Dow to hit 10,000. Why?

As I’ve watched the markets claw their way back from the brink of disaster I’ve begun to wonder what’s causing the market to rise. As I posted yesterday, the true US unemployment rate may be as high as 20%, the credit markets are almost non-existent, mortgage defaults increasing and (although I think it’s a great personal decision) savings rate has gone up. With people spending less, what’s going to stimulate the economy?

A Quick Summary
Just yesterday I read an article on the Huffington Post called Why the Dow is hitting 10,000 and it really gave me a great summary of the current market conditions. With personal spending way down, the government seems to be making up the difference (and more) with cash-for-clunkers, bank bailouts, mortgage bailouts and a cool trillion on “stimulus spending.” The only problem is that the money just doesn’t seem to be trickling down to the public.

The only problem is that the article seems to be a little short on the so what? factor. What happens when the government can’t spend any more but the people haven’t paid off all of their debts and continue to save? All of a sudden all these gains may seem like another painful memory.

Unemployment now over 20%

I just came upon an interesting website that shows the Shadow Statistics from those officially reported by the government.

This site says that we are actually in a period of much larger deflation (according to the CPI) than reported and that the current unemployment rate is actually at about 20% (not the 9% reported in the media.)

Their explanation for this is in the “discouraged workers” who are those people who have simply given up looking for work within the last 30 days. Isn’t that a little scary? That means that 1 in 5 people (both looking and not looking for work) do not have jobs.

Reading these types of things gets me very nervous about the recent rally in the stock market. I’m still following some of the advice that Dent shared about an upcoming depression.

Why Procrastinating Sucks

I have had an amazing August and September.

Off the top, I took a great waterfront holiday with my family. We were on the beach, out in the boat and simply enjoying the great family time and playing a little Wii in the evenings. We did a very short yet amazingly fun hike which has yet to impress a colleague of mine who completed the Inca Trail during the same period. The weather was great and the only thing wrong with the trip was that it was too short.

How does this relate to my title?

It doesn’t but this is a blog and people like to know that there is a human writing on the other end of these things… Here’s how it relates:

On August 8th, a main competitor of my company did the best thing that a competitor can do - they went bankrupt and canceled each and every contract they had with their customers (over 20,000 of them). I and my company were very happy to jump into the fray and add our services to their now non-existent supplier. I am very happy with the results and I was able to maintain my honest approach to the market and not take advantage of my new clients.

Backing up a month to July, I spent a great deal of time going through all my old files, desk paper and other items. It took a lot of time but I was able to get organized and was ready to start the fall strong. Little did I know that I would be up to my eyeballs in work starting August 8th and wouldn’t quit until mid-September. If I hadn’t been caught up, I would have been sleeping there every night.

Where I learned not to procrastinate

I once listened to an audio book by Raymond Aaron. In it, he tells a story about being asked to author the Canadian version of Chicken Soup for the Soul. In the book, he states that a person who authors one of the Chicken Soup books will earn on a minimum $1.0 million dollars. The owners (Mark Victor Hansen and Jack Canfield) said that he could start at any time that he was ready. Raymond Aaron kindly told them that he could start tomorrow. Their reply was that it was a huge project and that he should take time to get his things in order. Aaron’s response was,

I don’t leave things out of order because I want to be able to take advantage of an opportunity without worrying about things I haven’t done.

(this is a quote as far as I can remember it.)

After I listened to this, I knew that I wanted to change. Yes, even I was like most people out there who put off the big or uncomfortable things to take care of all the little easy stuff. Although I’m still not there, it’s a goal of mine to get things done so great opportunities will never need to wait.

Just think back to all the days that you’ve stayed late or have been up late working because “something came up unexpectedly” and your had to catch up. I hate that feeling…

Have a great night!

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He quit reading on page 21

I purchased the book Secrets of the Millionaire Mind by T. Harv Eker last week at a second hand store. I was very happy to get it (and a number of other great business books) for only $2.00 each. When I arrived at home I began to flip through the books reading headings, chapter titles etc.

Upon first opening the book, I saw underlines, scribbles and other “highlights” that looked something like this:

I started to get a little worried. Although someone had taken the time to point out the important sections of the book - a executive summary of sorts - I still like to read it myself. Just when all seemed lost, I reached page 21.

It all stopped.

No more scribbles. No more writing. No more Very Imp. on the side.

Of course, being an optimist I want to believe that after the first 20 pages, the previous owner of this book was so enthralled by the material that he read straight through the night. No pen or highlighter. Just the reader and T. Harv Eker.

