socialEngineering.txt

*Social engineering*

How to make friends and influence people
    Find below some pointers on how to behave when addressing a conversation with someone. So far, mostly extracted from the book: How to make friends and influence people by Dale Carnegie.

    **Do no criticize, condemn or complain**; it makes you look bad. To teach something to someone, **punishment for bad behavior works worse than reward for good one**. Incentivize people. I.E a pilot almost dies because a mechanic used the wrong fuel for the plane. Instead of being mad at him, he tells the mechanic to service again the plane for tomorrow, that he is sure that it won't happen again.

    People desire to be great and important. **Give honest sincere appreciation**. It has to be honest otherwise people will notice. Appreciate and encourage people so that they feel better. **Mention his name during the conversation**, will make them feel important and will help you remember it. To make someone like you instantly, **tell something nice that you truly like about him**, something that you admire, it has, to be honest, sincere like a hair cut, shirt, ask about it.

    Smile when meeting / talking to someone, **be grateful**.
        Focus on what they want and need. Talk in terms of other people interests.
    If there is any one secret of success, is getting **other people point of view and see things from that person's angle** as well as from your own.

    Be an interested, honest, passionate listener.

    Do not interrupt if you get an idea when someone else is talking.

    **Encourage others to talk about themselves**. Always make the other person feel important.

    **Ask questions that they will enjoy answering**. Find out what their passion is and talk and ask questions about it.

    **A man convinced against his will, is of the same opinion still**. Never argue with someone even if you are right, you will make the other person feel bad. If you are right, then you have nothing to win.

    How to address an argument:
        Distrust your first reaction and analyze carefully the situation.
        Control your temper, be friendly.
        Listen first to the other people's point of view.
        Look for areas of agreement.
        Be honest look for areas where you thought wrong and accept their point.
        Tell them that you will think about the other points.
        Thank your opponent for their sincere points and postpone a meeting for another day.
        When you win an argument you just other peoples feelings. Don't say I am going to prove this and that, it seems you are saying you are smarter than them. Galileo said: You can not teach a man anything, you can help him to find it within himself.
        **Avoid telling people they are wrong**, when listening to someone do not judge as a first reaction, but instead try to understand him and empathize.
        **Accept your mistakes, criticize yourself**: If you did something wrong, they are more likely to forget it and forgive you.

    I.E: if you want your rent reduced rather than complaining and insulting the landlord tell him how much you like the apartment and tell him that you can not afford it anymore.

    **Avoid saying the word no**. Find points of agreement. Agree on the purpose if you don't agree on the method.

    **You have to make people say yes**, keep open attitude for our ultimate purpose.

    **Talk in terms of other people best interests**. Look at things from other people point of view, agree to view him and then change his mind by making him agree on you.

    **Put on other people's shoes**, how would I react if I were him?

    **Always exaggerate your guilt** tell how mad the other person must feel; that there is no excuse etc.

    Say I don't blame you for how you feel, If I were you I would feel exactly the same.

    To make people more efficient, simulate competition. I.E two shifts competing with each other to produce more, etc The desire of self-improvement to be challenged and to feel that you are worth, to the game and do interesting work makes people more efficient

    If you need something out of somebody begin with an honWest appreciation.

    **Call attention on people's mistakes indirectly**: To criticize people avoid using the word 'but'. I.E I like this but you should change that. Try saying instead I like this and if you continue working like this you will improve that. If the workers leave the garden dirty, clean it and pile all the trash on one side and call them telling that you are very happy with how they left it. The next morning they will leave it clean.

    Do not give orders to people, **make suggestions about how you would do something**, ask them if this approach would work, maybe it would be better if... etc That way they will save their pride and they will be more cooperative.

    Praise every improvement someone does, they will be happy you do so.


The Compound Effect
    **Have healthy habits**, it might take you years to achieve your goals but doing 10 actions a day towards that will help you to achieve it. The opposite for unhealthy habits (TV, fast food, etc..). Have exceptions but get a healthy routine.
    **Take ownership of your failures**: no matter what happens to you, take responsibility for it. You are freed by your choices.

    **Track actions taken to achieve or to fail a goal**: It helps to focus on the problem and makes you aware of those actions.

    Invest early: Compound effect will make your money grow. Every dollar you spend and not invest is 5-10 dollars you lose in 10 years time.

    Replace bad behavior habits with healthier ones. Identify them first. For example, drink carbonated water instead of cola. Find money you waste every month (Netflix, insurance, Starbucks), does it really give you happiness? Change the habit.

    **What motivates you is the ignition of your passion**. You need to identify what you want to achieve to make a difference this time and not fail like the other ones. The power of why makes you stick to the habits. Otherwise, you will revert to sleepwalking through poor choices

    **Taking actions that align with your core values will make you happy**. If you hang out with people with different values you won't we happy.

*Goals = choice + behaviour(action) + habit(repeat) + compounded(time)*

    Identify behaviors leading to that goal and the ones blocking you from achieving it. People fit have good gym habits, people thin have good food habits, etc...

    Monitor how much time you spend watching tv, reading the news etc and change habits. News tend to be negative and depressing, avoid 	spending too much time on them.

    If you tell friends or people about your goals and tracking you are more likely to commit to them due to social pressure

    Competition also helps to stick to the habits, get your friends or coworkers to work with you


You are a BadAss

    You need to stop wanting to do something and start doing something about it

    And the day come when the risk to remain tight in a bud was more painful than the risk it took to blossom

    If you want to live a life you've never lived, you have to do things you've never done.

    Most people are living in an illusion based on someone else's beliefs. You have been raised by your family and your thinking is influenced by it, society has many expectations that are not necessarily going to give you happiness.

    (not such a good book, gave up on it).


Happiness
*Happiness = Health + Wealth + Wisdom*

*Health = Exercise + Diet + Sleep
    Exercise = High Intensity Training + Cardio + Regularity
    Diet = Natural Foods + Occasional Fasting + Plants
    Sleep = 7-9 Hours of Sleep + Circadian Rhythm*

*Wealth = Savings + Investments + Assets
    Savings = 10-20% Monthly Income * ROI
    Investments = 10-20% Monthly Income * ROI
    Assets = Estate Property + Intellectual Property + Skills*

*Wisdom = Knowledge + Experience + Tranquility
    Knowledge = Books + Lateral Thinking + Intellectual Curiosity
    Experience = Travel + Friends + Get out of comfort zone
    Tranquility = Self-control + Introspection + Perspective*

    Habits to change
        When you want to go shopping, go decluttering instead.
        When you want to eat garbage, eat green things instead.
        When you want to stay up late watching tv, go to sleep instead.
        When you want to argue with strangers on the internet, create something instead.
        When you want to look at social media, read a book instead.

    Good habits
        don't judge
        slow down
        pay attention
        be kind
        mediate
        sleep
        eat well
        laugh often
        breath consciously
        pamper yourself
        don't worry
        choose time over money

    Free time management
        The key to time management is prioritization
        I don't have time = it's not a priority
        Stop deleting emails, do first what matters, run a todo list
        Prioritize

    Personal Growth
        Passive Income
        Learn a new skill
        Discover a new place
        Have good friends, be close to them, help them.
        Meet someone new
        Be fit

    75 years study on happiness found:
        People living in a marriage without affection had worse health, unhappiness and died younger
        People more satisfied with their relationships in the 50s, where healthier in the 90s.
        People in bad relationships reported more pain in bad days.
        People who feel can count on their partners have sharper memory when they get older.
        People happiest in retirement, were the ones that worked had actively worked to replace workmates with friends.

    Alternate learning zone and performance zone
        **Learning zone** goal is to improve, concentrate on things we have not mastered, mistakes are expected. Maximizes growth. Good for long run.  Try out new strategies, ask questions,
        **Performance zone** do as best as we can, activities for execution, concentrate on activities we have mastered.

