Opportunity Cost – Episode 43

Opportunity Cost – Episode 43

Opportunity cost may not be a concept you consider often but after listening to this episode we promise your view might change, so join us as we listen to Ken and Tammi discuss the meaning of “Opportunity Cost”, how inflation works against us and how we may find scenarios to take advantage of taxes and real estate.

Ken Greene transitioned from being a Professional Engineer (P.E.) to the “Engineer of Finance.” His goal is to help people become financially independent and help them earn better yields with less risk by investing Off Wall Street.

 

 

Links and Resources from this Episode

 

Show Notes

  • Being grateful on Thanksgiving – 1:33
  • What is Opportunity Cost? – 2:42
  • Missing an opportunity – 3:42
  • Examples of Opportunity Cost – 4:42
  • Inflation that works against us – 5:42
  • What is inflation? – 6:44
  • How do you address opportunity cost? – 10:06
  • The art of negotiations – 11:51
  • Taking advantage of Opportunity Cost – 13:10
  • Taxes and real estate -15:22
  • Choosing when to say yes or no- 18:55

 

Review, Subscribe and Share

If you like what you hear please leave a review by clicking here

Make sure you’re subscribed to the podcast so you get the latest episodes.

Subscribe with RSS

Part 2 – Ready For Big Wins in 2019? Start With Small Financial Habits

Part 2 – Ready For Big Wins in 2019? Start With Small Financial Habits

Building Better Habits

Here’s a really fun topic about building better habits. Doesn’t sound like fun, but trust me you grind through it for three weeks and it becomes easy, and the results will be profound. So here’s a quick blog that’s not meant to be about me (it’s for you) to learn from what I have done wrong, and to learn for what has worked for me. I always ask my clients “to do as I do” unlike the majority in this industry that asks their clients to do what they say. I share these stories because it’s worked for me and if you’re reading my blogs, will probably work for you too.

Real wealth, financial freedom, it all begins with how you think and what you DO.

In The Engineer of Finance Podcast Episodes 22 & 23, I discussed the importance of goals and even more importantly, systems and your daily activities (habits). You might not hit your goals, but you better create them (write it down), and then you need to break it down to daily habits. How are you going to get there? What can you do now to hit that goal? And what can you do to make it fun too?

I will share a story about me – and again, it’s not about me, it’s just what I have personally done and how you can duplicate (or act like you’re in a grocery store: buy what you like and leave what you don’t like) for what you want to accomplish.

Several years ago I wanted to be invited to compete at the USTA NorCal Grand Prix event in Northern California. It’s a really fun event. You have to be one of the top eight players in your USTA rating level, and it’s very competitive tennis tournament where you get a chair empire and free swag at a nice tennis club. I just thought it would be a fun experience to be invited to the Grand Prix event. And what I enjoy about tennis is you learn a lot about someone’s character and your own by watching how they and you behave while competing.

So my goal was to be invited. I learned the rules, figured out how many tournaments I had to compete in and how high I needed to place. The more matches you win, or the higher you place in each tournament, the more points you earn. Plus, I had to create a budget to accommodate for the travel expenses and entry fees which add up. So I decided to set a goal to play in the minimum required amount of tournaments, and win or at least make it to the finals in each tournament. I then focused on my daily/weekly/monthly habits which involved the following:

  • Blocked the dates in my calendar for all the tournaments for the year that I wanted to compete in.
  • Set the registration deadlines in my calendar.
  • Set in my calendar the recurring days I was going to practice each week and how much time I would commit. Then I DID what was on my calendar.
  • Asked a friend and good tennis player to mentor me and practice with me.
    • I learned to focus and practice on my strengths: forehand and serve.
    • Practiced and competed to manipulate my matches so the tennis ball would most likely come back to my strength: my forehand

Creating the goal was the 1st step, but then it was all about daily/weekly/monthly habits. I did not know if I would hit the goal, but I knew what my habits had to be. Then I didn’t think about the goal that often just focused on my daily habits. Did I do what I was supposed to do that day? Did I do what I was supposed to do for the week?

By focusing on my habits, I placed fifth and achieved my goal. I was invited to the NorCal Grand Prix tournament! I was so elated! And by focusing on my habits – not the goal, I did it. Quick tangent: A goal can be defined as a dream with a deadline. What are your dreams with deadlines?

Back to my story, I was so elated that I was invited. I was bragging to my wife and then realized, “Oh, now I need to set a new goal, I want to win the whole thing!”

So I fine-tuned what my new daily habits had to be to prepare for the tournament to beat my nemesis who prevented me from a couple of tournament wins. I continued to focus on my strength, but then also knew I had to improve my game at the net. I was very uncomfortable there, and I had to make it very comfortable to win. Another quick tangent: imagine what you can accomplish if you keep pushing yourself and making yourself uncomfortable.

By resetting the goal and then just focusing on my habits and DOING IT, for the first time in my life, I actually surpassed my original goal and won the whole thing.

It’s a fun story. I’m proud of it. And it’s a great example of how you can apply goals, systems, and habits to your life, including your financial world. So let me help you create some goals for 2019 and then focus on the habits (your daily/weekly/monthly activities), so you will have a much greater chance of hitting or surpassing your goals for next year.

