Month End: July Snapshot

Remain consistent with your steps.

If you want to learn more about my opportunity, or if you want to have someone to discuss your debt reduction strategy with, or if you need a financial check-up, contact me.

The rich ruleth over the poor, and the borrower is servant to the lender.

I believe in your journey to….

A Debt Free Me


July 27, 2016

“The Interpretation of Financial Statements” is the classic book by Benjamin Graham. Widely regarded as the founder of value investing, Benjamin Graham’s principles of value investing have impacted scores of individuals from Warren Buffett to Bruce Berkowitz. Written in 1937, “The Interpretation of Financial Statements” guides the reader through the core concepts found in balance sheets, income and expense statements, and financial ratios. There are seven key points found in this book: working capital ratio, current ratio, intangible assets, cash, notes payable, liquidation value and net current asset value. The working capital ratio is one of the most important ratios to look at when analyzing a business. Working capital is calculated by subtracting current liabilities from current assets. A healthy working capital shields the company from being unable to meet demands, fund emergency losses and helps with the prompt payment of bills. A bank when analyzing a business for a loan request will look at the working capital ratio. The current ratio can be calculated by dividing the current liabilities from the current assets. As Graham states, “When a company is in a sound position the current assets well exceed the current liabilities, indicating that the company will have no difficulty in taking care of its current debts as they mature.” Graham informs the investor that notes payable is the most important item to watch among the current liabilities. Here, notes payable tend to represent bank loans or loans from other companies or individuals. In the case that the notes payable have increased at a faster rate than the sales over the years, it could be a negative sign for the company because it signals an over-reliance on borrowings from the bank. Another important part of value investing is margin of profit which is calculated by dividing the operating income by sales. This margin will help tell an investor how well a company is performing. It’s important to look at any company over a number of years and not simply a three to six-month period. Look as far back as five years if necessary. If you’re taking a value investing approach, then understand that you’re looking to buy shares of companies you want to hold onto for the long term. When you invest ask yourself, am I investing for capital gains or am I investing for cash flow? While you’re young you can seek to build a large portfolio, but as you get older you’re going to need passive income to supplement social security or possibly replace it. This book is not only helpful for investing in paper assets, but you can also take this financial knowledge and apply it to look at real estate financials if you want to invest in a real estate property or even business financials if you want to own a business asset. If you’re going to buy something from someone, and a sizeable amount of money is involved ask to see the financials of what you’re buying. The worst, the seller can say is no. This scenario is purely from an investor’s standpoint. The point is doing your due diligence to know if it’s a good investment, and if there’s no cash flow, then why are you doing the deal?

For many young adults, it seems easier to put off any investing decisions until their financial situation becomes, at least theoretically, more stable. Twenty-somethings, however, are actually in a prime position to enter the investing world, even with college debt and low salaries. Here are five advantages for investing in your 20’s: time, take on more risk, learn by doing, tech savvy, and human capital. By starting in your 20’s, a person has the advantage of time on their side. If you use the principle of compounding and constantly re-invest your earnings over time, a person’s investment will grow. A single $10,000 investment at age 20 would grow to over $70,000 by the time the investor was 60 years old (based on a 5% interest rate). That same $10,000 investment made at age 30 would yield about $43,000 by age 60, and made at age 40 would yield only $26,000. The longer money is put to work; the more wealth it can generate in the future. My mustard seed concept can teach you how to take advantage of the principle of compounding. If you want to learn more, then message me in the contact me section. People investing in their 20’s are also able to have more aggressive portfolios, which can be vulnerable to volatility in the market, but can also have larger gains. I suggest that if you invest in a 401K or if you’re building your own portfolio that you make sure you examine your portfolio at least once a year. After five years, you may need to adjust your investment strategy. Younger investors also have the opportunity to make mistakes and learn from those mistakes. If you invest later in life, you run the risk of losing your investment which not only affects you but your family also. The younger generation is a tech savvy one, able to study, research and apply online investing tools and techniques. Online trading platforms provide countless opportunities for both fundamental and technical analysis, as do chat rooms and financial and educational web sites. Human capital, from an individual’s perspective, can be thought of as the present value of all future wages. Since the ability to earn wages is fundamental to investing and saving for retirement, investing in oneself – by earning a degree, receiving on-the-job training or learning advanced skills – is a valuable investment that can have strong returns. The most important thing any young investor can do is start investing today. Time will not stop for you, and opportunity will pass you by. A young investor can invest in dividend stocks that can produce an income stream for as long as he owns it. In my opinion whether you start in your 20’s or 30’s, look for assets that produce income, and learn how to manage and if possible transfer risk. Again the single most important reason to start investing now is time. “A person’s days are determined.” (Job 14:5 NIV).

