I’ve got one new favorite book: On Writing by Stephen King. It was a great experience reading it. Not only did I learn a lot from the book, but also I love the writing style. I wish I could write like that!

Moreover, I found that many lessons from the book are applicable not just to writing, but also to life and career in general. They are essential for being successful in what you do.

Here are 17 lessons I learn from On Writing:

1. Do what you love

I know that this advice has been repeated many times. But it’s true. And King put it in a way I’ve never seen before:

For me, not working is the real work. When I’m writing, it’s all the playground…

I love the way he put it. Not working is the real work. Writing time is all the playground. Can you say that about your work? I enjoy what I’m doing, but I still can’t say that not working is the real work. This guy loves his craft at a different level and he’s serious about it. He made similar statements several times throughout the book.

Now, what if you do something that you don’t love? King’s advice is to move to something else:

If there’s no joy in it, it’s just no good. It’s best to go on to some other area, where… the fun quotient higher.

How high is the fun quotient of your work? Is there joy in it? Or is joy the last word you would associate with your work?

2. Practice, practice, practice

Hard practice is a must for being successful. In fact, this is why it’s important for you to do what you love. If you enjoy what you’re doing, you’ll be able to endure the hard practice needed for success.

The sort of strenuous reading and writing program I advocate – four to six hours a day, every day – will not seem strenuous if you really enjoy doing these things…

… practice is invaluable (and should feel good, really not like practice at all)…

If you don’t enjoy the journey, it’s unlikely that you will be able to pay the price for success. Joy is a big factor that makes the difference between those who make it and those who don’t.

3. Be serious

If you can take it seriously, we can do business.

Only if you are serious about what you do can you expect to achieve meaningful results. Many people enjoy what they do but they do it only as a hobby. Being serious means being committed to master your field.

4. Ignore naysayers

If you write… someone will try to make you feel lousy about it, that’s all.

Naysayers are there. It’s just a fact of life. There are always people who try to discourage you no matter how hard you’ve tried. So rather than getting discouraged by them, simply ignore them and move on.

5. Have a supporter

Writing is a lonely job. Having someone who believes in you makes a lot of difference.

This applies not just to writing. Whatever field you choose, you need to have someone who support you. You need to have someone who still believes in you when others don’t.

6. Immerse yourself in the field

If you want to be a writer, you must do two things above all others: read a lot and write a lot.

Do you want to get good at something? Fill your life with it. Live it and breathe it. More than just making you familiar with the field, it sharpens your intuition to the point where you can make sound judgment intuitively (like what Malcolm Gladwell discussed in Blink).

7. Be consistent

I like to get ten pages a day, which amounts to 2,000 words… only under dire circumstances do I allow myself to shutdown before I get my 2,000 words.

The longer you keep to these basics, the easier the act of writing will become.

Being consistent isn’t easy, but it pays off. While what you do daily might seem simple, doing it consistently will make a big difference in the long term.

8. Study the work of others

You have to read widely, constantly refining (and redefining) your own work as you do so.

Studying the work of others gives you two important benefits. First, it teaches you about the right way to do things. Second, it teaches you about the wrong way to do things. Both are useful.

9. Study the market

You should also pick up the writers’ journal and buy a copy of Writer’s Market…

… the most important thing you can do for yourself is read the market.

In addition to studying the work of others, you should study the market. You need to know what the current state of the market is. What are the opportunities? What are the challenges? Where is the market going? By understanding the market, you’ll be able to make the right decisions.

10. Spot ideas

Your job isn’t to find these ideas but to recognize them when they show up.

To get ideas, rather than trying to find something new on your own, you just need to spot the ideas around you. That’s why one key to innovation is being a good observer.

11. Keep the momentum going

Once I start work on a project, I don’t stop and I don’t slow down unless I absolutely have to.

When the momentum is there, you can complete your work with much less time and energy. So keep the momentum going and don’t lose it.

12. Get the first draft out as quickly as possible

…downloading what’s in my head directly to the page, I write as fast as I can…

Don’t try to be perfect the first time. Simply get the first draft of your work out and refine from there. Working in iterations is the best way to get something done.

13. Get rid of the inessentials

When you rewrite, your main job is taking out all the things that are not the story.

In your first iteration, there is a good chance that many unnecessary things are still there. That’s fine because your job is to get the first version done as quickly as possible. But in the next iterations, you should get rid of them. Leave only what needs to be there and nothing else.

14. Be your own first customer

I am, after all, not just the novel’s creator but its first reader.

When you become the creator of a work, it’s often difficult to see from the perspective of the customers. But that’s important because otherwise your work might go to the the wrong direction. So be your own first customer. Take a critical look at your work. Is it something that you want to use? Is there anything that you need to change?

15. Don’t do it for the money

Do you do it for the money, honey? The answer is no. Don’t now and never did… I never set a single word down on paper with the thought of being paid for it.

