Winning or Losing by Saving???

A few weeks ago, I came across this Instagram post from CNBC on a Grant Cardone quote. 

"You can skip spending $5 at Starbucks every day and save $10,000 over the next 5 years, but if you think $10,000 is going to change your life, you're not just broke, you're being stupid." - Grant Cardone

Well, that was a quick 2.5 years . . .

After a 2.5 year hiatus - and I'm not really sure if that was intentional or not - I decided it was time to post an update.  Wow, a lot has happened with a few trips around the sun!  Looking through past posts, I have mixed feelings.  I can honestly say I'm proud of how much I've stayed the course, even without writing this blog to help keep me in line.  However, I also remember why I think I stopped writing for a while.  I think I wanted more out of my writing and I gave up trying to get there.  That lack of fulfillment came maybe as I ran low on interesting material that I was passionate about writing or maybe as I felt my time was better spent on productive activities such as reading or researching ideas, rather than writing about dreams.  Anyhow, I guess I got the bug again . . .

Streamline Your Mind

From successful businessmen to politicians and entrepreneurs to investors, a penchant for reading seems to be a common trait existent in many of the world's top leaders.  From President Obama to former NFL quarterback Fran Tarkenton, many start their days scouring the local and national newspapers and favorite blogs. 

"The Week" published a wonderful article in 2013 describing Warren Buffett's and Charlie Munger's reading habits.  Here's an excerpt:

Warren Buffett says, "I just sit in my office and read all day." 

What does that mean? He estimates that he spends 80 percent of his working day reading and thinking. 

"You could hardly find a partnership in which two people settle on reading more hours of the day than in ours," Charlie Munger commented. 

When asked how to get smarter, Buffett once held up stacks of paper and said he "read 500 pages like this every day. That's how knowledge builds up, like compound interest."

The article goes on to describe how possible Buffett successor, Todd Combs, has heeded his bosses advice and reads up to a thousand pages on some days! 

"Waiting for the Universe to Respond to What You've Been Manifesting"

Over the weekend, I stumbled upon this picture on Instagram:

 

 

It was so ridiculous and pointless - just like most brain-drain social media posts, I suppose - but it was also one of those images that became stuck in my head.  How often do you feel like this?  I mean, REALLY feel like this?  I've felt this way more lately than I can ever remember - and it's tough.  Anxiety has got to be one of the most difficult emotions to suppress.  If you're like me - and I'm assuming if you're reading this then we likely share number of similar characteristics - it is not in your nature to sit back and watch the world go by.  You need to be doing something; you need to be planting some seed or nurturing one that you've previously sown.  Sitting and watching is next to impossible. 

Entity and Incremental Learning

From Business Insider

I've been on a bit of a psychological kick lately digging into books like "Bounce" and "Thinking Fast and Slow" - which is quickly becoming one of my favorites and, by far, one of the most informative I've ever come across.  "Bounce" mentions some of the work of Carol Dweck, who was the author of "Mindset", which contains some mind blowing information on how our minds work and how we can condition them to focus on success.

While her book was a great read, I had forgotten - or, more likely, didn't yet understand - how enlightening her concepts really were.  That was until a couple of months ago.  Not only did her writing continue to pop up in a number of books I had been reading, but my son was born.  After seeing how fast little babies pick up new habits and how quickly they learn, I began to think about the best way to raise him from a psychological standpoint to empower him to live the best life he possibly can.  I remembered Dweck and gave myself a refresher of her teachings, which took on an entirely different meaning than the first time I plowed through "Mindset". 

One of the tenets of "Mindset" was the distinction between entity and incremental learning.  Entity learning was the belief that brainpower and intelligence were innate and could not be improved.  It gave the individual a sense of entitlement.  On the opposite end of the spectrum was incremental learning:  the belief that "the novice can become the master" (quoted from "The Art of Learning").  Empowering! 

