leadership

Markets always win

In capitalism, there’s only one really important rule. Markets always win. You stand zero chances if you go against the market. Markets determine a big part of your life. If you choose the right markets, things will go well for you; if not, you’ll experience only struggle, pain and failure. You may fight against the market for years and at the end, you’ll probably be brutally knocked out to the floor, no matter how competent you are. You may lose everything and markets will laugh right in your face.

The brutal thing is that even if you don’t want to play the game, you’re playing the game.

In love life, your sexual market value more or less determines the quality of the partner you can attract. It’s usually someone in your range of sexual market value. It’s like you have a number on your forehead. Trends on the job market have a big influence on whether you’ll be employed or not, how much you’ll earn and how quickly you’ll get promoted. You can be the best in something no one wants to buy and you’ll be poor. If you’re an entrepreneur and don’t have customers who want to buy your products, there is no market and there is no business. Most startups fail because there’s no market.

A market is not a nice thing. It’s like a moody, perpetually dissatisfied cruel person leaving no room for negotiations, no room for discussions or compromises. Either you hit the spot and make the market happy or you’re out of the game. You can even make the market happy several times in a row and then fail it, and yet the market won’t spare you any pain. Markets are copy-cats of nature; and nature can be the most beautiful experience in the world or the cruelest one. That’s also why so many people criticize capitalism.

Let’s take a step back now. What is a market, really? Well, it’s nothing but supply and demand. Markets are nothing but people voting with their resources, be it with money, attention, love, sex or anything else.

If you can provide something in great demand and of scarce supply, you’ve hit the spot. If you supply something that’s in big supply and short demand, markets will ignore you and you’ll be poor. Offer something people want, but not many can do, and you shall prosper; offer something anyone can offer, and few people want, and you shall be one of many waiting in a long line, hoping that maybe someone spots you; and they probably won’t.

There’s a good story representing this connection between creating, delivering and capturing value, and markets. An old couple is walking in the park. The grandpa gets a heart attack and collapses on the floor. A young person passes by. Grandma, completely panicked, asks the person if they know CPR. The person responds: “I’m a really good person.” Grandma says that she doesn’t care about that, she only wants to know if the person knows CPR. The person responds again: “I’ve also finished college and work really hard.” That’s nice and all, but can you do CPR?

The point of the story is that markets only care about the things you can supply. Money knows no racism, no borders and don’t care about your history. Markets don’t care if you’re a good person, in love or not, the only thing that the markets care about is the value you can provide.

The formula is simple: no value, no money. Well, it’s not that simple, of course. There are many different types of value a person can produce. It can be social value, attraction value or whatever. For example, a good teacher produces a great social value, but not that much of a financial value, because supply of teachers is quite bigger than demand.

I’m definitely encouraging you to find the right balance between market value and social value, but you should never leave market value out of the equation. When we speak in terms of business (financial markets, career markets, startups etc.), “no unique value proposition, no money” is the golden rule.

The biggest problem with markets is that it’s not easy to be in a position where the demand is great and the supply falls short. It’s one of the toughest things in the world. Most people who hit the sweet spot do it based on pure luck. Others struggle for years before hitting it, after putting huge effort into strategizing, innovating, analyzing and failure; and even then you need to have a lot of luck. The good news is that you have to be right only once, the bad news is that it’s extremely hard to be right even once. But understanding markets can help you a lot to progress faster in life.

Everyone’s dream should be to have a monopoly in some niche market for a short period of time. A monopoly is definitely not good for the general society, but it gives a great advantage to an individual, even if only for a short period of time. Everyone would like to have a monopoly, everyone would like to be on top, maybe just to taste it, even if they don’t admit it to themselves. Monopoly is how you get on the top.

There’s even more. We want to control the markets, not only as individuals but as a society as well. In the same way as we try to control nature. Nature and markets, they both make us feel insecure. That’s why we have the government and government interventions. To control the markets and to control nature (with all its resources, threats, borders etc.).

The sad thing is that most interventions bring a new set of problems, like inefficiency and corruption. Controlling the beast is no easy task, and people more often hurt themselves than not. Going against the markets is hard, controlling them is even harder. Sooner or later, market meltdowns and scandals happen. But that’s how we organized the world.

Now let’s look at the markets from a brighter perspective. What can you do to understand markets more? The first thing you have to do is un-ego yourself. We all have assumptions about the markets. We think other people want what we want, like and dislike the same things, use technology in the same way etc. In most cases, we have wrong assumptions and wrong assumptions are the mother of all fuckups. That’s the main point of the lean startup theory and its first phase of building a startup, which is empathy.

When you un-ego yourself, you become empathetic, you listen to the voices on the market, you observe what people respond to, you search for what people are prepared to pay for.

In the second step, you should stop following your passion and start following your effort. Rather than idealizing life, you look at the hard facts. What markets really want that you can actually provide. There is no place for romance, idealism or egoistic behavior towards the markets. Only supply and demand. The good news is that with time following your effort and seeing all the results passion will also develop. But…

If you ignore the market, the market will ignore you. As already mentioned, you have to be aware that even if you don’t want to compete, you are competing. You’re voting with your resources and other people use their resources to vote on how much value you can provide for them. There’s no escape.

