100 Best Twitter Feeds for Your Financial Intelligence

I remember my awful and terribly unreliable Ford Laser. It JUST passed rego, the interior was off beige and the roof sagged.  Just arriving at a destination was touch and go, and I had countless breakdowns on cross-city tunnels. Once I broke down and the roadside repair man recognised me!

Many of my friends had been working fulltime for a few years and here I was starting my second year of University.

A friend of mine had just purchased a brand new, sleek and ‘sophisticated’ looking new car. It was tough, here I was studying my life away and living on just over $200 per week and here my friends were buying new things and appearing to live a life that was far from my reality.

The university years taught me to figure out how to manage my finances…it was hard, but it was some of the most formative moments of my life…

So many people fail to ‘invest’ into their own financial literacy. I don’t mean that everyone should become economists or bow-tie wearing stock analysts. If that is your dream, then by all means go for it. For most of us that won’t be the case. Most of us won’t need to understand the meanings of hedging/un-headging (I’m not even sure if that is a word!), derivatives, futures commodities and all of those other lovely, yet overwhelming financial terms.

Even though most of us won’t work in the financial sector but we all still need to ‘invest’ (brilliant) into our financial literacy.  We need to have an understanding (however basic) of how money works. We need to have a general idea of how money is lent to us, and the conditions by which it will have to be repaid.

This is not an attack on banks or credit cards – they are all a fundamental part of our society. We do however need to know how they work.

As lovely as the young lady is behind the counter of your local bank branch, of however well spoken that man at phone shop sounds you need to be able to make your own educated decisions.

You can only make an educated decision if you first have an understanding of the basics.

The other day and I heard about a study that was conducted by Michael Mischel – a psychology researcher at Stanford University. The study demonstrated the importance of ‘delayed gratification’ or self-discipline, and its role in role in long-term success. Mischel defines self-discipline as ‘the ability to delay immediate gratification in exchange for long-term success.’ In this brilliant and confronting experiment he offered hungry four-year olds marshmallows and left them alone in a room. He told the youngsters that he would return in a few moments and if they could resist eating the marshmallow they would receive some more. Not surprisingly, most of the youngsters were unable to resist the temptation and ate the marshmallow as soon as they were left alone. A few managed to resist for a short time but then ate them, and some were able to control themselves and received their promised reward. The children were interviewed many years later with startling results.
As Mischel suggests:
 
“The differences between the two groups were dramatic: the resisters were more positive, self-motivating, persistent in the face of difficulties, and able to delay gratification in pursuit of their goals. They had the habits of successful people which resulted in more successful marriages, higher incomes, greater career satisfaction, better health, and more fulfilling lives than most of the population. Those having grabbed the marshmallow were more troubled, stubborn and indecisive, mistrustful, less self-confident, and still could not put off gratification. They had trouble subordinating immediate impulses to achieve long-range goals. When it was time to study for the big test, they tended to get distracted into doing activities that brought instant gratification. This impulse followed them throughout their lives and resulted in unsuccessful marriages, low job satisfaction and income, bad health, and frustrating lives.”
 
I see financial management as a type of ‘delayed gratification.’ You often don’t see the results of your decisions immediately; they take time to come to the surface. The decisions you make today will shape your future. Spending money is a type of ‘instant gratification’ – it makes you feel better (for a short while), kind of like an anaesthetic. The problem is most people fail to develop a long term perspective with their finances, the fail to understand how their decisions today will influence their tomorrow.
I have decided to train for the Sydney Marathon, probably the most challenging thing I have ever done. I have decided to sacrifice my time, energy and feelings (especially at 5am on a freezing winter’s morning) and delay my gratification. I know, well I hope, that the countless hours of sacrifice will be worth in when I cross that finish line.
 
My wife and I have decided to sacrifice that family holiday and that new car and for a new house that we are saving for. We know that one day, one day in the very distant future, it will be worth it. I am not saying become stingy and tight with your money, but what I am suggesting is that you need to develop the discipline of delaying some things and focusing on your financial goals.
 
As a parent, you can do a number of things to help your children appreciate the importance of delayed gratification:
 
Lesson #1: Things require time:
 
We live in a world where everything is instant. We can go online and talk to people anywhere in the world, we can order a take away pizza that is delivered to our house within half an hour and we get frustrated if we have to wait at the checkout for a few minutes. Things like character and financial integrity take time to develop.
 
Lesson #2 The power of earning
 
It’s funny, you seem to look after things better when you pay for them. When I first got my driver’s licences my father used to let me use the car. To be honest, when I had driven round the corner and when I was out on sight I used to give that accelerator a little ‘push.’ I used to leave take away food wrappers on the floor and the petrol was always left empty. I am not particularly proud of how left the car, but I learnt a valuable lesson. When I purchased my first car (it was a speedy Ford Festiva), I made sure that I looked after it – for a while. My point here is that when you purchase something with your own money, your own hard earned cash, you tend to look after it better. As a parent, you can teach your children these principles.
 
Lesson #3 “You are the example”
 
I am not a parent, but I am a primary school teacher. One day, while I was teaching a lesson to a Year 2 class, I heard one of my students say the word ‘awesome.’ The word sounded familiar. The day before I was having a casual conversation with a colleague and I had been describing my experience on my first class. I was amazed, and slightly shocked that one of my students had heard me say it and then used the word in one of their own sentences. As a parent, don’t ever forget the example that you are to your children. It’s a little hard hitting, but your children will copy, or at least be influenced by, what you do and say. In terms of your finances, it is important to know that your children are watching you. Habits, and in particular financial habits, are learnt and engraved at a young age.
 
