Richard Yong

Not being what you aren't - A Warren Buffet Story.

http://www.berkshirehathaway.com/

That's a $200 billion dollar company's website.

They are a reinsurance and investment company. They know that, and they make sure you know that, they do it by making it clear what they do not do.

Here are some things they do not do:

• Web design
• PR
• Logistics (AGM, first Saturday of May)
• Executive lounging
• Excitement
• Buy expensive things (They bought a company once, the CEO was late... looking for unexpired parking meters)
• Hire writers

I think there's a story here around being who you are being made up of what you do, but more importantly what you do not do.

It's a dificult thing, and it took me six years of dawdling before I realised who I wasn't going to be. I wasn't clear about what I wasn't willing to do, and in return I ended up being everything to everyone, the Jack of All Trades. If you let others control your destiny, you end up being and doing what others want and not what you want.   

Can you imagine how uncomfortable some companies would be if they dropped their PR division, or fired their homepage designers?

It's the difference between the Doing Men, and the Maybe and Sorry Men.

Are you clear about who you aren't?

Are you clear about about what you won't do?

Some thoughts for Monday.

Flickr Cred: Thomas Hawk

The title is once again tongue in cheek. I was reading some scrawled pen marks in 'The One Minute Manager' by Blanchard and Johnson, it said 'No one does nothing to you, you do it to yourself.' Nice meaning, odd writing.

Oh and Activision blew analysts expectations away, putting on over 15% on Friday.

With Heart - Sleepless nights looking for the next Berkshire Hathaway

I sat with my eyebrows furrowed, deep in concentration.

Too many stocks, too little money. Age old problem, and here I was trying to scry an answer.

8 weeks ago, the market was dipping low, and an opportune moment to reinvest large chunks of cash. Here were the decisions keeping me up at night:

1. Activision. You know them as the makers of Guitar Hero and Call of Duty 4. They are merging with Blizzard. You know them as the makers of World of Warcraft and Starcraft.

2. Take Two Interactive. You know them as Grand Theft Auto IV. Electronic Arts (famous for SimCity, The Sims and all those sport games) were offering to buy them.

3. AMP Chinese stock fund. This makes sense, the Chinese Yuan will appreciate for the next few decades, but so will the mining Aussie dollar. The Chinese stock market is set to grow.

4. Challenger. I've spoken about these guys before. They run a tight ship, and buying in would mean a 'P/B' ratio of 1. That means for every dollar you invest, you're actually getting ONE dollar of the underlying 'net assets.'  A simplistic view is if they go bankrupt today, they will sell all their assets, pay off all their debts, and hopefully you'll get about what you paid back.

This is rare in finance companies. My expectation is that although their mortgage division will stifle, in a recession people will consume less, but save more. This means low interest rates, high inflation and increased use of financial planners and managed funds. Which is right up Challenger's alley.

They aren't wall street heroes either, they are extremely cost conscious and you won't be seeing their staff flying around in hired Bentleys or private jets. I like that. You know those corporate executives with private jets?  They aren't looking after their shareholders.

The decision I made in the end wasn't that hard.

I liked Activision, they had heart. EA didn't have heart, and Grand Theft Auto, while I would play it, doesn't seem to be the most tasteful game in the world. EA's slogan is 'it's in the game.' I think Activision and Blizzard have the same motto:

With heart.

Oh by the way, Activision announced they doubled last years revenue to $2.9 billion dollars. This is a company valued at $8 billion. Just WOW. 

epilogue - I just checked the opening price of ATVI (Activision) it's now pushing over $30. At this rate I can kick up my feet for another month. I haven't closed out my position yet, as I believe this stock has further to go (no I'm not giving advice, and nor should you construe it as such, this is ALL opinion!)

Flickr cred: TeeRish

TCO - Total Cost of Ownership, the other TLA about spending.

I only buy something if it adds some value to my life. One concept, stalwart to my buying decisions, is considering the TCO. The Total Cost of Ownership. The cost beyond the dollar price of buying.

So what are the costs beyond the dollar price?

