Sometimes we get too caught up by media and TV about all these things we should purchase and own and to upgrade our life-style to be happier. What they want to do is to brainwash us so we inherently make purchases without hesitation and any deep second thoughts.

How do we defend ourselves? To defend ourselves, we must first understand what we’re facing, so let’s understand these people’s agenda…

The people sellling these “things” are business people. They have their agenda. What is the agenda? It’s none other than – making as much money as possible, under the postulation of a capitalistic society, and guess from whom they want to make the money? Us! We the consumers. We have to understand that they are driven by profit, by business. They need to make their numbers, their quotas because it’s their jobs and we are living in this wonderful society of capitalism. That’s why we must think for ourselves if those things really make me happy.

Now I’m not saying it’s their fault since they are just doing their jobs, but we need to defend ourselves here.
Since the best defense is the best offense…
Let’s take offense in that they are trying to take our money from us!
Let’s be stubborn, stay frugal, and fight against these people who are trying to take money away from us!

Each time you want to buy something, think about if it’s really useful and add values to your life, and make sure you are not buying because they told you so.

Peace~~

Sunk cost is a most important idea I learned in a Decision Analysis class. In “technical” terms, sunk costs are costs that had already been incurred that is irrecoverable.

Why is this so important?

Sunk cost is an indispensable idea that enables you to have rational thinking and to make rational decision, and rational thinking and rational decision are what you need to prevail in many areas in life, such as investing, making business decision, deciding the next move in relationship/career/life, etc.

In a practical example of whether to sell your car, you can:

1. Compare current selling price with how much you paid for the car and think about the loss (the difference) if you sell the car now. If the loss is too big, you keep the car.
2. Think about how much you gain by selling (maybe use that toward a more fuel-economical car) and/or the maintenance and insurance you DON’T have to pay later, which will lead to more saving. And if those gain and savings do not provide more value than not selling, you will keep the car.

Now I didn’t cover every aspects and parameters involved in the decision of car-selling in real-life, but you get the idea.
Which do you think is a rational decision?

In the 1st scenario, you let something that has already happened in the past to drive your decision.
In the 2nd scenario, you consider all future potentials and base you decision upon those.
Pretty obvious.

The price you paid for the car is no longer relevant. However, you can imagine how people will choose not to sell like in the 1st scenario in real life.

Quickly, we can translate the same idea into making decisions in a business project and a personal relationship setting.

Instead of deciding whether a project should be continued with focus on how much money and human resources had been invested, you need to focus on how much potential investment return if the project is to be finished, the probability of the project failing, and how much more cost will be incurred, etc. You do not focus on those “wasted” resources because they are already sunk cost.

Now in terms of personal relationship, instead of deciding if you should stay with somebody based on the amount of time and effort spent, you evaluate about the current trust/confidence/comfort level you have with this person (that is a result of past experience, but NOT the past experience), the potential amount of happiness/sadness, whether he/she can change bad habits or if you can endure them, and many many other aspects involved in a intimate relationship looking into the future.

Those are just some very generic examples. But to put in more generic term of how sunk cost assist you to be more rational is that “what happened has happened and you should not let yourself get dragged down by the past”. I’m am not urging you to be completely rational and throw away the past, but it’s age-old wisdom that you do not let the past becomes the burden of future, especially the mistakes and bad experience. This is the same idea as we tell each other to “let go”.

Look into the future and based your decisions on those visions, my friends.

To have all the details and technicality on the idea of sunk cost, visit here.

My answer would be yes to the question, if we live purely or mostly by the value of capitalism.
Otherwise, this post would not exist. Ha!

Living in this capitalistic world, I can to see why the people with [monetary] power could possibly not want people to gain knowledge. The knowledge that I’ll explain now.

I truly believe when it’s all said an done, true happiness lies within ourselves. Once we can find this peaceful, gentle, kind, compassionate self within ourselves, we can come to acceptance to our true self and therefore, be able to ALWAYS act upon that. And with that, we’ll continue to empower this identify of “self”, so we don’t lose control eating, spending, chasing after ephemeral, etc. In other word, NOT looking in the outside world or from materials to fulfill this happiness that is so grounded in human beings, and also the root of all our actions, if one cares to trace and think deep enough.

If it’s so easy, why aren’t we all happy yet?
Well, it is not easy.
Nor is it fancy.
Which is why you don’t always hear this. (or do you?)

And why capitalism means no true happiness?
Because if everyone starts to find “this way to happiness” because those sales people’s numbers will go down.

Or if they do somehow try to teach you this idea, they’ll sell it in DVDs…in a series, and keep you buying next DVDs that only contain missing or repetitive information from the last.
Maybe I’m being too cynical.
But nonetheless, I’m serious that they don’t want you to know.

If you think about what I said about finding happiness in yourself and THEN understand and THEN practice it, a lot of the goods and services that they claim will somehow directly or indirectly make you happier will no longer be needed. These myriads of consumeristic “things” they offer will lose their appeals and they will no longer have a business.

This is we why are bombarded with advertising, most plausibly.
Make us buy.
And keep buying.
Non-stop!
Keeps us from thinking.
Keep us from realizing.

Their advertising so advertently strives to remind and “brainwash” people that they need more “things” to be happy. Strategy may include confusion tactics, meaning that we may just got lured to buy because there is waaaaay too much information than we can ever process cause us to be in a state of confusion.

Either way, the main point of this post is NOT about discarding materials completely and going into monkhood.

We are commoners.
And we want certain standard of livings.
At least for comfort.
I know I do.

The POINT is…
We must work on the inside of ourselves to be truly happy.

