Tag Archives: Mindset

Purpose

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“The only way to do great work is to love what you do. If you haven’t found it yet, keep looking. Don’t settle. As with all matters of the heart, you’ll know when you find it.” Steve Jobs

Purpose is an abiding intention to achieve a long-term goal that is both personally meaningful and makes a positive mark on the world, according to The Greater Good Science Center at the University of California, Berkeley. The goals that foster a sense of purpose are ones that can potentially change and improve the lives of other people. “If you can tune into your purpose and really align with it, setting goals so that your vision is an expression of that purpose, then life flows much more easily”, says author Jack Canfield

Purpose is not a destination, but a life’s journey, a mindset and a practice. It’s accessible at any age and at any income level, if we’re “willing to explore what matters to us and what kind of person we want to be—and act to become that person”. Filmmaker and author Drew Scott Pearlman writes: “Your purpose must be particular to you. This is the road less traveled. Your purpose cannot be someone else’s path, not your family’s path nor your friends’ path.”

Individuals with a sense of purpose report higher levels of happiness and life satisfaction—which seems associated with better health, wealth and emotional well-being outcomes. For many people, it was good and beneficial to have a purpose or a goal, no matter what it was.

Additionally, the physical health benefits of a sense of purpose are well-documented. For example, a Harvard’s School of Public Health study found that people who report higher levels of purpose at one point in time have objectively better physical agility four years later than those who report less purpose.

Moreover, researchers suggest that people take better care of themselves when they feel like they have something to live for. Having a purpose also seems to be associated with lower stress levels, which contributes to better health and emotional well-being. And, according to Helen Keller, “True happiness… is not attained through self-gratification, but through fidelity to a worthy purpose.”

Additionally, people with a more “prosocial” purpose—one aimed at helping others—experienced greater personal growth, integrity, and health later in adulthood. This result was echoed by a 2019 study by Anne Colby and colleagues at Stanford University. They surveyed almost 1,200 Americans in their midlife about their well-being and what goals were important to them. The researchers found significantly better physical health and higher emotional well-being among people who were involved in pursuing beyond-the-self goals, compared to those who were pursuing other types of goals. In other words, engaging in prosocial goals had more positive impact on physical health and emotional well-being than engaging in non-prosocial goals.

A sense of purpose appears to suggest that humans “can cooperate and accomplish big things together”. Research suggests that team leaders can effectively boost the productivity, work experience and well-being of their team members by helping them connect to a task-related higher purpose. The 2013 Core Beliefs and Culture Survey revealed that 91 percent of respondents who believe that their company has a strong sense of purpose also say it has a history of strong financial performance.

“Everything in your life informs you what your purpose is. How do you know it’s your purpose? It feels like it’s the right space for you. It feels like ‘This is what I should be doing; this is where I feel most myself.” Oprah Winfrey

Purpose also helps both individuals and the species to survive and thrive. Purpose often grows from our connection to others, which is why a crisis of purpose is often a symptom of isolation. Once you find your path, you’ll almost certainly find others traveling along with you, hoping to reach the same destination—a community.

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According to research by Kendall Cotton Bronk, a professor of psychology in the Division of Behavioral & Social Sciences at Claremont Graduate University, finding one’s purpose requires four key components:

  1. Dedicated commitment,
  2. Personal meaningfulness,
  3. Goal directedness, and
  4. A vision larger than one’s self.

Often, finding our purpose involves a combination of finding meaning in the experiences we’ve had, while assessing our values, skills, and hopes for a better world. It means taking time for personal reflection while imagining our ideal future. “Everything in your life informs you what your purpose is. How do you know it’s your purpose? It feels like it’s the right space for you. It feels like ‘This is what I should be doing; this is where I feel most myself’,” says Oprah Winfrey

A sense of purpose as we navigate milestones and transitions means that we can look forward to more satisfying, meaningful and abundant lives.

