Personal Finance using Management Consulting Hacks

1
Personal Finance using
Management Consulting
Hacks
Practical guide with case studies & real-life
examples

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A lot of people spend almost everything they earn, live on borrowed money and
struggle to make ends meet. This happens regardless of how much you earn.

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This situation can be changed. You can start gradually building your wealth by applying
simple hacks that will help you spend less, earn more and be more productive

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I will show you how to build your wealth gradually using Management Consulting Hacks.
Management Consultants are famous for the rational approach and efficiency

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In this course I will teach you Management Consulting Hacks using
easy to understand useful case studies and real life examples.

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In business you have to make a lot of important decisions
Thanks to this hacks, techniques and tools it will be much easier
for you to spend less, earn more and be much more productive

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Personal Finance using Management
Consulting Hacks
$190
$19
What you will see in this presentation is a part of my online course where you
can find case studies showing analyses along with detailed calculations in Excel
Click here to check my course

8
How the presentation is
organized

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We have divided the course into 7 parts. Each part contains useful Management
Consulting Hacks that will help you improve your personal finance

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Be more productive – How
to do the right things
Be more productive – How
to work faster
How to spend less
Additional revenue streams
How much money you
actually need?
How to earn more
How to invest wisely your
money

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General framework for
personal finance

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Building wealth can be boil down to 3 things
Income Expenses Savings=-
Savings x # of years = Total savings
Total savings x
1 + increase in
value in %
= Total wealth

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Let’s have a look at the general framework that we will use in this course
How to build your
wealth
Earn more Spend less
Be more
productive
Add new revenue
streams
Invest wisely your
money
Choose your life
partners wisely
Manage your kids
properly

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In every section we will go deeper into things you can do. Below example
for ideas how to spend less
How to build your
wealth
Be more
productive
Add new revenue
streams
Invest wisely your
money
Choose your life
partners wisely
Manage your kids
properly
Reduce usage /
frequency of using /
purchasing
Eliminate some
expenses
Renegotiate prices &
find cheaper provider
Calculate Total Cost
of Ownership (TCO)
Adjust your choices
and behavior using
TCO & tradeoffs
Be healthy & in shape
Calculate the value of
your time
Do make it or buy it
analysis using value
of your time
Measure happiness
per 100 USD spent &
adjust your choices
Reduce expensive
liabilities
Repurpose assets
that don’t generate
income
Check the end
outcome of things
and is it worth it

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Spend less – Introduction

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In this section we will discuss useful ways that will help you spend less and save
more money
spending less
Analysis of your
expenses / spending
Detailed discussion of
methods to spend less
Cases studies &
examples how to apply
them
Other useful things that
will help you spend less
& save money

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spending less

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As you may remember we have the following general framework
How to build your
wealth
Be more
productive
Add new revenue
streams
Invest wisely your
money
Choose your life
partners wisely
Manage your kids
properly

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In this section we will get deeper into ways to spend less
How to build your
wealth
Be more
productive
Add new revenue
streams
Invest wisely your
money
Choose your life
partners wisely
Manage your kids
properly
Reduce usage /
purchasing
Eliminate some
expenses
of Ownership (TCO)
Adjust your choices
and behavior using
TCO & tradeoffs
your time
of your time
Measure happiness
per 100 USD spent &
adjust your choices
Reduce expensive
liabilities
Repurpose assets
income
Check the endgame
of an action and is it
worth it

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Why you need data on what
you spend your money?

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What gets measured gets managed
Peter Drucker

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There are plenty of reasons why you have to first see on what you spend
currently your money
You will know how much money
you spend every month
You will see what is the structure of
your costs
You will be able to identify so
called one-offs
You can set priorities
You will know which categories you
will have to analyze in details
Awareness helps you already spend
less
You can set daily limits that will
help you get quick wins
You will know which habits /
believes you will have to deal with

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How to get data on how you
spend your money

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Let’s start with the goal. You want to see on what categories you spend
money and how much they make in your monthly spending

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There are 4 approaches to gather data on how much you spend and on
what
Fill in data in Excel by
categories
Fill in data in Excel –
every spending a
separate entry
Use data from your
bank account
 You create a matrix in Excel –
the rows are categories, the
columns are months
 Manually you put data every
time you spend them in the
proper cell
 You create a table in which
you put every spending.
 Every spending is a separate
row
 For every spending you put
not only the amount but also
the date of the spending and
you pick the category
 You can use the table to
create all sort of reports
 You can either do the
analysis directly in your
banking system by adding to
every spending the category
of spending
 You can also download the
data from the banking
system and analyze them in
Excel
Other specialized
tools for analyzing
your spending
 Mobile apps like: Mint,
Pocket Guard, YNAB
 Other similar tools that
aggregate your data from
different banking account
and the data that you put in
manually

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what
categories
every spending a
separate entry
Use data from your
bank account
 You create a matrix in Excel –
the rows are categories, the
columns are months
 Manually you put data every
time you spend them in the
proper cell
 You create a table in which
you put every spending.
 Every spending is a separate
row
 For every spending you put
not only the amount but also
the date of the spending and
you pick the category
 You can use the table to
create all sort of reports
 You can either do the
analysis directly in your
banking system by adding to
every spending the category
of spending
 You can also download the
data from the banking
system and analyze them in
Excel
Other specialized
tools for analyzing
your spending
 Mobile apps like: Mint,
Pocket Guard, YNAB
 Other similar tools that
aggregate your data from
different banking account
and the data that you put in
manually

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The fist method would look roughly like this in practice

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The second method would look roughly like this in practice
Date
Amount spend
In USD Reason Month Category
01/06/2019 400Mortgage 6Flat related expenses
01/06/2019 100
Fees for the
appartment 6Flat related expenses
01/06/2019 50Electricity 6Flat related expenses
01/06/2019 12Netflix 6Entertainment
01/06/2019 40Internet + HBO 6Entertainment
01/06/2019 30Phone 6Phone
03/06/2019 15Bachata 6Sport
04/06/2019 80Groceries 6Daily expenses
03/06/2019 25Lunch outside 6Dinning out

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what
categories
every spending a
separate entry
Use data from your
bank account
Other specialized
tools for analyzing
your spending

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Reduce usage / frequency of
using

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Just as reminder reducing usage is one of the ways in which we can spend
less. Now we will talk about this in details
How to build your
wealth
Be more
productive
Add new revenue
streams
Invest wisely your
money
Choose your life
partners wisely
Manage your kids
properly
Reduce usage /
purchasing
Eliminate some
expenses
of Ownership (TCO)
Adjust your choices
and behavior using
TCO & tradeoffs
your time
of your time
Measure happiness
per 100 USD spent &
adjust your choices
Reduce expensive
liabilities
Repurpose assets
income
Check the end
outcome of things
and is it worth it

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To show you how important this technique is I will do the following 3
things in the next few lectures
Cases study showing reduction
of frequency of usage
Cases study showing reduction
of frequency of purchasing
How to identify which expenses
are worth reducing

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Check the details of the cases in my online course
Reduce how often you do
something per month
Reduce how often you replace
something

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are worth reducing

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As we said we have 2 cases
something per month
Reduce how often you
replace something
 We reduce how often we do something
 In this way we reduce the overall all
expenses
 This techniques is great for things that are
cheap, but we do them very often:
coffee, parties, Uber / taxi etc.
 We reduce the frequency of purchase
 In other words we extend the time of
usage of specific thing
 It’s great for SMCG / items used for
longer period: clothes, cars, laptops,
smartphones, furniture etc.

