To Know Thyself

"There are three things extremely hard: steel, a diamond, and to know one's self. " - Benjamin Franklin

"This above all; to thine own self be true." - William Shakespeare

"Friendship with one’s self is all important, because without it one cannot be friends with anyone else in the world." - Eleanor Roosevelt

"If you do not conquer self, you will be conquered by self." - Napoleon Hill

"Every human has four endowments- self awareness, conscience, independent will and creative imagination. These give us the ultimate human freedom... The power to choose, to respond, to change." - Stephen Covey

What do all these great quotes have in common? They all acknowledge the importance of knowing yourself. I have recognized the importance of knowing myself for a long time, and I am sure that throughout my childhood it was imparted upon me in one way or another. In fact a big reason I started blogging was to truly challenge my beliefs and to reflect upon where I am and more importantly who I am.

The other day I took a Myers-Briggs Test Workshop for Choosing and Changing Careers. The premise of the workshop was to learn more about your personality preferences and to leverage that enhanced knowledge of yourself to find a career you truly love. Although the workshop had a career slant I think going through such a workshop is just as applicable to many other facets of life as well.

Here are a few things I took away from the workshop:

1. I went into the workshop with a fairly good self awareness. That was reassuring. I think the combination of my team sports background, military background, and conscious attempts (blogging, reading, starting a non-profit company etc.) to get to know myself better have paid off. That being said we all are constantly growing and changing so the journey to understand yourself is just that; a journey, not a destination.

2. Your personality is a profile of preferences in the way you respond to outside events. If you are extrovert you can still be introverted in various situations. Being an extrovert simply means that your preference is to respond to different life events as an extrovert does. There is a sliding scale of how strongly you identify with a certain preference.

3. Your personality profile can and does change in different situations. Although my "personal" and "work" self were largely aligned there are some scenarios where my preferences change. For instance, I am more laid back and have a go with the flow attitude in my personal life whereas I appreciate a more solid schedule and organized work environment.

4. Improving your own self awareness allows you to better recognize other peoples personality types and allows you to more effectively interact with different types of people.I couldn't help but analyze where my wife would shake out on the Myers Briggs test. It was pretty enlightening to see that the source of some of our minor disagreements may not be a lack of desire to resolve those disagreements but two differing preferences on how to respond to outside events. A simple example is cleaning the kitchen. My wife notices every crumb where I take more of a holistic view of how the kitchen ties in with the rest of the home's appearance. These are not coincidences. They are living examples of our differing personality profiles. My awareness of this subtle distinction in our preferences will surely make me more sensitive to how she lives her life....and may even improve my counter-wiping ability. Although this is an oversimplified example, it can be applied to relationship management in any scenario.

5. There are a few different facets that would make up my “dream job” that are consistent with my personality profile. I must be in a creative, team environment that is very collaborative in nature. Not surprisingly this ties in very nicely with things I have been passionate about in my life. Whether it was growing up playing hockey, starting Checking For Charity Corporation, or leading a team of contracting professionals in Iraq I have always thrived and enjoyed these types of environments. My future career should be no different.

Optimist Optimized

Before I deployed for six months to Iraq I thought that I would write about the many lessons learned throughout my time there. If you read my last post you know why that didn't happen. I thought that upon my return I would write about some of the lessons learned during my deployment once I had some time to reflect on all that I had experienced. That really hasn't happened either so far. So I find it a bit ironic that after a week back in the states adjusting to my old (but seemingly new) life that my first inkling to write again is not on the topic of what I learned in the desert of the middle east but what I have learned about my life stateside.

I have always been an optimist. Not a blind idealist by any means, but definitely someone who seeks to find the best in most situations. However after being purged of all but a few remnants of my stateside life for last six months, I now find my optimism optimized.

Like balance in anything else sometimes it takes the tough times to appreciate the good times. Although I never want to deploy and be away from the life I have built again, I am grateful for the experience because it has given me the ability to truly see how blessed my life really is.

The first few days I was back in Boston with my wife I could not stop gazing outside at the colors that were almost blinding after six months of different shades of brown. The sight of people living, working, and playing together in the neighborhood was suddenly a beautiful glance into what we have in this country and what our freedoms are all about. Holding my wife on a nice comfortable couch enjoying some good tea and even better conversation was the most fulfilling and enjoyable experience in the world.

