March 29, 2017

http://www.inc.com/jeff-haden/the-awful-truth-about-getting-rich-that-no-one-wants-to-hear.html

Many people want to be incredibly wealthy. (How you define “incredibly wealthy” is of course up to you–my “incredibly wealthy” may seem like pocket change to Floyd Mayweather, Jr.) Many people don’t hope to achieve that goal…but many people do. And there’s certainly nothing wrong with that. But you will never become incredibly wealthy by working for someone else. And you will never become incredibly wealthy by living a “safe” (more on that in a moment), “positive work-life balance,” time-clock-punching professional life. If you want to have a certain amount of money in the bank, then you are less likely to have it if you’re working for someone else. Even people with advanced degrees will earn an average income of less than six figures. When you work for someone else, you implicitly accept a limited upside and unlimited downside. Unless you somehow manage to be the employee version of a unicorn, you will never, ever become incredibly wealthy. In 2014, it took $127 million in adjusted gross income to make the top 400. (That sounds like a lot, but it just barely got you in the door. The average income of everyone on the list was $317 million.) Those are fun stats to whip out at parties, but what matters is how the top 400 made their money:

  • Wages and salaries: 4.4 percent
  • Interest: 4.2 percent
  • Dividends: 10.9 percent
  • Sale of Capital Assets: 65.2 percent
  • Partnership and S Corp Net Income: 16.2 percent

The author points out the way to become incredibly wealthy is to start your own business that can be scaled to a significant size. Unless you’re an actor, or musician, or athlete–in which case you’re still an entrepreneur, because you’re in the business of you–starting a successful business is the only realistic way to become incredibly wealthy. If that is your goal, you’ll need to start yours. Today.

http://www.investopedia.com/articles/fundamental-analysis/09/value-investing.asp

Value investing, and any type of investing, varies in execution with each person. There are, however, some general principles that are shared by all value investors. These principles have been spelled out by famed investors like Peter Lynch, Kenneth Fisher, Warren Buffet, John Templeton and others. In this article, we will look at these principles in the form of a value investor ‘s handbook.
Value investors agree that you should buy businesses and not stocks. Investors should look at the fundamentals of the company and not the trends in the stock price. You wouldn’t pick a spouse based solely on his or her shoes, and you shouldn’t pick a stock based on cursory research. You have to love the business you are buying, and that means being passionate about knowing everything about that company. You need to strip the attractive covering from a company’s financials and get down to the naked truth. Many companies look far better when you judge them on basic price to earnings (P/E), price to book (P/B) and earnings per share (EPS) ratios than they do when you look into the quality of the numbers that make up those figures. It’s best to invest in companies that you understand vs. being attracted to a company’s earnings. To quote Buffett: “look for three qualities: integrity, intelligence, and energy. And if they don’t have the first, the other two will kill you.” You can get a sense of management’s honesty through reading several years’ worth of financials. How well did they deliver on past promises? If they failed, did they take responsibility, or gloss it over? A good manager will be focused on growing the company and not just its market value. Growth in the company increases the value to the shareholders. If you do happen to find undervalue stocks and if you have the liquidity available, then go ahead and buy as much as you can. Keep in mind that the market only matters when you enter or exit a position. When you sell an investment, you expose your portfolio to capital gains and usually have to sell a loser to balance it out. Both of these sales come with transaction costs that make the loss deeper and the gain smaller. By holding investments with unrealized gains for a long time, you forestall capital gains on your portfolio. The longer you avoid capital gains and transaction costs, the more you benefit from compounding. Value investing requires a lot of patience and discipline, but when you do so, the potential payoff is large. Ask yourself how does this fit into my personal investing strategy? Do I like investing in paper assets, real estate, businesses or commodities? What is my concentration level? What is my exit strategy? Most importantly what is my legacy? When you look at your life through the lens of legacy you won’t lose focus on your vision and goals.

Items in italics are direct quotes from the articles above

If you need are interested in creating a budget, then contact me for a financial checkup in the contact me section. Also, learn more about the self-lending principle in the mustard seed section.

For this week, I’ve included Be Powerful –motivational speech video – T.D. Jakes from the Motiversity YouTube channel.

