Want More Money

$1,000 A Day From Adsense

2007-07-25T05:21:00.000-07:00

Steve Pavlina has an interesting article on how to make money from your blog using Adsense. Be sure to drop by for an inspirational motivation.

But is it even possible at all? I have to tell you that it really is. I'm not yet earning a $1,000 a day from Adsense, but I'm getting there. In compliance with Google's policies I can't divulge how much I earn, and I don't really care if others do it. But I know for sure that earning money from Adsense is definitely possible.

How am I doing this?

When making money from your blog or whatever web site that you have dreamt of, you need to understand one thing that most people do not. Building up your traffic can take time... plenty of time. And your job is to create either value for the visitors to keep returning to your site for more information, or to create an impact that will inspire him into taking action to click on Google's Ads.

What do you really need?

Passion for your blog. You must be very, very interested about the topic that you are blogging about. If not, your blog will not last more than 15 posts, and will die a slow and natural death. No one comes back to read it because no one updates it.

Inspiration to your reader. This is nothing more than the psychology of making a sale, however, subtle it is. In fact, subconscious selling has been proven to work better than telling the user directly that this is good, that is great. You will want to set him up in a mood that makes him ready to look for more information. Most users may not like to be sold: they only like to buy. So your choice of words can be extremely important in moving the user.

Can you really do it?

Yes, you can. But please, start now, before the business of online advertising change, before it is all too late. Do not expect millions of dollars coming your way, though. Until you get a $1,000 a day like Steve, it's an additional income stream, not a replacement for your day job.

Sensible About Adsense

2007-06-23T05:27:00.000-07:00

Often, you hear of successful people monetizing their website with Adsense and earning from it millions. Whether those fantastic figures are true, I have no **** idea. But I do know for certain: you can earn a small contribution towards your retirement out of Adsense.

Unlike ads that appear in newspapers with no relation to the content in the page, Google’s Adsense displays ads that tries (to some extent) to match the content on your website. And Google’s proposal to you as a webmaster is simple: when a user clicks on the ad on your page, the advertiser will have to pay Google. In return for generating that click, Google will then pay you 50% of the revenue earned from that click as commission.

What does this mean for the webmaster? It means that when using Adsense in your websites, you should running a business. Yes, running a business; not for yourself, but for the companies who purchased the ads. Remember, you are making a sale from which you will earn a commission. Therefore your job is to sell.

Unlike stocks and shares, Adsense is not a passive income earner. If you want to earn your million from it, you have to work for it, and there are a few parts to it:

1. Advertising your own website.

Remember, Adsense earns you commission from user clicks. But if no one visits you website in the first place, where will there be users to click on your ads? So before you start marketing other companies, you’ll have to market yourself first.

Put your site up for searching; publicize your site on forums; offer freebies from your site; offer latest information; get users to talk about your site’s subject matter in forums. Or… you can advertise your site with Google!

2. Sell to your readers.

Write about something that you are passionate about. Target your writing to give your readers information about your subject matter and tell them why that something is good.

This helps get your readers back to your site again, and this helps to create a need in them to want whatever that you are selling. Yes, like how the diamond industries created the need for a rock, you must create that need.

3. And keep at it.

Continue to provide your users information so that they will keep coming back for more. And continue to generate that need and desire.

How Can The Casual Investor Beat The Market

2007-06-20T03:26:00.000-07:00

We know that stock prices fluctuate day-to-day in a way that makes almost impossible to predict its direction accurately. Well, I could predict the direction with 100% accuracy. It either moves up or it moves down.

But seriously, take any intra-day chart and you’ll marvel at how random the movement of the prices can be. They are pretty driven by the random nature of human decision making. Some day fellow A buys at this value, fellow B sells that value. Other days C buys at this, D sells at that. If any astrologist tells me they can predict the sum of all their actions, he or she wouldn’t be an astrologist already.

Speculation of stocks is a huge zero sum game, mind you. When you are a winner, someone is going to have to lose that money to you. But how is investing not a zero sum?

