5 Tips how to manage your time (and budget) now

These are tough times. The world is on lock-down. People are losing jobs or are getting pay-cuts. And the probably worst thing of all is that we don’t know when this is going to end. Therefore, now more than ever, it is important to manage the money we have in the most cautious and structured way possible. Frugal living and strict budgeting can’t be a hobby now. It’s a must. So here we go, 5 things that you should consider doing today to navigate your finances and your well-being through these difficult times.

black calculator near ballpoint pen on white printed paper

Photo by Pixabay on Pexels.com

1. Review your essential spendings

If you never had a personal budget, now is a great time to start. A personal budget plan sounds complicated, but it’s really a simple calculation of income and expenses. The more details you put into it, the more aware you will be about your essential and non-essential spendings. In a situation like now, this information is vital to make smart money decisions.

What do I mean by “essential” spendings? We are talking about survival here. So it’s the 3 basics: Shelter, food and health. Your rent, including electricity, water, and internet. Your spendings on food and drinking water. And your expenses to maintain your health.

Every non-essential spendings need to be put under review and you should consider cutting or minimizing them.

2. Plan ahead with weekly limits on your expenses

After having reviewed your budget, you will know the amount of cash that you have (or that will be available for spending), and how much you need to spend for your essentials. Now plan ahead and split your cash and/or income in a way to keep your essentials going for as long as possible. I guess it’s safe to say that the goal should be to try to sustain your expenses for up to 6 months.

Any remaining cash should be split into equal weekly amounts for the same total period of 6 months. Putting a strong limitation on your weekly spendings is a good way to ensure that you don’t overspend and keep track of your budget.

When I was a student and had hardly any money to live on, I had a very simple system which I still recommend: Withdraw cash for a month ahead for your spendings, divide it in 4, and put each amount in a separate envelope. Each one envelope is for each week of the month, and no matter what happens, be strict with yourself not to open any of the envelopes ahead of time. This method will greatly keep you aware of the money you have and what you can or cannot afford.

3. Get your family on-board

This point doesn’t apply for singles, but for anyone living with a family, this is a crucial one. The whole family needs to be on-board with this. It won’t help if you set up the most delicate and strict plan for yourself while your partner is clueless and keeps on living as if nothing would have changed.

If you have kids, this is a great time to teach them about the value of money. They might cry if they don’t get a toy or some ice-cream, but they will remember this as a “tough” time when the family had to stay strong together. Chances are that you will emerge from this stronger as a family. And it’s never too early to teach kids about the value of money. Trust me, the school won’t do it for you.

4. Consider a side-gig

Financial advisors are preaching to their customers the necessity of having an emergency fund, which should cover at least 6 months’ worth of expenses. The reason that this topic is coming up so often is that there are so few people who actually do it. And to be fair, even most companies don’t follow suit. Just take a look at the world right now: As our economies come to a halt, after only one or two months of missed revenues, millions of restaurants, hotels and even airlines are declaring bankruptcies or are in need of bailout money. They clearly didn’t have any emergency funds whatsoever.

So in case, if you are late on this and can’t see a way to make your finances work over the next 3-6 months, you might have no choice but to consider a side gig. The good news is that if you are reading this, it means that you have a working internet connection, and luckily, there are millions of jobs available online.

Check-out online freelance jobs through platforms like “UpWork” or “Fiverr” which may have jobs matching your skillset. But even if your skills are from completely different fields, consider teaching/tutoring English (or what else you speak), doing transcriptions or translations. There are lots of opportunities out there.

These jobs will hardly make you rich, but they can be of great support to prop up your finances and to get you through this difficult time. Another positive aspect of having a job will be that you won’t go mad while sitting at home doing nothing.

Last but not least, there is a good chance that you might end up keeping your side gig even when this crisis will be over and we get back to our regular lives.

5. Don’t slack off

And finally, no matter how long this may go, I recommend that you don’t slack off. You might relax a little for a week or two, but after that, get a routine in place. You don’t need to wake up at 6 AM, but you shouldn’t sleep until noon either.

Set a proper routine when you wake up, take a shower, shave, have breakfast, dress properly. Then work on your side gig, perhaps study a little bit. Coursera, EdX, and Udemy offer plenty of opportunities to learn some new things for free these days.

Having set times for breakfast, lunch and dinner is good for your inner clock. Set some time aside to exercise at home. Body-weight workouts are a great alternative to the gym. Any other hobbies you may have will keep your body and mind sharp and ready to get back on track immediately when all of this is over.

3 Things you should know about FIRE

The dream of financial independence and early retirement has gained a lot of steam in recent months. But despite the popularity of the movement, there are some important points that need to be understood and which I would like to point out.

It’s easy – and it’s not

Frugal living, saving as much as possible, investing. The concept is simple and easy to understand, easy to copy. In theory. Putting in practice, there is a lot of sacrifice along the way and even after all the hard work, chances are that you won’t be living like a king, but will need to maintain a frugal mindset for the rest of your life.

Here is some overview on how to get started: Let’s say you purchase stocks or ETFs that will generate a yield of 5% annually after tax. You might do better. You might do worse. But from my investing experience so far it’s a pretty realistic expectation to have.

Let’s do the math then, which means that for every 1000 Euro invested, a 5% annual return will generate 50 Euros each year. Let’s put that in lines:

  • 1.000 Euros invested = 50 Euros / year
  • 10.000 Euros invested = 500 Euros / year
  • 100.000 Euros invested = 5.000 Euros / year
  • 200.000 Euros invested = 10.000 Euros / year
  • 500.000 Euros invested = 25.000 Euros / year
  • 1.000.000 Euros invested = 50.000 Euros / year

You can play around with the numbers, the %, and your saving targets, but I think this pretty much explains the whole challenge: You need to save and invest a lot to get to a point that you could seriously relax. And even if you get to the point that you have a Million Euros on your account, a return of 50.000 per year is hardly an amount to live on to consider oneself rich. Comfortable? Yes. Rich? No.

If your target is really to completely retire early, not only would you need to save up a lot, but you would also need to maintain a frugal and simple lifestyle to make sure your income and your wealth don’t get drained too early on. The last thing you would want is to turn 70 and see how others retire on their hard-earned social security while you start to worry about your funds and income. Because if you retire at 35 or 40 and didn’t pay much into the system, then it would be blatantly wrong to expect the system to cover for you later on.