• Maintenance
• Health
• Time
• Mental anguish
• Mental and physical clutter
• Opportunity

Before I sound melodramatic, I'll use the example of a car. If you buy a car, you need to spend time cleaning it, you might drive instead of walking or cycling, you need to maintain and fuel it. Some people have their cars as objects of desire, and the mental anguish from being in an accident or the car being stolen can be really high (remember your first car?)

I've always loved video gaming, but I secretly suspected that as a past time, it didn't really contribute to anyone or anything. I had been looking at the Sony Playstation 3 for quite some time, and was impressed, enthralled even. I could easily afford it, but I spent a long time debating the TCO.

The TCO analysis of the Playstation 3 (you could apply this to a TV too!):

• Health. The late night, sedentary lifestyle of gaming can make you seriously unhealthy. This is against my values of living a healthy life.
• Time. If I game for a long time, it means I've chosen, consciously or otherwise, not to spend the time with my wife, my family or working on projects and my health.
• Encouraging more 'screen time,' I spend over 12 hours a day working on a PC, it's seems silly to swap to the next 'screen' after work.

Sure I could use it in moderation and still have a balanced life, but then I wouldn't be able to justify the cost per use, and therein lies the magic relationship, and the hook of deciding to own stuff. Just because you can afford it or like it, doesn't mean you should get it.

I caved. I'm only human! I ended up buying a PS3 for 50% off. I rationalised it by saying I could easily get my money back. Sure enough I started spending late nights, and long periods of time playing the PS3. The short story - I got fat. I wasted time reading game reviews and gaming websites. The cost of ownership was more than I could stomach, literally.

I sold it, made my money back (Cost Per Use = $0!) and breathed a big sigh of relief.

So what does TCO mean to you?

• Stop. Think. Before you buy something, consider the hidden, non monetary costs. Use the ten second rule.
• Use don't own. Most of us just want to get the pleasure of using something.
• Borrow or rent as an alternative to owning, especially things with lots of added ongoing costs like maintenance, repair or health costs.
• Enjoy what you do own, lots of people get worked up over repair costs or broken things. That's the price of ownership, and if you know that when you hand over your money, you're a step ahead.

* This is a follow up to the Cost Per Use post

** TLA - Three Letter Acronym. I hate acronyms, so the title is a little tongue in cheek.

Flickr cred: Kate_A

Trust your gut, not the bell boy.

On October 20, 2007, I woke up and liquidated my entire share portfolio. If you look at the graph of what the market was doing, you'd think I was crazy, things were still looking up (it usually is before it goes over the cliff). Over half my net assets were invested in stocks. I collected my profits, sat back and waited.

The decision was instant. I worried some time after, at how quickly I made the decision.  A quick call to my wife to tell her we were getting out, and that was that.

No prolonged anguish, research or advice saying 'hey it's time to get out.' In fact there were no signs of an imminent crash. Everyone still talked about how great the markets were. In fact, I was getting stock tips from just about everyone.

Although the decision was instant, none of the experience and research behind it was.

Recently I read Blink by Malcolm Gladwell, I now understand that these decisions are quickly made, but require long periods of learning. Here are some habits I've practiced since I was young, which helped me piece together the facts behind my intuition.

1. I've been reading the business news daily since I was 15.

2. I've been reading about successful investors and business managers since I was 15

3. I've been watching and working with the actual businesses behind the 'stocks' for years. Watching the successful ones, and the not so successful ones at work. Walking the floors of businesses gives you a whole new perspective on who you trust with your money.

4. I've studied and watched economic theory in action for years. Including as part of a degree majoring in finance and accounting.

With this information, I realised back in October that the U.S economy was going into a recession, businesses were finding it difficult to find cheap financing and that the reported losses from the sub prime credit crunch had yet to be totally exposed (and reporting season was coming up...)

Here are some tips for investing:

1. Don't buy into the market, buy into a company. Make sure you would invest into these guys long term, even if you're only going in short term. If you can, try to see if you can spend an hour walking around the company's office, interview employees, check out their bathrooms. Knock on the walls. This might seem odd, but it will really change your perspective on how companies are run. If not, make a trip to their lobby, or call them up and see what their receptionists are like.

2. Pay attention to the news, even if it's just browsing the top 5 headlines everyday. I'm sure you do it with blogs and the Sunday paper, why not with those thousands of dollars you've invested?

