These are not new ideas. In 1937, in the midst of the Great Depression, Napoleon Hill published the book Think and Grow Rich. He was inspired by billionaire Andrew Carnegie to take on an enormous project – to interview 500 of the most successful men at the time (today we know at least half of these would be women) and to determine what they had in common that contributed to their success.

Carnegie used his influence to arrange interviews and Hill spent more than 20 years putting together the project. In the end, he discovered that all of the men had 13 principles that they all used.

I read this book years ago and applied some of the principles…and they worked! I also have an audio recording of the book which I often listen to on my Ipod while driving.

I recently started working with a new coach. The very first task he assigned me? To write out my “prosperity plan.” And I did. I continue to refine my visions, desires and beliefs as I learn more and more about who I really am and what I can achieve while living the lifestyle I love.

Here’s the first principle that Hill shares…I have used it in creating my latest prosperity plan. I invite you to test it for yourself.

Principle #1. Desire: The Starting Point of all Achievement

Every successful person has a burning desire. They don’t let anything quench it. Here are six steps to put this principle into place. It’s not hard…just do it!

1. Choose the exact amount of money you desire.
2. Determine exactly what you intend to give in return for the money you desire.
3. Choose a date when you intend to reach your money goal.
4. Create a plan to carry out your desire, start right away whether you feel ready or not – put your plan into action.
5. Write out your prosperity statement. Write the amount of money you intend to acquire, the date by which you will have reached the goal, what you will give in return for the money and a plan of how you will accumulate it.
6. Read your statement aloud once in the morning and once before bed. As you read it, feel and believe you already have the money.

Abundance and prosperity begin with a state of mind, with strong purpose, AND with little or no hard work. You don’t have to work hard but on the other hand, you can’t just sit back and wait for luck.

All who have attained success had desires and plans. Be ready to receive. Open your mind. Your thoughts create your life; you can create abundance and success or you can create hardship. Since you’re always thinking, make your thoughts good ones!

An expatriate who was working on a special project discovered a rather shocking cost cutting measure one day. The lack of tissue paper and toilet rolls in the toilets. He then started to carry his own toilet roll, which was placed on a corner of his desk. Was it a great thing to see during meetings?

The most hilarious example involves a person coordinating travel arrangements. The instructions were to look for and book the lowest fare in the time window indicated. One of my friends who was travelling overseas was awakened up at an odd hour by the travel coordinator who was calling to find out if my friend were willing to travel in a later flight because it ended up costing a few hundred rupees less than the the first flight. While relating this incident, my friend mentioned that he did not have the heart to tell the travel coordinator that he had spent far more in his international roaming call, simply because he was so serious and earnest. What can I say?

There are numerous other examples like regularly used cabs with negotiated and discounted rates being withdrawn and instead people having to use a call taxi or public cab and pay much more. There is the practice of switching off the air conditioner in certain stores in the afternoon as fewer customers are there. Unfortunately by evening the store is inundated with such a stale stench that no one wants to shop there.

This makes me wonder if there is a genuine intent to cut costs or if some manager is mindlessly following instructions from higher up so that he/she can report the change as “an action point” in review meetings. Do people view the sum total of all these control and cost cutting measures? Invariably steps in this direction involve multiple approvals, justifications, filling up forms and so on. Has anyone studied the time and effort wasted in this versus the actual savings made? Not to mention the additional expenses being incurred on the side while trying to do cost cutting!

Would it not be easier if every employee were told that the average cost per employee is “$X” much and as a team we all need to bring it down? Let individual initiative drive the effort. Instead, most such initiatives are implemented with little thought to ground level realities and the result – penny wise, pound foolish!

Common sense – where art thou? Has the downturn driven you into exile or has it killed you?

If only we were so real at business conferences. Venture capital, ROI, cash flow, cost of goods – there’s always lot’s of strategy talk, but rarely a drill down into specific dollars. So did you raise a million bucks or did you put $10k on your credit card? What does “turn a profit” really mean? How close is a ‘close call’? Facts give perspective. So let me throw out a few numbers for all you entrepreneurs and artists making your way:

$150,000 = the book advance my former business partner and I received for writing Style Statement. Originality goes a long way in publishing.

$70,000 = (yes, seventy) the production cost that we carried for the book – portrait and product photography, set dec, travel, graphic design and materials. That was a dumb move. We should have shared creative control with the publisher and let them carry the design costs.

$1.87 = approximate book royalty per book (which the author gets only if the advance is earned out). Note: very few authors ever earn out their advance.

