Why Success Isn’t Always Possible

I touch on a lot of this theory in my article Success is Cyclical, but I know anything insightful is worth repeating. Most people who are into personal development learn early on not to make excuses. We learn that our lives are our responsibility and we have to take action to get results. But as you mature, you realize results don’t always happen and aren’t always possible. You encounter numerous situations where the underserving get success and the intelligent, effective, and kind get ridicule. The reason this happens is because all living things are subject to cycles of growth and decay. “Good” things and “bad” things just the same. So the next time you feel like you want to be hard on yourself, gently ask “What season am I in?”, and you may get insight into your next moves.

Growth and Decay are two sides of the same Coin

Let’s take the stock market for example. Everyone loves when the market is up and hates when it’s down. Everyone, that is, except the wise. Wise people know that the stock market going down is both useful and necessary. When the stock market crashes, it forces companies and people to reorganize. After the first stock market crash we saw more legislation and federal protections from fiscal disaster. In 2008, we saw the Dodd-Frank Act. And, I believe, in the aftermath of the Coronavirus, we will see a push for Universal Basic Income.

A market crash can provide lower buying prices for a commodity that (we hope) will always go up. The point here is that when anything grows for too long, its outdated practices and inefficiencies necessitate a correction. This is why all successful companies, people, and organizations continually analyze and change as they gain more feedback over time. All those systems that don’t eventually fail.

Rewards and Recognition are Arbitrary

Speaking in generalities is a little dangerous. Of course rewards and recognition are good things usually given to the deserving, but not always. If you ever saw someone get promoted and you can’t wrap your head around why, this is why I say rewards are arbitrary. If you were a high-level executive at Enron, you would be rewarded and recognized for being dishonest. I think this happens in far more businesses than we would like to acknowledge. On the other hand, if you worked for an honest organization, you would be rewarded for hard work, ingenuity, and your ability to produce results. So if you took an honest, intelligent, hard-working person and put them in an executive position at Enron, chances are they would not be rewarded for their work (and hopefully the toxic culture doesn’t change their character).

Does that mean they aren’t doing the “right” thing? Of course not. It just means they are not doing the right thing to be rewarded under those circumstances. That’s why it is important that we screen all of the intimate relationships in our lives (work relationships, money management, romantic relationships, friends, etc.). We need to make sure our values are aligned with the values of the people we work closely with.

Hopefully this serves as some solace when you see things going sideways. Remember that success is not always possible, and that is a good thing!

Universal Basic Income

I wrote in a previous post that Coronavirus will teach us many lessons and new ways of interacting and being in the world. I think a huge change that will come as a result (even after the virus dies down) will be Universal Basic Income. Perhaps not this (2020) election cycle, but I imagine a good chance in the next cycle.

I gave a project in one of my math classes that asked students to search for a home and calculate mortgage payments etc. I always try to give students some real world use for the math they are learning. Even though they all sigh when I say “math is beautiful”. Anyways, I linked for them to use Redfin to search up their homes. I (naively) assumed that Redfin was everywhere. It is decidedly not. My wife and I bought our house using Redfin and it was very easy, and from what we could tell, very “user-friendly”. But many parts of the country that are less economically well off haven’t even benefitted from this new technology. Long story short, I began looking for the reasons behind this technology gap. It couldn’t just be race, it was very clearly socio-economic.

I say that to say, I then stumbled upon “The War on Normal People” by Andrew Yang. A fantastic book! In the book he talks about how our changing economy (especially after the Great Recession) has pooled resources among smaller and smaller groups of people. Many Americans are simply being left behind. Yang says that automation will eventually put large groups of people out of work. His solution is Universal Basic Income. I immediately followed his every move starting in mid-2019 until he eventually dropped out of the Democratic Presidential race in February 2020. He did very well for a “nobody” competing among much better resourced and connected candidates.