Money is a bad motivation to have. It could make you ignore your heart and you might end up living someone else’s life instead of your own.

16. Do it for the joy

I have written because it fulfilled me… I did it for the pure joy of the thing. And if you can do it for joy, you can do it forever.

This is perhaps the most important lesson in the book. If you do something for the joy of it, not only can you endure the difficult journey to success but also your life will be fulfilling. What’s better than that?

17. Do it to enrich others and yourself

Writing isn’t about making money, getting famous,… In the end, it’s about enriching the lives of those who will read your work, and enriching your own life, as well.

A nice conclusion of the book. If you live a life that enriches others and yourself, you’re living a great life.

Photo by Reinante El Pintor de Fuego

Note: This is a guest post from Steve Scott of Steve Scott Site

You’ve probably noticed that the market is saturated with self-help guides, audio books, and outrageously-priced seminars by motivational speakers. This is simply proof that most people enjoy receiving advice from others.

Here are a few “tips” that I’ve discovered on my own. Some of them are a bit humorous, but most of them are common sense. I think if you do your best to take them to heart, you’ll start to notice a clearer head and a bigger smile on your face.

1. Wake up at a reasonable hour. Everyone’s schedule is different, so if you work the night shift, your “reasonable hour” may be noon, but it’s a good idea to wake up before you have to. When I was in college I had the horrible habit of crawling out of bed ten minutes before I had to be in class. Although nearly everyone I knew at the time did the same exact thing, looking back, I see how stupid it really was. If I have a ten o’clock appointment, I wake up at seven so I can get in some exercise, take a shower, and eat breakfast before I run out the door.

2. Think of something that you have to look forward to. Once the alarm goes off and the initial confusion of “Ugh, it’s already morning!” has ended, think of something cool that you have going on in your life at the moment. Yeah, it sounds hokey, but it’s pretty helpful … and I’m sure you can think of something. Come on, anything! It can be as simple as, “Oh yeah! It’s Thursday, and that means it’s almost Friday! Weekend, here I come!” or something even better, like “The FedEx man is gonna deliver my new flat screen TV today!”

3. Look in the mirror. I’ve seen plenty of people in the movies and on TV shows who look at themselves in the mirror each morning and say things like, “You’re awesome!” or “You can do it!” before they start their day. I know this sounds relatively insane, but it helps—and I speak from experience. If you can’t tell yourself that you’re good at something and actually believe it, why should you believe anyone else who says it?

4. Take a shower and get dressed. This may be a no-brainer, but spending five or ten minutes in the shower will help clear your head and make you feel a whole lot better. Hopefully you can even find clean clothes to wear. (You know, ones that were hanging in the closet as opposed to the ones that are still in the laundry basket on the floor, wrinkled and covered in cat hair since Fluffy decided to take a nap on them.)

5. Scan the news online, read the “real” newspaper for a few minutes, or tune into the news channel on TV for a few minutes. However you get your news is up to you, but it’s a good idea to stay on top of things that are going on in the world, even though lately most of the news makes everyone angry. You shouldn’t be ignorant about issues that may affect you personally, and you’ll want to have firsthand knowledge as to what’s happening in case someone asks you about it later or tries to force their opinions on you as “the truth.”

6. Eat breakfast. Eating breakfast is a biggie that a lot of people skip, so be sure to eat something. A container of yogurt, a banana, maybe a granola bar as you run out the door … just be sure to eat. You’ll need energy to get through the morning. I like Starbucks just as much as the next guy, but a cup of coffee is not breakfast—even if it has chocolate syrup in it and whipped cream on top.

7. Make a to-do-list each day. I run my own internet business and mainly work from home (or a hotel, or wherever “home” may be at the time) so it’s a huge benefit to know what I have going on each day. Even if you spend your days at the office, you’ll still want to have some kind of agenda to follow. Set up a schedule on your Blackberry or write things down on a legal pad, but do it somehow … or you’ll wind up forgetting something important.

8. Get to work safely. Again, I mainly work from home, but if you drive to work – or ride your bike to work, or take the bus or train – do it safely. This is also why it’s a good idea to wake up relatively early. Rushing leads to speeding and speeding leads to tickets or fender benders … which will make you even later than you were going to be in the first place.

9. Take a deep breath and count to 3 when something starts to bug you. Co-workers, clients, things that aren’t going as smoothly as possible … there are dozens of things that can easily start to drive you nuts at the drop of a hat. You don’t want to wind up getting so frustrated with someone or something that you wind up going postal, so close your eyes and take a deep breath as you mentally count to three before you say something you may regret. Most likely, whatever’s bugging you isn’t as bad as you think it is.

