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Atomic Wealth Building Habits

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“You do not rise to the level of your goals. You fall to the level of your systems.” James Clear, a core philosophy of Atomic Habits:

“An atomic habit is a little habit that is part of a larger system. Just as atoms are the building blocks of molecules, atomic habits are the building blocks of remarkable results,” writes James Clear, author of the best selling book, Atomic Habits.

Applying the principles and philosophies of Atomic Habits to your wealth building, money management and achievement of financial freedom can grow into life-altering outcomes.

Focusing on little habits repeated over a long period of time is how to create good habits, break bad ones, and get 1 percent better every day.

Habits are the compound interest of self-improvement. Getting 1 percent better every day counts for a lot in the long-run. “It is only when looking back two, five, or perhaps ten years later that the value of good habits and the cost of bad ones becomes strikingly apparent,” writes Clear.

Thus, habits are a double-edged sword. They can work for you or against you, which is why understanding the details is essential.

Small changes often appear to make no discernible difference in the short term until you cross a critical threshold. The most powerful outcomes of any compounding process are delayed. You need to be patient. “Many of the choices you make today will not benefit you immediately,” Clear explains.

If you want better results, then forget about setting goals. Focus on your system instead. “You do not rise to the level of your goals. You fall to the level of your systems,” stresses James Clear. “Goals are good for setting a direction, but systems are best for making progress,”

Habits Shape Your Identity (and Vice Versa) There are three levels of change: outcome change, process change, and identity change.

Focus on who you wish to become

The most effective way to change your habits is to focus not on what you want to achieve, but on who you wish to become, writes Clear. Your identity emerges out of your habits. Every action is a vote for the type of person you wish to become.

Becoming the best version of yourself requires you to continuously edit your beliefs, and to upgrade and expand your identity. Your behaviours are usually a reflection of your identity. “What you do is an indication of the type of person you believe that you are either consciously or non consciously.,” Clear says.

The real reason habits matter is not because they can get you better results (although they can do that), but because they can change your beliefs about yourself.

A habit is a behavior that has been repeated enough times to become automatic. “Every action you take is a vote for the type of person you wish to become. No single instance will transform your beliefs, but as the votes build up, so does the evidence of your new identity,” said James Clear.

The ultimate purpose of habits is to resolve the routines, challenges and problems of daily life with as little conscious energy and effort as possible.

References:

  1. https://jamesclear.com/atomic-habits
  2. https://waymakerfinance.com.au/blog/applying-atomic-habits-to-your-finances

U.S. Has Vast Quantities of Untapped Oil

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Prioritizing climate change and green energy means that Democrats actually like high gas and fossil fuels prices. ~ American Enterprise Institute

The United States is sitting on 264 billion barrels of untapped oil — more than any other country on the planet, according to a new report from Rystad Energy. The vast quantity includes oil in existing fields, new projects, recent discoveries as well as projections in undiscovered fields.

More than half of America’s untapped oil is unconventional shale oil, according to Rystad. Thanks to fracking and the shale oil boom, the U.S. is sitting on more oil reserves than Russia.

Yet, the Biden Administration’s vow to make Saudi Arabia a pariah nation, to reduce the world’s dependence, and to curtail domestic fossil fuels production has made the United States more dependent on energy from foreign sources, writes Marc A. Thiessen, Senior Fellow, American Enterprise Institute. The hostility towards domestic hydrocarbons has also resulted in higher gasoline prices at the pump and in higher prices to generate electricity with natural gas.

Since taking office, the Biden Administration has leased fewer acres of federal land for oil and gas drilling, suspended all oil and gas leases in Alaska’s Arctic National Wildlife Refuge, and announced plans to block new offshore oil drilling in the Atlantic and Pacific oceans.

And the Biden Administration might be preparing to implement a ban on exports of gasoline, diesel and other refined petroleum products — a move that energy groups warn would backfire by reducing domestic refining capacity and further raising prices for U.S. consumers, explains Thiessen.

Prioritizing climate change and green energy means that Democrats may actually prefer high gas and fossil fuels prices. Higher gas and fossil fuels prices would encourage Americans to abandon fossil fuels. Rising gas and hydrocarbon prices would theoretically curb and ultimately end Americans use of fossil fuels.

References

  1. https://money.cnn.com/2016/07/05/investing/us-untapped-oil/index.html
  2. Marc A. Thiessen, With So Much Untapped US Oil, Why Does Biden Beg Dictators to Add Production?, The Washington Post, October 08, 2022

Thoughts

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Negative thoughts can make you feel sad and anxious. They take the joy out of life-and they can take a toll on your physical health. That’s why it’s so important to learn how to deal with them.

