Category: Planning

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Reality Awaits


In our post, From Dream to…, we continued the journey we have embarked on to explore different dimensions of the realm of dream delivery.

It’s always good to have dreams, and it’s even better to let them see the light of reality.

We humans have been endowed with very special gifts. Two of those gifts are of inherent importance: Intention and attention.

The conscious human intention is attributed to awareness, something other species don’t have. In the animal kingdom, for example, efforts are solely driven by instinct. We, on the other hand, have the capacity to choose, and then act on our choices, sometimes clear of the influence of instinct.

For an intention to unfold, attention has to be on its side. We need to ‘see’ the way before us, and continuously align our advancement to our intentions. Otherwise, instinct takes charge, leading a way that is not necessarily the same one we set off to traverse. That’s what renders most intentions unrealized. A sure prescription for disappointment.

Our focused attention on the intention should be dynamic. As we keep the original vision clear, crisp and infused in the work we do, we consistently observe the activities, making sure they align and have a good potential of leading to our intention. Why a ‘good potential?’ Because the future is, by its very nature, uncertain. We need to keep our options open at all times in the face of the unpredictable.

No matter how big and far an intention seems, reaching the top of that mountain is simply a walk; one step at a time. As important as knowing our intention is figuring out what those ‘steps’ are.

Usually, at the beginning it might be difficult to know the steps and how they align to lead to the desired result. We need a good estimate of the main building blocks of the ‘project’ at hand. As we start taking action, more details unfold, helping us adjust our course.

Depending on the complexity of the undertaking, this might grow into a quite large web of interrelated activities. That’s where project management methods and tools would come in handy.

Pick the system that makes sense to you. As this may become a daily companion, try selecting something that is fun and exciting to use.

I use a tool called Quire. Simple and effective. You can start with a single idea, then grow it into a plan by breaking it down into smaller ideas gradually, nestling levels of complexity within each other, in a parent-child configuration. This helps you focus on one thing at a time without losing sight of the bigger context immediately above it, or all the way back to the original single idea.

At any given point in time, you can see what is due today, tomorrow, and later, as well as what is overdue from previous stages.

How can that lead to realizing a dream? What if we get swamped by the details and lose sight of what we really want to achieve?

It’s possible to get derailed, ending up in a perpetual cycle of to-do lists that do not seem to finish. A common reality of so many people all over the planet.

To effectively avoid that, we must have our attention on the intention at all times. For example, we can commit to weekly, monthly, and annual alignment reviews, making sure what we do on a daily basis does not sway our ship adrift from the destination.

In the next post we will conclude this series with an example that links the dots together, in a way that help streamline the implementation of the concept.

Stay tuned.

The Wealth Maker

Image Credit: Todd Quackenbush on Unsplash

 

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Moments of Change


We, humans, use time and space to measure change, or the rate of change. The units differ depending on what we measure. Astronomers use light years, builders use meters, and quantum physicists use nanoseconds. No matter the unit, change is constant, within and without us. Furthermore, time is a concept represented by space. Have you ever seen or touched a minute?

Some changes happen regardless of our observation. Others force us to listen and have our eyes wide-open. What change has made you stop and think deeply, lately?

Resisting change is a common human mental habit. Other creatures flow with change in the environment surrounding them. Have you heard of a tree resist shedding its leaves in October to grow new ones in March? Or a flock of birds decides to stay in Alaska after the first sign of winter?

Whether we see change as an opportunity and flow with it, or consider it a threat and strive to prevent it from happening, most changes are natural and inevitable.

In business, change always hit the three vital elements of a project or a venture: Time, cost and resources. These three are interrelated in ways that are sometimes mysterious. Shorten the time, and cost goes up. ‘Restructure’ the organization, and time extends on its own terms.

What we must stay fully aware of is the following:

When you plan anything, make sure all variables involved are on the table.

What does that entail?

  • Know your financial capacity
  • Have key resources present
  • Understand, right from the main stakeholders, the time limits placed upon what you’re planning

My intention in this post is not to give you a project management crash course. You can find ample resources online and off-line on that. The intention is to raise our awareness, in life and in business, of the changes passing through our lives without us noticing, appreciating and effectively utilizing them.

One way to approach this is to start a journey of raising our awareness of both attention and intention.

