Non discretionary investing- the future of retirement planning

Investing in actively managed funds is a bad idea: they only eat up your hard-earned money, while financial mediators make a fortune. Make more of your money by investing in an index fund.

Actively managed funds are expensive and consequently often underperform the market.

The costs of investing in such a fund are very high. As an investor, you’d pay the brokerage commissions, the fund manager’s fees and so forth. All those fees add up to a hefty chunk of your expected profits.

If the funds perform extremely well, you might not mind those costs, but in the long run, actively managed funds are likely to yield you less profit than the overall stock market.

An actively managed fund will generate significantly less profit for you than a passive, low-cost index fund that merely mimics the performance of the overall market. In fact, if you had invested $10,000 in 1980, by 2005 you would walk away with 70 percent less if you invested in an active fund rather than an index fund, due to fees alone!

Few funds perform well, and there’s no guarantee even those few will continue to do so.
Investors pay huge fees to funds, deferring to financial experts who have a solid understanding of the stock market. However, despite industry knowledge or expertise, only 24 of the 355 mutual funds that existed in 1970 have outperformed the market consistently and remain in business.

Investors often underestimate the true cost of actively managed funds.
Actively managed funds automatically come with high costs. However, fund managers rarely disclose the dollar amount. Instead, they boast about the high returns but forget to divulge what the investor will really earn after deducting all the performance and portfolio fees.

Surprisingly, that omission occurs often: 198 of the 200 most successful funds in the latter years of the 1990s reported higher returns than the investors actually earned!

Put the majority of your assets in safe, low-cost index funds.
Don’t let what you now know about actively managed funds persuade you to keep all your money under your bed. The index fund is your best alternative.

In contrast to actively managed funds, index funds are much more cost-efficient.

By definition, an index fund holds a diversified portfolio that reflects the financial market or a specific market sector. However, instead of betting on the market, index funds hold their portfolios indefinitely, eliminating the risks of making short-term, volatile bets while simultaneously minimizing operating costs.

Because index funds track the performance of all stocks included in the index without betting on individual stocks, they’re also called passive funds.

Since they simply hold shares across particular market sectors, you will not have to bear operating fees for buying and selling shares, financial consultants, or fund management. You will, however, reap the benefits of commercial net returns.

Another advantage to index funds is that they’re likely to outperform actively managed funds in the long-term.

Each index fund comprises an expense ratio that represents management fees and operating expenses. These expenses, though typically totaling less than one percent, can add up in a long-term investment.

For instance, the Vanguard 500 ETF fund has an annual expense ratio of 0.05%, while the Aberdeen Asia-Pacific Income has an expense ratio of 1.14%. The cost differences add up over time.

Since index funds fluctuations follow the overall market, go ahead and choose the fund with the lowest cost structure.

Actionable advice: Invest the majority of your assets in an index fund, and if you want to gamble with some of your hard-earned money, then place a small amount in actively managed funds. If, despite what you’ve read you still want to partake in the thrill of risking some money and making fast profits in actively managed funds, bet on no more than 5%. You can afford to risk this small amount but absolutely keep the majority of your assets in a safe long-term investment.

Credit rating agencies may not always add sufficient value when assessing debt

Everyone accepts credit rating agencies’ accept of a debt issue as a professional opinion on

1. Likelihood of receiving the coupon and the principle
2. Likelihood of receiving them on the stipulated time
3. … in accordance to the debt conditions

These agencies also help sort out rating categories, giving you a relative understanding of debt against another debt issue.

However, you will only see a rating – A, AA, AAA. You will never see headlines reporting quantitative risk measures. So it is hard to understand the difference between AAA and B. An economist will use broader categories to differentiate between the investment grade bond and the rest. So ratings don’t add a lot of value.

There are quite few instances when credit agencies failed to evaluate correctly. For example, in March 2008, Moody’s Investors Services and Standard & Poor’s announced the downgrading of the ratings of the renowned investment bank Bear Sterns. Two days later, the U.S Department of the Treasure and the Federal Reserve Board started negotiating the sale of the bank to JP Morgan Chase. Bear Stern, which was one of the largest banks, only two years before that used to own assets of 350.5 billion dollars and total capital of 66.7 billion. The bank was sold for only 1.2 billion dollars by the end of March.

Although the blame was put on several sides, the U.S. credit rating agencies continue to be the number one aim, since they didn’t predict the collapse that was about to happen.

Another example is the Enron Scandal, which refers to the collapse of Enron Corporation, an American energy, commodities, and services company based in Houston, Texas, in December 2001. The company filed for bankruptcy few days after the downgrading of its credit rating.

I think it is more important for us to think about using ratios. People use ratios for equities. They say overgeneralize that a low PE is better than a higher PE ratio. I have doubts on these statements. There are too many assumptions in earnings estimation and growth assumptions. But it is better than comparing ratings.

Can we use interest coverage ratios? To pay down debt, we have to first consider the amount of money sitting in the firm’s bank account that can be drawn down to pay interest. So that’s the first level of assurance.