What really happened

Mr. Motivation attended a seminar and bought this book (I think this because it is signed by the author.) He got home and told his wife and friends how excited he was about making a million dollars by the end of the month. After a short bought of laughter, he grudgingly went to the “home office” (most likely a basement desk and computer) to read his book.

After teaching everyone a lesson about how committed he was he reached page 19. This is the portion of the book that starts to talk about “Verbal Programming.” Wait! This isn’t telling me the step-by-step method to becoming rich! He reads one more page and goes to bed.

Blown out of proportion

Of course, as usual I’m taking this to the extreme. I could be way off and the guy was actually a real live millionaire who was keeping up with the competition. That being said, doesn’t this show you why only 1% of the population reach the status of super wealthy and something like 90% end up retired broke?

Just imagine what could have been learned on page 22.

Please note: I have been to see T. Harv Eker and he is a very good motivational speaker. I also picked up his Business Mastery courses (another great garage sale find!) and they are excellent.

** As of this moment, I have still not fully read this book - currently on page 1.

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Re-starting with a New Business Model

My business partner and I recently re-started a web project that was originally launched in 2005. At the time, we had a business model that relied on free upfront service with a large potential payout on the tail-end. We has some success; however, there was one problem with the model: we were continually babysitting service providers, clients and sponsors.

Jump forward three years and things are starting to go very differently. We have increased the overall potential for the site and have made a fundamental change to the business model. Rather than a free service, we have increased our offering, charge an up-front fee for service and have moved the client responsibilities to the appropriate place.

Guess what? We make the same amount of money with less than 20% of the work! Do I hear the Pareto Principle calling?

Take a look at your own online businesses. Is there a way that you can modify your business model to reduce your workload yet make the same amount (or even more) money? I didn’t think so until I got so tired of the old model that it was either ditch the whole idea or change! I am still very happy that I read the 4-Hour Work Week for more great ideas about automation.

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Saving Money - 101, 202 and 303

Here are a few ways that I have recently saved a little extra money or made some substancial long-term savings.

Saving Money 101 - Ask for a discount

Yesterday, my wife and I were out shopping and we decided that we needed a couple of new pillows. We walked into a store and liked the feather down pillows. After hearing the price, we started to re-think how much we needed them! My wife simply looked at the sales person and said, “can you give us a discount on the pillows?” The sales person thought for a moment and said, “yeah, I can give you 50% off of the most expensive one.”
For no extra effort, we saved a large percentage of the total price.

Saving Money 202 - Don’t throw away your rebates or small floater cash

I purchased some contact lenses about a month ago and they came with a mail-in rebate for $75. I think that this falls into the whole range of BS items but that’s the world we live in so I claimed my money. It made me start to think about all the discounts and rebates that people never take the time to claim. Also, think about all those $1 or $5 left on gift cards and other little bits of PayPal cash that’s sitting out there. Spend it, invest it or donate it; just don’t throw it away!

Saving Money 303 - Get all the information

About a month ago, I called the bank that holds my student loans. I wanted to confirm the balance etc. and I asked the person if he wouldn’t mind reducing the interest rate on my loans (a shot in the dark!). At first he didn’t understand - told me I could reduce the payment - but then said that they were not allowed to reduce the interest rates on student loans regardless of credit score or financial situation (no shock there). I could have left it there but I asked one more question: “is there anyone who is paying a lower interest rate than I am?” He thought about it for a second and said, “well, people who have their loans guaranteed by another can reduce their interest by 0.50%”
I asked if my wife would qualify. He said yes. Although I won’t comment on how stupid this system is, why wouldn’t everyone do this? It’s free money!

I’d be very excited to hear of other ways to save money. Please leave a comment an let me know where you’ve made some big gains with very little effort.

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Tags: save money 101, save money 202, ask for a discount, frugal, saving money, saving, money

The Free Ride Is Over in 2017

I was watching a show earlier this evening that had a couple of people talking about the coming Baby Boomer crisis. According to their calculations, there will be a huge market and economic crash in about 2017. This is the date that the government will officially start paying out more in retirement benefits to aging Baby Boomers than they are taking in from the public.

Won’t that be nice? All of those people who are still working will be supporting all of those retired at a ratio of about 2:1 (rather than the 20:1 that our grandparents paid out.)

Their forecast is that even financial assistance that is currently available to young people will dry up. I’m talking about student loans, small business loans etc. The available cash will be sucked up by all the extra health care costs and medications.

