3 golden rules that have the power to change your life

3 golden rules

As I was crossing the street holding a small gift for my bookkeeper I was thinking about why I was bringing a gift. It was a small gesture that cost only $5 and five minutes of my time, but I felt good about bringing it, and I was hoping it would brighten up their day. Then it occurred to me: if someone came to my office with this small gift, it would sure make me happy.

1. Do unto others as you would have them do unto you.

Like Jim Rohn, I am also an amateur on the Bible. But with a little help from Google and Wikipedia, I do know that inside there’s a verse called Matthew 7:12, and according to Wikipedia it goes something like this:

Therefore whatever you desire for men to do to you, you
shall also do to them; for this is the law and the prophets.

This is also known as “THE” golden rule. On this same track, Zig Ziglar used to say, “You can get whatever you want, if you help enough people get what they want.” Think about this for a second. Can you trace any of your frustrations to times when you were focusing on yourself? For example, in traffic? I know I can! When someone is not driving to my expectations (drives too slow, doesn’t signal before making a turn, etc.) I get frust… fascinated! You can integrate this thinking into your business, your relationship, or your happiness in general. As you shift your focus from yourself onto the person or client you care about, you will not only feel better, but also achieve greater success. No matter how much our society and the media wants to convince us we are only focused on ourselves, real fire inside of us starts only when you start to give. Tony Robbins sums it up very nicely: “The secret to living is giving.”

2. Men are developed the same way gold is mined.

As I kept walking from the garage towards my bookkeeper, I thought about this golden rule and remembered another golden rule I read a while back in a beautiful, timeless bestseller: How to Win Friends and Influence People. I read it for the first time five years ago, and then two years ago I listened to an audiobook. I would recommend this book to absolutely everyone, and especially to business owners, CEOs and leaders in the making. There are some incredible gems inside this book! One of them is golden.

“Men are developed the same way gold is mined. Several tons of dirt must be moved to get an ounce of gold. But you don’t go into the mine looking for dirt. You go in looking for gold.” – Dale Carnegie

This was an eye-opener for me personally, especially since every leader is keen on personal development. Meaning, the same practice for developing your team, you can use to develop yourself. Play on your strengths, mask your weaknesses, and find someone or something to replace your weakness. Find someone whose strength can replace your weakness. Compliment your team when they do great work, as that will inspire them to do more great work. When they make a mistake, help them learn from it so that you have someone in place who has already made this mistake.

Looking for the gold will turn on your “reticular activating system” (RAS) which will help you find more gold. If you don’t know what an RAS is, the best and easiest way to explain it is for you to remember that time when you bought a car, or shoes, or brand of sunglasses and then you started to notice them everywhere. Those things were always there, but now you are noticing them because your brain now looks for them. Same with business opportunities, the perfect soulmate, and your goal in life.

Oftentimes, myself included, we fall prey to negativity and depression after we fail at a task again and again. We start to see so much dirt that we even neglect the gold we find. We justify it with, “Oh yeah, we were lucky,” “That’s the norm,” or “That’s still worse than xyz.” I once heard Arnold Schwarzenegger, in a motivational speech, say: “Nothing can replace hard work.” I can relate to him saying that because body building is a great example where you have to put in the reps, training, proper diet and whatnot to get the results. There is no amount of reading, talking, or motivational videos that can bring you results. You have to remove a ton of dirt so that you can get an ounce of gold. There are no shortcuts.

Once I thought of these two golden rules, I figured that if I could find a third one, that might turn into a nice little blog post. I didn’t have to think much, because even before I could open the door of the building I had the third golden rule.

3. Buy gold when it’s cheap. Sell gold when it’s expensive.

“Buy low, sell high” while having “asymmetric risk-reward” and “opportunity cost” in mind. It took me a few years to learn these terms, so I’ll explain them here just in case you aren’t fluent in the language of the sophisticated investor.

Buy low, sell high is pretty simple, and the simplest of the three concepts. That’s also why so many people lose money on it. They think they are “buying low,” until they realize they are not, and by then it is already too late. It took me a while to realize I have always been in the business of buying low, selling high! Oftentimes people classify this as value-added service, reselling, or investing. You can also buy a book or a course, acquire some knowledge (buying low), and then provide value to the marketplace by offering solutions and get your return with a much higher dollar sign (selling high).

