Monday, 25 July 2016

Stake your claim for a better future

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In the 12th century, philosophy was simple and inflexible. A man was born into a certain family and inherited his father's trade. A peasant raised his children to follow into his footsteps. Perspectives were narrow and improvement unthinkable.

The fate of each person was to accomplish certain prescribed tasks and preserve tradition. A good part of a person's earnings was spent to maintain his position: to keep housing, attire, and diet according to his condition. Those who succeeded in improving their social status represented a very small minority.

The medieval mentality encompassed a mixture of short-term frenzy and long-term resignation. On feast days, banquets were held and wine consumed, but during the rest of the year, passive acceptance was the rule. Silent suffering was viewed as a sign of wisdom.

Immediate advantages


People in the Middle Ages focused on immediate advantages and lacked long-term plans. A peasant in the 12th century would not have viewed a good harvest as an opportunity to save money, move to the city, and start his own business. In his mind, a good year was just a temporary escape from misery, not a step towards a better situation.

Our age offers almost unlimited opportunities to those who possess ambition and initiative, but it demands a radically different philosophy. Unless you acquire sound financial habits, chances are that you won't be able to seize those opportunities.

Unfortunately, not everybody makes the effort to pursue improvement. If you doubt my words, ask yourself the following questions: How many people save regularly in order to achieve financial independence? How many make to-do lists regularly? Material growth is linked to psychological development. Wealth is the consequence of vision and persistence.


Great possibilities

Our world offers numerous opportunities to individuals who want to exercise their creativity and entrepreneurship. Businesses can be started with little capital, digital technology can be used to enhance productivity, and the internet allows everyone to sell his products around the globe. If you want to improve your situation, there are no limits to what you can achieve.

No excuse can justify renouncing this immense array of possibilities. The barriers to change are mostly psychological. Irrespective of your current situation, you can embrace transformation. If you take action, you can improve your life.

The transition from the Middle Ages to modern thinking began in the 13th century, when Thomas of Aquinas wrote down his observations on the nature of individual initiative. His views about risk represented a major advancement vis-à-vis medieval beliefs. His understanding of the existence of different prices in various markets put an end to the medieval mentality and introduced the world we know, where each man determines his own destiny.

Nowadays, if you ask people about what is blocking their progress, you might hear the same answers that were given in the 13th century: insufficient resources, limited opportunities, excessive competition, and lack of contacts. Even though the world has drastically changed, not everybody is conscious of the opportunities.

Unlike peasants living in the Middle Ages, we no longer inhabit an immobile world that limits our ambitions. Is it your goal to further your education and accelerate your career? Do you dream of starting your own business?


A workable plan

Usually, saving some money is going to be the first step for making improvements in your life. You are going to have to let go of your impulse to spend money today and focus instead on the opportunities down the road. Time will reward your efforts if you define your objectives and carry out a plan to attain them.

Living frugally will allow you to save the funds that you need to take advantage of the next opportunity. In the Middle Ages, there was no way to move forward, but in the present world, real possibilities exist. Here are three ideas to help you gather that initial capital:


  • Redefine what's essential: You can make important savings if you acquire frugal habits. Your utilities bill can often be reduced. You can cut down your energy consumption, for instance, by turning off the heating in rooms that you are not using all the time and by improving the isolation of windows and doors.
  •  Extend the lifetime of your possessions: Clothes constitute a good example, in particular business suits. If you handle your wardrobe with care, it can serve its purpose for a long time without need of additional purchases. For office work, it is usually a good idea to choose conservative designs and colours. They are less subject to the vagaries of fashion and you can wear them for many seasons. White shirts are particularly easy to match with dark clothing. Frugality can also apply to items such as mobile phones. If the old one is still working fine, do you really need to purchase the latest model?
  • Reduce detours and unnecessary travel: Avoid the come-and-go that accompanies indecision. Thinking ahead is as important on the road as in other areas of life. If you plan your journeys carefully and drive smoothly, you can make substantial savings in motoring expenses. Make the effort to programme your trips for maximum efficiency. If you need to buy groceries, can you find a supermarket on your route to work? If you are planning to visit a computer store, can you run some errands on the same trip? If the location of your home allows it, you may even be able to ride your bicycle instead of using the car, a practice that would be also advantageous for your health.
Stake your claim for a better future, and redefine what is essential. Declare yourself willing to exchange short-term benefits for permanent advantages, and ignore the words of those who preach passivity. The world is more open to personal initiative today than ever before. If you reduce your lifestyle to the essentials, you will increase your ability to seize the next opportunity.

