February 9th, 2009 by Jan Shimano

Not being an experienced investor, I have been very concerned lately as I watched my investments dwindling before my very eyes. I decided to do a little investigating with the hopes of coming up with some answers.

It has been my experience that whenever I am motivated to seek an answer to a question, that answer invariably appears, and so it was with my search. I had read Rich Dad Poor Dad by Robert Kiyosaki a number of times and found it very informative. A friend of mine recommended I read his book, Rich Dad’s Prophecy, so I ordered a copy. That book was a major eye opener for me.

We are all aware of the cyclical nature of the stock market. We expect it to go up, down and sideways. However, in the long term we always expect to see a gradual incline. Normally, if we were to look at a graph covering many years, we would see an upward motion. We are seeing quite a different picture these days and it is a rather frightening situation.

A major part of the problem is that by the year 2016, the first of the 75 million baby boomers in the U.S. will be turning 70. A large percentage of these people have money stashed away in a 401k plan. When these baby boomers reach age 70 1/2, they will be obligated under law to remove all their money out of their 401k plan. They are going to have to liquidate their assets. Just think about that for a moment!

In the not too distant future, millions of people will be selling off the mutual funds and shares they have in their 401k because the Government has told them they have to. The Government has been waiting patiently to receive their tax dollars and now their day will have come. This is a major disaster waiting to happen. Undoubtedly, there will not be enough purchasers to offset the massive selloff during this period of time. It is possible that the U.S. Government could amend the law, allowing assets to stay in the 401k for a longer period of time, but then they would be delaying receiving their tax dollars.

Even though most people realize they are in financial trouble, they don’t understand the full impact. The advice they are being given is to still diversify, sit tight and ride out the storm. A great number of them seem to be following that advice, but this is what Warren Buffet says about diversification….”Diversification is a protection against ignorance. It makes very little sense for those that know what they are doing”.

It’s not too late to get a handle on your finances and make some intelligent decisions. Seek out the education you need to fully understand your financial position and take action now, to secure additional funds to see you through your retirement. The experts tell us that a home-based business is one of the wisest choices a person could make, especially during this economic climate. It is well known that fortunes can be made during such a time. There are many great opportunities out there. Go and find yours and take action.

diversification, economic recession, Finance and Money Management, finances, financial insecurity, financial security, Home based businesses, job loss, loss of income, mutual funds, stock market

January 25th, 2009 by Damian Papworth

I have a friend who has recently been bitten by the “fitness bug” Its quite strange. She is not actually training for anything, yet trains hours every day. She pays $40 an hour, (which apparently is cheap) three times a week to a personal trainer. He now gets her to fill in a “food diary” so he can check what she eats everyday.

Its a little bit sad really, she originally went out to give herself a better life yet now she cannot even enjoy many of its simple joys. Eating popcorn at the movies fills her with guilt. A dinner out with friends will be finished early if she has training tomorrow. She isn’t actually training for anything specific, yet her regime rules her life.

One of my other friends was the ultimate husband. Everything he did was for the benefit of his wife and home life. His reward for a hard days work was going home to her. She was the reason he went to work, she was the reason for everything he did.

One day, my friend was promoted. A worthy promotion as he really was the top performer at work, both in his own right and in the way he got the best out of all the people who reported to him. When he received this promotion, something changed. Quality of life stopped being his priority. Time with his wife stopped being his purpose. Rather, he started validating himself by furthering himself at work, by future promotions and by where he was placed on the corporate ladder.

To my mind, both these friends have lost their way. They have forgotten about the real things in their lives, the important things. They have gotten so caught up in an idea, they’ve lost all balance. They’ve became slaves to it.

With my first friend, she originally wanted to lose some weight and live a healthier, fuller and happier lifestyle. Losing sight of this, she now trains and eats to a regimen that excludes life outside this regimen. My second friend now sees time spent with his wife as a competing interest to time spent at the office, a constraint which gets in the way of his commitment to the job.

In the history of mankind, work for the sake of work was reserved to a societal underclass we call slaves. Other people only used to work to support themselves. Once they had achieved this, they enjoyed their lives with their family and friends. The concept of career is so new in the history of mankind, it can almost be called an aberration. Yet the majority of people we know get sucked into its myth, a myth where work is the end in its own right. As a result, people continue to confuse the means to an end, with the end itself.

Have a look at your own life. This is something I do all the time. Is there anything you seem to be dedicating yourself to, that really should be a means to a higher purpose. Is there anything you working on for the sake of the work, rather than the benefits that work should bring?

If there is, have you become a slave to an idea? Are you toiling for no purpose. Remember you only have one life, so review this work and try to work out what it will bring you in 10 – 20 years? Will you look back on your toil and smile at the benefits it brought you? Or will you look back and see a landscape of opportunities missed?

Typically we become slaves to ideas when we lose sight of the important things in life. We do this when we get so absorbed in the work we are doing, we forget to look at the broader picture. The quickest way to rectify this issue is to take a timeout. Spend a little time away from everything and get your head together again. Think about the things which are and will be really important over the course of your life, not just now. Forget about what everyone else is telling you, look into your heart and find your own perspective. Because once you find that perspective, you will throw the shackles of your self imposed slavery aside and get out of your rut.

If you do this exercise properly, you should end up with a list of things which are benefits of your toil, not part of the work itself. And they should be things that enhance your life. The goals of the company you work for should not be on your list. So a career goal could be early retirement, or an annual holiday to a remote part of the world. A fitness goal could be climbing to base camp Everest. Meeting a project deadline, or doing more repetitions at a higher weight are the type of thing which should NOT be on your list.

Going through this type of process, if done properly, will give you perspective. Once you have it, you will be in control of your life again. And being back in control, you’ll see work or training is there to support a higher purpose. And from here, you’ll have a vantage point from which you can recognise better methods, and oppotunities to find a better path to your goals. You won’t be stuck, trapped as a slave to your ideas. 
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Damian Papworth recognised a long time ago the way to financial freedom comes down to 3 things; increasing, managing and investing your cash. Review his investment strategies today.

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Finance, financial freedom, Investments