With your birth, you were put on different markets and dealt different cards. Talents, family money, beauty, intelligence, and your hard work, they’re all building blocks of your capacity to prove your value on the market. The more of them you’re born with, the better position you are in. That’s definitely a big advantage in the short term, but not necessarily in the long term. That is to say, good times make soft people, and things like the Dutch disease can happen. And hard and smart work always put talent (or other given things) to shame. It’s up to you how you’ll play game of life.

No matter what, you should respect the markets, learn its rules and play the best game possible. When thinking about markets (financial markets, job markets, consumer markets etc.), you should analyze short-term and long-term trends, you should always stay empathetic, constantly acquire new market insights and quickly adapt to changes. You must know how to manage your ego and your false assumptions by constantly, testing, experimenting and innovating.

Go with the markets, make the markets your best friends and you shall prosper; put ego before the markets and you’ll stay alone and miserable. It’s that simple. Your competences are your downside protection. If you’re very competent, you’ll always make something out of your life. Markets define your upside potential. If you hit the right market at the right time, you can win big. But if you’re competent and hit the right market, something magical can happen.

So start learning about the markets. Here’s a nice set of videos with all the basic information: https://wetheeconomy.com/films/cave-o-nomics/
Your competence level

Your competence level is basically an accumulation of internal resources in your past. The more internal resources that you accumulated in the past, the more competent you are. The good thing is that competences accumulate over time, and thus a potential for exponent growth and compounding exists.

Today, in the creative society, competence is the biggest safety and advantage you can really have, and the main source of self-actualization, meaning doing work you really enjoy; and it doesn’t matter if you’re starting your journey as independent entrepreneur, freelancer or are employed.

The higher your competence level is, the more you should be capable of converting internal resources into external resources (money, status…) and consequently you should be more successful in your personal and business life. The bottom lines of a higher competence level should be your better performance in order to create, deliver and capture value.

The best news ever is that inner resources can’t be spent like outer resources. You can always spend money and it’s gone, but once you acquire a skill, you know it forever. That’s why inner resources are that much safer than outer resources.

Inner Resources: Competences à Outer Resources

Knowledge Money

Skills Status

Experiences Contracts

… …

Your competence level (inner resources) consists of the following elements:

Psychological capital

The pure basis of your competence level is psychological capital. In today’s turbulent world, that’s the foundation of your potential capabilities. The ability to adapt quickly, constantly overcome obstacles, stay ambitious, have a wish for developing and acquiring knowledge, have courage, break out of your comfort zone, being resilient, persistent, focused, constantly pushing yourself etc. are all important parts of psychological capital. Without a suitable measure of psychological capital, all other elements of competence are significantly less useful to you and the world.

Possessing some knowledge or having a talent or acquiring a skill doesn’t mean anything if you don’t put it to good use. When you put your competences to use, you face obstacles, resistance, pressure, assholes, etc. and those are the real life situations where psychological capital makes the difference between you making it or not.

Talent

Talent means that you have a natural competence for a certain mental or physical activity. With talent, you’re gifted for a certain activity. It means that you learn and master it a lot more easily than others and you are significantly more skilful at it than your competition if you practice enough. We all have our own talents as well as areas we aren’t talented in.

You can diligently analyse your talents by doing a personal SWOT analysis. Talents are an important part of your competence, if not even the most important part, but only if you also develop and capitalize on them. Otherwise talent is practically thrown away. The formula is simple: Use your talents. That’s why the key factor before that is psychological capital. Talented or not, you have to fight and work hard.

Knowledge and IQ

Knowledge means knowing a certain field. It means you have a complete set of information that you imprint into your consciousness by learning, studying, observing or in any other way. It’s about understanding information about a subject that you get by experience or study. Knowledge represents the most basic skillset and qualification for a certain activity.

The rarer and the more sought-after your knowledge is, the more you are competent and the bigger is your value on the job market. For example, everyone knows how to make photocopies, but there are significantly fewer independent accountants, and even fewer accounting software programmers. The accumulated knowledge can be a consequence of formal or informal education. Formal education brings an additional paper that holds important value added in certain sectors, especially if this paper is stamped by the best universities in the world.

When we talk about knowledge, we should also mention the intelligence quotient as an important part of competence. IQ significantly contributes to competence, but only to a certain extent. As the book Outliers describes: if your intelligence quotient is below a certain number, you have a much more difficult time succeeding.

But someone who is a genius and someone who reaches a point that is a little higher than the average of intelligence quotient have completely the same chances of success. Of course intelligence, much like talent, doesn’t mean anything on its own. What’s crucial is the use.

In today’s society of information overload, there’s another important component of knowledge. It doesn’t so much encompass the ability of memorizing anymore, since information is easily accessible, but rather how quickly you can find information, analyse it and use it practically.

Skills

Skills are your abilities to do an activity well or in a practical manner. The more skills you have and the more they’re developed, the bigger is your competence level. The skills important for the creative society are mostly visionary and creative skills, skills of out-of-the-box thinking, leadership, sales, teamwork, fast learning and negotiation.

For example, if you’re a good negotiator, you can definitely make sure that you get a significantly better payment for the job you do. And the skill of selling yourself perfectly can definitely make this payment even bigger.

Emotional and social intelligence

As part of skills, we should especially highlight emotional (EQ) and social intelligence (SQ). In the creative society, it’s these two types of intelligence that contribute to an individual’s competence as much as the intelligence quotient (IQ). Working with people is very difficult, and if you have a good sense for people and know how to work with them, that’s the basis for the development of many key skills for success. You can easily increase these two types of intelligence on your own, by being proactive (reading the books and applying knowledge).