3. When everyone is running one way... poke your head up and make damn sure they aren't running over the cliff. Don't be the lemming.

4. The title comes from a tip I heard once, when the bell boy starts giving you stock market tips. Run. That was just before the dot com bust, and it's what happened 6 months ago.

5. Trust your own judgment. If you keep trusting everyone else, you end up just like everyone else. Do you want to be the 80% of people in the 80/20 rule? or the 20% of people with 80% of the wealth?

6. It's not magic.

If you have sharp sight, use it: but, as the poets say, add wise judgment

Marcus Aurelius - Meditations

picture credit: reuters - The graph is a three year chart of the australian stock exchange.

CPU will make your wallet fatter. and it's got nothing to do with computers.

As the weekend approaches and a weekend of glee is upon us, I want to share a cautionary tale on shopping.

Read this cracker. 10 xbox games sitting idle is the same as not going for a weekend holiday to Hawaii. I'm not kidding. Intuitively you and I would rather have a weekend in Hawaii lazing on a beach than a pile of unused stuff, but realistically, we all have a pile of stuff somewhere, and it comes from our relationship with buying stuff.

I use a simple concept when I buy new things. Cost Per Use. CPU. To justify a purchase to own something, the CPU has to approach zero. I like to use my things so much that by the time it's broken, given away or sold that it's pretty much cost nothing per use. Here are some examples:

Clothes - I hate unused clothes, every piece of clothing I own must have a cost per wear approaching zero. So if I buy a $200 jacket it better be lasting at least 20 years. That's a long time for a jacket to last. Alot of my clothes end up being of a multi use or utilitarian nature. It makes you think twice about buying that really nice shirt when the cost per use is in the hundreds of dollars. More if it's on credit.

Video Games - I abhor owning video games. Counter intuitive for a gamer like myself? Well it isn't. In the gaming industry there is a term called an 'attach rate' which is the number of games sold for every console. For the console to be worth losing money on (and Sony and Microsoft are losing money on every console sold) there needs to be a correspondingly high 'attach rate'

What this means is that consoles are great value for money, but games aren't. So owning games I don't play has never made sense to me. I only ever have one or two games at a time, and once I'm done with them, they're off to Ebay. The loss I make between purchase and sale is my cost for having played it for however long, and the cost per use generally starts to approach zero (because I used to game a lot).

Why CPU rocks.

CPU changes our behaviour towards purchasing stuff, it's not about owning stuff anymore, it's about use and enjoyment. I don't mind paying $7 to rent a dvd rather than pay $29 to own it outright, because the utility I get out of a dvd, is the one night watching it. I'd love to find a person with a large library of dvds that has watched them all twice.

One of the biggest paradigm shifts for me was over my ownership of books. Cost per use for most of my books is the cover price, which is ludicrous, $30 to read something once? I now use the library, why buy when I can borrow, and my cost per use hits a whopping free.

It also turns decisions into no brainers when it comes to experience. The thing with experience, whether it's exotic holidays or deep learning, is it's in constant use while you are paying for it. That 30 euro a kilo fiorentina steak, in Florence, cooked rare in front of me, in a crowded trattoria... worth every penny.

So next time you look at something you just must have. Take 10 seconds, ask yourself... what's the real cost per use? And if it is really valuable, spend with all your ability and happiness!

Have a great weekend!

Flickr cred: John Pannell

Why Kinokuniya hates books, Apple hates computers and how to kill money.

Bear with me, this one isn't really about books, computers or about killing money.

Kinokuniya hates books.

Kinokuniya would rather have no books on its shelves. It's true. If they could have it their way, they would have a shop so small, it would only stock books that are looked at or sold. Unsold books sitting on shelves costs Kinokuniya big time and they don't like it one bit.

What cost, exactly? Every dollar spent buying, housing, presenting, packaging and transporting books is working capital not invested in growing or developing the business.

Apple hates computers.

Gil Amelio (ex-CEO) liquidated two billion dollars worth of Apple's computer inventory and turned it into one and a half billion dollars of cold hard cash. Why? Working capital. A dollar in his pocket is a dollar free to spend on decisions. Anything tied up in unsold computers sitting in warehouses is dying money.

Amelio realised the opportunity and freedom of working capital.

