November 18, 2017

Items in italics are direct quotes from the articles below
Vladimir Putin’s wealth, even by the most generous of calculations, pales in comparison. In fact, throw in the vast riches of Microsoft MSFT, +0.18% co-founder Bill Gates, Warren Buffett of Berkshire Hathaway BRK.A, -0.21% fame and Amazon’s AMZN, +2.58% Jeff Bezos, and their combined fortune doesn’t even approach the riches of history’s wealthiest figures. Take Augustus Caesar, for example. The first Roman emperor tops the list, according to the Visual Capitalist blog. The adopted son of Julius Caesar controlled much of the world’s most powerful states — including Egypt — as part of his estimated $4.6 trillion net worth. Egypt made up at least 25% of global GDP at the time. Then there’s King Solomon, who was said to receive some $40 billion in gold each year as tribute. That helped bring his fortune to $2.2 trillion. Though it is hard to measure who the richest person in history was, because of the lack of completely accurate records. However, the article does provide a detailed chart. This calculation can change due to wealth being tied to land, and wealth could be exaggerated due to it being oral history. Nonetheless, wealth is concept that has been passed down for centuries. There are principles to building wealth that we can all apply to our daily lives. Remember to invest in assets that will produce income. Liabilities will always produce expenses. Make your money make money for you and repeat.

On Tuesday, the US Federal Communications Commission announced that it planned to vote on an order to roll back Obama-era rules governing net neutrality. Simply put, net neutrality means that all data on the internet is treated equally. An internet service provider can’t prioritize certain companies or types of data, charge users more to access certain websites and apps, or charge businesses for preferential access. Advocates of net neutrality argue that it ensures a level playing field for everyone on the internet. Telecoms firms, however, are largely against it because of the additional restrictions it places on them. But with the Republican-majority FCC likely to vote on December 14 in favor of rolling back the order, what might the American internet look like without net neutrality? Just look at Portugal. The country’s wireless carrier Meo offers a package that’s very different from the US. On top of the standard data package, users pay an additional amount based on what type of apps and the kind of data they use. Net-neutrality advocates argue that this kind of model is dangerous because it risks creating a two-tier system that harms competition — people will just use the big-name apps included in the bundles they pay for, while upstart challengers will be left out in the cold. For example: If you love watching videos, and Netflix is included in the video bundle but Hulu isn’t, you’re likely to try to save money by using only Netflix, making it harder for its competitors. And without net neutrality, big-name apps could theoretically even pay telecoms firms for preferential access, offering them money — and smaller companies just couldn’t compete with that. (It’s not clear whether any of the companies named above have paid for preferential access.) An ISP could even refuse to grant access to an app at all unless they paid up.  Yonatan Zunger, a former Google employee, recently retweeted Khanna’s tweet, adding: “This isn’t even the worst part of ending net neutrality. The worst part happens when ISPs say ‘we don’t like this site’s politics,’ or ‘this site competes with us,’ and block or throttle it.” If you’re thinking about your legacy, consider it at least two to three generations deep. In other words, you’re thinking at least the next 100 years, will what you have be able to provide for that kind of future? If not, what are you teaching your children and children’s children, so they can thrive and not just survive the world to come. In my opinion, net-neutrality is important. If it is roll backed, how will this affect the cryptocurrency markets? With more and more buyers into the cryptocurrency market, will this rollback cause a price decline?

This week, I’ve included Secrets of Success – Motivational video from the Mulligan Brothers 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


October 19, 2016

What makes Warren Buffett one of the riches people in the world? Unlike fellow billionaires Bill Gates, Mark Zuckerberg, and Jeff Bezos, he did not create a ground-breaking high-tech product. Instead, Buffett’s wealth began with a series of small, simple habits that anyone can follow and that are guaranteed to bring you greater wealth. The personal finance site GOBankingRates has identified some of the smartest habits that have put Buffett in every top-five list of wealthiest humans. Here are my favorites. You can read the full list here. The four habits are: think like an entrepreneur, invest even small amounts, borrow as little as you can, and live below your means. Being an entrepreneur does not mean you have to quit your job. Instead have an entrepreneur mindset, look for opportunities. Specifically look for ways to create assets that will generate cash flow; ideally assets that generate passive income. If you can’t afford it, then create it. It’s about looking at this abundant world and using your God given gifts to make it better. It may require sweat equity but it’s worth the effort. You don’t need a huge amount of money to become a successful investor. (In fact, here are some excellent investments you can make with $500 or less If you have your own business, either full-time or on the side, investing some of your earnings back into your business is one of the smartest things you can do. Buffett did just that when he and a friend bought a pinball machine for $25 and placed it in a local barber shop. When it earned money for them, rather than spend it, they bought additional pinball machines. In time, they had eight machines in different barber shops. When they sold that business, Buffett used the proceeds to start another business. It’s also important to carry as little debt as possible. Liabilities will create an expense which will reduce your income. I suggest if you must have debt, create your own debt and become a self-lender. My mustard seed app can show you how. You can learn more about it by contacting me. Finally, the hardest part is living below your means. The best way to do this type of living is to have a budget, and be content with what you do have.

Your debt-to-income ratio is a personal finance measure that compares the amount of money that you earn to the amount of money that you owe to your creditors. For most people, this number comes into play when they are trying to line up the financing to purchase a home, as it is used to determine mortgage affordability. (For more information, see Mortgages: How Much Can You Afford?) Debt to income is a common ratio you will see whenever you go to apply for a loan. Any lender will be looking at this ratio, and this ratio is a good measure to use in your own life. This article does adequately explain how to calculate the ratio so I’ll quote heavily from it. For example, if you earn $2,000 per month and have a mortgage expense of $400, taxes of $200 and insurance expenses of $150, your debt-to-income ratio is 37.5%. The more encompassing measure is to include the total amount of money that you spend each month servicing debt. This includes all recurring debt, such as mortgages, car loans, child support payments and credit card payments. Lending is always based on gross income, which is income before taxes. However, I will add that banks will factor in a standard living expense into their calculation as well factor in taxes. The article states that net income (take home pay) is income after taxes and deductions. I call net income the income after all your taxes, deductions and expenses are paid like a true business. In my financial small groups, I’m clear to make that distinction to avoid confusion. So, what is a good ratio? Traditional lenders generally prefer a 36% debt-to-income ratio, with no more than 28% of that debt dedicated toward servicing the mortgage on your house. A debt-to-income ratio of 37-40% is often viewed as an upper limit, although some lenders will permit ratios in that range or higher. However, although lenders may be willing to give you the loan, that doesn’t mean that you should take it. Another good ratio to keep in mind is your take home pay (gross profit) or what is deposited into your account divided by your fixed expenses. Fixed expenses are expenses you have to pay every month (mortgage/rent, insurance, cell phone, water, electricity, gas etc.) If your fixed expenses are greater than 50% of your take home pay, then you could be in trouble. These expenses don’t include living expenses such as food, or debt payments. The danger is if your ratio is this high you are likely to stay in debt, which over time could lead to financial ruin. Knowing your debt to income ratio and keeping it low is the key to having more income and less stress in your life. Have more contentment with less.

If you need a financial checkup you can reach me in the contact me section.

For this week, I’ve included Business Advice from “the Profit”, Marcus Lemonis from LinkedIn Marketing Solutions 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