In between the peaks and troughs there is an imaginary line analysts like to call ‘fair-value’. It does not quite exist, at least not to the short-term speculator. What is for certain is that given good business fundamentals, ie, good management, good business model, and healthy profits, the fair-value of the company’s stocks increases over time. That is especially true for a well-diversified basket of stocks, that when summed and math-ed up, is called The Index. That is only because businesses are set up to do just one thing and one thing well. Not to make the next fashionable cell phone, not find ways to provide loans for your kid’s education, not write the most powerful 3D Operating System on Earth. Businesses are set up to earn money. When they earn enough, they dish out dividends to investors like you and me, or they buy their stock back. It’s fundamentals like these that drive the price of their stock.

So one can conclude: the index is likely to rise over time. How then do the casual investor take advantage of this invisible trend? Buy into the index and stay invested. Never mind the volatility in the middle, because it’s zero-sum anyway.

Averaging Your Investment

Still, there are times when the market goes jumping off in a Bungee rope. There are times when the true profitability of the market is the driving factor in stock prices, not the speculators. When people decide to do something silly like ram planes into structures and drop bombs on other people’s homes, the consumer somehow gets disheartened, demoralized, devastated, and what-have-you. They stop spending; businesses stop earning from consumers; and B2B businesses stop earning from other businesses; and the whole interlinked business world spirals into a sorry state called recession.

The speculator or worried investor gawks at the computer screen when his or her portfolio dives with the market. It’s time to cut losses, he or she says, and then dumps stocks frantically. Some even go Bungee-jumping same way as the market, but without the cord. Well, my friend, the best time to buy into the market is when prices are low.

How then do you take advantage of this? Set aside a fixed amount every month or every year to be invested into the index. You don’t need a calculator to figure out that: when the stock prices are high, that amount buys you less units; and when the stock prices fall, that amount buys you plenty more.

It’s called Dollar Cost Averaging, and will help you invest in a way that smoothes out the volatilities and reaps better returns. Assuming that the market gives 10% return on any investment every year, then dollar cost averaging of $10,000 a year would yield the following:

Year	Current Value	Amount Invested	Total Value of Investment
0	$0	$10,000	$10,000
1	$11,000	$10,000	$21,000
2	$23,100	$10,000	$33,100
3	Total	$30,000	$36,400

So after investing $30,000 into the market it returns you a total of $36,400. That’s an annualized 6.6% return on your investment.

There’s also this technique called Value Averaging. (Aren’t there enough jargon already in the financial world?) It’s similar to Dollar Cost Averaging, except you don’t invest with a fixed amount every time. Instead, you invest by topping up your portfolio to a pre-determined value. As a simple example, say you want your portfolio to increase by $10,000 every year. So in the first year, you invest $10,000. In the next year, if this investment had increased to $11,000, then you invest only $9,000 this time, giving you a total of $20,000. If the market in the third year rises to $22,000, then you must invest $8,000.

Year	Current Value	Amount Invested	Total Value of Investment
0	$0	$10,000	$10,000
1	$11,000	$9,000	$20,000
2	$22,000	$8,000	$30,000
3	Total	$27,000	$33,000

In the above example, assuming the same market, you would have invested only $27,000 to achieve a total return of $33,000. That’s an overall annualized 6.9% return on your investment.

This Time It’s Different

The speculator or the troubled investor always say, “This time it’s different.” Markets are too volatile today. It’s only wise to buy low, and sell high when the time is right. Trouble is, they never figured out when the lows and highs were.

These are the people who yearn to beat the market, but never did. As for the index investor, after broker commissions and what-not, you probably are just a little worse off than the index. But then again, you don’t have to beat the index; you just have to beat the speculators because they are part of the market.

How to Accumulate Wealth

2007-06-18T07:18:00.000-07:00

This is not a guide of a thousand ways to to earn a lot overnight, but a modest one on how you can accumulate and increase your wealth over a reasonable period of time.

1. Get Rid of Your Huge Liabilities

Do you have anything in your possession soaks up a bulk of your savings, but offer no glimpse of return in the horizon? If you have anything of this nature (like a car) get rid of them fast! Huge ticket items that require thousands of dollars a month to service should be thrown away. And find alternatives to your lives without it.

In my case, I sold my car so that I can accumulate at least $12,000 of savings every year. My alternative? Public transport to wherever I go now.

2. Resist the Temptation to Buy

Do you have any big ticket items that you so would love to own? If you do, put it off for a while. Do something else to distract yourself from the temptation. The chances are, if you put it off long enough, you either lose the temptation to buy it, or the price of the item falls.