I feel that with my small contribution overseas I have been given the gift that many great men and women veterans before me have been given; the gift of perspective. I can see now why most veterans are passionate people that enjoy life and love their country. They have seen what other areas of the world are missing. They have tasted the bitterness of sacrifice, many of them much more so than I ever did. They have felt the deep longing for loved ones and for a simple life back home. Most importantly, veterans have experienced the overwhelming feeling of a return home to a familiar life with a completely unfamiliar but glorious clarity of just how great the gift of life truly is.

A Combat Landing - Welcome To Your New World

I reached up weakly, my arm shaking from stress, starvation, and a lack of sleep to wipe my sweat soaked brow. I gazed down at my drenched palm and eventually looked past it through the netting of my jump seat down to my dusty backpack. Suddenly the weathered C-130 I was crammed into with forty other people from various services and agencies simultaneously took a hard banking turn and started an intense dive. As we spiraled downward I knew we were making a combat landing into Baghdad and that this was fairly routine. But I couldn't help but feel a bit uneasy as the iron lung that held my life within began to groan and creak like a dying steel mammoth taking its last agonizing steps on a journey too far. I looked around the steamy innards of the beast and was struck by the intense silence of everyone on board. The faces of my comrades reassured me that my emotional duress was shared. Then suddenly I heard a loud crash. I felt my chinstrap clinging intently to the Kevlar helmet resting on my head, and I choked mildly as my flack vest rose with the impact. We had landed safely......I was in Iraq.

Not only did my over dramatic description above actually happen in the last week, but it also serves as a metaphor to my entire deployment experience since landing in Baghdad, Iraq. A combat landing is a short, intense and overwhelmingly new experience. As has been my five days or so in Iraq. There are a few things that have really hit me in my first week over here.

This isn't your Grandpa's war story - One of the most striking contradictions to my deployment expectations was what a modern base looks and functions like. I was expecting more of a tent city feel like in the movies. GI's walking around in greasy t-shirts playing cards and hanging out. Not here. There are government and contractor vehicles everywhere. There are contractors from around the world living and functioning alongside the various countries various service members. There are a lot of the things we have in the States, but everything in this "world" functions in a little different manner. It is really hard to describe, but the best I can do is say that nothing is really intuitive when you are plopped down into your new world. Which leads nicely into my next observation.

We take a lot for granted - As I said, nothing is intuitive over here if you have never deployed. I felt like and still feel a bit like a little kid. I went from being fairly self reliant to totally dependent almost overnight. It is a very fragile and frustrating feeling. I literally can never recall ever being so dependent because I was probably too young to remember. My coworkers and friends literally had to teach me how to eat, sleep, shower and more. It was during my initial transitory phase that I started to realize how much I take for granted in American society. Reliable, clean running water is a start. Housing that has most of my health and hygiene needs at my disposal is another. Mostly I took for granted the incredible amount of choice I had back home. Especially the choice of what to do with my time. Here most time is spent on basic health and work, and everything is laid out for the military guys. I can't imagine actually being an Iraqi national and having to do whatever it takes to make a better life for myself and my family. Obviously what choices you have with your time are much more limited. It almost makes me feel a bit guilty for the way I have viewed other countries in the past. As if their actions and interests should always be taken through an American filter. But that is not the case. Each nation has a unique past and a unique set of values that shape and define their existence. To think that others think the way we do is not only false but dangerously naive.

Good people can always get you though - Like most other tough times in my life I have been lucky enough to be surrounded by good people. When you surround yourself with good people life never really gets too shitty. And when it does at least you have some solid people to help get you through it. My deployment so far has been no exception and I have a good group of people that I can laugh with, complain with, talk with, work out with, and pass the time with until that lovely day that I get to go back home to my wife and the life we have built together.

I would love to hear any other observations or lessons from other deployers and how your experience has been different than mine thus far.

'Pulling Out' Method Gets New Respect....

