Success is simple.
If you are not achieving at the level you’d like, it’s almost certainly because of at least one of these 3 factors.
1. CLARITY.
Most people aren’t totally clear on what they want.
Sure they have a vague idea about a general direction, but that’s not enough.
You need to get absolutely crystal clear about your goals, and create a step by step path to making progress towards them.
You don’t have to know every step, just the next few. Once you travel a little further down the path, you’ll usually work out what to do next.
If you’re unhappy with your progress, the first solution is to sit down and re- clarify your objectives.
2. PRODUCTIVITY.
There are some people who are clear about what they want, but they just don’t do much to achieve it.
We live in a physical world, which functions by cause and effect, action and re-action. Unless you take lots of actions, significant change can’t occur. Conversely when you do act productively and proactively, it’s is astounding how much progress you can make over time.
I don’t think it’s a matter of intelligence either, it’s more about choosing those actions that maximise results, and exerting enough energy to move things forward.
3. BELIEF.
If you have Clarity and Productivity, you will usually massively outperform the average person. These two alone are formidable forces.
But occasionally people who exhibit both still fail. When this happens it can often be attributed to their lack of belief in themselves.
To achieve anything worthwhile you will confront countless obstacles and hardships.
The unsuccessful person is taken by surprise by these obstacles, and begins to doubt themselves.
The high achieving person understands that temporary failure is the very fabric of success. They know that nothing of worth was ever achieved in the history of mankind without initial failure. Ever.
When you choose to really believe in yourself, it affects your results in two profound ways.
You take more powerful actions, which inevitably lead to superior results.
And the people around you respect you more. They sense that you are a dynamic, effective, confident force to be reckoned with, and are more likely to want to help and support you.
So if you’re not satisfied with your success in business or life, take a few minutes to think about which of these three ingredients you may be missing.
Then each day when you wake up, resolve to focus on that area.
Pretty soon, your new focus will become a new habit, and that new habit will create a new destiny.
Tuesday, December 14, 2010
Maximising Your Income - Siimon Reynolds
I was on a plane from North Carolina to Los Angeles last week.
200 people on board and bored.
The flight was over 5 hours, yet only once did the flight attendants walk down the aisle offering food/snacks.
If they had simply done it twice they would have increased revenue by at least 30%.
Now this airline has well over 1000 flights every day, so just think how many tens of millions of dollars they are missing out on, simply by not coming back to their customers with another chance to buy.
Are you making the same mistake in your business?
Customers who buy once will often buy two, three or ten times.
If only they are asked.
Hundreds of billions of dollars of potential income is lost every year by all the businesses that don’t follow up the first sale with other enticements.
Repeat offers.
New reasons to buy.
Discounts for the next purchase.
A calendar of sale events.
Any of these techniques will increase the profits of any business significantly.
So many business owners complain that they aren’t making enough money.
But like that airline, they’re ignoring the opportunities right in front of them.
200 people on board and bored.
The flight was over 5 hours, yet only once did the flight attendants walk down the aisle offering food/snacks.
If they had simply done it twice they would have increased revenue by at least 30%.
Now this airline has well over 1000 flights every day, so just think how many tens of millions of dollars they are missing out on, simply by not coming back to their customers with another chance to buy.
Are you making the same mistake in your business?
Customers who buy once will often buy two, three or ten times.
If only they are asked.
Hundreds of billions of dollars of potential income is lost every year by all the businesses that don’t follow up the first sale with other enticements.
Repeat offers.
New reasons to buy.
Discounts for the next purchase.
A calendar of sale events.
Any of these techniques will increase the profits of any business significantly.
So many business owners complain that they aren’t making enough money.
But like that airline, they’re ignoring the opportunities right in front of them.
Sunday, November 28, 2010
The Importance of Saying No - Siimon Reynolds
Saying Yes, often seems like the right thing to do in business.
After all, it makes us seem nice, open, accommodating, optimistic and agreeable.
But saying Yes can also be a trap.
It can dilute our focus.
Stretch our resources too thin.
Put us at the mercy of other people’s agendas.
The fact is, one of the defining characteristics of top performers in business is the ability to say No.
In our world of dynamic complexity, there are literally hundreds of opportunities each month to say Yes to new projects, meet with new people, investigate new sectors and begin new strategies.
You are probably tempted right now to say Yes to all kinds of things that aren’t part of your core business.
But it’s really important you resist.
For two primary reasons.
Firstly, I believe, and many different research studies show, that the people who become successful persistently do one thing well over a long period of time.
They don’t chop and change.
They don’t stop when work gets boring.
They don’t look for the next shiny new sector, fad or industry.
They grind it out, getting a little more skilled at their area of focus every day.
It’s not a glamorous way to live, but it gets results.
And secondly, every time you say No to a distraction from your main mission, you remind yourself about what’s really important- what your key focus is.
You get stronger, both mentally and strategically.
This week, why not make it a rule to say No to the unimportant, the distracting, the trivia masquerading as the urgent.
Saying No to distractions is ultimately saying Yes to greatness.
After all, it makes us seem nice, open, accommodating, optimistic and agreeable.
But saying Yes can also be a trap.
It can dilute our focus.
Stretch our resources too thin.
Put us at the mercy of other people’s agendas.
The fact is, one of the defining characteristics of top performers in business is the ability to say No.
In our world of dynamic complexity, there are literally hundreds of opportunities each month to say Yes to new projects, meet with new people, investigate new sectors and begin new strategies.
You are probably tempted right now to say Yes to all kinds of things that aren’t part of your core business.
But it’s really important you resist.
For two primary reasons.
Firstly, I believe, and many different research studies show, that the people who become successful persistently do one thing well over a long period of time.
They don’t chop and change.
They don’t stop when work gets boring.
They don’t look for the next shiny new sector, fad or industry.
They grind it out, getting a little more skilled at their area of focus every day.
