Mutual Funds.
Many, many people are invested in mutual funds. Savings, holidays funds, down payments, retirement pensions. A large share of these are in mutual funds.
And ~90% of mutual funds lose money compared to the index over the long term.
Investor geeks puts it nicely in their article Mutual Funds are for Losers.
The nuts and bolts of a Mutual Fund follow this general pattern:
1) Investors like you and me give money to a mutual fund's broker.
2) The broker reports there is a decent chance to make you back a good return for the risk.
3) Times goes by, and the broker buys and sells stocks to try and make money.
4) Eventually, we the investors need the money back, and asks the broker to cash us out.
5) The broker calculates how much of the initial investment is left (minus losses, plus gains), and gives it back to the investor.
6) According to the average, the investor will net a return less then the index (market median) ~90% of the time.
7) Loss :-(.
Why do mutual funds make less then the average?
1) Higher costs:
Mutual funds employ financial folks to buy and sell the stocks. These folks research, discuss, and communicate with companies to try and foresee how stocks will go (up or down).
These people cost money - in most cases quite a bit more then you or I make. The frequency of trades that a mutual fund makes (many times an hour, or even minute) cost alot as well.
Lazy Potato Investor puts it well in: Would you like fees with that?
2) Results Reporting:
Mutual funds managers have a set schedule in which to make the 'return' that investors are seeking. This time crunch means that they often don't have the luxury of 'holding' a large number of stocks. They have to 'stick and move', meaning buying low and selling high - usually in fairly rapid succession.
This often means a flurry of trades and adjustments, an upward battle as they try to time the market.
I am a firm believer in human capacity, but now-a-days computers are trading on the stock market at a rate of millions of trades a second.
No human being can keep up with that sort of frequency, and many mutual fund managers expect to beat these computers and make money doing it. I don't buy it, and history backs me up.
Tomorrow, I'll do some calculations to put all of this into play, and show you how mutual funds really do steal your money.
Do you believe that your mutual fund is performing better then the index?
How much better?
Let me know.
Wednesday, August 31, 2011
Tuesday, August 30, 2011
Where should I invest my money?
So, where do I put my money, Jack?
I strongly believe that no one can tell you what investment strategy is right for you. If you are looking for guidance, I would employ a fee-based financial adviser.
That is not what I wanted to hear!
I realize that, but lets be frank: I don't know you, or your lifestyle.
You may have a unusually high or low risk tolerance, or a new, intricate investment pattern you know it 'fool-proof'. Or you may have insider information about the state of the fundamentals of companies - more then an adviser, or a blogger on-line can possibly have access to.
I would advise anyone that is looking into investing, especially in stock markets, is to READ. Read everything you can about everything to do with your investment before putting your money into it.
Good places to help you get a grasp of investing:
I think it's fair to say that almost all financial advice is a little bit biased, and I think that is due to the fact that so many people feel 'strongly' about the subject matter. This can lead to some people having some very intense (and often, unhealthy) emotions about dealing with income, bills, and investments.
Jack, I feel nervous about my money.
I believe a little nervousness is not a bad thing. Obviously, if you have trouble sleeping at night (a popular sign that you invested in a risky venture above your tolerance), then you need to make a change.
If you don't feel any nervousness investing your life-savings in a risky emerging markets stock, then you may need to speak with a financial adviser, and be told, in person the risks and repercussions of such actions.
If you are interested in learning about two of the most popular amateur investing styles, please read my post on Dividend investing vs Index investing.
In the end, no one can tell you what is perfectly correct for you; not even a highly-trained financial adviser can read your mind and know exactly what you really want.
Only you can know your investing inner-desires through conscious effort and learning.
Have you invested your money already?
Where did you invest it?
Let me know!
I strongly believe that no one can tell you what investment strategy is right for you. If you are looking for guidance, I would employ a fee-based financial adviser.
That is not what I wanted to hear!
I realize that, but lets be frank: I don't know you, or your lifestyle.
You may have a unusually high or low risk tolerance, or a new, intricate investment pattern you know it 'fool-proof'. Or you may have insider information about the state of the fundamentals of companies - more then an adviser, or a blogger on-line can possibly have access to.
I would advise anyone that is looking into investing, especially in stock markets, is to READ. Read everything you can about everything to do with your investment before putting your money into it.
Good places to help you get a grasp of investing:
- Investorpedia
- Finance Blogs
- Magazine-based sites (Globe & Mail, Moneysense, etc.) - Beware the rampant bias.
- Library books
I think it's fair to say that almost all financial advice is a little bit biased, and I think that is due to the fact that so many people feel 'strongly' about the subject matter. This can lead to some people having some very intense (and often, unhealthy) emotions about dealing with income, bills, and investments.
Jack, I feel nervous about my money.
I believe a little nervousness is not a bad thing. Obviously, if you have trouble sleeping at night (a popular sign that you invested in a risky venture above your tolerance), then you need to make a change.
If you don't feel any nervousness investing your life-savings in a risky emerging markets stock, then you may need to speak with a financial adviser, and be told, in person the risks and repercussions of such actions.
If you are interested in learning about two of the most popular amateur investing styles, please read my post on Dividend investing vs Index investing.
In the end, no one can tell you what is perfectly correct for you; not even a highly-trained financial adviser can read your mind and know exactly what you really want.
Only you can know your investing inner-desires through conscious effort and learning.
Have you invested your money already?
Where did you invest it?
Let me know!
Monday, August 29, 2011
Dividend investing vs Index investing
Today, I wanted to share some of my thoughts about one of the more popular amateur investor debates:
Dividend investing vs Index investing.
I'm a busy investor. Just tell me which one is better!
If only it were this easy.
There are many proponents on one side or the other. Here are a few of each, for your perusal:
Dividends:
Dividend Monk
Dividend Ninja
The Dividend Guy
Dividend Pig
Invest It Wisely
Indexes:
Oblivious Investor
Millionaire Teacher (Andrew Hallam)
Canadian Couch Potato
Most of these folks respect the 'other sides' investment choices, but generally prefer to go with one or the other.
I haven't decided my primary investment strategy yet (other then a handful or dividend stocks that I cut my teeth on), so I'm very interested figuring this out myself.
I'm going to compare the two in a general way (I am not an expert, and these lists are not exhaustive).
Why Indexes are great:
Why Dividends are bad:
But which one is better?
Dividend stocks simply pay out the dividend from their market value, so they generally have slower growth. But, you are being paid with 'today's' dollars, which means that they are worth more then 'future' money that is felt the effects of inflation and market growth (devaluation).
Indexes tend to slowly gain over time, when you filter out the market noise. You can also profit quite handsomely when you re-balance due to one sector doing much better then another.
You will have to make up your own mind about which investing strategy you will use, but I hope this simple primer will provide you with some insight when it comes to dividend and index investing.
What are your thoughts when it comes to dividend and index investing?
Do you use one style or another yourself?
Let me know :).
Dividend investing vs Index investing.
I'm a busy investor. Just tell me which one is better!
If only it were this easy.
There are many proponents on one side or the other. Here are a few of each, for your perusal:
Dividends:
Dividend Monk
Dividend Ninja
The Dividend Guy
Dividend Pig
Invest It Wisely
Indexes:
Oblivious Investor
Millionaire Teacher (Andrew Hallam)
Canadian Couch Potato
Most of these folks respect the 'other sides' investment choices, but generally prefer to go with one or the other.
I haven't decided my primary investment strategy yet (other then a handful or dividend stocks that I cut my teeth on), so I'm very interested figuring this out myself.
I'm going to compare the two in a general way (I am not an expert, and these lists are not exhaustive).
Why Indexes are great:
- Similar to a mutual fund in that it holds many stocks, in this case, from a tracked index, (such as TSX, S&P, etc).
- Attempts to follow the trends of it's market index - Which in the past have been generally 70% positive, 30% negative.
- Will never 'bust' unless nearly the entire stock market 'disappears'
- Generally has very low MER (Management Expense Ratios) so it is inexpensive to invest in.
- You can invest in multiple indexes, and have a portfolio that virtually covers many countries and markets, offering unparalleled diversity.
