Beating the Market - The Chops Theory
Thursday, May 7th, 2009 | investing | 2 Comments
Nobody Can Beat the Market
Any investor who has been around a while has heard that they can’t beat the market. After hearing it so many times, you start to believe it. Pretty soon, you want to move all of your money into an index fund. Then you light your torch and grab your pitchfork ready to storm the gates of whoever tried to sell you an actively managed mutual fund with a high expense ratio. And if anybody still believed they could beat the market, they could be shown research that shows that the majority of actively managed funds fail to beat the market. But is it that simple?
How to Build Wealth, Part 3
Tuesday, May 5th, 2009 | Uncategorized | 2 Comments
Own Things That Produce Cash Flow or Appreciate in Value
Once you’ve learned to spend less than you earn (or earn more than you spend) you should start to see money piling up in your bank account. But this isn’t the end - that money is sitting there doing nothing! Your money is like a little army of dollars and you are the general. It’s up to you to deploy it properly, so that it starts earning more wealth for you. Lazy money that relaxes in a checking account earning 0.0001% interest doesn’t build wealth. You need to use it to own things that make money.
How to Build Wealth, Part 2
Thursday, April 30th, 2009 | Uncategorized | No Comments
Spend Less Than You Earn
Many personal finance writers like the mantra of “spend less than you earn”, but more than a few wish it could be reversed into “earn more than you spend”. They argue that by adopting a scarcity mentality you will spend your energy being a baggie-washing frugalist and never truly achieve wealth. › Continue reading
How to Build Wealth, Part 1
Tuesday, April 14th, 2009 | Uncategorized | 2 Comments
The rules of building wealth don’t change. They’re the same now as they’ve been for centuries. It really boils down to two principles: › Continue reading
Investing - Know Before You Buy
Tuesday, March 31st, 2009 | investing | No Comments
A while ago I was talking to my boss and the subject of the stock market came up. She said that she used to buy stocks, so I mentioned that I own some stocks. Her eyes got really wide and panicky and she said “Stocks are too risky, I only buy mutual funds now.”
Why Do We Destroy Kids’ Dreams?
Tuesday, March 24th, 2009 | motivation | 1 Comment
When I was a kid I wanted to be various things when I grew up: astronaut, mailman, dinosaur rancher, President of the USA. My friends typically had the same ambitions and our parents usually responded by telling us that we could be anything if we just set our minds to it. However, somewhere along the way we all encountered some snarky pessimist who shot our dreams down by telling us “Hey stupid kid, you’ll never be president! There’s millions of people who want that job!”. Poof! Our dreams are popped. Is this really what we should be telling our kids?
6 Bubbles
Thursday, March 12th, 2009 | Uncategorized | No Comments
Apparently I need to check my comments and email more often. If you get the chance, check out 6Bubbles - another promising blog. The title references the six bubbles that built America (hint: one of them was the recent real estate bubble)
Failure Isn’t Permanent
Tuesday, March 10th, 2009 | motivation | 2 Comments
I’m trying to help a co-worker find a date. She had the wonderful idea of joining Match.com but got cold feet and chickened out before joining. I’ve been trying to motivate her for the past week to just take the plunge and join but she’s been putting up a lot of lame excuses. Her worst excuse is “what if I go on a date with somebody bad?”. It’s this kind of thinking that makes me want to hit her with a stick. You don’t stop because of one bad date - failure isn’t permanent.
The Fear Response
Monday, March 2nd, 2009 | Uncategorized | 1 Comment
Can you imagine what Batman would’ve been like if his butler Alfred had been a chronic worrier? Every time he’d try to go out and fight crime he’d have someone behind him going “oooooh, what if you get hurt?” or “maybe you’d better let the police get the Joker this time.” It would’ve been a real drag on Batman’s dreams. The same thing applies in personal finance (and life in general) - you need to have good, positive people on your side.
How to Save Money
Saturday, February 28th, 2009 | Uncategorized | No Comments
When it comes to saving money there are only a handful of basic principles. Once you learn them, you can apply them to any category in your life (such as cars, kids, pets, utilities, rent) and see new ways to save money.