Personal Finance

What Have You Learned About Yourself

By David Krug David Krug is the CEO & President of Bankovia. He's a lifelong expat who has lived in the Philippines, Mexico, Thailand, and Colombia. When he's not reading about cryptocurrencies, he's researching the latest personal finance software. 16 minute read

Over the years, I have listened to many audiobooks focused on self-improvement. I have been reluctant to write on self-improvement, despite having listened to hundreds of hours of audio on the topic. 

The data, statistics, steps, and insights are what I find most useful. As a business person, I appreciate it when there are clear causal links between effort and return.

Moreover, I’ll admit that touchy-feely isn’t really my thing. If you like the idea of bettering your life but don’t want to sit around a campfire singing “Kumbaya” and swaying softly, you share my sentiments.

But no one said that introspective growth had to be all warm and fuzzy. For what reason can’t it be based on actual data and practical suggestions?

There are common threads that run throughout all personal development books, just like there are in any other genre. Here are ten such recurrent themes, supported by evidence from science, along with concrete steps you can follow right now to begin achieving tangible outcomes in your life and finances.

1. Continue Education

Neither the economy nor the job market is as stable as they once were. McKinsey Global Institute predicted in 2017 that as much as one-third of all occupations in the United States would be lost to automation or require substantial retraining by the year 2030.

As a matter of fact, it has already occurred. Many low-skilled occupations were lost permanently following the Great Recession. According to a study by MIT’s Pascual Restrepo, published in The Economist, regular, low-skill job vacancies fell by 55% between 2007 and 2015, in comparison to openings for positions requiring higher levels of education and training.

Putting your career in neutral and hoping for the best is not an option. New knowledge and abilities are required on a regular basis to keep up with the ever-quickening pace of change.

That which was true yesterday is not necessarily true now, and that which is true today is not necessarily true tomorrow. It’s possible, for instance, that the professional technology platform you rely on will become irrelevant. On the other hand, your current sales and marketing channels could suddenly dry up, leaving you scrambling to adapt in order to survive and thrive.

This is most evident in the realm of online advertising. When I was at my former company, we experienced an instantaneous 30% drop in traffic and sales after Google made an adjustment to its search algorithm. I observed as our Ads marketing income dropped by half year-over-year as a result of our competitors’ more aggressive keyword bidding on Google Ads.

In a nutshell, staying the same will eventually lead to your extinction. Last but not least, there’s a phrase I frequently hear in the context of professional and personal growth; What got you here won’t get you there. This basically implies that the ways through which you have reached your current degree of success will not be sufficient to reach the next level. 

Higher positions require more varied abilities. While technical expertise may have helped you advance in your current position, it won’t be enough to ensure your success as a sole proprietor.

Taking Action

  1. Develop the daily habit of reading. daily reading time of at least 15 minutes. You’ll develop a useful habit as a result, one that has the potential to alter your outlook on life as well as your thinking.
  2. For career acuity, read regularly. Study articles on news, developments, and trends in your field of expertise. To do better in your area, look up practical, hands-on advice.
  3. Gain Personal Wealth through Reading. Set aside a little time each day, regardless of your profession, to learn more about managing your money and accumulating wealth. Read up on retirement planning, investing, and other topics to learn how to increase your savings and decrease your spending.

2. Make Love to Money

Investing, budgeting, and retirement preparation are not topics included in school curricula. Thus, if you seek financial success, it is your responsibility to determine your course of action.

Take, for example, a paper by Annamaria Lusardi and Olivia S. Mitchell, which appeared in the Journal of Economic Literature. Improvements in financial literacy increased the wealth of college-educated persons by 56%, the study found. And the benefits were even more striking among those with lower levels of education, where wealth increased by an astounding 82%.

The phrase “better your relationship with money” appears frequently in self-help books and podcasts, and while it may be a bit touchy-feely, I think it’s important to work on your feelings about money. The parallel holds true, though if you think money is the root of all evil, you won’t give it much thought and might even try to get rid of it unconsciously.

We who see financial success as a means to personal fulfillment and advancement, on the other hand, give our finances a higher priority. How to increase our earnings, diversify our holdings, and secure our financial future is what we study.

For the simple reason that, in reality, material wealth increases life satisfaction. Up to about $75,000 per year in income, a strong association was identified between money and happiness in a now-famous study published in the Proceedings of the National Academy of Sciences. 

Newer research published by the National Institutes of Health, however, shows that even wealthier people share this tendency, with the super-rich exhibiting higher pleasure levels than your average billionaire.

When it comes to tools, money is both the most potent and the most convoluted. It serves you better according to your level of expertise in using it. Keep in mind that it is merely a tool, a means to a goal, and not an end in and of itself.