“He who has a why to live can bear almost any how.” Nietzsche

References:

  1. https://greatergood.berkeley.edu/topic/purpose/definition
  2. https://greatergood.berkeley.edu/topic/purpose/definition#why-find-purpose
  3. https://greatergood.berkeley.edu/topic/purpose/definition#how-to-cultivate-purpose
  4. https://www.thegrowthreactor.com/quotes-about-purpose-in-life/

Inflation Will Persist

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“Inflation is like chewing gum. It’s sticky and flexible, and you definitely don’t want to step in it.” Capital Group

For the past 30 years, investors haven’t had to worry much about dealing with inflation, says Capital Group fixed income portfolio manager Ritchie Tuazon. That changed last summer when COVID-related distortions and excessive government stimulus caused prices for energy and most consumer goods to skyrocket.

Today, the biggest questions for long term investors are how high will inflation go and how long will it last?

Adding to the uncertainty is that there are two types of inflation, according to Tuazon:

  • Sticky inflation tends to have longer staying power. Sticky categories include rent, insurance and medical expenses.
  • Flexible inflation — affecting items such as food, energy and cars — has risen much faster in recent months but many believe it won’t last.

From Capital Group’s perspective, they expect high inflation might persist longer than expected and should move closer to its 2% historic goal by sometime in 2023.

Higher inflation levels should remain elevated through late 2022, fueled by labor shortages and broken supply chains. “Consumer prices will eventually return to normal, but that process may take longer than Fed officials are expecting,” says Tuazon.

The Fed is left to react to inflation, but not overreact. Start, but not go too fast. Tighten, but not in the “wrong” ways.

Regarding inflation impact, “the first question is whether inflation will cool off enough on its own to not threaten corporate earnings growth or hurt consumer spending”, states Liz Young, Head of SoFi Investment Strategy. “The second question is less about whether the Fed can control inflation expectations with policy moves and more about whether the market is going to think they’re making a mistake and create a self-fulfilling prophecy.”

References:

  1. https://www.capitalgroup.com/advisor/pdf/shareholder/MFCPBR-086-652781.pdf

Duke’s Coach Mike Krzyzewski Career Ends

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“It is not the critic who counts, not the one who points out how the strong man stumbled or how the doer of deeds might have done them better. The credit belongs to the man who is actually in the arena, whose face is marred with sweat and dust and blood; who strives valiantly; who errs and comes short again and again; who knows the great enthusiasms, the great devotions, and spends himself in a worthy cause; who, if he wins, knows the triumph of high achievement; and who, if he fails, at least fails while daring greatly, so that his place shall never be with those cold and timid souls who know neither victory nor defeat.” Teddy Roosevelt

One of the most impressive coaching careers in NCAA basketball history ended Saturday, April 2, 2022, when Duke Blue Devils men’s basketball team lost to North Carolina Tar Heels in Coach Krzyzewski’s 13th and last Final Four appearance in New Orleans. The loss shut down his bid for a sixth national title.

The loss marked the end of Mike Krzyzewski’s illustrious head coaching career – one that started at the U.S. Military Academy in 1975 before he took the Duke job in 1980. Krzyzewski, a West Point grad, played point guard at West Point from 1966-1969 under Coach Bob Knight and then spent 1969-1974 serving in the U.S. Army, coaching three different service teams.

In a 2018 Military Times article, Krzyzewski, the 75-year-old grandfather of 10, called West Point “the best leadership school in the world.” 

Regarding his tenure as head coach, “I’ve been blessed to be in the arena,” Krzyzewski said. “And when you’re in the arena, you’re either going to come out feeling great or you’re going to feel agony. But you always will feel great about being in the arena. And I’m sure that’s the thing when I’ll look back that I’ll miss. … But damn, I was in the arena for a long time. And these kids made my last time in the arena an amazing one.”

Krzyzewski’s coaching career ends with a victory total of 1,202 — including 101 in the NCAA Tournament.

References:

  1. https://nypost.com/2022/04/03/an-epic-ending-for-mike-krzyzewski-the-man-in-the-arena/

Visualization: Your Life In Focus

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“The key to effective visualization is to create the most detailed, clear, and vivid a picture to focus on.”

Research shows that the more you focus on the things you desire, the better chance you have at getting them. Thus, knowing what you want and focusing on what you want are essential for success and achieving your best life.

As you might ascertain, having a clear direction of where you’re headed or where you want to go is essential. Without a clear purpose and goals, it can be very easy to get caught up in things that aren’t actually moving you forward in your life’s journey.