Thanks
 
Mat

Real money

When I was little I remember speaking to my dad and he advised me that he never ‘sees’ the money that he earns. By this he meant that the wage that he receives goes straight into his bank account. This seems pretty obvious, your boss doesn’t usually hand you cash at the end of each work day for the hours worked. Your boss doesn’t usually travel to the bank, withdraw the available funds, travel back to where you are and hand you the cash.

The money I earn from teaching goes in one day and before I have a chance to actually ‘see it’ the money is sent all over the place to pay for the various financial commitment that I have; these may be electricity bills, rent, the internet connection company or the vast array of the other payments that I have to make on a fortnightly/monthly basis. The rest gets debited of my account for food, shopping or fuel etc.

My point here is that its often easy to become detached from your finances. The easy this about spending on credit is that people have the assumption that the money that they ‘have’ on their credit cards is theirs and that your credit limit is a challenge to see if you can spend that amount – this is not wise.

If you don’t actually ‘see’ the money that you are spending, if is quite easy to become detached.

 Few things to try:

1) Give yourself an allowance for the week.

At first it may seem as though you are back in year 8 when your parents gave you pocket money. But giving yourself some spending money to last the week makes you monitor what you spend. When your spending money has run out, then it’s all gone!

2) Try paying for your shopping using cash.

That’s right, before you enter the supermarket, of the clothing store go to the ATM and withdraw the money that you need. Why you have to physically hand over cash you often realise what you are spending.

 3) Try leaving your credit card at home for a week.

You’ll be surprised how much you reach for it to shout people lunch, buy petrol, or to purchase those new jeans. Instead, in your weekly/fortnightly budget, plan to be generous.

” The final step after seeing a problem and finding a new approach is to measure the impact of the work and to share the success or failure so that others can learn from your efforts.

You have to have the statistics of course. You have to be able to show for example that a program is vaccinating millions more children. You have to be able to show for example a decline in the number of children dying from the diseases. This is essential, not just to improve the program but also to help draw more investment from business and government.

But if you want to inspire people to participate you have to show more than numbers, you have to convey the human impact of the work. So people can feel what saving a life means to the families affected.

I remember going back to the world economic forms some years back and sitting on a global help panel, that was discussing way s to save millions of lives. Millions– think of the thrill, if you can save just one person’s life then multiply that by millions. Yet, this was the most boring panel I’ve ever been on. Ever, so boring even I couldn’t stand it. What made that experience a specially striking was that I just come from an event, where we were to do scene version 13 of some piece of software and we had people jumping and shouting with excitement. I love getting people excited about software. But why can’t we generate even more excitement for saving lives. You can’t get people excited unless you can help them see and feel the impact.

Way to do that is another complex question. Still, I’m optimistic. Yes, inequity is being with us forever. But the new tools, we have to cut through complexity have not being with us forever. They are new they can help us make the most on our caring and that’s why the future can be different from the past.

The defining and ongoing innovations of this age, biotechnology, the personal computer, and the internet give us a chance we’d never had before to end extreme poverty and end that from preventable disease.

Sixty years ago, George Marshall came to this commencement and he announced to plan to assists the nations of post-war Europe. He said, “I think one difficulty is that the problem is one of such enormous complexity that the very mass of facts presented to the public by press and radio making it exceedingly difficult for the man in the street to reach a clearer placement of the situation. It is virtually impossible at this distance to grasp at all the real significance of the situation.

Thirty years after Marshall, made this address which is 30 years ago as my class graduated without me. Technology was emerging to make the world smaller. More open , more visible, and less distance. The emergent’s of low cost personal computer, gave lives to a powerful network that is transformed opportunities for learning and communicating. The magical thing about this network is not just a collapses the distance and makes everyone your neighbour. It also dramatically increases the number of brilliant minds we can bring in the work together on the same problem and it skills up the rate and potential innovation to a staggering degree. At the same time, for every person who has access to this technology five people don’t. That means many creative minds I left out on this discussion. Smart people were practically intelligence and relevant experience for though who don’t have the technology or hone

their talents or contribute their ideas to the world. We need as many people as possible to gain access this technology, because these advances are trigging a revolution about these advancements and what human beings can do to one another. They are making a possible not just for national governments but for universities, corporations, smaller organizations, and even individuals to see problems , see approaches, and measure the impact of their efforts, to address the hunger, poverty, and desperations . George Marshall spoke up 60 years ago.

Members of the Harvard Family here in the yard — is one of the great collections of intellectual talent in the world. For what purpose, there is no question that the faculty, the alumni, the students, and the benefactors of Harvard have used their power to improve the lives of people here and around the world. But can we do more? Can Harvard dedicate its intellect to improving lives of people who never hear its name? Let me make a request of the Deans and Professors, the intellectual leaders here at Harvard. As you here new faculty, award ten year, review curriculum, and determine degree requirements. Please ask yourself. Should our best minds be more dedicated to solving in our biggest problems? Should Harvard encourage its faculty to take on the world’s inequity?

Should Harvard students know about the depth of global poverty – the prevalence of world hunger, the scarcity of clean water, the girls kept out of school, the children who died from diseases we can cure?

Should the world’s most privilege learn about the lives of the world’s least privilege?  

These are not rhetorical questions. You will answer with your policies.