Okay. So this is basic business management 101 for any business with inventory right? Basic stuff right? Liquidity is king yadda yadda, right? Right. Well let's take a different look at working capital.

Consider working capital in our daily lives. Not a common water cooler topic I'm guessing, but bear with me.

Consider every single thing you own as inventory. Also consider that your money might be dying.

Consider that for the lucky person, you have two eyes, two ears, two arms, two legs and two feet. Anything you own or use can only be used one at a time. Every single thing outside of your senses is not being used (let's call it 'warehoused').

Anything you own has a value, and if unused or under utilised, it's dead money. Heck, even if you sold something you didn't use for ten cents and stuck it in the bank, it'd be doing more than money being warehoused to die.

A good example of unused stuff is my library of over 100 books, lots of books I've bought over the years have been read once and shelved. Wasted working capital. First, it's a waste of my money, second and more importantly is it's selfish. If it's sitting on my shelf, nobody else can read it either. Dead, warehoused books. I've trimmed it down to about 25 now.

Apart from unused stuff, there is under utilised stuff too, a $1500 fish tank that I used to look at for 5 minutes a day and clean for one hour a week. I've stuck it on sale. That $1500 buys a heck load of entries to the best aquarium in Australia (over 55 visits actually) and no more cleaning!

When I look around now at the stuff I own (at least what's left of it) I see piles of unused capital or things I value highly. I spent over a thousand bucks on a camera, and have not regretted a single penny, but I regret buying my unused Playstation 3 (but don't worry I'll be selling it at a profit).

So why would anyone personally want working capital? I mean we're not walking, talking businesses.

Well, personal working capital buys opportunity and freedom.   

Working capital for the urban battler means freedom to choose what you do with your career, your time, your entertainment and your education. Nothing is warehoused and wasted. Your resources are either used to make great decisions, or invested into things of value. It's shedding the exuviae of life.

So what if we don't have working capital? Well... no freedom and mental slavery. Being forced to do things we don't want because we have no choice. The kicker is, it almost doesn't matter how much you earn. Just look at some companies who earned a lot, but didn't have any freedom to choose (Apple and IBM are great examples of companies who turned those ships around).

Many people have asked me if I'll be okay for money. I'll be fine. I'm no millionaire (yet), and it's got nothing to do with how much I earn, or how many assets I own, It's about the fact that I've set myself up with enough working capital to make free decisions.

Working capital buys opportunity and freedom. Warehousing does everything but that. It's not just me saying it, but successful businesses, everywhere. Don't resign your money to a cold lonely death!

Flickr cred to paul+photos=moody

Cut the overhead. Sleep better. How I pay $50 a year in mobile phone bills.

I've met corporate workers with no time,a frenzied schedule of things to do and a life on schedule. I've also met unemployed people with bucket loads of time, but nothing to do. So it's a a conundrum, how can you work, afford the things you want and have the time to do what you want? It's simple, if a little audacious:

Do what you want, as work.

It seems crazy, there are bills to pay, and the work you want might never pay the bills. The phone, the car, the mortgage, the credit card, the vet, the doctor, the this, the that, the, the, the. the list goes on.

I don't disagree at all. Money is a concern, but how much is enough? a lot less than most people think, but you need to think first. Most people go to work, then spend what they earn. I propose a better solution. Work out how much you need to spend (and invest), then go and earn it. It doesn't matter whether or not you love your work, because once you reach enough, the rest is a bonus, and buys you freedom of choice. You work on your terms, terms of what you do, where you do it, how you do it and when.

It's not about ascetism. I'm ambitious about my financial goals. It's about doing what you need, even if it's not that great to meet the necessities, then having the time, energy and resources to focus on the important. This is different for each person, everyone has unique dreams of building a business, spending half the year surfing, travelling the world, spending time loving and nurturing children and family or giving time to charity. I've seen too many people drained, with great financial resources but so much overhead that they ran out of energy to live, be healthy, be loving, be good people, let alone dream.

Well here is another audacious idea. Cut the overhead. AKA cut the crap. I recently spoke to Anthony Herro of Herro Solicitors in Sydney, and he said the single biggest factor of struggle in small businesses is overhead.

Here is how I've gone to a minimum overhead life, and these rules apply as much to business as they apply to life.