Can we use yield spreads? I think so. Yield spreads tell me the incremental rate over the risk free equivalent treasury bond. It tells me 2 things

1. My expected loss in a default
2. The premium I’m paying for credit and liquid risks

Please note that a firm would have been considered to have defaulted on payments when they fail to make payments on time. Being late for one day is default. So when you read on the news that shipping companies and banks fail to honor their debt obligations on time and in specific ways, they have defaulted. It happens frequently.

Credit risk is the risk that your borrower’s credit quality may change. If you gave someone $1000 for 2 years and in return, you get $100 per year and $1000 at the end of the 2 year period, you pray that this person doesn’t get into financial trouble. If he loses his job, his credit quality will change. But he may or may not decide to return you the money. This is credit risk. If he does not lose his job, but decides not to return you the money, this is default risk.

I often find that people are confused by credit, default and liquidity risk. Liquidity risk has nothing to do with borrower not returning money. If you bought a debt issuance and want to sell it on capital markets, you will face liquidity risks. You don’t know if you can liquidate this instrument quickly and in the right value. If you sell a $100 worth of stock for $50 and you have difficulty finding a buyer, the liquidity risk you are exposed to is tremendous.

Measuring bond value risk

How do we measure bond risk? Can we measure bond price like we measure stock price? Yes we can. But it is not as intuitive as volatility of yield spreads. I explained earlier that yield spreads contains information on bond risk factors. In addition, rates are inversely related to bond price. So it is better to measure bond risk by yield spread volatility.

For small changes in yields, bond price is directly negatively correlated. For bond portfolios, it’s not so clear cut. Bond convexity comes in to play – a term to describe the impact of different bonds with different payouts at different times. Every bond has a different modified duration.

So how is bond risks related to firm wide credit risk? Firms issue long term debt, these form the largest part of liabilities.

Layman understanding of credit safety

As a summary, a non-financial expert should only look at 2 things

1. Cash flow. The higher the cash flow the higher the interest coverage. I prefer to look into its operating cashflow. Are they making money from core operations? Some moneys sell assets to generate pseudo signs of positive cashflow.
2. EBITDA. You can also use earnings – add back non-cash charges.

Forget about ratings. They give you some information, but it’s clearly no adequate. Recall before the 2008 recession, rating agencies gave some of those banks that collapsed investment grade ratings.

Traditional Japanese lean concepts will revolutionize your business and personal productivity

Kaizen- The practice of constant improvement

Kaizen increases productivity by involving employees to help eliminate nonessential steps.

Kaizen leads you to greater productivity through elimination. When you analyze working processes, we often find several elements that consume time and energy without contributing anything to the end product.

Muda waste precious time, resources and ultimately money

These wasteful elements are called muda. By eliminating muda, we can free up resources, which in turn can be put to more effective use. For instance, muda could be overproduction, or the waiting time created by inefficient transportation. Work in progress, logistics and wait time is muda.

When team members come together to reduce muda, the firm will save a lot of costs. Kaizen is mostly used in manufacturing. Kaizen is applicable to a wide range of disciplines and fields. You can apply is to any industry.

Steps on how to apply Kaizen

1. Find ways to reduce muda
2. Solidify the solution and embed this new solution in the standard operating procedure

Gemba- Where the real action takes place

At this moment, I will introduce the “Gemba”. This term refers to the “workplace” or “production line”. You often need to be on the production line to see the problem for yourself. There are 5 terms related to Gemba

1. Seiri – sort out the mess
2. Seiton – straighten things out
3. Seiso – keep everything clean and tidy, literally.
4. Seiketsu– keep 1 to 3 a standard you do everyday
5. Shitsuke – sustain these new standards

I use the Kanban method to solidify gains under the 5S. Kanban is visual – allowing tasks to move from WIP to completion on a board. Visual management is an invaluable tool in an increasingly complex work environment. It’s cheap, commonsensical and allows us to save our time for the real work that needs doing.

Implement the three concepts together in your workplace to achieve improvement

Stringing the concepts together, Kaizen is a lean and efficient concept that must be implemented collaboratively among the team. Gemba is where things must start – at the workplace. We can use the 5S to find muda (waste), leading to Kaizen outcomes.

The place for improvements and innovations is the Gemba, so this is where managers should be. Only in the Gemba can one see where elements of Muda exist, and where there is room for improvement.

Soichiro Honda, the founder of Honda, never had a real office because he was always walking through the Gemba. If the workers see that their managers are in the Gemba, demonstrate Kaizen and are self-disciplined, their own motivation will increase. Both maintenance and improvement occur within the Gemba. Therefore, the manager needs to be there to do his or her job right. Of course, if the managers are active at all levels of the Gemba, they know their workers much better and both sides have more faith in each other. This is integral to the effective practice of Kaizen.

How to successfully utilize online platforms

The traditional business model of pipes has been replaced by the new online platform business model. The pipe’s model of building a business involved producers offering their service or product in the same location where the consumer was. However, the internet has altered the way people conduct business, view media and communicate with one another.

Unlike the pipe model, platforms are available online and allow any user to exchange products or services with another, regardless of their location, through online markets.