One way to deal with negative thoughts is to replace them with thoughts that make you feel better. Positive thoughts can make you feel better and more hopeful. And it helps your body too.

Do you have any negative thoughts right now?

Take a minute, listen to your thoughts, and see if you do. If you’re focusing on negative thoughts, remember: You are in charge of what you tell yourself. And, it’s up to you to come up with something more encouraging.

Because of the mind-body connection, your thoughts really can affect your health. By telling yourself more encouraging things, you’re telling your brain to produce chemicals that can:

  • Lower your blood pressure.
  • Reduce your risk for heart disease.
  • Make your immune system stronger so you can resist infection and disease.
  • Lower your stress level and make you feel less anxious.
  • Help you avoid stomach problems, insomnia, and back pain.
  • Make you feel happier and more optimistic about the future.

Sometimes negative thoughts are connected to the way you live from day to day. Here are some things you can try right now to help you see the brighter side of life:

  • Be “mindful” and focus on what you are feeling right now. If you’re sad, feel the sadness. But don’t tell yourself that you have always felt this way and are doomed to feel sad forever. Sadness passes. A negative thought can linger… until you let it go.
  • Share your feelings with someone close to you. Everyone has negative thoughts from time to time. Talking about it with someone else helps you keep those thoughts in perspective.
  • Do something nice for yourself. Maybe you could work less today and play with your kids more. Or you could find something that makes you laugh.
  • Take time to count your blessings. There are so many things for each of us to be thankful for.
  • Eat well. Sleep well. Be active. The nicer you are to your body, the easier it is to feel more positive about yourself.
  • Make social connections. Reach out and enjoy some time with family and friends.

References:

  1. https://myhealth.alberta.ca/Health/Pages/conditions.aspx

Stop focusing on how stressed you are and remember how blessed you are.

How to Invest for Beginners: Peter Lynch

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Investing can be for anybody, but is certainly not for everybody.

Only a handful of professional investors can compare to the legendary Peter Lynch. He rose to investing stardom in 1977 when he was appointed the fund manager of Fidelity’s Magellan Fund.

When Lynch took over, the fund had around $18 million in assets under management. After 13 years at the helm, Lynch increased the fund’s size by almost a thousand-fold.

In 1990, the Magellan Fund, and its over $14 billion in assets under management, became the biggest mutual fund in the world. At times, the fund held over 1,000 different stocks in its portfolio. Also, there was a period when it had an average annual return of 29.9%.

It doesn’t matter if you don’t know anything about investing, since there are actions a beginning investor can take to learn how to invest and how to manage their money and finances. One of the most important actions for new investors is to get started early.

Investing doesn’t have to be hard. Yet, it’s important to learn the basics of investing and what type of investments are the best depending on your financial situation and the amount of money you want to make. 

When you make it a point to save money, you are protecting yourself against life’s unforeseen difficulties. And when you invest, if you choose to do so, you will have a chance to earn much more than you would have expected to, growing your money exponentially.

Time Period

Long-term investing is one of the key concepts in Lynch’s and many of the most successful investor’s investment philosophy. Lynch argued that the value of stocks was rather easy to predict over a 10 to 20-year period, while short term predictions were pretty much useless and effectively impossible to make accurately due to market volatility.

Source: Brian Feroldi

Therefore, he strongly urged investors to always select stocks of companies that they understand, believe in and be patient to wait for them to go up over a long period of time rather than selling for profits.

According to research, if you invest a $1,000 every year on the highest day for a period of 30 years, you can expect a 10.6% annualized return. On the other hand, if you invest the same sum on the lowest day of the year, you can expect an 11.7% compounded return over the same period.

Peter Lynch also encouraged the reader to look for the tenbagger stocks.

A tenbagger is a stock that rises in value 10-fold or 1,000%. He advises against selling when the stock goes up 40% or even 100%. Instead, he urges investors to hold onto them for the long-term, despite the common trend of many investors to take profits by selling appreciated stocks.

References:

  1. https://finmasters.com/one-up-on-wall-street-review/
  2. https://www.benzinga.com/money/peter-lynch-books

Index Fund and Stock Investing

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“I’m extremely sceptical that anyone can do stockpicking well. The evidence is clear that simple low-cost index funds have outperformed 90 per cent actively managed funds over 10 years. A precious few stockpickers do outperform but there is no way to know in advance who they might be.” ~ Dr. Burton Malkiel

Burton Malkiel’s mission has been a multi-decades long advocate of index-based investing. In his book, A Random Walk Down Wall Street, published in 1973, he championed the premise that short run changes in stock market prices are unpredictable and that trying to beat the market is a fool’s game

Currently, index-tracking strategies account for about 40 per cent of U.S. mutual fund assets. Mr Malkiel’s advice is to ignore swings in short-term sentiment and to follow the ideas that he has supported over half a century–invest in low cost index funds. “What you shouldn’t do is panic and sell out. It is invariably a mistake, contends Malkiel. “Rather than trying to find undervalued US stocks, maybe the best solution would be to buy and hold an index comprising all the securities available for investment globally.”