I’ve learned that this concept becomes especially fun and powerful when you mix it with the other two: asymmetric risk-reward and opportunity cost. If, like me, you are not an economics major, there’s a good chance you’ve never heard of these two terms. After I learned some people made millions of dollars on account of them, it took me five minutes to understand them. Now don’t get me wrong, understanding something and doing something on a daily basis are two completely different things. You don’t get paid for what you know. You get paid for what you do. So what I can do here for you is help you reach the first step, which is to understand these two very powerful concepts.

It is what you do that defines you.
– Batman movie

Let’s start with the easier one, and the one you will need first: opportunity cost. If you don’t have any savings and are struggling financially, I am almost positive you don’t know what opportunity cost is. And even if you do, you are then ignoring this rule completely. I’ll explain by using an example of a smoker. I don’t have anything against smokers; I was a smoker for more than five years, and quit smoking almost 10 years ago. Why? My granddad died of lung cancer, and I was so broke that I couldn’t afford to buy my own cigarettes. I was sick and tired of being sick and tired. Cigarettes are a great example because most smokers buy them every single day. So hypothetically speaking, let’s say a pack of cigarettes that you would smoke that same day cost $4 where I am from. If you are in the US, this can go up to $6 or $7. But anyway, lets go easy, and say you would spend 30 times $4, a total of $120 that month on cigarettes. We both know that smokers don’t smoke for one month and then quit. Which is another reason why this is a great example for explaining opportunity cost. Let’s say a smoker smokes for 30 years (or 360 months). He would spend roughly $43,200 on cigarettes. And again, we both know that sometimes smokers buy more than one pack per day, AND that the price of cigarettes always goes up. If you used that money to start a business, acquire a client (with an ROI) or invest in the stock market, anything that could give you a return greater than $43,200, that’s opportunity cost: the cost of a missed opportunity. I think we can both agree that at only $4 per day, or $43,200, it’s pretty darn high!

If you are thinking, “Goran, that’s great, but I am so broke, I can’t afford cigarettes, or I am not buying cigarettes at all!” No problem. I was there; here’s what you do. Opportunity cost also applies to your time. For example, watching TV, playing video games, etc. Again, I was playing video games for 12 hours a day (if not longer), and watched so much TV as a teenager that it might be one of the main reasons why I dropped out of high school. So when I write this, don’t think I have anything against playing games or watching TV – I was there. Allow me to explain how opportunity cost applies to your time. Let’s say you are watching three hours of television every day. Or nowadays, people spend that amount of time on various social media channels, so you could use that as an example as well.
3 hours x 30 days x 12 months x 30 years = 32,400. That’s over 32,000 hours, and that’s IF you stop watching TV or browsing social media after 30 years. And that’s IF you only spend three hours doing it every day.

During that time you could learn several new skills, start a small business, become a better lover, make new friends, travel the world, plant a forest, help people in any kind of need, you name it. It is very hard to quantify and compare the return on investment from watching TV to that of becoming a brain surgeon (could you become a brain surgeon in 32,000 hours?) or a romantic lover, BUT it is a great philosophical question, and a great explanation of opportunity cost. I know I sound like a productivity junkie, and I am, but I am not saying you shouldn’t rest a minute in your day; rather, I am saying don’t spend over 60,000 hours watching TV during a 60-year period. I remember reading somewhere ( – and there is a heated discussion on who to attribute this quote to) – anyway, I think Gandhi said to his assistant that he would meditate today for 20 minutes. And then his assistant replied that he doesn’t have time in his very busy schedule for today! To which Gandhi replied, “Then I will have to meditate for an hour.”

Finally, the asymmetric risk reward. It sounds more complex than it really is. Since I am into search engine marketing, Google AdWords and conversion rate optimization, I’ll use that as an example. Let’s say your asymmetric risk reward is 1:10. In a nutshell, it means you risk 1 for the chance of getting back 10. For the sake of this explanation, let’s say, U.S. dollars are in question. For example, your cost per click on your AdWords campaign is $1 (I know, very low, haha), and you know that if that website visitor converts to a paid client you will get $10. (For the sake of this example, let’s ignore customer lifetime value.) But this is where many people get it wrong! They think that this is asymmetric risk reward. The truth is, sophisticated investors are 100 percent sure that 1 in 10 will convert! So they spend $1 knowing that in 10 clicks they will get back $10! It’s not an idea that, “If the website visitor converts, I will get it”; they know it will convert. Those are the types of opportunities they are looking for! If you spend $11 for 11 clicks, and only 1 person converts with a $10 return on investment, sooner or later, you are going to be out of business. Unless you cross-sell, up-sell, ask for referrals, sell subscriptions and “work hard and smart,” but then you are just increasing your asymmetric risk reward from 1:10 into 1:20. This is still asymmetric risk reward, but it’s not the same comparison. A great asymmetric risk reward is 1:100, where you risk 1 for the chance of getting 100. That way, you can miss 98 times, and still come through.

