Financial Archives - Page 9 of 12

Producing And Consuming

Posted on April 1, 2021

Do you consume more than you produce? It is an interesting question. Producing and consuming are both required in life. However, imbalances in your life will occur if you do one more than the other.

Producing here means providing something of value. The more you offer in value, the more productive you are being. The more the market perceives value in what you are offering the more you can charge for it.

If more people like what you offer, the larger your business will grow. This is how the world has companies valued at billions of dollars. Because of this, we also see billionaire founders and investors. This is what happens when you provide something that others find valuable, not just what you think is valuable.

What you think is valuable is what you will consume. The more value you place on a product or a service, the more you will be willing to pay for it. This payment you make will come from your own resources such as income or savings.

If the value of your consumption is more than the value of your production, you will have less money or wealth. If your production value is greater than your consumption value, you will attract and keep more money.

Producing and consuming are part of life. Which one you focus on helps determine how you spend it.

Financial Observe Think About It Time

Feeling like Spring 2000

Posted on March 31, 2021

Anyone else got that deja-vu thing going on? Stock markets near all time highs and some stretched valuations. It’s feeling like spring 2000.

The Deliveroo IPO was not in line with City expectations. This immediately made me think of a similarly hyped IPO from March 2000. It was the IPO of Lastminute.com, the dot.com seller of discounted travel. Although it’s initial day was much better, it turned south very soon after. Things continued to unwind through April and into May. Actually it continued for a full year. From the 14th March 2000 IPO through to 14 March 2001.

The NASDAQ peaked in March 2000, coincidentally. It then went on to fall 78% over the ensuing 31 months. The descent ended in October 2002.

This all came on the back of a very unique year, which was the last year of the Millennium/Century/Decade. We’ve also had a very unique year in 2020. That seems more circumstantial, or not relevant at all. But I thought I would throw it in there.

Anyway, after the bull market in the 90’s, there was a shake out. Maybe we are seeing the start of a shake out now again. We have had about a decade of bull market activity, so theoretically markets are due a correction.

It may be just me, but it’s feeling like spring 2000.

Financial Gratitude Think About It Time

If I Had His Money

Posted on March 30, 2021

I would do things differently. Have you ever heard someone say this? Maybe you’ve even said it. If I had his money I would do x,y,z.

Now it could be his or hers, but the idea behind the phrase strikes me as the speaker thinks they would do better with it. In my experience, hearing people say this, it tends to involve the speaker spending more cash on luxury items. Holidays, clothes, better meals out and cars seem to high on the list of improvements.

The irony seems to be, once again, that those who develop good cash management habits have more cash to manage. And those that don’t put effort into good cash management habits, don’t tend to have much money to manage. Though they are not short of observational skills and have a fine knowledge of how to improve the millionaire’s suboptimal lifestyle.

With just a few flourishes of a debit or credit card, the speaker can resolve your unfortunate circumstances.

This may be one of the reasons why the speaker might not have enough money of their own to mess about with. With their unique money mindset and a propensity to spend rather than save, we can better understand why the speaker is in this predicament.

The good news is that great money management habits can be learned. Then you can turn, if I had his money, on its head.

Action Financial Reframe your thoughts

Credit Cards Are Brilliant

Posted on March 25, 2021

I have always loved credit cards. They are so useful. They can be brilliant if you use them with the right intent. Credit cards are brilliant when you are sensible. However, like fire, if not used properly, you can get badly burned.

There are two features of credit cards that I think are great. The first is called a Balance Transfer. This is the option to shift one credit card balance on one card over to another card. On the surface, it may sound like a bad idea that has no benefit. However, if you get curious and look a little deeper, you’ll see some great benefits.

Let’s say you have a $5,000 balance left on one of your cards. And it’s attracting a 20% rate of interest. That would equate to $1,000 annually of interest. Now you could transfer that balance to a new or current card you hold. Find a good deal and you could pay 0% interest for up to 24 months right now.

In addition, you will usually have to pay a fee as well, but if you’re getting a new card, sometimes this is waived. Let’s say you pay an upfront fee of 4%. That would be $200. But no other cost for two years. That’s like a 2% per annum rate. Now you have some breathing room to pay the balance off over two years and it will only cost one tenth of your current card.

The other option is a Money Transfer. Similar idea, but the card company simply places the funds in your bank account. You don’t need to be paying off another account balance. Similar terms can apply.

Like I said, credit cards are brilliant. (Use sensibly and pay down the balance so you clear it when the 0% period ends.)

Financial Gratitude Observe Reframe your thoughts Time Video

Life Is Like A Movie

Posted on March 19, 2021

Have you noticed how things in certain movies become things in life? Remember the swish swish of doors in Star Trek? Life is like a movie, though only certain ones at certain times.

So when I was growing up, the swish swish of the doors on the Starship Enterprise seemed so futuristic. However, now most metro centres have thousands of these doors.

Then things started to unfold like the Schwarzenegger film Total Recall. The whole idea of virtual reality. We are getting there with Virtual Reality, Augmented Reality and Artificial Intelligence. We certainly have driverless cars on the near term radar. And trips to Mars being scheduled.

Then we have seen some elements of Tom Cruise’s Minority Report. People are being condemned for even thinking of an activity with a criminal element. It doesn’t matter if a crime has happened. The fact that it could have happened is enough for you to be removed from society.

Now things are moving on with skins in Fortnite and a virtual world in Clubhouse. This and the VR makes me think that the Ready Player One reality is not that far off from our current life.

