83: Find what you want in life - then translate this into wealth!
09-02-2006
Finding What You Want In Life
Critical to your general well being is to feel fulfilled in what you do at work. Ideally, whatever you do at work should be a real pleasure, something you look forward to every day. On Monday morning, if you start work at say 8 am, you should look forward to walking into your workplace and starting work.
Many of us have been socially conditioned to believe we have a set course in life with regard to work – this starts at school when we are taught to be scholars – that intelligence and knowledge are key skills and to be “successful” in life, you have to do well in exams, go to college and get professional qualifications. Remember your school teacher telling you “you’re a waster”, you friends and family criticising your latest idea, the exams you failed? What they were saying was that they did not believe in you – they wanted you to be a hard working scholar. We rapidly realise that no matter how many qualifications we have and how intelligent we may seem, it counts for nothing if it does not make you happy, feel fulfilled and does not earn you a living!
You can spend years doing degrees and end up not being able to get a “suitable” job in your chosen field. Social conditioning leads us into wage earning public and private sector jobs – working for other people. Fear of failure leads most to avoid entrepreneurial activities, owning one’s own business and investing.
We all change though life, and things change around us. What we need to do is see when our context has changed and our views have changed and make a change with it. So often, people slip into a certain job or role, and never consider different options, or cast aside any different options through fear, insecurity, or because it gets them outside their comfort zone. Or may be they say to themselves – "I’ll consider doing that, maybe in the future – let’s leave it for now". And think - let’s keep in the comfort zone.
Finding Your Strengths.
One of the critical elements of enjoying a job is to play to your strengths. So often, people do not even know what strengths they have – they do not even consider these. When annual appraisal / staff reporting in public and private sector “institutions” comes around - normally a supervisor will focus on the weaknesses – an example - “you’ll have to work on that weakness more, and improve it – I suggest you do more public speaking to improve that weakness”. Little discussion or thought might go into a person’s strengths. “You” have to define what your strengths are, with the help of others and play to them. But 80% of the value we create is from 20% of the work, and 20% of our skills deliver 80% of the value. We should play to our “80% spike” – the spike of skills strengths that is most pronounced. An example is Tiger Woods – he is excellent at golfing but would never claim to be excellent at 
everything else – he plays to his strengths, and any weaknesses he may have people just ignore. Same with Bob Geldof – he was a good singer, and excellent fund raiser, he’s also good at business, but he probably has many weaknesses that he uses to his advantage – look’s being one of them! Most company CEOs have a very strong spike of strength in may be 20% of skills, but many weaknesses in 80% - they just surround themselves with good people to fill the weakness gaps. This is what winning teams are all about. If you are in a team, decide what your key strengths are and start leveraging them – don’t get hung up on the weaknesses. If you are the manager or owner of a business, use you strengths and find other in your team to fill the weaknesses. Another example is Bill Gates – his key strength is systems architecture, identifying opportunities and having a vision and plan to implement them. He passed the CEO job on to his colleague because he could see he could add more value in this role than managing the whole business. The richest man in the world knows his strengths and is man enough to give up the “top spot” for the job as the “brain” behind the company, instead of its managerial leader. Now he runs a charity – and he’s very successful at giving or investing money in good causes.
We suggest you write down your strengths and your weaknesses. Then ask some peers what they think your strengths and weaknesses are - ask them to be brutally frank – otherwise you will not get much out of the exercise. Now write down what things you like and what things you do not like. Changes are what your strengths are will be what you like and what your weaknesses are will be what you do not like. Be brutally honest – do not go into denial – sometimes we want to believe we are good at something we actually are not good at. You might have set your heart on being a “manager” but find you’re actually not good at it and do not enjoy it – be brutally honest.
The lesson is that we often go through life thinking we are good at something, almost kidding ourselves, when in fact, we aren’t and are therefore wasting our time and our colleagues time. We go into denial and want to be good at something when we are not. So the trick is to match what you are good at with what you enjoy and identify your “20% spike” that creates 80% of the value. Then leverage it like mad. This will differentiate you from others as an individual and team member and make you more valuable to yourself and to whoever you work for, be it yourself of a company / employer.
What do you really like?