While one’s attention could easily sway and wonder, following the feed of the five senses, and the flood of unguided thoughts and feelings, this can dramatically change if that attention follows a well-thought-of intention.

Attention could be the most valuable gift we’ve been given. It’s like a beam of light that we can focus on anything we want, intentionally or unintentionally. And that is the key lesson here:

Let’s choose, as much as we can, to focus the beam of our attention intentionally.

However, to do that, we need to have intentions, to begin with, don’t we?

How to set good intentions will require its own post. For now, it suffices to say that each one of us needs to set aside enough time and positive energy to know, write, and commit to a set of intentions that spans the dimensions of his or her life and business (as if they are separate 🙂

As that evolves, and as we re-shift our attention to be more and more inline with the intentions we’ve set to ourselves, those passing changes I mentioned above will become visible and accessible.

In conclusion, accepting change as a fact of our being, and then using the energy it presents to reach higher levels of awareness and achievement, is a prerequisite to true success.

Post Photo by Jeremy Thomas on Unsplash

TWM

The image below shows a recent addition to our StoreFour‘s Digital collection (a positive change), in case you’d like to use a new technology to measure time in conjunction with your cell phone.

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Risk and Reward- The Vital Two R’s of Business


We are risk takers by nature, all of us, in varying degrees. But marching into the unknown is a human instinct that manifests itself in obvious, as well as mysterious ways. Every hour of every day we take risks. You may allow your mind to explore this idea and find examples. Traveling to a new country, hiking an unmarked trail, buying a gift for a loved one, tasting a weird- smelling food, going to war, getting married, asking for forgiveness, climbing the Himalayas, camping, skiing, driving, falling in love, leaving home, and doing nothing is also a form of taking risk, yet indirectly.

For the sake of our topic, let’s narrow down that endless list to just one: Starting your own business and deciding to become an entrepreneur.

Why do people leave the comfort and security of a guaranteed pay-check, and go on their own? For starters, that comfort has become unattainable lately. Downsizing, mergers, acquisitions, financial crisis, to name a few, have made job security a thing of the past.

But that is not the main reason entrepreneurs go out and face the world alone. It is something within each and every one, a calling if you will. I bet you’ve heard this before and you might be thinking: “OK, a calling, but what is the percentage of success of that calling? Show me the money!”

True, no matter how strong a calling was, and how enthusiastic the person would be, a business venture must yield financial results. In other words: Money 🙂

That’s why, before delving in the ocean of entrepreneurship, one must evaluate few traits that are vital to making that journey a pleasant and fruitful one.

So what are those traits? The first that comes to mind is risk tolerance. I’ve talked about this, giving it an acronym of RT in several posts about investing, and it still applies here, probably more so. A low RT isn’t going to help here. A very high one would result in taking too much risk, and again that is dangerously dangerous 🙂

We are looking for a healthy RT, which on one hand drives the entrepreneur to explore new, uncharted frontiers, most of the time alone and with little knowledge and tools, and on the other, keeps him/her aware of the potential challenges, and do enough research and preparation ahead of, during and after taking the risk. What is that called in plain English? Wisdom combined with courage. And in eloquent English: Courageously wise or wisely courageous 🙂

The heart of our discussion here is the following:

‘Risk and Reward are proportional: The more risk one takes, the higher the probability of reward. The opposite seems to be true, most of the time.’

Let’s start with a simple example: If you decided not to teach your four-year old child how to ride a bike, fearing the risk of injury, you denied him/her the rewards that come with riding a bike. One of them is innocent joy!

To get any reward, we must do something, right? And any doing involves taking a risk, no matter how small. That’s why they are related proportionally.

Raise the level of one, the other gets a boost. The challenge is to find that threshold where raising too much would result in unwanted results rather than rewards. And that threshold differs depending on the situation.

In the example above, rushing the learning curve increases the risk of injury. Taking the matter way too slow may delay the reward or even prevent it from happening.

We need to be patient with the whole process. We start by taking small risks and observe our emotional and mental reactions, just like building, you start with a foundation, then keep adding to it.

Another aspect of this building process is appreciating the results, no matter how small.

When it comes to building a new business enterprise, the principle would be the same, however, the application is different.

