Society Can't Buy Time

The biggest realization that I've come to in recent years is basically that: things take time.

Whether it's simply saving your money for a down payment on a house (simple), or reforming your country through violent revolution (complex), none of these can be done without everyday consistent effort, and also the elapse of a great period of time.

Society has ruined and distorted our perspective of time. We all come to view time as something buyable right now... something that we can simply purchase and is at our disposable. Pitiful we are... not knowing any better. Who are these engineers-of-perspective that make it so that we, the ordinary citizen, come to believe that time can be bought? Are they powerful groups involved in a world-wide conspiracy to keep people down? Or are they simply you and I - those who try to make their living by pushing this idea forth - trying to sell each other the guns and butter that supposedly make our lives better (but in actuality, only make the lives of the seller better)?

Why is time viewed as something that can be bought? Travel used to be a journey, a life-changing, life-altering educational experience - it has now morphed into the all-inclusive package tour. A pity, because the quick trip to see tourist spots and eat local delicacies is not even a small glimpse into the real lives of those who live there. It is only by living there, living in that locale, that one really knows life in other parts of the world. This is the only real way to experience the world. But, what does that take? It takes time - time that you won't be able to use to "build your career" - time that you think is too valuable to "waste".

If you slow down the pace of your life, I'm sure you'll discover many things you've never noticed before. You'll discover how beautiful life can be when you're not rushing to your job, rushing to meet some friends, rushing to have fun, rushing for no reason... you'll see that all the marketing and all the noise out there is just trying to keep the blinders over your eyes.

Most important of all, you'll notice that things take time. Just as it took you a dozen years to become as fat as you are now, it'll probably take you almost the same amount of time (or less, if you concentrate your efforts) to lose that weight you put on. Don't be fooled and think that by buying the "fat-ass-eliminator" that you'll compress the time of years into a few short months. Just the same, if your dream is to serve the finest coffee in the world from your chain of coffee shops - you can't expect overnight success. Things take time and effort - just as any great civilization and any great person labored for years, decades and centuries before they were recognized.

I encourage you to take the first step right now towards achieving your goals. Want to pay off that debt? Go ahead and make an online payment of $10... do it now and do it often. Want to become healthier? Go ahead and do a few push-ups... do it now and do it often! You get the point... go ahead and start now. But remember to continue everyday.

Standard of Living (Part Deux)

As you may or may not remember... or as you may not even know because hardly anybody reads this blog, I talked about Standard of Living in a past post. Today, I will talk about it again! Yeah! Anyway, last time I said that it is not people's wages or earnings that go up - it is merely that things get cheaper and thus standard of living for the average person raises. It may seem like your pay is higher than what your father's was when he was your age - but you can't compare the dollar amounts. You must compare what he could buy and what you could buy at the time. A really simple way to calculate is basically to see how many cans of Coca-Cola your dad could buy back in the day with one hour of his wages; and then see how many cans you can buy now. I bet you'd it would be almost the same!

As our world progresses and Moore's Law is in effect, the way an average person's standard of living increases is just amazing! It seems that all the conveniences of the world and things that our parents never dreamed of are within our grasps. It would be surprising if your grandparents ever took an airplane as youths (unless you come from some sort of wealthy legacy...), but now it's just run-of-the-mill travel and everyone does it. In fact, travel used to be a journey in which you'd come back a changed person; it is now mostly nothing more than another "fun" thing to do. I'm sure you also remember not more than five years ago when laptop computers were only for business people and rich kids. Now, however, they're a staple of every university student and in a couple of years it'll be the same for even high school students!

The reason this happens is because things get cheaper over time. As more competitors compete for business in particular fields, they search long and hard for ways of selling their product for cheaper and thus getting larger market share. What happens - to their detriment, but to the advantage of the consumer - is that they temporarily get more market share because of their cheaper prices, but soon another competitor beats them at that... and so on. So, things get cheaper and the middle-class have more trinkets to play with and baubbles to distract.

Within the past five years, I'm sure there are many things that you've noticed plummeting in price; computers, LCD TVs, refrigerators, A/C units, cars, etc. They're going down in real price, even though inflation is driving how much you earn up. You're earning more dollars, and these things are costing less of those dollars - amazing! Sure, things like gasoline and food are going up in price nowadays, but these are only temporary spikes in prices. Over the long term, you'll see that these commodities also go down in price.

If you're old enough, you'll probably remember those black telephones that one day disappeared from either your parents' or grandparents' homes. What was the deal with those? Well, they were rented from the telephone companies for around $29 per month. Yes, $29 per month! That's crazy, isn't it? And think about how much $29 could buy back 20-30 years ago! Now, $29 can purchase an excellent cordless phone, much less a rotary-dial telephone that wasn't even yours. Going even further back in time, refrigerators used to be rented out to people, else they were leased. And going back even farther than that, furniture used to be rented out! But let's go into the future for a moment; soon, cars will be so cheap that you could purchase one on a whim. Right now, some people can buy cars outright and others lease them... but in the future, beware!

That Makes Sense!

