The Power of Attraction

I’ve written about the power of attraction before, but an experience I had on Thursday and Friday just reminded me of exactly how powerful this principle is:

On Thursday, I attended and spoke at a marketing conference (Cherryflava Brand Hooligans – www.cherryflava.com). I was there in my capacity as the owner of Chariot Limousines, and had one of my vehicles there to shuttle a few lucky delegates between some of the venues. After the day’s speakers were done, we had a networking function at the Daddy Cool bar at the Grand Daddy Hotel. There, I got talking to the owner of the hotel and his business partner, and the conversation worked its way towards how we could use my limo’s to do airport transfers for his hotel/s. The two brands would work well together, and hopefully something will come of our conversation, but the real power came through the next day…

The four months between February and May are generally the quietest months of the year for my limo business. Understandably, this year has been exceptionally quiet, as our service is seen as a luxury, and would be one of the first things to be cut out of people’s budgets when they fall upon hard financial times. The business has still been ticking over, but I’ll admit that, of late, I have put nowhere near the amount of time and energy into it as I should have. I’ve been quite content to focus my time on my new ‘day job’ as a financial manager, and have put in the minimum of effort for my own businesses. For the conference on Thursday, though, I made the effort to take one of my cars out for pretty much the whole day, without being paid a cent, and made a point of talking about my business to as many people as I could.

On Friday, my phone didn’t stop ringing! At this time of year, I would probably take 2-3 calls a day for limousine enquiries, but on Friday I took well over a dozen. Even better than that, of the calls I took, four turned into confirmed bookings by the end of the day – confirmed, paid, the lot! All in all, it was an exceptionally good day for the business…

This just served as a reminder of how powerfully the principle of focus and attraction operates. What you focus on expands; and what you pour positive energy into attracts a positive response. I had been ignoring the inherent potential of my business, hadn’t been focusing on it, and had let it stagnate to a degree. Soaking up the atmosphere at the conference, I got a jolt of inspiration to talk about and focus on my business, and it paid off handsomely! It was a lesson to me (and hopefully now to you) that, no matter how down and out you may feel about something, never accept the negativity. Re-focus your time, energy and spirit, draw the original reasons for wanting to do whatever it is up out of the recesses of your mind, and get inspired. Get off your ass, get out there, just do something, and you’ll start to see results!

Finance Coach - Vol. 18

Finance tip: Spending

Treat yourself. In these times of hearing “Save, save, save!” at every turn, the suggestion of indulging may seem to be out of touch with reality. It’s been proven, though, that people will stick more readily with regimens or budgets if they ‘break the rules’ every now and then. For example, diets are more effective when the dieter knows that they can ‘cheat’ every so often with a chocolate bar or a piece of cake, as the dieter does not feel restricted to the point of depression and ultimately giving up. This reward principle can also be used in your financial life. Set yourself milestones on the road to your financial goals, and reward yourself with something small when you reach them. You could, for example, treat yourself to a night of take-aways if you’ve brought your food expenditure down by 20%; or have your hair done as a reward for paying off a credit card; or get that gadget or pair of shoes you’ve wanted once you have a certain amount in a savings account. The possibilities are endless, but having a reward system will definitely make you feel more balanced about following a responsible financial plan, and the positive reinforcement will pay dividends many times over…

Business tip: Staff

Rotate and cross-train. If you have employees that work specifically in one department (as is generally the case), consider doing some on-the-job rotation of staff between different departments and functions. You could have your accountant work with the production team for a week, get your designers out on the sales floor, or have an HR staffer assist with compiling management reports. Not only does this allow other staff to take up some slack and ensure continuity in the event of an employee’ sudden illness or resignation, but it also helps employees to get a better picture of the business as a whole. This leads to better inter-department communication, increased morale, and can also produce some innovative suggestions for improvement in areas previously un-thought of…

Finance Coach - Vol. 17

Finance tip: Mindset Assets vs liabilities.

