SUMMER
2020 TURBO CHARGE YOUR PENSION WITH THE POWER OF COMPOUNDING WORLD ECONOMIC & MARKET OUTLOOK Graham O’Neill
6 SECRETS OF HIGHLY MOTIVATED PEOPLE DEVELOPING MENTAL TOUGHNESS USING ANCIENT STOIC CUSTOMS YOUR EXPECTATIONS FOR EXERCISE ARE STRESSFUL 1 MINUTE SELF CARE TO REDUCE STRESS
TABLE OF CONTENTS 3
Turbo Charge Your Pension With The Power of Compounding
4
World Economic & Market Outlook - Graham O’Neill
8
Business Briefs
10
6 Secrets of Highly Motivated People
14
Developing mental toughness using ancient stoic customs
16
Your Expectations for Exercise are stressful
18
1 Minute Self Care to Reduce Stress
21
Meet the team
22
Range of services
Welcome to the Summer 2020 newsletter.
As always this issue contains a variety of articles which we hope will be of interest to you and your business. If you have any queries please do not hesitate to contact us and one of our highly experienced team will be happy to assist you.
Dervilla and Sarah.
TURBO-CHARGE YOUR PENSION WITH THE POWER OF COMPOUNDING With time and patience, compounding and tax relief can give your pension efforts a massive boost. Find out more about this little-known financial marvel... When it comes to pensions and retirement, the key to making serious money is to start as early as you can. Why? Because the sooner you begin, the more time your money has to benefit from a phenomenon known as ‘compounding’ – reportedly once called ‘the Eighth Wonder of the World’ by a certain Mr A. Einstein.
TAX RELIEF Income tax relief is still available on contributions made personally to a pension, 40% of the contribution for a top rate tax payer, or 20% for a standard rate tax payer. For a higher rate tax payer, this is equivalent to the government topping up your net pension contribution by up to 67%! In addition to income tax relief on any personal contributions, employer contributions to a Company Pension are also tax deductible and no benefit in kind is appropriated to the employee. No BIK means, no income tax, no PRSI & no USC – potentially around 50%.
HOW COMPOUNDING WORKS Often known as ‘compound interest’ or ‘compound returns’, compounding works a lot like a snowball rolling down a mountain. While we may start off with a small, fist-sized ball, we can end up with something much bigger as it gradually gains momentum.
Age*
5% p.a. growth**
7% p.a. growth**
Net Cost***
€250 p.m. 35
€158 853,19
€228 402,97
€54 000
40
€119 641,90
€160 509,36
€45 000
45
€86 717,32
€108 906,85
€36 000
50
€59 071,51
€69 686,39
€27 000
€500 p.m. 35
€317 706,37
€456 805,95
€108 000
40
€239 283,79
€321 018,72
€90 000
45
€173 434,63
€217 813,70
€72 000
50
€118 143,02
€139 372,78
€54 000
€750 p.m. 35
€476 559,56
€685 208,92
€162 000
40
€358 925,69
€481 528,07
€135 000
45
€260 151,95
€326 720,55
€108 000
50
€177 214,52
€209 059,16
€81 000
START NOW TO MAKE THE MOST OF COMPOUNDING
€1000 p.m.
The phenomenon of compounding can really help your money grow. As we’ve seen above, however, you need to give it plenty of time to allow it work its magic – so if you can, it pays to start sooner rather than later. As the saying goes, the early bird catches the worm. Or in this case, the returns.
35
€635 412,74
€913 611,89
€216 000
40
€478 567,58
€642 037,43
€180 000
45
€346 869,27
€435 627,40
€144 000
HERE’S HOW THE CONCEPT WORKS IN PRACTICE...
50
€236 286,03
€278 745,55
€108 000
• Let’s say you put some money into your pension. • After a year, you’ll have earned interest on that original sum. • In the second year you earn interest on both your original capital plus the first year’s interest. • Then in the third year, you earn interest on your original capital plus the first two years’ interest. • And so it goes on, like a snowball gathering size and speed.
The value of your investment may go down as well as up. Warning:
If you invest in this product you may lose some or all of the money you invest. These products may be affected by changes in currency exchange rates.
Assumptions: *Normal Retirement Age 65 **less AMC’s of 1.5% *** 40% income tax relief on premiums
Warning:
The above example is hypothetical and does not represent any investors particular experience. The above example excludes the impact of tax.
DLS Capital Management is regulated by the Central Bank of Ireland
3
MARKET UPDATE Economic Response to COVID-19
28th May
2020
Markets have continued to make progress in May, encouraged by further evidence in the Developed World of an easing both in COVID related deaths, and more importantly new cases. There is strong evidence that the lockdown measures put in place in Europe have delivered the desired results with estimates of many countries reinfection rate, the oft quoted ‘R’ below 0.5. Countries such as Denmark and Germany where restrictions have eased more significantly have not seen a significant spike in infections, with as a result markets believing an end is in sight to the recessionary conditions gripping Europe during the second quarter. Whilst comments about a worse recession than the Global Financial Crisis may dominate news stories, markets have been prepared to look through this to next year and beyond as there is the belief that the second quarter will mark the trough in economic activity.
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Globally, airlines, hotels and hospitality remain the sectors hit hardest and as a result those most dependent on government support measures to recover.
In the States, with a November election in the offing, Trump has encouraged the economy to re-open and to date early indications suggest a strong rebound in economic activity. In the US, the main risk revolves around a possible second wave and the impact of the early resumption of economic activity in some States certainly compared to the situation in Europe, will not be able to be accurately judged for a further four to five weeks at least. However, tentative signs across the developed world are that economic activity levels are picking up, albeit from extremely depressed levels.