Does that mean you start with a tiny little venture then expand gradually? That’s one way to approach it. Say open an online store with only one product line, give it your best till it starts making profit, then add a second product line, and so on.

Nevertheless, if you know that your RT is high enough to get into bigger business adventures, especially if you know you have good financial and practical backing by trusted partners, then you may want to create a vision that would lead to more aggressive plans. For example, starting an eCommerce platform, where small business owners can open their one-product-line stores.

The web is full of tools and articles on how to assess your RT level. Here’s one, which I have no affiliation with, and can’t guarantee its results, but you may want to give it a shot, or look for something else in that line of tools:

http://www.moneycontrol.com/personal-finance/tools/risk-assessment-tools.html

In conclusion, know thyself before starting a new business. The time, money and energy spent doing that is worth the clarity that result from being aware where your next step will hit the ground.

All the best,

The WEalth MAker

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Business and Technology: Allies or Adversaries?


Not long ago, trade was at the core of business: The exchange of value between the buyer and the seller, physically. People used to travel, on horseback, carrying their homeland goods, to distant territories. They would trade the goods they have with what the other country had to offer.

Nowadays, billions of dollars get exchanged everyday, across the globe, without anything physical being “traded”. The wonders of technology!

Millions go online to trade commodities they never own, or to bet on price movements of stocks, indices, currencies or commodities. What is being exchanged? Where is the value transferred from the seller to the buyer?

Has technology added an inherent value to business dealings?

Has it made making money easier or losing it faster?

A merchant in ancient times wouldn’t lose his shirt overnight. Today, a business may go down in days, due, in part, to a blind reliance on technology.

Technology is a tool, a means to an end. When a business adopts any new technology, it must “serve” the mission of that business. Failing to do so, is a sign of either picking the wrong technology, or not having the right expertise to correctly utilize it.

The other concern when it comes to entirely relying on the instantaneous availability of technology is the probability of the opposite! What would a business do in case of a power failure, a major software crash, a loss of connection to the intranet (the business’s own internet, sometimes called Virtual Private Network (VPN); a tunneled network that securely rides over the public Internet)?

Here are some guidelines concerning the “marriage” between business and technology:

  • What is the business about, regardless of “how” it’s going to reach its objectives?
  • Who are the “people”, human beings, whom will run that business?
  • Does this business need to rely “critically” on any technology? what is the percentage?
  • What is the technology strategy? One that is “derived” from the overall business strategy, not the other way around, even if the business is all about “making” technology. In other words, a hi-tech enterprise
  • Do we have, in-house, the expertise to select, procure, install, configure, test and run the technology we need, or do we need to outsource it?
  • Risk management: Document, in details, a Standard Operating Procedure (SOP) to follow in case of a technical malfunction, no matter how small. The overarching objective is to keep the business running, at its best, and keep customers happy
  • Have we considered implementing five nines High Availability (99.999 % HA)? There is no such thing as 100% availability, but five nines is close, yet not enough, alone

The list could go on. Add to it what’s relevant and specific to your business.

This article is an invitation to be aware of the wonders of technology, its limitations, and the best approaches to utilizing it for the good of a business.

The author loves technology and comes from a scientific/technology background, yet the misuse of a wonderful tool turns it from being an ally to becoming and adversary…

 

The Wealth Maker

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The Wealth Making Architect™


If you performed a Google™ search on the above title, you’d get something along the lines of either wealth advisors or engineering architects.

I wanted to introduce this term to reflect the necessity of building wealth from the ground up. Furthermore, to emphasize that “wealth” is not only financial. When an engineer designed a house, for example, he/she would take into consideration all the aspects which would make that house livable and ready to become a home!

Another vital step in creating that architecture is to create a blueprint. Have you ever heard of any sort of construction that didn’t have a blueprint to start with, to build upon and use as a baseline?

A Wealth Making Architect (WMA™) is going to follow the path of his/her counterparts in other disciplines. However, instead of designing a brick and mortar dwelling, they design a life-long wealth making, growing, and maintaining epic, with the client being the hero.

