Go Slow


Rushing is a form of greed. We can’t squeeze in a moment more than what it unfolds to offer. What does that mean? You might ask.

Each and every moment is a medium of expression and interaction. Our attitudes determine the way we interact with those moments, but nothing can “change” the nature of a moment, and what it has come to offer.

When it comes to investing, this is so rewarding, even if you can’t observe its effect immediately.

“Go slow” is not a synonym of “be lazy”. It’s an invitation to be mindful of your vision, objectives and actions.

Take your time researching a potential business; read, analyze, and discuss, but never rush to a decision under the pressure of timing the market. That strategy has proven to be misleading, at best…

Once you reach a decision, and you become ready to act, then go for it, do not delay. Here you can be bold and swift.

Now you have planted the seed. You can’t sit next to it and repeat: “Grow, grow, …”. Can you do that on a farm? Can you speed up natural processes, skip a season, harvest in February and plant in September?

The same principles apply across the board, in each and every human endeavor.

Your seed is the “wonderful business” you’ve mindfully invested in. Go slow! Learn to wait. Cultivate patience. It pays in droves at the right time.

How do you know if it is time to harvest? When the business ceases to be “wonderful”, or when it has already produced a handsome return. Before you sell, though, you should have already completed the same research process on another business, in which you intend to reinvest the profits from selling the first business. You need to have liquidity as part of your portfolio, but don’t leave too much sitting around, doing nothing (actually un-invested money becomes a burden, over time, as it loses some of its original value due to inflation and other factors).

Is that boring? You bet it is! But boring is better than losing, isn’t it?

Refrain from buying and selling for the sake of having fun and excitement. Find another venue to satisfy that desire. Investing isn’t a game to be played. It is a discipline to be followed…

Good Investing!

The Wealth Maker

The Wealth Algorithm (10) – Plan B


 

What if you couldn’t secure the necessary funds to start your project, to reach your dream? Would you give up? I don’t think so. Having had a powerful intention, which you believe in; giving up, giving in, failure, whatever, are not part of your vocabulary, even when you talk to yourself (by the way, random, obsessive self-talk is destructive!).

If that was the case, the first step would be to revise your plan, especially the due date. Then, assuming you have a monthly income, before paying the bills, or buying anything, put 10% of that income aside. Open an investment account for that purpose, and deposit 10% of your monthly income in it, before you spend a dime.

Once your savings in that account reach $1000, start investing. Your target is to make 5% a month. Below is an example of how you would manage your investment account:

Month   10%Savings   5% Yield   Monthly Total

1       200.00             0.00           200.00
2       200.00             0.00           400.00
3       200.00             0.00           600.00
4       200.00             0.00           800.00
5       200.00             0.00          1,000.00
6       200.00           50.00          1,250.00
7       200.00           62.50          1,512.50
8       200.00           75.63          1,788.13
9       200.00           89.41          2,077.53
10       200.00         103.88          2,381.41
11       200.00         119.07          2,700.48
12       200.00         135.02          3,035.50
13       200.00         151.78          3,387.28
14       200.00         169.36          3,756.64
15       200.00         187.83          4,144.47
16       200.00         207.22          4,551.70
17       200.00         227.58          4,979.28
18       200.00         248.96          5,428.25
19       200.00         271.41          5,899.66
20       200.00         294.98          6,394.64
21       200.00         319.73          6,914.37
22       200.00         345.72          7,460.09
23       200.00         373.00          8,033.10
24       200.00         401.65          8,634.75
25       200.00         431.74          9,266.49
26       200.00         463.32          9,929.81
27       200.00         496.49          10,626.30
28       200.00         531.32          11,357.62

 

Over a period of 28 months, and because of the power of compounding, your $200 monthly savings, have turned into $11,357.62!

Notice that you haven’t been withdrawing at all. Every month, you add the monthly savings (A), to the 5% yield on the previous month’s total (B), then to the previous month’s total (C). Or: A+B+C=D. The sum, (D), is reinvested again, and so on. Please spend some time studying the above table. As simple as it may look, it’s so powerful and effective.

