Old Joe, a Lousiana Creole, retired in his 40’s, after serving as an enlisted man in the U.S. army for over 20 years. Upon retiring early, he knew he had enough income to live in a simple home and wear simple clothes and drive a simple car. He would spend the rest of his simple life fishing.

When he was in his 70’s I asked him, “Did you ever go back to work for a while after you retired years ago?”

Old Joe replied with a grin, “I sure did. Once. I needed money to buy a new fishin’ boat. As soon as I got enough money I quit that job and bought the boat.”

Old Joe’s life teaches we don’t need luxury to live a life with financial freedom, and once we achieve financial freedom we can slow down and enjoy this short life. Meanwhile, others who experience financial freedom refuse to retire and work beyond age 100. Their lives teach us to continually challenge ourselves with the work of a craft. A craftsman of any kind — be it a doctor or an artist or an athlete or a businessman or an investor — if willing, engages himself in a long process of self-discovery and self-development.

A photographer not only takes pictures, he captures what is.

Two men walk alone into the wild of Alaska. The intent is to live in the wilderness during the cold winter. One is prepared with survival skills honed for years in the Alaskan wilderness. The other is completely ill prepared. In fact, he had never set foot on snow until his arrival in Alaska only a few days earlier. Whose mother should worry more?

Four out of five start-up companies fail. Why? More than likely, it is because they were unprepared. To be prepared involves adequate funding, a solid business plan, experience and passion for the business, not being a spendthrift, and possibly industry connections.

Don’t let the failure rate of start-ups discourage you from starting a business. Just be sure you are prepared before you set off on your business journey.

“An idea that is developed and put into action is more important than an idea that exists only as an idea.” — Buddha

Two athletes share the same age, body weight, height, muscle mass, are equally coordinated, and have played the same sport for the same number of years. Yet one athlete is vastly superior to the other in the highest level of competition. Why? Will power.

Will power is the common denominator among elite athletes in all sports. Will power cannot be taught, but it can be “caught” if inspired by a leader.

Genius is not required to become an extraordinary investor. An ordinary person can become an extraordinary investor if she has the will power. Without will power, there can be no self-discipline, no commitment to continuously improve, and no faith in yourself when you are not a winner. However, will power must be balanced with humility. A will power to win at any cost is ultimately self-destructive.

The difference between a successful person and others is not a lack of strength, not a lack of knowledge, but rather a lack of will. – Vince Lombardi

Too long in the vault, these original takes of Bob Marley’s Slogans are hypnotic. Listen to this song with its timeless message, and you’ll understand why so many call him a prophet.

I don’t think they’re available on CD or iTunes yet. Hear it on youtube:

We’ll See (a Taoist story)

An old farmer cherished his horse. One day the horse ran away. Upon hearing the news, his neighbors said with empathy, “What bad luck.”

The old farmer remained calm and said, “We’ll see.”

Remarkably, the horse returned the next morning with three, beautiful wild horses. The neighbors rejoiced. “What good luck!”

The old farmer kept calm and said, “We’ll see.”

The following day, his son rode one of the untamed horses. He fell off the horse and broke his leg. The neighbors offered sympathy and again said, “What bad luck.”

The old farmer was not convinced this was a misfortune. He replied, “We’ll see.”

A few days later, officials drafted into the military all young men of the village except his son because he had a broken leg. The neighbors congratulated the farmer for his good fortune. “What good luck!” they said.

“We’ll see”, said the farmer.

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When you lose, you ask yourself, “What went wrong?” You ponder this for a long while, arrive at conclusions, and hopefully learn from your mistakes. The experience of losing, then, should be simultaneously “good” and “bad”. But must personal growth be born of pain? Is only losing a teacher and winning never a teacher? The last question is misplaced on the prime mover. Neither losing nor winning is the teacher. You are the teacher.

When you win, ask yourself, “What went right?” Ponder this for a long while, arrive at conclusions, and you will experience greater consistency of positive results. Without realization, winning is also simultaneously “good’ and “bad”.

