sign up log in
Want to go ad-free? Find out how, here.

Investing in your relationships; 10 traits of an outstanding leader; The toothfairy as a financial advisor; Lifestyle inflation; Tax credits

Personal Finance
Investing in your relationships; 10 traits of an outstanding leader; The toothfairy as a financial advisor; Lifestyle inflation; Tax credits

By Amanda Morrall (email)

1) Connectivity

On a business trip awhile back, a Maori delegate I was travelling with us gave a closing speech in his native language and translated it into English afterwards. I can't remember the talk chapter and verse but it closed with an important lesson about how the real value in this world, "what counts most" is "people, people, people.'' I was reminded of that sage bit of advice after reading this piece from financial advisor Liz Koh on the value of investing in personal relationships. 

Invest in Your Relationships

One of the most interesting aspects of wealth creation is that it is virtually impossible to do on your own. Put a person on a desert island and he or she will not create any additional wealth than is already present on the island. Give that person the best technology available to communicate with others and suddenly there is an almost unlimited ability to create wealth.  There is a direct correlation between your wealth and the nature and extent of your relationships with others. Think of any super wealthy person – Bill Gates, Mark Zuckerberg for example – and think about how many people in the world they interact with either directly or indirectly. It is through these connections that their wealth has been created. There are, of course, many different types of relationships that we all have which contribute in different ways to our financial wellbeing. The better your relationship with your partner and immediate family members, the happier you will be and the more likely you will be to succeed financially. Separation, divorce and arguments about money on the other hand, lead to financial loss. Good relationships in the workplace lead to increased opportunities for career development and pay rises. Developing networks with people in the wider community can lead to both career and business opportunities. Professional relationships with experts such as accountants, lawyers and financial advisers will help you make the right financial decisions in life.

So many people live their lives with a narrow circle of friends, barely interacting with the rest of the world, and wonder why there is little change in their financial position. These days, with the advent of social media networks there is little excuse not to be well connected. You can achieve financial success by investing time and effort in developing your relationships.

 

2) 10 traits of a good leader

I don't think it's any coincidence those who invest in their inner circle, on an authentic level and not just an exploitative how to get ahead basis, make good leaders. People are drawn to them and inspired to reach their potential as well.  Here's an article from pickthebrain.com on the 10 traits of an outstanding leader. Good food for thought for those trying to cultivate success beyond a six figure salary.

3) Tooth fairy money lessons

My youngest looked me square in the eye last week and asked me whether the tooth fairy was "for real.'' I crossed my fingers behind my back and replied "Yes, of course.'' We visited the tooth fairy's den once in Kaikoura on a cave tour I reminded him. I know the gig is up soon but it's nice to stretch the magic of make belief a bit longer. Here's a piece from the Globe and Mail on making financial mileage out of the tooth fairy by using her as a opportunity to engage your child on the subject of money. A survey, out of Canada, shows 87% parents give between $2 and $5 per tooth so the lessons x32 could be valuable one day. And here's another from frugal zeitgeist on the benefit of early education in money.

4) Lifestyle inflation

It is a fact of life that for all but the most restrained the more you earn the more you spend. Call it lifestyle inflation. I was talking money with a friend the other day who confessed that he had more money and less worry of it as a "broke student" than an active and thriving member of the workforce because as a student, his financial life was relatively uncomplicated. No money, equals no spending. It also equals no savings which is no good but by adopting this student mindset and habit, most of us could stand to gain.  

On that note, I also found this financial confession from sustainablelifeblog.com quite interesting. In it, he talks about how despite a pay increase that came with a new job, he ended up blowing more of his discretionary income. A shrewd inventory of his expenses found the main culprits were take-aways, taxes and a one-off splurge on an engagement ring. Can't fault the guy for spending on love but the added tax grab for worker trying to get ahead is a burn to be sure.

5) Tax deductions

The aforementioned blog resonated with me on a few levels. The move from Christchurch to Auckland was sweetened by a pay increase but lifestyle inflation, even though I seldom go out, has been a burn. In my case, the lifestyle cost increase came in the form of a beach. School expenses have been another unanticipated gobbler of income. This year's fees went up almost 20% to $300 per kid. I understand that's not bad compared to what others are paying but still. A reminder to parents that school fees are a claimable tax deduction.  See Inland Revenue's website here for other eligible tax credits.


To read other Take Fives by Amanda Morrall click here. You can also follow Amanda on Twitter@amandamorrall

We welcome your comments below. If you are not already registered, please register to comment.

Remember we welcome robust, respectful and insightful debate. We don't welcome abusive or defamatory comments and will de-register those repeatedly making such comments. Our current comment policy is here.

14 Comments

A reader reminded me of the full text from the Maori verse referenced in #1.

Here is it.

Hutia te rito o te harakeke, kei hea rā te kōmako e kō?
Kī mai ki ahau, he aha te mea nui o te Ao?
Māku e kī atu, he tangata, he tangata, he tangata.