It’s not a glamorous way to live, but it gets results.
And secondly, every time you say No to a distraction from your main mission, you remind yourself about what’s really important- what your key focus is.
You get stronger, both mentally and strategically.
This week, why not make it a rule to say No to the unimportant, the distracting, the trivia masquerading as the urgent.
Saying No to distractions is ultimately saying Yes to greatness.
Saturday, November 20, 2010
A Quality Life Demands Quality Questions - Dr. John F. Demartini
The quality of your life is based partly upon the quality of the questions you ask yourself daily. If you are not inspired about your life or if you are not living the life you truly dream of, it just may be because you are not asking yourself the highest quality questions. The moment you do is the moment your life begins to change. Most people who struggle through life ask themselves such uninspiring questions that their lives become exactly that, uninspiring. Asking yourself low-quality questions leads to a low quality life, but asking yourself high quality questions is one of the keys to living the more self-actualized life you dream of and deserve.
Below are seven high quality questions you could begin asking yourself daily. I have been asking myself these seven questions for many years and have been able to fulfill many of my dreams through this method. Many of my friends and students have also done the same. These questions have already been demonstrated to increase the quality of many people's lives around the world. Let's now take a look at these seven high quality questions.
1.What would I absolutely love to do in life?
This question helps bring clearly into your conscious mind one of your heartfelt and meaningful dreams or objectives.
2.How do I become handsomely or beautifully paid to do it?
This question helps you awaken your creativity and helps you reward yourself in return. It helps make your vocation your avocation. Why not get financially rewarded for doing whatever you love?
3.What are the seven highest priority actions steps I could complete today that would enable me to do it?
This question helps you see how possible it is to accomplish this or any other meaningful dream or objective. It helps you organize your actions.
4.What obstacles might I run into and how do I solve them in advance?
This question helps you plan more effectively and prepares you for the challenges you might face in advance. It enables you to act more than react along your journey.
5.What worked and what didn't work today?
This question helps you refine your actions and keep them on priority. All great endeavors require such feedback.
6.How do I do what I would love more effectively and efficiently?
This question helps you consistently think of more effective and efficient ways of accomplishing your meaningful dream or objective.
7.How did whatever I experienced today - whether positive or negative, serve me?
This question helps you realize that all great endeavors come with both supportive and challenging consequences both of which act as feedback mechanisms to assist you along your accomplishment journey.
Yes, there is a bit of thinking involved in asking and answering quality questions, but with a little effort and refinement you can certainly accomplish a great number of objectives and fulfill a greater number of dreams. Don't you deserve to live your dreams? Begin asking yourself the same quality questions and see what answers they lead you to. Be as specific and concise as you can. Watch how your creativity begins to soar. The quality of your life is based partly upon the quality of the questions you ask yourself daily and the quality and quantity of actions you take for yourself daily. Begin to ask higher quality questions and begin to act on your dreams today.
Below are seven high quality questions you could begin asking yourself daily. I have been asking myself these seven questions for many years and have been able to fulfill many of my dreams through this method. Many of my friends and students have also done the same. These questions have already been demonstrated to increase the quality of many people's lives around the world. Let's now take a look at these seven high quality questions.
1.What would I absolutely love to do in life?
This question helps bring clearly into your conscious mind one of your heartfelt and meaningful dreams or objectives.
2.How do I become handsomely or beautifully paid to do it?
This question helps you awaken your creativity and helps you reward yourself in return. It helps make your vocation your avocation. Why not get financially rewarded for doing whatever you love?
3.What are the seven highest priority actions steps I could complete today that would enable me to do it?
This question helps you see how possible it is to accomplish this or any other meaningful dream or objective. It helps you organize your actions.
4.What obstacles might I run into and how do I solve them in advance?
This question helps you plan more effectively and prepares you for the challenges you might face in advance. It enables you to act more than react along your journey.
5.What worked and what didn't work today?
This question helps you refine your actions and keep them on priority. All great endeavors require such feedback.
6.How do I do what I would love more effectively and efficiently?
This question helps you consistently think of more effective and efficient ways of accomplishing your meaningful dream or objective.
7.How did whatever I experienced today - whether positive or negative, serve me?
This question helps you realize that all great endeavors come with both supportive and challenging consequences both of which act as feedback mechanisms to assist you along your accomplishment journey.
Yes, there is a bit of thinking involved in asking and answering quality questions, but with a little effort and refinement you can certainly accomplish a great number of objectives and fulfill a greater number of dreams. Don't you deserve to live your dreams? Begin asking yourself the same quality questions and see what answers they lead you to. Be as specific and concise as you can. Watch how your creativity begins to soar. The quality of your life is based partly upon the quality of the questions you ask yourself daily and the quality and quantity of actions you take for yourself daily. Begin to ask higher quality questions and begin to act on your dreams today.
Lessons from a Great Baseball Player! - Siimon Reynolds
I just heard Cal Ripken give a speech.
For those who don’t follow the sport, he’s one of the greatest baseball players of all time.
Astoundingly, he played in the major leagues for almost 17 years straight without missing a single game.
He was voted Most Valuable Player in the entire league twice.
He knows a lot about succeeding.
So I thought I’d put down my summary of Cal’s thoughts on what it takes to be highly successful:
1. The right approach – right attitude, a personal mission statement, and an honest and simple approach.
2. Strong will.
3. Passion – it is critical you choose to love what you do.
4. Love to compete – you must set yourself challenges constantly, both internal and external.
5. Consistency – constantly adjust and re-adjust to solve problems.
6. Conviction – thick skin, be stubborn, see things through to the end.
7. Strength – physical and mental. Constantly get new information to improve.
8. Life management – seek to create control in each area.
9. Personal life – nobody can say they have it all worked out, but it demands daily attention.
For the next month, I’ll have Cal’s points posted up on my bathroom mirror as a reminder.
It could be worthwhile for you to do the same.