Taking Action

  1. Keep Yourself Up to Date on Financial Advice. If you want to learn more about money management and how to grow wealth more quickly, sign up for the Money Crashers newsletter.
  2. Check your Assumptions. When you’re ready to commit to longer work, “Rich Dad Poor Dad” by Robert Kiyosaki is an excellent choice. The book is still widely read decades after its initial publication because it can alter one’s perspective on financial matters.

3. Consciously Keep a Positive Attitude

When it comes to self-help books, I have yet to find one that doesn’t focus on the importance of having the right mentality. Successful people know that maintaining an optimistic outlook takes work.

Every day, you must tend to its growth. University of Pennsylvania psychologist Dr. Martin Seligman has devoted a great deal of time and energy to studying the effects of mindset on productivity.

Forbes looked at a study of insurance salespeople and concluded that those who were more upbeat were more successful. Two times as many pessimists left their jobs during the first year.

Your state of mind might affect your physical well-being. Heart patients who reported the highest levels of optimism had a 31% lower mortality rate than their pessimistic counterparts, according to research published in the American Journal of Epidemiology.

Maintaining an upbeat attitude is difficult. Even the most optimistic people have their share of bad luck from time to time; the key is how you handle the bad times.

Taking Action

  1. Develop a Habit of Gratitude. Exercising thankfulness first thing in the morning and the last thing at night can have a profound impact on your life. Doing so helps you rewire your brain for more optimistic thought patterns.
  2. Maintain a Positive Peer Group. Negative people drain your vitality by constantly whining and focusing on the worst-case scenario. When life throws you clouds, surround yourself with upbeat people who will help you discover the silver lining. If you don’t have any good role models in your life, you can at least practice positive thought with the help of quotes like the ones found in Janice Wald’s Mostly Blogging.
  3. Be Optimistic Regarding Your Financial Situation. If you want to improve your financial situation in a straightforward way, try adopting some of these good behaviors.
  4. Be Sure to Keep your Sense of Humor. When anything goes wrong, try to see the funny side of it. Maintaining your sense of humor strengthens your defenses against negative emotions like anger, depression, and suffering.

4. Establish & Track Goals

Goals should be pushed to the very limit of what you think is achievable. If you don’t aim high, you’ll never achieve more than you thought possible. Big hairy audacious goals are a concept made famous by Jim Collins and Jerry Porras. 

The basic idea is that you have a better chance of achieving your objectives if they are ambitious and meaningful to you.

You may use the same reasoning in both your professional and private life with equal success. Consider using the following examples of long-term financial objectives as a starting point for your own personal goal setting.

Taking Action

  1. Believe in Yourself and Your Capabilities. Pick a couple of big, far-off objectives that really thrill and motivate you. Put these lofty ambitions in writing and keep them where you can see them frequently. Goals are more likely to be achieved if they are written down, according to research conducted by Gail Matthews of the Dominican University of California.
  2. See How Far You’ve Come Each of your objectives should have a deadline and measurable success criteria established so that you can track your development over time. It may help to keep track of your progress every week and every month. In business, it is often said that what gets measured actually improves.

5. Be Responsive & Accountable

You have sole responsibility for your life’s outcomes. Good days and terrible days are something you have to deal with, just like everyone else. There are lucky breaks and unlucky breaks in everyone’s lives.

Everyone has to deal with difficulties and even tragedies, but the end result has nothing to do with “what happens to you.” How well you anticipate and react to challenges will determine the quality of your outcomes and the degree to which you succeed.

Certainly, it’s terrible that you’re dealing with this disease or injury. What about medical coverage? To what extent did you consistently perform all of your physical therapy exercises? Or have you just been moaning about it and playing the victim?

You have two options when these things happen: you can either stay knocked down and blame everyone and everything else, or you can pick yourself back up and attempt another route to your goals.

This is what sets successful people apart from the rest of the pack. According to studies conducted by Stanford University professor Kathryn Shaw, previous business failure actually increases the chances of success for the next business attempt. However, most business owners who have tried and failed to find success never even try again.

Take your setbacks as opportunities to learn and grow. Own up to your wins and losses, take stock of what went right and wrong, and then forgive yourself and get back in the game.

Taking Action

  1. Ask for Opinions. Earlier, I suggested you put your aspirations on paper. The next step is to disseminate them. Get feedback on your plans for the future from three trusted friends or family members.
  2. Get Yourself an Accountability Buddy. Identify a companion who can help keep you accountable since you both have the drive to succeed. Discuss your shared objectives, metrics for success, and updates. When participants had an accountability partner, they were 95% more likely to achieve their goals, according to a study reported by Inc. Magazine.
  3. Do More Investing. To take your learning to the next level, consider working with a coach, searching for a mentor, or joining a mastermind group. It costs nothing to get started with an accountability partner.