Another exercise you must do is “describe what you like most”. No, this is not work related necessarily, but anything. Think back to when you were younger – what did you really enjoy? Now think about the present – what would you most like to be doing now (apart from reading this special report of course!). Now think five years into the future. What would you most like to do in the future?
We might have fond memories of walking in the countryside, sunbathing on a beach, surfing, playing golf, being with one’s family. The questions is, is it feasible to do this all the time? Why not? May be we could plan a job where we can spend as much time on the beach or at a summer holiday location as possible, with the family? May sound daft, but is worth thinking about seriously – why wouldn’t you want to do what you really enjoy? Also, don’t kid yourself about work – you might not realise how much you actually like it or would miss it if you did not do it?
We the latest technology, internet and communications, you can potentially work almost anywhere in the world. You could have an office on a beach. You can telephone while you are cycling. And you can invest in property anywhere in the world. It’s possible to manage a property portfolio remotely. The point is, you need to expand your mind and ideas and consider your dreams – what are you dreams? Are they realistic? Can you make your dream into a plan? When you have the plan, will you start to action it? Can you make a living out of it? Can you manage the risk? So the sequence goes like this - one need’s to answer:
- What am I good at?
- What do I enjoy at work?
- What do I enjoy outside work?
- Where do I want to be in 5 years time – the dream?
- Where do I want to live and work?
- Can I make a living and support my family by doing it?
- What is my plan? – prepare it.
- Now start actioning the plan.
At the very least, you should be able to put it down on paper and develop an action plan. Then you can start to action. This does not mean quitting you current job or anything quite that drastic. It may mean going an evening training course in “starting a business” or researching moving to a different part of the country to change your lifestyle. You may even find what you are doing is just fine, and that you are one of the fortunate people to have already found your niche and be totally happy with what you do for a living and where you live.
Set yourself a goal
Decide what you want in life, whether it be financial, lifestyle, work related etc, and make it a goal. Write the goal down – and put a date to it. You need to refer to it regularly to help you remember what you are striving for. Make a plan to achieve the goal, and monitor your progress towards this goal using measurable criteria. Now you have a goal, you now need a plan.
The Plan
Get a plan! It is extremely important after developing your goal to put your ideas and plans down on paper, otherwise they will be forgotten and the value of your thoughts and ideas will be lost. When you put things on paper, you can go back and find tune, modify and build on them. Words become reality. I have a 150 page life plan – everything from strengths, weaknesses, opportunity, threats, so where I would most like to live (in my case, this is actually three places – one place for each season!), how my skills match my companies, business ideas, investment economics, trends etc. I have a target for 2012 – which involves a dollar amount of net wealth – and a plan to get there. I am following my plan, and cannot see any strong reason why I should not get to my target, as long as I am disciplined and follow the plan. If you have not plan – get one – fast! Why? I’ll ask a few questions and it may become obvious:
- What will your pension be?
- Are you sure it will be worth anything by the time you retire?
- When will you retire?
- Do you think there is a chance the retirement age will increase?
- How long will people live in 30 years time and how much will I need to fund this?
- Are you going to work at your current job for the next 10-20 years? If not, what will you do instead?
- Do you want to live in the area you are currently living in for the next 10-20 years?
- If not, where do you want to live?
The simple fact is that most people haven’t a clue what they will be doing in 20 years time and they live from day-to-day, year-to-year. They bearly give it any thought. Most people do not have a pension plan. Time passes by, things move on, change and we often don’t change with the times. We don’t realise that the world we live in changes – it just creeps up on us. We put things off until the next day – we procrastinate. I will now be provocative and try and change you paradigm, to get you thinking – all of the below may come true by 2020 (I cover trends in more detail later, but this is a selection to get you thinking):
- Retirement age increase to 70
- State pension reduced to 50% of current value
- Stock market crashes after 2007 (Dow at 5000, FTSE at 3000 and never recovers) – no capital equity markets needed any more
- Best people bail out of large companies into private equity funded companies, making publicly traded capital equity markets almost redundant
- Aging “baby boomer” population start mass withdrawal of equity funds for retirement from 2010 onwards, leading to stock market crash
- House prices in retirement centres (on coasts) double (again) in UK and USA, as environmental constraints stifle further building – people prefer to either live in city pied de terre apartments, city town houses or holiday home on the coast – typical large middle range suburban houses become far less popular, especially inland in cold climates
- People head to coastal and/or holiday destination or culturally progressive cities to retire.