Most who achieve FIRE keep working

Given the staggering amount of money required to really and fully retire early, most people don’t go all the way. Because it’s too hard and it takes a too long time. BUT what many do is to turn to their passions and their actual idea of looking for a purpose once they reach a point of feeling secure enough to do so without going broke.

Say you have saved and invested 200.000 Euros and receive a 5% annual return after tax, 10.000 Euros a year. That’s not enough to retire. But living in the right place, it may be enough to pay your rent. Having “shelter” secured, you might not feel the pressure anymore to chase for a high paying job that would be required to protect you and your family. You could choose another profession or challenge that may suit your personal goals much better, and even if you would bring only another 25.000 Euros a year back home, that could be already enough for a decent living with the good feeling of doing something that you actually really appreciate.

I am also not sure if the actual goal of a “real” retirement would fit with the character of any FIRE aspirant. Because to get to the point that you could actually retire on your savings and investments is really hard work. It requires dedication, patience, and real commitment. Something that you see mostly in career and goal-oriented personalities. Now they might not be always the corporate types, but considering how much work and effort they put into reaching their goal, it’s hard to imagine that they would be able to stay idle right after hitting their target. There are simply too many exciting and interesting things to do in the world to waste time on doing nothing.

It’s really about time and independence

In reality, investing and generating passive income, escaping the rat race… it’s a mind game. Because with every step along the way, with every additional income you create for yourself and with every day you get closer to become financially independent, you are reducing the burden on your shoulders. The burden and the responsibility to yourself, to your loved ones, to society.

Financial independence empowers you to make conscious and responsible decisions, without the seductive element of money attached to it. When you live frugally and have a minimalistic mindset, when you know that you have “enough” and don’t need to compromise your values, your convictions and your personal goals for profits and gains, then you can act true to yourself at all times.

You can also take the time to think things through. To consult with people who matter and you will have more opportunities to do “the right thing”, which more than often goes not well along with the profit and benefit-oriented thinking of many corporations and individuals out there.

I am not sure how many other people out there see it this way. For me, this should be the ultimate outcome. I intend to keep working until I die, but not in the traditional sense and not on other people’s terms. I don’t want to deal with CRAP any longer than necessary and this is why I follow the FIRE movement.

Having said all that one thing should also be very clear: Without those companies which are striving for profits, without all those people who prefer to have a regular working life and who actually appreciate going to an office every single day, FIRE wouldn’t be a thing at all. Otherwise, how would we expect a 5% annual return after tax on our investments?

Stakeholders are the better shareholders

There was some amazing news coming from Wall Street a few weeks ago. 181 CEOs, members of the so-called business roundtable and representatives of some of the largest companies in the USA, declared that maximizing shareholder value is no longer the single purpose of their companies. Instead, the emphasis would shift towards stakeholders.

I believe that many people out there don’t understand the difference between a shareholder, and a stakeholder. Or they didn’t take the manifest seriously. Otherwise, I have no reasonable explanation of why this fundamental shift in corporate management attitude doesn’t receive more coverage.

Shareholders vs. Stakeholders

The definition of a shareholder is very simple: Someone who owns shares of a company.

The definition of a stakeholder, however, can be very complicated: It’s everyone who is in direct or indirect relation with a company.

This includes the shareholders. But it also includes the employees, business partners, land-owners, basically all who are affected by the companies operations. It includes the entire eco-system in which the company is active, including the environment.

With a similar mindset to the one of thinking global and acting local, a company that takes care of its stakeholders will do its best to contribute to society in every aspect that makes sense and where the company can make an impact within the scope of its operations. Starting with its own employees, support to local governments, business partners and spreading into larger topics and areas as long as they are related to the companies business.

A holistic concept

This is a true game-changer. It acknowledges that a company, any company, carries responsibility towards society as a whole. It assumes the understanding that the companies’ employees are actually a true and real asset and require at least as much attention as its shareholders. It also acknowledges that company profits need to receive a long-term consideration that goes beyond quarterly reports.

Putting stakeholders to the front of a companies responsibilities is a holistic approach to business.

Too good to be true

I had (and still have) some serious doubts when I read the news. Especially when I noted that Jeff Bezos is a signatory of the declaration, my alarm bells went off.

The CEO of Amazon is hardly known to be a person who cares for his stakeholders. If he signs such a treaty, it automatically degrades the value of the paper it’s written on. Jeff Bezos and Amazon have gained amazing success over the years making Bezos the richest man on this planet. But his contribution to the world ends with the shopping experience.

Compared to people like Bill Gates or Warren Buffett, his priorities and philanthropic efforts seem almost non-existent. The most diplomatic word that would come to my mind would be “uninspiring”.

Same would account also for a few other CEOs and companies which have shown little effort in the past to take care of their stakeholders. Is this declaration really going to change it? Or is it just a PR stunt?

Shareholders will profit – in the long run

Time will tell, but I do believe that among many SMEs out there, the idea is nothing new. In fact, most family-run business and small enterprises which are not listed on the stock exchange had this approach on their business cards for a long time. It’s been the large corporations who moved into a questionable and unsustainable business mind – and it’s time that they get back on track.

Being an investor and shareholder myself, you might wonder why I applaud this change. True, some companies might have to review their supply chains, work procedures, payrolls. This might affect profit margins and ultimately the dividends that I collect every month.

But I rather see my dividends growing steadily over a period of 50 years than to read news about how the companies that I am invested in are contributing to environmental destruction, abuse of workers and handling its business partners unfairly, only to secure a slightly higher profit percentage.

The employees are at the heart of a company. Business partners and the environments are the tools, places and customers that ensure it stays in business. The way I see it, putting stakeholders first is definitely a smarter approach to do business and shareholders will profit from it on a much wider spectrum.

Get independent and stop dealing with CRAP

There are many reasons to strive for financial independence. For me, some of them are company politics and the never-ending dealing with CRAP. It’s one of my favourite acronyms:

  • Criticism
  • Rejection
  • Assholes
  • Pressure

You can’t become a leader in any organization without it. It’s part of the deal. No matter what you do, once you are in charge of others, CRAP will be part of your daily experience. It’s to a large part the reason why people in higher positions get higher salaries. It’s not really about their skillset, but more so about their ability to deal with CRAP.