• Say no to fixed costs. In business, fixed costs are the devil, they are unavoidable costs that come whether or not your business is making money. These become an expectation of your income. For businesses, these are things like rent, for people, these are the cable TV bills, the 24 month mobile phone plans and the devil of all fixed costs, personal loans (cars, holidays, whatever.) These are the bills that enslave you to work to continue servicing them. Ouch.
• Say yes to variable costs. In business, variable costs are those that change with your level of revenue. These are things like raw materials and utility bills. Personally these are things like charges per use and buying outright. No financial ties. Not using it? Don't pay for it. It's dodging the monthly repayment contracts for the internet, phones, cars and any other expenses.

In reality, it's difficult to always kill off all fixed costs and move to variable costs, but you can reduce them. Here are ways:

• Don't subscribe to anything. Cable TV sucks. Mobile phone plans suck. Leases, loans anything with the word 'repayment' or 'instalments' suck.
• Maximise your pay per use services. Pay by the call and you'll start using your mobile less (contrary to popular belief, you don't need to call every missed call back or reply to every single sms). I've gone to $50 a year prepaid mobile service, and I use Skype and VOIP for my calls. I pay less for calls, and I only pay what I use. It's scalable to use.

Fixed cost is the whip that send you to work, there will always be a minimal amount, and it's different for each person (rental, mortgage, food, hygiene, etc.) Variable cost is the stuff you can say no to unless you use it.

Cut the overhead. Be scalable and be free.

Fish in a barrel and Jewellery.

Shooting fish in a barrel and selling luxury jewellery have eerie similarities. Take a look at today's Sydney Morning Herald.

'Couples Hit By Gold Spike' - Smiling couple bemoan price increase of $400, paying $2200 for groom's white gold ring. Jewellers cite price of gold.

I'm going to rename the article. 'Couples Hit By Stupidity.'

Yes. The price of gold has gone up. Incredibly.
Yes. Your ring uses gold.
No. It does not justify the price. Not even close.

Here's the 'back of the napkin' analysis.

If the 18ct white gold ring is 10 grams, 7.5 grams of it is pure gold.  Today, that's $270USD of gold ($1000USD/ounce). Back in November it would have cost $216USD ($800/ounce).

A $54USD change, does not, a $400AUD price increase make.

Price rise gouging aside, that's about a $1900AUD premium they paid on a 'simple wedding band'. That's about 80 hours worth of work for the average Aussie. If it was down to craftmanship, exotic design or any esoteric reason I might bite, but from experience of the industry... It's a brand premium. It's the Tiffany's phenomenon. 

Don't get me wrong, I love to buy nice things and I'd say a wedding is a pretty darn good time to buy nice things. But no matter what sales people might say, the luxury and brand price premium on jewellery will never represent your love for anyone.

While the ring itself might represent your love, the cash, dearly departed, has more similarities to ceremoniously standing around a toilet, putting bundles of crisp fifty dollar notes in and hitting flush. It might just buy your jeweller his next Ferrari too.

I'm no stranger to expensive tastes. I've paid more for a single fish (as in swimming around in a fish tank), a watch and other assorted dross... But always at fair market value.

It seems people don't want to be rich anymore. They just want to look rich.

Flickr credit: Paul Watson

Investing

The idea of someone else going out and making money for me is very tasty. That's why I love investing.

Many people I've talked to about investing who don't invest themselves seem to tell themselves stories about investing, just like a job, they think it's too hard, it's gambling or you need to know too much. Sure there is some learning, but it's not rocket science.

I first invested in the share market at 16. It was the summer of 2000 and I'd earned my first grand from two weeks working in a factory polishing and soldering electric thingamibobs onto printed circuit boards for  ten and a half hours a day. It introduced me to hard work, but I loved it.

My plans were to buy a massive fish tank but my plans were put on standby when my dad told me about something called the share market. The next weeks were spent carefully researching, and I invested half in IT security, and half in petroleum. I doubled my money in a month, it was the tech boom. I sold out before the bubble burst.

Everyone has an opinion, but here are mine for the next few months.