I'm putting off my decision to purchase a new LCD TV for my room. It's not a necessity, so why take the plunge now?

3. Settle Your Debts

Do you have any debts under your name that you can afford to settle immediately, so that you can save on the interest? Credit card debts, hire-purchase debts, etc. Settle them now!

It's important to go debt-free so that you don't owe anyone any money. It's not only a matter of personal pride, it's a matter of unnecessary cost.

4. Set Aside A Fixed Amount Every Month

I cannot further stress the importance of this. You must be disciplined in setting aside as large an amount of your total income (but comfortable enough for you to survive) into your savings account, preferably one that does not have an ATM card that you can draw out from.

5. Take Up Sidelines

Can you sell your free time or expertise to others who need them, perhaps doing consulting, providing home tuition, or can you set up a website that earns money from advertising? If you can, without breaking the employment contract with your employer, and without breaking the law, go ahead and work for your money. This will give you the extra income that you can enjoy life with, and the extra savings you can set aside into your bank.

Until you have a million dollars in your account, this is likely to earn more than the interest in the banks.

6. Curb Your Spendings

No harm going for an occasional spa, or treating you and your wife a night in a far away resort. After all, life is here for you to enjoy. But the usual try-not-to-spend-too-much-on unnecessary-things still apply, where you can help it. If you have anything left over, put it into your savings on top of those that you have set aside monthl.

7. Invest Your Savings

Set up a portfolio of stocks, or mutual funds if you wish, according to a fixed asset allocation that you have planned. And rebalance your portfolio every year. Do not hope for stellar gains in the short term, but a steady 6%-8% annually. If you aren't comfortable with investing all your savings, set aside, say 50% of it for investment.

But beware, don't invest in unknown schemes that ask for your money and promise the sky.

8. Move Your Savings Around

Banks are not there to think for you, they are there to run a business. In other words, they exist to earn your money. Loyalty to a bank today is unrewarding. Instead, keep your eyes peeled for the latest promotions in Fixed Deposits, or Savings Rates, and rush for the best.

9. Quit Gambling

If you like to bet heavily at the races, or to sit around the table dishing out several hundreds of dollars at a time, it's time you stop. Remember, casinos, races, pools are all set up to run a business. Yes, they are set up to earn money from you. The games all designed with one goal in mind, to make most of you lose. What about the winner, you ask? That's just their marketing expense.

I'm not against these games as leisure, as long as you play within your means. My limit is really just several small dollars in a year, for a small hope to strike a million-dollar lottery.

10. Exercise, Work Out, Stay Healthy!

Take your children for a stroll. Go for a nice morning jog, a swim, anything! Just get that bottoms off the couch in front of the TV. Sleep well, eat right, yada, yada. Think for your body, so that you can enjoy your golder years in the pink of health.

It's not extremely difficult to be able to accumulate wealth. With the exception of investing, almost everything else is risk-free. Have a great journey on the road to riches!

Easy-Forex? The best trading platform available today.
Forex trading involves substantial risk of loss, and may not be suitable for everyone.

'Get Rich Quick' Makes The Seller Rich

2007-06-16T19:12:00.000-07:00

The 'Get Rick Quick' is an extremely persuasive form of marketing that tricks the user into buying a product that will almost never work for the user, or a product/service/deal/scheme that never exists. So instead of buying to get rich quickly, the users end up paying the seller, so that the seller gets rich. These types of scams have been around in the past, and have continued to exist into the digital age in a variety of different forms.

You may be surprised to know some of the 'Get Rich Quick' schemes can be considered legal. An article on Wikipedia explains:

Legal Schemes
1. Work-at-home tasks that guarantee high return with no effort.
2. Selling training courses in trading of as real estate, rare coins, gemstones and other financial assets.
3. Selling software or miracle items for predicting lottery, gambling bets, stock market up/down swings, etc.
4. Selling books on how to make money fast, or on information above.

Most of the legal schemes have a proper product or service to sell, and they are pretty much willing-buyer-willing-seller. But the result of using them never works as the buyers have been misled to believe. Then again, if it really worked, would the seller have sold it for money instead of keeping the secret to her/himself, so that s/he could earn more?

Illegal Schemes
1. Pyramid Schemes
2. Advanced fee fraud

All of the illegal schemes sell no product to the buyer, only a dream of riches that will never be realized.