And some might even enjoy it for a while. The constant competition, attention and the feeling of winning whenever you come out on the top. But in the long-run it is tiring. Exhausting. And you are not always winning, you will be losing frequently. In fact, the amount of times that you got to pull yourself together, to get up after you have been beaten down and to push through things that might not match your moral or ethic standards, your expectations and believes, it is so much higher compared to the few wins that you collect along the way.

Some just accept it for what it is. But for others, this might lead to depression, frustrations, the occasional loss of faith in humanity, and burn-out. On top of all that, it is really time-consuming and you might start asking yourself, why you are doing all the effort. What is the actual purpose of your journey?

Serving others is the true purpose of any company out there

Tim Cook said it once and he is absolutely right. Every company, every product and every service is meant to be for someone, to solve some problem, challenge or requirement. Solving problems creates value and pricing follows. So whatever we do when we work, we do it to serve.

When you recognize this to be the case, you have the best chances to really understand the purpose of what you are doing. Knowing your purpose gives you passion, and aligning with it leads to dedication. Dedication leads to success. Success doesn’t necessarily mean a monetary reward, but it often comes along with it.

But serving others is a never-ending task. There will always be a problem. A challenge. An obstacle. A restraint, limitation or a sudden turn of events. And there are always other people. Foes and friends. Competitors. Supervisors. Investors. Shareholders. Politicians.

The more success you have, the more lives you will affect. Whether you want it or not, your actions will have an influence on the lives of other people. On the dreams, which you might elevate or destroy for those who work under you, to the pressure and constant rejection by the supervisors who you work for. Shareholders and investors will always keep you under pressure to deliver the best possible financial results. Sometimes forcing you to action things that might go against your conscience or against what you might consider being the right thing to do.

Cut the CRAP

And I think it’s all actually OK. It’s important. Going this path for a while can help you to understand how human minds work, about group dynamics, all the different agendas out there that people follow. Personal and business-wise. It will give you a deeper understanding of different perspectives, sometimes unexpected connections, incentives and occasional shocks on what may seem like irrational behaviour or unforeseen turn of events. Pushing towards success helps us to develop, to learn and to understand the world around us a little more.

But I don’t think you need to do this your entire life. There is a point when the whole thing becomes overwhelming. A burden. Your mind will be dragged down, your physical condition will start to suffer, your personal relations will get affected and step by step you might start seeing only the problems around you. Depression may follow and with it a steep fall from your high ground at work, and possible medical repercussions.

We call this a burn-out. It doesn’t happen overnight, but when you climb the career ladder, it will slowly creep into your work-life. Usually, when you notice it it’s already too late. So knowing all this, how can you avoid it from happening? The answers are, firstly by becoming financially independent and secondly, by choosing when to stop.

Financial independence comes first, because it’s the tool that allows you to go for the second step. When you become financially independent, you can cut the CRAP at any given time without the need to worry about any repercussions on your life. Your shelter, food and healthcare can remain protected. If you really think about it, you will realize that this is quite a lot, more than most people on the planet have today.

Find your inspiration

For me, CRAP is one of the most important reasons for working even harder to reach FIRE. This doesn’t need to be the case for everyone. Some people might enjoy regular work. Having their 7 to 5, the daily soap operas at the office, the feeling of belonging somewhere. Those may find their inspiration for FIRE somewhere else. But for me, after independence and freedom, CRAP is the next immediate reason on my list of motivations to get out of the rat race.

Depending on work is not a smart long-term plan

I don’t remember whether my parents were asking me about my aspirations when I was young. I also don’t remember hearing them talking to neighbours, friends or family about what I am going to do when I grow up. They never really tried to push any particular profession on me. Maybe because they wanted me to discover the world on my own. Or maybe because as a kid I was not easy to talk to.

We went to school, learned all the basics that were considered important to find our passions, to figure out our talents, sharpen some skills, and to give us a hint of a direction towards some of the opportunities that were out there for us.

What nobody talked about were the things that would stand in our way. The things that would hinder us to develop, hinder us to grow, hinder us to follow our passions and hinder us to truly try to discover our full potential.

To some part, I understand. I wouldn’t believe anyone who would tell me that there was a very high probability to end up doing a job that I might not really care about, for people I might never get to know, to receive some money that will be just enough to cover my living expenses. Mundane tasks day in and out, without passion and without any true commitment, just to get through the day.

This is what we call the rat race and a reality for so many people in the world.

Everything has a price-tag

The grown-ups give us a lot of hope when we are young. They tell us that we can be anything we want. Do whatever we want. And achieve whatever is possible. In reality, it’s all not that simple.

Once we move out from home and leave the protective roof of our parents home and their care, reality quickly kicks in. We need money. Money to pay the rent, groceries, utilities, to go out, to travel. Everything in this world has a price tag on.

So whether you want it or not, you have to start to work. And the moment you get your first job, you enter the rat race. We all got to make a living and yes, living has a price to it. Shelter, food and health. These are the basics and to secure them one needs money.

The bad news is that as long as our financial system exists in its current form, these price-tags will never go away. They just grow larger. With inflation always present, you will experience that over your lifetime prices for everything around you double and triple.

It always starts with trading time for money

I started when I was 14 years old. My parents couldn’t pay me too much pocket money and sometimes cash would be short even for the simplest basics like new shoes or a jacket. So I just found a job to be able to afford what I wanted and needed. I started filling up shelves in a grocery store.

From there on, I would sacrifice every Saturday for it. 6-8 hours every Saturday morning, putting milk cartons into the shelves, sorting frozen pizzas, yoghurts, re-fill soda bottles and occasionally guiding some customers through the store. My salary was something around 6 EUR per hour if I remember correctly. I would earn 36-48 Euros for each Saturday, being paid-out in cash by the end of each week. A huge improvement to the 5-10 EUR that I would get from my parents per week.

This is how I learned to trade time for money. When I needed money, I went to work. When Saturdays earnings were not enough, I would free up an afternoon during the week and work one more day after school. Suddenly I could afford to buy new shoes, to get rid of my glasses and buy contact lenses. I had money to spend when hanging out with my friends. It seemed to be a great concept.

What I obviously didn’t think about at that time was that at some point in my life I would have to pay the rent on my own. Utilities, food, to have my own medical insurance. I didn’t think about how many hours I would need to spend in that grocery store to be able to afford all of it.

