Category: Wealth Secrets

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The Wealth Algorithm (3)


 

Please read the last three articles, if you haven’t already.

We now have a clear intention. So we should be ready to go to work, right? Not quite yet. I want you to read your “own” intention, and notice what you “feel” as you read it. Your first impressions. Don’t think! Just allow yourself to “notice” or “observe” your internal “echo” to the intention.

If you observe any resistance, any disbelief, you should work on that first. Inner barriers are the ones you must deal with. Outer barriers fade away as soon as you become completely clear within.

How would you do that? The best method I’m aware of for “emotional releasing” is called The Sedona Method (TM). Please visit http://www.sedona.com, and explore some of the principles and processes of “Letting Go”.

Once you feel ready, once there is no more resistance to the intention, you may move towards fulfilling it. But always keep your intention statement vivid in your mind and heart. It’s your guide throughout your journey.

The first logical step after that is to know where you stand right now, relative to your intention. Do some inventory of your financial “health”, and come up with your “net-worth”.

A net-worth is calculated by adding up all your “assets”, then subtracting from the result the summation of all your “liabilities”.

Let’s have an example. Say you have 10K cash in your bank account, a car that is worth 8K, a stock portfolio that can be sold for 15K today, and an equity of 30K in your house. Then on the other side of the equation: You still have a mortgage of 100K to pay, and a 5K loan to one of your friends.

Your net-worth is: 10 + 8 + 15 +30 – 100 – 5 = -42K

Your networth is negative, which means you should add that negative number to the amount in your intention statement. If your intention was to make one million, considering your networth, it would become $1,042,000.00

Knowing your current net-worth helps you have an even clearer start. Your target is very well-defined now. It’s time to go to work.

Does that mean what we have done so far was not “work”? It absolutely was! In some sense, it’s the most important part of the algorithm. What follows is mainly “physical” and “mental” work. We’ve set the spiritual and emotional foundations, upon which, the remainder of the “work” shall rely!

The Wealth Maker

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The Wealth Algorithm (2)


 

 

Hopefully you had a chance to “decide” what “you” really want. Let’s explore that a bit further.

If the main target was financial wealth, financial freedom, financial security, financial independence, or financial abundance, then we would need to make that crisp and clear to the subconscious. Why the subconscious? Because it’s the part of our minds that gets the work done. No matter how convinced we were at the conscious level, unless that conviction trickled down to the subconscious, to the engine that makes things happen, we would stop at that; a mere verbage!

Words have tremendous effect on our minds. Let me give you an example. Suppose you’re thinking about buying a new phone. Which statement has a better chance of getting done: “I’m not quite sure which phone I “might” buy “,  or “I intend to buy an Android (or I-Phone) N.x smart phone, next Saturday”?

I guess the point is now clear. Let’s use that in setting an objective. We already know the “What”. Now we will write that which we “want” in a language that gets the subconscious cranking! Here it is:

“I intend, and allow myself, to make (specify amount) dollars by the end of (specify year), or before”.

Notice that we did not say anything about the “How”. Never include that in your intentions. You shall figure that out as you start moving in “the general direction” of your intention. You want your intentions to be specific, and at the same time, flexible enough to grab better opportunities along the way.

I’m going to leave you with this statement till the next post. Once you reach a phrase that is believable to you, stick with it, write it down where you can see it at least once a day. Read it loudly to yourself. Feel the emotion and excitement behind every word. But don’t stop at that! Go to work on your intention. Your task would be more enjoyable and easier now that you “know” what you “want”.

Another observation is that we didn’t use the word “want”. Wanting implies a strong desire, which is a sign of weakness. It usually leads to moving targets. Since you “want” to be wealthy, you will stay in that state of wanting, as the target is pushed farther.

On the other hand, intentions are affirmative. They reveal confidence and belief. When an intention reaches the level of “knowing”, without any shred of doubt, it gets manifested for sure, one way or another. We’re not counting on miracles here, but rather, on the effective alignment of inner and outer forces.

The intention alone won’t make you a fortune. However, it sets the stage for you to start off your journey on the right footing, and that is exactly what you need!

The Wealth Maker

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The Wealth Algorithm (1)


 

In the last article, I introduced a broad definition of wealth, which covers all aspects of one’s life: The spiritual, the intellectual, the emotional, the social, the financial and the physical. To be truly wealthy, one should attend to all these dimensions, with balance.

This does not call for continuous attention to all at the same time. That would be impossible. One area might demand more work than the rest, for a certain period of time, or under specific circumstances. But the aim is to cover them all, and give each one what it needs, at the right time, and in the right amount. So that we can say with confidence: Our life is wealthy, on all dimensions.

