This is the second part of an X-part post (I'm gonna just keep posting on this subject as I come up with ideas) which focuses on becoming motivated from the inside, because most likely you don't have a personal motivation coach just waiting in the wings to cheer you on when you don't feel like pushing forward.
My tip for this month is to constantly tell yourself, "my time is valuable" whether you think it's true or not. Would someone who's time is valuable watch television, stumble aimlessly online, or socialize to much? The answer is obviously, no.
I also find this statement empowering and enlightening in a plethora of situations. So try it the next time you find yourself evading a task you need to accomplish.
Saturday, October 11, 2008
Friday, August 29, 2008
How To Motivate Yourself To Make Money
This is something I struggle with often. Motivation is the fuel needed to launch those projects and ideas you have that need sweat equity before any profits come out on the other end. Usually the source for long term motivation is clear (i.e., infinite freedom, time with family, etc), but what about short term motivation. What is going to put the fire under your ass when all you want to do is sit on the couch and watch a night of T.V. pass you by (while you should be working on your business for example).
I believe I have a solution: DEBT
For someone who has strong, basic financial principals down (saving, no consumer debt, etc) debt can be an excellent motivating factor for making money.
If I can't pay my bills one month, and I have to carry over a balance on my credit card (after paying the minimum), or I'm carrying a balance on my checking plus account with my bank, these facts role around in my head all the time, 24 hours a day, I'm even dreaming about where I'm going to get the money to pay for these expenses. This acts as a fuel to think of new ways of coming into some money. Now that extra "motivation" pushes me into coming up with new ideas, working on previously abandoned projects and forces me to put down the remote control, and find new/old ways to make some cash.
As for how to get into debt, there IS a certain way to do this: Instead of paying off all your monthly expenses, let the non-urgent expenses wait, and deposit those extra funds into some sort of investment vehicle. I believe this strategy is also called "paying yourself first".
What strategies do you use to motivate yourself?
I believe I have a solution: DEBT
For someone who has strong, basic financial principals down (saving, no consumer debt, etc) debt can be an excellent motivating factor for making money.
If I can't pay my bills one month, and I have to carry over a balance on my credit card (after paying the minimum), or I'm carrying a balance on my checking plus account with my bank, these facts role around in my head all the time, 24 hours a day, I'm even dreaming about where I'm going to get the money to pay for these expenses. This acts as a fuel to think of new ways of coming into some money. Now that extra "motivation" pushes me into coming up with new ideas, working on previously abandoned projects and forces me to put down the remote control, and find new/old ways to make some cash.
As for how to get into debt, there IS a certain way to do this: Instead of paying off all your monthly expenses, let the non-urgent expenses wait, and deposit those extra funds into some sort of investment vehicle. I believe this strategy is also called "paying yourself first".
What strategies do you use to motivate yourself?
Tuesday, August 26, 2008
Negotiate With Patience
As I learn more and more about making money, I see several patterns which seem to emulate over and over. One of them is the importance of buying low and selling high (obviously). And in order to do this effectively, having patience on hand will always give you the edge needed to buy low, thus giving you the ability to sell higher.
An example of this could be buying a used car. If you have the luxury of time and the ability to use patience, a quality used vehicle can be purchased for significantly less then if you were in a rush and needed to buy immediately.
Another example could be the purchase of stock, and using a limit order instead of a market order. Using limit orders effectively allows you to negotiate the stock price instead of simply purchasing whatever is for sale at that moment, although a little patience may be needed.
So if you happen to be in the market for a car, or shares of XYZ, don't only exercise good judgement, but also take a moment to exercise patience.
An example of this could be buying a used car. If you have the luxury of time and the ability to use patience, a quality used vehicle can be purchased for significantly less then if you were in a rush and needed to buy immediately.
Another example could be the purchase of stock, and using a limit order instead of a market order. Using limit orders effectively allows you to negotiate the stock price instead of simply purchasing whatever is for sale at that moment, although a little patience may be needed.
So if you happen to be in the market for a car, or shares of XYZ, don't only exercise good judgement, but also take a moment to exercise patience.
Wednesday, July 16, 2008
Was The New York Yankees a Good Investment?
Watching the all star game on TV, when some sort of "fun fact" comes up on the screen about George Steinbrenner and how much he paid for the Yankees in 1973, which was to the tune on $10,000,000. The relativistic current value of the New York Yankees is $1.3 billion according to Forbes magazine.
So the question is...did old George make a good monetary investment. I say monetary because no one really buys a sports team for monetary reasons, more like for bragging, and simply because you love it, but this example is good to focus on due to the undeniable success of the Yankees ball club and the assumption that he must have made a very healthy profit from his initial $10 million.
How about some math and find out...
The first question we need to ask is, "what annual percentage rate has George been getting while owning The New York Yankees."
In order to answer this I would take out my trusty TI-86 thats been hanging out in my desk draw since I graduated from college and crank out some numbers. (you can also visit many web sites which will do these calculations for you, like right here.)
If your using a graphing calculator like me you would input ((1,300,000,000/10,000,000)^(1/38) -1) x 100 = 13.66% annual rate of return, pretax of course. The formula to go along with this equation is r=(FV/PV)^1/n -1
r=rate
FV=future value
PV=present value
n=number of years
So the question is...did old George make a good monetary investment. I say monetary because no one really buys a sports team for monetary reasons, more like for bragging, and simply because you love it, but this example is good to focus on due to the undeniable success of the Yankees ball club and the assumption that he must have made a very healthy profit from his initial $10 million.