For example, struggling comedian and actor, Jim Carrey used to picture himself being the greatest actor in the world. When Carey was still a “wannabe” during one of his appearances on “The Oprah Winfrey Show”, he spoke about his early days trying to make it in the entertainment business. He was broke and had no future. But he took a blank check and wrote out $10 million dollars to himself for acting services rendered and dated it five year in the future.

Subsequently, he carried that check in his wallet at all times and looked at it every morning, visualizing receiving $10 million. Five years after he wrote the check to himself, he found out that he was going to earn $10 million from the movie “Dumb and Dumber.”

“Create the highest, grandest vision possible for your life, because you become what you believe.” Oprah Winfrey

Vision boarding is an excellent way to get clear on your goals. Creating a vision board is a powerful way of getting to know yourself and what it is you truly want in your life.

A vision board is essentially a physical (or digital) manifestation of your goals. Vision boarding involves collecting images or objects that speak to the future you want to create and arranging them on a board for a tangible and aesthetically pleasing reminder of where you’re heading.

References:

  1. https://seatgeek.com/tba/articles/oprah-winfrey-2020-vision-tour-dates-tickets/
  2. https://www.mindbodygreen.com/0-20630/8-successful-people-who-use-the-power-of-visualization.html
  3. https://www.mindbodygreen.com/articles/how-to-make-a-vision-board

 

“Success = Knowing, Growing, Acting and Serving.”

The Power of Visualization

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“Successful people, such as professional athletes and other top performers, have used visualization techniques to visualize their desired outcomes for ages.”

Visualization is one of the most powerful tools you can use to accomplish any goal you set for yourself. Visualization can be applied to help you improve your performance and be successful in all aspects of your life.

Visualization works because when you visualize, your mind and body don’t really know the difference between what you visualize and reality. When you visualize your goal, you create the thoughts, focus and energy that will help to pull that goal towards you.

The Power of Visualization.When you visualize, your body and mind react as if they were true. Many people believe that when you believe something to be true, you attract it to you – you make it true.

However, believing something to be true doesn’t necessarily make it happen. For many people taking action is challenging due to lack of confidence or a lack of belief in their goal. Visualization, because it taps directly into these emotions, can strengthen your belief in yourself, in your abilities and in your goals.

Additionally, visualization helps paint the scene so you can better plan and prepare for success. When you visualize your success as reality you can also visualize your path to get there.

Before taking the stage to speak to a large audience, Matt Mayberry, Maximum Performance Strategist and a former NFL linebacker, always picture himself giving the “perfect” speech. He would begin weeks in advance by picturing the audience and the positive reaction from the crowd. 

Top performers, among many others, have mastered the technique of positive visualization and openly credit it as a success tactic. Practice makes improvement. Practicing visualization isn’t just a fun exercise – the better you become at visualization the faster you will achieve the success you desire.

When you think of a big goal or dream that you want to achieve, it’s natural to think of all of the obstacles that will come your way. 

All top performers, regardless of profession, know well the importance of and consistently practice of picturing themselves succeeding in their minds before they actually do in reality. It is extremely effective when harnessed and used correctly.

“The key to effective visualization is to create the most detailed, clear, and vivid a picture to focus on.”

Research shows that the more you focus on the things you desire, the better chance you have at getting them. For example, struggling comedian and actor, Jim Carrey used to picture himself being the greatest actor in the world. When Carey was still a “wannabe” during one of his appearances on “The Oprah Winfrey Show”, he spoke about his early days trying to make it in the entertainment business. He was broke and had no future. But he took a blank check and wrote out $10 million dollars to himself for acting services rendered and dated it five year in the future.

Subsequently, he carried that check in his wallet at all times and looked at it every morning, visualizing receiving $10 million. Five years after he wrote the check to himself, he found out that he was going to earn $10 million from the movie “Dumb and Dumber.”

Consider two other examples:

  • Boxing champion and legend Muhammad Ali was always stressing the importance of seeing himself victorious long before the actual fight. 
  • Michael Jordan always took the last shot in his mind before he ever took one in real life.

As the examples demonstrate, you to can visualize and create an image of what you most desire. You create a detailed mental scene of what it looks like as you achieve your goal. Visualize it happening now, and the scene that is playing out.

There is a big difference in imaging your goals and making them feel so real your mind believes it has already happened. The more you surround yourself with imagery or words related to your goal, the more real it will become to you.