10. Periodically take a break … away from your desk! Be sure to walk away from your desk every few hours. You’ll wind up getting frustrated if you sit there staring at your monitor nonstop, and your eyes will start to hurt. Getting up for five or ten minutes every three or four hours will not blow your entire day, believe me. You also need to take a break and eat lunch. Sitting at your desk with a Snickers bar that you got from the vending machine doesn’t count.

11. Tie up as many loose ends as possible before the work day ends. We all know that some days you’ll wind up working later than expected, but don’t make it a habit or your boss (or you) will start to assume that you really do work twelve hours each day even though you get paid for eight. Get as many things done as possible each day, but try to leave on time. There’s always tomorrow.

12. Eat dinner. I had to stress the importance of eating breakfast and lunch, so of course I’m going to remind you to eat dinner! And if today is one of those days you wind up putting in some overtime, get up from your desk to eat dinner. A carton of Chinese take-out every night of the week will begin to affect your waistline and your mood. Try to eat dinner with other people, if possible. Everyone should have friends. (You know, besides Fluffy the cat, even though I’m sure he’s cool.)

13. Enjoy a hobby after work. Whether it’s taking a bike ride or a walk, watching a movie, reading a novel, it’s a good idea to have some sort of hobby besides work! Spend an hour or two doing something that you enjoy to help get your mind off of work.

14. Unwind a bit before bed, and get ready to repeat the cycle tomorrow! Whether “unwinding” involves the above-mentioned hobby or something else, take time to chill out for a bit before hitting the sack. This will give you the ability to get a good night’s sleep, wake up, and do it all over again … and if this happens on Friday night, you probably don’t have to go to work tomorrow! Even better!

Yes, some of these fourteen tips might seem a bit common sense. The funny thing is they really work. I guarantee that implementing them into your daily routine will make you feel happier and more excited about the possibilities that each day brings!

Steve Scott is currently realizing one of his dreams by traveling throughout the world. To read more about his adventures and how he’s able to afford this reality, check out his blog at Steve Scott Site.

Photo by R’eyes

One year from now, I don’t want to be the same person as I am today. I want to grow. I want to become better and better.

One way to do that, I realize, is by expanding my personal capacity. Expanding my capacity means being able to do things I wasn’t capable of before. It means being able to handle things I previously couldn’t. If you consciously decide to expand your capacity, you will become a different person in the future. You will look back and see how much you’ve grown.

Here are eight tips to expand your personal capacity:

1. Take a new challenge

Expanding your  capacity is like weight lifting. If you are able to lift 100 pounds but keep lifting that all the time, your capacity won’t increase. You need to move to the next level and lift something heavier. It will feel difficult at first, but over time it will become easy. Then, once you become comfortable with it, you should lift something even heavier.

Similarly, to expand your capacity you must take new challenges beyond your comfort zone. Work on something you aren’t comfortable with.

Look at your current situation. How long have you been doing what you’re doing? When was the last time you took a new challenge? If you find yourself in comfort zone then shake things up. Find a new challenge and take it.

In my case, I realize that I didn’t take a new challenge in the last year or two. I lifted the same weight for far too long. Now that I learn the importance of expanding my capacity, I’m working on a new challenge.

2. Make sure it’s exciting

When you are looking for a challenge to take, make sure that it’s something you are excited about. I’ve tried to work on a challenge I wasn’t excited about. The results? Wasted time, money, and effort. Working on something that’s not exciting feels like a chore. I must push myself to do it.

On the other hand, if I work on something exciting then working on it feels effortless. Sure, there are times when I need to motivate myself, but the total amount of energy needed to get things going is much, much lower. Furthermore, I enjoy the time working on it. I want more of it, not less. As a result, I move further ahead.

3. Make it fun

Not only should you take an exciting challenge, but also you should make the process fun. In my case, I like to think of a challenge as a game. I have a challenge to overcome and I have some resources at hand. I need to allocate my resources wisely and work my way over the obstacles. There are surprises and pitfalls along the way. Isn’t it just like a game?

Thinking of a challenge as a game makes me more excited about it. It also makes it easier to handle failure. After all, loses are normal in games. They are something I need to go through if I want to become a better player. Rather than discouraging me, they make me even more motivated to increase my playing skill.

4. Focus

If the challenge is beyond your comfort zone, as it should be, then it won’t be easy. You need to focus your heart and mind on it. Don’t spread yourself too thin. Don’t try to do too many things at once. That’s a sure recipe for failure.

5. Invest

Some people are willing to take a new challenge but hesitant to invest their time and money in it. But if it’s a worthy challenge then it’s worth your time and money. There’s no reason not to invest in it.

Remember the game metaphor above? The resources you have in a game are there to help you achieve the game’s objective. You should invest them in weapons, buildings, and whatever other tools you need to achieve the objective. Similarly, you should invest your resources to expand your capacity. Don’t do it above your mean, of course, but you get the point.