ECB president Christine Lagarde has warned that in Europe GDP is expected to shrink by 8-12% which would dwarf the problems of the Financial Crisis. Within Europe countries with the most fiscal space and least exposure to hardest hit sectors such as tourism are likely to be able to emerge from the pandemic in better shape on a relative basis. In the last few days European markets have been encouraged by the call by Brussels to borrow €750bn for a recovery fund with European Commission president Ursula von der Leyen urging a transformation of the EU’s central finances that will allow it to raise unprecedented sums from the capital markets and hand out the bulk of the proceeds as grants to hard pressed member states. This will involve transfer payments from Northern Europe to Southern Europe and as yet although this proposal has been agreed by Germany and France, there is opposition from what have been described as the Frugal Four: The Netherlands, Austria, Sweden, and Denmark. For this to be enacted the EU still faces the difficult task of forging a consensus across its 27 member states as there is also likely to be some form of opposition from countries in the East such as Poland and Hungary. THERE IS ALSO SOME UNCERTAINTY WHEN THESE FUNDS WILL ACTUALLY BE DISPERSED WITH SOME SUGGESTIONS IT WILL NOT BE UNTIL LATE 2022/EARLY 2023. THERE WILL ALSO BE SQUABBLES ABOUT TO WHOM THE MONEY ACTUALLY GOES. The EU has proposed that new taxes and levy’s including a reform of the EU carbon market and a levy on large businesses which will in effect be a tax on big tech companies such as Facebook and Google could fund much of the bill. These measures, if they are enacted, will in the short term benefit the hardest hit sectors most, as has been seen in recent days in stock market performance.
In China, the economy appears to be returning to some levels of normality and, for example, in Hong Kong, restaurants are now packed as if a war has ended with face masks not required to be worn whilst diners are eating. Estimates suggests China manufacturing activity has returned to around 90% of peak levels, although part of this is likely to be a catchup to solve the supply chain issues which cropped up at the start of the COVID-19 outbreak. A clear concern for China is whether the end demand from Western economies will be strong enough to support these levels of economic activity. China’s share of global manufacturing output which was below 5% in 1980 is around 20% today. Within China’s Service sector, activity has been slower to re-bound, although still significantly off its lows. To date, the view that it is easier to re-boot a manufacturing orientated economy than a service one seems true, with so much of the service sector dependent on businesses which either require large amounts of human interaction, or significant numbers of people being present. The UK is later in the crisis as lockdown measures were put in place relatively late, and the test and trace system which was abandoned in mid-March has meant controlling the disease has been more difficult than in most other countries. This is now promised from June 1st. However, restrictions are now being eased for many sectors, although offices are likely to remain quiet until after the summer months at least.
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Vaccines & Treatments
Central Banks Central Banks have been at the forefront of recognising the severity of this downturn and that an unprecedented event such as COVID-19 requires unprecedented responses, not just from the Central Banks, but also governments. Fed Chair Powell has cautioned that there could be lasting impacts on the US economy and investors should be sceptical about economic modelling as this is an unprecedented situation which no one has enough data on to accurately forecast outcomes with any degree of certainty. Within the States larger companies seem better placed to react to the pandemic than SMEs and this can be seen with the huge divergence in performance between, for example, large tech and their median US company with the median company in the US still down over 15% (Russell 2000) despite the NASDAQ hitting positive territory year to date.
There has also been reasonably positive news on the medical front. In mid May Moderna, the Boston based biotech company reported its potential vaccine boosted the immune system of participants to the same or higher levels of protection as patients who had recovered from the disease. Whilst the number of participants in the early stage trial was low, two positives were that the vaccine worked effectively in its lowest dose format, and furthermore there were no serious side effects amongst patients. This vaccine candidate is known as mRNA-1273 and with the vaccine showing only minor side effects was welcomed by the market with sentiment improved globally. Moderna was the first US company to put a vaccine into human trials, creating the first vials in just 42 days after the receipt of the genetic code of the vaccine, something previously unheard of. Its messenger RNA approach allows it to effectively programme a vaccine, although this is ground breaking medical science and therefore not previously approved by any Regulator. Moderna is now expected to start a large Phase 3 trial in July. Unlike most vaccines which show the bodies immune system an attenuated version of the virus, Messenger RNA translates a protein from the virus into human cells and shows it to the B cells that secrete antibodies. Antibodies wane over time, so the more antibodies that are created at the start the more likely they are to remain effective for longer.
Oil On the commodity front, the oil price is likely to be supported by the re-opening of the US economy ahead of its important driving season.
There is also reported to be continued progress on the vaccine being developed by Oxford University which Astra Zenneca are looking to put into full scale production and China has also announced that a vaccine has also entered human trials. Never has science advanced so much in such a short period of time to combat an epidemic, but research groups in China in particular have spent years working to combat similar Coronaviruses such as Sars and Mers. This accumulated knowledge has allowed scientists to advance at unprecedented speed. After the positive news reported by Gilead on its Remdesivir drug treatment this has also been adopted in the UK and some other European countries. Remdesivir seems most effective in treating non-serious cases and has also effectively shortened patients’ time in hospital who are receiving the drug. Other cocktails of treatment often based on drugs originally developed to combat Ebola or Aids are also now being trialled. This includes a triple antiviral therapy in Hong Kong which has shown promise. Clearly, a vaccine is important to allow the world to return to normality, but progress on the drug front should not be underestimated if effective early treatment can prevent patients from becoming severely ill, or in other words, something which can significantly reduce the mortality rate.
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Consumer Spending
Geo Politics
Leading economist Gavyn Davies has commented that attempting to make sense of this recession is like peering through a thick fog. In other words, to fully understand its nature full data for second quarter GDP, which is published in July, will need to be seen, together with the third quarter economic upturn. Due to income support measures globally this recession is unusual in that whilst consumer spending has slumped it has not been accompanied by declining personal incomes and in fact has seen a surge in savings. Whilst some estimates suggest US second quarter GDP will fall at an annualised rate of over 40% and unemployment rates may rise by as much as 20%, lost wages have been by and large made up by government unemployment benefits in the Developed World. Typical recessions show a squeeze on real disposable income which causes a slowdown in consumer spending, whilst savings ratios remain little changed. This recession is different. Within the US the Cares Act has resulted in disposable income being supported and in fact Goldman Sachs estimate that in the States 75% of the newly unemployed will receive more in government payments than they previously earned in wages. This is an unprecedented change in US public policy.
