Basically they are your run of the mill dudes that have done the normal thing (ie. they have a background in sales and marketing), it didn’t work out so great or they weren’t so satisfied with living the “American Dream” and decided to try something new, fresh and novel.
They love it. They love the freedom it brings them. They love the empowerment. The improved relationships.
Quite frankly …. I’m sold
This week we are discussing the key elements of being a successful Minimalist according to Joshua and Ryan.
Have integrity – do what you say and say what you do! Build trust with the people you work with.
FOCUS, according to Bill Gates and Warren Buffett is the number one attribute you require in life to achieve success.
Have a goal (SMART goals)
Make a plan with specific measurable milestones
Take action. Start taking action on the first step in your milestone list.
Failure is a milestone, not a destination. Persistence, consistency is essential until you achieve your goal.
Never doubt your ability to achieve success. In Warren Buffet’s words “I always knew I was going to be rich. I never doubted it for a minute.” Believe in yourself!!!
One of the most important decisions you will ever make in your life is who you choose as your life partner.
You want to associate with people who are the kind of people you would like to be.
Ultimately – they will have the most influence on you in the long term and this includes your career.
A study done in St Louis by Brittany Sullivan and Joshua Jackson at Washington University has shown us that having a conscientious spouse who is involved in the career of the other spouse can boost one’s salary significantly.
Because conscientiousness means taking the time to involve oneself in the activities that allow the other partner to flourish.
This attentive attention comes across as support.
People with a conscientious partner are 60% more likely to become promoted and flourish in succeeding at their long term goals.
Luna Jaffre a Certified Financial Planner™, has never bought the common notion that one must sacrifice passion or forfeit creativity in order to get serious about money. Teacher, artist, entrepreneur, writer, and visionary
Scott Pape is an author, television presenter and radio commentator. He’s not a financial planner but finished his Bachelor of Business at La Trobe in 2001. He lives and works in the country and has a down to earth can do kind of attitude to life.
Morgan Housel was a financial columnest for the Motley Fool and Wall Street Journal. He is also the author of The Psychology of Money which has sold over one million copies. He is now a partner of the Collaborative Fund which is an investment firm focused on supporting and investing in the shared future.The firm’s funds focus on investments around two macro themes: the growth of the creative class, and the concept of the collaborative economy.
Why the Psychology of Money?
Morgan notes in his book, the Psychology of Money, that there is a lot of literature around budgeting and how to do finances but a lot of literature does not account for or focus on the fact that humans are irrational balls of emotion that do not behave in consistent, reliable ways. Many of our choices are formed via emotion and the way we feel – and we can see this reflected in how we choose to invest.
In his book (and article) he goes through 20 points on the psychology of money, looking at the concept of risk versus luck and reflecting on people who have a lot of things versus people who have wealth and how the wealthiest people in the world have exercised consistent investing over time to reach their fortunes.
I loved his analysis of Warren Buffet noting that Buffet started investing at the age of 10 years old. By the time he was 30 years old he had reached his first million. He mentioned that he has averaged returns of 22% over time and it is really TIME that is the critical element in his success. When you compound 22% returns over time, you quickly find you are snowballing wealth. Most of his fortune has come over the age of 60 years.
In the same vein he refers to Jim Simon’s who has made over a billion dollars from investing between 1988 until 2018. He achieved this by using quantified trading strategies, for the Medallion Fund and managed to return on average 66.1% gross before fees from 1988 until 2018. Jim Simon’s has been a more successful investor than Warren Buffet, however he has not been doing it for as long so ultimately it is TIME that is the secret to enormous amounts of wealth.
So what are the secret strategies to being a successful investor according to Housel?
Here are some of my favourite tips from the book:
If you spend your income on things, you will have things instead of wealth. In order to accumulate wealth you need to save money and invest it rather than spending it on items.
In order to have the grit and resilience to save wealth there is an element of not needing to be attached to status, greed, appearances, keeping up with the Jones’s. Recognising that status is an illusion, in the sense that when people look at you driving your expensive car they don’t think “Wow, who is that amazing person driving that expensive car?” They think “I wonder what I would look like if I was driving that expensive car”. Once you come to terms with the fact that no one else will care you can release your attachment to needing to meet some appearance to please others.
He notes it is likely that 80% of your investment success will be based on a small portion of your investment. So expect a lot of failure on your pathway to success. It’s like 99% failure and 1% success. There are a lot of quotes around this – even Michael Jordan notes he was so successful because he missed so many shots and lost so many games, he failed enough to succeed.Having enough. Being enough. Understanding that greed and risk, such as gambling at high stakes for high returns has led to many an investors downturn/demise. So – recognizing that you have enough. Your starting point should be “I am enough” “I have enough” so that you are making reasonable and rational investment decisions.On this note – only invest what you have – not what you don’t have.
Getting wealthy versus staying wealthy. Recognising there is one type of mindset to get wealthy versus staying wealthy once you get there.
“No one is Crazy” People are subject to their age, era they grew up in, the economy at the time of their lifetimes. We invest differently based
So recognising that sometimes success actually looks a lot like failure.
Compounding – consistently investing over time is where the results are at. Not being swayed by dips in the market. Staying the course with your strategy until you see results, instead of bailing at the first sign of hardship.
I think this book is a really great way to cut through some of the BS around investing and prime your mindset for what truly is grit and resilience necessary to become a successful investor.
Recognising that its not all roses and pretty pictures. That you may actually be investing for a really long time before you see results. That it takes perseverance, resilience, grit, determination. Starting from a place of being enough and not getting greedy for more than is necessary. Recognising that wealth and status aren’t the be all and end all – true wealth comes down to having your health, loving relationships, freedom, and what he stresses the most is TIME. Having freedom over how you spend your time is the ultimate wealth any human being can experience.
In order to succeed what you really need is consistency and self-discipline. We have recently visited with a friend in Darwin from the defence force and they shared a story about the army and how in the army they teach people a technique of survival which is about setting your parameters or the boundaries you require to survive and then sticking to those boundaries. All it takes is knowing what you want, setting the boundaries and then the self-discipline to stick to the strategy over time.
It’s great having you all on board! I look forward to catching up with you next week where we will be discussing creating a vision for your life!!