Enough by John C. Bogle

Is there no limit to what enough is in modern society? Capitalism is at play. Management earn obscene amounts of compensation. Greed can cause a system’s downfall. How long can materialism and greed last? I have been given enough, in more aspects than just financially. My great grandfather was incredibly thrifty. My family was fraught with financial difficulty. I had to work when I was young in order to feed the family. I learnt to accept responsibility when I was young. I did well in school and mum put in so much effort into investing in my education. My attitude in life has been influenced by my family. The first ‘diamond’ of my life was my admittance to the Blair Academy. My family was incredibly close-knitted and that helped a lot. Later, I got admitted to Princeton University on a full scholarship. Even then, I had to take up temporary jobs for me to get paid. However, my parent’s marriage fell apart after that. I discovered that the mutual fund was new at that time and wrote about it. Mr Morgan was the boss of Wellington Fund. When I was 35, he said I could take over the firm. After a disagreement with the other shareholders, I got fired. My business model was to manage our affairs internally and not require any external party to manage it. Vanguard would have to do everything in-house if it wanted to succeed. Before 1875, I founded the world’s first index mutual fund. The fund didn’t need to be managed as the returns would track a basket of stocks that were representative of an index. ‘If you build it, they will come.’ Thankfully, we got approval from the SEC too. A donated heart was one of my ‘diamonds’ too. This heart enabled me to live healthily. Be blessed by the number of diamonds you have. Humans are all too interested in short-term gains. Companies should recount their past values which enabled them to thrive. Virtue doesn’t come from money. It comes from doing good.

Some men wrest a living from nature and with their hands; this is called work. Some men wrest a living from those who wrest a living from nature and with their hands; this is called trade. Some men wrest a living from those who wrest a living from nature and with their hands; this is called finance. – Old Epigram from 19th Century Britain

There is a food chain and the investor is at the bottom of it. The financial system cannot be too costly. We are often trading paper and paying bankers too much. In addition, the financial system is fraught with complexity. Young graduates like to enter banking. We should strive to do good in our jobs. Never let money alter your conscience. Do not invest in products which require you to pay high management fees etc. Serving your client is the highest priority. The sub-prime crisis was an example of extreme greed. The finance sector takes up too much of the earnings of the S&P 500. Sometimes, the markets crash but those people in IB keep making money. The ex-CEOs of Citigroup and Merrill Lynch were paid very well just before the sub-prime crisis. They were not penalised heavily after that. However, bankers earned nothing as compared to the hedge fund managers. The hedge fund industry demands high management fees and investors can’t survive. The number of CFAs are increasing all the time. There is an inherent disconnect between cost and value in our financial system. Humans have abandoned the traditional standards of investing. The author looks up to people like Benjamin Graham and uses value-investing. Speculation is rife nowadays. The cumulative costs keep growing. Does the financial system create more value than cost? My fear is that the finance sector is getting too big and out of control. There needs to be a financial system reform. As public investors, we should demand more from our financial system.

The motivation of too many of those rushing into finance is more aligned with what they can get from society than what they can give back to it. – John C Bogle

Too Much Speculation, Not Enough Investment. Investing is about long-term ownership of the business. Speculation is just the opposite and is about short term gains. One of Keynes’ famous works is the ‘General Theory of Employment, Interest and Money’. In the long run, the stock price must be aligned with the business fundamentals. Speculators cannot capture the inherent value in a stock. Markets are volatile because of speculators. In the expectations market, prices are set based on the expectations of investors. These are not based on ‘real value’ per se. We live in an era of speculation. However, it is true that investors win and speculators lose in the long run. Stock markets have crashed, just like on Black Monday in 1987. Short term outcomes can’t be predicted accurately nowadays. There have been little cases of black swans in the long term market. The financial system is prone to innovation. Learn to emulate tortoises. Market timing is not sound. Market timing doesn’t work. It is difficult to make the right decision consistently on market timing. We need to improve the balance between entrepreneurial innovation and more traditional values. We cannot allow the whirlwind of speculation to continue unabated.

In investing, tortoises tend to win far more often than hares over the turns of the market cycle…Placing large bets on an unknown future is worse than gambling because at least in gambling you know the odds. Most of the decisions in life motivated by greed have unhappy outcomes. – Peter L. Bernstein

Too Much Complexity, Not Enough Simplicity. Simplicity has been the key to successful investing. Technology has complicated our lives. There are many middlemen in a CDO offering. Some banks are also not concerned with the creditworthiness of such offerings. The market has been flooded with interest rate swaps, credit default swaps etc. The value of the derivatives market is huge. ‘As long as the music is playing, you have to keep dancing.’ The Federal Government has also backed such offerings. It is better to buy an index fund as it has better returns. Innovations have hurt investors. The winners are usually the fund managers or distributors. Innovations like stock index fund, bond index fund have done investors well. ETFs are great. However, they are being traded too frequently, leading to speculation. Some ETFs also do not contain stocks that track the stock market index. There are many different types of funds nowadays, like market neutral, hedging, commodities, private equity etc. However, please examine the track record before buying. Commodities are purely speculative in nature. Fund expenses must be cut if investors are to gain. Fund failure rate is very high amongst idiosyncratic funds. Some funds are not concerned with shareholder performance. It is time to get down to basics. The author believes that the simple way is the best way. The mutual fund industry often fails to provide market-beating returns. The fund manager should serve investor’s interests.