Experience (to a certain extent)

Experience is the process of getting knowledge or skill from doing, seeing, or feeling things. You gain experience based on an activity, on doing, not reading or talking about something. Experiences are findings that you figure out on the basis of things you go through. Experience allows you to make better decisions.

The more experience that you have, the more correct is probably your subjective reality map compared to the objective reality. And that’s the basis for good decisions. We could also say that experiences are your scars from different battles, helping you to make better decisions in the future. Good decisions are a consequence of experience. Experience is a consequence of bad decisions. Thus there is no experience without scars.

There is another thing called too much experience. Too much experience sometimes leads to the phenomenon of paralysis. When you gain too much experience, you start avoiding sometimes even reasonable risks without being aware of it. This is why when gaining experience, it’s crucial that it doesn’t paralyse you.

Values

Your personal value system is the basis for your decision-making – what you’ll give priority to and spend time on in your life. Together with psychological capital and personal talents, values are those factors that define your potential for accumulating competences. You can be as talented and ambitious as can be, but if you don’t focus on your goals and thus suitably allocate your time, you’ll have a lot of difficulty in realizing your goals, no matter how competent you are.

For example, if partying is higher on your value list than career, you probably won’t allocate much time to progress your career. Consequently, it doesn’t matter how competent you are.

When it comes to the value system, it’s also important that these values are healthy and include a long-term view. If someone is a con artist, for example, they’ll have a hard time being successful in the long run. That’s why integrity also has to be a key part of your values.

Views and beliefs

But we can even take one step back. Your values and decision-making system are the consequences of your views and beliefs. The latter construct your subjective reality map (how you personally see reality) that you’re creating up to the beginning of puberty through primary and secondary socialization. After that, we need a lot of energy to even be able to suitably adjust this map.

Narrow-minded beliefs can have an incredibly negative influence on you capitalizing on your competence, no matter how big or unique it is. For example, if you have the narrow‑minded belief that money corrupts people and you don’t want to be “corrupt”, it will be extremely difficult for you to get rich, even though you might have all the competences for it. But you just won’t go after money.

Consequently, an important part of your competence level are your views and beliefs, which also make a great starting point for your personal growth. Analyse which toxic beliefs are holding you back. The good news is that cleaning up views and beliefs lasts throughout the entire life.

Social capital

Social capital are invisible bonds between individuals, built on the basis of previous collaboration and including the key component called trust. Even though social capital is already somewhat of an internal-external resource, it’s still an important component of your competence.

The more people that you know (or who know you), the more you’re worth, we could say simply. In this, the social capital can be given or inherited or deliberately built. You should definitely work hard on developing networking skills and building your social capital, because it’s no secret that knowing the right people can definitely help you progress much faster in life.

Personal brand

All the things listed above are reflected in your personal brand. It’s generally true that the more competent that you are, the bigger is supposedly the power of your personal brand. Accumulation of your inner resources reflects in your personal brand, which are your name and surname. In today’s world, the biggest part of your personal brand is seen online on all the social networks.

However, it’s not necessary that your competence level can always help you, at least not from the beginning, when you start building your name. There are a few studies that concluded that being too competent compared to others may even decrease your performance level. But in the long run, if you have a high enough psychological capital and emotional intelligence, even this isn’t an obstacle. When you prove yourself that you are the next Bill Gates, everyone will want to network with you.

A brand can also have more power than your actual competence level if you excel at personal marketing. We could say that empty vessels make most noise in the short-term. But in the long run, the brand evens out with actual competence sooner or later. Thus the best combination is to really have a high competence level, including you being good at marketing and selling yourself. At the end of the day, to be really successful, you have to create value (innovate, possess knowledge or skills), deliver (marketing and performing) and capture value (negotiating price).

The conclusion

You, and only you, are the biggest, most important, safest, most reasonable and potentially the most lucrative investment in your life. So invest into yourself and your competence. The investment will definitely pay off and you can’t lose in any way. You’ll always be able to create external resources from internal resources. In order to succeed, you only need one person to believe in you. It’s best if that person is you. So be good and thorough when investing into yourself and your competence!
Problem-solving mindset
Let me tell you two stories. The first one is about my water heater. One morning I wanted to make myself a nice tasty herbal tea. There is a button (1) on my water heater that opens the lid (2), where you pour in the water (see picture below). I pressed the button and it was stuck. I couldn’t make the button unstuck and I couldn’t open the lid. I was struggling for like ten minutes until I gave up. I boiled my water using the stove, which is just a little bit more work, but I was still pissed off. My only positive thought was about how water heater is a good invention. But the important part is that I was really annoyed.

A few minutes after my water started to boil, my girlfriend woke up and came into the kitchen. She saw what I was doing and she knew that the water heater button for opening the lid was stuck. She said to me: “Why don’t you simply pour water through the hole (3) where the water comes out?” I was like, fcuk, such a simple solution to the problem and I hadn’t been able to see it myself, because I was too annoyed with the problem to even start thinking about alternative solutions. It’s no deal but it would safe me some effort and lots of emotional energy.