6. Take risks

The more you know about something, the less the risks involved. But in the beginning, when you are working on something new, risks are inevitable. Don’t be afraid to take them. Those who aren’t willing to take risks may never move to the next level. You might fail but you will learn a lot in the process. They will make you a better player.

People who just play safe will regret all the opportunities they’ve wasted in life. I don’t want to be that kind of people. I might fail, but at least I won’t regret myself for not trying.

7. Build the desire to “kill”

Your progress will be faster if you have the desire to “kill” your “enemy”, which in this case is the challenge you take. This desire will fuel your effort every day to get better at what you do. It will also make you more resilient in the face of difficulties and failures. Without such a desire, your progress will be slow.

8. Move on

Once you achieve certain level of mastery in a particular challenge, move on and take a new, more difficult challenge. Don’t stop and be comfortable with where you are. Keep expanding your capacity.

Photo by Jakob Montrasio

Note: This is a guest post from Lisa H of Getting to Zen 

We have all worked at places that we were less than excited to get up in the mornings and go to; this is an awful feeling. It is much more pleasurable, and less stressful to go to a work environment that is filled with positivity and enjoyment. A positive work environment is not only important for our physical, mental and emotional health, but is also important for the results that we produce for the company. The better we feel at work, the more likely we will take pride in our job activities and be loyal towards our place of employment.

So let’s look at some ways to create a positive working environment.

1. Accept the right position

The first step to creating a positive work environment is to secure a position that positively suits you. Before you accept a position, you should know what your key skills are; what type of work you want to do, what kind of role you would like, where you see yourself in five years, and what kind of environment you thrive in. Knowing the answers to these questions will help you to recognize those opportunities that meet those criteria, giving you a running start.

2. Be a positive person

Present an attitude of positivity and approachability. Show coworkers that you are available and wiling to help them. Walk around with a smile, and make eye contact with those you pass in the hallways. Be friendly, pleasant and nice. Talk with kindness, encouragement, civility, and respect. Ask questions before making assumptions. Be fun to work with. Listen to others with interest; and finally, don’t complain, whine or gossip.

3. Take responsibility

Take responsibility for the direction of your career. Ultimately you are responsible for creating an environment in which you can learn and grow. The longer you stay on a “dead-end” career path, the harder it will be to stay positive. If you are not happy with the current directions of your career, communicate that to your manager if you wish to stay with the company; otherwise, look for another job that you feel is a better match.

4. Communicate with your manager

Meet with your manager regularly to ensure you are on track for meeting his or her expectations, and your performance goals. Don’t always wait for your manager to reach out to you. Informing your manager about the status of the activities you are performing shows that you are credible, trustworthy, interested in the business, and committed to your job. You may even consider sending a weekly status report indicating what you are working on, what you have completed, and what you have pending.

5. Be social

Interact with your colleagues in a non-working way. Join a company team or group. Bring a few games in that you can play over your lunch break. Celebrate birthdays, and other special events. Cultivate working friendships. Organize a competitive sporting event. Organize a departmental pot luck lunch. There are so many things that you can do to connect with others while at work.

So, if you are wondering what a positive work environment looks like, here are some signs.

• You are doing a job that you enjoy
• Your ideas are valued
• Your creativity is encouraged
• You feel appreciated
• The job matches your skill set
• You have work friends that you can talk to
• Your manager is approachable
• There is room for you to grow
• You are recognized when you do good work
• You feel like a part of a team
• You look forward to coming to work
• You are respected
• You are happy while at work
• Work is fun

See you in the comments.

Lisa H (aka RunningBear) is a technical writer living in Phoenixville, Pennsylvania. She enjoys long distance running, cooking, sewing and blogging. Her blog, Getting to Zen, includes articles on personal development, enlightenment, consciousness and awareness.

Photo by mudpig

Do you have a set of productivity tools that you consider essential? I do and here I’d like to share them with you. But, to prevent the post from being all over the place, I limit the scope only to programs that I install on my computer (which is a Windows machine). I don’t include any web application here.

Of course, the tools that work for me don’t necessarily work for you. But I hope that you will find something useful here.

I’m not the kind of person who likes to change my tools whenever something fancier comes out. Once I find a tool that works, I usually stick with it unless I find a very strong reason to move to something else. That’s why I’ve used most of the tools below for years.

Here are my essential productivity tools:

1. Firefox

Firefox with its add-ons has become an integral part of my online life. I often don’t realize how important it is until I come across a computer that doesn’t have one. I feel powerless when I use such a computer. I can no longer do things that have become second nature to me. That’s why the first thing I do when I use a new computer is to install Firefox and my favorite add-ons.