We are all athletes. It’s just that most people don’t know it. If a sedentary woman changed her lifestyle into a physically active one, she will be amazed at her level of fitness and how good she looks within only 1 year. Anyone who is not catastrophically ill can be reasonably fit. The first step to fitness is realizing your inherent, athletic potential. The second step is to set the goal to move toward your athletic potential. The third step is to execute.

So if you’re an athlete but didn’t know it, can you also be an investor and not know it? Yes, for those who have defined benefits in a pension plan. These people tend to be government employees. For example, a military officer with a monthly income of $6,000 retires after 20 years. In retirement he receives 50% of his monthly salary ($3,000 monthly or $36,000 per year plus cost of living adjustments). That’s the equivalent of someone who had saved $1,000,000 and receives an annual interest return of 3.6% interest plus inflation protection! In addition, the retired military officer benefits from government subsidized health care. In exchange for this, let’s not forget the officer served his country and put his life at stake.

“What keeps me going is goals.” — Mohammad Ali

(Click here for source of image.)

“Walk barefoot,” advised my Balinese healer, who I had visited for back pain relief. His English girlfriend was translating Indonesian into English. “Gently press your toes into the earth with each step. Your toes are like the prongs of a power cord that plug into an electrical socket. Be sure to plug the full length of your toes into the earth.”

In circles I walked barefoot, bringing consciousness into my toes.

“How does it feel?”

I did not have to stop to reflect upon the sensation. “I feel more integrated with the earth.”

“Good. Now stand still. Relax. Again, gently press your toes into the earth.”

“How does it feel?” he asked again.

“I feel a more solid foundation.”

He nodded his head, “The whole body is integrated. Proper body alignment begins with the foundation of the body — the feet — which will help support the spine.”

Since this consultation, I walk barefoot more often. My once delicate feet now tread over rocks and pebbles on the beach with ease. I no longer have to bring consciousness into the action of my toes. The process has been naturally integrated in the movement pattern of walking barefoot. Integrating proper movement patterns allows healing.

In the same vein, the principles of sound investing must be integrated into the practice of investing. It is not enough to hear them or even to understand them. The process of integration begins with bringing awareness into the principles, one at a time. Meditate on the principle many times. Allow it to become instilled in the mind. From here, you will automatically apply the principle into the movement pattern of investing.

“My feet ain’t got nothing to do with my nickname, but when folks get it in their heads that a feller’s got big feet, soon the feet start looking big.” – Satchel Paige

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An old woman sat squatted before the village gate. A traveler stopped to speak to her, “I am weary from a very long journey. Tell me what are the people like in your village.”

The old woman replied, “Tell me first where you are from and what the people are like from your village?”

“I am from Bukah. The people there are rude and selfish. They lie, cheat, argue, push and shove. It is a very unfriendly place.”

“Well then, you should not enter my village,” said the old woman. “Here the people are rude and selfish, too. They lie and cheat and argue constantly about nothing of importance. They are especially mean to strangers. I sit here alone breathing the dust because they pushed and shoved my frail and old body outside the gate.”

Stunned, the traveler said, “Then this is no place for me! Although I am weary I will continue on in my journey.” And he left without setting foot past the village gate.

Only a few hours later, another traveler stopped to speak to the old woman. “Excuse me. I have traveled a very long journey from my village called Bukah. What are the people like in this village?”

The old woman rubbed the palms of her hands and replied, “First tell me what the people of Bukah are like?”

“The people of Bukah are kind and loving. They are honest and trustworthy and encourage one another. It is a very friendly place. I miss it already.”

The old woman smiled. “Well then, you will love my village. Here, too, the people are kind, loving, honest, and trustworthy.” Now she stood up and hugged the traveler to welcome him just before he happily entered the village gate.

