Start with Conversation

Financial Planning starts with a conversation about you and your relationship with money. The goal being to help you understand your risk tolerance and what matters to you. If you want to still the waves of money anxiety, you are building your capacity to deal with complexity, randomness, and ambiguity. 

We do not, and cannot, have a complete understanding of cause and effect. We cannot know in advance what the result will be for each path we pick. If we did, we would all just pick the one that took us to our intended destination. The rules are always changing. You cannot just do exactly what has been done in the past and expect the same result. 

A good conversation about financial planning starts with understanding you as a person, how you see money, what your goals are, and what you value. You do not get paid for taking risk. You get paid for adding value in monetizable areas others have signaled is in short supply. 

Risk tolerance is mainly your ability to adapt, adjust, and accommodate. Like physical strength and flexibility, risk tolerance is something you can build through exercise. 

Then you make money, or your money makes money, by solving problems for decision-makers with money.

Wary of Force

A lot of people work best under pressure. When they have to. When they are in a corner. I am the opposite. I don’t like myself in a corner under time pressure when I become very task orientated. When the goal is victory at all costs. There are two cornerstone biblical stories I don’t identify with at all. The first is the binding and sacrifice of Isaac by Abraham because “God wills it”. The ultimate loss of perspective and parking of a moral compass. When obedience trumps consequences. Pure play child abuse. The second is the story of Job. Where God and Satan have a bet of whether Satan can turn Job against God by making his life awful. The ultimate abuse of the gift of unconditional love. I avoid corners. I would rather internalise the discipline required and chip away every day than be forced into situations without time and space. The day before an exam, I want to be off to the movies to clear my head. If a client suddenly changes their requirements the evening before a meeting, I would rather be fresh than pull an all-nighter. Presence requires time and space. Be wary of forced actions and decisions.

"The Sacrifice of Isaac" Caravaggio

A Path with Space

One path to superficial financial freedom is a bigger salary. That can open the door to borrowings because most loans are a multiple of income. Spend first, pay later. A deeper level of financial freedom comes at it from a different angle. Goals and spending. Pay attention to what you find fulfilling. Pay attention to the sources of joy and meaning available. Our lives are path dependent. Lots of our decisions are made for us by default. If we don’t choose consciously, life chooses for us. Normally we cast our eyes on those earning more. This means we miss all there is to learn from those earning, and spending, less. Price is just a clearing device. How much is there? Who wants it? Meaning a high price is a better indication of scarcity than value. If you can improve the skill of finding value in things that are abundant, you are on the path to financial freedom. If you can get a gap between your earning and spending, you can start to build capital. A deeper path to financial freedom is creating space to breathe. One step, inhale, another step, exhale, and repeat.

Find a Path

Success

As the world becomes connected, our stories become more detached from our daily realities. When you in a small pond, pretty average people get to lap up the glory of being the biggest fish. Then that protection falls away. As Global and Local mix, the benchmark for being the "news maker" gets higher. The "good life" pushes to the edges. Unless we let go of comparison. If we celebrate good enough. If we celebrate mediocrity. If we celebrate the things that are on the menu. There is nothing wrong with being gloriously average. Spectacularly unspectacular. Unless the stories we consume make us think our lives aren't good enough. We can raise the profile of simple. Of affordable. Of plentiful. Of thinking inside the box. Rare and unique raise the price of things... not the value. Price is just a clearing mechanism. A measure of how much there is of something. That is a very bad measure of value. Success needn't be about setting yourself apart.

Big Fish

Peddling Discontent

Our imaginations are both our most powerful tool, and our greatest enemy. We can imagine change. Very specific change. We aren't capable of the level of complexity required to imagine what that would actually be like, and how we would actually get there. We struggle enough with understanding now. Our bluntest motivational tool is imagining where we want to be, that isn't here. What we want to have, that isn't here. I believe it starts here. Massively reducing our ambitions. Accepting where we are, then taking really small achievable steps, every day. Park the rage. Park the spinning ambition. Use your senses to really understand your small corner of the world, and be connected to those around you. Breathe. Ask. Listen. Give. Celebrate the average. Celebrate the things you have. Chip away at the obvious obstacles. No one else understands what is going on either. We are all trying to make sense and meaning of it all.

Use the Tools you have

Work on the problems you can solve

Two Ways

Three important concepts when thinking about living a fulfilling life are Commitment, Openness, and Results. There are two ways of looking at each of these ideas that can seem, or be, in opposition.