Text: http://johnvespasian.blogspot.com

Image: Photograph of a medieval church, taken by John Vespasian, 2016.

 

For more information about rational living, I refer you to my books

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Sunday, 17 July 2016

Read this before you quit your job: You don't want to become a misunderstood genius

"I am leaving behind everything that is artificial," announced Paul Gaugin to his friends when he was 43 years old. "I have decided to go back to nature and devote the rest of my life to painting."

Predictable disillusionment

Gauguin left Europe for Central America and later moved to an island in the South Pacific where he produced a series of paintings to which no one paid much attention.

Destitute and ignored by the public, Gaugin died in 1903, when he was only 55 years old. Long after his death, critics recognized him as a genius. Nowadays, each of his paintings is worth millions.

Paul Gaugin's biography is the quintessential story of the unrecognised artist living in miserable conditions. Disillusioned by his lack of success, he became an alcoholic, an aspect that must have contributed to shortening his life.

I do like Paul Gaugin's paintings, although they don't belong to my favourites. I will leave to art critics the job of praising Gaugin's work, since this is not the main lesson to be drawn from Gaguin's life story.


Nonsensical sacrifice

His was the kind of huge error that is often portrayed as heroic sacrifice. The fact is that nobody needs to ruin his life in order to become a great painter, inventor, musician, or entrepreneur.

Do you think that Gaugin would have lived longer if he had stayed in Europe and worked further at his job? Certainly, since he was a stockbroker. Would he had produced such great paintings if he had devoted just his evenings and weekends to art? In my view, that's most likely.

"Paul, your idea of leaving everything behind is pure nonsense," I would have told Gaugin if I had been one of his friends. "There are better ways to do things." I guess that Gauguin might have been curious to hear my advice, so here it is:

  1. For succeeding in art, like in any other field, persistence plays a much bigger role than talent. A little every day amounts to a lot in the long term.
  2. Extraordinary skill and expertise are the result of learning from a long series of failures. Take your time to make mistakes.
  3. Giving up something in exchange of nothing is counter-productive. Advance slowly and make each step worthwhile.
  4. Innovation in art, business, or philosophy needs a long time to catch the public's attention. You need to be both relentless and realistic.
  5. Instead of wasting time complaining, devote your efforts to promoting your work. Becoming an effective marketer is as difficult as becoming an accomplished artist.
The rational approach

It is much better to build your business, your house, or your pyramid, stone by stone. One day, your monument will be so high that no one will be able to ignore it. Forget questionable ideas that lead to uncertain results.

Go for the gold, go for the solid approach. Persistence and patience work in most cases. Giving up everything and throwing yourself to the wolves is not a good approach. When you are faced with unproven ideas, follow my formula: abdicate what you cannot demonstrate.

[Text: http://johnvespasian.blogspot.com]

[Image by freeparking under Creative Commons Attribution License. See the license terms under http://creativecommons.org/licenses/by/3.0/us]


For more information about rational living, I refer you to my books

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Sunday, 10 July 2016

Serenity and efficiency begin with clarity

There is a cure for stress. It is not a drug and it is not a fantasy. It won't cost you money, but it is not for free. From those who try it out, some feel born again, others rejuvenated. Experience has shown however that many people cannot cope with the freedom that the remedy brings.

Running in circles


The remedy is known under many different names. You may call it simplification or reduction, downsizing or streamlining, selection or choice, reshuffling, refocusing, elimination, or termination. In any case, the concept is much easier to name than to implement.

In order to be able to concentrate our energies on the essential areas of our lives, we must first establish clear priorities. The latter, of course, is what makes some people shun simplification. What they dread, like mice running in circles, is to stand still for a minute and question their contradictions.

Rational decisions are impossible for those whose life lacks a sense of direction. Overloading one's days with senseless activities is a psychological defence mechanism against the terror of taking responsibility. Too much to do is an excuse to avoid facing indecision. A hundred random acquaintances cannot replace conversation with one true friend.

Newspapers often report of companies that collapse due to excessive debt. Stress is heavier for the soul than indebtedness for a business. Serenity and efficiency begin with clarity. Selection enhances results. Resources are limited in all endeavours, but the time of our lives is the most scarce resource of all.
 

Less complexity 

Less complexity results in more energy. Fruit growers prune their trees once per year in order to reinforce the vigour of the healthiest branches of each plant. Lean trees will produce more fruit than those whose moribund branches have not been cut off.