This article was honestly just too funny not to post! Check out the full article here which was featured today on ABCnews.com. What I find most interesting is the responses different groups of people have towards Mrs. Jones' scientific research. I guess this issue, like other polarizing issues, has the power to divide us no matter how many similarities we as humans have. For those too lazy to read the who thing here are some excerpts.

The act of withdrawal -- the male pulling out before ejaculation -- is a long controversial method of birth control, one many sex education classes have condemned as risky.

But Jones' findings, based on several studies and data from the Guttmacher Institute , a nonprofit organization focused on sexual and reproductive health where she is a senior research associate, were just the opposite.

Her studies found that in perfect use -- meaning the man pulls out every time -- withdrawal has a 4 percent failure rate, as compared to condoms, which have a 2 percent failure rate.

More:

"Although withdrawal may not be as effective as some contraceptive methods, it is substantially more effective than nothing," said the report. "It is also convenient, requires no prior planning and there is no cost involved."

And more:

"I've grown used to promoters of abstinence only-until-marriage programs dismissing the effectiveness of contraception," said Jones. "However, I'm surprised to see such disparagement of withdrawal among a crowd that is presumably younger, more diverse and open-minded."

"Perhaps because most of us have been told for so long that withdrawal doesn't work, we are unable to embrace scientific evidence that counters what we 'know,'" said Jones.

A Lesson In Change

The last few months have been an interesting time for me. I have been working two jobs. One that seeks to embrace and encourage change through continuous process improvement, and one that knowingly or not stifles change and creativity. As frustrating and unique it has been to work in two completely different environments at times, the experience has been valuable. Earlier this week I was informed that I will be shipping out to a different base (destination unknown) by the end of the summer. It was pretty shocking and it caught my wife and I off guard. These recent experiences all share a common thread and that thread is change.

“The only thing constant in life is change” - François de la Rochefoucauld (French classical author, leading exponent of the Maxime, 1613-1680)

All of the experiences got me thinking about how we as human beings deal with change. When animals don’t change they die, as in they become extinct as a species. Humans aren’t attune to thinking in terms of a species. We think in terms of individuality. We embrace who we are as a person. However I would argue that we too die if we do not change, yet the effects are harder to see as the scope of change is typically only defined as that individual's lifespan.

We all like to latch onto the concept and buzz about embracing change and seeing it as an opportunity. However, in practice this is rarely the case. I would argue that this tendency might be some form of a survival instinct. If we find something that works we continue to do it; it really is quite rational. What we often fail to realize is that the world around us is constantly changing and therefore doing the same thing over time is ignorant and more risky than constantly changing and adapting.

I have found, and verified through my recent string of experiences, that empowerment and choice are key elements in determining how people with deal with change. As a continuous process improvement facilitator for the Air Force, I work in a lot of Rapid Improvement Events (RIE’s). Over time you start to see patterns with regard to human behavior even though the participants change. There are always people who come in pissed off that they have to participate, that they have been voluntold to participate, and they say that the stuff doesn’t work. The RIE’s typically last about 3-5 days and I can comfortably say that the majority of those types of people leave feeling that they have positively affected their process and changed something that they didn’t think they could and/or would want to change. How does this consistently happen? How does one go from Scrooge to DCC in a matter of days? The answer is empowerment.

When people are empowered to make change they embrace change. Not only do they embrace it, they see it as a important force in their personal development and their day to day happiness. RIE’s are a proven way to form a team of key players and to empower them with the ability and resources to make change. Even if they come in as antagonists they are inspired to create something. I really believe that it is an innate human desire to create.

Contrast this example with my recent relocation blindside. When I learned I was moving I was floored. This wasn’t part of my plan. I am not supposed to move yet. This ruins everything. Blah blah blah. I was not empowered to make the change, I was told. I did not go through a buy in process to verify that this change is for the better, therefore I resisted. The fear of the unknown is a powerful thing, and often when you are forced to change you are being forced into the unknown. As you can imagine this doesn’t get too many people excited.

