Financial Fitness

Financial fitness as outlined by James Ritchie in The Ministry of Business

After working hard for your income, this is what you do with your paycheck:

Account 1: Independence account: first you pay yourself.  This portion of your paycheck goes into an independence account. When enough has been accumulated in this account, you use it to buy investments (a Gold Account) and the profits and interests and dividends earned on those accounts go back into the independence account to grow that account and therefore allow you to buy bigger and bigger investments.

Account 2: Budget account.  Includes money for tithes and offerings, domestic expenses, living expenses, family expenses, and all normal costs of living.

Account 3: Savings account.  This account is for both your wish list and for planned spending.  The wish list might include a car, boat, cruise, yacht, etc… and the planned spending would be things like vacation, Christmas, etc…

I really needed this review and feel like it would be really good to set some goals with my spouse about how we can proceed to follow this advice.  In a way, we are doing this.

In Rich Dad, Poor Dad (not a book read in this class, but applicable, none the less), the author talks about making your money work for you, rather than you working for your money.  I believe he is teaching these same sound principles.  I think it might be time to listen.

The Challenge to Become

In his October 2000 conference address, The Challenge to Become, Elder Dallin Oaks said, “The Apostle Paul taught that the Lord’s teachings and teachers were given that we may all attain “the measure of the stature of the fulness of Christ” (Eph. 4:13). This process requires far more than acquiring knowledge. It is not even enough for us to be convinced of the gospel; we must act and think so that we are converted by it. In contrast to the institutions of the world, which teach us to know something, the gospel of Jesus Christ challenges us to become something.”

He then goes on to delineate between having a testimony of the gospel and being truly converted, stating that the Lord does not care so much about what we have believed, but what we have become. “To testify,” he says, “is to know and declare.” But the Lord is challenging us to do more than that.  We must be truly converted which comes by doing and becoming.

Elder Oaks declares that the work of conversion is done in our homes.  He said, “Now is the time for each of us to work toward our personal conversion, toward becoming what our Heavenly Father desires us to become. As we do so, we should remember that our family relationships—even more than our Church callings—are the setting in which the most important part of that development can occur. The conversion we must achieve requires us to be a good husband and father or a good wife and mother. Being a successful Church leader is not enough. Exaltation is an eternal family experience, and it is our mortal family experiences that are best suited to prepare us for it.”

A measure of our success on this journey of conversion, said Elder Oaks, is to have the spirit, to begin to see things the way the Lord and our Father in Heaven see things, and to be able to hear their voice instead of focusing on the worldly voices around us.  If we are truly being converted, we are “doing things in His way instead by the ways of the world.”

Good to Great

Good to Great, by Author Jim Collins, discusses 11 companies that became great and the things they had in common.  

3 elements were evident:

1. Disciplined people – getting the right people and keeping them focused “get the right people on the bus”
2. Disciplined Thought – being able to be honest, brutally honest about what is going on, and focusing on the right things.
3. Disciplined action – spending time on the right things

These three elements can be broken down into six key concepts. The first three elements begin to build moment and take the players to push and push, the second three elements are the results of the flywheel effect.  A flywheel, after being pushed for so long, eventually starts to gain its own momentum and pushes itself with little outside effort or influence.  Great companies keep the flywheel moving so that it comes to that breakthrough and truly takes off.  Bad leaders start and stop the flywheel over and over keeping the momentum from ever reaching breakthrough.

• Element 1 – Level 5 leadership: leaders that are humble, professional, hardworking, blame their success on luck rather than skill or personal greatness. Usually come from within the company.
• Element 2 – First ‘who’, then ‘what’: Make sure you have the right people on the bus.  If you have the right people, they will figure out what needs to be done.  The wrong people slow things down and mess up the flywheel.  Don’t waste time on the wrong people.
• Element 3 – Confront the true facts: honesty and candor allow companies to make the right decisions to move forward, rather than deal with distorted facts that can lead them to focus on the wrong things.
• Element 4 – Hedgehog Concept: hedgehogs are simple animals that know one big thing and do it well.  Companies should be the same. They stick to what they are doing and avoid getting deterred by other things or opportunities. They stick to their mission.  They know what they are best at, what makes money, and what their people are passionate about.
• Element 5 – Culture of Discipline: Disciplined people don’t need managers or hierarchy to make them do their work.  Discipline combined with an entrepreneurial effort tend to make for excellent performance.
• Element 6 – Technology Accelerator: Don’t get caught up in tech fads.  Use technology to make what you are doing better, not just so you are high tech.  Find the technology that will improve your business, don’t mold your business around new technology.