For those who don’t follow the sport, he’s one of the greatest baseball players of all time.
Astoundingly, he played in the major leagues for almost 17 years straight without missing a single game.
He was voted Most Valuable Player in the entire league twice.
He knows a lot about succeeding.
So I thought I’d put down my summary of Cal’s thoughts on what it takes to be highly successful:
1. The right approach – right attitude, a personal mission statement, and an honest and simple approach.
2. Strong will.
3. Passion – it is critical you choose to love what you do.
4. Love to compete – you must set yourself challenges constantly, both internal and external.
5. Consistency – constantly adjust and re-adjust to solve problems.
6. Conviction – thick skin, be stubborn, see things through to the end.
7. Strength – physical and mental. Constantly get new information to improve.
8. Life management – seek to create control in each area.
9. Personal life – nobody can say they have it all worked out, but it demands daily attention.
For the next month, I’ll have Cal’s points posted up on my bathroom mirror as a reminder.
It could be worthwhile for you to do the same.
Saturday, November 06, 2010
Act like a Start Up Business! - Siimon Reynolds
I believe one of the most powerful ways to succeed in any business is to always behave like you’re a start up business.
Why?
Because founders of start up businesses usually have these characteristics:
1. They have white hot desire.
Their founders just don’t want to build something, they are DESPERATE to build something great.
That kind of desire makes things happen. Gets things done. Cuts through the red tape and bureaucratic inertia.
As Harvard Business School professor John Kotter recently wrote, “When people have a true sense of urgency, they think that action on critical issues is needed NOW, not eventually, not when it fits into a schedule. Now means making real progress every single day.”
2. They are scavengers with money.
As businesses get bigger, the purse strings loosen. So often, we stop watching the dollars as much. Start ups watch every penny. They don’t hire unless they have to. They outsource. They bargain down suppliers and buy cheap furniture. They’re cheapskates and damn proud of it.
3. They really value clients.
To a start up, every client matters. So they treat them like royalty, even when they are asked for more than they should. They respond fast to problems and indeed look to solve potential issues before they occur.
They over service, even when it’s not necessarily ‘cost efficient’ to do so.
4. They keep improving their systems.
Start ups know good enough isn’t good enough. When your firm’s survival is at stake, you just have to get better. Founders of start ups are always questioning their processes, living and breathing Kaizen, making constant incremental improvements. Doing the little things that often end up being big things.
5. They have a wildly huge vision for the business.
Start ups are powered by dreams. Big dreams. Few people set up a business to make a little more money. They are fueled by grand ambitions to change their lives and change the world. Anything seems achievable in the first 6 months of opening a business. People who run start ups live on a higher plane of possibility.
So, has your business still got these characteristics?
Or have a few of them been lost as your company got larger and more established?
I believe that the longer you can maintain a start up culture the stronger your growth will be.
Act small and you’ll grow big.
Why?
Because founders of start up businesses usually have these characteristics:
1. They have white hot desire.
Their founders just don’t want to build something, they are DESPERATE to build something great.
That kind of desire makes things happen. Gets things done. Cuts through the red tape and bureaucratic inertia.
As Harvard Business School professor John Kotter recently wrote, “When people have a true sense of urgency, they think that action on critical issues is needed NOW, not eventually, not when it fits into a schedule. Now means making real progress every single day.”
2. They are scavengers with money.
As businesses get bigger, the purse strings loosen. So often, we stop watching the dollars as much. Start ups watch every penny. They don’t hire unless they have to. They outsource. They bargain down suppliers and buy cheap furniture. They’re cheapskates and damn proud of it.
3. They really value clients.
To a start up, every client matters. So they treat them like royalty, even when they are asked for more than they should. They respond fast to problems and indeed look to solve potential issues before they occur.
They over service, even when it’s not necessarily ‘cost efficient’ to do so.
4. They keep improving their systems.
Start ups know good enough isn’t good enough. When your firm’s survival is at stake, you just have to get better. Founders of start ups are always questioning their processes, living and breathing Kaizen, making constant incremental improvements. Doing the little things that often end up being big things.
5. They have a wildly huge vision for the business.
Start ups are powered by dreams. Big dreams. Few people set up a business to make a little more money. They are fueled by grand ambitions to change their lives and change the world. Anything seems achievable in the first 6 months of opening a business. People who run start ups live on a higher plane of possibility.
So, has your business still got these characteristics?
Or have a few of them been lost as your company got larger and more established?
I believe that the longer you can maintain a start up culture the stronger your growth will be.
Act small and you’ll grow big.
Wednesday, November 03, 2010
Are You A Rich or Poor Millionaire? - Dr. John Demartini
According to a Survey of Consumer Finances, the average wealthy American has $1,400,000 in assets, and $275,000 in debts, for a net worth of over $1.1 million. Of those assets, they are fairly equally split between 'financial' assets (stocks, bonds, mutual funds and cash), and 'non-financial' assets (real estate, personal business equity, collectibles). Even then, most believe that they cannot afford to buy everything they really need. These results suggest that money is not the only determinant of real life wealth.
Dr. John Demartini defines a ‘poor' millionaire as someone who is living just to make money. On the contrary, Demartini believes a rich millionaire is someone who values the fullness of his or her life while making a profit doing what they love or loving what they do. He goes on to explain that doing what you love and making millions does not have to be mutually exclusive.
"If an individual is truly doing what they love to do they cannot help but feel prosperous and grateful for where they are and what they have. You cannot put a monetary value on being in love with life," says Dr. Demartini.
A multimillionaire in his own right, Dr. John Demartini does not deny he is an advocate for building tangible wealth and learning the fundamental laws of financial wellness.
So how do you make one hell of a profit and still get to heaven according to Dr. Demartini?