    Pillars of meaning
        **Seeking happiness causes unhappiness** Having the perfect job, boyfriend and apartment won't bring happiness
        **Belonging** being in relationships were you are valued for what you are or believe.
        **Find purpose** Use your strength to help others (maybe through work). You need something worthwhile to do, you need something to drive you forward,
        **Transcendence** experiences that make you loose sense of time (maybe programming)
        **Story telling** Creating a narrative of events of your life helps you to find purpose growth and purpose

    Things to avoid:
        Do not say 'like'
        Do not apologize for everything
        Do not eat too quick
        Do not focus conversations on you
        Do not talk too loud
        Do not interrupt people
        No nail biting

    What is you grandmother's name? You probably don't even know. In two generations no one will remember anything about you. Your actions do not matter in grand scheme of things. Stop worrying about what people will think or what is social acceptable, do what you want to do before it's too late.

Productivity & Life Strategies
    **Sleep at the same time every night** This habit enable you to fall asleep faster and wake up at the same time like clockwork, all subconsciously.

    **Do the most difficult thing first** Either the start of your day, the beginning of a project. After completing this task, you'll have not only done something meaningful with your day but you'll feel the momentum carry through to other tasks.

    **Replace common and recurring decisions with routines** You really don't need to expend mental energy picking an outfit, deciding on breakfast, thinking about when you should go to the gym. All of this keeps happening and the faster you commit to pre-selecting a single/few time slots or options, and sticking to them, the more mentally clear and swift you'll become with making decisions.

    **Avoid starting and stopping to eliminate your administrative overhead** When you stop a task to answer an email, help someone with something, or check notifications, you disrupt or completely avoid getting into deep work. Instead, designated a time to deal with all the ‘admin' stuff on your time, not someone else's.

    **Write down mistakes and lessons learned** We almost always repeat our mistakes, it's too hard to remember the lessons we thought we learned. Writing them down and revisiting them helps us etch them into our memory.

    **Design your environment to serve you** Whether this is cleaning your office, eliminating distractions, getting rid of bad influences, or surrounding yourself with like minded people. Designing your environment to push yourself in the direction you desire will have a disproportionately positive effect on your success, because of how easy it is to implement.

    **Identify and mentally label the credible people around you** It's hard to decipher constructive criticism from noise, if you have this list and keep it up to date, you'll have a much easier time in trusting opinions and getting honest feedback.

    **If it takes less than a few minutes to do, just do it** We procrastinate on many small things, that when they pile up, it becomes an actual problem. This rule doesn't mean disrupting deep work; that's a form of procrastination in itself. It means that when you aren't, you can bundle a few tasks together and be done with it in less than 10–15 minutes. Dishes out of the dishwasher, bed made, floor swept, call returned. It's easy and will leave a clean mental state for future you.

    **Have an overarching goal for the day** Each night, write one down for the next day. If you complete this, it was a successful day.

    **Bundle your social media distractions** Similar to designating hours for tasks like emails. If you designate a time in the day to consume Instagram, Facebook and Twitter, you'll be less distracted by every notification that comes in. An experiment I conducted earlier last year was to delete every social media app from my phone that had a desktop alternative, this worked quite nicely albeit less convenient. I now use well-being features available in the latest iOS and Android updates.

    **Make your communications clear and concise**Especially being true for emails. Dot points are a life saver and allow people to quickly decipher what's being said or requested. Beating around the bush or being overtly kind never helps. Conveying urgency, being firm and clear will get things done faster than going back and forth until the email chain is 30 emails long.



Others
    **Lemons market** The buyers know more about the product than the buyer (like used cars), the cheaper product wins.
    When you buy something you are giving up something else (I.E earlier retirement). The happiness of buying something is usually less than not doing it and.
    **Social approval indicator** Let you think that people is taking about you without actually doing it.
    **Bad is stronger than good** we get more pain from losing 1k than good for winning 1k. Called negativity bias Bad emotions are contagious; do not escalate discussions 

    **Decision making**: Don’t do **binary decisions** but explore all the possibilitiesTry to predict what will happen if you do that; tell stories about what could happen, how thing would be better; worse and weird.
    If it doesn't matter in 5 years, it does not matter now.
    Lean to be okay with people not knowing your side of the story. You have nothing to prove to anyone.
    When you realize how unimportant you are to 99.99999% of the people, their judgment losses weight. They aren't worried about you, they have their own shit.
    Let me fall if I must fall. The one I will become will catch me.
    Everything you want is on the other side of fear
    I used to talk in a room and wonder if the liked me. Now I look around and wonder if I like them.

Awaken the Giant within
    The hardest step in achieving anything is making a true commitment.
    The most successful people make decisions quickly because they are clear on their values and what they want.
    The more decisions you make the better you're going to become at making them.
    Learn from your decisions. Failure is necessary and we can learn from it.
    Make More decisions to learn and make better ones in the future. Decision making gets better the more you do it.
    Stay committed to your ideas but with a flexible approach.
    Enjoy making decisions, decisions you make might change the course of your life forever.
    Everything people do is to avoid pain or to get pleasure.
    Do not try to change your behavior, understand it to take better decisions.
    Sometimes you know you should do something but you don't because it will bring temporary pain until not taking action is more painful than taking it. This is the emotional threshold.
    A man who suffers before it's necessary suffers more than it's necessary.
    The secret of success is learning how to use pain and pleasure instead of having pain and pleasure use you. If you do that, you're in control of your life. If you don't, life controls you.
    We are driven to avoid pain and to get pleasure, find out what motivates you, what brings you joy and focus your objectives on that. For instance, drug addicts link pleasure to drugs, Donald Trump to be more powerful, and Mother Teresa to help others. They are driven by this. Think what is pain and please experiences that shaped your life.
    We make neuro-associations of pain and pleasure. For instance, seeing a drunk family member when you are young will make you not want to try alcohol. You can use these experiences to shape and teach your children.
    We are not driven much by what we intellectually know but by what we learned to link pain and pleasure to.
    Put aside passing moments of terror and temptation, and focus on what's most important in he long term, your values and personal standards
    Look for a mentor in each aspect of life: relationships, finances, health etc someone with more experience.
    There are three things we can control in our life: what we focus on, what things mean and what to do in spite of our challenges.