After a strong run in stock markets, and with the US election due in November, President Trump has chosen to escalate trade and geo political tensions with China. The Financial Times leading economist, Martin Wolf, has commented that history suggests that a threat to globalisation can have ominous results. In the early 20th Century tensions between Germany and other European countries resulted in the First World War. This was a period when the relative economic might of the UK (the established super power) fell versus that of Germany, Russia and the US. It took place in an era of economic globalisation and rapid technological innovation. Latecomers to the economic party which was Germany then and China today are unlikely to accept permanent disadvantage looking at history. It is clear that China does not accept the West’s view that the post 1945 world is a permanent arrangement and this is more understandable looking at China’s share of global GDP in 1870, which at around 17% dwarfed the UK and US which was only around 9%. Back then, Germany was determined to enjoy its place in the sun, and today the same is true of modern day China where President Xi is determined to restore China to what he believes is its rightful place in the world after a century of foreign humiliation, something which is as popular with the Chinese population as anti China feeling is with a majority of US voters. Wolf cautions that a conflict which began in Europe in 1914 and took in most of the world did not finally end until 1945 when Europe, East Asia and the global economy was in ruins. Hopefully, this apocalyptic outcome can be avoided.
Despite this income support, because of government restrictions, consumer spending has collapsed in Service sectors and also many discretionary goods such as autos. There are now estimates in the States the savings ratio could well rise to above 20% of household income. This type of pattern is being seen throughout the Developed World, so a key question for the economic recovery is how much of this increased savings rate will be reversed as the lockdown is eased. In other words, will consumers go out and spend, meaning that pent up demand helps drive a more robust economic recovery than many expect. Previous work on pandemics, as referenced in a previous article (Pandemics and Interest rates-What next-April 2020) based on work undertaken by the University of California Davis, suggests that saving rates post pandemics remain higher than occurred previously as consumers either take precautions against a resurgence of the disease or rebuild lost savings where these have occurred.
Globalisation Post the Financial Crisis some aspects of globalisation have been under pressure, a subject referenced in the paper ‘If globalisation is so good, why has it become unpopular?’ written by IRC in the summer of 2018 and updated last year. With the US now announcing it will no longer consider Hong Kong autonomous from China, trade tensions are likely to escalate ahead of the election and could well result in an increased focus by markets on Geo Politics at a time when the world needs coordinated efforts to restore economic activity in the post pandemic period.
Although part of the decline in spending has been involuntary due to the closure of restaurants and many stores, big ticket items may take longer to recover. Another test for global economies will be when the emergency unemployment benefits finish which will be the end of July in the States. It will be important for Central Banks to continue their high levels of fiscal stimulus, which in the US has been estimated at around 13% of GDP, particularly when emergency pandemic payments end and many households are faced with unemployment rather than being on furlough. How governments wean populations off wage support will be a critical factor for economies in the second half of 2020 as certain hard hit sectors are unlikely to return to anything like normal levels of employment for the remainder of this year at least, with a vaccine necessary for full recovery in these parts of the economy.
Xenophobia Xenophobia is a long used tactic by political leaders under pressure, and a paper by the Federal Reserve Bank of New York argues that the Spanish Flu pandemic in 1918-20 was correlated with societal changes in Germany which ultimately resulted in extremist voting, as foreigners were blamed for the large numbers of deaths and ultimately the election of the Nazi Party.
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SUMMARY Markets are clearly now prepared to look through the problems of this year in the belief that even if a full recovery takes two years corporate earnings in 2022 will be back at previous peaks. In markets outside of the States valuations remain relatively attractive with, for example, estimates of the non-US Shiller PE having fallen to around 11x from 17x and in both Asia and Emerging Markets together with Japan price to book valuations for equities versus history remaining attractive. One risk is permanent damage to either consumer or business sentiment resulting from the pandemic, meaning a full recovery is not achieved even over two years with this being evidenced to date by a rise in the savings ratio. Clearly, it is too early to see whether either consumer spending or corporate capex has been permanently damaged as with so many businesses shut down by government directive, spending plans by Chief Executives cannot even be ASSESSED.
In the short term markets have clearly had a good run and with the increased concerns about geo politics and the possibility of a resurgence of the disease in the US after a fairly rapid opening up of its economy, a trading range of the S&P 500 in the 2600-3100 level looks likely to be maintained for some months. Catalysts to break this on either the upside or downside would include clarity on the economic rebound, news on vaccines or medical treatments, or a serious escalation/de-escalation in trade tensions between the world’s two super powers of the US and China.
THE MARKETS ARE PRICING IN AT THE HIGHER END OF THE TRADING RANGE A WORLD NEARER FULL SPEED THAN HALF SPEED MEANING WITHOUT A V SHAPED RECOVERY MARKETS WERE LOOKING STRETCHEWD. HOWEVER VACCINE NEWS WILL REMAIN A MARKET MOVING EVENT & ANY POSITIVE NEWS HERE WILL LIKELY OUTWEIGH ANY DISAPOINTING ECONOMIC DATA AS IT WILL ENABLE MARKETS TO SEE THROUGH THE VALLEY WITH GREATER CERTAINTY AS THE MISTS OF UNCERTAINTY ARE BLOWN AWAY. AS OF TUESDAY JUNE 9TH THE S&P RELATIVE STRENGTH INDICATOR AT 74 WAS EXTREMELY OVERBOUGHT LEVELS, THE PUT/CALL RATIO AT ITS MOST OPTIMISTIC ON MARKETS FOR A DECADE AND THERE WERE STORIES OF DAY TRADERS SPECULATING ON THE MARKET WHICH SUGGESTED A LEVEL OF MARKET FROTH. IN COMING MONTHS THE US ELECTION AND BLACK LIVES MATTER WHICH IN ITS WIDEST FORM IS ABOUT INEQUALITY COULD ALSO BECOME IMPORTANT MARKET DRIVERS.