Suggestion, Anchoring, and the Adjustment Heuristic

I've recently been reading (listening on audio!) through Daniel Kahneman's "Thinking Fast and Slow" and one idea struck me that I haven't been able to get out of my head:  Anchoring and the Adjustment Heuristic.  Here is the Wikipedia definition:

Anchoring or focalism is a cognitive bias that describes the common human tendency to rely too heavily on the first piece of information offered (the "anchor") when making decisions.

Kahneman and Amos Tverskey Kahneman goes over numerous examples of this bias; one involved asking study participants if Gandhi was 144 years old when he died.  While this question is obviously absurd, as 144 years is longer than anyone can live, it sets an "anchor" from which the participants "adjust" from.  Participants adjust down from 144 to reach their answer. 

In another example, real estate agents were given sufficient information to assess the value of a house.  Within this information was the list price.  Some agents were provided information with a very high list price while others were given a very low list price.  The ones given the high list price produced a significantly higher value of the home than did those who were given the low list price. 

Trips Over Gifts

My wife and I have an agreement:  If at all possible, we don't buy each other gifts for birthdays or holidays, but instead use that money towards experiences.  This agreement forces us to use our imaginations to come up with something fun to do for special occasions and compels us to step outside of our comfort zones to try new adventures.  I'm not saying we haven't ever bought each other something, but the idea is that an experience, if at all possible, takes precedence over material goods.  And they don't have to be huge, expensive experiences - just something thoughtful.  A nice night downtown or a   A few of my favorites have been:

-Hot air balloon ride in Asheville, NC. 
-Great American Beer Fest in Denver and offseason stay in Vail
-Deep Sea Fishing in San Diego

Each of these coincided with a trip that we already had planned.  With sites like Groupon and LivingSocial, these types of experiences can fit within a budget.  I'm not going to try to tell you that they are cheap, because they aren't, but they also don't need to break the bank.  There are many activities that can be enjoyed for much less than a gift would ever cost. 

Shyp in Chicago!

Last night, I was fortunate enough to attend a "fireside chat" at the General Assembly in Chicago with Kevin Gibbons, CEO and Co-founder of Shyp, and Antonio Gracias, CEO of Valor Equity Partners and board member on Tesla.  Mr. Gracias moderated the discussion and had some very interesting questions Mr. Gibbons. 

In case you are unfamiliar, Shyp is a company designed to make shipping easier and "frictionless".  You simply download the app, take a picture of the item you intend to ship with a pick up address, and a Shyp courier swings by (usually within 20 minutes) to pick up your package, wrap it, package it, and send it. 

The Opportunity Cost of Fantasy Football

I have recently been the recipient of verbal office jabs for my choice to abstain from Fantasy Football this year.  My retort?  The opportunity cost of drafting, managing, and discussing Fantasy Football does not warrant participation.  I played last year.  I enjoyed it.  I enjoyed it a little too much, spending Sunday's refreshing my phone at the local B-Dubs, telling my wife I need some obscure receiver to catch at least 4 passes for me to lock in a playoff spot - as if to include her in my predicament.  The end of the season was a welcome relief, maybe as much for me as it was for her.  No matter how many times I have vowed to not let FF take over my life, I still found myself sucked into the office banter throughout the week and a zombie - a shell of my non-football self - on Sundays.  I am STILL being sucked into the office conversations, and I'm not even playing this year!  That's power of Fantasy Football!

What is the tradeoff for that time and stress?  What am I missing out on?  Am I getting more out of participating than I would from some other activity?  What are the opportunity costs?

Beer Economics: To Brew or not to Brew . . .

We all have our "thing".  The "thing" . . . you know, the one that you, savor extraordinaire, just won't budge on.  It goes against every principle you try to uphold on a daily basis.  It's material, it's expensive, it's unnecessary, but it's sooooooo good!  Maybe it's coffee?  No, you would never frequent Starbucks each morning for a $5 Pumpkin Spice Latte with your name spelled incorrectly down the side - that would be asinine.  But there are still ways to get your fix, to feed that craving, and conquer that one weakness for a reasonable price.  Maybe when you're at the grocery store staring at that wall of Folgers and Maxwell House, maybe you can't help yourself but reach for a bag of Peet's for only $1 more per bag, or 15 cents more per pot.