To make any habit stick, you need to continue to do that habit. The same goes for visualization, the more you practice the quicker you will be in the frame of mind that helps pave the way to success.

Visualization is extremely powerful in helping you achieve success and realize your goals. However, you will still need to put in the hard work and dedication. Don’t forget to repeat, repeat, repeat!

  • Picture yourself victorious – If you can’t see it, then it’s not going to happen. In order to achieve your biggest goals and dreams, you have to picture yourself victorious. You have to look beyond your current circumstances and past failures. While visualizing, it’s necessary to visualize as many details as you can. Re-create any feelings that are in alignment with your dreams. Make it part of your daily routine. You will be amazed at the improvement in your life and astounded when your dream is realized.
  • Create a vision board. – A vision board gives you the opportunity to actually see your goals. This vision board can be a poster board, a piece of paper, the back of a cardboard box, or anything. On the vision board, put pictures that illustrate what you desire in your life. On your vision board, you can also post quotes that embodied what you want and read them every single day.
  • Utilize the power of a trigger card – Your biggest goal and dream can be placed on a note card to serve as your trigger card. From your 3×5 index cards, read daily the goal you desire most. Get in the habit of doing this every day. Each morning and each night, read those index cards, close your eyes, and imagine yourself accomplishing and following through on that major goal of yours.

Get in the habit of putting together a positive vision into your everyday life. Visualize yourself succeeding, achieving every goal, accomplishing every task. The key is to make your positive vision stronger than anything that can set you back. The more vivid you can get, the better it will work for you. Start thinking of your personal goals in life. Spend about 10 to 15 minutes picturing yourself achieving each one.

Get as detailed as possible. Picture what you will do once your goal is reached. How amazing does it feel? How will this change the course of your life? Remember, the little details increase the likelihood of the big picture.

It’s important to understand that visualization alone isn’t enough. But, it is an integral part of the process of you becoming the best version of yourself. That’s the power of visualizing your dreams. That’s the power of dreaming. That’s the power of relentlessly believing and working toward your vision every single day.

If you can’t visualize yourself being extremely successful, dominating your profession, and running a phenomenal business, then chances are you never will.

References:

  1. https://www.entrepreneur.com/article/242373
  2. https://www.selfgrowth.com/articles/How_Visualization_Creates_Wealth_and_Success.html
  3. https://www.mbswithcalie.com/visualization-for-success/
  4. https://www.entrepreneur.com/article/283241
  5. https://www.entrepreneur.com/article/242373

Seven Steps to Success: John C. Maxwell

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“Attitude is the first quality that marks the successful man. If he has a positive attitude and is a positive thinker, who likes challenges and difficult situations, then he has half his success achieved.” John C. Maxwell

Although there is not a perfect formula to be successful, everyone has the capability to become successful. Success is a journey that you create for yourself if you strongly desire it and act on it. And, success can be learned and attained by you and everyone else. One ‘tried and true’ way to learn about becoming successful is to study the success of other people.

And that is what John C. Maxwell* has done. After over nearly fifty years of knowing successful people and studying the subject, John C. Maxwell has taught millions the principles of success and has embraced the following definition of success:

Success is…

  • Knowing your purpose in life,
  • Growing to reach your maximum potential, and
  • Sowing seeds that benefit others.

By this definition, success is a journey rather than a destination. No matter how long you live or what you decide to do in life, you will never exhaust your capacity to grow toward your potential, nor will you run out of opportunities to help others.

Additionally, Maxwell has developed a process of seven steps for success that are available to you and anyone else who desires to study and pursues the journey of success:

1. Make a commitment to grow daily.

“Success is… knowing your purpose in life, growing to reach your maximum potential, and sowing seeds that benefit others.” John C. Maxwell

Success comes from growing, not from achieving, acquiring or advancing. If you commit to growing each day, you will soon start noticing positive results in your life. Every action that you take towards growing will bring you closer to success, it doesn’t matter how small your action is or how slow you go as long as you keep going. As the poet Robert Browning said, “Why stay on earth except to grow?”

2. Value the process more than events.

“You’ll never change your life until you change something you do daily. The secret of your success is found in your daily routine.” John C. Maxwell

If your goal is to go to the next level in life, then strive for continuous improvement. Events in life are temporary, they teach you how to make better decisions. However, it is the process of change and growth that have lasting value. Choose to embrace the process and learn from both, the process and the event.

