Dien Rice
April 11, 2008, 09:06 PM
Hi Ankesh!
Excellent post Dien!
>Any ideas on how to overcome this "achoring" bias our minds have?
>Are you truly "stuck" at your income level? Or can you mentally change your
>own "anchor" of how much you earn?
Actually you kind of gave a hint yourself.
People who were made AWARE of the higher amount of money in their banks spent more. Those who were made aware of a smaller amoung in their wallets spent less.
Improve people's awareness of the possibilities and they'll do better. Stories and case studies will break their invisible mind barriers. Show them how the best sales person of the co. generates his sales. Make them read biographies of people in the Forbes Richest list.
Good idea! As you get to feel a high income is "normal" (by reading stories, case studies, and biographies), you'll more naturally "push" yourself to earn more as well...
The "friend effect" could also be a factor here. Ankesh has pointed out before that if you average the income of 5 of your closest friends, it will be close to your own income. Partly this is because you'll learn the same things your friends know - which will help you make profits. But another effect could be this "anchoring" effect...! You see your friends' incomes as the "normal" range...
Here's something Ankesh wrote about this effect... http://www.nethotsheet.com/making-friends.php
(By the way, be sure to check out Ankesh's new site too, Non-Toxin http://www.nontoxin.com ! Essentially, whenever Ankesh gives out wisdom, make sure you're there to soak it in... That's what I do! :) )
Backdoor trick: Make people save 10% of their earnings automatically. If you're an entrepreneur, open another bank a/c and setup a system where 10% of all your earnings before tax goes to this new bank a/c.
You'll keep on doing as well as where your comfort level lies. But after a year, you'll have 1 months extra salary. You can then invest that. And invest and grow rich.
(I think having the 10% savings rule is a MUST HAVE if you want to create a passive income portfolio.)
Thanks Ankesh, that's great advice too! :)
Cheers,
Dien
Excellent post Dien!
>Any ideas on how to overcome this "achoring" bias our minds have?
>Are you truly "stuck" at your income level? Or can you mentally change your
>own "anchor" of how much you earn?
Actually you kind of gave a hint yourself.
People who were made AWARE of the higher amount of money in their banks spent more. Those who were made aware of a smaller amoung in their wallets spent less.
Improve people's awareness of the possibilities and they'll do better. Stories and case studies will break their invisible mind barriers. Show them how the best sales person of the co. generates his sales. Make them read biographies of people in the Forbes Richest list.
Good idea! As you get to feel a high income is "normal" (by reading stories, case studies, and biographies), you'll more naturally "push" yourself to earn more as well...
The "friend effect" could also be a factor here. Ankesh has pointed out before that if you average the income of 5 of your closest friends, it will be close to your own income. Partly this is because you'll learn the same things your friends know - which will help you make profits. But another effect could be this "anchoring" effect...! You see your friends' incomes as the "normal" range...
Here's something Ankesh wrote about this effect... http://www.nethotsheet.com/making-friends.php
(By the way, be sure to check out Ankesh's new site too, Non-Toxin http://www.nontoxin.com ! Essentially, whenever Ankesh gives out wisdom, make sure you're there to soak it in... That's what I do! :) )
Backdoor trick: Make people save 10% of their earnings automatically. If you're an entrepreneur, open another bank a/c and setup a system where 10% of all your earnings before tax goes to this new bank a/c.
You'll keep on doing as well as where your comfort level lies. But after a year, you'll have 1 months extra salary. You can then invest that. And invest and grow rich.
(I think having the 10% savings rule is a MUST HAVE if you want to create a passive income portfolio.)
Thanks Ankesh, that's great advice too! :)
Cheers,
Dien