The Pyramid Scheme involves a follower recruiting another level of followers, who will in turn recruit another level of followers. Each time the followers are recruited, they pay a certain amount of money to the recruiter, and the recruiters above. They are enticed into the scheme with excited sales pitches of commissions for selling products by the recruiters under them, but they almost never get to see the products that they are supposed to sell.

The Advanced Fee Fraud, also called Nigerian Scam, often involves the scammers sending unsolicited correspondences to the victims for money. The way the correspondences are worded to provide compelling reasons so that the victims believe the authenticity of the deal. The scammers ask for money, and promise many-fold returns when the deal was complete, but victims are always disappointed.

Conclusion

I have no statistics, but the number of articles that teaches one to 'Get Rich Quick' seems even more than the number of articles that teaches one to avoid it. Clearly, these schemes must be working for the seller. And you would wonder why people continue to fall for such scams; even when most of the scams are obviously fake. Yet, people still do.

There are those who complain that there isn't enough done by the authorities against such unscrupulous people, but the responsibility falls ultimately on the individual. But as long as people continue to be willing preys, the predators will continue to prey.

As an exercise, just browse through some of the advertisements on the right of this blog. ;) Without going to visit them, try to take an educated guess at how many of them are frauds, how many are actually real.

Recommended Reading

Get Rich Quick Schemes
Avoid Get Rich Quick Scams
False Profits
Nigerian Scam and Other Crimes Cost $198.4 million

Easy-Forex? The best trading platform available today.
Forex trading involves substantial risk of loss, and may not be suitable for everyone.

Crash Course in Stocks

2007-06-15T07:32:00.000-07:00

Are you a newbie thinking of riding on the latest waves of bulls in the global stock market? Don't rush into it! It's hard enough to see your neighbors profiting from the up-cycle in the markets, you don't want to make it harder by going in at the peak only to lose money when the market tumbles. Sure, investment is one way to increase your wealth passively, but it is not the only way. Make sure you do your research before going into investment.

There are some basic things to read about in the world of investments.

Basics of a Stock

A stock, put simply, is a certificate of ownership of a company that issued it. Companies normally issue stocks to raise capital in order to fund their expanding business operations, in return for bigger profits. When the stocks are issued, investors buy them and then legally become a small owner of the company. The money then goes to the company for their operations.

The stocks once owned by the investors can then be traded on the stock exchange, a glorified market place where these certificates change hands from an owner to another. The price of the stock, determined by the seller and buyer, is what you see scroll on the ticker in the stock market.

Dividends

When you own the stock of a company, the directors can sometimes decide to dish out dividends (which are a portion of the company's earnings over a period) to investors as a measure of good will, or as a message to all to say that "I'm doing very well!" Needless to say, dividends issued by the company whose stock you own drives up your returns, and makes many investors happy.

Fees and Taxes

When investing, you can be sure that your money will go through many hands before it gets to the company or to the seller who sold his stocks to you. Regardless of the value of the service added along to way, you are bound to incur some fees in terms of commissions, sales charges, blah blah blah. These fees will eat into your final profit, because they increase the cost of your stock. Some of these fees are subject to a minimum so be sure on what the fees are before purchasing your stock. Otherwise you may end up paying too much fees for a small amount that you purchased.

When trading stocks on exchanges from certain countries, your gains over the original price of the stock can be taxed, thus reducing your overall return. Dividends when issued to you can also be taxed. Clearly, you will need to know the tax structure before you make the decision to purchase the stock.

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Forex trading involves substantial risk of loss, and may not be suitable for everyone.

Factors Affecting Stock Price

The price of stock is generally affected by company financials, that is, how well the company is perceived to perform in the future. That means the price on the stock is what investors' perception or prediction of the company's profitability.

The company's profitability can then, in turn, be affected by:
1. Inflation: Cost of raw materials/shipping rise rises and eats into profits.
2. War/Bad News: Affect consumers ability to spend, which lowers revenue.
3. Competition: Cost increase to provide additional value add, or revenue lowers to compete.
4. Mergers/Acquisitions: Reduce competition, consolidate operations to reduce cost.
5. Dividends: Issue of dividends increases cost to company.
6. Interest Rates: Higher interest rates also drives up borrowing cost for companies, leading to lower profits.

