My favourite life lesson (part 2) double entry system

For those who study accounting, we are taught using this simple credit/debit system to make sure the books are balanced.

I like to use it in life too.

When I was a partner with a large accounting firm, I often get asked this question, “how tough is it to get to your position?”

To be honest, I never have a great answer.  To me, it’s a simple and boring one – in order to achieve something big in life (yes, this is relative), you need talent, hardwork, confidence, and a whole lot of luck (which includes timing).  And the result is a product (multiplication not addition) of these 4 factors too, i.e. if one of them is 0 or close to 0, the result is pretty much 0 no matter how large the other 3 numbers are.

The other thing is, similar to the double entry system, it’s meaningless to look at just one side of the equation.  For example, it’s pretty silly to ask whether 1 million (or any number) is a lot of money.  If you use it to buy a big-mac, that’s a lot of money.  If you use it to buy a mansion in Hong Kong, that’s nothing!

So, it’s never really about how tough is it to do something, rather, it should always be about whether the two sides of the equation match, more accurately, it should be about whether that something is worthwhile (in light of the effort given).  As long as they are “balanced”, you have made the right decision!

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s