Western economies have definitely seen through the worst stage of the Phase 1 of this pandemic, although clearly there remains the risk of a second wave when the northern hemisphere hits its winter. The containment of the virus in Australia and other warmer countries suggests the summer months in the northern hemisphere are not likely to be a period of extreme risk and justify easing lockdown measures in a relatively timely manner. The emerging world continues to suffer problems with its efforts, or through its lack of efforts to contain this pandemic, with India now seemingly giving up on its lockdown due to economic necessity and this country, together with Brazil, Indonesia and Mexico, seemingly moving to a strategy of herd immunity driven by economic necessity. There may well be a combination of different types of recovery depending on the region and economic sector. Whilst markets are today focused on an improving outlook for economic activity and corporate profits, geo politics will once again need to be closely watched as it was seen during 2018 that protectionism is an economic extension of nationalism and if such policies are stepped up, can pose a threat to economic activity and corporate earnings in normal times. It is unlikely President Xi will sit back and allow America to make the running on this with no form of response.
G O’NEILL 14.06.2020
Graham is an investment researcher of international note and has been working in this area for over 20 years. He began his career in the stock broking industry before becoming an institutional fund manager where he practiced both in Ireland and the UK where he worked in senior roles with a number of institutions including Royal Life holdings, Guardian Royal Exchange and Abbey Life. Throughout his career, he has managed multi-million Euro funds and developed innovative investment fund concepts. Seeing the need for non biased, critical analysis of the investment industry, Graham began work as an independent investment researcher in 1992 and since then, principally, he has provided services to financial institutions. Graham is also a director of RSM Group, a leading UK investment research company. Director at Independent Research Consultancy Limited
Through his research process, Graham filters through the broad range of Irish and International investment fund managers for those investment managers who consistently perform best. He conducts in the region of 150 teleconference meetings and on site interviews with asset managers in UK, Europe, China, Hong Kong, Singapore and Australia. Following on from these meetings, Graham produces detailed research notes.
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EU LEADERS TO MEET IN BRUSSELS TO BREAK NEGOTIATING DEADLOCK
OFFICE WORKERS SEEK TO EMBRACE AUTOMATION, SURVEY SAYS
European Union leaders plan to meet physically in Brussels for the first time in months in a bid to break deadlock over a recovery plan intended to counter the economic damage of the coronavirus pandemic. The European Commission has proposed a €750 billion recovery fund of grants and loans and a generous new seven-year budget, but member states disagree on the size of the package and how to split it between member states. A group of so-called “frugal” states led by the Netherlands also oppose giving out grants that member states would not need to repay, while countries such as France insist this is essential to avoid burdening weaker economies with additional debt. To break the deadlock, a summit will be held in mid-July, ending months in which leaders of the member states have conferred only remotely due to the health restrictions of the pandemic.
The majority of Irish office workers want to see more automation in their workplace, with almost half saying they would change jobs for a company embracing it more, a new survey claims. The research, which was carried out by Censuswide for digital transformation specialist OpenSky and involved 1,000 people across Ireland, found 62 per cent would like to see their organisation embrace more automation, such as robotic process automation (RPA) which reduces time-consuming, repetitive tasks. That was more pronounced in Carlow, Dublin and Cork. Just over a quarter believed automation would results in a four day work week, and 35 per cent said they thought automation would allow them to do their work more effectively.
OVER HALF OF YOUNG PEOPLE REPORT CONCERN OVER POTENTIAL COVID-19 JOB LOSSES
CONSTRUCTION OUTPUT IN IRELAND TO SUFFER WORST DECLINE IN EU
Over half of Ireland’s young people have concerns about losing their job as a result of the Covid-19 pandemic, according to a survey commissioned by Bank of Ireland (BoI). The survey, carried out by Ipsos MRBI, of 1,000 consumers aged 16 and over took place over the first half of May. It found that 53pc of people under the age of 30, who were only coming into the jobs market at the time of, or since, the last recession, are most concerned about losing their job, compared with 38pc for the population. BoI found that those most impacted by the health aspect of the virus, such as those over 60, were the least affected financially, as they typically are mortgage-free with lower regular bills. Conversely, the least affected health-wise, mainly those under 30, are some of the most affected by the economic and financial aspects of Covid-19.
Construction output in Ireland is expected to suffer a contraction that would surpass any single-year decline during the financial crisis, according to figures from industry forecaster Euroconstruct. New figures show output in the sector is expected to fall by 37.7pc this year. According to stockbroker Davy, this would be worse than the most significant fall during the financial crisis of 33.6pc in 2009. Expectations regarding the fall are the worst in Europe, though reflect the UK figures, where a fall in output of 33.4pc is expected. Annette Hughes, a director at EY-DKM Economic Advisory, which compiled the figures for Ireland and is a member of Euroconstruct, said the drop in output is expected due to the shutdown of construction sites after the onset of the Covid-19 pandemic here. She believes onsite health guidelines may also affect productivity.
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HIGHLY MOTIVATED PEOPLE Build the right habits and motivation will find you Most of us have met people who are always passionate and full of life. It seems that they have a secret stash of motivation. Well it turns out that motivated people do have an undisclosed font of enthusiasm and energy. Many highly motivated people don’t think about the source of their energy because they have developed habits that ensure that they remain motivated and enthusiastic at all times. All of us are motivated from time to time but people who are constantly motivated have found methods that help them to constantly create more vigour. Enthusiastic and energised people craft a life that ensures that they have a constant source of additional motivation by surrounding themselves with activities that create energy. I’ve singled out six habits that we can learn from people who never lose their zest for life.
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1
MANAGE YOUR ENERGY RATHER THAN YOUR TIME
Manage your energy rather than your time Energy is what drives motivation.