I expect aggressive acquisitions of fundamentally profitable companies by cashed up companies. The share market has reacted violently and indiscriminately, especially in Australia where very few companies are exposed in a big way to the sub prime and credit crisis. This means that a few jewels in the market are being sold at a massive discount compared to what they should be worth. If I was buying a company... I'd be watching the market very carefully...

I would look for stocks that are easy pickings for aggressive takeover actions, those trading with extremely high dividend yields, earnings consistency and very low P/E ratios. I won't buy vapour stock based on analytics alone, they have to be a strong business. I'm either going to be using short term trades to  profit on volatility, or long term holds to profit on long term capital gains, tax concessions and dividend yields (at least 1 year). It'll take fortitude to take a long term hold on any counter in this market though...

After working in many listed companies, I've found out they differ like chalk and cheese, some you would trust to look after your grandma, others you wouldn't touch with a ten foot pole... These days, almost anyone with enough capital and nouse can launch a 'company' on the markets, so make sure you know more than just the ratio and trend analyses.

Other investments I would consider would be long term positions in listed investment companies trading at discounts to their net tangible assets (what the shareholder would theoretically get if the company sold all assets).

My other investment interest at the moment is in China. Everyone knows the Ren Min Bi is trading at a huge discount, and the economy is kicking along at ~9% growth this year... The share markets have taken a beating, but what about the fundamentals? Time to invest long term? The indicators are right, strong economic growth, discounted securities, incredible trade surplus and an artificially discounted currency. One thing I could feel when I was in China was the buzz.

As a final note on trading, one thing I've found over the last 8 years of trading though, is what everyone knows seems to be very different from what everyone is doing.

15/03 update, if you're interested in more detailed reasons, a fantastic article interviewing Mike Tilley the CEO of Challenger is up on businessspectator.com.au - here's a taster

Retail pricing has very little relativity to the underlying value of the assets, so you’ve seen these funds really take a hammering and from a personal investment perspective I think that many of them offer enormous value at the moment because the underlying quality of the assets is such that you’re able to buy through some of the retail funds into assets that in the wholesale market will trade at 30, 40, 50 percent premiums to the look-through value that’s on offer in the retail market.

Flickr credit: Rednuht

Flip!

Monday Morning

8:45 AM - Relax in a cafe. Green tea and breakfast with a friend, shooting the breeze on photography.

9:59AM - Eagerly anticipate the opening of the stock market. (yes... eagerly). Finger poised over the refresh button.

11:25AM - Finalise my positions and close out of the market to earn over half my monthly income.

That was Monday morning for me, the second Monday without traditional employment, and in a stock market slowly crashing and burning to the ground.

Some people would call it crazy to buy in this market, but Peter Sheahan would agree with me. In his book FLIP, he studies succesful ventures that think counter-intuitively and then act boldly. He uses case studies of business giants like Richard Branson, Google, Toyota, Rupert Murdoch and Apple to prove his point.

So how did I use FLIP thinking? I bet against the herd.

Everyone hears about buying low and selling high, but when the market is slow grinding to a painful halt, people are screaming to sell, not realising it's time to buy low. Not one person told me to buy on Friday. Every person I met told me it was like catching a falling knife. I started having butterflies on Sunday... Had I made a devastatingly wrong decision?

No.

I used some careful counter-intuitive thinking and bold action.

Oh, and I used some basic trading fundamentals too (don't be counter-intuitive just to be bold. Action from stupidity is still stupid). Every stock I bought was trading at what I affectionately call a discount. People had been scared by horrible news in the U.S. and had sold my stock beyond it's real value. So I bought them, knowing that the downside was minimal, the potential upside tasty.

I haven't always listened to my sound logic. Two years ago I had plans to buy Nintendo stock, which were being buffeted and had reached the same price levels they had in the early 90's. They were about to come out with the Wii. I knew that. I love gaming. But no one else did. The market definitely didn't. I didn't buy because people told me it was risky to buy tech stocks. I try not to think about that mistake anymore...

I've learned my own lessons in thinking for myself. More recently I closed my sizeable stock portfolio about 4 weeks before it started tanking at the end of last year, I was still being told to BUY BUY BUY. I dodged a flying bullet there. Some call it luck, I like to call it thinking.

Remember, fortune favours the brave, but not the stupid.