Invest in index-funds (low cost), and get international exposure. The US is only one third of the world economy, and other areas are growing quickly.

Investors cannot consistently beat the market or achieve outsized returns, so invest in low-cost, tax-efficient, broad-based index funds. Not only is it simple, but it’s likely to give you the best outcome as an individual investor.

Rules to stock investing

  1. Confine stock purchases to companies that appear able to sustain above-average earnings and cash flow growth for at least five years. Growth increases, earnings, dividends, and likely the multiple the market will pay for those earnings.
  2. Never pay more for a stock than can reasonably justified by a company’s intrinsic value. Not a perfect measure, but look at how stock trades relative to earnings and cash flow growth potential. Avoid stocks with many years of high growth priced in.
  3. It helps to buy stocks with the anticipated growth. Try to be where other investors will be a few months from now. Look for companies that have strong balance sheet and strong financial growth.
  4. Trade as little as possible. Ride the winners and sell the losers. Sell before end of each calendar year any stocks on which you have a loss. Don’t have patience for losing stocks whose fundamentals have changed. Losses can help less tax burden through tax loss harvesting.

According to Dr. Malkiel, you aren’t likely to win even with these sensible rules. That said, those with a penchant for investing in individual stocks of companies, may still enjoy the game and not want to give it up.

References:

  1. https://www.ft.com/content/c67c06ba-b19c-3341-9665-eb985e3f8d02
  2. https://calvinrosser.com/notes/random-walk-down-wall-street-burton-malkiel/

Dr. Burton Gordon Malkiel, Ph.D, the Chemical Bank Chairman’s Professor of Economics at Princeton University, is responsible for a revolution in the field of investment management. His book, A Random Walk Down Wall Street, first published in 1973, used new research on asset returns and the performance of asset managers to recommend that all investors use passively managed “index” funds as the core of their investment portfolios.

Mindfulness: Being Mindful

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Research suggests mindfulness influences how you interpret the world.

“I learned that courage was not the absence of fear, but the triumph over it. The brave man is not he who does not feel afraid, but he who conquers that fear.” ~ Nelson Mandela

To live mindfully is to live in the moment and reawaken oneself to the present, rather than dwelling on the past or anticipating the future. To be mindful is to observe and label thoughts, feelings, sensations in the body in an objective manner.

Mindfulness can help you achieve greater understanding, which in and of itself will bring you peace. It will also help you develop greater inner strength. This will enable you to make better choices in your lives, which will lead to a healthier and more fulfilling life. Being Mindful can mean meditating or simply stopping to smell the roses.

Mindfulness encompasses two key ingredients: awareness and acceptance.

  • Awareness is the knowledge and ability to focus attention on one’s inner processes and experiences, such as the experience of the present moment.
  • Acceptance is the ability to observe and accept—rather than judge or avoid—those streams of thought.

Studies show mindfulness slashes stress, relieves pain, and improves your mood. And scientists are beginning to understand how. One study found that 8 weeks of regular meditation and being mindful can change parts of your brain related to emotions, learning, and memory. Even washing dishes can be good for your brain, as long as you do it mindfully.

As you develop mindfulness through your practice, your emotions will naturally change. The reason is that you begin to identify less with your ego, and you begin to see more clearly your connection with the rest of the world. And when you truly see this interconnection, your loneliness will disappear.

Through mindfulness, your anger and frustration will also subside. As you meditate, your mind will naturally calm down. This will reduce the mental agitation that triggers your unhealthy emotions. They will be replaced with more wholesome emotions, such as love, compassion, and joy.

“Meditation is not evasion; it is a serene encounter with reality.” ~ Thich Nhat Hanh

The more you practice mindfulness meditation, the deeper your understanding of your emotions will be. When you are truly mindful, you are aware of when your emotions arise, what your sources are, and have the inner strength to resist the temptation to fuel the negative emotions, and be able to cultivate the positive ones. This will lead to greater equanimity.

Mindfulness of Your Mind

As you get older, your mental abilities begin to decline. Your memory, concentration, and reasoning ability slowly diminish. This is an inevitable sad truth about growing old. However, not all of your mental decline is due to age, and there is a lot we can do to slow this decline.