There is no denying that many big budget movies such as “Wall Street” are entertaining and can give a glimpse, albeit a sensationalized one, into the wild world of finance and trading. For every blockbuster, must-watch finance movie starring A-list celebrities, there are dozens of small-budget films and documentaries that often give a more genuine insight into the true side of investment banking. What they may lack in star power, these films make up for with closer looks into the real world of high-stakes trading. Five movies suggested in this article are: Billion Dollar Day, Floored, Too Big to Fail, Trader, and Boiler Room. Billion Dollar Day focuses on the lives of three forex traders and it is a BBC documentary set in 1986. Floored is a 2009 documentary set on the Chicago futures trading floor and shows how the Internet is impacting finance. Too Big to Fail is an adaption of Andrew Sorkin’s novel, and tells the story of the 2008 financial crisis. Trader tells the story of hedge fund trader Paul Tudor Jones. Boiler Room is one of the movies on this list that I’ve seen. This little-known drama released at the end of the dot-com bubble tells the story of an ambitious college dropout going to work in the boiler room of a small stock brokerage. He quickly becomes entrenched in the firm’s culture of greed and corruption. The movie stars Giovanni Ribisi, Vin Diesel, and has a cameo by Ben Affleck. Each of these movies will help give you insight into the world of investment bankers. It’s important, so you can see how they make their money, and help you ask the important question, what’s he really trying to sell you?

If you have a prayer request, or if you’re in need of a financial checkup you can reach me in the contact me section.

I recently finished watching the Big Short, and I encourage you to watch this movie to see another side of the financial crisis of 2007-2008. I’ve included a YouTube clip which gives an animated explanation of the crisis:

“But those who want the best for me, Let them have the last word—a glad shout!— and say, over and over and over, ” GOD is great—everything works together for good for his servant.” I’ll tell the world how great and good you are, I’ll shout Hallelujah all day, every day.”

Psalm 35:27-28 MSG

July 20, 2016

Silicon Valley’s best-known venture investors have emerged largely unscathed from the rapid descent of Theranos Inc., but the decline offers a cautionary tale for a community that bets big on visionary founders touting revolutionary technology. If you’re not familiar with Theranos Inc., then feel free to do a web search on this company. It was founded by Elizabeth Holmes, who at the time was praised as a visionary for what her company was going to do in the health service industry. Now she’s been banned from the blood testing business for two years. This company was valued at $9 billion during a 2014 funding round. “For me, the Theranos saga is a wonderful reminder: While you want to invest in people who are visionary and are committed to their businesses, you want to partner with people who are truth-seeking,” said health-care investor Bryan Roberts, a partner at Venrock. “A lot of people [involved with Theranos] fell down on that in this.” Often what a person or business does in private will in time come to the light of day. This Scripture is a reminder of this quote, “I the LORD search the heart and examine the mind, to reward each person according to their conduct, according to what their deeds deserve.” Jeremiah 17:10 NIV. Before Theranos’s problems came to light last October, at least some Silicon Valley investors cheered her apparent success. Marc Andreessen, whose firm isn’t a backer of Theranos, tweeted that Ms. Holmes would be the first female tech founder on his list of “revolutionary entrepreneurs.” One of the big red flags about Theranos was its unusual roster of investors and board members. The actual board members at that time weren’t medical experts, and the company didn’t publish its results in peer reviewed medical journals. Theranos replaced many of its directors last October and created a new medical-advisory board.
The Theranos spokeswoman said, “Theranos has boards composed of individuals of extraordinary experience and talent in many fields. Their contributions have been significant.” The article then goes on to give a few more examples of Silicon Valley startups that have run into issues. The importance of building a big business is not in how quickly it can reach a billion-dollar valuation but for how long it can last, how much good it will actually do, and how strong its fundamentals are. If the foundation isn’t strong then the cracks will appear and the truth will come to light. Theranos is a case study which will more than likely end up in a business college textbook. Financial literacy, and common sense are two keys to investing for positive cash flow.

