It's incredibly obvious, but usually neglected -- you need to spend less than you take in to accumulate cash.

Most people do not give this much (any?) thought, or at least don't take action on it. So, they tread water. Or worse, accumulate debt.

If you're able to spend less than you earn and bank the difference, your cash position goes up. This puts you ahead of the vast majority of people already.

But, then you can wind up in a tricky position.

Especially once you become good with money, you realize you can turn it into working capital at a pretty good rate. Someone who has spent some time learning the in's and out's of a few marketing channels, or technology, or throwing great events, or... whatever... can then turn free cash into useful production, which turns back into cash, at a good clip.

A consultant goes into a company and gets an assignment to improve sales.

He talks to various people in sales, and asks who the best salespeople in the company are.

There's pretty consistent agreement -- the best salespeople are Mary, Joe, and Matt.

It's not quite an axiom, but it seems like people unused to money who come to have a lot of it, shortly thereafter have no money again.

It's easy to understand why someone who wins the lottery and fritters it away goes down that path, but cash is just as dangerous in the hands of someone who is legitimately disciplined and working hard for their money, putting together good transactions, and building up a base of cash.

Money does all sorts of strange things to your psychology. Here are three big ones:

*It makes you think you're smarter than you are: when you've earned well, you tend to think it's because you're brilliant. You systematically underestimate the effects of market conditions and being in the right place at the right time, both of which can be tricky to replicate without large amounts of experience (and, even then).

*It makes you think you've reached a new level permanently: once you've gotten good at earning money, it's therefore permanently easier. This may or may not actually be true, and almost never to the extent you think with the first successes you have.

Leo Babauta has inspired millions through his writing on Zen Habits, where he's shared his experiences in building up great habits, cutting clutter and junkfood from his life, learning about great parenting and building a wonderful family, eliminating debt, increasing his income and productivity, and living a life that's more happy through and through.

Leo is now graciously participating in GiveGetWin with a practical class on "action-oriented contentment", and he sat down with Sebastian Marshall to share his thoughts on what motivates him, around what contentment is, on trusting yourself, on being compassionate and compassion as an impetus for action, on self-compassion and treating yourself well, and happiness in general. Enjoy:

"Practical, Action-Oriented Contentment and Compassion" by Leo Babauta, as told to Sebastian Marshall

I used to get distressed if I was working on something in business or getting into a conversation, and then things just dropped off. I worried that I screwed up or did something wrong. Maybe whoever I was talking to hated me, even?

But no, it's not like that. Nobody hates you. Everyone's just busy, and people you're looking to work with are probably more busy than normal -- after all, you found out about them and want to work with them, meaning they're doing something cool, which makes them more busy than normal.

When you don't get a reply from someone or something falls off, it's usually not because people hate you. They most likely didn't judge you harshly. Probably they just got busy. I've got emails and calls to return from people I really like and know pretty well that I haven't returned yet, because I've got a long list of other stuff to do too. Everyone at least somewhat busy has stuff like that.

That doesn't mean you give yourself a pass on whatever it is -- if you write interesting compelling emails or calls, if you get introduced through someone trusted and well-known, and you can find a way to stand out and make it really interesting right away (not always easy!), then you've got a better shot.

But, even then. People are busy, things drop off. Nobody judged you harshly; nobody even cares. Followup a few more times. Or contact someone else. But don't get down on yourself. People are busy, and you've got to followup with them a bunch to get things done. It's just how things are and is no reflection on you. No reason to feel bad. You just hustle some more.

Instead of accepting my inbox as the status quo, today I started to think about why it isn't empty.

My email usually isn't empty.

Why?

*Partially due to not having quite perfect discipline on the kinds of processes (a la David Allen's Getting Things Done) that reliably get through email*Partially through getting a large volume of email*Partially through not having better systems in place*Partially through not having cultivated faster decisionmaking (though, I'm pretty fast)*Partially because having email in the inbox is just the default state, albeit a very slightly unpleasant one.

All of those I'm aware of. But perhaps one more -- I hadn't really sat and reflected on why have this email specifically in my inbox.

Marvelous book. Brilliant in its simplicity, but with lots of immediately actionable insights. I'm three-fourths through right now (it's a short read, maybe two hours?), and tremendously enjoying it.

It's using the term economics in the classical sense to mean household management, going through points about the nature of wealth, using assets wisely, using time well, living well, and so on. It's primarily a recollection of a dialog between Socrates and Critoboulus.

I'm reading this translation, which is free on Kindle and totally decent, though the spacing/layout of footnotes is a little messy. 

It's short enough that I'd say just jump in -- the pacing starts a little slow, but there's actionable insights in there. Recommended.

When I started in contracting, I used to brand our company and work with "we have the very best service in the world, we'll do whatever you need to get things right."

Eventually, I got away from that. While I liked solving client challenges and working really hard to get a great ROI for clients, it didn't ring correctly to me. Something about how we said it, and how we did it, made things not quite right.

We always liked going the extra mile, and we offered a 100% guarantee on our work (sometimes even 100%+) to take the risk away from the client. We priced our services aggressively below market and looked to demonstrate results, in order to get repeat business. And indeed, we did -- it was just a few clients that provided the huge bulk of our revenue by coming back to us with orders for 5x and 10x larger than their original, and eventually getting to a trusted point where they'd ask for work over email and say "just bill me whatever, you guys have always been fair." That's a nice feeling.

Date: 4/6/2013

Time: 11am-2pm

Location: Yoyogi Park

Cost: Free

Thanks, C. Dense email here, lots of things going on. A few thoughts --

1. You're not underpaid because you don't have a degree; you're underpaid because you've either (1) been unable to show others tangibly your ability to perform highly, (2) don't have the relevant contacts, connections, and/or hustle to look for a higher paid position (which is much easier with connections, but connections can be replaced with just hustling more, which generates connections), and/or (3) you're not good at negotiating.

I won't take one of those extreme positions and say degrees don't matter; they do. But companies don't care about their people's credentials anywhere near as much as they care about results. Even if 90% of companies in the particular space you wanted to work were very credential focused (and in programming, it's much lower than that at the best companies to work), you'd still be able to get a great position by just contacting enough people. 

So, ask yourself: how's your Github look? Do you write publicly? Do you have documented work you did a good job on? Do you regularly go out and meet people, and talk about the space you work in? Those are what get you paid more highly, not a piece of paper.