“If you think you know it all, you’re a fool for sure; real survivors learn wisdom from others.” Proverbs
28:26 MSG‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬

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March 22, 2017

http://www.investopedia.com/articles/personal-finance/070115/3-secrets-you-didnt-know-about-estate-planning.asp

Estate planning is complicated, which is why it’s highly recommended that investors seek an experienced financial advisor and/or attorney to help sort everything out. The three estate planning secrets below will help investors stay on the right path. (For more, see: Estate Planning: Introduction. The three secrets to know is avoid disinheriting children, divorce inheritance protection, and trust beats probate. If you have children from a previous marriage and want to pass your assets to them, then it’s possible that the stepfather or stepmother could pass those assets on to their children or even new spouse. A good way to prevent this event is using a living trust instead of a beneficiary designation or joint ownership. If you have a six-year-old child, then you’re not going to be very concerned with that child getting divorced at some point down the road. However, it’s never too early to start planning, and the divorce rate is currently around 50% in the United States. If you don’t take the correct actions, your child’s inheritance could end up in the hands of his or her ex. This is surely not what you have in mind for an inheritance, especially if your child is currently married and you’re not fond of the spouse. The solution is a specially designed trust. With this approach, trust shares are created when you pass, and each share will remain in the trust so the trustee can handle the shares. As a trustee, the child will be able to handle those funds as he or she desires, and this trust is protected from creditors and bankruptcy. An exception to the previous statement is if the trust is used to guaranty a loan, in which case the creditor can look for repayment from the trust. Finally, if your estate is planned through a will then it must go through the probate court system which often involves fees, taxes, and legal fees. An important note is that having a living trust doesn’t guarantee that you will avoid probate. In order to avoid probate, all assets must be titled in your name. This includes bank accounts, certificates of deposit (CDs), stocks, bonds, real estate, etc. (For more, see: 6 Ways to Lose Your Estate.) It’s important to consider the benefits of a living trust vs. a will. Trusts take a little more money to create, however as the author states in the long term, there is more money that can be left to your children. It’s important to be able to provide for your children’s children. If you’re interested in learning more about how I can help you with setting up a living trust contact me, and I’ll be glad to offer a direction.

http://www.investopedia.com/investing/alternative-investments-stock-market/

Most people think of investing as buying stocks and bonds. The more adventurous might think about a real estate investment trust (REIT). Also, some people consider buying stocks of mining companies or investing in a metals exchange-traded fund (ETF) as a way to invest in gold, silver, platinum and other metals. But what if you want to avoid anything that trades through a broker or online discount broker? There are alternative investment opportunities. Some of them can make you a lot of money, and some of them may make you a little money. Either way, you are not trapped into choosing stocks, bonds and ETFs that are traded publicly. When you start thinking about alternative places to put your money, you need to stay away from scams and get-rich-quick schemes. You need some legitimate investment vehicles that may help you prosper. (See also: Should Your Retirement Portfolio Include Alternative Investments?). The author made sure that all facts and figures were current as of February 15, 2017. The four alternative investments are peer to peer lending, real estate, gold, and owning your own business. With Peer to Peer Lending, your money is invested with a pool of other investors to loan money to people for either personal or business purposes. Your rate of returns is typically, however the risk is also higher, because these borrowers are typically not able to get loans through traditional lending institutions. I’ve discussed gold, real estate, and business in previous blogs, but it should be noted that the author recommends that an allocation of five to 10 percent in gold is considered healthy for an individual’s portfolio. It’s important to have a knowledge of each asset class. The question you should ask yourself is am I investing for capital gains or cash flow? Have I properly protected my assets? How liquid am I? Are my assets creating wealth? My strategy may not work for you because my wants, needs, goals and vision is different. Create a foundation for yourself and build from it.

Items in italics are direct quotes from the articles above

If you need are interested in creating a budget, then contact me for a financial checkup in the contact me section. Also, learn more about the self-lending principle in the mustard seed section.

For this week, I’ve included Don’t Allow Them to Doubt You – best motivational video from the Motivation Archive YouTube channel.