- You can profit from the shifting currents between indexes (during your 'rebalances').
- You don't need to buy and sell often, just 're-balance' your portfolio perhaps a few times a year to bring it back into line. I like to refer to this as The Ratcheting Effect.
- Since indexes track the market, they can also track it off a cliff into a crash (although you will be in a better position then most).
- It's 'boring' (no thrill of the hunt for excellent stocks, just the same index funds, over and over)
- You won't need to trade often, so that can mute any excitement about investing.
- The upcoming markets may slow to the point where you are not 'gaining' very much in capital gains over time, but this is universal for most any stock.
- You can pick and choose exactly companies to invest in.
- You can leverage insider knowledge about company performance to purchase your dividend stocks when they are at their best 'value' (lowest cost).
- You can enjoy a constant, small stream of income as these companies pay out dividends to you at regular intervals.
- Long-term dividend paying companies tend to be well-run, and more resistant to wildly fluctuating stock prices and values, helping to keep your investment stable-ish.
- During a 'crash', you may be in a better position then non-dividend investors due to the continual income from dividends (but only if your companies manage to keep up the payments during the slump).
- Some companies offer what is known as a 'DRIP' or Dividend Re-Investment Program' - This program will reinvest your dividends into more stock from the same company, often at no additional cost to you, and sometimes at a discount to the regular market price. (Some investors swear by DRIPs).
- Dividends paid by qualifying Canadian companies in Canada are given a *very* preferable taxation rate.
Why Dividends are bad:
- Low Diversity - You will only invest in companies that pay enough dividends to interest you - This limits your selection of stocks, and will almost definitely keep you from picking up any high-capital growth stock.
- Companies may drop dividends for any reason, or no reason at all. They are not beholden to pay them (Unless you are purchasing preferred shares, or shares with other, special conditions).
- The few companies you invest in (compared with the hundreds in an index) leaves you open to losing all your money if the company folds.
But which one is better?
Dividend stocks simply pay out the dividend from their market value, so they generally have slower growth. But, you are being paid with 'today's' dollars, which means that they are worth more then 'future' money that is felt the effects of inflation and market growth (devaluation).
Indexes tend to slowly gain over time, when you filter out the market noise. You can also profit quite handsomely when you re-balance due to one sector doing much better then another.
You will have to make up your own mind about which investing strategy you will use, but I hope this simple primer will provide you with some insight when it comes to dividend and index investing.
What are your thoughts when it comes to dividend and index investing?
Do you use one style or another yourself?
Let me know :).
Saturday, August 27, 2011
Investment Strategy: How to rebalance a portfolio - The Ratchet Effect
I have explored a few different investment strategies that involve 're-balancing' your portfolio.
I have not, however, run across a clear step-by-step direction for performing this movement. I'd like to share with you an idea about the re-balance of stocks I like to call 'The Ratchet Effect'.
Nuts and Bolts of The Ratchet Effect.
Lets say you are an index investor. You have the following asset allocation, and you invested $10,000 evenly between these indexes.
25% - $2500 - Domestic Canadian Index
25% - $2500 - US Index
25% - $2500 - Emerging Markets Index
25% - $2500 - Total Stock Market Index
$10000 Total.
One year passes. The markets bounce around and shift like a bucking bronco. On the investment anniversary, you check your broker account to see the following balances
$2670 - Domestic Canadian Index
$2240 - US Index
$2845 - Emerging Markets Index
$2618 - Total Stock Market Index
$10373 Total (3.7 % Overall return)
Now, lets say you didn't have any more money to invest. So, you take some money from the 'best performing' index, and apply it to the 'worst performing' index.
This would give us the following allocation:
$2670 - Domestic Canadian Index
$2492 - US Index
$2593 - Emerging Markets Index
$2618 - Total Stock Market Index
We sell $252 from Emerging Markets, which brings it to $2593, 25% of our total value $10373.
Then we buy $252 of US Index, which brings it roughly to the 25% value range that we want all indexes to stay at.
We have Ratcheted up our total value, and purchased more stock in the index that currently has the best value to buy in.
This strategy is cheap and easy.
To improve the return of this strategy, you may investigate adding additional indexes/stocks to the mix.
Please check out Canadian Couch Potato's Portfolio Models to see some good index-based mixes in person.
Remember that this can also work with any portfolio of stocks, but works best with a portfolio that has stocks that will move relatively independently of each other (this is why different countries' major indexes work well).
But Jack, my diversity-poor bank portfolio's stocks are all priced the same!
Don't go into your brokerage account and expect to see large performance differences between your stocks if it's filled with only Canadian Banks, or Telecoms, or Utilities. They would all perform very closely, and you wouldn't get an opportunity to 'sell high' on one of them and 'buy low' on another, as they would be at very similar valuations.
Next time you are looking at your portfolio, check which of your holdings is performing the best, and consider investing it's gains into your most undervalued stock.
Please notice that this is not investment advice. I am an amateur investor, and I only know what I have read from others, which may or may not be completely accurate.
I have not, however, run across a clear step-by-step direction for performing this movement. I'd like to share with you an idea about the re-balance of stocks I like to call 'The Ratchet Effect'.
Nuts and Bolts of The Ratchet Effect.
Lets say you are an index investor. You have the following asset allocation, and you invested $10,000 evenly between these indexes.
25% - $2500 - Domestic Canadian Index
25% - $2500 - US Index
25% - $2500 - Emerging Markets Index
25% - $2500 - Total Stock Market Index
$10000 Total.
One year passes. The markets bounce around and shift like a bucking bronco. On the investment anniversary, you check your broker account to see the following balances
$2670 - Domestic Canadian Index
$2240 - US Index
$2845 - Emerging Markets Index
$2618 - Total Stock Market Index
$10373 Total (3.7 % Overall return)
Now, lets say you didn't have any more money to invest. So, you take some money from the 'best performing' index, and apply it to the 'worst performing' index.
This would give us the following allocation:
$2670 - Domestic Canadian Index
$2492 - US Index
$2593 - Emerging Markets Index
$2618 - Total Stock Market Index
We sell $252 from Emerging Markets, which brings it to $2593, 25% of our total value $10373.
Then we buy $252 of US Index, which brings it roughly to the 25% value range that we want all indexes to stay at.
We have Ratcheted up our total value, and purchased more stock in the index that currently has the best value to buy in.
This strategy is cheap and easy.
To improve the return of this strategy, you may investigate adding additional indexes/stocks to the mix.
Please check out Canadian Couch Potato's Portfolio Models to see some good index-based mixes in person.
Remember that this can also work with any portfolio of stocks, but works best with a portfolio that has stocks that will move relatively independently of each other (this is why different countries' major indexes work well).
But Jack, my diversity-poor bank portfolio's stocks are all priced the same!
Don't go into your brokerage account and expect to see large performance differences between your stocks if it's filled with only Canadian Banks, or Telecoms, or Utilities. They would all perform very closely, and you wouldn't get an opportunity to 'sell high' on one of them and 'buy low' on another, as they would be at very similar valuations.
Next time you are looking at your portfolio, check which of your holdings is performing the best, and consider investing it's gains into your most undervalued stock.
Please notice that this is not investment advice. I am an amateur investor, and I only know what I have read from others, which may or may not be completely accurate.
Friday, August 26, 2011
Why I invested my down-payment into stocks instead.
Well, I tossed and turned for weeks, not sure what to do with my down payment fund. I've finally made up my mind.
I won't be buying a place for at least 6 months no matter my choice. Where should I put the money in the mean time?
1) Hoard it away in a low-interest savings account that pays no more then 1.25% interest?
Bear in mind that with the announced low interest rates, that savings account isn't going to be increasing it's rate any times soon (next year or two).
With the savings account, my money will be safe, with no risk of 'loss', but very little gain - in-fact, less gain then the inflation rate.
Interest (1.25%) + Inflation (~3.00%) = -1.75% Annual Profit
So if I leave it in there, I will, in-essence, be losing money. To be fair, this loss is 'controlled', in that I can watch, every month, and see the exact loss, and count on it being exactly the same, unlike in a stock, which can (and will) shoot up and down in value constantly.