3. Don’t wait for inspiration.

“If you start today to do the right thing, you are already a success even if it doesn’t show yet.” John C. Maxwell

People who advance far in life find ways to motivate themselves and live the best they can regardless of how they feel. At times, they even have to push themselves to do something. Successful people persevere. Basketball great Jerry West said, “You can’t get much done in life if you only work on the days when you feel good.”

4. Be willing to sacrifice pleasure for opportunity.

“Success is peace of mind, which is a direct result of self-satisfaction in knowing you did your best to become the best that you are capable of becoming.” John C. Maxwell

There are two paths to follow: “You can play now and pay later, or pay now and play later. You choose whether you will first want to pay or play. Regardless of the path you choose to take, life will always demand a payment. If you choose “to pay first,” you will be more pleased with your results and enjoy greater and sweeter rewards

5. Dream big.

“Where success is concerned, people are not measured in inches, or pounds, or college degrees, or family background; they are measured by the size of their thinking.” John C. Maxwell

If you’re going to dream, dare to dream big. Dreaming small may keep you from discovering what you’re truly made of. Robert J. Kriegel and Louis Patler, authors of If Ain’t Broke, Brake It, assert, “We don’t have a clue as to what people’s limits are. All the tests, stopwatches, and finish lines in the world can’t measure human potential. When someone is pursuing their dream, they’ll go far beyond what seems to be their limitations. The potential that exists within us is limitless and largely untapped. When you think of limits, you create them.”

6. Plan your priorities.

“To Stay Focused in Life: You can’t know everyone. You can’t do everything. You can’t go everywhere. We have to pick and choose between good and a little bit better.” John C. Maxwell

Successful people have many things common and one of of them is that they have mastered the art of how to effectively manage their time. More than anything, they have organized themselves. Henry Kaiser, founder of Kaiser Aluminum and Kaiser Permanente Health Care, says, “Every minute spent in planning will save you two in execution. Time cannot be retrieved, so live every moment the best you can.

7. Give up to go up.

“One of the major keys to success is to keep moving forward on the journey, making the best of the detours and interruptions, turning adversity into advantage.” John C. Maxwell

Everything that has value comes as a result of making sacrifices. Life will present you with countless opportunities to trade something you value for something else. Keep your eyes open to identify those opportunities and once you do, make sure that what you decide to trade will be a trade up, not down.

In conclusion, “success is a journey” isn’t just a matter of words and ideas, it’s a matter of actions. It’s in you to act on what makes you achieve your success every day. Know that what may mean success to you may not mean success to others, and vice versa–and this is completely fine. Success implies diversity of thoughts, habits, behaviors, values, and attitudes.

“If you make it your discipline to do a little bit of growing every day, in just a few years you will be amazed by your transformation.” John C. Maxwell

References:

  1. https://www.johnmaxwell.com/blog/what-i-believe-about-success/
  2. https://www.linkedin.com/pulse/seven-steps-success-john-c-maxwell-ivette-k-caballero

* John C. Maxwell is an International Leadership Expert, Speaker, #1 New York Times bestselling author, coach, and speaker who has sold more than 26 million books in fifty languages. As the founder of The John Maxwell Company, The John Maxwell Team, EQUIP, and the John Maxwell Leadership Foundation, he has trained more than 6 million leaders. Dr. Maxwell speaks each year to Fortune 500 companies, presidents of nations, and many of the world’s top business leaders. For more information about him visit JohnMaxwell.com.

Gratitude Rewires Your Brain

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Gratitude is good for your mind and body. A healthy mind = a healthy body.

Research shows that gratitude and kindness not only lifts your spirits and warms your hearts, but, it can also aid in fighting off, healing and sometimes even curing illnesses.

Acts of kindness and feelings of gratitude flood your brains with a chemical called dopamine.

When you are truly grateful for something (or someone) your brains reward you by giving you a natural high. Because this feeling (or natural high) is so good, you are motivated to feel it again and become more inclined to give thanks, to show appreciation and to do good for others.

Research on gratitude benefits shows that these neurological effects open the doors to many health and emotional well-being benefits.