Most of the efficiency and self-help advice that we get is all about improving our time management. The sage advice makes all kinds of suggestions on how to use our time more effectively so that you get more out of the day. They miss one point. Motivation has nothing to do with time. Motivation is all about energy. No matter how much time you have, if you spend that time on energy sapping activities, you’ll never find your motivation. Fortunately, the opposite is also true, no matter how little time you have, you can get a lot done if you have loads of energy and passion.
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The difference between one man and another is not mere ability . . . it is energy. ― Thomas Arnold This suggests that you should concentrate on how to improve your energy rather on how much time you have. Here are some suggestions to get you going: Begin each day with the most stimulating activities. This is the best way to kick start your day. It ensures that you have something worth getting out of bed for. Completing an exciting task will stimulate you to continue onto the next task of the day. Find someone else to do the energy sapping activities. Find someone to delegate the energy sapping tasks to. Opportunities to outsource abound and there is always someone out there who is more than willing to do the tasks that leave us drained. Do all the energy sapping tasks at once. If there are draining tasks that you just can’t give away, batch them all together and do them all at once. That way you can at least clear away all of the draining activities and then get on with doing those things that motivate you most. In setting up your daily routine, centre your plans around the energy requirements and not the time taken. When you plan your days, make energy, not time, your guiding principle.
MAKE SURE THAT YOUR SURROUNDED BY HIGHLY MOTIVATED PEOPLE
The people we mix with have a huge impact on our own emotions and attitudes. Enthusiastic people know that and they use the knowledge to their benefit. You’ve no doubt noticed in your daily interaction with others how their attitudes to life can affect your own enthusiasm and energy. • Happy positive collaboration with motivated and energetic people can leave you feeling almost instantly motivated and full of the joys of life • In the same way a negative person can leave you feeling drained and devoid of any motivation. The people that you spend a lot of time with have the power to affect the way you feel most of the time.
You are the average of the five people you spend the most time with. ― Jim Rohn If you are constantly in the company of people that sap your energy, you can hardly expect to come out of those interactions feeling motivated and raring to go. On the other hand, if you seek the company of motivated and enthusiastic people you will find that their enthusiasm will have a positive effect on your own feelings. So, think carefully about who you spend your time with. • If you’re seeking a new position, take a careful look at how much energy the people in the office have. • If you’re looking for a business partner make sure that you find one with loads of energy. • If you’re looking for a nerd romantic partner make sure that they don’t drain you of energy. To feel more enthusiastic and motivated in your own life, you have to keep company with the people who create energy rather than draining it.
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3
CELEBRATE YOUR ACHIEVEMENTS
Celebrate even your smallest achievements. You’ll find that it will empower you to greater motivation. It’s simple enough to do and it’s worth the effort.
So, here’s the lesson in this.
It’s all about rewarding yourself for the behaviour that you want to perpetuate. Humans like recognition and reward, and so it has a positive impact on future behaviour.
Celebrating your own accomplishments costs nothing. You don’t have to splash out on luxury gifts or throw a huge bash. The timing of the reward is more important than the size. when it comes to building motivation, immediate reward pips a delayed one to the post every time.
When you run your first half marathon and your friends and family celebrate your achievement with you, wishing you well and congratulating you, you are much more likely to sign up for the next one.
There are plenty of small celebrations that will motivate you to achieve more:
If you’re willing to share your problems and concerns with your partner and they offer you sympathy and approbation for sharing you’ll be willing and even enthusiastic to speak to them about your concerns in the future.
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Learning to regularly celebrate your own accomplishments will lead you to create a motivation that will help you to achieve your ambitions in the future.
• Take yourself out for your favourite lunch when you’ve finished a masterly presentation at work. • Congratulate yourself when you achieve an A on a test. • Buy yourself your favourite coffee as a reward for starting an exercise routine. It makes psychological sense to reward yourself for a job well done.
Failure is not fatal: it is the courage to continue that counts.
WHEN YOU FAIL, FORGIVE YOURSELF
It’s not the end of the world if you fail. The only people who never fail are those who have never tried. If you’re too harsh on yourself in the face of failure, you’ll slay your motivation. People with low self-esteem tend to criticise themselves harshly and look judgmentally upon the errors that they have made. • They consider themselves unworthy. • They indulge in negative self-talk. • They castigate themselves, believing, incorrectly, that it will motivate them to do better in the future. Beating yourself up and mistreating yourself will not improve your motivation, quite the opposite. It will lead to further mistreatment and unhappiness. Fortunately, the opposite also applies.
― Winston Churchill
Being compassionate with yourself will help you to recuperate from a setback. Enthusiastic people not only stay motivated and invigorated – they are also accomplished at growing their motivation and vitality even when they suffer setbacks. The most effective way to ensure that your motivation and energy remain intact after suffering a setback is to forgive yourself and treat yourself with compassion. • Speak to yourself with kindness as you would to a friend who is unhappy. • Empathise with yourself. You are, after all, more than the sum total of your errors. • Making mistakes and feeling terrible about them is no reflection of your own skills or talents. Treat yourself gently and you’ll stay motivated even when the going gets tough.
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5
Every minute spent organizing, an hour is earned.
CRAFT AN ENVIRONMENT THAT CREATES ENERGY
― Benjamin Franklin
As much as the people that you interact with can sap your energy, so too, can the environment.
The design of your environment can help you to stay motivated
We all like to think that we are in control and have the solution to everything, that with enough positive energy we can overcome all the odds.
It isn’t always possible to change your environment, but you may find that it isn’t as difficult as you think. And redesigning your work or living space can have a major impact on your energy and motivation levels.
This is not true
• Make time to discuss your problems with your partner in a relaxed environment over coffee on the weekend.
Your environment is vitally important to how you feel and how much energy and motivation you manage to drum up on a daily basis.
• Make sure that your desk is properly arranged and sorted before you leave in the afternoon so that you can walk right in in the morning and get stuck in.
• Getting into an important discussion with your partner as you climb into bed at the end of an exhausting day is unlikely to end well.