Studies have shown that mindfulness meditation helps preserve and even improve your mental abilities. Mindfulness meditation can improve your memory, concentration, and abstract thinking. Several studies have shown that even small amounts of meditation can have a significant impact. The impact is even greater with years of practice.

In addition to mindfulness, another thing you can do to preserve your mind is to keep it active. However, not all mental activity is equally beneficial. Mental activities that require little use of your mind, such as crossword puzzles, have little effect. What has the most impact is learning a new skill, such as a new language. Learning a new skill forces your brain to create new neural pathways.

Proper nutrition can also have a tremendous impact on your mental abilities. This is more a matter of giving your brain what it needs to function at an optimal level. For example, your brain needs a fair amount of protein and fat to work properly. You also need plenty of fluids. When you’re dehydrated, which many of you are, your memory and concentration are greatly diminished.

Physical activity will also improve your mental abilities. In order for oxygen and nutrients to reach your brain, they have to be transported there through our blood, and physical activity improves the blood flow to the brain. You don’t need to do a lot of exercise to get the health benefits. Sometimes just walking regularly is enough to improve the blood flow.

Mindfulness encompasses awareness and acceptance, which helps you understand and cope with uncomfortable emotions, allowing you to gain control and relief. To cultivate these skills, concentrate on breathing to lengthen and deepen your breaths. Notice your thoughts and feelings, and practice curiosity and self-compassion.

References:

  1. https://www.psychologytoday.com/us/basics/mindfulness
  2. https://www.webmd.com/fitness-exercise/ss/twelve-habits-super-healthy-people
  3. https://mindfulnessmeditationinstitute.org/2020/12/05/find-greater-happiness-in-your-retirement-through-mindfulness/

THE U.S. NATIONAL DEBT IS NOW MORE THAN $31 TRILLION

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The U.S. national debt has now surpassed $31 trillion. Everyday the U.S. government spends over $1 Billion in interest payment on the National Debt.

The $31 trillion gross federal debt includes debt held by the public as well as debt held by federal trust funds and other government accounts, according to the Peter G. Peterson Foundation. In comparison, the U.S. gross national product, a monetary measure of the market value of all the final goods and services produced and sold in a specific time period by countries, is $25.25 trillion according to Bureau of Economic Analysis.

In very basic terms, gross federal debt can be thought of as debt that the government owes to others plus debt that it owes to itself.

The National Debt is now more than $31 trillion. What does that mean?

America’s high and rising debt matters because it threatens our economic future, reports the Peter G. Peterson Foundation. The coronavirus pandemic may have rapidly accelerated our nation’s fiscal challenges, but we were already on an unsustainable path, with structural drivers that existed long before the pandemic.

Making the hard choices to put our nation on a more sustainable fiscal path will help ensure a stronger and more resilient economy for the future. Otherwise, staying the course means a bleaker economic future for the nation and threatens the economic well-being of all Americans.

References:

  1. THE NATIONAL DEBT IS NOW MORE THAN $31 TRILLION. WHAT DOES THAT MEAN?, The Peter G. Peterson Foundation, October 4, 2022. https://www.pgpf.org/infographic/the-national-debt-is-now-more-than-31-trillion-what-does-that-mean
  2. https://www.bea.gov/news/2022/gross-domestic-product-third-estimate-gdp-industry-and-corporate-profits-revised-2nd

Healthy Aging

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Attitude, habit and daily life choices can make a difference in your health and longevity.

Dr. Michael Roizen, M.D., founder of the Reboot Your Age program, writes in the new book The Great Age Reboot: Cracking the Longevity Code for a Younger Tomorow, 40 percent of premature deaths (premature meaning before you turn 75) are related to lifestyle choices.

According to Dr. Roizen, not enough people realize that their attitude, habits and daily life choices can make a difference in their long-term health and longevity. “The largest error is thinking that your choices do not make a difference, but making healthy choices early and consistently allows you to enjoy good health and a longer life,” says Roizen.

By the time you turn 60 years old, “75 percent of your health outcomes are determined by your habits (healthy or unhealthy) and choices”, submits Dr. Roizen.

Focus on 6 + 2

Roizen’s barometer for health success and healthy aging is “6 Normals + 2”. Here are the “Normals” and “Plus 2”, writes Jeff Haden, in Inc. Magazine.

