Connect with us

Business

Finance: A formula for prosperity

Published

 on 

PHUKET: There is a fantastic equation that can be used in almost any decision you make in life.

I learned this from the supplement company that I work with but it also applies to financial planning, life planning, and many other areas in life. The equation is simply X=Y.

In the equation we can substitute any action for X so that Y is the result of that action.

An easy example: if you wish to lose weight and get more fit, then Y is ‘losing weight’, because that’s the desired result. X is the action you have to take to achieve the weight loss, such as eating healthier and exercising more.

If you are not getting enough Y – the pounds aren’t coming off – then you simply haven’t done enough X, so you need to exercise more and control your diet better.

If we substitute ‘investment’ for X and ‘return’ for Y, we can then use this framework to decide the best option between competing alternatives when considering what to do with our money.

For example, consider investments A and B (X) both return $100,000 (Y). Investment A requires $1,000,000 and investment B only $500,000. As Y is the same, we choose from the options of X.
I know this is a simple example but it demonstrates the point that when Y is the same we choose the easier X.

However, if both investments required $500,000 but A returned twice as much as B, we would obviously choose A. So if X is the same we will choose the better Y.

Another example of this could be where X and Y are equal but one X is less risky. In that event we choose from whichever X has less risk.

Of course, when investing, we don’t always have all the information that we need, but thinking along this framework can aid the decision making process.

This is even more the case if we have a very clear Y. Knowing exactly what you are trying to achieve makes it much easier to choose the best path to get there.

If you get to the train station without knowing where you want to go, you won’t know which train is right. Choosing the fastest train may simply put you even further in the wrong direction.

When planning our life, or our retirement, it is very important to make our goals as clear as possible, and then explore as many different paths as possible to get us there.

If our Y is very clear, then we can examine and choose the best X to get us there. If we are not getting enough of the result we want, it is often a case of us simply needing to increase the X.

In finance terms, that may mean we need to save more money out of our monthly pay packet. Using this framework may also help us decide if that money is best put towards real estate or some kind of financial investment.

In any event, it is a nice framework to substitute into any area of life, even our marriage. If a happy marriage is our desired result, we can look at how we spend our Friday night as a choice between various cases of X and how they will affect the Y we have chosen.

Often our actions don’t always match up with what we really want in life, simply because we don’t take the time to think things through all the way.

David Mayes, MBA, resides in Phuket and provides wealth management and life coaching services to expatriates around the globe, specializing in UK pension transfers. He is a regional representative of the Faramond Group, located in Kuala Lumpur, Malaysia. Faramond UK is regulated by the FCA to provide advice on pensions and taxation. He can be reached at 085-335 8573 or david.m@faramond.com

— David Mayes

 

Get more from The Thaiger

Join the conversation and have your say on Thailand news published on The Thaiger.

Thaiger Talk is our new Thaiger Community where you can join the discussion on everything happening in Thailand right now.

Please note that articles are not posted to the forum instantly and can take up to 20 min before being visible. Click for more information and the Thaiger Talk Guidelines.

Archiving articles from the Phuket Gazette circa 1998 - 2017. View the Phuket Gazette online archive and Digital Gazette PDF Prints.

Follow Thaiger by email:

Kanchanaburi3 mins ago

Kanchanaburi school director found dead in canal

Pattaya1 hour ago

Small children in Pattaya learn to get help when locked in hot cars

Chiang Mai2 hours ago

Heavy rains collapse part of Chiang Mai’s ancient city wall

Sponsored2 days ago

From regulation to cannabis delivery, here’s what you need to know about cannabis in Thailand

Events2 hours ago

6-hour whiskey drinking contest draws criticism

Pattaya3 hours ago

Pattaya official urges mayor to expand legal nightlife zone

Thailand4 hours ago

Things you can do in Thailand during the rainy season

Join the conversation on the Thaiger Talk forums today!
Indonesia4 hours ago

Earthquake in Indonesia felt throughout southern Thailand

Patong5 hours ago

Foreign women rescued from rip current in Patong

Thailand21 hours ago

Woman smashes up her 1.5 million baht car over feud with Ford Thailand

Bangkok22 hours ago

1.8 billion baht in donations at the Erawan shrine in 2022

Phuket23 hours ago

Phuket welcomes 4 million tourists in 8 months

Tourism23 hours ago

Carnival Magic theme park opens in Phuket to fanfare

Video24 hours ago

Ask the Thais | Stereotypes, Racial Profiling, and Discrimination

Coronavirus (Covid-19)1 day ago

Thailand watching BQ.1.1 variant as Covid rules ease

Thailand1 day ago

Military conscription in Russia could benefit Thailand’s economy

Thailand1 year ago

Morning Top Stories Thailand | Police to end protests, Human Trafficking | September 14

Thailand2 years ago

Thailand News Today | Thai Airways in rehab, All go for Songkran | March 4

Tourism2 years ago

Phuket’s nightlife. Yes, bars and clubs are still open | VIDEO

Phuket2 years ago

Thailand News Today | Covid passport talks, Thai Airways heads to court | March 2

Tourism2 years ago

Phuket Thai food treats you need to try | VIDEO

Thailand2 years ago

Thailand News Today | Bars, pubs and restaurants ‘sort of’ back to normal | Feb 23

Tourism2 years ago

In search of Cat & Dog Cafés in Phuket Town | VIDEO

Thailand2 years ago

Thailand News Today | Gambling crackdown, Seafood market to reopen, Vlogger challenge | Jan 21

Thailand2 years ago

Thailand News Today | Covid testing for visas, Business impact, Vaccine approval | January 19

Thailand2 years ago

Thailand News Today | Weekend Bangkok bombs, Thailand fires, Covid update | January 18

Thailand2 years ago

Thailand News Today | Stray car on runway, Indonesian quake, 300 baht tourist fee | January 15

Thailand2 years ago

Thailand News Today | Governor off respirator, sex-trafficking arrest, condo prices falling | January 14

Thailand2 years ago

Thailand News Today | Chinese vaccine, Thailand ‘drug hub’, Covid update | January 13

Thailand2 years ago

Thailand News Today | Bangkok may ease restrictions, Phuket bar curfew, Vaccine roll out | January 12

Thailand2 years ago

Thailand News Today | Covid latest, Cockfights closed down, Bryde’s Whale beached | January 11

Trending