- People commute from southern
- Energy prices double as gas and oil as demand for hydrocarbons expands from boom in Indian and Chinese demand.
- Most high tech services outsourced to
- Divide between the “haves” and “have nots” gets bigger
- Massive expansion of the wellness industry – selling health, anti-aging and fitness.
- Regulation by governments of developed countries will dictate that 50% of all vehicles by 2020 will be powered by alternative fuel sources (e.g. hydrogen, electricity, battery)
- There we be a doubling of air travel and a 50% increase in vehicles from current levels
Okay, just a few scenarios – however, any one or more of these happening can cause a big economic impact for you, hamper you retirement plans, particularly if you do not plan to mitigate risks and get the time of investments or actions wrong.
How to get on in a large corporate organisation
A few key traits you have to show if you are to progress in a large corporate organisation:
- Help your boss as much as possible – always look to do more in less time, add the most vale possible, be structured/disciplined, professional and honest
- Get support from your peers – be seen to be poplar with your peer group and respected – help them so they help you
- Smile, look comfortable, be confident – if you smile a lot, people think you are enjoying work and will automatically think you are on top of your job and doing well
- Always dress the part – smart, over-dress if anything
- Ask for what you want – don’t be scared to ask for a rise – it will indicate you value yourself and have high self esteem
Habits - the good, the bad and the ugly
Good habits lead to a happier life. A habit is something you do, regularly, almost automatically, almost without thinking about it. There are good habits, like being loving to your family and partner, eating healthy food, taking regular exercise etc. There are also the so called bad habits like watching too much TV, overeating, drinking excessive alcohol, taking drugs, being negative about people, being stressed-out. Ugly habits are violent, being degrading, racist etc. Steven Covy is the master of presenting a principled centred lifestyle bases on good habits as a platform for success living – I certainly recommend his books. The trick is to reduce the bad habits to an absolute minimum, and increase the good habits. Much of the lifestyle advice I give in the book, if done regularly, can become a good habit. A habit that can lead to a healthier, happier, longer life which can be more fulfilling for you and your family.
Faith
Many people find great strength, particularly through rough periods, through faith – either religious or some other form of worship or being. My advice on this is that if this faith helps you, then practice it. I have to admit I am not an expert on faith and worship myself. A good thing to do it to imagine that the end of your life is close at the age of say 80 – now look back and think whether you are happy with what you have experienced, achieved and what you are leaving behind. If you are unhappy looking back, make a list of the things that you should have done but never got around to doing.
You might want to make a big contribution to a worthwhile charity – to help people less privileged than myself. You might have a strategy to develop tremendous wealth in your first goal - to firstly become financially secure by making good investments with high return - then to start giving it away to charity and worthwhile causes. I’ll first enjoy making it and then enjoy giving it away again! A double positive whammy!
Values
A good exercise is to describe your values. Most people living in Western Europe and the
You have to look at what you work on and see whether it matches your values – for me it does and this gives me confidence and motivation to continue at a fast pace. If you do not believe what you do matches your value, this could be a cause of demotivation, underperformance at the work place and general stress / burn-out. You ay not realise the impact that your values have on what you are doing. An example is if you worked for a biotechnology / genetic engineering company but felt uncomfortable the uncertainties and risks in the crops that were being developed. You may feel guilt or discomfort from being paid to work on such activities. Another example is if you worked as at an open cast coal mine but did not like the damage and scars done to the environment of such activities and also though coal burning power stations were polluting and should be replaced by gas fired or renewable power stations. In essence, if you believe in the industry you work in, then it will shine though in your work. If you do not respect the industry or job you do, this will be noticed by your colleagues, company and yourself eventually.