This commentary is from Mainak Dhar, managing director at General Mills. After twenty years, ten bosses, five moves, four kilos, and a journey that has spanned experiences across many different businesses and countries, I am back where it all began — Mumbai. Did I ever imagine I’d be working in the corporate sector for twenty years? To be honest, perhaps not, but back then a time horizon of a couple of years was long term thinking. As I think back to that twenty-two-year-old me sitting in the reception, waiting to collect my visitor ID badge, if I had the chance, what would I say to myself? Here’s an attempt. In this article, Mr. Dhar gives 20 tips to the version of him of 20 years ago. I’ve picked a few to share and I encourage you to read this article. Perhaps much later than I should have, I realized that our identity does not come from the designation we have at our jobs but what inspires us, what makes us feel alive. It’ll all be a waste of time. If money is what you chase, the goalpost will keep shifting. I figured that one out pretty early- you may as well get started on day one of your career. You learn as much, if not more, from the “bad” bosses as the “good” ones. It’ll all be ok. You’ll screw up, you’ll be hurt, you’ll have bad days but you know what, nobody owes you a happy life. You need to find things and people that make you happy. His letter is an honest assessment of working in any career. Work not just for your paycheck, but also work to learn. What do you learn? You learn or rather reveal more of your own God given gifts, and uncover new abilities you didn’t know you had through collaboration. Your workplace’s responsibility is to pay you for your job. It’s your responsibility to use your paycheck to take of your own business. Your business is your life and the legacy you leave behind.

Announce plans for Bangkok’s tallest building in the depths of a financial crisis. Persist through violent street protests and a military coup. Target wealthy foreigners who would pay millions for an apartment. People thought Sorapoj Techakraisri was crazy. That he was only in his 30s added to the skepticism. The 77 story MahaNakhon tower will have its first residents this September. By far the largest skyscraper on the skyline, MahaNakhon will contain 209 Ritz-Carlton Residences, ranging in price from $1.4 million to $10 million; a five-star Edition Hotel by Marriott International; and flashy boutiques and restaurants. Techakraisri
believes that Bangkok is close to having a metamorphosis and becoming an alternative to Singapore. Techakraisri’s company Pace Development’s market capitalization is just $315 million, and its profits are scarce. “It’s not yet a solid company in terms of earnings, though it should do fine,” says Avin Sony of Asia Plus Securities, the Thai firm that managed Pace’s initial public offering in 2013. He predicts that as buyers take possession of their units in MahaNakhon this year, Pace will post a small profit, followed by much bigger earnings in 2017. Even though Thailand has been struck with political turmoil, the super luxury segment of Bangkok’s property market seems to be experiencing a boom. Ultimately Techakraisri is investing for the long term and believes that the government will stabilize, and that expats will be looking to buy his condos as a second or third home. Once the doors open at MahaNakhon and prospective buyers can see the finished product, says Techakraisri, they can expect a higher price tag. “It becomes an emotional sale. When they see the view?-and the residence, the sky bar, the hotel–they will just want it.” This article highlights the vision of a man who didn’t stop believing that a luxury high rise was possible. In contrast, to the Theranos article earlier, it’ll be interesting to see how MahaNakhon tower will do. Our dollar for now is strong, and so I’d recommend looking for opportunities in other markets if you have the ability. If you have a budget, you will be able to focus on two important things: eliminate unnecessary debt and expenses, and build a savings and have money to invest in businesses. If you’re interested in my process go to the contact me section.

Also, below is a preview for the movie the Founder based on the life of Ray Kroc.

If you have a prayer need, or if you’re in need of a financial checkup you can reach me in the contact me section.

“But those who want the best for me, Let them have the last word—a glad shout!— and say, over and over and over, ” GOD is great—everything works together for good for his servant.” I’ll tell the world how great and good you are, I’ll shout Hallelujah all day, every day.”