Another observation is that the increase from one month to the next is exponential, not linear! Although your total is about 11K at the end of the 28th month, you don’t have to wait 2800 months to reach a million. You’re actually pretty close. You could find out by applying the above formula till the monthly total hits one million. If you did that, you would find out that you would need a total of 125 months. Or around 10 years.

The assumptions we made were conservative: A $2,000 monthly income and only 5% return. If either of these (or both) went up a little, the total number of months would decrease dramatically, again, because of the magic of compounding.

Now you have a backup plan to revert back to in case your original plan could not be implemented. As a matter of fact, you could go for plan B, even if plan A did work! Think about that…

The only challenge with plan B is the 5% monthly return. You might ask: How am I going to maintain such yield every month? What kind of investment am I supposed to use? You could either revisit the methods provided in this blog, or do further research. You will find what you’re looking for.

All the best,

The Wealth Maker

Making Money Online


Before you start reading this article, why don’t you perform a simple Google search on the title of the post. I just did: 54,600,000 results! And counting.

Why all this interest in making an online income, whether a supplementary income, or a main one? I don’t think there’s one definite answer, but among the reasons could be the following:

1- The economy is still soft. Finding a traditional job is not that easy anymore

2- The hype: So many people have the false impression that making money online is easy, and requires minimum, or no work at all. That’s why the failure rate is more than 95%!

3- Unlike making money off-line, scam is the mainstream of most advertised opportunities

4- A lot of workers have become fed up with corporate cultures. They want to have their own thing. Unfortunately, while the frustration is understandable, securing a viable alternative online is difficult, to say the least

Does the above mean you can’t build your own online empire? Not at all. It just sheds the light on some of the facts that most of us ignore, as we become hyped up by the attraction of easy, fast money.

Millions are being promised within a month or less. When you get in, you realize that those millions were made under very special circumstances, which you can’t imitate, unless you “upgrade” to the premium “package”, spending more money on an illusion!

So what should you do?

The first step would be to ask yourself: Why do I want to make money online? Even if the answer was clear in your head, write it down, in as much details as possible. This would be your vision.

The next question is: Do I have what it takes to create some sort of an income on the Cyberspace? To answer this one, you first need to know “What it takes”, right?

I can tell you few of the factors, but you must do your own research as well.

It takes time, dedication, the ability to work alone, or in other words, discipline. It takes time management skills, and it may take some money; a starting capital. Finally, it takes finding the right, legitimate online opportunity, that fits your needs, your resources and your skills. A business that has the potential to fulfill your vision.

The third question is: How would I find such an opportunity? And how would I know it’s legitimate, not scam? You’ve got to search for it my friend! Exactly like searching for a business opportunity off-line. It could be joining an exsiting online business as an “affiliate”, making money through commissions. Or it could be starting your own online business.

I’m going to leave you now to think about this topic. Please share your thoughts and/or questions.

In the next post, I’ll talk about different categories of online opportunities. Stay tuned!

Wish you happy and safe online “work”…

The Wealth Maker

Value-based Investment: Mr. Market


Mr. Market

We’ve been using this term rather casually. Ben had used it in his book: “The Intelligent Investor” at several occasions.

I like to use metaphors. I find them easier to understand and to relate to, by so many people.

Imagine you are in the middle of the ocean, the Pacific for example. Your are the captain of a well-built ship. You’ve mastered the skill and the art of sailing such a vessel. You have a good deal of control over the ins and outs of that ship. However, do you control the weather? No one claims that, even the best of captains!

What you do, as an “Intelligent Captain”, is that you make sure that you understand the physics of the weather, and know the up-to-date weather forecast. Now you sail your ship, so that Mr. Weather is on your side; blowing your sails in the right direction, even during the harshest storms.

Got the idea? No one can control Mr. Market. It’s so moody, no one can even predict its next move for sure, ever. So, what can we do? We select our investments carefully, so that the ups and downs of Mr. Market’s moods do not affect us dramatically. We sometimes use those rather extreme variations to our benefit. We will see how, down the road.

For now, think of Mr. Market as the weather. Be prepared as much as you can. But don’t waste too much time trying to precisely predict its next move. Even worse, trying to time it.

When your investment strategy is based on solid principles, patience and discipline, Mr. Market’s current mood has little effect on the future of your portfolio.

Happy investing..

To be continued…