Rich people plan for three generations
Poor people plan for Saturday night
– Gloria Steinem

In conclusion, I really think that by living these three golden rules every day, you are going to be exponentially better than you were supposed to be a month from now, a year from now, a decade from now. I know it’s extremely hard to plan for the future and look decades away, but that’s one of the traits that separates the ultra-rich from the mediocre and the poor. Long-term thinking and delayed gratification go hand-in-hand when it comes to securing wealth for yourself and your family. Thinking long term also has a nice spin with opportunity cost. You shouldn’t think of your $100 phone plan as “just $100 a month.” Instead, see it as stealing $1,200 from you every year and $17,300 from you every decade. Jim Rohn used to say that it’s not what the TV will cost in dollars, it’s what it will cost in time spent watching it.

How to get out of debt – 14 tips

The Total Money Makeover

First of all I have to say I am not some financial guru. Just a few years ago my finances were a mess. I didn’t know it at the time, but once I started improving them I realized the obvious. My finances were a mess. I knew something was wrong, but I couldn’t pinpoint it. I couldn’t help the people I love, I couldn’t make a difference for the causes I cared, my business was struggling and I had to borrow cash each time there was a big spending on the horizon. Like a minor fix on the car. Sound familiar?

Getting a loan was so easy!

Credit card number one, credit card number two, overdraft, loan number one, loan number two…

Before I knew it, I had too much month at the end of the money, and my only source of income at the time was a new fledgling startup that just received an angel investment. I was lucky because I was able to sell my first company which helped take care some of my debt, but that didn’t change my habits. We were barely making any income because the product from the new company was yet supposed to be fully developed, and it was a race against time. Later when it was becoming obvious that we aren’t capable of making the revenue to support the team, and no investor was coming to the rescue, the team started to fall apart. I resolved to what was my final loan to save the company. I was on my own, and I started with myself. I decided to first take care of my own finances before figuring out my business. So I read a few books, watched a few seminars, and more importantly I took action.

I started tracking my personal finances. I created a budget for me and my fiance. Together we made a firm decision to stick by it. We weren’t going to starve ourselves, we were still traveling, visiting family in different cities, there was time and money for our favorite cafe, but when the month was over, our personal finances had to be in the green.

Income > expenses. That was our number one rule. Then we started eliminating our debt, and after we were done with that, we started saving some money. We realized that “income > expenses” is easier if you work both on improving your income AND reducing your expenses. We learned that you also need to financially reward yourself and the ones closest to you, so that the struggle makes sense. When you do it like that, your rewards are thought out, and you make the decision based on your real wants and needs.

I think one of the books that really captures those steps is The Total Money Makeover by Dave Ramsey. It doesn’t cover everything, and you still have to act (not just read the book), but it is a great start for someone who is clueless and needs help! Nothing wrong in needing financial help, you are definitely in the majority on this fine planet. I think it’s one of the ultimate mysteries. How do you explain two different families living in the same city, one barely getting by with $1000, and the other also barely getting by with $1500. Shouldn’t the one with $1500 be well off since they are making as much as 50% more than the other family? Somehow we find a way to mess it all up. I remember one of my investors telling me a story about his friend. His friend got a raise, and then he sold his old car, and bought a brand new car with a loan. Why in the world would you do that? Couple years later my friend did the same thing.

You can get out of debt, only when you decide that you really want to get out of debt. If you put other things before getting out of debt, you will never get out of debt.

Another important thing I found out during my financial crusade was that the little habits I originally thought weren’t that dangerous were in fact really dangerous. Think of it like this, if you pay something EVERY month, you really have to be 100% certain that you absolutely need that. Otherwise, it’s not “just $5”, it is at least “$60” (x12 / per year) and once you calculate in opportunity cost (if you invested those $60 dollars elsewhere) it snowballs into a much larger problem or should we say opportunity. This is especially important if you are an entrepreneur. $60 spent elsewhere are the $60 that weren’t invested in your business. Some may say, $60, that’s nothing. Few years ago, I would agree with you 100%. But now I know my customer acquisition cost (CAC), and I can tell you exactly how many clients I could get with $60. I could also tell you our customer lifetime value (CLV), and how much exactly we didn’t make because the measly $60 were spent elsewhere…

I don’t want to say quit smoking, and invest the money in a tobacco company but if you do the math yourself you could get a compelling reason to do so. Obviously you’ve decided that smoking means more to you than financial freedom, which is totally OK if you’ve accepted this as your destiny. I am using this example only to explain the root of the problem. You can get out of debt, only when you decide that you really want to get out of debt. If you put other things before getting out of debt, you will never get out of debt. Some of you may be asking, can I get out of debt and still indulge in that one thing I love to enjoy the pleasure of? Sure you can, but you will probably have to cut of something else, so that you at least start to spend less than you earn.