My mother who was filled with pride—the day I was admitted here—never stop pressing me to do more for others. A few days before I was married, she hosts to the bridal event and when she read aloud a letter about marriage that she had written to Melinda. My mother was very ill with cancer at that time that she saw one more opportunity to deliver her message and at the close of the letter she said “from those to whom much is given, much is expected.”

When you consider what those of us here in this Yard have been given – in talent, privilege, and opportunity – there is almost no limit to what the world has a right to expect from us.

In line with the promise of this age, I want to exhort each of the graduates here to take on an issue – a complex problem, a deep inequity, and become a specialist on it. If you make it the focus of your career, that would be phenomenal. But you don’t have to do that to make an impact. For a few hours every week, you can use the growing power of the internet to get informed, find others with the same
interests, see the barriers, and find ways to cut through them. Don’t let complexity stop you. Be activist. Take on big inequities.

I feel sure it will be one of the great experiences of your lives. You graduates are coming of age in an amazing time. As you leave Harvard, you have technology that members of my class never had. You have awareness of global inequity, which we did not have. And with that awareness, you likely also have an informed conscience that will torment you if you abandon these people whose lives you could change with modest effort. You have more than we had; you must start sooner, and carry on longer.

And I hope you will come back here to Harvard 30 years from now and reflect on what you have done with your talent and your energy. I hope you will judge yourselves not on your professional accomplishments alone, but also on how well you have addressed the world’s deepest inequities … on how well you treated people a world away who have nothing in common with you but their humanity.

Good luck.”

“Whether through democracy, strong public education, quality health care, or broad economic opportunity reducing inequity is the highest human achievement.

I left campus knowing little about the millions of young people cheated out of education opportunities here in this country. And I knew nothing about the millions of people living in unspeakable poverty and disease in developing countries. It took me decades to find out. You graduates came to Harvard at a different time. You know more about the world’s inequities than the classes that came before. In your years here, I hope you’ve had a chance to think about how in this age of accelerating technology we can finally take on these inequities and we can solve them.

Imagine, just for the sake of discussion, that you had a few hours a week, and a few dollars a month to donate to a cause. And you wanted to spend that time and money where would have a greatest impact in saving and improving lives. Where would you spend it?

For Melinda and I, the challenge is the same. How can we do the most good for the greatest number with the resources we have. During our discussions on this question, Melinda and I read an article about the millions of children who are dying every year in poor countries from diseases that we had long ago made harmless in this country. Measles, malaria, pneumonia, hepatitis B, yellow fever, one disease that I had never heard of rotavirus was killing half a million children each year, none of them in United States. We were shocked. We’d assumed that if millions of children are dying and they could be saved, the world would make it a priority to discover and deliver the medicines to save them. But it did not. For under a dollar, there are interventions that could save lives that just weren’t being delivered. If you believe that every life has equal value, it’s revolting to learn that some lives are seen as worth saving and others are not. We said to ourselves “this can’t be true. But if it is true, it deserves to be the priority of our giving.”

So we began our work in the same way anyone here would begin it. We ask “how could the world let these children die?”

The answer is simple and harsh. The market did not reward saving the lives of these children and governments did not subsidize it. So the children died because their mothers and fathers had no power in the market and no voice in the system.

But you and I have both. We can make market forces work better for the poor if we can develop a more creative capitalism. If we can stretch the reach of market forces so that more people can make a profit or at least earn a living, serving people or suffering from the great inequities.

We can also press governments around the world to spend tax payer money in ways that better reflect the values of the people who pay the taxes. If we can find approaches that meet the needs of the poor in ways that generate profits for business and votes for politician, we will have found the sustainable way to reduce inequity in the world.

This task is open-ended. It can never be finished. But a conscious effort to answer this challenge can change the world. I’m optimistic that we can do this. But I talk to skeptics who claim there is no hope. They say: “Inequity is been with us since beginning and will be with this until the end because people just don’t care.” I completely disagree. I believe we have more caring than we know what to do it. All of us here in this yard, had 1 time or another and seen human tragedies that broke our heart and yet we did nothing, not because we didn’t care but because we didn’t know what to do. If we have known how to help, we would have acted. The barrier to change is not too little caring. It is too much complexity. To turn caring into action, we need to see a problem, see a solution, and see the impact. But complexity blocks all three steps.

Even with the advent of the internet and 24 hour news it is still complex enterprise to get people to truly see the problems. When an airplane crashes, officials immediately call press conference. They promise to investigate determine the cause and prevent similar crashes in the future. But if the officials were brutally honest, they would say of all the people in the world who died today from preventable causes one half of one percent were on this plane. We’re determined to do everything possible to solve the problem that took lives of the one half of one percent. The problem is not just the plane crash, but the millions of preventable deaths.

We don’t read much about these deaths. The media covers what’s new. And millions of people dying is nothing new. So it stays in the background where it’s easy to ignore. But even when we do see it or read about it, it’s difficult to keep our eyes on the problem. It’s difficult to look at suffering if the situation is so complex that we don’t know how to help and so we look away.

If we can really see a problem which is the first step, we come to the second step: Cutting through the complexity to find the solution. Finding solutions is essential if we want to make the most of our caring. If we have clear and proven answers anytime an organization or individual asks “How can I help?” then we can get action and we can make sure that none of the caring in the world is wasted. But complexity makes it hard to mark a path of action for everyone who cares and makes it hard for their caring to matter.