1.Make your spiritual life a business and your business life a spiritual experience
2.Do not try to receive something for nothing, or try to give something for nothing
3.SAVE 10% OF ALL YOU EARN - The more you have, the more you can attract
4.If you want to retire then you are in the wrong business
5.Anything you do consumes time. To maximize the value of your time, prioritize your interactions
6.Organize and lead your inner parts purposefully
7.Desperate people do desperate things, while inspired people do inspired things
Dr. John Demartini defines a ‘poor' millionaire as someone who is living just to make money. On the contrary, Demartini believes a rich millionaire is someone who values the fullness of his or her life while making a profit doing what they love or loving what they do. He goes on to explain that doing what you love and making millions does not have to be mutually exclusive.
"If an individual is truly doing what they love to do they cannot help but feel prosperous and grateful for where they are and what they have. You cannot put a monetary value on being in love with life," says Dr. Demartini.
A multimillionaire in his own right, Dr. John Demartini does not deny he is an advocate for building tangible wealth and learning the fundamental laws of financial wellness.
So how do you make one hell of a profit and still get to heaven according to Dr. Demartini?
1.Make your spiritual life a business and your business life a spiritual experience
2.Do not try to receive something for nothing, or try to give something for nothing
3.SAVE 10% OF ALL YOU EARN - The more you have, the more you can attract
4.If you want to retire then you are in the wrong business
5.Anything you do consumes time. To maximize the value of your time, prioritize your interactions
6.Organize and lead your inner parts purposefully
7.Desperate people do desperate things, while inspired people do inspired things
Sunday, October 31, 2010
The King of Time Management - Siimon Reynolds
I’d like to nominate Mike Duke, the CEO of Wal-Mart, as King Of Time Management.
Contemplate this:
He runs the world’s biggest company.
He oversees 8600 stores.
He has a staff of 2.1 million people.
Yet he still handles all his emails by the end of each day!
He is so dedicated to sticking to his schedule that he is not above standing up to leave while people are still talking to him in meetings. This guy is definitely worth studying.
As you can imagine, there’s a mountain of management techniques he uses that we all could profit from emulating. But today, I’ll just focus on one.
His folder system.
Duke has eight senior people reporting directly to him. On the credenza near his desk, he has one folder for each of them. It has their name and the time of Duke’s next meeting with them. Before they arrive, he takes out their folder and reviews all the areas they manage. Anything they have promised to do is listed in the folder too, so he keeps that item in there until it’s done. It’s such a simple, effective system, but it’s cleverer than may first appear. Let’s look at it in detail.
He concentrates on the eight people who can create the most change in the company (most leaders have a far wider focus). He prepares for each meeting before the person arrives (most people don’t do any preparation before internal meetings). He is clear at all times what they are up to (most CEO’s of big companies have only a vague idea). He follows up rigorously (most senior managers have no system for follow up).
Even at Wal-Mart, where efficiency is an obsession, senior staff marvel at how much Mike Duke gets done with this system. Maybe you should consider adopting his method too. The reality is, the people who get to the top in business aren’t necessarily smarter than their competition. But, like Mike Duke, they’re usually more focused and organised.
Contemplate this:
He runs the world’s biggest company.
He oversees 8600 stores.
He has a staff of 2.1 million people.
Yet he still handles all his emails by the end of each day!
He is so dedicated to sticking to his schedule that he is not above standing up to leave while people are still talking to him in meetings. This guy is definitely worth studying.
As you can imagine, there’s a mountain of management techniques he uses that we all could profit from emulating. But today, I’ll just focus on one.
His folder system.
Duke has eight senior people reporting directly to him. On the credenza near his desk, he has one folder for each of them. It has their name and the time of Duke’s next meeting with them. Before they arrive, he takes out their folder and reviews all the areas they manage. Anything they have promised to do is listed in the folder too, so he keeps that item in there until it’s done. It’s such a simple, effective system, but it’s cleverer than may first appear. Let’s look at it in detail.
He concentrates on the eight people who can create the most change in the company (most leaders have a far wider focus). He prepares for each meeting before the person arrives (most people don’t do any preparation before internal meetings). He is clear at all times what they are up to (most CEO’s of big companies have only a vague idea). He follows up rigorously (most senior managers have no system for follow up).
Even at Wal-Mart, where efficiency is an obsession, senior staff marvel at how much Mike Duke gets done with this system. Maybe you should consider adopting his method too. The reality is, the people who get to the top in business aren’t necessarily smarter than their competition. But, like Mike Duke, they’re usually more focused and organised.
Saturday, October 30, 2010
Central Bankers Are Out of Control - Greg Canavan, Sound Money Sound Investment
"The wavelike movement affecting the economic system, the recurrence of periods of boom which are followed by periods of depression, is the unavoidable outcome of the attempts, repeated again and again, to lower the gross market rate of interest by means of credit expansion. There is no means of avoiding the final collapse of a boom brought about by credit expansion. The alternative is only whether the crisis should come sooner as the result of a voluntary abandonment of further credit expansion or later as the final and total catastrophe of the currency system involved."
Ludwig von Mises - Human Action. A Treatise on Economics
Make no mistake; central bankers are laying the groundwork for their own demise.
Their hubris knows no bounds.
Federal Reserve Chief Ben Bernanke is preparing the market for quantitative easing part two (QEII). It is widely believed that the Fed's balance sheet will expand by a further $1 trillion.
This is leading to heavy selling of the US dollar. As a result, currencies all around the world are rising in terms of the dollar, and their governments and central banks don't like it.
The dollar index (see chart) has previously traded lower than it is now:
Ludwig von Mises - Human Action. A Treatise on Economics
Make no mistake; central bankers are laying the groundwork for their own demise.
Their hubris knows no bounds.
Federal Reserve Chief Ben Bernanke is preparing the market for quantitative easing part two (QEII). It is widely believed that the Fed's balance sheet will expand by a further $1 trillion.
This is leading to heavy selling of the US dollar. As a result, currencies all around the world are rising in terms of the dollar, and their governments and central banks don't like it.