The Subtle Art of Not Giving a Fuck
    Our culture is obsessively focused on **unrealistically positive expectations**: be richer, happier, healthier, smarter, perfect job, more popular, more admired...
    All self-help guidance is fixation on what you lack.
    **The smallest dog barks the loudest**: A confident man does not need to prove that he's confident. A rich woman does not need to convince anyone that she is rich. If you dream about something all the time you reinforce the same unconscious reality: you are not that.
    The world is constantly telling us to buy more, be more, make more, own more, etc
    The key to a good life is not giving a fuck about more, it's giving a fuck about less, only about what is try and immediate and important.
    Everyone has flat TV, expensive phone, even groceries delivered. **Our crisis is no longer material but existential**. there are infinite amount of things we can now see and any number of ways we can discover that we don't measure up.
    The desire for a more positive experience is itself a negative experience.
    The acceptance of one's negative experience is itself a positive experience
    The richer you want to be the poorer you become, the sexier you want to be the uglier you feel.
    The less you care about something the better you will become at it.
    Not giving a fuck is to stare at life's terrifying challenges and take action.
    The moments of non-fucker are the moments that most define our lives: switch in careers, dropping out of college, join a rock band, dump your girlfriend... **Not giving a fuck is to stare life's most terrifying challenges and take action**.
    You have to learn to pick what matters to you based on your values and focus on that.
    You must give a fuck about something, it's in our biology.
    If you find yourself consistently giving too many fucks about trivial shit such as mouse batteries dying too quickly, your ex profile picture, etc.. It's because you don't have much going on in your life to give a legitimate fuck about and that is your real problem. If you have no problems, the mind finds a way to invent some.
    Maturity is learning to give a fuck about what's truly fuckworthy.
    Accept life, care about family, friends and personal goals.
    Problems never stop, they just get upgraded/changed: Happiness comes from solving problems. If you avoid them, then you're going to make yourself miserable. If you feel you can't solve your problems you will feel miserable. The secret is to learn how to solve the problems.
    Nobody actually happy has to stand in front of a mirror and tell himself that he's happy. Do not deny your problems or concerns. Exercises that make you feel good short term are useless and generate addiction.
    What pain do you want to sustain? A path to happiness is a path of shitheaps and shame.
    Who you are is defined by what you're willing to struggle for. If you enjoy the struggles of a gym, you can run triathlons. You can't win if you don't play.
    A true measure of self-worth is not how a person feels about her positive experiences, but about negative ones. A person with high self-worth can look at himself and say: Yes, sometimes I am irresponsible with money, and I should improve it. Entitled people are incapable of acknowledging their problems and are left chasing high after high accumulating deny, until reality hits.
    Because of the Internet, TV and social media, we think that **exceptionalism is the new normal**. Because of the people is average, we feel insecure and not good enough. We cope with this either with self-aggrandizing or other-aggrandizing (get rich quick scheme, saving starving babies in Africa, getting good marks, having sex with everyone...).
    Technology and mass marketing is screwing up people's expectations of themselves, there is a culture of exceptionalism.
    Your actions don't matter that much in the grand scheme of things, your life will be not noteworthy and that is ok.
    You should find appreciation for ordinary things: simple friendship, creating something, helping a person in need, reading a book, laughing with someone you care...
    Suffering is inevitable, problems of life are unavoidable, but you can choose what to suffer about. There was a Japanese soldier that was told to defend a jungle, he did not know the war had finished and continued killing civilians for 20 years after the war. He was told after that and came back to Japan. He was eating worms in the jungle for 20 years but happy to fight for a greater cause. When he came back society was just nerds and he got depressed. Another guy went to look for the Yeti and died but was happy to do something meaningful.
    The onion of self-awareness
        First layer: Understanding one's emotions. This is when I feel happy, this makes me feel sad, this gives me hope. Expressing emotions and understand them is difficult.
        Second layer: Ask why we feel certain emotions. Why do I feel angry? Is it because I failed to achieve a goal? Why people feel uninspired? They illuminate what we consider success or failure.
        Third level: Personal values, Why do I consider this to be a success/failure? How I am choosing to measure myself? What standard I am measuring myself and people around me? (very difficult to do). These values determine the nature of our problems and the quality of our life. Why do you feel the need to be rich in the first place? If people are unhappy is because of a particular value and not the fact they don't drive a Bentley.
    Honest self-questioning is difficult. It requires asking yourself simple questions that are uncomfortable to answer. Think about what is bugging you, then why. Chances are it is a failure of some sort. Then take that failure and ask why it seems true to you. Has it been a failure? Maybe you are looking at it the wrong way: Maybe I don't need to be close to my brother to have a good relationship that I value. Maybe just mutual respect and mutual trust. Maybe these metrics are better than how many text messages do we exchange. Not having a close relationship is fine. We get to control what our problems mean based on how we choose to think about them and measure them.
    Comparing ourselves with others rather than without standards it's a mistake and will make us unhappy (I.E Dave Mustaine vs Metallica and the Beattle that got kicked and happy with his family).
    If you want to change how you see your problems, you have to change what you value and how you measure success and failure.
    Shitty values
        **Pleasure**: Pleasure is a horrible value to prioritize. People who focus their energy on superficial pleasures end up more anxious, more emotionally unstable and depressed.
        **Material success**: Some people measure their success on how much money they make, what car they drive or if the front lawn is greener and prettier than next door. Once basic physical needs are provided, the correlation between happiness and worldly success approaches to zero. Prioritizing material success over other values, such as honesty, nonviolence, compassion is a mistake.
        **Always being right**: Our brains are inefficient machines. We constantly make poor assumptions, misjudge, misremember facts, make decisions based on emotional whims. We are wrong pretty much constantly. If your metric for success is being right, it will prevent you from learning from your mistakes, empathize with others. It is more helpful to assume that you're ignorant and don't know a lot. This keeps you unattached to superstitious or poorly informed beliefs and promotes constant state of learning and growth.
        **Staying positive** There are people who measure their lives by the ability to be positive about everything (lost job, parent dead, husband cheated, etc...) Sometimes life sucks and it's ok to admit it. Constant positivity is a form of avoidance, not a solution of life's problems. Things go wrong, people upset us and accidents happen. This makes us feel bad and it's ok. Negative emotions are a necessary component of emotional health, deny negativity is to perpetuate problems rather than solving them. We need to express problems in a socially acceptable manner and in a way that aligns with our values.
    Completing a marathon, raising a child or starting a business with our friends is going to give us lot's of problems to solve, but much more meaning and happiness in the long term than buying a new PC, finishing a video game, eating chocolate, etc...
    "One day, in retrospect, th years of struggle will strike you as the most beautiful" by Freud.
    Pleasure, material success, always being right and positiveness are poor ideas for a person's life. Some of the best moments of one's life are not pleasant, not material, not successful, not known and not positive.
    The points to nail down some good values and metrics. Pleasure and success will naturally emerge as a result.

    **Defining good values**
        Good values are reality based, socially constructive, immediate and controllable.
        Bad values are superstitious, socially destructive and not immediate or controllable.
        For example: Honest is a good value (it's something you have complete control over, it reflects reality and benefits others even if it is unpleasant). Popularity is a bad value. If being the most popular in the dance is important, much of what happens will be out of control (you don't know who else is in the party, or who they are. The metric is not real, you feel popular/unpopular but you don't know what other people think.
        Examples of healthy values: honesty, innovation, vulnerability, standing up for oneself or others, self-respect, curiosity, charity, humility, creativity. These values can be achieved internally. Bad values rely on external events.
        Everyone wants a private jet, the question is your priorities and what influences your decisions making. I.E Hiroo Onoda's loyalty to Japanese empire.
        This is **what self improvement is about**, prioritizing better values choosing better things to give a fuck about. Better problems mean better life.

    We are always taking an active role in what's occurring to and within us, interpreting the meaning of every moment and occurrence. We are always choosing what values we live and metrics by which we measure everything that happens to us.
    **Accepting responsibility for our problems is the first step to solve them**. I.E. A man is too short. Even though he is intelligent, interesting and good looking. Because he thinks he is too short, we does not go out and does not try to meet women. This is a crappy value: Not being tall enough. A better value would have been I want to date women who like me for who I am.

    We are responsible for experiences that aren't our fault all the time, this is part of life. We need to take responsibility of our own emotions. Blaming other for how you feel will only hurt yourself.
    **Victimhood Chic**: The responsibility/fault fallacy allow people to pass off the responsibility for solving their problems to others. This gives a temporary high blaming other people and a feeling of moral righteousness.
    **Outrage porn**: Rather than reporting real stories of real problems, the media finds a problem mildly offensive, broadcasts it to some audience, generate outrage, then broadcast that outrage back to the population to outrage another part of the population. This triggers an echo of bullshit pinging back and forth between two imaginary sides, distracting everyone from real problems.

    People gets addicted to feeling offended all the time because it gives them a high, self-righteous and morally superior feeling.

    Our values are imperfect and incomplete. This openness to being wrong must exist for real change or growth to take place.



