DIVIDING THE FINANCIAL PIE

I believe real-life economics must be one of the most glaring omissions in our educational system. I say this because in my travels to lecture throughout the world, I constantly run into otherwise well-educated people -- doctors, lawyers, top corporate personnel, even entrepreneurs -- who haven't the vaguest idea as to how to manage their finances.

So if you will indulge me, I would like to share a simple formula of how money should be allocated for the creation of wealth.

Taxes -

Yes, I did say taxes. I realize that the topic of taxes may seem like a strange place to begin the discussion of creating wealth. And yet throughout our lives, whether young or old, we must learn the necessity of paying taxes. And as soon as they have any money at all, our children, too, must learn that when they spend money they immediately become consumers. And all consumers of goods and services, no matter how young, must pay taxes. Why?

Because we have all agreed to live as a society, and for that society to function properly, there are some things we cannot do for ourselves alone. For example, we cannot each build a piece of the street. The machinery would be too expensive, and it would take too long to learn how to use it. So we have a government. And a government is made up of people who do things for us that we cannot or do not want to do ourselves. Because the streets, the sidewalks, the police, and the fire department must all be paid for, we've agreed to add some money each time we buy something and give it to the government.

We then move on to federal taxes. Here is a good way to explain federal taxes. I call it "The Care and Feeding of the Goose that Lays the Golden Eggs." It's so important to feed the goose -- not to abuse the goose or tear off its wings -- but to feed and care for it.

What's that you say? The goose eats too much? That's probably true. But then, don't we all eat too much? If so, let not one appetite accuse another. If you step on the scales and you're ten pounds too heavy, you've got to say, "Yes, the government and I are each about ten pounds too heavy. Looks like we both eat too much." No question about it. Every appetite must be disciplined -- yours, mine, and the government's. Hey, we could all go on a diet!

My mentor, urged me early on to become a happy taxpayer. Now, I must admit it took a while, but I finally did become a happy taxpayer. Part of this transformation occurred when I began to understand the function of taxes and that it is right for everyone to pay his or her fair share.

I finally decided I didn't mind picking up my share of the tab for defense. It's so necessary for our safety as a country to keep the international bullies away. Some people say, "Why bother with all that expensive equipment? They won't come over here." Obviously, those people haven't been reading their history books.

Others say, "We're not about to pick up the tab for defense." Well then, I suggest they go to a place which doesn't offer defense as part of the package. If one is going to enjoy the benefits, one should pay a share.

Now, let me add this: Don't pay more than you should. By all means take advantage of the incentives. They were given to you as a reward for channeling your money into areas the government thinks help the economy.

All I'm saying is that when everything has been computed, all legitimate deductions have been taken, and you reach that last line on your income tax form, whatever the amount, pay it. And pay with happiness, knowing that you're feeding the goose that lays the golden eggs - the golden eggs of freedom, safety, justice, and free enterprise. Some goose! Some eggs!

The 70/30 Rule -

After you pay your fair share of taxes, you must learn to live on seventy percent of your after-tax income. This is important because of the way you'll allocate your remaining thirty percent. The seventy percent you will spend on necessities and luxuries. The thirty percent? Let's allocate it in the following ways:

1. Charity
   Of the thirty percent not spent, one-third should go to charity. Charity is the act of giving back to the community that which you have received in order to help those who need assistance. I believe that contributing ten percent of your after-tax income is a good amount to strive for. (You may choose a larger or smaller amount -- it's your plan.)

   The act of giving should be taught early in life. The best time to teach a child the act of charity is when he gets his first dollar. Take him on a visual tour. Take him on a tour of a place where people are truly helpless so that he learns compassion. If a child understands, he won't have any trouble parting with a dime. Children have big hearts.

   There is another reason why the act of giving should be taught early and when the amounts are small: It's pretty easy to take a dime out of a dollar. But it's considerably harder to give away a hundred thousand dollars out of a million. You say, "Oh, if I had a million I'd have no trouble giving a hundred thousand." I'm not so sure. A hundred thousand is a lot of money. We'd better start you early so you'll develop the habit before the big money comes your way.

2. Capital Investment
   With your next ten percent of your after-tax income you're going to create wealth. This is money you'll use to buy, fix, manufacture, or sell. The key is to engage in commerce, even if only on a part-time basis.

   So how do you go about creating wealth with the ten percent of your income you set aside for that purpose? There are lots of ways. Let your imagination roam. Take a close look at those skills you developed at work or through your hobbies; you may be able to convert these into a profitable enterprise.

   In addition, you can also learn to buy a product at wholesale and sell it for retail. Or you can purchase a piece of property and improve it. And if you're fortunate enough to work at a place where you're rewarded for additional productivity, you can work for more income and use this income to invest in an ownership position through the purchase of stocks.

   Use this ten percent to purchase your equipment, products, or equity -- and get started. There is no telling what genius lies sleeping inside you waiting to be awakened by the spark of opportunity.