6. Give Your Physical Health Priority

An analogy my uncle, a biology professor at UC Santa Barbara, once gave me was as follows; Consider your body to be a motor vehicle. Everyone hopes their vehicle will last for at least 200k miles. 

However, most of us abuse our vehicles severely for the first 80,000 miles, slamming on the accelerator and brakes, filling them with the cheapest fuel possible, and neglecting to perform any necessary maintenance. So what does that mean? Our average vehicle lifespan is under 100,000 kilometers.

You can only use one set of cognitive abilities in one physical vehicle. Nothing about them improves with time. On the other hand, if you take better care of them, you can boost and maintain their efficiency.

If you’re wondering how any of this relates to things like prosperity and contentment, know that studies consistently find that improved health is associated with greater financial success. 

Let’s use a question from a recent Gallup survey as an example; Did you eat healthily all day yesterday? Subsequently, respondents were asked if they have sufficient funds to fulfill all of their desires. When asked whether they had enough money, over 70% of healthy eaters said they had, whereas just 57% of those who ate poorly could make the same claim.

Furthermore, a study published in Psychological Science reported that we observed that the decision to contribute to a 401(k)-retirement plan predicted whether an individual proceeded to improve poor physical health indicators disclosed during an employer-sponsored health assessment.

Exercising is the same way. Data from the Centers for Disease Control and Prevention showed that of the nine indicators we evaluated, money was the largest predictor of weekly physical activity at the state level, as reported by The Washington Post.

Taking Action

  1. Make a Resource Center for Your Goals. Get fit and eat well on a budget by stocking up on healthy recipes and no-cost at-home training plans.
  2. Develop Good Health Practices until they are as automatic as brushing your teeth. Simply relying on your own strength of will to do the right thing is a recipe for failure. Instead, make exercise a regular part of your schedule. It does not matter if it is in the morning, afternoon, or evening. The fact that it occurs at the same time each day is crucial.
  3. Make Sure you Can Always Count on your Routine. The first several weeks may be particularly challenging, and you may find yourself making excuses to take time off. Just don’t. Get rid of your old, unhealthy cookbooks and replace them with a folder full of nutritious meal plans. I keep mine on Google Drive on my phone. Prepare for the coming week’s meals by mapping them out on the weekend, and then buying only what you need. Cook extra at dinner so you can have them for lunch the next day.

7. Get Surrounded by a Successful Tribe

Assemble a supportive, prosperous, and goal-oriented group of friends. If someone asks to meet you at a wholesome café rather than McDonald’s, for instance, make friends with them. Instead of being pushed to take a cheat day and hang out with them while you eat, drink, and watch TV, find individuals that encourage you to exercise.

Finding folks who are more financially successful and literate than you is the most crucial thing. This has had a tremendous impact on my personal life because Baltimore and Abu Dhabi are two very different social groups for me. 

In Abu Dhabi, almost all of my acquaintances work in education. They talk about their students’ experiences and criticize their bosses. I find that when I try to discuss stocks, the economy, or personal finance with them, their eyes start to glaze away.

However, the majority of my Baltimore friends are professionals, business owners, and people in the business world. The topic of the state of the economy comes up whenever I meet with them. Investments and ways to increase income are topics that we discuss.

Without regard to disparities in pay, one of these groups is significantly better at saving money. The take-home pay of my professional acquaintances back home is comparable to, if not higher than, what foreign teachers in Abu Dhabi make. 

Furthermore, the majority of these teachers have a problematic connection with money, which causes them to spend almost all of their high monthly salaries each month.

People mimic their surroundings in their behavior. Students associated nearly exclusively with peers who had similar GPAs, according to a Russian study that Science Daily translated. 

Similar findings were made in a study that appeared in Psychological Science, which showed that having strong-willed companions around helped persons with poor self-control resist temptation far better.

Taking Action

  1. Maintain a positive mental environment by associating with positive people. Spend time with folks who are consistently productive. It’s been said that you become like the five individuals you spend the most time with. Spending time with and getting to know people who are as successful as you or more so increases the likelihood that some of those people’s positive behaviors will seep into your own life.
  2. Put yourself in the shoes of the person you’d most like to make friends with. Make an effort to better yourself if you want to hang around with successful people. There are two ways to gain influence.

8. Be in Control of Your Habits

To be more on par with your desired trajectory, surround yourself with people who have already attained the level of success you seek and adopt their behaviors.

I’ve spoken before on the importance of maintaining a regular exercise routine; a survey conducted by Tom Corley and featured on CNBC found that 76% of self-made billionaires devote at least 30 minutes a day to physical activity.

The same survey revealed that daily reading is a habit shared by 88% of self-made millionaires. The vast majority of them (89%) also sleep for at least 7.5 hours nightly.

The successful are the way they are because of the habits they have developed. Those at the bottom of the economic ladder are prone to vices such as smoking, excessive TV viewing (an average of five hours a day), and frivolous spending.

