You need money to make money

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I was in Norway not long ago, and they recently had a change of government, and I heard a lot of complaining from the opposition about how the rich will get richer, and the poor will stay poor with the new administration, and it bugs me. Do not misinterpret what I am saying. Poverty on a global scale is a tragedy, but the phrase « the rich is getting richer, and the poor stay poor» is almost always used as an argument for more taxes, not as an argument for human aid. So to be clear this is not an article about poverty on a global scale, but about economy in western countries.

We often divide our society into different classes, to simplify the study and analysis of different aspects of our societies dynamic. Even though the old model where proved outdated by London school of economics www.bbc.co.uk/science/0/21970879 (see the link for more information), I am going to use the old model that divides our society into: working class/the pleb, middle class, and upper class/elite, just because it’s less complicated. Of these groups of people only the upper middle class and the elite have enough liquidity to invest. The other groups use almost all their income on expenses, upkeep and so forth, and when they save money it’s usually to by a new car, a bigger house or go on a nice vacation. Lets say that a family has a total income of 50 000£, and that they use it all on food, electricity, house, cars etc. If someone in the family got a salary increase and they now have a total income of 51 000£, and that their expenses still where 50 000£, that means that they have 1 000£ they can use at whatever they like…

This is where we have a crossroad. There are several reasons for this crossroad, but they can be divided into three categories. Number one is the consumer culture, number two is the difference in mindset, and the third is knowledge.

A part of the consumer culture is the goal of having average or above average comfort and lifestyle. With that I mean that most people are never satisfied with having a lifestyle that is below average, and therefore want two cars, a medium sized house, good and healthy food, nice clothes and so on… This lifestyle costs a certain amount of money, and if you have a income that don’t allow you to achieve this lifestyle, then you will use most of a salary increase, lottery winnings or other forms of extra income to achieve this lifestyle. If you on the other hand already live above average you will in most cases don’t feel the external and internal pressure to achieve a better lifestyle, as much as those who have a below average lifestyle, and therefore be more likely to save the money.

Our mindset comes from experiences and upbringing. A person who grew up not knowing if they would have food the next day, are going to bring that mindset into his adult life and spending habits, no matter how much they earn today. The same way a person who grew up in abundance, are also going to bring that mindset into his adult life and spending habits. Our mindset will always be influenced by our upbringing, and not only that but we will also in some degree adopt the mindset of those around us. If you wonder why you behave like you do, or why you manage your economy the way you do, then I suggest that you confront your own mindset, and you may find some answers.

The final category is knowledge, and in this case knowledge about economy. There are three main sources of information about how to manage money. The first is parents. The second is education, and the third is life. In Utopia, knowledge would have been free, and equally available to everyone, but lets face it. We don’t live in Utopia. A good education costs a lot of money, whether it is a degree at Oxford or a afternoon seminar at the culinary academy you better have your chequebook ready. If you don’t have time to do everything yourself, you can always hire a consultant. Knowledge in form of hired manpower is effective, but expensive. Since most forms of knowledge is expensive, it seems that the upper middle class and the elite again are at a advantage.

The lower middle class and the working class have less money to invest than the upper middle class and the elite, nor do they have as much access knowledge about the global economy, and therefore we are left with these calculation:

Lower middle class and the working class:

Little knowledge about global economy → the odds of successful investments are less likely. + Little available money that can be invested = if successful investment, the return will be small.

Upper middle class and elite:

A lot of knowledge about global economy → the odds of successful investments are more likely. + A lot of available money that can be invested = if successful investment, the return will be large.

In conclusion it’s easier for the upper middle class and elite to set aside money, and to make successful investments, but it’s no excuse for the lower middle class and the working class to complain. Life is hard, and if you want something you have to work for it. You need money to make money, that’s just the way it is. If you want to invest money you better start putting money aside, and accumulate knowledge wherever you can find it.

S,L,I: Save, Learn, Invest.

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Norway

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I am in Norway now, it is amazing! We spent our first days in Oslo, the capital. Some of the highlights wherw; the Munch exhibit, the opera and vigelandsparken. Then we went climbing in the mountains. We walked across Bessegen, walked on a glacier and climbed Norways highest mountain Galdhøpiggen (2469m), we are considering to return to Norway in the winter, to see the midnight sun and aurora borealis. Next stop is Riga, Latvia.

 

munch-madonna

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Every diamond has its flaws

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Over the years I’ve become a bit of an amateur gem collector. I don’t know why I became so interested in gemstones, but its might have something to do with my interest for chemistry, their unique physical properties, the advanced mathematics formulas that are used to calculate how each stone should be cut to get it to shine brightest or simply their beauty.
Above all other gemstones diamonds fascinates me the most. Diamonds consists of the same chemical element as your pencil. Diamonds as all other gemstones are created by extreme amounts of pressure and temperature, and humans have managed to mimic those conditions, and to make synthetic gemstones, but these synthetic gemstones have a lot of differences to the reel ones.
Every natural diamond, no matter how brilliant and clean, has microscopic “impurities” that distinguishes it from the lab created diamond, despite of these “impurities” real diamonds has a hardness of 10 on moll’s scale, and are the hardest material known to man.
This has become the origin of one of my life-rules: everything that has no flaws is fake, or counterfeit. It might sound a bit depressing, but I’ll have to disagree. If nothing in this world is perfect, that means that it’s acceptable for me to be imperfect too.
I had a period a while back where I thought I had to be perfect at everything, and frankly it was exhausting! I was exhausted and unhappy all the time, because everything I did was about pleasing someone else. Mates, don’t try to be perfect, be yourself, you’ll be a lot happier!
“Every diamond has its flaws” doesn’t just apply to humans, but it applies to items, business transactions and so forth. In these areas of life “Every diamond has its flaws” have pretty much the same applications as “If it’s too good to be true, it probably is.” Always double check things that sounds too good to be true and it can save you a lot of time and money.
I want to end with a thought for you to think about. Natural diamonds have a higher value than lab created diamonds, even though it is possible to create much more beautiful diamonds in a lab. Why?
I think it’s because forgeries or imitations will never become as great or beautiful as the original, even though they are more perfect.