The same day, a friend sent me a link to a Kickstarter campaign named Smartphone Workout Shorts – Better Than Armbands. In the past two years, I have been in the gym many times. Several times, I took my mobile phone with me. I never liked arm bands and I always had the problem of where to put my phone. It slides out of your pocket, there are many exercises with weights that can crack your screen and so on.

I was always bitching and complaining and thinking to myself about how “uncomfortable” life can be. I wonder how I would have survived a decade or two ago without all the technology we have available now that makes our lives super comfortable (well, toilet paper was invented not early than 1857). But to get back to the point: I never even once shifted my thinking from my pain/problem to possible solutions. The lesson here is not about the product itself, but about the simple solution every one of us could think of, if we had a problem-solving mindset instead of a bitch-whine-and-complain one. Having a problem-solving mindset is how you notice good business ideas.

From whining to problem-solving

The next time you encounter a problem that pisses you off and you start to bitch, whine and complain, pause for a moment. Start managing you emotions and opening your mind to creative problem-solving thinking. That is what producers do. Start asking yourself questions like:
- How could I solve my problem in the most creative and innovative way?
- What kind of a product or service would solve my problem? Could I build it?
- How could I innovate my way out of this situation?
- What are the alternative ways of achieving my goal?
- What would happen if I do the opposite?
- What would MacGyver do in this kind of a situation?
- Etc.
You can’t be focused on a problem pissing you off and negatively thinking about “how hard” your life is, and be looking for a creative solution at the same time. Bitching, whining and complaining just takes too much of your mental bandwidth. Feeling like a victim in a specific situation has never brought any good solutions and creative ideas. But on the other hand, being inventive, creative, proactive and entrepreneurial usually always leads to some kind of progress. Maybe you don’t only solve a problem for yourself, but also come up with a million-dollar idea. There is always a step you can make, if you just keep your mind open and don’t block it with negative emotions.

Always remember the famous quote: “Your mind is like a parachute, it only works when it’s open.” Your mind being open especially means that you know how to manage your negative emotions and thoughts that are preventing you from looking for the most creative solutions.

For example, one of the cognitive distortions is called jumping to conclusions. If your mindset when facing a problem is that nothing will work, no matter what you try, then you definitely won’t find a solution.

Thus keep you mind open, be creative and when you whine, bitch or complain about a problem, stop for a moment and shift your way of thinking. Ask yourself: what is the optimal way of thinking in the situation and how could I creatively solve the problem; keep your mind open and start brainstorming, testing and experimenting.
Be more of a producer than a consumer
Today, we live in an extremely materialistic world, where we are programed to be a subconsciously obedient consumer from a young age onwards. You’re exposed to a few hundred marketing messages on average each day, and most advertisers try to convince you to buy things you don’t need to impress people you don’t like with hard-earned money from a job you may even not like.

But there’s more than that. Productivity has risen dramatically in the past two decades. An average worker creates more value than ever. Nevertheless, wages aren’t going up, they are remaining steady or even decreasing. All of the benefit (or extra profit, if you want) goes to employers or business owners. That’s why rich people are getting richer, and poor people are getting poorer.

It’s true that an average inhabitant of the world can afford more and more material things. The material abundance has never been as high as it is today. But the profoundly sad truth is that the material status isn’t improving because wages and productivity are higher, but because it’s much easier to access debt. People enslave themselves to debt more and more, just to afford another thing they probably don’t even need.

Being an obedient consumer

There are many reasons and motivators why you should buy something new. Because you get the instant good feeling of gratification, because you deserve it since you work hard, because you’ll feel a little bit better about yourself or other people will notice you more, because a new thing will bring short-lived excitement into your life, and so on.

It’s so easy to spend money. Your hard earned money is just an electronic figure. Your fastest connection to that figure is a piece of plastic; doesn’t even feel like a real money. Just some numbers. You see something you like. You just swipe your plastic and you feel a little better for whatever reason.

You don’t have enough of your own money? No problem. You have a few more decades to live and you’re going to work hard, for sure, and earn some money. Lenders know that, and they want a piece of your future earnings. That’s why it’s so easy to borrow money and just buy something you want. With a single signature.

A big screen TV you can’t actually afford. A fancy nice car. A big modern home. Dozens of shoes and coats and other clothes. Vacations you haven’t taken for so long and you definitely deserve. A big expensive latte. Restaurants and drinks and parties. There are so many options to spend money, and it doesn’t matter whether you actually have it or not.

You can swipe credit cards and take more and more debt until reality kicks in. The easier road sooner becomes hard. The good short-lived feeling of owning something new becomes a long-term catastrophe; because debt means slavery. Possessions you cannot afford destroy your freedom and your potential, and sooner or later your health and relationships as well, because of all the stress. The more things you buy that you cannot really afford, the longer your jail sentence is, the more enslaved you are.

One of the problems is that things are rarely as they seem. Maybe your neighbor has a bigger house than you, drives an expensive car, wears expensive clothes, has a nice motorbike and I don’t know what else, but in reality, he may be an enslaved person working a job he hates just to pay the debt he owes. The material things are just his short escape from reality.

Having material things in life doesn’t really mean neither wealth nor happiness. Almost anyone can go to a bank for a consumer loan to buy a few fancy things and enslave their own future. But sooner or later, you don’t own things anymore. They own you. Your freedom goes away, your happiness goes away, and all you do is work hard to pay off the debt. Everybody earned money except you. Remember: if you don’t know who the fool in the room is, you’re probably that fool.