Too Much Counting, Not Enough Trust. We often place too much emphasis on numbers and trust them. Then, we have optimistic views on the future because of them. Even numbers produced by the government can be questionable at times. We need to understand the sources of stock returns. Do not project future returns based on past historical rates. This causes the expected rate of return of investments to rise. The bubble of investor optimism will have to burst someday. It is smarter to set your expectations for future earnings on basis of current sources of returns. There is a bias towards optimism in the future. CEOs often paint too optimistic pictures for earnings and analysts tend to agree with them. The standard for analysts has changed from GAAP earnings to operating earnings. Pro-forma earnings also exclude all the one-time losses etc. Creative accounting is a big issue nowadays. Pension holders might lose money on their investments and this will have other repercussions as well. Businesses like to use M&A to create ‘value’. For each M&A deal, the bankers and lawyers earn huge sums of money. ‘Paper’ companies have acquired ‘rock’ companies that make. In Vanguard, we believe in organic growth, not forced growth. Nowadays, we do not know how to ask without any numbers and this is a scary fact. Trust is important.

The first step is to measure what can be easily measured. This is okay as far as it goes. The second step is to disregard that which cannot be measured, or give it an arbitrary quantitative value. This is artificial and misleading. The third step is to presume that what cannot be measured really is not very important. This is blindness. The fourth step is to say that what cannot be measured does not really exist. This is suicide. – Daniel Yankelovich

Modern capitalism has two parts: there’s business, and there’s finance. Business is renting you a car at the airport. Finance is something else. – Michael Kinsley

Too Much Business Conduct, Not Enough Professional Conduct. Professional associations are now run like business enterprises. However, professionals should be responsible and selfless in their service towards their clients. Times have changed nowadays. Professional conduct is less well regarded as in the past. Too many banks are seeking competitive advantages at the expense of their customers. The battle for professional independence is never won. Trust and be trusted. Capitalism has eroded as well and this is a big issue. Owners’ capitalism has been transformed to managers’ capitalism. Institutional investors are a big thing nowadays. Managers are not acting as they should for their principal. Beware of negligence and profusion have prevailed among corporate management. How much should the CEO be compensated? It is hard to determine how much value a CEO has added. Sometimes, their salary growth outstrips the corporate profit rate. There are accountability issues. Institutional money managers hold a lot of power. CEO stock based compensation should be based on intrinsic value and not actual stock price. The compensation consultant has also become more popular. Many CEOs are also paid according to how they fair in their peer group. A basic set of ethical principles is needed to guide the profession. Financial engineering is getting more and more popular. Capitalism must be fair, regulated and ethical.

Money management extracts value from the returns earned by our business enterprises, and in the process of maximizing its own commercial benefits, the industry seems to have lost its professional bearings. – John C Bogle

Too Much Salesmanship, Not Enough Stewardship. The industry is characterized by salesmanship too. Mutual fund size has grown by a tremendous rate recently. Fund investors start trading funds instead of simply holding them. The holding period for stocks has been cut from 6 years to 1 year. Fund costs have soared as well. The fund industry is more like a marketing industry now. Investment focus has been truncated. Some funds are only created because of the latest market fad. There is a need for reform. We need to cut down costs for investors. Serve the investor for a lifetime. There are too many choices of funds out there and this makes people confused. There is a need to have long term investment horizons. Serve the long term investors. We must all return to the index fund. Put fund investors in the driver’s seat. Shareholder education takes time. The industry should aim to be objective and unbiased. We need to have an industry that is of the shareholder, by the shareholder, and for the shareholder. We need a mutual fund industry with vision and values. We must build companies that stand for something. Stewardship will pay off. It is important to keep the faith every day.

Too Much Management, Not Enough Leadership. Our large corporations are over-managed but underled. Managing and leading are completely different. The leader is more original. The leader should be able to inspire. They should care about the deeper values of the organization. There are 10 rules for building a great organization. 1) Make caring the soul of the organization. 2) Forget about employees (call them crew members instead). 3) Set High Standards and Values – and Stick to Them. 4) Talk the Talk. Repeat the Values Endlessly. 5) Walk the Walk. Action Speaks Louder than Words. 6) Don’t over-manage. 7) Recognize Individual Achievement. 8) Loyalty is a Two-Way Street. 9) Lead and Manage for the Long-Term. 10) Press On, Regardless. A superior company thinks about its dream. It also applies unconventional thinking. We were based on value profit chain concepts. I built a company that would endure. Businesses should have purposes besides making money.

