20 things in 20 years

Since I left school around 20 years ago and in that time I’ve learned some things, that might just be a short cut for you. I’m not going to explain them – just state them. This list is non exhaustive and here they are:

  1. Taking longer to make decisions rarely improves the final result of said decision.
  2. Large companies primarily make decisions to protect income, startup companies primarily make decisions to grow income.
  3. Hard work from an average person invariably has better results than average work from a smart person.
  4. We remember and revere experiences much more than we do things. We should know which one to accumulate.
  5. People who have money problems while on low incomes have them on high incomes as well. It’s the habits that matter.
  6. Spare time is a poor choice to allocate anything important to (read here family, exercise, reading).
  7. Large companies most often reward people on cultural alignment more than actual results of tasks.
  8. Passion projects often take a lifetime to bare fruit. The short term favours sacrifice of belief systems.
  9. Great technocrats always get paid well. Great leaders always get paid more.
  10. Being aligned to your partners values is more important than alignment of interests. True for business and love.
  11. Financial independence is always a function of spending less than your income. Regardless of income size.
  12. Technology is recalcitrant towards the status quo and history. It forges ahead regardless.
  13. Informal and self education is of greater value than the formal version. It should also never end.
  14. Over time, prices for most everything relative to income drop. The only exclusion I know of is land.
  15. The most valuable things in life cannot be bought or sold, they must be earned. Respect, love, health.
  16. Secrets kill the soul.
  17. Ideas should be shared.
  18. Generosity is rewarded in the long run but may be invisible.
  19. We all have valuable skills, and these skills can leveraged in many ways once we stretch our imagination.
  20. The people we spend our days with has a greater impact on happiness than the work we do.

What are some of the philosophical things you’ve learned?

Stay true vs the pivot

I bumped into  friend who recently had a successful exit to a tech start up. One thing that I have really looked onto with envy is his ability to throw the old model out and start a fresh. In fact, he did it more frequently and with more haste than most people I know. if it wasn’t working he moved on to an entirely new idea, or made a quick pivot onto the sticky good parts of the concept.

Turns out this process has worked for him.

I’ve been more of a stay the course kind of guy. This comes from my general long term philosophy on when it comes both investing and how to live life. I’ve recently wondered how much this has held me back in startup land – while acknowledging it has worked very well for me financially.  But what I’m starting to realise now is the difference between pivoting from an idea as opposed to pivoting the process. And that I can remain true to my ethics so long as I don’t confuse the former with the latter.

The course is the process, the pivot is the direction.

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10 ways to significantly increase your income

There are a bunch of ways to increase our incomes. Whether we are business owners, startups or employees the principals are the same. So here’s a list of 10 things we can do (starting tomorrow) to boost the income we receive from whatever we do.

  1. Learn or improve our public speaking skills – Our ability to sell ourselves and anything verbally is still the number skill in business. Anyone who can speak in private, can speak in public – it just takes practice. There are tricks we can learn and if we learn them what we earn will increase dramatically.
  2. Write a blog – If we write a blog on what you do it has a wondrous way of increasing our knowledge bank, our reputation and builds a verifiable asset we can use to sell our credentials. All I can say is that of all the things I’ve done in my life, blogging has created more  economic benefit for me than anything else. You’ll only know how this happens if you have faith and do it.
  3. Keep your body in good shape – I believe it has two important ways it impacts our earning potential. Firstly a fit body has a brain that works better. This is a medical fact. Secondly, people subconsciously judge us on what we look like. If we are in good shape people increase their trust levels of us. Because we look after ourselves, they believe we can look after them and their business. I know this is almost cultural heresy, but I do think it is true.
  4. Groom & dress well – As per the second point above. How we look is an asset. It doesn’t mean we need to wear expensive clothes or look like a movie star, but have pride in our own human existence. Never be afraid to invest money in nice clothing.
  5. Work harder on yourself than you do on your job – People buy us as they asset, both in startup land and employment land. So we must invest in self development more than developing the business. If we do the former, that latter happens automatically.
  6. Leverage the wood chips – Every job has some kind of ‘off cut’ or left over which is part of the process of being productive. This is often a great asset which can be leveraged. Know what your wood chips are, and take them to market. This not only invents revenue, but displays vision. People will notice.
  7. Learn another language – It might be Chinese Mandarin or Javascript. Any language will do. The point is that it increases our mind power and enables us to see and understand things that other people can’t. It is far more impressive to know how to speak another language than it is have a post graduate qualification in the same area. It separates us from the crowd. And differentiation leads to greater income.
  8. Help others grow – Help friends and colleagues achieve their goals. Help them with what you know and inspire them to be all they can. Do it without desire for any repayment. It will inspire you and karma will return the benefits.
  9. Save 30 percent – Keep 30 percent of your income to be invested. Do this before any expenditure occurs at all. Put 10% into active capital (your own entrepreneurial ideas). Put 10% into passive capital (shares, interest bearing deposits, other peoples business ventures) and put 10% back into society – this should be defined by yourself. It takes far less than people think for the compound benefits of such a simple financial strategy to accrue.
  10. Spend 10% on your income on self education – No matter what we earn we must ensure we allocate 10% of this to re-educating ourselves. In a world of rapid change this is not a choice but a must. This is the ingredient to continued self worth and value. It pays for itself many times over. Just ask any millionaire.

By the way this list is ‘non-exhaustive’ – but a set of activities I have learned and used. Maybe you’ve got some additional tactics you can share in the comments.

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Entreprenuerial double dipping

An important fact that emplyees and entrepreneurs ought remember:

You can’t sell your job.