Depending on money is killing your opportunities to grow

When you grow up, before you even know it, you start trading most of your time for money. Regular work contracts in Europe have something around 35 working hours per week on them. In Asia, it’s around 48. And more than often, this one job is just enough to secure the previously mentioned basics: Shelter, food and health.

Those who want to be able to get a little more out of life start taking part-time jobs, freelance online and adding up hours of work. This is what they know, what they learned. To trade time for money. But as more and more of their time is being traded out for cash, their opportunities in other areas shrink with every traded minute. Learning new skills, discovering new passions, spending time with their loved ones. The time to do those things disappears with every traded hour. Minute by minute.

How long can you work

And the big question is, how long can you actually do this? What will happen when you get old? Will your social security be enough to live on? What if you get sick? Handicapped? When your mental ability goes down?

And how about all those things you always wanted to do in life? Going for a trip around the world, feel some wanderlust in the Swiss Alps, climbing in the Himalayas, snorkelling in Thailand, drinking Mojitos in Cuba or visiting the Empire State Building? Do you think that you will be able to pursue your dreams once you left the workforce?

We are not smart enough to consider all those things when we are young. I wasn’t smart enough then to think about the next logical step when I started to work in the grocery store. But as we get older and develop a deeper sense of logic, we certainly should be smart enough to put it into consideration, shouldn’t we?

Working is not bad – depending on work is

There is of course another way. A way to develop passive income and to stop being dependent on any job. This does not mean to stop working. Absolutely not. I can’t imagine a life without work. I want to do something. I want to work.

But I don’t want to worry about money.
I don’t want to have to work for money.
I don’t want to depend on work for money.

Those whose minds are trapped in the system won’t understand this idea. How could they? They never learned anything else. But, what if we could work for our passions, our beliefs, our aspirations and our dreams? Wouldn’t it just be something else entirely?

FIRE is all about that. About freeing up your time, your mind and your passions. Because once you reached financial independence, you can focus on things that will truly matter to you. Isn’t this a goal worth striving for?

Doing the right thing

Among all the places I worked at, one place remained deeply engraved in my DNA. The Intercontinental Hotel in Berlin. I worked there for about a year as a receptionist, and even though the time was short, it had a strong impact on the development of my career and on my personality.

The first and most important thing I learned was, that it’s impossible for me to work like a robot. The Intercontinental Hotel in Berlin is a massive conference hotel with a very intense daily operation. The amount of effort, focus and never-ending attention to detail are crucial to keeping this well-oiled machine running… which is the reason why I quit after a year.

I learned a lot and had great colleagues, but when every single work-step is standardized, constantly being measured and evaluated, then, step by step, you become a machine. While there are tons of advantages to this kind of system, I realized that I was not happy with it and that it was just the wrong kind of pressure for me.

Secondly, I learned a phrase that seems trivial, but that just feels so good and so right: “Do the right thing.”

Corporate brainwashing

The Intercontinental Hotel brand belongs to the Intercontinental Hotel Group (IHG). Having also Holiday Inn under its wing, IHG is one of the largest hotel groups in the world. And like every large company with a recognizable brand, there is a solid amount of brainwashing going on to put its employees like soldiers into a line. Don’t get me wrong, every large company in the world does it so I am not judging here.

This brainwashing usually starts with a simple induction training. You will learn all about the vision of your company (what the company wants to achieve), their mission (what the company is actually doing to get there) and some basic principles the company has been build upon. The goal is to establish a bond and to let the employees identify themselves with their employer.

In the second step, things start to get more specific with more focused principles and rules to follow. At IHG, we had a thing called “The 5 winning ways”. I remember 3 of them, but luckily Dr. Google knows them all:

  1. Do the right thing.
  2. Show we care.
  3. Aim higher.
  4. Celebrate the difference.
  5. Work better together.

It has been 8 years since my IHG assignment, and I still remembered number 1, 2 and 4. Especially the first one though gut really stuck in my head. What a great statement to make. “Do the right thing.”. How could anyone not relate to that??

The right thing to do

I mean seriously, who would want to do the “wrong” thing? Doing the right thing seems like a natural, obvious and only choice in any given situation, doesn’t it? Ah, sure it does! BUT… if only things could be that simple.

Unfortunately, nothing is ever simple. As it turns out, things that one person considers to be “right”, someone else might consider to be just the opposite.

We all have something that I like to call an “inner compass”. Something that gives us a sense, a feeling and a guide on how to make decisions. This inner compass is the result of many factors that stretched through our lives. Our family values, our education, our friends, colleagues, work experience, relationships, political influence… Our experiences shape our perspective and establish a certain point of view on any decision we take every single day. Since every one of us has lived differently, this inner compass will also never be a 100% match with the inner compass of others. Thus, the feeling of “right” or “wrong” will be also different for each individual person.

Shifting perspectives

But things get even more complicated because we all have also other factors influencing our decisions. Our boss, our colleagues, our customers, our business partners. Even we might think about something being the right thing to do at a particular moment from our point of view, we might be forced to do something else to meet the expectations of someone else. To maintain a relationship. To keep a job. To our personal benefit. To someone else benefit. The reasons can be countless.

With this much influence and distractions, perspectives can shift easily. Even you sometimes might want to do something that feels like the right thing to do, the result might be just the opposite.

And the same goes for companies. Ultimately, companies are not some soulless entities, but collections of individuals who are bound by a common agenda. That is why in my opinion the Vision and Mission statement of a company is so important.

There may be moments when you think that a company, a CEO or a manager of a business does something that goes against your inner compass. A decision that you do not agree with, condemn or even consider straight evil. And yet there may be a solid reason for it, and the long-term effect of this decision might turn out unexpectedly closer to your sense of something right.

An example (from my point of view)? Let’s look at the energy giant SHELL (Royal Dutch Shell). Their activity in the oil business might feel wrong, but the fact that they use a large number of their funds to transition to natural gas and renewables is a positive long-term move. Positive for my inner compass.

Of course, it might happen exactly the other way round as well. AMAZON, for instance, is pushing for a 15$ per hour minimum wage, which sounds amazing. Only that its utter motives might rather be to kill-off its competition in the SME sector who simply can’t afford to pay such wages. Again, my point of view.

So when you invest, how do you really know that the company you invest in is “doing the right thing”? Truth is, you don’t. But to a certain extent, you can at least have some certainty that you are doing the right thing by investing. Because even if markets are going down now and a recession might be looming. As history has shown, investing was (so far) always the right thing to do.