2) Place the vast majority of my free-flow 'down-payment funds' into stocks?
If I invested in decent quality dividend stocks, I would enjoy the slow trickle of dividends. I'd have to reinvest and re-balance the portfolio every month or so, and watch to see which stocks were the most 'under-valued' for my monthly investment.
The stock market is one of the most volatile investments a person with money can make. It rocks up and down constantly, and no-one knows where or what it will do next. Will the company you invest with have a good year, a bad year, or will it simply close it's doors, and disappear? No one knows for sure with stocks.
But the gains can be great, and if an investor takes his time, and invests is strong companies, with good track records, the risks can be reduced by a margin.
I believe that I have the capacity, and the situation, that would benefit from careful investment in the market. I'm young, and, even though I loathe the idea of working for a long time, I know that in reality, I will be. I have the capacity to 'bounce-back' from some losses. I don't have children, so no-one depends directly on me for their survival.
Plus, if I can invest decently, I just might get a little further ahead then if I didn't.
I have already spoke with my land-lord about reducing my rent, and she seemed relatively receptive to the idea, considering I'm the best tenant she's ever had (I pay rent 2 months ahead, and am as quiet as a church-mouse).
Plus, I am comfortable where I am renting, and frankly, I will end up spending quite a bit more on gas when I move out as the places in my price range are 20 minutes further from my work then my current rental residence.
For me, it just makes more sense to invest then to make a down-payment.
I won't be buying a place for at least 6 months no matter my choice. Where should I put the money in the mean time?
1) Hoard it away in a low-interest savings account that pays no more then 1.25% interest?
Bear in mind that with the announced low interest rates, that savings account isn't going to be increasing it's rate any times soon (next year or two).
With the savings account, my money will be safe, with no risk of 'loss', but very little gain - in-fact, less gain then the inflation rate.
Interest (1.25%) + Inflation (~3.00%) = -1.75% Annual Profit
So if I leave it in there, I will, in-essence, be losing money. To be fair, this loss is 'controlled', in that I can watch, every month, and see the exact loss, and count on it being exactly the same, unlike in a stock, which can (and will) shoot up and down in value constantly.
2) Place the vast majority of my free-flow 'down-payment funds' into stocks?
If I invested in decent quality dividend stocks, I would enjoy the slow trickle of dividends. I'd have to reinvest and re-balance the portfolio every month or so, and watch to see which stocks were the most 'under-valued' for my monthly investment.
The stock market is one of the most volatile investments a person with money can make. It rocks up and down constantly, and no-one knows where or what it will do next. Will the company you invest with have a good year, a bad year, or will it simply close it's doors, and disappear? No one knows for sure with stocks.
But the gains can be great, and if an investor takes his time, and invests is strong companies, with good track records, the risks can be reduced by a margin.
I believe that I have the capacity, and the situation, that would benefit from careful investment in the market. I'm young, and, even though I loathe the idea of working for a long time, I know that in reality, I will be. I have the capacity to 'bounce-back' from some losses. I don't have children, so no-one depends directly on me for their survival.
Plus, if I can invest decently, I just might get a little further ahead then if I didn't.
I have already spoke with my land-lord about reducing my rent, and she seemed relatively receptive to the idea, considering I'm the best tenant she's ever had (I pay rent 2 months ahead, and am as quiet as a church-mouse).
Plus, I am comfortable where I am renting, and frankly, I will end up spending quite a bit more on gas when I move out as the places in my price range are 20 minutes further from my work then my current rental residence.
For me, it just makes more sense to invest then to make a down-payment.
Thursday, August 25, 2011
Making mistakes at work
Well, today I made some mistakes at work. One small, the other... not so small.
Strike One
I was speaking with my boss, whom also happens to be the head of the company (small company), and he was telling me to contact a product manufacturer and deal with an issue one of our customer was having.
At the end of the conversation, he pulled the file folder out of my hands, and said, "You don't really understand any of this, do you? I better make the call myself."
I couldn't help but stand there, staring at him in surprise - It's not that often that someone out and out tells me that I am particularly ignorant or stupid, but my boss does a pretty good job doing it.
Anyways, I said I would be fine, and held out my hand for the file; he reluctantly handed it to me.
Now, I understand if he was trying to manipulate me into performing the tast by saying I wasn't good enough to perform it, making the man inside me say 'Hey, of course I can do that! Let me show you!"
But I was going to perform the task anyways, and I never said that I didn't want to do it.
Him and I both knew I was going to perform the task.
So I was upset.
Strike Two
The second (and much larger) mistake I made today was shipping a control board to a customer that didn't have a certain piece of hardware on it, when our company always includes this piece of hardware for free.
And of course this customer was in dire need of this board, in fully working condition, with this hardware - and I was the one responsible for packing, testing and sending this board away.
I felt so utterly saturated in fail that I was confident I was going to get fired.
I went home for lunch, and packed up all my company branded clothes (because you know they like to have their shirts back).
Coming back to work, I was almost crying I was so sad.
If I lost this job, I would really have nothing. - No investing, No house, and No future.
So you can understand why I was so utterly devastated.
But I returned, and it was like it all blew over. I don't really know why. I spoke with my boss, twice, and he didn't seem mad at all. Which makes me feel much better.
Or, he has a much more sinister plan in store. Which seems alot more likely.
My job performance is pretty decent - I do a good job most of the time, so I guess this is why he wasn't very angry at me.
Strike Three, and I'm still in
When you believe you are going to get fired, weight the positives of your performance, as well as the negatives.
And if at all possible, don't quit.
Just like selling stock for less then you bought them for,
You are effectively locking in your losses by quitting your job.
And now a-days, it's better to work at a tough job that pays decent for a while then to bounce between lower paying jobs that you really can't get into.
Even though you would like nothing more then to walk out the door and never, ever come back.
:(.
Strike One
I was speaking with my boss, whom also happens to be the head of the company (small company), and he was telling me to contact a product manufacturer and deal with an issue one of our customer was having.
At the end of the conversation, he pulled the file folder out of my hands, and said, "You don't really understand any of this, do you? I better make the call myself."
I couldn't help but stand there, staring at him in surprise - It's not that often that someone out and out tells me that I am particularly ignorant or stupid, but my boss does a pretty good job doing it.
Anyways, I said I would be fine, and held out my hand for the file; he reluctantly handed it to me.
Now, I understand if he was trying to manipulate me into performing the tast by saying I wasn't good enough to perform it, making the man inside me say 'Hey, of course I can do that! Let me show you!"
But I was going to perform the task anyways, and I never said that I didn't want to do it.
Him and I both knew I was going to perform the task.
So I was upset.
Strike Two
The second (and much larger) mistake I made today was shipping a control board to a customer that didn't have a certain piece of hardware on it, when our company always includes this piece of hardware for free.
And of course this customer was in dire need of this board, in fully working condition, with this hardware - and I was the one responsible for packing, testing and sending this board away.
I felt so utterly saturated in fail that I was confident I was going to get fired.
I went home for lunch, and packed up all my company branded clothes (because you know they like to have their shirts back).
Coming back to work, I was almost crying I was so sad.
If I lost this job, I would really have nothing. - No investing, No house, and No future.
So you can understand why I was so utterly devastated.
But I returned, and it was like it all blew over. I don't really know why. I spoke with my boss, twice, and he didn't seem mad at all. Which makes me feel much better.
Or, he has a much more sinister plan in store. Which seems alot more likely.
My job performance is pretty decent - I do a good job most of the time, so I guess this is why he wasn't very angry at me.
Strike Three, and I'm still in
When you believe you are going to get fired, weight the positives of your performance, as well as the negatives.
And if at all possible, don't quit.
Just like selling stock for less then you bought them for,
You are effectively locking in your losses by quitting your job.
And now a-days, it's better to work at a tough job that pays decent for a while then to bounce between lower paying jobs that you really can't get into.
Even though you would like nothing more then to walk out the door and never, ever come back.
:(.
Wednesday, August 24, 2011
Why I hate my job
I hate my job.