The institution must be the object of intense human care and cultivation. Even when it errs and stumbles, it must be cared for, and the burden must be borne by all who work for it, all who own it, all who are served by it, all who govern it. Every responsible person must care, and care deeply, about the institutions that touch his life. – Howard W. Johnson

Too Much Focus on Things, Not Enough Focus on Commitment. Where are the things by which one measures one’s life? Don’t let things measure the man instead. Life is never smooth and we might lose our wealth one day. However, your character is the one that will endure. Boldness and commitment is all important. Commit the most to make a second life. It is crucial to be committed to your family. Commitment to neighbours and the community is also important. We thrive as human beings and have faith in ourselves. Give credit to those who have helped you along the way. You didn’t succeed on your own. Be bold and summon your magic.

Too many 21st century values, not enough 18th century values. Do not move away from the truth. Facts are everywhere. The Age of Reason occurred in the 18th century. Many of the great leaders spoke about the period of Enlightenment. Benjamin Franklin was a great leader in the 18th century. Joseph Schumpeter also described what an entrepreneur ought to be. Entrepreneurs and capitalists are not the same. Have the will to conquer, and the joy of a good battle. Franklin invented many tools for the public’s benefit. There are other motives for business other than profit. A man should have a mind to improve, a heart to cultivate and a character to form. Keep striving to improve. Return stewardship to capitalism. Lead with purpose. Virtue is all important. Franklin listed 13 virtues. He started his day by asking ‘What good shall I do this day?’ and ended it with ‘What good have I done today?’ His energy and persistence helped him in his public life.

Knowledge is not the personal property of its discoverer, but the common property of all. As we enjoy great advantages from the inventions of others, we should be glad of an opportunity to serve others by any invention of ours, and this we should do freely and generously. – Benjamin Franklin

The real test for an honest and productive society is not what a society has achieved, but what it aims to achieve. It can put honest people on a pedestal even if they do not maximize their personal benefits and preferences…and discard and shun as models of failure dishonest people who achieve their highest ambitions by fraud and abuse of trust. – Tamar Frankel

Too Much ‘Success’, Not Enough Character. We often chase success but success continually eludes us. Is success all about achieving wealth and fame? Financial wealth is not a good measure of success. Fame is a flawed measure too. Fame is used for other purposes now. One can contribute to society in a great way but yet not be famous at all. Power should not be used capriciously and arbitrarily. Power should be used for a worthy cause. Have we been chasing the fake rabbit of success? Success isn’t about meeting other people’s expectations too. You should just base success on your own expectations and make the most of your talents. We should admire those people in professions where they can contribute to society, but not achieve any fame or recognition. Modern life has forced people to be competitive. Life demands much more of us nowadays. What are you competing for? Without character and courage, nothing else lasts. To hone character, one must undergo tribulations etc. Be yourself and strive to be better. With age, you should better understand where the rabbits are. Challenge yourself and strive to be better. Chase the real rabbits of your life.

Success can be measured in our contributions to building a better world, in helping our fellow man, and in raising children who themselves become loving human beings and good citizens. Success, in short, can be measured not in what we attain for ourselves, but in what we contribute to our society. – John C Bogle

I long to accomplish a great and noble task, but it is my chief duty to accomplish humble tasks as though they were great and noble. The world is moved along, not only by the mighty shoves of its heroes, but also by the aggregate of the tiny pushes of each honest worker. – Helen Keller

Highly educated young people are tutored, taught, and monitored in all aspects of their lives, except the most important, which is character-building. But without character and courage, nothing else lasts. – David Brooks

What’s Enough? What is the relationship between happiness and success? Success is not the key to happiness, happiness is the key to success. Humans are resilient. Money only provides a transitory form of happiness. Autonomy, social interaction and competence are all important. How much money do you need? I want to give something back to the less fortunate. For example, give back to your alma mater. I also offered scholarships to the Blair students. It has been a thrilling ride indeed. I was born to save rather than spend. Our shareholders also have received superior returns. I do not like extravagance. My retirement plan is the largest in the family balance sheet. Saving early and regularly is the key for wealth accumulation. Postpone your first payment for Social Security. Stick with low-fund fees. There are still many people living in poverty in the US. The income disparity is growing. You must remember that you are fortunate but not all fellow Americans are enjoying it. The domination of the US will not happen forever.




The Fix by Jonathan Tepperman (Part 1)

How Nations Survive and Thrive in a World in Decline

Politics is the art of looking for trouble, finding it, misdiagnosing it, and then misapplying the wrong remedies. – Groucho Marx