$6000 = cost to design my site. I could have done it myself more austerely, but it would have taken 3 months to launch instead of the 8 weeks we did it in.

$128 = cost of a Logitech Laser mouse, which has brought me untold delight.

$600,000 = capital-raised for my last company.

$11,000 = my income for the first year in business at my last company.

$17,000 = my income for the second year in business at my last company.

$85,000 = my salary for the third year in business at my last company.

$0 = what I left with from my last company.

$7000 = annual cost of full time daycare for my four year old.

$170 = hourly rate for my accountant.

$3000 = my standard speaking fee.

$250 to $350 = what you should expect to pay for a good lawyer.

$600 = money I saved using Picnik for photos instead of buying Photoshop.

$25 = the donation I make to Women for Women International or Kiva on behalf of each Fire Starter client.

$9 = what I paid for my last pair of jeans at Value Village. Stretch Dickies. Fantastic.

1 = the singular principle that guides me: evoke the truth.

Some read books written by the rich hoping to gain some insight about how to make their first million.  Others succumb to get-rich-quick scams all because the idea of receiving loads of money is just too hard to resist.

Some gain money very easily while others seem to earn little no matter how hard they try.

What accounts for the difference? Is it just pure luck? Or is there a universal formula that anyone can use to create more wealth?

It really is all in the mind.

Generally, every positive action starts out as a powerful thought.  The more you think about something, the more you believe in it.  Beliefs motivate you to act.  And actions have consequences.

All you need to figure out is what kind of thought stimulates the inflow of wealth.

Wealth creation teachers like Rhonda Byrne and Loral Langemeier say the same thing: to have more money, you have to attract it with your thoughts.

If you think that becoming rich is just an impossible dream, then you are not likely to receive more wealth because of your thoughts.  It is the universal law of attraction that is at work, even in the material world of finances.

Rhonda Byrne’s world renowned book, The Secret, lays out a plan that you can use to attract wealth into your life. It’s all about having the right attitude.

Here’s how:

Change your attitude about money

Instead of believing that you need to move mountains to become rich, try telling yourself that “money comes easily and frequently.”  Say that often to yourself and believe in it.

If there is any doubt at all about how easy money can flow into your life, that doubt will attract a negative force that prevents you from creating wealth.

Be a cheerful giver

Money begets money.  The universe works according to a natural process of filling and emptying.  To get more money, you have to give money. But the act of giving has to come from your heart; otherwise, the law of attraction will view the gift of money as a mere sacrifice, or an act that affirms your lack of money.

Giving more money is a positive act that strongly shows your belief that money comes to you easily.  The universal law of attraction will work by responding to your outflow with an inflow, oftentimes greater than what you give out.

Visualize receiving money

Ask and you shall receive.  That is how the universe works.  Junk all conservative thoughts about money.  Refrain from thinking that the world does not owe you material favors.  It is this negative attitude about the world working against you that prevents you from reaping all that the world has to offer.

Starting today, picture yourself surrounded with earmarks of wealth and feel it.  Change your negative attitude about money.  Feel the excitement. Wealth may be on its way.

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This is the third article in a three part series on The Credit Crunch. Here are the links to parts 1 and 2 if you have not yet read them. 

Part 1: The Credit Crunch: Why it happened?

Part 2: The Credit Crunch: What can we learn

Since before the late 19th century we have been struggling to understand economics in such a way that like other sciences we can make predictions about what will happen when we apply a particular stimulus.
Countless higher degrees and PhDs have been awarded as we honed our collective understanding of economic cause and effect, but over a century since the beginning of the study of economics we have still not been able to come up with a definitive model that describes how our economy works.

This is nothing to be ashamed of.

We have been studying the weather for a lot longer than our economy and have only recently come to the conclusion that the processes that produce weather are chaotic. This means that while we may understand the physical processes that produce weather we do not have the ability to make predictions because the complexity of the weather generation processes defies prediction.

In the same way it would appear that the economy, while we have a broad understanding of cause and effect, because of its chaotic nature, also defies prediction.

What we are seeing now in the aftermath of the Credit Crunch are attempts to influence the economy by governments who are ploughing in billions of pounds or dollars, into systems to try to stimulate them without any clear understanding of the effect that their efforts at stimulation will have.

It is like watching someone trying to start a car by kicking the tyres.

In the sixties we were given two types of weather forecast, the short range forecast, for the coming week, and the long range forecast, for the next quarter. When the UK meteorological office in Bracknell got two super computers to make more accurate forecasts, the first thing that the computers told the forecasters was to stop making long range forecasts because the results were no better than chance.

