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Wealth and Riches part 2

Posted by on Jul 24, 2008 in Money | 3 comments

In part one I talked about measuring wealth in time and freedom. In part two I will be discussing 5 ways to get started. As a quick note, I would like to mention I wrote this post on my itouch while commuting on the Tokyo metro.

1. Assess your bills and eliminate

Learn to live with less. Look over your expenses and eliminate anything that is not a necessity. When you think necessity, think stranded on an island and what you need to survive. You can always add things back later, but after some time without most things you will find they really aren’t that important.

2. Use cash/get rid of credit cards

Some people might disagree with this so let me explain. Credit cards allow you to spend money you don’t have. Stop carrying them with you. Set a monthly budget including lunch, gas, and spending money. Pull this amount out and don’t go over it. If it helps, only keep the daily amount in your pocket.

3. Create a want/dream list

Figuring out what you want and how much it costs will not only help you set some saving goals and focus your efforts, it also brings to light the things you purchase that aren’t important. Check out The Four Hour work Week for a dreamline template.

4. Make your money make money

There are a lot of things to invest in. Find something that interests you and learn about it. Talk to successful people who are investing in the fields you are interested in and learn from them. And don’t forget, one the best investments you can make is in yourself and your own education

5. Find cheap fun

Learn to enjoy life and have fun without spending money. You can find one list on cheap fun here. But don’t limit yourself to that list. Find something you enjoy and then find a way to do it cheaply. Or better yet get paid for it.

Sit back and watch your money grow! It seems difficult at first, but after you do it for a month then it gets much easier…and eventually fun.

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Great Advice From Eddie Lampert

Posted by on May 16, 2008 in Personal Development | 0 comments

If you want to get ahead, then you need to do things before everyone else. Once something is seen as profitable, cool, or unique, then it is already too late. The idea is that if you think of something first then you have a competative advantage. If you are informed, everyone else is probably doing the same thing. The ability to anticipate gives you the edge, but how do you learn to anticipate. Lot’s of practice and experience. As Eddie lampert wrote in his article on Fortune, “you have to keep practicing and preparing.” This is applicable to business, marketing, investing and savings, sports, and many other things in life. It takes thinking outside the box, which is hard to do since most of us are trained to just follow the rules. You can find the full article here. I originally found the article on Brand autopsy.

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Could One Marshmallow Be The Difference Between Poor Or Rich?

Posted by on Apr 28, 2008 in Money, Personal Development | 0 comments

Could the ability to restrain yourself from eating one marshmallow make a difference between struggling through life and the ability to retire wealthy and early? Yes it can, according to a study done in the the 1960’s by Stanford University psychology researcher, Michael Mischel. The study tested 4-year old children’s ability to delay gratification. The researcher then placed a marshmallow in front of the child and gave him/her two options. The child could eat the marshmallow, or he/she could wait until the doctor came back from an errand and the child would receive two marshmallows. Only 1/3 of the children were able to wait until the researcher returned. I read the story in the book Influencer: The power to Change Anything (a book I would highly recommend by the way), but you can also find more details on the story here.Influencer: The ability to change anything

I know, it doesn’t really seem like a big deal right. Well, they followed these kids into their adulthood and it turned out that the children who were able to delay gratification and wait for the second marshmallow were more successful, had high paying jobs, and tended to be more happy people than the ones who choose to eat the marshmallow. Think about it. The ability to delay gratification means you can save and invest when others are spending money on various things they don’t really need, you can control what you eat, make yourself exercise, push yourself through school when others are partying. This one small behavior has the ability to completely change your life. I know, it is much harder than I make it sound. Luckily, according to the book, Influencer, this behavior can be learned. Since the two books have a lot of similar ideas, I would also encourage you to read Made to Stick.

However, in some cases it really is simple. Most people give up on investing and even saving because they feel it is too difficult. But put in the context of the marshmallow story, finance and investing is really not eating one marshmallow so you can have two. You don’t spend your money, put it in some type of investment, and then it becomes more. The behavior that has to change is the “not spending” part. But, as i mentioned in an earlier post, it gets much easier once you get used to it.

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