SSSC Show Notes June 8th – June 12th

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June 8th – Mars

I love this quote by Marcus Aurelius:

“The impediment to action advances action. What stands in the way becomes the way.”

Obstacles are part of life, and learning how to turn them into opportunities is about attitude, determination, and practice.

Throughout my career I have found that the jobs with the greatest amount of pain points and difficult problems have lead to the most growth – both in technical and leadership skills.

It turns out this is the same attitude you need as an entrepreneur. The key to winning in business is being willing to solve enough problems and overcome enough failures to realize success.

It reminds me of a scene from the movie The Martian, spoiler alert, when he returns to earth and is speaking to a classroom of college kids about his experience on Mars.

He told them, “At some point, everything's gonna go south on you and you're going to say, this is it. This is how I end. Now you can either accept that, or you can get to work. That's all it is. You just begin. You do the math. You solve one problem and you solve the next one, and then the next. And If you solve enough problems, you get to come home.”

The same is true here on earth.

If you are in the process of launching a start up, a blog, or other business venture, embrace problems and learn to view them as opportunities. The more problems you solve, the better you get at finding solutions that work.

If you do this consistently at your day job, you'll soon be one of those key employees owners look to when they inevitably, experience new problems. Being a key employee leads to promotions, pay raises, bonuses, and a marketable resume leading to more opportunity.

In the Obstacle Is the Way, Ryan Holiday writes:

“Overcoming obstacles is a discipline of three critical steps. It begins with how we look at our specific problems, our attitude or approach; then the energy and creativity with which we actively break them down and turn them into opportunities; finally, the cultivation and maintenance of an inner will that allows us to handle defeat and difficulty. It’s three interdependent, interconnected, and fluidly contingent disciplines: Perception, Action, and the Will.

Obstacles are part of life. Embrace them fearlessly, and turn them into opportunities for success.

June 9th – Royal Society

Let’s talk about minimalism.

You see my mother is the head of the “Royal Society for Putting Things on Top of Other Things” (cue Monty Python clip).

And she lives with me.

We need fewer things.

Hence, the minimalist lifestyle.

The minimalist lifestyle is about removing things from your life that don’t give you value. Minimalism is a tool that can assist you in finding freedom. Freedom from worry. Freedom from guilt. Freedom from the trappings of the consumer culture we’ve built our lives around. Freedom from overspending.

Once you accept that you’re not going to own everything your neighbors own, you can start focusing on the few things that really matter to you. The waste of spending on everything else disappears. Minimalists search for happiness through experiences instead of things. So its up to you to decide what matters in YOUR life.

Here are 3 questions to ask yourself before making a purchase:

  1. What problem does this solve? If a new thing is not solving an existing problem, it becomes its own problem.

  2. Is my purchase based on a genuine need or a cultural pressure?

  3. Am I choosing quality over quantity?

Will Rogers said,

Too many people spend money they haven’t earned, to buy things they don’t want, to impress people they don’t like.

By embracing minimalism, we can break that cycle.

June 10th – Apps Don't Work

In our modern age, many folks out there have begun using money apps for budgeting. I started using Mint years ago. It seemed like a great tool – just hook up all of your bank accounts, credit card accounts, mortgage accounts, ALL THE ACCOUNTS.,and the app will does the heavy lifting for me.

It just never worked out. It was almost too easy. Efficiency is great, but you still have to be hands on with your processes. Especially when it comes to your budget and savings plan. You need to be joined at the hip with it. And if you're not in the data, its hard to be super attached to it.

Doing the work in Excel, or even on paper, is less efficient, yes, but it forces you to pay attention. It forces you to have a process in place. It forces you to make decisions.

Money apps are too easy to ignore. When is the last time you opened yours and gained some meaningful insight into how you're tracking and what you can do over the next couple of weeks to improve your financial position? Or how you're meeting your mid term and long term goals? What has the app told you about your income streams?

Even if you hook up all your accounts, and enter your budget into the app, it still requires maintenance and its easy to get this idea that it won't ever need to be updated. I mean, let's be honest…have you added all of your accounts? Confession time – I never loaded my student loan into Personal Finance. I couldn't bear to. My net worth looked great without the $50k student loan. And it looked terrible with it. I figured what does it matter? It'll get paid off eventually.

Then when I calculated how much it was going to cost us to live our life on a sailboat, even for a couple of years, I realized that we couldn't make it work if we still had that pesky student loan to pay off. So I had to face reality.

Adding financial management to a phone that is constantly distracting you with updates from texts, emails, and social media may hinder your solemn, sacred budgeting process.

