Wealth Zone Blog

Green Saving Pt. 1

2009-03-02T01:57:00Z

At the Wealth Zone Blog we write about all aspects of wealth; making it, keeping it and attitudes of success.
In this entry I wanted to mention some products to help save electricity. Many of us have electronic accessories in our house that never really "turn off" even after you have pressed the off button. Cell phone chargers still consume small amounts of electricity even when no cell phone is attached for charging, Many TVs, especially the older tube type, will keep the tube charged for quicker starts. The examples are endless.

Belkin produces an interesting power strip that has 6 switchable outlets and 2 always on outlets. The switchable outlets are controlled by a remote control that you can mount on the wall like a light switch or - use it like a remote!
The Smart Strip LCG3 Energy Saving Power Strip with Autoswitching Technology.
This device senses the flow of electricity and when it reduces to a trickle, it shuts the outlet off.

If you aren't sure if a device is using any electricity when it's off or want to find out how much it uses, then check out the Kill A Watt EZ Electricity Usage Monitor. It can be used to calculate the cost of running 1 device for a period of time based on your electric rates.

Full Service Brokers and Financial Advisers

2009-02-20T18:10:00Z

With the long year of market turmoil, some of you may be thinking of switching to a broker or financial adviser or switching firms that provide these services. I though I would offer some thoughts to help you interview the new firm and see if it is suitable for you.

Full service brokerages and financial advisers usually have in house analysts that research investments and then release their recommendations to the sales force. The sales force in this case is your broker or financial adviser. The firm can make money from these recommendations through the commissions generated from client buys and also from mutual funds (the fund pays the adviser a "commission" for selling the fund).

I think an important aspect of using an adviser or broker is to understand how they help you manage your money and specifically, cut losses. Many firms recommend stocks and mutual funds under the buy and hold theory, but this only works if the stock or fund is going up. When it is not, there should be a plan to decide when the investment choice has gone against you and it's time to cut losses and move on.

So here are a few questions you may want to consider asking your new firm (maybe you should ask your existing firm):

Does the firm front run recommendations?

This means that the firm will take a large position in the recommendation and then sell to the clients from their inventory at a slight markup.

Do the brokers/advisers buy the same recommendations?

Some firms have a policy of being neutral and don't allow the brokers to buy the recommendations. That's o.k. If they do, then you know that the brokers are placing their money where yours is. If the firm does not restrict the brokers from taking the same positions, but they don't, why?

Can the brokers buy or sell before the clients?

Some firms may have a strict policy that prevents the brokers firm buying before the recommendations are released to the clients. Some don't...

Does the firm have a preferred client list that receives recommendations before other clients?

Are you going to be on that preferred list or how does someone qualify to be on that list (probably high net worth and large amount invested with firm)?

Will the firm ask about your risk profile and recommend only those investments that fit that profile?

Recommending high risk stocks to someone who wants asset preservation and income is not suitable.

What is their money management policy? What happens if a recommendation is down 10%? 20%? How do they know when to cut losses or take profits?

If the firm can not explain a policy for this then you will eventually wind up with positions that have 30-50% losses (and more).

Remember - in bear markets, he who losses the least comes out ahead. The bear market in general equities can drag on for another 9 or more years.

Good luck.

Endurance

2007-05-08T10:35:00Z

Sticking to a goal can feel onerous when it takes a while to achieve it. Along they way, perhaps you might begin to doubt yourself or others might begin to doubt whether if you will make it or not.

I recently heard someone tell the story of Herb Kelleher, founder of Southwest Airlines. He had an idea to startup a low cost airline and compete with the big guys at the time. Of course, the entrenched players, not wanting to respond by innovation or their own cost cutting efforts, decided to go the usual route and sued the company endlessly in court. The entrenched, thinking that they had more time and money to go to court, would wear Herb and his company down and force them out of business. Herb was a lawyer, so he was able to use his own skills in court to fend of the litigation.

In one particular suit, he lost in trial court, and then proceeded to lose in appeals court. At this point, some people begin to doubt he would make it. But, Herb was determined to press on anyway. I am not sure if he had doubts at the time, but what did he have to lose? One way or another they were trying to get him and his company out of business. So he files an appeal to the state supreme court and this time - he prevails.

Now we know today that not only has the company succeeded wildly, but it defined low cost competition on it's terms - not those of it's competitors. Even if you aren't thinking about something as grand as an airline, know that endurance and perseverance count as much in the success of your idea or goal as anything else.

If you want another example of endurance, see the movie called "Shackleton". It's a story about Sir Ernest Shackleton who was determined to raise money and take a crew to Antarctica to explore an area of it. Antarctic exploration was a hot topic at the time in the early 1900's. His goal at the time was to sail in the ship "Endurance" and arrive on the continent via the Weddel sea, cross the continent via the south pole to the Ross sea. Unfortunately, after arriving in the Weddel sea, the pack ice closed in on his ship and it had to be abandoned as the ship was crushed. Although Shackleton did not succeed at his original goal which was to cross the Antarctic continent, he acquired a new goal along the way which was to rescue his men from the failed mission. It took two years in all to round up all of the men involved and not one of them was lost. He could have easily given up at any point but he did not.

Barriers to Success Part II

2007-04-16T02:56:00Z

In a previous post, I mentioned that trivial online pursuits were a possible barrier to success, in that some people may spend too much time in chat rooms or reading about celebrities or playing games, etc. We all need some entertainment in our lives, but when these pursuits chew up significant amounts of time, it prevents any real progress from being made in more meaningful pursuits.

I have often said that in 20 or 30 years, historians will look back on the turn of the century and the state of the internet at that time and view it as the re-invention of the Gutenberg press. Unfortunately, they will come to the conclusion that the opportunities it presented were squandered by many.