• If you plan to take up running make sure that you have suitable gear before you start.
• Working in a disorganised work environment is likely to suck the energy from you and lead to procrastination and distraction.
The resolution to motivation problems is not just about exerting more self-control, it is possible to create an environment that supports your objectives rather then making their attainment more difficult to achieve
• Taking a run on an icy morning with inappropriate gear will quickly put you off any further exercise.
JUST SAY NO
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If you don’t prioritize your life, someone else will. ― Greg McKeown Make sure that you’re spending your motivation on the things that matter rather than squandering it on trivia.
Accepting every task despite conflicting motivations has a way of draining your motivation and energy
Prioritise the important things and you’ll find that you have plenty of motivation:
When you run out of energy, your motivation will disappear along with it. How can you expect to find the energy and motivation to complete important activities when you’re using all your energy on unimportant and trivial ones?
• If your relationship is important to you, you won’t spend every night in the pub • If health is important to you, you’ll get out of bed early and go off to the gym
• How can you find the time to pursue vital tasks at work if you are always taking on other people’s tasks?
• If the success of your business is really important, you’ll give up your weekend sports plans to spend with your business partner making plans for the future.
• How can you pursue a great new hobby if you have already committed to spending your evenings at the movies?
Everyone has a finite level of energy. If you drain yours on the things that aren’t important, you’ll have no energy left for the things that matter most.
• How can you spend time with your family if your always out and about?
In summary You can remain constantly motivated by developing habits that ensure that you spend your energy on the things that matter and surround yourself with people and environments that feed your energy rather than draining it. By changing the way that you do things you can ensure that you have more than enough energy to do the things that matter.
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Developing
MENTAL
TOUGHNESS using Ancient Stoic CUSTOMS
LEARNING FROM MICHAEL JORDAN AND MARCUS AURELIUS As a child I was huge Michael Jordan fan, as were many other sports fans. For me he is the absolute epitome of mental toughness. Right now, I am part way through a series that documents Michael Jordan’s last basketball season with the Chicago Bulls. The Last Dance is a great documentary even for those who are not basketball fans. The series offers you a view into the life of one of the world’s greatest competitive sportsmen ever. Many believe that Michael Jordan is the best player of basketball in the history of the game. He won every one of the 6 NBA finals that played in. Other basketball icons like Magic Johnson, Lebron James, Kobe Bryant and Larry Bird have all lost at least one championship game. Many people see Michael Jordan as the epitome of mental toughness. There was no stopping him. He was a legend. One great story that lives on is the 1997 NBA Finals where he played a major role in the game despite having a stomach bug. If you’ve ever had a stomach bug, you’ll know that it lays you low. Despite being ill Jordan showed up and during the course of the game managed to score 38 points. There are few healthy players have can boast even one game where they scored as many points. Michael Jordan’s life was beset by challenges and distraction which would have set back a lesser sportsman. And he was not just physically talented, what set him apart was his mental toughness.
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Understanding Mental Toughness? The concept of mental toughness has not been around for long and has origins in professional sports. Around twenty years ago the concept started to draw the interest of the scientists.
confident, and in control under pressure.” Mental toughness defines how well you can perform in a pressurised situation. The construct has recently drawn more interest because the pressure we face in every aspect of our daily lives is steadily increasing. Many people refer to mental toughness using words such as determination, persistence and resilience.
In a paper published in the Journal of Applied Sport Psychology in 2002, Graham Jones, Sheldon Hanton, and Declan Connaughton defined mental toughness as: “Having the natural or developed psychological edge that enables you to: generally, cope better than your opponents with the many demands (competition, training, lifestyle) that sport places on a performer; specifically, be more consistent and better than your opponents in remaining determined, focused,
The references to mental toughness maybe new, but the concept has been around for more than 2000 years and goes all the way back to the Stoic Roman emperor Marcus Aurelius.
Indifference to Indifferent Things Equals Mental Toughness The concept of mental toughness originated from the world of sports. Michael Jordan was a perfect example of an athlete who could perform well even when he was pressured. No matter the circumstances, he was never distracted and did what he had to do. This becomes abundantly clear in the documentary.
what he did was very similar to the Stoic concept of “indifference to indifferent things.” Jordan’s talk brought to mind the words of the Stoic Roman emperor Marcus Aurelius. He kept a journal called Meditations in which he wrote: “To live one’s life in the best way: the power to do this resides within our soul, if we are capable of being indifferent to indifferent things.”
So how does the man in the street develop the type of mental toughness demonstrated by Michael Jordan. The ability to perform well in a pressurised environment is something that all of us can do with.
This is the first law of Stoicism. According to the Stoics you should worry only about those things that are important to you. Remain indifferent to the feelings and circumstances that are obstacles to achieving your dreams. These are just noise and should not detract you from your mission.
This year has not been easy, living though lock down brought on by the pandemic has resulted in a fast-changing global environment with uncertain outcomes that all of us must deal with. Mental toughness can ensure that we perform consistently when the going gets tough.
Marcus Aurelius as a Stoic had as his life’s objective the moral good that the Stoics pursued. Michael Jordan would not be distracted from anything that got in the way of winning the championship.
In watching Michael Jordan in the documentary, I realised that
Indifference in Practice The works of the Stoics Seneca, Epictetus and Aurelius are instructive on how to practice indifference. They highlight the importance of repetition and practice. If you want to develop mental toughness you have to start to practice indifference in your everyday life.
It’s easy to practice. If something is important you pay attention and do what has to be done. If it is unimportant get on with your life. Since all of this revolves around what is important and what is not, you can only start to practice this if you understand your priorities. Personal goals are a prerequisite for mental toughness.
• When things happen that upset your equilibrium, get over it
You must have a set of core values. This presumes that you understand yourself allowing you to focus on the things that are important and ignore the rest.
