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Do You Need a Bigger Boat to be a Success?

sailing on a boatWe once heard Donald Trump asked, “What’s the difference between a net worth of $70 million and $700 million?”

He replied, “A bigger boat.”

BIGG success is life on your own terms. If a bigger boat floats your boat, then go for it.

When people sell their boat to buy a bigger boat, it helps our economy. It puts people to work. Companies make more money. Taxes are generated. It’s a win all the way around.

Or is it?

We’re going to share a thought process to determining if a bigger boat (or any other major purchase) is consistent with life on your own terms.

Hear George & Mary-Lynn discuss today’s topic on The BIGG Success show. Click a player to listen.


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There are five elements of BIGG success – money, time, growth, work and play. All five elements are involved in the decision to buy a bigger boat.

We hope to demonstrate the interconnectedness of the five elements with this discussion.

Money

Obviously, it will cost you money to buy a bigger boat. You will get the money by earning more than you spend.

The question is: Is a bigger boat worth the price? To determine that, you need to answer two more questions:

What are the returns?

What is the true cost?

A bigger boat may or may not yield financial returns. We’ll talk about this more when we hit on work.

However, you would expect a bigger boat to give you emotional benefits.

Time

In order to reap those benefits, though, you will have to spend something else – time. Time is part of the cost of a bigger boat.

Will you really have time to enjoy it? Or will you have even less time because you’re working more to pay for it?

Work

Let’s skip growth for now. We’ll come back to it shortly.

Work may pay for your bigger boat. However, if that’s the case, your true cost of the boat is higher. In your quest to live large, you’ll sacrifice living.

You’ll be spending more time at work. Is it worth it?

Of course, a bigger boat may actually help you make more money. You may be able to entertain clients, employees, funders, etc.

A bigger boat may help you build more and better relationships. Or is that just a rationalization? If that’s what it takes, are they the right relationships?

Play

On the other hand, a bigger boat may be the ticket to more free time. You may enjoy being on it so much that you just naturally schedule time away.

Of course, you could do this without a bigger boat. But maybe you know you won’t.

Growth

How does growth come into play? If we use the factor cited by Donald Trump, your net worth must increase 10 times to buy a bigger boat.

So it will take a significant amount of growth to accomplish this. How can you increase your wealth 10 times over?

This is where a bigger boat really comes into play. It makes the intangible tangible.

It’s your reward. You know you will work long, hard, and smart to be able to buy it. You will save and invest your money wisely or you won’t get it.

It represents BIGG success to you. Great!

Then get a brochure. Or find a photo of the bigger boat you want.

Keep these visual representations in front of you. Plaster a BIGG “10x” on top of it.

Put the exact net worth you need to reach on the brochure or photo. Now break this goal up into smaller steps. Devote all your energy to getting to the next one. Then keep going. Keep driving to BIGG success!

For you it may not be a bigger boat. What is it? What drives you to achieve more?

Direct link to The Bigg Success Show audio file | podcast:
http://traffic.libsyn.com/biggsuccess/00721-072611.mp

Image in this post from Eastop

The Magical Money Illusion

magic_hatBigg success is life on your own terms. There are five elements of bigg success – money, time, growth, work and play. Today we’ll focus on money.

Status – a high rank or standing within a group of people – is a good thing. It means prestige, importance and respect.

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But status also can work against us. Sometimes in our quest to show off our net worth, we lose our self-worth. We worry about our image instead of our essence.

We give off the illusion of money when often the money isn’t there. It’s the magical money illusion. Even though we make a lot of money, it all goes out the door trying to give off the illusion of wealth.

This is one of the lessons we’ve learned from recent history. Now we’re going back to timeless principles of saving money and using debt sparingly.

For some reason, there seems to be a natural human tendency to compare ourselves to others. We found a great article that describes two experiments that tested people’s desire for relative affluence.

Earn $2,000 more!

The first one was conducted in the early 1990s. Participants were presented with two job opportunities in the same industry.

With the first option, they would earn $35,000 a year while their colleagues earn $38,000. Under their second choice, they would earn $33,000 while colleagues earn $30,000.

Most people chose Option 1. However, here’s where it gets interesting:

Two-thirds said Option 2 would make them happier.

We think more money will make us happier. However, this research shows that, for a lot of people, making more than their peers is what really does the trick.

Half the money is just fine

Let’s look at a second study. Its participants were a very bright group – the faculty, staff and students at Harvard University.

They were also presented with two options. The researchers took special care to make it clear that the prices paid for goods and services would be the same in both cases. In other words, more money would mean more and/or better stuff.

