The simple demonstration that proves debt makes people poorer

dollar-163473_640Day 546. The promise of credit houses makes is to treat yourself now, pay later. The problem is this promise makes the bank richer and the debtor poorer. What? This is not what your banker told you. No, because your banker has a direct interest to lend you money: to make more money. Nothing’s fundamentally wrong with that or with debt, but depending on what you are purchasing with debt, it will have an effect on you wealth. Want a demonstration? Here’s a simple one.

If you have a car, it’s almost sure you paid it with a credit. If not and paid it in cash, bravo! But for the sake of the demonstration, let’s say you have (or will) paid with a credit. The car of your dreams costs 20,000 dollars (or euros, or pounds, chose your currency). Your financial institution proposes you to purchase it with a 5% interest credit over 6 years. You are lined up to repay 322 dollars per month for 72 months, a total of 23,191 dollars. 6 years later, the value of your car will have drop by close to 65%, and if sold will bring you, let’s say 7,000 dollars. This means this car will have cost you slightly more than 16,000 dollars over 6 years.

Now imagine you set aside 322 dollars per month for 6 years at 2.5% interest annually (less than the 5% for sure, but easily found anywhere). After 72 months, you will have 24,985 dollars interests included (in this case you gave your money to the bank who in exchange pays you interest). With this amount you pay cash your 20,000 dollars car, while having earned close to 5,000 dollars. The question of course is yes, but during 6 years if you needed a car, what did you do? You could have taken public transport, rent a car when needed, or carpool. If you spent less than 16,000 dollars, you have started a virtuous circle that will put you in control and will have your money work for you!

However, beyond the fact that you are now in control, your financial institution will start a different dialogue with you. Yes they paid 2.5% interest on the money you left on your account, but rest assured it will have used this money to lend it to somebody else, generating more than the 2.5% it served you, so net, it has made money and can count on a good customer.

Of course in the example above we should have factored inflation and other factors on car pricing, but even if we complicate the example, the math will stay the same, and it comes to a simple principle: the lender gets richer, the borrower gets poorer. There is one, and only one, exception to this principle and it’s when the loan is contracted to purchase an assets that generates more than it costs. In other words, if your car will allow you to make money, is necessary to make money and the sum you will make covers the price of the repayment, then this debt is a good debt. This is the principle number 2 of the 3 rules I explained in a previous post.

We will see in a following post that this does not apply only to cars or houses, but to other goods, that should always be acquired in cash!

3 simple principles to get the unexpected expected

Day 545. No projects, no plans ever run as expected. You should always expect the unexpected, but not be frozen by the unexpected. It may not happen, however, to avoid really bad surprises, here are 3 simple tips to get ready when the unexpected occur:

  1. Change is natural so welcome the unexpected. No need to have regrets, what’s gone’s gone! Be ready to embrace change by being flexible and not surprised.
  2. Have plans B ready. When the unexpected strikes, you may need to slightly change directions. Have one or many plans B ready, in all the 3 directions of any project: time, quality and resources. If the unexpected strikes, trigger one of those plans. This may require additional planning, but you won’t regret it.
  3. Be a lifetime learner and ensure your team is. When the unexpected strikes, stop, reflect, document and learn. Nothing’s best to learn and grow.

Nobody likes a project that goes in the wrong direction. By embracing those 3 simple principles, you’ll ensure that you can deliver confidently what you forecasted. Not rocket science, just confidence and flexibility.

We are never ready. So what? Start!

Day 544. When I am about to start something or do something new, I am always asked: « Are you ready? » And my answer is invariably: « I don’t know, but I’m going to do it anyway! » If I were to wait to be ready to do something, I would almost do nothing. You can never be ready, but you’ll always have to start. Not ready is an excuse for not doing things that matter, for not producing what you have to, and for turning down in front of your fears.

You only know if you were ready if you try. This means accepting you may not be ready, you may face failure, and you may learn something valuable. Next time you are asked if you are ready, say yes and go for it, who knows, it may work.

People do not decide to become extraordinary. They decide to accomplish extraordinary things

Day 543. Below is the mail I sent yesterday to my team to help deliver their best in the last mile of the fiscal year. The title is a quote from Sir Edmund Hillary and the picture from an unknown source, but I found it beautiful. Enjoy!



I woke up this morning with butterflies in the belly. Are we going to make it? The first thought that came to mind was the last 2 kilometers of any marathon I ran. Those two kilometers are hard, your muscles ache, your whole body aches, and your mind asks you to quit. It’s ironic to know that most quitters quit in these last two kilometers, so close to the finish line. But it’s understandable, you have to shut down the little voice inside your brain who asks you to stop, you have to look beyond the finish line, and you have to decide to cross the line.

I leave you with the below picture and quote from Sir Edmund Hillary who first climbed Mount Everest. We are three days away of an extraordinary year! Decision is ours!


Oh, did I mention we are in the making of an extraordinary, extraordinary, extraordinary year for Office 365? Butterflies are flying away!

Thank you and let’s bank a HUGE EXTRAORDINARY year. All cents count!


Change is hard and necessary

Day 542. Doing the same thing and expecting a different outcome is the definition of insanity. I am paraphrasing the great Albert Einstein, but this is so true. In a fast changing world, we have no other choices but to embrace change. Trying to resist it is like staying aboard a sinking ship hoping it will stay afloat in the end. Of course change is hard. Change requires we drop activities, behaviors, ideas to start new ones. Change requires we wipe out the status quo.