Step 1: Write it down on a piece of paper. What do you want to accomplish? Why? Is there a burning desire to do something different? How can you make it fun as well?

  • Are you tired of all the interest you’re paying to banks that don’t care about you?
    • Credit cards, student loans, car loans, mortgages, …
      • There’s a joke I heard years ago asking, “Why do banks have a drive-thru?” The answer was to see how their car looked every month. Funny, not so funny. Kind of like the new Monopoly game that just came out for millennials.
    • Is the stock market scaring the hell out of you? Do you want more certainty for your financial future?
    • Are you tired of most of your money being locked up forever in these potential money traps known as 401(k)s and IRAs?
    • Do you want to be financially free? Do you want to live the life you deserve? Trust me; it’s a simple switch of replacing one bad habit with a new good habit.

Step 2: What do you have to do each day, week, month to get there. Break it down. Make a list, check it twice. It doesn’t have to be complicated, keep it simple.

Step 3: Who can help you? Who can you trust to be on your team to keep you accountable? Your spouse? A new financial advisor, maybe me, that can help keep you on the path? It’s amazing how we miss the weaknesses and strengths in ourselves, but we ask someone from the outside looking in, and they can immediately spot it. That’s why I asked my friend for help competing in the USTA NorCal Grand Prix. He immediately saw my strengths and weaknesses and helped create a game plan that was simple and easy. A test is easy once you know the answers.

Step 4: Now DO IT! Take action! The hardest and simplest thing could be picking up the phone, calling my office, and asking for a little help. The first day is the hardest, and you must focus on the ‘why.’ What’s your burning desire to improve your situation? A month later, it’s routine. It’s effortless. Six months later you will be so proud of what you accomplished.

Step 5: Track your progress. Write down your emotions. What’s working what’s not working. Troubleshoot. Make a few changes and DO IT.

I hope this blog has a huge impact for you next year! It starts this December 2018 for next year’s goals for health and wealth! If you’d like a little help or a nudge, please don’t hesitate to give me a call.

 

 

 

 

Profit Is Good – Episode 41

Profit Is Good – Episode 41

If you like doing something then profit from it! This is the message Ken Greene is trying to get across as he and Tammi discuss one of today’s most enticing topics: how to obtain profit and does perceiving it give you freedom?

Ken Greene transitioned from being a Professional Engineer (P.E.) to the “Engineer of Finance.” His goal is to help people become financially independent and help them earn better yields with less risk by investing Off Wall Street.

 

Links and Resources from this Episode

 

Show Notes

  • Understanding profit – 2:44
  • Profitable but evil – 5:30
  • Enormous wealth – 5:59
  • Amazon’s “threat” – 6:21
  • Profit is good – 9:15
  • Improving trough profit – 13:49
  • Work harder, get luckier – 15:11
  • Spending less – 22:31
  • Getting in touch with Ken – 25:52

 

Review, Subscribe and Share

If you like what you hear please leave a review by clicking here

Make sure you’re subscribed to the podcast so you get the latest episodes.

Subscribe with RSS

Stop With The Scarcity Mindset! How To View Budget With Abundance

Stop With The Scarcity Mindset! How To View Budget With Abundance

How To Change Your Budget Mindset From Scarcity Mode to Abundance Mode

 

I have realized that for an analytical thinker, I have been writing a lot about conceptual topics. Very interesting. And here comes another blog where I talk about more conceptual ideas; but hang with me, because if you get this right and adopt an abundant mindset and purge a scarce mindset, your probability of never having to worry about your finances will increase exponentially.

In this industry and all other industries, I cannot tell you how important it is to think with abundance versus scarcity. I have no tolerance for “can’t”, especially when I ask collaborators, financial firms, or vendors how to solve a problem and they tell me it’s impossible. Odds are it isn’t impossible, they just think it is because they are perceiving the problem through a scarcity mindset. When you approach problems with abundance, solutions will follow.

And Now, A Word From Disney

A few nights ago I watched the Disney animated movie, “Meet the Robinsons” with my kids. If you haven’t seen it, please watch it — it’s fun. And I don’t think this is a spoiler, but there are some scenes and a theme to the movie that emphasizes an abundant mindset. One of Walt Disney’s famous quotes was, “Keep moving forward, opening new doors, and doing new things, because we’re curious and curiosity keeps leading us down new paths.” Look at the empire Walt Disney created with this type of mindset. He didn’t have a scarce mindset of how it could not be done as the banks kept informing him. Working with his brother and others on his team he found a way to keep moving forward and to get it done.

Quick tangent, he got the funding for Disneyland from his BankosaurusTM because the banks would not give him the money. I mention it all the time on my podcasts and I’m sure in these blogs: banking is necessary, banks are not.

Thank you, Walt Disney! I cannot tell you how many great memories I have going to Disney World and Disneyland with my friends and family.

Stop talking about why you can’t, Start exploring how you can.