Commitment can mean showing up with a level of intensity. Being fully present, and willing to bring everything you can offer, every time. It can mean a level of quality. 

Instead of showing up "this time", it can also mean showing up "every time". Less intense, more long term. "There is nothing to writing. All you do is sit down at the typewriter and bleed." Ernest Hemingway. Hemingway didn't wait for inspiration. He didn't wait for quality. He built habits that created the environment in which quality is born. He did the work.

Openness can mean a willingness to try everything. It can mean letting go of reservations and leaning into experiences and ideas. A level of flexibility.

Instead of always being prepared to change paths, it can also mean listening while staying on a chosen path. The grass is always greener, and real growth takes time, patience, and building. You can recognise the challenges on your path, and work on them. Every path has challenges. Starting again has costs. Openness doesn't require action as proof.

Results are the way we count and identify growth. Growth is our scorecard. We need to identify a place we were, a place we are, and a place we are going to. Something with words and numbers we can articulate to paint a picture of change. Results are the cornerstone of plans and goals.

Not everything that counts can be counted. Some work is internal. Alexander the Great was a brilliant strategist, and military genius. A man of results. As his Empire expanded East towards India, he came across famous meditating Yogis. Alexander's fame was for conquering the world. The Yogi's success was "conquering the desire to conquer the world". My friend Francois calls this the "Paradise Principle" - where even the staunchest non-believers live a postponed life for some imagined future. Tolerating the present for a future pay-off when our lives will commence. Not all results are about change. Some are about acceptance and awareness.

Commitment, Openness, and Results take different forms. Choose those forms consciously.

Are you Empire building?

Tweak the Loop

Wake up. Do what you do. Go to Sleep. Wake up. Do what you do. Go to Sleep. Life is a little loopy. I work on my Daily Practice. What is my loop? What are the things I do every day? Micro-ambition is the idea that an ounce of practice beats a ton of theory. Theory lives in our heads. Dreams, Visions, and Ideologies bear more resemblance to our perception than anything concrete. Practice deals with the world as it is. We have a degree of control over our actions in the time between when we wake up, and close our eyes. Then all bets are off. Our actions today, connect our actions yesterday, to our actions tomorrow. Those add up. They compound. They build. Take control of your Loop. Tweak and repeat.

Asking Clearly

Tim Ferriss makes the point that people shouldn't really aim to 'work for themselves' if the dynamics are the same. When stuff needs doing (by you) it shouldn't really matter who is telling you to do it. He talks about getting better at delegating. To do that, you need to get better at asking. Asking clearly and specifically. That is hard. Most of the time, I am lost in the grass. If you want a tin of jam, it is easy to say, 'Will you fetch a tin of Jam for me?'. A lot of the time our problems are much more hand-wavy than that. We think in big, ambitious, abstract terms. Another Tim, Minchin, talks of being micro-ambitious. Coming up with small, specific, very achievable goals. Mini-successes that aren't far from where we are now. Tweaks. In reality, the only way to get anywhere is step by step. In reality, we will only be able to deal with step two, once we have completed step one.

Compare to Yesterday

When we are constantly building, there can be a debilitating feeling of spinning the wheels. Bill Gates said, 'Most people overestimate what they can do in one year and underestimate what they can do in ten years.' I am a big fan of Tim Minchin's idea of being 'micro-ambitious'. Little goals add up. Slowly, until you look back and see how far you have come. Big goals just freak us out, because frankly, we are not in control of the path, and deep down we know that. We are good at fitting stories to the past. At coping. We have a fair amount of ability to control the next step. We can remember our last step fairly well, without too much retelling the story to make ourselves feel better. So if you compare, compare to yesterday. Do something that matters today. And repeat.

Tim knows

Pointless

Map of Alexander's Empire and his route

There is a story of Alexander the Great coming across a Yogi on the banks of the River Indus, sitting quietly. Alexander asked what the Yogi was doing, and he replied, "Experiencing doing nothing". The Yogi asked Alexander what he was doing, and he replied, "Conquering the world". Both men smiled at what the other was doing, and thought "Pointless, what a wasted life". 'Wu Wei' is a concept in Taoism that could be seen to combine the two. It means 'action through inaction'. When action comes through an effortless engagement, without any attempt to force or control.

