True Wealth
The WordPress.com stats helper monkeys prepared a 2013 annual report for this blog.
Here’s an excerpt:
The Louvre Museum has 8.5 million visitors per year. This blog was viewed about 74,000 times in 2013. If it were an exhibit at the Louvre Museum, it would take about 3 days for that many people to see it.
“When a proactive, constructive idea hits you, all of a sudden, never dismiss it, act on it instantly”
That exactly what happened one afternoon, two months ago. I felt so driven to create a LinkedIn group, and name it The Trader. No analysis or deliberate planning, just a strong gut feeling.
Are gut feelings, intuitions, inspirations enough to embark on a new business idea, take an investment decision, or get married!
Honestly, I am not sure. It depends on the person, the topic, and the circumstances. In this case, it was clearly a good idea. The only resistance came from this part that always says no!
I’m so glad now I listened to that hunch. The Trader has become an exemplary group, in less than two months. Not because I created it, but because of the fine people, who accepted my invitation to join, then shared their wisdom, expertise, and hearts. I owe this success to them.
So what is this group all about? Most LinkedIn groups are networking boards. It is different with The Trader. The vision, in three words, is to learn, share and grow.
The world today is filled with financial advisors, professional traders, investors of all types, wealth management experts, financial authors, or just novice beginners, who are eager to find their way through all the clutter, online and off-line.
The Trader aims to start a movement of “financial awareness”. When the right people get their heads, and their hearts, together, have a clear vision, and robust intentions, they can create miracles. You don’t need thousands of members, just a selected few.
The discussions are still spontaneous, which is perfectly normal and healthy. Down the road, and guided by the group’s vision, The Trader will step on its path.
I believe The Trader can present a robust and sane investing model to the industry. That could be the nucleus for a revolutionary trend, one that is rooted in the principles of value investing, yet flexible enough to utilize the best of evolving schools of thought.
It is still young. It has a bright future, and a rich potential.
The Wealth Maker
With the advent of the Internet, creating and maintaining wealth has become accessible to more people all over the globe. Throughout the posts of this blog, I have covered several methods, techniques, and concepts that, if followed properly, would lead to making, growing, and maintaining wealth.
Nevertheless, the explosive proliferation of “money making” tools, especially online, has not replaced the need for intelligence! On the contrary, it has made losing money much easier and faster than ever before…
What does it entail to be an intelligent wealth maker? Knowledge? Hard work? Yes, but on top of that, one should realize that this business starts within. It has so much to do with knowing who you are and what you want, with ultimate clarity.
Coming from a solid foundation like that would make you use your awareness to identify the right opportunity, and avoid everything else.
Does that require a 160+ IQ? Not at all. A decent IQ, supported by a good EQ would suffice.
Start by spending time and energy exploring your innermost orientations, motives, tendencies. Discover your values. Revisit your roles and mend your essential relationships. Know where you are going, and then set intelligent objectives and action plans on how to get there. Be flexible enough to learn and adjust as you go.
However, be aware that some things are changeable, while others are changeless!
The Wealth Maker
Over the years, I have come to believe and realize, that in order to reap the tangible and invisible fruits of work, one must provide real value to others. Something he or she feels proud of. Something that coincides with the principles that person believes in, and knows to be true.
The rewards are numerous. Money and the riches are but one of them. How about “peace of mind”, “healthy self-esteem”, “an elevated sense of spiritual content”, “deep satisfaction”, and happiness, to name a few?
Yet, above all comes a unique connection with The One who Blesses us with the gift of work! The ability to go out in the world and create positive change, without expecting gratification from our fellow humans. Rather, we look up and say: “Thank You for making me a channel, through which You Provide some of Your Bounties!”
It is possible to make money in today’s world without offering any value in return. Moreover, it is possible to make a lot of money by spreading harm and misfortune.
By choosing to be an enlightened wealthy being. By choosing to create wealth and value, you benefit yourself, as well as all around you.
What is real value? That is something you need to identify. It is not the same for everyone. A farmer provides value by producing quality food. A doctor by eliminating disease, and so on.
Find something you love to do. Check its validity against your principles. Learn all you can about it. Set an intention to excel at it, and then move into that direction with all your energy. That is success!
The Wealth Maker
Investing is a business that relies heavily on objective knowledge, such as statistics, probability, math, historical data and trends, analysis, logical judgment, in addition to several other fields of factual knowledge.
Most investors, especially those who rely on technical analysis methods to reach buy and sell decisions, stop there. If their analysis suggested that a specific investment did not fit the mathematical model employed, they wouldn’t invest in it.
There is, however, a small camp of investors who use something else, in addition to all the above. That is intuition.
