In order to aid my progress towards success, I have discovered a tenet of protecting my relationship with those close to me pastorally and able to build relationship of those whom I can achieve a win-win situation towards our personal goals.

Okay, that last statement probably seems too long-winded. Let me simplify it. I want to achieve certain goals (success in a certain arena). However, in my circle of associates (friends, families, relatives, colleagues, etc), many a time, those who are closer to me (friends and family members) are the ones who discourage me or put me down in my ambitions when I share about my dreams and goals. Now, I’m not saying it’s all the time and I am not saying they do it out of the intention to harm me. In fact, I believe their words are often out of genuine concern to protect me from reckless decisions and foolish mistakes.

However, close proximity also means higher tendency to rub shoulders the wrong way and stepping on each others feet. While I love them (and I believe they love me too), I find it hard-going to realize or unleash my potential toward my lofty ambitions (lofty in my perception).

“You can’t do that.”

“By doing this won’t get you anywhere.”

“Play it safe. It’s too risky!”

“Don’t you know many people failed already?”

I have to keep declaring and reminding musel that: Risk comes from lack of knowledge, leading to lack of control. Action cures fear because it is the direct application of faith and courage, a form of wisdom.

Because I want to eliminate the negative influences and focus on my goals, I have come to appreciate the art of positioning myself in a conducive environment for personal growth.

I want to surround myself with people who can add value to me, people who can build me up instead of tear me down, people of similar ideals as me. But I do not want to lose my friends or spoil my relationships.

So here is my conclusion: I will keep my friends but change my peers.

Allow me to run the risk of being naggy and repeat my main point:

Keep my friends; change my peers.

What is considered as a worthy financial risk?

Definition of a financial risk
I define a financial risk as: the ability / inability to be bound by the asset / liability one holds on to.

Risk is lack of control
Is crossing a traffic light less risky than driving on the road? Is using a knife more risky than using a scissors?

Risk is high for the lack of control. The less the knowledge you have for the subject, the more risky it is as compared to someone else who has more knowledge. Lack of knowledge means lack to options to choose. While more knowledge doesn’t necessarily guarantee success (and may even arise information overload, leading to analysis paralysis), it does allow the development of wisdom through experience (I define wisdom as the application of knowledge).

So back to the topic: is crossing a traffic light more risky than driving on the road? As mentioned, it depends on how much control you have (and knowledge you can apply). If you are going to drive a car, wouldn’t you first get yourself passed with a license and then insurances for your life and your car? Likewise, if you can prepare yourself by equipping yourself with the necessary knowledge, you will be able to make appropriate decisions when the time calls for your action. More knowledge, more control, less risk.

How to lower financial risk?
I asked myself this question when I was in my university days and I have come to a simple but powerful conclusion:

Increase financial intelligence.

In other words, I resolved to increase my knowledge on finance. I resolved to apply all my financial knowledge in as concerted a manner as possible.

This point is so important I am going to reiterate it. The best way against financial risk is to build on your financial education.

Your greatest financial asset is your financial intelligence.

Here, I find it good to recall the definition of a financial risk. A financial risk is the ability / inability to be bound by the asset / liability one holds on to.

In a simplified explanation suffice for this article, I mean that:

The more assets I hold, the less risk I am exposed to; the more liabilities I hold, the more risk I bear.

Assets put money into my pockets;
Liabilities take money out of my pocket.
[Click here for more details I write on the definition of assets and liabilities.]

Examples
To put this into context, I will raise up a few examples. They may sound a bit over-simplified and that is for the sole purpose of driving the key points across. As a caveat, I hereby declare that I might be wrong and I am often wrong; so if you feel that what I am saying is grossly in disagreement with your beliefs, please feel free to inform me. I really appreciate your help and kindness. You may also drop a comment. I promise I will do my best to answer and discuss with you for the elaboration of my message.

Example 1 – How many clients do you have?
Are the clients of your boss your clients, really? For many, we probably think that it is a ‘yes’. For me, I think otherwise. If I work for my boss as an employee, I really only have one client, and that is my boss.

Contrast this to a business owner or a self-employed. They would have many clients o their own.

Whose financial risk when measured in terms of number of clients is higher?

Example 2 – Savings plan for insurance policy?
I have several insurance agents recommending their lifetime savings plan for me. While I am not against these type of insurance policies, I personally prefer higher liquidity of my cash.

I definitely would go for accident/death and hospitalization insurance coverage, though.