Sharpen the saw
    Working smarter, not harder: Besides allowing you to get more done, regularly making time to take care of yourself also increases your sense of agency and effectiveness.
    When it comes to our personal lives, we should focus on four domains: physical, spiritual, mental, and social/emotional.
    All of these dimensions are interconnected. If we feel good physically, we have mental clarity and better control of our emotions. If our social life is good, we'll have more motivation and energy to take care of ourselves physically. And because these human domains are interconnected, it allows us to synergize them which will enable you to do more in less time (more on that below).


The Compound Effect
    **Routines** are important. Soldiers are trained with routines, so even with the imminent threat of death, they can carry out their duties with precision in the middle of the chaos of combat.

    Get used to **journaling**, summarize what you achieved at the end of the day, what went well and not so well, any ideas you had or thoughts, what is worth doing tomorrow.

    Doing the same things week after week will stop showing compounded results (i.e. change workout) mix it up, challenge yourself in new ways.

    Consider adding more adventure to your life: eating different kinds of food, taking a class, visiting a new place, meet new people helps you feel alive.

    You should design your morning and evening routines in a journal.

    Pick 3 things you are not satisfied with your life and you want to improve, write 20 actions you could do to improve them.

    You are 100% responsible for your life and your choices.

    Your brain is not designed to make you happy. Your brain has only one agenda in mind: survival. It is designed to seek out negative resources. Avoid watching the news. You should protect what you feed to your mind.

    Commercials are designed to make you feel bad about yourself unless you buy things you don't need.

    **News and magazines have no bearing in your personal life and goals**, dreams or ambitions. Use RSS or twitter to filter what you care.

    People who you usually associate are called reference group. A lot of your success is determined by them. We become the combined average of the five people we hang around the most. The people whom we spend our time determine what conversations dominate our attention and opinions we are exposed, our ambitions, our habits, etc...

    To improve in an area, you can find an accountability partner who tries to achieve the same goals, to share the pain and motivate each other. Or find a mentor and have a weekly call of 30 mins.

The 7 Habits of Highly Effective People
    **Overview**. We have two mental maps, the map that shows how we see things and the one that shows how things should be. When we describe what we see, we in effect describe how we see ourselves, our perceptions and our paradigms. When someone disagrees with us, we think something is wrong with them. Each looks through the unique lens of experience.
    Principles are guidelines for human conduct, values are maps that people decide to use for guidance.
    Admission of ignorance is the first step in our education.
    **Habit** is the intersection of knowledge, skill, and desire. This is what to do, how to do it and wanting to do it. You need the three.
    Happiness can be defined as the fruit of the desire and ability to sacrifice what we want now for what we want eventually.
    The following habits are aimed at improving efficiency to maximize long term benefit and growth.
    **p** is production and **p/c** production capability. You need to find and keep an **optimal P/PC balance** for efficiency growth.
    Our most important financial asset is our own capacity to earn. Invest in improving your p/c.
    P/PC can be seen in software development as technical debt.
    **Habit 1: Be proactive**. Self-awareness is the ability to think about your thought process. It enables us to examine the way we see ourselves and others.
    A lot of what we are is determined by three factors: **genetic determinism** determined in our DNA, **psychic determinism** or childhood friends and parents, and **environmental determinism** which is your spouse, boss, and economic situation.
    Proactively is taking initiative, being responsible for our own lives, making things happen.
    Reactive people is affected by weather, they build their emotional lives around the behaviour of others, empowering the weaknesses of others to control them. They are driven by feelings, circumstances and affected by their environment.
    Proactive people are driven by values carefully thought about, selected and internalized. Proactive people is still influenced by external stimuli but their response is value-based.
    Gandhi: They can not take away our self respect if we don't give it to them.
    It is not what happens to us that hurts us, but our response.
    Proactive people focus their efforts in the **Circle of influence**. They work on the things they can do something about.
    Reactive people focus their efforts on their **Circe of concern**: on the weaknesses of other people, problems in the environment, and circumstances you cannot control, victimization, reactive language.
    Problems can be classified in three categories: **Direct control** problems: they involve our own behaviour and we can solve them by working on our habits. **Indirect control** problems: involve other people's behaviour and you can fix by changing our methods of influence, and **No control** problems which we can not do anything about, like past situations, which we have to smile and learn to live with them.
    The **have's** and **be's**: The circle of concern is filled with the have's (I'll be happy when I have my house paid off, if I had a more patient husband, if I had more free time...). The circle of influence is filled with be's: I can be more patient, wiser, be more loving.
    Every time we think the problem is out there, that thought is the problem. We empower what's out there to control us.
    We are totally free to choose our actions, but not the consequences of those. The proactive approach is to immediately acknowledge **mistakes**, learn from those and correct it in the future. Reactive people will justify it, deceive it and rationalize it to self and others, giving it disproportionate importance, causing deeper injury to self and others.
    The response to any mistake affects the quality of the next movement. It is important to admit it and correct it quickly so it does not have power on the next movement and we are empowered again.
    The **commitments** we make and the integrity to those is the essence and clearest manifestation of our proactivity.
    The power to make and keep commitments to ourselves is the essence of developing the basic habits of effectiveness.
    We are responsible for our own effectiveness, happiness, and most of our circumstances.

    **Habit 2: Begin with the end in mind**
    If this were your funeral and your relatives and friends where making a speech, what'd you like them to say? what type of person would you like their words to reflect? what character would you like them to have seen in you? what achievements? what to remember?
    If the ladder is not leaning against the right wall, very step we take gets us to the wrong place faster.
    **Personal mission statement** or philosophy or creed. It focuses on what you want to be (character) and to do (achievements) and values or principles  in which those are based. Example
    Succeed at home first. Never compromise with honesty. Hear both sides before judging. Defend those who are absent. Be sincere and decisive. Develop a new proficiency every year. Plan tomorrow's work today. Keep sense of humor. Be orderly in person and at work. Do not fear mistakes. Maintain positive attitude. I will try to keep myself free from addictive and destructive habits. Money will be my servant not my master. Seek FI. Use money to make life more enjoyable.
    People have **centers** in which people focuses: **Spouse**, **Family**: growth from family traditions. **Money**: economic security. **Work**: workaholics sacrifice other things in life. **Possession**: physical but also intangible like fame glory. **Pleasure**: we live in a world where instant gratification is available and encouraged. **Friend enemy**: belonging to a peer group. **Church**. **Self centeredness**.

    **Habit 3: But first things first**
    Effective time management if putting first things first. Leadership decides what first things are, management puts them first.
    **Time management matrix**: an activity can be defined in terms of **urgent** and **important**.
    Urgent things act on us (a phone ringing), they press on us, insist on action, easy to do. Often they are also unimportant.
    Important things will involve results and are related to your mission, values and high priority goals.
    We **react** to urgent matters. Important matters require initiative and proactivity.
    **Quadrant 1** are tasks urgent and important (putting out fires). They drive our lives. We want to reduce those. They lead to stress, burnout. It is important to correctly categorize the tasks from Q1 and Q3 (not important).
    **Quadrant 2** is the heart of effective time management. It deals with things that are not urgent but important. I.E building relationships, writing a personal mission statement, exercising, preventive maintenance. What things could you do regularly that would have a tremendous positive difference in your life? Also, spending time on preventing activities in Q2 will also reduce tasks of Q1.
    You need to plan the activities of Q2 according to your values and mission statement. This will cause natural inclination towards doing those and not spending time on Q3 and Q4.
    Activities in Q2 increase your production and production capability.
    Your planning methodology should take into account: **Coherence** with your mission statement, roles, goals, desires and discipline. **Balance**: in your life, to not neglect important areas or roles. Think about two goals you want to achieve for each role. **Q2 focus**: Your methodology should move you into Q2. **Flexibility**: your planning tool should adapt to you. If should be **portable**
    Organize on weekly basis.
    Do not prioritize what's in your schedule but schedule your priorities.
    Emotional Bank account is a metaphor that describes the amount of trust that's been built up in a relationship.
    Seeking to understand another person is one of the most important deposits you can make.
    Making something important for another person important to you is a good deposit.
    Small discourtesies, little unkindness and disrespect makes large withdrawals. Little things mean big things.
    The cause of almost all relationship difficulties is rooted in conflicting or ambiguous expectations around roles and goals.
    One of the most important ways to manifest integrity is to **be loyal to those who are not present**. In doing so, we build the trust of those who are present. When you defend those who are absent, you retain the trust of those present.
    **I really shouldn't be saying this** makes a massive withdrawn to the person present as shows you can not be trusted.
    **Integrity** you should treat everyone with the same set of principles.