If you were to pluck out the centre of the flax bush, where would the bellbird sing?
If you were to ask me, "What is the most important thing in the world?"
I would reply, "It is people, people, people."

 

Up
0

ah yep...the more and more people...the less and less birds. 

The moa and countless others of course became extent.  And continue to do so, as its the people the people the people who want more more more....

Up
0

"The better your relationship with your partner and immediate family members, the happier you will be and the more likely you will be to succeed financially."

Can you provide evidence to support this contention Amanda?

Up
0

Well, it's not my contention but that of a financial advisor but it is harder to quarrel with the suggestion that if you have a good relationship with your loved one's you are happier...(I can observe that from people I know) and when you are happier, there actually is good research now to support that you're more likely to be successful. 

Shawn Achor's book "The Happiness Advantage" actually talks about this at length. It's an interesting book.

 

Up
0

I didn’t suggest it was your contention. Neither was I questioning that if you have good relationships with ‘loved ones’ you’ll be happier. If you look at my posting the aspect I highlighted related to evidence of a causative link between getting on with immediate family members and financial success. You haven’t addressed that in your response, instead you refer to ‘loved ones’, a much broader category than close family members.

You might want to be wary of extrapolating theories based on ‘people I know’.

Up
0

Two simple rules can help avoid "lifestyle inflation".

Don't buy what you don't need, especially don't buy to keep up with "trends" or "fashion".

Don't replace what you have until it is worn out.

Up
0

....................your referring to partner selection no doubt.

Up
0

Some of the research around Satisfaction & well-being:

http://positivepsychology.org.uk/pp-theory/happiness/57-happiness-and-s…

In three months, the effects of being fired or promoted lose their impact on happiness level.

Winning the lottery often leaves people less happy.

Recent changes in an individual's pay predict job satisfaction, but average levels of pay do not.

People in wealthy nations appear to be much happier than in poorer ones but this finding does not hold true for some nations (e.g. Brazil).

Desiring wealth leaves one less happy.

People who go to church are happier and live longer, although this may be explained by the social support that belonging to a religious community gives to people.

Having children does not make you happier and having under fives and teenagers actually makes you less happy. Saying that, having children can make your life more meaningful, and also parents tend to live longer.

Also being married & staying married will increase your wealth compared to other options

Up
0

Another perspective is that financial prosperity will often flow from a broader-based 'prosperity' built from good relationships, creative thinking,  trying out ideas/projects, curiosity about new places/people/events etc etc.. & networks etc ....combined with hard work perserverance/resilience

Which of course is why some extreme environmentalists & zero populationists & 'limited economic pie' people are mentally limited in their ability to create wealth ... or envisage wealth for all  .... 

There is after all more than enough for everyone  -   the bottlenecks are in either our own self-imposed limitations or destructive political/corporate forces.

Up
0

MB's homework:

http://physics.ucsd.edu/do-the-math/2011/10/sustainable-means-bunkty-to-me/

 

The problem of course is those who think money is wealth. Oh, and in the limited thinking that says 'there's more than enough for everyone', just because there was enough for some, so far..

 

Go tell that in Rwanda, Haiti, Bangladesh. Greece.Tell the Arab kids to go make sandcastles. Oh, perhaps they just lack imagination?

Up
0

Arab poverty is due to (as I pointed out) destructive political forces -  and a lack of care & development for the majority.  Not to mention the anti-semitism - hatred never brings prosperity.   Rwanda due to Muslim extremism/violence.  The resources are all there,  in many cases they are resource rich - they are bound by political destructiveness & individual passivity due to wrong philosophies.

 

Up
0

Try reading the link.

 

In fact, all his posts. He's a physics Prof, as indeed are most who are warning. Might be interesting to wonder why that is.

 

But you won't, will you?

Up
0

OK, I read it.  Promise to bike to work tomorrow (as always actually!). So, I'm not driving the 4 litre 4WD monster you might imagine....   

As your blog points out there are financial benefits to participating in reducing energy usage etc, even if you don't believe the whole "we're running out of everything scenario".  So I'm happy to borrow good ideas from your 'movement'.  

A physics PhD has a pretty narrow frame of reference.  As someone with a Masters & Doctorate in Technology, I'm not overly swayed by academics -  they sometimes believe in their own publicity too much - and they are normally on a career bandwagon of 'publish or perish" so Green articles are more likely to be published or accepted at conferences.  

Up
0

Good on'ya.

 

It's hard to explain (and mostly I don't bother) that contemplating entirely predictable future problems is not being a 'gloomster', and indeed, that what will happen will happen regardless of emotions held.

 

I wouldn't bother inventing, thinking, doing, building and teaching, if I thought there was no point, and I suspect Scarfie here is a fellow traveller in that attitude. The only way to address something is to be proactive - but a lot of folk don't have the mental discipline to separate proactive from optimistic.

 

One thing is for sure, the future won't be like the past, and shouldn't be asked to pay for it.

 

 

Up
0