Additionally, in the hypothalamus, which is the part of your brain that regulates a number of your bodily functions including your appetites, sleep, temperature, metabolism and growth, a 2009 National Institutes of Health (NIH) study showed that your hypothalamus is activated when you feel gratitude, or display acts of kindness.

This research on gratitude means that your existential bodily functions operate better with grace. That is a powerful thought.

References:

  1. https://www.consciouslifestylemag.com/benefits-of-gratitude-research/

Positive Wealth Building Thoughts

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“Wealth is the product of a man’s capacity to think.” – Ayn Rand

“We become what we think about.” — Earl Nightingale

Wealth building begins and ends with your mindset, thoughts and behaviors. Thus, it’s imperative to keep your thoughts focused on the positive, on success, on making an impact, on changing the world and on changing people’s lives for the better.

There is an old adage that goes:

  • Watch your thoughts, they become words.
  • Watch your words, they become actions.
  • Watch your actions, they become habits.
  • Watch your habits, they become your character.
  • Watch your character, it becomes your destiny.

You must not fix your eyes on current world conditions or even your own personal situation. Instead, you must focus on what you can control, on how you respond, and on how well you maintain a positive and winning mindset and attitude. Focus on the solution not the problem.

So, your keys to success tips include:

  1. Use only positive words while thinking and while talking. Use words such as, ‘I can’, ‘I am able’, ‘it is possible’, ‘it can be done’, etc.
  2. Allow only feelings of happiness, strength and success into your awareness.
  3. Every time a negative thought finds its way into your mind, immediately replace it with a positive thought or an affirmation.
  4. In your conversation, use words that bring forth feelings and mental images of strength, happiness and success.
  5. Before starting with any plan or action, visualize clearly in your mind its successful outcome.
  6. Read at least one page of an inspiring book or an inspiring article every day.
  7. Associate yourself with people who think positively.
  8. Act courageous. Always sit and walk with your back straight. This will strengthen your confidence and inner strength.

In order to build wealth and to achieve financial freedom, you must develop a wealth building mindset and follow a deliberate plan. As you will discover, your wealth grows to the extent that you do.

“We become what we think about most of the time, and that’s the strangest secret.” – Earl Nightingale

Bottomline…for success, keep your focus and thoughts on wealth building!!! Because, what you focus on expands and establishing habits is the key to expansion.

Don’t focus on the problems your dealing with today or the conditions of the world; fix your eyes on your systems, habits and the destination.

Napoleon Hill describes success as the product of having a definite objective. In achieving that objective, you need a clear definite aim and a definite plan to get there.

A definite chief aim means in simple terms that you must have a clear objective that you are aiming to achieve. Success — building wealth and achieving financial freedom — will not come to you and you will not be able to manifest what you want, unless you know what you want.

Success is ultimately achieved by focusing on a clear objective, and pursuing that objective deliberately and with all the means at your disposal. In simple terms, success is simple, but not easy.

“Whatever the mind of man can conceive and believe it can achieve.” Napoleon Hill

Actually, you just have to be exceptionally clear about what you are trying to achieve, passionate about achieving it, comfortable and happy that what you’re doing matches your values: and finally, and perhaps more important than anything else, you must believe that you can achieve it, you must expect to do so, and you must have a plan to achieve it.

So it’s imperative that you use the power of your thoughts and mind to focus on the positive aspects of your life. This works similarly to building strength in the muscles of your body. As you focus on what’s going right in your life, it will grow and expand like a muscle.

What you focus on grows and expands!

References:

  1. https://www.therealsecretofsuccess.com/napoleon-hill/
  2. https://activerain.com/blogsview/5155111/what-you-focus-on-expands

Systems are Best for Long Term Success

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“Goals are good for setting a direction, but systems are best for making progress.” James Clear

James Clear, author of Atomic Habits, spoke at a conference I attended about ‘goals and system’. During his insightful talk, he explained that “Goals are good for setting a direction, but systems are best for making progress. ”

Furthermore, he said that, “I began to realize that my results had very little to do with the goals I set and nearly everything to do with the systems I followed.” To explain, he writes that “If you’re an entrepreneur, your goal might be to build a million-dollar business. Your system is how you test product ideas, hire employees, and run marketing campaigns.”

