Finance

Synthesis from Science of Money and Some Other Books

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So I just finished Science of Money by Brian Tracy and I was thinking to write summary. However, just writing a summary isn’t right, because there are so many interesting things from other sources as well which I thought to throw in the mix.

Science of Money gets a big recommendation from me, if you are interested about money. On the measure of how much Kindle highlights I’ve made, this was a great book with a lots of learning as I exceeded the 10% with over five percentage points. The fact that I cannot even highlight and remember everything, is a very good sign that if you are interested, get the book.

Book starts by verbalizing what I have been thinking and experiencing a in my professional life: “Money remains one of the most thought – provoking , emotional , and polarizing subjects in the world.”

Whenever we start to talk about money with people we do not know well, it is a topic that does easily cause strong emotions and polarizes. Conversations can end or light up quickly.

What is money? Money is medium of exchange, the medium to exchange value. Things themselves do not have any value, only when there is someone to pay.

As Yuval Noah Harari put in Sapiens “money is the most universal and most efficient system of mutual trust ever devised.” Money is medium of exchange, and it’s based on trust and belief that you can exchange it tomorrow too.

More important than money, is however the value. And because we all exchange our services for something, we better be always looking to create more value. Because of this, Brian Tracy puts it well that everybody works on straight commission. To me this was a breakthrough thought that instantly connected with another thought from Daniel Pink’s book to Sell is Human: “selling is moving people”, therefore we are all in sales.  I think this thought by Brian Tracy is really interestingly combined with this thought and creates even greater thought:  we are all in sales with straight commission.

When we begin to internalize this, we start to think more about the value we create in the hours, days and weeks. Brian puts it well that wealthy people work for six days a week. They also keep on investing on themselves to keep on learning new valuable skills.

Earning ability, the skills is important. Even more important is the habit of saving money from what you earn, after that you can scale up.

Parkinson’s Law and How to Use It

More importantly Brian goes through most relevant laws that govern money and earning. They all important, yet in here I would like to focus on Parkinson’s law that says expenses rise to meet the income. Or “work expands so as to fill the time available for its completion.”

On contemplating this, I’ve successfully understood why Elon Musk for example divides his time into five minute chunks to get more done. Even bigger chunks such as 30 min or 45 minute will work. Setting a time limit for a task will make sure that it will get done.

Identity and limiting beliefs

Brian goes to length talk about limiting beliefs, self-doubt in particular that as he shares in one story, is the tool of the devil as the metaphor.

As a medicine for self-doubt he recommends the inverse paranoia (believing that world is conspiring to make you succeed) that was practiced for example by W . Clement Stone who was worth 800 million $ at the time he died.

Many of us live with kind of (socially programmed) level of self-worth in money and social as well. This is mostly unconscious, we inherit from our childhood and youth environment and strive for it. If we are below the level of our programmed level of living standard, we are willing to work harder. If we are above, we will find ways to spend and get rid of the money.

Changing your identity about money happens as with any habit: slowly and surely. As with getting anywhere, visualizing the success and using the imagination to be actually already there is the first step to achievement. This is the way for example soccer hero’s are born: young boys watching their childhood heroes on the field. Or for any pop star as well, it all starts with a dream – a visualization and then a long journey with many tiny steps towards that dream.

Money is not the end goal, as said, money is just a metric on how much value you are creating. However, be patient, learn, learn and learn. You will be surprised: this is a more probably road than winning a lottery.

“The most important principle of personal or business success is simply this; you become what you think about most of the time.” – Brian Tracy

Since all money just measures how much value is being created, the value creation is critical. All value is created from nothing. This makes life a wonderful adventure, because it means we there is no limit to the value we can create if we are imaginative.

If your work is profitable then it’s worth of your time and effort, a nature’s way of guiding us.

 

Work and Humility

“When you go to work, work. Put your head down and work.” – Brian Tracy

Brian gives about working and understanding that working is exchanging value and then value should be maximized. With the acknowledgement that we are all humans, I like this kind of thinking. When we work, the focus should be working and creating value for the customers. To create value for customers we need to be finding new ways to serve these people in customer organizations.

Then I might add a different point of view as well, that our focus as human beings is rather limited. There are no such things as 12 hour productive streaks. We need to stay focused and productive during our day, however in between there should be smart breaks, a bit of exercise, and why not some laughter as well.

Overall I really like the idea of recognizing when you should be focusing and working and when you should be having fun is a big difference and I like the humility here as an approach.

Cause and Effect

 “All wealth, all happiness, all prosperity, all success are the direct and indirect effects or results of specific causes or actions” – Brian Tracy

To conclude so much content, I would say that value creation, through work and imagination are the basis. One important thing is what is called secondary consequences. This thought really hit me, that I actually see think about this stuff! Most people think only about what happens next, primary consequence if you do this or that. However, there are also the secondary consequences which will happen eventually from other perspectives.

Whatever you want to achieve in life you can either achieve it by chance or doing something differently. Study the cause and effect, and think of the secondary consequences too.

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