Every day you allocate these two precious resources and your current situation in life shows you how you're doing. To live your life to your fullest potential, you want to choose activities that provide the best return for your time and energy.

The best way to do that is to:

Invest them in activities that use your natural talents.

This sounds obvious but take a few minutes now and reflect on your past week. Resist the urge to come up with excuses as you ask yourself:

If you're like most people, you probably didn't use many of your talents at all. I can bet that you're probably not even sure what your talents are.

No matter which group you're in, take the following steps to use your time wisely:

Step 1: Believe that you have talents.

We all do. If you've stopped believing that, then you've been trapped in an environment that hasn't allowed you to showcase those talents. If this sounds like you, you may want to jumpstart your life.

Step 2: Figure out what those talents are.

Many people have an inkling about their talents but if you don't have a clue, consider taking an aptitude test or check out books like The Strengths Finder 2.0 or What Color is Your Parachute. You may also want to ask close friends, family members and colleagues on what they see as your natural talents.

Step 3: Use those talents all the time.

Since we spend most of our waking hours at work, this means finding a job where your strengths are requirements in the job description and avoiding careers where your talents are actually weaknesses. With your spare time outside of work, look for hobbies that use your natural abilities to further hone your skills.

Warning: Don't confuse talents with interests. Talents are actual skills that you can use where as interests provide the context in which to use those skills. For example, you may be interested in movies but it doesn't mean you're limited to acting or directing. You can write scripts, build sets, raise money, etc.

To make the biggest difference you can make in the world, find the intersection between:

• what you're naturally great at
• what you're interested in
• what people will pay you money for

Money amplifies the impact of your talent and financial freedom can be both a pre-requisite or result for pursuing what you love.

But no matter how talented you may be, without action, nothing happens so take 30 seconds now and write down three things you're naturally good at. If you don't know, write down three things you'll do to find out.

To close, here is a passage from writer Marianne Williamson that inspires me every time I read it:

Our deepest fear is not that we are inadequate,
our deepest fear is that we are powerful beyond measure.
It is our light, not our darkness, that frightens us.
We ask ourselves, who am I to be
brilliant, gorgeous, talented and fabulous -
Actually, who are you not to be?You are a child of God.
Your playing small doesn't serve the world.
There is nothing enlightened about shrinking
so that other people won't feel insecure around you.
We were born to make manifest the glory of God within us.
It is not just in some of us: it is in everyone
And as we let our own light shine, we unconsciously
give other people permission to do the same. 

- Marianne Williamson, Writer

Let your light shine.

Photo by Lilit Matevosyan

The post Let Your Light Shine appeared first on Embrace Possibility.

But no matter how valuable the lesson, it is not fun to learn it the hard way.

Some say these learning pains are unavoidable and necessary for the learning to stick. This may be true for some people but for many of us, the same lessons can be learned without having to the suffer.

To learn lessons the easy way, you need three things:

1. Awareness of the lesson to be learned
2. Intellectual understanding of the lesson and how it applies to you
3. Belief that it does apply to you

This article can help you with the first two criteria. The third part is all up to you.

If you prefer to learn your lessons the hard way or if you believe the lessons of others don't apply to you, feel free to stop reading now.

For those of you who want to save yourself some time, money and energy, here are my top life-changing insights:

1. The effectiveness of your communication is measured by the feedback that you get.

How effective you are as a communicator has nothing to do with your intentions. It has everything to do with the other person's response. I used to believe that as long as my intentions were good, any miscommunication was the fault of the other person. How can it be my fault if they don't get it?

I've come to realize that I was wrong. If you're not getting the response you want, YOU need to change YOUR approach, not the other person.

If you have a nagging parent, you've experienced this firsthand. They remind you to do this and to do that, all with the best intentions in mind, but how often do you listen? How often are you grateful for these reminders? Nagging parents rarely get the response they're looking for. They don't realize that they're the ones that need to change. Instead, they use their noble intentions as an excuse for continuing their ineffective actions.

To measure how effective you are, forget your intentions and look at the feedback you're getting.