Introduction. This book is about success stories which the author has seen for himself. This is about finding solutions in an uncertain world. It is possible to overcome the problems if the right strategies are adopted. The negative news in the media can easily overwhelm you. Life is difficult and some of us have problems to make ends meet. Many Americans are not optimistic about the economy. After 2008, things seemed to go downhill. Even in Russia, there is negative economic growth rate now. In 2011, there was conflict in the Middle East. The US-Iran nuclear deal has been a disaster. Growth is predicted to slow down. Greece almost went bankrupt, the EU is no longer as united as before. ISIS is gaining ground again. Many refugees are heading to Europe. China’s economy is also slowing down. The emerging-market growth rate from 7.4% to 3.8% between 2010 and 2015. The liberal, rules based global order doesn’t seem to be working all that well now. A lot of our global failures is due to the failure of politicians to lead. We need to understand the problems actually and notice that they can be fixed. The stories in the book will show that it is indeed possible to solve. The first problem is inequality. It can certainly pose a lot of problems for us. The income gap in the US is widening and the poor get more disgruntled. The solution is to grow the economy in the past. A lot of corporate profits might be ending up in the hands of the rich. The second big issue is immigration. Many of the displaced are heading to Europe. Trump denounced immigration in a harsh manner. Attacking immigrants might not be the best solution overall. A lot of bright Americans are not retained by their country. The fact is that there is little evidence that immigrants cause a lot of trouble. Although Germany has let refugees in, they are not given the support to integrate in society and they end up causing trouble in the end. The third big issue is Islamic extremism. The Syrian rebel forces were allowed to grow and the Islamic State was formed. The Jihadists seem to be expanded in recent years. Civil War is the next big issue to hit us. Iraq is now in a big mess after the US troops pulled out. There are other civil wars in Africa, Syria etc too. Corruption is the next big issue to face us. Corruption tends to affect both poor and rich countries alike. This often leaves the poor at a disadvantage. It undermines the trust in the government and the system of rule. The Resource Curse is our next big issue (6th). Africa is known to have a lot of untapped natural resources. However, will they be able to handle this wealth? They might invest in the wrong things that do not aid the people. It is also common for resource-rich countries to be run by dictators as you can bribe your people to win yourself votes. Energy is also a big concern. There was a shale revolution in recent years. A lot of the countries that have shale are unlikely going to tap on them. The next big issue is that of the Middle-Income Trap. It is hard to reach the developed country status as there needs to be productivity increases. It might sound easy, but politicians are not up to the task. Many countries know what to do, but executing it is hard. The next major problem is gridlock I. Infighting among political parties in Mexico, Italy etc have caused many problems. Even though India’s Modi is good, he is still facing gridlocks. Despite all the problems in the World, it is not wise to abandon hope. We just need to look for the right fix.

Profits to the People (How Brazil Spreads its Wealth). How did the former Brazil’s president, Luiz Inacio Lula da Silva, turn inequality into a manageable problem? Economic growth is not working the way it is used to. Thomas Piketty suggested a global wealth tax. However, the rich can get around paying tax and it might get controversial. How did Brazil do it? It is hard to imagine Brazil as a model for anything. Brazil is blessed with resources and a young population. Many are living on less than $2 a day. However, by 2011, its economy was growing by 4% a year. Inequality fell as well. Lula had a 87% approval in 2012. Lula had humble beginnings. He worked hard and climbed in the Sao Bernardo Metalworks. Later, he founded the leftist Workers’ Party. He lost the president election 3 times. Many people didn’t trust him at the start and Brazil was in shambles in 2002. However, his predecessor, Cardoso’s structural reforms were not popular. Lula listened closely to the ground and understood the problems people faced. He cut spending and reduced budget deficit and demanded a budget surplus when he took officer in 2003. Within 6 months, their bond value had risen by 20%. Now, he launched a social welfare campaign. His programme handed people money instead of goods or services. These were effect at eradicating poverty. Many denounced the idea as giving the poor dietary staples would be more practical. The food programme launched in the past was a flop as corruption was rife. It was shown that many families did not squander the money. The scheme would be targeted at those in extreme poverty. However, it came with conditions, like parents needed to send kids to school, women needed to go for checkups etc. The critics thought that the money would be better used to build schools etc. There was also concern for welfare dependency. He made the public feel that they ‘earned’ the cash by fulfilling the conditions. Lula had issues dealing with non-compliance with conditions. Also, he had to deal with undeserving candidates applying to the scheme. It worked after he set up a ministry to deal with these issues. The trick was to imposing conditions for assistance. The programme does not give out excessive amounts of money, just enough for the family to get by. It is a cheap antipoverty programme. It was certainly an innovative welfare program. Lula also adopted conservative macroeconomic policies. He offered large firms cut-rate loans. He was not upset that the rich got richer. He wanted the greatest good for all. The results of his policies were great. Bolsa Familia, the social welfare programme, worked wonders. In addition, vaccination rates are increasing, infant mortality is dropping etc. The poorest Brazilians are also more optimistic about their futures. The money was paid directly to the beneficiary, with no intermediary. The rich do not care about the programme as it is run cheaply. Even in 2006, when Lula was allegedly accused of corruption, he still won. Lula was an everyday man who could relate to the poor. However, despite this, there are still 28 million Brazilians living in poverty. The good thing is that the payments given out are quite low and people are still incentivized to work. Many of the international media have lauded this programme as being successful. Many other developing countries are also trying to learn from Bolsa Familia.