Psalm 35:27-28 MSG

July 13, 2016

More and more people are choosing to retire abroad to enjoy a better climate, new experiences, access to affordable healthcare and a lower cost of living. One destination long popular with expats is the Philippines, a nation that spreads out over more than 7,000 islands. This country is located in Southeast Asia and is near Taiwan, Indonesia and Malaysian Borneo. The author argues that it is possible to live better and make your money stretch further by living abroad. This article examines if it is truly possible to retire in the Philippines with $200,000 in savings. Each year, International Living’s Global Retirement Index ranks retirement destinations around the world, measuring factors such as climate, healthcare, benefits and discounts, and cost of living. For the 2015 Index, the Philippines scored 92 out of 100 for cost of living, placing it in the top 10 for cost of living, and matching Belize, Cambodia, Ecuador, Guatemala and Thailand. Only Nicaragua and Vietnam ranked higher for low cost of living, each earning a perfect score of 100. In the Philippines, the $200,000 would last roughly 21 years. If you add in Social Security, a retiree can cover most of your living expenses. The author recommends that when you do transition to live in the Philippines, you should eat and live like the locals live to begin spending at the “local rate.” As such, it is always recommended that you work with a qualified attorney and/or tax specialist when making plans for retiring abroad. Also the author adds as a foot note that you should really research before retiring to the Philippines because of the increased violence as of 2014.

A two-day rally for Nintendo has lifted the company’s market value by 718 billion yen, or $7.1 billion. The surge began Friday after the debut of a new mobile game app, Pokémon Go, and accelerated Monday with the shares rising by the daily limit of 25 percent in Tokyo. I encourage you to watch the video. It seems as though Pokémon Go will have an interesting effect on Nintendo’s share price but in people’s behavior as well. It’ll be interesting to watch as adults respond to their childhood activity suddenly taking on an adult life. This smartphone app has soared to the top of download charts. It’s a location based app in which users will try to find Pokémon characters overlaid on real life locations. Nintendo’s console sales have slowed, but if Nintendo can capitalize on its franchises then there is still enormous potential for profits and the company’s overall growth. Pokémon Go represents a success for augmented reality games, because it is overlaying digital images over the real world, and opens the possibility for truly mobile gaming. Also, it should be noted that Niantic, Inc. is the company behind the software that integrated the augmented reality into the Pokémon Go, and their first game was Ingress. Niantic may be a company to watch.

Here is a very basic plan for achieving financial independence: get a job, start to save, get raises, save as salary increases, take advantage of dollar-cost averaging (DCA), benefit from a bull market, hit magic number, and retire.
It sounds simple and straightforward on paper, but in reality, earning a high income does not automatically translate into a high net worth. The reason that there isn’t a higher net worth for most people is because there isn’t a discipline to save. Often times, when a person’s income increases, his expenses will increase also. This increase can take the form of a new home, and growing a family. Obviously with more people to take care of, the ability to save becomes more difficult. Another factor is lifestyle. People are more prone to want to enjoy life vs. setting aside money for the future. An additional factor to consider is geography. Depending on where you live, the cost of living can also be a drain on your ability to save. A final factor to consider is the eye of the beholder. What a person perceives as a lot of money may not actually be a lot, because having a better lifestyle means you end up with more to pay for. Sticking to the seemingly simple plan of earning more and saving more requires serious discipline and sacrifice. It means living below your means, regardless of the level of your means, and making savings a priority. In other words, “Keep your lives free from the love of money and be content with what you have…” (Hebrews 13:5 NIV). The most important thing you can do to increase your net worth is to create simple disciplines. Buy assets that produce income. Save before you pay bills or spend money. Set measurable small goals and celebrate the victories. Remember, it’s not about how much you make, it’s about how much you keep. If you want to learn a trick to help you accelerate your savings, then feel free to click on the contact me section link below.

If you need agreement in prayer, or if you’re in need of a financial checkup you can reach me in the contact me section.

“But those who want the best for me, Let them have the last word—a glad shout!— and say, over and over and over, ” GOD is great—everything works together for good for his servant.” I’ll tell the world how great and good you are, I’ll shout Hallelujah all day, every day.”