Mine?  Mine is craft beer.  My dad had been brewing beer long before it was hip.  I sidestepped the Icehouse college phase.  I never "moved up" to the expensive Coors Light.  Nope, my first "bad" beer was Sam Adam's.  At that point, I was doomed.  It's a one way track.  A guy can move from Iowa to California and he'll understand what he had been missing, but you can't expect a Californian to relocate from San Diego to Des Moines and survive.  It's a step backwards, in his eyes.  After my dad's craft beer, there was no turning back. 

But craft beer exploded.  Now, a six pack of Lagunitas Little Sumpin' Extra ale will set you back $9.99, if you're lucky, and that's before taxes.  You want to buy Ballast Point Sculpin in Chicago?  How about $13 minimum?!

Utility - In Another Sense

Utility, in an economic sense, is defined in Investopedia as:

"Utility is an abstract concept rather than a concrete, observable quantity. The units to which we assign an "amount" of utility, therefore, are arbitrary, representing a relative value. Total utility is the aggregate sum of satisfaction or benefit that an individual gains from consuming a given amount of goods or services in an economy."

I became familiar with the term "utility" in this regard from Jordan Ellenberg's "How Not To Be Wrong" and it intrigued me.  Business Insider and Smithsonian give nice summaries of its use in the book here and here respectively.  The gist of it is that everything comes with a cost and you need to ask yourself what cost are you willing to pay for a level of comfort.  It is an "inconvenience factor" and Ellenberg measures it in utils.

Financial Freedom - July 2015

I recently (better late than never!) came across a couple of blogs that I really enjoyed on personal finance:  Root of Good and Mr. Money Mustache.  Both blogs focus on early retirement and different techniques to become financially independent - my goal numero uno.  Mr. Money Mustache has a way of conveying to readers the proper mindset one needs to go down this path and the differences between those who achieve this goal and those who do not.  My favorite part of Root of Good is the financial update and transparency he provides into his family's financials with monthly updates. 

After being inspired by these two blogs of men who have successfully obtained financial freedom, it occurred to me that, while it is extremely beneficial to read about the reflections of those who have succeeded, it may be even more beneficial to document the journey as it unfolds.

Personal Goals - Ultimate, Tangible, and Intangible

My Goals:

SUCCESS = FREEDOM

1)  No regrets
2)  Maximize time with family and ensure happiness
3)  Financial Freedom by 1/1/2020
4)  Relocate family and purchase home in Chicago area.  Accomplished 3/31/2015
5)  Purchase/Open Business
6)  Travel as much as possible

*Doing all of this with integrity in a way that would make God proud and with the end result of leaving this world a better place than when I entered it.

As you can see, some of these are more tangible than others.  No regrets?  Maximize time with family?  It is difficult to quantify whether or not these are accomplished.  I'll tell you that I KNOW when I'm NOT spending enough time with family, but how do you really know if you have maximized it? 

Overcoming Weakness

How can you expect to improve in your area of expertise, your chosen field, or as a person in general by focusing solely on your strengths?  Everyone has a weakness; what differentiates those who succeed from those who do not is how those weaknesses are dealt with. 

In "The Art of Learning", Josh Waitzkin discusses the necessity to identify your weaknesses and work on improving them until they no longer hold you back.  In case you are not aware, Josh is the subject of the book and movie "Searching for Bobby Fischer". 