“If you think you know it all, you’re a fool for sure; real survivors learn wisdom from others.” Proverbs
28:26 MSG‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬


March 15, 2017

http://www.investopedia.com/news/rich-get-richer-savers-lose-1-trillion/

America’s Gilded Age in the late nineteenth century was famous for industrialists who amassed unimaginable wealth — such as John D. Rockefeller, Andrew Carnegie, and Cornelius Vanderbilt – and also for the era’s startling poverty. The U.S. is seeing something like that today. The booming stock market, up three-fold since the financial crisis, is no source of excitement for risk-averse small investors and savers, particularly retirees who expected to live off interest income. From 2008 through 2015, U.S. savers lost nearly $1 trillion of income from the cratering of yields on bank deposits and bonds, according to research by insurance company Swiss Re cited by the Wall Street Journal. And that’s even after adjusting for the benefit from paying lower rates on personal debt. Back in 2007 one-year CD yields were close to 4%, and currently one-year CD yields are less than 1%. Many retirees who were dependent upon these higher rates are being forced to find spare to part time work just to make ends meet. Some are moving into the stock market in the hopes of higher yields, and some can’t pay their bills. Time is a valuable tool, and to take advantage of compounding interest, a person must start early and often. A person should constantly be investing in his financial education and at the same time continue to create value for the sake of generating income and or security. I do recommend teaching yourself the self-lending principle as a means of breaking free from the cycle of consumer debt. When you buy assets, buy assets that are passive income producing that can be turned into a system and scaled. Without being creative, I argue a person could become a victim of the wealth gap that today’s current retirees are experiencing. That wealth gap is highlighted by the disparity between the pay of CEOs and their workers, which grew even wider in 2016, according to a study by consulting firm Compensation Advisory Partners, as cited in a Bloomberg story. The study looked at 42 U.S. public companies, a relatively small sampling, but it nonetheless is sure to spark debate. It found a 5.5% median pay hike for their CEOs, roughly double the 2.8% rise for the year in hourly pay for non-farm private sector workers, according to the U.S. Bureau of Labor Statistics. There is an income gap between workers and CEOs, so it’s important to work your job but also mind your business. What is your business? Your life. Every penny that comes into your bank account is your responsibility. Make your money work for you without you having to always work for it.

http://www.marketwatch.com/story/robert-kiyosaki-says-entrepreneurs-should-read-this-book—-it-will-talk-to-your-soul-2017-02-28

Robert Kiyosaki has an unusual reading recommendation for would-be entrepreneurs — one that even the most devoted fans of the “Rich Dad, Poor Dad” author might not see coming. It tells the story of a knight about to meet his death in battle. It’s written by a Hollywood movie star. For Kiyosaki, it’s become a treasured read. “Believe it or not I read a lot of spiritual books. One of the best is ‘Rules for a Knight’ by Ethan Hawke,” Kiyosaki said during a January interview, when asked if there were any books he would recommend for MarketWatch readers. “It’s so well written, talks to your soul,” he said of the book. “All my friends are entrepreneurs and they all get copies of it.” This books takes the form of a letter from a knight written to his children right before battle, and it outlines the rules for being a knight. That may not sound like fertile material for learning the secret to success in the 21st century business world, but the knight’s rules do have an aura of entrepreneurial mantra about them. The rule for humility begins, “Never announce that you are a knight, simply behave as one,” while the rule for gratitude states, “For all that has been, a knight says, ‘Thank you.’ For all that is to come, a knight says, ‘Yes!’ ” Robert Kiyosaki states that he only operates at the highest of spiritual values and seeks to do business with people with similar values. Values such as integrity, and honor are words with significant meaning. Personally, I look for a person with strong spiritual values such as transparency, integrity, and consistency. Another book he recommends is “The Untethered Soul,” by Michael A. Singe. If you prefer your reading to be more firmly rooted in the worlds of business and finance, Kiyosaki suggested two books on economics in MarketWatch’s live interview with him in August, which you can read more about here. Robert Kiyosaki’s “Rich Dad Poor Dad” is coming upon its 20th anniversary, and it is a good introduction into looking at money differently. This book was personally recommended by my good friend. His mentoring and this book helped shape in part how I look at finances. If you read that book, then you must read his second book “Cashflow Quadrant”. If you don’t enjoy reading, then I suggest the audio book version or even the short summary clips you can find on YouTube. However, reading is essential to being able to see into how a writer thinks and it’s not the same as a quick edited version. I’ve found that when I’m struggling to read a book, I read something I enjoy reading and then pick up and read from the book I’m struggling with. Block out a time even if you have to set an alarm for it to make the time to read. Your brain is a muscle and it needs a work out from time to time.