In comes Coronavirus. Even conservative estimates predict up to 30% unemployment as a result. People who are hard-working simply can’t work. It’s not their fault. They aren’t lazy, they didn’t do anything wrong, they were just blind-sided. It necessitates a change in thinking. If people who are willing and able to work can’t, should we deny them human decency? Would we rather spend our money on at least a certain percentage of lazy people on welfare? Or would we choose to give money to people as an investment, knowing that most hard-working people will immediately invest that money back in their communities? Most people won’t buy drugs or alcohol with it. They’ll get tutoring for their kids, get their car fixed, go back to school, or stay at home and raise children. So we see the first glimpse of a universal income from the Trump presidency?!?! Interestingly enough, living in the cultural “progressive” bubble that is the DC area, I find that many “democrats” are surprisingly close-minded about UBI whereas many more conservatives can see the value. Talk about irony.

My prediction is that Universal Basic Income will become a reality for all Americans within the next 10-15 years, likely sooner rather than later. What do you think? Thanks for reading.

New Chandelier (and why I do little projects like this)

As I learn more and more about money, one of the essentials always comes back to the forefront. The idea of an asset as opposed to a liability. I just put up a new chandelier in my living room. Projects like these are always a mixture of excitement, disappointment, and eventually great satisfaction. As with any new project, the first time is hard. But not in an oppressive way, just in a matter-of-fact kind of way. Something you learn to absorb as part of the process.

My old chandelier (which I truly hated)…
The new chandelier…which I love!

As with most projects, this seemingly simple task had a lot of little frustrations built in. Nothing major though. And now, next time I want to change a chandelier, I will know exactly what to do and what not to do.

Whenever I spend money I ask myself if the purchase is going to provide any returns or if it will end up taking money from me in the long run. Something like putting up a new chandelier can be a little change that could increase the resale value of my home. So I go for it!

I look forward to doing a lot more little projects like this because, as I said before, the process is very satisfying.

The next time you make a purchase, ask yourself, “is this a liability or an asset?”, and in no time making intelligent purchases will come as second nature. Until next time…

Inspect What you Expect

In fitness, relationships, finance and life, this old management theory seems to ring eternally true. Inspecting what you expect means to constantly monitor anything that you care about or prioritize. There is an idea, which I first learned from reading the works of Bill Harris of Centerpointe Research Institute, that all things tend to break down and become disordered unless energy is added in some way. This is called the Law of Increasing Entropy. When I think about my wallet, my waistline, and the health of my relationships, I know this Law to be true. A little too much rest, a little indifference and things start to get out of hand. Of course, life will always have challenges that are not of our making, but much of our unhappiness with our results can come from failure to recognize and respond to this Law.

Inspect your Plate and your Weight

I recently got back in the habit of weighing myself daily. What a shock! Despite feeling pretty good, I am about 20 pounds over where I want to be. By being intentional about what I am eating and monitoring my workout plan, I was able to lose about a pound in one week with very little effort…just a little more awareness (I am a 5’11” muscular guy so ymmv). It truly is amazing how when we take our eyes off of what is important, things can change for the worse very quickly.

Early on in my fitness journey I also got in the habit of tracking my food. Using a tool such as MyFitnessPal makes this almost painless. Without fail, every time I “take a break” from tracking, I lose/gain unwanted weight, or my workouts and energy levels suffer. Just like clockwork, when I am more regular in tracking my calories, I can pinpoint exactly where the extra pounds (or lack of energy) are coming from.

Keep an Eye on Expenses

Parkinson’s Law says that expenses will rise to meet income. Very true! Think about it, when most of us are 25, we have all the major things in life (a place to live and a car), but most people, as they earn more money, continue to get bigger and better versions of those things. Think about it, if you make $50,000 you can afford to have a car. You will likely (if you are sane and logical) spend maybe $5-10k on a car. But years later as you grow in your career making maybe $100,000 you may be tempted to proportionally increase the price of your car. Bad idea! If you can muster the discipline to live well below your means, you will be able to grow your wealth at an astounding rate.

