restless peasant: life, changing :

Spend

A key theme running through this blog over the years has been the need for peasants and freedom seekers like us to create and utilise Assets. This pattern of living copies the cleverest of the strategies of the landed gentry, hopefully without aping their sometimes less than caring attitudes towards others.

Without formal education in the ways of money, it can be difficult for a peasant to know how to deal with it, indeed how to get it is a big enough challenge for most of us. The result of that is that most of us can’t afford to wait around and end up with an all consuming job or jobs and we know from some of the money making gurus that JOB stands for Just Over Broke!

The problem that most of us have is related to the lack of knowledge of how money can be put to work for us once we have some, so that we can continue to enjoy it for the long term. Otherwise it’s boom or bust all of the time, with bust being the more common of the two positions.

Assets and Liabilities

Assets are things you can create or invest in that generate money, such as a rental property, a small business or even intellectual property like a book you’ve written. Assets are created once and generate money many times over without you having to do much in the way of further work. This means of course that you need to spend a little bit of time and effort maintaining the asset, but largely you can leave it to work away generating cash while you think up and create some more.

Liabilities on the other hand are things that swallow cash, such as a monthly car payment, a mortgage on your house or credit card debt. Liabilities are doubly troublesome for the waged among us, as the money needed to pay for these cash drains has already been taxed before we get it. This explains the money trap that many peasants like us find ourselves in. There’s no use in moaning about it, the answer lies hidden in plain sight and is being used to great financial effect by the toffs while we complain.

The Trouble with Windfall Assets

So if assets are so great why is it that people who suddenly get lucky and are handed substantial assets such as a lottery win seem to end up miserable and penniless again in a very short time?

The problem for these people is that they fail to grasp or even get advice on the first two points above…the difference between an asset and a liability. Therefore they spend a great deal of their windfall on liabilities such as fancy holidays, cars and other luxuries. The cache of cash (the Capital) they had dwindles as these liabilities have to be paid for every month. These purchases are also for things that lose value overnight; a new car drops its value like a hot potato as soon as it is driven off the garage forecourt, because a great deal of its initial cost was tied up in profit for the dealer and the manufacturer and not a true representation of its material value. In this way, the second owner gets a better deal always. The rich never buy cars, by the way!

How to Spend

All of this means that a big part of financial self education should be to learn how to spend, because as you will have seen, rich people don’t seem to skimp on the luxuries. The main difference is that they spend pre-tax money that has already been generated by an asset i.e. profits. They never spend down the capital.

How to spend
The wealthy buy luxuries (liabilities) out of profits before tax. The Capital reserve grows and is never tapped into for spending on non money making items and the tax bill is minimised

The Myth of Ownership

When you grow up with nothing much to speak of, when your parents are frequently overheard worrying about money and there’s never anything leftover for holidays or Christmas presents, the lack of a feeling of security is palpable. Due to this, it is common for peasants like us to feel like we need to own stuff when we reach adulthood and to strive to never be in those same situations with our own kids.

This leads a lot of peasants down the garden path to debt and deeper and deeper insecurity, driven by the myth of ownership. But what do I mean by that? Forgive me for being so blunt…see that Range Rover the rich guy just turned up in? He doesn’t own it and what’s more, he doesn’t even have any desire to own it, because it is a tax deductible business expense that he pays a lease for every month from pre-tax profits, but still a liability. To own a luxury car like that, he’d need to dig deep into his Capital reserves and as soon as he drove it home, it would be worth 20% less than he paid for it. So in effect his company rents it for him to use and the money used to pay for it and run it and put fuel in it, is all tax deductible. In other words the money is never taxed!….think about that for a moment.

Next, see that 5 year old Ford your neighbour just drove up in?…he only thinks he owns it, because he pays a monthly car payment for it. By the time he’s paid it up, it will be knackered and he’ll need a new one…he never owns a car either and the payment comes from wages that have already been taxed!

This is the Ownership Myth in action and it applies not only to cars, but also houses, boats, buildings, clothes, fishing tackle and books too…Let me be even blunter here:

Ownership of anything is a Myth…we are all going to die very soon and you know the old saying about taking it with you!

As peasants, if we can get over the Myth of Ownership we can start to make real progress towards a life of freedom.

The poor buy liabilities like Mortgages, cars and holidays from after tax wages. They typically have no Capital reserves and in many cases are only financially solvent if the next pay cheque turns up on time as promised…one day it won’t!

Financial Education

So the most important thing in gaining freedom while still living in the real world, as opposed to foraging in the woods, is to educate yourself about money and how it really works. I’ve pointed to some resources you can use for this purpose at the end of this post and I highly recommend you get hold of them and start reading.