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Get the low hanging fruits first. By low
hanging fruits we mean things with big
impact and easy to accomplish

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Resources needed
Impact
SmallBig
High
Low
 Things with big impact that
require little work
1
 Easy but with low impact
3
 Things with big impact yet
expensive, time consuming
2
No
In low hanging fruits we divide the potential choices in 4 categories

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As we said we have 2 cases
something per month
replace something

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Let’s see how the low hanging fruit framework would look for the first
category
something per month
replace something

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12
4 3
Frequency of doing
something during the month
High
Low % in total expenses
HighLow
Lunch outside
In the case of the reducing frequency of usage the low hanging fruit method
looks like this. Below how it would look for Giuseppe
Coffee
Mortgage
Uber / Taxi / Cab
Dinner with Girlfriend
Netflix
Cinema

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Let’s see how the low hanging fruit framework would look for the
second category
something per month
replace something

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12
4 3
# of years between purchase
Low
High How high is the cost / price
HighLow
Renovating the flat
Below how it would look for Maria
Clothes
Domestic appliances
Smartphone & Laptop

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Just as reminder eliminating some expenses is one of the ways in which we
can spend less. Now we will talk about this in details
How to build your
wealth
Be more
productive
Add new revenue
streams
Invest wisely your
money
Choose your life
partners wisely
Manage your kids
properly
Reduce usage /
purchasing
Eliminate some
expenses
of Ownership (TCO)
Adjust your choices
and behavior using
TCO & tradeoffs
your time
of your time
Measure happiness
per 100 USD spent &
adjust your choices
Reduce expensive
liabilities
Repurpose assets
income
Check the end
outcome of things
and is it worth it

46
We will start by discussing how to identify which expenses are worth
eliminating. Later on as always we will move on to case studies
How to identify which
expenses are worth
eliminating
Cases study showing
elimation of some expense

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that are worth eliminating

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There are 3 main reasons why you should eliminate certain expenses
Eliminate things you
don’t use
Eliminate things you
don’t enjoy
 There is no point in paying for
something that you don’t use
 There is no point in paying for
something that you don’t enjoy
 In this category you will have all
sorts of products that you buy due
to social pressure or to show-off
Eliminate things that are
harmful
 Don’t pay for things that are
harming you
 It doesn’t make sense to pay for
pain or things that will cause a lot
of trouble in the future

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Renegotiate prices & find
cheaper provider

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Another great thing that you can use to spend is less is simply to look at the
prices you pay and change them
How to build your
wealth
Be more
productive
Add new revenue
streams
Invest wisely your
money
Choose your life
partners wisely
Manage your kids
properly
Reduce usage /
purchasing
Eliminate some
expenses
of Ownership (TCO)
Adjust your choices
and behavior using
TCO & tradeoffs
your time
of your time
Measure happiness
per 100 USD spent &
adjust your choices
Reduce expensive
liabilities
Repurpose assets
income
Check the end
outcome of things
and is it worth it

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We will start with a general framework and later I will show you in practice how
to deal with this subject
Approach to renegotiation of prices
& finding cheaper providers
Cases study showing how to do it in
practice

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Renegotiate prices & find
cheaper provider

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Below a nice approach that is useful when it comes to cutting down on
prices paid
List categories of
costs that you incur
Estimate annual
expenses for every
category
Estimate roughly the
potential in
percentage that you
can save
Prepare action plan
for every saving
Act using the action
plan you have
defined

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Total cost of ownership –
Introduction

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Now we will move to a bit more complicated issue the Total Cost of
Ownership
How to build your
wealth
Be more
productive
Add new revenue
streams
Invest wisely your
money
Choose your life
partners wisely
Manage your kids
properly
Reduce usage /
purchasing
Eliminate some
expenses
of Ownership (TCO)
Adjust your choices
and behavior using
TCO & tradeoffs
your time
of your time
Measure happiness
per 100 USD spent &
adjust your choices
Reduce expensive
liabilities
Repurpose assets
income
Check the end
outcome of things
and is it worth it

56
We will start with a definition and later on I will show you a case study that will
use the concept of total cost of ownership
Definition of the Total Cost of
Ownership
Cases study using Total Cost of
Ownership

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The case study will be devoted to trying to decide whether it’s better to own a
flat or rent it
Rent or buy a flat

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 All the cost related to owning or using a specific
item / thing
 It will also include the cost of lost opportunity i.e.
money not earned due to spending time on
repairing the thing
Total cost of
ownership
=
Let’s start with a short definition

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 Cost of buying a car
 Insurance
 Fuel
 Cost of maintenance including repairs &
parts
 Time wasted on maintenance, parking etc.
 Other i.e. parking tickets, traffic ticket etc.
Let’s compare the cost of owing a car and using a rideshare /
taxi / cab service
 Cost of rideshares

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Rent or buy an apartment / flat –
Introduction

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Let’s imagine that Peter is considering 2 choice: buying an apartment or
renting it. Let’s use the total cost of ownership to see what makes sense.

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Let’s have a look at the information that Peter has
Buying the apartment would
require EUR 150 K
Renting cost EUR 600 per month
Interest rate is 3%, inflation 2%,
Wage increase is 5%
Peter currently earns EUR 30 per
hour

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Consulting Hacks
$190
$19
For more details and content check my online course where you can find case
studies showing analyses along with detailed calculations in Excel

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Adjust your behavior using Total
Costs of Ownership & tradeoffs

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There are plenty of areas in which you can apply the Total Cost of Ownership
framework
Choice of flat & the
way you finance it
Choice of car
Holiday house vs
paid holidays
Own boat vs rented
boat
Choice of printer or
printing service
Choice of razors
Choice of cosmetic /
beauty procedure
Choice of
smartphone
Choice of domestic
appliance
Car vs Scooter vs Bike Many, many more

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Staying in shape can help you drastically reduce your
expenses. Here we have both direct as well as indirect impact

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Below some of the benefits of staying in shape & healthy
You spend less on food
You spend less time on buying and
preparing food
You don’t have to exchange your
clothes that often
You spend drastically less on health
related issues
You spend less time with doctors /
hospitals
You are more productive and have
more time to work
Your example will impact your kids
and they will be less costly for you

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To show you how important it is and how to do it in practice we will do 3 case
studies and we will talk about 2 useful frameworks
Costs comparison
How to o lose
weight – case study
How to get into
shape using – case
study
Low hanging fruit
framework
SMART goals

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How to lose weight – Case
Introduction

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Imagine that you want to help Kate lose weight. Use the low hanging
fruit approach to map all the potential solutions. First list activities

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How to lose weight –
List of potential activities

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Just as a reminder you were supposed to help Kate lose weight. The first
step is to list all potential activities that can help her achieve the goal

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Let’s first list all potential ideas
Cut down on sweets by 50%
Buy special meal kit / box diet
Run 2 times a week for 30 minutes
Walk every day 15 K steps
Hire personal trainer / coach
Measure calories intake
Do intermittent fasting
Stop eating carbs / carbohydrates
Eat 2 kg of vegetables every day Give up sweet beverages
Start drinking green tea Drink 4 liters of water every day
15 minutes of daily exercises Plastic surgery

76
1
Now try to map all ideas on the low hanging fruit matrix
2
4 3
Impact
High
Low Difficulty level
LowHigh

77
How to lose weight –
Solution

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Just as a reminder you were supposed to help Kate lose weight. We have
the list let’s try to put the on the map and identify low hanging fruits