The dollar index (see chart) has previously traded lower than it is now:
But demand from the world's consumer of last resort, the US, is probably more tepid than it has been at any time when the dollar index was at lower levels. Hence dollar weakness is leading to a loss of competitiveness for many nations who have built their economic model on exporting to the US.
As a result, we are now seeing nations from Asia to South America deliberately try to weaken their currencies against the US dollar in a vain attempt to maintain the post 1971 (end of Bretton Woods currency system) global economic order.
This is the beginning of currency wars not seen since the 1930s.
In addition to Ben Bernanke readying the markets for QEII, officials from the former head honcho of the central banking world, the Bank of England (BOE), have been spouting their own hubris.
Deputy Governor Charles Bean recently told savers that it was part of the BOE's strategy to keep interest rates low and that they could not expect to live off the interest from their savings.
In non-central banking parlance he means to say; the BOE is determined to maintain negative real interest rates to cause mild but persistent inflation. Inflation is an insidious tax on society, affecting in particular the prudent and the savers (who, as you will see below, are the ones who actually provide a nation with its productive capital).
But inflation benefits the banking class because it erodes the value of the bad debts made during the boom. Instead of taking responsibility for the bad lending decisions, by writing off debts and wiping out the management and investors who made the lending possible, inflation allows the system and status quo to be maintained.
Mr Bean's comments reflect the complete arrogance of the central banking community.
Following hot on his heels was Adam Posen, external member of the BOE's Monetary Policy Committee. He recently delivered a speech with the title, 'The case for doing more'. In it, he argued the same tired old mantra of central bankers everywhere:
"The risks that I believe we face now are...ones of sustained low growth turning into a self-fulfilling prophecy, and/or inducing a political reaction that could undermine our long-run stability and prosperity. Inaction by central banks could ratify decisions both by businesses to lastingly shrink the economy's productive capacity, and by investors to avoid risk and prefer cash."
So according to Posen, inaction by the central bank could threaten England's prosperity. We would argue that previous action by the central bank is exactly what has threatened the country's prosperity. More action can only make things worse in the long run.
How?
Let's go back to the Mises quote at the beginning of the article. He says that booms and busts are the unavoidable outcome of repeated attempts to lower the market rate of interest by means of credit expansion. It may have been written in 1949 but it still holds true today.
It effectively means that central bank attempts to push the market rate of interest below the 'natural rate' cause widespread distortions in production and consumption. This leads to a misallocation of resources and consequently, booms followed by busts.
We'll show you how this happens.
First, a description of the natural rate of interest. The interest rate is the price of money at any particular time. The natural rate, or equilibrium rate of interest, is the rate that seeks to balance out the needs and desires of savers and consumers.
In a world without central bankers, a falling rate of interest would be the result of an increase in savings. Basic economics tells us that savings = investment. So as these savings make their way into the banking system banks have more money available to lend to investors. The increased quantity of funds available pushes down the price of money. In other words an increase in savings causes the natural rate of interest to decline.
Think carefully about the signals that are being sent here. An increase in savings suggests individuals are deferring consumption into the future. We would therefore expect to see consumption declining as savings rise. The lower rate of interest improves the economics of longer-term projects designed to take advantage of an expected increase in future consumption.
But if individuals decide to consume more of their incomes now and save less, there will be less 'money' available for investment and in a free market in money, the natural rate of interest will rise under this scenario. In short, the price of money, set by the market, has a natural tendency to curb excesses because they help coordinate economic production over time. If there are not enough savings, interest rates should rise and vice versa.
Now, let's introduce the central bank into the equation. When a central bank lowers the rate of interest it does so by injecting money into the banking system. These additional 'reserves' are created from nothing. Commercial banks then utilise these reserves as the basis for a new round of fractional reserve based credit creation.
In effect, the artificial boost in reserves provides a signal that savings have increased which leads to an increase in investment...but the signal is false. Investments increase even though the real level of savings is quite low. And as we point out above, if savings are low that means consumption is high. Because the signal is false, in time the investments turn out to be 'bad' and the boom turns to bust.
This is exactly what was behind the credit crisis of 2008/09. An excess of false savings in the banking system led to overinvestment. As soon as credit dried up, the mal-investments were exposed and projects all around the world were put on hold (because future consumption levels were in doubt). In a short period in 2008/09 commodity prices fell more than they did in the Great Depression. Even the largest producers in the world suffered share price falls of more than 50%.
You may recall that when the full force of the US housing bust hit financial markets around September 2008, interest rate 'spreads' over government bond yields, and therefore market rates of interest, began to rise sharply.
Why? To signal the need for an increase in real savings and to lower consumption. The effects of such an adjustment would not have been pretty. Indeed, allowing rates to increase would have caused a deep recession.
Building on the wisdom gained from decades of central banking experience, what happened next? Errr...co-ordinated global interest rate cuts...another huge injection of artificial savings and the promotion of consumption. Exactly the opposite of what would occur if a free market in money existed.
Now the monetary stimulus from 2008/09 is beginning to dissipate. But even more distortions have resulted, the effects of which are morphing into nascent currency wars.
This brings us to the second part of Mises' quote:
"The alternative is only whether the crisis should come sooner as the result of a voluntary abandonment of further credit expansion or later as the final and total catastrophe of the currency system involved."
Today's currency system, with the US dollar as the global reserve currency and all others in some way tied to it, is beginning to break down. With reckless and clueless central bankers still held in high esteem by governments and wider society, at this point there does not appear to be any reason to think that 'the final and total catastrophe of the currency system' will be avoided.
That is not meant to be a sensationalist comment. For those of you who have been reading for a while know we are not into hyperbole. But this is the reality facing investors who choose to look beneath the headlines and shallow analysis. If you're genuinely interested in protecting your wealth, this stuff matters.
