Principles versus Practices

In reading more articles from Jim Collins, I saw that he gives much of his focus towards delineating the important difference between principles and practices.

• Timeless Principles are things that you stand for. Your core values. The things that should never change even if they become a disadvantage to you. Like he says, if you lose your core values, then you will end up losing your soul: who you really are.
• Daily Practices consist of how you do things. They are the strategies and operations you implement to achieve your goals. These are the things that should never stop changing in our constantly changing world. As he says, refuse to change your practices then the world will pass you by.

Giving me food for thought, I started thinking what are my timeless principles and daily practices.

• Timeless Principles – I believe that time is the most valuable commodity that humans have. I want to trade as little of my time for money as possible. I don’t want to work the best forty years of my life and exchange it for a maybe ten to twenty years of comfort when I am old, frail, and can’t do jack cause I’ll probably be disease-ridden too. I don’t want to work for an employer that sticks me in a cubicle from 9-5, tells me what to do, when to work, when to get off work, when to eat, and how much my time is worth. I want to do something I am passionate about and is significant to me, and I don’t want to be chained by the limits of job compensation in order to accomplish it. I want to be financially free so I don’t need to worry about debt or my future. I want to retire by 35.
• Daily Practices – Many of these are constantly evolving and built to propel me further in accomplishing my goals…
  • Keep up with current financial conditions around the world
  • Soak up as much accounting and financial knowledge through books, discussions, and other mediums
  • Create yearly BHAGs (big hairy audicious goals) to fight off complacency
  • Review my accounts to make sure I am where I want to be
  • Keep track of my weekly discretionary expenses
  • Keep track of my overall net worth by tracking income and expenses
  • Automate certain expenses for efficiency so I can focus on the larger picture
  • Project paths to paying off liabilities and growth of assets to get a feel of the overall future net worth
  • Create budgets that are focused on investment/savings growth and revise as circumstances change
  • Have a plan of action ready for when I do retire
  • Calculate minimized expenses and reject lifestyle inflation
  • Breakdown my gross income and see where all of the cash flow goes
  • Construct an investment plan and stick with it
  • Constantly looking for mentors to learn from and expand the peripheral limited by my experience
  • Grab opportunities to have new experiences (especially ones that let you travel and learn other cultural values)
  • Applying the Pareto 80/20 rule and refusing to waste time on tasks that give little to no benefit for the amout of effort put in
  • Putting more emphasis of having experiences rather than stuff that ends up being junk

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