Here are the add-ons that I consider essential:

• Scrapbook
  Scrapbook has been my reference system for years. There are already thousands of articles and clips in my Scrapbook library.
• Alexa Sparky
  When I come to a site, I usually take a quick glance at its Alexa rank to have an estimate of the site’s popularity. Alexa shows the traffic rank of a web site, so the smaller the number is, the higher the traffic it has. Alexa is far from perfect, but it serves as a rough estimate for me.
• SEO Quake
  Being a blogger, I often need to do an online research about other sites or certain search engine queries. SEO Quake has become an indispensable tool for this. It makes my research way easier to do.
• Xmarks
  I often bookmark interesting sites I come across. Xmarks backs up my bookmarks and synchronizes them across different computers.

2. Microsoft OneNote

OneNote has become an “extension” of my brain. Getting Things Done states that you need to put everything out of your head into a trusted system. OneNote is a core component of my trusted system. I put practically all of my notes and ideas there. I also use it to manage my to-do list.

I especially like OneNote’s collapsing and expanding feature since it helps me see my notes and ideas in the level of detail I desire. When I want to see more details, I just need to expand the node. When I want to see the big picture, I can just collapse it. This feature has helped me tremendously over the years.

On a side note, I’m currently exploring Evernote. I recently bought a Mac and I need something that works on both my Windows and Mac machines. Evernote fills this need nicely because it syncs data automatically between machines. Unfortunately, it doesn’t have OneNote’s collapsing and expanding feature (or perhaps I miss it?). My primary note-taking tool is still OneNote, but I might expand my use of Evernote in the future.

3. Microsoft Outlook

I use Outlook to manage my calendar, not my emails. I actually hesitated to include it here because it’s easily replaceable with other alternatives (such as Google Calendar), but I decided to include it anyway because calendaring system is an essential part of my productivity system. I use Outlook simply because it synchronizes with my cell phone.

4. Cool Timer

There are many benefits of using a timer. In essence, using a timer helps you become more productive. I use timer a lot in my daily workflow and Cool Timer has become my timer of choice for several years. It’s a simple timer that you can set to function either as a countdown timer or as a stopwatch.

5. WinKey + MemoKeys

I’m a fan of using keyboard shortcuts. WinKey allows me to set shortcuts for commonly used programs and files so that they are only one keystroke away.

On the other hand, MemoKeys gives me shortcut keys for commonly used text. For example, I have a shortcut for my email address. Whenever I need to give my email address in an online form, I just need to press the shortcut and it’s done.

6. Everything

Have you ever forgot where a file is in your computer? Perhaps you have to create a report and forget where a file you need is. I often found myself in such a situation and it was frustrating.

Everything solves the problem for me. Unlike many other desktop search tools (such as Google Desktop) that searches the content of all files, this tool searches just the names of the files. That’s exactly what I need. Furthermore, since it works only with file names, it’s also way lighter and faster than other desktop search tools.

***

In addition the the tools above, there are other tools that aren’t directly related to productivity but which I consider essential. Here they are:

1. Microsoft Money

Money is the tool I use to manage my personal finance. Though I miss some transactions here and there, I’ve been recording my financial transactions in Money for years. Money makes it easy for me to see where my money went in any period of time. It also helps me see how my investment portfolio performs.

Money is now discontinued by Microsoft, so you might want to use other programs like Quicken or Mint to manage your personal finance.

2. KeePass

If you want to have a secure online life, using good passwords is important. Moreover, you should use different passwords for different sites. This way when someone stole your password for one site, he wouldn’t be able to use it to attack your other online accounts.

KeePass is the solution I use for this. It helps me generate good, strong password for every site I ‘m interested in and store them in an encrypted file at my local computer. I need to remember just one password, the one used to open the KeePass file.

3. DropBox

Isn’t it nice if you have all your important files backed up automatically without you even being aware of it? That’s what DropBox does. DropBox is the newest tool in my toolbox. I now save all of my important files in the DropBox folder so that they will always be backed up to an online storage.

4. iTunes

This tool is essential for me not because of its music playing capability but because it helps me find a lot of great content. I love to learn and iTunes has become an important source of materials in the form of podcasts and lectures.

***

These are the tools that I use practically every day. What about you? What tools do you think are essential?

Photo by flattop341

Do you have idle potentials that you don’t develop? I have one: coding.

I remember that when I was in high school I often spent time coding just for fun. At that time, I had a 80386 computer with 4 MB memory (it’s amazing how people could live with just 4 MB memory back then – it’s not enough to run even an empty browser window today!). I could spend hours writing programs (mostly simple games) and enjoyed every moment of it. But in the last few years I no longer did any serious coding. I still coded a bit because I teach programming, but I no longer considered it a fun it used to be and spent most of my time on other interests instead.

I recently realized that to live my life to the fullest, I need to make the most out of my potentials. Just think about it. If you are capable of doing something but don’t do it, can you say that you are living your life to the fullest? I don’t think so. You can only say that if you develop your potential.

That led me to redevelop my coding talent. It’s something I enjoyed doing, but for years I’ve left it gathering dust. I’m digging into it again these days and what an exciting world I find! There are many possibilities today that weren’t possible even a few years ago.