I have to get up early. I have to dress a specific way. I have to deal with big stressful issues. I have to speak with my boss that looks at me like an expense on his balance sheet. I am demeaned.
I hate my job.
But if I step back, and look at my problems with 'this job', the issues are really central to most jobs.
1) Time demands - Jobs require you to sacrifice time for money.
2) Appearance demands - You have to wear uniforms or suits or special 'gear'.
3) Stress demands - You have to deal with problems, and often, solve them with your own ingenuity.
4) Sub-ordinance demands - You have to answer to someone, and do what they say.
For me, the subordinate demands are what get me.
I don't like being under anyone's thumb, be it a boss, or a co-worker. I strongly disagree with being demeaned and put to meaningless tasks.
But almost every job has 'bosses'. Even with my self-employment business, the customers are my bosses, commanding me to perform.
Some days I feel up to the tasks, heck, even revel in the challenge. But most days, I am tired. Worn out. I simply don't want to be told what to do by anyone.
This is why I work so hard - to escape from this vicious cycle.
This is why I can't understand people that spend to 'get away' from their job stresses. To get away from your job stresses, you have to get away from your job, not the 'stress' of the job.
By spending money, you are in-debting yourself to your work even more, forcing yourself to work for the things you never needed in the first place.
Save your money - Invest it smartly - Make your money work for you - Retire early - Work when you want, not when others do.
And most of all - Don't spend money to get away from your job stress. Work towards getting away from your job!
(I actually Googled 'Make money work for you' to find a suitable link, but the first twenty links were sales pitches for mutual funds. *sad-face*)
I have to get up early. I have to dress a specific way. I have to deal with big stressful issues. I have to speak with my boss that looks at me like an expense on his balance sheet. I am demeaned.
I hate my job.
But if I step back, and look at my problems with 'this job', the issues are really central to most jobs.
1) Time demands - Jobs require you to sacrifice time for money.
2) Appearance demands - You have to wear uniforms or suits or special 'gear'.
3) Stress demands - You have to deal with problems, and often, solve them with your own ingenuity.
4) Sub-ordinance demands - You have to answer to someone, and do what they say.
For me, the subordinate demands are what get me.
I don't like being under anyone's thumb, be it a boss, or a co-worker. I strongly disagree with being demeaned and put to meaningless tasks.
But almost every job has 'bosses'. Even with my self-employment business, the customers are my bosses, commanding me to perform.
Some days I feel up to the tasks, heck, even revel in the challenge. But most days, I am tired. Worn out. I simply don't want to be told what to do by anyone.
This is why I work so hard - to escape from this vicious cycle.
This is why I can't understand people that spend to 'get away' from their job stresses. To get away from your job stresses, you have to get away from your job, not the 'stress' of the job.
By spending money, you are in-debting yourself to your work even more, forcing yourself to work for the things you never needed in the first place.
Save your money - Invest it smartly - Make your money work for you - Retire early - Work when you want, not when others do.
And most of all - Don't spend money to get away from your job stress. Work towards getting away from your job!
(I actually Googled 'Make money work for you' to find a suitable link, but the first twenty links were sales pitches for mutual funds. *sad-face*)
Tuesday, August 23, 2011
Earning Jack: Investment Snapshot
Welcome to my new net worth charting and 'wealth' allocation system (TM).
The general idea is that I show you where-abouts my money is, so you can have some idea how I live. This in turn, may give you some ideas about your own personal finances.
I may end up changing the format and style of the snapshot as time goes on, but this will at least give you a decent idea of my allocations at the end of the month..
(This chart is a modified version of Brien's 'Net Worth' chart from www.2millionblog.com. It is used with permission.)
Net Worth
So, as you can see, I haven't got alot (which explains the blog title).
My goal is $1,000,000 by retirement. I haven't decided when I will retire, but as soon as possible is the primary goal.
Every month end, including the end of August, I will be updating this chart, and posting it, to show you how I'm fairing.
What do you think?
The general idea is that I show you where-abouts my money is, so you can have some idea how I live. This in turn, may give you some ideas about your own personal finances.
I may end up changing the format and style of the snapshot as time goes on, but this will at least give you a decent idea of my allocations at the end of the month..
(This chart is a modified version of Brien's 'Net Worth' chart from www.2millionblog.com. It is used with permission.)
| Net Assets | July-11 | Aug-11 | Change | % |
| Emergency Fund | $ 1,000.00 | $ 1,000.00 | $ - | 0.00% |
| Taxable Accounts | $ 1,000 | $ 1,500.00 | $ 500.00 | 50.00% |
| Taxable Brokerage | $ - | $ 665.94 | $ 665.94 | 665.94% |
| TFSA Accounts | $ - | $ - | $ - | 0.00% |
| RRSP Accounts | $ 565.00 | $ 565.00 | $ - | 0.00% |
| Stock Options | $ - | $ - | $ - | 0.00% |
| ESPP | $ - | $ - | $ - | 0.00% |
| House | $ - | $ - | $ - | 0.00% |
| Receivable (Payable) | $ - | $ - | $ - | 0.00% |
| Other Assets | $ - | $ - | $ - | 0.00% |
| Total Assets | $ 2,565.00 | $ 3730.94 | $ 1165.94 | 45.4% |
| Liabilities | ||||
| Credit Cards | $ - | $ - | $ - | 0.00% |
| Mortgage | $ - | $ - | $ - | 0.00% |
| Tax Liabilities | $ - | $ - | $ - | 0.00% |
| Other Liabilities | $ - | $ - | $ - | 0.00% |
| Total Liabilities | $ - | $ - | $ - | 0.00% |
| Goal Progress ($1,000,000 CAD) (Investments + House - Liabilities) | $ 1,565.00 | $ 2,730.94 | $ 1165.94 | 0.27% (Total) |
| Net Worth | $ 2565.00 | $ 3730.94 | $ 1165.94 | 45.4% |
So, as you can see, I haven't got alot (which explains the blog title).
My goal is $1,000,000 by retirement. I haven't decided when I will retire, but as soon as possible is the primary goal.
Every month end, including the end of August, I will be updating this chart, and posting it, to show you how I'm fairing.
What do you think?
Monday, August 22, 2011
Working on the side: Pt.6
Over the last week or so, I've been talking about my side business. Yesterday I wrote about how I learned to leave emotions out of the equation, and simply get a full-time job, and work my business on the side. Today, I'll talk about someone in an opposite position.
I have a friend whom is a plumber. Likely the most friendly guy I have ever met in my life. He is an entrepreneur, and fixes pipes and fixtures for a living, driving around in his company van, logo emblazoned on the sides. He is very good at his job, and has new, clean tools that perform any task he needs to do excellently.
At this point, he has little to no work.
Is it his fault? It he going about his business wrong?
I don't believe so. He's run ads in the newspaper for years, always kept his clients happy, and even hands out business cards at the parties he holds for his friends (and friends of friends.) He's been a mentor of mine for years, always giving me words of advice when I needed them.
But none of this has allowed him to stay successful.
He is suffering, much like I was when I tried to grow my 'little business' into a full-time endeavor. And he has watched his 'large business' shrink as time went on, and profit margins dwindled.
I know that it eats away at him inside, the losses, the lack of work. But he knows that it's not him. It's not his sparkling personality, or fine workspersonship.
He is in a reactive industry, where work is reliant on people's willingness to call for him.
They know he does a good job, and he is well priced for his service. But if a toilet isn't exploding, he doesn't get a call.
And this means he can't afford his mortgage payments, or put any money aside for his children's education. Christmas is a struggle.
This is really the point of this post:
Don't put all your eggs in one basket with a self-employing business.
Do you know someone that has watched their business disappear before their eyes?
Have you had the duty of telling someone that they can't do their dream full-time?
Let me know! :)
I have a friend whom is a plumber. Likely the most friendly guy I have ever met in my life. He is an entrepreneur, and fixes pipes and fixtures for a living, driving around in his company van, logo emblazoned on the sides. He is very good at his job, and has new, clean tools that perform any task he needs to do excellently.
At this point, he has little to no work.
Is it his fault? It he going about his business wrong?
