In a rare coincidence, it seems that a bunch of Japanese holidays managed to line up this month resulting in having 3 week days off. I opted to take an additional 2 days off to take the week off for an entire 9 days.
I've been away from work for about 8 days so far and it's been great to get away from everything for a while.
I'll have pictures later on, but I opted to head out to the Japanese country side in Nagano to spent 5 days to attend a fire festival and go hiking through a mountain range known as the Japanese Alps. It was also nice to get away from the internet and my computer too, as it some how ends up being a significant time sink, which allowed me to do a whole lot of activities and meet people that I wouldn't usually have the opportunity to.
I'v also realized that being away from the computer for a while has been a good thing, which has allowed me to use some of the down time to just do some thinking that I usually wouldn't do, which has left me a little rusty in the cognative and reflection department. Also, I haven't been able to put perspective into what has been going on in life recently as it's rather easy to get stuck into a repetitive grind. And when that happens, sometimes a lot of things going on around loses a lot of meaning... and it also can get quite disorientating, especially when it comes to making decisions.
This has been kind of tough these last month with the long hours and other things going on with the personal life, for which for the time being I am going to leave the details out. But I have some tough but necessary things to do for which I haven't been seeing in a positive light, which also makes it tougher. It's important to find the positive things and focus on them... and keep going, because if you don't, you'll end up in a situation/place that you don't want to be.
I'll admit that I am being a little vague right now, because it doesn't seem right to say everything at the moment, though I would much rather be entirely open. I need to put all the bad things that happened this year and a few recent things behind me and move on.
Saturday, September 26, 2009
Monday, September 07, 2009
How long till your first million?
Work is starting to tire me out. The long hours and running multiple projects at the same time does bad things to one's social life, stamina, stress level and concentration. For July and August, I've done 80 hours of over time and this month I'll be trying to scale back to 50 hours. A 8~12 hour work day is not exactly the way I want to be spending the rest of my life.
The trick to living a good life is working smarter, not harder. So, I've started doing some calculations to get a general idea of how long would it take for a person to make their first $1 million dependent on the amount they are able to save per year, both dependent on whether if they just stuck that cash in a bank or earned some interest.
There are probably similar types of graphs like these in financial planning books but I have created one for myself as shown in the image below (click for an enlarged and much clearer version).
The results don't look encouraging, but let's do the math. The above graph plots the amount of money you will have saved dependent on your annual savings rate and depending if you reinvest the money to earn 7% or not. The dotted lines represents a linear savings rate.
I have been collecting expenditure data for my life style and it comes out that I spend approximately $2000/month in living expenses, including taxes. Given this, I will have expenditures at $24,000 year. Suppose now that I want to save $20,000 a year, requiring earnings at approximately $44,000/year.
Without investing, it will take me 50 years to make my first $1 million, or 23 years if I reinvest my entire savings at 7%. I'm going to be pretty old by the time I get that far, considering inflation and everything, $1 million is not going to be the worth the same thing in 23 or 50 years. This is not an acceptable solution, so we are going to have to do something to increase income.
Suppose that we bumped things up a notch and aimed for a $40,000/year savings rate. Making the bad assumption that the tax rate doesn't change, I would have have to earn at least $64,000/year to make this goal. Obviously, the time to make the first $1 million is cut in 1/2 to 25 years if you just stashed in the bank or 15 years if the funds are reinvested at 7%. The numbers are starting to look a little more reasonable.
Now, suppose for a young person that your income is $44,000 and you need to bump it up to $64,000 now to hit that $1 million target in 15 years using the 7% investment plan.
You have 2 choices:
1. work approximately 50% longer or
2. find more productive ways of generating income.
Suppose that I worked an 8 hour work day and took option 1 and extended the work day to 12 hours. Including a 1.5 hours of commute time and about 8 hours of sleep for a total of about 21.5 hours/day being used up. This leaves 3.5 hours for personal time during the weekdays.
That obviously does not seem like a reasonable lifestyle to me. Thus working longer for more money is out, so option 1 is dead, so we consider option 2.
How does one find more productive ways of generating income? How do you go to your boss and say that you want 50% more pay? Under what conditions would they provide you with that cash? The most obvious answer to me would be to improve productivity either by doing more of the same in less time, or doing something completely different to produce more value in less time.
Negotiating with HR or management for salary increases is obviously a thorny issue, but you are going to have to be equipped with the right kind of information to make your point. From my point of view, talking directly in dollars and cents or productivity is very important to winning that salary increase. But also, there are obviously limits on the amount of money your employer is willing to pay an employee. If you really want to make the big bucks, then you are going to have to go at it alone.
I now have some real world experience in me to finally appreciate these numbers, I only wish that people would have found ways of understanding the magnitude of long term planning in their early 20s. Imagine if you were 35 and you made your first million.
The impact is huge.
So you want to gun for your first $1 million? I'll give you a chart for how much and how long you need to save to achieve it.
I will admit that the calculations done here are crude and requires refinement, but the basic analysis of the $1 million problem should give everyone a good idea of what exactly you're up against.
Attaining this goal is a very tough challenge, hard enough that it isn't easy to do alone. For all you young people out there, if this is a worthy goal for you to attain, look to your peers and find ways to help, work together and educate yourselves. Because it's going to be now or never, and the sooner the dialogue starts, the better.