Moreover, goals are good for setting a direction, but systems are best for making progress and reaching your destination.

Goals can become too limiting, says Scott Adams, the nationally syndicated cartoonist of Dilbert. Systems, in contrast, habits are things that people regularly do and that increase the odds that an event ends up creating an experience that leads to an eventual success, even though that success might not be immediately apparent.

A system, says Adams, contributes to a positive attitude that widens a person’s field of perception, which he contends is what makes some people luckier than others in that they can see more opportunities.

Build a system for getting 1% better every day.

In Clear’s opinion, “a handful of problems arise when you spend too much time thinking about your goals and not enough time designing your systems.”

https://twitter.com/atomichabitss/status/1498825041835823105

According to Clear, several problems arise when you focus on goals and ignore the system, such as:

Problem #1: Winners and losers have the same goals.

Successful and unsuccessful people often share the same goals, thus the goal cannot be what differentiates the winners from the losers. It wasn’t the goal of winning the Tour de France that propelled the British Cyclists to the top of the sport, states Clear. Presumably, they had wanted to win the race every year before—just like every other professional team. The goal had always been there. It was only when they implemented a system of continuous small improvements that they achieved a different outcome.

Problem #2: Achieving a goal is only a momentary change.

To truly have meaningful and long-lasting change, you must change your habits that led to the problem or challenge in the first place. Achieving a goal only changes your life for the moment. That’s the counterintuitive thing about improvement. You think you need to change your results, but the results are not the problem. What you really need to change are the systems that cause those results. When you solve problems at the results level, you only solve them temporarily. In order to improve for good, you need to solve problems at the systems level. Fix the inputs and the outputs will fix themselves.

Problem #3: Goals restrict your happiness.

The problem with a goals-first mentality is that you’re continually putting happiness off until the next milestone. Happiness should not be just something for your future self to enjoy.

Furthermore, goals create an “either-or” conflict: either you achieve your goal and are successful or you fail and you are a disappointment. You mentally box yourself into a narrow version of happiness. It makes no sense to restrict your satisfaction to one scenario when there are many paths to success.

A systems-first mentality provides the antidote. When you fall in love with the process rather than the product, you don’t have to wait to give yourself permission to be happy. You can be satisfied anytime your system is running. And a system can be successful in many different forms, not just the one you first envision.

Problem #4: Goals are at odds with long-term progress.

Finally, a goal-oriented mind-set can create a “yo-yo” effect. When all of your hard work is focused on a particular goal, what is left to push you forward after you achieve it? This is why many people find themselves reverting to their old habits after accomplishing a goal.

The purpose of setting goals is to win the game. The purpose of building systems is to continue playing the game. True long-term thinking is goal-less thinking. It’s not about any single accomplishment. It is about the cycle of endless refinement and continuous improvement. Ultimately, it is your commitment to the process that will determine your progress.

Fall in love with systems

James Clear surmises that “goals are good for planning your progress and systems are good for actually making progress. Goals can provide direction and even push you forward in the short-term, but eventually a well-designed system will always win. Having a system is what matters. Committing to the process is what makes the difference.”

The next time you think about a goal, something you deeply desire to achieve, think of the system that you will follow — and how often — in order to reach it.

References:

  1. https://jamesclear.com/goals-systems
  2. https://www.cioinsight.com/careers/dilbert-creator-focus-on-systems-not-goals/
  3. https://jamesclear.com/good-habits
  4. https://medium.com/swlh/thinking-in-systems-not-goals-2b9a4105d0d3

James Clear is the author of the #1 New York Times bestseller, Atomic Habits.

“The most useful form of patience is persistence. Patience implies waiting for things to improve on their own. Persistence implies keeping your head down and continuing to work when things take longer than you expect.” ~James Clear

Long Term Investing is about Future Cash Flow

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Ultimately, in long term investing, fundamentals and cash flow are paramount for an investor (an investor is a business owner).

Years ago, a hockey game between the Boston Bruins and Edmonton Oilers had been paused for some technical issues with the stadium lights. To kill some time, the announcers started interviewing people including the Edmonton Oilers, Wayne Gretzky, undoubtedly the world’s greatest hockey player at the time. The announcer stated that Gretzky wasn’t the biggest guy in the league, or the strongest, or the fastest or the toughest, yet he was regarded as the greatest hockey player in the world.  So, how then did Gretzky explain his own genius?  Gretzky simply replied:

“I don’t go where the puck is; I go where the puck is going to be!”