    **Habit 4: Think win/win**: Win/Win is a frame of mind and heart that constantly seeks mutual benefit in all human interactions. Agreements/solutions are mutually beneficial and satisfying. All parties feel committed to the action plan and good about the decision. Win/Win sees like as a cooperative not competitive arena.
    **Win/Lose mentality** is used when one child is compared to another. It lies on competition not cooperation. Like school, law.
    **Lose/win** is a paradigm with no expectations, standards, demands or vision. Little courage to express their own feelings and are intimidated by ego strength of others. They bury feelings and have disproportionate range or anger, overreaction to provocations. This affects relationships with others.
    **Win/win or no deal** if no solution for both is reached, we walk away.
    Win/Win performance agreements can have four types of rewards managers or parents can provide: psychic (recognition...) financial. opportunity (training), responsibility.
    **Habit 5: Take time to understand** first, is important in empathic communication. Take time to understand the other before trying to get them to understand you.
    There are **four types of listening**: Ignoring: not listening at all. Pretending: "yeah, huh-huh, right". Selective listening: hear only parts of the conversation. Attentive listening: Paying attention and focusing our energy on the words being said. **Empathic listening**: listening with intent to understand. The essence is not to agree with someone; but to understand emotionally and intellectually the other person. 60% is body language. Do not listen with your autobiography and assuming your thoughts. Diagnose before you prescribe.
    If someone replies with logical answers you can keep pushing, if they become emotional back off and try to understand.
    The vision of the world is very limited by our experiences. We suffer from shortage of data. Appreciate interacting with other points of view. These differences add to your knowledge. Value the difference in other people, do not take insults personally.

    **Habit 7: Sharpen the saw**: is personal PC. it's renewing and exercising regularly the four dimensions of your nature: physical, spiritual, mental and social/emotional.
    Sharpening the saw is a Q2 activity. We have to make it a healthy addiction.
    **Physical dimension** involves eating well, getting the right sleep&relaxation, and exercising regularly. Exercising is a Q2 activity, and not doing it lets to Q1 health problems.
    **Mental dimension**: Some people stop studying when they finish school and spend their time watching TV. Practice habit 3 and spend less time on things that do not produce P or PC.
    Writing is a powerful way to sharpen the saw. Keep journal of thoughts, experiences, insights, leanings promotes mental clarity, exactness and context.
    Organizing and planning represents other forms of mental renewal associated with Habits 2 and 3.
    **Social/Emotional dimension**: Integrity is the most fundamental source of personal worth. Long healthy life is the result of making contributions, having meaningful projects that are personally exciting and contributing to bless the lives of others.
    Treat a man as he is and he will remain as he is, treat a man as he can be and he will become what he can be.
    The more proactive you are (habit 1), the more effectively you can exercise personal leadership (habit 2) and management (habit 3), the more Q2 activities you do (habit 7) the more you seek first to understand (habit 5), the more effectively you can find synergetic win/win solutions (habit 4 and 6).
    True financial independence relies on  continuing your education, your power to produce, to learn, create, adapt, wealth is intrinsic.
    Spending one hour a day to renew your physical and spiritual and mental dimensions is the key to the development of the 7 habits.
    Choose purpose and principles to live by; otherwise the vacuum will be filled and we will lose our self-awareness. Learn, commit, do, repeat.
    Struggle is worthwhile and fulfilling. It gives meaning to life and enabled to love, serve and try again.

Rich Dad, Poor Dad
    **Rat race**: Working for your salary, increasing your expenses/taxes when your salary goes up and being stuck in this cycle.
    Education is the foundation of success.
    The reason the rich get richer, the poor poorer and the middle class strugles is because the subject of money is taught at home, not in school.
    Saying 'I can't afford it' makes your brain stop thinking. Saying 'how can I afford it' makes you think.
    Your house is a liability not an investment.
    Don't work for money, make your money work for you.
    **Lesson 1: The rich don't work for money**. If you learn life's lessons, you will do well. If not, life will continue to push around. Don't push back against people, it's life that is pushing. Life pushes all of us around. Some gives up, some fight. Don't blame others for your problems.
    Don't be the nice hard-working guy; don't spend life playing it safe and doing the right things.
    You have to realize that you are the problem. It's easier to change yourself than everyone else.
    The poor and the middle class work for money. The rich have money work for them.
    Don't get in big debt and settle for 3 week vacation and a pension after 45 years of work.
    **The rat race** is increasing your expenses every time your salary goes up, needing more money.
    People who say they don't work for money are lying. No one wants to work 8 hours a day every day.
    Be truthful about your emotions and use your mind and emotions in your favor, not against yourself. Be an observer, not a reactor to your emotions. Don't let your emotions do the thinking and talk on your behalf.
    Unfortunately, for many people school is the end, not the beginning.
    Don't let money run your life, asking yourself if your paycheck will be enough.
    Learn to use your emotions to think, not think with your emotions..
    Instead of working for money, learn to have money work for you.
    Working harder is not usually the best solution to your financial problems.
    A job is a short term solution to a long term problem.
    People prepared to be flexible, keep an open mind and learn, they will grow richer and richer.
    It's not how much money you make, but how much money you keep.
    You must know the difference between an **asset** and a **liability**, and buy assets.
    An asset is something that pushes money into your pocket. A liability is something that takes money out of your pocket.
    The cause of financial struggle is people's spending habits, spending all they have and seeking a better paid job to spend more. They are in a hole and keep digging.
    The middle class considers their home their primary asset, instead of investing in income-producing assets.
    **Wealth** is a person's ability to survive so many days forward. Unlike **net worth**, which includes your liabilities as assets and is inaccurate. Wealth measures how much money your money is making and, therefore, your financial survivability.
    **Lesson 2 Why teach financial literacy?**
    **Lesson 3 Mind your own business**
    The mistake of becoming what you study is that people forget to own their own business. They spend their lives minding someone else's business and making them rich. Focus on your assets column and growing those, instead of your income statement.
    You can keep your day job but focusing your paycheck to acquire assets like: owning business that do not require my presence (stock, bonds, mutual funds, real estate, notes).
    Buy luxuries last, first get rich increasing your asset column.
    **Lesson 4: The history of taxes and the power of corporation**
    It's been shown in history that the rich always outsmarted the intellectuals and manage to evade taxes. The rich has money power and intent to change things.
    The tax man will always take more if you let him.
    If you work for money, you give the power to your employer, if money works for you, you keep control of the power.
    **Lesson 5: The rich invent money**
    **Lesson 6: Work to learn, don't work for money**
    Great talent in a specific field is not enough to become rich.
    **Financial intelligence** is the synergy of accounting, investing, marketing and law. These are the skills that will help you make money, not working hard. For example, a programmer learning marketing and sales but get his income increased dramatically.
    **You want to learn a little about a lot**. I was a shy person so I became a salesman at Xerox.
    Job is an acronym for just over broke. Workers work hard enough to not be fired, and owners pay just enough so workers won't quit.
    Every year you get a pay raise and every year you will be disappointed.
    Life is much like going to the gym, the hardest part is deciding to go. Oncee workout is over, you are always glad you went.
    Maybe McDonal's does not make the best burger, but they are the best at delivering an average burger.
    The main management skills needed for success are: management of cash flow, management if systems, management of people, sales and marketing.
    Communication skills such as writing, speaking and negotiating are crucial to life success.
    Selling and marketing are difficult for most people primarily due to their fear or rejection.
    Spend a year learning to sell, your communications skills will improve.
    **Overcoming obstacles**
    The main reason financially literate people does not develop assets are: fear, chrism, laziness, bad habits, arrogance.
    **The compound interest** is one of the wonders of the world.
    For most people, the pain of losing money is far greater tha the joy of being rich.
    Failure inspires winners, and failure defeats losers.
    People go broke over a duplex, they buy big houses and big cars, but not big investments. They play life too safe and too small.
    Overcoming **cynicism**: It takes courage to not let rumors and talk of doom and gloom affect your doubts and fears. We are all little chickens running in circles. Don't let doubts and dears close your mind, open your eyes.
    In the end, the only real asset you have is your mind.
    Choose friends that bring something to your life and that you can learn from.
    People say "you are what you eat" I say: "You become what you study". Be careful with what you learn.
    In today's fast-changing world, it's not so much what you know anymore that counts, but **how fast you learn**. That skill is priceless. Working hard for money is an old formula.
    The number one delineating factor between the rich, the poor and the middle class is the **self-discipline**.
    Don't get in large debt positions, keep your expenses low, build your assets first.
    Savings are used to create more money first, not to pay bills. Every day, with every dollar you decide to be rich or poor.