If there’s one thing I’m not ashamed of, it’s profit. But I want people to know that my philosophy, at heart, is that of a mother. No one is fairer than a mother. Even if she has 300 kids, she will treat them all equally. That’s what I used to say to the Brazilian people: that I govern for all. – Luiz Inacio Lula da Silva

Let the Right Ones In (Canada’s Immigration Revolution). The middle of the last century was turbulent indeed. In the 1940s, Canada were strict with their immigration policies. Justin Trudeau is their new PM. They took in Syrian asylum seekers. Canada has one of the highest immigration rates in the world. More than 20% of their population is foreign born. People from the Philippines, China and India are there too. Many of their residents don’t mind. There is sufficient public support. There has not been anti-immigrant riots in the last half a century. The government has been good at convincing the people that immigration is a necessity and is good. Pierre Elliott Trudeau was PM from 1968 to 1984. He was extremely charming and smart. He studied in the UK at LSE and gained a holistic picture of the world. The French militant group caused havoc in Quebec in 1967. Trudeau took power in 1968. Trudeau transformed Canada from a bi-national one to a multicultural one. The two language policy of French and English won’t cut it. He wanted to treat the minorities better. He also set up the Human Rights Commission in 1978. He wanted to create a distinctly Canadian identity. Some politicians in Europe have denounced multi-cultural policies. For Trudeau, he still wanted to keep the native and core culture intact. There were two problems: cultural divide and the assimilation of immigrants. It is the world’s second largest state by landmass. There was also a push by the government to increase its population due to the large land mass. In addition, many workers were moving to the US from Canada. In the 1940s, Asians were largely not accepted. In 1962, Canada abandoned ethnicity as a basis for evaluating immigrants. However, Ottawa was slow to adopt this new stance and there were still issues. Later on, the point system was created based on 9 criteria: education, age, fluency in English etc. More non-Europeans entered the country. In the US, immigration still centers on family reunification as the primary entry criteria. However, in Canada, it was different. Ottawa now focuses on formal education. Trudeau oversaw the development of Charter of Rights and Freedoms. All these policies have helped avoid the backlash that modern economies have faced in recent years. Indeed, the immigrants rely less on welfare and their employment rate is also highest in the OECD. This definitely helped to overcome the shrinking and aging workforce. Many see immigration as a way to strengthen nation’s identity. Brits are very hostile towards immigration. The immigration story of Canada has a lot to do with pragmatism and necessity than idealism. The US should study Canada’s success story

There cannot be one cultural policy for Canadians of British and French origin, another for the original peoples, and yet a third for all others. – Jonathan Tepperman

Canada has the highest naturalization rate in the world, with 85% of eligible permanent residents becoming citizens. That’s important because citizens are more likely than guests to invest in their new homeland and be welcomed for doing so. – Jonathan Tepperman

Kill Them With Kindness (How Indonesia Crushed and Co-opted Its Islamic Extremists). In 1998, Indonesia tossed their leader out of office. It has more than 10000 islands. Suharto was a tyrant, but at least he was competent. He kept the economy growing at 7% per annum during his 30 year reign. Although it is a Muslim state, where 90% of the people are Muslims, he crushed those who tried to make it more Islamic. People feared that Islamist militias would start bombing the place. Now, Indonesia is a stable democracy. Terror attacks are rare. The majority do not believe in extremism, unlike in the Middle East. They are close to eliminating the threat of extremist violence. Islam was never imposed in Indonesia in the past. The people are more open minded. The Islamist political parties are also not competent. The irony thing is that as the population became more devout, Islamic extremism declined. Although people want to embrace sharia law, they don’t like the way it is being enforced. Abdurrahman Wahid, Megawati Sukarnoputri, Susilo Bambang Yudhoyono managed to do a good job on this front. They all wanted to consolidate the country’s fragile freedoms. The leaders wanted to seem popular by appealing to the common Man. Wahid was a sick old man, but his pluralistic policies were lauded. Megawati was related to Sukarno and didn’t tackle the issues well. However, she got the army out of politics. Yodhoyono was a democrat at heart, despite being an Army General. SBY also protected the minorities and guarded against discrimination. He also actively eradicated corruption. He launched major anti-poverty campaigns. Between 2006 and 2011, Indonesia did very well and doubled exports. Indonesia also learnt that attempts to eliminate Islamic parties like in Egypt have failed. They invited some of these parties into their coalition and cabinet. This was a very intelligent move. Megawati reacted to the Bali bombings and set up an anti-terror unit. It was called Detachment 88. Many of the JI members have been killed or captured. Also, they have been able to dig information out of the criminals. Also, they have tried to rehabilitate those who can be helped. Those prisoners who co-operate are rewarded as well. In July 2014, Joko Widodo was elected as President. He seems even more democratic than SBY and seems willing to fight extremism too. He also doesn’t have an elite background. He is also very into technology and knows the benefits of it. Jokowi is often compared to Obama, who doesn’t have a lot of national and international experience. He is a symbol of hope.

