make that feeling last 🙂 Circumstances in life can always change; people who don’t think their finances in the future can get better or get worse are not being honest with themselves. It’s important to understand where your life currently stands, where you want it to go, and how you’re going to make that happen. If the current circumstances around you suck, then find a way to change them 😀

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Random Useless Fact:
Somebody made a ridiculous bet on the Germany vs Brazil World Cup game. Either that person can predict the future, or is just extremely lucky.

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