Tag Archives: inspiration

Warren Buffet: How a Sixteen Year Old Turned $5,000 into almost $1B

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Almost everyone has at some point heard of the famous figure Warren Buffet. However did you know that Warren’s success didn’t just start as an investor. Mr. Buffet actually began making strides towards his massive fortune in his high school years.

In high school he was making more than a lot of his teachers by running a pinball machine business and delivering papers. At the age of sixteen he had amassed five grand. $5,000 at his age would be the equivalent of around $60,000 today! He was just sixteen.

While most of us can’t redo our high school years, childhood or even college experience, we can chose to adapt many of the principles that Warren did in his younger years and implement them long term.

There are three things that we can use from Warren’s life to make changes today:

  1. Win Friends and Influence People

Warren implemented (not just read) this book. Simply reading it and taking daily action to change behavior and habits can go a long way in making your life a more successful one.

2. Understand the time value of money

Warren, even in his teen years, didn’t squander his cash on toys, games or nice clothes. He understood that a dollar today could be worth $30, $100 or (in his case) $1000 in the future.

3. Be entrepreneurial

This doesn’t mean you need to start a company or quit your day job. Just like Warren, you can figure out creative ways to make side money. If Warren Buffet at the ages of 13, 14 and 15 could figure out how to make side money, then you, as an adult can figure out how to do the same.

Conclusion:

Warren Buffet is extraordinarily rich. I can’t tell you that you’ll be as rich as him. I can’t even guarantee that you’ll have $1M. But I can guarantee that you’ll grow as a person and become richer then you are now if you implement these three steps.

Try them, you may find that they actually work.

Three Ways You can Make Side Money This Year

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Most folks in the U.S. struggle with money. Whether that means they don’t know what to do, or they don’t have the discipline to do what they know. Whatever the reason, there’s no doubt that often an extra flow of income can help bridge the gap between making your goals and falling short.

The following are three ideas of ways you can make money this year and every year after:

Plasma Donation

This is often one of the toughest ways to make money, especially for those who faint a the sight of a needle. I know for me personally I used to literally walk out of movies that had needle-type medical scenes.

However this past winter I have been overcoming my fear and at the same time making decent money! I have made about $300 in the past month with limited time commitment as well as gaining confidence in myself. (Not to mention plasma donation is literally saving lives.)

I have found you can make about $40 to $45 per day on average for just an hour or two, depending on where you go and the bonuses they provide.

Online Ads

If you have a blog, youtube channel, or some other form of online website, you are able to add ads and make the site profitable. This obviously doesn’t happen over night. But given some time, you will be able to make some extra cash.

I have recently set up an Adsense account and am working on creating an extra income stream from writing.

Online Resale

If you’ve ever gone to a thrift store, or bought something on craigslist you know that it’s possible to buy online and resell for a profit. While there are no guarantees, it’s definitely possible to develop a niche and eventually make decent money with limited time commitment.

Conclusion:

There are no clear answers to the income question. Ultimately income alone won’t improve your finances. Managing the money you have is a first step. But for many people extra income is a massive boost. For those people this might be the push that you need.

3 Things Young Adults can do to Prepare for Their Future

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As millions of young adults enter the workforce, finish education, and begin a life of financial responsibility, there are many of us who have a lot of uncertainty for the future.

The following are three key things to anticipate for the future:

An Older, More Diverse Population

Let’s face it, as time progresses there will be more and more old folks in the economy. This isn’t necessarily a bad thing (after all, someday we’ll be those old folks), but this is just one more thing to anticipate in the future.

In addition, there will likely be more ethnical and gender diversity. More and more women will enter the workforce, as the population of African Americans, Hispanics and Asians increases in the U.S..

These are all positive changes. Not only will we be experiencing more diversity of creed, religion, nationality and ethnicity, but we will also be seeing more and more women in the workforce. This is all at a time when we are living longer and longer.

More Technology and Automation

Unless, in the unfortunate event the world enters WWIII, we will likely see continued progression of technology both in terms of software, like AI and automation and in terms of machines and physical advancement.

Key areas to keep and eye on are in the medical field, biotech, vehicle automation and AI. These massive changes will likely lead to an ever-evolving need for labor. Automation will likely destroy certain jobs forever, while technology will create new demand and new industries.

Potentially Higher Taxes

At this moment taxes are historically low. After the tax cut of 2018 there are many economists and financial advisors anticipating higher taxes in the future to cover our increasing deficit. While there is no crystal ball that can see the future, we do know that it’s unlikely for rates to stay this low forever.

That said, it would be prudent to plan for this by utilizing tax-advantaged accounts like Roth IRA’s and Roth 401K’s.