Do the important things first
During any working day it is important to differentiate the urgent from the important activities. If someone asks you to do something urgently – first ask whether it is important or can wait. You must work on the most important high priority items first. The think that works best for me is to keep a live action list which can be added to all the time – put the most important at the top of the list (very important emboldened text). Mix private and work related items – colour coded (green = private, purple = work). When you have actioned something, turn it grey, then eventually drag and drop clusters of actioned items below. This way you get a chronological list and keep the highest priority items at the top – you then make yourself do them – no escape. One of the worst traits we have is procrastination – putting things off. This is normally because we fear starting doing these actions – fear of failure, fear of upsetting someone, the tough decisions, getting outside the comfort zone. The advice - just do it! Better upset someone than not do anything at all. Ever get that really good feeling when you’ve done that tough task, then get to the easier ones after – it becomes so much easier! But if you put off the tough and important things, they will build up, and emotionally start sapping your energy. They’ll eventually get you so pre-occupied with worrying about not doing them, or missing the important deadline, that you’ll end up messing up on the simple actions as well! Do the tough things first – then you can relax and scream through the rest, then leave the office early – whilst being in everyone’s good books! As they say, it’s not the hours you work that matter, it’s what you do in the hours you work. No-one ever got promoted for working long hours – in fact, we’re sure you’d agree that managers look down with pity on employees that work all hours, especially if they only deliver average results – they start thinking “imagine if that person worked less hours – gosh, he’d have below average performance – the man’s struggling to keep up even burning through all those hours in the office”.
May sure you overshoot expectations
Never unduly raise peoples expectations and under-deliver. The theory is - if someone raises their head above the parapet and promises something special, initially there will be warm enthusiasm, but this turns to anger if there is under-delivery to this “promise” – it’s almost as if a promise is broken, you have been dishonest, and even arrogant, boastful and unrealistic. You are immediately put on the defensive. Better to quietly surprise someone with quality work ahead of time and below budget. Quiet with your promises and don’t set the target too high, but then a quick blaze when you deliver the result. We’ve all been past masters at raising people’s expectations and not delivering – and normally been on the wrong end when things ont go to plan. This is equally applicable in private as well as working life – to your partner, kids, colleagues, parents. Live up to your promises and have the personal integrity to deliver against expectations.
Travel
Travel can be very stimulating – and stimulation is a key aspect of a healthy life. Experiencing a different environment stimulates the mind, senses and gives important memories to look back on. Sure you can vividly remember your summer holidays when you are a kid, all those years ago. On the beach, travelling in the car, seeing new places and being with the family – they say we normally remember the best things - the vivid memories of such travel experiences surely mean that travel and holidays are good for us. So make sure you book time to get to see the world – even if it’s just a weekend break somewhere close by. It is not have to be exotic. Message is, try and have active holidays, with periods of activity, periods of relaxation. Take a good book, see the sights, experience the culture, meet the people, sea, sand, sun, countryside, mountainside, cities – whatever takes you fancy, but get out there and do it - make the effort. And the best holidays are normally are not the expensive ones. Just think back yourself on the most memorable holidays – were they the most expensive – probably not.
Watch the pennies
If you save $5 a day for the next 50 years and invest it in a 12% return investment (average stock market return over the last 50 years), it will be worth $1,000,000 by 2053 – you will be a millionaire. To become successful financially, you have to:
- Save, then
- Invest wisely
The simple fact is, most people spend exactly what they earn. A soon as they earn more, they spend more. Commonly known as the “rat-race”. The harder you work, the more your expenses, the more you need that next big pay rise and so on. These people can never get ahead financially because their liabilities are the same as their assets. They have little or no net worth. Expensive car, expensive house, expense holidays, only one income from being an employee – of a company that can fire them the next day. You HAVE to first reduce expenditure, then invest, preferably by leveraging your cash and investing in low risk, high return investments. That’s the great thing about property. If you put down a 10% deposit on a 100,000 pound house, and the price goes up 10% in the first year, you have made 100% return on equity. Then you can re-mortgage, to release the 10,000 pounds gained value, and buy another 100,000 pound property. Then if the price goes up another 10% you make 20,000 pounds, all tax free mostly using other people’s money. Even if the prices do not go up, if you manage to pick a property for 10% below market value (may be the property just needs a good decoration, or some simple work done to it, or has a distressed seller) you can get a 100% return in a few months if you view enough properties and put many low offers in and see the right opportunity.
