Delayed Gratification December 7, 2006
Posted by The Probabilist in : [Articles], Business, Doodads, Emotions, Financial Literacy, Goals, Responsibility, Wealth, Assets, Investing , 9 comments
The concepts of delayed versus instant gratification are undoubtedly one of the most important choices that separate rich thinking from poor thinking. And it isn’t a choice until you’ve consciously identified it as one. Since it’s too often a matter of unconscious repeating of the pattern that your family or closest friends are instilling in you, it’s very important to think it through for yourself. Does no money down with fixed monthly payments really make more sense to you compared to acquiring assets that pay for what you want? Your answer should address both financial and emotional sensibility.
Financially there’s no doubt about which is a more sound decision. The two alternatives both represent a spiralling result. One is an upward/positive spiral while the other one is a downward/negative spiral. By buying first and paying later the monthly expenses keep building up and it’s increasingly more difficult to set a fixed percentage aside, a.k.a. paying yourself first. Most people don’t even think about this aspect to begin with. So, rather using a portion of any monthly income to invest in assets that add more income, the asset itself can increase in value when invested and maintained properly.
Emotionally delayed gratification also serves a better purpose, since it’s a question of worthiness. When are you worthy of something, before you have the money or when you have the money for it? The answer is simple in logical terms, but since people in general aren’t rational beings the emotional reasoning dwarfs the rationale.
But choosing delayed gratification doesn’t have to mean for you to squash the existence of your emotional expression. In fact, it can be used in advantage to gain the mind-set of delayed gratification. See, sometimes you might have got so accustomed to, lost interest of or completely disposed of something that you’re still paying the bills for and those are the emotionally worst ones to pay for. But in contrast if the money needed to buy something is acquired through hard and smart labor it can serve as a much better outlet of emotional outburst once it’s paid for in cash. It’s simply a smarter way to harness the emotional side of wanting something.
The rich always think in terms of delayed gratification. It doesn’t matter if it’s about creating a business, investing in real estate or simply desiring another doodad, to name a few examples. This is the process they all have in common, whatever they put their mind to. Just trying to answer the question of how you can afford something doesn’t mean any answer is the right answer, as with the case of typical jargon like “low down, easy monthly payments.” That’s the middle class trap. Looking good and going nowhere has never been my path in life. Which one is yours?
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Bargaining for Advantage December 1, 2006
Posted by The Probabilist in : [Books], Business, Communication, Goals, Personal Growth, Politics, Relationships, Abilities, Investing, Leadership, Speaking , 1 comment so far
G. Richard Shell, the author of this book catches your attention by stating that we all negotiate every day with all people we’re in contact with. He offers not only valid principles on the different stages and courses of action during a negotiation, but also many practical real examples where they were used. Among the examples are how Donald Trump, Benjamin Franklin, Mahatma Gandhi, Akio Morita and J. P. Morgan handled different situations to their advantage.
The first part of Bargaining for Advantage describes the six foundations of effective negotiating - your style of negotiation, your goals and expectations, authoritative principles and norms, relations, the other party’s interests and influence. It’s all about equipping the reader with improved ability to prepare oneself for bargaining situations. As I mentioned earlier, you can’t achieve more or perform better than you’re aware of being possible.
The second part then splits the negotiation into four distinct phases or processes - preparation, trading information, openings and concessions as well as closure and carrying out. This is where the six foundations are of practical importance to help you keep your edge at all times. Additionally he touches upon ethical standpoints when negotiating and separating between three sets of rules of what’s morally acceptable to say and not say.
The only thing I found missing, which is an important part of negotiations is what’s considered as true and what’s not. There are moments when two sides simply can’t come to an agreement of what is fact and what is opinion and how valid and accurate they are and to whom. I read this book in Swedish for a course I’m taking. Even though I’m not currently in a life situation where negotiations are a significant part of adding more value, I still found Bargaining for Advantage a worthwhile read. At least I know where to re-discover great answers once the stakes are getting higher.
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