My 10 Golden Rules: If I were 22, I’d wish that someone would have taught me

1) How to succeed?

The education system you just went through has planted some seeds into you.  Now it is up to you—and only you—to make them grow.

Go the extra mile, and see how good you can be at something. The harder you work, the less crowded a road you’ll find – fewer people than you think embrace work as a central path to self-worth. Success is more about contribution than it is about achievement.

There are no short-cuts to success. None.  So suck it up, stop whining, work smart, find your niche and be great at it.

And voilà, you “suck seed”.

Success = The Freedom to be yourself.  And that in its core is the privilege of a lifetime!

Success is a mindset, not a goal to be attained.

2) How to avoid money problems?

Live within your means: Don’t get caught up in the marketing machinery of consumerism.  Avoid seduction.  Be frugal.  And I have to digress a bit: Frugal  is nowadays a rather unpopular word, yet its Latin origins mean, to enjoy  or use well.  So do see to be frugal  as having a high joy-to-stuff ratio.

Become a master in delayed gratification.  Plan your purchases (in general, the longer the time-frame before a purchase, the less you will pay).  Do not go shopping as a form of pleasure or in the spur of the moment.

Buy yourself more experiences (travelling is a great option) instead of stuff that you don’t really need.  Don’t try to impress your neighbors or “friends” who you do not really like that much anyway with material possessions.  They might appear rich, but who knows, they might not be that happy after all while serving their mortgages/credit cards/car loans, just trying to impress you and never reaching that “peace-of-mind-status”.

Do learn as much as possible about how money works, so that you do not have to spend your entire life working for money, but have money work for you!

Be aware that once you earn USD 34,000 a year, you do already belong to the elite top 1% earners in the world.  So little?  Yes!  It always depends on the perspective that you take.  Look at the world as your home and not only the street you live in.  After all, you—and only you—set the rules for your happiness.

And remember that money can buy happiness if you do it correctly.

“It is very simple to be happy, but it is very difficult to be simple.” — Rabindra Nath Tagore

3) How to get more satisfaction?

Start a business.  It does not have to be a big one and should be—for a start—in addition to your “day job”.  Multiple income streams are a great basis for long term wealth creation.  It is statistically proven that the highest chances to becoming wealthy are linked to owning a business.  Look for opportunities in fields that interest you.

And bear in mind: If you are not prepared to be wrong, you are not ever coming up with anything original.  Be willing to be different.  Do not be afraid to take risks.  So keep challenging yourself, even—and especially—after defeats.  Failure and adversity are among the best ways to grow and to learn. If you never fail at anything, you may be aiming too low, playing it safe.

Check in with the age-experienced frequently and listen to their regrets.

It certainly helps you to stay on course, knowing that no matter how great your talent or effort, some things just take time.  You can’t produce a baby in one month by getting nine women pregnant.

“Twenty years from now, you will be more disappointed by the things that you didn’t do than by the ones you did do.” — Mark Twain, writer

4) How to become rich?

The true key to becoming rich is patient saving starting today and an understanding that wealth accumulation happens over the course of a lifetime.

How?  Take advantage of the Ninth Wonder of the World called compound interest (there is no proof at all that Albert Einstein said this, but it might as well have been him).   Heard of the exponential function?  Study it!  It’s the most valuable piece of mathematics you’d ever learn.

“Compound interest is the ninth wonder of the world. Those who understand it, earn it. Those who don’t, pay it.” – Albert Einstein

Then start a Regular Savings Plan at your trusted bank into a low-cost broad-based ETF (Exchange Traded Fund) as soon as you get your first salary.  Do not buy mutual funds as more than 75% of them do not even manage to beat the benchmark index over longer periods of time.  But all of them cost more in annual fees than ETFs.  What are you paying that higher fee for then?

You should do that.  As with that Regular Savings Plan, you automate your wealth accumulation (in the span of a normal lifetime, a mere $1 a day, $30 a month will grow into $1 million).  Even better, save 10% of your income.  Stick with your savings plan for at least 30 years and let the money work for you 24/7 x 365 x 30 (money does not go on vacation!).

And then, follow the smartest investment move: inactivity.  Do not get scared by the short term volatility in the stock market.  In the long run, it will always go up!

Always pay down debt—as fast as possible—so that this “compound-interest-bugger” does not work against you.

The only good debt is one where the value of what you bought increases more each year than the interest rate you’re paying.  Like a house or business.

Money isn’t everything!  However, once you have a basic level of love, health, and respect, your actual quality of life is highly influenced by how much money you have.  You can’t really live life to the fullest or reach your potential if you remain poor.

“Plan for the future, because that is where you are going to spend the rest of your life.” — Mark Twain

5) How to be happier?

Time is your most precious resource.  If you are a person with a flexible schedule and average resources, you will definitely be happier than a rich person who has everything except a flexible schedule.