And here’s a list of the steps involved:

  1. Find out what the requirements really are: Working closely with your client, you set an objective to clearly “understand” the hopes, the dreams, the needs, and the responsibilities of that client. Once you’ve reached such understanding, you turn it into a set of specific, implementable”requirements”; one which the client accepts and feels satisfied with
  2. Now you go to the drawing board and create a solution derived from the requirements. This is easier said than done. How can you “weave” requirements into solutions? Into a blueprint that has an eye on the vision, and another on the strategy and plan. Your knowledge and expertise play a major role here, and that involves specific methods, processes, products and/or services available. Sometimes you might need to seek help from other members of your organization/team to “develop” new products or services that would meet the requirements (those must prove reusable with other clients in order to justify the cost and time of a new development)
  3. The next step is a comprehensive review of the solution with your client. Although you both had reached a set of specific requirements, the blueprint might not express what the client was hoping for. This could be the result of the client being not sufficiently informed/educated, or it could be a flaw in the design. Either way, a revision and an update version of the solution should be created. This can take more than one iteration
  4. Once you reach an agreement with the client on the blueprint of his/her financial story, you start translating that solution into long-term and short-term objectives. Each objective requires an action plan. Here comes the knowledge and skill of financial planning, or let’s say, wealth-making planning; the bits and bytes of what needs to be done on a daily basis
  5. Implementing the plans is not an open-ended endeavor. You wouldn’t hand them over to the client and “instruct” him/her to go ahead and “do” the steps! You still need to work with them regularly, and make sure they are ready to commit their time and energy to implementing what has been mutually agreed upon
  6. As with any plan, the process continues dynamically. This is the tracking/observing, feedback, review and update/correction cycle. Plans are not meant to be set in stone. They must evolve in reflection to consistent change. However, a good architect would not divert too much from the original vision and the blueprint.

The past is gone for all of us. The future is known to none of us. All we’ve got is the present moment. Planning, to a great extent, is a matter of trying to predict the future based on past experiences. It helps, but nothing is certain. That’s why it’s a good practice to keep risk planning in sight, and always have plan B within reach!

The Wealth Maker

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Are you ready to start?


Why do most dreamers end up at the nearside of their dreamland?

Why do only three percent of the population, or less, make it, financially?

Is it lack of knowledge or lack of courage?

Or is it a main effect (not a side-effect) of a widespread disease called: Perfectionism?

How much preparation does one need in order to start? And what kind of preparation is that?

We tend to fall prey to our own predictions! Our own procrastination, which is, oftentimes, an implicit result of our fears…

So, when do we start? At the onset of the dream, or when the dream starts vanishing!

When the dream is ripe; clear in your mind and soul, and you take one action, just one simple action, something remarkable happens!

Trouble? Challenges? You bet! Yet, you got a huge advantage there; the image is still vivid behind your eyes and between your ears. Sometimes it’s even pounding in your chest.

While challenges mount up the moment you start, your momentum has been set in motion. Just before that one action, you had been in total inertia. Your own dream had been weighing you down.

Never wait till your plans are perfect. They will never be.

Dream vividly, intend purposefully, plan carefully, yet, start taking actions now!

The process is not linear. Always balance out your preparation and your action energy, even if you have to juggle between the two. Actions give you valuable feedback on your plans, so you would revise and improve them. Plans, on the other hand, guide your actions, so you wouldn’t shoot in the dark!

The Wealth Maker

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More on Budgeting


 

We started our discussion about budgeting in the last post. The question we concluded with, was: What is a budget? I like to keep things clear and simple. We could spend pages defining a budget, but that’s not our purpose here.

A budget is a spending plan! That is it. The more you have to spend, the more important having a budget becomes. It could be a simple spreadsheet, or it could be a 500-page volume.

The budget categorizes your spending, so it becomes easier to track. Then based on historical data (the accounting software we talked about earlier is handy here), the budget “allocates” a portion of the expected income to each category.

Now this is all projection. Why is it important? If you went spending without a plan, without some guidelines, you would, most probably, exceed the limits. Even worse, you might spend more on less-important categories than on essential ones.

Let’s have an example. What is more important than your children’s health? Without allocating enough funds to that category, you may end up taking some of that money to cover a less important area, such as eating out.

This leads to a very vital aspect of a good budget: Weights and priorities. Not all spending categories were created equal! Factor that in right from the start. Let your budgeting software know those priorities as it allocates the funds.