In a simple one liner, Gretzky confirmed that his success did not come from chasing the puck. Instead it came from staying one step ahead and by anticipating  where the puck would  likely go next.

Thus, it is important to look at the future potential of a stock or investment instead of focusing solely on past performance. Long term investing is about looking from the perspective of a business owner at a company’s fundamentals and cash flow.

Cash Flow

In finance, cash flow (CF) is the term used to describe the amount of cash (currency) that is generated or consumed in a given time period by a business. It has many uses in both operating a business and in performing financial analysis. In fact, it’s one of the most important metrics in all of finance and accounting.

Every investment is the present value of all future cash flow.

Many investors are lured by short term performance.  They are interested in finding the latest, hottest, top performing stocks and investments driven by the financial entertainment media.  However, investors who buy those top performing investments today may not necessarily enjoy the same returns in the future. In investing, it’s essential you approach buying stocks like a business owner.

Cash flow is not the same as net income (or profit).

While cash flow describes the movement of money into and out of your business, profit is the surplus of money your business has after you’ve subtracted the revenue from your expenses.

The inflow and outflow of cash into and out of a company reflects the health of that company’s operations. That’s why it’s important as an investor (business owner) to be able to understand a company’s fundamentals and cash flow.

Cash flow is more dynamic in concept then profit – as it measures the movement of money – then profit, which simply demonstrates how much money you have left over after your expenses have been deducted. Even a profitable business can fail if a business doesn’t have a healthy cash flow.

Without a healthy cash flow, profit is meaningless.

Many successful companies (like Amazon, Twitter, Uber and Yelp) actually existed a long time without profits, but no company can survive without a healthy cash flow. For small to mid-cap companies, profit is still important, but cash flow is vital.

If you don’t have cash on hand, you can’t pay for your company’s basic needs like rent, employee salaries, electricity or equipment. If you don’t have enough cash on hand to replenish inventory or pay operating expenses, you will become unable to generate new sales. If you can’t afford operating expenses, your company will eventually fail. That’s why cash flow is such an accurate predictor of an investment or company’s success.

Cash Flow From Operating Activities

The operating activities reflects how much cash is generated from a company’s products or services. Positive (and increasing) cash flow from operating activities indicates that the core business activities of the company are thriving.

Cash Flow From Investing Activities

Investing activities include any purchase or sale of an asset, loans made to vendors or received from customers or any payments related to a merger or acquisition is included in this category. In short, changes in equipment, assets, or investments relate to cash from investing.

Cash Flow From Financing Activities

Cash flow from financing activities shows the net flows of cash that are used to fund the company. Financing activities include transactions involving debt, equity, and dividends. Some examples are: issuance of equity (shares), payment of dividends, issuance of debt (e.g. bonds) and repayment of debt.

Free Cash Flow

One of the most important financial number is free cash flow (FCF). It is the cash flow available to all the creditors and investors in a company, including common stockholders, preferred shareholders, and lenders.

You can calculate FCF, if not provided, quickly. FCF = Operating cash flow – capital expenditures (aka. CAPEX). Simply, capital expenditures on the CFS is the line item “Purchase of Property, Plant and Equipment” (PPE). the PPE expenditure is the “maintenance amount” of running a business. Though it says “purchase”, this includes repairing, renewal and/or maintenance of the companies assets.

No company can survive without a healthy cash flow.

Generally, you want to see a steady increase in cash flow from operations. If this number is growing (while debt being in control) at a rate of 10% or more annually.

However, past performance cannot guarantee future results. In other words: don’t assume that an investment is going to continue to perform well in the future simply because it’s done well during a specific time period in the past. 

Two of the key ingredients for success in investing is understanding that cash flow is king and your a business owner when you purchase a company’s stock.

References:

  1. https://ignorethestreet.com/cash-flow-statement-fundamentals/
  2. http://www.momentumcapitalfunding.com/cash-flow-fundamentals-business-owners/
  3. https://corporatefinanceinstitute.com/resources/knowledge/finance/cash-flow/
  4. https://www.powerofpositivity.com/make-you-rich-quotes/