Note from Stephen: This is a guest article from Jonny over at thelifething.com . You should check out his blog. It is a unique perspective and he has a different sense of humor that I really enjoy.
Ok, I have never really been one for math. It wasn’t that I couldn’t play the system to get high grades through school or bribe the class geek to help with the trickier bits of fluid dynamics at university, it was just that I couldn’t see the real life application of what we were learning and there-in lay the problem.
The School System Teaches You To Throw Up
The School system will teach you to regurgitate facts, life will teach you that this has very limited application in the real world and to get ahead you have to get creative and sometimes downright sneaky.
There are three key life skills that should be taught in school but are not because everyone is far too busy learning about Pythagoras theorem and the history of the Tudors.
You will forget Pythagoras and his theories and all about the Tudors 5 minutes after leaving your school gates for the last time and will probably only use what limited knowledge is left once more in your entire life….and that’s if you are really lucky.
If you are serious about getting out of the Rat Race then it is worth having an idea of the lessons that were swept under the educational rug during your time in school so that you can use them to your advantage and get finally make your break.
Neglected Lesson 1: Basic Finance
I say basic finance because I am not talking about being a stockbroker or investor or FSA. There are far too many complex systems made up by some seriously bored people in the financial game to worry about, and most of them cause serious problems down the line anyhow.
Good basic finance is understanding your Personal Cash flow, The Dangers of Debt, What Compound Interest Is, Good Saving Principles and How Pensions Really Work without being reduced to to a puddle of tears on the floor.
I am in no way the best person to speak at length about personal finance mainly because I have a monotone voice that will bore you to death, however there are two fundamental ideas I would like to illustrate, if you would allow me, which I hope will be very helpful to you and your financial life.
Dead Fish Economics:
It is handy and simple to think of your personal finances in terms of a fish. You will be either of three different types – A happy Fish, An Unhappy Fish or a Dead Fish.
This refers to whether you live inside your means, on your means, or outside of your means.
Living inside your means, or spending less than you earn makes you a Happy fish and is the best possible way to live. It is like a fish living IN water.
Living on your means, or spending as much as you earn, makes you an Unhappy Fish and is not the best way to live but you can survive as long as there is money coming in. This is like a fish living “ON” water. It can survive but it is not ideal. You just have no buffer zone of savings should circumstance change.
Living outside your means, or spending more than you earn, makes you a dead fish. I don’t think I need to point out that being a dead fish should be avoided. A fish is DEAD when it lives out of water just as living outside your means in pretty fatal. The happiness you achieve from the extra stuff you buy is short lived but the stress levels of compound interest and debt remain. Best to try and avoid if possible.
Compound interest is a sneaky little blighter as its math can get a little confusing. In laymen’s terms you are paying interest on interest so over the long time this can become very substantial, especially if you are paying interest monthly.
Before going into debt or getting that new credit card it might be worth remembering this little picture to remind you of the dangers of compound interest growth.
Compound interest is like a snowball rolling down a hill. It starts small but very quickly gets exponentially larger and very soon can get out of control causing serious damage to your neighbors greenhouse and prized vegetable patch, which is bad news for everyone involved.
Editor’s note from Stephen: On the other hand making compound interest work for you in your savings is like a snowball of money rolling down hill towards you.
Neglected Lesson 2: People Skills
Life is People. Business is People. Success is People. Hobbits are people.
The so called “soft skills” that are not taught in school are probably the most valuable lessons you can learn. Being able to get people to like you, to work with people effectively, to build teams and to communicate with people are essential to your personal success.
Here are a quick few starters for instant people skills.
Smile: Ridiculously easy and underrated but the results are drastic for breaking down barriers and engagement, just make sure you have brushed your teeth first, don’t want that bit of spinach on show.
Listen: You have two ears and one mouth. This should say something about how much you should listen compared to speaking. Listening, really listening to someone and not just waiting for your chance to speak will open doors that you never imagined and will substantially increase your ability to make friends. Good listeners are very attractive people.
Use their name: A person’s name is the most beautiful sound to them in the world. Forgetting someone’s name is worse than dating their grandmother. If you are not good with names then now is the time to learn. Try association techniques or yoga, anything that will help you remember a person’s name. It will increase your social life considerably.
Neglected Lesson 3: Creativity
If success in life was based on how many Shakespeare plays you can recall then life would be a whole lot easier. As it happens this is not the case.
Life is fast paced, constantly changing, wildly unpredictable and constantly at the mercy of the whims of 8.6 billion people.
Thinking you can control life is like reaching for that itch right between your shoulder blades, it just isn’t going to happen.
What you can do though is get creative, get innovative. See a problem and solve it. Draw from multiple experiences and create a solution. The people that do this are the people those that get ahead in this world. The future is only going to get faster and more unpredictable so why not focus on being able to adapt and create just as quickly.
Thanks for reading and I hope it helps. If you are familiar with my blog then you will know that if I feel that a blog hasn’t been spiked with enough humor or I happen to have come across a particularly good joke I always end with one.
“A man and a friend are playing golf one day at their local golf course. One of the guys is about to chip onto the green when he sees a long funeral procession on the road next to the course. He stops in mid-swing, takes off his golf cap, closes his eyes, and bows down in prayer.
His friend says: “Wow, that is the most thoughtful and touching thing I have ever seen. You truly are a kind man.”
The man then replies: “Yeah, well we were married 35 years.”
What do you think? Leave a comment and join the conversation.
Get Free Updates to The Rat Race Trap by Email here or via a reader in the top left sidebar. I would love to have you on board.