I said it’s not easy, despite it being a simple idea. It is because to approach the state of true happiness that I mentioned requires continuous effort, to maintain and develop the ourselves. You need to be consistently aware of your mind, your body, your attitude. From that, you gather information about yourself only then to think and evaluate “what” to keep and “what” to discard and “what” to develop.

In fewer words…
You will maintain a consistent state of self-evaluation (aka. understand yourself).
You will maintain also a consistent effort to improve (aka. remove bad habits, make good new ones).

Yes, that’s why it’s not so easy, but then once you are in the groove, it doesn’t seem so tough either.
So every step you take in this manner will make you stronger for the next.
Didn’t I say life is a spiral before?

The thing is… Majority of population maybe able to start and keep up some extraordinary effort for a day, a week, several weeks, a month, several months…but years after years? I think we all know how it is. It is even harder when these business people don’t like this idea and would do anything to convince us otherwise.

But we all have to start from somewhere.
Why don’t you start today?
I know I have, otherwise this blog will not exist.

And even if my posts are confusing (hopefully not) and make no sense what-so-ever to you, check out the links I provide in the navigation on the right. Those personal finance and personal development blogs contain LOTS of great information and quality content that I myself have learned much from.

I’ve talked about the concept “keeping it simple” in a few posts before. I want to re-iterate the power of the concept of simplicity, in terms of things we can do everyday.

First of all, I truly believe simplicity is where happiness lies in life.
Now, let’s think about basic things that ourselves love to do.

For me –
I like to listen to music. I like singing. I like playing the piano. I like playing basketball. I like having a good conversation or “quality-chililng-time” with friends. I like reading a good book. I like surfing the web and learning about what others think and more stuffs in general. I like taking a walk on a good day. On and on…

I have spoken about my own interests and hobbies, but I’m sure you have a list of your own. Usually, these are all very basic simple things. And when you look at these things, they may have some fundamental cost but on the long term, it costs a lot less compared to the incessant chasing of trends and purchasing of materials.

Instead of going to the mall, wasting time and money on impulse purchase (maybe to keep up with neighbors, people you know, or other “Jones”), you can develop your skills on these simple things, these interests, these hobbies. This will not only save you money on the long run (in most cases), but you will be happier and feel better about yourself because you are doing what you actually want to do. It’s double the benefits! Isn’t this so much more wonderful?

For myself I know I won’t be happier by spending money and time at the mall or going on crazy outtings with whoever, and instead, I can spend time listening to music, or reading a book with soothing background music, or practicing piano, or any of the other things I mentioned. What do you think I will do?

Make no mistake, I still enjoy outtings with good friends and great companies, but never do I do it to fit in or because I have nothing to do.

So make a list of things you are interested in doing or would like to make hobbies of. Every time you want to fill the void of your time by doing things that’ll make you splurge money for the sake of gaining an instantaneous pleasure only for splurging, refer to the list and do one of the things on the list instead.

Even if you don’t save money, you’ll be doing something that will benefit yourself mentally and maker you happier in the long run. Much better than buying random things for no good reason or that you’ll deem useless and dismiss quickly.

I frequently mention the importance of communicating with the “self” and understanding the “self” for the sake of personal development. Tracking your assets, liabilities, and cash flow is the equivalent for your personal finance. It is also imperative for solving your money problems and solving your money problems.

When you want to find out the health of a company, a division in a company, a deli at the street corner, or any other business, what do you do?

Interview their executives? No.
Simply observe their customer flow? No.
Based on reputation? No.

Ok, I know you are not that stupid.
You will look at their:
– balance sheet for total outstanding assets, long-termand liabilities, and short-term liabilities
– cash flow for revenue, fixed operation cost, variable cost, and essentially, profit.

If you want to know the health of your financial situation, you have to keep track of the same thing.
To improve your financial situation, or to simply GET RICHER, you have to understand those same parameters for yourself.
Hence, the need to track your assets, liabilities, and cash flow.

If for nothing else, you should at least know your expense and income in order to spend less than you earn, which is the most basic thing in personal finance everyone should be doing, in order to NOT go brankrupt!

You don’t have to keep track of every nickel and dime, unless you want to.

There are softwares out there that can assit you in doing this AceMoney, Microsoft Money, Quicken… convenience includes allowing you to import a file with all the transactions in the month from your online credit card account into the software. It really only takes 5-10 minutes each week if you perform updates weekly.

Otherwise, you can simply keep a spread sheet of the balance of all your saving/loan accounts and major assets, updated on a monthly basis. With the total balance showing monthly, you can compare and see which direction your finance is heading… either be up or down!

The most significant thing that I’d say about this is that it will at least keep you above negative or from going bankrupt, even if you are too lazy to implement any concrete strategy to improve.

Why?

Because when you actually SEE your total balance in real, concrete numbers and it is going downward and perhaps, in the negative, in RED… I’m quite sure 99.99% of you can no longer deny the fact and notice that something’s wrong and something must be changed. Hopefully before you can no longer pay all your bills.

Versus just having one of these thoughts in your head, “Darn, I’m poor”, “Hmmm, I’m spending too much”, “Oh, I think I don’t have enough money”.

That is in equivalence to something I always think –
That if wars are still fought with knives and swords, spears and halberts, people would be much less willing to kill because they’ll actually feel the refuting sensation every time weapon enters the flesh of another fellow human’s body.

Seeing the numbers is kind of the same thing.
You feel the stings and blows every time you see your total balance decreasing.
Worse yet, in the red.

On a personl note, tracking of my expense is telling me that I am spending quite a bit lately, which is okay because I’m still spending below my income and it’s money worth-while to make myself and others around me happy. However, I am reminded that I should buckle down a little.