Labeling your experience makes a difference

I learned this line of thinking about 20 years back.

I was in Singapore on a business trip. My partner in Singapore had a customer who was having a “problem” and they needed our expertise to solve the problem.

Till that time I always labelled a “problem” as a problem. As engineers we are trained to solve different kinds of problems. Whether they are problems related to calculus or related to magnetic interference in an electrical signal.

Now when I met my partner in Singapore, he changed my whole attitude towards ” problems” by calling them challenges. Especially when dealing with people – and all business problems are about dealing with people – if you label the problem as a challenge, the brain functions differently.

When you look at something in business as a problem the approach that your brain takes is adversarial. It kind of goes into figuring out all kinds of ways of how to oppose the person/company which is causing us the problem.

On the other hand when you label something as a challenge, you try to work collaboratively with the prospect / customer to find a solution. It now makes the whole situation completely different and easier to manage. Now your brain starts doing possibility thinking and looks for various options.

Coming back to my partner in Singapore, I was amazed at the way he labelled the situation with the customer also and then collaboratively worked out a solution between them, customer and us. This turned out to be our first order from Singapore twenty years back.

Since then a lot of times I have observed that the way I label the situation has a lot to do the way I solve it. If I am labelling the situation as manageable then I find a solution faster. The brain does get influenced by the labels we put.

Try this and let me know who you benefit.

Till next time then.

Carpe Diem!!!

You cannot have financial freedom – without financial discipline

Affirmative action, compounding, Financial Independence, Human Brain

A few days back I had written a post on why you need discipline and not money to get financial freedom.

I have been sharing with you that I am reading the book The Road Less Stupid by Keith Cunningham. I was introduced to this book by Joe Polish. I had heard him speak a lot about this author in multiple podcasts. So I searched and found an interview where Joe is interviewing Keith.

I liked the ideas that he spoke about in the book and therefore ended up buying it. The ideas and especially the thinking questions are worth pondering on. Today I spent close to about 4 hours on the 3 questions I had listed yesterday in my blog post and did get somewhere with the answers that I got.

Coming back to the headline, while reading the book I had happened to chance on this sentence. It struck me immediately because I continuously keep harping about the need for discipline to reach financial freedom.

This discipline is not possible if you base it on will power. Will power is something which get exhausted very fast on a daily basis. Your brain gets exhausted so fast that the more decisions it has to make the faster the energy depletes. With energy gone you cannot exercise will power.

So you need to put in systems which take the decision making away from you. That’s possible only when you automate the investment process with things like Systematic Investment Plans (SIPs) or the equivalents in your country. You could go with ETFs or Mutual Funds or direct stocks. The item is not important. What is important is to get into automating the process so that there is no concept of using will power. Then let the power of compounding work for you.

Till next time then.

Carpe Diem!!!

When will the tide turn

Human Brain, mindset, Turn around, Worry

The last 3 weeks in India have been dreadful to say the least. We have had an explosion of the Covid19 pandemic in the second wave.

Everyday we only see dreadful pictures and hear about near and dear ones who are either infected or someone close to them is infected or is dying.

Even though I am an optimist and the tide always turns, I am not sure if this is the bottom or we are still some distance away from the bottom.

While I am trying to utilize this time when we are locked in to read some intelligent stuff, which I am also sharing with you from time to time, I do get disturbed with information about my colleagues and their loved ones.

So while on books, right now I am reading the book Road Less Stupid by Keith Cunningham. A book with some really good questions already laid out to help you think about your business and therefore life. The positive about the book is that its not got lengthy chapters so you even if you get interrupted you don’t have to restart from a long way away. The best part like I said earlier is that he’s already laid out a lot of questions for us people to get our thinking process started.

Will share with you if there are some specific take aways that I got.

Meanwhile, I know the tide always turns, its just when will it turn now for the better so that all our people are better soon.

Till next time then.

Carpe Diem!!!

Discipline – not money – for financial independence

Affirmative action, compounding, Financial Independence, Human Brain

Yesterday I was listening to a talk by Keith Cunnigham. He is an author of multiple books including the book “The Road Less Stupid”

During this talk with Joe Polish, Keith asked a very pertinent question and I paraphrase it here- “If you were to look back at your 3 financial decisions seriously would you have been better off by not having taken those decisions”

I started thinking about my major decisions and one of them was buying a house. I have written a full post earlier also on this – that it was not a decision I would like anyone to take because it chokes the financial bandwidth – if you are buying it with a loan. If you are buying it all cash then its a good asset or taking a loan of the amount which gives you some kind of tax advantage then its worthwhile.

But then I started thinking again whether I would have been better off financially by not buying the house. On a theoretical calculation, the amount of installments I am paying on my mortgage, if I had been investing the same amount in equities or mutual funds, because of the compounding over 20 years, I would have been much better off to buy this house today and still have lots money left over.

However when I think on the flip side, by buying the house and having monthly mortgage payment, I had to exercise a tremendous amount of discipline to ensure that the payment was done on a given date. I am not sure I had the maturity at the time of putting up SIPs and I was financially illiterate to ensure that I block of the amount into an investment on a monthly basis.

Which brings me to the bigger point – for financial independence – which I have devoted a lot of my posts on – has very little to do with what you earn. It has more to do with what you invest automatically. The key word over here being automatic.

If you think you can have the discipline to ensure consistency every month , to invest on your own, chances are your brain will play games and you will find multiple excuses for not investing. On the other hand if the money will go out of your account automatically even before you get to use it, then you will find a way to manage your finances with the remaining money.

To come back on Keith’s point, yes I would have had a better financial position, provided I had the discipline to ensure my monthly investments.

How are you doing on the financial discipline side, look forward to hearing your comments.

Till next time.

Carpe Diem!!!