As I work through accepting the fact that I am moving I can begin to rationalize that the change is not automatically the root of all evil. Being an optimist I even tell myself that this is going to work out to be a good thing in the end. However, positive thinking and rationality still do not change how people (or myself for that matter) react to the prospect of change. Becoming empowered to make change is the catalyst that shapes future behaviors regarding change. If you can get used to working through dealing with and creating change you are in essence familiarizing yourself with confronting the unknown. And that confrontation takes courage. Become a courageous change agent, alliteration aside it is a valuable lesson that will better your life.

Cool Quotes

Here are some more Cool Quotes to get you through the weekend. Why try and say it any better than those who already said it best? Enjoy.

“Travel is fatal to prejudice, bigotry, and narrow-mindedness, and many of our people need it sorely on these accounts.” - Mark Twain

“I had just one more chance to be a boy, and I took it!” - Theodore Roosevelt, in answer to a friend who asked why he had literally risked his life on an expedition into an explored river in Brazil.

“Twenty years from now you will be more disappointed by the things you didn’t do than by the ones you did do. So throw off the bowlines, sail away from the safe harbor. Catch the trade winds in your sails. Explore. Dream. Discover.” - Attributed to Mark Twain

Joseph Heller famously responded when told by Kurt Vonnegut that a hedge fund manager had made more money in a single day than his classic novel Catch-22 made in its entire history, “Yes, but I have something he will never have… enough.”

"All that we send into the lives of others comes back into our own" - Markham was born on April 23, 1852 (American poet He is best-known for his poem of social protest, 1852-1940)

"One can only see what one observes, and one observes only things which are already in the mind." - Alphonse Bertillon was born on April 22, 1853

"Nothing so conclusively proves a man's ability to lead others as what he does from day to day to lead himself." - Thomas J. Watson

"Fear makes strangers of people who would be friends." - Shirley MacLaine was born on April 24, 1934 (Outspoken American actress and dancer, b.1934)

"The habit of reading is the only enjoyment in which there is no alloy; it lasts when all other pleasures fade." - Anthony Trollope was born on April 24, 1815

What Do You Want?

I read this post by Ben Casnocha yesterday and found it interesting. He is reviewing a book, which I haven't read, and eventually gets to talking about being consumed with start-up or business success. Read the full post here. Ben argues that this is one of the drawbacks with the start-up life and admits that he doesn't know whether or not it is necessary to success in that area.

Most ambitious companies -- certainly start-ups -- require of their employees single-mindedness. They demand all-consuming focus, and to "give thought to the critical personal and political issues that affect one's emotional present" is seen a distraction. Some of the successful business executives I've met are absolutely immersed in their professional micro-universe. The politics of the world, their personal relationships, their personal philosophies: who cares? Whether they realize they're wearing blinders, I don't know. Whether blinders are necessary to achieve massive professional success, I also don't know.

I would take it a step further and say that this is a drawback to the pursuit of anything in life. When you want something and pursue it you risk becoming consumed by it. I did this with hockey for the majority of my life. I don't regret my personal pursuit of excellence in hockey, and I attribute much of my success to that desire and passion.

People struggle with being consumed by something they love and desire when they aren't honest with themselves about what they truly want out of life and/or by having a narrowed scope of a small portion of their overall life journey. You must know what you want out of life, and just because you want the one thing that is consuming you doesn't mean that there aren't other things in you life you wish to pursue and enjoy as well. So you want business success. What happens when you achieve it? What is the end state? One of my personal mantra's is "always content, never satisfied." This is my personal reminder to always enjoy where you are at and what you are doing, but to always be wanting and driving for more. To always want a better life for myself. I remind myself of this to put into perspective the things I enjoy in life as well; family, friends, experiences, learning, achievement, etc. You can see how focusing on meeting that sales quota for example can drown out those other things. Be honest with yourself and keep the totality of how you want your life to play out in mind.

Strategic Life Focus

I have been thinking a bit more about the Post For The Optimists and how we as humans react to adversity. It is not easy to stay positive. I think most people would describe me as a positive person, however those who know me also know that I am extremely emotional and in the short term I can get very discouraged and sometimes a little negative. Typically after I get the heart pumping, I settle down and try to analyze the situation and move forward. I have been trying to figure out my reactionary paradox and I think it is all in the way you view the cards you are dealt. I am trying to view things through a strategic life focus. What I mean by that phrase is that you should look at the grand scheme of things. Try to see how the circumstances you are in will affect your life as a whole, given that it plays out how you envision. Will this moment matter in 10 years, a year, a month, a week? In short, think long term. I think that if you view a tough scenario through this lens it can temper some of the childish reactions that we as humans naturally revert to. Just a theory but I am going to give it a shot.