You and Money

Keep in mind that the rich and the poor have a fundamentally different relationship with money. It’s nothing to do with being clever, just about knowing one simple rule:

The poor work for money, while money works for the rich.

 


See all posts »

How to do 9 weeks work in an hour

9 weeks work in an hour? The average work week is around 40 hours. Certainly this is the commonly accepted figure. Of course when you add in overtime (paid or not) and all of those little extra 10 minutes here and half an hour there to finish urgent projects, the real figure is probably a lot more for most wage slaves. I wont rub it in further by mentioning the commute to and from work and certainly wouldn’t want to labour the point about your actual hourly rate after all of the extra time, taxes, fairs, fuel and lunch costs etc. No, I wouldn’t want to do that. It could be hurtful to many people.

However, just to help illuminate the point of this post a little more before I actually get to the point; much of that 40 ( or 60 or 80) hours is hugely unproductive. Hey, you know me by now, I’m not being scathing about the lack of productivity, but it’s probably so low as a percentage of the actual hours spent on the premises that most business owners would feel suicidal if they worked it out.

Now, tell me what’s holding you back from digging your tunnel out of there? What’s stopping you from building the project you have been dreaming of for ever? It’s most likely time, isn’t it? You don’t have enough time to spend on it, but if you did, then you could leave that 9-5 (7-7 more like in most cases) behind and enjoy yourself. You could be an idler, a traveller a painter or a musician if you just had the time to spend on the freedom project.

What if you could get an extra 9 working weeks in the year to spend just on your freedom project…yes 9 full 40 hour work weeks. And by the way, these work weeks I’m talking about are fully productive, there’s no water cooler time, no pissing around waiting for someone else to waffle on in meetings, no travelling, no extra costs etc etc. Just 9 full 40 hour work weeks when you don’t have to be anywhere else or work on anything but your freedom project!

Here’s how to get those extra weeks for your own stuff:

Put in 1 solid hour of work on your freedom project every day for the next 365 days. As soon as the hour starts, get your head down. Close all browser windows. Just have the program you need open. If it’s something physical you need to do, leave your iPad, phone and laptop somewhere else. Switch off the TV if you’re doing this in the evening, but put a solid 60 minutes into the work you know will create your freedom.

After 365 days of this, you will have worked for more than nine, 40 hour  week equivalents, which is actually more like 4 months in a real job due to the lack of distraction and the massive amount of non-productive time that is wrapped up in every real job.

Build your freedom project 1 fully focussed hour at a time, make it a habit, make it feel bad not to do it and in one year from now you will have spent the most productive year in your life and will be well on the way to creating yourself out of the rat race. You can jump off the hamster wheel of doom forever.

Frightened you’ll just sit and piss about checking Facebook?

Next time I’ll show you how to make sure you know exactly how to fill each of your 365 new hours.


See all posts »

start me up

And so we arrive at the end of January as agreed with a bunch of ideas and a new found fire in the belly for making 2016 the year for change. I’ve managed to write a blog post every day for a month at last and I hope some of them have been helpful to you. But it’s not the end, merely the beginning of a new chapter in our lives. I’m going off now to mix this jumble of blog posts and ideas up with some added material into a little eBook that you’ll be able to download soon.

If you’ve followed along for the whole of January thank you. I hope you’ve found time to pull together some ideas for your freedom enterprise. We’d all like to go off grid and be self sufficient if we could, but the fact is that we need to make money from somewhere, so it might as well be from doing something (s) we love and enjoy. You might well be interested in what’s coming up for February.

January saw us define, plan and generally cogitate over the idea of getting money from something we love to do already or by turning a passion, skill or previous experience into an enterprise that can sustain us financially.

The very best way I have found to make income continually is to copy the toffs of this world and put your assets to work for you. By leveraging the money making power of assets, you can gradually build up a serious income.

If you have a Salmon river, 100,000 acre forest or wind-farm, please feel free to use these as your money making assets  ;-), but I’m guessing if you’re still reading this, that the aforementioned isn’t an option for you. Don’t worry about this though, because you are fortunate enough to live in an era where it’s possible to make your own valuable assets out of thin air, largely for free. Some of these you already have, fully formed and they don’t even require any further tweaking or beautifying in order for you to get started making money from them.

February is going to be all about creating assets and putting them to work for you and if you have any kind of career (even a shit one) behind you, I’ll show you how you can use the experience from that to build your first thin air assets very quickly indeed. If you don’t have that and are very young, then I envy you, you can build assets so quickly with your unencumbered brain that it’s hard for us oldies to imagine.