So why not the savings plan? I have yet to find any insurance savings plan that can guarantee a higher return than the rate of inflation or other investment vehicles within my knowledge (circle of competence).

I am not fond of the:

• Low liquidity due to the penalty of withdrawal before the maturity date
• Low rate of return compared to inflation and investments

If I hold such a plan, I feel like i am actually holding a liability, because I make the commitment to “pay” my “savings”. I become bound.

However, for the less financially savvy, this is one way to safeguard them from over-spending out of ill-discipline.

For the more financially savvy, if you can get a higher return from other instruments and you have the discipline to invest your savings (anywhere else with a higher liquidity), what would you do when offered a lifetime savings plan?

Example 3 – Is my house an asset?
If you find yourself generating income from your house, such as rental income, that can offset your monthly house expenses, such as mortgage and maintenance fees, your house is an asset.

If you find yourself having to spend more than I earn more through you house, it is a liability.

Would you like to hold more of profitable houses or houses that you have to spend more money?

In conclusion, if you hold more assets, you are exposed to less financial risk to holding liabilities. My suggestion for you who want to become more financially savvy is to avoid holding liabilities and accumulate as many assets as possible.

An asset puts money into your pocket;

A liability takes money out of your pocket.

In essence, if the cash flowing in from your assets is more than the cash flowing out from your liabilities, you will have positive cashflow. With positive cashflow, this will allow you to save up and eventually invest, if you will.

For example, if you house is able to collect rent cheques that offset the mortgage and maintain fee monthly, your house is an asset. Otherwise, it is really just a liability because, left on its own, it sucks the money out of you whether you do anything or not.

The key is to accumulate assets so that your passive income can be more than your active income in every time period. Achieving this will accelerate your path to financial freedom and financial success.

As practical as it can get, the essence of the book is really in the application of the principles. While I cannot promise results, I can encourage and challenge you, who are reading this now, to pick up the book, read it yourself, and test out the ideas and see for yourself if your life will be headed for a positive transformation.

As the author remarked, this is really an action book and he is advocating a change in lifestyle more than the mere doing of the ‘right things’ to manipulate people.

Part One: Fundamental Techniques in Handling People

1. ‘If you want to gather honey, don’t kick over the beehive.’
Don’t criticize, condemn or complain

2. The big secret of dealing with people
Give honest and sincere appreciation

3. ‘He who can do this has the whole world with him. He who cannot walks a lonely way.’
Arouse in another person an eager want

Comment:
As I read this section, I am reminded of several statements that made a lasting impression in my being. For example,

• You are important.
• Do unto others what you want others do unto you.
• Love your neighbor as yourself.
• People don’t care how much you know until they know how much you care about them.

Part Two: Six Ways to Make People Like You

1. Do this and you’ll be welcome anywhere
Be genuinely interested in people

2. A simple way to make a good first impression
Smile     ^__________^

3. If you don’t do this, you are headed for trouble
Remember nam

4. An easy way to become a good conversationalist
Be a good listener. Encourage others to talk about themselves.

5. How to interest people
Talk in terms of the other person’s interest

6. How to make people like you instantly
Make the other person feel important sincerely

Comment:
I suppose this section is as plain as it can be to bring across the author’s insights. If you desire popularity, this section alone is powerful enough to assist you to your goal. Reading this section opened my eyes to be more humble and to be a better friend to my fellow mankind.

Part Three: How to Win People to Your Way of Thinking

1. You can’t win an argument
Avoid argument

2. A sure way to make enemies – and how to avoid it
Never say “You’re wrong”. Show respect for others’ opinion

3. If you’re wrong, admit it
If you’re wrong, admit it quickly and emphatically (clear and straightforward)

4. A drop of honey
Begin in a friendly way

5. The secret of Socrates
Get the person saying ‘Yes, yes’ immediately

6. The safety valve in handling complaints
Let the other person do a good deal of the talking

7. How to get cooperation
Let the other person feel that the idea is his / hers

8. A formula that will work wonders for you
Try honestly to see things from the other person’s point of view

9. What everybody wants
Be sympathetic with the other person’s ideas and desires

10. An appeal that everybody likes
Appeal to the nobler motives

11. The movies do it. TV does it. Why don’t you do it?
Dramatize your ideas

12. When nothing else works. Try this
Throw down a challenge

Comment:
In this section, you’ll be able to find principles on to influence people. In essence, you’ll find ideas related to ‘how to sell’. Notice how frequent the phrase ‘the other person’ appears. It is really all about the other person.