Cutting through complexity to find solutions runs through four predictable stages: determine a goal, find the highest impact approach, deliver the technology, ideal for that approach, and in the mean time here’s the best application in technology you already have , whether it’s something sophisticated, like a new drug or something simple like a bed net.

The AIDS epidemic offers an example, the broad goal, of course, is to end the disease. The highest leverage approach is prevention. The ideal technology would be a vaccine that gives life on immunity with a single dose. So governments, drug companies and foundations are finding vaccine research but their work is likely to take more than a decade.

So in the mean time, we have to work with what we have in hand and the best prevention approach we have now is getting people to avoid risky behaviour. Pursuing that goal starts the four steps cycle again. This is the pattern. The crucial thing is to never stop thinking and working, and never do what we did with malaria and tuberculosis in the 20^th century, which is to surrender to complexity and quit.”

Unless you have been living under a large rock, you will have certainly heard of the ‘Global Financial Crisis’ or the ‘sub-prime mortgage crisis’ that shook the world in mid to late 2007. In the short space we have today, it would be impossible to give this huge financial event the in-depth analysis it deserves. In future posts we will touch on some of the main points and discuss how it is related to issues of borrowing, lending, financial management and banks.

I actually find the financial crisis fascinating, its geeky I know, but it has huge implications about how we manage our money on an individual, national and international stage.

Over the next few weeks we’ll try and ‘unpack’ this monstrosity. As boring as you might think the Global Financial Crisis was it can provide us with some very important lessons on how we can handle our money responsibly.

We are going to have a number of guest writers discussing the implications of the Global Financial Crisis so stay tuned.

Thank you to all those people that have commented on the website or sent in email. We really appreciate your feedback and ideas.

Keep your thoughts and suggestions coming.

You can keep up to date with new content and  weekly discussions through the mycents facebook page http://bit.ly/aAA7J5 or follow us @mycents_today on twitter.  Each week we have discussions about topics at #mycents on twitter.  

You can also email directly through info@mycents.com.au

As always, we appreciate all your feedback, ideas and suggestions.

Looking forward to hearing from you.

Mathew

So, why should we bother setting goals?

However old you are, whether you have just received your first instalment of pocket money (lovely stuff), or if you are about to start your first casual job or you may have just got your P-Plates and need some extra petrol money, money management is extremely important. You may be studying at university and you need to buy textbooks (they are very expensive) or you could be buying your first house. Whatever the case, handling your money wisely is vital.

Steven Covey, author of ‘The Seven habits of Highly effective People’ suggests that in life we need to ‘begin with the end in mind.’ In other words we need to have goals or something to work towards. Unfortunately, the future has a habit of creeping up on us and coming sooner than we could have every imagined (sorry to sound old). Understanding how money works, how it can work for you and what you want to do with it is very important.

I agree than money is not the most important thing n the world, but I do believe that it can have a huge influence in our quality of life. We spend time (if your motivated) taking care of your body (through exercising), relaxing (to recharge ourselves) and socialising (hanging out with our friends) but what about investing (great word choice) into our financial literacy?

Over the next few months mycents is going to unpack these ideas.

I look forward to hearing from you.

Mathew Green

I am not a financial planner,  nor do I really ever intend to be one, but that doesn’t mean that I don’t understand the importance of ‘financial planning.’ The Mathew Green interpretation of ‘Financial Planning’ is simply ‘having a plan for your finances’ (ground breaking I know!).  

I don’t know about you, but I often get distracted. I am usually in the middle of something and I then, before I know it, I get distracted and loose focus, of forget why I am here in the first place. That’s why it’s important to have some kind of a plan – kind of life a road map to guide you through. Maps tell you where to go and even advise you of potential problem you might face on the way (if you have a GPS!).  

It’s the same with your finances, you need a plan or a list of goals that can keep you focussed on where you want to go.  I set a number of goals in my life. These may be about my career, relationships, marriage or holidays – why should your finances be any different?  

I want to encourage you to stop, and take time to think about your financial goals: 

1.  What do I want to be doing in 5 years?

2.  Do I want to buy a house?

3.  Do I want to live overseas?

4.  Do I want to study?

Have Fun!

Isn’t it amazing how many ‘necessary’ expenses we have? Those absolute necessities seem to creep up. When I was at University, paying rent, eating (barely) and owning an extremely unreliable car, my ‘necessary’ expenses were food, caffeine and the occasional salad roll from the local bakery.

In always seemed to just have enough, and only just scraped through the fortnightly pay cycle. After I finished University I got a full-time and still only just  held on until payday; I have now learnt to exercise a little more foresight with my spending.

The sad truth is that most of us will live like that each week. We will  earn a full-time wage, pay some ‘necessities,’ go out to dinner a few times, pay some more ‘necessities’ and have nothing left. Unfortunately many of us were better off before we had a full-time wage.

I remember thinking ‘one day when I am on $50,000 a year I’ll be rich.’ The truth is, during University I didn’t have ‘necessary dinners out’ or ‘those new necessary jeans. My point is never to live life like a scrooge, far from it. My point is to think about where your money is going, and not to live week to week.

Don’t wait until you have a six-figure salary to make wise financial decisions, start today.

Mat

My only experience with hurdling resulted in a bruised leg, an unfinished race and a severely battered ego – the ‘girl of my dreams’ never spoke to me again. 