2. Follow your passion using your strengths to get the best return for your time and energy.

We are all allotted 24 hours every day. What you achieve with your life depends on how you use those 24 hours. Unfortunately, there are so many options that it is easy to choose activities that do not give you the best return for your time and energy. Walk into any corporate office and you can easily find examples of people engaging in low-return activities.

To have an impact in the world and to live to your full potential, follow your passion and support that passion with your interests and strengths in a sustainable way.

• Your passion tells you WHY you're doing what you're doing.
• Your interests will decide WHAT you should do to achieve your WHY.
• Your strengths will determine HOW you're going to accomplish WHAT you set out to do.

Focus on activities that use your strengths because that will give you the most return for your time. Improving your weaknesses usually don't pay because that time can be better spent working on your strengths. If you have activities on your to-do list that play to your weaknesses, either remove them or find someone else to help you with them.

If you're not sure where to begin, I recommend following these step-by-step instructions:

1. Start by looking within. Think about your values and beliefs and create a personal mission statement that answers WHY you believe you've been put on this earth. There is no right or wrong answer. If you don't have a personal mission statement, take some time now to create one. If you are uncertain, choose one for now knowing you have the flexibility to change it as you learn more about yourself.
2. Identify your top interests and strengths along with the activities that use those interests and strengths to move your mission forward. If you're not sure what your strengths are, take an aptitude test or check out The Strengths Finder. To pin down some of your interests, think of personal experiences where you lose track of time because you were so engaged or books you can't put down.
3. Analyze the activities you've just identified and select the ones that people are willing to pay you to do so you can sustainably continue to do them.

Get started on these steps as soon as possible. Every minute you delay is another minute being wasted on low-return activities. Give yourself a reality check by tracking how you are currently spending your time. Do this for a few weeks and analyze your time logs. How much time do you spend using and honing your strengths to move your mission forward?

3. People do the best that they can with what they know.

This insight has greatly improved my interpersonal relationships. I have realized that people, who are rude, disrespectful or exhibit any other negative behavior, really don't know any better. Their actions stem from strategies that they truly feel are the best ones to handle the current situation.

This can be extremely frustrating if you have access to better strategies. The key is to understand that the other person didn't have the same experiences and insights that you've had and therefore should not be held accountable.

It's like blaming a two-year old for drawing on the walls. They really don't know any better and it's unfair to blame them for being ignorant of the impact of their actions. They are doing the best that they can with what they know. Realizing this may help you give other people the benefit of the doubt and empathize with their situation. This was a game changer for me.

One application of this insight is to give other people a break including those from your past who have wronged you. Your parents, your former bosses, even random strangers did what they thought were the right things to do. Forgive, truly forget and move on.

This rule also holds true when dealing with yourself. Don't be so hard on yourself - you're doing the best that you can with what you know.

The best way to cure ignorance is through education. Keep learning new things. If you're dealing with difficult people, empathize and be curious about their strategies. By taking the initiative to listen and understand, you open others up to you and your ideas. When they give you permission, recommend a book, a movie or a person that will expose them to better strategies for life. Just be careful not to cross the line from being helpful to preachy.

4. There is no such thing as "can't".

I've written about this insight in detail (click here to read).

5. Change happens only when the other person perceives real value for them to change.

Face it - you're never going to change anyone who doesn't want to change. The only way someone will change is if they truly believe your proposed behavior or idea is more beneficial to them than their previous behavior or idea. They make this decision based on their values, not yours.

We are all selfish in the sense that we care about our well-being. We're wired to adopt the best strategies that will help us in life. When you ask someone to change, you're telling them that your strategy is better than their current one. If they agree with you then you'll get change. If they don't agree with you, then nothing will happen.

Look at the different times in your life when you've accepted and rejected change. How did you decide one way or the other?

If you're looking to change someone, clearly show them the benefits they'll receive from adopting your proposed behavior. In addition, help them see that your way is better than other alternatives including their current strategy. To do that effectively, you need to understand what they valued in their old strategy. This won't be easy but if you can get them to accept your strategy as being better, they will gladly change their behavior.

