Thursday, October 11, 2007

Simple White Powder

Baking soda, flour, icing sugar, and cocaine. They're all white powders. They look the same but have drastically different uses and prices. Platinum and steel both look metallic, but you wouldn't put steel in your safety deposit box.

When comparing two items, we often only compare one characteristic and completely ignore other factors that will affect value. It can be cruelly difficult to see new value unless we're able demand of ourselves that we seek it.

Decrepit properties, scrap metal, and sewage offer immense value to those who can look for it. What value is looking you right in the face, right now?

Thursday, September 06, 2007

Give Value to Get Value

There is a limit to true value and it's this: we can never receive more value than we produce and give to others. The amount that we can save, the worth of our assets, and the significance of our relationships are capped at our level of contribution to those around us.

In terms of the material, the more we care for the things that we have - the more we appreciate them - the more value they hold for us. If we maintain our possessions well, we are less likely to neglect them and to think of them as valueless.

With money, the more respect and consideration we give it, the more likely we are to save it and accumulate wealth with it. If we nurture our income and set some aside for our future, our wealth will grow to the point where it can support us.

When we value our time and we see its fragility, we are less likely to waste it. We'll plan our days and focus our efforts. We are all allotted the same 24 hours every day. If we value those hours, we will get much more out of them.

The relationships we hold are what shape us. The more we give of ourselves to others, the richer and deeper the relationships we'll have with our peers. But we'll never get to this level of richness unless we bring value.

The more value we assign to our lives and strive to be better, the more we'll have to give to others and live richer lives.

Monday, September 03, 2007

Weeping Weeds

It won't win any prizes, but my lawn has fewer weeds than it did in the Spring. True, it doesn't have much grass and what is there is dried to a crisp, but the weeds are in a much sadder state.

Back in May, I had visions of a lawn reminiscent of a palace in Versailles. When I bought weed killer to spray on the lawn, I had second thoughts of using it after reading the instructions. It went something along the lines of "Make sure none of your skin is uncovered during use. Discard and clean clothes after use." What?! No way.

You can guess the solution for my alternative weed killer. Yup, vinegar. 7% (pickling) vinegar mixed with a drop of dish soap (helps it stick to leaves) and poured into a spray bottle is extremely effective at killing off weeds. And, it's cheaper than almost any weed killer on the market.

The moral? Value comes from finding alternatives that have multiple benefits.

Sunday, July 22, 2007

One Month ROI

Some spending we do out of habit. The thing we buy may have stopped bringing us value a long time ago, but we still do buy it.

An example is the daily, or triple-daily or more, habit of purchasing coffee. Many ads tout how affordable their products are by saying that you can own it for "less than price of a cup of coffee a day." So, we go out and buy the product thinking that instead of buying coffee everyday, we'll just spend our coffee money on this. In reality, we spend on both.

When we do go for coffee, we are usually looking for a hot beverage to warm us up as the A/C in the office is cranking, or as a caffeine jolt. It adds up quickly.

A valuable habit is to make your own coffee or tea at your desk. A $20 insulated carafe, an $8 tea kettle, and a $2 box of tea will pay for themselves in less than a month. Even if you still go for coffee, you'll do so out of active choice and not passive habit.

Sunday, May 20, 2007

Spending Stability

Stability is the basis for continuous improvement. In The Toyota Way, Jeffrey Liker explains the use of “tact time” to stabilize the flow through an assembly line. When the flow is stabilized, you can look for ways of improving the process and make small adjustments to increase efficiency.

Stability plays a big role in getting more value out of what we buy and in accruing wealth. Making spending predictable allows us to think about what we’re purchasing. We can then work in small improvements and become even better.

One method is to use the amount of cash in our checking accounts as a gauge of flow. If our pay is being deposited in the same account that we withdraw from for spending, we can see changes over the course of a week or month.

After we’re setting aside money for savings, retirement, insurance, mortgage, household expenses, food, and entertainment, and putting in our income, is the amount increasing or decreasing? Are there large drops or spikes? Why? How can we stabilize these?

When we stabilize our spending, we are then being able to look for ways of gaining more value.

Tuesday, May 01, 2007

If in doubt, clean

If you overate, clean. If you spent too much, clean. If you don't know what to decide, clean.

Clean when you're upset. Clean when you're angry. Clean especially when you're feeling depressed.

Cleaning is not a solution. Cleaning is a catalyst. Cleaning interrupts positive feedback cycles and balances them. It gets you going on something positive, it helps you think, and it makes your surroundings more pleasant.

To stabilize, we need to clean.

Sunday, April 08, 2007

When less is more

There are things that take away value from our lives the more we buy them. Purchasing these things requires careful balance.

Take food. You can get food in large quantities for a very low price. At a discount supermarket, a half dozen donuts are only dollar. A jumbo pack of a marshmallows is only $2. Party-sized bags of chips are also only $2. For the price-conscious who have lots of storage space, the response may be "bonanza!" But, look at the real value. If one finishes off a huge bag of marshmallows, what is that going to do for the person's health? How many hours of exercise will that person need to do to consume the energy from those marshmallows? A party-size bag of chips may be the energy equivalent of three hours of swimming. Three hours! ... and swimming is exhausting.

The same principal applies to other consumable goods like entertainment. 5-for-1 DVDs are a real bargain, but you have to spend up to 15 hours watching them. Is it really worth it? In an already squeezed schedule, will those 15 hours bring added value to our lives?

Sometimes, it is better to purchase high quality goods in low quantities. This applies more when we have to add our health or time to consume them.