It is hard these days not to be disillusioned by the people and organisations on which we could rely upon in the past, or which we thought were operating ethically. After all, as we look around us lately, the world appears to be a really crazy place.
The media almost daily seems to be exposing stories of another war, disaster, or of a wrongdoing by a businessperson, politician, bureaucrat etc. In addition, it appears many of these stories, good or bad may also be written for an ulterior motive, are blatantly false. Worse still, many other stories are not being exposed for the same reasons.
In addition, there are our own firsthand experiences which affect us personally, many of which can leave a permanent and negative footprint on us.
The question is therefore, in the year ahead, where trust is so lacking and/or is being broken, “How do we survive today and who or what can we now trust?”
The following suggestions are designed to help you maintain a positive value in your own beliefs and to have a level of respect for your own business and life decisions. The fact is that it is hard to maintain a level of positivity and move forward if you continue to always allow all the bad news to affect you negatively. Remaining positive is particularly difficult to maintain if you believe you can no longer trust any other people or organisations
In no particular order, my experience suggests the following.
Take due care to ensure you know about the people and the organisations you deal with in life and business. When one of these parties makes a decision or takes an action you disagree with, take the time to ascertain what has occurred. Afterall, no one, not even you, are perfect all the time.
It is important to know whether the decision or act that impacted you negatively was during the ordinary course of life or business, or a deliberate act of betrayal or in seeking to gain a commercial advantage at your expense. Depending on the outcome of your deliberations, you need to accept that life and business do not always go your way, and to move on.
If the actions were deliberate however, that cause you to lose faith or respect, you must deal with that party very carefully in the future, or perhaps not all. All future decisions therefore must be to protect your personal safety, or of a purely commercial nature for the benefit of your business.
Everybody makes mistakes, and every mistake is an opportunity to learn something new. A positive perspective says this learning experience is part of your business and personal growth. It is also a chance to make a change for the better in your business and personal lives, and in doing so, allows you to avoid making the same mistake again. After all, all mistakes cost money. Therefore, if you eliminate the same type of mistake reoccurring, you must save money.
Identify where you source your knowledge, and research widely for both positive and negative information. It is not good enough just to seek information that validates your thoughts and beliefs. You need to understand the negative point of view and take a positive view in order to understand and reduce any negative outcome to your interests. Alternatively, you may be able to take advantage of any negative factors to take advantage of your competitors, or any other opportunities which could arise.
Do not ignore your own life experiences as these experiences have made you the person that you have become. There would mostly likely have been many successes, the value of which should never be underestimated and forgotten when times become difficult. You would have also experienced a number of negative outcomes.
All these experiences are of value and should be considered as a learning opportunity. Every lesson learnt and applied in the future will assist you to make better educated decisions.
As you experience more situations, you are also creating a subconscious knowledge base, which is known as your “gut feelings”. These feelings are the sum of your life experiences and are not to be ignored. Rather your “gut-feelings” should be embraced. If you do that, they will serve you well in your personal and business lives.
Complete due diligence with trusted advisers. No matter what business opportunities appear, always complete due diligence to an appropriate level and commensurate to risk. Conservatism should be your predominant philosophy, however a “gut feeling” and taking a small risk occasionally should be also part of your decision-making process.
The right group of advisers and mentors will guide you well, and help you make the right decisions, whether that be conservative or taking a measured risk. These people will support you ethically and pragmatically. Furthermore, if they believe your decision may be wrong, they will always take the time to explain in a calm and measured way why based on their professional knowledge.
Beware of the word POTENTIAL when assessing new opportunities. As with all risk, there is both a negative and positive outcome which are possible. This is why the word “POTENTIAL” is one of the most dangerous words in business and life. Beware those opportunities where potential is one of the key factors and the reason to proceed with any opportunity. Unfortunately, too many proposals offer the factors of success in glowing terms and minimise the potential for loss.
Without a balanced approach to risk taking, you may miss the best and most profitable opportunities in your life. The secret is to trust yourself and your trusted advisers, plus to make those decisions in a balanced manner so as to not make any negative outcomes which may destroy your mental and financial capabilities. Even if a negative outcome occurs, it may be the best long-term outcome for your life if you learn something positive from that outcome.
Financial resources and debt. An old accountant’s words ring true. “A business without cash is not a business.” In addition, cash in pocket and cash in the bank equals freedom and time savings. You can make decisions immediately when required and take advantage of special offers or when a business or an individual may have to liquidate stock or assets quickly.
Regarding debt, as has been explained repeatedly by many other experienced professionals, there is good and bad debt. Good debt is when buying a home, or stock or other business assets at a discount. The proviso is of course you have enough cash or assets to sell to ensure you can meet all interest payments as they fall due during the life of the financial facility.
Another accountant said that an interest expense is only worth a tax deduction to extent allowed by the ATO. In Australia this means you can only claim 33% of the interest expense, and the rest of the expense is unclaimable.
In summing up therefore, cash in bank gives you the confidence and ability to operate your life or business as you see fit. Cash also allows you to quickly take up unexpected opportunities, whilst denying competitors access to the same opportunities. You also save time completing applications for finance, which may be then denied.
Debt is never free and always comes with potential losses of time and control over your business.
Understanding what is happening in the world is essential. You do not live your life or conduct business in a vacuum. As a result, you do need to understand the dominate factors which may affect your personal and business life and make appropriate decisions accordingly. Nothing stands still and laws change, costs increase, businesses start up or close, social norms change, etc.
Today, it appears too many people go around in the personal and business lives with their eyes wide shut, as in the movie with the same name. As a result, their brain is disengaged because they are afraid of change, believe they are too busy to take even a measured risk, or are distracted by their social media advices, or fail to learn from history, etc.
All these factors may result in damaging surprises and unpleasant outcomes, or of missed opportunities. A number of these negative outcomes may have been avoided if only people had taken more notice of the world around them and acted positively.
In conclusion, the media reveals these days that almost every organisation, politician, bureaucrat, business supplier, customer or people we used to trust, has been found wanting. These stories may reveal corruption, bad business practices, the breaking of people’s trust, unexpected insolvency/bankruptcy, fraud, etc.
The truth is, as always, at the end of the day, you can only rely on yourself. You can achieve this goal by working with those parties which you have learnt to trust. Of course, the proviso is that you have worked out your own business and life strategies and have developed the self-esteem to stick to them, even when times get tough.
