Why is discipline so important for success in any productive endeavor?

In this blog I will list some of my top Quora answers for the last few days. 

In the answers shared today I focused on:

  1. Why is discipline so important to success in investing, business and all productive activities? How does it link to execution vs just having ideas?
  2. How can somebody make $30,000 a month online? Is it realistic and what are the practical steps to give yourself a chance of achieving this?
  3. What is to stop people in the top 1% just leaving a country if the taxes are too high? Could there be more higher taxes in a post-Covid world, including regional-wide taxes from the EU?
  4. Can being frugal and only buying what you need result in wealth, or is it a fools game?
  5. What jobs pay more than $1.5m a year? Are there any alternatives to jobs that pay this much?

If you want me to answer any questions on Quora or YouTube, don’t hesitate to contact me.

Why is discipline so important for success in any productive endeavor?

Source: Quora

Everybody wants a magic pill:

Few want the diet and hard exercise instead:

The same is true in business, investing or any other domain. Most people want the get rich quick idea.

Few are willing to focus on execution with persistence, discipline and determination.

In reality, it is execution that matters not ideas, and discipline is essential for execution.

This quote sums it up:

A person with average natural talent, but with a lot of discipline to execute long-term, can easily beat somebody with superior ideas and natural talents.

We see it all the time in sport. Sport stars that look good at 18, 19 or 20 but they go off the boil due to lifestyle or lack of discipline.

At the same time, you see people with minimum levels of natural talent do well.

What really separates high performers from others though is discipline for a long period of time.

Many people can be disciplined for a few months or even years but tend to give up too easily.

Ultimately, anything worthwhile takes effort and sacrifices

How can I make $30,000 per month using the internet?

Source: Quora

There is a lot of misleading information online about this so I will give you the truth and realistic options here:

Option 1 – stick to doing what you are doing right now

  • This works for anybody who is a business owner or paid mainly on performance
  • It doesn’t sound very exciting but if you are already doing OK in business, you can leverage using the internet
  • Let’s give a simple example. Let’s say you are a real estate agent selling luxury properties. Your average sale size is $15,000. Right now, you are getting 6 sales a year, so $90,000. Almost all the sales are coming from using traditional methods. If you use the internet, you could get leads from another the world, and move into new markets. So, now instead of meeting 30 people at the local chamber of commerce or other kind of networking event, you have the chance to be accessible to millions or even hundreds of millions online. In addition to that, you can continue doing what you have been doing, but online leverage just adds fuel to the fire.
  • The last example is one of many I could have used. The point is, if you are already doing OK in an industry that can work in an online world, then you have a great chance
  • Of course, in reality, it will take a number of years to build up to 30k a month (360k a year)
  • To give you a simple example, the “YouTube millionaire” Graham Stephen was a real estate agent, so mainly paid on commission. He started using YouTube, and it bought him in some leads he monetised. As his audience grew, he started to make a lot from online revenue as well as real estate commissions. That is another point. As your audience grows, you can move away from your core offering.

Option 2 – start from zero and do something new

  • Let’s say now that you don’t have a job, and haven’t built up an income from doing things offline
  • Now you can try affiliate marketing or many other things online from $0
  • BUT it is more competitive in some ways than the slower approach of option 1, which can take years to build up slowly
  • So, this approach is more likely to work if people are either very persistent, have a niche area of specialism and/or are being taught properly by somebody who has done it before
  • If you are say a multi-lingual lawyer already, even if you have literally qualified 1 day ago and are unemployed, you have a better chance of making it straight away online because you have skills the market is looking for.
  • If you don’t have skills the market is so obviously looking for, then you need to build up skills like branding, marketing or whatever to position yourself well.

That is a summary in any case. At the end of the day though, the internet and non face-to-face meetings are only going to get bigger.

If the 1% rich is ever taxed more, what is stopping them from just moving to another country?

Source: Quora

That’s true. Many wealthy people might consider it. There are some things stopping it though:

  1. A few countries tax based on citizenship – Eritrea, North Korea and the United States. South Africa and China have bought in such taxes by stealth, but not in name. More countries could follow. The EU as a block might one day follow. If you are from such as country you need to renounce your citizenship to pay less taxes.
  2. The exit tax as Chris says below means people need to pay for renouncing their citizenship in some countries
  3. Friends, family and sometimes the hassles of moving.

I do think in a pre-COVID world governments will need to find new revenue sources.

The most likely targets will be “the rich” and expats because they seem distant from most people’s lives.