Based on my research, it looks like we’re heading towards this crash. Even knowing this, I got stuck in the same rut in thinking that it’s a long way off. It’s only 9 years away (I’ve also heard estimates that it will hit in 2013) so be prepared.

It doesn’t matter how old you are. Start doing your own research and at least be aware of the issues that aging Baby Boomers will bring to the forefront in politics, taxes and your lifestyle.

Let the countdown begin. Keep track with my RSS Feed.

Do You Know Your Strengths?

As I mentioned in my previous posting, Play To Your Strengths with Marcus Buckingham, I have begun the journey towards focusing on my strengths and removing those aspects of my career that utilize areas that I am weak.

When I say this, what I mean is that I’ve decided to take control over my career (again), get rid of the auto-pilot and really push my goals forward. To do this, I’ve latched onto a growing “Strengths Movement” that has been developed over time, but has more recently been brought forward by Buckingham.

The Strength Movement
To summarize the strength movement, I guess I would personally describe it as,

Aiming your life in a direction that allows for a continual use of the talents and strengths that are most prominent, bring you the greatest sense of accomplishment and helps you create a successful life.

Based on the strengths finder profile, I should be moving my life in a direction that uses:

• Futuristic- inspired by the future and what could be and inspire others to the same
• Strategic - create alternative ways to proceed and can spot relevant patterns
• Ideation - facinated by ideas and able to find connections in seeminly disparate phenomena
• Intellection - characterized by intellectual activity and appreciate intellectual discussions
• Activator - can make things happen by turning thoughts into actions (often impatient)

It’s good to know what I should be moving towards. Just last week, my brother and I were discussing things that we are passionate about. I came up with a number of things but most prominent was my indoor soccer. As you can imagine, we had a good laugh and decided that there probably wasn’t a lot of money in playing indoor rec league soccer.

What I realized was that the passion that I have during soccer is in the competition of the game and the friends I play with.

So my next step is to figure out how to spot futuristic trends and patterns by combinding different ideas then motivating others around me through discussion while taking action on my ideas (and play soccer on the side!)

Let’s see what I can do!

PS. Thanks to Dan at dcrblogs.com for pointing out my problem in his post The Secret Behind The Secret. I guess I did lose sight of what I wanted.

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Tags: marcus buckingham, strengthsfinder, strategic, blogging, achieve success, multiple streams of income

I’m Here To…

Yesterday I started a journey towards a greater and more focused life (The Success Principles - 62 Step Challenge). I’ve decided to follow Jack Canfield’s 62 steps to bring greater success into my life. For those of you who missed it, the book is called The Success Principles and it’s now day 2!

Be Clear Why You’re Here

After yesterday’s big start, I was again shocked by this chapter. The basis for this section is that you know why you are doing what it is you are doing, rather than blindly going through life.

The great question is: What’s the why behind everything you do?

Isn’t this one of those questions that you’re supposed to just know the answer to? If not, don’t you just quickly come up with something like, “To help people” or “To make the world a better place?” If these really are your “WHY” then you’re far ahead of everyone else. So far, most people I know have a why that sounds more like, “just get by on the salaries we’ve got an blow any savings on stuff like iPods and other toys!”

Beyond Family

As I began to think about this I realized that although I am not the spendthrift like many people I know, I still don’t have a clear purpose in life. Let’s be clear here: I will put everything into making sure my children grow up to be strong, successful, caring and independent adults and that my wife has the happy, fulfilling and joyous life she deserves but what’s my broader purpose? What is it that drives me to succeed on a micro and macro level?

Greed. Oops, that was my evil side talking…

Seriously, I’m not sure that I’ve come up with anything that fits me 100% but following the process in the book, here’s what I’ve come up with:

• Two unique personal qualities: Creativity and Intelligence
• Expressing those qualities: Inspire, Educate and Motivate
• A perfect world: Everyone is openly expressing their wants and needs. Everyone is active, positive and motivated to succeed. Everyone is focused on supporting their family and in achieving their goals.

My Purpose:

My purpose is to use my creativity and intelligence to inspire, educate and motivate people to live successful, active and happy lives and strive to reach their personal, family and business goals.

Not a bad first try. It may need a little tweak here and there but at least I’ve got something to work with.

Advice from Raymond

I was listening to the Raymond Aaron Real Estate Course in the car yesterday and he talked about knowing what your supposed to be doing before you make decisions that affect your future. In his example, it was around business goals. If you’ve got business goals (a purpose) then before making any decisions you should ask yourself: Does this move me closer to my goal or further away? If the anwer is further away, you’ve got your easy answer.