The Power of Silence

-"Brevity is the soul of wit.  If you've got something to say, say it and stop talking.  If you don't have anything to say, you're doing yourself and others a favor by keeping quiet.  If you can't make a contribution, don't slow down the people who can."  -Craig Newmark, Craigslist Founder, "Getting There"

Listen more, talk less.  Try it.  As with any exercise in discipline, it is difficult at first, becomes easier with practice, and, once accomplished, is EXTREMELY empowering and fulfilling.  So many people feel they have to make a statement about all topics that come up in casual conversation.  Why? 

What it boils down to is protection of ego. 

The Problem with Self-Help

It seems everywhere you turn these days, someone is trying to help you help yourself - with either rah-rah infomercials or "You Can Do It" blogs. Here are a few problems I see with these:

How much time and money are you spending on these products?

Think about what you could accomplish in the time you expended constantly reading self-help blogs and ebooks online? Think about what you could do with the money you spent on purchasing products from these gurus. You could save it up and buy some weights, if your goal is go become more fit.

8 Minor Adjustments to Maximize Productivity Towards Your Ultimate Goal

I don't think an entire blog needs to be dedicated to changing your daily life.  I think you can get the point across in a single post or two.  Once you have a handle on it, you should be able to assess your own life and optimize your actions - no further blog reading or research necessary on how to maximize the time in your day.  So . . .

Each morning offers the opportunity to start fresh . . . a new beginning, a clean slate.  Many people wake up and immediately begin to stress and dread about what they have to do that day.  That mentality sets the stage for an unorganized, unproductive day.  Others use the morning to plan out tasks they intend to accomplish that day to help them reach their ultimate goal.  That small difference can have an extraordinary compounding effect and create a drastic advantage for that person over others.  For a quick analysis of how little changes can make a big difference, check out a previous post comparing Al and Joe and the differences in their routines.

Making slight adjustments each day can create the foundation for a healthier, more productive life, set you up to ultimately achieve your goal, and pay dividends in your future.  Below are 8 suggestions for maximizing your time each day:

1. Workout in the morning

Planning to workout in the morning can mean an improved chance that you actually do workout that day. 

Like Billy Beane Playing Small-Stakes Poker

Small-Stakes Texas Hold 'Em is based on a series of bets that are capped after three rounds of betting.  For example, the first round of betting, after the cards are dealt in a $3-$6 game, requires a $3 bet, nothing more, nothing less.  After subsequent cards are turned (the 'flop', the 'turn', and the 'river'), betting is capped at $6 per round. 

These betting rules play a significant role in strategy and have a tremendous psychological effect on

A Day in the Life of Ambitious Al . . .

. . . and his friend, Regular Joe.

Ambitious Al and Regular Joe are friends and coworkers at Wilde, Guess & Co. an investment bank in Chicago.  Both are well-educated, intelligent individuals.  In fact, Joe ranked higher in his graduating class than Al.  Joe talks about becoming a VP and hitting it big time, but talk is what he does best.  Al, more reserved, is goal oriented and, after moving as high as he can at WG&C, plans to open his own hedge fund.  Let's take a look at how each spends his day, while tracking the hours each productively works towards their own individual goals:

5:00 a.m. - 6:00 a.m.: 
Al: Wakes up, stretches, and heads to the gym. (1 productive hour - healthy body is the foundation of a healthy mind!; 1 hour cumulative)
Joe:  Sleeping. (0 productive hours; 0 hours cumulative)

6:00 a.m. - 7:00 a.m.
Al:  Heads back from the gym, cools down,

The Roots of Laziness

"All life demands struggle. Those who have everything given to them become lazy, selfish, and insensitive to the real values of life. The very striving and hard work that we so constantly try to avoid is the major building block in the person we are today."

-Pope Paul VI

Laziness is innate; it was a necessary trait for survival from our distant ancient ancestors.  In Jared Diamond’s Pulitzer Prize winning book “Guns, Germs, and Steel”, early hunter-gatherers would constantly – and probably unconsciously - weighed the risk-reward of their expeditions, with the goal of obtaining the most calories for as little effort as possible.