How a disintegrating monetary and currency system impacts investment markets is a very tough call to make. At the two extremes there is hyperinflation or deflation. Neither scenario is good for investors but at this point we still lean toward a deflationary outcome.
One thing is for sure though - central bankers are out of control. Future generations will look back on this period of economic history and wonder how we could have been so stupid to allow unelected officials to brazenly, inexpertly and contemptuously control the price of money.
As a result, we are now seeing nations from Asia to South America deliberately try to weaken their currencies against the US dollar in a vain attempt to maintain the post 1971 (end of Bretton Woods currency system) global economic order.
This is the beginning of currency wars not seen since the 1930s.
In addition to Ben Bernanke readying the markets for QEII, officials from the former head honcho of the central banking world, the Bank of England (BOE), have been spouting their own hubris.
Deputy Governor Charles Bean recently told savers that it was part of the BOE's strategy to keep interest rates low and that they could not expect to live off the interest from their savings.
In non-central banking parlance he means to say; the BOE is determined to maintain negative real interest rates to cause mild but persistent inflation. Inflation is an insidious tax on society, affecting in particular the prudent and the savers (who, as you will see below, are the ones who actually provide a nation with its productive capital).
But inflation benefits the banking class because it erodes the value of the bad debts made during the boom. Instead of taking responsibility for the bad lending decisions, by writing off debts and wiping out the management and investors who made the lending possible, inflation allows the system and status quo to be maintained.
Mr Bean's comments reflect the complete arrogance of the central banking community.
Following hot on his heels was Adam Posen, external member of the BOE's Monetary Policy Committee. He recently delivered a speech with the title, 'The case for doing more'. In it, he argued the same tired old mantra of central bankers everywhere:
"The risks that I believe we face now are...ones of sustained low growth turning into a self-fulfilling prophecy, and/or inducing a political reaction that could undermine our long-run stability and prosperity. Inaction by central banks could ratify decisions both by businesses to lastingly shrink the economy's productive capacity, and by investors to avoid risk and prefer cash."
So according to Posen, inaction by the central bank could threaten England's prosperity. We would argue that previous action by the central bank is exactly what has threatened the country's prosperity. More action can only make things worse in the long run.
How?
Let's go back to the Mises quote at the beginning of the article. He says that booms and busts are the unavoidable outcome of repeated attempts to lower the market rate of interest by means of credit expansion. It may have been written in 1949 but it still holds true today.
It effectively means that central bank attempts to push the market rate of interest below the 'natural rate' cause widespread distortions in production and consumption. This leads to a misallocation of resources and consequently, booms followed by busts.
We'll show you how this happens.
First, a description of the natural rate of interest. The interest rate is the price of money at any particular time. The natural rate, or equilibrium rate of interest, is the rate that seeks to balance out the needs and desires of savers and consumers.
In a world without central bankers, a falling rate of interest would be the result of an increase in savings. Basic economics tells us that savings = investment. So as these savings make their way into the banking system banks have more money available to lend to investors. The increased quantity of funds available pushes down the price of money. In other words an increase in savings causes the natural rate of interest to decline.
Think carefully about the signals that are being sent here. An increase in savings suggests individuals are deferring consumption into the future. We would therefore expect to see consumption declining as savings rise. The lower rate of interest improves the economics of longer-term projects designed to take advantage of an expected increase in future consumption.
But if individuals decide to consume more of their incomes now and save less, there will be less 'money' available for investment and in a free market in money, the natural rate of interest will rise under this scenario. In short, the price of money, set by the market, has a natural tendency to curb excesses because they help coordinate economic production over time. If there are not enough savings, interest rates should rise and vice versa.
Now, let's introduce the central bank into the equation. When a central bank lowers the rate of interest it does so by injecting money into the banking system. These additional 'reserves' are created from nothing. Commercial banks then utilise these reserves as the basis for a new round of fractional reserve based credit creation.
In effect, the artificial boost in reserves provides a signal that savings have increased which leads to an increase in investment...but the signal is false. Investments increase even though the real level of savings is quite low. And as we point out above, if savings are low that means consumption is high. Because the signal is false, in time the investments turn out to be 'bad' and the boom turns to bust.
This is exactly what was behind the credit crisis of 2008/09. An excess of false savings in the banking system led to overinvestment. As soon as credit dried up, the mal-investments were exposed and projects all around the world were put on hold (because future consumption levels were in doubt). In a short period in 2008/09 commodity prices fell more than they did in the Great Depression. Even the largest producers in the world suffered share price falls of more than 50%.
You may recall that when the full force of the US housing bust hit financial markets around September 2008, interest rate 'spreads' over government bond yields, and therefore market rates of interest, began to rise sharply.
Why? To signal the need for an increase in real savings and to lower consumption. The effects of such an adjustment would not have been pretty. Indeed, allowing rates to increase would have caused a deep recession.
Building on the wisdom gained from decades of central banking experience, what happened next? Errr...co-ordinated global interest rate cuts...another huge injection of artificial savings and the promotion of consumption. Exactly the opposite of what would occur if a free market in money existed.
Now the monetary stimulus from 2008/09 is beginning to dissipate. But even more distortions have resulted, the effects of which are morphing into nascent currency wars.
This brings us to the second part of Mises' quote:
"The alternative is only whether the crisis should come sooner as the result of a voluntary abandonment of further credit expansion or later as the final and total catastrophe of the currency system involved."
Today's currency system, with the US dollar as the global reserve currency and all others in some way tied to it, is beginning to break down. With reckless and clueless central bankers still held in high esteem by governments and wider society, at this point there does not appear to be any reason to think that 'the final and total catastrophe of the currency system' will be avoided.
That is not meant to be a sensationalist comment. For those of you who have been reading for a while know we are not into hyperbole. But this is the reality facing investors who choose to look beneath the headlines and shallow analysis. If you're genuinely interested in protecting your wealth, this stuff matters.
