Rich Dad's Guide to Investing

I am glad that I've managed to start reading again recently. I walked, unintendedly, into Borders and came back out with more than a hundred dollars worth of books. Of the books I bought, one of them was Rich Dad's Guide to Investing. Having read Robert Kyosaki's Rich Dad, Poor Dad some years ago, I knew that he would do me good and I wasn't disappointed.

To prevent a repeat of his story; forgetting what his lessons were in the first book, I've decided to write down what I gathered from his third book.

The central idea driving his book is the 90/10 Rule; the notion that 10% of the world's population controls 90% of the wealth. The objective of his book is therefore to help the 90% join the 10 and change the balance of wealth in the world.

One of the most important thing is to first want to get rich. It is a problem of mentality. Very often we are unable to get rich because we think like poor people. The rich looks very differently at the world and one must start thinking like the rich in order to get rich.

However, having understood the issue with mentality, it is not necessary to pen it down here. I intend instead to make this post a reminder in the future of what I should do in the future should I forget the more practical steps to get rich.

More practically, here is what I think he taught us to do:

1) Get more financial education. All the riches in the world is useless if one does not know how to harvest it. Financial education allows the person to learn more about the avenues to get rich and the ways to grow wealth. Financial education also equals control. Having more financial knowledge ensures that all endeavours are calculated risks and going blindly into investment makes the so-called investor a gambler and nothing more. Hence, the chance of winning or striking it rich is no higher than buying the lottery every week. Almost zilch.

2) Know the difference between asset and liability. Anything that makes you more money is an asset and anything that makes you lose money is a liability. Before buying anything, make sure that it will make you money. Do not waste money on anything that does not bring in an income, like a yacht, or a car, or a million tons of other luxury items. However, keeping this point in mind, it is entirely possible, I realise, to make a liability into an asset. For example, we often say a car is a liability. However, if that car is a useful tool that allows one to make more business and clinch more deals, then it is not a liability but an asset because one was not able to make those money without a car.

3) Know good expense and good debts from bad expenses and bad debts. Money spent is not a bad thing if it is money well-spent. Do not be unduly attached to money because it is only a tool that should be working for you. Too much importance placed on money makes one a slave to it and lose the bigger picture of being rich. If one earns $1000 and half of it is put in a business and other investments and one is left with barely enough to spend every month, one could still be getting richer. For me, this means that I need to very soon go and start investing my money in stocks and shares and other vehicles even if that would make me seemingly very poor.

4) Prioritise properly. To be rich, one must put in order of importance this way:
a. To be rich
b. To be comfortable
c. To be secure
However, to carry out the plan, first make oneself secure. Buy insurance to cover all areas of need such as accident, hospitalisation, illnesses, disability and death. Insurance is something necessary to have but hopefully never to need. Do not see it as an unnecessary waste of valuable money. After that is covered, make plans to be secure, put money with financial advisors and fund managers to ensure a reasonable return on money put in that could guarantee a comfortable retirement and life in case of inability to work due either to old age or other reasons. Again, these expenses are good expenses.

After these grounds are covered, now make plans to invest. Here it is the best to start a business. One does not have to be able to afford more assets if his business can afford it for him. Start businesses or investments which will yield income and use the money earned to buy more assets and let the money roll itself in.

5)Make plans. Always make plans. Make plans to get rich, make plans for if those plans fail, make plans for if those plans succeed, make plans for when you suddenly become poor and make plans for when one suddenly becomes rich and think of how to re-channel those money into making more. When there is a plan, one will also be able to become richer and richer.

6)Money is not needed to start rolling in money. Ideas, rather than money, are what earns money, and ideas are free. With the advent of the Internet, it has become ever so easy to start a business.

After writing so much, I still think the points are not empirical enough. Even more concretely, this is what I am going to do.

1) Watch out for any financial classes I can join and attend them. Learn more, the more I learn, the more I know, the less risk I have, the more I can adapt to ever-changing ideas and economics.

2) Call my financial advisers and insurance agents and make sure I have all my bases covered in terms of insurance and security coverage.

3) Ask those same people to suggest financial and investment plans. Look at all of them, listen to what each has to say, and start buying. And when the next income tax comes, make sure I know which ones can be used for tax deductions. The rich use their money to buy investments and then get taxed on the remaining income which usually is not much. That's why they get richer. The poor gets taxed and is left with little before they can even think of buying anything, that's why they remain poor.

4) Work full-time but start a business part-time. Think of an idea or improve something that someone else is already doing. Ideas don't make to be new, they just have to be better. Save on start-up cost by thinking of something that can be done using the Internet. Find my friends and join forces.

Consumption

For the past year and more, I have been consumed by one thing, and one thing only.