The easiest way people see for getting out of a financial hole is by earning more money. But sooner or later, they realize that more money is rarely a solution for poor financial management. You just can’t buy more financial discipline. That’s why most lottery winners go broke soon after winning the money. You must financially discipline yourself, no matter how much you earn. Because money follows management.

Don’t try to only look rich, work hard and be disciplined to really become rich. Buying stuff on credit means slavery. Living a modest and frugal life and not spending money like crazy, especially not by taking debt, means freedom. You have more choices and more choices mean more freedom. You have more options to pursue your dreams and the things you really want in life.

The opposite is also true. The hard road becomes much easier with time. If you save money, you’ll become a winner sooner or later. Because a free cash flow will allow you to become an investor, a business owner or lender. Cash in your bank account will give you more options and possibilities.

Being an innovative producer

The large majority of people are consumers. Most of them afford their lifestyle by taking debt. They enslave themselves and limit their options. But logically, this planet has another type of people – the ones who are selling the products to this majority. These are the people with a completely different mindset. They’re called producers. They’re driven by the force to innovate, to produce to solve problems and to create beautiful shiny products and services that provide value.

Every one of us has the capacity to innovate, create something new, provide value and produce different products and services. Every one of us has a much greater potential than to just go to work, take debt and spend money as the easiest way to escape reality and its challenges. Not everyone is made to become an entrepreneur, but you can also become an investor, sole proprietor, freelancer, you can produce and sell stuff in your free time, partner up etc. There are numerous ways of becoming a producer.

You can break free from being only a consumer by becoming a producer as well. The sooner you switch sides, the sooner life becomes easier. You get more ideas, you see more opportunities, you’re more immune to all the advertising messages, and even more importantly: the will to create and contribute awakens in you. Switching from a consumer to a producer mindset can be one of the greatest things you do in life. First you produce and provide value, which makes you rich, and then you consume. Producers get rich and consumers go poor. That’s a fact.

Think about providing value to the world. See yourself as an innovator, entrepreneur, businessperson, visionary, creator and producer of added value. See yourself as an investor and business owner. Instead of spending money, invest money, save money and produce.

You can even take being a producer to a totally new level. If you have a consumer mindset, you only think about what you’ll buy for your spouse on Valentine’s Day. Producers prefer to think about what they can sell on Valentine’s Day. They see millions of spenders who just want to buy stuff as proof of their love.

Consumers buy things in shopping centers, producers sell them. Consumers buy products on TV, producers sell them. Consumers borrow money to buy stuff, producers lend money. Consumers buy things for every holiday and special occasion, producers see special occasions as opportunities to sell things to needy people.

Think about all the needs people have. Think about how you can provide value to the world. Think about how you can solve problems for people. Think about all the business ideas you have; and if you don’t have them, brainstorm. Think about your dreams and talents, and how you can monetize them. Think like a producer and a creator of value.

“You look at the world, when you buy a sandwich or a beer; you are a consumer where you trade money for a certain type of good. I think money is fundamentally an exchange of value. So, how can you be the guy that produces the value so that people can use that to give you the money? When you see that way, then you kinda see the matrix. That’s the biggest switch you probably have to make.” Terry Lin, Baller Leather, Your Own Way Out Interview

Changing from a consumer to a producer mindset

Changing your mindset from being a consumer to being a producer is not an easy job, but it can be done. Here are some tricks that are going to help you change perspective.

Whenever you want to be an obedient consumer, do the following:
- Whatever you buy, multiply the price by ten. That’s the actual cost of your purchase. If you were to invest that money, that is approximately how much money you’d make in twenty-five years with an average return on your investment.
- Everything you buy doesn’t only cost money. It also costs you your freedom, your space in life, your future and the number of your choices. See how you’re enslaving yourself with every purchase, especially if you’re buying things on debt.
- Whenever you get a paycheck, Pay yourself first. Have a savings account and put some money aside for your future. See it as part of your expenditures and consumption. Feel instant gratification when you save money. Whenever you see your neighbor’s fancy car and feel bad, look at your savings account and it’ll make you feel better instantly.
- For bigger purchases, wait two to three months, don’t make impulsive decisions, especially not for big purchases. If you still need the new thing, maybe you should buy it, but rather not. Time will curb your consumption desires.
- Rather than buying things you won’t use in a few weeks’ time and that only start collecting dust, live a minimalistic life. Remove all waste from your life.
- If you really have problems controlling your expenditures, find a spouse with better money management habits than you. It will be a good influence on you and you’ll be able to save much more money.
Tricks to acquiring a producer mindset:
- Become a smarter consumer, educate yourself, compare prices, understand taxes and the monetary system, read financial statements, become financially educated. Try to see everything you buy as a business deal with room to negotiate.
- Read investing and business books, as this will motivate you to save more and to produce more value for the world; besides learning new things.
- Spend more time with investors and producers. Join business or investor clubs, make new friends, and go to conferences.
- Invest in yourself, unless you don’t think you’re a good investment. But you are. Leveling up your skills, upgrading you mindset and having a better life strategy is the best investment you can make.
- Have a long-term approach. It takes years to change your mindset, to learn new skills and to really become a producer and then produce something of real value. The good news is that you only have to be right once with the right product (to get rich), but you can’t just switch sides, it’s not that easy. You must learn about the markets, you must develop new skills, expand your social network, and so on. The learning curve is long and takes a lot of effort, years of hard work, but it’s worth it. Not only because of a better earning potential, but also because of the feeling that you created something and contributed to the world.
- Start creating something small and try to sell it. Maybe you can start with selling things you don’t need at home. Try to identify small opportunities for making some money. Make your first dollar, then ten dollars and continue like that.
- Go to the Arab part of the world and practice bargaining and negotiating. Most people feel uncomfortable negotiating and getting the best possible price. If you can’t do it, partner up with someone who can.
- Make sure your spouse understands your goals and supports them. If you try to save, invest and produce, and your spouse only wants to spend and consume, things will not work out very well. Besides investing into yourself (you), your spouse is the most important choice you make in your life.
- Think about what else you consume that’s unnecessary, like news, TV, unhealthy food etc. Try to see your time and energy as precious resources you can either waste or invest wisely.
- Try to think about how to create products with real value. If you want long-term success, you need to create value that people really need and respect. Try to build products you’d proudly put your name on. Don’t try to just to make a quick buck or scam people.
My friend Robert Rolih wrote two reports that are great if you are new to investing:

That’s also what I do. I’m not rich (yet) but my material status is improving every year. I drive an average car (which I even downgraded a few years ago) and I live in a small but cute flat I can afford. I spend as little as possible on clothes. I don’t buy any unnecessary stuff. I try to live as minimalistic of a life as possible.

I have a spouse who knows how to save money and she motivates me to spend even less. She is a really good influence when it comes to money. My major expenditures are investments into myself (books, seminars, MOOCs…), healthy food, technology and sports. All that I see more as investments than costs.

Seven years ago, I wasn’t even close to being careful with my money, because of my false mindset. That’s changing for the better every year; especially by reading books and socializing with the right people, and it feels so much better. Still, I’m not obsessed with money and I value relationships and doing good much more than financial benefit.

I see myself much more as a producer than a consumer. I produce things I’m good at, things like writing articles, doing workshops, managing complex projects and delivering consulting work. I’m just in the process of switching from producing value for the local to the global market, while my plan is to also create some products so I can progress from only trading my time for money to also having some passive and portfolio income.

It may take me the next decade to really do it, but I have no problem investing into the process and trusting it. Despite all that, I really enjoy what I’m doing. It’s not only about the final event, the path alone pretty much has the same value and importance.
5Ts – Elements you should look for in your environment

Your current position in different areas of life is the result of who you are – your genes, behavioral patterns, values and beliefs, decisions etc. and environment, from the people you spend time with to your company culture, the industry you work in, market trends, government, and so on. Your environment determines your potential as much as you determine it with your own personal power. The environment as a system can either empower your ambitions or stifle them.

In many cases, people who thrive in a certain environment would suffer in another kind of environment. A corrupt politician does better in a country with lots of corruption than he does in transparent and fair systems; meanwhile a person who focuses on creating and delivering value has a hard time succeeding in an environment that respects political connections and bribes more than free markets.

Thus you should always look for an optimal environment that can support your ambitions and is in line with your values. You may do better either in a big company or a startup, in a technology company or the traditional industry, you may work better as a specialist or a generalist or even an entrepreneur. You may feel better living in a crowded city or far away from the noise and a mass of people. You have to figure out which environment suits you best.

The good news is that the world is becoming more and more flat. Location doesn’t matter as much as it used to, as long as you’re connected to the internet. You can innovate without having to emigrate.

Nevertheless, there are five elements that you should look for in every environment and will contribute to your long-term success. These are the elements that encourage creating, delivering and capturing real value by being human and keeping personal integrity, achieving it with prestige, not dominance. A system that supports these five values still has competition, the world is still tough, but also fair, empathic and collaborative. The bottom line is that we’re all connected, we all share one world and for now, only one planet. Hurting anyone else simply means hurting yourself.

For your long-term success, make sure that both your private and professional life take place in environments with the five values listed below; because the world is changing and those who profit from secrecy and deception will soon discover they only have a few places left to hide. The first three values you should look for in an environment are based on research that dr. Richard Florida did on thriving societies in today’s world, published in his book The Rise of the Creative Class.

Talent

The first T is talent. Talent is the basis of everything. Jobs are created where talented people are. Capital follows the talent. A critical mass of talented people creates innovation, out of the box thinking, (healthy) mutual competition, interdisciplinary dream teams, and so on. You need enough expert minds and complex communication in order to encourage creativity. That’s why the best universities in the world are so important for progress – because you’re in a system with a critical mass of talent that empowers you.

First of all, you should work in a system full of talent. The measurement for that is quite simple: if you’re the smartest person in the room (system), you’re in the wrong room. You want to be in a room of highly talented, educated, skilled and motivated people. Today, teams win, not individuals. Consequently you want to see your connections as part of a larger team that’s trying to achieve something, not only in your professional life but also in your private one (spouse, family…). Talented teams produce innovation and progress!

Technology

The second T you want to look for is technology. Technology is leverage, technology helps with progress and efficiency. Technology is the thing that increases your productivity, connectedness, mobility, quality of life, access to information, knowledge, resources and much more. Technology is also the thing that brings better transparency and collaboration among talented individuals.