In the crisis opposing the taxis to Uber in France and in many other places on the planet, we have two systems that collide. It should be a great occasion to rethink the models, to shake old fashioned way to do stuffs, but instead it becomes confrontational, taxis trying to preserve the status quo and their privileges, if any. Competition has always been a driving force to reduce pricing while increasing quality. In France, our paranoid government wants to forbid SFR to purchase Bouygues Telecom to save competition that they recognized behind healthy and a contributing factor for better pricing and quality, while at the same time wants to kill competition in the transportation area by forbidding Uber to operate. Try to understand the logic of those guys stuck in a 19th century mentality.

Taxis have no choices than to slowly disappear if they do not reinvent themselves. I confess I have not taken a taxi in France for years for two reasons: they are awfully expensive (an airport-downtown trip will cost up to three times in Paris what it costs in the US or Dubai for instance), and most of the time the driver is unpleasant. With what happens, I will not be inclined to take a taxi soon.

Of course change is hard, but it is necessary. It’s only by embracing change that we find peace of mind and can smile at what the universe throws at us. As Robin Sharma says: Change is hard at the beginning, messy in the middle and gorgeous in the end. Are you ready?

The 3 rules of sound personal money management

Weathering the storm

Rule number 2: Manage your money like a company – First Part

Day 541. Money is an energy. It’s used to fuel the world. A lot of people say money is the root of evil and therefore encourage others to live in poverty or at least with a minimum money. I believe that money can be a blessing and a curse. It all depends on how you manage your money. It’s true that money can make people go crazy and commit crime. It’s although true that money can save people’s lives, can cure disease and can positively contribute to the well-being of people. As for many things, charity begins at home and it’s crucial to know the basis management rules of money. Personal money should obey the same rules as an entreprise money.

You are your own company, let’s call it yourself, inc. Yourself, inc. has an accountant: you! And if there are one guy in a company that knows how to handle the company’s money, it’s the accountant. He can be, or has to be, the bad-ass who ensures money is well treated. A financially sound company can weather any storm and will resist any crisis. Same for an individual. However, to handle your personal finance well, it has to obey the following 3 simple principles:

  1. Pay everything cash, except for case number 2
  2. Use credit only if the asset you acquire allows you to make money
  3. Put aside a share of your monthly revenue to weather storms or to treat you (in cash)

Of course, this is not what a majority of people will tell you. I will however show you why these three simple, though not easy to apply, principles will be at the start of sound money management.

3 working days are lost in front of the TV each week

Weathering the storm

Rule number 1: Switch your TV off! – Fourth Part

Day 540. In 2013, many newspaper and online news sites revealed that the French were spending, on average, 3h50 in front of their TV every day ! I assume other countries will have similar statistics.

If I do a quick calculation, this represents close to 27 hours every week in front of a TV set. This is actually more than 3 full working days. Just imagine if half of that time was dedicated to a form of enjoyable work like, for instance, personal development or professional training. With an additional of 13 hours of training every week, we would have a country infinitely more competitive that any other developped country, with a skilled workforce. Of course, we could think of transforming that time into other fun activities that help individual to have a more fulfilling life.

However, making the choice of switching TV time with something that really matters to each of us is a choice. A personal choice and a political choice. Because TV is the best way to convey political propaganda, therefore from a political standpoint, the power has nothing to gain for their own rights in trying to cut TV watching time. Therefore, all that is left is the personal choice. Are you willing to cut your TV time to grow? It’s easy, it’s simple, it’s just a matter of chosing it. Are you ready?

It’s Monday, What are YOU going to do differently this week?

Day 538. Hey, just sharing an idea with you guys. I was running yesterday, through the forest that I have the chance to live by, under a gorgeous blue sky. Running is generally an idea generation time. It’s probably the hormones that my brain generates that makes it working differently or faster. I had many ideas flowing during this run. Among others came productivity ideas (I will come to these ones in later post), post ideas and one simple idea of how better planning the week.

If you part of my regular follower, you know I am always looking for better ways to be more productive and one of those ways is to plan the week ahead. In the planning sessions I have on Sunday evening I look at my short, mid and long term goals and ensure my planning reflects all of those and help me getting closer to them.

One thing I overlooked actually was around what I need to learn to get to my goals faster and better. And to that ties the question I used as the title. Learning is about doing things differently or doing new things. Therefore, there is one question that needs to be answered week in week out: what am I going to do differently this week? This could be a new thing I will start doing to increase efficiency, a thing I will stop doing in order to snoop in something new, or a thing I will tweak.

Therefore, during the Sunday planning, two questions are added:

  1. What did I do differently (and what did I learn) that I can continue doing, because it made a difference?
  2. What will I do differently this week to continue learning and improving?

Simple to implement, huge learning and growing opportunity.

Anger is the result of ineffectualness

Day 537. Why are we angry? We can be angry at somebody or at something. Anger is an emotion. It can spearhead action and call for a change. This is what psychologists consider the good side of anger. However, it’s easy to cross the line that delineates the good warning system from the harmful reaction to our health and relationships.

Although, as for all emotions, we cannot control anger, we can however control our response to anger. Anger expressed with violence is destructive, anger expressed with assertiveness is helpful. Anger is actually the result of our ineffectualness, of our inability to handle a situation that we feel goes beyond our control.

We are angry at a kid breaking a glass while trying to drink. We are angry at a situation that goes haywire in a direction that we did not forecast. We are angry at an action somebody takes while we expected something else. In all those situation, it’s normal to get angry, it’s not constructive to react violently and vehemently. It may feel good, but it will always destroy trust, confidence and relationship. It’s much better to breathe and confront the reality by evaluating the situation and its outcome. One of the methods I found useful in most cases is to ask two questions to yourself or to the other party involved: Is this really important? What should have been different?

Generally, even if it’s an important event, there’s always a lot to learn from it. And as I was saying recently, either you win our your learn! When angers comes in, better learn!