Some simple tips to save money:
· Do your own home decoration and improvements
· Cycle or walk to work
· Buy food in bulk from a wholesaler
· Resole your shoes
· Repair broken furniture
· Clean carpets instead of replacing them
· Go for low cost holidays to cheap destinations
· Do not buy branded cloths, unless they are top quality and will last for years
· Buy second hand cars (at least 3 years old)
· If you have two cars, get rid of one and get some exercise instead
· Do not eat out unless a special occasion – invite your friends over instead
· Turn off the lights, conserve heat, install loft insulation
· Book plane tickets early or late over the internet to get the best deals
· Don’t carry a lot of cash around
· Cut up your credit cards – if not, at least always pay your credit card bills on time
· Don’t get into an overdraft situation
· Avoid the shops – go for a walk in the park instead
· Make your kids earn their pocket money (good practice)
· Take lunch to work, take a shorter break and get home half an hour earlier
· Stay with friends or family instead of in a hotel when on business trips or holiday
· Borrow a friend or family house for your next holiday – do a swap
· Write a shopping list before going shopping, and stick to it
· Rationalise your savings account, life insurance, endowments policies to release extra funds for higher return investments
· Keep a track of tax deductible items
· Always submit your travel expenses – deduct against tax where possible
· Avoid catching taxis – walk, cycle or go by public transport instead
· Avoid excessive business travel – teleconference, videoconference or email instead
· Make sure your house is properly insulated – particularly the ceilings/roof space, windows and doors
· Replace all light bulbs with long-life ultra-low wattage bulbs
· Move to a smaller lower maintenance house, rent out the larger one
· Avoid large / excessive school fees
· Stay healthy and avoid medical fees
· Look after you teeth – this is expensive!
· Avoid expensive long commutes to work – consider downshifting to a cheaper location where you would have a higher disposable income and better prospects
· Be proud of saving money and being frugal – do not let colleagues and friends persuade you otherwise – remember most people living on the Indian subcontinent live off about $30 a month
· Spend quality time with your family – on cheap activities like playing in the park, playing games or socialising
· Stop drinking and smoking
· Buy a book on investing and improve your financially knowledge
· Aim to accumulate vast wealth then give much of it away to the needy – the charities of your choice.
Please take this advice very seriously – if you scoff at the idea of saving money to invest, then you will likely never become wealthy. What ever we see with the retried folk today, don’t think it’s going to be so easy in the future. The retired population will almost double in the next 40 years, the stock market will likely crash when people start pulling on their mutual/pension funds – so don’t expect you can bag what you’ve gained so far and live happily ever after!. You have to accumulate as much net worth as possible before it’s too late. Don’t start thinking about this when you’re 50 – you need many years off a good run to accumulate enough to live comfortably, if you are to retire at 60 and live until 90. Don’t sell yourself short. Be proactive, start saving and investing wisely - now.
There is a strong correlation between being frugal and being a millionaire. Most millionaires are rather private, married, fugal, unassuming people that have build excessive wealth through proper management of their expenses. On the whole, they are not the stereotypical flash Porsche driver that goes on exotic skiing holidays and shopping in the
Advice on investing
PropertyInvesting.net ’s general advice on investing is:
· Find yourself a trusted financial advisor (and/or accountant, solicitor)
· Be very careful about your own financial knowledge – assume you are not knowledgable – ask lots of questions, learn as much as you can
· Always keep a track of your cashflow – your statement of how much money is coming in and going out each month and what the totals are
· Make a list of your assets (things with value) and your liabilities (things that cost to keep) and evaluate your net worth – work on increasing your assets, reducing your liabilities and increasing your income / positive cashflow
· Invest as much as you can safely do
· Use property investments to leverage your capital and shelter against tax
· Invest for the medium-long term
· Never pay too much for anything
· Always try and negotiate the price down
· Remember you win or lose when you purchase something – make sure you get as low a price as possible to give yourself a “safety margin”
· Look for distresses sales – “motivated sellers” – and make use of the low ball offer and hope they accept
· Never trust a financial adviser that takes a commission on a purchase or sale of your equity
· Avoid the emotion and hype of the market – generally when people or most depressed about a market, this is a time to buy, when they are most bullish, this is the time to sell
· Never buy into a dying industry – as Warren Buffet says, if you put an excellent manager in charge of the best business in a dog industry, you will still fail. It’s like a used cigar butt – it never gets any better!
Financial investing is a bit of a minefield – you basically have to find someone you trust if you cannot do this yourself (because you do not have the skill or knowledge). Another option is to buy a tracker fund, which on average does better than fund managers – and you’ll pay less commission.