Observe Archives - Page 47 of 68

The Power Of Compounding

Posted on June 11, 2021

Following on from the last few days, I’m combining retirement thoughts with compounding. The power of compounding is quite incredible.

I read an article recently about setting aside almost $3,000 for a child when they are born. This money could come from parents, grandparents, uncles and aunties or even from crowdfunding, I suppose.

The idea was that you could put that $3,000 into a low cost S&P 500 index fund and just let it sit there for 65 years. You would not take any out, nor would you need to put any more in. You would just let it roll over and compound.

Using the figures from the article, it noted the S&P had delivered an average annual return of between 10% and 11% in its nearly 100 years of existence. If it continued to average that rate, or even a little less (9.5%), the account would be worth over $1m by their 65th birthday.

This is more than 90% of what people would have in their retirement savings. By doing this one thing, during pregnancy or within the year after their birth, you would set them up for retirement. Regardless how their financial habits developed, they could always count on their $1m retirement fund when they turned 65.

The power of compounding is compelling.

Observe Think About It Time

See Compounding In Nature

Posted on June 10, 2021

Financial compounding is sometimes considered a wonder of the world. However, you can see compounding in nature too, if you look for it.

Let’s first review the common example of a penny doubled every day for 30 days. Would you rather be patient for 30 days or have $1m today?

Being patient pays off. After 30 days of doubling, that humble penny will be worth over $5m!! This is why consistent and frequent saving and investing is important for financial freedom. In the longer run, the difference can be very large.

We see compounding effects elsewhere too. Global population growth has shown strong growth over the last 100 years. It took thousand of years to reach the first billion people on Earth (1804). The second billion took 123 years. The third billion was only 33 years after that. You get the picture.

You also see this in animals, rodents, bugs, birds etc. And think how a chicken can produce one egg per day. Get a rooster involved and you can soon have dozens of chickens laying eggs and producing more chickens And more eggs to eat. Now some people aren’t so patient and want to eat the chicken for meat on day one. And then struggle or starve after that.

Think ahead, be patient and let nature take its course. When you see compounding in nature, use it to your benefit.

Action Health & Fitness Observe Progress Reframe your thoughts

Going Faster

Posted on June 9, 2021

Life seems to be going faster. Expectations and everyday things seem to change more quickly than before. Going faster can be great though it is good to slow it down occasionally too.

With most things, there is a finite limit for speed. Even light seems to reach a maximum speed. Other things like cars, rockets and airplanes have been pushing their limits further for decades. Though there is a point where it is not safe or technically possible to go faster.

Perhaps people reach that point too. Getting all those things done in one day might not be possible. Nor should we try to do it. Speeding around in a car isn’t good. Rushing through work may reduce the quality we bring to the table. Rushed conversations are rarely productive, especially if they have some differing views or involve a delicate subject.

When do we assess we are going fast enough? Is it when we have an incident or accident or health scare? Clearly going slow has its own challenges, which we won’t get into here. However, as individuals, we do need to double check that all that ’faster’ actually translates into better somehow. If it doesn’t, we should consider adjusting some things in our life.

Going faster is fun and desirable, but is it the best option?

Financial Observe Think About It

The Retirement Idea

Posted on June 8, 2021

Is it a myth or reality? Even if it was realistic for everyone, would everyone want to do it? The retirement idea is an interesting one.

Leaving one’s job and ceasing to work is roughly what the Oxford dictionary says it means. The ceasing to work is the bit that I find most interesting.

The idea that you do not work at all from that magical date, might be alluring for some. However, many others may find it a bit stressful not working at anything. So we have to dig at its meaning a little more.

Would it have to be no paid work or simply no working at all? What if you like your work? Many older people continue to work at their career job well after retirement age. Musicians and actors are both groups where we see some people working into their 70’s. Entrepreneurs and business owners can also be found working into their 70’s, 80’s and even 90’s.

Other people who work in occupations outside of the spotlight can also carry on working past the official retirement age.

For some, they like keeping busy. For others, they don’t have something else they would necessarily like to do. Others do it to keep some money coming in, even if they don’t really need it. Still others continue to work because the extra income helps them have the income they want or need.

The retirement idea may need a rethink.

Gratitude Health & Fitness Observe Think About It Time

The World Is Amazing

Posted on June 6, 2021

Without context this might seem a bold statement to some. However, with historical data one can see the world is amazing and getting better.

Why you might not believe this could be for many reasons. It doesn’t make it less so though. It is certainly how I see the world. There are a lot fewer bad things happening than 100, 500 or 5,000 years ago. In addition, we can see quite a few good things in this era that didn’t exist previously or weren’t as good.