Learn to Live with It (Rwanda’s Wrenching Reconciliation). Rwanda’s Hutu majority tried to exterminate the country’s Tutsi minority. It happened in 1994. Kagame was the then leader of Rwandan Patriotic Front, a rebel army who was fighting the Hutu-led government. The Inkotanyi, Tutsi insurgents, managed to prevail. Rwanda was decimated by the war. Many of the Tutsis were slaughtered. Rwanda is one of the world’s poorest countries. Many of them were suffering from post-traumatic stress as well. The President had to heal the situation and restore order to Rwanda. The government had to deal with genocides. Kagame had to deal with the genocide suspects. There were not enough jails to house these people. Trials alone were not enough, and justice had to be served. In addition, it would not help the victims in somehow forgiving their perpetuators. Kagame was a real pragmatist. The strategy for recovery had 4 parts. The first was that RPF would establish a strong force and build a unified garrison state and control the country. Next, the government would invest in economic growth and build institutions. This included boosting human capital and providing free health care. Corruption was also stamped out. Kagame also tried to turn Rwanda into a race-blind nation. The government created 12 thousand village tribunals to hear the cases. The trials would not last for many days. It would promote both justice and reconciliation, not one or the other. Communities could select their judges, based on their integrity levels. Thus, the people had a say. Gacaca was an ambitious transitional justice projects. Kagame was criticized as many criminals managed to get away with a lighter sentence if they were co-operative. In addition, the judges were not trained. Gacaca was not a perfect system, but they managed to see many cases and speed up the process. It was a good interim measure given the severity of the situation. The tribunals also encouraged engagement between the victims and perpetuators. It also emphasized community service as a form of rehabilitation. The country is in much better shape now. Many people have been lifted out of poverty. A vast majority of Rwandans supported Gacaca. Hutus and Tutsis now live peacefully together. It was a form of enforced unity, but it works I guess. Kagame has become a polarizing figure in the last few years. His critics target his human rights record and intolerance for dissent. His government has been accused of killing Hutu soldiers and civilians. Many nations can learn from Rwanda after their civil war. Usually after a civil war, it helps to take a more radical approach. Rwanda invented a solution, Gacaca, which was tailor made to their own organization. That was remarkable indeed.


Secrets of the Millionaire Mind by T Harv Eker

Study this book and try out the principles contained in it. This book is all about money. You should have a financial blueprint for yourself. Through this book, you will understand what creates success and what causes failure. Some people are simply too afraid that they don’t even try. Rich people all think in similar ways. The strategy was to copy how they think. Later on, I studied exactly how they thought. You have to have a long term strategy and you need to keep focusing on that. Sometimes, your mind can be a big obstacle to your success. Basically, this book will teach you to think rich and to get rich. To move up in life, you have to let go of the bad habits.

Your Money Blueprint. There must be both outer laws (technical skills) and inner laws (mindset). Can you be at your best even when you don’t want to be? Your character is what determines your level of success. Wealth Principle: Your income can grow only to the extent you do! With more money comes huge responsibility and not many people can handle it. Most people are unconscious. We live on 4 realms of existence: physical, mental, emotional and spiritual. Understand cause and effect. Learn to change your inner world and things will be different. When you declare something aloud, you can feel it resonating. An affirmation is something similar too. A declaration is an intention to do something in future. You can discover someone else’s money blueprint easily. Wealth Principle: Thoughts lead to feelings. Feelings lead to actions. Actions lead to results. Your blueprint is everything that is ingrained inside you. Your mind is conditioned. We are heavily influenced over what happened when we were young. Verbal programming is an influence. This is basically what people tell you. All this has a subconscious effect on you. This is very powerful indeed. If you believe that rich people are greedy, you will tend to hate money in future. Emotions win logic when the mind is unconscious. Remember that conditioning will have an effect on your thinking. Awareness, understanding, disassociation and reconditioning are important. Your parents play a huge role in your life and you probably model yourself after them. ‘Monkey see, monkey do’ behaviour is very normal indeed. For a big part of my life, I re-lived my dad’s up and down pattern of making income. Change your success blueprint and you will be saved. Saving too much for rainy days might not be a good idea too. For some, the more money they make, the angrier they become. You need to understand why you want to amass more wealth. You can’t solve all your problems even with more money. Fear is the root of all evil. Having more money is really better than more money. Your inner world has a big bearing on the outer world. Earn money through purpose, contribution and joy. Specific incidents in the past can shape your beliefs on wealth. Do not let money be a burden to you. Money can cause break-ups. If you have a mismatch of blue-prints, fights can occur. Choose understanding. How much you earn doesn’t matter. What matters is that you should reach your full financial potential. Are you programmed for saving or spending money? Your blueprint will determine your outlook on life and your future. You must have a blueprint which is like a thermostat. Learn to reset your thermostat. ‘Your income can grow only to the extent that you do.’ Study yourself. Learn to respond to situations. Genetics has a part to play, but people are largely influenced by what happens around them. Stop blaming your partner.

The reality is that most people do not reach their full potential. Most people are not successful. Research shows that 80% of individuals will never be financially free in the way they’d like to be, and 80% will never claim to be truly happy. – T Harv Eker

If you want to change the fruits, you will first have to change the roots. If you want to change the visible, you must first change the invisible. – T Harv Eker

The reason or motivation you have for making money or creating success is vital. If your motivation for acquiring money or success comes from a non-supportive root such as fear, anger, or the need to “prove” yourself, your money will never bring you happiness. – T Harv Eker

The Wealth Files – Seventeen Ways Rich People Think and Act Differently from poor and middle-class people. Your mind must be wired to financial success. Awareness is to think the way rich people think. Wealth Principle: You can choose to think in ways that will support you in your happiness and success instead of ways that don’t. You have to let go of your old ways. Learn to change yourself.