Psalm 35:27-28 MSG

July 5, 2016 i-keep-bank.asp

Everybody has an opinion on how much money you should tuck away in your bank account. The truth is, it depends on your financial situation. What you need to keep in the bank is the money for your regular bills, your discretionary spending and the portion of your savings that constitutes your emergency fund. Knowing how much you should keep in the bank depends on one crucial word: budget. The author outlines two techniques: the 50/30/20 rule and Dave Ramsey’s strategy. The 50/30/20 comprises 50% for fixed costs, 30% for discretionary money, and 20% for financial goals. 50% of your money should be for costs such as rent, water, electricity, car payment, internet etc. 30% of your money is for spending on wants vs needs. 30% can be spent on entertainment or food. 20% of your money should be for the future either as setting up an emergency fund or saving for an IRA, a 529 plan, or other investments. Dave Ramsey recommends this strategy based off of what you receive via paycheck: charitable giving – 10-15%, food 5-15%, savings 10-15%, clothing 2-7%, housing 25-35%, transportation 10-15%, utilities 5-10%, and medical/health 5-10%. Beyond your monthly living expenses and discretionary money, the major portion of the cash reserves in your bank account should consist of your emergency fund. Regardless of much you set aside, you want to make sure your money is instantly accessible so you can use it right away. Personally I have two savings account, one that is directly connected with my checking account, and the other is at a different bank earning a higher rate of interest. From time to time, I will transfer from the localized savings to earn the higher interest rate, however I make sure I have enough in case I need it. It is important to bring order to your finances as soon as possible so you can get into the habit of saving and building an emergency fund. If you are interested in learning the process I do then go to the contact me section. The most recent Federal Reserve data from the “Report on the Economic Well-Being of U.S. Households in 2015” surveyed Americans and mentioned that “[f]orty-six percent of adults say they either could not cover an emergency expense costing $400, or would cover it by selling something or borrowing money.”

A cartoon reproduced on shows a pilot in the cockpit making his welcome-aboard announcement to the passengers: “The flight time today is five hours in first class and 12½ hours in coach.” Although that may not be literally true, ask passengers who sit “up front,” and you will often hear them remark on how fast the flight seemed to go and how comfortable they were. Here are five points comparing business and first class: the waiting game, boarding privileges, getting comfortable, food and drink and attention paid. Many airlines are boarding first and business class together, however on a few first class flights, the passenger will literally be escorted from the arriving terminal to the lounge, and from the lounge to the departing terminal. When you’re considering the getting comfortable option, it’s important to know the type of plane you are flying on and if the seat will turn into a bed. Depending on what airline you fly, it’s best to call ahead and ask about those kind of options especially if you’re flying overseas. Food and drink is where business and first class differs the most. On first class you often have food prepared under the auspices of a famous chef – Air France, rated No.1 for in-flight food by the Robb Report – offers menus designed by Michelin-starred chefs. For a year, starting in March 2016, select U.S. to Paris flights will feature entrées from Daniel Boulud. Finally, in attention paid, a passenger in first class will have service which is much more proactive instead of reactive. The major differences between first class and business class are the seats and the service but the actual differences greatly depend on airlines, routes and airplane models. Still, according to USA Today, first class always supersedes business class on international flights.

Robocalls—those pre-recorded, unwanted phone calls—are at a record high. Over 10 billion calls have been made in the US at the time of this article. These robocalls can both be aggressive and friendly. These calls have been occurring even on our smart phones. These calls are happening as a result of technology having access to lists and lists of phone numbers that are placed into a computer program and are then sent through the Internet in literally seconds. The purpose of these calls is to allow identity thieves to gain access to your personal information. One way you can fight back is through the FTC’s do not call list – Another way to fight back is if you don’t know the number than simply hang up and don’t answer the phone. You can also use a call blocking app called Hiya which can add the number to a block list. The best service is called nomorobo. This service is available on LAN lines, and will soon be available for iPhone and Android phones. It sees when a lot of phone numbers are being sent out or spoofing and then it hangs them up or notifies the person to not pick up. We live in an age where criminals will use technology in order to gain access to your identity, and in response we should use technology to our advantage to fight back. However, If you don’t have identity theft protection, I recommend you get a plan in place just in case. You can find out more about an identity theft protection plan by reaching me at the contact me section. “A good name is more desirable than great riches; to be esteemed is better than silver or gold.” (Proverbs 22:1 NIV).

If you need agreement in prayer, or if you’re in need of a financial checkup you can reach me in the contact me section.

“But those who want the best for me, Let them have the last word—a glad shout!— and say, over and over and over, ” GOD is great—everything works together for good for his servant.” I’ll tell the world how great and good you are, I’ll shout Hallelujah all day, every day.”

Psalm 35:27-28 MSG