Recently I listened to an audiobook on personal finances, The Total Money Makeover, by Dave Ramsey. Watch the video below to see what 5 takeaways I got from it.

If you are watching this video, and reading this blog post I think we can both agree life isn’t so bad. You can afford a device with Internet access. Billions of people don’t have this privilege and opportunity. Earlier I mentioned $60. What if life was such a struggle that $60 sounds like a lot of money! I hear you, I’ve been there! You have to start somewhere, and the next best thing after money is time. You have to be careful how you spend time. Think of it like budgeting your time in a day, or in a month. If you keep spending time with the same people that aren’t going anywhere, guess what are the chances you won’t go anywhere either? Exactly.

You have to spend quality time on improving your skills (books, courses, seminars) and looking for opportunities (networking, cold calls, brainstorm business ideas, send CVs). If you are not spending at least 8-12 hours per day on these activities (when you are tight on cash), you won’t get far. Again, same problem with finances, if there’s something more important than getting ahead in life (like playing video games) you aren’t going anywhere. I don’t have anything against you if you are playing video games (I was once like that myself) but five, ten or twenty years down the road I can almost guarantee; you aren’t going to be happy.

In closing, I can say that getting out of debt is easy, once you find a good reason for it. As I mentioned before, once you put getting out of debt on the top of your list, you will find a way. Why? Because recipe is so simple it sounds stupid. Spend less than you earn. Don’t buy stuff you don’t need, sell stuff you don’t need, increase your income, save and invest the difference. That’s step one. Within one year, you can be clear of debt, and ahead of majority of people living around you. Maybe you are going to drive an old car, or have to rent an apartment (car and a home are biggest purchases most people will ever make), but this is secondary! Getting out of debt in my opinion, needs to be your number one priority!

Fourteen ways to get out of debt

  1. Sell stuff that are lying around house and / or in your garage and attic
  2. If you are an entrepreneur, increase your revenue by: raising prices/providing more value, increase the frequency of purchase from current clients, get more clients
  3. If you are not an entrepreneur (become one, at least part time – check job opportunities on Upwork, Fiverr ) or ask your employer how you could provide more value so that you get a raise
  4. Track how you spend time and money, this will give you a great clue where you are making mistakes
  5. If you don’t have time for the first 4 advices, stop doing one of the most unproductive activities in your day, and do any of the first advices listed here
  6. Set a written budget, do whatever it takes to know how much exactly you can spend on each category, and whatever you do, don’t cross that budget
  7. When you set your budget, include: emergency saving, debt payoff, donations (if you are not way-way-way in the red). Giving any amount of money that helps someone or something you care about, will fill your heart and give you energy to proceed on your crusade.
  8. If the debt is huge, you have no choice but becoming an entrepreneur. As long as you are changing time for money (working for a paycheck) it will take you a very long time to payoff your debt
  9. Don’t take new debt to refinance the old debt unless you absolutely know what you are doing. Since you are here, I’ll assume you don’t so I’ll advise you to not to get a new loan. I also made the same fatal mistake few years ago! I got a loan, to clear my overdraft debt. A year later I had a loan to repay, and I was again deep in the overdraft.
  10. If the temptation is to great, eliminate it completely! If you can’t control your credit card spending, cut the credit card. If you can’t control your overdraft, call your bank to cancel your overdraft.
  11. This one is tricky. If you already sold everything your “don’t need” it’s time to rethink what you don’t need. Do you really need a tablet if you have a smart phone? Do you need a DSLR if you have an expensive smart phone? Do you really need to watch Netflix, or should you work on improving your skills?
  12. Once you gain momentum or you get out of debt, resolve to never make the same mistake! Take note of the changes that set you free, keep repeating those actions, and never repeat the mistakes that got you here in the first place!
  13. Stop paying stuff with credit cards, or with 6-12 months “easy pays”. It’s very hard to control your expenses like that, and especially if you are in debt. If you really, really, REALLY need to buy something, sell something else, increase your income and talk with a third party to help decide if you really need this thing you can’t afford.
  14. Get everybody under your roof to be on the same page! If your spouse spends whatever you saved, you will soon be in debt, or single.