Now that you’re an adult, you can make such a statement. Your responsibility for the outcome rests solely with you. The lesson to be learned from this is not to let habits govern your life, but rather to actively work to improve them.

Taking Action

  1. Develop Your Habits Piece by Piece. Consider adopting only one good practice. Or, to put it another way, what is one bad financial behavior you want to break? Make a definite plan to do or abstain from that behavior religiously for a whole month.
  2. Find a friend to keep you accountable. Talk to your accountability partner about your plans and keep each other updated on your progress. If you fail to keep up with your routine and skip a day, allow yourself five minutes to feel bad about it before forgiving yourself and getting back on the horse.
  3. Learn as much as you can. In order to improve your financial situation, it is important to acquire some good money management practices. Even better, you may take it a step further by modeling your behavior after that of millionaires.

9. Select the Restriction

When it comes to making progress toward your objectives, what is the “One Thing” that would make the biggest difference? To rephrase, what is the one greatest obstacle standing in your way?

Let’s say you work as a salesperson, but you spend 50 percent of your time on administrative or technical responsibilities. It’s easy to be productive and efficient when you’re actively trying to close a transaction. Yet just a fraction of your time is devoted to really selling.

Distractions like these administrative and technological chores are what is preventing you from making much more money. In this case, it’s crucial that you finish off any unnecessary activities immediately. 

Either you can convince your supervisor to lift the limitation on your workload, or you can hire help to handle the extra responsibilities. The best way to maximize the impact of your efforts would be to find new employment that better suits your interests.

There is always one thing that is preventing you from making more progress. If you remove this barrier, another will take its place as the bottleneck and slow down your progress.

Taking Action

  1. Discover the Barriers to Your Success. To unblock a process, it is necessary to first identify the most significant barrier before moving on to the next most significant barrier.
  2. Maintain a Single-Minded Focus on Easing Restrictions. Stanford studies have shown that the more you try to juggle multiple tasks at once, the less productive you will be at any one of them. One explanation for this is that diverting attention away from the source of the problem prevents you from addressing the One Thing that will most effectively boost your outcomes.

10. Be Willing to Take Chances

The most successful people in the world are often the ones who take risks that others are afraid to take, according to self-help gurus. They’re risk-takers, but their actions are informed by thoughtful consideration and investigation.

To begin with, you should know that launching a business is a huge gamble. All the successful business owners did it, though. The world’s wealthiest people are not professionals like doctors or attorneys though many of them are also entrepreneurs, but rather the founders of successful businesses.

Innovation inherently entails some degree of danger. Apple took a chance when it released the original iPhone because there was no smartphone equivalent at the time.

However, before investing hundreds of millions of dollars into creating the first genuine smartphone, Apple undoubtedly conducted extensive market research. Taking risks is linked to greater job satisfaction for business owners, according to a study published in the Journal of Organizational Computing and Electronic Commerce.

When it comes to measured risk, most individuals get it completely backward. The investment of money in stocks, real estate, or any other vehicle entails some degree of risk in exchange for the possibility of a return on that investment, and this is easily demonstrated. 

Inflation guarantees a negative return on cash holdings every year. Doing something incorrectly is preferable to doing nothing at all if there is a chance of failure.

Taking Action

  1. Make Smart Bets with Your Life, Your Money, and Your Career.
  2. Put Your Cash in the Stock Market. In the long run, it’s more expensive to sit on the sidelines during a stock market slump because the market always recovers.
  3. Spend Time and Money on Expanding your skill set, even if doing so requires taking a calculated risk on your own future.
  4. Obtain Opinions on Your Work and Development. Keep in mind that perfectionism is a coping mechanism. If you’re working on something and telling yourself it’s not ready for anybody else to see now, remember that even a mediocre book that gets published is better than a great one that never sees the light of day.
  5. Make a Jump Off of Your Setbacks. You may learn and improve from both success and failure. It’s easy to find examples of people who tried and failed before succeeding the second time around as entrepreneurs; these people are the ones you should look to.

Bottom Line

Ultimately, faith is a basic tenet of self-improvement. Believe in yourself, your work, your loved ones, and a cosmos that essentially wants you to succeed. This belief need not be religious though it can be useful.

Instead of knowing for sure, you’ll be left to constantly second-guess and worry. As a rationalist who places a premium on empirical evidence, faith is not something I find myself drawn to easily.

However, after venturing out on my own, I realized that I had alternatives. Either I could trust that all my efforts were paying off in the future, or I could accept the reality that was right in front of me a firm that was barely making enough money to pay its bills.

Whether you’re an entrepreneur or an employee, you’ll still have to make that decision. When there is no rational basis for believing in yourself or your ambitions, it is still your choice whether or not to persist.

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