79
Let’s first list all potential ideas
Run 2 times a week for 30 minutes
Walk every day 15 K steps
Do Intermittent fasting
Eat 2 kg of vegetables every day Give up sweet beverages
Start drinking green tea Drink 4 liters of water every day
15 minutes of daily exercises Plastic surgery

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1
Let’s map all ideas on the low hanging fruits matrix
2
4 3
Impact
High
Low Difficulty level
LowHigh
Run 2 times a week for 30 minutes Walk every day 15 K steps
Eat 2 kg of vegetables every day
Start drinking green tea
15 minutes of daily exercises
Do Intermittent fasting
Give up sweet beverages
Drink 4 liters of water every day
Plastic surgery

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How to get in shape –
Introduction

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Let’s help Tom get in shape by using the SMART goal framework. Help
him achieve his goals in 9 months

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Let’s first define the goals in the SMART framework
Tom weighs 110 kg. He wants to
lose 30 kg in 6 months
He can currently lift 30 kg. He
wants to reach 60 kg
He can currently run for 2
minutes at speed 7 min/km
We wants to run for 30 minutes
at the speed 5 min/km

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Calculate the value of your
time

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Whether you clean, cook, wait in the line you are effectively using your
precious resource that is also limited – the time

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Time like money is limited and you can exchange between each other
Time Money

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Calculating the value of your time is a next step that will help you save
money
How to build your
wealth
Be more
productive
Add new revenue
streams
Invest wisely your
money
Choose your life
partners wisely
Manage your kids
properly
Reduce usage /
purchasing
Eliminate some
expenses
of Ownership (TCO)
Adjust your choices
and behavior using
TCO & tradeoffs
your time
of your time
Measure happiness
per 100 USD spent &
adjust your choices
Reduce expensive
liabilities
Repurpose assets
income
Check the end
outcome of things
and is it worth it

88
Calculating the value of your time is a next step that will help you save
money
How to build your
wealth
Be more
productive
Add new revenue
streams
Invest wisely your
money
Choose your life
partners wisely
Manage your kids
properly
Reduce usage /
purchasing
Eliminate some
expenses
of Ownership (TCO)
Adjust your choices
and behavior using
TCO & tradeoffs
your time
of your time
Measure happiness
per 100 USD spent &
adjust your choices
Reduce expensive
liabilities
Repurpose assets
income
Check the end
outcome of things
and is it worth it

89
Whenever we are looking at a activity there will be 2 components. We calculate
the value of time to know the tradeoffs and be able to compare
Activity
Money Time
Preparing a meal
$ 5 1 hour
$ 5 $ 20
$ 25
Eating a meal at restaurant
$ 30 0.5 hour
$ 30 $ 10
$ 40

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Now let’s see how you calculate the value of time
# of hours devoted
to activity
x
Hourly wage / salary
net of taxes
=
Value of 1 hour
expressed in money

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Calculate the value of time –
Case Introduction

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Let’s imagine that you want to help Maria use her time wisely. Therefore,
you want to show how much she invest in daily things expressed in money

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There are a few things that we know about Maria
She earns EUR 40 per 1 hour
after deducting taxes
She cooks every day. It takes 1
hour to prepare a meal
She cleans the house every
week. It takes 4 hours to clean
She shops every second day. It
takes her 1.5 hours per 1 visit

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How to use the value of your time
to make decisions?

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You can use the value of time for 3 things
Make-or-buy analysis Spend less
 You can use the value of time to do
the so called make it or buy it
analysis
 In make-or-buy analysis you try to
see what makes sense: to do
something on your own (i.e.
cleaning) or to delegate this to
somebody else, buy the service or
product
 In some cases you may decide to
do something on your own even
though the price of buying it is
lower than the value of time you
devote to it
 You do it when you are stranded
for cash, but you have time that
you can use to do some tasks to
save cash
Earn more
 In cases when you can turn your
time into more money you can use
the result of the make-or-buy
analysis and decide to delegate
some things to other people / firms
 The saved time you should put to
working more / earning more to be
able to pay to the supplier of
services / products that you
decided not to do

96
In a sense you can use the following criteria to decide what to do
Make-or-buy
analysis
Is the price
lower than the
value of your
time?
Do you need the
cash
Can you turn
additional time
into additional
money
YES
Do the thing on
your own
NO
YES
Buy the thing
and start
working more
Do the thing on
your own
YES
NO
Decide using
other criteria i.e.
happiness
NO

97
Do make it or buy it analysis
using value of your time

98
As we have suggested you should use the value of your time to decide whether
you should do something personally or you should buy it /delegate it
How to build your
wealth
Be more
productive
Add new revenue
streams
Invest wisely your
money
Choose your life
partners wisely
Manage your kids
properly
Reduce usage /
purchasing
Eliminate some
expenses
of Ownership (TCO)
Adjust your choices
and behavior using
TCO & tradeoffs
your time
of your time
Measure happiness
per 100 USD spent &
adjust your choices
Reduce expensive
liabilities
Repurpose assets
income
Check the end
outcome of things
and is it worth it

99
I have mentioned that you should follow an easy rule to decide what
you do and what you don’t do yourself
Make-or-buy
analysis
Is the price
lower than the
value of your
time
Do you need the
cash
Can you turn
additional time
into additional
money
YES
Do the thing on
your own
NO
YES
Buy the thing
and start
working more
Do the thing on
your own
YES
NO
Decide using
other criteria i.e.
happiness
NO

100
Check my online course for details on the case studies
Should Maria delegate some of
her everyday work?
Car vs Uber

101
Car vs Uber – Introduction

102
Let’s imagine that you were to decided whether it makes more sense to
buy a car or to use Uber

103
We will consider 3 scenarios
Consider 3 scenarios
In scenario 1 you use the car just
to get to work
In scenario 2 you use it also for
buying and visiting friends
In scenario 3 you also travel on
weekends

104
Let’s see what is the difference for
# of days during
which you use the
car during the
month
Scenario 1 - just to get to
work
 20
Average # of km per
day covered
 50
Scenario 2 - work, shopping,
friends
 26
 70
Scenario 3 - work, shopping,
friends, weekends
 30
 90
% probability of
scenario
 50%  30%  20%

105
A few hints on what costs you should take into consideration
for the own car option
Purchasing of the car & financing
Maintenance
Insurance
Fuel
Parking
Other costs i.e. traffic tickets

106
Measure happiness per 100 USD
spent & adjust your choices

107
Now we will move to spending efficiency. This time the efficiency we will
measure in happiness level per 100 USD spent
How to build your
wealth
Be more
productive
Add new revenue
streams
Invest wisely your
money
Choose your life
partners wisely
Manage your kids
properly
Reduce usage /
purchasing
Eliminate some
expenses
of Ownership (TCO)
Adjust your choices
and behavior using
TCO & tradeoffs
your time
of your time
Measure happiness
per 100 USD spent &
adjust your choices
Reduce expensive
liabilities
Repurpose assets
income
Check the end
outcome of things
and is it worth it

108
Let’s have a look at a short example that will exemplify what we have in mind
Activity
Cost
Duration
Happiness
Book
$ 10 5 hour
Cinema
$ 10 2 hour
Happiness level for 100
USD
$ 100 50 hour $ 100 20 hour

109
You should group the activities and pick rather things that give you
more happiness per 100 USD spend
Entertainment
Sport
Your relations with friends
Your relations with your
girlfriend
Your relations with family
Food

