Well, after the midterm election results have settled for a while, I promised I would pipe in with my thoughts about what this means for tax policy moving forward. Here they are:
Yes, you read that right.
Despite what may seem like a fundamental shift in the makeup of Congress (the Republicans taking over control of the Senate) and the questions I’ve been asked of late that seem to imply that it will, by necessity, change the way the tax code is legislated and implemented — the truth is that our tax code is so deeply entrenched as a way to curry particular favors and reward certain interests, that it would take a VAST political movement to make substantive change.
And, in my opinion, that won’t be happening with a divided government. I could be wrong of course — but let’s just say that for the purposes of THIS year (2014), don’t be banking on anything changing in your favor unless YOU make it happen.
That’s a good maxim, in general, when it comes to politics.
But moving on from the political “realm”, and from the last few weeks of tax and estate planning fare, I wanted to take a higher view of doing life WELL.
To do that, I like, of course, to examine the lives and principles of those who have done very, very well.
There are always principles to bring forward to today. In fact, their power is increased because of the deteriorating work ethos and wisdom of our current age (at least, in my humble opinion, that is!).
So, I’ve recently read up on J. Paul Getty — at one point, the richest man in the world. Here’s a distillation of his wisdom, based on my reading…
Duane Bishoff Reveals The Billionaire’s 4 Keys to Success
“Character isn’t something you were born with and can’t change, like your fingerprints. It’s something you weren’t born with and must take responsibility for forming.” – Jim Rohn
J. Paul Getty became the richest man in the world during his time by practicing a few basic principles of risk-taking and reward throughout his life. I’ve gathered them for you — and regardless of whether or not you run your own business, they apply.
1) Know How To Assess A Decision
Whenever J. Paul Getty was considering a business decision, he would ask, “What’s the worst possible thing that could happen in this situation?” Then, when he was clear about the worst possible outcome, he focused all of his attention on making sure that it didn’t happen. You should apply this technique to every risk situation or investment you ever make.
2) Consider Murphy Sub-Laws
Remember Murphy’s Law: “Whatever can go wrong will go wrong.”
Per Getty, there are several secondary laws to Murphy’s Law, such as “Whatever can go wrong will go wrong at the worst possible time” and “Of all the things that can go wrong, the most expensive thing will go wrong at the worst possible time.”
Another sub-law is “Everything takes longer than your best calculation.” In advising, Getty would take the very best estimate of break-even for any business venture, and then triple it to arrive at a more realistic number.
3) Always Add A Fudge Factor
Another sub-law is “Everything costs more than you can possibly anticipate in advance.” In minimizing risk in any venture, always add a “fudge factor” to account for the degree of uncertainty.
Having learned from Getty, whenever I now do a business plan, I always add 20 percent to the total of all costs that I can identify, to come up with the probable cost. Anything less than this, whether in business or your personal life, is likely to be an exercise in self-delusion and to open you up for some unhappy surprises.
Once you have identified the worst possible things that could go wrong, make a list of everything that you could do to offset these negative factors. Engage in “crisis anticipation.” Look down the road, into the future, and imagine every possible crisis that could arise as the result of changing external circumstances.
4) Do The Things You Fear
Getty wrote that one of the very best ways to develop your ability to take intelligent risks is to consciously and deliberately do the things you fear, one step at a time.
A very good way to overcome the fear of risk-taking is to set clear, written, measurable goals for yourself, and then to review those goals regularly. When you have clear goals and plans, and you continually work on them and evaluate your progress each day, you will see what you’re doing right and how you could improve your performance. You’ll feel more competent and capable, and will feel better about yourself. You’ll become more thoughtful and reflective and willing to take on even greater challenges. You’ll feel like the “master of your fate and the captain of your soul.” And your likelihood of success will become greater and greater.
Now, here are three steps you can immediately take to put these ideas from Getty into action:
First, take any worry situation in your life today and ask, “What is the worst possible thing that could happen?” Then go to work to make sure it doesn’t occur.
Second, look into the future in your life and determine the worst things that could happen.Engage in “crisis anticipation” regularly, and continually be taking steps to guard against your worst-case scenarios.
Third, work from clear, written goals and detailed plans. Review them regularly. Consider alternatives, and always look for ways to increase the likelihood of your success.
If some of these concepts seem “tried and true” … well, they are.
And there’s a reason for that. Maybe this should be the day you tried them anew.
To more of what’s yours, in your pocket…
Hobson, Bishoff & Dowdy, PLLC