Is that easy? Not at all! Is it impossible. No, it’s possible and attainable, but it takes vision, it takes planning, and it takes enlightened action, not reaction..

Let’s now go back to financial wealth. I imagined someone came up and said: OK, I agree with you, I’ve read all your articles, but now I feel lost! I don’t know where to start. Give me a simple, step-by-step prescription. I want to be financially wealthy, that’s all I know!

Starting from this article, I’ll be answering that question, simplifying the subject as much as possible, focusing more on application; on the translation of the so many concepts mentioned so far into our daily life.

I always like to start with this question: What is it that you really want? If I woke you up at 3:00 AM tonight, and asked you this question, would you be able to answer right off the bat?

We all want to be financially wealthy, but is that the right answer? Had it been so, most of us would have become rich already. Simply because, asking the right question, makes you search for the right answer, and most probably implement that answer. So the problem starts from the question and the answer.

Between now and the next article, I want you to ask yourself this question: “What do I really want?”. Be as specific as possible. Avoid any wishing or hoping. Never use “should”, “would”, “might”, “but”, “can’t”. In other words, don’t implant barriers before you even start. Make your answer a simple present tense statement, as if that which you want is already here and now! We will devise a certain way to formulate that answer; using the right words, in the right sequence. But why don’t you give it a shot first…

 

All the best,

 

The Wealth Maker

 

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What is Wealth?


 

We go through life searching for satisfaction, happiness, joy, fun, etc. But when it comes to money, we use the term “wealth” rather lightly. Most of us use it to refer to financial wealth; the riches.

However, wealth is much broader than that. It contributes to every dimension of our lives, including our finances.

Wealth always starts from the inside, not the outside. The “wealthier” one is within, the wealthier he or she is without.

Think about that for a moment: Can someone become financially wealthy if he or she believes that he doesn’t deserve that wealth? Of course not.

And even if we built a financial Empire, if we missed the real joys of life, like love, contribution, deep satisfaction, we would not feel wealthy. We would be “rich”, but not wealthy.

So when you set your objectives, make sure you cover the important areas of your life first, the big rocks. Money comes and goes, but some aspects of our lives may not come back if we ignore them for a long time. The tree of love needs continues nurturing, and it’s more important than the tree of money!

If you could have both, then you would be truly successful and wealthy!

 

The Wealth Maker,

 

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Trading Secrets: When to Enter and When to Exit


 

Those are the two most important decisions a trader has to take. They sort out the winners from the losers, in this tough activity.

So how would you make these two calls?

First, let’s focus on the decision to enter a trade. Once you choose whether it’s going to be a “Buy” or “Sell” call (as explained in the previous article), you now need to pick the right entry point. For Buy trades, you need the lowest possible price. On the other hand, for Sell trades, you look for the highest possible price of the asset you intend to trade.

Let’s use an example. Suppose you wanted to trade gold on the upside (a Buy Call). You look at the price chart, and you notice that gold has been trading between $1595.00 and $1610.00 an ounce over the last 24 hours. Then you go through the latest financial news. The stock markets, say in  North America, have been going down for the last five sessions. You also look at world news: There’s a conflict in Syria, an earthquake in Japan, and the Russian army has just entered Georgia to aid the local government in its struggle against the rebels.

How does all of that affect your trading decisions? Let’s take them one by one. The slump in the stock markets makes most investors flee to safe havens, namely gold and silver, which means the prices of these two precious metals are destined to rise, at least on the short-term. The instability in Syria and Georgia points to threats to oil supply, and higher demand of weapons. Liquid cash is at play here. Again, gold and silver are easier to convert into cash than stocks. This supports the speculation that prices of these two instruments are expected to go up.

Now you are more confident that a Buy Call is the way to go. Your next step is to choose your entry point. This is tricky. If you jumped in immediately, you might lose the chance of entering at a lower price. If you waited too long, you might miss out on the window of opportunity, as prices already started to ascend rapidly.

Your target, as a wise trader, should not be to enter at exactly the lowest point, and leave at the highest possible price. If you insisted on that scenario, you would lose many trades. So what is your target? You want to have a piece of the pie, not the whole thing, in order to avoid the risk of making your pie and eating it!

Going back to the price range, you put an “order” to buy 10 ounces at $1600, and sell them at $1605. Why would you do that? To be as certain as possible that your net would catch some fish in the middle. The price may not go as low as $1595, or as high as $1610 again. But the probability, given all the analysis, of the price moving through the range between $1600 and $1605 is quite high, and that’s what you want.

This kind of trade may look modest, but it would give you $50.00 within a day. Keep in mind that this should not be the only trade you do. You should get involved in two to four trades concurrently. This serves the objective of diversification, which we’d talked about before.

In today’s online trading, all platforms give you the facility to set an entry price, a stop-loss price, and a take-profit price. Your role is to pick the right prices.