110
Reduce Liabilities / Debts / Loans

111
Many people are stacked with expensive debts. You have to deal with them to
reduce your overall expenses
How to build your
wealth
Be more
productive
Add new revenue
streams
Invest wisely your
money
Choose your life
partners wisely
Manage your kids
properly
Reduce usage /
purchasing
Eliminate some
expenses
of Ownership (TCO)
Adjust your choices
and behavior using
TCO & tradeoffs
your time
of your time
Measure happiness
per 100 USD spent &
adjust your choices
Reduce expensive
liabilities
Repurpose assets
income
Check the end
outcome of things
and is it worth it

112
There are some golden rules that you should follow when it comes to
debt reduction
Pay first the most expensive debts
Pay the expensive loans / debt as
soon as possible
Don’t loose liquidity. Be able to cover
your payments in every period
Increase the amount on the cheapest
debt to pay off the more expensive
debts
Play with the length of the loan to be
liquid in every period
Play with the size of the loan to be
liquid in every period

113
Below a nice approach that is the most useful when it comes to
reducing debts
List all debts and
interest paid on
them
Model each debt /
loan in a separate
sheet
Check what is the
cash gap and what
you have to do it to
cover it
Check how much
you can save by
paying off the most
expensive debt first
Act using the action
plan you have
defined

114
Reduce Liabilities – Case
Introduction

115
Let’s imagine that you have to help Adam and Eva deal with their debts. They want to
lower the amount they spend on interest paid. Have a look at their debts

116
A few information about Adam and Eva
They earn in total EUR 6 000
They can save up to 20%
They have 3 loans: mortgage,
credit card and car loan
Try to help them restructure
their debt

117
Repurpose assets that don't
generate income

118
Another step you can take is to repurpose assets that don’t generate income
How to build your
wealth
Be more
productive
Add new revenue
streams
Invest wisely your
money
Choose your life
partners wisely
Manage your kids
properly
Reduce usage /
purchasing
Eliminate some
expenses
of Ownership (TCO)
Adjust your choices
and behavior using
TCO & tradeoffs
your time
of your time
Measure happiness
per 100 USD spent &
adjust your choices
Reduce expensive
liabilities
Repurpose assets
income
Check the end
outcome of things
and is it worth it

119
Let’s first start by dividing our assets into 4 groups
YES
Do we use the assets
currently?
Useful & valuable
 You use them currently – so they don’t
generate cash.
 This asset value will increase with the time so
don’t sell it – keep it!
 Try to make this group as small as possible
Potential investment that can generate cash
today
 Keep them provided you don’t have to repay
your debts
 Try to generate cash from them
Not used & losing value
 Sell them
 If selling is not possible rent them to generate
some cash
Useful & losing value
 Don’t buy too much of those
 Use them as much as possible
 Try to make this group as small as possible
NO
Not-used
Used
Does its value
increase with time?

120
Let’s have a look at some examples
YES
currently?
Useful & valuable
 Our first flat / apartment that is located in the
center
today
 Second flat / apartment located in the center
 Summer house
 Books that are no-longer printed
 Jewelry
 Clothes that we hardly ever wear
 Second laptop or second iPhone
 Second flat located in a town which population
is decreasing
 Car we hardly every use
 Car that we use to go to work
 Clothes we wear
 Our smartphone that we use daily
NO
Not-used
Used
Does its value
increase with time?

121
Below the approach we propose to handling the assets
Divide the assets
into 4 groups
Sell assets that you
are not using and
that are losing value
Rent the rest of
assets that you are
not using
Try to minimize the
assets you use
Rent bigger part of
the assets you are
not using

122
Repurpose assets – Case
Introduction

123
Tomasz & Monika married 5 years ago and they have decided with his wife to
go through their assets and put them to use. Help them with this task

124
A few things we know about Tomasz & his wife Monika
They have has 2 cars. Monika uses her
car once every 2 weeks
They have 2 small apartments and 1
big apartment.
One of the small apartment is filled
with their old clothes
In the second apartment they rent
just 1 room out of 2

125
Below a detailed list of their main assets
Old clothes
Tomasz’s car
Monika’s car
Small Apartment 1
2 toaster
3 vacuum cleaners
Books from the beginning of 20th century
2 old laptops
Small Apartment 2 4 old smartphones
Big Apartment
Land in the village with one of the highest
unemployment rate in Poland

126
YESNO
Not-
used
Used
currently?
Does its value
increase with time?
Useful & valuable
today
Try to map them using our framework. Divided them in 4 groups

127
Repurpose assets – Assets
mapping

128
Just as a reminder you were supposed to help Tomasz and his wife to go
through their assets and put them to use. First you had to divide into 4 groups

129
A few things we know about Tomasz & his wife Monika
They have has 2 cars. Monika uses her
car once every 2 weeks
They have 2 small apartments and 1
big apartment.
One of the small apartment is filled
with their old clothes
In the second apartment they rent
just 1 room out of 2

130
Below all detailed list of their main assets we got from them
Old clothes
Tomasz’s car
Monika’s car
Small Apartment 1
2 toaster
3 vacuum cleaners
Books from the beginning of 20th century
2 old laptops
Small Apartment 2 4 old smartphones
Big Apartment
Land in the village with one of the highest
unemployment rate in Poland

131
YESNO
Not-
used
Used
Do we use the
assets for
currently
Does its value increase with time?
Useful & valuable
todayNot used & losing value
We can divide their assets in the following way
Old clothes
Tomasz’s car
Monika’s car Small Apartment 1
Small Apartment 2
Big Apartment
1 toaster
1 vacuum cleaners
Books from the beginning of
20th century
1 toaster
2 vacuum cleaners
2 old laptops
4 old smartphones
Land in the village

133
The last thing worth considering that will help you spend less is to check the
end outcome before investing
How to build your
wealth
Be more
productive
Add new revenue
streams
Invest wisely your
money
Choose your life
partners wisely
Manage your kids
properly
Reduce usage /
purchasing
Eliminate some
expenses
of Ownership (TCO)
Adjust your choices
and behavior using
TCO & tradeoffs
your time
of your time
Measure happiness
per 100 USD spent &
adjust your choices
Reduce expensive
liabilities
Repurpose assets
income
Check the endgame
of something and
whether it is worth it

134
In those situation usually you must spend significant amount of money in
advance. The outcome may be small..
Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10

135
…medium…

136
…or great.

137
There are plenty of situation that this approach is extremely important
Education
Buying a car
Buying a flat / house
Investing in a certificate
Startup investment
Stock investment
Moving to a new place
Changing your career path

138
Check the online course for details on the case study and calculation in
Excel
Should George do the MBA?

139
Consulting Hacks
$190
$19

141
Be more productive
– Introduction

142
The key to growing your wealth is to be more productive. In other words to
do more valuable output, more efficiently and most of all do the right things

143
We have covered methods to spend less. Now it’s time to have a look at
productivity
How to build your
wealth
Be more
productive
Add new revenue
streams
Invest wisely your
money
Choose your life
partners wisely
Manage your kids
properly

144
Check our presentation on productivity hacks to learn how to 10x your
efficiency
Management consultant
productivity hacks
How to be lazy and still get things done
presentation

146
General framework for earning
more

147
In this section we will get deeper into ways to earn more
How to build your
wealth
Be more
productive
Add new revenue
streams
Invest wisely your
money
Choose your life
partners wisely
Manage your kids
properly
Be more productive
Acquire new skills &
knowledge
Deliver value
Demonstrate that
you have delivered
the value
Ask for a raise
Change the way you
are getting your
money
Befriend people
within the firm
Network outside the
firm
Get promoted
Move from one firm
to another
Get more hours
Change your career
path to a more
promising one