Look out for the eBook of January very soon and the first asset post tomorrow.

 

 

 

Photo Credit: Bonita la Banane via Compfight cc


See all posts »

implementation 101

Yesterday we discussed how people get all smug and cosy because they think that buzzing around like a blue arsed fly (well known Scottish-ism) is a sign of success, when actually it’s just busyness with no constructive output.

Here’s a crash course on making progress:

  1. Identify a list (Mindmap) of positive things you are doing right now in your business. Positive things being things that are actually bringing in new or looking after existing customers and that are leading to cash arriving in your hand. Choose the top 3 performing POSITIVES.
  2. List out the actions you could take to DOUBLE the effect of the 3 positive things from above.
  3. Choose the 3 most likely from step 2. Define an Action to be taken, assign responsibility for this action to a named person (probably you), assign a timescale and start doing them.
  4. If you have time do steps 1-3 for NEGATIVES in your business set up. In the second step you are now looking for actions that could HALF the effect of those Negatives.

You are now working on the 6 actions that will bring the fastest and biggest benefit to your fledgling business. Implement these actions above and beyond anything else that is going on.

As soon as these projects are up and running, create a SYSTEM that makes them easily repeatable.

Once you’ve got this up and running (4-8 weeks max), go through the process again, this time review the unused items from your previous step one lists. If these are still valid (many of them will have become non-issues due to your recent work) add them to a new Mindmap and brainstorm new ideas for positives and negatives to add to this.

Repeat steps 1-4 from above.


See all posts »

busyness and implementation

Your new freedom business or self powered enterprise has a lot of advantages over conventional employment. These include of course the freedom to decide what you do on any given day and the freedom to decide on the direction and purpose of the business.

Depending on your upbringing and especially if you’ve been caught up in the world of working for others for any length of time, you might already be tainted with the protestant work ethic, which professes that “the Devil makes work for idle hands”.  The fire and brimstone salesmen have for centuries made us feel bad about idleness and it is this that has sparked the modern craze of busyness. Beware this illness when you start your freedom enterprise as it has the power to tie you in knots and make you doubt your worth.

“The really efficient laborer will be found not to crowd his day with work, but will saunter to his task surrounded by a wide halo of ease and leisure. There will be a wide margin for relaxation to his day. He is only earnest to secure the kernels of time, and does not exaggerate the value of the husk. Why should the hen set all day? She can lay but one egg, and besides she will not have picked up materials for a new one. Those who work much do not work hard” Henry David Thoreau

Instead of keeping yourself busy I encourage you to focus on implementation of your ideas and plans for your business enterprise.

When I was a business adviser over 10 years ago now, I repeatedly came up against brick walls with clients. They were generally fully up for making changes to their businesses and fully appreciative of my facilitation of the process to define the projects they should be working on. However, when it came to actually doing the things that would make the biggest differences they came up with all sorts of excuses and delaying tactics. This is bad for a business adviser, because despite the positive feeling within the company, to the outside world nothing is seen to change. Inevitably a senior person asks the question: “How much value did we get out of that business adviser guy who came in recently?”

Therefore I implore you to focus on a very short list of key projects to get your enterprise up and running successfully in the early stages. Further to that, once these projects are identified and defined you need to concentrate on the actions you must take to make your vision a reality. Don’t spend a minute more getting ready to get ready, just get started.

Here’s the priority list:

  1. Get a customer
  2. Look after that customer like they are royalty (not that I agree with the concept of royalty)
  3. Get another customer and repeat

Next time we’ll look at a method for planning that is sure to get implemented.

 

 

Photo Credit: Cole Vassiliou via Compfight cc


See all posts »

simplicity

Yesterday I suggested simplicity as a means of relieving the pressure that is on your new enterprise to make money.

Simplifying your life and outgoings can release a great deal of latent creativity too, which might well feed into your enterprise.

My first aim in my own simplification process was to obliterate monthly bills. Now I have no car payment, no credit card debt, no loans, no unnecessary subscriptions to anything; all of this takes the pressure off significantly.

You can reduce essential bills too. Electricity companies want you to use more electricity so they actively support the proliferation of gadgets that plug in to the wall. What’s essential?

Food bills are growing, but food waste is growing faster…what’s that all about?

Stuff is another aspect of modern life that tends to result in stress and a reduction in creativity. Is there stuff like excess clothing, gadgets and junk lying around your place? Start to get rid of it slowly, but steadily and don’t replace it. You can also raise a bit of spare cash this way by selling it off on eBay or with local free ads.

 

 

Photo Credit: renatotarga via Compfight cc


See all posts »

Subscribe: rss | email | twitter | +