I don't believe so. He's run ads in the newspaper for years, always kept his clients happy, and even hands out business cards at the parties he holds for his friends (and friends of friends.) He's been a mentor of mine for years, always giving me words of advice when I needed them.
But none of this has allowed him to stay successful.
He is suffering, much like I was when I tried to grow my 'little business' into a full-time endeavor. And he has watched his 'large business' shrink as time went on, and profit margins dwindled.
I know that it eats away at him inside, the losses, the lack of work. But he knows that it's not him. It's not his sparkling personality, or fine workspersonship.
He is in a reactive industry, where work is reliant on people's willingness to call for him.
They know he does a good job, and he is well priced for his service. But if a toilet isn't exploding, he doesn't get a call.
And this means he can't afford his mortgage payments, or put any money aside for his children's education. Christmas is a struggle.
This is really the point of this post:
Don't put all your eggs in one basket with a self-employing business.
- Work a full-time job that you can comfortably deal with.
- Work a side business that doesn't have a conflict of interest with your full-time job.
- Learn as much as you can about finances, frugal-living, investments, stock, shares, bonds, etc.
- Read financial blogs, and learn as much as you can.
- Learn a variety of skills (How to change oil, fix a toilet, paint a wall, etc) so you don't have to pay someone else.
Do you know someone that has watched their business disappear before their eyes?
Have you had the duty of telling someone that they can't do their dream full-time?
Let me know! :)
Sunday, August 21, 2011
Working on the side: Pt.5
Over the last couple of days, I have written a fair amount about how I overreached with my business, and allowed my emotions to get the better of my business sense.
Today, I'll look at a few general tips that worked well for me, and helped me cope with my business 'underperforming' in my mind.
1) The big one was taking my business performance too personally, and trying too hard.
I've found that this is a big mistake for a few reasons:
I realized that I was stressing myself sick, sounding desperate on calls, and advertising door-to-door, which I didn't want to do in the first place. So I made a decision.
2) Start applying for jobs.
Not just any work though - I only applied for jobs that I could reasonably see myself doing, longer term, and without a ridiculous level of stress. I didn't want to burn out.
Part of the reason I had went to self-employment was a string of jobs at places where employee satisfaction was valued lower then the muck we swept off the floors. Staples was one such place.
So, I finally got my interview for my current position as a key & inventory management support specialist, and for all intensive purposes, it is leagues better then anything I've ever had before. The stress level is also manageable, so I can still take work on the side, and not let it frazzle me too badly
3) A full-time /side business split means less money stress, more stability, and better earning without the risk.
I can't describe how great it feel to be able to put away that extra money from my side business, and place it in my 'future savings' account.
The strangest thing about the entire arrangement is that I am getting more side business work now, after I started a full-time job then ever before.
It's seems to be very true, at least in my case:
4) People call more and pay more to busy people.
I have a friend that I will talk about tomorrow that is in the opposite position, through no fault of his own.
Do you have a side business that you enjoy?
Do you trust busy people more?
Let me know! :)
Today, I'll look at a few general tips that worked well for me, and helped me cope with my business 'underperforming' in my mind.
1) The big one was taking my business performance too personally, and trying too hard.
I've found that this is a big mistake for a few reasons:
- You can't make people buy things from you. You can only make your 'product' as appealing as possible.
- In 'service' industries, you are called when you are needed, not when you are broke and need work to pay the rent.
- People often wait a very long time before having their belongings serviced - Often because they believe it can be more cost-effective to buy a new one, and throw the old one out.
- People may like you, and give your card out, but that doesn't guarantee any work, ever.
I realized that I was stressing myself sick, sounding desperate on calls, and advertising door-to-door, which I didn't want to do in the first place. So I made a decision.
2) Start applying for jobs.
Not just any work though - I only applied for jobs that I could reasonably see myself doing, longer term, and without a ridiculous level of stress. I didn't want to burn out.
Part of the reason I had went to self-employment was a string of jobs at places where employee satisfaction was valued lower then the muck we swept off the floors. Staples was one such place.
So, I finally got my interview for my current position as a key & inventory management support specialist, and for all intensive purposes, it is leagues better then anything I've ever had before. The stress level is also manageable, so I can still take work on the side, and not let it frazzle me too badly
3) A full-time /side business split means less money stress, more stability, and better earning without the risk.
I can't describe how great it feel to be able to put away that extra money from my side business, and place it in my 'future savings' account.
The strangest thing about the entire arrangement is that I am getting more side business work now, after I started a full-time job then ever before.
It's seems to be very true, at least in my case:
4) People call more and pay more to busy people.
I have a friend that I will talk about tomorrow that is in the opposite position, through no fault of his own.
Do you have a side business that you enjoy?
Do you trust busy people more?
Let me know! :)
Saturday, August 20, 2011
Working on the side: Pt.4
Last-day, I was just about at the bottom of my side business venture, or at least it sure as heck felt like it.
I had called in nearly all my prospects from my back-list of clients, without a single bite. I felt incredibly rejected, and din't really know what to do. My grandpa, one of my major mentors, had suggested that it was because I was in a 'reactive business'.
That is, 'Don't call your customers, they call you'.
I still wasn't satisfied with that. I still felt as through they had 'betrayed' me, and went with other service providers (pizza techs that work for nothing).
But then, out of the blue, a few days later, I get a call from one of my oldest clients. Seems he had 3 units that needed work done, and a 4th one built. I took the call, and made an appointment as professionally as I could, trying had to sound unsurprised that he had called me back.
He actually thanked me for calling him, and offering him such a good deal - He had recently had someone else do work for him (a bit cheaper then my rates, he admitted), but the work was shoddy, and he wasn't at all satisfied.
In fact, the other tech had up and disappeared on him when he had an issue, taking the money with him.
I honestly couldn't imagine doing that, considering how I was trying to make as good a reputation as possible. So, went to his home office, and performed the job. It took nearly 2 days with all the things that needed to be done, and he was positive during the whole thing, even when I handed him a healthy invoice.
He was happy to pay me because he knew I did good work.
I also handed him a few business cards, and asked him if he knew anyone else that needed work done. He said he did, and I should expect a call in the coming weeks.
So, I felt like a true entrepreneur again, a fat cheque in hand. It seems I was making my business much more dramatic then it had to be.
And that's really the secret of owning a business. It's not about emotions, or personal grudges, or feeling like you're being cheated.
For me, owning a successful business is about doing a solid, reliable job, and slowly growing your client base through excellent referrals and excellent workspersonship. This is the best way.
Today, I do not perform my business full time, or even what I would call part time. I simply get a few calls a week, and schedule them in when I am able to get to them. Most of my clients are more then happy to wait a bit longer.
Quite frankly, if you look busy, people will wait longer, and pay you more.
I tell my clients that I am booked up during nearly every day, and that I am only able to get to them after 5:00PM (When my day-job ends, but I do not tell them I have a day-job.). They always are very understanding, and we come to a compromise on when and where is best.
Tomorrow, I'll throw out some general tips about how I make my side business successful.
Do you have any tips for prospective entrepreneurs?
When was a time you let emotions over-run your business sense?
Let me know :)!
I had called in nearly all my prospects from my back-list of clients, without a single bite. I felt incredibly rejected, and din't really know what to do. My grandpa, one of my major mentors, had suggested that it was because I was in a 'reactive business'.
That is, 'Don't call your customers, they call you'.
I still wasn't satisfied with that. I still felt as through they had 'betrayed' me, and went with other service providers (pizza techs that work for nothing).
But then, out of the blue, a few days later, I get a call from one of my oldest clients. Seems he had 3 units that needed work done, and a 4th one built. I took the call, and made an appointment as professionally as I could, trying had to sound unsurprised that he had called me back.
He actually thanked me for calling him, and offering him such a good deal - He had recently had someone else do work for him (a bit cheaper then my rates, he admitted), but the work was shoddy, and he wasn't at all satisfied.
In fact, the other tech had up and disappeared on him when he had an issue, taking the money with him.
I honestly couldn't imagine doing that, considering how I was trying to make as good a reputation as possible. So, went to his home office, and performed the job. It took nearly 2 days with all the things that needed to be done, and he was positive during the whole thing, even when I handed him a healthy invoice.