Additionally, companies are increasingly outsourcing their production to achieve cheaper costs, thus creating a gap between production and consumption. Subsequently, this situation has led to the rise of the new online platform business model.

Unlike the pipes business model, platforms allow users to create value, through buyers and sellers, as seen on Amazon, Craigslist or Uber.

User Friendly platforms allow users to add value

The key to platforms is that they are designed in such a way which makes the exchange between producers and consumers easier and faster, through simple user interfaces.

Some of the most popular platforms, such as Telegram, Viber or Skype, are very easy to use, by allowing users to send and receive free calls and SMS messages in a simple way. User-friendly and easy-to-use platforms attract users, as consumers tend to use platforms that are quick and easy to understand.

User friendly platforms allow consumers to tinker and experiment with the platform in ways that the creators may have never thought of, allowing the user to add value.

For example, Facebook started out as a platform to connect people. Soon enough, users began using the platform to buy and sell products and services through online posts. Facebook is now one of the largest market places for businesses and users as they can buy, sell and advertise products and services.

A successful platform is designed in a way that users can interact and get what they want

The initial formation of a platform entails creating a set of core values and then adding content and features to the initial base.

For Example, Uber’s core value is to offer rides to users and costumers to drivers. However additional content and features have been added. Now the user is able to acknowledge who is going to be their driver/rider is and also able to rate him/her.

The core of foundations of any platform is the services and products it offers. The more the services and products that are offered on a platform, the bigger it will become. Thus, creating an appealing platform is essential, as it allows for the expansion of products and services offered and subsequently for a bigger user base.

How does an appealing platform appear?

For a platform to be truly appealing, it needs to provide users with the possibility to realize exchanges in a simple and easy way.

Exchanges usually take two distinct forms: first is the creation, that allows any producer to generate something of value and increases the platform’s content supply. This could be a post on Facebook, or a posting on Tumblr.

The second is administration, a process that allows users to distinguish good content from bad content, thus making the platform more appealing for all users. The latter is done, for example, on Facebook where users are able to “like” comments or share a specific post.

Subsequently, an organized and appealing platform can face a big issue, when the content generated is so much that users have trouble finding what they want.

Therefore, a well-organized platform must have consumption filters in order to control the amount of excess content. Consumption filters work by connecting data to the content generated by users, which makes it easier for the rest users to find what they want.

An example would be when searching for a YouTube video; you can filter through the number of views, the titles and likes in order to sort out the good from the bad. By applying those filters, you can find the best rated video for you. 

A successful platform entices users to generate new valuable content

Before the onset of platforms, the internet comprised of 90% of people consuming content, 9% of people administrating content, while only 1% creating content. However, the success of platforms has urged a larger percentage of users to generate content.

In order for platforms to effectively create producers, they need two things; methods of content creation and networks to show it.

A successful platform which utilizes both methods is Instagram, as the latter platform allows users to post photos or videos, with filters and editing options, through an easy-to-access and widespread network. Instagram is now the most prominent photo and video sharing platform.

Interaction failures may cause difficulties for platforms, but they can be solved

An example of interaction failures is when you post a new photo on Facebook but you get no likes, or apply for a job on Reedsy but you get no responses. The reasons for an interaction failure may be that you posted a bad picture or sent a weak CV; however it can also be the platform’s fault.

Users often take advantage of multiple platforms which offer the same service. This means that no platform owns the entire market share of a particular service.

Take messaging platforms for example. Skype, Facebook Messenger and WhatsApp are all similar platforms. However, they are used by people interchangeably as they can use all those platforms to stay in contact with their entire social circle.

The best way to overcome interaction failures is by creating a precise metric system to discover the problems which hinder interactions and approval of your platform.

For Reedsy which helps Freelancers find employment, an effective metric system can count the amount of freelancers who haven’t gotten a job in a specific time, or the number of job postings that aren’t filled. Reedsy will then be able to evaluate the problem and offer a precise solution for users, which are experiencing interaction failures.

How to avoid the consequences of not having content when first starting a platform

When a platform begins to work, there is usually no content. However there are ways to avoid the initial repercussions of this lack of content.

Additionally, if the platform is functioning within a market where it’s easier to attract one group of consumers than another, there are effective ways to entice the latter group to use the platform as well.

For example, on match-making apps and websites: there are always more men than women registering. When men realize that there are not enough women registered they stop using the specific website. To avoid this, matching-making sites and apps often advertise free promotions and special offers to women, so that they join the site and prevent men from leaving.

Another tactic to entice users, is offering incentives for existing users to invite other users to join the platform. For example, various mobile games offer rewards to users, whenever they get their friends to join the game or when they make in-game purchases.

The new business model of platforms has replaced the traditional one, which used to offer limited options in terms of selling products or services. Platforms now offer a myriad of options for consumers and producers, including the ability of interaction, regardless of where they are located. Additionally, platforms now allow any user to create content and value, revolutionizing the way business can grow.

Is the best investment strategy to do nothing?