Disclaimer: I own shares of Royal Dutch Shell – B.

About 996 and Jack Ma

I got to admit it. I am a workaholic. Not only did I work the last two years in a job with a 6-day-workweek with 10-12 hours daily, I also had a side-gig writing articles for a financial magazine, I was exercising four times a week for two hours straight, I was working on this blog and I invested a lot of time in stock and market research. So, being active for 90-100 hours a week was pretty much “the ushe” for me.

What is 996

996 refers to a description of a work routine that is being predominently practiced in some Chinese companies. I can confirm that it’s also pretty common in Thailand, Japan and South Korea. It stands for working from 9 AM to 9 PM and this for 6 days a week.

This equals to 72 hours of work every week and it is a reality for many workers in China. We are not talking here about regular labour jobs like construction or the notoriously overworked hospitality sector, but mostly about employees of IT companies. Programmers, software engineers etc.

Working more than 40 hours a week is illegal in China. However, as in many asian countries, laws are often something more of a guideline and tend to be “flexible”.

Jack Ma calls 996 a blessing

There are plenty of smart people in this world, but Jack Ma is not only smart, but also very outspoken. I like to listen to his “teachings” as he has a very sharp mind. In most cases he chooses his words with caution but they always have an impact. To give it a more clear picture, he is like the Bruce Lee of business. Sharp, on point and hard to counter.

Surprisingly, he did not choose his words very wisely when it came to comment on the 996 debate. His remarks that working 996 is a blessing were not well received on social media, so he followed up with a post on his blog to explain it further:

“Any company should not, and cannot, force employees to keep a 996 work schedule. Alibaba has always advocated, living your life with gusto and being happy at work. But young people, themselves, must understand that happiness is a struggle! Not defending 996, but do pay tribute to the fighters!”

Well, I was curious how he actually REALLY said it and I found a full transcript of his blog on this topic. It may be a little long, but I think it’s worth a read so here you go:

About 996, this is a hot topic in China now, and many companies have this issue. I personally think that being able to do 996 is a huge blessing. Many companies and many people want 996 but have no chance.

If you are not 996 when you are young, when can you 996? You have no 996 in your life, do you think you are very proud? In this world, every one of us wants to succeed, we all want a better life, and we all want to be respected. I ask everyone, if you don’t work harder and longer time than others, how can you achieve the success you want?

To say nothing of 996, as of today, I definitely have been working more than 12×12. There are a lot of people in the world working 996. There are many people working 12 hours and 13 hours a day. There are many people who work harder than us, and who are smarter than us. Not all people who do 996 have this opportunity to really do something valuable, meaningful and able to have a sense of accomplishment.

So today China BAT (Baidu, Alibaba, Tencent) companies can be 996, I think it is the blessings of us all. If you think about people who don’t have a job, think about the people who may be closing the company tomorrow. Think about the people who don’t know where the company’s Revenue will be in the next quarter. Think about the people with programs that you have put a lot of efforts on but has no user at all… Compared with them, until today, I still feel that I am very lucky, I have not regretted 12×12, I have never changed my point in myself.

Many photos now reveal show that the standing position of Ma Yun (i.e. Jack Ma) was at a side in the past, and in Central position nowadays. I am already the President of the Student Union and the President of the Hangzhou Student Union at the University. You go to see those photos. When I was in that corner, people were brought out by me. I was their big brother. Why am I a big brother? Because I spend more time than them. In addition to the class exams, I spend more time working in the student union than anyone else. I learn how to serve others, learn how to build relationships between classmates, and let the students do a better job in school. Only if you pay a huge price, one day you will possibly be rewarded. If you don’t pay the price, you can’t have a return.

In another word, what kind of company is Alibaba? Alibaba “Let the world have no difficult business to do”. This is our mission. Our company is very hard. We have not deceived anyone. We have not told you that the company is very comfortable. Do you think that “making the world having no hard-to-do business” is to fool you? We are really doing this.

Today, we have so many resources, we have a huge mission, and hope that in the future, there will be no hard-to-do business in the world. Cannot you pay for it? You have to. So, we said that if you join Alibaba, you have to be prepared for 12 hours a day, otherwise why do you come to Alibaba? We don’t lack people who feel comfortable for 8 hours to work. Today if we have to recruit some people with 8 hours to work, sitting in a good office every day, the conditions are very good, the canteen is also good, and the sense of honor is also good, we can find many people like these on the street.

But what do we need? We ask you what do you want to do in this company? It is to change yourself, help others, and achieve a mission.

Alibaba also worked overtime in its early years, but what kind of overtime did we work? Overtime for learning, after our 8 hours of work, the most important night is the retrospect and study. What we did wrong today, what should be fixed, how should we learn from each other. Two hours and three hours outside of 8 hours are learning and upgrading, which was not working overtime.

I hope that the Alibaba people love the work you do. If you don’t love it, even if you are working 8 hours, you will detest the longtime work. If you love it, 12 hours is actually not too long.

If you are not happy for 8 hours of work, the thing you do has no meaning and you are not comfortable. You don’t know what to do for 8 hours, it doesn’t make sense, so even if you don’t 996, you don’t know what to do.

This is life. You have chosen a company that ranks first in China today. The first is to pay the price. There are at least 50 million companies in China. If you choose this company instead of others, this is certainly not the same. I went home at 1 o’clock yesterday. Why? My own choice of road, no complaints, no complaints, this is my choice. Everyone came to Alibaba, since you have chosen, instead of letting yourself suffer, it is better to be more comfortable with your 996. Your ten years work can compete with others’ 20 years. This is the case.

Joining Alibaba, what after all are we bringing to others, what is the return? This is what I have thought about most during this period.

I think that joining Alibaba is not for high wages, not because of stocks, not because we have a good working environment, not because of the annual bonus, not because of these things. These are very important. We all have parents and kids, have wives and children, and we must take care of them. If you can’t take good care of this family, give them a good life, a good education, and take care of your parents’ health, that is the wrong life. But what I mostly want to consider is that you have been in Alibaba for ten years, how do we turn you into a different person.

Change within a year, change within three years, you go back home, your parents find out that this child has changed, your wife find out how my husband has become ideal, has become full with ideas, has become focusing on work, your kid feels that his Mom and Dad are really different from others. This is the personal growth of the Alibaba people we hope. This growth is not how high the position is, but how you think about the problem, your attitude facing difficulties and your attitude towards life.