Part Four: Be a Leader – How to Change People Without Giving Offence or Arousing Resentment

1. If you must find fault, this is the way to begin
Begin with praise and honest appreciation.

2. How to criticize and not be hated for it
Call attention to people’s mistakes indirectly

3. Talk about your own mistakes first
Talk about your own mistakes before criticizing the other person

4. No one likes to take orders
Ask questions instead of giving direct orders

5. Let the other person save face

6. How to spur people on to success
Praise the slightest improvement, and praise every improvement
Be hearty in your approbation and lavish in your praise

7. Give the other person a fine reputation to live up to

8. Make the fault seem easy to correct
Use encouragement.
Make the fault seem easy to correct.

9. Making people glad to do what you want
Make the other person happy about doing the thing you suggest

Comment:
This section talks about the touchy issue of handling the unpleasant. Most of my peers tend to avoid confrontation and ‘sweep the matter under the carpet’, leaving the problems that need to be solved unsolved for a long time, resulting in unspoken tensions. If you can do this well, you’ll not only be a good manager, you’ll be an awesome leader!

For a PDF of Communication Principles derived from this book, simply click on Communication Principles.

Feel free to drop a comment or contact me directly and I will do my best to get back to you as soon as possible!

Curious, I decided to pick up the book at one of my local bookstores and immerse myself of its content. It is indeed one of a must-read I’d recommend. Originally published in 1937, his is not just a classic text. It is timeless!

It addresses a need that has always been in demand by the mankind since long ago. With simple principles and plenty of real-life stories to function as encouraging testimonies, the book provides practical insights to the question:

How can I improve my relationships?

The book promises to help its reader achieve eight things, namely:

• Get out of a mental rut, think new thoughts, acquire new visions, and discover new ambitions.
• Make friends quickly and easily.
• Increase your popularity.
• Win people to your way of thinking.
• Increase your influence, your prestige, and your ability to get things done.
• Handle complaints, avoid arguments, and keep your human contacts smooth and pleasant.
• Become a better speaker, a more entertaining conversationalist.
• Arouse enthusiasm among your associates.

Because I believe nothing speaks louder than the actual content of the book to prove how valuable it can be to you as it is for me, I am to going to extract a few of the key insights I gained directly from the book. Here are some examples.

‘If there is any one secret of success, it lies in the ability to get the other person’s point of view and see things from that person’s angle as well as from your own.’
- Henry Ford, founder of Ford Motor Company

‘There is nothing else that so kills the ambitions of a person as criticisms from superiors. I never criticize anyone. I believe in giving a person incentive to work. So I am anxious to praise but loath to find fault. If I like anything, I am hearty in my approbation and lavish in my praise.’
- Charles Schwab, first president of United States Steel Company handpicked by Andrew Carnegie

‘Action springs out of what we fundamentally desire… and the best piece of advice which can be given to would-be persuaders, whether in business, in the home, in the school, in politics, is: First, arouse in the other person and eager want. He who can do this has the whole world with him. He who cannot walks a lonely way.’
- Harry A. Overstreet, author of ‘Influencing Human Behaviour’

This is one of those books that I highly recommend for reading AND applying. It derives from real-life studies and research. It is more practical than academic. It is simple to understand. Yes, even though it was written in the 30s, it is still simple to understand!

If this is what you’re looking for, do check it out.

Now, as a way to show my appreciation for you, my readers, I have also prepared a short compilation of the key points I gathered from the book. For more information, you may find it on:
www.lowhanyew.com/how-to-win-friends-and-influence-people-key-points.

Thank you for your support.

Feel free to drop a comment or contact me directly and I will do my best to get back to you as soon as possible!

In other words, I define theory as a statement of a timeless principle derived from a proven hypothesis. It is largely a rule, created by man, derived from the realization of truth.

If your assumptions are wrong, your theory will be flawed.

Definitions are very important. If you define something differently, your assumptions will be different too. Hence, your interpretation of someone else’s theory would be different as well.

So this is my conclusion,…

…. For a theory to work, the assumptions must be correct.

Feel free to drop your comments to share your thoughts!

The rich will always take note of the percentage involved in every kind of numerical transactions. The poor may well miss the point in viewing transactions this way.

For example, suppose Mr. Albert (Person A) and Mr. Bernard (Person B) decides to make a deal and have a monetary transaction. Let’s say A is selling B a toy and it originally has a selling price of $100. Now because B is a friend of A, and A decided to give a discounted price of $80 for B as a token of appreciation.