History may be trying to tell us that our attempts to stimulate the economy have just as much chance of success as forecasters had at predicting the long range weather.

The economy, as does the weather, goes in cycles. In the seventies we were sure we were seeing the beginning of a new ice age and today we are predicting global warming with no less certainty. For the last fifteen years we have been experiencing steady growth in the global economy, and today we are in recession.

The difference between the weather and the economy is that we never thought that we could control the weather so it was quite easy to admit that we could not predict it beyond the three day forecasting service we currently enjoy. Economists have not yet reached that epiphany and believe that they do still have some degree of control over the economy.

The consequence of this difference of understanding is that economists continue to throw billions of public money at their problems while weather forecasters are content to make the short term forecasts that their understanding of chaos shows them is the best that they can expect.

Because the economy was in a state of stable growth for so long the perception appears to have become that this was the natural state of affairs and would continue for the foreseeable future. People working in the financial sector therefore traded on the expectation that this expansion would continue forever and therefore lost their ability to continue to trade when the other half of the cycle, recession, occurred.
Their businesses became tuned more and more finely to the conditions of a growth market and were no longer able to cope when the conditions of that market changed.

We can see the effect more dramatically if we use the world of formula one racing for an analogy. We have F1 cars that have been developed to run in a specific environment, the F1 race track, but outside of that environment they are completely useless. Take an F1 car down the high street and you will see what I mean. There is no room in the car for shopping, the traffic calming measures would tear the aerodynamic features off, a single raised drain cover would rip the bottom out of the engine, the car would overheat by going too slow and it would not be able to turn corners. In this situation would you spend more money to change the F1 car to try to make it cope with the high street conditions, or would you recognise that the design was fundamentally unsuitable, throw it away and start again?

In the economy we are facing a situation where our financial and other institutions have tuned their operations for a specific set of market conditions, growth. They have now shown that they are unable to cope with a different set of market conditions, recession.

We have two choices. We can continue to throw money at the problem in the vague hope that it might do some good, or we can admit that these institutions have evolved to service a specific market and are now no longer viable when those market conditions change.

If the latter do we, like the F1 car, keep patching it up with expensive solutions that don’t really solve the problem, or do we allow them to fail and replace them with something more robust?

What would be the cost of allowing the institutions who have evolved in this way to fail? Would it be more than the money that is currently being spent to try to save them?

–

Peter A Hunter is the author of the book Breaking the Mould  and A Collection of True stories about what happens when ordinary people are allowed to become powerful. Visit his website at www.breakingthemould.co.uk.

This is the second article in a three part series on The Credit Crunch. Here is the link to part 1 if you have not yet read it. 

Part 1: The Credit Crunch: Why it happened?

The efforts of these companies in the short term to reduce costs may be seen as a necessary evil but if they are not conducted in the correct manner then these companies run the risk of damaging their infrastructure to such an extent that they may not be able to recover even when the current pressure is removed.

A few years ago I was watching TV and I saw an interview with Rod Eddington, the then Chairman of British Airways. He was understandably complaining about the market share that he had lost to Ryanair, Easijet and the other budget airlines. But he was also being quite bullish about it.
He said that in the previous 3 years he had reduced British Airways operating costs by five percent.

What he didn’t say was that in those same three years he had made sixteen thousand of his staff redundant.

The question that I have to ask is, “How did the people who remained working at British Airways feel when they found out that sixteen thousand of their colleagues had been made redundant?”

Did they feel good about it? Did it make them feel secure? Did it increase their trust in BA? I don’t think so.

Three years later and the redundancies had changed the way the workforce felt about their jobs, from people who were proud and motivated to employees who just turned up for their pay.

This is the sort of change that occurs with monotonous regularity in industry.
A caring and productive workforce is changed into one that turns up for the pay check and has no other interest in being there.

When this happens the value of what is left of the company is considerably less than the sum of the parts.

At the end of the Cold War the armed forces were told that there would be a restructuring process. Everybody knew that this meant redundancies, we had won the war without a shot being fired and now it was time to stand down.
The powers that be would not admit that the reason for the restructuring was to make redundancies and when the redundancies came they acted as if they were truly surprised.

To the one hundred thousand or so men being made redundant this did not change the fact of their redundancies but it sent the clear message that the people who ran the Royal Navy, Air Force and Army were no longer people to be trusted and that there was no honour in continuing to serve them.