I remember it clearly, or it may just be branded in to my pre-pubescent memory. I was waiting at the start line during a PE lesson on a cold English morning. My PE teacher had showed us proper hurdling technique and we had practised numerous times – the approach, the jump, the land, then to approach, the jump and the land, then the….. you get the idea. I looked to my right, and there she was, the girl that I had a crush on since the beginning of term. According to my, rather ‘highlighted’ version of events, she was there cheering me on waving a flag – in reality I’m sure that she was oblivious to the fact that I was even there…. The point is, it was time to begin, the whistle blew and ten or so year eight boys raced towards the first hurdle and everyone cleared it as rehearsed…the second one didn’t go as planned. The approach was perfect, the jump and the landing was not as smooth. I came to a crashing end and became tangle awkwardly in a hurdle and with that my Olympic dreams were shattered…

To be honest, I am not sure exactly how that story went, I am almost certain that my ‘dream crush’ wasn’t watching and I am positive that if she was she wouldn’t have cared and I am certain that I will never go to the Olympics for hurdling.

At the beginning or my race I was aware of a number of things:  I knew where I wanted to get to and I knew that there were things that there would be obstacles.  I had rehearsed, granted I hadn’t done it extensively, and I really wanted to get to cross the finish line. Unfortunately for my sporting ‘career’ it didn’t all go to plan.

In life you will undoubtedly face hurdles you will almost certainly do things wrong. The same parallel can be drawn with your financial journey. You will face challenges, the stock market may continue to decline, there will be changes in interest rates, there will be unexpected bills, costs and expenses but it is how you react to these challenges that is important.

We need to begin seeing our financial challenges as opportunities to develop our understanding of how money works and to fine tune our financial management.

As hard as things may be, financial hurdles can be wonderful opportunities.

Even though this isn’t specifically about financial literacy, I believe that you can learn a lot from this story. I have believed for a while that the greatest, and most incredible, brilliant, innovative and world changing concepts are still inside the minds of people (specifically young people). I believe that people are unique, incredible and influential.

I came across this brilliant post the other day about the famous Walter ‘Walt’ Disney. I don’t know much about this man, but I know that he, as we all do, had to start from somewhere.  Walt was a producer, animator, entrepreneur, director, writer, visionary and, amongst other things, a philanthropist. Walt co-founder “Walt Disney Productions” with his brother Roy and ‘became one of the most famous motion picture producers of all time.’ Walt Disney Productions has grown into a multinational company which now grosses over (US) $35 Billion a year.  Mr. Disney has won over 26 Academy Awards, and has been nominated 59 times and he has won 7 Emmy Awards.  There are now a Disneyland and Walt Disney World resort theme parks in China, Japan, France and the American.

As with many great business owners and people that have had a resounding influence I am sure that is wasn’t always smooth sailing for Walt. Having said that, there are a number of lesson that we can learn from his success:

• Competition is Good – “I have been up against tough competition all of my life. I wouldn’t know how to get along without it.”

I used to be scared of competition. There will always be people and organisations that have more resources, capital and leverage then you – especially if you are a start up. Instead of being squashed and feeling disempowered by competition use it to your advantage. See what they  are doing, and see if you can do it better, more efficiently of cheaper.

• Do What You Love – “Disneyland is a work of love. We didn’t go into Disneyland just with the idea of making money.”

Do what you love – I LOVE this. My dream job is to do the thing that I am most passionate about (seeing young people discover who they are meant to be, and thrive), and get paid well for doing it. I know that sounds idealistic, but the truth be told, we have more resources and leverage at our fingertips than any other generation before. We can talk to people anywhere in the world (mostly for free), we can be in the next hemisphere in a matter of hours and we can be anything that our hearts desire.

What are you passionate about? What is that that thing that keeps you up until all hours of the morning? It may be starting a business, it may be helping people, it may be anything. Do what you love, and I guarantee that you will be successful at that. I couldn’t imagine spending 30 years doing a job that I hated, a job that I cared very little about just for a great pay.

Follow your interests and follow your heart (thanks Opera!).  

• Do the Impossible – “It’s kind of fun to do the impossible.”

I love this. I heard a quote once, “Nothing great is achieved easily.” ‘Great,’ buy its very definition means that its difficult, or even impossible. Challenges in life will either overwhelm or squash you, of they will motivate you to achieve your goals – i don’t know about you, but I choose the latter one.

• Action Always Trumps Inaction – ‘The way to get started is to quit talking and begin doing.”

This is probably my worst trait. I usually wait until everything is ready, until that idea is fully formed and I have carefully calculated all of the things that can go wrong before I start a venture. The truth is,  you will never be ready. I am not saying that you should be foolish and go out and make all kinds of financial commitments that you can’t keep – that would be foolish. What I am saying is that you need to start something: that business plan, that budget.

• It Takes a Village – “You can design and create, and build the most wonderful place in the world. But it takes people to make the dream a reality”

As brilliant as you think you are ‘no man is an island.’ I know that that idea in your head is incredible and that is probably is the ‘next big thing,’ but you still need people. I have a variety of people in my life, friends, mentors,  people I influence, people that influence me, family and colleagues.

• Get Better Daily “Whenever I go on a ride, I’m always thinking of what’s wrong with the thing and how it can be improved.”

I am committed to getting better every day. I am one of those people who are quite ‘visionary.’ I see the brilliant idea years down the track, but I often struggle to work out the little steps that are needed to get there. Personally, I think you should be committed to getting a bit better at something each day. This may mean: handling your money wiser, being more relational, managing your accounts more diligently, improving your fitness or even just being a more generous with your words. Whatever it is you need to be focussed on making little steps each day to improve yourself.