   Here is an exciting thought! Why not work full time on your job and part time on your fortune? Why not, indeed? And what a feeling you'll have when you can honestly say, "I'm working to become wealthy. I'm not just working to pay my bills." When you have a wealth plan, you'll be so motivated that you'll have a hard time going to bed at night.

3. Savings
   The last ten percent should be allotted to savings. I consider this to be one of the most exciting parts of your wealth plan because it can offer you peace of mind by preparing you for the "winters" of life. And through the magic of compounding interest, greatly aided by the new tax-free retirement programs available to every working person in this country, you can accumulate a princely sum over the years.

   Let me give you the definition of "rich" and "poor." Poor people spend their money and save what's left. Rich people save their money and spend what's left.

   Twenty years ago, two people each earned a thousand dollars a month and they each earned the same increases over the years. One had the philosophy of spending money and saving what's left; the other had the philosophy of saving first and spending what's left. Today, if you knew both, you'd call one poor and the other wealthy.

So, I'm asking you to not only be a happy taxpayer, but to also remember that giving, investing and saving, like any form of discipline, has a subtle effect. At the end of the day, a week, a month, the results are hardly noticeable. But let five years lapse, and the differences become pronounced. At the end of ten years, the differences are dramatic.

And It all starts with the same amount of money -- just a different philosophy.

BUILDING TRUST WITHIN YOUR TEAM

“Trust is always earned, never given.” – R. Williams.

Do you trust your team? Do you think they trust you?

How much does a lack of trust impact your projects and daily work life? How much effort would you give for someone you don’t trust?

Take a look around your workplace. Is there a lot of – often inaccurate – gossiping? Do people only approach other colleagues or managers about issues, not you? Have you seen a drop in initiative and a rise in employee turnover? Do people seem defensive, even fearful?

If yes, you’ve got a few problems within your team.

Thankfully, though, there are some easy ways to boost trust; ways that are relatively painless to achieve, but which last for the long term. In fact, as Steven Covey, author of “The Seven Habits of Highly Effective People”, states, "Trust is the highest form of human motivation. It brings out the very best in people. But it takes time and patience ..."

Trust starts with you. There are three characteristics you should always show when running a team: integrity, competence and leadership.

To put it in the most clichéd way, “If you talk the talk, you’d better walk the walk.” Once people think you have no integrity and you’re not trustworthy, you’ve lost them.

As such, you should always strive to:

1. Effectively communicate. Always openly communicate by being positive, seeking others’ ideas, listening and disclosing the right thing at the right time.
2. Be honest and consistent. Tell the truth, share information, be a role model and do what you’d like them to do: show up on time, work hard and if you say you’re going to do something, do it.
3. Show good judgement. Protect personal information and don’t gossip.
4. Watch your body language. If you say, “I defended you with every fibre of my being,” while not looking them in the eyes, fidgeting and stiffening up your body and face … no one’s going to believe you.
5. Remember, it’s not all about “you”. Listen and respond with empathy, promote open communication and beneficial relationships, and always accept constructive criticism.
6. Get to know your team. Spend time with them and share your thoughts, feelings and rationale – even ask for help.
7. Promote ethical standards. Develop an atmosphere free of harassment and discrimination while promoting “honesty, fairness, mutual respect and trust, and compassion and sensitivity in the exercise of power”.

And within your team, strive to ensure that:

• Positive and affirming behaviour is the norm
• There’s an atmosphere of encouragement (support and praise)
• You protect and help each other
• Gossip and unfair criticism stops
• You celebrate your diversity and appreciate your differences and skills

With a team that trusts and respects each other, you’ll quickly experience:

• Increased efficiency as everyone knows that their colleagues will carry out their responsibilities, leaving them to better focus on their own
• Enhanced unity, which comes from trusting each other, and helps strengthen their overall focus and commitment
• Mutual motivation with everyone striving to gain – and retain – the trust of their colleagues.

All of which can only help motivate each employee to do their very best!

At the end of the day, just remember: you’re in it together. You should trust them, and you should give them every reason to trust you.

THE TWO CHOICES WE FACE

Each of us has two distinct choices to make about what we will do with our lives.

The first choice we can make is to be less than we have the capacity to be. To earn less. To have less. To read less and think less. To try less and discipline ourselves less. These are the choices that lead to an empty life. These are the choices that, once made, lead to a life of constant apprehension instead of a life of wondrous anticipation.

And the second choice? To do it all! To become all that we can possibly be. To read every book that we possibly can. To earn as much as we possibly can. To give and share as much as we possibly can. To strive and produce and accomplish as much as we possibly can. All of us have the choice.

To do or not to do. To be or not to be. To be all or to be less or to be nothing at all.

Like the tree, it would be a worthy challenge for us all to stretch upward and outward to the full measure of our capabilities. Why not do all that we can, every moment that we can, the best that we can, for as long as we can?