Atomic Habits
    A habit is a routine or behaviour performed regularly, and in many cases, automatically.
    If you can get 1% better each day, you will 37% better in a year.
    Habits are the **compound interest** of self-improvement.
    The impact created by a change in your habits is similar to the effect of **shifting the route** of an airplane a few degrees.
    Making a choice that makes you **1% better or worse seem insignificant**, but over your lifetime these choices determine the difference between who you are and who you could be. Success is the product of daily habits.
    You should be more concerned about your current trajectory than your results.
    Your outcomes are a **lagging measure of your habits**: Net worth is the measure of your financial habits, weight of eating habits, clutter of cleaning habits, etc... **You get what you repeat**.
    Check out how your daily choices will compound ten or fifteen years down the line.
    **Tiny battles** like reading books, going to the gym will define your future self. You need to know how habits work, and design them to your liking to avoid the dangerous half of the blade.
    **Knowledge compounds**: Learning a new idea won't make you a genius, but commitment to lifelong learning can be transformative.
    Habits appear to make no difference until you cross a critical threshold and unlock a new level of performance.
    **All big things come from small beginnings** Atomic habit refers to a tiny change, a marginal gain, a 1% improvement.
    There are **three layers of behavioral change**: Changing your outcomes (losing weight), changing your process (new gym routine) and changing your identify (self image, judgments about yourself and others, worldview).
    You might start a habit because of motivation, but you need to change your identity to stick to it. Research shows if you believe in an aspect of your identity, you are more likely to act in alignment with that belief. I.E Voters vote more than people who vote.
    You need to find out what are your principles and values, who do you want to become. Are you becoming the person you want to become? The first step is not the how, but the who.
    Habits reduce cognitive load and free up mental capacity.
    Building an habit can be divided in four steps: **cue, craving, response and reward.
    Every craving is linked to a desire to change your internal state.
    **Cue** is about noticing the reward.
    **Craving** is about wanting the reward.
    **Response** is obtaining the reward.
    For example: Clue: your phone buzzes, craving: you want to learn the contents of the message, response: you grab the phone and read it, reward: you satisfy your craving to read the message. Grabbing the phone becomes associated with your phone buzzing.
    The **four laws of behavior change**: Make it obvious (cue), make it attractive (craving), make it satisfying (reward).
    You can invert these laws to learn how to **break a bad habit**: Make it invisible (cue), make it unattractive (carving), make it difficult (response), make it unsatisfying (reward).
    This is a continuous process, there is no finish line. Keep rotating through the four laws to fix the next bottleneck.
    **Habit scorecard**: Make a list of your daily habits: wake up, turn off alarm, check my phone, go to the bathroom. Score each one good+, bad- or =.
    There are no good or bad habits, only effective habits. Effective at solving problems.
    People who make a specific plan for when and where they will perform a new habit are more likely to follow through. I.E I will exercise for one hour at 5pm in my local gym.
    A fresh start is motivating.
    **Diderot effect** states that obtaining a new possession often creates a spiral of consumption that leads to additional purchases.
    **Habit stacking** is a special form of an implementation intention. Rather than pairing your new habit with a time and location you pair it with a current habit. I.E after I pour my cup of coffee in the morning, I will meditate for one minute. Set of simple rules to guide your future behavior.
    Change in **what you see** can lead to a big shift in **what you do**. Its important to live and work in environments filled with productive cues and avoid unproductive ones.
    Every habit is initiated by a cue, and we are more likely to notice cues that stand out. I.E It's easy not to take your vitamins if they are stored away.
    If you want to make a habit a big part of your life, make the cue a big part of your environment. I.E have the house plenty of bottles of water.
    People with best self-control are those who need it less. They spend less time in tempting situations.
    **Make it invisible**: One if the best ways to eliminate a bad habit is to reduce exposure to the cue that causes it.
    After spending hundreds of thousands of years hunting and foraging for food in the wild, the human brain has evolved to place **high value on salt, sugar and fat**.
    Humans want to fit in, to bond with others, and to earn the respect and approval of our peers.
    **One of the deepest human desires is to belong**. Charles Darwin: In the long history of humankind, those who learned to collaborate and improvise most effectively have prevailed.
    Behaviors are attractive when they help us fit in.
    We pick up habits from the people around us. We copy the way parents handle arguments, the way our peers flirt with one another, coworkers get results, when your wife has the habit of checking that the door is closed twice, you do too, etc...
    Family and friends provide an invisible peer pressure that pulls us to in their direction.
    We soak up the qualities and practices of those around us.
    When you join a book club or a band or a cycling group, your identify becomes linked to those around you.
    Reframe your habits to highlight the benefits rather than their drawbacks. Your brain will think they are more attractive. I.E a wheelchair liberates you. I.E rather than I need to go running in the morning, think It;'s time to build endurance and get fast. Reframe I am nervous with I am excited and Im getting an adrenaline rush to help me concentrate.
    **It doesn't feel good to fail** or be judged publicly, so we tend to avoid situations where this might happen. This is why you avoid and delay action.
    The brain is like the muscles of the body, they adapt as they are used and atrophy as they are abandoned.
    **Organize each space for its intended purpose**, making the next action easy. Want to work out? Have your gym clothes and bag ready.
    Create an environment where doing the right think is as easy as possible.
    The greater the friction, the less likely the habit.
    Do not overwork, you need to make your habits fun. The secret is to say below the point where it feels like work.
    What is rewarded is repeated, what is punished is avoided. **Make your habits satisfying**.
    Make the immediate outcome pleasant or you won't repeat.
    Good habits tend to not provide immediate pleasure and what ones do (watching tv against working out).
    Make a habit feel successful to stick to it.
    Habit tracking is powerful because it leverages multiple laws of behavioral change: make a behavior obvious, attractive, and satisfying. It also keeps you honest. It creates a visual cue that reminds you to act, in inherently motivating, and is satisfying when you record another successful instance of you habit. It's a visual proof that you are casting votes for the type of person you wish to become.
    Bad days hurt you more than good days. You need a 50% increase to get from 100 to 150. But only 33% loss to get back to 100. The 'bad' workouts are the most important ones. They let you keep your compound gains. It's not always the result of the workout, is about being the type of person who doesn't miss a workout.
    We teach for standardized test instead of emphasizing learning, curiosity and critical thinking. **We optimize for what we measure**. When the measure becomes the target, it ceases to be a good measure.
    The more immediate and costly a mistake is, the faster you learn from it. I.E bad reviews. If you want to prevent bad habits adding an instant cost to the action is a great way.
    Having an **accountability partner** is useful. Knowing that someone is watching can be a powerful motivator.
    Big five personality traits: curious and inventive vs cautious and consitent, organized and efficient vs easygoing and spontaneous, introvert vs extrovert, friendly vs challenging, anxious and sensitive vs confident and calm. You should build habits that work for your personality. Shape the exercise around your interest (I.E gym vs cycling). Work hard on the things that come easy.
    The human brain loves challenges, but only if it's within an optimal zone of difficulty. I.E playing tennis against someone who is much better than you is boring.
    The **Goldilock rule** states that humans experience peak motivation when working on tasks that are right on the edge of their current abilities.
    Reflection and review enables the long term improvement of all habits because it makes you aware of your mistakes and helps you consider possible paths for improvement.
    Perform an **annual review** in which you reflect the previous year. How many articles published, new skills, workouts, new places visited, whatever is important for you. What went well? What didn't go so well? What did I learn?
    Perform an **integrity report**: Use it to determine what went wrong, revisit your core values, and consider if you have been living according to them. Reflect on your identity and how you can work toward being the person you want to become. What are your core values in work/life? How can you set higher standards?
    Your identity creates **a kind of pride** that encourages you to deny your weak points, and prevents you from growing.
    A **lack of self-awareness** is poison, and Reflection and review is the antidote.
    **Happiness is the absence of desire**. It is the state you enter when you no longer want to change your state or react to cues.
    **Being curious is better than being smart** Being motivated and curious counts more than being smart, because it leads to action.
    Being poor is not having too little, it is wanting more. If your wants outpace your likes, you will always be unsatisfied.