You may have come across the notion of the two hemispheres of the brain. The left hemisphere is specialized in logic, analysis, the outcome of the data feed that come from the five senses. The right hemisphere is intuitive, subjective, spontaneous It is responsible for our emotions and spirituality.
People differ in terms of which part of the brain they use more often. Accountants, for example, are mostly left-brained. Poets, on the other hand, tend to be more right-brain oriented. A low percentage of any population can use both sides of the brain effectively. Those are hard to find. If you stumbled upon one of them, and were able to recognize the gift, I’d recommend you stick to them as long as possible!
To be a true enlightened investor, you should not ignore your right side of the brain. Although that is a gift, it could be improved with training and practice (to some extent).
So how would intuition help you make investment decisions?
Let’s tackle that tough, and interesting question in the next article.
Till then, why don’t you get more familiar with your brain/mind? Observe your daily life and see which part you utilize more. Here’s a little drill: The phone rang. It’s your best friend calling from the airport, telling you he’s in town for two days. You already had plans, yet, you’d like to see your friend and spend quality time with him. What would you do?
The Wealth Maker
The reason you need to know where the money comes from and where it goes to is to plan for the future. That is called budgeting.
In the last article, we touched on the practice of tracking the sources of your income. Similarly, keep track of your spending. This activity is so vital for budgeting. As you know the spending categories, the amounts, the patterns, you start drawing your budget’s draft.
You don’t have to do this with paper and pencil anymore. Invest in a good personal/small business accounting software. They have become so sophisticated and fun to play with.
I’ve had some experience with Quicken. The features are overwhelming: You can track your spending down to the penny, enter your financial institutions’s details, download your transactions from those institutions to the software (so you won’t need to manually enter each spending), create cash flow charts, and most importantly to our discussion here, create budgets!
As the software becomes familiar with your spending patterns, your income, and your liabilities, it helps you create a professional budget very quickly and effectively. Of course, you must be aware of what the software is doing, and guide the processes to your special preferences.
Quicken is not the only software out there. Microsoft has Money, and there are few others. Do not use a 2nd tear software for this task. It’s worth a $70 or so investment.
Once you have your budget in place, you can use it to guide your spending from now on. But what is a budget? That’s what we’ll talk about next time. One important tip before we wrap this up: Always prepare your budget, especially the personal one, with your significant-other. She or he must be involved to avoid conflicts down the road. But more importantly, sharing this is a sign of mutual respect, and hopefully, love 🙂
The Wealth Maker
So far, we have focused on answering two main questions: “What” and “How”. What we want and how to achieve it. If you reviewed most of the articles, you would find a trace, or link, to either one of the two questions.
I feel it is the right time now to ask “Why?” We rather touched on that in the article titled “What is Wealth”. Today I would like to shed the light from a different viewpoint.
Let us assume that by following the concepts, recommendations, and practical methods spread throughout this blog, you have actually become financially abundant. Why did you want to be among the financially elite? Let me ask you the question differently: What is it that you wanted to do with all that wealth?
Wealth accumulation, for its own sake, is futile. There is an old saying that money is like manure; pile it up, and it would ruin the smell of the whole ranch. Spread it around, and you would get a fertile land.
I suggest that your initial intention should address this question. Elaborate on the dreams you would like to fulfill as you reach your financial intention.
A new house, a new car, kids’ education, money set aside for emergencies? Those are the typical candidates, and there is nothing wrong with working on achieving them.
Yet, there are things beyond the self and the close family. Contributions that stay behind when you leave!
Think about that for a moment, or more. How can you contribute to the education, health, and well-being of those in need around the globe?
In my opinion, the two worst enemies of humankind nowadays are ignorance and poverty.
Have a plan of regular contribution to fight those enemies, as much as you can.
You had a plan of saving 10% of your monthly income to create your wealth. Now is the time to adopt a similar plan of paying back, of spreading the benefits of your wealth.
That is the “Why” behind the “What” and the “How”. That is the “spirit” of wealth. Those who commit to such plans report an amazing observation! Every penny they give away to a noble cause comes back multiplied several times, and sometimes more, depending on the sincerity of the giver.
Make your contributions private, except before those who see you as a role model, especially your children. I promise you if you did, you would feel a sense of peace and satisfaction much deeper and richer than what you would feel if you publicize your charitable activities.
Congratulations on reaching this stage in your pursuit of ethical and worthwhile abundance. I am glad our journey together has come to such pleasant conclusion. It is an end of the articles, but not an end to your work on growing and maintaining your wealth on all dimensions. And to your contribution as a responsible wealthy being!
All the Best,
The Wealth Maker
What’s the difference between speed and velocity? Speed has only a magnitude, while velocity has a magnitude and a direction. In other words, it’s a “vector” physical/mathematical quantity.
