Nine Things Successful People Do Differently

Why have you been so successful in reaching some of your goals, but not others? If you aren't sure, you are far from alone in your confusion. It turns out that even brilliant, highly accomplished people are pretty lousy when it comes to understanding why they succeed or fail. The intuitive answer — that you are born predisposed to certain talents and lacking in others — is really just one small piece of the puzzle. In fact, decades of research on achievement suggests that successful peoplereach their goals not simply because of who they are, but more often because of what they do.

1. Get specific. When you set yourself a goal, try to be as specific as possible. "Lose 5 pounds" is a better goal than "lose some weight," because it gives you a clear idea of what success looks like. Knowing exactly what you want to achieve keeps you motivated until you get there. Also, think about the specific actions that need to be taken to reach your goal. Just promising you'll "eat less" or "sleep more" is too vague — be clear and precise. "I'll be in bed by 10pm on weeknights" leaves no room for doubt about what you need to do, and whether or not you've actually done it.

2. Seize the moment to act on your goals. Given how busy most of us are, and how many goals we are juggling at once, it's not surprising that we routinely miss opportunities to act on a goal because we simply fail to notice them. Did you really have no time to work out today? No chance at any point to return that phone call? Achieving your goal means grabbing hold of these opportunities before they slip through your fingers.

To seize the moment, decide when and where you will take each action you want to take, in advance. Again, be as specific as possible (e.g., "If it's Monday, Wednesday, or Friday, I'll work out for 30 minutes before work.") Studies show that this kind of planning will help your brain to detect and seize the opportunity when it arises, increasing your chances of success by roughly 300%.

3. Know exactly how far you have left to go. Achieving any goal also requires honest and regular monitoring of your progress — if not by others, then by you yourself. If you don't know how well you are doing, you can't adjust your behavior or your strategies accordingly. Check your progress frequently — weekly, or even daily, depending on the goal.

4. Be a realistic optimist. When you are setting a goal, by all means engage in lots of positive thinking about how likely you are to achieve it. Believing in your ability to succeed is enormously helpful for creating and sustaining your motivation. But whatever you do, don't underestimate how difficult it will be to reach your goal. Most goals worth achieving require time, planning, effort, and persistence. Studies show that thinking things will come to you easily and effortlessly leaves you ill-prepared for the journey ahead, and significantly increases the odds of failure.

5. Focus on getting better, rather than being good. Believing you have the ability to reach your goals is important, but so is believing you can get the ability. Many of us believe that our intelligence, our personality, and our physical aptitudes are fixed — that no matter what we do, we won't improve. As a result, we focus on goals that are all about proving ourselves, rather than developing and acquiring new skills.

Fortunately, decades of research suggest that the belief in fixed ability is completely wrong — abilities of all kinds are profoundly malleable. Embracing the fact that you can change will allow you to make better choices, and reach your fullest potential. People whose goals are about getting better, rather than being good, take difficulty in stride, and appreciate the journey as much as the destination.

6. Have grit. Grit is a willingness to commit to long-term goals, and to persist in the face of difficulty. Studies show that gritty people obtain more education in their lifetime, and earn higher college GPAs. Grit predicts which cadets will stick out their first grueling year at West Point. In fact, grit even predicts which round contestants will make it to at the Scripps National Spelling Bee.

The good news is, if you aren't particularly gritty now, there is something you can do about it. People who lack grit more often than not believe that they just don't have the innate abilities successful people have. If that describes your own thinking .... well, there's no way to put this nicely: you are wrong. As I mentioned earlier, effort, planning, persistence, and good strategies are what it really takes to succeed. Embracing this knowledge will not only help you see yourself and your goals more accurately, but also do wonders for your grit.

7. Build your willpower muscle. Your self-control "muscle" is just like the other muscles in your body — when it doesn't get much exercise, it becomes weaker over time. But when you give it regular workouts by putting it to good use, it will grow stronger and stronger, and better able to help you successfully reach your goals.

To build willpower, take on a challenge that requires you to do something you'd honestly rather not do. Give up high-fat snacks, do 100 sit-ups a day, stand up straight when you catch yourself slouching, try to learn a new skill. When you find yourself wanting to give in, give up, or just not bother — don't. Start with just one activity, and make a plan for how you will deal with troubles when they occur ("If I have a craving for a snack, I will eat one piece of fresh or three pieces of dried fruit.") It will be hard in the beginning, but it will get easier, and that's the whole point. As your strength grows, you can take on more challenges and step-up your self-control workout.