How a disintegrating monetary and currency system impacts investment markets is a very tough call to make. At the two extremes there is hyperinflation or deflation. Neither scenario is good for investors but at this point we still lean toward a deflationary outcome.
One thing is for sure though - central bankers are out of control. Future generations will look back on this period of economic history and wonder how we could have been so stupid to allow unelected officials to brazenly, inexpertly and contemptuously control the price of money.
Your Future Self - Siimon Reynolds
Today I’d like to talk about a concept developed by a great Canadian coach, Dan Sullivan.
It’s called the Future Based Self.
The essence of it is as follows:
We all have three selves, and our success in life depends on which one we live in most of the time.
The first is the The Past Based Self. We all know people like this. They live most of their lives thinking about their past. Reminiscing about it if it was good. Filled with regret, anger and remorse if it was bad. Their ability to progress is severely hampered by not being in a forward thinking, positive, creative state.
Then there’s the Present Based Self. These people can be quite efficient, as they act in the present, and do what needs to be done now. But they usually get bogged down by short term problems and busy work, forgetting to look ahead. They also have a vision of themselves centered on their present capabilities – who they are now, rather than what they could be.
Finally there is the Future Based Self. This person has created a vision of themselves (and their company) that is usually 3 years or so ahead of where they are now. As a result, they are always growing, learning and evolving in order to make that vision a reality. They are constantly in the process of becoming more. Focusing on bridging the gap between their current achievements and their potential.
So,which self do you live in most of the time?
Once we make the conscious choice to live in our Future Based Self, our actions in the present tend to change. We not only get clear about where we are going, we start behaving like that higher level person we want to become. Those superior actions, over time, give us much better results. I think you’ll agree, the Future Based Self is not just an interesting concept, it’s a life changing one.
But the ideal of course, would be to grow into your Future Based Self, while still enjoying and appreciating the wonders of present day life. Loving life as it is, while moving up to ever higher levels.
I’m not saying it’s easy. But it’s certainly a state worth striving for.
It’s called the Future Based Self.
The essence of it is as follows:
We all have three selves, and our success in life depends on which one we live in most of the time.
The first is the The Past Based Self. We all know people like this. They live most of their lives thinking about their past. Reminiscing about it if it was good. Filled with regret, anger and remorse if it was bad. Their ability to progress is severely hampered by not being in a forward thinking, positive, creative state.
Then there’s the Present Based Self. These people can be quite efficient, as they act in the present, and do what needs to be done now. But they usually get bogged down by short term problems and busy work, forgetting to look ahead. They also have a vision of themselves centered on their present capabilities – who they are now, rather than what they could be.
Finally there is the Future Based Self. This person has created a vision of themselves (and their company) that is usually 3 years or so ahead of where they are now. As a result, they are always growing, learning and evolving in order to make that vision a reality. They are constantly in the process of becoming more. Focusing on bridging the gap between their current achievements and their potential.
So,which self do you live in most of the time?
Once we make the conscious choice to live in our Future Based Self, our actions in the present tend to change. We not only get clear about where we are going, we start behaving like that higher level person we want to become. Those superior actions, over time, give us much better results. I think you’ll agree, the Future Based Self is not just an interesting concept, it’s a life changing one.
But the ideal of course, would be to grow into your Future Based Self, while still enjoying and appreciating the wonders of present day life. Loving life as it is, while moving up to ever higher levels.
I’m not saying it’s easy. But it’s certainly a state worth striving for.
Saturday, September 04, 2010
Four Minutes In The Morning - Brad Feld
Amy and I created a tradition about a decade ago we call “four minutes in the morning.” We try to – fully clothed – spend four minutes together every morning 100% focused on each other.
I’m an early bird – usually getting up around 5am regardless of the time zone I’m in (except on the weekends – then I sleep until I wake up – sometimes 1pm.) Amy sleeps a little later (usually 6:30am). So – I often have around 90 minutes alone every morning, which I treasure. I have a well defined morning routine that includes a cup of coffee and 85 or so minutes in front of my computer.
When Amy gets up, I try to remember to jump up from my computer and start our four minutes. Sometimes I forget and notice it when she thumps me on my head or clears her throat loudly. But I eventually remember. We then leave the office area, go to our living room, or outside on our porch, and spend our “four minutes” together.
Of course, the “four minutes” is metaphorical. Sometimes it’s 15 minutes. A few times a year it turns into an hour when we end up in a discussion about something. But it’s always 100% bi-directional attention, except for our dogs who often want in on the discussion.
I travel a lot so this often translates into a phone call in the morning. We recently started using Skype instead and it makes an amazing difference. This morning, as Amy was in Keystone and I was in Boulder, we caught up with each other in our un-showered goodness. Now, if we only had smell-o-vision, the experience would have been complete.
I miss Amy a lot whenever we aren’t together. We’re lucky that we get to travel together a lot and that each of our work experiences have lots of location flexibility. Skype has helped in a surprisingly nice way with one of our routines.
My recommendation to all my guy friends out there – try the “four minutes in the morning” routine with your significant other. It’ll pay many dividends.
I’m an early bird – usually getting up around 5am regardless of the time zone I’m in (except on the weekends – then I sleep until I wake up – sometimes 1pm.) Amy sleeps a little later (usually 6:30am). So – I often have around 90 minutes alone every morning, which I treasure. I have a well defined morning routine that includes a cup of coffee and 85 or so minutes in front of my computer.
When Amy gets up, I try to remember to jump up from my computer and start our four minutes. Sometimes I forget and notice it when she thumps me on my head or clears her throat loudly. But I eventually remember. We then leave the office area, go to our living room, or outside on our porch, and spend our “four minutes” together.
Of course, the “four minutes” is metaphorical. Sometimes it’s 15 minutes. A few times a year it turns into an hour when we end up in a discussion about something. But it’s always 100% bi-directional attention, except for our dogs who often want in on the discussion.