When we take or eyes off of our expenses we fall prey to one “super-size-me” to the next. Bigger house, bigger car, bigger yard, vacation homes, luxury spa memberships. If we can keep an eye on our spending, we can take advantage of Parkinson’s Law and get closer and closer to financial independence.

Obviously this idea of monitoring to make progress applies to countless other areas of life. Hopefully you gained some insight to make a positive change in your life! Until next time…

Listening to the Seasons

I started seriously working out in the spring of 2012. I remember the exact event that motivated me. I went to the gym with a colleague and we went to the bench press. I did my customary 5-8 reps of 135 lbs and when it was his turn, I watched with amazement as he easily repped 225 lbs. I was amazed. I made a decision that one day I would be able to do the same.

I started my fitness journey doing Stronglifts 5×5 (an excellent start). Within just a couple months, all my lifts had gone up significantly. Then something happened. Progress slowed. Alot. I tried to push past it, but workout after workout I grew more tired and burnt out.

Any fitness professional worth their salt would know the obvious answer is periodization. Basically meaning altering the volume and intensity of your workouts over time to allow for full recovery.

I say all that to discuss an important idea when it comes to fitness and to life. The seasons.

There is a Time for Everything

Ancient wisdom going back to King Solomon talks about the importance of seasons (“There is a time for everything…”). It took me a while to see the true wisdom in understanding and going with the seasons.

When I began to periodize my training, I started to make progress again. Albeit more slowly, but progress nonetheless.

I then began to notice the same patterns in other areas of my life. At times, things would thrive, and then at other times, despite my most valiant efforts, things would change or “get worse”.

In my mid-twenties, I happened upon a book by Jim Rohn entitled “The Seasons of Life”. Reading this book gave me a philosophy that I refer to often (especially in difficult times). I want to share a few of these experiences so that hopefully you can notice and go with the seasons of your life.

Seasons of Fitness

Our bodies cannot work at 100% all of the time. There is basic information we have to know about how our bodies work in order for us to get the most out of them. For beginners, you should follow a linear program. Meaning you should add more weight to the bar, or walk/run longer, until you stop making progress. When you become an intermediate athlete (which will take 3-6 months), then you begin to periodize.

Now with this bit of wisdom, I know that I can’t always lift heavy. I need light days and deload days. I also need to work on other aspects of my fitness to improve. I highly recommend working with a good fitness professional if you are having any trouble at all reaching your goals.

Financial Seasons

Money is an interesting thing. Sometimes you feel like you have more than enough, and then other times, scarcity overtakes you. I am reminded of a story in the bible where David is asked to interpret the Pharaoh’s dream where he sees seven skinny cows and then seven lean cows, and the lean cows eat up the fat cows. David interpreted this dream to mean that there would be seven years of plenty, and then seven years of famine. David’s solution was to save 1/5 or 20% of all the grain during the good years. As a result, Egypt had food all throughout the lean years.

I believe this will be true of pretty much everyone’s financial situation. Sometimes money will come in from unexpected sources, and other times unexpected bills will pile up. So what do we do? We learn to live frugally and save for those times when opportunity and money is hard to come by. Coincidentally, a 20% savings rate would be a great place to start (hopefully ramping up to 50% or more over time).

Just a few weeks ago I got an unwelcome bill. To the tune of $4,000! Of course I was bothered, but my wife and I have carefully planned and saved to the point where a bill of this size is actually no big deal. The comfort of knowing you can handle a financial setback is much better than the comfort of riding in a new car…to me at least…

Professional Seasons

Seasons become very apparent in our work. Sometimes things come to us and thrive. The promotion comes, we learn a new skill or a new way to earn money, and everything is great! And then there are other times where we are looked over for a promotion, a colleague says a harsh word to us, or our work begins to overwhelm us and throw us out of balance.

Here too, we are admonished to submit to the seasons. We should always be learning and growing, but we should be patient (and expect) that we will meet the inevitable plateau and/or backslide. During these times we have to remember that our next season of opportunity is coming. What are we doing to prepare for it? Are we reading? Are we speaking with wise older people? Are we trying new things?