The trick to living a good life is working smarter, not harder. So, I've started doing some calculations to get a general idea of how long would it take for a person to make their first $1 million dependent on the amount they are able to save per year, both dependent on whether if they just stuck that cash in a bank or earned some interest.
There are probably similar types of graphs like these in financial planning books but I have created one for myself as shown in the image below (click for an enlarged and much clearer version).
The results don't look encouraging, but let's do the math. The above graph plots the amount of money you will have saved dependent on your annual savings rate and depending if you reinvest the money to earn 7% or not. The dotted lines represents a linear savings rate.
I have been collecting expenditure data for my life style and it comes out that I spend approximately $2000/month in living expenses, including taxes. Given this, I will have expenditures at $24,000 year. Suppose now that I want to save $20,000 a year, requiring earnings at approximately $44,000/year.
Without investing, it will take me 50 years to make my first $1 million, or 23 years if I reinvest my entire savings at 7%. I'm going to be pretty old by the time I get that far, considering inflation and everything, $1 million is not going to be the worth the same thing in 23 or 50 years. This is not an acceptable solution, so we are going to have to do something to increase income.
Suppose that we bumped things up a notch and aimed for a $40,000/year savings rate. Making the bad assumption that the tax rate doesn't change, I would have have to earn at least $64,000/year to make this goal. Obviously, the time to make the first $1 million is cut in 1/2 to 25 years if you just stashed in the bank or 15 years if the funds are reinvested at 7%. The numbers are starting to look a little more reasonable.
Now, suppose for a young person that your income is $44,000 and you need to bump it up to $64,000 now to hit that $1 million target in 15 years using the 7% investment plan.
You have 2 choices:
1. work approximately 50% longer or
2. find more productive ways of generating income.
Suppose that I worked an 8 hour work day and took option 1 and extended the work day to 12 hours. Including a 1.5 hours of commute time and about 8 hours of sleep for a total of about 21.5 hours/day being used up. This leaves 3.5 hours for personal time during the weekdays.
That obviously does not seem like a reasonable lifestyle to me. Thus working longer for more money is out, so option 1 is dead, so we consider option 2.
How does one find more productive ways of generating income? How do you go to your boss and say that you want 50% more pay? Under what conditions would they provide you with that cash? The most obvious answer to me would be to improve productivity either by doing more of the same in less time, or doing something completely different to produce more value in less time.
Negotiating with HR or management for salary increases is obviously a thorny issue, but you are going to have to be equipped with the right kind of information to make your point. From my point of view, talking directly in dollars and cents or productivity is very important to winning that salary increase. But also, there are obviously limits on the amount of money your employer is willing to pay an employee. If you really want to make the big bucks, then you are going to have to go at it alone.
I now have some real world experience in me to finally appreciate these numbers, I only wish that people would have found ways of understanding the magnitude of long term planning in their early 20s. Imagine if you were 35 and you made your first million.
The impact is huge.
So you want to gun for your first $1 million? I'll give you a chart for how much and how long you need to save to achieve it.
I will admit that the calculations done here are crude and requires refinement, but the basic analysis of the $1 million problem should give everyone a good idea of what exactly you're up against.
Attaining this goal is a very tough challenge, hard enough that it isn't easy to do alone. For all you young people out there, if this is a worthy goal for you to attain, look to your peers and find ways to help, work together and educate yourselves. Because it's going to be now or never, and the sooner the dialogue starts, the better.
Friday, September 04, 2009
What I have learned while working
What I've learned while working:
I work at my own pace
I don't like repitious work, and will usually dream at finding a way
to automate it
I am good at automating data analysis
I enjoy putting machines together that reduces my work load
I attend about 10 hours of meetings every week
I also don't care for most of the meetings
I don't generally like discussions with too many "what if's"
I also don't like discussions when everyone is shooting off the hip
I am generally slow when it comes to e-mail
I'll get back to people faster if it is important
My work related e-mails (when written in Japanese) tend to be short
I am far more motivated to work when I see an immediate goal (and
somewhat tangible reward)
I make mistakes (lots of them)
I am really forgetful
I tend to think about other things while doing boring work
I have a terrible habit of forgetting everything I've thought about
after getting home
I have not seen many young people contribute or have the opportunity
to contribute radically new ideas / projects
Observations:
Mistakes are a waste of time
If you are credible, people will generally take what you say at face value
Giving good presentations at meetings is 50% of what is required to succeed
The other 50% is doing a good job
The best managers have excellent memories and are very detailed
The best managers are good at identifying the important issues quickly
The worst ones (even though they are nice) hold too many meetings and
progress tends to be slow
Managers generally like definitave answers
If you are good at your job, managers tend to be friendlier
Being 2x more efficient than everyone else will not result in 2x more pay
Given the option to take a chance vs going the safe route, more often
the safe route is chosen
Getting something new approved requires a lot of testing... even for
small changes
Problems can occur even for small changes
Young people are often not in a position of high impact
When mistakes occur, counter measures are usually often discussed
Most counter measures usually slow work down to prevent mistakes
Having too many counter measures is a pain in the ass
A few things about Japan:
Business level customer service in Japan is amazingly good
If you really need something done, they can usually work something out
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