All those who joined Alibaba will not be the same after three years, and will be different after five years. The people after ten years in Alibaba will be trusted to go anywhere. We must definitely develop this skill, but within the ten years, if you want to realize it, you have to pay the price beyond ordinary people. Otherwise why are you being here? I have said this very thoroughly, it is a bit tough, but it makes sense. We don’t fool you guys, oh come, the conditions are very good, we don’t need to fool anyone now, we haven’t been fooling anyone either in the past, and we don’t need to fool anyone at all today.

I feel today that Alibaba has done great things. What we do can have real value to society, let the people buy better things and enjoy a better life.

Business is the greatest public welfare, creating jobs, creating taxes. Without commercial taxation, without economic development, where would be the high-speed rail, and where would be the highway? We have contributed to the progress of society. We have made everyone in Alibaba grow and we have created countless jobs.

Alibaba has a blessing, we people have solved our own food and clothing, have our own good income, our company does not have to worry too much about profit, we can also do something for others, this is a great blessing.

In fact, public welfare is to help yourself, and charity may be to help others. I myself am really proud of it. Many of us in Alibaba today, though a lot of people are just not visible, are all doing a lot of charity. I also strongly hope that all Alibaba people will participate in countless non-profit organizations throughout the Alibaba Group, or participate in Alibaba’s charitable foundation.

Many people just want to buy a car or buy a house for Mom and Dad. This is very important, but I think you should have this ideal, that is, after working in Alibaba for 10 years and 15 years, one day you can build your own charity fund. You can do it. Some things that you are willing to do can help your child to have more blessings and help you to have blessings. Isn’t it a good thing? Then it requires 996.

Source: https://medium.com/@evanliuchina/alibaba-jack-ma-having-a-996-job-is-a-huge-blessing-97b5037937a3

I added the source just in case. I didn’t translate it on my own. And as you noted, I have highlighted a few sentences which I consider important.

Is Ma right?

Well… I think he is. As my readers know, I do believe that the term “work-life-balance” is pretty useless and actually hindering people to develop and to find their full potential. This is not something that capitalists tend to sey. The quote of “finding a job you love to never work again” dates actually hundreds of years back and refers to exactly the same issue. Wishing for a work-life balance when looking for a job is already putting restraints on your dedication to your very own future.

This is even more true for those who wish to reach FIRE. Financial Independence. Retire Early.

If you really want to FIRE, you just got to put those extra hours and dedication in your work. Your ten years of work HAVE to equal 30 or 40 years of work of those who enjoy a work-life-balance. There is no way around it. How else would you think being able to pull it off?

Even I am promoting stock investing, it is by all means no magic bullet. You might get lucky with one or two companies, but to setup a sustainable portfolio you need to balance your risks. And even if you can cut down 10 or 20 years of work by investing in stocks, truth is that the sooner you want to retire, the harder you got to work for it.

Your career is your single, most important asset and it can be your strongest weapon to reach FIRE. Saving 20 Euros a month is better than nothing. 200 Euros a month is reasonable. 2000 Euros a month however will make a real difference. How can you pull it off if you don’t work harder and more than anyone else?

Having said that, I believe that Jack Ma should have put it exactly that way. He should emphasize (even if just to comply with the law) that 996 is a blessing for those who want to reach for the stars, but not a requirement to work at Alibaba. Not everyone is able to work 996, similarly, not everyone can reach FIRE. However, it’s a blessing if some companies can give you the opportunity to actually really do the hard work and to get where you want to go. I think if he would have said it that way, the outcry would be far less dramatic.

Career Advise for FIRE aspirants

I like to write sometimes about my work. First, because it is an exciting job, and second, because there are countless lessons I gathered on my path to the top.

As some readers will already know, I am a General Manager in a hotel, currently in Thailand. Most recently I was able to secure a new contract, which will (hopefully) turn me into an Area General Manager being in charge of up to 5 hotels. While I am not the smartest and certainly not the best hotelier out there, I reached this stage in my life after working less than 8 years in the hotel industry.

I moved up in positions quickly, from carrying luggage in a Novotel in South Korea to become an area executive for one of the largest and most powerful business company (and family) in Thailand. Therefore, I think I can share some of my knowledge about how to get there with my readers. Bear in mind, this is my personal experience and it might contradict with many, if not most things you will hear from your parents, advisers or coaches.

But before I go ahead, let me tell you first why it matters and why it is important if you are on your path to FIRE.

Your career is the single, most powerful tool to reach FIRE

You can get rich with stocks. You can get rich with a business. You can get rich with a lottery. But for most, building up a successful career is the single, most important step to reach FIRE quickly.

As I mentioned in a previous article, your career is a very important asset. This is simply because the more money you earn, the more you can save and invest. It really makes a difference whether you put aside 100 EUR a month, or whether you are able to put 2000 EUR every month into your stock account without worrying of paying your bills.

This single reason should be motivation enough to pursue a quick and rewarding position. But this is easier said than done, so here some food for thought on how to make it happen:

Forget the term “work-life balance”

The myth of a happy life with a healthy balance between the amount of time you spend at your work and with private things is a major career-killer. If you want to make it to the top, you have no choice but to really put EVERYTHING into your job. This goes far beyond your job description, as you need to really try to understand as much as you can about every aspect not only of your job but of everything that is related to it. Knowledge is the key to success. The more you know, the better-informed decisions you will be able to make and the faster you will be able to take on more responsibilities. Learning requires a lot of time and you should be willing to devote yourself to it.

Embrace what others fear – responsibility and loneliness

In all the years I have experienced this countless times. Smart, great team players who would not advance in their careers because of the fear to take on more responsibility. The excuses are always the same: I am not smart enough yet, I don’t know how to do this or that, I am not sure if this is the right thing for me…

There were much smarter and better people around me when I got my promotions along the way, but the big difference between us was always that I couldn’t wait to take on larger roles and to rush into taking charge of things bigger than me. Most of the time, I even didn’t know exactly what I would have to do once I get the promotion or the new job description. I just knew that I want to do it and I was super-confident that there is nothing that I couldn’t learn.

There is a downside to it. It will make you feel lonely sometimes. Because what most regular people enjoy about their job is the camaraderie and the feeling of belonging to a group. However, the more you move up, the smaller your group is becoming and once you are on the top, you are indeed quite alone.