Once the trade is executed, you should keep an eye on it. If it behaved in a way that would indicate a bad result, you would need to interfere, by either closing the trade, or adjusting the stop-loss and/or take-profit prices. Your first and most important objective is to preserve your capital, then to make profits.

A wise trader would not discount a small profit if he/she felt that waiting for a higher profit might risk a good portion of his capital. A profit of $2.00 is definitely better than a loss of $10!

Another aspect of trading is repetition. If you couldn’t make the profit you had anticipated, you would go out at a lower profit, preserve your capital, then enter again, using the same asset, or a different one. The bottom line is to create momentum and good income. The kind of asset is irrelevant. It’s only a vehicle. What matters is how you handle the asset in a way that brings the best possible results, under the current circumstances.

To be continued…

The Wealth Maker

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How To Trade?


Trading is different from value investment in several ways. While VI is long-term in nature, trading is short-term by definition. VI focuses on the fundamentals of the business you’re investing in, trading is concerned about price movements and technical analysis.

In the last article, I talked about a special type of trading, called Binary Options (BO) Trading. In this post, I’m going to spend some time elaborating on trading in general.

Trading, as the name implies, is an exchange of two investment aspects, over a short period of time. A trader buys an investment instrument, at an attractive price, hoping that its price will go up (or down) over a certain period of time. This is an exchange between time and money.

If the instrument’s price went up, say after three hours of purchase, the trader could “long” the asset (sell it at a profit), retrieving the principal plus the difference between the original (entry) price, and the current (higher price).

If the instrument’s price went down, below the entry price, the trader would have few options here: He could “short” the trade, meaning he would sell the instrument at a loss, to avoid further loses, he could wait, if his information and best judgement expected the asset to go back up, at least to the entry price. Or he/she could set a “stop-loss” price, at which the trading platform would sell the asset automatically. Usually, the stop-loss and “take profit” prices are set at the inception of the trade. Setting these two price limits is tricky. It takes experience, knowledge of current market conditions, vision, and decisiveness (and a touch of good luck). “Take-profit” is the price at which the platform would sell (or buy) the asset, making a preset profit for the trader.

As you can trade on the way up, you can also trade when prices go down. In this case, you wait till the price reaches a point of saturation. To determine such point, you need to use your technical analysis skills. If you looked at the asset’s price vs time graph, and noticed a clear peak, that might be an indication that a price descend would follow. You would sell the asset at that high price, and then buy it back when it fell down. Your profit would be the difference between the two prices.

Some price peaks are deceiving. The price goes down for a short period of time, then moves up, reaching even a higher peak. In that situation, a trader would lose money if he/she had traded on the speculation of a price downfall.

It’s obvious that the two most important decisions here are: When to enter a trade (buy an asset or sell it), and when to exit (sell an asset or buy it).

In the next post, I’ll shed more light on these two critical calls. The successful trader never takes these two lightly. They actually distinguish a careful and wise trader from a lousy one. Since this is not gambling, lousiness and panic are the trader’s worst enemies.

The Wealth Maker

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Online Investment – Binary Options


 

Binary Options (BO) trading is probably the furthest from Value Investing (VI), when it comes to investment fundamentals. While in VI we focus on the business behind the symbol, A BO trader is almost completely concerned with current price movements. Some BO platforms offer options with a 15-minute life span!

BO is a relatively new version of day trading. Most BO transactions finish within an hour. Recently, some platforms started giving the trader the option to choose longer expiration periods.

The basic concept behind BO trading is to “predict” if the “asset’s” price is going to move up or down relative to the entry price.

Here’s an example: Let’s assume the trader is interested in crude oil’s price movements. The trading platform offers crude as one of the available BO assets. The trader needs to have some funds in his or her account in order to trade. The minimum amount per BO trade varies from one platform to another. Usually between $10 and $50.

Let’s say the platform in this example requires $30 to trade one BO asset. The trader selects crude, enters the minimum trading value, which is $30, then he or she has to decide, or “predict”, whether crude price will go up or down from the current price, say at the top of the hour.

From looking at the charts; trying to forecast price movement trends, reading the latest news, and using his/her best judgement and “gut feeling”, the trader decides to choose the “UP” option. Once he hits “Buy” or “Submit”, the platform registers the price at which the trader “entered” the trade. Let’s say the price was $91.5 per barrel, and the entry time was 10:15 AM.

The trader can either wait, or look for other trades, if he or she still has funds in his/her trading account (because the $30 for the crude trade has already been deducted from the available trading balance).

