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Originally Posted by Bhairava Brenner  Hi Ilya
Thank you very much for your response, |
You are welcome. Glad it helped.
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I'd have two further questions if you don't mind;
1. So how much discipline can be lost by not doing anything? And doesn't the same apply to habits? I've "installed" good habits, but if I don't do them for a while, won't I have to put conscious effort into doing them regularly again?
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As I see it, you can't loose discipline. Discipline is not the goal, but a tool. You refer to discipline as the achievemets you have (like getting up early consistently). I find it usefull to separate these things. The results in personal development are the new skills, beliefs, self-identifications that we develop. Discipline is on one hand is the conscious effort necessary at a certain stage of learning the skill. On the other hand it is the skill of applying this conscious effort when needed.
So if you applied discipline once, then another time and had success, you have this skill. You might not be very efficient in applying it and it comes with practice, but you are effective.
Now, about the results. The skills that you've learned stay with you forever. Again the efficiency may vary through time, but if you've learned something it stays with you forever. The best example is ridin a bicycle or writing Once you've learned how to do it - it stays. If you don't practice it for several years, you may feel weird riding for the first time, but the skill still would be there. Now, there is difference between learning the skill itself (reading, for example) and applying this skill (reading regularly). Luckily, regular application of a skill is a skill itself! You may call it a higher level skill, or a meta-skill.
And I think many people think that this higher level skill can be replaced by the conscious effort - hence, discipline. It can be this way, but i think this is just not efficient. If you need to do something regularly, treat it as a skill and learn it. The 30-day trial is very good for that. If at the end of 30 days you still need discipline to do what you've practiced, it means that either you don't really need this skill for some reason, or you haven't really learned it. Why you couldn't learn? Well, because you may have made the skill too difficult for you to learn. It wouldn't surprise you that it is difficult to learn the skills necessary to win the Olympics. But some of the everyday skills that seem pretty easy, may be difficult as well.
I'll give you an example. When I started taking care of my finances, it was very important for me to track my expenses. So I started doing it. It was hard and required a lot of discipline (conscious effort). So I said to myself: "what makes it so hard?". It turned out that I tried to rely on my memory too much. It wasn't working. I couldn't remember all my transactions at the end of the day. So I started writing them down. To make long story short, I had to first change the pencil to a good pen, to change my large notebook to small one. Finally I came to an arrangement, when I keep all my money in my wallet and my money-traking notebook and the pen are also in my wallet and each time I pay for something, It is very easy to write it down. Before I've sorted all these small details I had to rely on discipline. Now, I just don't remember how I write my expenses down, I do without noticing and they are just there when I need them. This is what I call a "habit" - the level of mastery, when you apply a skill without effort. If you have to rely on discipline, the habit is not there yet.
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2. I'm currently setting up first plans, ideas to work my way to financial independence. I've read through the recommended books, but on a practical level I'm not all to sure what to do. So if I may ask, what did you invest in to generate passive income? Is there any advice you could give me as I approach this daunting task?  |
My portfolio is rather diverse. I keep some money in index mutual funds, both in Russia and in the US. I have invested in gold, and other precious metals. I also have both residential and commercial real estate.
I was lucky to have my own appartment in Moscow, so I've decided not to live there but to lease it and move to another appartment with rent smaller then what I get for my own and pocket the difference. My commercial real estate is nothing more then a couple of garages that I also lease. They cost around $3000 and yeld 30% returns per year. I also invest in my friends' businesses.
Your other question is a large one. I won't give advice on what to invest in. Investing is market specific and Russia is different and each person has a unique financial situation. But I would suggest that you track your expenses, figure out what your monthly expences are, especially on safety level (housing, food, basic clothing, healthcare - anything you can't survive without). Your intermediate goal would be to create enough passive income to cover these costs. Your first goal, would be to create the "cushion" fund. 3 to 6 months worth of your montly survival or total expenses. To do so you will have either create additional source of income without increasing spending, or reduce your spending or both. Simultaneously, start doing your long term plans - (retirement, buying a house, sending kids to university). For this you may need to consult with a financial advisor, or wealth planner (don't know how they are called in your country). And start looking around for investment opportunities. I don't know what they will be for you, but if you put your attention to that, they will present themselves.