Wealth File #1: Rich people believe that they have control over their life. Rich people feel like they have control over their lives. Some people like to play the blame game. For instance, you can blame the economy etc. The next group of people will justify and say things like ‘Money’s not really important’. Love doesn’t feed anyone and doesn’t pay for infrastructure. Wealth Principle: Money is extremely important in the areas in which it works, and extremely unimportant in the areas in which it doesn’t. The more you complain, the more you will focus on the bad stuff in your life. Do not become a ‘crap’ magnet by complaining non-stop. Make sure you stay away from complainers. Remind yourself not to complain for a week. Remember to choose your words wisely.

Wealth File #2: There is no such thing as a really rich victim’. Do not yearn for attention and be at the mercy of others. Disconnect attention from love. You can either be a victim or be rich. Tell yourself you have a millionaire mind. Instead of wealth, you play for security. The middle class just want to be comfortable in life. If you are middle-class, you can’t afford the most expensive meals and you might need to think twice on your expenditure. One needs to aim big. Write down goals for your annual income etc. Poor people want to be rich but they lack commitment. Mixed reasons are the reason why you won’t get rich. If you are afraid of failure or hard work, then you definitely won’t get rich. It is important not to have mixed messages at all.

Wealth File #3: The number one reason most people don’t get what they want is that they don’t know what they want. Wanting alone is plain useless. The best way is to commit to being rich. Being rich requires a strong mindset and knowledge and expertise. You must be willing to give up something to gain wealth. The Universe will support you in your plan. Commitment is the key.

Wealth File #4: Rich people think big. Poor people think small. You must think big. Wealth Principle: You will be paid in direct proportion to the value you deliver according to the marketplace. How many lives do you affect? How do you want to live your life? Do not play it small. An entrepreneur is actually a problem solver. Play big and live up to your potential. Every one of us is talented in our own little way.

Wealth File #5: Rich people focus on opportunities, poor people focus on obstacles. Is the glass half-full or half-empty? In general, the higher the risk, the higher the reward. There is an element of luck required to become rich. To succeed, you have to do something. Focus on opportunities you can find. Remember: what you focus on expands. Try every opportunity as a learning opportunity. The trick is to get in the corridor and into the industry that you want and love. Get into the corridor! Action always beats inaction. Learn to practise optimism. Focus on gratitude.

Wealth File #6: Rich People admire other rich and successful people. Poor people resent rich and successful people. Do not be jealous of the rich. Poor people tend to resent the rich. The opinions you make only affect your happiness, not someone else’s. You don’t need to be poor to be pious. Money is power in the modern society. Trust is very important. You have to be trustworthy in the first place. Rich people can be nice and good too. They can also be very generous. Bless that person that which you want to be.

Wealth File #7: Rich people associate with positive, successful people. Poor people associate with negative or unsuccessful people. Model from other successful people. Do not reinvent the wheel. Learn how rich people play the game. Do not bother about changing negative people. Just be the best that you can be. When you meet negative people, think of how you are not looking forward to be like them. Try to get rid and distance yourself from them. It is either you affect or infect other people. Birds of a feather flock together and make sure you flock around with the right people. Make it a point to only associate yourself with positive people. Remove yourself from toxic situations. Engage yourself in sports. Hard work pays off. Winning can dull your desire at times. Rich people like hanging around other successful people too. Read biographies of rich and successful people. Join a high end club. Stop watching too much television.

Wealth File #8: Rich people are willing to promote themselves and their value. Poor people think negatively about selling and promotion. You need to focus on promoting yourself and your services. If you don’t, you will be left behind. You need to extol your virtues in order to succeed. Do not have that ‘I am special’ attitude. All rich people are excellent promoters. They are also usually leaders. It all involves some form of persuading others. You must sincerely believe in your product and in yourself. Listen to marketing classes and courses.

Wealth File #9: Rich people are bigger than their problems. Poor people are smaller than their problems. It is not easy getting rich. Poor people do not want to work hard to get rich. Most poor people will just avoid and run. Grow so that you are bigger than your problem. When you handle so many problems, you will realize that they don’t mean much to you anymore. Problems will never go away and that is the nature of life. Have a mindset of conquering problems. You should be focussed on your goal. Nothing can stop you. Tell yourself that you are ‘bigger than your problems’.

Wealth File #10: Rich people are excellent receivers, poor people are poor receivers. If you are poor at receiving, you won’t receive much. Most of us like to punish ourselves. This is how people sabotage their own success. Rich people want to prove their worth to others. Whether you are worthy or not, it all depends on yourself. It’s all about your mindset. It’s a lot to worry about. Tell yourself that you are worthy and that you deserve to hold your head up high. ‘For every giver there must be a receiver, and for every receiver there must be a giver’. When others want to give, be courteous and accept it. Even if no one else wants to take it, it has to go somewhere. Being poor is a weakness that can be avoided. If you are rich, you will be able to help even more people with your money. ‘Money will only make you more of what you already are’. Do not block yourself from receiving more money. Tell yourself that you will be an excellent receiver in future. Pamper yourself and spend on yourself once in a while.