But there are other factors that can affect stock prices are not directly related to company financials, but to investor supply-and-demand.
1. Interest Rates: Higher interest rates for increases savings rates and bonds yields, means less demand for risky stocks (or more demand for cheaper stocks so they can get higher return), so stock price falls.
2. Expectation of Dividends: Drives demand, and this increases stock prices.
3. Regulatory: Government intervention to impose regulatory restrictions may affect investor returns, driving prices up or down accordingly.
4. Large Investors: Be it rich individuals or large institutions, they can drive the price of a stock by virtue of the percentage of shares they own.

At the end of the day (no pun intended), a stock price can only move in two directions: up or down. But the factors that affect its direction can be considered, in the mathematical sense, random. This is because the investor does not know a priori, some of the factors that will affect the price until it happens.

Conclusion

The explanation to how stock trading works is nothing complex. But the picking of the right stock, deciding when to buy, when to sell, is what's extremely difficult.

Tonnes and tonnes of material have been written on selection strategies, including suggestions from the academic community. There are strategies that employ technical analysis of charts to predict the next peak / trough. There are those that use fundamental analysis to determine the future profitability of a company. There are even those who use the movement of the planets, funny graphs and what-nots to plot the next market downturn! (But don't believe those please).

If and when I next write about investment strategies, I would love to talk about the lazy investor's approach to investing: using Mutual Funds and Index Funds. In the meantime, do read up on some of the techniques used by traders and investors.

Technical Analysis of the Financial Markets
Technical Analysis of Stock Trends, Ninth Edition
The Little Book of Common Sense Investing

Insurance to Cover Income Upon Death

2007-06-14T06:18:00.000-07:00

There's a common misconception about insurance for covering death. Most financial advisors would advise that the older you get, the more you need death insurance, because you are likely to die the older you get. It may benefit them because the more premium you pay, the more commission they earn. For you as the consumer, is that really the best way to go? Remember, too much unnecessary insurance is a cost to you, and it may not be something that you would like to spend on.

My opinion is that the coverage for death requires only a decreasing term insurance. The reason is extremely simple.

Take me as an example. I am now 30, and I plan to retire at 60; which gives me long period of 30 years to earn my living. Let's suppose that necessary expenses for household amount up to $1,000 on a monthly basis. If someone up there decides that I should lift off and meet him this moment, I will be unable to provide for this expense for the next 30 years for my family. Now, that amounts to $1,000 x 12 months x 30 years = $360,000 in total. Take into account inflation of 2.0% per annum, you will need a total of $508,553 coverage. But if up-there decides you should join the clouds or crowds 10 years later, you will only need $377,156 to cover those expenses.

Have a look at the following chart to better understand my point.

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Forex trading involves substantial risk of loss, and may not be suitable for everyone.

I hope you understood the chart. It simply says that the later you get promoted to wear that golden ring above your head, and that pair of white wings on your back, the less you need to cover your family. A policy that does that is called a decreasing term insurance. It's cheaper than a level term insurance, and it's definitely much cheaper than one that comes with cash-value at the end of maturity. But that isn't all. Remember, you should be setting aside savings every year? The beauty of your savings is that it can help form part of that coverage! If you set aside some $18,000 every year and have those savings grow at about 3.0% annually, you end up requiring a shorter period from your insurance policies.

I have one that covers me for about $100,000. It's nothing spectacular, but I have another plan that covers me for more. But I will talk about in another post.

Oh, please don't take my word for it. Read up on both sides of the story before you make the important decision for your family. Here are some great sites to visit: The Motley Fool, Insurance.com.

It's always good to Be Prepared.

Start Early

2007-06-13T05:20:00.000-07:00

An article on Yahoo Finance gave me inspiration for this article. Columnist Ben Stein rightly argues that time is neutral and cures nothing. For those of you fellows who think that they can afford to start saving up for their retirements when they reach about 40-50 years of age, they had better get their bottoms away from the TV couch, and open their exercise books to scribble their workings.

Take myself for example. After I sold my car, I still have the following yearly bills to foot (in Singapore Dollars):

1.	Utilities	$150 x 12	$1,800
2.	Groceries	$1,000 x 12	$12,000
3.	Entertainment	$400 x 12	$4,800
	Total		$18,600

If I retire at about 60 years old and expect to live for another 20 years, I will need about 20 years x $18,600 = $372,000 in today's money. Suppose the value of money falls by 2.0 percentage points every year (that is, the cost of items inflates by 2.0 percentage points every year) for 30 years, I will need at least $600,000 to last me through 20 of my twilight years without having to worry about making ends meet. I haven't yet included possible medical bills because of old age, but I will touch on that on another post.