He was happy to pay me because he knew I did good work.
I also handed him a few business cards, and asked him if he knew anyone else that needed work done. He said he did, and I should expect a call in the coming weeks.
So, I felt like a true entrepreneur again, a fat cheque in hand. It seems I was making my business much more dramatic then it had to be.
And that's really the secret of owning a business. It's not about emotions, or personal grudges, or feeling like you're being cheated.
For me, owning a successful business is about doing a solid, reliable job, and slowly growing your client base through excellent referrals and excellent workspersonship. This is the best way.
Today, I do not perform my business full time, or even what I would call part time. I simply get a few calls a week, and schedule them in when I am able to get to them. Most of my clients are more then happy to wait a bit longer.
Quite frankly, if you look busy, people will wait longer, and pay you more.
I tell my clients that I am booked up during nearly every day, and that I am only able to get to them after 5:00PM (When my day-job ends, but I do not tell them I have a day-job.). They always are very understanding, and we come to a compromise on when and where is best.
Tomorrow, I'll throw out some general tips about how I make my side business successful.
Do you have any tips for prospective entrepreneurs?
When was a time you let emotions over-run your business sense?
Let me know :)!
Friday, August 19, 2011
Earning Jack
Recently, I was asked why my blog is called 'Earning Jack'.
Well, it's really very simple:
I'm not earning very much (Jack, in-fact), and scrambling to earn more and save more so that I can reach my crossover point sooner.
And hey, I am a Jack-of-all-trades, with my interests bouncing around so much, so it fits quite nicely.
I'm continually trying to build my side business, and live off of the proceeds of that, and save every dime of my full-time job wages into my investments to maximize the outcomes of them.
Will it be able to do it?
Well, I believe that as long as the TSX doesn't completely implode in the next 15 years, I'll be just fine.
Curious where I've invested?
I'll be starting a new series called: "Earning Jack on my Investments" very soon. Stay tuned.
Do you want to write full time, but can't due to financial considerations?
How do you fit writing into your schedule?
Let me know! :)
Well, it's really very simple:
I'm not earning very much (Jack, in-fact), and scrambling to earn more and save more so that I can reach my crossover point sooner.
And hey, I am a Jack-of-all-trades, with my interests bouncing around so much, so it fits quite nicely.
I'm continually trying to build my side business, and live off of the proceeds of that, and save every dime of my full-time job wages into my investments to maximize the outcomes of them.
Will it be able to do it?
Well, I believe that as long as the TSX doesn't completely implode in the next 15 years, I'll be just fine.
Curious where I've invested?
I'll be starting a new series called: "Earning Jack on my Investments" very soon. Stay tuned.
Do you want to write full time, but can't due to financial considerations?
How do you fit writing into your schedule?
Let me know! :)
Working on the side: Pt.3
Last time I wrote about my side work, I had just bought my 'first pair of professional shoes' and was busily calling all my previous clients to drum up business.
It was at this point I was getting nowhere, fast.
I combed through my phone lists, categorizing people by the last time I had served them, and how much I charged. I attempted to recall if they seemed to like me or not. In my mind, it seemed like everyone liked me, as I was pleasant and helpful, and I gave them a good deal.
Yet, every person turned me down, and shied away from my services, even when I offered them for nearly free.
What was my problem? I couldn't believe that people wouldn't want to have my do work for them for free. I looked good, I brushed my teeth, and even brought magnets for their fridges, so they would always have my name and number.
I talked with my grandpa. He's basically about the nicest guy on the outside, but he dishes out the cold hard truth if you ask.
"You're trying too hard. People don't want you right now, and by pushing, you're pushing them away. Don't bother people when they don't need you. They'll bother you when they need you."
So, I was trying too hard, and pushing too hard. I was coming off like an overbearing salesman, trying to make a quick buck. I worried that I had ruined the few client contacts I'd had, crushing the tenuous lines of communication under my giant boot of irritating salesmanship.
But if I was offering my services for free, then why did they turn me down?
I wasn't going to make any money on the deal. In-fact I was going to lose money in gas and travel to go to these people's houses.
And if I didn't call people, how would they know I existed to request my services?
It was a catch-22.
I couldn't get work if I didn't contact them, and if I did contact them, I wouldn't get work. I was understandably distraught.
But most of all, I felt like a complete failure.
Where could I go from here?
I'll let you know tommorrow :).
Have you ever felt like a failure in your business?
How do you cope with the tough times?
Let me know :).
It was at this point I was getting nowhere, fast.
I combed through my phone lists, categorizing people by the last time I had served them, and how much I charged. I attempted to recall if they seemed to like me or not. In my mind, it seemed like everyone liked me, as I was pleasant and helpful, and I gave them a good deal.
Yet, every person turned me down, and shied away from my services, even when I offered them for nearly free.
What was my problem? I couldn't believe that people wouldn't want to have my do work for them for free. I looked good, I brushed my teeth, and even brought magnets for their fridges, so they would always have my name and number.
I talked with my grandpa. He's basically about the nicest guy on the outside, but he dishes out the cold hard truth if you ask.
"You're trying too hard. People don't want you right now, and by pushing, you're pushing them away. Don't bother people when they don't need you. They'll bother you when they need you."
So, I was trying too hard, and pushing too hard. I was coming off like an overbearing salesman, trying to make a quick buck. I worried that I had ruined the few client contacts I'd had, crushing the tenuous lines of communication under my giant boot of irritating salesmanship.
But if I was offering my services for free, then why did they turn me down?
I wasn't going to make any money on the deal. In-fact I was going to lose money in gas and travel to go to these people's houses.
And if I didn't call people, how would they know I existed to request my services?
It was a catch-22.
I couldn't get work if I didn't contact them, and if I did contact them, I wouldn't get work. I was understandably distraught.
But most of all, I felt like a complete failure.
Where could I go from here?
I'll let you know tommorrow :).
Have you ever felt like a failure in your business?
How do you cope with the tough times?
Let me know :).
Thursday, August 18, 2011
Working on the side: Pt.2
Yesterday, I wrote about how I use my side businesses, and how I had some rough beginnings.
Actually, we'll say I was rough for a long time, working hard to promote my business, but getting basically nowhere. I couldn't beg people to let me do work for them.
Then I realized:
Begging is not professional.
In order to have people recognize me as professional, I would have to show it in every iota of my appearance and candor. This must be the secret of the 'pros'.
By walking and talking like a duck, I would, in-fact become a duck.
So, I went out and bought some very nice new clothes. Fine-spun golf shirts, not that different then the ones I had worn when I worked at Staples. Well-tailored dress pants, and new shoes. Even a big bag of fine-threaded dress socks. I scraped off the white golf-logos from the sleeves with a exacto-knife, and stood in the mirror, admiring the 'professionally cut' figure that peered back at me.
I was absolutely ready to make money.
I felt a run of 'professionalism' in my blood, and called up some of my previous customers that day, to offer them a new 'service special'. I smiled while I spoke, and said more 'pleases' and 'thank yous' then I care to remember. I called over half my back library of 'clients', most of whom were family friends, or referrals from them.
By the time I was through, I was beat, like a I had run a marathon. Not a single new lead. Not a single person wanted me to work on their unit, even for free. I had been brushed off, in the most polite ways, of course, that they had 'already taken it elsewhere' or 'didn't need any more work done'.
Now, it is very reasonable to think that they really did simply not need anything done. But we are talking about people that haven't had me (or anyone else to my knowledge) work on the unit for a year or two. I offered a 'annual tuneup/clean up' and they were strongly not interested.
What did I do wrong?
There were a few reasons that I didn't get the resounding response I wanted, and to give you a hint:
It had nothing to do with my shoes.
Have you ever been brushed off by a client?
What did you do to solve it?
Let me know! :)
Actually, we'll say I was rough for a long time, working hard to promote my business, but getting basically nowhere. I couldn't beg people to let me do work for them.
Then I realized:
Begging is not professional.
In order to have people recognize me as professional, I would have to show it in every iota of my appearance and candor. This must be the secret of the 'pros'.