Many people think about this concept quite straightforwardly - their possessions are their assets, and what they owe others are liabilities. I think about them quite differently. For me, an asset is something that makes you money, while a liability is something that loses or costs you money. Now, this flies in the face of some ‘conventional’ wisdom, as others will say that your car is clearly an asset, for example. The way I look at it, if you use your car to make money, then it’s an asset, but if all you use it for is transport, and you fork out dearly every month for that, then it’s actually a liability. But you need your car to get to work, you say, and you earn money there! Yes, but do you need a fancy, fully-kitted out sports car to get from home to work? No, you don’t. An entry-level, reliable one will be just fine. On the subject of liabilities, I do carry some debt. But all of it is ‘good’ debt, as I have used the money I have borrowed to start businesses that make me more money than the debt costs me. Thus, for me, those debts could even be seen as assets! Now, I’m not telling you to go and sell everything you own, but just keep this thought process in mind next time you’re looking at a big purchase…

Business tip: Management

Follow the 80/20 principle. Also know as the Pareto principle, this law states that 20% of all the things you do produce 80% of the total results, and vice versa. The trick, as an effective manager or businessperson, is to identify the 20% that produces the most results, and focus on those areas. This could be the 20% of customers that bring in 80% of your business, or the 20% of your marketing-spend that brings in 80% of your qualified leads – whatever it is, identify it and refocus some of your time spent on the other 80% of things you do, to capitalise on the areas identified. You don’t necessarily have to drop the ineffective 80% completely (and you often can’t), but look at perhaps delegating that work to someone else who has the capacity or initiative to make the most out of it. Being the best manager you can, or building your business to it’s full potential, depends on it…

Finance Coach - Vol. 16

Finance tip: Electricity

Save energy when cooking. One of the first ways to reduce your electricity usage, and thus your energy bill, is to plan one day in advance what you want to make for dinner. Make your decision, take the food out of the freezer, and put it in the fridge – it will defrost there, and take less time and energy to cook the next day. Another energy-saver is to use your microwave for defrosting – a microwave only uses about half as much energy as a conventional stove. With stoves, resist the urge to open the door and peek – every time you do this, about 20% of the heat inside is lost. Another handy trick is to make sure to keep your stove-top clean – if it isn’t, dirt on the surface will absorb heat instead of reflecting it back to the cookware, resulting in you needing more time (and energy) to make sure your food is prepared the way you want it.

Business tip: Communication

Be positive in public, and negative in private. When one of your staff or colleagues has done something good – such as completed a project successfully, or brought in a new client – make sure to congratulate and laud them in front of others. This positively reinforces the good behaviour, and acts as a signal to others who see it that good work is recognized and rewarded. On the other hand, when one of them has failed or underperformed on a task, resist the urge to come down on them in public. Rather take them to one side and have a quiet word with them – ask them for their side of it, and find a lesson in the failure. They will respect you for handling it this way; and cutting them down to size in public can instill a sense of fear of failure amongst others, which can stunt creativity and innovation within your business.

How I'm growing my net worth...

With many people having asked me about my saving and investing habits recently, I thought I’d share the processes and habits I follow to grow my net worth as quickly as possible. Some of them are generally held investment approaches, some are common sense, and some are unique, but here goes:

• I always pay myself first. I get paid by my employer on the 25^th of the month, and pay myself (from my two businesses) on the 27^th-28^th. On the first day of the following month, I do my monthly allocations (explained in the points below) to my saving/investment accounts. This way, before any bills are paid, I ensure that I have tucked away money for my future. My future prosperity is more important than paying small bills (and besides, I know that I can always make more money to cover the bills somehow, so they never go unpaid).

• My first monthly allocation is as follows (as adapted from T. Harv Eker’s book “Secrets of the Millionaire Mind”): I take 10% of everything that came in the previous month, and put it into a ‘retirement account’. I treat the money in this account as no longer mine – it is to be accessed when I retire, and not a day before. This I use to buy retirement products (annuities, pensions, etc.), or invest in various unit trusts.

• My second allocation is my ‘small business’ allocation. I take 5% of what came in the previous month, and put it into an account which is dedicated to lending to, and investing in, other peoples’ small businesses. I remember how hard it was (and is) for me to find funding whenever I have wanted to launch another business, so this is my way of giving back to the small business community which is very much responsible for my success so far. I generally lend this money at a decent interest rate (to give me a good return on the money), but I don’t request as much security as the banks do. I invest in the entrepreneur, but am quite prepared to lose the money that I allocate this way.