• Understand what your highest objective is and pursue it indifferently • Make sure that everything is centred around your life’s goals
Right now, all of us face daily challenges so it should be easy to find ways to practice the ancient art of indifference. Keep practicing and you should soon start to see a change in the way that you think. You’ll know when you are starting to develop mental toughness when your actions become predictable and consistent.
• Don’t be indifferent to everything • This is how I have started practicing indifference in my life • I dropped my expensive smart phone in the pool - Indifferent. • Someone who had read an article of mine left constructive criticism of the article - Not indifferent. • Someone in the office spread rumours about me - Indifferent • My child fell and hurt herself badly - Not indifferent.
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YOUR EXPECTATIONS FOR EXERCISE ARE STRESSING YOU OUT The secret component of an effective workout plan through the eyes of a personal trainer.
Richard had been a high school sporting hero, but as time passed, he found a job, got married and had a family and suddenly eight years had passed in which he had not once visited a gym. I’ve been a personal trainer for a number of years. Over that period each of my clients has approached me with the same problem. Their experiences may all sound very different. But after careful consideration it becomes clear that all are pretty similar despite the fact that their fitness training has followed very different paths.
Here are the stories of some of my clients.
Sue had managed to lose a couple of stone. She ran regularly and went to
aerobics classes three times a week. As time progressed, she was finding that she had to do a lot more exercise just to maintain her weight. To make matters worse, she didn’t feel well, battling daily with fatigue.
Ken had managed his own daily workout routine. He would take a long run every day. Do an hour of High Intensity Interval Training after work each evening and maintained a strict diet. Despite this, he didn’t feel well and suffered with fatigue and a general disinterest in life. Sharon had never done much exercise. She realised that she needed
to get into shape but hesitated for months before contacting me. This is because she felt a little embarrassed to contact a professional trainer in her poor shape. She feared that she wouldn’t be in any condition to manage the exercise plan that I would put her on. Exercise, she felt, must wait until she was fitter.
It may not sound as though these stories have anything in common. But, in fact, there is one common theme. Not one of these people is enjoying their exercise. Two of them chose not to exercise at all and two just drove themselves harder and harder. All of them felt that the exercise was out of their control. It was not making them feel good and was tiring them out rather than improving their health. If you want exercise to inspire and revitalise you, relieving stress and making you feel good, you have to use your exercise sessions to make a connection with yourself.
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Let’s change our attitude to exercise Many people seem to think that the more they exercise, the healthier they will become. But if you just keep adding to the exercise burden, the amount of exercise can become exhausting and too much to manage. When you start to stress out about the amount of exercise that you have to do rather than allowing it to relieve your stress, you’ll find that it becomes too much to handle over the longer term. I believe that this misconception happens because of societal expectations. Society has idolised the svelte and healthy form and rejected less than perfect chubbier shapes. The current belief appears to be that the unhealthier you are the more exercise you need.
Richard’s training, for example, became unmanageable when he became an adult with all the stresses and responsibilities of daily adult life. Sue just added more and more exercise to her routine in her quest to stay ahead of the weight gain. Ken kept running an extra mile as he sought to stay fit. Sharon kept putting off the exercise in the belief that she had to start with a higher fitness level than was her current truth. Like most things in life, if you are to stay motivated and gain vitality from your workout routine, it must add value. If it’s not adding value, you’ll quickly sop enjoying it and your workout will become a chore.
This belief consigns exercise to the realms of punishment. It’s become a penance for the sin of being unfit. The belief is that you can earn your place amongst the fit and healthy by breaking your back on the treadmill or undertaking hours of high impact exercise every week.
It is my experience that people make their workout routines far more stressful than they need to be. They also believe that they need do more exercise and use more energy than they do to stay fit. So, exercise becomes a load rather than a revitalising stress relieving process.
Exercise is seen as the punishment for the evil of becoming unfit and unhealthy. It is the price that we have to pay for daring to allow ourselves to lose form and deviate from the glorified body shape of the 21st Century. With this attitude it’s little wonder that we find exercise so stressful.
Using exercise as the means to an objective
It can happen that as you start to regard exercise as a way to attain an objective, rather than an enjoyable pastime that keeps you in tune with your body, the exercise become unmanageable. If exercise is a means to overcome your shortcomings or your feelings of not quite making it, you’re missing the point of the exercise and you’re failing to see the power that you have in this place and time. If, like many, you exercise to lose weight, you may be tempted to speed things up by vastly increasing the amount of exercise that you do each week. This is counterproductive and will lead to exhaustion, making it more difficult to lose weight. If your workouts are ongoing attempts to chase that illusive dream, you will keep giving more and more until you have exhausted all your strength.
Choose the exercise plan that celebrates who you are and you will have found that plan which will leave you happier and healthier.
Exercise to celebrate your life
When you change the way that you think about exercise, when it’s no longer about pursuing an external objective, you’ll find that illusive strength and the vitality. You’ll find that your workout does relieve the stress and it will leave you feeling full of life and re-invigorated. Before you embark on a punishing workout that leaves you feeling tired and rundown, consider how you can create an exercise plan that celebrates your life.
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THE 1-MINUTE SELF CARE PRACTICE TO REDUCE STRESS EFFECTIVELY Take full control of your life in just 60 seconds Stress is a dual problem. It refers both to the mental awareness of tension and the physical response to that tension. There are times when stress is essential to our well-being. It is the means by which we recognise and react to confrontations Stress happens when you believe you are at risk or facing hazards. As soon as you face a perceived threat your body reacts by triggering hormones which put you on high alert. This is what triggers, in turn, the fight or flight response.
Stress occurrences can include all kinds of events including relationship problems, work related stresses such as retrenchments or physical danger such as when you happen upon a spider along your hiking path. When such events occur your body releases cortisol along with a rush of other hormones. Even though this rush of hormones may save your life in the event of a dangerous encounter in the wild, it does little to solve ongoing problems such as relationship problems or a life-threatening illness.
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Stress is not good for you, so it is essential to find a way to effectively manage it. You need to find that reset button to get on with your daily activities, stress-free. I’ve recently started using a system called STOP. It’s a self-care practice that takes just one minute, and it works. I have found it to be one of the most effective means to stop stress in its tracks.