Now let’s fast forward to 11:00 AM. It’s the time when the BO trade expires. If the price was above 91.5, say 91.51, or more, then the transaction is said to be “In the Money”, and the trader would gain a percentage on top of the original $30. That percentage ranges between 70% and 85%. Let’s use 80%. This means: 30 *1.8 = $54, would be returned to the trader’s BO account balance, with a net profit of $24.

On the other hand, if the price was below the entry price at the expiration (11:00 AM in our example), say 91.49, or less, the transaction is said to be “Out of the Money”. The trader would lose the trading deposit ($30), but some platforms return between 5% to 15% to the account balance. If the trader had started with a balance of $100, he or she would end up with $74.5 (assuming the returned percentage was 15%).

In rare cases, the transaction expires “At the Money”, which is exactly $91.5. In that case, the trader gets back the $30, without any gain or loss.

From the above example, we can see why this kind of short-term investment is called binary. Because it has only two possible outcomes at the expiry of the trading transaction.

BO trading is stressful. Although the potential of making huge returns rapidly is obviously there, so many traders lose all their capital, especially when they get emotional, and try to retaliate, by investing even more to recover their loses.

There is also a factor of luck, and another of speculation here. That’s why experienced traders enter several transactions simultaneously, with the hope that more than half of the trades would end in the money.

Another aspect of BO trading is its heavy reliance on technical analysis. If you lack that skill, the process becomes closer to gambling than trading.

Most, if not all, BO platforms require a minimum deposit of $100, or more, just to start trading (this is different from the amount required per trade). They also run strict verification procedures, before a trader can withdraw any profits, especially if the platform was regulated.

Before engaging in this risky investment, you should research the provider (the BO platform) extensively. Read the FAQ. Evaluate your technical analysis capability, and only use money which you’re prepared to lose! Never use your milk or bread money…

I strongly suggest that if you’re a novice trader, you should steer away from BO trading.

All the best,

The Wealth Maker

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What is Money?


What is money?

If you have any!

Oh Honey!

There are so many

Questions about money:

Is it a thing?

Or is it a concept?

Does it bring happiness?

Does it really matter?

Money is a sort of energy

That vibrates

At a certain rate

If you happen to vibrate

At the same rate

You resonate

With the money state

And start

Attracting it to you

That’s the first part to activate

Your own money magnet

————————————————————————————-

Next, you need to know

What is it that you want

And why

Then you start moving

In that general direction

Turning stones over

knocking on doors that are closer

Then those farther, and farther

Till the right door

Opens before

You knock on the door

———————————————————————————–

However!

You’ve got to Believe

That the source of all

Money, or whatever

Is the Creator

That faith

Helps you take

The right turn

At the right time

After all…

It’s all His

The purest your heart is

The closest you become

To getting that sum

You truly want

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Investment Strategy


 

So what is an investment strategy? It’s not an action plan, it’s not a mission statement, and it’s not a set of objectives.

Actually, these concepts are organized as follows: You start with a vision, then a mission to reach that vision, then a set of objectives to guide you through your movement towards the vision. Then comes the strategy, which defines “how” you’re going to achieve the objectives, how you’re going to carry out the mission, and how you’re going to reach the vision. Finally, an action plan is the actual set of steps you take to implement all the above within the framework of your intentions. In other words, the action plan is the manifestation of your intentions.

Let’s start with the vision.

A vision is what you see in the future. In the context of investing, it’s what you see yourself achieve, say 10 years from now.

Your vision is tightly related to your self concept. If having a million freaks you out, because you don’t know what to do with it, or because you worry about protecting it, then don’t worry. You won’t reach that amount! Wealth or poverty, both lie within, not without. Do you want a proof? More than 90% of those who hit the jackpot lose all the money within a year. Why? They are poor on the inside. They can’t handle prosperity, it’s too much for them.

On the other hand, truly wealthy people, stay wealthy, even if their bank accounts are clean and shiny :-). How? They have what it takes, on the inside, to create physical wealth again and again, all because they are full of non-physical wealth. Their minds and hearts are rich.

You always need to start with a vision. You actually do start with one even if you don’t notice consciously. “Everything is created twice” (to quote Stephen Covey): First in our minds, then on the ground. The better the first creation, the more robust and successful the second. So instead of delving into a life-changing experience like investing subconsciously, without being fully aware of your final target, I’m inviting you to sit down, grab a pen and paper, and chart some course.

Now along the path, you’ll face challenges and difficulties, or even unexpected success! Have you heard of the “fear of success”? You need to be prepared. And that where objectives come into play. They guide your march towards your vision.

Success is not only achieving “what” you set for to achieve, it’s also “how” you intend to achieve it.

In summary,  an investment strategy is your approach to investing. It’s your vehicle to reaching your vision.

In a following post, I may give some practical examples of the embodiment of a good investment strategy.

Till then, stay healthy, wealthy, and wise…

The Wealth Maker