Items in italics are direct quotes from the articles above

If you need are interested in creating a budget, then contact me for a financial checkup in the contact me section. Also, learn more about the self-lending principle in the mustard seed section.

For this week, I’ve included The Wisdom – Bruce Lee from the Absolute Motivation YouTube channel.

“If you think you know it all, you’re a fool for sure; real survivors learn wisdom from others.” – Proverbs 28:26 MSG‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬

March 8, 2017

http://www.marketwatch.com/story/this-is-no-1-financial-regret-of-older-americans-2016-05-17

Most Americans are filled with regrets — financial regrets. Fully three in four, in fact, admit they harbor financial regrets, according to a survey of more than 1,000 adults by Bankrate.com. Their biggest regret: not saving for retirement early enough (nearly one in five Americans put this in the No. 1 spot). What’s more, among those 65 and up, 27% said this was the biggest regret, compared with 17% of those aged 30 to 49. The author goes on to show the consequences of waiting to save comparing the difference of saving at age 25 vs 35. According to 2015 data from the Employee Benefit Research Institute, fully 28% of workers say they have less than $1,000 saved and 17% have between $1,000 and $9,999; meanwhile, just 14% of workers have $250,000 or more saved. That’s far too little, according to many financial advisers: Guidelines from Fidelity, for example, state that by the age of 30, you should have your entire salary saved; by 40, three times your salary saved; and, by 50, six times your salary saved. Other financial regrets include not having an emergency savings and too much student loan debt. It’s important to have a budget to know how much is coming out and when it’s coming out. Make sure you have positive cash flow at the end of the month. If you do, I recommend a simple 10-10-80 strategy and just as important starting to use the self-lending principle.

We’ve all heard the stories of young entrepreneurs who start a successful business from their parents’ basement. But how do you build a business from inside a van? Mariah Coz knows. She built a seven-figure business in a 35-square-foot van–that’s about the size of a small bathroom!–which she shared with her boyfriend as they traveled across the country. They spent about a year and a half on the road, visiting nearly every state in the continental United States. Among her favorite experiences were hiking in Yosemite, exploring Yellowstone, and seeing the Grand Canyon. Mariah took her expertise of living in her camper and turned into an online course, and began teaching business strategy through her company Femtrepreneur. She teaches others interested in freedom how to build online business and offers six important tips. The tips are: be flexible, pick one day a week and block out five to eight hours for work, figure out what chains have the best Wi-Fi and become a repeat customer, do less with more impact, set realistic expectations and goals, and focus on mobile-friendly marketing. You must be able to systematize your business so it will run with as little involvement from you as possible. The author suggests setting aside a block of time to complete all your tasks for the week which will allow focus and productivity. If you are going to use a business’s Wi-Fi I suggest that you have a good identity theft protection plan in place, because your information is on an open network and can become compromised. “When you have limited time to devote to your business, you have to focus on the high-impact activities and cut out all the rest. That means applying the 80-20 principle–focusing on the 20 percent of activities that bring in 80 percent of your revenue. Focus on just one product, one marketing channel–one thing at a time,” she says. Finally, it’s important to set realistic goals while at the same time making sure that your marketing is convenient for your needs if you are constantly traveling. Mariah believes everyone has unique life experiences and skills that can help people and can be monetized. And the good news is, it doesn’t need to take a lot of time or money to get started. As she puts it, “You can start now with what you have, where you are, no matter what situation you are in!” It’s important to act, and to not waste your days because they are measured. Ask yourself how can I take advantage of my unique gifts and knowledge, how can I reach the world and make it better, and how can I do it just once and have it accessible to the world? If you can figure out how to answer these three questions, then in my opinion you can build a business.
Items in italics are direct quotes from the articles above

If you need are interested in creating a budget, then contact me for a financial checkup in the contact me section. Also, learn more about the self-lending principle in the mustard seed section.

For this week, I’ve included Retrain your Mind from the Be Inspired YouTube channel.