Meditating Yogi

Seeing Your Potential (Sediqa)

We all have those friends on the periphery of our circles. Friends of friends who come up so often, we have no idea why we aren't friends, or haven't had much contact. Fictitiously, let's call them the Beremy Jortz of the world. One of my Beremies has been Sediqa. Fortunately, my friend Stu persisted (for 5 years) in trying to convince me that Twitter wasn't just an sms to the world. I have made some great friends through Twitter, and some of this involves 'following friends of friends'. That would be weird in the real world. I imagine all sorts of Black Scorpions and Jumping Jortz getting very intermingled. Clearly we are better off in a world where we maintain our private spaces. Interesting people tend to hang out with interesting people. 6 degrees later and everyone is interesting. Sediqa doesn't use her real name on Twitter, so I won't provide a link unless she does... We wouldn't want you meeting or anything. If you did, you'd be lucky. She's awesome, and I am jealous of Stu for having her as a real life friend.

I clearly have nothing in common with Beremy... except friends

Seeing Your Potential
by Sediqa Khatieb

A few weeks ago Trevor asked me to write a blog post on "Happiness". This is what I've come up with. 

I've spent the last 9 months hustling.

Hustling, a word I use to describe doggedly chasing down my dreams and aspirations. To continue undeterred, even when you've been rejected a dozen time. To overcome self-doubt and relentlessly pursue your idea of happiness.

I am hell-bent on making 2015 the best year ever. To do this, to ensure that 2015 would be the most memorable year of my life, I had to set BIG, SCARY goals. Most of these goals involved running.

I fell in love with running in my late twenties. It wasn't an instantaneous love affair. I did not tie my shoelaces, pound the streets for 5 measly minutes and think, "This is great! This is how I'd love to spend EVERY weekend. I'd love to leave parties early just to ensure that I have a good night's rest before a race. I'd love to spend hours on the net, researching how best to fuel my body." Running was tough in the beginning. It still is.

But I persevered. And I developed a deep appreciation and respect for my body. I marvelled at how strong I've become. Hills that first represented a major obstacle were now scaled with ease. And I watched as the minutes on the stopwatch changed. I was crossing the finish line in less time. There was solid, visceral evidence that I was getting faster, better. All the hard work, all the sacrifices, all those early morning runs were paying off. And I couldn't help by wonder, "What else am I capable of?"

So I set myself some big, scary running goals. And I chased after them. Doggedly. And every time I achieve a goal I say, "I think you can do better. I think you're capable of more." And it's nice. It's nice to see your potential.

Sid... seeing something

Today a Good Day

I like the idea of small, achievable goals that add up. Tim Minchin calls it being micro-ambitious. As soon as goals become very large, just taking the first step becomes very difficult. I also like the idea that the process is even more important than the goal. If we get incredibly good at looking towards some future point, our gaze is still on 'what next' when we are in the moment we have so looked forward to. In less than a years time, if my application is successful, I will be attempting the Unogwaja Challenge. Until earlier this month, I got to frame this as 'the year after next'. Safely enough in the future that the enormity of the task of cycling c. 170km a day for 10 days, and then running the Comrades Marathon is tomorrow's problem. But tick tock. Time waits for no one, no matter how hairy. It is now 'next year' I am aiming for.

A marathon is a long way. Even a half marathon intimidates me. The Comrades is more than twice that. Then there is the cycle bit before you get to the start line. That is the big goal. The goal that makes me sweat a little and people who care about me think I am nuts. I tell them, although not for charity, it is for a good cause. I am not trying to be a hero. I will not destroy myself. Apparently we only think running is bad for us because we spend most of our time on our bums, then try run. This confuses the body. We were in fact, born to run. Then I remember the figure of 170km a day. Ten days. Comrades Marathon. How to start?

So for the next bit, I am not going to think about the goal too much. I am just going to try and enjoy each day as I kuier with London. I am just going to include some walking in the kuiering. I have started 'Urban Hiking' and would like to try walk the length of a marathon in one sitting during the next week or two. I have done 10 miles a few times (one as a very slow run, breaking my distance record). I was staying in Norwood Junction and walked to Brixton and back. On another day I walked to Hoxton Square. On the way I get to see London just doing its thing. I have even, believe it or not, being getting quite a tan. I have also been zooming through Audio books.