Step one in your search for happiness is to continually work towards having control of your schedule.

Be always conscious of your time.  There is so much to be gained from being able to be in the moment and being able to appreciate what’s going on around you, right now this very second.  Whatever you do, try to make the most of it and seek to focus purely on the positive aspects of each moment.

The shortcut to anything you want in life is to BE and FEEL happy NOW.

To get more control of your time, it might help to avoid “facebooking”, “twittering”, and “instagramming” your life away.

“Success is getting what you want.  Happiness is wanting what you get.” — Warren Buffett

“Peace of mind is worth millions of dollars and if you have a million dollars, then it’s priceless.” — Andrea Wishom

6) How to be yourself?

Preserve your integrity.  Be honest.  Be kind.  Be response-able. Build close relationships with other people.  Help others.  Be reliable and always dependable.

Think big about your dreams and your work, but in your personal life, act small.

Live your life by design instead of by default.  And you are your own designer.

A wise man once said, “All a man has is his name and his word.”  Of course, this applies to women as well.

“One half of the troubles of this life can be traced to saying ‘yes’ too quickly and not saying ‘no’ soon enough.” — Josh Billings, humourist

“The 18/40/60 rule to happiness: At age 18, people care very much about what others think of them. By age 40, they learn not to worry what others think. By age 60, they figure out that no one was thinking about them in the first place.” – Daniel Amen

7) How to stay ahead of the game?

Think!  Schools have done a great job, teaching you WHAT to think.  Now it is your turn to learn HOW to think.  Caution: constant pondering or worrying about things you can’t control does not qualify.

A good start is to question “common sense”.  It often seems right because we can’t imagine thinking about a problem differently.  Why?  Because we’re generally lazy and close-minded.  And this is one of the most dangerous ways of thinking.

“Emancipate yourselves from mental slavery; none but ourselves can free our minds.” — Bob Marley

“We are what we think.” — Gautama Buddha

8) How to simplify your life?

Building great habits is critical.  The more of them you have, the more capacity you’ll have in handling the many competing claims that life throws at you.  Good habits can take you to unanticipated heights and in ways that’ll almost feel effortless.  The “muscle memory”, having developed good habits in your youth (yes, including basics like eating right, good sleep, hygiene, regular study and exercise, loving your family and friends) will sustain you when others struggle.  So it is your habits that will lead you to a destiny you earn.

“We are what we repeatedly do. Excellence then is not an act, but a habit.” — Aristotle 

“The only thing that matters in life is health, family, and friends – all the rest is theatre.” — Samuel A. Hardege

  

9) How to avoid doing dumb things with your money?

Be conscious about the irrational behavior that we humans are so prone to conduct and work smartly to avoid those biases (cognitive thinking errors).  Slow down and focus on rational thinking when making choices, and then fit your actions to your brain.

The book “The Art of Thinking Clearly” by Rolf Dobelli, describes the most common ones with illustrative examples.

And don’t say that you don’t suffer from the “Bias Bias”.  This is the belief that you are less biased than you really are.  Everyone is prone to cognitive errors.  Some, more than others, but no one is exempt.  Coming to terms with the idea that you are your own worst enemy is the single most important thing you can do to become better in managing your money.

Daniel Kahneman, who won the Nobel Prize in 2002 for his work studying cognitive psychology, once said, “I never felt I was studying the stupidity of mankind in the third person.  I always felt I was studying my own mistakes.”

You’re twice as biased as you think you are (four times if you disagree with that statement).  However, when you realize you are as biased as everyone else, you’ve won the game.

And be prepared always for unpredictable rare events, those ‘Black Swan Events’.  Read Nassim Nicholas Taleb’s “The Black Swan” for details on this important and undeniable consequence of randomness.

“It is remarkable how much long term advantage people like us have gotten by trying to be consistently not stupid, instead of trying to be very intelligent.” — Charlie Munger (business partner of Warren Buffet)

10) How to grow continuously?

Get outside of your comfort zone daily. That’s one way to grow. The other way is to read widely and read more of the good stuff.  Adults who embrace exploration and self-learning will have no problem keeping up as learning new things is something they enjoy and easily becomes habitual.  Skip that “brainwash” of our modern media and pick up some good books instead (often those written in the last century).  And–as a bonus–you will undoubtedly come across many precious nuggets of wisdom shared by people who went through life before you, been there and done that.  Like these :

“You can get everything you want if you just help enough other people get what they want.” — Zig Ziglar

“Whatever is worthy and right is never impossible.  Whether you think you can or whether you think you can’t, you’re right.” — Henry Ford

“The opposite of courage in our society is not cowardice; it is conformity.” — Rollo May, Psychologist

“Nothing is impossible to a willing mind.” — Han Dynasty

“Listen to your parents more than you feel like. Most of the time, they really do know better than you.” – Andy G. Schmidt