If that makes sense to you, then you're obviously not being challenged in your thoughts. Yes, that's right... if you hear, read or are told something and you think, "That makes sense!" you're basically just agreeing to something you already agree with. And what is the point of that? What do you learn when you are just re-iterated something that you already know? Furthermore, it may be something that you think is correct, but is not - that is the most harmful information of all! It happens everyday, though. People are always spouting off so-called common sense as "advice" and "knowledge". You hear it, you agree with it, and it makes you think that person is so smart. Sure, "That makes so much sense."

In reality, however, you should pay little attention to the advice out there that you immediately agree with. Pay no attention to the things that you merely mull around in your own mind and come to agree with based upon your own, limited knowledge. As people, we all have limited knowledge, and if we agree with something; it's because we know about it, we've heard it before, and probably everyone else in the world understands it, too. This kind of thinking will get you almost nowhere further than where you are now. You'll probably just end up buying tonnes of books and reading blogs that tell you what you want to hear, rather than something that would enlighten you. This is one of the weaknesses the "financial gurus" play upon... giving the audience what they want (not what they need).

If you've ever studied history, you'll find the old pattern that great thinkers who have changed the world with their thoughts were always crazy. Yes, crazy. They were crazy at first, because you're crazy when no one can see your novel point of view. You're crazy when your ideas and thinking seem so far-fetched that people get angry and lock you up. With hindsight, however, we can see that people like Galileo (who thought the Earth was spherical) and Leonardo DaVinci weren't so crazy, after all.

But, who is that Chinese guy up there? Well, that's a man called Xun Zi, who learned stuff from Confucius, but didn't sit there and think, "Hmm... that Confucius is so smart! I totally agree with everything he says, therefore it must be right." He learned from Confucius, but also questioned Confucius' words of wisdom. Xun Zi proposed that all people are born innately evil and only through rigorous law and education could they become civil beings. Xun Zi proposed that society needed to depend on laws to keep people in line, rather than depending upon moral upbringing and education. I'm not trying to propose who was right and who was wrong - I'm merely pointing out that if Xun Zi had just agreed with Confucius, he might never have proposed his history-altering ways of thinking. Don't you know that the man who united all of China, Qin Shi Huang, created a society along the guidelines of Xun Zi?

The point is that we all have limited knowledge, and if we come across something we totally don't agree with - don't just dismiss it as being crazy or unworthy of your attention. Maybe you should think about it, analyze it, research it? In the best case, you'll come away with new knowledge (that most other people don't have) and a new understanding; and in the worst case, you'll only have wasted your time (but you'll be able to intelligently refute future "crazy advice").

The 80/20 Rule

I'm sure you might have heard the term, "80/20" in your days browsing blogs, reading articles and watching the news. Usually, the 80/20 rule is used when people are talking about employees at companies - what they imply is that 20% of the employees produce 80% of the revenue, and that the other 80% only account for 20% of the revenue. It makes most people think that obviously, the company should just fire that 80%! And to an extent that's true... but there's a certain dynamic that is missed out on in such a simple explanation of the rule. The rule is also not very talked-about much when it comes to money. That's why I chose this topic today for MoneyBrick!

Let's look at it simply first: some people say that 20% of their stock portfolio is giving them 80% of the gains that they received this year. The other 80% only gave them 20%! Isn't it time to get rid of that other 80%? It might seem like an obvious answer, but the real answer is no. Although you can identify precisely in your portfolio which stocks accounted for the majority of gain - unlike a company that may have a harder time identifying the top producers - you may screw yourself over the next year! The catch is that although this year stock ABC and stock CBC gave you 80% of your returns; there's an equal likeness that next year, they will be the under-performers (relatively speaking, of course). If you choose your stocks well, all of them will go up, but some will undoubtedly outperform all the rest.

Even though people like to slap labels on certain statistical discoveries and call them things; "80/20 rule", "law of the few", etc. The fact is that these observations are always in hindsight and thus very clear. It's easy to discern a pattern when you're looking for a pattern through historical performance. Just as it's easy to see various animals in random cloud patterns! Basically, it would be close to impossible to pare down your investments so that all your holdings are giving you a phenomenal rate of return. It's probably a lot easier to pare down a company - to get rid of people who don't do their job well - but there's also an intermingling between the "20" and the "80" that in part account for how a smaller number can produce a majority of revenue, results, etc.

When it comes to anything, it is usually the entire mix of what you have in your basket that produce the results that you get. Surely, you can break it all down and say that this and that produced 80% of the results, but it is possible and more than likely that whatever little seemed to produce those large results were assisted in unseen ways by everything else. No one would argue that flour is really important in baking a loaf of bread - but flour makes up such a large portion of the bread and without yeast, it's nothing. Does that mean one should try all manner to get rid of the flour, because yeast does so much for so little? You see... not really! The truth of the matter is that bread requires both huge amounts of flour and a little bit of yeast; they work best that way and although seemingly put forth differing amounts of effort - it is only together that they can produce the desired result.

So basically, when it comes to money, education, business or anything else that's important to you, don't take the 80/20 rule to an extreme and start cutting out what's big and seems to not be doing its job. You might find out that it was the interaction between the various ingredients that was the most important after all.