For their Lordships the way that redundant soldiers sailors and airmen felt was of no consequence because they were no longer on the strength.
.
The year following the final tranche of redundancies the armed forces suddenly found that even at one third of their previous strength they could not recruit sufficient people to fill their requirement. That years recruiting was disastrous and only by spending a small fortune on advertising were they able to bring the numbers up to a level that sustained their new reduced strength.

What they had forgotten was that before anyone joins the services, or any company, they will look for someone who is already there and ask them what it is like to work there, and the story they hear is the story that they will believe.

The Armed Forces and British Airways all suffered the same fate. They lost the trust of their workforces.
By failing to take care of their personnel during the redundancies they turned their former employees against them and made it extremely difficult and expensive to recover from the position they had put themselves in.
The same thing will happen to organisations caught up in the current crisis.

By making redundancies to satisfy our short term need we can stack up a whole new set of problems for the future.

In most cases the difference between feeling discarded and feeling respected is no more than a kind word and a handshake but for many managers that is still too much for them to do,

This cautionary tale is for those managers. It is their organisations who will suffer when business resumes if they don’t take care of their people now.

This is the second article in a three part series on The Credit Crunch. Do not miss part 3.

Part 3: The Credit Crunch: Can we predict the future?

–

Peter A Hunter is the author of the book Breaking the Mould  and A Collection of True stories about what happens when ordinary people are allowed to become powerful. Visit his website at www.breakingthemould.co.uk.

We can see the effect in the failures of our financial and retail institutions but the question of why it happened, and what we can learn from it, seems less clear.

In December I was sent a link to a seminar given at Harvard University on the 25th September 2008 called “Understanding the Crisis in the Markets” in which a panel of experts from Harvard University did their best to get to the bottom of the problem.

The lecture lasts 90 minutes and can be seen in full at http://alumninews.harvard.edu

Presenting the seminar was a panel of six experts including Jay Light, the Dean of the University, Rob Kaplan, a Professor of Management Practice, Elizabeth Warren, a professor of Law, Greg Mankiw, a professor of Economics, Keneth Rogoff. a professor of Public Policy and Robert Merton. a winner of the Nobel Prize for Economics.

The genesis of the problem appears to revolve around a phenomenon called leveraging. Briefly, if I own my house then it has a value. I can realise that value by selling the house, but then I would not have anywhere to live, so I have to buy another house and have not really achieved anything. Or I can take out a loan against my house, then I will have somewhere to live, and the money. I have leveraged my house. As long as I am able to continue making the payments on the loan the system works.

The breakdown in the system, as described by the panel, started as early as 10 years ago in the United States when mortgage brokers became tired of the boring old system of carefully assessing people’s ability to repay mortgages and instead started to look for ways that they could make more money from their sale.

One of the ways they came up with was what was called a “teaser” rate in which the sale of a mortgage was assessed on the ability of the buyer to make payments on a low introductory rate which lasted typically two years, and not on their ability to pay the other 28 years of a 30 year mortgage, at double the teaser rate.

At the same time the mortgage companies were spreading their risk around other financial institutions by repackaging and selling their mortgage-loans to them. They were therefore less concerned about buyers defaulting on their loans when the higher rate kicked in because they were no longer lending their own money.

With more money available house prices started to increase and this led to the ratio of average house prices to average wages rising in America from something like 2.8:1 to over 4:1. In the UK that Ratio exceeded 6:1 as house prices rocketed and the mortgage companies looked for new ways to sell mortgages.

This was not sustainable in a flat market, but the world was in growth, corporate profits reached record margins, property prices were increasing and the market was being sustained, for a while.

Meanwhile wages were stagnant in real terms while living costs continued to rise, making it increasingly difficult for homeowners to make ends meet. For many the only way out was to take a second job. Then the homeowners discovered their ability to remortgage, or leverage, their homes to release their capital.

While property prices continued to increase this was fine because when the teaser rates on the remortgage ran out the property had increased in value sufficiently to remortgage again.
This release of capital masked the fact that middle class America was having an increasingly difficult time funding their lifestyles from their wages.

A point to note is that the perception of these “sub prime” mortgages is that they were supplied to the poorer sections of the community to get them on the housing ladder. In fact over 80% of these loans were remortgages sold to existing borrowers – the home owning American middle class.

Then house prices stopped rising.

Now when the teaser rates ended there was no more equity to be released and the homeowner was left with a huge debt and no way to pay it off.