6. Money is an amplifier.

Many people, my mother included, view money in a negative way. The pervasive view is that it's bad to be rich because money corrupts people. It's not hard to see why they would feel that way when the media shows ample examples to support their views.

Despite all the press, I've come to realize that money is not evil. It merely acts as an amplifier. If you want to do good things, money will allow you to do more good things than you can without money. If you want to bad things, money will allow you to do more of that as well. To make a significant impact in the world, you need a good amount of money. That's just how the world, at this moment, works.

Are you financially free? If not, what is your plan for financial freedom?

If you don't have one, why not?

The simple but arduous road to financial freedom involves:

• maximizing income,
• minimizing expenses,
• saving as much as you can and
• investing those savings so it can grow beyond inflation.

The earlier you start, the faster you'll become financially independent. For those of you who are against denying yourself the finer things in life, think of all the grander things you are missing out on because you are not financially free.

7. The identity you give yourself is who you become.

Who you are on the outside is directly connected to the story you tell yourself on the inside. If you tell yourself that you're a successful business professional, you'll dress, talk, walk and act in a way that mirrors that belief. If you believe you're inept, then your actions will confirm that as well. Your self-identity dictates who you attract, who you socialize with, how you act relative to others, etc.

The common misperception is that identity is fixed. People often say that they're "keeping it real" to excuse their bad habits and behaviors. They try to hold on to their identity without realizing that from the minute they were born, their identity has been continuously changing on many levels. They went from baby to toddler to teen to worker to parent. They've gone from student to the new guy to the seasoned veteran.

Aim high when you decide on your identity because you will live up to the expectation and image that you set for yourself. Tell yourself the story of success that you want and your reality will reflect that. You can decide what your identity is at any time. Don't give that power away to others. If you don't like where you are now or where you're headed, jumpstart your life by reinventing yourself.

8. When truth is relative, being right is irrelevant.

I can believe something to be true and someone else can believe a contradicting idea to be true and we may both be right.

Sounds a bit strange, doesn't it? Shouldn't the truth be absolute?

It's easy to think that life is black and white. If we all have the same facts, we should all draw the same conclusions. This might work if we all had the same brain, lived in the same way with the same experiences but we don't. By the time outside stimuli reach our brain for processing, it has already been put through our personal filters. What gets analyzed by my brain is very different from what gets analyzed by your brain despite the same stimuli. This allows for both of us to come up with equally valid conclusions even if they contradict.

Daniel Kahneman, author of Thinking Fast and Slow, is right when he said,

"We have an unlimited ability to ignore our ignorance".

Before I realized my ignorance, I spent a good amount of time trying to prove that I was right. Understanding now that everyone is entitled to their own truths, it doesn't make sense to argue about right or wrong. The focus should be on getting what I want. The next time you are arguing with a loved one or colleague, ask yourself, "Am I trying to build a stronger relationship or am I trying to be right?" This will help you resolve your argument fairly quickly (hint: being right is often wrong).

The difference between strong communicators and weak communicators are those who are curious about the other person's views and can build a bridge from their own view. Ask yourself - what assumptions is the other person making that makes their story true? Resist the tendency to think the other person is either slow or missing information and that is why they are coming up with faulty conclusions. In many cases, we may be the slow one that's missing information.

Dogma is dangerous.

Consider the idea of relative truth (or not).

9. Other people's values and traits rub off on you.

Whether you like it or not, the people you surround yourself with will have a strong influence on you. It doesn't matter how old you are or how resolute you are in your beliefs and identity, you will end up adopting the thoughts, values and behaviors of the people you spend the most time with.

We all want to belong and we subconsciously behave in ways that gain the approval of those around us. You don't realize this because it happens incrementally. You are constantly taking one step closer to the group until you eventually fall in direct step with everyone in the group. There are examples all around you. Think of your friends who've changed dramatically because they began spending time with a very different group of people.

Siblings prove this point well. Same family, same upbringing, very similar genes and yet siblings can be very different. If you look carefully, the difference that makes the difference is the people they spend most of their time with.

"When the character of a man is not clear to you, look at his friends."