By walking and talking like a duck, I would, in-fact become a duck.
So, I went out and bought some very nice new clothes. Fine-spun golf shirts, not that different then the ones I had worn when I worked at Staples. Well-tailored dress pants, and new shoes. Even a big bag of fine-threaded dress socks. I scraped off the white golf-logos from the sleeves with a exacto-knife, and stood in the mirror, admiring the 'professionally cut' figure that peered back at me.
I was absolutely ready to make money.
I felt a run of 'professionalism' in my blood, and called up some of my previous customers that day, to offer them a new 'service special'. I smiled while I spoke, and said more 'pleases' and 'thank yous' then I care to remember. I called over half my back library of 'clients', most of whom were family friends, or referrals from them.
By the time I was through, I was beat, like a I had run a marathon. Not a single new lead. Not a single person wanted me to work on their unit, even for free. I had been brushed off, in the most polite ways, of course, that they had 'already taken it elsewhere' or 'didn't need any more work done'.
Now, it is very reasonable to think that they really did simply not need anything done. But we are talking about people that haven't had me (or anyone else to my knowledge) work on the unit for a year or two. I offered a 'annual tuneup/clean up' and they were strongly not interested.
What did I do wrong?
There were a few reasons that I didn't get the resounding response I wanted, and to give you a hint:
It had nothing to do with my shoes.
Have you ever been brushed off by a client?
What did you do to solve it?
Let me know! :)
Wednesday, August 17, 2011
New Look, Less Filling
So, how do you all like the new look?
I've tweaked it a bit, spiffed it up, and now we're getting where I've been wanting to go - attractive, and less... 'Gothic'.
I've also changed the name, to make it more in-line with my personal goals / feelings about the blog.
I've added some linkage on the side, if you want to share 'Earning Jack'. with your friends. Go Ahead. Maybe they'll even like it.
I'm also going to provide a 'net worth' guage on the sidebar, so you can see how I am doing, month to month.
I always love seeing other people's financial lives, and I feel (possible foolishly) fairly confident about my current set of financial decisions.
Plus, a little oversight never killed anyone. Right?
I've tweaked it a bit, spiffed it up, and now we're getting where I've been wanting to go - attractive, and less... 'Gothic'.
I've also changed the name, to make it more in-line with my personal goals / feelings about the blog.
I've added some linkage on the side, if you want to share 'Earning Jack'. with your friends. Go Ahead. Maybe they'll even like it.
I'm also going to provide a 'net worth' guage on the sidebar, so you can see how I am doing, month to month.
I always love seeing other people's financial lives, and I feel (possible foolishly) fairly confident about my current set of financial decisions.
Plus, a little oversight never killed anyone. Right?
Working on the side: Pt.1
I am a key & inventory management support specialist. This means that I install and support these systems in-person, over the phone, and with remote access on my PC.
It's a pretty decent job - I don't have to travel away from my family much, and the money is decent. I work at a small company, so I see the owner several times, every day. This can up the stress level a bit, but inside, he really is a decent guy, even if he tends to get overcome with some of the daily challenges of running the business.
My side work is what tends to 'drive' me more.
My first business is fixing computers, that is, laptops, desktops, and most consumer electronics. It makes good money, when there is work!
My second business is a store on e-bay. I am in the process of handing this over to my parents, as my mother has nothing to do with her days (she is retired), and my dad can generally get through any technical stuff that she gets caught on.
Between these these two side businesses, I am kept pretty busy. I tend to have some computer repair work a few times a week, so I'll spend my evenings working on laptops, taking them apart (which satisfies the part of me that is creative and curious), and when I'm not doing that, I'm writing here on my blog.
My suggestion to anyone that is looking at starting a side business?
Do it.
But my grandpa once told me (being self-employed for over 25 years now), in order to make it, you have to be excellent at what you do. You have to have to be one of the best, confident to a fault, and strong in your convictions.
Most of all, you have to have patience.
You won't make it in a week. Or a month. Or a year. Maybe not even ever.
You have to accept that you will have months without a single 'call' or 'order' or 'sale'. Maybe even a string of many months.
When I was first starting out, I couldn't even beg people to give me work, even for pennies on the dollar of what I wanted to charge. People didn't trust me, didn't see me as a professional.
And really, they were right.
I hadn't realized what one of the most powerful forces is when you are starting a business.
Tune in tommorrow, and I'll let you know ;-).
Have you ever run a business?
What are your thoughts about how to start?
When did you realize it was 'for you' or not?
Let me know! :).
It's a pretty decent job - I don't have to travel away from my family much, and the money is decent. I work at a small company, so I see the owner several times, every day. This can up the stress level a bit, but inside, he really is a decent guy, even if he tends to get overcome with some of the daily challenges of running the business.
My side work is what tends to 'drive' me more.
My first business is fixing computers, that is, laptops, desktops, and most consumer electronics. It makes good money, when there is work!
My second business is a store on e-bay. I am in the process of handing this over to my parents, as my mother has nothing to do with her days (she is retired), and my dad can generally get through any technical stuff that she gets caught on.
Between these these two side businesses, I am kept pretty busy. I tend to have some computer repair work a few times a week, so I'll spend my evenings working on laptops, taking them apart (which satisfies the part of me that is creative and curious), and when I'm not doing that, I'm writing here on my blog.
My suggestion to anyone that is looking at starting a side business?
Do it.
But my grandpa once told me (being self-employed for over 25 years now), in order to make it, you have to be excellent at what you do. You have to have to be one of the best, confident to a fault, and strong in your convictions.
Most of all, you have to have patience.
You won't make it in a week. Or a month. Or a year. Maybe not even ever.
You have to accept that you will have months without a single 'call' or 'order' or 'sale'. Maybe even a string of many months.
When I was first starting out, I couldn't even beg people to give me work, even for pennies on the dollar of what I wanted to charge. People didn't trust me, didn't see me as a professional.
And really, they were right.
I hadn't realized what one of the most powerful forces is when you are starting a business.
Tune in tommorrow, and I'll let you know ;-).
Have you ever run a business?
What are your thoughts about how to start?
When did you realize it was 'for you' or not?
Let me know! :).
Tuesday, August 16, 2011
In the beginning
I started this blog to share my journey through writing and financing my goal of being a full-time writer.
I realize that I will be working at this for a very long time. From what I have read on other blogs, most people agree that attaining full time financial independence (that it, not having to work a full-time job to afford living) is a life-long exercise in frugality, budgeting, and investing wisely.
Do I have what it takes?
I've always spent less then I've earned, watched my money (often with a tinge of grief as it merrily disappeared from my accounts), and invested in the best places I knew. Unfortunately, this often meant the local credit union's "High-interest" savings account, which, even during the heydays of pre-2008, wasn't higher then 3%!
Now, reading up on blogs such as: http://learndividends.com/, http://www.intelligentspeculator.net/, http://www.thesimpledollar.com/, I've learned that it is possible to put that money to much better use, often through investing directly into strong companies that pay dividends.
I feel as though with the tips, hints, and guides that these blogs and others put forth, I'm able to make a much more informed decisions on how to make more, save more, and invest more money.
My fictional writing with have to sit on the back-burner while I work hard to make the money that I'll require to make my dream of financial independence come true, but I won't stop writing, not here, or on my personal projects! Add that to the fact that I still want desperately to publish my novella 'Pale Dawn', which is the first part of the 'Loneman' trilogy. I can't wait to introduce Kesh, and the humble beginnings to her sultry, saucy, current self.
So, I'll be using this blog to chronicle my journey. I hope that you find it just as entertaining and useful as it is to me to write it.
I realize that I will be working at this for a very long time. From what I have read on other blogs, most people agree that attaining full time financial independence (that it, not having to work a full-time job to afford living) is a life-long exercise in frugality, budgeting, and investing wisely.
Do I have what it takes?
I've always spent less then I've earned, watched my money (often with a tinge of grief as it merrily disappeared from my accounts), and invested in the best places I knew. Unfortunately, this often meant the local credit union's "High-interest" savings account, which, even during the heydays of pre-2008, wasn't higher then 3%!