149
The first step to earning more is simply to be more productive. This is the
cornerstone for all other moves. First take care of that

150
When it comes to the most useful personal productivity hacks they can
be divided into 2 groups
Select (do the right
things)
Work faster

151
When it comes to doing the right things are few simple rules / tools that
you can use
80/20 rule
Go from general to
specific
Use simple math
Go for low hanging
fruit
Right down issue
trees
Use benchmarksSet priorities

152
Working faster requires you to do some changes in the way you work
Create to-do lists Set SMART goals
Use the right tools
and master them
Remove bottlenecks
Talk and write in a
simple way
Create universal
structure for folders
Avoid emailsAvoid multitasking
Standardize
everything
Create templates and
modules
Avoid iterations
Guess and prepare
ahead

153
Acquire new skills & knowledge

154
New skills & knowledge are extremely important for variety of reasons
Can help you do you work faster / do more
or better work
You can be able to do more valuable things
for the firm
Signaling effect of new skills & knowledge
New skills can help you change the rules of
the game i.e. automate work
Thanks to new skills / knowledge you may
be able to better cooperate with other
departments
If the skills / knowledge you have just
acquired does not exist in the firm you
became the main expert
Some skills are required on a specific
position

155
Check the following case studies in the course
Compound effect
Case study – Ann improving her
reading speed

157
Delivering value is extremely important and unfortunately difficult
You The firm
Value
Money

158
The value may have different forms. No matter what it is make sure you
are delivering it
Physical product (i.e. produce part of the
finished product, tool, building, machine)
Digital product (i.e. create post, video,
manual, tool, software)
Service (i.e. analyze something, count,
transport, give advice, train people)
Generate sales
Status / Show off effect
Other (i.e. provide a different point of
view)
Bring new customers

159
Deliver value – the Process

160
Below the approach to deliver value
Figure out who
decides about the
value
Define with him
what value for him
and the firm is
Define the KPIs to
measure the output
& quality of the
value
Learn how often and
how the value will
be measured
Define what to do to
deliver more value

161
Let’s have a look at an example of a sales representative
Figure out who
decides about the
value
Define with him
what value for him
and the firm is
Define the KPIs to
measure the output
& quality of the
value
Learn how often and
how the value will
be measured
Define what to do to
deliver more value
 Sales Director  Revenue generated
by the customers
assigned to the
specific sales rep
 Gross Margin
generated by the
customers assigned
to the specific sales
rep
 Gross Margin value
expressed in
thousands of EUR
 % Plan execution of
Gross margin
 Payment terms
expressed in days
 Monthly
 Measured by the
Finance department
 Improve the
acquisition of new
customers
 Create tools that
would shorten the
visit at the
customers
 Organized the
routes in a more
optimal way

162
Demonstrate that you have
delivered the value

163
Famous philosopher Kierkegaard wondered what sound
makes the tree when it falls in an empty forest.

164
He came to the conclusion that it doesn’t matter. If there
is no observer, the tree doesn’t matter. It doesn’t exist

165
Only the presence of the observer makes something real. The same goes
for the value you deliver. If nobody knows about it – it does not exist

166
A few tips what to do to demonstrate the value
Pick the right boss
Define with your boss the value that
you have to deliver
Define & track the KPIs for the value
Make yourself and the value you create
visible (i.e. participate in rankings)
Participate in projects that will help you
highlight the value you create
Create things that will be used by a
large number of people in the firm
Discuss your progress in value creation
with your boss
Create things that will be used by the
most important decision makers

168
One day the lion – the king of all animals have gathered them in the
forest and told them that he is very annoyed with the current situation.

169
Therefore, he has prepared a list of animals that he will eat.

170
The rabbit came and asked him if he was on the list. The lion
confirmed that and told him to say goodbye to his family

171
Next came the dear and got the same answer. Animals came and went and almost
all of them got the same answer from the king. Prepare to die – you will be eaten.

172
At some point came the Fox. He asked the Lion the same
question. The Lion told him that he is also on the list.

173
At this point the Fox did something no other animal dared to do

174
He asked the Lion: ”Can you cross me off the list”. The Lion surprising
said YES and cross him off the list. In this way the fox survived.

175
Below the approach we propose to negotiating the raise
Do you research
Prepare you pitch –
why you deserve the
raise
Prepare the ground
for the discussion
about the raise
Meet with your boss
and be persistent
Don’t overdo it
 Check what is the
level of salaries in
your department,
the firm on similar
positions and on
the market
 Check your
performance
against others
 Check what is the
financial situation of
the whole firm
 Prepare on the
basis of the
research the
reasons why you
should get the raise
 Such reasons
include: your much
higher
performance, your
salary is much lower
than on similar
positions, you are
delivering new
value to the firm
 Don’t ambush the
boss
 Ask him for a
special meeting to
discuss your salary
 Make sure that
around the point of
discussion you are
creating a lot of
value and your boss
is aware of that
 Meet with the boss
and present your
pitch – why you
should get a raise
and what amount of
money you have in
mind
 Make it clear that
you are happy with
the work regardless
of your salary
 Make sure that he
agrees that you are
delivering high
value and you are
relatively underpaid
 If he doesn’t agree
for a raise ask under
what conditions and
when you can get it
 Don’t try to get too
big a raise – this
may put you in
danger if your
performance is a
little bit lower or
the firm has
problems
 Don’t ask for a raise
too often. Once a
year, especially
around the
performance review
is a good rule of
thumb

176
Change the way you are getting
your money

177
Another way to earn more is simply to change the way you earn money. Let’s
consider 2 employees that are creating content
5 000
Peter John
Base salary 5 000
168# hours they work a
month
168
10# of posts they create
a month
10
How they are paid By the hour By the # of posts

178
Now let’s imagine that both of them increase their productivity by 50%. As you
can see John earns much more
5 000
Peter John
Base salary 7 500
168# hours they work a
month
168
15# of posts they create
a month
15
How they are paid By the hour By the # of posts
0% 50%
50% 50%

179
Now let’s think when it makes sense to move from charging by the hour (effort)
to charging by the output
You can be much more productive
than the average employee
You enjoy working
You don’t need that much socializing
at the work place
The output is easily observable by
you and your employee
The output is relatively standardized
– there is little variance
You are healthy and hardly ever
experience things that can harm your
output

180
Befriend people within the firm

181
Let’s see why it makes sense to befriend people at your firm
People give more willingly raises to
people that they like
You are more likely to get a help from
colleagues if they like you
People talk & share information with
colleagues that they like
If they like you will have higher chances
to participate in interesting projects
Being likeable increases your chances of
getting promoted
If you are liked a decrease in your
performance will be treated more lightly
If you have more information & earlier
you see the threats & opportunities

182
Once we know why it is important to be liked let’s talk about how to achieve it
Real work – delivering
value
Inefficiencies
Before
value
Inefficiencies
After
Help others

183
Below the approach to befriending your colleagues
Define how to help
other and deliver
value
Allocate time for this
activity
Be proactive – ask to
help people
Help your colleagues
As for help when
you need it

185
Networking within your firm is not enough. You have to reach out to
outside network as well. Below a few reasons why it is so important
You can get new opportunities not
available within your firm
You can catch new, interesting trends
earlier
You can bring those trends to your firm
and be perceived as an authority in
this area
You can learn new things
They may offer you to participate in
events, projects that will improve your
personal brand
You may get new interesting job offers