All societies (systems) that thrived in the past and will thrive in the future innovated in one way or another. Talented people created a tool to do something better, faster, more efficiently etc. The future belongs to the creative class, and the creative class creates and delivers value by using technology. That’s why you should try to work in systems that use, operate, leverage, encourage and invent new technologies.

Tolerance

The third T is tolerance. You want to live in a diverse, heterogenic, integrative environment that’s tolerant and empathic. Innovation means always trying new things. Maybe you’ll have to try 10,000 options that don’t work before inventing something that does. Failure with validated learning is inevitable in the process of inventing new things. And you need the courage to fail. You need an environment that doesn’t judge failure but tolerates it. You also want an environment that’s tolerant towards people experimenting and trying new things.

That’s why tolerance is so important in the system you function in. Not only does that diversity encourage you to keep your mind open and try new things, you can also more easily find new connections that weren’t discovered yet, and don’t have a lot of societal pressure judging you if you fail. No tolerance means no innovation, no innovation means no progress.

Transparency

A lack of transparency may be a huge political advantage, especially for corrupt acts and unfair benefits; corruption inevitably occurs when a select few have access to important information, which allows them to use it for personal gain. But it’s also true that the world is changing and those who profit from secrecy and deception will soon discover that they only have a few places left to hide. Because a lack of transparency creates unhealthy systems. To quote Dalai Lama: “A lack of transparency results in distrust and a deep sense of insecurity.”

Transparency is simply defined as a lack of hidden agendas and conditions, accompanied by the availability of all information required for collaboration, cooperation, and collective decision-making. Transparency is so important because it’s the essential condition for a free and open exchange, whereby the rules and reasons behind regulatory measures are fair and clear to all participants.

In a non-transparent system, effort is rarely rewarded. That’s why talent in systems like that has little value. That’s why you want to work in a transparent system. You don’t want to keep questioning how much your co-worker earns, you want to know that you’re paid according to your value added and be sure that your co-workers are as well. The key ingredient of transparency is honest, deep and direct communication. So look for systems that encourage transparency and honest communication.

Transcendence

Last but not least, we are at the fifth T. The last T refers to transcendence. Transcendence is about fighting for an important and good cause. Transcendence means having a strong why, a why that’s stronger than all the obstacles you meet along the way.

Transcendence is about being in an environment that has a big vision, an environment that encourages you to constantly improve and become your best. It’s about an environment where you fit in, because you know you can develop your talents and feel purpose in life.

It concerns a transcendent environment, where things are not only about you, but about the whole team and the whole ecosystem, even the whole world. It’s about you becoming your best, it’s about you leaving a legacy and it’s about making the world a better place for everyone else.

It’s about a system that encourages you to be a good person. People are often not bad and evil, but the system and life situations bring out the worst in them. Think about the Stanford prison experiment. There’s evil in all of us, the only question is what kind of a system we’re functioning in, which part of our personality the system brings out.

You want to be in a system that brings out the best in you. Transcendence is what really defines you as a human being and what separates humans from animals. A transcendent ecosystem is a system that empowers more divine forces in you than animal instincts.

You can also influence your environment

What’s important isn’t only that you find an environment that fits you best and empowers you the most, but also that you help to construct and develop ecosystems that encourage talent, technology, tolerance, transparency and transcendence. If you want to achieve your maximum potential and peak performance, you have to find your optimal environment, online or offline.

But when you do that, it’s your duty to help develop other systems and societies, so that other people will also have more options. You best achieve that by being a role model and by being socially active. Let me illustrate this with a story.

A man asked Mother Theresa what he can do to promote world peace and make the world a better place. She replied: “Go home and love your family.” A family is the first place where family members should support each other in developing talents, using technology as a leverage, being tolerant to mistakes and trying new things, being transparent and having a strong sense of purpose and mission.

You are a product of your environment as well, so choose it carefully.
Endgame and final outcome
Every activity or action you do in life leads to some sort of a final outcome. There are two ways of looking at this. The first approach is doing as you feel in a certain moment and letting the final outcome be a surprise. It’s a very spontaneous strategy, but one thing is for sure: you’ll probably end up in a totally different situation than you imagined.

Most people go for this strategy. It’s much easier to go with the flow. It’s much easier to surrender yourself to your inherited behavioral patterns, environmental forces and outside stimulations. The problem is that a spontaneous strategy rarely leads to what you really want in life. If it were that easy, everyone would be happy and successful. The sad truth is that only dead fish go with the flow. Life wants you to struggle and fight for yourself.

That leads us to the second strategy. The second strategy is having the final outcome in mind, the endgame you really want. After you have the final outcome in mind, you work on your personal development, you don’t react to environmental forces but are instead proactive and so on. You take initiative and control of your life. You become aware of your personal power and never let it go.

Here, friction comes into play. The more your endgame and final outcome are different from your current situation and your path in the past, the more effort it will take to turn the ship the other way. You know the saying that you can’t teach an old dog new tricks. A different desired outcome simply requires a different type of thinking and action. Thus if you want to attract different situations and final outcome in your life, you first have to change yourself.

Of course this path isn’t easy, but it’s definitely worth it. This is how you develop your character, this is how you level up your game. You go for something that’s different from what was given or meant for you. You decide for a different, better direction. That means friction. That means struggling and fighting. But that also means reaping all the internal (character development) and external (goals you have) rewards.