Now, reading up on blogs such as: http://learndividends.com/, http://www.intelligentspeculator.net/, http://www.thesimpledollar.com/, I've learned that it is possible to put that money to much better use, often through investing directly into strong companies that pay dividends.
I feel as though with the tips, hints, and guides that these blogs and others put forth, I'm able to make a much more informed decisions on how to make more, save more, and invest more money.
My fictional writing with have to sit on the back-burner while I work hard to make the money that I'll require to make my dream of financial independence come true, but I won't stop writing, not here, or on my personal projects! Add that to the fact that I still want desperately to publish my novella 'Pale Dawn', which is the first part of the 'Loneman' trilogy. I can't wait to introduce Kesh, and the humble beginnings to her sultry, saucy, current self.
So, I'll be using this blog to chronicle my journey. I hope that you find it just as entertaining and useful as it is to me to write it.
Friday, August 5, 2011
Active Investing
As always, I like to peruse financial blogs and articles, picking up whatever knowledge I can like a particularly sticky rolling stone.
Active investors. Those people that get up early in the morning, and stay up until all hours of the night, pouring over reports and figures, funds and mutuals. Often referred to as 'Day Traders', they make many trades, and try to 'beat the market'.
Part of me believes that they are actually having a good time at it, too. I mean, playing with money, making it or losing it, it's like a very costly video game. Except instead of guns and gibs, it's bar and pie charts. Like playing at a high-rollers casino without the noise and pumped in oxygen.
Honestly, I am torn. I feel like I am missing out. I want to start 'investing'. I almost feel like I'm stuck at the little kids table, looking over at the adults feasting on roast and wine. Will investing get me there?
Very doubtful. But it's that ingrained need to fit in; to be seen as a successful, full, strong, adult person. To be able to say 'Oh yes, I gained on ABC and lost on XYZ. What about you?'.
It's silly. It's utterly unimportant. But I'm am opening a discount online brokerage account with Credential Direct anyways. I read many reviews, and they seem to be not too bad; added to the fact that they are in Canada, like I am, which makes me feel decent about the decision.
And yes, I've been writing. A smidge.
I write this blog, and I add or tune "Pale Dawn" every once in a while.
It's tough to find the energy to write. I get home, and check on my small pile of side businesses, e-mailing, calling, and managing the day to day operations. After that, I eat dinner, maybe read around the web a bit on the topics I'm interested in that week, and go to bed.
If this is life, it's awfully drab and boring.
Active investors. Those people that get up early in the morning, and stay up until all hours of the night, pouring over reports and figures, funds and mutuals. Often referred to as 'Day Traders', they make many trades, and try to 'beat the market'.
Part of me believes that they are actually having a good time at it, too. I mean, playing with money, making it or losing it, it's like a very costly video game. Except instead of guns and gibs, it's bar and pie charts. Like playing at a high-rollers casino without the noise and pumped in oxygen.
Honestly, I am torn. I feel like I am missing out. I want to start 'investing'. I almost feel like I'm stuck at the little kids table, looking over at the adults feasting on roast and wine. Will investing get me there?
Very doubtful. But it's that ingrained need to fit in; to be seen as a successful, full, strong, adult person. To be able to say 'Oh yes, I gained on ABC and lost on XYZ. What about you?'.
It's silly. It's utterly unimportant. But I'm am opening a discount online brokerage account with Credential Direct anyways. I read many reviews, and they seem to be not too bad; added to the fact that they are in Canada, like I am, which makes me feel decent about the decision.
And yes, I've been writing. A smidge.
I write this blog, and I add or tune "Pale Dawn" every once in a while.
It's tough to find the energy to write. I get home, and check on my small pile of side businesses, e-mailing, calling, and managing the day to day operations. After that, I eat dinner, maybe read around the web a bit on the topics I'm interested in that week, and go to bed.
If this is life, it's awfully drab and boring.
Tuesday, August 2, 2011
Financial Reading
I've kicked the vast majority of my illness, and I am back to work after the long weekend. I didn't get a great night sleep last night, as the girlfriend is still not feeling that great, and required a back rub to even get to sleep. She told me that it was one of her customer that got her sick, and she in turn got me sick. I just wish neither of us was sick!
I'm reading about dividends today on 'My own Advisor', and 'Dividend Growth Investor'.
In case you are not sure what a dividend is, it's basically a stock (yes, from the stock market), that pays you money just for owning it.
For example:
You buy some stock in 'Sunoco Logistics Partners L.P. (SXL)' who happens to offer stocks with dividend payments.
Then, depending on what schedule of payments they have, they will pay you a certain amount per year. If it was a quarterly schedule, you would get a check in the mail every quarter for the amount of money per share you own.
It seems like a pretty decent way of investing your money, and having it come back to you.
As far as I can tell, being the very amateur investor that I am, dividend stocks will pay a fair shake more then even the best GIC's and savings accounts. The flip side of course is that there is also more risk involved, as you never know what's going to happen with any particular company. But is McDonald's going to fold? I highly doubt it.
I'm also excited about payday. Woo. Primarily because I am looking at apartments - Yes, I'm looking to purchase my own place! I just have to keep working. I believe that it will get easier to work when I am able to have my own fridge and bedroom. It's really the sleep that is the issue - I am a supremely light sleeper, and without a good nights sleep in many years, I'm really starting to get run down.
The market is still rough for many people, so the turnover of housing in my town is fairly decent - I can see a few places, in my price range, that would work for me. I'm going to have to shop around for mortgage rates though - my credit union didn't seem to be that interested in having my business :(.
My folks advised me to go to one of the banks - I think I will set up an appointment with one of them and see how they treat me. Or if they offer a better rate.
You would think after having worked with my credit union since I was 6 years old, they would be more happy to set me up with a secured mortgage that is going to net them - as far as I can tell - Between 20-45% gains over the next couple years. It's kind of mind-boggling for me.
And the tellers always take forever to deposit my paycheques too. I don't fully understand.
Anyways, in order to help pay off the future mortgage faster, I'm going to try and get a second job - not sure where, but I'm confident that someone will want to hire me, even if it's only for 10-20 hours a week, in the evenings.
Wish me luck on that :).
I'm reading about dividends today on 'My own Advisor', and 'Dividend Growth Investor'.
In case you are not sure what a dividend is, it's basically a stock (yes, from the stock market), that pays you money just for owning it.
For example:
You buy some stock in 'Sunoco Logistics Partners L.P. (SXL)' who happens to offer stocks with dividend payments.
Then, depending on what schedule of payments they have, they will pay you a certain amount per year. If it was a quarterly schedule, you would get a check in the mail every quarter for the amount of money per share you own.
It seems like a pretty decent way of investing your money, and having it come back to you.
As far as I can tell, being the very amateur investor that I am, dividend stocks will pay a fair shake more then even the best GIC's and savings accounts. The flip side of course is that there is also more risk involved, as you never know what's going to happen with any particular company. But is McDonald's going to fold? I highly doubt it.
I'm also excited about payday. Woo. Primarily because I am looking at apartments - Yes, I'm looking to purchase my own place! I just have to keep working. I believe that it will get easier to work when I am able to have my own fridge and bedroom. It's really the sleep that is the issue - I am a supremely light sleeper, and without a good nights sleep in many years, I'm really starting to get run down.
The market is still rough for many people, so the turnover of housing in my town is fairly decent - I can see a few places, in my price range, that would work for me. I'm going to have to shop around for mortgage rates though - my credit union didn't seem to be that interested in having my business :(.
My folks advised me to go to one of the banks - I think I will set up an appointment with one of them and see how they treat me. Or if they offer a better rate.
You would think after having worked with my credit union since I was 6 years old, they would be more happy to set me up with a secured mortgage that is going to net them - as far as I can tell - Between 20-45% gains over the next couple years. It's kind of mind-boggling for me.
And the tellers always take forever to deposit my paycheques too. I don't fully understand.
Anyways, in order to help pay off the future mortgage faster, I'm going to try and get a second job - not sure where, but I'm confident that someone will want to hire me, even if it's only for 10-20 hours a week, in the evenings.
Wish me luck on that :).
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