“If you think you know it all, you’re a fool for sure; real survivors learn wisdom from others.” Proverbs 28:26 MSG

March 1, 2017

http://www.marketwatch.com/story/these-timeless-investing-principles-made-warren-buffett-rich-2016-06-02

 Warren Buffett distills investment success into three words — “margin of safety” — and tells investors to take one of two approaches: either focus on value or buy an index fund. Buffett, the “Oracle of Omaha,” has been steadfastly giving such advice for decades, through calm and choppy markets alike. In fact, 20 years ago I hosted Buffett and Charlie Munger, his Berkshire Hathaway BRK.A, +0.05% BRK.B, +0.04%  partner, for two days of debate that was recorded in my book, “The Essays of Warren Buffett: Lessons for Corporate America.”  At the time, Buffett’s investing style was out of fashion. Critics said the Oracle had lost his touch, misunderstanding the go-go “new economy” and its “game-changing” technology. But Buffett foresaw exceedingly high stock prices — which soon proved correct. Moreover, two decades later his value-based investing style has not only survived, but thrived, due in large part to three pivotal components:  margin of safety, focus on exceptionally valuable companies, those already run successfully, rather than turn around prospects, and know your limits and avoid investment targets outside what Buffet dubs your “circle of competence.” A margin of safety involves buying a stock at a low price compared to the value obtained. But don’t go to extremes; it’s better to buy a great business at a fair price than a fair business at a great price, Munger has famously quipped. You want to focus on companies that already run successfully. Buffet calls this focused investing. This concentration on stocks that have the highest probability of beating the market over the long term. Non-exit businesses are those commanding competitive advantages that deter rivals and withstand technological onslaughts for years, such as barriers to entry or brand strength. Buffett calls these features “moats,” like medieval defenses fortifying castles. Such quality businesses are desirable when run by people you like, trust and admire — individuals you’d be happy to have your child marry, Buffett advises. Finally, know your limits and avoid investment targets outside what Buffett dubs your “circle of competence.” So if you cannot make required judgments — about value, moats, and managers — then invest through low-fee index funds. Doing so beats the after-cost results most professionals deliver. As they say in poker, “If you’ve been in the game 30 minutes and don’t know who the patsy is, you’re the patsy.”  Buffett implores you: Don’t be the patsy. Investing in any of the asset classes requires certain core principles to follow. Find a mentor who has been in the asset class you love with at least 20+ years of experience and learn from him. His real-world knowledge will teach you far more than reading it. You don’t have to experience an event to gain wisdom. Listen and learn.

http://www.inc.com/betsy-mikel/ending-your-emails-with-this-1-word-vastly-improves-the-response-rate.html

I’m sure I’m only one of many people who feel as if they’re drowning in a sea of email. There are countless tips on how to manage your inbox if you’re on the receiving end and how to write better emails if you’re on the sending end. Yet still, sometimes emails simply go unanswered. I’ll admit I’m guilty of the nonresponse, especially when my emails start piling up after a few days away. This isn’t very hopeful if your day-to-day involves a lot of emailing — especially if it’s critical that you get a response. Thankfully, the folks at Boomerang, a plug-in for scheduling emails, did a little study to see if the language people use to close their emails has any effect on the response rate. “We looked at closings in over 350,000 email threads,” data scientist Brendan Greenley wrote on the Boomerang blog. “And found that certain email closings deliver higher response rates.” The author lists of closings on e-mails and asked which were the most effective in getting replies. “Emails that closed with a variation of thank you got significantly more responses than emails ending with other popular closings,” Greenley writes. Here are the exact numbers: Emails that ended in Thanks in advance had a 65.7 percent response rate. Of emails that ended in Thanks, 63 percent got responses. The third most effective closing was Thank you with a 57.9 percent response rate. Across the board, Boomerang found that sign-offs that included some sort of expression of gratitude had a 36 percent relative increase in average response rate. Also, keep in mind that ending your e-mail with regards or best is one of the worst ways to end your e-mails. How you present yourself is important. First impressions are captured in a person’s mind, and depending upon the impression, the person may not express any further interest. The best approach is an attitude of gratitude in all situations. It doesn’t mean you don’t get angry, or sad when its justified, however if you consistently give an image of unprofessionalism then don’t be surprised if you don’t receive the results you want in work and or life. Everything worthwhile is uphill and how you present your view of the journey can impact the people around you.
Items in italics are direct quotes from the articles above

If you need are interested in creating a budget, then contact me for a financial checkup in the contact me section. Also, learn more about Mustard Seed in the mustard seed section.

For this week, I’ve included THE WINNING MENTALITY – Powerful Motivation 2017 from the Be Inspired YouTube channel.

“If you think you know it all, you’re a fool for sure; real survivors learn wisdom from others.” Proverbs 28:26 MSG