Always start with an endgame in mind

Okay, so there are two possible strategies. One is that you let life kick you wherever it wants. It may be an easygoing strategy, but sooner or later, life will kick you somewhere you don’t want. The second strategy is to start with the endgame in mind and then work on yourself and actions that will lead you to the final outcome you want. The second strategy demands much greater efforts, but then the rewards are great as well.

The second strategy will definitely bring you a better life in the long-term, but the question is why most people decide for the easier path. The real reason for that is that most people don’t even know what they really want in life. People have a really big problem answering the simple question of what they really want out of life. There isn’t much besides wanting a big stack of money. And if you ask them “What for?” the answer is: “You know, to not struggle and to enjoy more”. That’s definitely not a winning character.

Thus the first step is always knowing what you want out of life. That’s why you start planning your life with a life vision. Your life vision is the list of everything you want to experience in this life. At the end, you’ll be very happy if you realize about half of the things on the list. Life is much shorter than we think. After having your vision and prioritizing things you want to experience, you also need to have an endgame in mind.

The final game or endgame for every single thing you choose from your life vision list is your very detailed description of what you really want from life. Because the more exactly and clearly you know what you want, the easier it is to get it, the easier it is to build an adequate strategy. Let’s look at an example.

Let’s say that your vision list contains being super fit at least once in your life, maybe especially when you’re young. In that case, this part of your life vision should be a really high priority, since you’re never going to be any younger than you are today.

But what does being fit really mean to you? Here, having the final outcome or endgame in mind is important. Does it mean having a muscular body or running a marathon? Does it mean being able to climb the highest mountains or being really good at basketball?

The idea is to have a really clear outcome in your mind. Try to visualize (imagine) your final outcome. You can also help yourself with making personas. Try to see yourself having a muscular body or finishing a marathon. Ask yourself which image sparks the most intense positive feelings in your body. Which image is the one that motivates you the most? That is your endgame. You need to have a really clear picture of what you want out of life. The more details you have about your final outcome, the better.

Connect your every single activity with a final outcome

You’ve probably heard of Maslow’s hierarchy of needs. Maslow’s hierarchy of needs is portrayed as a pyramid with the largest, most fundamental levels of needs at the bottom and the need for self-actualization at the top. The pyramid has six different types of needs. The most basic ones are physiological needs like air, water and sex. Then we have safety needs like personal and financial security. The next ones are needs of love and belonging to family, friends and spouse. Then self-esteem needs come into play, giving a sense of contribution and value. The final ones are self-actualization needs.

To what outcome are your actions leading you?

The lower you are on the pyramid, the clearer it is why you’re doing things. You need to breathe air with the final outcome to survive. Same goes for your shelter. But the higher you go on that pyramid, the less clear the outcome is defined. The higher you go on Maslow’s hierarchy of needs, the more it is up to you to define the final outcome you really want and then fight for it. The higher you are on the pyramid, the more life is a blank canvas and your job is to create as beautiful a picture as possible.

Thus everything you do, every activity, action, connection or investment is connected to your final outcome. If it’s not on your vision list, if it doesn’t lead to the final outcome you desire, stop doing it. I know it’s hard and somehow scary to take control of your life, but it’s the only way to really live life to the full. Don’t do things just because you’re used to doing them or because the society expects you to do them or because you’re scared of trying something new. Do things that lead you to the outcome you want.
- Are you having a fight with your friend or business partner? What is your most probable final outcome? Is that something you want?
- Have you read a lot about a specific topic? What is your final outcome?
- Do you watch TV a lot? What is your final outcome?
- You don’t spend much time with your kids? What will be your final outcome?
Ask yourself about the final outcome you want, especially when starting any new activity. Even if you don’t have a final outcome in mind, ask yourself where will your actions lead you. Don’t start something just because it sounds good or your friend asked you to. Think about the possible outcomes, think about the outcome you want the most. If there is no outcome you really want, save your energy for something that’s more important to you.

An exception is the beginning

The more you have control over your life, the easier and quicker you can decide if something is for you or not. The more you are mastering your life, the easier it is to connect activities with final outcomes. But beginnings are quite hard, especially the first step.

Thus when starting to take control of your life, there’s nothing wrong if you try and experiment and decide for some activities that don’t yet lead to a clear outcome. What’s important in the beginning is that you kick yourself out of the comfort zone and just start doing something. It’s why you first need to be in the search mode and not put any pressure on yourself. With time, what you want becomes clearer and clearer, and you can so easily switch from the search to the execution mode.

Staying flexible

As I’ve mentioned, changing your life route is not a linear process. It takes a lot of trying, experimenting and failing. It’s not like: “okay, I’m going to change the course of my life”, then you struggle a little bit, and a miracle happens. Especially in the beginning, you have to stay open-minded, be prepared to fail and learn. Choosing yourself means that things never get easier, only you get better.

But even after going from the search to the execution mode, you still have to stay flexible. There come times when you need to go back into the search mode. Life always throws you off the tracks from time to time, you do things based on wrong assumptions, you fall and things don’t go according to plans and so on.

Your final outcome may be delayed, or may even have to change, but that’s a part of life. Because it’s not only about the final outcome, but also about the journey. That’s why you need the Agile and Lean Life approach. You have to stay flexible, you have to adjust your path to the final outcome or maybe even adjust the final outcome itself based on the feedback you’re getting from life.