$100 –> $80

To emphasize on the absolute numbers would be to think in absolute terms, that is, $20 is shaved off the $100.

$100 – $20 = $80

To emphasize on the relative numbers would be to think in relative terms, that is, $20 discount off $100 is a 20% discount. To think in relativity is to think in terms of percentage.

$20 / $100 = 20%

In other words, now B is buying the toy at 80% of what he would otherwise pay for.

So what’s the big deal, you ask? It is a very big deal when we scale this kind of thinking into the application of our daily life.

Consider the advertisements that bombard us, as commuters, from location to location. Think of the message that says, “Just $1 per day and you can afford so and so product!”

What about this kind of message that goes, “Only a monthly installment of $200 for so and so electronic item for your precious household”?

The point I am making is: sellers want to let potential buyers feel that they are gaining an advantage by emphasizing on the short term “rewards” through emphasizing the “small” sums. However, in reality, to the prudent, when one starts to view transactions in relative terms, the true value of what is worthy and unworthy will become clearer.

Example 1:

Mobile phone plans. “Add this ring-tone function with only $5 per month in your bill”. Now multiply that with 12 months of $5 and you get $60 extra expense. To a man who has an income of $2,000, this may seem negligible. But, to those who think in relative terms, $60 of $2000 means 3% of that income just disappeared into thin air… Of course, one may argue that $5 of $2000 is only 0.25% of your monthly income. The question I’ll then ask is, is this kind of lifestyle worth sustaining for you? If you earn $20,000, does it mean you don’t mind spending an expense of $50 every month for something you don’t use? That $50 is worth about 5 days’ meal for the kid just down the alley…

Example 2: 

Daily necessities and commodities. Last time (about 10 years ago), in my country, a cup of coffee at a coffee shop costs about $0.50. Today, it costs about $1.00. To those thinking in absolute numbers, they may just think, “Oh come on! It’s just 50 cents!” But to those thinking in relative terms, it means a hefty 100% in price hike!

By being clearer on the true value, one can make better informed decisions, away from emotional impulses. 

Example 3:

Mr. Charlie (Person C) is buying a property. He found a semi-detached real estate (house) that the seller is offering at $1,300,000. Upon meeting the seller, they negotiated the price and the seller ended up proposing $1,100,000. C is super happy and decided to purchase the house because he thought, “Wow! I got $200,000 off!” It’s a 15.3% discount!

But what C did not realize is that he had failed to do his due diligence to compare the market value of similar houses. If he knew that the market value is actually $1,000,000, he’d know that he is actually paying 10% higher (premium) than what he should pay at fair value.

Such is an example of one being blinded by the absolute thinking’s temptation.

Key points:

• The rich place more emphasis in relative thinking over absolute thinking when it comes to numerical transactions
• Relative thinking is in terms of percentage
• Relativity means it involves comparisons
• Comparison requires a due diligence of getting as much information as possible

Do you know that according to Pareto Principle, around 20% of the world human population owns around 80% of the money?

The problem with resources is not in the scarsity of resources but in the ill-distribution of resources.

The way I see it: there is enough resources for the entire world to use, but for some reason or another, some are hogging on to the resources in their various forms.

I have a very simple definition of repentance.

Repentance is the renewal of the mind with the truth. 

The truth sets the recipient free.

• It liberates him of the chains of lies.
• It transforms a person from the inside, and the out.
• It is the replacement of lies with the truth in his and influenced his decision-making to live accordingly. After all, one cannot live a life of who he is not in his being for long. It is his identity. (Be-Do-Have)
• He is convicted (awareness and acknowledgement) of his wrong and desires to be right.

Repentance is the continuing effort of voluntary sanctification (cleaning process).

• The old has gone and it is going, while the new has come and is coming.
• It is a process. It is like a turnaround.

The next questions will be:

• Turn to where?
• Where did the truth come from?

That is yet another topic worth discussing, but I will end this post as it is for now. Feel free to drop a comment!

Cheers.

It is better to be roughly right than to be deadly wrong.

By applying this principle has many advantages. I use this principle as a guidelime to help me make decisions, even the tough ones. It helps me to avoid analysis paralysis.

True, there are times when one will need to have precise measurements, such as engineering the parts for rocket science. But I am not a rocket scientist or an engineer. I am more of a business person and a musician.

Let’s face it. Too often than not, unforeseen circumstances happen and we cannot (with emphasis) predict the future to every miscroscopic level. At least, not that I know of unless one possesses an all-knowing ability…

Feel free to drop a comment to let me know how you think!

Cheers!