Your Money or Your Life
    **Financial intelligence** is being able to step back from your assumptions and emotions about money and observe them objectively.
    **Financial integrity** is knowing what is enough money and material goods to keep you at the peak of fulfillment, and what is just excess and clutter. It is having all aspects of your financial life in alignment with your values.
    Debt and lack of savings makes our nine to five routine mandatory.
    Lottery winners are less happy than they used to before.
    We build our working lives on the myth of more. More responsibilities, more perks, more possessions, more prestige, and more respect. But rather than satisfaction, the more we have, the more we want. More clothes, bigger house, new widget.
    The US converted in the 20s leisure from being a relaxed activity and transformed into an opportunity for increased consumption. We are not citizens we are consumers.
    People is driven by fear, promise of exclusivity, guilt, greed and need of approval. Advertisement aims at throwing us off balance emotionally.
    When we are depressed or lonely we buy to make us feel better. When we want to celebrate we buy, when we are bored we buy. We try to **satisfy essentially psychological and spiritual needs with consumption**.
    When we are kids, we are told the message that **money is happiness by giving us presents**. But as an adult, more **money means more responsibilities and more worry**: more expensive car, expensive home, getting robed, tax accountants, needing a better job...
    **The money fulfilment curve** shows that once the basic needs are covered, more money usually decreases happiness. **Declutering** helps reduce this.
    Sell the possessions you don't use.
    Money is something we choose to trade our life energy and time for.
    Ask yourself, is this expenditure of life energy i alignment with my values and life purpose?
    **You pay for money with your time**. You choose how you spend it.
    Men do not desire to be rich, only to be richer than other men.
    **Financial independence** is having enough. Avoiding the drama of nine to five till you're sixty five. Making a dying.
    Discern which expenses are fitting and fulfilling and which are unnecessary extravagant.
    You can never get enough of what you don't really want.
    Our values are those principles and qualities that matter to us. Living our values give us peace of mind. Values are the ideas and beliefs on which we base our decisions.
    You need to know your purpose of life.
    **Frugality** is getting good value for every minute of your life energy and from everything you have the use of. Waste lies not in the number of possessions but in the failure to enjoy them. Frugal means having a high joy-to-stuff ratio. Frugality is valuing your most precious resource: your energy.
    Often it's not material things we enjoy as much as what these things symbolize: conquest status, success, achievement...
    Riding a bicycle saves money three times: in gas, gym and doctor bills.
    Invest in preventive actions. I.E cleaning your teeth. Wore things out.
    Research your purchases, the cheapest is not always the best.
    Across time and culture the following needs are universal: subsistence, protection, affection, understanding, participation, recreation, identity and freedom.
    People don't need enormous cars, closets full of clothes. They need to feel attractive and excitement. People don't need electronic equipment, the need something worthwhile to do with their lives. People need identify, community, challenge, acknowledgment, love and joy. Trying to fill these needs with material things will result in **psychological emptiness** and it's the main desire for material growth.
    **Be in active pursuit of health**. Cultivate new friends, specially younger ones and participate in a community. Simplify your possessions.
    Giving presents is an important way to express love.
    **Fulfillment** is knowing when you have enough. You should ask yourself: Am I likely to get fulfillment from this money spent in proportion to the resources that it represents? Is this purchase in alignment with my values?
    Men used to hunt and women to gather for two and a half days a week. That averages a 15h a week or 3h per day. The notion that everyone should have a job came with the industrial revolution.
    **Leisure** is a commodity to be purchased, rather than free time to be enjoyed. Consumption keeps the wheels of progress moving.
    The value of leisure has dropped and the value of work risen.
    **What do you want to be when you grow up**? is part of the problem. You should instead ask what do you want to do.
    Why do we give the best years of our lives to our jobs?
    Work has two functions: financial and personal (emotional, intellectual, psychological).
    The problem with our paid employment is that our needs for stimulation, recognition, growth, contribution, interaction and meaning are not meet by our jobs.
    We have **confused work with paid employment**. Work is any productive or purposeful activity. Paid employment is one activity among many other. It does not need to provide with our sense of meaning, purpose and fulfillment.
    Our fulfillment as humans beings lies not in our jobs but in the whole picture of our lives.
    Our real work is just to live our values as best we know how.
    We forgot important jobs like loving our mates, being a decent neighbor or developing a sustaining philosophy of life.
    Happiness is our birthright.
    The purpose of paid employment is getting paid and your real work is far bigger than this one job. By separating work and wages you can see more clearly whether you ar valuing your life energy.
    How much money do you need to be at the peak of fulfillment?
    Your job consist on working on someone else's agenda.
    Disconnect work from wages, say I work as a programmer, rather than saying I am a programmer.
    There is our work life, our home life, our community life, our inner life and our secret life.
    When you retire, the quality of your retirement will be enhanced if you have been able to disconnect your work from your wages. Retirement should be retirement from paid employment, not from life.
    You are not only working when earning money. Taking care of yourself, your home, your family is unpaid work.
    There is an almost universal belief in our culture that if you are unemployed your are nobody.
    For greeks, **leisure was the highest good**, the essence of freedom, a time for self-development, and for higher pursuits. Yet we are unable to relax and enjoy our leisure.
    The only purpose of paid employment is getting paid. Increase your income.
    **Savings** is money put aside for something. **Capital** is money that keeps working for you.
    Align your earning and spending with your values and with what brings you fulfillment.
    Reflect on your life while you are living it.
    Leave the nine to five straitjacket, stop climbing a career ladder, follow the promptings of your heart and mind.


