This is the second video in a two part series in which Jim Rohn discusses setting goals.
Andrew Peel
Posts Tagged: APeel Solutions
26
Sep 10
How do you set your goals – Part 1
Goal setting is vital for any business. This video has the legendary Jim Rohn discussing setting them.
Andrew Peel
15
Sep 10
10 Ways To Improve Your Life Part 2
If you are looking for ways to earn extra money it may surprise you working harder rarely works. Find out why?
Focus on your strengths instead of improving your weaknesses – Quite often people are told to ‘do something about their weaknesses’ in order to ‘get on’. Actually this seemingly logical advise is very illogical and is counter intuitive.
Everyone is good at a maybe five to six things and they are average at a lot more. It is easier and smarter to leverage your strengths than increase your weaknesses slowly. This is known as ‘multiplication’ over ‘incremental’ changes. It’s what is meant when a business focuses on its core business to strengthen their position.
Too much of a good thing becomes the opposite – This may seem odd however its often the case if someone spends too much time on what they perceive as a good thing they become the opposite. In the case of wanting more time the idea of having lazy days seems ideal. However the end result we are aiming for is freeing up time to do something we really want to do instead of days of doing nothing.
Extra money is very rarely the real solution to your problems – Financial independence is the aim of lifestyle of improvement. Simply piling up more money rarely leads to people being happier. If this were the case then all lottery winners would be happy. The actual fact is that 95% of lottery winners are back their pre-lottery win levels.
Absolute and relative income – The normal way to measure income is to say person A makes for example $100,000 per year sounds great. The way the new rich measure income is money and time usually by the ‘hour’.
Person A as we said earns $100,000 per year for this she works 80 hours a week for 50 weeks of the year. So she makes $25 per hour. Person B earns $50,000 per year however works 10 hours per week. So he makes $100 per hour. In other words he is four times as rich as Person A. Your relative income has to be at the minimum level you need. The anything above that you should view as relative income and work to maximise your income per hour as opposed to the hours you work.
Distress versus Eustress – Distress is something we should avoid and is based on destructive criticism. Eustress is a new concept I came across reading ‘The 4-Hour Working Week’ by Timothy Ferriss. Eustress is stress based on constructive feedback and is aimed at improving our performance. It’s the type of feedback you get from a coach to improve say your ‘golf swing’. In this case many people pay a Professional to criticise their performance and then they act on that criticism. The stress created here is eustress as it is for your good. It’s based in the Greek ‘Eu’ the word for ‘happy’.
Andrew Peel
10
Sep 10
10 Rules To Change Your Life – Part 1
Do you want to align your financial planning and budgeting with your financial independence? Timothy Ferriss’s Best Seller, ‘The Four Hour Work Week’, is based on 10 principles that challenge the status quo without being stupid. What are these rules?
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Seeing retirement as the end goal of your life is a mistake for 3 reasons:
- It assumes you have spent your working life doing something you dislike. If this is the case you should do something to change this.
- Increasing life spans mean you could be retired for 30 – 40 years. Even $1M in a retirement ‘pot’ will be low also current interest rates for savings are at an all time low.
- If the maths works for you in your current position, and you are interested and work hard a week into your retirement you will be bored.So he argues you should see retirement where you are unable to do any kind of work as a worst case scenario because you are unable to.
- Your interests and levels of energy go in cycles. Rather than spending your life doing the same thing day and day out consider an alternative. This alternative is what he calls a characteristic of the New Rich (NR). These people decide to spend X amount of time working hard on something then Y amount of time relaxing. They match the hard work to their upswing in energy.
- Be productively lazy. As far back as the late 1800′s productive laziness has been seen by the NR as a good thing. You will note there is no relationship to the number of hours you put in work and the size of your paycheck – even in commission related work. The real top earners work smart and focus on what is important and drop the unimportant. You will be recognized by your results and your results are based on your important acts.
- There is never going to be a right time. The following quote from the book puts this rule best – “If it’s important to you and you want to do it ‘eventually’ just do it and correct the course along the way”.
- Ask for forgiveness as opposed to permission. I have lived by this rule in work. It’s far better to be a troublemaker and make things change and apologize for any genuine distress caused later. People will find many reasons to stop you doing something however when you start to move they will move out of your way.
Being truly financially independent means aligning your financial budgeting and planning with this mindset. Part 2 in the next post.
8
Sep 10
How to challenge your HMRC tax demand
Getting your tax correct is a big part of financial planning and budgeting. However what if the taxman blunders?
The big news story in the UK at the moment is the scandalous mistakes made by Her Majesty’s Revenue and Customs (HMRC). Last week they owned up to blunders worth £2Bn and blamed it on – you’ve guessed it a computer system.
This week we learn the person in charge of this mess earns more than the Prime Minister and was the subject of an investigation in his previous job for siphoning off money into businesses he was associated with. He managed to leave before any action was taken and the Government put him in charge of collecting taxes. Sound judgement there then.
In addition HMRC have admitted they have 18 million open cases they are investigating. One of the first rules regarding financial education I learned is, ‘pay yourself first’.
Most of the people affected by this debacle are employees who pay tax via our Pay As You Earn (PAYE) system. Your employer deducts your tax and sends it to the HMRC. So the real question is how can the system have gone so wrong? The only logical conclusion is HMRC is incompetent. To have allowed the situation to get this bad before doing something is bordering on gross negligence.
The Government is being very quiet about some key facts and legal rights you can use to challenge a request from HMRC to pay more tax because they say you have underpaid.
- The form they send you is actually a Notification of Tax Calculation as opposed to a Tax Demand however HMRC want you to believe it’s a demand. If you receive one the first thing you should do is write back and ask for a detailed explanation of how they arrived at the calculation.
- When you do receive the detailed calculation if you still disagree then people on PAYE have 2 choices. If you have been paid your pay and have no other income then your Employer may have calculated your tax incorrectly. In that case you should contact HMRC and inform them you believe your Employer is at fault and they should contact your Employer.
- If you only have one job and the amount the HMRC says you have been paid matches your P60 (you get one at the end of the tax year from your employer) then you need a Form A19 from HMRC. Use this form and say you refuse to pay the tax because you reasonably expected your tax to be correct as you provided all the information your Employer needed. In addition most of these Notifications relate to tax year 2008/9. This is over twelve months ago and is another statutory reason to refuse to pay.
- If the HMRC refuse to accept your A19 then appeal to the HMRC Adjudicator. They are independent from the HMRC and they are legally required to ensure HMRC behave themselves.
The Government want you to believe there is nothing you can do but pay up. Just remember the principle of ‘pay yourself first’ and contest any demand for tax if it’s the fault of the HMRC. If enough people do this the Government will probably back down.
All the leading tax experts agree avoid simply paying up on the first letter. Let’s face it challenging it is only going to cost a few postage stamps. This whole episode is another example of the conspiracy against your money.