Conclusion:

Preparing for the future doesn’t have to involve knowing all the details. While you don’t have to know everything, you should prepare for what’s likely to happen.

The advice contained in this blog is meant to be taken at the reader’s discernment. Talk to your financial planner to see how the advice may or may not apply to you. Ultimately you are fully responsible for your finances so make sure you have someone who is willing to walk with you on your journey.

Atomic Habits: What I Learned from James Clear’s Book

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We all know habits are important – whether for our personal fitness or our finances. Yet nearly all of us acknowledge the fact that we don’t have the best habits for our personal development.

This book, which I read and reflected on the last two weeks, revealed just how important habits are. I took away many points – some of which I already knew and some of which were completely foreign.

In summary, I learned that habits are crucial for success. They form by a cue and often are formed in large part by our environment. Controlling your environment is a huge part of success. Making your habits Obvious, Attractive, Easy and Satisfying is what the book was really about.

One thing that really stood out to me was the fact that many of the most successful people got to where they are because of environment and habits. Good habits can come from accountability partners, from creating a good environment or simply working to create the obvious, attractive, easy and satisfying habits the author talks about.

I would highly recommend the book for anyone interested in habits or personal development.

Getting on the Grid: The Importance of Communication

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We all like to think, especially here in the U.S., that we’re capable of doing nearly all of the things we set or minds to– and doing them well.

While it’s certainly true that almost anything we set our minds to can be done well, the reality is that we have to pick a few things to become great at. Everything else has to either be left in a mediocre/neutral/average state, delegated or abandoned.

While this might sound like a negative, pessimistic view, it’s actually the truth. There is only so much energy, time and resources in our limited life to do everything we set out to do.

With that in mind, we can understand that facilitating our strengths and weaknesses will ultimately determine our success in life. A big part of this is delegation and communication.

Communication, at it’s simplest level, is just transferring knowledge or feelings from one party to another. And the main way this happens is through connection–through authentic mutual understanding.

Your ability to connect, and therefore communicate, plays a massive role of where you’ll be in 20 years. Take time to focus on it, focus on your strengths, and focus on others.

Are Markets Efficient?

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When investing your money you’ll hear many different forms of opinion. Experts like Dave Ramsey will tell you to invest in growth stock mutual funds, others will say that index funds are the way to go. Then there is a group of investors that says you can beat the market by buying “undervalued” stocks.

The question that arises is, is there such a thing as an undervalued stock, and if so, is there a reliable way to take advantage of this “market inefficiency”.

Your investment philosophy in stocks is largely dependent on your opinion on what’s called the Efficient Market Theory (EMT). This theory states that markets are fully efficient. In other words any given price in the markets reflects the cumulative “wisdom” of all investors actings logically on fundamental data regarding value.

Essentially the market, according to this theory, is always acting completely logically based on the current information. So at any given point the market isn’t overvalued or undervalued – it’s priced at the fair equilibrium price given the current information available.

Some practitioners and theorists have brought up concerns with the theory stating that it doesn’t accurately reflect the actual results we see in the real world. For example, in the tech “bubble” of 2000, were investors acting completely logically on the market’s information or was there inefficiency?

Ultimately you’ll have to make your own determination. At the moment there isn’t unanimous agreement by the community.

3 Finance Habits to Improve Your Bank Account and Your Sanity

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In James Clear’s book, Atomic Habits, he concisely illustrates a very important point. Often we think that we need to design the most optimal habits in our lives. For example we need to have a plan to exercise two ours each morning with the proper amount of cardio, aerobic and strength exercises. While doing this can certainly be a great boost of confidence and personal fitness, Clear points out that most of the time we don’t need complex habits – we need two minute habits.

Creating habits is hard enough. For anyone who has tried to change their daily routine for the better, they know how much of a challenge shifting behavior can be. Yet nearly all of us fail. The reason? Our habits aren’t simple enough.

Clear tells us not only to start with two minute habits but to make the cues and catalysts for those habits almost automatic. After all, “You can’t improve a habit that doesn’t exist.”

An area that I have personally been working on is the area of personal finance. I have thought about this topic a great deal in my personal life and have come to the conclusion that there are three key habits for anyone serious about controlling their money:

1) Pay Attention

Tracking your fitness has been shown to produced fitter people. Watching your personal growth has been shown to produce successful people. And measuring your finances has been shown to make richer people. Many studies illustrate this point. Simply staying on top of your bank balances, credit card balances, credit score and retirement accounts will leave you in a much stronger position. The reason is that we tend to improve things we pay attention to.