186
Below the approach to networking outside your firm
Pick the form of
networking that is
comfortable for you
Allocate time for this
activity
Plan where to go
and what to do
Define KPIs for you
networking activities
Execute & track
efficiency of you
networking

188
Another way to earn more is simply to be promoted to a higher position
Higher position in most cases means
higher salary
Higher position means more influence
on the firm
Higher position means more exposure
to Board Members and the outside
world
At certain level you will be entitled to
bonus schemes
At higher positions you will benefit
more from productivity gains
If you change the company at higher
position your salary gain will be
usually bigger

189
Below the approach to getting promoted
Understand the
career paths that
exists in the firm
Learn the
requirements for
getting promoted
Understand the
limitations
Define with your
boss what you have
to do get promoted
Execute & track your
progress towards
promotion
 In many firms you
have very limited
number of positions
directly above you
that you can fill in
 In many cases the
promotion have to be
done by moving to a
different department
or region
 Not all firms have
defined career paths
 In many cases there
are some informal
rules i.e. director has
to have at least
certain number of
years experience in
specific department
 Your promotion will
depend on the
gatekeepers
 The most important of
them is usually your
direct boss or his boss
 Huge importance in
some firms play the
HR Manager

191
As you may remember we said that you can work more by improving
productivity. You can gain a lot also by eliminating chores at home
value
Inefficiencies
168 hours
Before
Time spend on other
chores at home
value
Inefficiencies
After
Help others
Time spend on other
chores at home
40-60 hours

192
In this way we can drastically increase the time for work
value
Inefficiencies
168 hours
value
Inefficiencies
After
Help others
Before
Time spend on other
chores at home
40-60 hours
Time spend on other
chores at home
value
Inefficiencies
Remodel your life
Help others
value

193
Such drastic remodeling of your life makes sense for many reasons
Specialization leads usually to
efficiency jump
You reach faster excellence level – the
10 thousand hours rule
You can generate more cash
You can deliver 2x-3x more output
than your colleagues / competitors
You reach the critical mass much
faster
You progress becomes more visible

194
Change your career path to more
promising

195
In many cases you have the choice to stay on your career path…..

196
….or to change it to a more promising one

197
Below some reasons why you should do it
Your current job may stop existing
You can gain much more if you
change the career path
You can apply part of your current
experience on the new path
You are bored with your current
career path
You find the new career path
stimulating
You want more flexibility that current
career path does not offer

198
Change your career path to a more
promising one – Case Introduction

199
Julia has finished History and currently works as a barista in a coffee shop.
Help her decide whether it makes sense to change her career path.

200
Below a few information about Julia
She currently earns
EUR 800 per month
She can become a programmer and
earn 50% more
Requalifying would cost her
EUR 4 000
As a programmer she would get 5%
salary increase every year above
what she can get now

201
Consulting Hacks
$190
$19

202

203
– Introduction

204
In this section we will discuss useful ways that will help you generate additional
revenue streams
additional revenue streams
Detailed discussion of
methods
Cases studies & examples
how to apply them in
practice

205
General framework for additional
revenue streams

206
In this section we will get deeper into ways to earn more
How to build your
wealth
Be more
productive
Add new revenue
streams
Invest wisely your
money
Choose your life
partners wisely
Manage your kids
properly
Sell your services
Exchange your time
for something else
(i.e. shares)
Create assets & tools
Sell or rent your
assets & tools
Create new revenue
streams using your
assets & tools
Other (i.e. create new
business)

208
In previous sections we said that thanks to better work and by doing make-
or-buy analysis we can gain a lot of time
value
Inefficiencies
168 hours
value
Inefficiencies
After
Help others
Before
Time spend on other
chores at home
40-60 hours
Time spend on other
chores at home
value
Inefficiencies
Remodel your life
Help others
value

209
You can also do with this time a lot of other things that will help you earn
more money
value
Inefficiencies
168 hours
value
Inefficiencies
After
Help others
Before
Time spend on other
chores at home
40-60 hours
Time spend on other
chores at home
value
Inefficiencies
Remodel your life
Help others
?

210
The additional time that we have gained by outsourcing some of the chores &
improving productivity we can apply to the following areas
Additional time
Work more for
the current
employer
Sell services to
other firms
Learn new things
that will help you
earn more
Create Assets &
Tools that you
can sell / rent
Create your own
startup
Work for other
startups
Other options i.e.
network

211
As you can see selling services is one of the alternatives to working more for
the current employer
Additional time
Work more for
the current
employer
Sell services to
other firms
Learn new things
that will help me
earn more
Create Assets &
Tools that I can
sell / rent
Create my own
startup
Work for other
startups
Other options i.e.
network

212
Let’s see when it may make sense to sell your services to other firms
There is no conflict of interest
There are no other legal barriers
You have / you can acquire the
skills needed
There is an easy way to get
customers
Preferably there is a marketplace
for those services
The services can be delivered
flexibly
The service will not impact
negatively you primary job
You have necessary assets, tools to
do the service
You can earn more from the service
The customer will pay you

213
Sell your services – Examples

214
Let’s have a look at some services that you can provide
Transportation
and related
 Uber / Lyft
 DoorDash /
Postmates / Uber
Eats
 Lime / Bird
 Instacart
Requiring design
/ graphical skills
 99designs
 Fiverr
 Dribbble
 Guru
Data gathering /
inputting
 UpWork
 Freelancer
Programming /
Coding
 UpWork
 Freelancer
 GitHub Jobs
 People Per Hour
 Toptal
 Hired
 Dice
 Guru
Other
 TaskRabbit
 Amazon
Mechanical Turk

216
By Assets we mean things that you can create and later monetize in some way
Physical assets i.e. house, garage
Blog, posts, presentations
Emailing List
Movies
YouTube channel with
subscribers
Online courses
Books
Patents
Tools
Others i.e. short music, photos

217
Tools are special class of assets that needs more details. Let’s start with a short
definition
 Tools are assets that can solve a problem that the user has
yet it requires certain input from the user
 Tools can either automate some work done previously by
the user or do work that previously the user couldn’t do
by himself
Tools
=

218
We have the following main groups of assets
Provides internal data
to users
 Data on the rents in the
city provided by Airbnb
 Open Baremetrics
showing internal KPIs &
metrics to external users
Automates work
Calculates something
for the user
Combines information
from different sources
Other
 Emailing software
 Zapier
 Macro / VBA in Excel
 Calculators of mortgage
related data
 Calculator of net income
depending on the taxes
 Offers from different
banks
 Macro data reported by
different institution
 Data on the sales prices
of real estates
 Check lists
 Templates
 Standard documents

219
Assets & Tools – Examples

220
Tools can start from a very simple form. Below some examples
Excel based sheets
Google Sheet
Power Point or PDF documents
Airtable based tools
Mobile app created with a builder
Chatbot created with a builder
Questionnaire created using Jot-
form
Calculator created using Calculoid
WordPress based theme
Others

221
Sell or rent your Assets & Tools

222
If you wan to monetize your assets or tools you have 3 main channels
Marketplaces
 Amazon
 Udemy / Skillshare
 Eloquens
 YouTube
 Shutterstock / Adobe Stock /
Envato
Direct sales Own e-commerce
 You personally
 Your sales force
 WordPress plugins
 Shopify
 GumRoad

