Innovation Is A State Of Mind

You probably know the myth of innovation as a sudden flash of insight that comes from nowhere. We read about that "aha" moment, or that light bulb turning on in the mind of some inventor or innovator, and this is true to an extent. Einstein really did get flashes of insight while shaving in the morning. However, he was of course working on the particular problems he had insight into, and he didn't suddenly have ideas for new kitchen gadgets or movie plots.

Einsteins innovations, in other words, no matter how "sudden" the original ideas were, came from past and present mental work. It is like a singer who works at his craft for ten years and then becomes an "overnight success." Innovative people only have "sudden" new ideas because they have habitually worked and thought in certain ways for some time. If you want to become an innovative thinker, then, why not start cultivating those mental habits?

Mental Habits Lead To Innovation

Problems can be opportunities. "Problem" may have a negative connotations, such as being a hassle or stressful, but any problem can lead to an innovation that improves our lives. Not knowing the time lead to clocks small enough to put on our wrists. Nasty diseases lead to sanitary sewer systems. Start looking for opportunity in every problem. Even a mundane problem like not having enough storage space could lead to a new innovation. You may just build a plywood floor in the attic, but you could invent a new type of outdoor storage unit.

Innovation begins with understanding the key elements. Metal, wood or glass are not key elements of a door to an innovator. A way to get in, a way to keep others out - these are key elements. Begin with these, and soon you're imagining new ways to make a door. You could design a door that is opened by your voice (nice when your hands are full), or one that shuts and locks itself when anyone else approaches. Think of the key elements in things.

Attitude helps innovation. The creative problem-solving technique of concept-combination involves combining two ideas to see what new idea or product results. The crucial point is that you assume there will be a useful new idea. Starting with that assumption, your mind will work overtime to produce something. A shoe and a CD have nothing to do with each other, but it took just a minute to imagine a CD player with headphones that only plays the music correctly if a jogger maintains his ideal pace. When you assume there is something there you'll often find something.

Playfulness helps innovation. A playful mind is a creative mind, and while high IQ doesn't correlate with creativity, put it together with playfulness, and you have an Einstein. Remember, he imagined himself riding on a beam of light in order to arrive at his theory of relativity. Why not start playing with ideas and things, in your mind and in your surroundings. Innovation should be fun.

Monitoring Your Finances Reveals Priceless Lessons

A most important element for building wealth is to measure it. The people I know that have continually increased their net worth track it in order to direct it and stay motivated to reach ever higher financial goals. Seeing the quantifiable results of your spending and investing decisions is the first step to take control of them. Contrarily, the people I know in the worst financial shape have no idea where there money is spent and are too afraid to know what their net worth might be because it won't be pretty. Which extreme more closely matches your attitude? As Dr. Deming says, "You can't manage what you don't measure." Think of it: if you were seriously wealthy, you'd spend some time every week managing some aspect of money. Well, if you want to improve your financial condition, a beginner version of a money management and tracking method is required. In addition, the more money you build up, the more financial assets and obligations there are to monitor. If you don't have your financial tracking in place before you acquire them, I'd bet that you won't own them for long.

If you don't see and feel the gains and losses of your financial decisions – you are playing the complicated money-game of life without any scorecard. This is how so many people with decent paying jobs and insurance still get into financial trouble. You need to have navigation reference points to know if you are steering toward building wealth or destroying wealth. It is by monitoring your net worth that you'll start to uncover the financial impact and consequences of your decisions.

The starting point for financial measuring is a simple statement of net worth (or balance sheet). If you have never heard this term, it is a list of the current market price of everything that you own and what you owe to others. The difference between these two numbers is called your net worth, and this is the number that you want to measure and increase every single month.

As with a business, once you start measuring the financial consequences of your behavior you can begin making your own personal spending rules. For example, if most of your monthly income is spent at restaurants, try making a rule that you only go out twice a week. If you're spending too much money on gasoline you need to find several ways to reduce it. Simple insights and subsequent rules like these will help increase your net worth, which will lead to bigger insights and develop into bigger gains.<

If you find that you have a lot of debt that is decreasing your net worth, or possibly a negative net worth, then what rules about debt are you going to create for yourself? After you get some money saved, where are you going to put it? How much time are you willing to spend monitoring it? How much effort are you willing to exert to educate yourself about investing? These questions will aid in building your investing rules. Eventually you'll have rules for spending, saving, employing debt, and investing that will shape your personal plan for you to start moving your net worth in a sharply positive direction. Think about adding a rule to read a new financial book each year. Your financial statements and financial rules can be as simple or sophisticated as you want to make them. If you keep making even baby steps forward, it may become no big deal to have specific rules for retirement planning, tax implications, entity structuring, evaluating investment real estate, checklists for buying mining companies, or selling a company you've built.

When you have calculated your first statement of net worth, you start having the ability to plan for purchases and payments. As a simple example, if your auto insurance bill arrives once a year, you can calculate how much money that you need to set aside each month to easily pay it when it arrives. Or if you are getting a new car, you'll be a lot happier planning for the initial costs before you get squeezed at the end of the month and end up paying a few bills late.

After you get comfortable with a net worth statement, you can move on to an income & expense statement. Then move on to making projections for all of your statements. And creating scenarios such as: How much is a reasonable goal for retirement income for you? How much net worth will you need by when? How are you going to increase your income, increase your savings, increase your investment returns? The answers will be built upon the financial habits, tools and education that you'll develop, but it can all start with your first net worth statement.