2) Plan Ahead

Creating a written plan and sticking to it is actually what separates us from animals. We have the ability to plan ahead and participate in what Ray Dalio calls “higher level thinking”. The plan doesn’t have to be complex. You can sit down with your advisor or do it yourself.

3) Learn

This blog isn’t intended to be the sole source of your financial information. But if you combine regular blog and book reading with input from your financial advisor you can improve your knowledge exponentially over time.

Conclusion: 

Do you want to bolster yourself to the top 1% of Americans? Do you want to experience less financial stress and uncertainty? Follow my three-pronged approach to 1) pay attention 2) plan ahead and 3) learn.

Does Active Management Have a Place in the Modern Investment Portfolio?

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As index funds have become more and more popular a rising question has been, does active management still make sense for the average investor? Answer is of course not simple enough for a yes or no answer. However there are a few pros and cons we can look at for the two options. First let’s look at the advantages of passive management:

1) Relative autonomy 

Time is often saved from having passive investments. While of course there is initial research that goes into selecting the underlying ETF’s or mutual funds, once set up your strategy you will have relatively low time costs going forward.

2) Lower expenses

With passive management comes low expenses. Over the long term expenses can eat into  a large portion of your returns so paying close attention to this is crucial.

3) Lower taxes

Active management usually means less trading and less trading means both less transaction costs and less capital gains tax. Both of these add up in the long term.

Now that we’ve covered a few of the pros of passive management let’s dive into some of the pros of the alternative…

1) Potential for greater returns

By definition a passive manager can’t meaningfully beat their respective benchmark. However with active management everything changes. There is also ways a chance for outperformance. Of course the flip side of this double-edged sword is that you can underperform, which is often the case.

2) Lower volatility

Depending on the management style you are able to experience lower volatility in your investments from active management.

So which should you choose? After everything is said and done the thing that matters the most is your returns relative to the corresponding benchmark index. For example if you’re comparing a large-cap active fund verses and S&P 500 index fund.

Once you’ve selected your funds for comparison you need to determine if a) your fund has outperformed the benchmark in the past enough to cover expenses and additional active costs and b) will the fund continue to perform this way or better in the future.

If you can answer yes for both of these questions you may have a great candidate for an active portion of your portfolio.

The last option you have available is to execute the active management your self. This is a whole different story that deserves it’s own separate discussion for a different post. For the time being focus on comparing returns both pasts and potential for the future.

What I learned from Malcolm Gladwell’s book Outliers

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Have you ever wondered why nearly all the top hockey players were born in January, February or March? Ever wonder why the smartest people in the world aren’t the most successful? Malcolm Gladwell’s book contains these exact answers and more.

I found his book extremely revealing. I came into the book thinking that success was almost completely determined by intelligence, hard work and intentionality. While these traits are significant parts of making the most with what you have, Gladwell illustrates that much of what determines success is due to completely unpredictable and random factors.

While much of our success is determined by luck – where we were born, who are parents are and their respective network and culture – a lot of these advantages can be recognized and limited. But we can’t just assume luck isn’t impacting these things – it always is.

Recently I’ve been reflecting on my current reads and taking notes to summarize what I’ve been getting out of the books. I did this for Outliers and took away a few key points. Here they are below:

  1. If you see a pattern, don’t assume it’s random, examine the history behind it
  2. Understand your own history and the apparent consequences/indications of what that means for you

I hope these two points are helpful. A key takeaway was to look at the contributing factors and history behind success. This, of course, is consistent with the title of the book!

How I Wrote a Book in One Summer – and How You can Too

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Most of us see writing a book as a daunting project – one that could take months, if not years to complete. But it doesn’t have to be this difficult. I began my summer in 2018 with the idea of producing a manuscript that was both clear and comprehensive. And that’s what I was able to do.

I didn’t complete this task out of sheer discipline. In fact I put very little upfront effort into completing the first draft. How?

I all begins with habits. I made a point to start the summer with a new routine. Each morning I would produced about a 500 word chunk that could be added to one of my chapters. As time progressed throughout the summer I began to enjoy the process of writing each morning.

As writing became a daily habit my confidence began to grow. I went from a 10,000 word manuscript to a 25,000 word manuscript to a 40,000 word manuscript. And before I knew it I had completed the first draft of my book.

To be frank I didn’t finish editing the book until the end of the year. What I really did last summer, which I find to be the most difficult part of writing a book, is complete a first draft on little disciplinary effort.

My book, which just came out this January, proves to anyone, including those who hate writing, that book creation doesn’t have to be as tedious as we once thought. The key to success is to start and make writing part of your daily routine.