I like this question because it takes your purpose and moves it to the next level. Asking yourself why you’re doing something is a moment that almost no one takes but would benefit everyone!

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How To Retire Young - part 2

In the last article I wrote about how to retire in 77, 38 and 22 years. I understand that may not seem like ‘Retiring Young’ but consider how many people are going to retire with nothing!

Lets do another quick summary of what it means to be retired. The definition I like is this: when your passive income overtakes your expenses, you are officially retired.

Did you catch the important part of that phrase? It’s PASSIVE INCOME. Regular income above your expenses is not retirement although it does mean you’re smarter than the average person (net disposable income is -$0.01 - meaning the average person is spending more than they make.)

So what types of income count as passive income?
Here’s a quick list:

• Real Estate income
• Portfolio income
• Cash flow from businesses

Basically, if you can make money from an asset without actively managing it, you are making passive income.

How To Retire in 10 Years

OK, here’s where it starts to get tougher. 10 years goes by in a flash so if you haven’t planned out your income streams and know what you’re investing, you probably won’t make it. Set your goals and follow them.

To achieve this goal, you need to be a little more aggressive in your investing both through additional education and achieving higher returns. That being said, the basics will still stay the same.

1. Real Estate Investment
Here is a sure way to create the income you need for retirement and keep the assets for the same income level for years to come.

The strategy comes down to 1. Buying for cash flow and 2. Duplicate your success.
Keeping with the same assumptions in part 1 on increases in cash flow and appreciation, you would still need to increase your level of commitment and leverage your ongoing purchases more effectively.

This means that you need to withdraw equity when rates are favorable to further invest in additional properties. You also need to hire a property manager (or multiple managers) because you’re no longer dealing with only 3 or 4 properties. This also means that you need to follow Rich Uncle Moneybag’s advice and trade up some of those green houses and purchase the read hotel (or other multi-unit properties).

What does this mean for you? Again, it means staying educated. Learning new ways to generate cash flow from real estate (ie. coin laundry, video games, parking spaces, rent guarantees) and keeping your money in the most optimized assets.

2. Portfolio
This is a little more difficult to achieve without a base level of invested income to begin with. With real estate, you can start with a few thousand dollars or some OPM (Other People’s Money.) With a portfolio, you pretty much need to create it yourself. Even with $100,000 in stock or equivalents, a 25% return each year still only nets 25,000 income. After 10 years you would have a portfolio worth about $1,000,000.

I know, getting 25% is very difficult right? Well there are tools that you can use once you have larger amounts of money that allow you to achieve those returns.

How To Retire in 5 or Less

If you thought retiring in 10 years took a lot of work, not try to think about how much planning and thought it will take to cut that time in half!

Retiring in 5 years is beyond the simple use of real estate or portfolio income. To retire in this time-line, you need to create a business that will generate cash flow for you and integrate that cash flow with numerous other avenues of investment.

Basically, in order to generate this type of income you are going to be putting in some long hours in the beginning but, over time, you will be able to reduce it and eventually work yourself out of the system all together.

**Note to reader - my internet connection was cut prior to the auto-save on this section. Hopefully I’ve learned something since last night! Oh the joys of high speed.

I began to think about my own online businesses. A couple of them were started a few years ago and, while they haven’t put me into the realm of the elite, there has been some income and it has grown over the years. In 2 to 3 more (hitting the end of the 5th year) I hope it will be making a significant contribution to my overall income streams. The nice thing about them is that I really don’t need to check them at all. On one, I didn’t even look at it for a month and the income continued to come in.

You need to think of your own businesses in this same way. Remember, if you can find (or create) and niche you’ve got 6 Billion people on the planet as an overall market. There’s a good chance that even a few 100,000 people may be interested in what you’ve got.

That being said, just because the internet is huge these days doesn’t mean that there are not huge opportunities to create businesses offline. Think outside the box and aim high.

How To Retire Tomorrow

So you jumped ahead did you? Wouldn’t it be nice if it was possible to retire tomorrow without the necessary cash flow or paper wealth? Here’s how you can still do it: Change your definition of ‘retirement’. Instead of thinking of retirement as having $1,000,000 in the bank or residual income (cash flow from assets) greater than your annual expenses, perhaps you should choose volunteering in Africa or a religious life. Other than that (and winning the lottery) I can’t offer a solid way to retire tomorrow. Too bad you slackers. Thanks to

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