In the meantime the mortgage companies, well aware of the problems they were stacking up, had spread the risk of their loans throughout the financial community by taking out loans on their loans, or leveraging, so that ownership of the mortgage was spread around in a very complex way that only works in an expanding market, or while the release of equity continues to fund expansion.

When the release of equity dried up nobody could afford to repay their loans. Not the house owners, nor the financial institutions.

The complex relationships of the world’s financial institutions and the global nature of their business has ensured that these effects are being felt around the world.

The discussion finished with questions from the floor, one of which suggested that the current crisis might be dwarfed if the problem of over leveraging is not solved before the next round of teaser mortgage rates expire.

The panel of six experts agreed that the answer was not going to be easy to find.

This is the first article in a three part series on The Credit Crunch. Do not miss part 2 and 3.

Part 2: The Credit Crunch: What can we learn

Part 3: The Credit Crunch: Can we predict the future?

–

Peter A Hunter is the author of the book Breaking the Mould  and A Collection of True stories about what happens when ordinary people are allowed to become powerful. Visit his website at www.breakingthemould.co.uk.

Boy! What a coincidence that this question came to be asked of me. Considering that I have lived most of my life without an adequate supply of the essential moolah, I must be an expert on this subject. From the last I can remember I have had to mooch and plan for even to most of banal things; even a cup of coffee. But by golly, was it fun?

On the question of coffee or any other, essentially to mooch you have to have friends and in that I have enjoyed exceptional Grace of the Lord. Now my policy is that only fools buy them; whatever these things are. So here was my day planned out. Early morning visit to a friend and of course coffee and browse his newspaper. Then reach the office of another friend just in time for the most divine coffee again. And later if lunch could be fitted in, that would be fine but not as important as the coffee. The 4 pm coffee was the cup that required all my meticulous planning but I managed it for 25 years so I suppose I did well.

Let me relate to you how planned my life without money. I bartered my knowledge of the French language by teaching at the local YWCA and received in return a bunch of bank notes which were exchanged for a bike and camera etc. Then I wanted to go to France as some friends invited me. So I bartered the camera and bike for new bank notes that were exchanged for an airline ticket. But I am not that stupid to blow it all off. So I asked an uncle to refer me to some family friends who gave me a bunch of pearls to explore a market for them in France. I gave those pearls away to anyone who would give me in return a paper that would be legal tender for a new camera and some left over. Back home, with the ‘left over’, I paid the friends for the pearls and bought a new bike and astonished everybody with my new camera; not to say with everybody wondering how I managed a trip abroad on my kind of income.

But then I got tired of all this planning and I got married and my saga ends there. We then come to the original question of living without money. The questioner presumes: In olden days people used the barter system. If this is possible then black money from the system will vanish, hunger for amassing wealth will vanish, so many good things will happen.

How naïve! Humans are humans. Nothing good can ever come out of their propensity to grab and accumulate. Nothing comes of nothing. Barter or not, nothing good will happen; of that I am certain. There is buyer and there is a seller. How intensely the buyer wants the seller’s product will decide the exchange rate and the level of fleecing; above or below the table. So let’s be pragmatic.

Seriously speaking aren’t we missing something? What after all is money? If you are referring to gold mohurs and paper bank notes then they are just that. They are pieces of metal or paper. It could as well be sea shells. It is the value you give them that makes them what they are: an exchange rate valuation of goods, products and services. So this is the wrong way to study this subject.

The point is that we have to give to get. We may think we are enjoying things free of cost, but are we really? Cash or kind, payment is always in the pipeline. You were not under the impression that I got all my coffees, scot-free? That would be the understatement of the year. I paid by doing odd jobs; being of service in some way or the other. It just happened that I do have some subjects of interest in which I am considered good and advice and help was in demand. And I gave it freely, after all free cups of coffee, meals and what-not did not come by out of the blue.

So the long and short of it is: there is no living without money. Even my three year old daughter won’t give me a kiss without a bar of Cadbury’s chocolate. And about my wife’s payment schedule it would be best not to talk about it at all!

Money is an optical illusion. Try to get a free cup of tea from a hotelier and you will see? Either you will pay in predetermined exchange rate via bank notes or else wash the dishes in his establishment!

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PK is a teacher of languages/communication, counsellor and a businessman active in 6 countries. He combines his knowledge of life with his education in management, applied psychology and occult psychology from his time in The Ashram in Pondicherry and assists aspiring managers to reach their next level. Please visit http://sites.google.com/site/pkcentreforchange/Home