Apparently, not many people in the US knows this. A startling report released two years ago by the US goverment revealed that savings per household had fallen to below 0% of their income.

(Image courtesy of The Daily Reckoning)

Easy-Forex? The best trading platform available today.
Forex trading involves substantial risk of loss, and may not be suitable for everyone.

To be frank with you, I am broke at 30 years of age. I have less than $20,000 in my name, and I am about the get married; peers at my age would have at least $100,000 in that pink little piggy bank. So I have every reason to worry. Thus all the drastic actions that I have taken, and am taking to boost my wealth.

When you have nothing at all, investments at about 6-8% annually earn you very little return. Setting aside a fixed (and substantial) amount every month is the only way to increase your wealth fast. (And please don't take the short cut and dump your life savings into Chinese stocks. When the bubble pops, so will you.)

Here are some books with tips on planning for retirement, and they aren't too expensive. Some are written by Mr. Ben Stein himself. Getting Started in A Financially Secure Retirement (Getting Started In.....), Yes, You Can Still Retire Comfortably!: The Baby-Boom Retirement Crisis and How to Beat It,
Yes, You Can Get A Financial Life!: Your Lifetime Guide to Financial Planning

Let Others Do The Spending

2007-06-12T03:33:00.000-07:00

It is a well-known fact (or well-believed theory) that the increase in spending by consumers actually boosts the economy in which the consumers live (assuming a closed system). Consumer spending results in job creation and wage increases, and subsequently encourages more spending. Job creation results in the production of goods, services, and other mechanisms that drive consumer spending. Good marketing is one such mechanism and it invariably entices consumers to spend regardless of their needs.

But as an individual, do you have to subscribe to that? My answer is no. My philosophy is to let others do the spending, unless:
1. The spending is a necessity.
2. The spending provides an adequate return on investment.
3. Not spending results in a loss greater than the cost of item.

The definition of necessity is subjective. But I am sure we can agree to a great extent that something is necessary if you need it to survive. And good heavens, you don't need all that little shiny rocks around your neck, or that yellow chassis that goes from 0 to 100 in 10 seconds, or that two-storey bungalow that was never meant to house more than 4 people.

What is adequate return on investment? Well, if your local savings rate is anything below 2.0% per annum, that just isn't adequate by my standards. Inflation sets you back. Search for other forms financial instruments that can return much more. Look at bonds, and even stocks if you want greater returns.

Oh, don't save for the sake of saving, and end up having to pay more later.

If you think you will have trouble trying to figure out how to save, well, you can go to various internet sites for help. Money Saving Expert. Or check out some of the self help books available: How to Save Money Every Day, How To Save Money On Just About Everything, 1,001 Ways to Save, Grow, and Invest Your Money to name a few.

Easy-Forex? The best trading platform available today.
Forex trading involves substantial risk of loss, and may not be suitable for everyone.

In a country where population count goes by the millions, there is sufficient people to provide the spending power to support the economy (assuming spending = good economy). As one single individual, there is no need for you to add on to that statistic. Even if you had the power, your spending would probably be too small too insignificant. And as a favor to yourself, do not add yourself on to the list of people who has negative savings, ie, people who are in debt.

So unless you are filthy rich, you should be spending a lot to support to economy, (or donating a lot of your wealth to charity!), focus on having good, liquid savings.

Begin today with a savings plan that you can follow!

Don't Cut Up Your Credit Card

2007-06-09T10:04:00.001-07:00

You must have heard of advice from financial advisors to cut up your credit card so that you will never once be tempted to spend again. In my humble opinion, that's like taking lozenges to soothe a sore throat: it doesn't get rid of the problem.

And the problem is obvious. It's the user of the credit card, not the credit card. It's also not the banks behind them, although they are the one who market the card as a must have, and the use of it as a way to showcase one's affluent lifestyle. The banks and the people behind the card wants you to think you are well-to-do, (ironically) by spending as much as, or all of your money. Who else will pay for their logo hanging precariously from their building, their annoying tele-marketers, their pretty roadshow promoters, and that heavy-weight Chief Executive Officer and his office space at the 99th floor?