  1. Regain and maintain normal blood pressure. The target is 110/75.
  2. Regain and maintain a healthy level of LDL cholesterol. The target is 100 mg per deciliter.
  3. Regain and maintain a healthy fasting blood glucose level. The target is 100 mg/dL or below.
  4. Maintain a healthy weight for your height. Here’s where it gets tricky. Most people use body mass index (BMI) to determine a “healthy” weight. But muscle, or lack of, matters. A 6′ tall NFL cornerback who weighs 215 pounds has a BMI of 29.2. That puts him at the high end of the “overweight” category, even though by any objective measure he’s incredibly fit. Your body fat percentage is probably a better indication of whether you’re maintaining a healthy weight.
  5. Practice ongoing stress management. Roizen’s target is to “sleep well and feel at ease in your own skin.” But don’t just think of sleep in terms of longevity; a 2018 study found that lack of sleep correlates with tension, anxiety, and lower overall mood. Sleep is good for you later, and good for you now. Aim to get 7 to 9 hours a night. For the best rest, do it on schedule — turning in and waking up at about the same times every day.
  6. Have no primary, secondary or tertiary smoke from tobacco in your body. If you aren’t familiar, tertiary smoke involves pollutants that settle indoors when tobacco is smoked. Think couches, curtains, bedspreads, etc. Your body repairs itself quickly once you quit smoking. As soon as 20 minutes after your last cigarette, your heart rate and blood pressure drop. In other words, don’t smoke. And, if feasible, try to avoid being around people who smoke.

Now for the “Plus 2.”

  1. Get a full body check up. You are what you measure, and you can’t know your numbers — and if necessary work to improve them — until you get your numbers.
  2. Keep your vaccinations up to date. Roizen recommends that everyone get an annual flu shot since it can decrease flu and lung problems as well as reduce the risk of heart attack and stroke. He also recommends people aged 50-plus get the shingles vaccine, and those 65 and over get the pneumonia vaccine.

The key is to consistently make healthy choices that help prevent chronic disease and set you up for a long life.

  • Don’t smoke, and if you do smoke, quit today.
  • Don’t drink alcohol beverages to excess, but drink plenty of water.
  • Get a good night’s sleep and practice mindfulness.
  • Eat a healthy, low refined carbohydrates, no processed food, high fiber diet.
  • Exercise 150 minutes a week.

References:

  1. https://www.inc.com/jeff-haden/a-noted-physician-says-better-health-greater-longevity-comes-down-to-rule-of-6-plus-2.html
  2. https://www.webmd.com/balance/ss/slideshow-binge-watch-risks

Stop focusing on how stressed you are and remember how blessed you are.

Cash Flow is King During Retirement

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Cash flow, or money going in and out of your household bank account, may be the most important personal financial metric for retirees. Cash flow positive retirees are financially good to go and do not worry about paying their bills.

Retirees, and their Financial advisers, often focus only on the money in side of cash flow, that is retirement income. But retirees should thoroughly evaluate the target and aim of cash flow. That is expenses or the money out side of the ledger, also.

Thus, it is essential for retirees not to skip over a thorough review of estimated retirement cash flow.

Knowledge is power. To know thyself was such an important principle that this adage was inscribed on the Temple of Apollo in Ancient Greece. When retirement savings and cash flow are on the line, do not allow stock market fear impact your investment decisions.

Reviewing expenses empowers you with information to make informed, realistic decisions. A known fear is less intimidating than an imagined, uninformed worry.

Here are some suggestions to help retirees navigate volatile markets and perform an essential cash flow assessment.

  • A cash flow management isn’t budgeting. It is a process of clarity and honesty. It helps retirees really see all their income (money in) and spending (money out). Cash flow management allows you to see what you are doing wrong (or right). Knowledge is power and financial freedom.
  • Be realistic. Health care is a huge expense, for example. So, plan realistically. Living expenses are often more than anticipated and returns on investment are never consistent. Be conservative in your estimations and assumptions.
  • Get comprehensive. Beyond the standard expenses, make sure to allot expenses for items such as continuing home repairs, occasional renovations and automobile replacement costs.
  • Don’t get lost in the weeds. It is more important to capture all the large expenses than worry about recording precise numbers. It isn’t necessary to record the past year’s expenses down to the penny.
  • Control your emotions. Retirees, like all people, are emotional. However, emotional people don’t make the best investors or managers of personal cash flow. Do not allow fear impact your investing or cash flow. As Warren Buffett said, “If you cannot control your emotions, you cannot control your emotion.”

When stocks are down and stock markets are crashing, ‘don’t watch the markets closely’ and ‘stick to your financial plan’. If you were to react to the market wild swings and all the fear everyone has when it drops, you’ll end up with less value and cash flow than you started, every time. The stock market will fluctuate up and down dramatically at times. It is not always a rational and logical place because of fear.

References:

  1. https://www.nasdaq.com/articles/cash-flow-king-when-planning-retirement-2016-08-12

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of BrowleeGlobal, LLC

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