Charlestown Chiefs Here I Come.....

Tonight I am making my second minor pro hockey debut out of New Jersey men's league. That's right, tonight I will be playing for the Danbury Mad Hatters of the Eastern Professional Hockey League (EPHL). Ned Braden how I feel thy pain. Besides the comedic value of the situation, it really is a mixed bag of feelings tightening up the chinstrap again and hitting the ice in a competitive game.

Last year I played a few games with the Valley Forge Freedom of the Mid Atlantic Hockey League and it was a similar situation. Playing division I hockey for the Air Force Academy Falcons hockey team was the culmination and realization of a life's worth of work and dedication, and I wouldn't have traded it for the world. Between the world class people involved, the high level of competition, and the experiences that I went through it truly was one of the highlights of my life. With the commitment to the Air Force Academy came a commitment of a 5 year active duty service commitment upon graduation. What does that mean for a division I athlete? Well it basically means that professional hockey is out of the question. If you don't believe me google Army Football and Draft and read about how Caleb Campbell was drafted and ordered not to attend the NFL training camp a day before it started. For someone like myself whose draft status waved goodbye quite along time ago the chance of playing professional was even more slim. This didn't really bother me too much because I never really thought I had a chance of playing professionally. It was always my dream to play division I hockey and I achieved that dream. Looking back on my lifelong hockey career and knowing what I know now, I wish it would have been my dream to play professionally. Who knows if I could have accomplished it, however I know now that I was in essence holding myself back by writing off that dream a long time ago. One of my best friends and fellow linemate for many years always held onto the professional dream and never looked back, he is now playing for the Buffalo Sabres.

But you already said you will be making your minor pro debut for the second time tonight? Doesn't that mean you did achieve the goal of playing professional hockey? Well, I guess to a hockey outsider it could look that way. And truthfully these two experiences do help ease some of the pain of not knowing what could have been had I attended a different division I program. But I like to tell people that any "professional" league that has to remind people that they are professional by adding it within the title of the league, probably isn't a league I personally would consider professional. I guess it meets the bare minimum standard of paying people to play hockey, but the MAHL (now defunct from the area and moved to the Midwest) didn't have too many things about it that I would classify as professional.

The MAHL had some talent. The games were a good tempo and surprisingly (as well as thankfully) the league wasn't a total gong show with a fights every two seconds. However, there were plenty of low end guys in the league that wouldn't have made my junior A hockey team and there were a few that in my opinion probably should have taken two weeks off and quit for good. But like everything else in my life it was a great experience and one I learned from. Which is why I am heading out tonight.

Here are some quick life lessons and tidbits I learned from my last stint in semi pro hockey:

- Competition is great. Real competitors always crave it and seek it out in most things they do.

- Ego is a funny thing. I have always wanted to be good enough. Not for anyone else, but for me. However you have to keep things in perspective.

- Speaking of perspective, my experience in the MAHL was great to help me hone mine. I was probably the only guy in the league with an actual career. I told the coach upfront no practice, no road games and that if they need a guy to fill in I am here. They said that was fine and so I always kind of felt like an outsider to the whole lifestyle and experience. Some of these kids seriously think they are going to play in the NHL. On one hand I respect anyone who sticks to a dream and never quits. But like I said before you need perspective. Here I am coming out of a year and a half of beer league hockey a few times a week and stepping in getting a point or two a game. These kids are practicing every day, making $100 a week living with 5 guys in a hotel room, and I am thinking to myself "wow that 5 year active service commitment is hurting a little less right now.:

- As great as competition is, it doesn't not quench the thirst of a true competitor without the addition and joy of playing on a true team. These semi pro settings seem more like a glorified men's league with guys rotating in and out than a true team. Nothing can replace the feeling of having 25 driven, overachieving, word class human beings by your side all working towards a common goal.