The investment chief for Nevada’s Public Employee’s Retirement System, Steve Edmundson has no colleagues at his firm, he seldom has meetings, and he usually packs his own lunch. Despite his solitude and unusual work habits, Mr. Edmundson’s fund has more returns than other pension funds that run like clockwork, with hundreds to thousands of employees. The key to Mr.Edmundson trading tactic is to do the least possible work necessary, which often entails doing absolutely nothing.

By Rasa Sarwari

Cutting costs and investing in low risk bonds and stocks

Nevada’s pension fund is invested in stocks and bonds that are all in low-cost funds that mimic indexes. Mr. Edmundson rarely makes more than one change to his portfolio every year. News headlines don’t matter much to him, whether it’s local or global.

Mr. Edmundson’s secret isn’t a complex formula or inside information on the markets, instead his strategy is not to outperform the market, but instead keep expenses low. He’s stated numerous times that his firm is “bare bones”, when it comes to expenses.

Instead of racking up expenses Mr. Edmundson prefers to save every penny his fund has. This is why he doesn’t have expensive office furniture, or high end perks, nor does he even buy lunch. He has stated that he doesn’t want to spend $10 every day in order to have lunch.

Despite his frugalness Mr. Edmundson’s funds over 1 year to 10 year periods ending on June 30, have shown greater returns than many of America’s largest public pensions, such as the New York Public Employees’ Retirement system, or The California Public Employees’ Retirement System (CalPERS).

Is doing nothing, really better than doing something?

In light of Nevada’s high returns, other state pension funds have taken note of Mr. Edmundson’s strategy, and the spokeswomen for CalPERS, which is valued at $300 billion compared to Nevada’s $35 billion, said that Nevada reduces the complexity, costs and risks in a portfolio.

For that reason, a big number of famous public pension funds have now taken up Nevada’s strategy, as numerous pension funds are dealing with low cash reserves and reduced interest rates. Even California’s $300 billion public pension fund has decided it would cut ties with 50% of firms that are handling its money.

Accordingly, compared to a decade ago nearly half of US public pensions are now in low-cost index funds. Many investors are now “migrating towards Nevada”, states says Stephen McCourt, who is the co-CEO at pension investments consultant Meketa Investment Group Inc.

However, other investors disapprove of Nevada’s do nothing approach. Mr. Chattergy is the pension chief investment officer for Hawaii and a friend of Mr. Edmundson’s, who disagrees with Mr. Edmundson’s approach. Unlike Mr. Edmundson’s approach, Mr. Chattergy relies on a myriad of investment market strategies, which have thus far been successful in getting him returns comparable to Nevada.

Should you turn funds passive?

In 2005, when Mr. Edmundson was brought onto the Nevada pension plan as an analyst, almost 60% of the funds stocks were in indexes. After becoming Chief investment officer in 2012, Mr. Edmundson did something unprecedented, by turning the fund more passive. By 2015, Mr. Edmundson had fired ten external managers, and put all of Nevada’s bonds and stocks into passively managed funds.

Subsequently, Mr. Edmundson saved the Nevada fund a fortune, as its outside management bill was nearly 1/7th of the other public pension’s, according to Callan Associates, which tracks retirement-plan expenses.

If Mr. Edmundson relied on outside management like other public pensions, he would have racked up $120 million annually in fees; however in 2016 the Nevada fund only paid $18 million.

Despite the success of Mr. Edmunson’s cost cutting, he still does day to day work, like any other average office employee. He prepares material for board meetings, drafts proposals and does administrative tasks, as he believes taking on extra employees would cut into costs.

Nonetheless, Mr. Edmunson still has some way to go if he truly wants his fund to succeed, as Nevada’s current assets would only fund 73% of what is needed to meet future retirement obligations to workers.

Key takeaways

Unlike other investment firms that woo and buy the attention of their clients, through expensive lunches or grandiose presentations, Mr. Edmunson often councils Nevada’s top pension officials on interest-rate risk, as well as investment targets in his small boardroom, through uninspiring Powerpoint presentations. Additionally, he avoids taking his clients out for expensive dinners, as he sees it as an unnecessary expense.

Moreover, Mr. Edmunson generally doesn’t work overtime, outside his normal 8-5 hours, drives to work every day in his 2005 Honda Element, which has over 280,000 kilometers on it, and in 2015 his salary was $127,121.75, according to a Nevada Policy Research Institute database.

The key take away from Mr. Edmunson’s success is not necessarily hard work, instead it’s the opposite. By doing the least work possible, Mr. Edmunson has cut huge risks and expense for his fund, and instead provided huge returns.

Charlie Munger’s investing system – Simplicity

Munger follows an investing system that focuses on simplicity. He follows Benjamin Graham’s investing principle – keep things simple.

This means to invest in businesses that are not over your head. Buy shares for less than their future earning potential. You will need patience waiting for them to appreciate.

Wait for the right moment to make a new investment. This method requires a realistic approach.

There are three important principles

First, treat owning a share as ownership in a business. You won’t understand the value of your shares unless you truly know the company in which you are investing.

Second, buy at a discount to give yourself a margin of safety. A margin of safety is the difference between the share’s current market price and its intrinsic value, that is, its future cash flow.

Third, stay rational. This is harder than it sounds. It’s your job to remain unemotional when selecting investment opportunities. Never allow your emotions to take control of your investing decision.