So back to the question: what idle potentials do you have? Here are three ways to discover them:

1. Remember the things you enjoyed doing. Is there anything you enjoyed doing in the past that you no longer do these days? It could be an old hobby or the way you spent your spare time. Whatever it is, there’s a good chance that you can develop it.
2. Remember the things you’re trained in. If you’ve been trained in a particular skill in the past then you can work on it again. You may later use that skill to complement your other skills.
3. Ask people around you. People who are close to you can give you hints about your idle potentials. They could remind you of an event in the past that you’ve forgotten about. Ask them about it and listen to what they say.

After discovering your idle potentials, here are some tips to develop them:

1. Find the fun. It’s hard to dig into something if you don’t enjoy it, so try to find the fun in it. Remember what made you excited about it in the past. Was it the sense of challenge? Was it the thrill of accomplishing something? Once you find the fun, the rest is easier.
2. Find good resources. It will be much easier for you to develop your potential if you have good resources at hand. Obviously, you can use search engines to find them. You can also find relevant links at Delicious. For instance, delicious.com/popular/design gives you popular links in design. Finding relevant videos at Youtube or other video sites is also helpful because it could be more fun to learn something through videos.
3. Work on projects. The best way to develop your talent is working on projects. It doesn’t have to be a big project; it could be a small project that you can finish in just a few days. The nice thing about working on projects is that you put your talent to practical use and you feel the satisfaction of getting tangible results. That will motivate you even further.
4. Find companions. Having good companions around you helps you develop your potential faster. You can brainstorm with them and encourage one another. At the end, everyone wins.
5. Synergize your potentials. Rather than just developing your potentials independently, find ways to synergize them with your other skills or knowledge. If you have a project using talent A, find ways to use talent B to add value to it. This way you will create a lot more value for other people that will in turn open new opportunities for you.

What do you think? How do you develop your potentials?

Photo by ralphbijker

Do you believe in success without risk? I just read The Warren Buffett Way and there’s an interesting passage there about how Warren Buffett considers risk:

He does not add a risk premium to his formula for the simple reason that he avoids risk…

“I put a heavy weight on certainty,” he says. “If you do that, the whole idea of a risk factor doesn’t make any sense to me. Risk comes from not knowing what you’re doing.”

Interesting, isn’t it? This is similar to what Malcolm Gladwell wrote in The Sure Thing. Gladwell argues that successful entrepreneurs, contrary to the conventional wisdom, actually don’t take risk. Instead, they are looking for “the sure thing”, the thing that can give them success with the least amount of uncertainty.

Knowing that Buffett has similar idea makes me really interested. Is it true? Is there really such a thing as risk-free success?

Here are five principles of risk-free success that I learn from The Warren Buffett Way:

1. Build your competence

If risk comes from not knowing what you’re doing, then eliminating risk means you must know what you’re doing. So it’s essential that you build your competence in the field you’re interested in. The best way to do that is by finding a mentor (Buffett was a mentee of Benjamin Graham) but you can also learn by reading books or talking with people. The important thing is that you should test your knowledge in the real world. It gives you the feedback necessary to quickly build your competence.

2. Never move out of your circle of competence

Everyone has a circle of competence. You need to know yours and be careful not to move out of it. Buffett, for instance, never invests in technology companies for the simple reason that he doesn’t understand them. Even during the dot-com boom when everyone rushed to buy technology stocks, he remained unaffected. Doing something outside of your circle of competence invites a great deal of risk.

3. Master your emotions

You might wonder: if people don’t know what they are doing, then why do they do it? The answer is that they can’t control their emotions. There are two primary emotions at work here: fear and greed. When they see that other people profit from a trade, greed makes them follow the crowd even though they don’t understand what they’re doing. And when they see that other people avoid something, they also follow the crowd because of fear. Your emotions make you do something that you don’t know. That’s why essential to master them.

4. Do your homework

It takes a lot of work to be certain about the prospect of a business. In Buffett’s case, he analyzes different aspects of the business such as its economic performance, management team, track record, and more. Only after doing the research can he be sure whether or not a business is worth investing in.

Similarly, you need to do your homework for the opportunities that come your way. Just because everyone else says that it’s good (or bad) doesn’t necessarily mean that it’s indeed good (or bad).

5. Be patient

This is related to mastering your emotions, but I think it’s worth a deeper look. Patience is one important lesson I learn from Warren Buffett. He said that one strength of his company is, strangely, inactivity. Other managers are often “addicted” to activity which makes them trade a lot of mediocre stocks. Buffett, on the other hand, is patient enough to wait for the great opportunity to come. This is probably one of the biggest reason why people do what they don’t know: they can’t wait long enough. Greed (to get quick gains) or fear (of not looking good in front of others) are at play here.