- Just have fun. As someone who wants to succeed and achieve my goals and expectations, I am very susceptible to placing a lot of pressure and undue stress on myself. Sometimes I just need to concentrate on having fun and trusting in my ability. Life is a balance.

- When you keep your goals and long term vision of your life in your sights then everything happens for a reason. Setbacks and unforeseen twists and turns are just new chapters in your life that serve that ultimate vision. Put your head down and skate and have faith that you will end up exactly where you should end up.

The Importance of Travel

A few weeks ago my wife and I booked a vacation to Hawaii. I have never been to Hawaii, except for a brief stop at the airport on my way to Japan, and I am really pumped for our trip. My wife and I have a rule that we take at least one vacation a year. We travel home for holidays and go to weddings and various other events so typically in a year we travel much more than that, but our one vacation rule really only applies to trips where the only purpose is to have no purpose. We never really discussed why we made this rule but I am assuming that we both place very similar importance on the value of travel and vacation.

I have played competitive hockey since I was 10 years old. I grew up in Portland Oregon. The nature of the sport (the limited number of people who play due to availability of ice, amount of commitment necessary, cost of equipment, etc.) coupled with where I grew up playing had me travelling more than most kids my age. Our closest competitor was in Seattle which was about 3 hours away. When I was young I always just thought travel was fun. We got to listen to metal for hours on end, eat junk food, spend and manage money without our parents, talk about girls, develop our locker room vocabulary, and sneak the occasional exclusive pay per view movie on the road. Typical teenage boy stuff. What I didn't realize was how the travel was developing a more cultured and educated view of the world.

Intuitively I think that I knew that I was being exposed to different adventures that most kids could not have dreamed of. By age 12 I had been to Japan, Disneyland (a dozen times), and parts of Canada most Americans couldn't prove exist without today's Google Earth technology. So am I saying that kids who travel are going to turn out to be better people than those who don't? No, but I am acknowledging that there is something to be said for experiencing different parts of the world. I think that my early travels really helped me to get along with various types of people. I learned quickly that not everyone lives like me, thinks like me, looks like me, likes death metal like me, thinks that my humor is cool, has the same dreams and aspirations as me, and experiences the world the same way I do. More importantly I think I learned that most people are inherently good. For all our differences, most people are very similar. It developed my romantic realism view of the world. I was idealistic enough to know to treat people right even if it was scrub at a truck stop. But I also developed enough street smarts to know that if someone in a San Fran train station is asking ten 13 year old kids for change for a dollar he is probably scoping out which pocket their wallets are in. I don't think I would be who I am today had I just played soccer once a week in Beaverton Oregon growing up.

This kind of travel carried me all the way through college. Playing hockey for a division I program out of Colorado also meant for a lot of travel. Throw in a service academy budget and a first class program and you have got some great travel and experiences. The lessons learn as a kid were honed as a young adult. Except, being older I appreciated all the experiences more and looked at them with a keener learning eye.

Today my travels are a little different. My wife and I typically try and get the most out of a vacation by paying the least amount possible, with the most amenities included, for the longest amount of time. This typically leads us to do all inclusive trips and cruises. Once might argue that these are just slices of American life plotted in a random country but I don't fully agree with that. Yes you can probably sit and drink beers on the beach anywhere with the resorts being quite similar. But I would argue that the culture permeates the walls of the resorts. Plus we like to do various excursions to get out of the resort and immersed in what the country has to offer. I think that this style of vacationing is synonymous with our place in life. We have some money to throw around. Not a large amount. So any trip is a year long saving event. With all the other trips for weddings, visits to see family, child births, and weekend trips, I think the allure of going somewhere with absolutely no agenda is really appealing. We talked about doing Europe this summer but doing Europe requires a lot of coordination, travel, and energy. To be honest I think we both found the concept of sipping a few cold ones on the beach, meeting random people, and seeing where the day/night takes us to be a better fit at this stage of our life.