Here are some rules to succeed in investing.

Do not move your shares too often. Selling and buyer incurs commissions and fees. Try not to follow the herd. You don’t have to buy when everyone is buying. In fact, it is always safer to stay out when the market is overbought.

Differentiate between investing and trading. For investing, hold a long term view and always be well diversified. Trading is a type of work. Investing is allowing money to work for you.

At Seeking Returns, we hope non-professional investors take on non-discretionary investing. See the strong evidences here.

CFD broker: both the referee and the athlete

Contracts for differences, also known as CFD, is an arrangement between the investor and the provider to exchange differences in the value of a financial products or index between the time the contract opens and closes. UK Financial Conduct Authority (FCA) found that there is a “clear information asymmetry” between firms and retail investors in the CFD market.

High level of leverage and volatility

CFDs have high level of leverage. According to the research of FCA, some firms offer the leverage over 200: 1, which means the clients just need to pay a small fraction of the total value and the CFD provider covers the rest. It is true that this is attractive, but owing to the high leverage, the volatility of CFD is greater than other financial products. That is to say, you may lose much more than your initial deposit. Some people even compare CFD trading to “borrowing money to gamble”.

To avoid large-amount loss, many firms use auto account close-out. If you do not have sufficient funds to cover your total margin requirement (the balance of your account falls below a certain level), your CFD account will be closed out by the firm without consulting you. Then there would be liquidity risk. Even if some time later, the price of the underlying asset recovers and shows a profile to you, you cannot trade and you have to meet the loss.

The firms’ gambling-style promotion and bonus for opening accounts also contribute to the high risk. In practice, many clients are not well aware of the risk (the firms never tell them) and trade the products they do not have enough understand, unlike the financial products sold in the market. Actually, CFD is so volatile that even the most educated and experienced investors could have totally wrong predictions, no mention the inexperienced retail ones.

Conflict of interest: both the referee and the always-win athlete

Hedging against the clients is common and reasonable—few people can find their relevant clauses concerning conflict of interest hiding in a long and full-of-terms contract. Especially when your trading amount is large or the position on one trend is much larger than the opposed trend, to manage the risks, they have plenty of ways to be the clients’ competitors like getting exposure to that asset or index with partner companies to get the broker’s desirable result. The brokers sometimes hedge entirely or partly into the market, when the risk management models ask them to do so.

The client’s CFD trade could be close owing to the broker’s benefit. When the “risk management league” fails to produce the results that they want, the CFD provider may close the client’s trade without warning or paying any profit or money. There are also liquidity risks. If there are not enough trades being made for an underlying asset, the investor may be unable to trade over that asset. Imagine a sports game, the CFD provider or broker is acting both the referee and the athlete so they always win. Sometimes the retail investors do gain something because the winners want to keep them in the field and continue to play the game.

On December 6th last year, FCA published the consultation paper on “enhancing conduct of business rules for firms providing contract for difference products to retail clients”. In the consultation paper, FCA said the internal analysis found that 82% of CFD investors lost money on it and every client lost £2,200 at average. For consumer protection, FCA is going to tighten regulation of CFD trading.

让你的工作可视化，手头一次只做一件事

你的注意力是一种有限的资源。每日所见的人、事、物全都在争夺你有限的注意力。人脑在面对多重任务时并不能全力以赴，这也是你最好不要一心多用的原因。

麦吉尔大学行为神经科学教授利维坦认为一心多用其实是在耗费你大脑的能量，“在任务间切换会耗费体力，比起只专心做一件事来说，一心多用让你更疲劳”。
用个人看板工具吧！

这是一个真正有效的任务管理系统。它不仅容易操作，而且能让你不再在多重任务间切换，并且能更快的够保证你完成你设定的目标。

看板（在日语里是公告牌的意思）是为了达到及时生产（JIT）而采用的一种生产管理系统。丰田公司的工程师大野耐一发明了这一大幅提高效率的生产管理系统。
看板管理很简单，你需要在卡片上写上必要的信息，还需要一个你可以排列这些卡片的板子。

它的好处就是，可视性非常强。你一眼就可以尽览你有哪些工作需要做，哪些是正在做的，哪些应该优先处理，哪些已经完成。简单的说，看板管理法可以在整体上帮助你提高效率。
看板不仅在项目管理领域很流行，很多人还把看板引入了个人生活的安排中。Trello, SwiftKanban,和KanbanFlow都是很流行的运用看板管理法的app。

因此，个人看板就是管理个人事物的系统工具。它的理念是对要处理的事和时间的自我管理。从很多方面来说，看板管理法在机会与成就中达到了完美的平衡。

它的核心原则是:让你的工作可视化，手头一次只做一件事。​​​​

极简主义的重要步骤：网络极简与克服成瘾

在过去的十二个月里，我一直在测试自己对于践行极简主义的边界在哪。我扔掉了所有的衣服，搬走了家具，睡在地板上，换了工作，以骑自行车代替开车。

大多数人在极简方面只停留在丢弃物品上。物质负担是精神负担的外在表现形式。可是你尽可以扔掉所有物品，每天穿同样颜色的T恤衫，可还是被精神负担所累。比如你在购物、性、看A片、做按摩、喝酒和玩游戏这样的事情上的沉溺不可能随着你扔掉多余的衣服裤子和玩具而也烟消云散。