Easy-Forex? The best trading platform available today.
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So, what's the solution? I control my spending. I try, as far as I can, only purchase what is necessary, not what is desired. I have to admit that in this day and age, when your sense of fashion (and not only your personality) defines your acceptability, or when it's cool or in to be holding that bulky iPod video player in your hand, or when you really want that trip away from the Joneses in a packed two week tour of the whole of Italy. But still I have to try. No sense in following the masses when I have no money left for retirement.

But why should you not cut up your card and keep it? Besides the fact that cutting up plastics are really a waste of natural resources, the cards can sometimes offer great bargains at times when you have to buy what you need. But after signing on the dotted line, or punching your name and the numbers into your browser, make sure that:

1. Settle your debts. How to Settle Your Debts

2. Pay your bills on time, please. Although banks hate it when you don't pay (because you filed for bankruptcy), they love it when you don't pay on time, because they can then legally slap you with a $45 fee (or-whatever-they-please-interest-rate) for late payment, by simply just mailing you a letter.

3. Make sure there are no recurring annual membership fees. If they do, call up your bank and threaten to cancel. They usually end up waiving the fee (at least in the country where I live).

Poor Dad Poor Dad

2007-06-09T03:40:00.000-07:00

I'm guessing most of this site's readers would have probably know by now who Robert Kiyosaki is. He is known for his popular (in both the good and the bad sense) Rich Dad Poor Dad bestseller. Written in the form of a story, he argues that the middle class stays in the middle class, and the upper class gets richer because of the differences in the way they think.

The Poor Dad is his true father, who is a lecturer in a university and earns a reasonable living. But he walks on the safe path of life, goes through motion of basic education, university education and then finding a respectable, secure job. He is one who, like many of us, takes little risks. He encourages his son to study hard, and find a safe job. He works for money.

On the contrary, Rich Dad, who is his friend's father, had earlier dropped out of school grade and made himself a millionaire. Rich Dad teaches him (and his friend) invaluable lessons in managing wealth and finance, and to learn how to take managed, or calculated risks. He encourages his son to work for himself, and not for others. He makes money work for him.

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There are many lessons that the author teaches, most of which financial advisors will be able to guide you on, if you ask.

In order to achieve financial independence, we must first be able to account for our own finances. We need to know what is our income, what are our expenses, etc. It is not at all difficult to learn, and is really just basic math. Once you grasp that, you then start to ascertain which of those you own are assets which of those are liabilities. An asset is item that produces income for you. Obviously, you are your own asset, because you can produce income for yourself. But other things that you own can also produce income for you, and most of which are produced passively. Stocks, bonds, property, intellectual property, for instance. Liabilities are items that cannot be sold for more than what you bought it for, for as long as you own them, and are probably items that does not generate any income. Cars, computers, LCD TVs, etc.

Once you have classified them, it is then your job to increase your income, reduce your expenses, increase your assets, reduce your liabilities. That's what I have been trying to do: take on additional jobs, take no cabs to work, increase my mutual fund investments, and sell my car.

Rich Dad Poor Dad is an inspiration for those who yearn to climb out from the middle class to reach upper class, or at least attain financial independence. I won't kid you: there have been criticisms about his book. But personally, I think there are some lessons to be learned from the book, but do not expect a detailed guide on how to be a millionaire. You'll have to come up with that guide yourself. :)

Amazon is selling Rich Dad Poor Dad at a discounted price from the original. So it's a great time to pick up the book if you haven't already done so. Good luck!

Sell My Car

2007-06-08T04:21:00.000-07:00

I personally practice (as far as I possibly can) to avoid purchases of big-ticket luxury items, especially those that will yield no return at the end of their life span. But to be frank, I made a grave financial mistake once, and landed myself into a pile of debt that I really hated.

I bought a car.

Why did I hate it so much that I had fights with my mom over this? She wants a car for a higher social status, to be exchanged with the expenses that I had to bear:

1. Monthly installment for the next 7 years - SGD $550.
2. Average fuel cost - SGD $400
3. Parking costs - SGD $100
4. Insurance premiums (amortized) - SGD $ 100
5. Road tax (amortized) - SGD $50.
6. Regular Maintenance - SGD $50

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That amounted to whopping SGD $1250 a month for the ownership of the car, and SGD $15,000 annually. (That translations to about USD $10,000 annually). And my car was only a Hyundai Getz 1.3L.