8. Don't tempt fate. No matter how strong your willpower muscle becomes, it's important to always respect the fact that it is limited, and if you overtax it you will temporarily run out of steam. Don't try to take on two challenging tasks at once, if you can help it (like quitting smoking and dieting at the same time). And don't put yourself in harm's way — many people are overly-confident in their ability to resist temptation, and as a result they put themselves in situations where temptations abound. Successful people know not to make reaching a goal harder than it already is.

9. Focus on what you will do, not what you won't do. Do you want to successfully lose weight, quit smoking, or put a lid on your bad temper? Then plan how you will replace bad habits with good ones, rather than focusing only on the bad habits themselves. Research on thought suppression (e.g., "Don't think about white bears!") has shown that trying to avoid a thought makes it even more active in your mind. The same holds true when it comes to behavior — by trying not to engage in a bad habit, our habits get strengthened rather than broken.

If you want to change your ways, ask yourself, What will I do instead? For example, if you are trying to gain control of your temper and stop flying off the handle, you might make a plan like "If I am starting to feel angry, then I will take three deep breaths to calm down." By using deep breathing as a replacement for giving in to your anger, your bad habit will get worn away over time until it disappears completely.

It is my hope that, after reading about the nine things successful people do differently, you have gained some insight into all the things you have been doing right all along. Even more important, I hope are able to identify the mistakes that have derailed you, and use that knowledge to your advantage from now on. Remember, you don't need to become a different person to become a more successful one. It's never what you are, but what you do.

HEIDI GRANT HALVORSON

Active vs. Passive Funds

A passively managed fund tries to mimic its benchmark index, while an actively managed fund tries to beat the market. 

What are actively managed funds?

With actively managed funds, the fund manager has the flexibility to choose where to invest and alter the composition of portfolio as and when necessary. Actively managed funds constantly seek investments opportunities to try to achieve better-than-average returns. 

What are passively managed funds?

Passively managed funds buy into the shares that comprise a specific index. The weightage of each asset in the portfolio is the same as the weightage assigned to it in that index. This style of fund management requires little interference from the fund manager. The performance of such a fund is largely determined by the markets. 

Also, it is important to know that all passively managed funds may not be index funds. There are quasi index funds that dedicate a majority of the corpus to the index but not the entire corpus and model based index funds that pick up stocks from various indices. Such funds will not imitate the market completely.

Is there a need for the two styles of management?

Passive investing is built on the premise that the markets are efficient. This implies that the current market price has already factored in all the available information about any particular security, leaving little or no scope to exploit mispricing of securities, since the prices already reflect their true value. 

On the other hand, active management is based on the premise that the market is not completely efficient. This in turn gives the managers of such funds scope to do better than the market. 

How do actively managed funds approach the market?

The fund managers of such funds typically work with a combination of investments that the manager perceives will beat the market. This stock/security selection is made effective by various actions like tweaking existing investments, timing the purchase and sale of securities, proactively looking out and acquiring potential investments. These funds are constantly monitored.

Is there any advantage in managing funds actively?

The primary advantage of an actively managed fund is that it provides flexibility. Such a fund also has the scope to diversify the investment portfolio which helps in mitigating risk. Active managers seek to build portfolios that try to outperform a fund’s market benchmark. 

What can you look out for in actively managed funds?

Actively managed funds frequently move in and out of stocks, so they incur higher trading costs. A lot depends on the skills of the fund manager and the robustness of the processes and systems of investments followed by the fund house. Given the dependence of these funds on the judgment of individual fund managers, monitoring an actively managed fund’s performance becomes imperative.

How do passively managed funds approach the market?

Passively managed funds invest in portfolios that are meant to imitate the market. These funds invest in stocks that comprise an index. The investments may replicate the weightage of the securities as per the index in order to deliver returns that try to match their index. This causes the performance of these funds to mimic the concerned index. They are not designed to perform any better than the market.

What can you look out for in passively managed funds?

There is an element of tracking error in such funds. One must bear in mind corporate actions, liquidity to be maintained and expenditure incurred by the fund. These elements cause a gap to emerge between the fund’s return and the index’s return and this gap is referred to as tracking error.

