Posts Tagged ‘riches’

Six Tips for Running the Millionaire Marathon

June 23rd, 2010

aarmono @ Flickr

What if all this economic fear and loathing is a bunch of crap?

It’s really only one scenario that we covered here. What if the economy turns around and recovers like it has consistently done over the past 20,000 or so years of human history?

After all, in the vast context of economic history, this profoundly steep recession or depression, is nothing more than a blip on the chart. In the financial Olympics, it’s a 50-yard dash.

It’s at these moments of clarity (or delusion) that we should examine our long-term financial outlook. Investing is a marathon. Not a sprint. To remain competitive in this long run and to build endurance, you need a training regimen. Here are some tips on how you can be a marathon millionaire.

Read more…


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Is Wealth Contagious?

May 18th, 2010

pic by photobyalyssa @ Flickr

If you ever been stuck in an elevator with someone who is sneezing and sniffling, you know that colds are contagious.

But, what about attitudes?

You’ve probably played on sports teams or worked in companies that had a collective attitude. An attitude–bad or good–seems to be contagious.

Let’s take this one more step. Is wealth contagious? Can you “catch” wealth from the people you associate with?

It seems it could. There are a few ways that wealth is contagious.

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How Not To Be A Rich, Selfish Jerk

August 7th, 2009


We’re designing Automated Trading systems so that people can become financially free.
That, you may say, is just a politically-correct phrase for “rich.” Guilty as charged.

But, when you say rich, a whole bunch of money memes pop up. One of the leading money memes is that when you become rich, you’ll become a selfish jerk.

It’s probably a meme that strikes celebrities the hardest. Ever notice that stars ride around in limos, live in mansions and say how much they hate rich people. It’s because they want to be cool–and still have a limo, mansion, and money. (Even though I contend the very policies they endorse keep people poor, but I digress.)

You can still be rich and not be a selfish jerk.

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Three Ways Saving Money Makes You A Better Person

March 12th, 2009

Recently, George posted a series of articles on why saving money can actually lose you money.

I think they were brilliantly done, but I wanted to offer my own views on savings.

As his posts pointed out, saving can be restrictive, especially if it’s based on fear, like Depression-era folks who buried their nickles and dimes in backyards and tucked them under attic roofs. (And they’re probably still there doing no one any good and not earning interest. In this case, just like George said, these small investments are losing money.)

That doesn’t mean that smart saving–and spending–doesn’t have value. What you need is an attitude adjustment in your approach to saving. Here’s how smart investors approach saving:

Saving Creates Smart Consumers

If you save money, you’re less likely to throw your money on unneeded goods that you can’t afford. You’re less likely to build up bad debt. Smart consumers also force businesses to be smart producers.

Saving Money To Make Money

Saving should be a way to re-deploy and grow your wealth. It’s called investing or trading.

Saving Money Can Expand Your Comfort Zone

I think you should have an emergency fund–a stash of cash on hand. Experts recommend three to six months of expenses. Creating an emergency fund should build your confidence and allow you to take risks to fulfill your dreams.

If you can approach savings–not hording–with an attitude that you’re generating more wealth and making your personal financial IQ a bit smarter, then saving becomes a force of good, not a source of fear in your life and in the wealth-intelligence-starving world around you.


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Fear And Loathing On Wall Street: Can The Market Get Its Mojo Back?

March 11th, 2009

Mojo Bag

My friend told me about the time he visited New Orleans on a business trip and decided to visit one of those Voodoo shops. The owner, a priestess of sorts, gave my buddy a magic bag–or a mojo bag–to help him with his sales presentation.

What the heck, he said, and took it along to the meeting… And his presentation was a smashing success.

Now, my friend isn’t a superstitious guy, so he decided to open up this strange bag to find what magic amulets or lucky coins had driven the success of his presentation. Inside of the mojo bag, he was a little disappointed to find a bunch of twigs and stones. All quite common.

My friend concluded the magic was never in this little purple velvet bag tied by a red ribbon; he had carried the magic inside himself.

I was just reading over Warren Buffet’s letter to Berkshire Hathaway shareholders and I think Buffet points out the major ingredient in the market’s mojo bag: confidence.

Buffet writes:

By the fourth quarter, the credit crisis, coupled with tumbling home and stock prices, had produced a
paralyzing fear that engulfed the country. A freefall in business activity ensued, accelerating at a pace that I have never before witnessed. The U.S. – and much of the world – became trapped in a vicious negative-feedback cycle.

Fear led to business contraction, and that in turn led to even greater fear.

But I’m willing to go into the root of this problem one step further. Americans are dysfunctional about wealth-creation. As a general rule, people love to create wealth for themselves and are envious when it is created for others.

Over the past few years, I have heard the constant drumbeat in the media that rich people are evil. Granted, rich people can be jerks. So can poor people. In fact, on any given day, I can be a jerk.

But, trying to shake down anyone’s money–rich or poor–because they may be jerks will never cause money to flow better.

There’s another concern. Once, investors really had no choice but to keep their money in American accounts. That’s no longer the case. We are part of a global economy and a global investment environment. Smart countries will be glad to take investments from Americans and let them compound their money without cumbersome taxes.

Change has not come to America. It’s the same old politics of greed and envy and it’s producing the same old bad mojo. Until we correct our own attitudes toward wealth creation, long-term prosperity and equality can never take root.


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Money-Squared. The Power of Exponential Returns

November 17th, 2008

The power of exponential investing is pretty amazing. It’s the ability to double or triple your money.

Exponential returns can be realized with a little thought experiment. You’ve probably heard of it before.

The adviser asks for a small return for his services to his emperor. He merely asks for a grain of rice on the square of a chess board. And with each day’s service, he asks to have that pay doubled.Exponential

Doesn’t sound like much, says the emperor. But by day twenty he owes his vizer millions of grains of rice. And, by the end of the a month, the number is bankrupting.

Here’s a much more thorough explanation from the Cato Institute website:

The Emperor of China was so excited about the game of chess that he offered the inventor one wish. The inventor replied that he wanted one grain of rice on the first square of the chess board, two grains on the second square, four on the third and so on through the 64th square. The unwitting emperor immediately agrees to the seemingly modest request. But two to the 64th power is 18 million trillion grains of rice–more than enough to cover the entire surface of the earth.

Wow. I’d want a lot of Sesame Chicken to go with all that rice.

Exponential gains are a little more dramatic than compound returns–which are typically just a fraction of the initial amount that is re-invested over and over. Exponential is a multiplier… of two times, three times, or more.

Possibility is one thing.

But how realistic is it?

Investors report exponential gains fairly regularly. I read of one investor who made 866 percent gain. Then there’s Warren Buffet who did quiet well, thank you very much, with just 30 percent or so returns. (He used the other multiplier–time—and consistent gains to create his wealth.)

There are some examples of exponential growth right now. Technology is one. And, we could have another thought experiment: if the inventor created a technology that could double rice production every day, wouldn’t that be the same effect as shaking down the emperor of China?

In other words, as technology increases exponentially, wealth will go with it, as long as minds can conceive of the journey.


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