- Japanese Proverb

Who are the people you spend most of your time with? Do they embody the qualities you look up to? If not, what are you going to do about it?

Make a conscious decision to spend less time with people you don't want to become. If some of these people are your close friends, you may feel disloyal. This is normal. Just understand that they will rub off on you just like you will rub off on them. What might help you feel less guilty is knowing that people spend less time with their close friends all the time and they don't get judged negatively for it.

• New parents spend less time with their single friends.
• College students spend less time with their childhood friends.
• Those who work spend less time with those who don't.

You don't have to feel guilty. Just because you don't see each other often, doesn't mean you can't stay friends.

Use this rule to your advantage. Be selective with who you spend time with and choose people who are already where you want to be so you grow when you conform to the group. The key is to find groups that will pull you up as opposed to those that will pull you down.

10. The choice is always yours and that makes you completely responsible.

Almost everything that happens to us is a result of our choices. Whether our life is good or bad, we're a direct contributor. This insight has had the most impact on my life.

The minute you hold yourself accountable for your life's results, you become empowered to resolve issues and take pride in your accomplishments. Those who don't take responsibility remain helpless because they blame something or someone else for their troubles. Their lives never get better because they've already decided that it's not their fault and there is nothing they can do about it.

Many first meetings I have with clients are whine and pity parties. They complain about how unfair it is that their boss or company mistreats them or their colleagues take advantage of them. Just before they go into their well-rehearsed rant of being underpaid and overworked, I stop them and ask, "Why don't you just quit? There are plenty of other companies out there."

This usually opens up a floodgate of excuses for why they can't quit - weak economy, bills to pay, waiting for retirement, etc. After they finish, with empathy I point out that it's still a choice that they've made and they're paying the consequences of that choice. Those who accept the idea become my clients and we work on a game plan to transition into a better situation. Those who continue with "Yeah, but ..." get their coaching fee refunded in full and an offer to contact me after they stop playing the role of victim.

If you want power over your life, frame everything that happens to you as a consequence of your choices. If you truly believe that, your life will improve.

11. No one is coming to the rescue.

This is a bonus insight for finishing the first ten. I'll keep it short and sweet.

Stop waiting for someone to solve your problems.

Everyone is busy with their own issues.

No one is coming to save you.

Take control of your life.

Any help is bonus.

You can do it.

Take time to read through these insights again. Print them out. Highlight helpful points. Share this article with your friends, family and colleagues.

Also, think about how these insights might apply to you. Learn them the easy way by understanding each insight and believing that it applies to you. Try one on each month and see if they fit.  If you get through all of these principles, you may want to check out 13 more from Matthew McConaughey.

I'm always interested in learning lessons the easy way. What strategies or ideas have significantly improved your life?

The post Top 10 Insights that May Change Your Life for the Better appeared first on Embrace Possibility.

So far:

You've learned the starting point for your journey is your current net worth and that measuring your net worth is the only way to track your progress.

You've figured out your destination when you determined your number.

Some of you even took some time to sort through and handle any excess baggage (bad debt) that may slow you down on this trip.

Now all you have to do before you set off is to determine your current pace.

This article will help you answer:

Am I moving in the right direction?

How fast am I travelling?

When will I arrive at my destination?

So how will we do that?

Two words ...

...Income and Expenses.

Many of you shy away from your own finances because you are scared of numbers. This is one of the reasons why you are not financially free. Fortunately, I understand that numbers can be intimidating so I am going to give you a step-by-step process that any elementary school student can follow.

Let's start with income:

Step 1 - Calculate the gross (it just means before taking deductions like taxes, 401K, etc.) monthly income by adding up all the money you receive.

Example:

Gross Salary: $4000

Interest from Savings: $120

Stock Dividends: $230

Rent from Tenant: $1000

Total Gross Monthly Income: $5350

Easy, right?

Now for the expenses:

Step 2 - Calculate monthly expenses by adding up all the money that you spend on average in one month. For expenses that are once a year but recurring (i.e. christmas and/or wedding gifts), just divide the one time expense by 12. Taxes should be included in your expenses as well.