How to use STOP
GET STILL
STOP is an acronym for Get Still, Think, Observe and Pivot. STOP offers you a method of taking a quick look at your health. It is about living in the moment, helping you to evade the mix of feelings, thoughts and a lack of energy that can result in stress build-up.
When you are faced with a stressful event, try to relax or get still. This should help to overcome your natural fight or flight response, your immediate reaction to run or defend yourself against the threat. If you can calm yourself down under such circumstances, you will have control over the situation. Your mental strength is greater than the power of your body. Knowing this you can use the power of the brain to take control of your body. Calm yourself down, inhale through your nose while you count to five and take control.
STOP can help you to do a self-assessment offering you a means to overcome stress and a way to identify what it is that triggers your stress. STOP consists of four easy steps as detailed below. Each step will take you 15 seconds
THINK Once you have regained your equilibrium, try thinking about the circumstances unemotionally. Consider what it is about the event that activates your stress trigger. It will help if you allocate a word to the situation. Perhaps someone cut you off in the traffic and that triggered your response. The word traffic would adequately describe the stress trigger. Having identified what upset you, you can start to objectively consider your thoughts and reactions to the event. Doing this allows you to reduce the triggers into smaller more manageable parts.
OBSERVE Once you know what triggered your stressful event, try to stand outside yourself as an objective observer. Consider what caused you to react as you did to the trigger. Understand what triggered the intense emotional reaction to the situation. Observing yourself from a distance can help you to understand the situation better. It is an essential part of caring for yourself.
PIVOT Having calmed yourself down, named your stress trigger and seen yourself through the eyes of a neutral observer, you are now ready to pivot the way that you think. This is a formidable tool that can help you escape from the spiral of your thoughts. The aim of the pivot is to take you to the place that makes you happiest. Go to the place of your dreams. Keep a mental picture of your happy space, let yourself escape to that place and it will draw you right out of your stressful situation.
The fifteen second intervals that I have suggested for the process works for me, but you may take longer. If you need a minute for each step, then take your time. The whole point of the process is to draw you into the now when you’re stressed and need some respite.
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Creating a STOP habit A habit is something that is difficult to give up. It is a routine part of our lives. We can access habits when the going gets tough. This is why it is important to make a STOP one of life’s habits. You may be called upon to use the process even when you don’t feel inclined to. You must, therefore, make the process a regular daily part of your life.
1 3
I suggest that you set up a regular self-care schedule much like the one below:
On arising each day, consider your waking thoughts. Take time out in the first five minutes of the day to take a hard look at yourself and what’s going through your mind. Observing yourself as an outsider would will get easier as you practice. It will also help you to improve your STOP efforts.
Find your happy place and take some time to enjoy it, wherever it may be from your favourite hiking trail to sunny beach or a tranquil riverbank. Choose your place, real or imaginary, and try to visit it every day.
Make sure that you schedule meetings, appointments and other activities with a 15-minute gap in between so that you have time to STOP and to rejuvenate yourself. Think of the breaks as a breather that you can use to calm yourself and find internal peace.
Try to express situations and emotions with a single word. Thus “I am happy today.”, “My hobbies are interesting”, “Public transport is frustrating”. When you can express your feelings or circumstances in single words, you’ll have a better handle on how to manage them.
2 4 Practice STOP and you’ll soon find that you can encounter and manage stressful situations more easily. This system has worked for others. You can make it work too.
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Dervilla Whelan
Sarah Keane
(BBS, CTA) Managing Director
(BAAF, FCA, CTA, QFA) Director
Dervilla Whelan is the Managing Director of DLS Capital Management Ltd and also one of the founding members of DLS Partners. She was previously a taxation partner in Baker Tilly O’Hare (now part of Baker Tilly Ryan Glennon) and is a graduate of Trinity College, Dublin and the Institute of Taxation in Ireland. Her key skills include advising clients on all aspects of their financial affairs, including advising on the appropriate structures required for all types of investments and pensions. Dervilla is heavily involved in the Family Office service for our high net worth clients. Dervilla’s involvement with both DLS Capital Management Ltd. and the tax practice, DLS Partners, ensures that her clients benefit from a holistic approach to all of their financial affairs
Sarah Keane is a graduate of Dublin City University in Accounting and Finance and a Fellow of the Association of Chartered Accountants (FCA). She is also a member of the Institute of Taxation in Ireland (CTA), and the Professional Association for Financial Services in Ireland (QFA). Her key skills include advising clients on all aspects of financial planning, including retirement planning strategies, taxation and investment advice. Sarah is highly experienced in the preparation of investment financing strategies for individuals and companies. Sarah is also heavily involved in the Family Office service for our high net worth clients.
Graham O’Neill
Stephen Cahill
Graham is an investment researcher of international note and has been working in this area for over 20 years. He began his career in the stock broking industry before becoming an institutional fund manager where he practiced both in Ireland and the UK where he worked in senior roles with a number of institutions including Royal Life holdings, Guardian Royal Exchange and Abbey Life. Throughout his career, he has managed multi-million Euro funds and developed innovative investment fund concepts. Seeing the need for non biased, critical analysis of the investment industry, Graham began work as an independent investment researcher in 1992 and since then, principally, he has provided services to financial institutions. Graham is also a director of RSM Group, a leading UK investment research company.
Stephen Cahill is the Tax Manager at our Tax Practice, DLS Partners. He graduated from DIT and is a member of both the Association of Chartered Certified Accountants (ACCA) and the Irish Tax Institute. Stephen is responsible for all areas of Tax, including, VAT, PAYE, Income Tax, CGT and Corporation Tax. He also is involved in the preparation of Financial Accounts for sole traders and limited companies and assists in the preparation and review of monthly management accounts for larger corporations.
Independent Consultant
(BSc (Marketing), ACCA, CTA) Tax Manager DLS Partners
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