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Personal finance is about providing you the tools to achieve your goals. What are your goals?
2 Most Important Things in Personal Finance
1. Life is amazing
2. Spend less than you make
Section 1-0
Ted Talk – Adam Baker
What is the question each of us need to ask ourselves?
What does freedom mean to you?
What is currently a booming industry in the US? Why is that the case?
Storage space 2.2 billion square feet. Acquiring things in our life in pursuit of things will grant us
security, peace, or happiness. We start to identify ourselves by our physical things.
Ted Talk – Clay Christensen “How Will You Measure Your Life?”
The reason why successful companies fail, is they invest in things that provide the most immediate and tangible
evidence of achievement.
God will measure my life, is the individual people whose lives I blessed.
People really get stuck and then they don’t know what to do and they don’t seem to have any tools for getting
unstuck.
Dysfunctional beliefs — things they believe that are true that actually aren’t true. And it holds them back.
What is your passion. Less than 20% of the people have any one singular identifiable passion in their
lives.
Well you should know by now, right? Don’t you know where you’re going? Let’s start from where you
are. You’re not late for anything.
Are you being the best possible version of you? There are many many versions of you that you could
play out all of which would result in a well-designed life.
Connecting the Dots - who you are, there’s what you believe and that’s what you do in the world. If you can
make a connection between these three things, if you can make that a coherent story, you will experience your
life is meaningful.
When you can connect your life view and your work view together in a coherent way you start to experience
your life as meaningful. That’s the idea number one.
Five Ideas
Connecting the dots to find meaning
To work in life views
Stay away from gravity problems
Do three plans never one
Choose well - There’s no point in making a good choice poorly.
Get curious, talk to people, and try stuff. And you will design a well lived and joyful life.
Examples:
- Operations – risk that we will be late or over budget because we don’t know about “x”
Avoidance technique: Bring in a consultant with experience in “x”
2. Mitigation - aim at reducing the impact that a risk will create if it occurs.
Examples:
- Operations - Risk that we will not have enough capacity to take customer orders.
Mitigation technique - setup of a variable contract support structure that I will only
- Technology - Risk that my application will not receive the correct data from a client (calling
application)
Mitigation technique - creation of exception processing to deal with these situations without
crashing.
- Everyday Life – Risk that I will get badly hurt if in a car accident.
Mitigation technique – Wear a seatbelt and install an airbag.
3. Transfer - move the impact of a risk (if it occurs) to an external party. Impact can be measured by a 3rd
party.
Example:
- Everyday Life – Risk that I may incur large healthcare costs.
Mitigation technique – Purchase health insurance.
4. Acceptance - process of actively deciding that you will accept the consequences (impact) of a risk if it
occurs.
Example
-
- Everyday Life - Risk that I may get a ticket if I speed on a road but deciding the benefit of going
faster is greater than the combination of the ticket price and chance of getting caught.
Risk management – picking your technique based on the size and structure of the risk.