Story of Personal Finance - An Ant and a Grasshopper

A long time ago,in a land far away, lived two insects - an ant and a grasshopper. These two insects have two distinct personalities and also two different habits in life. During the warm summer days, the ant are busy collecting foods and stockpiling it in their nest. The ant view the summer season as an opportunity for it to collect as much food as they want and also preparing the ant for the winter. As for the grasshopper, it have a different view from the ant. It see the summer season as the time to have fun and laid back for a while. "Why worked so hard?", it said to the ant. "Enjoy the summer, because you definitely will not enjoy winter", said the grasshopper as it happily hopping around. The ant ignore the grasshopper and worked hard as ever in stockpiling it nest. Finally, as the days grew shorter and nights longer, winter finally sets in and the ant is comfortably sitting in its nest knowingly that his foodstock can last the whole winter. But unknown to the ant, the grasshopper was freezing above ground, searching for food that was no longer available abundantly during the summer.

This story is a story of personal finance, and how you view your life during hard times and good times. Always practised delayed gratification and always be prepared for the bad times as whether you are prepared for it or not, it will happen.

Think and Innovate, Do not Follow and Imitate

"What we think determines what happens to us, so if we want to change our lives, we need to stretch our minds." - Wayne Dyer

"I found that when you start thinking and saying what you really want then your mind automatically shifts and pulls you in that direction. And sometimes it can be that simple, just a little twist in vocabulary that illustrates your attitude and philosophy." - Jim Rohn

As Henry Ford once said, thinking is the hardest thing to do and therefore many people choose not to be thinking and leave the thinking part to someone else. This 'someone else' can be the internet, tv, media, newspapers, magazines and even your boss or friends. This is why this group of people will lead a normal and mediocre life. By letting other people think, and you just follow the patterns and trends set by 'someone else', you will never achieve your true potential. Patterns and trends are being set all the time by people, and this group of people that will benefit from the creation of wealth that comes with it. The famous quote "Innovate and do not Imitate" is very true if you really want to create wealth. Only the person who thinks harder than anyone else will truly explore their true potential and therefore achieve success and wealth.

Quotes on Fear

'The enemy is fear. We think it is hate; but, it is fear.' - Gandhi.

'Inaction breeds doubt and fear. Action breeds confidence and courage. If you want to conquer fear, do not sit home and think about it. Go out and get busy.' - Dale Carnegie.

Fear is a great paralyser. It holds you from achieving the full potential of your life. Fear comes from human basic instinct of self protection. It helps humans to avoid any necessary danger. But too much fear stifles a person from doing any action that can promote personal growth. If you have fear of public speaking for example, the logic thinking of your brain is to avoid the circumstances as best as possible. By avoiding the thing you fear such as public speaking, you are not solving any problem. You also will not challenge yourself to grow. By doing the things you fear, you will in time conquer the fear and therefore will make you the master of your own destiny.

The Secret of the Riches - Continuous Learning

"The real horror of ghetto life is not the daily frustrations and deprivations. People can overcome those. The real nightmare is the effect the environment has on beliefs and dreams. If all you see is failure, if all you see is despair, it's very hard for you to form the internal representations that will foster success."

- Excerpt from Unlimited Power, Anthony Robbins

Everyone knows the magic of compounding. Even Albert Einstein was once amazed by the power of compounding and labels it as the eighth wonder of the world. But do you know that not just money but knowledge also can be compounded over time. Try gathering as much knowledge as possible in your early years. In time, your knowledge on a particular area will grow as you grow old.

For example, if you know a thing or two about computers when you are young, the knowledge will start to grow as you start to read here and there. You will also start to notice things related to computer even without trying. This is human nature that psychologist called Reticular Activating System or short 'RAS'.

Continuous learning is the absolute requirement for success in any field. The only moment in time when you are not learning is when you are dead. We start learning the moment we are born into this world. Everything that we venture for the first time has a learning curve. Whether they are playing sports, learning musical instruments or starting in a new job has its own learning curve. Successful people will always try to learn as much as they could in their new field and speed up their learning curve in order to become competent. A person who fails usually has fewer patients and tends to quit early. By staying focus and adopting a continuous learning attitude, you can excel in any field you choose as long as you can withstand the learning curve barrier.