***

The next time you are about to take a risk, stop for a moment and ask yourself:

• Do I know what I’m doing?
  • Is it in my circle of competence?
  • Have I done my homework?

• Do I master my emotions?
  • Are greed or fear at play?
  • Am I being impatient?

By being honest with your answers, you can avoid many unnecessary troubles.

Photo by Search Engine People Blog

That’s an important question to ask in your career. Why? Because the stronger your bargaining power is, the higher the price you can ask for your skills. On the other hand, if your bargaining power is weak then you risk being undervalued by the market. You might get paid less than you deserve.

There is a scene in a recent episode of The Apprentice UK (one of just a handful of TV shows I watch, by the way) that clearly describes this principle. The teams were given two vans full of fishes each and they had to sell all of them before 7 p.m. One team, being very close to the deadline, desperately needed to sell all the fishes that were left. They went to a law office and tried to sell the fishes there. The price negotiation between the team and the potential buyer was interesting. It went something like this (I don’t remember the exact numbers so these are approximations):

• Team: 130 pounds  Buyer: 50 pounds
• Team: 100 pounds  Buyer: 50 pounds
• Team: 75 pounds  Buyer: 50 pounds
• Team: 55 pounds  Buyer: 50 pounds
• Final price: 50 pounds

Do you see how unbalanced the negotiation process was? The team reduced their asking price significantly over time but the buyer never increased theirs, not even by one pound.

Why did it happen? Because the buyer’s bargaining power was way stronger than the team’s. The team had no choice but to sell the fishes. The buyer, on the other hand, didn’t need the fishes. That’s why the buyer won the negotiation without conceding even one pound.

I learn one important lesson here:

To be valued by the market, you need to have strong bargaining power.

Here are some ways to increase your bargaining power:

1. Increase your intrinsic value

This goes without saying. Your intrinsic value has a big effect on your bargaining power. Your intrinsic value depends on your personal quality such as your skills, knowledge, and attitude. To increase it, you need to constantly improve yourself.

2. Avoid desperate situation

A homeowner who needs money fast is much more likely to sell her property for less than its real value. She desperately needs the money so she doesn’t have the time to wait for a better offer. Just like the case with The Apprentice’s team above, the buyer can make a ridiculous offer and still win the negotiation.

So you need to avoid being in a desperate situation. Have a cushion. Save money and build an emergency fund so that you have time to find a good offer.

3. Have options

The more options you have, the more you can prevent yourself from being undervalued. If you don’t have options, you have no choice but to take whatever offer you get no matter how bad it is. In career, getting offers from more than one companies increases your bargaining power. So does having alternative income streams.

Here are three ways to have more options:

• Build your network
  You can get information about available opportunities through your network. The stronger your network is, the more opportunities you can potentially get. These 106 tips to build your network might be helpful.
• Start a side business
  It’s not easy to build a side business while you are still having a day job, but you can start slowly. Allocate time in the evening or weekend to work on your business. Over time, it could become a strong source of income. It takes time to build a business so the earlier you start, the better.
• Develop skills in related fields
  If you are a web developer, you may want to learn about web design. If you are a writer, you may want to learn about blogging. This way you have more options in your career because you aren’t limited to just one field. Project-based learning is a good way to develop your skills.

***

Once you increase your bargaining power, don’t let yourself be undervalued. Ask for what you are worth.

Photo by SergioTudela

The more I look around me, the more self-employment seems to be the way to go for many people. I’m not sure if this is just my observation or if it’s indeed a global phenomenon, so I’d like discuss it with you.

There are two reasons why self-employment seems to be the way to go:

1. Necessity
   Many people lose their jobs because of the recent financial crisis. I read many stories about people with high salary who suddenly found themselves out of work and found it difficult to get new jobs. For them, self-employment could be the only way to go because the job market isn’t as good as it was.
2. Opportunity
   Many other people choose self-employment not because of necessity but because of opportunity. They find that self-employment gives them more freedom and flexibility, not to mention the potentially big financial reward they could get.

I am an advocate of self-employment and over time I become more and more convinced because of the stories I hear from people around me. I often hear about those who lose their jobs and how it could take them months to get new jobs, if ever. I imagine that if only more people went through the path of self-employment, I would hear less such stories.