Mat

Points taken and adapted from  http://www.dumblittleman.com/

I have begun to reread Stephen Covey’s “The Seven Habits of Highly Effective People.” If you haven’t read this book I highly recommend it. Mr. Covey talks about a number of timeless principles of personal change, and offers some powerful lessons in personal change.

For today, I wanted to briefly unpack one of his seven habits – “Habit 2 – Begin with the end in mind.”

In the words of Mr. Covey:

 “Beginning with the end in mind, is based on the principle that all things are created twice. There’s a mental or first creation, and a physical or second creation to all things.”

 I don’t know about you, but my current level of financial understanding isn’t enough to take me to where I need to be. Indulge me for a second; one day (hopefully not too far in the distant future) I would like to be able to choose what I do with my time, I would like to do what I love and not worry about the pay check. You may want to:

• Own your own home

 • Travel extensively through Asia • Buying a tropical island

• Buy someone a boat, or

• Open a florist ( I would seriously like to do this).

Whatever it is, it doesn’t matter, the point is you have to have some kind of idea of what you want and where you want to be. There is a ‘gap’ between where you are, and where you want to be. In relation to your finances, there is a gap between where your finances are now and where you would like them to be. The difficult thing is figuring out how to ‘bridge that gap.’

 There are a number of ways to do this, and you may have some more ideas. Bridging the gap can mean a number of things, and as I have said in recent posts, you have to be willing to figure it out and ‘seeking to understand’ your finances.

 What decisions do you need to make TODAY to move you towards your financial goals?

I look forward to hearing your feedback and ideas via the mycents.com.au website.

Mat

“Thank you, President Bok, former President Rudenstine, incoming President Faust, members of the Harvard Corporation and the Board of Overseers, members of the faculty, parents, and especially, the graduates.

I’ve been waiting more than 30 years to say this, that I always told you I’d come back and get my degree. I want to thank Harvard for this honour, I’ll be changing my job next year and it would be nice to finally have a college degree on my resume. I applaud the graduates for taking a much more direct route to your degrees. For my part, I’m just happy that the crimson called me “Harvard’s most successful drop out”. I guess that makes me valedictorian of my own especial class. I did the best of everyone who failed. But I also want to be recognized as the guy who got Steve Ballmer to drop out a business school. I’m a bad influence, that’s why I was invited to speak at your graduation. If I’d spoken in your orientation, fewer of you might be here today. Harvard was a phenomenal experience for me, academic life was fascinating. I used to sit-in on lots of classes but I haven’t even signed up form and dorm life was terrific. I lived up at Radcliffe in Courier House. There are always lot of people in my dorm room late at night discussing things, because everyone knew that I didn’t worry about getting up in the morning. That’s how I came to be the leader of the anti social group. We clung to each other as a way of validating our rejection of all those social people. Radcliffe is a great place to live. There are more women up there and most of the guys were mad science types. The combination offered me the best odds if you know what I mean. That’s where I learned the said lesson that improving your odds doesn’t guarantee success. One of my biggest memories of Harvard came in January 1975, when I made a call from Courier House, to accompany in Albuquerque in Mexico that had begun making the world’s first personal computer. I offer to sell them software. I worry they would realize I was just a student in a dorm and hang up on me. Instead they said “I’m not quite ready come see us in a month.” It was a good thing because we haven’t written the software yet. From that moment, I worked day and night on that extra credit project that marked the end of my college education and the beginning of a remarkable journey with Microsoft. What I remember, above all about Harvard, was being in a midst of so much energy and intelligence. It could be exhilarating, intimidating, sometimes even discouraging, but always challenging. It was an amazing privilege, and though I left early, I was transformed by my years of Harvard. The friendships i made and the ideas I worked on, but taking a serious look back. I do have one big regret. I left Harvard with no real awareness at the awful inequities in the world – The appalling disparities of health, and wealth and opportunity that condemn millions of people to lives of despair. I learned a lot here at Harvard about new ideas in economics and politics. I got great exposure to the advances being made in the sciences. But humanity’s greatest advances are not in its discoveries but in how those discoveries applied to reduce inequity.

This is one of the speeches that has changed the way I look at opportunities in life. Enjoy…..

 “Thank you. I’m honoured to be with you today for your commencement from one of the finest universities in the world. Truth be told, I never graduated from college and this is the closest I’ve ever gotten to a college graduation. Today I want to tell you three stories from my life. That’s it. No big deal. Just three stories. The first story is about connecting the dots.

I dropped out of Reed College after the first six months but then stayed around as a drop-in for another eighteen months or so before I really quit. So why did I drop out? It started before I was born. My biological mother was a young, unwed graduate student, and she decided to put me up for adoption. She felt very strongly that I should be adopted by college graduates, so everything was all set f or me to be adopted at birth by a lawyer and his wife, except that when I popped out, they decided at the last minute that they really wanted a girl. So my parents, who were on a waiting list, got a call in the middle of the night asking, ” We’ve got an unexpected baby boy. Do you want him?” They said, “Of course.” My biological mother found out later that my mother had never graduated from college and that my father had never graduated from high school. She refused to sign the final adoption papers. She only relented a few months later when my parents promised that I would go to college.

