Tuesday, 11 March 2008

Some definitions

I've come across some interesting definitions of concepts over the past many years:

Identity: "The meaning you give to the situation in which you find yourself"

Intellectual honesty: "The ability to see the world as it is and not as you would like it to be"

Tactical and Strategic decisions:
Tactical - A decision you take when you have to take a decision.
Strategic - A decision you take when you don't have to take a decision (i.e., no urgency).

Assets and Liabilities:
An Asset is something that puts money in your pocket.
A Liability is something that takes money out of your pocket.

I first heard the definition of identity when I took a course called "Careers, Roles and Identity" at management school. It was Prof. Indira Parikh who taught me that. I thought it was humbug at first, but I have since grown to appreciate the truth of it.

I don't remember where I read the definition of intellectual honesty, but I must say it has rung true for me from the beginning. That's why I've never forgotten it.

A colleague at work mentioned the difference between tactical and strategic decisions, but didn't say where she had heard it.

The definitions of asset and liability are from Robert Kiyosaki, author of Rich Dad, Poor Dad. They're very different from the accounting definitions of the same terms, but probably more important from a wealth-building viewpoint. In accounting terms, a new car is an asset. From Kiyosaki's viewpoint, it's a liability. Kiyosaki's is the thinking one needs to adopt in order to make sound savings and investment decisions. [People have asked why I drive the same car that I bought nearly 10 years ago (second-hand, of course). It's partly because I'm influenced by Kiyosaki thinking. If I had an extra $20,000, I would rather use it to reduce my mortgage than to waste it on a new car. My current one does a perfectly acceptable job of getting me from A to B. I've made some horrific financial decisions in my time, of course, but my car purchase thankfully wasn't one of them.]

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