Create and Design Your Life

Try and ask yourself this question, "Are you going with the flow or making the flow as you go along?" Successful people tend to have an attitude of delayed gratification. Every action they made takes into consideration of short term and long term gain. Think wisely of any actions you made as some actions would lead to instant gratification but in the long term will cause negative outcome. For example, the attitude of buying the latest brand new car or the latest gadget available in the market. This are in the short term gratification as you only can enjoy it in a short term duration only. The misery of losing a huge chunk of money will cause negative consequences in the long run. The money spent can either wise be invested in a long term gain that will last much longer. Learn the attitude of the rich so that in return you will become one.

Are you an "I create my life" person? or are you a "Life happens to me" person? The "I create my life" person is a proactive person who does not wait for any favors. This type of person always believes that wealth will come by active action by their side. Misfortunes or problems arise from their own doing and it is up to them to resolve it without blaming on others. In a work environment, this type of person will always climb the corporate ladder fast as he does not blame others but only themselves in moving upwards in their career.

The "Life happens to me" person is a passive person who always tries to blame others for their misfortunes or problems. They believe that if they are poor, it is because it is destined that way. They always treat themselves as victims. In a work environment, this type of person will not move very far in their career. They will always complain about office politics or not being appreciated for their work. They will always have a victim mindset.

The Analogy of a Frog and Personal Finance

If you were to pick a frog and put it into shallow hot boiled water, the frog will instantly leaped from the pot and jump out to safety. However, if you were to pick up the same frog a little later and then put it into a shallow cold water, the frog will not react to it and will be comfortably be sitting there as it is a cold blooded animal. But, if you were to do experiments by heating up the cold pot with a very, very slow fire with the frog still sitting in it. The water will eventually rise up to 100 degrees. As any cold-blooded animal, the frog’s body will adapt to the rising heat and will adjust its blood temperature to the environment. Eventually, when the water reaches boiling point, the frog will die as a result of adapting itself to the environment without even realizing it.

So, what’s personal financing has have to do with the frog story? A lot. People who started off their career start just like the frog in the shallow cold water. The money they received by the end of the month is enough to get by since their requirement for life is low. But, as your career and salary increase so does your desires and lifestyles. As you start to buy your first car, buy your first house, started to use credit cards, your lifestyle will change incrementally but not as fast as your salary increase. As same with the frog, you will not notice that you have a debt problem since the increment is not sudden. And when you realize it, it is too late and you will end up with a huge pile of debt.

There are many paths for us to achieve financial freedom, but the majority of us choose the path of job security. How can we blame them? The education system was shaped to produce workers and not entrepreneurs. Many people realized that as the company their working with starts to prosper, the owner of the company is the one who eventually benefits and the employees usually are not much richer compared to the first day they started working there. The reality is that the boss is not responsible to make you rich, but their responsibility is just to make sure you got your paycheck by the end of the month. It is your responsibility to make sure that you will end up rich and not somebody else.

Don't Worry Be Happy

Here is an estimate of the things most people worry about:
40% - Things that have not happened yet
30% - Past things that already occured
12% - Health conditions that may or may not be true
10% - Petty things, such as office gossips or etc.
8% - Real problems

Based on this percentages, the only real reason for people to get worried is only a mere 8%. Therefore you have another 92% for you to free your mind from worries and simply to be happy. Happiness is a choice made consciously and subconsciously in our mind. If you have set your mind to focus on all the negative and shortcomings of your life, the mind will be set to autopilot and be on worried mode all the time. But in the otherhand, if you learn to master the focus of your mind, then you will free yourself from needless worries. As the law of the universe stated, an empty gap will always be filled by another matter, the same goes with our mind. As the negative thoughts been weed out, this will leave a gap in our mind for the positive thoughts. Happiness is the pre-requisite for success. Happiness will set the foundation needed for a higher level of success.