Example:

Rent: $1200

Utilities: $150

Phone: $80

Gym Membership: $20

Gifts: $1200/12 = $100

Income Tax (Federal and State) = $1300

So far so good? Great!

Step 3 - Calculate the difference between the money coming in and the money going out.

To help you with this calculation, click here for an income and expense calculator from frugalvillage.com. All you have to do is input your gross monthly income from step 1 and it will give you your "monthly spendable income" assuming a 33% tax rate. Then you input all your expenses for the month. At the bottom you will get the total left over for the month.

This total will help us answer the 3 questions above:

Am I moving in the right direction?

If your total is positive (you earn more than you spend), you are moving in the right direction. If your total is negative (you spend more than you earn), you are going the wrong way. If you have a negative total, the first thing you need to do is find ways to cut your expenses ... immediately.

How fast am I travelling?

The larger your number. The faster you're travelling. A large negative number means your travelling quickly in the wrong direction.

When will I arrive at my destination?

You will arrive at your destination when your current net worth is equal to your target net worth calculated from Lesson 2. Unless you already own a home, a business or other investments, the money you have in your bank and in your retirement accounts will make up the bulk of your net worth.

The income calculated from this lesson will determine how much you can save. Use this savings calculator from Bankrate.com to see how much you need to save monthly to reach your "number" within a set number of years.

Example using Bankrate's Savings Calculator:

How much do you want to save?  $1,000,000

How many years? Play around with this number to make the "monthly deposit required" = monthly amount leftover 

Interest rate: 6% Daily Compounding

How much money can you spare to start? $1000

Do you wish to skip 2 weeks out of the month? Yes

When do you make your first deposit? Today's date

Starting with $1000 I will save a million dollars ...

in 5 years, if I save $489/day

in 15 years, if I save $117/day

in 30 years, if I save $34/day

So if I started saving when I was 20, I would be a millionaire when I became 50 and all of this assuming a conservative interest rate of 6%. This is the power of compounding interest and the earlier you start saving the better.

If you haven't already, I highly recommend that you calculate the money you have left over each month after you pay all your bills and expenses. If the number is positive, use the savings calculator to see how long it will take you to reach your target "number" if you saved everything that was left over each month.

Once you know your pace, it's time to discuss strategy.

In the next lesson, we're going to answer the question:

What can you do to get to your number faster? 

The post Be Financially Free – Lesson 4 – Current Pace appeared first on Embrace Possibility.

With that "number", you now have a destination as you begin the road to financial freedom.

If you are starting your journey with a negative net worth (click here to learn how to calculate your net worth), you have your work cut out for you. The biggest reason for a negative net worth is usually ...

... DEBT.

It is important to distinguish between Good Debt and Bad Debt.

Good debt is when you borrow money to pay for things you NEED (Home, College Tuition and/or Car Payments) but can't afford up front without using up all your cash and selling out of your investments.

Bad debt is when you borrow money for things you don't NEED (IPad3, Trip to Tahiti, Luxury Goods, etc) and can't afford. Most credit card debt falls under this category.

No matter what type of debt you have, you should work to get out of it as fast as you can.

If you have a spending problem, the very first thing you should do is remove easy access to credit by cutting up all credit cards and closing any lines of credit. For those who only have good debt and can control spending, there is no need to cut up your credit cards.

If you don't have a plan to get out of debt, then most likely you are not going to get out. Fortunately, here is a simple and effective 7 step process that will help you eliminate your debt:

Step 1 - Organize all your debt by creditor, interest rate and minimum payment amount and sort by interest rate from highest to lowest.

Step 2 - If you are late on any payments, IMMEDIATELY call your creditor (personal or institutional) to explain. In many cases, the interest rates and loan terms can be negotiated.

Step 3 - Review your income and determine the LARGEST monthly amount you can use to pay off your debt. Remember to make sure you have an adequate emergency fund (1 year's worth of expenses).

Step 4 - Add $20 to every minimum payment on your list of debts and add up the final total monthly debt payment. You want to always pay more than the minimum if you are serious about getting out of debt.

