I’m also in the process of putting together some awesome stuff for the first couple of weeks of January. Those awesome things include:

1. The release of Changes That Stick: How to Make Lasting Changes, the ebook. This is going to be based on my blog series of the same name, but will include lots of additional content. I am working to create a solid resource that helps you make real changes to your life. The best part is that it will be 100% free and is an ethical bribe to convince you to sign up for…
2. The Lasting Changes Newsletter. I will be launching my newsletter during the first week of January, and I hope that you’ll be one of my first subscribers. The newsletter will feature content that you won’t find on the blog, and will be focused on making positive changes in your life and doing that in ways that are enjoyable and fulfilling. It will be a nice complement to a new series on the blog about…
3. Living Your Best Life in 2009. If Oprah can do it, so can I! The first two weeks of 2009 are going to feature a ton of content on how you can get closer to your best life, one small step at a time. This series will show you how taking one small action in just 5 minutes to 1 hour every day will help you live the life you desire, in less time than you think.

I hope you have a great Christmas/Hanukkah/Kwanza/Festivus/New Year. 2009 is going to be awesome, and I’m glad that you’ll be here for the ride!! Be sure to subscribe to free site updates through an RSS reader or by email so you don’t miss a thing!

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Do you ever worry about coming up with money to get what you need or want in life? Do you see money as an obstacle to your happiness? If you do, you can learn some powerful lessons from the business world by finding ways to bootstrap your life.

In business there are many ways to finance a new venture. Sometimes businesses borrow start-up cash, or find a venture capitalist or other investors to cover their operating expenses. However, one of the most powerful ways to start a business is to sustain it through bootstrapping, or without obtaining outside funding. Bootstrapped companies try to avoid external debt and often spend very small amounts of money until they become profitable.

Why Is Bootstrapping Powerful?

There are some people, such as Seth Godin and Yanik Silver who argue that bootstrapped companies are more creative, more resilient, and more competitive in the long term. As Yanik says:

“Bootstrap. Having too much capital leads to incredible waste and doing things using conventional means.”

When companies intentionally rule out borrowing to cover standard expenses, they often have to get very creative to get the resources they need. For example, a bootstrapped company might begin in a garage like Apple. They may pay employees with a share of the profits rather than a regular salary. Rather than having corporate travel accounts, bootstrappers might drive all night to a meeting and arrive hyped up on caffeine, adrenaline and hope.

All of this may sound challenging, and it is, but bootstrapping has the advantage of forcing creative thinking. Without extra money to spend, bootstrappers have to figure out new and creative ways to get what they need. This can lead to many innovations such as developing new software, inventing new work practices, and creating very innovative company cultures. Instead of automatically solving a problem by spending money, bootstrappers have to think in terms of obtaining the resources they need to complete a job.

How Can You Bootstrap in Your Life?

So, bootstrapping may be well and good for a business, but you might be wondering how all of this applies to you. I think that during times when many people are feeling strapped for cash, we can apply the mindset of the bootstrapper to find creative ways to meet our needs and the needs of our families.

How do you go about doing this? The key lies in focusing on your desired outcome first and figuring out how you are going to achieve it second. This is just the opposite of what we’re conditioned to do. In most situations, we figure out the means (acquiring a pile of money) before we are really clear about our desired ends.

As an example, imagine it’s the middle of the summer, your lawn is getting overgrown and your lawnmower just broke. If you’re like me, you live in a town that will give you a ticket if your lawn gets too long, then they’ll come and mow it for you, charging an exorbitant rate. To avoid this, your first instinct is probably to run out and buy a new lawn mower. That’s one possible solution to the problem, but it isn’t the only one.

When you instantly run out and buy a lawnmower, you are acting as if your desired end is to own a new lawnmower, but that’s incorrect. Your real desired end is to get your lawn mowed and avoid getting a ticket. There are many ways of doing this, and they all involve different amounts of money. Here a just a few ways you could get your lawn mowed in order from least expensive to most expensive:

1. Use a different tool you already own to mow the lawn, such as a weed eater, or a pair of clippers (if you have a very small lawn).
2. Borrow a neighbor’s mower, and fill it up with gas before you return it.
3. Find a young teenager to mow the lawn for a small fee.
4. Buy a used mower from the local small engine shop.
5. Run to the nearest home and garden center and immediately buy a new mower.