Concentration of efforts improves results. Shepherds cull their herds at regular intervals to prevent contagious sickness to spread. We all are naturally reluctant to give up possessions accumulated in the past, but frequently, liquidating non-performing assets and reinvesting the proceeds is the best strategy.

Selection frees up resources for higher priorities. Retailers put slow-moving items on sale or give them away for free in order to make space on the shelves for more popular goods. Are you investing endless efforts in a dead-end career? How can you reinvent your past and aim at a future that is spectacularly better than your present?
 

It is high time

Productivity experts who advise manufacturers always start by asking workers to clear up the factory floor. It is only when misplaced tools and obsolete inventory are removed from the work space that people begin to see their own mistakes. Without visibility, there can be no transformation.

A cluttered agenda is a cage that houses paradise birds waiting to be released. Those birds are your best ideas, the ones that you have not formulated yet. It is high time to simplify your life and sharpen your ambitions. The birds are ready to fly. Open the cage and set them free.


[Text: http://johnvespasian.blogspot.com]

[Image by Fremlin under Creative Commons Attribution License. See the license terms under http://creativecommons.org/licenses/by/3.0/us]


For more information about rational living, I refer you to my books


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The John Vespasian Letter

Sunday, 3 July 2016

Do not let anxiety prevent you from taking action

Exaggerated fear is, more often than not, a mistake. If you act prudently, every period can be good to make financial commitments to secure your future. When bad news and pessimism reign (such as it happened last week), those are times of great opportunity to purchase shares of solid companies at low prices.

Excessive fear

Stories of financial collapse reported by the media in the last decade have scared many people out of the stock market. At the time of writing this, you can hardly turn on the radio or open a newspaper without learning about the upcoming financial crisis.

However, in investing, like in everything else, realism triumphs over exaggerated anxiety and worry. Gloomy forecasters seldom look objectively at facts. On many occasions, share-holders would be better off if they just keep a cool head, and avoid liquidating their stocks at fire-sale prices.

The first step to develop self-confidence as an investor is to realize that nobody possesses the ability to predict exactly when shares are going up or down. There is no magic formula for successful investing. The best you can do is to strive to keep well informed, make rational decisions, and focus your eyes in the next decades.


Whenever a period of inflation or deflation starts, some gurus will claim that they had predicted what was going to happen, but these are often the same persons who had previously made many wrong predictions. A broken clock gives you the right time twice per day, but cannot provide you accurate time measurements. You really need to think for yourself, and make your own decisions.

Patience and foresight


Reason and realism constitute a superior approach to making investment decisions (and all sort of decisions in general). If you want to develop self-confidence as an investor, you have to remind yourself every day to have patience, and keep looking ahead. Ignore short-term volatility and look at the big picture. Ask yourself where the world economy is headed for in the next years.

You need to move your focus beyond the next quarter, and see what the whole year will look like. Look for companies with a strong international presence. Even in periods of generalized gloom and doom, many countries continue to grow at a good speed.
 

Conservative investors tend to prefer enterprises that operate in stable markets, in particular if their dividend is maintained or increased. At the same time, risks can be minimized by investing in corporations, such as pharmaceuticals, that have world-wide distribution for their products. These enterprises often purchase licenses for new medicines from small laboratories and universities in order to distribute those medicines internationally.

Rational expectations

How can you increase your confidence in making the right financial decisions? First, you have to realize that you do not need to know everything in order to become a good investor. In order to succeed and increase your self-confidence as an investor, all you have to do is identify well-managed companies whose shares are priced attractively. If their products meet fundamental human needs efficiently, chances are that those businesses will continue to do well in the future.

Indeed, unexpected problems might come up next week, and make your shares go down. When it comes to investing (and to most important decisions in life), a certain measure of uncertainty is part of the game. 

A claim of infallibility is something that you should leave to those who believe in magic. Yet, as a general rule, rationality works much better than magic, in investment and in everything else. A important part of rationality is accepting that you will make some mistakes along the way, and that you should not engage into endless self-recrimination.

Make your investment decisions (and all other important decisions in your life) on the basis of rational expectations.  Research the facts, think for yourself, try to make good choices, and stop worrying about the future. 


If you diversify your portfolio and buy shares of companies that operate in countries with good prospects of economic growth, you should be able to profit from the increasing prosperity around the world. Do not let anxiety and worry slow you down. Take constructive action. Let the pessimism to those who let their lives be driven by exaggerated emotions.

[Text: http://johnvespasian.blogspot.com]
 

Image: photo of antique sculpture taken by John Vespasian, 2015

For more information about rational living, I refer you to my books


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Sunday, 26 June 2016

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