Step 5 - Subtract the total monthly debt payment from the amount you allocated to pay off debt. If you have extra money, apply that to the debt with the highest interest rate. If you can't make the minimum payments, consider consolidating your debt to lower the minimum payments.

Step 6 - Make your payments according to your plan in Step 5 and adjust if income or situation changes.

Step 7 - Repeat Step 1-6

Although not advisable, you can take out a home equity loan to pay off your debt since the interest is tax-deductible and you can usually get a much lower interest rate than your credit cards. Of course, if you end up spending the money from your home equity loan on a trip to the Maldives and can't pay it back, you can lose your home.

Getting out of debt is never the solution. You must look at the specific habits that got you into trouble. Only by changing those habits can you truly take the next step towards being financially free.

"Think what you do when you run into debt; you give to another power over your liberty"

- Benjamin Franklin

Now that have made arrangements for your debt, let's get back on the journey with our next lesson.

The post Be Financially Free – Lesson 3 – How to Get Out of Debt appeared first on Embrace Possibility.

Most people don't get into a car and just start driving. They usually have a clear idea about where they want to go before they even leave the house. The road to financial freedom is just that - a road. Before you take that road, it is important to know where you are and where you want to go.

If you ask most people who want to be financially free what it means to be financially free, they rarely describe it in a measurable way. The usual responses are along the lines of "I don't have to work if I don't want to" or "I don't have to worry about money". With such vague destinations, it is no wonder why most people are not financially free.

In Lesson 1, we learned that the only way to keep score is by calculating your net worth (click here if you want a review). By now, you should all know your current net worth (if not, click here for the net worth calculator). Just like planning a trip, once you know your starting point the next step is to determine your destination.

So where do you want to go?

Think about the lifestyle you want to lead and what the average monthly expense will be when you retire. Also you'll need to decide when you want to retire and how long you plan on living. Of course, the longer you continue working, the less you'll need to save per month.

If you want a quick rough calculation of your target net worth, ING has a Find Your Number Calculator that is quick and easy to use (note: I don't use ING and I am not endorsing ING and any of its products and services).

Once you have your desired number, you can use the retirement calculator at the bottom of this article to see what you need to save per year depending on your current net worth (current savings), your target net worth (desired retirement savings) and the time you want to retire (years until retirement).

Now that you have an idea of where you want to go, we need to begin planning for your trip to financial freedom.

In the next lesson, we're going to take a slight detour and discuss good and bad debt and the best way to get out of bad debt. This way you can unload any unnecessary baggage that you have before we begin our journey. This will be a must read for anyone with a negative net worth.

If you are part of the lucky group that is debt-free, you can continue your journey by going straight to lesson 4.

The post Be Financially Free – Lesson 2 – Do You Know YOUR Number? appeared first on Embrace Possibility.

For those who do agree or would like to become financially free anyway, read on.

Most people are not financially free for one simple reason:

They don't know how to keep score.

People tend to equate financial success with big homes, fast cars and luxurious lifestyles. It is this "consumption thinking" that holds people back from attaining their financial freedom. In Thomas Stanley's two books, The Millionaire Next Door and The Millionaire Mind, most of the millionaires profiled don't drive expensive cars nor lead extravagant lifestyles. They tend to value frugality.

There is only one way to keep score and it is ... (drum roll please)

...keeping track of your net worth.

Net Worth = Total Assets - Total Liabilities

Assets are things of value such as cash, investments (e.g. stocks and bonds) and the value of your home. Liabilities are the obligations that you owe such as credit card debt, student and bank loans and mortgage.

If you already know what your net worth, then all you need to do is make sure it stays positive and keeps going up. The faster it goes up, the better you're doing. In a future post, I will talk about how to decide what your target net worth is.

For those of you who don't know your net worth, get your financial information ready because you should calculate it right now. Stop whatever else you're doing because this is the most important number you'll need to know if you want to be financially free. It won't take too long and all you need to do is plug your numbers into the calculator below:

The post Be Financially Free – Lesson 1 – What is your Net Worth? appeared first on Embrace Possibility.