This was the start in my life. And seventeen years later, I did go to college, but I naively chose a college that was almost as expensive as Stanford, and all of my working-class parents’ savings were being spent on my college tuition. After six months, I couldn’t see the value in it. I had no idea what I wanted to do with my life, and no idea of how college was going to help me figure it out, an d here I was, spending all the money my parents had saved their entire life. So I decided to drop out and trust that it would all work out OK. It was pretty scary at the time, but looking back, it was one of the best decisions I ever made. The minute I dropped out, I could stop taking the required classes that didn’t interest me and begin dropping in on the ones that looked far more interesting.

It wasn’t all romantic. I didn’t have a dorm room, so I slept on the floor in friends’ rooms. I returned Coke bottles for the five-cent deposits to buy food wit h, and I would walk the seven miles across town every Sunday night to get one good meal a week at the Hare Krishna temple. I loved it. And much of what I stumbled into by following my curiosity and intuition turned out to be priceless later on. Let me give you one example.

Reed College at that time offered perhaps the best calligraphy instruction in the country. Throughout the campus every poster, every label on every drawer was beautifully hand calligraphed. Because I had dropped out and didn’t have to take the normal classes, I decided to take a calligraphy class to learn how to do this. I learned about serif and sans-serif typefaces, about varying the amount of s pace between different letter combinations, about what makes great typography great. It was beautiful, historical, artistically subtle in a way that science can’t capture, and I found it fascinating.

None of this had even a hope of any practical application in my life. But ten years later when we were designing the first Macintosh computer, it all came back to me, and we designed it all into the Mac. It was the first computer with beautiful typography. If I had never dropped in on that single course in college, the Mac would have never had multiple typefaces or proportionally spaced fonts, and since Windows just copied the Mac, it’s likely that no personal computer would have them.

If I had never dropped out, I would have never dropped in on that calligraphy class and personals computers might not have the wonderful typography that they do.

Of course it was impossible to connect the dots looking forward when I was in college, but it was very, very clear looking backwards 10 years later. Again, you can’t connect the dots looking forward. You can only connect them looking backwards, so you have to trust that the dots will somehow connect in your future. You have to trust in something–your gut, destiny, life, karma, whatever–because believing that the dots will connect down the road will give you the confidence t o follow your heart, even when it leads you off the well-worn path, and that will make all the difference.

My second story is about love and loss. I was lucky. I found what I loved to do early in life. Woz and I started Apple in my parents’ garage when I was twenty. We worked hard and in ten years, Apple had grown from just the two of us in a garage into a $2 billion company with over 4,000 employees. We’d just released our finest creation, the Macintosh, a year earlier, and I’d just turned thirty, and then I got fired. How can you get fired from a company you started? Well, as Apple grew, we hired someone who I thought was very talented to run the company with me, and for the first year or so, things went well. But then our visions of t he future began to diverge, and eventually we had a falling out. When we did, our board of directors sided with him, and so at thirty, I was out, and very publicly out. What had been the focus of my entire adult life was gone, and it was devastating. I really didn’t know what to do for a few months. I felt that I had l et the previous generation of entrepreneurs down, that I had dropped the baton a s it was being passed to me. I met with David Packard and Bob Noyce and tried to apologize for screwing up so badly. I was a very public failure and I even thought about running away from the Valley. But something slowly began to dawn on me. I still loved what I did. The turn of events at Apple had not changed that one bit. I’d been rejected but I was still in love. And so I decided to start over.

I didn’t see it then, but it turned out that getting fired from Apple was the best thing that could have ever happened to me. The heaviness of being successful was replaced by the lightness of being a beginner again, less sure about everything. It freed me to enter one of the most creative periods in my life. During the next five years I started a company named NeXT, another company named Pixar an d fell in love with an amazing woman who would become my wife. Pixar went on to create the world’s first computer-animated feature film, “Toy Story,” and is now the most successful animation studio in the world.

In a remarkable turn of events, Apple bought NeXT and I returned to Apple and the technology we developed at NeXT is at the heart of Apple’s current renaissance, and Lorene and I have a wonderful family together.

I’m pretty sure none of this would have happened if I hadn’t been fired from App le. It was awful-tasting medicine but I guess the patient needed it. Sometimes life’s going to hit you in the head with a brick. Don’t lose faith. I’m convinced that the only thing that kept me going was that I loved what I did. You’ve got to find what you love, and that is as true for work as it is for your lovers. Your work is going to fill a large part of your life, and the only way to be truly satisfied is to do what you believe is great work, and the only way to do great work is to love what you do. If you haven’t found it yet, keep looking, and don’t settle. As with all matters of the heart, you’ll know when you find it, and like any great relationship it just gets better and better as the years roll on. So keep looking. Don’t settle.

My third story is about death. When I was 17 I read a quote that went something like “If you live each day as if it was your last, someday you’ll most certainly be right.” It made an impression on me, and since then, for the past 33 years, I have looked in the mirror every morning and asked myself, “If today were the last day of my life, would I want to do what I am about to do today?” And whenever the answer has been “no” for too many days in a row, I know I need to change something. Remembering that I’ll be dead soon is the most important thing I’ve ever encountered to help me make the big choices in life, because almost everything all external expectations, all pride, all fear of embarrassment or failure these things just fall away in the face of death, leaving only what is truly important. Remembering that you are going to die is the best way I know to avoid the trap of thinking you have something to lose. You are already naked. There is no reason not to follow your heart.