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Consciously or unconsciously, you bring energy into every activity. If a competitive athlete in an individual sport is overwhelmed with negative energy, chances are high she will lose the game. Likewise, if an investor is overwhelmed with negative energy, chances are high he will lose on the investment. This simply manifests the Law of Attraction.

Stop and feel the energy within you. Is it negative or positive? Negative energy consists of greed, or anxiety, or cynicism, or anger, or any combination thereof. Positive energy consists of joy, or stillness of mind, or patience, or openness, or any combination thereof.

Beware of excess positive energy. An excess of joy turns into irrational, over exuberance. An excess of openness turns into not thinking for yourself. Under either form of excess, losses are likely to result.

Always bring awareness to the energy you carry within before investing. If the energy is negative, do not invest no matter how sensible the opportunity seems. Positive energy must be in balance and aligned with rational thinking. Only then are you are truly ready to invest.

* The above story I heard in Bali, Indonesia. As usual, I have added my own embellishments, including calling the town “Bukah”, which means open in Indonesian.

(Click here for source of image.)

“Just play. Have fun. Enjoy the game.” – Michael Jordan

Teaching tennis during the summer to two beginner level girls was fun. The girls learned how to volley with control, ground stroke with top spin, serve without a push, and basic game strategy for doubles…enough to do fine for high school tennis. I was proud of their work ethic, progress, and above all, their love for the game.

I watched them play their last match. They were given no time to warm-up, but neither were their opponents. The top of the net obstructed most of balls the girls hit with top spin. Their volleys were rushed and forceful. They tried for too many winning point shots, while their opponents kept the ball in play. (To keep the ball in play is a strategy to win by allowing your opponents to beat themselves with unforced errors.) Unnerved with falling behind in score, the girls I had trained reverted to old and ineffective habits such as hitting most ground strokes with flat strokes. Their confidence waned, sinking into a sea of disappointment. Abandoning the process based on skills, they inadvertently abandoned playing in a balanced state of mind.

The root problem lied in that they were too goal oriented, not process oriented. The increasingly elusive goal of victory reflected in their sluggish body language, as though their bodies were slowly melting into the earth. Ironically, had they focused on the process of playing skillfully rather than on winning, they may have come back from far behind to win the match.

To be fair, being process oriented is not an easy feat when things go against your favor. Being process oriented is a skill that takes conscious effort to cultivate. First, you must trust the effective process. In trusting the process, your mind and muscles are not bound by unnecessary tension. Your mind remains in relaxed state, regardless of the circumstances. Secondly, you must have the discipline to stick with the process. Knowing the process but abandoning it is as useless as not knowing it at all.

Do not confuse being process oriented with being intransigent. Being process oriented allows for adjustments. It includes contingency plans and is continuously refined. If you are process oriented, you are fully present to make the proper adjustments.

An investor should stick to the process of adhering to sound investing principles with at least 90% of his wealth. The remaining 10%, call it “play money”, can be used on an “experimental basis”.

Playing a high impact sport with an injury risks worsening it to a chronic one. Caught in the heat of the moment during an exciting game, it can be difficult for the athlete to consider the magnitude of this risk. Likewise, the investor must consider the magnitude of risk.

Take, for example, the following simple scenario.

Initial investment: $1000
60% probability of 3 x return = $1,800
10% probability of 10% loss = ($10)
30% probability of 100% loss = ($300)

Expected outcome: $1,490

This investment may be tempting. Who doesn’t want to make an investment with a expected return of 49%. Now let’s suppose someone were to invest 80% of their net worth on this one “promising investment” and the outcome turned out to be the worst case scenario of 100% loss. The loss could be devastating, especially if the investor were nearing retirement age. Hence, the magnitude of risk for this investment is too high if overweight on it.

Always pair up an analysis of probability with magnitude of risk to determine how much should be invested. Too many investors fail to consider the magnitude of risk. This dumbs down the process of investing.

“Things should be made as simple as possible, but not simpler.”
– Albert Einstein

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