• For my ‘retirement’ allocation, I adjust the percentage tucked away upwards by 10% every 6 months. Thus, when I started, I was putting away 10%. 6 months later, I increased the allocation to 11%; and then another 6 months later, to 12.1%. This method was adapted from Dr. Demartini’s book “How to Make One Hell of a Profit and Still Get to Heaven”, and is based on the premise that the human mind can take a 10% change in anything without any mental disruption.

• Once I’ve made these allocations, my money is free to be spent in any way I see fit. I could pay bills, spend it on entertainment, save it for a holiday, whatever. Generally, I keep my living costs very low, to ensure that most of my income is freed up to use differently from month to month (as I’m guaranteed to come up with some new thing or idea to spend it on!).

• I drive a 21-year old car, which is fully paid off. This doesn’t mean I’m a miser driving around in a heap of junk, either. It’s a 1988 BMW 325i. I’ve had it for 8 years, and it runs as well as the day it came off the production line. It still goes like clappers when I need it to, and fulfils my need for speed without any problem! I maintain it meticulously, and it looks after me just as well. I don’t see why I need to have the worry of a bank repayment hanging over my head every month, paying for a car that looks as good and goes just as well as the one I already have. Yes, I will ultimately buy a fancy-ass sports car one day, but I have other aims and dreams to fulfil first (like being a millionaire by my 27^th birthday).

• I still live at home with my parents, which obviously saves me a small fortune. Now I know that this option is not always viable for everyone, but there are always ways to bring your accommodation costs down (share with others, move in with a family member for the short-term, downsize where you live, etc.). Personally, I have made the choice to take the funny looks from people (“You’re 25 and you still live with your parents?!?”) in my stride, because I know it’s accelerating my advance on financial freedom exponentially.

• My other living expenses are minimal. Entertainment-wise, I obviously still go out and have a good time with friends and colleagues often (I am still a young man, after all), but I just don’t go completely mad and splurge every time. I’ll have people around at my place, or alternate nights on the town with house-parties. I have a great social network, so it’s definitely not like I’m sacrificing my youth for financial gain!

• I reward myself for my hard work and financial discipline. Eker’s book suggests that you put away 10% of your income to a ‘play’ account. This is meant to be spent every month on things that makes you feel wealthy and happy, and is a balance against the 10% put away for retirement. I don’t quite follow this principle to the T, but I do indulge myself every now and again. Whether it’s a meal at a really fancy restaurant with my girlfriend, or a new gadget for myself, I don’t feel any regrets about spending money on myself. I put in the hard work to make that money, so I owe it to myself to enjoy it.

• Another way I reward myself is taking time off often. It might change slightly now that I’m working for someone else too, but generally I would go away on holiday 4-5 times a year. Even if it’s only a 4-day long weekend an hour down the coast, it allows me to recharge my batteries, re-connect with myself, and stoke my fires of inspiration.

• Every time I walk past money on the ground, I pick it up. Every time. This is my way of saying to the universe that I appreciate it presenting me with a money opportunity, and always look forward to it bringing me more. You might think this is silly, but I come across business opportunities (and have them brought to me) nearly every day, so I must be doing something right!

• With the money that I have left, after doing my allocations and paying for monthly expenses, I have plenty of options. Generally, if I don’t have a specific purpose for it, I will invest it in growing one of my businesses, or put it away into alternative investments. Currently, I am saving up for an extension to my limousine fleet, so I put away some for that when I have it. I have also set myself the target of having a million bucks in a liquid investment by the time I’m 30 years old. For now, my chosen vehicle to get there is investing in unit trusts. If, a few months or years from now, that goal changes, that’s fine. Whatever I have in that account or vehicle will have been a good investment up until that point, because I know that I saved the money, and didn’t squander it on useless junk. I will then be able to use it to start another business, or invest somewhere else – only the future will tell!