In the above example, it’s interesting to see that most people will choose the most expensive option. This is the opposite of what a bootstrapper would do in such a situation. The bootstrapper would look at all of the possible solutions, and pick the one that results in the most efficient solution for the least amount of cost. In this example, option 2 or 3 would probably be optimal because those are inexpensive choices, but not as labor intensive as option 1.

There are many other situations where you can call on the creativity and ingenuity of bootstrappers to find free and inexpensive solutions to your problems. The key is to think very carefully about what you actually want to get out of a situation. Here are a couple of situations, the assumed goal and the real goal.

• It’s Saturday night and you decide to go to a movie. With tickets and snacks for 2, it would be at least a $30 expense. You are assuming that your goal is to see a particular film, but actually your goal to relax and be entertained. Can you be just as entertained by inviting friends over to play games? By renting a DVD for $4?
• You want to advance in your career and need some additional training. You consider applying to graduate school, which will cost $30,000 over 3 years. In this case you are assuming that your goal is to have an advanced degree when it is actually to get a more challenging job at a higher rate of pay. How else could you do this? Could you attend training and certification courses that your employer will pay for? What about finding a mentor who is doing the job you want and asking for advice on self study material?

Resources are Abundant, Even When Money is Scarce

In both of the examples above, it is pretty easy to see that there are many possible resources for accomplishing the real goal. Some of these resources can be purchased, but many of them are only available through creativity, networking, and persistence. This is true in many situations. In fact, if you are convinced that a lack of money is keeping you from achieving your desired goal, you’re wrong. Take some time to think of all the resources that you have available to you such as relationships, skills, organizations, and of course your own creativity. If you make a list of all of these you’ll soon discover ways that you can at least get closer to your goal, even if you have no money available to you.

I’m not trying to call out anyone who is going through financial hardship. I’ve been in some pretty bad situations myself. In fact, when I was a kid my father went through several long layoffs. The last layoff began just as I was about to enter a very expensive private college.

My experiences taught me that if I was going to achieve anything in those circumstances, I had to find ways to do so with little or no money. I found ways to use the public library to educate myself beyond my formal schooling. I formed relationships with teachers and mentors that recommended me for advanced programs that made me a stronger college applicant. Eventually I was able to gain admission to a great school and secure enough scholarship and financial aid to graduate with less debt than I would have had at a public university. That resourcefulness continues to serve me well.

Learning to bootstrap is a way of increasing your freedom. If you can meet your needs with little money, suddenly you’re not trapped in a job you hate. You can explore interesting opportunities even if they don’t pay as well. You can leave bad relationships when you know how to form better ones. Bootstrapping isn’t really about frugality. It’s about creativity, self sufficiency, and personal power. I hope that you’ll find ways to bootstrap a few things in your own life, starting right now.

If you’d like to read about more ways to survive and thrive on little or no cash, sign up to receive automatic updates from this site using an RSS feed reader or in your email (yep, it’s free!).

Photo by Zsuzsanna Kilián.

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As you start this weekend, watch the video and ask yourself the following questions:

• What is my perfect day? Be specific. Work to incorporate at least one “perfect” activity into your weekend.
• What am I grateful for right now?
• What can I do to increase my engagement in my community?

Have a happy weekend.

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Think about that for a second.

Being born on Earth means that you have a 20% chance of living a miserable, malnourished, hopeless existence. If you’re reading this post, you got very, very lucky in the lottery of life.

One of the most debilitating consequences of extreme poverty is the complete lack of resources available to the poor to improve their conditions in life. In most countries education is not free, so the very poor can’t participate. Health care is either expensive or not available at all, so diseases like malaria and pneumonia that can be easily treated in the developed world kill millions every year. And until very recently, the very poor had no access to credit to begin businesses and other income generating activities.

The good news is that we have answers to nearly all of these problems now. Do we have the will to implement them?

Grameen Bank Changes Our Perceptions

Several years ago, I heard about this crazy bank in Bangladesh that was lending out as little as $1 USD to extremely poor people. Even crazier, they weren’t requiring any collateral or contract for these loans. Crazier still, their default rate was lower than most banks in the U.S.