About a year ago, I was diagnosed with cancer. I had a scan at 7:30 in the morning and it clearly showed a tumor on my pancreas. I didn’t even know what a pancreas was. The doctors told me this was almost certainly a type of cancer that is incurable, and that I should expect to live no longer than three to six months. My doctor advised me to go home and get my affairs in order, which is doctors’ c ode for “prepare to die.” It means to try and tell your kids everything you thought you’d have the next ten years to tell them, in just a few months. It means t o make sure that everything is buttoned up so that it will be as easy as possible for your family. It means to say your goodbyes.

I lived with that diagnosis all day. Later that evening I had a biopsy where the y stuck an endoscope down my throat, through my stomach into my intestines, put a needle into my pancreas and got a few cells from the tumor. I was sedated but my wife, who was there, told me that when they viewed the cells under a microscope, the doctor started crying, because it turned out to be a very rare form of pancreatic cancer that is curable with surgery. I had the surgery and, thankfully, I am fine now.

This was the closest I’ve been to facing death, and I hope it’s the closest I get for a few more decades. Having lived through it, I can now say this to you with a bit more certainty than when death was a useful but purely an intellectual concept. No one wants to die, even people who want to go to Heaven don’t want to die to get there, and yet, death is the destination we all share. No one has ever escaped it. And that is as it should be, because death is very likely the single best invention of life. It’s life’s change agent; it clears out the old to make way for the new. Right now, the new is you. But someday, not too long from now, you will gradually become the old and be cleared away. Sorry to be so dramatic, but it’s quite true. Your time is limited, so don’t waste it living someone else’s life. Don’t be trapped by dogma, which is living with the results of other people’s thinking. Don’t let the noise of others’ opinions drown out your own inner voice, and most important is to follow your heart and intuition. They somehow already know what you truly want to become. Everything else is secondary.

When I was young, there was an amazing publication called The Whole Earth Catalogue, which was one of the bibles of my generation. It was created by a fellow named Stuart Brand not far from here in Menlo Park, and he brought it to life with his poetic touch. This was in the late Sixties, before personal computers and desktop publishing, so it was all made with typewriters, scissors, and Polaroid cameras. it was sort of like Google in paperback form thirty-five years before Go ogle came along. I was idealistic, overflowing with neat tools and great notions. Stuart and his team put out several issues of “The Whole Earth Catalogue”, and then when it had run its course, they put out a final issue. It was the mid-Seventies and I was your age. On the back cover of their final issue was a photograph of an early morning country road, the kind you might find yourself hitchhiking on if you were so adventurous. Beneath were the words, “Stay hungry, stay foolish.” It was their farewell message as they signed off. “Stay hungry, stay foolish.” And I have always wished that for myself, and now, as you graduate to begin anew, I wish that for you. Stay hungry, stay foolish.

Thank you all, very much.”

What are your thoughts?

Just because you don’t acknowledge something doesn’t mean that is goes away. I remember being little and playing hide and seek with my grandad- I would usually be ‘it.’ My counting skills probably weren’t that advanced so I most likely only gave him up to 13.

When it was my time to hide I was convinced that if I simply covered my eyes and hit my face that i would instantly become invisible to the world. My justification was that if no one else could see me I was invisible – evidently all brilliant minds start off somewhere.  If could not ‘see’ the problem (in this case the person that was trying to find me) then they simply didn’t exist.

Another example is when I received a parking fine (many examples could be made here). I decided to ignore the original $129, or so, fine that I received and decided that it would simple ‘go away.’ To my amazement, a month later i received a lovely letter advising me to pay the amount by the specified date; I decided to decline their kind offer. To my amazement i received another reminder with an additional late payment fee – my fine had now reached $179.  I decided to pay the full amount and, as I will still at university, didn’t eat for a fortnight. I would like to be able to tell you that i learnt from this experience but many more late payment fees for parking fines followed.

My point here is that things do not go away simply because you ignore them, or because it’s not a ‘convenient time.’ It is never convenient to pay a bill or pay down debts but ignoring them is the worst thing you can do.  

Ignoring the reality of your finances doesn’t fix them – ignorance is not bliss..

Please continue to let us know what you think about the mycents posts…

Mat

I have a ‘fictional’ friend of mine that is in the finance industry who was VERY excited about the end of the financial year. He cracked open the Moët and loosed his braces, relaxed his bow-tie and closed the spreadsheet for a few hours while he lived large on the last day of the financial year. On a serious note, and while we may not all be approaching the end of financial year party with as much enthusiasm as my ‘friend,’ it is a great time of year to stop and reflect.

 I see the end of the financial year as a great time to pause, think and reflect on my financial progress so far.  I think that it is better to reflect on your progress early, so that you can make necessary changes to get you back on track.

If one of your financial goals was to own a Ferretti Yacht (for your convenience here is the link (http://bit.ly/ap3tP8) and you are working casually in retail one day a week, then maybe that is a little unrealistic.

A few questions to consider:

• What financial goals did you set at the beginning of the year?
• Are you making progress towards them?
• Do they need to be ‘tweeked?’
• Are the realistic?

The great think about starting a new financial year is that you might get a tidy little tax return (it’s your money anyway). What are you going to spend it on?

I look forward to hearing your stories and experiences at mycents.com.au

Mat

I have only been following Scott Pape from barefootinvestor.com for a few months now, but what he is doing is inspiring. I think for to long money matters have been boring, irrelevant and confusing. In his brilliant posts, blogs and videos Scott brings a fresh approach to financial matters.

Here Scott discusses his thoughts on the 2010 Australian Budget:  

Scott Papes\’ thoughts on the 2010 Australian Budget