Always remember, your number one investment is you and your earned income. Typically, your residual and passive income streams are secondary for quite some time. So always focus on abundance. Don’t think about how you can’t get something done, think about how you can. Who can help you? Who do you need on your team? What can you do to become the best employee or entrepreneur possible? What are all the different ways you can solve this problem?

Look at the abundance of information on Google. Amazing! There is so much around us with all the information out there, with all the specialists in each industry, that can help you create and do amazing things.

 

Contribute to the Growth of Others

Focus on how you can help and educate your employees, peers, and your boss. When I was an engineering intern I was so grateful for the managers and engineers that would share their knowledge and educate me on management and design. I didn’t understand why some in the telecommunications and civil engineering industry would keep it to themselves. Now I understand, they had a scarce mindset — they were afraid the new employees and interns would replace them or outperform them in time.

Once I was able to transition from less of a trainee to more of a trainer, I was eager to help new interns. I wanted to pass that knowledge on that I learned. And as I stepped into the role of mentor, we both improved at our craft. It became abundantly clear to me that as everyone gets better and better, I was pushed to keep improving and imagined what we could accomplish as a top team.

Scarcity breeds complacency, and there’s no room for complacency in finance or anywhere really. Kill the scarce mindset if it ever creeps in and focus on abundance.

 

Ready For A Jedi Mind Trick?

Budget sounds like scarcity. Investments sounds like abundant mindset. The truth is, budgets create abundance.

When I talk about investments with people who are eager to grow their wealth the right way, the immediate response is excitement. They want to learn more about how they can make more money with their money so they can do more things, have more time, and as a result, more choices. The abundance mindset immediately kicks in with most people.

When I bring up budget, I typically don’t get the same response. A couple years ago I was buying a new cell phone and the young salesman noticed I was a financial advisor and started asking me a lot of questions about money and investments. He wanted a sports car. He wanted more toys. And some of his friends made a killing (at that time) in cryptocurrency and directional trades in the stock market. He asked me what’s the number one thing he should focus on to become rich. I told him it all starts with savings and a budget. I went from a hero to zero in his eyes within a second. Needless to say, he did not become a client. Which is okay, I was just there to buy a smartphone.

Consistently when I first meet prospective clients and I bring up the evil word “budget”, I can see the scarcity mindset kick in. So I created a new term: Cash Flow Optimizer (CFO). Full disclosure, I realize it’s corny. But the point isn’t to win the award for most creative new financial term, the point is to find a new way to think about growing your wealth through savings. (Also, it’s infinitely better than budget).  

The word budget has baggage. When I ask prospective clients who are sick of living paycheck to paycheck what they think of a budget, I hear this:

 

  • I don’t want to be told what I can’t do
  • that means I can’t spend as much
  • I don’t get to do everything I want to do
  • that sounds like a lot of work to track
  • I know I should save money, but I struggle with it
  • what if I want to remodel my home and it’s not in the budget?

 

 

When I ask the same question to prospective clients who already have a budget and strong savings plan ahd who want to maximize their economic potential (my forte) below are their answers:

  • Profit
  • Find lost money and put it to good use
  • Find errors from the banks (I’ve yet to see one that is not in the banks favor)
  • More opportunities: the ability to invest and make more money on their money, which becomes this perpetual “money making machine.” I stole this name from a new client. She’s a very sharp and motivated registered nurse and loving mom. I was showing her how to create a savings/checking account that is specifically allocated for savings and investments. She nicknamed it the “money making machine” account. Awesome! That’s an abundant mindset.

 

This is my last blog (for a while) where I try to cleverly tackle the word: budget. I want to emphasize to those reading this blog that are struggling with this word, embrace the word: CFO. Switch the thought process from scarcity to abundance. If you’d like a nudge or a little help, don’t hesitate to talk with me. I will make it easy and — gasp — fun! Games are fun when you’re winning. I am sure I will have plenty of future blogs talking about abundance. We all deserve a life filled with abundance, start with rewiring how you think, feel and talk about saving.

First-past-the-post Voting System – Episode 40

First-past-the-post Voting System – Episode 40

The land of the free and the midterm elections will be the topic of conversation as we discuss the current landscape of the US government and the so-called First-past-the-post voting system.

Ken Greene transitioned from being a Professional Engineer (P.E.) to the “Engineer of Finance.” His goal is to help people become financially independent and help them earn better yields with less risk by investing Off Wall Street.

 

Links and Resources from this Episode

 

Show Notes

  • Republican or democrat? – 5:05
  • The size and wealth of the government – 6:08
  • US voting system – 6:50
  • How Trump won the Primaries – 8:04
  • First-past-the-post (FPTP) system  – 8:10
  • Contributions to political parties – 9:58
  • A balanced budget – 11:07
  • The feeling of a misplaced vote – 12:54
  • Choosing the candidate we want – 14:56
  • Buying an association (President and Vice President) – 19:03
  • The US as a free nation – 20:50
  • Freedom to vote or not – 21:59
  • Distrust in the voting system – 23:00

 

Review, Subscribe and Share

If you like what you hear please leave a review by clicking here

 

Make sure you’re subscribed to the podcast so you get the latest episodes.