Peer Pressure

When adults do it, we call it keeping up with joneses and when kids fall for it, we call it peer pressure. Either way, it is one of those traps that can suck one into a downward spiral. So today, let’s discuss peer pressure and how best to navigate it. I read about a story where in our local school district, kids are involved in this TikTok challenge where they steal toilet paper from the school restrooms or otherwise destroy the restroom and put a picture on TikTok. How crazy is that?

Peer pressure is nothing new. And there is nothing wrong with hanging out with friends who are trying out different things. It becomes a problem when we allow their behavior to influence our decisions. For teenagers, this is especially difficult. They are trying to get acceptance from their peers and be part of the “cool” group if you will. This is the same for adults when otherwise rational people try to keep up with the lifestyle of their peers. It all comes down to who we are as people and if we are comfortable in our skin. If we are happy with who we are, we will never try to impress other people. And this is the rub really. Most people are trying for approval from external sources. We look for validation from our colleagues and friends of the choices we make for ourselves.

Psychologists say that people overspend beyond their means just to impress other people or to fill a void within themselves. In a consumption economy, we are actually encouraging this behavior by making credit easily available to anyone and everyone without regard to the ability to pay back. A lot of these material items are flashed as a signal of wealth instead of a signal of debt.

I had an interesting conversation with my cousin a few years ago. She was visiting from India and we were chatting and she asked how come a lot of minimum wage employees were able to afford the latest iPhone. It was a great question. I explained to her that when people buy these items, they are not looking at the cost of the product but the monthly payment. Can they afford that additional $20 monthly payment, then they buy it without concern about savings or anything else. I have nothing again taking on debt for appreciating assets such as a home but when one takes on debt to pay for consumables where value deteriorates within the first few months, you are just taking the unnecessary financial burden.

This is purely a psychological issue rather than a financial education issue. People want to keep up with those around them and impress them so they splurge without regard to their own financial situation.

So how do we get out of this cycle of comparison? The first thing to realize is that happiness comes from within. No matter the external conditions, if we are content with who we are and what we have, we will not need external stimuli for our happiness. One way to develop this state of mind is through meditation. Create a daily meditation practice with an emphasis on “I have everything that I need at this moment”. Another way is to develop a gratitude practice. Be thankful for what you have and that brings contentment which leads to happiness. We have talked about both of these at length in the past. I encourage you to review our Gratitude episode as well as the Contentment episode on the YouTube channel.

The next thing you can try is to figure what your value is. If someone drives a fancy car, do you value the car or is it just for show? Once you know your values you will stop competing and that is when you will begin to see changes. It also helps when you stop following influencers on social media. They are there to paddle consumables. It is their job but that does not mean that we have to follow them. And most important thing is to realize that self-worth has no relation to material worth. They are completely detached from each other.

Once you implement some of the solutions outlined here, you will begin to feel change where you can still hang out with your friends without being in need to compare your lifestyle with theirs. I hope this is helpful in some way to you or someone you love. One thing I would strongly suggest is to instill these values in our kids at an early age. The Sooner they realize they don’t need to do anything to impress someone else, the better off they will be in their lives.

Change Is The Only Constant

I am sure you have heard the famous line from the Greek philosopher Heraclitus: Change Is The Only Constant. Some people embrace change and some people tend to resist it. Today, let’s talk about how to navigate change without affecting our minds!

Have you ever heard the term managed growth? This used to be in fashion ten or so years ago and everyone and their brother used to throw the term around. In my experience, there is no such thing as managed growth. Either you grow or you shrink. There is nothing wrong with shrinking if that is what you want but to think that you can stay constant without growing or falling back is just a fantasy. Let’s talk about a couple of real-life examples.

Let’s start with corporate America. If you have followed IBM, you will notice that IBM has a history of struggles in the past 25 years. There challenge is to stay relevant in a constantly changing environment. They had CEOs who thought they can manage the company with what they were offering and just be at a certain level and keep the business going. It sure did not work and they had some spectacular declines. Then they had some CEOs who saw the landscape around them changing and embrace that change and transformed the company. Some companies adopt and some don’t. Look at Circuit City and Best Buy. Two chains with similar offerings, one is history and one is still relevant.

Now, this is just an example in the corporate world. The same is true in other areas of society and even in our personal lives. Change does not mean financial change either. Change to me is growth. I am sure all of us have changed from where we were 10 or 20 years ago. That is a good thing. We are better for it. It sure does not seem like it though when we are going through those changes. So how do we handle stress and anxiety that may flare up due to change?

First, let’s look at what brings that stress with change. As human beings, we are wired towards the status quo. Our mind interprets change as a threat. That begins this fight, flight, or freeze response in your system. Our system thinks it is protecting us from the change! The reason for this is that the pain of loss is usually a lot greater than the pleasure of gain. So if your pain of loss is x times higher than whatever pleasure you are going to get, why take that chance? This is the real dilemma. This is what brings stress with change. A Harvard Business Review article (https://hbr.org/2012/09/ten-reasons-people-resist-chang) outlined why people resist change. These reasons include Loss of Control, Excess Uncertainty, Concerns About Competence, Ripple Effects, Past Resistance among others. If you break this down, it all boils down to just one thing. Fear of failure. More specifically, the pain that comes from that failure.