Wealth File #11: Rich people choose to get paid based on results. Poor people choose to get paid based on time. A steady paycheck usually interferes with your ability to earn even more. Security will come at a price. Rich people get paid based on the results they produce. Rich people emphasize on getting paid for their results and not the amount of time spent. Do not trade time for money. This is because your time is limited and you won’t be able to increase your wealth much. Do not have a ceiling on your income. If you are in a personal service business, you need to find a way to leverage yourself. I encourage you to work for yourself. Most millionaires start their own business. Selling can be a profitable profession too. You can do MLM and be a part-time distributor. This is known as network marketing. It is important that you should get paid for your results. You can start a business by joining part-time first.

Wealth File #12: Rich People think ‘both’; Poor people think ‘either/or’. Both the rich and poor live in the same physical world. Rich people want both money and meaning in their work. Poor people only choose one. Ask yourself how you can have both. Be creative so that you can enjoy both. Think in terms of win-win. Pursue work and projects that you love. Money is important and it is like a lubricant. It gives you the freedom to enjoy life. You can have your cake and eat it too. Poor people only eat a small slice of the cake. Money can be used over and over again. It can create value after it passes through different hands. Money does not get depleted. You can be rich and yet be kind as kindness comes from the heart. Tell yourself that you have a millionaire mind.

Money is a lubricant. It enables you to ‘slide’ through life instead of having to ‘scrape’ by. Money brings freedom – freedom to buy what you want, and freedom to do what you want with your time. Money allows you to enjoy the finer things in life as well as giving you the opportunity to help others have the necessities in life. Most of all, having money allows you not to have to spend your energy worrying about not having money. – T Harv Eker

Wealth File #13: Rich people focus on their net worth. Poor people focus on their working income. Learn to ask others what is their net worth. Net worth is the true measure of wealth. Net worth is everything that you own but there is a need to deduct your liabilities. Working income requires effort and time to earn. Passive income is important and the poor usually do not have this. Savings are important if you want to be rich. Save and grow your money via investing. The last method is to simplify your life so that you require less spending. If you have lower standards of living, you will require less money. There is a law that says expenses will rise in direct proportion to income. A large income alone might not create wealth. ‘Where attention goes, energy flows and results show’. Find a good financial planner to help you.

Wealth File #14: Rich people manage their money well, poor people mismanage their money well. Money management can be programmed in an individual. Managing money is very important indeed. Do not give the excuse that you don’t have time or enough money to manage. ‘The habit of managing money is more important than the amount’. Create a separate bank account and channel a portion of your income into it for investments. Never withdraw this amount for spending. It is important to start small, even if it’s a meagre amount. Use 10% of your salary for play and rest. Split the rest of your salary into categories like necessities, give, education and long-term savings. If you don’t control money, it will end up controlling you.

Wealth File #15: Rich people have their money work hard for them. Poor people work hard for their money. Hard work alone will not make you rich. Learn to work hard. Hire others to work for you. Money is energy. The goal in the end is financial freedom. The key is to earn enough passive income so that you don’t have to work anymore. You could also earn money from a part time business or even participate in network marketing. Most of us weren’t taught about how to earn a passive income. Find a career that enables easy generation of passive income. Poor people are more concerned with instant gratification. If you buy things for instant gratification, it won’t make you happy in the long term. Rich people can be very thrifty indeed. However, do not over-extend yourself. Consider investing in real estate as well. Every dollar can be a seed to earn even more in future. Get educated and attend investment seminars. Focus on passive income.

Wealth File #16: Rich people act in spite of fear, poor people let fear stop them. Action is crucial. Affirmations can only do that much. Action is extremely important. Fear and doubt all cause us to procrastinate. Tame the cobra of fear. There is no need to eliminate or get rid of such fears. The key is to simply act even if you are scared. Be a warrior and learn not to be stopped by anything at all. Wealth Principle: ‘If you are willing to do what’s easy, life will be hard. But if you are willing to do what’s hard, life will be easy.’ You must break through the comfort zone and do what is uncomfortable. Poor people don’t like to feel uncomfortable and like to stay in their comfort zone. Comfort zone can be equated to wealth zone. It is important to stretch yourself and your abilities. Happiness comes from realizing your full potential. Live at the edge of your box. Practise even when you are not in the mood. You are not your mind. It is crucial to train your own mind. Observing is a good way to learn. Make a conscious effort to improve your life now. Your mind is almighty and all-encompassing. You will pay for your negative thoughts. Apply power thinking and nothing that nothing has meaning unless we ascribe meaning to it.

Wealth File #17: Rich people constantly learn and grow. Poor people think they already know. Rich people are constantly learning and eager to develop. If you think you are always right, you won’t be exposed to new methods of thinking. The world is not static. If you are not learning, you will be left behind. You need to pick up skills and learn how to manage your money. Success can be learnt. It is possible to learn to succeed at anything. No one was born a genius. The quickest way is to develop yourself. Grow yourself into the best person you can be. If you want to get paid the most, you need to be the best. I always learnt from the masters of the respective fields.