223
To support them you can consider 3 main marketing techniques
Content Marketing
 You create a content that will
support your sales, creating traffic
for your sales channels
 The most popular forms are posts
(blog on WordPress), presentations
(SlideShare), movies (YouTube)
 Many build additional distribution
channels for the content: Instagram
page, Facebook page, LinkedIn
account, twitter account
Freemium or Free Trial
Model
Affiliate Marketing &
Referral programs
 In Freemium you offer part of the
product for ever for free
 In Free trial you offer the whole
product for a limited time i.e. 30
days
 In Affiliate marketing you offer part
of your revenues for bringing
customers to independent Partners
 Affiliate marketing is done usually
via affiliate platforms that already
have a lot of potential partners for
you
 In referral programs you offer
usually some gifts (i.e. your tool,
assets for free for some time) for
bringing a user or a customer
 One of the most famous referral
program was run by Dropbox – you
got additional free space for some
actions including bringing new users

224
Assets & Tools – Where to find
ideas

225
There are 5 main sources of ideas for creating Assets & Tools
Marketplaces
 Books: Amazon,
SlideShare
 Online courses: Udemy,
Skillshare, Coursera,
Lynda
 Excel based tools:
Eloquens
 Mobile Apps: App
Store, Google Play,
Amazon Appstore
 Movies: YouTube,
Shutterstock, Adobe
Stock,
 Music: YouTube,
 Photos: Shutterstock,
Adobe Stock,
Podcasts
News about startups
that got funding
Forums Other
 Smart Passive Income
 The Foundation
 Chris Ducker
 The Foundation
 Indie Hackers
 Entrepreneurs On Fire
 Crunchbase  Reddit
 Local copies of Reddit
 Forums devoted to
specific topic
 Facebook Groups
 Product Hunt
 Your own needs
 The needs of your
current customers or a
group you know well

226
Sell or rent your Assets & Tools
– Case Introduction

227
Let’s imagine that you have to help Jorge estimate what Assets & Tools he should build
to use to the fullest potential the time he has gained by improving his productivity.

228
A few information about Jorge. Try to estimate how much he can earn and
what option is better
Jorge earns 30 EUR per hour
He has managed to save 40
hours a month
He can create online course or
Excel based tools

229
Below additional information on the online course
1 online course with 60 lecture
requires 240 hours of work
He can earn EUR 90 per month
from 1 course
He has to pay additionally EUR
30 per lecture for editing

230
Below additional information on Excel based tools
1 Excel based tool will take him
15 hours to create
He can earn EUR 10 per month
from 1 Excel based tool

231
Create new revenue streams using
your Assets & Tools – Introduction

232
In some cases you can create on the basis of assets and tools new additional
revenue streams. Below example of what you can do using Excel based tools
Excel based tool SaaS based tool Consulting firm
 You help the
customers use or
implement the tool
 You gain fees from
the consulting
hours sold to the
customer
 You can up-sell him
new services and
find ideas for new
products
 You earn one-off
payment from the
sales of the tool
 You have no contact
with the end
customer
 You earn
subscription fee
from the customer
 You have direct
access to your
customers via
emailing list and in-
product
communication
 You can up-sell him
new products or
upgrades (better
plans)

233
Below another example of a evolution from a small YouTuber to something
entirely different and a bit unexpected
1 YouTube channel
Multiple YouTube
channels
Content Production
Firm
 You have not only
YouTube channels
but also blogs,
podcasts
 Content is produced
by many teams
 You have multiple
revenue streams
 You earn from ads,
branded content,
sponsorships
 You earn only from
you own production
 You earn from ads,
branded content,
sponsorships
 Most of the
channels have
content produced
by your employees
Content Production
Firm & e-commerce
firm
 You have not only
YouTube channels
but also blogs,
podcasts
by many teams
revenue streams
 You add to your
revenue streams
income from sales
of physical or digital
products
Content Production
Firm & Brand
Owner
 You use your
channels to
produce content &
create brands
by many teams
revenue streams
 Majority of your
revenues comes
from licensing the
brands you have
created and
cooperation with
other brands

234
Create new revenue streams using your
Assets & Tools – When it makes sense

235
Creating additional revenue stream using the Assets & Tools makes
sense under certain conditions
You can’t gain more by allocating the
time to building new assets
You can gain more from new revenue
streams than assets building
You can gain more from new revenue
streams than current works
Current assets may stop to exist or
stop to being unique
You expect a decrease in revenues
from assets
You want to build independent
business using the assets

236
Consulting Hacks
$190
$19

238
How much money you need
– Introduction

239
It is always a good idea to calculate how much money you actually need
to live the life you want. We will discuss this issue in this short section

240
We will discuss in this section the following issue
Backward logic
Retirement age if you
have no passive income
– case study
Retirement age if you
have passive income –
case study

242
Invest wisely your money –
Introduction

243
In this section we will discuss useful ways that will help you invest wisely
investing wisely
Overview of some methods
and assets you can invest
into

244
General framework for investing
wisely your money

245
As you may remember we have the following general framework
How to build your
wealth
Be more
productive
Add new revenue
streams
Invest wisely your
money
Choose your life
partners wisely
Manage your kids
properly

246
In this section we will get a little bit deeper into how to invest wisely your
money
How to build your
wealth
Be more
productive
Add new revenue
streams
Invest wisely your
money
Choose your life
partners wisely
Manage your kids
properly
Understand different
types of investment
assets
Diversify
Understand the
timing
Be rationale not
emotional
Automate
investment
Adjust your
investments to your
age

247
Different types of assets in which
you can invest

248
You have 6 main groups of investment assets
Cash Bonds
Mutual funds
(active
management)
ETFs (passive
management)
Others i.e.
startups,
commodity
Returns
Real Estates
 Low
Risk
Required
knowledge
 Low  Medium
 Long term
below ETFs
 Medium  Medium  Low - High
 Low within
certain limit
 Close to zero
for some
bonds
 Big  Big  Medium  Huge
 Low  Medium  Medium  Medium  Big  Huge
Stocks
 Medium
 Huge
 Big

249
You have 5 main groups of investment assets
Cash Bonds
Mutual funds
(active
management)
ETFs (passive
management)
Others i.e.
startups,
commodity
Returns
Real Estates
 Low
 1%
Risk
Required
knowledge
 Low
 ≈ 0-3%
 Medium
 Below ETF
 Medium
 ≈ 5-10%
 Medium
 ≈ 4%
 Sky is the
limit
 Low within
certain limit
 Close to zero
for some
bonds
 Big  Big  Medium  Huge
 Low  Low  Medium  Medium  Big  Huge
Stocks
 Medium
 ≈ 5-10%
 Huge
 Big

251
Below a few golden rules worth applying
Don’t loose the money
Check the timing
Invest small portion of your wealth
in risky assets
Invest at minimal constant pace no
matter what
Invest more in bad times
Invest less in good times
Avoid debt for majority of
investments
Adjust your investments to your
age

252
Things that will influence your
returns

253
There are 3 factors that will impact your investment results
Knowledge
 How much you know about a class
of assets
 How much you know about the
general investment landscape
 How much you understand unit
economics of the business assets
 How much you know about
specific asset you have bought
Timing Luck
 In what part of the economical
cycle you are
 Usually, when you invest at the
top of the cycle you buy assets at
too high prices
 Usually, when you invest at the
bottom of the cycle you buy
assets at much lower price than
the fair value
 The random things that you are
not able to account for – the
government suddenly passed the
law in your favor, the weather
was much hotter or colder than
expected, etc.

