Tag: Kindness

Calm Is Contagious

Former Navy SEAL commander Rorke Denver described the best lesson he had learned from a master chief in the Navy – that when you’re a leader, at a minimum everyone is going to mimic you. So simply: “Calm is contagious.”

Staying calm even everyone around you is losing their composure and running around like headless chickens, means that you can stay detached enough from the situation that you can still think clearly and objectively.

But, as a byproduct it keeps everyone else a little calmer too. Nelson Mandela was once on a flight where he noticed that one of the plane’s propellers had stopped working. He notified a friend on the plane, who then relayed the message to the pilot. The pilot already knew about it and had already called the airport to make an emergency landing. And while the friend feared for his life, Mandela was just seen reading his newspaper, just like he had been before he noticed the engine fault. When the plane made the emergency landing and Mandela was on the tarmac, he leaned over to his friend, “Man, I was scared up there.” Mandela was just as frightened as his friend, but he showed the courage to stay calm. If he had displayed his fear and panic, he would have likely made everyone around him panic even more.

In life there will be times when you are a role model to others – whether to a younger sibling, friend, new hires at work, to your child, to your community. And so, it’s not only calm that is contagious. Compassion is contagious. Kindness is contagious. Joy is contagious. On the other hand, anger is contagious. Envy is contagious. Deception is contagious. However you act, there will be someone out there that will use that as a template for their own life. So act accordingly.

Ubuntu: Why There is No Such Thing As Self-Made

Ubuntu is an African philosophy made famous by leaders such as Nelson Mandela and Archbishop Desmond Tutu. The word literally means humanity, and is often translated into “I am because we are”, or “humanity towards others”. There’s also a popular maxim in Ubuntu: “A person is a person through other people”.

The philosophy teaches the interconnectedness of humanity, and that it is for your benefit to help others. It’s a philosophy that fosters community, compassion and kindness.

In the Western world, we are keen to describe ourselves as self-made, or use the term to describe someone positively. But in reality there is no such thing. In the modern world, we can easily lose a sense of the fact that we are being helped all the time. If we go to the store, we are using money that somebody gave us, to buy food someone grew, made and packaged, using a car that somebody manufactured and taught us to drive, on roads somebody else built, stopping at traffic lights that somebody invented.

The growth of the population and the globalization of the culture makes it much more difficult to remember these things that we can be grateful for, based on other people’s actions. As Warren Buffett said, “Someone is sitting in the shade today because someone planted a tree a long time ago.”

Ubuntu simply describes that we can’t speak without learning it from others, walk without learning it from others, or even think without learning to think from another human being. We learn how to be a human being through other human beings. Archbishop Desmond Tutu said in The Book of Joy: “After all, none of us came into the world on our own. We needed two people to bring us into the world.”

And that’s why there’s no such thing as self-made. I am because we are. Ubuntu.

The Psychology of Money: Morgan Housel’s Finance Tips

Morgan Housel recently wrote The Psychology of Money: Timeless Lessons on Wealth, Greed, and Happiness. No matter how we think about it, managing our own money and trying to build wealth is a game of emotions. Here’s a summary of the main points:

Go out of your way to find humility when things are going right, and forgiveness/compassion when they go wrong. The journey of building wealth is based on risk and luck. Remind yourself that the journey of investing is filled with ups and downs and to be ready for that emotionally.

Less ego, more wealth. Building wealth is simply spending less than you earn. Richness is buying cars, houses and boats. Wealth is what you don’t see – it’s money saved/invested instead of spent. The hardest financial skill is to get the goalposts to stop moving – life isn’t any fun without any sense of “enough”.

Manage your money in a way that helps you sleep at night. If you’re finding that you can’t sleep at night because you’re risking too much investing, you need to rethink your strategy. You may know it’s the “right” strategy, but if you can’t manage it emotionally, you may need to accept a lower risk and lower return by holding a higher percentage of your net worth in cash, or choosing lower risk strategies.

If you want to do better as an investor, the single most powerful thing you can do is increase your time horizon. Time is the most powerful force for growing your wealth. Be patient, and be in it for the long game like Ronald Read and Warren Buffett. In other words, just shut up and wait!

Become okay with a lot of things going wrong. You can be wrong half the time and still make a fortune. Having money in the market means you have to accept that on some days you may lose money, even as much as 30% or more of what you have invested. But if you can use the barbell strategy and invest in some assets with huge upside potential, you can still afford to be wrong most of the time while building wealth.

Use money to gain control over your time. Money means freedom. Being able to do what you want, when you want, with who you want is one thing that having money can bring.

Be nicer and less flashy. You may think people will like and respect you more based on your possessions, but in reality being more compassionate and kind works better. Make sure that when you’re buying possessions it’s for the right reasons – spending money to show people how much money you have is the fastest way to have less money.

Save. Just save. You don’t need a specific reason to save. Saving for something like a car or a down-payment for a house is good, but save as a default strategy too. Who knows what expenses can crop up as a surprise, wouldn’t it make more sense to be financially ready when they crop up?

Define the cost of success and be ready to pay it. The cost of success in investing is the uncertainty, the doubt, and the fear of losing some of your money. But if you want to play the game you need to see those things as a fee for participating. If you’re not willing to pay it, you may be better off just holding everything in cash and settling for a 0% return.

Worship room for error. You never want to be in a position where you could lose all your money, or losses in the market affecting the lifestyle that you live. If you lose a little you can still recover. If you lose it all, you have no money left, and you’ve been ejected from the game with no bankroll to buy back in. Avoid ruin at all costs.

Avoid the extreme ends of financial decisions. The more extreme your financial decisions, the more likely you may regret them if your goals and desires change at a later date. Good investing is less about making good decisions than it is about consistently not screwing up. You can afford not to be the best investor in the world, but you can’t afford to be a bad one.

You should like risk because it pays off over time. But you should be afraid of too much risk that would ruin your chances of winning the overall game.

Define the game you’re playing. Remember that everyone has their own unique financial goals based on the lifestyle and life goals they have. You don’t even necessarily have to compare yourself to overall market returns either. Just choose a strategy that you’d be happy with, without looking at other people and what they’re doing.

Respect the mess. There’s no single right answer in building wealth. Just find out what works for you.

Want to read more on investing? Read about Benjamin Graham’s value investing philosophy.