A Running Track in Regent's Park I didn't know about

The idea of the Urban Hiking approach started when I went for a run without my phone. I was in an area I didn't know, and decided to trust my nose. I got a little lost and the run eventually became a walk as I tried to figure out my way back. Almost 4 hours later my hosts opened the door to a very tired, but inspired, newborn urban hiker. You can't really get lost in London. There are tube and bus stops all over the place. A cab could easily take you home. You could just run or walk map free until your body starts complaining.

Fancy joining the Circus?

Today's walk has lead me to Crouch End and 'Fifty Five' - a little coffee shop with savoury pancakes. They have free wifi. All these things make me happy. Yes, I am easy to please. My micro-ambitious goal was for today to be a good day. So far, so good.

Chill Out and Work Hard (Jonathan Winter)

I caught up with an old friend and colleague in Jordan Springs on the weekend. Geoff had left Aus as teenager and has recently returned. He took me past the school he went to as a lighty. He says there were 72 of them in the school. His class was mixed with each row a different grade and the teacher teaching them all at the same time. I love the idea of that. When I was at school, a lot of the learning came through asking peers for help. Often the best teachers are those who know only a little bit more than you. They remember what it was like not to know! Living in residence at university gave me the chance to mix with some of the guys who had been at school with me, but a few years behind. Jonathan was one of those guys. I would have loved to be in a mixed classes with some the guys above and behind me like him. Good thing learning doesn't have to stop when school stops... a guest post from Jonathan Winter is coming.

Chill Out and Work Hard

by Jonathan Winter

Long term goals have not worked for me. Does that make me a failure? I’m not asking this question of you, dear reader. I’ve at least accrued enough wisdom to know that what you think of me matters less than what I think of me. So, do I think I am a failure? I live a comfortable lifestyle in a first-world country. I have sought-after university education, a supportive, loving network of family and friends, and a decent job that pays the bills. Yet, in the past, I have sometimes pontificated over the aforementioned question. Am I a failure because I haven’t lived up to expectations? The expectation that I will achieve the long term goals that someone of my ‘ability’ should be able to reach.

Stuff that!

I don’t think this is a unique trap that has befallen me. I, and many of my brethren in this vast, interconnected, globalised (western) world, have been taught to dream big. And when those dreams fall through, you and I are going to feel a bit shit about it, aren’t we? So I’ve decided that the real question I should be asking myself is: “What motivates me?” The answer is goals; short term goals.

I’ll let Australian comedian and musician, Tim Minchin, elaborate.

I advocate what Tim advocates: be micro-ambitious! Increasingly I’ve found that the successful people whose example forms the basis of our carefully formulated dreams are (a) exceedingly lucky and (b) successful not because they followed a dream but because they seized opportunities that arose whilst in pursuit of something they found stimulating. Consider the career of Jack Black. His background is fairly unremarkable, but what I take away from his story is that if opportunities had not come his way he would still be happily jamming away in his apartment with his buddy, Kyle Gas. Happy. You’re not going to seize opportunities if you’re not happy.

I suspect that the complex of chasing unrealistic dreams has worsened in the digital age with a previously unheard of degree of immediacy and access into the personal thoughts and lives of those we idolise. I’ll refrain from pointing to the egregious popularity of certain reality stars and socialites, but the opinions and commentary of the uber-successful tend to betray a truth that ostensibly says: these people are ordinary folk. Why can’t I be uber-successful too? The answer is (of course): Stop thinking like a damn fool. Paint that picture; invest $1000 in that stock you’ve been eyeing up; take that first kite-surfing lesson; reread that family law handbook. Set the finish line over here not over there. Keep busy and derive satisfaction from your micro-achievements. Let the bigger picture take care of itself a little bit.

One of my mother’s favourite idioms is “how do you eat an elephant?” (one bite at a time). I say forget about the elephant. Focus on finishing that chewy morsel on the elephant’s hindquarters. Maybe you’ll eventually eat the whole elephant; maybe a delicious minty slice of roast lamb will show up instead. Mmmm, roast lamb! Ok, ok, that tasty metaphor has run its course. In the interest of wrapping things up I’ll list a few other expressions that I think should be stricken from ‘common knowledge’:

• You can do anything if you put your mind to it
• You can be anyone you want to be
• Follow your dreams
• Do something you love, and you won’t work a day in your life (Ok I still quite like this one – doesn’t seem to work out very often though, just don’t let it get you down!)

I’ll leave you with the inspired ramblings of another comedian, Jim Jefferies (language warning)! Meanwhile, I’ll revel in the satisfaction of achieving the micro-goal of finishing this little article.