扔掉物质负担确然是一个好的开始，很多人连这一步都做不到。而新如今网络造成的负担与物质负担一样有害。想一想你在社交网络上有多少点赞之交？再想一想你每天都会刷的那些社交媒体平台。

毋庸置疑，你社交网络上90%的朋友都是无效社交，并且他们本不应打扰你的日常生活。当你无休止的刷那些新闻和视频时，你只是让你本就不足的注意力更加分散而已。

以下是一些针对减少网络负担的有效建议：

• 发文时使用文字，减少图片。多数图片并无实际意义且耗费网络空间和人的注意力。

• 写作时语言清楚、简洁。避免形容词的使用。如实描写即可。

• 不要沉迷于与好友聊天，一般朋友和泛泛之交就更不用。把宝贵的时间用在与不同领域的精英、专家交流上，或者是其他同在极简道路上的朋友。

• 吸烟、喝酒、玩游戏、看A片会麻木你的感官。当你对这些上瘾时，你只能依靠他们来体会人生了。可是生命是远超于这些东西的。高级的感官刺激来自于目标的达成，而非这些令你心理、生理成瘾的东西。​​​​

Digital minimalism and tackling addiction are crucial steps to minimalism

I have tested the boundaries of minimalism over the last 12 months. Throwing all my clothes away, removing furniture, sleeping on the floor, changing jobs, cycling instead of driving.

Most are stuck at the stage of removing excess physical items. The physical excesses are manifestation of the emotional excesses. One can throw everything away, wear the same colour shirts, and still suffer from excesses of life. For e.g., your indulgence in expenditure, sex, pornography, smoking, massages, liquor and gaming cannot be removed just because you threw your extra shirts, pants and toys away.

Removing physical excesses is a good first step. I don't know of many people who have moved on from this first step. Digital excesses are as toxic as physical excesses. Think about the number of connections and friends you have on social media applications. Consider the social media platforms you access on a daily basis.

Suffice to say, 90% of your connections are useless and should not be allowed to disturb your daily life. Your decision to scroll though endless news and videos are mere "comfort food" to replenish your acute deficiency in your ability to focus.

Here are some practical steps to reducing digital excesses:

       Blog with words, use less pictures. Most pictures are not plagued with useless   illustrations that not only take precious web space but also attention.

1.        Write clearly and simply. Adjectives are not appreciated. Tell things as they    are.
2.        Remove your addiction to chatting with close friends, friends and even    acquaintances. Reserve time to connect only with champions (subject matter    experts) and friends on path to minimalism
3.        Smoking, drinking, gaming and pornography numb your senses. You depend    on these things to experience life when addicted. Life is beyond these  elements. Find exciting through achieving goals, not through these digital and  physical addiction 

极简主义如何帮助创业

极简主义的基本概念可以帮助你用最少的资源达成最佳的效果。这与精益管理和精益商业版图等成功的管理框架相一致。

传统的商业模式要求你在开始行动之前就要做周密的规划。这是假设你可以充分了解市场需求。极简主义的观念则教你做最少的事情以获得客户反馈。

快速的客户反馈可以让你根据实际的市场信息来调整你的产品。

例如，你可以投入一个便宜的实验模型并询问顾客他们的意见，随即相应地调整你的产品。这比起基于你的研究来研发整个产品要好太多了——那样的话在随后进行替换会非常昂贵。

成为一个极简主义者有助于你去排列任务的优先次序。任务需要消耗资源，或者是精力，或者是资本。把最重要的任务和非关键的任务区分开。创业最重要的要点就是以尽可能少的现金流而尽可能长的生存下去。

一些有助于排列任务优先次序的工具

Trello — 看板式项目管理

Asana — 分配你的任务，跟踪和制定责任

Slack — 群组聊天，文件共享，代替邮件​​​​​​​

富有成效的工作原则

你可以赚钱，但你无法赚得时间。列一个主任务清单来让你的时间得到更合理的利用。

时间和金钱一样需要管理。你应该计划出日常，每周和每月的活动，以便你用最有效的方法来花费你的时间。例如像Trello，Asana，Wunderlist这样的工具有助于你写一个计划清单。

主任务清单包含你需要完成目标所需做的所有事情。当你完成后，将这些内容分为两类：计划行动和下一步行动。

计划行动是首要任务，需要较小的行动步骤，而且可能需要几天或几个月才能完成，如整理你的厨房或规划一个非现场研讨会。

下一个动作是一个可以让你前进的单一的步骤。

主任务清单的一个要点是让你免于将大量的任务同时浮现在脑海里。

你需要毅力来控制自己的注意力。了解自己的弱点并找到一个平衡。

注意力是一种宝贵的资源，你需要毅力来指导和控制它。

每天，你可以将注意力集中在少数事情上，因为注意力不是无穷的。

专注于工作，必须平衡生活中你对其他事物的注意力。你的日常活动应该为你的注意力持续提供辅助。有些人在散步后更加专注 ，而其他人在工作后更好地集中精力。

饮食和睡眠习惯应该和你的注意力模式一样，以同样的方式听音乐或独处或进行社交生活。

关键是要找到可以支持你的注意力并且让注意力持续的活动！​​​​​​​

Simple personal investment plan

Save a fix percentage of your income.

