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Monthly Archives: April 2010

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You don’t have to be ready – just go.

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So, a few days ago, I ended up donating a ton of my old books to the public library. The great thing about cleaning out your bookshelf is you are forced to make decisions about what’s important and what isn’t. Once book I kept was Loral Langemeier’s The Millionaire Maker.

Langemeier’s work is great because she provides a rough draft on how to start a business. But it’s framed more in the language of easy to read personal finance literature and less from the standpoint of a dry business text. So, I kept it around because it serves a good review and occasional source of inspiration.

One thing she says, which makes a lot of sense is: you don’t have to be ready to start a business, just do it. This resonates for me because a lot of people don’t take action to improve their finances.

I see this a lot in my peers. For example, when I talk to my friends about starting a small business or buying a house or investing in stocks, most of them immediately start to find a bunch of reasons for why they aren’t ready. Usually its something like “well I need to research it more” or “ I need more savings” or “stocks and real estate are risky”, etc. etc. This is a shame because most of the people I know who are aren’t willing to take action to improve their fiscal bottom line also tend to be poorer. Thus, by waiting until they are 100% ready, then tend to deny themselves important opportunities for wealth creation.

Bottom line: whether it’s starting a business, paying off debt or investing in stocks. You don’t have to 100% ready, just go do it.

Best,

James

13 Ways to Save Money

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Folks,

It spring time in DC. The weather is beautiful here, it partly cloudy and nearly 80 degrees. Spring is typically a time to do some cleaning but its also a good opportunity to start saving some money. Why? People tend to get out and about more, so you might have some extra spring travel planned. Also, saving money tends to help your budget and accelerate your investing. So, here are 13 ways to shave a little off your budget:

1. Switch from name brand groceries to store brand.
2. Pack all lunches for school / work.
3. Join a carpool. This saves both money and the environment.
4. Turn off the lights when leaving the house.
5. Water the lawn at night, as evaporation from the sun will waste water.
6. Set your lawnmower to cut the grass as short as possible.
7. Keep your showers short.
8. Consider hand-washing your dishes if you don’t have a full load.
9. Save your leftovers for a second meal.
10. Eat everything in your pantry before you make a new trip to the grocery store.
11. For shorter trips, use a bicycle or walk instead of driving your car.
12. Wash your car at home, rather than a commercial car wash.
13. Leave your credit cards at home.

While some of the above tips will only save you pennies at a time, but if you try to work several of these into your daily routine, the overall effect could help shave your household expenses by a significant amount. The money you save can be used for investing, paying down debt or for going on vacation if that’s your inclination.

Best,

James

You Are What You Read

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Folks,

Main point of today’s posting is: you are what you read.

There is a ton of finance and investing information out there. Don’t pollute your mind with bad investing strategies and philosophies. The quality of what you read and listen to is far more important than the quantity. So it makes sense to learn to evaluate the quality of what you read and hear.

Regarding this, here are some thoughts:

1) Tune out network programming in favor of classic books. MSNBC is fine, but MSNBC and most broadcast cable news programs don’t really provide a whole lot of insight or education – they produce a combination of commentary and entertainment. Instead, what makes more sense would be to invest some time in reading classic works which facilitate building wealth. The Intelligent Investor by Jim Graham or The Millionaire Next Door are good starting places.

2) Take pessimistic gurus with a grain of salt. A couple of examples of pessimistic gurus are guys like Swiss economist Nouriel Roubini and American investor Jim Rogers. Both of these persons have publicly made pessimistic comments about the economy, arguing that hyperinflation is sure to impact the dollar or that farmland is the best asset to hold in the future.

While its true that the economy has been challenged over the past couple of years, some people make a mistake by putting too much stock in a pessimistic perspective. For example, had you listened to Roubini and Rogers, you might have sold dollar denominated assets or bought gold or silver in 2009 and thus missed very profitable opportunities in stocks over the past year. Basically, take pessimists with a grain of salt. If you buy into their perspective too much, it can blind you to important investing opportunities.

3) Ignore most personal finance blogs. Being a personal finance blogger, I know this sound like a criticism of the blogging community. However, unless the blogger you are reading is willing to make their networth public and they have above average wealth, don’t bother with their blog.

The reason for this is you have no way of judging the quality of bloggers writing for your own wealth building. A great way to judge the quality of someones reasoning regarding wealth is if they are able to implement correct strategies to significantly build their own net worth. Bottom line, if they don’t disclose and aren’t richer than you, ignore them. Most bloggers don’t disclose and aren’t richer than you, therefore you can safely ignore their writing.

Bottom line: you are what you read. Carefully evaluate the quality of the information you take in.

Best,

James

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