The fact is, the app can't hold you accountable. You have to be fully committed. And if fully committed doesn't mean that you're willing to spend some dedicated time crunching numbers, maybe you aren't ready for financial freedom.

Don't rely on mindless apps to get you there.  Just tracking expenses isn't enough. And let's face it, that's what most financial apps do.

Listen, I know its a challenge – there are so many demands on our time. We are all stretched thin. But this is your livelihood. This is your ticket to more time, to meaningful time, so take the time, and love on your budget every week. Spend time on your long-term goals, track your progress, celebrate your wins, and improve on your mistakes.

Commit to a weekly deep dive on your income and expenses, and take a peek at your net worth – your real net worth – at least every few months. If you're paying off debt, you're gonna see that number soar in no time.

June 11th – The Stock Market is Stupid

Let's talk about the stock market. I see a lot of people bragging on Twitter about how well their brokerage accounts are faring, and how all those people who sold their stocks were mistaken, and I chuckle. They could be right. They ARE right. Today.

Here are some interesting facts about the stock market:

  • GDP or Gross Domestic Product has taken a hit the last few months.

      • GDP is the most closely-watched and important economic indicator for both economists and investors because it is a representation of the total dollar value of all goods and services produced by the US economy.

      • [1]According to the Bureau of Economic Analysis, the GDP for the U.S. shrank at a rate of 5% during the first quarter of 2020.

  • Unemployment is at 13% in early June of 2020 up from 4% in January of the same year.

On June 10th, the Federal Reserve released in a statement, [2] “The coronavirus outbreak is causing tremendous human and economic hardship across the United States and around the world. The virus and the measures taken to protect public health have induced sharp declines in economic activity and a surge in job losses. Weaker demand and significantly lower oil prices are holding down consumer price inflation…The ongoing public health crisis will weigh heavily on economic activity, employment, and inflation in the near term, and poses considerable risks to the economic outlook over the medium term.”

For those who aren't certain of the direction of  the economy in the short term, I think this statement by the Fed deserves some attention. I reference the source link in my show notes and you can read it there.

This spring, those who follow the stock market watched the Dow Jones Industrial Average fall more than two thousands points on March 9th. Since that early correction, we've seen a great retracing back to previous high levels, causing a deep V shape on index charts.

Some are calling it a “Phantom V”, like David Haggith who wrote an article on Seeking Alpha called, [3]”I Believe in the Stupidity of the Stock Market.” He states in his article, “The market is stupid because it is actually betting on the “V.” It believes in the “V.” I don't, and I'm not betting on the “V.” I'm betting on stupid, and that seems like a pretty safe bet right now. “

The frustration for stock traders is that the current valuation of the stock market is out of line with the drop in GDP and the high unemployment rate. It doesn't make logical sense. But then again, when did it ever?

So what's the answer?

As Michael Douglas's character Gordon Gekko alluded to in the movie Wall Street, that good ole hero Greed will save us.

“Greed is good. Greed is right, greed works. Greed clarifies, cuts through, and captures the essence of the evolutionary spirit. Greed, in all of its forms; greed for life, for money, for love, knowledge has marked the upward surge of mankind.”

 

June 12th – Weekend Budget Checkdown

Hi, this is your Friday savings pep talk. Before you head into the weekend, there's a few items that will help you stick to your budget. I'm calling it the Weekend Budget Checkdown.

  1. Before you visit a single store or make reservations at your favorite restaurant, go over your budget for this pay period, and compare to what you've already spent. If you listen to me often, you'll know I'm a big proponent of budgeting by pay period instead of by month – that way you always know exactly how you're spending each paycheck.
  2. For this pay period, you should have a bucket for discretionary spending. (unless you're in ultra frugal mode, which is awesome, good for you). So take a look, or as my co-worker would say, take a gander at what you've already spent this pay period, how much is left, and decide how much of your fun money you can spend over the weekend.
  3. Go ahead and pull that amount out in cash, or if you prefer to use a debit card, take a piece of notebook paper, write your spending allowance at the top, and then every time you use your debit card, deduct what you bought from what's left to spend.

Yes, its a pain in the butt, but we have big dreams, and we're not going to reach those dreams by being lazy or complacent.  I'm giving this pep talk to myself as much as I am to you. I'm no master of frugality. I have to remind myself constantly why I'm forgoing some pleasure today for a way bigger reward down the road. 

All I know is this – If I can do it, you can do it.

On Sunday evening, if you stayed within your budget, give yourself a mini reward. Spend an hour doing something just for you. You earned it.

And then Monday morning, get your butt moving again. We've got bills to pay and cash to save. Its hustle time!
Have a great weekend!

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