So how do we handle this stress-induced change and more importantly embrace the change? First, let’s talk about handling stress that is caused by change. The first thing to do is to make sure that we understand the consequences of change. Often, we are stressing out because we are not prepared for change. If we look at the change in a rational way and see it through all its implications, we will be able to break down what preparations we need to make for different potential outcomes of change. Once we have clear ideas as to what can happen and how we may handle it, 90% of the stress goes away. Now, we are ready for that change. I had an interesting discussion with board members of a non-profit I am involved in. We have been growing like weeds in the past three years. Some members of the board are frightened by that growth. They think this growth will change the organization and I was trying to argue that it does and it will change the organization for the better. I tried to explain how big an impact we were making and that we needed to prepare for this and take certain actions now so that we are not caught off guard. You see some people like the status quo. Taking action means making decisions and bringing in change. They are just not ready for it. Maybe someday they will be but hopefully, it is not too late because if you don’t grow, you might end up shrinking.

So how do we embrace that change? We must look at what that change brings. What kind of positive outcome may be associated with the change. We also need to look at the negative outcomes of not embracing change. Once we are clear on this, oftentimes, change actually invigorates us rather than brings stress. Hope this makes some sense and you all look at it rationally next time you are confronted with change.

Luck of the Draw

Last week we discussed victim mindset and how we should avoid blaming others for things that may be happening in our lives. Today, I want to take this one step further and examine, why things happen in our lives the way they do. We all have certain tendencies that keep us in this loop of a specific pattern. Two people trying the same thing and coming out with a different result. I call this Luck of the Draw. Let’s dig deeper.

Although our tendencies are what keeps us in a pattern, have you ever thought about what creates those tendencies within us? We are all predisposed to certain thought patterns, actions, and behavior. It all comes down to our Karma. Our karma influences our thoughts and creates tendencies that put us in these patterns whether positive or negative.

Let me give you an example. There was this famous Indian Buddhist monk named Atisha. He was one of the most recognized scholars of his time. The king of Tibet at the time decided to invite him to teach his people. Atisha happily accepted and went to Tibet. He brought a cook with him. Now Atisha’s cook was known for his bad temper. He was impolite and otherwise rude to Atisha. He would cook the food and then would ask Atisha to eat if he wanted to and would not care if the food was tasty or not. The Tibetan people were watching this drama for a few weeks. Finally, one of them could not resist. He went to Atisha and said, you know, we have good cooks here in Tibet and we are happy to lend you a couple of cooks. Why are putting up with this nonsense from your cook? Atisha had a brilliant answer. He told them he create certain karma that put him in this position and that reminds him that he needed to learn patience. His cook was both allowing him to work out his karma and teaching him how to be tolerant!

You see, all of us are put in certain situations based on our karma and we must accept that and make the best out of our situations. Warren Buffet calls this the Ovarian Lottery. Your fate in this world is decided by where you are born. If you happen to be born in a first-world country, your life will turn out one way versus if you are born in a poor country. This is karma.

So how do we get out of the karmic tendencies we have? The answer is really simple. By being mindful of every decision and every thought, you are breaking that cycle of tendency. So how do we become mindful? The first thing to do is to recognize what type of tendencies we have developed over the years. For example, some of us may tend to get into a negative thought process about someone or something, someone else may tend to make nonbeneficial decisions such as gambling, etc. Once we recognize the type of negative tendency that always ends up hurting us in the end, we can then begin to address this. One thing to be careful of here is not to take on all of our negative tendencies at once. That can get overwhelming. So let’s just focus on one tendency that we can begin to break.

Once we have identified this tendency, mindfulness will help us break the trend. We need to be mindful about when the thought or action related to that tendency begins to creep in. If we are mindfully watching when it does, we will begin to remind ourselves why we want to break that tendency. Initially, it may be difficult to break the habit and you may snap right back into it. That is perfectly OK. In my experience every three or five times you are successful at breaking that tendency, you will fall right back in once. So we start again. After a few cycles, the gap between relapse increases. Now you are not snapping back into your tendency for longer and before you know it, you have overcome this tendency.

So you see, we all have these karmic tendencies or habits. I call it luck of the draw. Our challenge is to not accept those as they are or to blame others for it but to learn to snap out of those karmic cycles. I encourage you to dig deep and identify one tendency you would like to break. It is not easy to identify but with enough introspection, you will be able to do it.

Why Me?

Have you noticed some people always ask Why Me? I was reading an article about some royalty somewhere—we shall not name names—and noticed that they were complaining about how they were getting attention in the media while appearing for a media interview! Now, these people have everything one could ask for. They were born with a silver spoon in their mouth—literally! I bet a majority of the people in this world would happily swap places with them. Even then, they thought they had this miserable life and anything that went wrong was a direct result of someone else’s action. So today, I want to talk about this victim mindset and how that is detrimental to our health and our progress.