In conclusion, just as the seasons of weather dictate when we will sow and when we will reap a crop, the seasons of our lives dictate when we will sow and reap in our relationships, finance, health/fitness, and work. Let’s be sensitive and listen to the wisdom of the seasons.

Until next time…

How Normal People Can Save 50% or More of their Income

So before we even get started, let’s discuss why we would want to save that much money anyway. Blogs like Mr. Money Mustache have popularized the idea of FIRE or financial independence through early retirement.

I love reading articles on that site and the like. As a relatively new FIRE devotee (about a year), I quickly learned that saving 50% of your income is not only possible, but easy. My wife and I were able (over the course of a year) to save about 55% of our income, boosting our savings and investments significantly.

Applying a little bit of the Pareto Principle (80/20 Principle) we can assume that some lifestyle changes and budgeting principles will create more of an impact than others. In my experience, the three most important factors have been: 1) choosing a home that is affordable, 2) choosing a car that is affordable, and 3) planning (specifically meals and trips) in advance.

I specifically wrote this article with normal people in mind. People who are not necessarily high income earners, but those who work and have a reasonable amount of discipline. I found that the median household income in America is about $60,000. So any theoretical calculations will be using this figure. Please adjust to meet your income. Now…let’s get into it…

Choose an Affordable Home

A good rule of thumb is to choose a home that is 2 to 2.5 times your income. So for our imaginary household, that would be a $120,000 to $150,000 home. Translated into rent, you would be looking for a place for about $1,200 a month. My wife and I (we are both public school teachers) live in an expensive metropolitan area, and we have a dual income. Strangely enough, our humble abode comes in at 2.28 times our yearly income.

Now for the why. Simple. Your house is the BIGGEST financial purchase you are likely to ever make. Think about that…chances are this is the most expensive thing you will ever buy. Sobering thought.

When you choose to buy a home well within your means, you can free up large amounts of money. Be realistic. If a neighborhood has good schools and is safe, how much more would you really enjoy living somewhere else that much more? Don’t become “house-poor”.

Choose an Affordable Car

I proudly purchased my first car for $8,000 CASH in 2011. To date (2019) it is still running strong and I have reason to believe it will last me at least another 3 years and likely more.

Recently I was getting routine maintenance done on my car and I saw a sign that said “Your car is the second most expensive item you are likely to purchase, make sure to take care of it”. To be honest, I was shocked when I read that. I mean…I know it’s true, but I just never let that reality sink in.

Here is the deal with cars. If it is reliable, runs well, is clean, and meets your transportation needs, any car more expensive is just a flex. Think about what you get from a nicer car. Probably just a few compliments and a much bigger car note. No one really cares what you drive, and if they do, they probably aren’t financially independent. Now, to be clear, flexing is cool. Just be acutely aware that it is just a flex and can cost you a lot both in the short and long run. Flex carefully.

Plan your Meals and Trips

Before I considered the idea of FIRE, I didn’t pay too much attention to my purchases. I knew we had enough money to cover our major expenses, so I just had fun eating out and buying little gadgets at my leisure.

It wasn’t until I started looking closer that I realized that these seemingly small luxuries were costing us several hundred dollars a month.

Once we realized this, we began planning our meals for the week. We found that when we did this, we could keep our grocery prices reasonably low and still enjoy the occasional fancy dinner with no financial strain and still hit our savings goals. You see, it is one thing to decide Friday night that you are going to go to an expensive restaurant and it is a whole other thing to plan it on Sunday and think all week about spending $100 that you could be saving. We still enjoy the nice dinners and frequent vacations, but we are much more money conscious in the process.  

We also give ourselves an allowance. $150 to buy whatever we want that month. I have gone a number of months spending only a fraction or none of my allowance. It seems that frugality is a muscle after all.

In closing, these are the strategies that helped our family go from saving ~20% of our income to over 50%. Please feel free to use them and let me know if they worked for you too! Until next time…

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