Flickr credit - Y roc30

Dollars per awesome

There is more to life than increasing it's speed

- Mahatma Gandhi

In the busy-ness of life it can feel like we live in a blur of rushing from one task to the next, as though the neurotic need to do something will somehow provide some perverse sense of completion or satisfaction in our lives.

Hard Fact #23124: When you die, your inbox will not be empty. It's true, no matter how important you are, the day you check out is the day you will still have things to do.

Fortunately, we can make the most of our things to do. Tackling them with conscious appreciation and understanding can give us greater clarity about our choices to make clear decisions on whether to do, delegate, dump or defer.

Every task we choose to do, we're trading our life for. Read that again. A portion of your life is traded for every single thing you choose to do.

As morbid as it sounds, being conscious about every minute towards a finite end has shifted my perspective on how I decide to deal with my inbox items. I've become much more critical of how I spend my time and the value I place on my work time (hint: It's no longer in dollars per hour/week/year, it's in dollars per awesome).

flickr photo courtesy of veo

Owning things.

Ever since I was a young child, I thought that fame, wealth, big houses and fancy cars would bring happiness. The older I get, the bigger the gap between owning things and happiness gets.

Mathieu Ricard's Happiness explores the fragility of our modern happiness, he asks if developed countries have high levels of satisfaction, do we then lose this satisfaction from our lives if we lose our material comforts? 

The other day I watched a documentary about the Cocos Island villagers, in the 70's they were ruled by a ruling family, the Clunies Ross. Various Australian officials at the time mentioned that although the villagers lived in 'third world conditions' they had a sense of calm, no fear of the future, their days filled with fishing and tending to their homes. In the evenings, families and friends would commune and tell  stories to one another. It reinforces Ricard's thinking that for the Cocos islanders being content was the key, rather than an insatiable quest for more.

For me, I'm trying out the conscious act of owning, wanting and spending less, and focusing on what's important (writing my own life story, building relationships and living now). Mind you, the lure of buying instant pleasure and gratification has resulted in lots of things I like, but don't really need, cds, video games, two guitars, two aquariums, the list goes on.

I'm going to try a few things this year:

• Create an inventory of every single thing I own
• Sell, give, throw every thing that isn't important.
• Focus on becoming independent of my things.

I'm going to start by ebaying all my old stuff, and start making some harder decisions (do I sell my Playstation 3?)

Image credit: ATIS547

Ten year old Millionaire

I made my first hundred dollars selling trading cards, at the age of 10.

I had wanted to buy  the cards for months, $15 for 60 6X9cm cardboard pieces. My dad could hardly believe it! he thought it was extortion, however he has never witheld anything from me. I vividly remember my father reluctantly handing me three crisp $5 notes. I had hit the jackpot... until I realised that 60 cards wasn't going to be enough.

Knowing there wasn't any more funding to be had from my family, I decided that I would have to make my own fortune, especially when I heard that rarer cards could be worth up to $200. Very quickly, I became more interested in the buying and selling of cards than collecting cards.

I began to trade common cards for rarer cards, and scout for potential 'clients' (other kids) who were rich and wanted certain cards. I began to make frequent trades and sales of cards, at times up to $80.

I thought I was a millionaire, a ten year old with a few hundred dollars! I rolled my earnings into more cards and saved some, and my collection and wealth quickly grew.

This was my first real experience with making money, and I didn't understand at the time why my friends were mowing lawns, cycling their way through paper runs, gathering cans or working at the local pizzeria for 'small' sums at a time, what took them months to earn, I could earn in one day. At the same time, I respected and admired their consistent effort, especially those who woke up early to go on paper runs.

This experience taught me a few important lessons while I was young.

1. Look for the demand.
2. When something is popular, look. Don't touch. (a valuable lesson for my later forays into the stock market)
3. Working hard and long doesn't necessarily make you any more money than other 'jobs.' But it is more consistent and stable.
4. Work can be fun, especially the adrenaline rush of deal making.

This was the beginning of my experiences with money, and why I've always tried to look for something different. I've learned that I am not satisfied with the act of earning or receiving money.

Income I make must be an exact, direct extraction of my hard work, blood, sweat and tears. That's the satisfaction and contentment I feel that I made something happen.

Kanye West said it best. Good money's earned.