People who have a victim mindset always have this scarcity mindset. They always feel that they have to compete for everything and with everyone. Some people wake up in the morning and are looking for things and others are to blame. That is no way to live a life. Let me tell you an interesting story. About 20 years ago, a good friend of ours was diagnosed with terminal cancer. Once we found out, I would call and talk to him every week just to have a conversation and cheer him up if you will. He was in an amazing state of mind. During one of those conversations, I casually asked if he thought if this had anything to do with the type of place he was working at. What he said was so profound, it stayed with him to date. He said, why not me? Why am I so special that a disease will skip me? He went on to say that he never complained and asked “why me” when things were going great. I had a newfound respect for my friend. You see he accepted life as it came. There was no complaining or looking for blame or anything like that. Not trying to figure out why let alone why me.

People with a victim mindset on the other hand try to blame other people for their own problems. They also tend to feel sorry for themselves. They have a negative attitude about almost every situation they come across. Because of this negativity, they some to attract people with a similar mindset so which creates its own downward spiral. In general, they don’t take responsibility for their actions. People with a victim mindset develop a setup of negative behaviors that are difficult to turn around. For example, they believe their life is somehow harder than everyone else’s and they always are looking for pity. They are pessimistic in nature and are risk-averse. They have this sense of entitlement.

Sometimes politicians are promoting a victim mindset because that is a lot easier than actually solving their problems. It’s always easy to throw money at a problem than to actually solve the problem. If one persists with a victim mindset, they may end up with permanent guilt or even depression. They may become resentful of other people and develop a tendency to thrive on drama.

Good thing there is hope. The best way to help people with a victim mindset is to show the power of generosity. If they begin to practice generosity, their ego will diminish and will allow them to see the bigger picture. Another antidote is gratitude. A gratitude mindset created an abundance mindset which is exactly the opposite of a victim mindset. If they begin to develop a gratitude mindset, eventually they will see the abundance and positivity in their lives. It is not easy to change someone who has developed a victim mindset but with a few months of gratitude practice along with generosity, you will begin to real results.

How much is enough?

I was a guest on the Mindful Fire podcast released today. So I thought it would be appropriate to talk about one question that kept coming back again and again on this podcast. Before we dig in a little about the podcast. Host of Mindful Fire Adam Coelho is a 10 year Google veteran and is passionate about financial independence and mindfulness. During our interview, he asked several times, how did I know I had enough when I decided to retire. So let’s dig into this age-old question How much is enough?

In our previous contentment discussion, we talked about how if you have food, clothing, shelter, and healthcare, you are luckier than 99.9% of the rest of the world. At times, it may not seem like that but think about it, how many people are struggling to put food on the table daily? What does that mean to be financially independent? If you are making more money than you did five or ten years ago, when do you believe you have reached a point where you have enough money without any worries for the future?

Wall Street has a formula for how much is enough. I am sure a lot of you know the classic 4% rule they have been preaching for the better part of four decades. It says that you should have 25 times your annual expenses tucked away in order to retire. Meaning, if you take a 4% annual withdrawal from your savings, based on average market returns will make sure that you outlast your money. Now, I have reservations about this formula because no two people are alike. If you own some rental real estate that is producing enough to cover your expenses, you may not need the 25 times your expenses. My point however is not about any formula. What I am here to argue is that it is a moving target. If you think about it, your expenses are much higher today than they were when you were just starting in the real world! As your income kept increasing, so did your lifestyle and expenses.

So let’s discuss how much is enough in the context of our expenses. We live in this consumption culture where everyone wants the next best thing that is being bombarded by advertisements and marketing experts. I remember, we used to use our mobile phones for three to four years on average. Now, these devices are being replaced annually or every two years at most. Does everyone need that iPhone 12? And it is just not about mobile phones. We used to live in a house for all our lives—that is where the 30-year mortgage was originated. Now people keep moving “up” every three to five years. our consumption culture is creating a lifestyle that has become so expensive that the majority of our households need two incomes to run a household. That has reduced family time and relaxation time for the entire society. We are the most tired nation on earth. Here is an interesting tidbit—people are so afraid to lose their jobs that they are checking emails on their vacation! So the first thing we need to do is reduce our consumption. That is good for us individually as well as the society as a whole—think about the resources we will save. Once we curtail our consumption, obviously it will reduce our “number” for financial independence no matter what formula we use.

Another point I would like to make is that most people think that financial independence is that destination. They will reach that someday and their life will change! It is never like that. One thing I have often advocated is to “leg in” to your financial independence. If you think you are halfway there, for example, try making some changes in your life and begin to do what you would want to do during retirement. You never know what you may and may not enjoy. So don’t wait till that someday, begin living your life today!

The last thing I would say is that figure out your purpose. Because there is only so much golf one can play. If you are fortunate enough to reach that financial independence, you may get bored or even depressed if you don’t have a plan for it. The best way to avoid that is to make sure that you have a purpose for which you are passionate. Whatever that may be for you but it is important to figure that out before you call it quits. I may have said this before but start volunteering for your favorite cause. Just a couple of hours per week. You would be amazed what giving back does to our mental health.