More specifically, here are some reasons why I advocate self-employment:

1. Your income source won’t depend on one party
   If someone works for a company, his boss could fire him and eliminate his income source. I don’t know about you, but I don’t feel comfortable giving the control of my entire income to someone else. Being self-employed means that nobody can fire you.
2. Your income won’t drop to zero if something bad happened
   If someone got fired from his work, his income practically dropped to zero. Those who are self-employed won’t experience that. Sure, you might lose clients, but it’s unlikely that you lost all of your clients at once. If something bad happened, it wouldn’t be drastic. Instead of having your income dropped to zero, it would drop gradually and therefore give you time to work on something else.
3. You can cut work-related expenses
   Since you work on your own, you have more control over the way you work. This often translates to saving on work-related expenses such as transportation costs.
4. Your have more control over your time
   In most cases, you can arrange your own work time. This flexibility means that it will be easier for you to allocate time for other things in your life.
5. Your reward is more proportional to your effort
   When you are in a corporate environment, providing twice as much value doesn’t necessarily mean getting twice as much reward. But when you work on your own, that can happen more easily. You contact with the market directly so any extra value you provide is more likely to be rewarded.
6. The Internet opens new opportunities
   The Internet allows you to deliver your value directly to those who need it without any middleman. In addition, the Internet helps you aggregate potential demand. Let’s say you have a specific skill that only 1 in a million people need. Without the Internet, it will be difficult to find even one client in your local area. But thanks to the Internet, you now have access to over 6000 potential clients. It means that your ability to make a living from that specific skill increases exponentially.

The first and the second reasons are the most important, in my opinion. Self-employment can give you more security. You are less likely to suddenly fall into a deep financial trouble because of lost income.

Of course, there are also negative aspects of self-employment. First of all, it’s not easy to start a self-employment career. It could be difficult to get consistent income in the beginning because of the difficulty to find clients. You might also need to work harder than when you work for a company since you are now on your own.

That being said, I think the freedom and security is still worth it. With the world and the job market becoming more unpredictable, having your destiny in your own hand seems to be the best alternative.

This is just my opinion, of course. I’m interested to hear yours. What do you think?

Photo by mescon

There is an interesting lecture on Behavioral Finance by Yale professor Robert Shiller. In it, he spoke about how people tend to be overconfident. They overestimate their ability to perform. It happens not just in the financial world, but also in our daily life. One example Robert Shiller gave is that students tend to overestimate how their college’s team will perform in a match against other college.

I have an experience with overconfidence myself. A few years ago, I and some friends worked on a software project. We estimated that we could finish the project in three months. Do you know how much time it eventually took? Fourteen months! That shows how I and my team underestimated the complexity of the project and overestimated our ability to handle it.

So, overconfidence is a common problem. Being pessimistic isn’t good, of course. But being overconfident isn’t good either. Here are two reasons why:

1. You may fail to deliver on your promise
   That’s what happened to me and my team. We failed badly to deliver on our promise. That lesson taught me to be more careful and realistic next time.
2. You may blame yourself too much
   This is the other side of being overconfident. When you are overconfident about something and fail, you may blame yourself too much for the outcome. Robert Shiller mentioned a finding in Searching for a Corporate Savior about how companies often fired their CEOs who didn’t perform as expected even when the entire industry actually declined. The CEO couldn’t be blamed for an industry-wide problem, but the board – who had initially been overconfident with the ability of the”charismatic” CEO – still put the blame on him. This happens at individual level too. You may put all the blame on yourself which make it difficult for you to move forward.

Now that we’ve seen the danger of overconfidence, how can we overcome it? Here are some tips:

1. Acknowledge the role of luck

Many people in the financial market think that they can predict how the market will do. The more they make correct predictions, the more they are confident about their ability. They aren’t aware that in many cases they are just lucky. Hard work is important, but luck does play a big role.

Paul Graham once wrote that Bill Gates is a very smart man, but he is also very lucky. Without the luck factor, he would probably end up near the bottom of the Forbes 400 instead of being one of the richest men in the world. Bill Gates himself said on different occasions about how lucky he is.

Outliers by Malcolm Gladwell discusses the role of luck at great length.

2. Don’t credit yourself too much

Continuing the previous point, be careful not to credit yourself too much when you are successful. Remember that you are probably just lucky.

This doesn’t mean that you don’t need to work hard. After all, successful people are those who capitalize on luck with hard work. But without luck, hard work won’t mean much either.

3. Comprehend the complexity of a project

When you are about to take a project, dig deep into it to really understand the breadth and scope of the project. Be on the lookout for potential pitfalls. Taking the time to really understand the complexity of a project helps you avoid unpleasant surprises later on.

4. Have a cushion

Even after you comprehend the complexity of a project, you still need to have a cushion. Give yourself extra time and resources for unexpected things. But be careful not to give yourself too much cushion. Otherwise you may become less competitive than your competitors.

5. Be prepared for failure

Some people are so confident in themselves that they can’t think of the possibility of failure.

Robert Shiller told the story of Irving Fisher – a Yale professor in the early 20th century – who said that the stock market in 1929 was in “permanently high plateau.” He invested heavily in the stock market, but ended up losing a lot of money in the 1929 crash. Yale needed to buy his house and rented it out to him for him not to be on the street. Did he change his view after all that happened? No. He still insisted that he was right. He borrowed money from his wealthy relatives, invested it, and lost it all.

So be prepared for failure. Doing so will help you recover quickly.

Photo by pincusvt