Acierta al Comprar una Vivienda
    La piedra angular de la compra de una vivienda siempre será el precio. El precio no será lo que diga el vendedor, sinó lo que un comprador esté dispuesto a pagar.
    Para ver el precio de mercado de una vivienda, busca en Idealista y fíjate en viviendas de similares características en el mismo barrio.
    El **valor catastral** lo calcula cada municipio cada 10 años. Se divide en suelo y construcción.Solo el pripietario puede pedirlo en el ayuntamiento con el IBI. Según este valor pagarás más o menos IBI.
    El **valor fiscal** es la valoración que ha hecho el gobierno de tu comunidad autónoma y puede ser superior al valor de mercado. Dependiendo de este valor pagarás más o menos ITP. Si compras por debajo de este valor, pagarás más impuestos.
    Ambos valores vienen con el IBI. Puedes pedirle al propietario cuanto paga de IBI y calcular el valor fiscal en la web de Hacienda.
    Para la compra de una vivienda de segunda mano se paga el impuesto **ITP**, es 10% en Cataluña.
    Los gastos de compra suelen ser de 1.5% del valor de la propiedad.
    Las **hipotecas** se paga un interés medido con el Euribor, que es el índice de referencia del interés en que se prestan dinero los bancos. Las hipotecas suelen mencionar el **TIN** y el **TAE**. A ti te interesa en TAE que agrupa todos los costes de hacer la hipoteca y hace el promedio anual.
    En España se utiliza el sistema francés: todos los meses pagas lo mismo de hipoteca, pero los primeros años casi todo son intereses, y estos se van reduciendo a medida que amortizas.
    Hay hipotecas fijas, variables o mixtas. Normalmente las mixtas tienen lo malo de fijas y variables al principio pagas muchos intereses, y a lo largo tienes la incertidumbre del Euribor.
    Negocia con el banco poder amortizar más sin pagar comisión.
    El **seguro de vida** es para pagar la hipoteca si mueres. La mayoría de entidades lo exigen.
    El **seguro de hogar** es obligatorio por ley, puedes contrtarlo con la hipoteca o otra empresa.
    **Dación de pago** te permite saldar la hipoteca entregando la propiedad.
    Habla con los vecinos del inmueble que te interesa, para conocer si ha habido problemas, vecinos molestos, problemas con el ayuntamiento, obras pendientes, derramas (fachada, ascensor, filtraciones, rellano, ...)
    **Ubicación**:observa el estado de las calles, como son los vecinos, ruidos, aceso a carreteras, servicios básicos, grafitis, aceras manchadas, fachadas antiguas, farmacias, ambulatorios, supermercados, buses, metros.
    Las plantas bajas són las que más polvo acumulan.
    Los metros cuadrados suelen estar mal indicados, suelen ser los no útiles o directamente estan mal en el plano. Mira la escritura y catastro y pueden no coincidir. Pasillos son no útiles. Evita distribuciones raras.
    Lo que da un aspecto más antiguo es lo más caro de reformar: cocinas (vitro,encimera) o baños (inodoros, duchas). Fonaternia y cuadro elétricos son caros de cambiar.
    Visita el mismo inmueble por lo menos dos veces: en un día luminoso y en uno lluvioso. No visites más de 3 inmuebles en un mismo día.
    Las segundas viviendas se suelen vender porque el cash hace falta.
    Para comprar un piso, tendrás que hacer una **reserva** dejando una señal en la agencia. EL siguiente paso son las **arras**, 10-15 días desde la reseva. Se paga 5k-10k si el comprador se echa para atrás lo pierde. Si el vendedor se echa para atrás lo paga.  hay cláusulas resolutorias que te permite evitar perder el dinero, si no te conceden la hipoteca, etc.. Se fijan 60 días para ir al notario y firmar, tiempo para conseguir hipoteca.
    Cuando se transmite la vivienda, se hace libre de cargas. Para que no quede nada pendiente.


The Book on Rental Property Investing
    Rental properties are great because they let you **bug with leverage**, you buy with bank's money to increase the potential return and risk.
    Rental property investing lets you manager your own investment, you are directly responsible for the outcome. People always need a place to live, demand won't end. The equity is fairly stable and predictable.
    **Appreciation** is an increase in the value of an asset over time. It can be natural: tendency for prices to rise over time, or forced: doing an improvement to the place to increases it. Counting on appreciation to be profitable is especulating and not recommended.
    **Cash flow** is the amount of income left after paying all the bills. Usually expressed as monthly dollar amount. It is the most important wealth generator for rental property investors.
    A **loan payment** has a principal and interest. The principal goes directly into the equity of your property.
    The more leverage you use, the greater the risk you take.
    **Price does not equal value**. Warren Buffet: Price is what you pay, value is what you get.
    Having cash reserve to cover problems you might face is imperative. The amount depends on a number of factors, such as the number of properties. ~Six month expenses for each unit.
    The more risk, more reward. You need to do the right math to get the right profit.
    **Compound interest** is the profit earned by reinvesting profits.
    You should set-up a plan: I.E Buy each unit at 80% of the actual value, force 10% appreciation the first year through improvements, property must appreciate at least 3% each year after year one.
    A solid team can help you turn your from a new investor into a successful real estate mogul.
    Most important factors to analyze: Cash flow and appreciation.
    **Buy an hold investor**.
    The key to calculating income is **estimating the fair market rent**. Determined by the market. Will depend on location, bedrooms and bathrooms, amenities (parking, aircon), size, ...
    When a unit is vacant, try to bump up the rent. If the market will bear the increased price. If in a week or so there are no takers, start easing down the price until it rents to find the market rate. Too many applications? Rise the rent.
    You should include in your math a 5% or so **vacancy rate**. A 5%-15% **repairs** rate depending on the age, and also **capital expenditures** (replacing roof, plumbing, windows, paint...) This is fixed cost and will be a bigger percentage if it's a low income rental.
    **Cash on cash return on investment (CoCROI)** it shows the yield our money is making us based on the cash flow. It ignores appreciation and loan pay-down). It lets you compare this investment against other investments, like stock market or mutual funds. It is the ratio between how much cash flow we received over one year and how much money we invested it.
    **CoCROI=Total annual cashflow/total investment**.
    **The 50% rule**: Rental properties expenses tend to be 50% of their income, not including mortgage principal and interest payment. **Cash flow = Income * 0.5 - Mortgage**
    **The 2% rule** is the ration between rental income and purchase price. If the monthly rental income is less than 2% of the purchase price, it's probably a bad deal. But depends on the local market/area.
    To find a good deal you should look at 100 homes in screen, offer on 10, and get only one accepted. If you get more than one accepted, you are offering too much. Don't be afraid to submit a lot of offers.
    Understanding the location you are investing is key to being successful with the investment. **Rate locations A to D**. Class A are locations with newest buildings, hottest restaurants, best schools. Class C are lower income area with 30 year old homes or more. Class D is where you wouldn't travel alone. A lot of crime or drugs, high unemployment. Avoid D. Don't buy a property in a neighborhood that has an unsolvable problem. The property will be difficult to rent, the tenants will trash the house, you will have to deal with evictions late rent.
    Check the price to rent ratio for each location to determine the areas of higher yield.
    Focus on the deals that need work. Homes that have some problems are avoided by most of the buyers, so it's easier to get a deal.
    Paint the home before renting it, it increases the value. Kitchens and baths sell houses. Consider fixing them. Sometimes it's easy and cheap to transform an old kitchen into a newer one with some painting and tails.
    Make your offer without many **contingencies**. You can specify anything as contingency. Typical ones are inspection and funding.
    Use a professional **inspector** to check out the property before buying it. They will make a details report of the state of the property.
    You can show the seller you are serious about the offer by **adding more as earnest money** that is required. He will be more likely to accept. If the offer is turned down, you can conteroffer again a bit more. If the initial offer is accepted, you probably offered too much. **A little back and forth is a good thing**.
    You need to be **prepared to walk away**.
    Find the real motivation for selling the property, it can help in the negotiation.
    Appeal to the math in your negotiation, Expenses will be X, I can only rent it for Y, I need to pay Z to get W% return.
    Ask the seller what is the lowest price. Then go lower.