With this is mind, I have been wanting to read Factfulness by Hans Rosling for several years. I received it for my birthday last week and thought I would read a few pages today to see what it was like. Wow! I am really enjoying it.

It is loaded with facts, psychology and ideas. That is my kind of book. It was so easy to read a few pages quickly as it makes sense and I already believe it so there is no convincing needed. Nor is there any rebuttal of the ideas or data as I am already on that same page. In addition, it is great to have it as a reference book with all the data, graphs and charts.

The world is amazing and it keeps on getting better. It is not perfect, and it is unlikely to ever be so. But, it is so much better than 20 years ago, let alone 200.

Gratitude Observe Think About It

Know When You Are Done

Posted on May 23, 2021

We can push ourselves too far or beyond the point of enjoyment. We must monitor our own feelings. Know when you are done so you don’t go overboard.

This idea is the same for eating ice cream as much as it is for finishing a work project. You can also use it to decide what you like in life and what you do not.

You can eat too much ice cream. The taste is so good it is hard to stop. But you need to know when you are done. The unintended consequences of not paying attention can be significant.

Although it seems so important in the moment, the longer term ramifications are not justifiable. If you eat a 500 ml tub of ice cream every day, it will have an impact on your weight, insulin, heart and overall health and fitness.

Similarly, if you work too hard or too long on a project, you risk burnout. Often we have done the job very well and could stop. However, perfectionist tendencies and fear of our peers can keep us toiling away longer than necessary.

Know where the boundaries are. Know where yours are. Keep an eye on them and act accordingly.

Know when you are done.

Observe

The Dichotomy Of Life

Posted on May 22, 2021

You have to be impatient at times and patient at others. The dichotomy of life recognises that an extreme action, or its opposite, may be required depending on the situation.

If your daughter has had an accident, you should be impatient in getting her to medical help. However, 99% of the time, you should be patient when going through traffic.

Do you ever find yourself out of time? Yet, at other times, you have too much time on your hands? (Cue the 1981 song by Styx here)

You have songs espousing to Keep The Faith (Bon Jovi) and groups called Faith No More.

There is a delicate balancing act between the extremes most of the time. It isn’t always there, but it is usually a good thing. Go and find examples of this in your life. Although, they may not come quickly to you, if you put in the effort, and have patience, you’ll see them.

You will find many articles written on this topic. Have a read and see what you think. Do not think you are alone in your thoughts. At any given moment, other people have the same thought as you.

The dichotomy of life is real.

Observe Think About It

Powerful Storms

Posted on May 19, 2021

Hurricanes, tornadoes, thunderstorms, lightning, torrential rain and high velocity wind are all associated with powerful storms.

These environmental systems can come into our lives quite quickly. They are often incredible to witness. The sites, sounds, size and impact of intense weather systems can leave one in amazement. Pictures and videos can capture the moment but being there live, in person, can provide a whole new perspective.

I mention this as, here in London, on the 18th May, we had some crazy weather. It swooped in rather quickly. The sky blackened. Possibly the longest rumbling thunder I’ve ever heard, enveloped us in a percussionists dream. There was sharp lightning, intense rainfall and even hail. Not one to be out in. Alas, both our sons arrived home in the middle of it and were absolutely soaked.

This reminds me of living through Hurricane Emily, the Category 5 storm that pummelled Mexico in 2005. In addition, I’ve witnessed some incredible storms in Eastern and South Western Ontario. Once, in the former, we had to pull over and stop the car because the rain was so torrential. In the later, the skies lit up with an incredible array of lightning.

Well sometimes we have storms in our life. Some we see coming and some explode upon us with little warning. But we can weather those storms. Know that it won’t last. It may be intense but it will subside and you can carry on again.

Powerful storms are engaging, but do end.

Observe Reframe your thoughts

Who Is Famous To You?

Posted on May 16, 2021

This test will help you to understand what is important in your life. You can more easily see where you are headed. Who is famous to you? Why do you know them? Why do they matter to you?

If you can name most of the players in English rugby, then you have a rugby focus. Some people will know all the names of the Prime Minister’s cabinet. That will tell you something about them.

If you know all the names of the journalists at a certain newspaper, it may indicate where you get your news from.

Now, just because these people are famous in your eyes, does not mean that other people will know them or even should know them. Other people will follow a different group and not know a thing about those that you follow.

What is important here is that where you spend time and energy, is the direction you are moving. So if the people you follow are in country music, you will move toward that culture. If it is mafia bosses that you follow, you might find your life being absorbed by organised crime.

Be aware of all the influences on your life. Then assess whether that is truly an important direction to be moving in. And also why it is so important in the context of your 90 year life.

Who is famous to you?