How about some math and find out...
The first question we need to ask is, "what annual percentage rate has George been getting while owning The New York Yankees."
In order to answer this I would take out my trusty TI-86 thats been hanging out in my desk draw since I graduated from college and crank out some numbers. (you can also visit many web sites which will do these calculations for you, like right here.)
If your using a graphing calculator like me you would input ((1,300,000,000/10,000,000)^(1/38) -1) x 100 = 13.66% annual rate of return, pretax of course. The formula to go along with this equation is r=(FV/PV)^1/n -1
r=rate
FV=future value
PV=present value
n=number of years
Now if you run the same equation for the S&P500 since 1973 until today (Jan 12, 1973 - July 23, 2008) the annual compounding rate of return is just 6.44% which is nothing to be proud of compared to George's 13.66%. Turns out buying a ball club may be a good monetary decision after all.
Sunday, June 8, 2008
Feelings On Retirement
My girlfriend is taking a class called "Dimensions of Aging" and retirement is a large subject in class.
One assignment in the class was to watch a PBS documentary on retirement and answer several questions. One question was...
The link to the video is Here. By the way, it's 2 hours long; so I'll understand if you don't watch it. And just in case your curious, here's my answer to the above question.
"I believe the process of retirement is as good as can be expected. The population as a whole is asked to delay gratification now in anticipation of the inability to work at a reasonable age. This request is asked 30-40 years prior to gratification. In the age we live in today of McDonald's and microwaves, asking someone to delay gratification and set a significant amount of money aside each paycheck is asking a lot.
I plan to retire in my early 30's from the sale of various independent business' reinvested in stocks and possibly real estate.
I feel that society as a whole has lost the discipline and frugality needed to endure the temptation to spend more then you earn and not save at all. These virtues need to be infused into the curriculum of pre-k through high school; until we give our young the tools to act responsibly, how can expect them to save and invest in the fashion needed to independently secure their future?"
What's your answer?
One assignment in the class was to watch a PBS documentary on retirement and answer several questions. One question was...
5. After looking at this documentary,...how do you feel about the process of retirement? Do you plan on retiring from the workforce in the traditional fashion (i.e., taking Social Security as well as withdrawals from any private pension plans you might participate in), or do you plan on working beyond the normal retirement age determined by Social Security? Do you have any other questions or feelings about the process of retirement after viewing this video?
The link to the video is Here. By the way, it's 2 hours long; so I'll understand if you don't watch it. And just in case your curious, here's my answer to the above question.
"I believe the process of retirement is as good as can be expected. The population as a whole is asked to delay gratification now in anticipation of the inability to work at a reasonable age. This request is asked 30-40 years prior to gratification. In the age we live in today of McDonald's and microwaves, asking someone to delay gratification and set a significant amount of money aside each paycheck is asking a lot.
I plan to retire in my early 30's from the sale of various independent business' reinvested in stocks and possibly real estate.
I feel that society as a whole has lost the discipline and frugality needed to endure the temptation to spend more then you earn and not save at all. These virtues need to be infused into the curriculum of pre-k through high school; until we give our young the tools to act responsibly, how can expect them to save and invest in the fashion needed to independently secure their future?"
What's your answer?
Thursday, June 5, 2008
Emotion Control
If it were possible to possess the ability to control your emotions, where the individual could at one moment genuinely feel the fear, worry and panic during a stock sell off, then just the next moment experience the sober, calm, rational and reasonable feelings which are more appropriate, this individual would possess an edge capable of earning wonderful returns in the stock market.
With discipline and practice I am attempting to identify the fear brought on from this automatic human response, repress it, and exercise intelligent rational trading behavior. Taking advantage of fearful, irrational and stupid prices available during panic stock sell offs.
Leave a comment and tell me what do you think of this strategy.
With discipline and practice I am attempting to identify the fear brought on from this automatic human response, repress it, and exercise intelligent rational trading behavior. Taking advantage of fearful, irrational and stupid prices available during panic stock sell offs.
Leave a comment and tell me what do you think of this strategy.
Tuesday, June 3, 2008
The Simple Choices
The everyday choices in life become simpler when a decision is made to settle for nothing less then spectacular. When a student attends high school and he or she wants to go to one of the best colleges in the U.S., the decision is simpler then a mediocre student anticipating a position at mediocre college. The decision is much more complicated for the second example student then the first, because the choices offered to those who demand a seat at the top are very few.
The same is true when making a decision to retire thirty-five years early. The decision to live fearlessly becomes simple. The decision to try hard every day becomes simple, and the decision to actually follow through and take those leaps of faith is simple. It simply must be done. Although the option to get a real nice and cozy job where mediocrity is protected is always an option for those who want to work till 65.
The same is true when making a decision to retire thirty-five years early. The decision to live fearlessly becomes simple. The decision to try hard every day becomes simple, and the decision to actually follow through and take those leaps of faith is simple. It simply must be done. Although the option to get a real nice and cozy job where mediocrity is protected is always an option for those who want to work till 65.
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