I travel a lot so this often translates into a phone call in the morning. We recently started using Skype instead and it makes an amazing difference. This morning, as Amy was in Keystone and I was in Boulder, we caught up with each other in our un-showered goodness. Now, if we only had smell-o-vision, the experience would have been complete.
I miss Amy a lot whenever we aren’t together. We’re lucky that we get to travel together a lot and that each of our work experiences have lots of location flexibility. Skype has helped in a surprisingly nice way with one of our routines.
My recommendation to all my guy friends out there – try the “four minutes in the morning” routine with your significant other. It’ll pay many dividends.
Stress To Success Secrets - John Demartini
On a daily basis:
1.Write and read your goals.
2.Clear away your goal's obstacles.
3.Prioritize your activities.
4.Act on top priorities.
5.Visualize your success.
6.Write and read your affirmations.
7.Practice deep breathing and stretching.
8.Do selective and collective reading.
9.Groom for success.
10.Dress for success.
11.Love what you do and do what you love.
12.Surround yourself with 'succeeders'.
13.Drink lots of water.
14.Eat light, moderate meals.
15.Reduce the four 'addictors' - coffee, cigarettes, alcohol and sugar.
16.Contract and then relax all muscles.
17.Help others fulfill their goals.
18.Save 5 to 10 percent of your earnings.
19.Write three thank-you letters.
20.Reward yourself for your accomplishments.
21.Express feelings of love.
22.Hug someone special.
23.Clean and organize your environment.
24.Eliminate low-priority 'non-necessities'.
25.Study the subject you'd love to master.
26.Spend time in total meditative silence.
27.Massage your body or scalp.
28.Take a hot bath before retiring.
29.Count your blessings with gratitude.
30.Get a good night's rest.
31.Follow a Stress-to Success Checklist.
1.Write and read your goals.
2.Clear away your goal's obstacles.
3.Prioritize your activities.
4.Act on top priorities.
5.Visualize your success.
6.Write and read your affirmations.
7.Practice deep breathing and stretching.
8.Do selective and collective reading.
9.Groom for success.
10.Dress for success.
11.Love what you do and do what you love.
12.Surround yourself with 'succeeders'.
13.Drink lots of water.
14.Eat light, moderate meals.
15.Reduce the four 'addictors' - coffee, cigarettes, alcohol and sugar.
16.Contract and then relax all muscles.
17.Help others fulfill their goals.
18.Save 5 to 10 percent of your earnings.
19.Write three thank-you letters.
20.Reward yourself for your accomplishments.
21.Express feelings of love.
22.Hug someone special.
23.Clean and organize your environment.
24.Eliminate low-priority 'non-necessities'.
25.Study the subject you'd love to master.
26.Spend time in total meditative silence.
27.Massage your body or scalp.
28.Take a hot bath before retiring.
29.Count your blessings with gratitude.
30.Get a good night's rest.
31.Follow a Stress-to Success Checklist.
How Your Self Image Determines Your Wealth - Siimon Reynolds
I’ve been reading an interesting book lately.
It’s called ‘Identity Economics : How Our Identities Shape Our Work, Wages, and Well Being.’
It raises some pertinent points for anyone who wants to achieve great wealth in their life.
The authors show that how you see yourself plays a huge part in how much you earn, and indeed how much wealth you believe you deserve.
Identity affects how you dress. What wages you ask for, or what prices you charge your clients.
Even how much money you save or spend.
With self identity being so critical to financial success, it is truly amazing that people don’t spend time daily developing their self image so that it supports them, rather than pulls them down.
Do you do anything at all to maintain a healthy self identity?
Most people don’t, for two reasons:
1. They have no idea that their identity is affecting how much they earn.
2. Even if they do know, they don’t know what they can do to change their identity.
In fact, changing your identity is relatively easy, although it takes some months to do it.
You just use the same technique taught to Olympic athletes to enhance their performance. Mental rehearsal.
That is, every day for at least ten minutes, close your eyes and mentally ‘see’ yourself performing superbly at work.
Earning large amounts of money. Being happy and healthy. Enjoying your ideal lifestyle.
At first it seems implausible that something so simple could affect your performance. But there are literally thousands of scientific studies that show that, over time, it does.
And remember this:
You’re visualising how things will go anyway, all day long. It’s just how the brain works. So you might as well take control of the process and visualise exactly what you want.
With regular daily practice you’ll find you will be more confident, more at ease, more effective.
You’ll also find your economic identity will have changed.
And soon after, your wealth.
It’s called ‘Identity Economics : How Our Identities Shape Our Work, Wages, and Well Being.’
It raises some pertinent points for anyone who wants to achieve great wealth in their life.
The authors show that how you see yourself plays a huge part in how much you earn, and indeed how much wealth you believe you deserve.
Identity affects how you dress. What wages you ask for, or what prices you charge your clients.
Even how much money you save or spend.
With self identity being so critical to financial success, it is truly amazing that people don’t spend time daily developing their self image so that it supports them, rather than pulls them down.
Do you do anything at all to maintain a healthy self identity?
Most people don’t, for two reasons:
1. They have no idea that their identity is affecting how much they earn.
2. Even if they do know, they don’t know what they can do to change their identity.
In fact, changing your identity is relatively easy, although it takes some months to do it.
You just use the same technique taught to Olympic athletes to enhance their performance. Mental rehearsal.
That is, every day for at least ten minutes, close your eyes and mentally ‘see’ yourself performing superbly at work.
Earning large amounts of money. Being happy and healthy. Enjoying your ideal lifestyle.
At first it seems implausible that something so simple could affect your performance. But there are literally thousands of scientific studies that show that, over time, it does.
And remember this:
You’re visualising how things will go anyway, all day long. It’s just how the brain works. So you might as well take control of the process and visualise exactly what you want.
With regular daily practice you’ll find you will be more confident, more at ease, more effective.
You’ll also find your economic identity will have changed.
And soon after, your wealth.
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