The other important element is allocation. How would you decide that, say, groceries would need $2000 this month? The easiest way is to track your spending for a period of time, that is relevant to the budget’s span. Therefore, if you were budgeting month-by-month, then track your spending for a full month, to get an idea how much you would need for the coming months.

Finally, a budget has a lifetime, like everything else! If you were responsible for creating the US government’s budget, then you would need input concerning, at least, the next 10 years, then prepare the current year’s budget accordingly.

Our focus here is personal/small business. In that environment, your budget should take into consideration your overall mission statement (personal, family and/or business), objectives, values and roles. Budget for a year, and have monthly sub-budgets to help you track more effectively.

Always put your investment money aside before you start this process, as if it never existed. We had talked about this before, but it is worth repeating here: Deposit a monthly percentage of your income in a separate account, which is dedicated to investing/growing your wealth.

 

The Wealth Maker

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Wealth Maintenance – Budgeting


The reason you need to know where the money comes from and where it goes to is to plan for the future. That is called budgeting.

In the last article, we touched on the practice of tracking the sources of your income. Similarly, keep track of your spending. This activity is so vital for budgeting. As you know the spending categories, the amounts, the patterns, you start drawing your budget’s draft.

You don’t have to do this with paper and pencil anymore. Invest in a good personal/small business accounting software. They have become so sophisticated and fun to play with.

I’ve had some experience with Quicken. The features are overwhelming: You can track your spending down to the penny, enter your financial institutions’s details, download your transactions from those institutions to the software (so you won’t need to manually enter each spending), create cash flow charts, and most importantly to our discussion here, create budgets!

As the software becomes familiar with your spending patterns, your income, and your liabilities, it helps you create a professional budget very quickly and effectively. Of course, you must be aware of what the software is doing, and guide the processes to your special preferences.

Quicken is not the only software out there. Microsoft has Money, and there are few others. Do not use a 2nd tear software for this task. It’s worth a $70 or so investment.

Once you have your budget in place, you can use it to guide your spending from now on. But what is a budget? That’s what we’ll talk about next time. One important tip before we wrap this up: Always prepare your budget, especially the personal one, with your significant-other. She or he must be involved to avoid conflicts down the road. But more importantly, sharing this is a sign of mutual respect, and hopefully, love 🙂

The Wealth Maker

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The Velocity of Wealth Creation


 

What’s the difference between speed and velocity? Speed has only a magnitude, while velocity has a magnitude and a direction. In other words, it’s a “vector” physical/mathematical quantity.

What does velocity have to do with wealth? A lot!

Like it or not, time is an essential variable in the wealth equation. We’ve seen in several places how we could use time to our advantage, as intelligent investors. For example, once you find a “wonderful business”, you don’t pay the “sticker price”. You “wait” till the share price of that business drops low enough to give you a Margin Of Safety (MOS). Please review the first few articles.

The velocity of wealth is the pace and direction at which you move towards achieving your wealth objectives.

There are several factors that affect that pace. Your age, the stage of life you’re currently at (a student, an employee, a family man  a retired person, etc), the geopolitical environment you happen to be in, the influence of your family, friends, co-workers, your upbringing, the level of your self-esteem, the amount and quality of the financial knowledge you have.

At some stages, it’s wise to focus a considerable portion of your time and energy on wealth creation. This would give you the freedom to slow down at other stages, and focus on other priorities.

So your wealth creation velocity changes speed, and sometimes direction, as you move from one stage to another, or as you change any of the factors mentioned above (the list is not inclusive, you could come up with other factors relevant to you).

You could also derive from the above that your financial wealth creation, is but one of your priorities. Hence, it’s essential to have a vision of your life that encompasses all your priorities, values and roles. And a mission statement, which maps out the distribution of all of these elements across your life.

A question may arise here: Can one increase or decrease his/her wealth creation velocity, without negatively affecting other areas of their lives?

Yes they can, but not randomly or abruptly. For example, when your family responsibilities are at their minimum, you can dedicate yourself much more to wealth building (instead of wasting your resources on meaningless activities). This would pay dividends later on, when you don’t have the same amount of free time.

As a rule of thumb, the earlier you start the better. I know people who started investing in their teens. Don’t wait till before retirement to think about your financial future. It would be late, but not impossible. There are always ways to start all over again, and as the saying goes: It’s never too late!

The Wealth Maker