Conventional wisdom suggests that people are poor because they lack education, ambition, or the knowledge to produce enough income to help themselves. Lending money to a very poor person must surely be a losing proposition because they will never be able to repay it. Muhammad Yunus, formerly a U.S. trained economics professor, decided to challenge that conventional wisdom. He believed that with access to credit, the poor would create businesses that generate incomes for themselves and their families.

The bank that he founded, Grameen Bank, has been one of the biggest success stories in improving the lives of the poor in the last 25 years. It even won the Nobel Peace Prize in 2006. Ninety-seven percent of all of its borrowers have been women, who traditionally lack access to credit and property ownership. The bank has even begun a micro-micro lending program of less than $1 for beggars (their word, not mine), encouraging them to begin selling very low cost items to supplement their begging income.

Why is this important?

Helping people increase their income from $1.25 USD to even the paltry sum of $2 USD creates tremendous opportunities for them and their families. At that level of income, people in the developing world can gain access to a basic but nutritious diet, very simple shelter, preventative medicine like mosquito nets, and most importantly, education for themselves and their children. Grameen not only lends money, it encourages its borrowers to make the 16 Decisions including deciding to educate their children with their increased income. As the children of Grameen borrowers gain education, they will be better able to support themselves and their families in the next generation. Grameen hopes that its lending programs will act like a pebble thrown into a pond, and the ripples will spread widely for many generations to come.

Microlending for Everyone

So, why should you care about a bank in Bangladesh?

Grameen’s bold actions provided an important proof of concept: The very poor want to help themselves. When given access to resources similar to what we can access in the West, they do help themselves. They start business, create jobs and income, help their families, and repay their debts.

Moreover, because Grameen has been so successful, many other microlending programs and banks have been started throughout the world. There are microlending banks, programs through the World Bank, foundation-funding microlending programs, and even microlending in poor communities in the U.S. Then, in 2005, two really smart people from Stanford founded a little organization called Kiva.

If you care at all about ending poverty, Kiva is just about the damn coolest thing since the polio vaccine.

Through the magic of the internet, and extensive partnerships throughout the developing world, you (yes YOU) can put as little as $25 into an account at Kiva’s site, look at all of the prospective borrowers, and loan them some money. After a while they repay your money and you can loan it to someone else. I’ve been on Kiva for about a year now and so far I’ve loaned money to a woman to buy inventory for her clothing making business and to a man to make repairs to his taxi. I’m continuing to recycle the money I’ve put into the system, which is great. Without any further investment from me, the people that I’m lending to are able to expand their businesses and create more opportunities for themselves and their families.

Do Something. Now!

You know what? No one wants to be poor. No one asks to be poor. No one deserves to be poor. NO ONE needs to live on less than $1.25 USD a day in this world. It’s ridiculous.

You can’t single-handedly end global poverty, but there are many, many things you can do to make one person’s life better, right now. Here are just a few ideas:

• Sign up for Kiva. You can open an account with $25. Lend the money out, get it back, and lend it again. It’s the hardest working donation you’ll ever make. (While you’re there, consider donating $5 or $10 to Kiva for their operating expenses. Charities have to pay the electric bill, too!)
• Read about the United Nation’s Millennium Development Goals. The United Nations has laid out ambitious goals to end or seriously reduce extreme poverty by 2015. The 2008 progress report shows that there has been progress, but there is much left undone.
• Stand Up against poverty this weekend. In partnership with the U.N., millions of people are taking action this weekend to improve the lives of the very poor. Here is a map of events in the U.S. Find one and take action.
• Donate to your favorite relief charity. If there isn’t a natural or man-made disaster to clean up from right now, there will be soon. Help your favorite relief charity be there providing much needed services during the next tsunami, earth quake, or fire.

Today is October 15, 2008. What have you done today to end poverty?

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Make a list of other changes you’ll implement as more money begins to flow into your life, such as upgrading your computer, overhauling your wardrobe, taking a nice vacation, or buying more organic produce. Imagine that those things are becoming part of your daily routine. Implement those changes when you can afford to.