But late last year, just before Christmas, I made the tough decision to sell it off. It was sold at a loss relative to linear depreciation. But if I hadn't, I would have had to suffer more because of all the recurring costs (fuel, maintenance, etc) that I had to pay regardless.

My friends tell me, "I only see others go up the lifestyle ladder by purchasing a new car, or trading in for a better car. Hardly I've seen anyone who went down by selling off his car, and taking the bus to work."

So how did I go from being a car owner to a bus rider? Some discipline, some encourage from my dad, and mom (surprise, surprise!). At the end of the day, it's about planning my personal finance (remember, Earn More Spend Less), and sticking to it.

No doubt, my lifestyle has undergone a change, but no regrets. I'm a happy debt-free man! Can you guess how much richer I am annually now? No prizes for getting it right. :D

Recommended Reading

The Reason You Are Broke
10 Reasons Why I Ditched My Car

(Don't) Earn from Paid Surveys

2007-06-08T04:04:00.000-07:00

My experience with surveys aren't that great. Since last year, I believe, I have only amassed a total of USD 5 from surveys. The rest of you may think differently, but I have certainly not found earning money from surveys to be a worthwhile attempt.

Sure, you can sign up and leave your contact in hundreds of survey sites, but how many survey sites actually get back to you? Even if they do send you a survey once or twice when the moon shines blue, what is the chance that you will succeed going past the screening questionaire (by submitting honest answers)?

Yet today, you still see lots of online advertisements on Google for paid surveys. And worse, they promise the riches that sound too good to be true, because they really are. If you belong to one of those who will believe, or have believed in any of these earn $3,500 a month schemes, stop and think again. What's in it for people who will pay you that much money?

Our money don't grow on trees, and that goes the same for theirs, too, you know?

Moonlight If You Can

2007-06-08T03:02:00.000-07:00

I have a regular day job that pays reasonably well. But because my skill set is largely technical (I am a software researcher and developer), there will come a point in time in my life when jobs like these come harder to find.

I am currently in preparation to amass savings large enough to start a small business for food and beverage where I live. I have not yet decide on the type of food I would like to sell, but I know it will have to be up in about five to six years time.

And now I practically have nothing to begin with.

So then, one may ask, how do I amass my savings? In a society that encourages spending, it would seem as if amassing a huge savings within five years will be an impossible task. In reality, it is not. All you have to do is the following two things:

1. Earn More.
2. Spend Less.

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Are you surprised you didn't learn this in school? I am. I have already taken a series of steps of achieve that. But let's focus on the first - to earn more.

I hope you belong to the category who knows that get-rich-quick schemes are too good to be true. I base my earnings on work that I do outside my day job as a software developer-cum-graphic designer. I find my jobs mostly on GetAFreelancer.com and GetACoder.com. Basically, companies who seek low-cost developers can put their projects up here for bidding, and developers (or graphic designers) bid for the projects. I've gotten myself a few projects and won the companies' trust, and the next thing I knew, they kept coming to me for more projects.

The fee isn't a spectacular 6-figure a year, I would be glad to say that the hard work has gotten me some USD $1,600 over the last three months.

Invest My Savings

2007-06-08T02:53:00.001-07:00

I just past thirty, but up until now, I haven't had the mind to worry about money. But when I started to do so as my wedding approaches, I also found out about ways to earn money. My personal history isn't as important as the fact that we need to start young. Really young.

I have begun investing some two years ago, and my mutual funds are, given the current bullish market sentiments, have been doing reasonably well. I didn't see stellar gains of 100%, but at least my funds did way better than the local savings rate.

My current portfolio for unit trusts are the following:
Weightage (%) - Profit (%) - Name -
07.31% / 10.82% / Aberdeen Indonesia Equity
07.55% / 14.32% / Aberdeen Malaysia Equity
14.07% / 12.17% / Aberdeen Thailand Equity
15.90% / 20.41% / First State GEM Leaders
19.52% / 18.29% / Infinity Global Stock Index
12.11% / -3.42% / Legg Mason Global Bond Trust
23.54% / 16.05% / Lion Capital India

Total Profit = 13.28%