Under Option 1, they were offered $50,000 per year while others were only making $25,000. With Option 2, they would earn $100,000 a year while everyone else earns $200,000.

56% of the participants chose Option 1! They gave up $50,000 in income in order to make more than their peers.

It’s the Jones Effect. They’re happier making more comparatively but less absolutely.

Isn’t it amazing that really bright people making choices that seem illogical?

How do you move past this natural inclination to compare yourself to others? How do you do what’s really best for you?

Change the focus of your comparison.

Instead of focusing on what you make or what you have compared to others, concentrate on what you need to live the life you desire.

When you live your life on your own terms, you’re liberated from all of that. You focus on what you make relative to you what you need to make. Others disappear from the calculation.

You focus on what you want relative to what you have. Who cares what anyone else has.

You focus on what you know, not on what other people think. You create the life you want and you make sure it’s sustainable. That’s financial freedom. That’s peace of mind. That’s bigg success!

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Get the tips and tools you need to be a BIGG success.
Subscribe to the Bigg Success Weekly – it’s FREE!

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Thank you so much for checking in with us today. Please join us next time when we talk about horse jockeys and personal productivity. Until then, here’s to your bigg success!

Subscribe to The Bigg Success Show in iTunes. 

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Direct link to The Bigg Success Show audio file:
http://media.libsyn.com/media/biggsuccess/00471-083109.mp3

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(Image in today's post by miamiamia)

Reading and wRiting and aRithmetic

Back-to-School on chalkboardIt’s Back-to-School season so we’re doing a ten-part series on lifelong learning. We’ve kicked it off with two shows on reading and writing. Now we want to talk about arithmetic.

We’re going to take a little different tack today than we have with the last two shows. We’re going to talk about two specific things we need to know when it comes to arithmetic.

These two things both involve our personal finances. That’s why they’re so important.
Read more

How the Rich Make Money

golden_eggs.jpgThe Federal Reserve recently published some new wealth data [PDF]. They looked at levels of net worth and the income associated with each. They defined net worth as total assets (including a primary residence) minus any money owed.

You need a net worth of over $8 million to make the top 1%, $2 million gets you in the top 5% and it takes about $900,000 to place yourself in the top 10%.

So those are your targets if life on your own terms means being in the top 10% or above.

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Making more doesn’t mean having more

This report also looked at share of total wealth. As it turns out, the richest of the rich – the top 1% – didn’t get richer. They still held approximately one-third of the country’s total wealth in 2007, the same as 1995.

However, their share of income was up significantly – from 17% in 1997 to 22% in 2007.

The wealthiest people in our country saw a bigg increase in share of income, but their share of net worth didn’t go up. Does that mean rich people got caught up in the “spend, spend, spend” economy? Possibly.

We often think, “If I could just make a little more money.” This study offers further proof that making more doesn’t necessarily translate into having more – even for the richest among us!

Make do, then make more

The crucial thing – the starting point – is to figure out how to make do with what we already have. Then when we make more, we’ll have more because we manage it all better.

We can enjoy some of it now and invest the rest for our future – for the life we dream of living.

How the rich make money

As might be expected, the average person gets most of their income from salaries and wages. As we move to the top 5%, we see that a larger share of income comes from business ownership and investment real estate.

It really kicks in for the top 1%. Plus they have built up enough assets to get a significant boost from selling those assets for a profit. It’s Economics 101 – buy low and sell high.

But it’s no panacea

We’ve recently seen people losing money in business and real estate. Like most things, it’s no panacea. It’s risky. But if you aren’t trying to get rich quick, you can greatly improve your odds.

The best advice

We also found it revealing that this study showed that the bottom 50% lost money holding assets and from the ownership of businesses and real estate.

The rich made a lot. The bottom half lost money. What do the rich know?

Before you jump into investing in a business or real estate, educate yourself. Get advice from someone who’s actually succeeded at it. If they’ll mentor you, that’s great. If they charge you for it, it will be worth every penny.

You’ll get where you want to be faster by learning from people who have done it rather than trying to learn it on your own.

So if life on your own terms means building wealth, get started creating multiple streams of income today – even if it’s just part-time!

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Get the tips and tools you need to be a BIGG success.
Subscribe to the Bigg Success Weekly – it’s FREE!

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Please join us next time when we ask, “Are you talking to the right person?”

Thanks for reading our post today. Until next time, here’s to your bigg success!

Subscribe to The Bigg Success Show in iTunes. 

Subscribe to the Bigg Success feed.

Direct link to The Bigg Success Show audio file:
http://media.libsyn.com/media/biggsuccess/00381-042709.mp3

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(Image in today's post by barunpatro)