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Important information!

around the world
It has been a long time since I last wrote to you. A lot has happened in my life this last month, and therefore I’ve not had the energy or passion to write. The most significant thing that has happened is that my parents decided to file for divorce, but enough about that for now.

I have a big announcement. I’m going to travel around the world, starting with Norway this October. I do not know for how long I will travel the world, or where I’m going, but the opportunity presented itself, and some mates and I are going to travel the world for at least 6 months, and I think it will be an experience we’ll never forget.

My website will certainly be influenced by this trip, but how much and how remains to see.

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Creativity

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We often forget how important creativity is. Every child is creative, but somewhere in live we lose our creative abilities. I think our creativity gets crushed under the massive pile of books that we have to learn by heart in various educational institutions, and after a while we are so focused on learning things by heart and to do everything the right way, and suddenly there’s no room for creativity.
While we have the gift of life, it seems to me the only tragedy is to allow part of us to die – whether it is our spirit, our creativity or our glorious uniqueness.
Gilda Radner
I don’t think we realise how valuable creativity is in our personal lives and in business. Let’s start with taking a look at the importance of creativity in the business world.  Creativity is vital in the creation of new products, new ideas, advertisement and problem solving. If you look at it creativity is vital in every process of most businesses, because most businesses follow this pattern. You first have to create the product or come up with an idea of a service you want to sell. Then you have to advertise the product, and you always have to solve problems, and many of these problems won’t have a straight forward solution, and therefore you have to be creative.
Creativity involves breaking out of established patterns in order to look at things in a different way.
Edward de Bono

The personal benefits of creativity are different. While you in business use creativity as a tool to succeed, the personal benefits of creativity are joy and peace. Creativity is a great way to express your emotions, and think we all have experienced how good it’s to express what we fell. This isn’t about how you express your emotions, but that you do it. Another good thing about being creative is that you use the right part of your brain. The left side of the brain is the side you use the most in the daily life, and it’s main tasks is logic, facts, math and language, and after a long day at work this part of the brain will most likely be tired, and therefore being creative and access emotions and imagination will rest the left part of the brain, and use the right side instead. This will be relaxing and give you new energy.
Personally I try to paint as often I can. I’m not a great painter, but I enjoy it, and it’s a great emotional release. What creative spare time activities do you have?

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Leadership part I: Type of motivation…

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Different types of leaders use different methods of motivation, to motivate the employees. The two classical motivational methods are known as the carrot and the stick. The carrot is that if you work well, you get benefits, and therefore the employees will work as hard as they can to achieve these benefits. The stick on the other hand takes advantage of the employees fear to make them work as hard as they can, so they don’t lose their jobs.

Personally I prefer using another motivations method. Instead of motivating people by giving them money or threatening to fire them, I prefer to make the work a purpose in itself. I believe that people who enjoy the work they are doing they will do it well, and be effective. To make this work there you have to hire people who are passionate about their work. This is easily seen in a job interview. Personally I would rather hire someone who is passionate about their work, than someone that has excellent credentials and is indifferent, because a person that is passionate will yearn to learn more about their field of expertise, and therefore they will improve over time. Passionate people also improved the work environment. Have you ever worked with someone that was indifferent? It is a pain! They don’t carry their share of the work, and become a burden for the rest.

To just hire people who are passionate isn’t enough. Step two is to make the work environment pleasant. There are many studies that prove that breaks, plants, good lighting and social encounters outside work actually makes people work faster. The short version is, make the office interior nice and pleasant, but not cozy, give them long enough breaks so they have time to eat, chat a bit with coworkers or just relax a couple of minutes, but not so long that they lose focus, encourage coworkers to socialize outside work hours, and last but not least as a CEO, VP or any type of leader, be accessible for questions, and be friendly, but even though your main goal is to be friendly be direct and crystal clear about what you tolerate and what you don’t tolerate.

This is just my preferred method. If you do it differently I would love to hear how you run your company!

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Relationships that gives you confidence

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Well married, a person has wings, poorly married shackles. – Henry Ward Beecher
The persons that you have in your life affect you. They can make you feel happiness, hope and courage, or they can make you feel limited and small. Surround yourself with people who make you the best version of yourselves.
I had a friend once that whenever I said that I had a dream about doing something great and difficult, he answered me with raised eyebrows and the words “huh, you wish. You aren’t good enough to do that!” I always felt small and useless around him. After a while I decided that I didn’t want to be treated that way, and I stopped spending time with him, and I started to spend time with people who believed in me and supported me. The result was that I became happier and more confident. I wasn’t afraid of not being good enough anymore, but I tried, and if I failed I tried again.
The people that you spend time with affect you, and how you feel about yourself. Don’t waste your time with people who make you feel miserable. You are worth more than that. I think sometimes you have to be a bit cynical and protect yourself first. If you have friends who destroy your dreams and hopes, then find new friends. I believe that every dream can come true as long as you have the courage to believe you can do it, but if you have people in your life that destroy your confidence in yourself and your dreams, it will be so much more difficult to make your dreams come true. So cut them loose, and be with people who encourage you, and gives you confidence.

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