Sure, you can still have great relations with your teams, but there is no way around it: Your agenda, your perspective, and your responsibilities will always set limits and restraints. And sometimes you might be forced to do things that your teams and even you won’t like, but which are necessary to help your company move forward. When you keep moving to the top, you are forced to keep the big picture in mind and to do what it takes to help your company grow. This will more than often not align with the interest of someone in your team.

There is a Chinese proverb: 高处不胜寒.
It says literally that “It’s cold at the top of a mountain”. It certainly is true for people in high positions. I would often sit alone during lunch or dinner while my teams would enjoy eating in groups at the canteen. Not that I couldn’t share the canteen food with them, but simply because I had so many things to think about and decisions to make, that I would often spend the time thinking about the right or wrong thing to do, even during the precious time that is supposed to be my lunch break.

It’s hard to balance. It’s hard to have a family who accepts you coming home late every single day, to never plan vacations and to move around the world whenever the next opportunity pops up. I am lucky enough to have a very understanding wife, but I know plenty of people who fail on that part. It’s a hard price to pay.

Don’t be scared to do mistakes – and find the right boss to coach you

When you take on more responsibilities quickly, mistakes are unavoidable. Actually, it really doesn’t matter whether your progress slowly or quickly. Mistakes will happen anyway. While you certainly should always try to keep the mistakes at a minimum level, the single most important thing is to learn from every mistake you do. You can try to do this on your own, but it’s much more efficient and will work more quickly if you have the right supervisor to teach you.

I had supervisors who would scream at me. Supervisors who wouldn’t say a word. And supervisors who were moody or simply idiots. I didn’t care about any of that, as long as I could learn anything from them. As long as the learning curve is going up, I would stick with this supervisor no matter what. But as soon as I would notice that a particular supervisor got nothing to teach me or wouldn’t make the effort to support me, I moved. One month of not learning something new can throw you back several months in your career progress, so just really make sure to keep on learning and to have the right people around you to help you grow.

Learn how to communicate and how to build trust

Whatever you know, whatever your skill is and whatever you can do, it won’t matter if you don’t get the chance to show it off, it won’t matter if you don’t get your team behind it and it won’t matter if you don’t learn how to present it to those who judge you on it.

Learning to speak, to listen, to present, to negotiate, to evaluate, to correct, to teach and to scold… it is probably the single most critical skill for any leader. Developing emotional intelligence, learning to read characters and being able to quickly adapt to any person that you encounter along the way is crucial to develop your career.

Because while you got to be used to be lonely sometimes, any business depends on other people. We build products and services with people, we work with other people and we sell our products and services to people. It’s all about people. A manager and/or leader who can’t communicate this properly will have a hard time being successful. And you need success to move up.

Forget this crap about manager/leader comparisons

There was a time when people would discuss the differences between managers and leaders. In most cases, managers were the bad guys and leaders were the good guys. I also used to do these comparisons to evaluate my bosses.

It’s all a bunch of crap.

Truth is, that you need to learn when you have to manage and when you have to lead. No matter your job, you will always have budget restraints, relations between employees and business partners to consider and of course responsibilities towards your business owners. You have to effectively manage the resources you receive to make the best out of it, and this includes the people who work for you.

So you go to take the lead when you get a chance for it, but you also need to manage when it’s required. There is no black and white here, it’s all a grey area and in most cases, it’s not about what you do but how you communicate it that will make the difference whether it’s perceived as a management or leadership decision.

Focus on your skills, not your dreams

I was once reading this quote:

“Who you are, who you want to be, and who you can be are 3 different things”. We all had a dream about who we want to be someday. We all have skills that we learned along the way. We all have weaknesses. And we all have the potential to learn new skills.

However, while I admire people who have no talent for a particular profession, but who nevertheless spend years to improve themselves to chase their dreams, from a FIRE-aspirant perspective it’s simply not the right thing to do.

It would be smarter instead to focus on skills and qualities about yourself which are among your key-strengths and to try to find a matching profession based on those skills. While your parents and teachers will preach you to find a job that you love, I say that you should find a job that you can become the best at. The love will come along together with the success that you will experience.

It’s a little bit like marriage. You don’t necessarily choose the most attractive partner you can find, but the one who you can’t imagine living without. That’s at least how I see it.

And I am not alone on this one. Marc Cuban i.e. is preaching the same, emphasizing that following your passions is simply a piece of bad advice, calling it one of the great lies of life.

Soooo… what now?

I have frankly tons of more things I would like to share but I will save it for another post. I know that some of these points might not match with many voices out there, but please don’t forget that this is specifically for people who would like to achieve FIRE as quickly as possible.

To reach FIRE quickly, you need to push up your career as far as you can so you can increase your income. This will enable you to increase your savings and investments, in ways that most people can’t imagine. Saving 40-50% of your income is just easy if your income is three or four (or more) times higher than the average Joe.

FIRE is not for everyone and there is no easy way to get there. Like with everything in life, to reach something as challenging as FIRE, you really need to work hard on it and sacrifice a few things you might hold dear. So the question is, how badly do you really want it?

Planning for the last job – ever

Following up on my new years’ plans, I am now finalizing negotiations with my next employer. As my current work contract will expire by the end of April, I focused the last 2 months on trying to secure a new contract. Today, I succeeded.

While I couldn’t hit my self-imposed targets completely, the new job will bring some significant improvements and benefits to my career and to my private life. I will be in charge of a new hotel opening as a General Manager, with the expectation to grow into an Area General Manager role and in charge of a few more hotels within the contract duration of 2 years. By 2021, and if everything goes well, I might very well be in charge of up to 5 hotels across Thailand, and by 2023 there might be even a few more doors opening.

At the same time, I have also reached out to some of my colleagues from The Motley Fool in Singapore and Hong Kong. While I sure am getting busier, following up on my work with The Motley Fool Germany to analyze markets and stocks from the German, Swiss and Austrian area, I might soon start to also write about the stock market in Thailand. Yes, I am a workaholic.

All these efforts have one main goal in common: FIRE. Financial Independence Retire Early. This is the real reason why I am putting so much on my plate.

What makes this new job so exciting is that I am actually planning this to be my last job. My new contract will be for 2 years. It might get extended later on, and I actually have some further ideas and possible plans to continue of even up to 6 years with possible promotions along the way.