Our ultimate life objective should be to create as much as our talent and ability and desire will permit. To settle for doing less than we could do is to fail in this worthiest of undertakings.

Results are the best measurement of human progress. Not conversation. Not explanation. Not justification. Results! And if our results are less than our potential suggests that they should be, then we must strive to become more today than we were the day before. The greatest rewards are always reserved for those who bring great value to themselves and the world around them as a result of who and what they have become.

SCIENCE OF SUCCESS

But not for everyone. Even in the worst recession in 70
years, millions of people continue to achieve one success
after another. Often it's in business and they are still
making sales, growing their business and finding ways to
prosper in the midst of bad times. Millions of people go
right on achieving their personal goals of fitness, family
life, spiritual peace, learning new skills or writing the
novel they've always wanted to write. How do they do it?
Whatever their personal dream, some people have found the
"secret" to achieving their goals no matter what the
external circumstances.
I assume they may have had to adjust or adapt to this new
world situation. In some cases, they may find it "harder" or
slower or they may have to find a new "way to get there,"
but some people seem to thrive no matter what. Some people
have "all the luck!" Some achieve their financial goals even
in hard times. How do they do it?
There is no magic and there is no "secret!" But there are
principles and processes that some people know and apply.
And unfortunately, too many people either don't know them,
don't understand them, or don't apply the principles and so
they struggle and often fail to achieve their dreams.
Is there really a "recipe" for success? I think so!
Is it really universal? Does it really work for anyone and
let them achieve virtually any goal? Yes, I think so!
There are reliable, repeatable systems and processes that,
when understood and applied properly, can help you save for
the future, invest well, enjoy a happy family, write a novel
or run a marathon. These powerful, universal techniques have
been used by successful people in every area of life. These
tools will help you raise a teenager, maintain your health,
start a business, develop more patience or even run for
political office! These PRINCIPLES and TECHNIQUES make all
the difference!
And two miraculous truths: (1) They are not a "secret!" They
have been known, taught and used through the ages! And (2)
they can be used by anyone who desires to learn and apply
them.
You can find them in books and audio programs--often free at
your local library. You can learn them from a good mentor or
coach.

Quotes of the Week
"Why not seize the pleasure at once? How often is happiness
destroyed by preparation, foolish preparation!" -- Jane Austen
"I don't wait for moods. You accomplish nothing if you do
that. Your mind must know it has got to get down to earth." -- Pearl S. Buck
"The future belongs to those who believe in their dreams." -- Eleanor Roosevelt
"Take the first step in faith. You don't have to see the
whole staircase, just take the first step." -- Dr. Martin Luther King Jr.

THIS LIFE

A mouse looked through the crack in the wall to see the farmer and his wife open a package. "What food might this contain?" The mouse wondered. He was devastated to discover it was a mousetrap. Retreating to the farmyard, the mouse proclaimed this warning : "There is a mousetrap in the house! There is a mousetrap in the house!" The chicken clucked and scratched, raised her head and said, "Mr. Mouse, I can tell this is a grave concern to you, but it is of no consequence to me. I cannot be bothered by it." The mouse turned to the pig and told him, "There is a mousetrap in the house! There is a mousetrap in the house!" The pig sympathized, but said, "I am so very sorry, Mr. Mouse, but there is nothing I can do about it but pray. Be assured you are in my prayers." The mouse turned to the cow and said, "There is a mousetrap in the house! There is a mousetrap in the house!" The cow said, "Wow, Mr. Mouse. I'm sorry for you, but it's no skin off my nose." So, the mouse returned to the house, head down and dejected, to face the farmer's mousetrap . .. . Alone. . . That very night a sound was heard throughout the house -- the sound The farmer's wife rushed to see what was caught. In the darkness, she did not see it. It was a venomous snake whose tail was caught in the trap. The snake bit the farmer's wife. The farmer rushed her to the hospital. When she returned home she still had a fever. Everyone knows you treat a fever with fresh chicken soup. So the farmer took his hatchet to the farmyard for the soup's main ingredient: But his wife's sickness continued. Friends and neighbors came to sit with her around the clock. To feed them, the farmer butchered the pig. But, alas, the farmer's wife did not get well... She died. So many people came for her funeral that the farmer had the cow slaughtered to provide enough meat for all of them for the funeral luncheon. And the mouse looked upon it all from his crack in the wall with great sadness. So, the next time you hear someone is facing a problem and you think it doesn't concern you, remember --- When one of us is threatened, we are all at risk. We are all involved in this journey called life. We must keep an eye out for one another and make an extra effort to encourage one another. YOU MAY WANT TO SEND THIS TO EVERYONE WHO HAS EVER HELPED YOU OUT... AND LET THEM KNOW HOW IMPORTANT THEY ARE. - REMEMBER - EACH OF US IS A VITAL THREAD IN ANOTHER PERSON'S TAPESTRY. OUR LIVES ARE WOVEN TOGETHER FOR A REASON. One of the best things to hold onto In this world is a FRIEND.

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