Insure yourself for the entire loss of income assume you cannot work from the time of insurance purchase to the time of your retirement. Choose the cheapest insurance product. Plain products like term is better.

Invest your savings into index funds. I can't stress this enough. http://www.alexlew.com/p/why-passive-investing.html?m=1

Your portfolio should be diversified across regions and into stocks and bonds. 

Rebalance every year.

使用我们的权利改变社会

一个公民平日里所做的选择不应仅仅是以法律和是非判断为标准。更重要的是，你想要为后代留下一个什么样的社会。

当你面对不公时保持沉默，也就是对正义倒戈相向。当你面对欺凌时畏缩不前，也就是为暴力摇旗呐喊。当无人为孕妇让座时你也无动于衷，你就放弃了行使你的权利的机会。

人们行使权利是为了表明态度。人都会有不满。遇到不公平不公正的时候更是会争吵。关键就在于，在面对不公时，在弱者求助时，在穷人挨饿时，你运用你的权利表明态度。如果人只有当自己成为了不公平的受害者，才会有所反应，那有什么用呢？我们不需要把正义和平等的主张留给其他人。我们自己拥有这份责任。

强者和弱者之间的区别在于历经失败洗礼后的意志。弱者惧怕失败所以选择轻松模式。从策略上来说这很明智，毕竟他没有为了克服苦难而接受过“适应性”的训练。强者则主动迎接重重困难，诚实坦率，维护自己的尊严，承认自己的错误，捍卫弱者的权益。他们中的很多人因为自己贯穿一生的坚定执着而死。但不管怎样，他们改变了这个世界。

我们赞美生命中为数不多的赢家。我们为他们的成功鼓掌喝彩。但是我们却记不起那些在他们之前的失败了的先驱者——他们走过各种不同的失败的路。正是这些失败的尝试帮助后来者探索出了自己的道路。探路者是高尚的，比选择“轻松模式”的弱者更值得尊敬。

给予好的建议。只有能真正传播出去的建议才是好的建议。只是留着给自己什么用也没有。​​​​

我这一年在金融科技风投公司做商业分析员的经历

​​​这一年里，我成功把一个产品从概念带到实行阶段。我从来没有在人生中的哪一年学到这么多的东西。下面是我的一些总结和感悟。

等级制度会毁了工作进度。团队中的高级成员也有必要亲临现场，不断学习。如果你想迎来飞跃性的成长，那么你需要更多地吸取失败的教训而非成功的经验。每一个人（哪怕是最初级的成员）都应该可以发出同样大小的声音。团队中一定会有一些捣乱分子。一些成员喜欢夸张问题，他们应该立刻离开。

产品设计和平面设计应该严格区分开来。产品设计是团队中的核心人物。只要给他们足够的时间，他们就可以把用户反馈转化成真实可见的产品特征。产品设计百分之九十的时间都在思考，画草图和提问。可能他们提出的大部分问题都要费时费力才能得到答案。但是这些问题都是有意义的，必要的。

简化行政程序。要雇用聪明的行政人员，这样智囊团才能真正专心做实在的工作。行政程序可能包括索赔，申请，电子报送，行政网络服务等等。

采取极简主义。丰田生产系统的实用性就在于它可以大幅度减少浪费。通过判断并且舍弃不必要的部分，判断并且解决“不平准的”因素，我们可以明显减少生产过程中的瓶颈。

你永远只需要现有人员的70%。（的确，70%这个数字只是我的个人估算。）实际情况是80/20法则一直成立，20%的人完成了80%的任务。我们可以主动把这20%的人找出来然后给予他们适当的奖励。他们的工作态度难能可贵，更重要的是他们总能启发大家用正确的方式取得成功。我们无需为要撤走剩下那80%的人担心。就算是你偶然撤走了一个有用的成员，他/她其实很有可能是可以被替代的。

一名可靠的分析员做的试算表一定是简单的。比如他应该了解做增长估算时最好用数据表。一名高级分析员可以在不断变化的潮流中建造更强的模型。从我的经验来判断，一名成功的分析员应该熟练使用excel快捷键，不需要频繁地用鼠标。

CEO是成功的企业家也是梦想家。他的角色非常重要。但是这个团队也需要为自己的发展承担起责任。

极简邮件

在探究CEO究竟是什么样的邮件风格之前，我们必须先了解CEO每天的工作状态。CEO要处理的事情非常多，五百强企业和创业公司的CEO都一样。而全球经济形势的瞬息万变像鞭子一样不断抽动着他们脑海中的陀螺，每一分一秒都不容儿戏。所以不管他们是写邮件还是看邮件，冗长拖沓的文字都会浪费他们的时间，增加沟通成本和负担。言简意赅，直达重点是他们最鲜明的风格。