In the era before the first Gutenberg press, very few books were available and there were very few people who possessed reading skills. Those who could not afford books or get access to them and were unable to read were at the mercy of those who could. Those who had the books held the power. Gutenberg's invention eventually leveled the playing field as publishing became cheaper and educational opportunities increased. For the first time, people could read for themselves what was written in these books.

The internet has so much information available that once again, it has re-leveled the playing field for access to information. If you live in a small town with a limited library or perhaps no library at all, there is an amazing amount of informational resources available online. Why not take advantage of the tremendous resources available? With the information that is now available world wide the only thing that might be holding you back is you.

Finding Your Way To The Goal

2007-04-11T02:11:00Z

A common trait found amongst successfull people as that they set goals for themselves and then go on to acheive them. Sometimes, we get sidetracked on our way to our goal or we never start towards our goal because the end result seems too overwhelming to acheive.

In the move "The Secret", author Jack Canfield said something to the effect that it's possible to drive from California to New York at night even though the headlights only illuminate the road ahead 200 ft at a time. If you start out in California at night you certainly can't see New York at the end of the road, but a little at a time, the headlights illuminate the path and signs appear along the way to help guide you towards the goal of getting to New York.

If we apply this thinking to goals that we set for ourselves, it doesn't have to be a huge obstacle that you can not see every step that is necessary to get from start to finish. The tragedy of goal setting or dreaming up a goal is that no action is ever taken in the first place becuase it seemed impossible.

If you ever dreamed of becoming a millionaire and then suddenly thought "no way, that's way too much work", dream again. If you are starting out with a small amount of money - say $5,000. The road 200 ft. ahead might be how do I turn $5,000 in to $10,000? After you go 200 ft. ahead and are at the point you could barely see before, the road 200 ft ahead might be how do I turn $10,000 in to $20,000. Perhaps along the way some signs will appear to help give some directions.

Great Success Classics

2007-04-08T00:08:00Z

Have you ever wondered how some people became successful? Didn't it seem as though they were successful right out of the womb and you might have wondered to yourself, "how come I didn't get it?".

Not to worry. In some later articles we will discuss some successfull people who "rose from the ashes" - people who were alcoholics, high school dropouts and had dysfunctional family lives etc. But many of them had at one point or another in their lives read some of the well known "success classics".

The intersting aspect of some of these "success classics" is that they have been around for 60 to 100 years but they are not well known to most people. Yet, they offer some of the greatest insights in to conditioning your mind to think in terms of success, wealth and riches.

I found a book that has 50 of the greatest success classics. While I have not read the actual book, I have read many of the classics contained in the book and would highly recommend it to anyone looking to improve their attitude for success.

50 Success Classics: Winning Wisdom for Life and Work from 50 Landmark Books

Barriers to Success Part 1

2007-04-06T02:34:00Z

What keeps people from succeeding? In this multi-part series, I'll discuss behaviors and other factors involved in staying in a stuck state and never moving ahead. Some examples of this are:

watching television
playing video games
frivolous pursuits online
substance abuse
resistance to change

One of the biggest barriers to success often involves engaging in activities that consume a lot of time and have little or no return for the time invested. My favorite example is television. Someone once said that TV is the greatest mind control tool any dictator could want. I have asked people on occasion why they don't spend more time on personal development topics like investing, finance, or self improvement etc and the first line of defense is "I don't have time". Yet they can tell you about Monday night football or what happened in the latest episode of some sitcom.

If you could learn to make an extra few thousand dollars or more per year in the same time that it takes to watch TV 1 or 2 nights a week would you do it? Sadly, it never occurs to most people to do this because it is far too easy to sit down and watch TV rather than learn something new. Yet many of these same people often wonder why they don't have it better off in life.

One of the keys to improving any area of your life besides the desire to change or succeed is the understanding that you need to be in a constant learning state. This doesn't mean you have to take college courses - you can learn a lot through a variety of ways; online resources, books, seminars and clubs to name a few.

Getting the Mindset for Wealth

2007-04-06T02:04:00Z

Are you one of the people who thinks negatively about money, something like:

"I'll never be rich" or
"rich people are greedy" or
"money isn't important"

Some of these ideas are rooted early in childhood, from things you might have heard your parents or relatives say. Some of them might come from subtle programming you received in high school or college. But, it needn't be so.

Let's examine the popular but self defeating phrase - "I'll never be rich". The mind is very powerful in it's capability to act on thoughts. In this case, the moment one thinks "I'll never be rich", it will become a self fulfilling prophecy. There are any number of destructive phrases that people unwittingly use all the time without realizing they are only undermining themselves. Some other examples: "I'll never loose weight", "I can't do ....", "I"ll never be...". Each of these phrases is an instant excuse for you to stay stuck in your present state.

I can tell you from personal experience that if you are determined to lead a miserable existence from negative thinking because it is a familiar comfort zone then you will be wildly successful at it. Instead, you can be wildly successful from thinking positively and have a good time doing it.

Even if there are other areas of your life that you would like to change besides your wealth, all of it starts with the mind. No person, no course, no counselor, no self-help book will change you until you are willing to change. Do not despair if you are not sure how the change will come about; once you are determined to change, seeking the help to change will come much easier and will be more effective.

When it comes to wealth, we have been programmed as a society with a variety of negative messages that come from many sources. These messages work silently in the background to suppress the desire to lead a comfortable life. There is an endless amount of material I could write about that and why it is happening, but let's focus on how to defeat that negative programming. In the future we will deal with that and much more to help improve the attitude for wealth. Meanwhile, if you are ready for change and would like to get started, here is one resource to check out. The people at this site have a wonderful program to help remove old negative programming about money and wealth and get you started on the right track to prosperity.

http://www.plentyofwealth.com

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