Yes, we can build personal brand equity, but the revenue and value we create belongs to the owner of the organization we work for.

This leads me to an important factor that we must remember when we set out out on our way into startup land. We get the uncommon opportunity to get twice the benefit of everything we create. Let me explain.

Whenever we make a sale – we get to keep the gross margin. Put it in our pockets as profit. If we do this often enough, and well enough we also usually have a residual amount that we can pay ourselves as a wage. (yes, it is the opposite of what most people think, profits come before wages when we are building a business.) But the real kicker is revenue we create becomes a sale-able asset. We can sell our invented revenue stream. What this means is that for every dollar we earn, that is a dollar that we can sell. It’s a kind of entrepreneurial double dipping. And this is exactly the same thing the company anyone works for is doing by employing people.

The reason we can sell this revenue, is that the average sale price of a company is its annual revenue figure. So $1 in in real terms equals $2 generated.

Startup Blog says – get out there and generate.

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Property Investing 101

A startup blog regular – Josh Moore has been asking for as post on Property Investing. Which like anything can be treated like a startup. It’s a big topic with a million books on it. But I have had a side interest in it for some time. So here are some tips on stuff that I think is worth knowing when investing in property. A bit of a 101 guide:

  • Property returns on average about 10%. Which is quite similar to the share market on.
  • Banks will lend much more money for property investments due to lower volatility than shares.
  • You should buy investment properties that you, yourself would like to live in.
  • Land goes up in value. Concrete and air does not increase in value.
  • Period buildings (unique styles, historical) have higher capital growth than the average property.
  • Rental returns are usually below 5% per annum.
  • Property investment can be a quicker path to wealth than shares due to leverage (borrowing money).
  • Getting someone to manage a property costs about 7% of the rent per week. (so you wont have to fix toilets)
  • You should always allow for 6 weeks a year vacancy on rental properties.
  • High capital growth properties & areas, tend to have lower rental yields.
  • High yield properties tend to have low capital growth.
  • Areas going through gentrification usually have greater capital growth.
  • A rental guarantee is a lie – the rent for the guarantee period is usually built into the selling price.
  • Auctions are invented by real estate agents who want it to sell quick to get their money.
  • Homes on busy roads have a higher turnover of renters and reduced yield.
  • Homes near water (river, beach, lake) grow faster and fetch a premium.
  • Tax benefits of property investment in Australia are a significant advantage.
  • You can draw out profits (capital gain)  from a property that has grown in value and not pay tax on it
  • You can buy insurance against tenants in case they damage your house (Landlord Insurance).
  • Investors should choose between yield or capital growth when investing.
  • Capital gains tax on selling is 50% lower if you’ve held the property for over 12 months.
  • Property investing is very dependent on government policy, technological change, and infrastructure.
  • The key to investing is compound growth. Trading removes the power of compounding.
  • Trading properties & developing, is not investing, they are more like running businesses.
  • Trading properties is expensive – acquisition usually costs between 6-9% of market value.
  • Disposing of property usually costs around 3-5% of market value.
  • The property market can go through long periods of sustained stagnation, 10% returns is 100 year+ average.
  • Buying properties off the plan is risky. The saving in stamp duty can be a false friend.
  • Mortgage insurance is for the bank, not the mortgage holder.
  • The word mortgage is French, meaning; An engagement until death.
  • I believe that property is a get rich slow category
  • The biggest land holder on earth is ‘The Catholic Church’

Hope this helps getting you off and running in your property ventures. Good authors on the subject include; Jane Somers and Dolf De Roos.

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The truth about goal setting

I’ve been setting visual and written goals for a few years now. However last year was one of the more limited goal setting years I’ve had in some time. In truth, I achieved less than in previous years.

I’ve also come to the conclusion that some times the goals we set for a year, take a few years to yield, for our brain to work out the subconscious algorithm needed to make them happen. I’ve never had a year when I have achieved all the goals that I have set, but it is also true that I achieve more in the years when I have made more of an effort in creating, reviewing and refining my goals.

On occasions I have made a personal postcard and sent it to myself with my goals as the visuals. I’ve shared one of these below, and while some of it is personal, it’s more important to share the goodness than worry about what people might think. You will notice that some things on it are not specific, and can’t be ticked or crossed, while others are specific. I really believe that very specific goal setting can actually work. I don’t know why, it just does.

Some of the Ticks included:

– Getting rentoid.com to feature on A Current Affair (if you click this link, you’ll see how close the reality was to my mashup up preemptive visual goal – quite extraordinary)

– Traveling with my, now wife, to elope

–  Starting a family (see baby pic – my daughter even looks like this picture I found on-line!)

– Going to New York & Rome

– Getting published articles in the AFR, the Age and Sydney Morning Herald

– Surfing Weekly

– Graduating from being a University Tutor, to becoming a University Lecturer

– Turning my Startup Blog into a Startup School

– Helping my father sell his farm

– Getting rentoid in the news multiple times (Just google rentoid)

– Travel overseas in Business Class

– Collaborate with rental Industry to become leading portal

Some of the Crosses included:

– Flying in a private jet somewhere

– Having 10 million+ in net assets

– Upgrading my home (Including pool & eco friendly house features, and grand design renovation)

– Running a marathon

– Opening a new office for rentoid

– Getting on the cover of a business related magazine

– Becoming known as a respected business thought leader.

Some of these goals that I am yet to achieve, but am still seeking, in fact some I am very close to…. if they eventuate I will let you know. For 2012 I want my goals to be more specific and I intend on sharing them here to be honest in public and make myself more accountable.

The one thing I know for sure, is that we don’t achieve any of the goals we don’t set.

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