外部邮件：直接不等于没礼貌，礼貌不等于绕圈子

如果你是第一次联系这位CEO，那么格式排版的规整程度会影响CEO对你的印象。如果你之前和CEO联系过，那就尽量把最近联系的那封邮件翻出来接着后面写，这样即使CEO一下子没有想起来你是哪位，也可以从历史记录中找到线索。尽管以前联系过可以算得上是“认识”，但是未必真的跟你这么熟。开头简短的问候句子，比如“Hope all is well.”，作用和气垫一样，里面什么也没有，但是可以有效减少摩擦。

如果你的邮件20秒还读不完，还不知道你的意图，那就不要发了，毕竟大家都很忙。写得跟小说一样的邮件需要看超过一遍才能筛选出重点和有用信息，这是非常低效的。

内部邮件：更像短信，无需漂亮

在企业内部，尤其是部门内和团队内，邮件往来和短信很像，主要目的是交流工作进度和工作情况，内容即时简洁和发短信一样说清楚了就可以，无需铺垫和客气。

在和同事交流沟通的过程中，邮件连称呼之类的格式都可以不要，甚至不需要主语，比如“Will do.”“Will send over a draft by the end of the day.”。

想要写出CEO风格的邮件，一个很有用的方法就是，让自己以为邮件和推特一样有字数限制。你实践得越多，你就越擅长遣词，从而每周都可以节省下原本用于回复长邮件的时间。​​​​

为什么选择极简主义？

轻松保持整洁。我的个性是比较喜欢囤积东西的，但是又很讨厌乱。如果房间很乱的话，我会咬紧牙关，难受得浑身发痒。以前，房间一开始变乱我就会觉得不想在那里待下去了，结果就真的很少待在房间里。所以我经常在沙发上或者其它房间里过夜，就是想逃离那种忍不住去收拾房间的压力。而现在，收拾房间就是几分钟的事情，房间成为了我心目中平静的避难所。把衣服挂好，抚平褶皱，扔掉垃圾之后再睡下，每星期只需要大清扫一次，所有东西都会很整齐。

没有了买不需要的东西的想法。每次当我想买一些没什么实际用处的东西的时候，都会想起来我是多么的爱我那整洁有序的房间。这就马上扑灭了我的购物欲望。我始终遵循“一个进，一个出”的原则，买了一个新的东西放进房间里就一定要有一个旧的东西撤出来。这种做法并不浪费钱，相反，我省下来不少钱，花在了新的相机或者度假这类大的开销上。

马上找到自己要的东西。我最喜欢这个。没有太多杂物的干扰，我总能很快找到我要拿的东西。某件特定的T恤，钢笔，充电器什么的很快都能找到。以前我经常因为一时找不到而慌乱，现在完全没有这个问题。

头脑更清醒。可能这是对心理的最大的影响了。不知怎么的我发现，更简单的环境有助于思考。如果我不会因为看见杂乱的景象而烦恼，集中注意力也就容易多了。所以我总是想营造一个极简的空间，这样我的思维会更清晰。

感觉更自由更不受束缚。我很享受那种随时都可以去旅行或者搬家的自由灵活的感觉。大学毕业以后我就一直都想这么干，现在也容易多了。携带的物品太多会让人窒息，妨碍人的行动。我搬过很多次家，完全明白这个过程是多么的压力满满。东西少一点，旅行搬家也会更容易更轻松。过多的物品让人徒增愧疚感——很少穿的衣服，没有用过的文具或者不喜欢的礼物，全都会成为心理负担的来源。在过去，我的房间里有很多孕育着我的愧疚感的物件，然而我终于放下了。我们的所有物应该是为我们服务的，而不是反过来。

视觉上的满足感。一目了然无障碍的空间很美。植物，书，鞋子，所有的东西都摆放得当，。我喜欢所有光滑无痕的平面和白墙呈现他们本来的样子。这也就意味着，我可以出于真正实用的目的，在更少但是更好的东西上投资。

极简主义如何起步？

列一个你的物品清单。把你至少一年没用过的东西收集起来，毫不留恋地捐出去吧。

在购买的时候慎之又慎。避免冲动购物，思考一下某件只是偶尔用到的东西，能不能从朋友或者邻居那里借用，而不是买下来。很多时候我们买东西只是因为偶尔会用到。如果你已经可以预见眼前的这件东西一年不会用超过一次，那就不要拥有它。

打折的时候才买东西。总有地方在搞促销。打折的时候才买东西，你可以省下来四分之一甚至更多。这也让你买之前有足够的时间思考。

想清楚什么对你是真正重要的。当你回顾一生的时候，有什么你是后悔没有做成的吗？有什么你觉得是浪费了时间的吗？那就从拒绝根本不重要的事情开始。最终你会发现你在意的才会留下记忆。

想明白你可以怎样改变你的人生。我见过在生命的终点发现自己一直苦苦追寻幸福只是徒劳的人。尝试从旁观者的角度来审视你自己。决定你这一生究竟要为谁而活，并且找到方向。当你在帮助他人的时候，是很难消沉的。