Which brings me to the other great thing about travel, the Nintendo factor. Remember playing Nintendo for hours as a kid? Remember finally making it to Mr. Sandman on Mike Tyson's punch out only to have the screen turn into a bunch of random twitching blocks of color before you could get the code to jump straight to Mike Tyson? What did you do? Hit restart. Restart didn't always work. The game was still frozen up. So what did you do then? You pulled out the cartridge and blew the dust off/cooled the chip and put it back in. And then it worked! Well sometimes I feel like my life is like a struggle to get to Tyson. I work hard doing a fairly constant and consistent weekly routine. The weekends are nice, the little getaways are good, trips back to the motherland are well needed and enjoyable. But they aren't really a true vacation. They all are quite a bit of work. They are just a restart. Its the week long, do nothing get aways that are blowing on the cartridge of life for this guy. I am always amazed at how long my good mood carries over after I return from a trip like that. I think it recalibrates your perspective on your life as well. I am sure there are countless other benefits to vacation and travel but those are the main ones for me. If you still doubt the importance of travel and vacation try and remember your last four years of work and what of importance came out of those years, and then think back to your last four years vacations and see which resonates more as a chapter in the story of your life.

Money Tips - Perspective

http://www.iwillteachyoutoberich.com/blog/why-average-is-not-normal-and-why-most-people-get-this-wrong/

Money Tips - This edition of money tips is all about gaining perspective on investing. First and foremost read a great post at the link above regarding the volatility of the stock market complete with a slide show presentation. Did you check it out? Good. I think the post does a great job at showing how quickly you can get into trouble by trying to time the market. For even more proof look at my picture above detailing 100 years of the market. What do you see? Do you see all the peaks followed by tremendous losses? What would happen if you bought there and how would you know if you were buying at a peak? Pretty depressing isn't it? Not so fast. What else do you notice about the last 100 years of the market. Step back from the screen. It has an upward trend over time. This is great news for you, especially if you are starting young.

The first thing I want to throw into the fray is a concept that many people fail to grasp. You only lock in losses, or gains for that matter, when you sell. You have purchased shares at a current market value when you buy stock or mutual funds etc. I am always hearing people say, I have lost 40% of my retirement in the past year, or I lost $2k in the market this month. Well have you sold your shares? No? Well then technically you haven't lost anything. These are merely paper losses (theoretical losses assuming you sold at that point in time). Currently the market just values your holdings less than it previously did when you bought them.

So now you grasp this concept, the question is how can you use it to your advantage? Well the answer is simple. First off always view your success in investing through the right lens or perspective. You are in it for the long haul. The goal is to achieve your financial goals (see previous Money Tips post) and those aren't going to happen overnight. You aren't destined to become the next Wall St Wonderboy or girl. Your perspective should be long term and should be through the eyes of the eternal optimist. The market is rising, great your share are becoming more valuable and you are building paper gains. The market is falling (like the last two years) even better. Why? Because the assets you are purchasing are on sale. Just because you bought XYZ Co last year for $5 per share and today you can get it for $1 per share, is not bad news. Assuming that you buy! Lets say you can now buy 5 share at $1 a piece so you have $5 worth of XYZ Co this year but now you have gained five times the shares for the same price. If shares were suddenly flat screens, or clothes, or beer you would be ecstatic so treat investing in the same way.

A simple way to buy low sell high is dollar cost averaging, or buying the same dollar amount of assets each month (or any time period). If you consistently buy $100 worth a month you naturally be purchasing less shares when they are highly valued (buying high = bad) and more shares when they are on sale (buying low = good).

I actually have been pulled back lately from investing in the market, however it is not due to aversion to perceived losses.....I just said things are on sale! I have been pulled back to build more liquid capital (cash equivalents in money market funds) in order to posture myself to achieve some of my other financial goals, which in this case is buying an investment property. That being said, I have almost reached my target for cash savings and then I plan to aggressively take advantage of a nations assets that are on sale.

What should I buy you ask? Well I plan on covering asset allocation within Money Tips soon that will give you some insight into what I have set as my strategy (see previous Money Tips) which may allow you to vector in on a strategy of your own. I'd love to hear comments and suggestions regarding the Money Tips posts and the message they are sending so post under comments or send me some hate mail in my profile. So start to buy because now is a great time to buy....wait it's always a great time to buy!