Therefore, regardless of whether chasing them will bring in less taxes or more taxes, some populist politicians might bring in new taxes such as:

  • Exit taxes
  • Taxes on citizenship and not residency
  • “Minimum taxes”. In other words if you move to a low tax country (like Bulgaria which charges 10% on most income) then that’s OK, but not if you move to a 0% tax country.
  • Country specific taxes. In much the same way that some South America governments have specifically said their citizens need to pay taxes if they move to Panama, and France did the same thing with Monaco, some governments might target more specific locations.
  • Wealth taxes but not income taxes.
  • Some countries could work together with international bodies like ASEAN and the EU to bring in regional taxes.

In many developed countries, the top 1% pay 25%-32% of the total tax take. Even a slight reduction due to people moving would make a big difference.

In reality as well, such moves will harm the upper-middle and high earners who aren’t super wealthy.

MNCs like Amazon and billionaires have the resources to find ways around new rules.

Somebody who is just inside the 1%, like somebody earning 200k in Europe, is less likely to be able to take such actions unless they plan in advance.

It reminds me of FATCA in the US. It was billed as a way to make the MNCs pay but all it did was make life more difficult for middle and upper-middle income Americans overseas.

Can I get rich if I only spend my money on my needs?

Source: Quora

There is an increased chance, but it isn’t a certainty. Alongside frugality, what matters is:

  • When do you start being frugal and for how long. Doing it long-term makes a bigger difference as it all compounds.
  • How much your spending is relative to your income. Somebody that spends 100k but is earning $2m after tax is relatively frugal. Somebody who spends 100k and earns 100k isn’t
  • How you use the money you save. Saving in the bank won’t do it these days with interest rates being so low. Money needs to be put to work. Just with the first bullet point, compounding is key here. Investing well for 2 years isn’t the same thing as 50 years. Even small investments compound over many decades.
  • If you define rich as wealth or income. If you define it as being wealthy then you can absolutely get wealthy slowly by this method. Somebody won’t necessarily become high-income with this method.
  • You avoid bad luck. No matter how hard we try, there can be unexpected emergencies which force our hand. For example, somebody loses their job due to covid and can’t pivot quickly enough. Of course, people who are prepared have a lower chance to fail like this. For instance, businesses that went online years before covid, when it was clear the world was moving in that direction, did better during 2020 compared to those that played it safe. But people can’t guard against all unexpected risks. So, unfortunately, unlike the other points, this one isn’t completely under your control.

If you spend only on your needs, plus the odd treats, for the long-term, it makes a huge difference, especially if you invest the surplus well.

Many people give up after a few years of productive behaviour because the gains take a while to fully show.

What jobs make over 1.5 million a year?

Source: Quora

There aren’t many. People who are salaried in a job will usually only get paid that much because they have a specific skill or expertise they can offer.

The only salaried jobs that pay that much are:

  • Executives who become CEO and other top senior positions
  • Sports stars at the top of their game. Most tennis, footballers and basketball players don’t earn that much. A small fraction earn many multiples of the figure you quote though, like some of the ones below.
  • Some partners of major law firms, consulting firms and investment banks. Sometimes it is more like $1m though, and depends on the country you live in.
  • A small number of doctors, dentists and vets in the US and a tiny fraction of other countries. In any field, there are always a minority of people who can earn that much, even if they aren’t executives. This is especially the case if somebody becomes specialised in a niche. For example, a clinic which caters to celebrities and executives will pay a doctor much more than the average clinic

However, the vast majority of people who earn over $1million a year are paid on performance.

That includes

  • People who start their own business
  • Those that are freelancers like a small number of YouTubers
  • Those that are paid on performance and are inside the top 1% of their field. For example, most used car salespeople don’t earn close to $1m. The top 0.1% will in some countries. The same is true, probably to a larger extent, for people like real estate agents.

Also let’s not forget that the distinction between a salaried employee and self-employed person has been blurred.

Many of the sports stars listed above get a salary but the majority of their income is paid into their own companies.

Likewise, many executives get paid in stock as part of their package.

Further Reading

Many people know that the Japanese stock market, the Nikkei 225, has been one of the worst performers around the world in the last 30 years.

The market is often seen as an outlier to the expression that “markets always come back from crashes” and eventually hit record highs.

So, why did the Japanese Nikkei never recover from the bubble years?

Or is it a misconception once we adjust for things like dividend yields?

In this answer below, takes from Quora, I explain why the Japanese stock market has done better than many people assume and the media widely report.

Now that the market has hit its highest level since 1991, and could continue to move higher in the coming months and years, the answer is more relevant than ever.

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