Trent took this advice as the height of irresponsible money management. He argues that taking steps like that will only lead to lifestyle inflation that will leave you in the same shape that you started out with:

If your salary doubled tomorrow, what is the first thing you’d do? In Pavlina’s world – and in far too many people’s world – the first response is to head out and start buying stuff.

There’s one big problem with that, though. As soon as you start buying more expensive stuff and settle into a more expensive life pattern, your “standard” expenses go up. You now require more money than you did before to maintain your basic lifestyle.

I took notice of this disagreement for one reason – both of the arguments here are correct. What makes them interesting is that they represent two completely different mindsets with respect to money. In Trent Hamm’s world, each person has access to a certain amount of money. That amount may be quite high, but is certainly not infinite. Because of that, it’s not good to keep inflating your lifestyle with each pay raise. It’s important to save money and plan for times when you might not have access to as much.

In Steve Pavlina’s view, money is just another manifestation of energy, emotion and human thought. There is no limit on how much can be made available. While saving money isn’t bad, it won’t be necessary if you keep manisfesting more through a combination of thought, intention and action.

Because these two people approach this aspect of life in completely different ways, they come to completely different conclusions about how to act in certain situations. This is a perfect illustration that mindset is a fundamental driver of human behavior.

Mindset Makes All the Difference

When many people try to create change, they attempt to do so from the outside in. For example, if someone wants to lose weight, he or she usually starts by changing his or her diet, or exercising, or both. While these are important steps to take, there is one other step that is at least as important: he or she has to stop thinking like a overweight person and start thinking like a helathy person. Many people never make that transition.

Do you wonder why so many people lose weight and then just gain it all back – and more – again?

If the underlying mindset does not change, the recently slimmed down person will just go back to the same patterns of thinking and the behavior that results from that. They will continue to get the same results they’ve always had. This not only applies to weight loss, but to every other behavior change you can imagine.

By way of another example, I have struggled for years to become one of those super-efficient early risers that are so popular out in the personal development blogosphere. I’ve gone through periods of getting up at 5:00am to meditate, or 5:30 to get a quick workout in, or 5:45 to try to beat the traffic to work.

It never lasts. Within a couple of weeks (or seconds), I find myself pushing back the alarm, or hitting the snooze button, or coming up with some excuse.

The problem is I haven’t started to think of myself as an early riser. I’m still a person that enjoys sleep more than efficiency.

Does That Visualization Stuff Actually Work?

The good news is that there are ways to transform your mindset and help your positive changes take hold. Some of the techniques seem a bit difficult to me. For example, I’ve never been able to get into self-hypnosis. One thing I’ve found helpful in my own life is the use of deliberate visualization.

As I mentioned in my post about Positive Thinking Day, I’m not a natural optimist. However, I decided several years ago that life is more fun when viewed through an optimistic lens. I set about to become more positive about life and used a lot of visualization techniques in the process. For example, I will actually set aside time to visualize something that I plan to do in the near future – things like going to the beach or seeing friends – and visualize myself having a good experience. I will imagine myself smiling and laughing and generally enjoying myself.

9 times out of 10, I have a good time after one of these sessions. I’ve established the mindset that the activity will be enjoyable, so it is. If instead I go to a party, get together (or meeting, hmmm) with the mindset that it will be a chore, it usually is. If you’re a natural optimist this may seem obvious, but it took me years to figure out!

The same types of visualization techniques can work for many behavior changes. To pick on our person trying to lose weight, in addition to their diet and exercise, I would prescribe 10 minutes a day of thinking about their new, slim body and their healthy lifestyle and habits. After enough time (and it could take months) they will begin seeing themself as a slim person, even if their external reality hasn’t quite caught up yet. Their is a big mental difference between being a slim person trapped in an overweight body and an unhealthy, overweight person who happens to be slim. In time, all things revert to their conditioned state.

No matter what change you would like to make, take 10 minutes right now to visualize the situation as you want it to be. Then take deliberate action toward that. The combination of the two techniques will move you farther in the direction of your dreams in no time!

If you’d like to read about more ways to transform your mindset, sign up to receive automatic updates from this site using an RSS feed reader or in your email.

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