Over time, I’ll probably remember something else useful, or come across an interesting wealth-building strategy – I’ll be sure to share it with you…

TravelBlog 1: Singapore – Information

Having recently been to three different countries in Asia on holiday - Singapore, Hong Kong (China) and Bali (Indonesia) - I’d like to relate my experiences to you, the reader. For each of the three destinations, there will initially be an ‘info’ blog post, with mainly short, point form notes about the area. This will then be followed by a post with insights, where I will try and relay a slightly more in-depth view of the place. Having been most impressed by Singapore, I thought I would logically start there…

• The first thing that hits you when you walk out of the airport is the heat and humidity. We were there during April, and every day was around 30 degrees Celsius (86 degrees Fahrenheit), with roughly 80% humidity. Being very near the Equator, that does not change much throughout the year.

• Outside of the built-up areas, it is extremely green and lush. It rains almost every day, although this is generally in the form of a brief shower in the afternoon.

• While there is one main island, Singapore actually consists of 66 smaller islands as well.

• While the total land area is only 4700km2, the population is estimated at 4.8m.

• There are 4 main race groups, being Chinese, Malay, Indian, and Eurasian.

• The four main languages are Mandarin, English, Malay, and Tamil. English is widely spoken, though.

• Buddhism is by far the dominant religion, with approximately 78% of the population following it. The remainder is split between Christianity, Islam and Hinduism.

• Historically, they have had a 100% employment rate, although that has now dropped to 95% with the global financial crisis.

• There are no homeless people anywhere – if a person falls on hard times, their living will be subsidized until they get back on their feet, or they will be put in a home or shelter, and assisted in finding employment.

• The crime rate is very low. There are harsh fines for many smaller crimes (such as littering, spitting, importing chewing gum, smoking in a no-smoking area, etc.) and the death penalty is applied to those convicted of drug trafficking, murder, kidnapping and hijacking.

• They are currently experiencing a negative birth rate, and are incentivising young people to have children with monetary grants.

• Because of the lack of space, residential density is extremely high, with 98% of the population living in high-rises.

• As property is so expensive, 85% of the population lives in government-subsidised housing.

• The average price for a simple, 5-roomed apartment is roughly US$1.5m. A penthouse would set you back in the region of US$3m.

• Their income tax rates range from 2% to a maximum of 20% (very low relative to our tax rates in SA of 18-40%).

• Sales tax (GST or VAT) is 7%.

• There is a compulsory government social security savings scheme, with a contribution of 20% of your monthly salary. This is matched by a further 14% from your employer.

• As crowded as it is, the government is still keen to attract foreigners to live there if they are skilled at a specific occupation, or have a minimum of US$1m to invest.

Finance Coach - Vol. 15

Here’s your Monday serving…

Finance tip: Investing

Asset classes. You might hear people talking about different ‘asset classes’, and how their investments are ‘diversified’. An asset class is a grouping of assets (or investment types) that have similar characteristics. The general classes would be deemed as: cash, bonds, property, and equities (also known as shares or stocks). One major difference between asset classes is the amount of risk associated with that particular class, with some being seen as more risky than others. For example, equities are seen as more risky than cash – this is because the return you get on cash is generally guaranteed within a certain range, whereas there is no guarantee with equities, and it’s quite possible that you could lose money. Matched against this risk is the possible return from that asset/investment. More risk = chance of more return. Using equities vs cash again, there is a chance of a much higher return on equities, whereas you would never really get more than a few percent on cash. From the least risky to the most risky, the classes would be in the order of cash, bonds, property and then equities. Being diversified means that you are invested in more than one asset class, which one would generally do to minimize risk (as negative returns in one area could be balanced by positive returns in another).

Business tip: Marketing

Make a scene. If you are looking at launching or advertising a product or service, and want to make a bit of a splash in public, consider making it look like it’s being filmed for TV. Find an area which has high foot traffic (a busy area of a mall, or on a busy sidewalk or park walkway, for example), and set up some lights and a camera or two (they don’t have to be recording, but have them manned). People will always be intrigued by such a set-up, and will be drawn to come closer and see what all the commotion is about. You can then have a stand or small stage set up, where you are showing your goods or talking about your services. Having a small crowd already gathered will also bring more people in, as they may be too shy to be the first ones there, so consider a ‘rent-a-crowd’ (complete with instructions to applaud and make a noise every so often), or rope your family and friends in to fill some space. Pick a time and day when people are more likely to be receptive to your particular offering, and you’re away!