Finally, we have Terminator. Well, that melting man business and pulling yourself back together is quite impressive. But happy for it to be a few more years before that.

Life is like a movie. Go get the popcorn ?.

Action Financial Health & Fitness Observe Think About It Time

Gen X Will Be skipped

Posted on February 23, 2021

Reading an article yesterday struck a chord. It noted that because Baby Boomers have held onto their jobs so long, that Gen X will be skipped in the career process.

I used to think that all those Baby Boomers would be retired by 60 or 65. They were wiser, better with their money and more aware. Consequently, my overriding thought was that there would be incredible opportunities. Many senior level leadership roles would open up as the ageing work force meant declining numbers available to work.

30 years later it may be that the opposite is true. People are healthier now. They feel they have to work longer as they know they will live longer. They will require more money. Some want to work longer as they enjoy their career and enjoy the experience.

Whatever the reason, Baby Boomers are not retiring as early or as quickly as I had anticipated. This seems to be adding a strange overhang in the market. Without the OG’s retiring or moving on, the Gen X’ers are stuck on the second or third rung with little upward mobility.

There are worse places to be in this world. If they have a nice job and are waiting for the other person to die or at least be sidelined, they may be disappointed. But we will all carry on. Soon roles will open up a plenty. Though it may be the Gen Z’ers that fill them.

Gen X will be skipped.

Action Financial Gratitude Time

Stay Focused On Your Plan

Posted on February 21, 2021

There are two levels to this. We are able to spend our time in a variety of ways. Some good and some less so. Stay focused on your plan to progress your highest priorities.

It can be so easy to get distracted. And it can be easy enough to think there is nothing you can do for a situation. You might even think that you can do something but it might not truly progress your highest priorities. Make sure you play the best game possible and forget about the rest.

Should you spend your time and energy on arguing that someone has done something unjust? Or are you better to simply start making the situation better in any way that you can?

In addition, do you help someone because you can, or no one because none of the others get the benefit of your help? Should you help some children because you are able to? Or should you wait until you can help all children equally?

People tend to have thoughts like these everyday. Some will freeze and do nothing. Others will go off trying to change something in the past. Your highest priority, however, should be to stick to your vision and work towards that alone. Ignore the naysayers. Brush off the trolls and critics.

Stay focused on your plan.

Action Financial Gratitude Observe Think About It Time

When Do You Take The Hit?

Posted on February 16, 2021

Are you a pain now or pain later person? I know it can be a constant debate in my head. The question always remains, ‘When do you take the hit?’.

Should you cut back on your lifestyle for a few years now to live gloriously the rest of your life? Or should you keep it up and find that 60 comes and goes and you keep chugging along until 70 or 80 years old. It’s your choice. Which will you choose?

It is hard to tell which to do. And it often depends on your mood and the situation. I don’t believe anyone likes to give up the excitement of the now for the potential good later. But if we do not do that, we can find ourselves perpetually working. And that doesn’t sound brilliant either.

I believe sometimes you need to take the hit early on so you can thrive later. The conundrum is that if you get the timing off, there is little you can do about it.

So take it on faith and dial back the lifestyle for a few years while you build your wealth. You will be so glad you did. You may even discover how amazing your life is without all the extras in your life.

When do you take the hit?

Financial Observe Property Reframe your thoughts

Good Debt

Posted on February 10, 2021

Some words just have a bad connotation. While others are riding high with positive brand awareness. Good debt straddles the middle.

For some, all debt is bad or evil or unnecessary. That is how it sits in the bad camp. However, those in the know about debt are happy to have good borrowings in their portfolio.

Generalisations do not help. Often as we get closer to the specifics of a topic we split off into different perception points. This is helpful. We can then better understand our position. Ideally we wouldn’t carry any debt for any purpose. Although, a little bit of borrowed money to help build a company, buy assets and get your future flowing, can be a good thing.

It is always interesting to me when people react to the word debt. It is a word many people want to clarify, if they do not condemn it straight away.

Many people have a difficult personal story involving borrowed money. It is not uncommon for people to have been in sizeable challenging positions when they were young. And unfortunately it is usually bad borrowing that they have collected.

I am trying to raise the awareness of debt, both good and bad, money, finances and life options. That is why I host Money Mindset Monday at 10:30am UK time on Clubhouse. My co-hosts / co-moderators are great and people get a lot of value.

In the meantime, get to know good debt.

Financial Observe Reframe your thoughts Think About It

Your Money Pays For Their Vacation

Posted on January 30, 2021

Make sure you only buy things that are essential to your life or for true happiness. Remember that when you spend, your money pays for their vacation, not yours.

Think about that for a minute. You buy two large pizzas for £25 and that is a fair exchange. You receive two large pizzas with toppings of your choice and they receive the payment they wanted. However, think one level deeper.

When you buy the pizzas, your bank account goes down and their bank account goes up. You have less cash for your vacation and they have more cash for theirs.

Quit giving your money to everyone else so they can have your vacation.

You could buy two large pizzas at the shops for £10. Then put the £15 of saved money into two other accounts. The first £7.50 could go into your vacation fund. The other £7.50 could go into your long term strategic investment fund.

You get to eat the pizzas and you build up your vacation and investment fund accounts. Sure the pizzas may not be quite as delicious from the fridge. And there would be some effort in cooking them. However, you would still have the nutrients and additional funds in your core accounts.

From one simple example, you would have almost £800 across your accounts in one year.

When you’re about to spend, remember, your money pays for their vacation.