254
Let’s see how important & timing is for different type of assets
Cash Bonds Stocks
Mutual funds &
ETFS
Luck
Real Estates
 10%
Timing
Knowledge
 20%  30%  20%  10%
 0%  10%  30%  60%  50%
 90%  70%  40%  20%  40%

256
When it comes to stocks there 2 ways in which you can earn money
from them
Dividends
 A part of the profit paid out to
shareholders
Increase in value of the
stocks
 The price of the share may change
after you bought them. If it goes
up, you in theory gain. If it goes
down in theory, you lose

257
Let’s see what drives the dividends and the increase in the value of
stocks / shares
Dividends
Increase in value of the
stocks
Net profit /
EBITDA
Cash from
other sources
Increase in
expected
profits
Buy Backs

258
The problem with stocks is that you don’t know whether you have
bought a winner
Dow Jones 30 1999, 2000, 2010, 2019

259
Now let’s have a look what kind of returns you can expect
% Dividend and % Total Return Rate

261
Also with bonds you have to be very careful. Some consider them safer, yet
you must know that they differ greatly. We can divide them in 3 categories
Bonds issued by countries
 Countries issue bonds to finance
mainly their public debt
 They can be nominated in
different currencies
 Some have fixed interest rate
some have variable interest rate
 You can lose part o the invested
money or everything (100%) – if
the country goes bankrupt –
happened to many of them:
Argentina, Mexico, Brasil, Poland
Bonds issued by states,
regions
 Also regions and state can issue
debts to finance projects or
refinance their public debt
 Usually those bonds are less safe
than the bonds of the country of
which they are a part
money or everything (100%)
Bonds issued by firms
 Some firms instead of taking loans
from banks issue bonds to finance
their growth.
 The bonds can be backed up with
some collateral or have no
collateral at all
 Usually they have offer higher
interest rate than the country in
which they are located
 They are in most cases less safe
than the bonds issued by their
countries
money or everything (100%)

262
Let’s see at some examples
Bonds issued by countries
 USA
 Eurozone
 Switzerland
Bonds issued by states,
regions
Bonds issued by firms
Good
Potentially
Bad
 Emerging
Markets
 EU members
that are not
part of
Eurozone
 States /
regions with
good
financial
standing that
are part of
stable
countries
Good
Potentially
Bad
 States /
regions with
bad financial
standing
 Firms with
great ability
to produce
cash flow no
matter what
i.e. Amazon
 Firms with
high
profitability
and almost a
monopoly
Good
Potentially
Bad
 Others i.e.
Toys R us

263
Now let’s have a look what kind of returns you can expect
% Dividend and % Total Return Rate

265
When it comes to real estates, we have 3 main groups. Majority invest in
residential real estates
Residential
 Flats, apartments, houses
Commercial
 Shopping malls
 Offices
 Warehouses
 Hotels
 Others
Land

266
There are many ways in which you can earn money on residential real estates
Buy & rent the whole
apartment
Buy & rent rooms Light flip
Extensive flip
Daily renting (Airbnb,
Booking.com)
Subletting (Renting of
apartments that don’t
belong to you)
Buy to keep

267
The great thing about real estates is that you can leverage it (take a lot of
debt. Below short example
Stocks
 300
Real estate
 300Amount invested
In thousands of USD
 300  1 500Value of the assets
you can buy
In thousands of USD
 3%  5%Yield / Interest rate /
Dividend rate
In %
 9  75Cash flow generated
from the assets
In thousands of USD

268
Real Estates – the Risks

269
Of course real estates have their risk factors as well
Timing
Change in the status of the
district
Legal changes
Maintenance costs
Political changes
Infrastructure changes
Interest rate
Too big supply

270
What is a portfolio management

271
Create new revenue streams using your
Assets & Tools – Case Introduction

272
First let’s think about what kind of cost positions you have
Food & Drinks
Hotel
Clothes (bride and the
groom)
The band
The place / venue
Flowers
Entertainers for the kids
Church costs
Other costs

273
First let’s divide the cost into 2 groups: fixed and depending on
the number of guests
Food & Drinks
Hotel
Clothes (bride and the
groom)
The band
The place / venue
Flowers
Entertainers for the kids
Church costs
Other costs

274
Let’s see how we can estimate the costs of food & drinks, hotel,
place / venue
# guests
Cost of food &
drinks per 1 guest
Food & drinks costs
Hotel costs
x
# of rooms needed
Cost per 1 room
x# of guests per 1
room
# of guest requiring
hotel
% of guest
requiring hotel
÷x
# sq m (space)
Cost per 1 sq m
Place venue costs
xSpace per 1 guest
x

275
Let’s see how we can estimate the costs of entertainment and flower
costs
# guests
Cost of food &
drinks per 1 guest
Food & drinks costs
Entertainment
costs
x
# of kids
Cost per 1 kid
x# of kids per 1
guest
# of guests with
kids
% of guests with
kids
xx
# of vases
Cost per 1 vase
Flower costs
x
# of guests per 1
vase
÷

276
After we have calculated every cost position we have to sum them
up to get the total cost of the wedding
Food & drinks costs
Hotel costs
Cost depending on
the # of guests
Entertainment costs
Flower Costs
Place / venue costs
+
Clothes (bride and
the groom)
The band
Other costs
Church costs
Fixed costs
Total cost of the
wedding
+
+

278
Issue tree - general
Area of analysis
Area 1
Problem 1
Problem 2
Possible Reason 1
Possible Reason 2
Possible Reason 3
Possible Reason 4
Possible reasonsSuspected problems
Analysis to be
performed
Analysis 1
Analysis 2
Analysis 3
Analysis 4

279
Issue tree for John's flat –
Introduction

280
Imagine that you would have to create an issue tree for John’s flat. What
kind of problem he has and what could be the reasons for that

283
Opportunity tree
Gross Margin
Sales
% Gross Margin
% Front Margin
% Back Margin
# of transactions
ATV
Traffic
% conversion
 YouTube
 Ads on instagram
 Affiliation with bloggers
 Guest blogging
Opportunities
 Long form / Short form
 Reduction of delivery methods
 No account
 Emailing for people abandoning cart
 Upselling and Cross selling
 Free delivery for higher tickets
 Introduction of new categories
 Reducing number of suppliers
 Finding new suppliers
 Renegotiation

285
Cost drivers are causing the cost to go or down
Cost of a Udemy course
Slide preparation
Recording and editing
# of slides
Cost of 1 hour
# of hours per 1 slide
# of lectures
Cost of 1 hour
# of minutes per 1 lecture

286
Personal KPIs – Introduction

287
Let’s imagine that you have to define the personal KPIs for Giuseppe that
will help him make sure that he is increasing his chances of being happy

288
A few information about Giuseppe
Giuseppe has a girlfriend
He works as a business analyst
His family, health and friends are
important to him
He also wants to get more
financially sound

289
To define KPIs I would recommend following a very simple
sequence of actions
Define what areas
matter for you
Identify drivers Define output KPIs Define input KPIs Set targets for KPIs

290
Let’s look how we can define KPIS for the financial well-being
Financial well-being
His net value
Area Drivers Output KPI Input KPI
Generate positive CF
 Net value in EUR  % of his salary not spent during the
month
 Additional money invested
 Additional income generated
 Cash flow generated during the month
 Positive cash flow generated during the
month as % of his salary
 % of his salary not spent during the
month
 Additional income generated

291
Consulting Hacks
$190
$19

292
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