But it will be (hopefully) the last company and job that I will work for full-time. Whether it will be only 2 years as per the initial contract or even grow into 4 years or more. This will be my last full-time job and the last company I applied for a job with.

Working on full-blast for even just 2 more years and keeping up my high saving rate of over 40 %, will enable me to continue building up my passive income from stocks – to a level that my passive income will be able to cover all my regular daily expenses while still keeping on growing. I have calculated it 10 times through and the result is the same. Unless anything very unexpected happens, this next 2 years will be indeed enough to reach my target.

Light at the end of the tunnel

What this really means is that I am not just planning my next career move. I am planning for FIRE to kick in and to reach financial independence. I will be 41 years old by that time. What is even more staggering to me is that I only started to really put that much effort into the whole thing when I started my hotel career at the age of 29. This means that I will have reached my goal after only 12 years of truly hard work. I wish someone would have taught me some lessons about FIRE at school, then I might have reached FIRE probably around 10 years earlier on.

All the struggles, all the pushing myself to learn more, to work over-time and to trying to impress my supervisors, business partners, colleagues, all the hard work… will finally pay off…

Obviously, being a workaholic I don’t have any intention of truly calling it a day by then. My plan is then to turn my side-gig with The Motley Fool into a little more intensive exercise. I also think about going back to Germany for a short time, to certify myself as a financial advisor and to open up a small career and financial coaching business here in Thailand.

A million ideas, let’s see which one of them will become real in the end. The main point for me about FIRE is not to stop working in general, but about to be able doing things on my own terms.

There is a quote that money is power. It is. For me, it’s the power to regain control over your life, to reduce your dependency on others and to experience a form of freedom that most people in the world struggle their whole life for to find. I am now only 2 years away from it. 24 months. 104 weeks. I am really excited about it.

Freelancing is the future – and so is investing

Many things have changed since I finished high school. Some for good. Some for bad. Some for… it’s hard to tell yet. For example, my parents used to tell me that if I wanted to be successful, I had to finish high school, then graduate, and if I really wanted to become the best I would have to go for a DR. title.

Well… that didn’t happen. I finished high school with mediocre grades. I started to study Chinese and East Asian Arts but dropped out after a few months. Then I went for a vocational education program in banking and after 2 years of suffering through it, I decided that a bank was too boring and went back to studies again. It turned out that I got real talent for the Korean language, and so I got a bachelors degree in Korean studies in record time and with excellent grades, but that was as far as my aspirations had taken me. Then I started to work in hotels in Asia… and I got stuck with it.

It was not a bad career. After 8 years of hard work, out of which 6 years were with a 6-days-work-week and shifts of 12 hours a day, I became a General Manager in a hotel at the still young age of 37. Now I am looking for my next assignment and there seems to be a glance of opportunity ahead to become an Area GM (in charge of several hotels) with a long-term prospect of even moving up to the rank of a Vice President at some point. Yes, I could do worse.

But I didn’t need a Dr. title for that. I didn’t need a masters degree. My bachelor degree did open some doors and it’s hard to tell if I would have gotten where I am without it, but I can frankly say that I am using hardly more than 5-10 % of what I learned during my studies for my job routine.

I also know that I am not alone with this experience.

It is no secret that most college students hardly use anything of what they learned during studies in their regular jobs. If you ask me, that is also not the point of visiting a university or college. The main point is rather to broaden our horizons and to bring some methodology into our brains to understand critical thinking, decision making, research and techniques to evaluate whatever problem we are confronted with. We learn how to handle ourselves and how to develop further knowledge. It is not really meant to prepare us for a specific job. Well. There are a few exceptions. For doctors or lawyers for example. But I think my observation is pretty accurate for many fields of studies out there. Not all, but many.

People adjust as work environments create new patterns

So basically we know by now that what our parents were telling us was a bunch of crap. It’s not their fault, they grew up in a different world. A world without the internet, a world where working conditions were miserable but still better than what the 1st and 2nd World War left over for them. They were willing to work 7-days a week to help rebuild their country and to make sure their family has food on the table when they came back home.

Millennials don’t know any of that. While the parents of my generation were worried about an electric outage for their house or condo, Gen Y and Z are worried about empty phone batteries.

With the ever-increasing demand for Fussball-tables, free coffees and bean bags in office, with the rise of social welfare benefits, 5-day-workweeks (or even less) and countless other ways how the lives of employees need to be improved, companies have found a new method to strike back. Freelancing. And people are embracing it in the masses.

Freedom – not more and not less

Whether it’s driving for Uber or doing a quick translation job on Fiverr or Upwork. Freelancers are now everywhere. Some do it as a side-gig. Others turn to do it full-time. There are countless jobs available online that can be taken on by anybody who got the right skills at the right time. Rather than a diploma, the only thing you really need to take off is references. The more jobs you get done, the stronger your profile gets and the easier the earning becomes.

You are free to choose your place of work (as long as there is some wi-fi around), you can negotiate your salary. Nobody cares who you actually are, as long as you can get the job done. It’s a great opportunity for anyone with a certain skill-set to get into the market and simply start working.

But freedom obviously has its price. There is no security. If you get sick, you got no income. If your equipment brakes, you have to get a new one on your own. Retirement? Nope. Medical insurance? Dental? Nope to that too. Vacations? Paid Holidays? Don’t even dream about it.

Freelancing is not as free as we want to believe. 

When you decide to become a freelancer, you need to bear this in mind. While with certain skills you are able to actually make a good living, you need to think about all those eventualities and how you can protect yourself in case of misfortune.

Also, believe it or not, even you might enjoy what you are doing as a freelancer at this very moment. But things can turn around and there is a high chance that you will start to hate your freelance job at some point. You will find out, that while you are free to set your terms, you are still not out of the rat race – because you still need to trade your time for money, to work relentlessly to ensure you can bring food to your table!

Protecting yourself through investments

Therefore, freelancers are actually even more exposed to financial dependence as they age compared with regular employees, and they should start investing very early on and learn all there is to learn about passive income.

Working for yourself on your own terms is a great and amazing opportunity. Make sure it doesn’t become a nightmare once you’re out of luck, when times turn tough, or simply when you get old – by building up streams of passive income. As my readers know well, investing in stocks is, in my opinion, a great way to do just that.