The seven most important observations from my work, business and personal life are as follows. I will be as brief as possible as most of what follows has been written about previously over the years in my blogs and newsletters.
1 Cash in pocket and savings is essential.
Cash in pocket is required because of blackouts in the future when nothing will work, or where there is an unexpected denial of service, your bank or account(s) are hacked, or any unexpected natural disaster, etc.
Savings are essential to cover the unexpected contingencies and buying opportunities which always occur. The reality is that a business without cash is not a business because cash and savings are critical tools of business.
At the end of the day, if holding cash was good enough for Charlie Munger and Warren Buffet, then it is strong indicator it should be good for you.
2 Debt can help you accumulate financial worth or lead you to into financial and emotional despair.
Debt is of value to buy assets that are likely to appreciate and add to your family’s worth or provide your business with a competitive advantage over its competitors.
Debt used to buy assets and experiences which can be classed “… as I want It now verses can I afford it now”, or “… with a look at me vanity factor” are of questionable long-term value.
Debt can be best summed up as; “… giving you want you want today, and handcuffing you to your financier/creditor until paid in to the future.”
3 Reputation is a long-term asset that cannot be simply gauged by a dollar value.
A good reputation allows you to recover from bad decisions and fake news of wrongdoings, obtain cheaper finance, and stand out above the competition when going for a new job or partnership in business.
A good reputation can be lost in a blink of an eye and the resultant bad reputation status may follow you for the rest of your life. You are also gauged by the people you associate with because you can be “… tarred with the same brush”.
The value of a good reputation was constantly emphasised by Warren Buffett.
4 Manners
The adjusted old saying “Manners maketh man or woman” has stood the test of time. In today’s business and social environments, manners are more essential than ever as it helps you stand out from the crowd and shows how much you value the other party’s concerns and interests.
The value of good manners, of please and thank you, are less used today because people think they are special, or have forgotten their value.
Good manners cost no dollars. Bad manners may cost you many dollars.
5 Due diligence
Due diligence is a must do today before starting any project, or working with other people.There are no secrets in the world today as stories in the media keep illustrating. Secrets can be exposed by aggrieved parties, a whistleblower, lazy or careless employees, a “death bed” confession, etc.
Due diligence is available for a fee, or freely obtained through your business and personal experiences and records and every time you leave the office or your home. Of course, you cannot walk around with your eyes “wide shut”, or buried in your mobile devices, or by being inattentive during conversations.
Due diligence often provides potentially damaging information before it occurs. This means:
- if a mistake occurs, this is a reactive learning situation which has already occurred.
- identifying a future problem, and avoiding harm, is a proactive action that may eliminate future mistakes or help achieve a positive result for your project.
On review of completed due diligence reports, never ignore your gut feelings when something doesn’t feel or look right. Your gut feelings warning you when something may not be right, and it is rarely wrong.
6 Be accountable and never stop learning
You will make many decisions over time and not everyone will end up producing a positive result. The importance of accepting responsibility and learning when your decisions don’t work out as intended, is essential.
The problem is; success can often lead to arrogance and carelessness. Meanwhile, failure, is a great learning experience that should not be wasted. The failure after all, can be turned into a positive if you don’t waste it by on-going feelings of negativity.
During life’s journeys searching for opposing views with an open mind is essential in that it helps you understand what the commentators are actually saying. This focus serves two purposes, which are:
- to see through what they saying, and how to learn how to pick apart and highlight how their flawed messages are not valid.
- it helps you pick up useful and fresh ideas that you might not have thought about.
7 Do not skimp on the essentials in whatever you are doing; it just does not pay
It is always wise to pay for the best of the essential factors even though you might not have unlimited funds to succeed. Accordingly, it is critical to spend according to what you can afford and which is commensurate to your objective.
You should know what is essential to achieve your objective. Wants are nice that can distract you from what is required. Rarely does worrying about wants help you to focus on the essentials in life which are the ultimate requirements for success.
In my view, the following essential components are really important.
Legal advice – obtain the best you can as most of us rarely understand whether we actually know which are the words which protect our rights or damage our rights.
Always use a specialist lawyer for the area of the law that is applicable and who is prepared to fight for you and their work in court.
If you do not understand any terms of trade in business or any other legal document, do not sign that document without contacting your preferred lawyer.
Accounting support and advice - is required to pay as little tax as possible, legally and within the rules of your taxation authorities. A conservative and respected accountant is essential to achieve these outcomes with a minimum contact from taxation authorities. After all, any contact with your tax authorities usually causes further costs, wasted time, and perhaps costly penalties.
Debt collecting – always look for a professional debt collector to use even if you think you don’t need one. This early contact helps you to build a positive relationship and gain professional ideas before you extend credit.
Importantly, listen to their advice and suggestions, which is often given freely because they practice the art of debt collection daily, and you do not.
Consultants and mentors – are essential at times, as appropriate. Look for those which have a good track record with others and match with your specialised needs for the occasion.
Introductions are valuable however you do need to feel comfortable – with any service providers as recommended by your business acquaintances.
It is important to feel comfortable on a personal level with these providers. At the end of the day, people react differently to different people and not every introduced person may not suit you.
Keep all documentation and take notes – because data, notes and records are valuable evidence when protecting your rights. Your evidence lacks creditability if you rely on “… they said, you said …” scenarios, and in doing so, makes it difficult to prove your case.
Be prepared to defend your rights – because if you are not prepared to pay to protect your rights, any efforts and costs to protect your rights are wasted. There is no point all in having the best lawyer prepare legal documentation to protect your rights, if you are not prepared to pay for the fight, or have no contingency funds to pay for it.
Summary
There are no guarantees in business or our personal lives. I believe however the above information will give you every chance of surviving and succeeding as they based on over 55 years of experiences in many different roles.
Accordingly, I suggest it is worth your while to review this information and use it as appropriate to achieve your objectives in your business and personal lives.
I wish you all the best for the future.
Kim.