Corporate Culture

Everyday, a small Ant arrives at work very early and starts work immediately. She produces a lot and she was happy.
The chief, a Lion was surprised to see that the ant was working without supervision. He thought if the ant can produce so much without supervision; wouldn’t she produce even more if she had a supervisor?
So he recruited a Cockroach who had extensive experience as supervisor and who was famous for writing Excellent reports.
The Cockroach’s first decision was to set up clocking in attendance system. He also needed a secretary to help him write and type his reports.
So he recruited a Spider, who managed the archives and monitored all phone calls.
The Lion was delighted with Cockroach’s reports and asked him to produce graphs to describe production rates and to analyze trends, so that he can use them for presentations at Board Meetings.
So the Cockroach had to buy a new computer and a laser printer. He recruited a Fly to manage the IT Department.
The ant who had once been so productive and relaxed, hated this new plethora of paperwork and meetings which used up most of her time!
The Lion came to the conclusion that it was high time to nominate a person in charge of the department where ant worked.
The position was given to Cicada, whose first decision was to buy a carpet and an ergonomic chair for his office.
The new person in charge, the Cicada, also needed a computer and a personal assistant, who he brought from his previous department, to help him prepare a ‘Work and Budget Control Strategic Optimization Plan--- ( Means what?)
The Department where ant works is now a sad place, where nobody laughs anymore, and everybody has become upset.
It was at that time the Cicada convinced the boss, the Lion, of the absolute necessity to start a climatic study of the environment.
Having reviewed the charges for running the ant’s department, the Lion found out that the production was much less than before.
So he recruited the Owl, a prestigious and renowned consultant to carry out an audit and suggest solutions. The Owl spent three months in the department and came up with an enormous report, in several volumes, that concluded, ‘The department is overstaffed.’
Guess who the Lion fire first?
The Ant, of course, because she “showed lack of motivation and had a negative attitude.”
Thus Ant’s career is destroyed.
Every Corporate, every Family has their own culture. The word ‘Culture’ is very dangerous! Basically Cultures are formed for the progress of the people. But many times Cultures become hurdles for the people. There is ‘Culture Phobia’. Many Corporate and Families are trapped in this Culture Phobia.
Please check that your Company, Organization, Family has not become the victim of this Culture Phobia.

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What is the difference between amortization and depreciation?

Because very few assets last forever, one of the main principles of accrual accounting requires that an asset's cost be proportionally expensed based on the time period over which the asset was used. Both depreciation and amortization (as well as depletion) are methods that are used to prorate the cost of a specific type of asset to the asset's life. It is important to mention that these methods are calculated by subtracting the asset's salvage value from its original cost. 

Amortization usually refers to spreading an intangible asset's cost over that asset's useful life. For example, a patent on a piece of medical equipment usually has a life of 17 years. The cost involved with creating the medical equipment is spread out over the life of the patent, with each portion being recorded as an expense on the company's income statement.

Depreciation, on the other hand, refers to prorating a tangible asset's cost over that asset's life. For example, an office building can be used for a number of years before it becomes run down and is sold. The cost of the building is spread out over the predicted life of the building, with a portion of the cost being expensed each accounting year. 

Depletion refers to the allocation of the cost of natural resources over time. For example, an oil well has a finite life before all of the oil is pumped out. Therefore, the oil well's setup costs are spread out over the predicted life of the oil well. 

It is important to note that in some places, such as Canada, the terms amortization and depreciation are often to used interchangeably to refer to both tangible and intangible assets.

What's the difference between a bank guarantee and a letter of credit?

A bank guarantee and a letter of credit are similar in many ways but they're two different things. Letters of credit ensure that a transaction proceeds as planned, while bank guarantees reduce the loss if the transaction doesn't go as planned.

A letter of credit is an obligation taken on by a bank to make a payment once certain criteria are met. Once these terms are completed and confirmed, the bank will transfer the funds. This ensures the payment will be made as long as the services are performed.

A bank guarantee, like a line of credit, guarantees a sum of money to a beneficiary. Unlike a line of credit, the sum is only paid if the opposing party does not fulfill the stipulated obligations under the contract. This can be used to essentially insure a buyer or seller from loss or damage due to nonperformance by the other party in a contract.

For example a letter of credit could be used in the delivery of goods or the completion of a service. The seller may request that the buyer obtain a letter of credit before the transaction occurs. The buyer would purchase this letter of credit from a bank and forward it to the seller's bank. This letter would substitute the bank's credit for that of its client, ensuring correct and timely payment.

A bank guarantee might be used when a buyer obtains goods from a seller then runs into cash flow difficulties and can't pay the seller. The bank guarantee would pay an agreed-upon sum to the seller. Similarly, if the supplier was unable to provide the goods, the bank would then pay the purchaser the agreed-upon sum. Essentially, the bank guarantee acts as a safety measure for the opposing party in the transaction. 

These financial instruments are often used in trade financing when suppliers, or vendors, are purchasing and selling goods to and from overseas customers with whom they don't have established business relationships. The instruments are designed to reduce the risk taken by each party.