What does velocity have to do with wealth? A lot!
Like it or not, time is an essential variable in the wealth equation. We’ve seen in several places how we could use time to our advantage, as intelligent investors. For example, once you find a “wonderful business”, you don’t pay the “sticker price”. You “wait” till the share price of that business drops low enough to give you a Margin Of Safety (MOS). Please review the first few articles.
The velocity of wealth is the pace and direction at which you move towards achieving your wealth objectives.
There are several factors that affect that pace. Your age, the stage of life you’re currently at (a student, an employee, a family man a retired person, etc), the geopolitical environment you happen to be in, the influence of your family, friends, co-workers, your upbringing, the level of your self-esteem, the amount and quality of the financial knowledge you have.
At some stages, it’s wise to focus a considerable portion of your time and energy on wealth creation. This would give you the freedom to slow down at other stages, and focus on other priorities.
So your wealth creation velocity changes speed, and sometimes direction, as you move from one stage to another, or as you change any of the factors mentioned above (the list is not inclusive, you could come up with other factors relevant to you).
You could also derive from the above that your financial wealth creation, is but one of your priorities. Hence, it’s essential to have a vision of your life that encompasses all your priorities, values and roles. And a mission statement, which maps out the distribution of all of these elements across your life.
A question may arise here: Can one increase or decrease his/her wealth creation velocity, without negatively affecting other areas of their lives?
Yes they can, but not randomly or abruptly. For example, when your family responsibilities are at their minimum, you can dedicate yourself much more to wealth building (instead of wasting your resources on meaningless activities). This would pay dividends later on, when you don’t have the same amount of free time.
As a rule of thumb, the earlier you start the better. I know people who started investing in their teens. Don’t wait till before retirement to think about your financial future. It would be late, but not impossible. There are always ways to start all over again, and as the saying goes: It’s never too late!
The Wealth Maker
Since the beginning of this series, we’ve been on a journey. No hurry, no rush. It’s a journey of a lifetime. Most of us have spent their days under pressure, trying to do several things concurrently. It’s different here. When you come to this blog, I want you to set everything else aside. Read, focus, apply, enjoy the dream of eventually reaching abundance. Through these articles, your reading and application, together, we shall make that dream your reality!
Today, I’m going to talk about the second option of financing that dream, which is partnerships.
I had written an article titled “Investment Partnership (TM)“. It would be helpful to go back and have a look at it before you continue reading.
According to the online Merriam-Webster Dictionary (TM), a partnership is “a relationship resembling a legal partnership and usually involving close cooperation between parties having specified and joint rights and responsibilities”
The keywords in that definition are: Relationship, legal, cooperation, parties, specified rights and responsibilities.
How does that relate to our discussion?
Your intention is to reach a certain sum of money by a certain date. In order to do that, you need a capital to grow. Obtaining that capital requires some sort of financing. An investment partnership (TM), is the option we decided to pursue to secure that financing.
As I mentioned in the article referred to above, this partnership takes place between two parties: One party provides the capital, the second party provides the time, energy and expertise to grow that capital, over a specified period of time. The two partners are equal. They share profit and loss on a 50/50 basis.
The partnership agreement “specifies” the details of the “relationship”: The legal aspects, the type of cooperation, the involved parties, and the rights and responsibilities of each party. It also specifies the capital, the timeframe, and the way any outcome shall be shared between the parties.
From your perspective, here is what you need to do:
In the next article, I’ll shed more light on each of the above steps. Please spend some time on this post, and let me know if you have any questions or comments.
The Wealth Maker
Please read the last four articles, if you haven’t already.
We now have the start and end points of our journey defined. That is a clear, believable intention, and the current networth.
What’s left is the process to go from the start line, to the end point.
Why is it important to define these two points? The answer is very simple: Imagine going online to book a plane ticket. What are the first two questions you have to answer? Leaving from? And going to? Right? You can’t make a reservation without knowing your source and destination points.
Same here. Actually, this is the first lesson in Success 101!
They say: To make money you’ve got to have money. Is that always true? Can you start your financial wealth building journey with zero-out-of-pocket investment?
Well, you could, but it would take much longer, which means you must start off at a much younger age, say at 10 years old!
Are you 10 years old now? I guess not. Then let’s focus on the other route, which is financing.
How can you finance your dream? A big question, eh..?
Unfortunately, it’s not enough, most of the time, to have only the start and end points well-defined, in order to obtain the financing you need. A third critical component is required, and that is your plan. In professional terms: Your business plan.
So let’s talk about that in the next post.
Between now and then, write your intention statement on one side of an empty page, and your networth on the opposite side. Read them to yourself, then start exploring ways to move from the left to the right of the page…
All the best,
The Wealth Maker
The Wealth Maker 