I no longer write about other areas of my life; that, is not right. We must never be consumed only by one thing.

I must pick up my pen again.

The pen writes words.
Words express ideas.
Ideas come from thought.
And what is a man, if not his thoughts?
For Descartes has put it succintly: Je pense, donc je suis.
And from those thoughts, will arise actions.
From actions, we have the future.

It has come to this

"Same same but different" was the kind blessings my friend has given me.

Two times I had to go through the same shit. Same things to do, same problems, same near results, same mediator even.

Tomorrow will be my last day, or first. Will be really be "same same but different", or just "same same"?
Even if it's the former, I heard it only gets worse from there. So the wrong move started way back in 2007, or 2008, or even 2006, depending on how you look at it.

But it seems to be a bad move nonetheless. I have only myself to blame. So many chances to get out and with each step I plunged deeper in. Now all is set in stone, at least the damages are.

Although I have achieved a "Zen-ness" of sorts, some problems are still real. This "Zen-ness" only made the decision to just let it be and turn a new direction more tempting.

Whatever the result is, at least I think I won't be in for the long haul, not really.

Sleeping Beau

And so it is, that I should sleep for over a day, after my previous post.

The weekend has come and gone, in a state of unconsciousness. From 5 am I slept, till the early afternoon, when I woke to work. Work took barely two hours, as I fall back asleep.

I missed dinner, and I missed Arsenal's victory, to find myself drifting in and out of consciousness this morning at 8.

I need my sleep.

SAN DIEGO, California (AFP) - – What starts with an "s" that seniors need more of than younger adults, is great to get a bit of in the middle of the day and could cause teens to turn to drugs if they don't get enough of it?

The answer is sleep, according to several studies presented at the annual meeting of the American Association for the Advancement of Science.

A study conducted by researchers at the University of California San Diego (UCSD) found that 68-year-old adults, on average, did better on a simple memory test if they got more sleep.

In younger adults, aged 27 years on average, the quality of sleep also affected how they performed on the same test.

"What mattered in the younger adults was sleep efficiency -- that the sleep was consolidated into one solid chunk," said Sean Drummond, a professor at UCSD's department of psychiatry who led the study, adding that sleeping soundly and uninterruptedly happens less and less frequently with age.

"The most common change in sleep as we age is you wake up in the middle of the night and you're awake for some time, meaning you have lower sleep efficiency," Drummond said.

"In the older adults what we found is that waking up in the middle of the night did not affect brain function or performance the next day but if a young adult did that, it had significant detrimental effects on brain function," he said.

Another study looked at the possible benefits of napping.

"Our question first was could you get the same benefits from a short daytime nap as a full night of sleep," said Sara Mednick, also from UCSD's department of psychiatry.

"We started looking over a number of different tests beginning with a visual learning test, which showed that if you had a 90 minute nap you showed the same level of benefit as a full night of sleep," Mednick said.

"There's something very special about naps," she said.

But not everyone has the luxury of being able to catch a few Zs in the middle of the day, and as a substitute, many seek a caffeine boost.

But a double espresso works less well than a 20-minute nap, said Mednick.

"On some tasks, such as those involving perceptual memory, caffeine works as well as a nap," said Mednick.

"But when the task involves the hippocampus, the area of the brain devoted to explicit memories you can manipulate consciously, such as learning a list of words or a phone number or name, with caffeine, your memory for those kinds of tasks is decreased," she said.

Meanwhile, another study found that "two significant clinical and public health problems, sleep disorders and drug use in teens" are closely inter-twined.

Not only are teens who sleep less than seven hours a day more likely to do drugs, but they are also likely to pass both their bad sleep and drug-use behavior to friends and siblings. Related article: Study links lack of sleep to drug use among teens

"An adolescent who does not get enough sleep can influence a friend's sleep behavior, which increases the risk that the friend will use drugs," the study says.

Researchers at UCSD and Harvard University found that teens with a friend who sleeps less than seven hours a night are 11 percent more likely to sleep less than seven hours themselves and 19 percent more likely to use marijuana than teens whose friends get a good night's kip.

The US National Sleep Foundation recommends that teens get at least 8.5 hours of sleep and that adults, both younger and older, get at least seven hours.

The study was the first to find that poor sleep habits and drug use spread through teenagers' social networks "like a contagion," extending to up to four degrees of separation -- or to friends of friends of friends of friends.

My Way

And now, the end is here
And so I face the final curtain
My friend, I'll say it clear
I'll state my case, of which I'm certain
I've lived a life that's full
I traveled each and ev'ry highway
And more, much more than this, I did it my way

Regrets, I've had a few
But then again, too few to mention
I did what I had to do and saw it through without exemption
I planned each charted course, each careful step along the byway
And more, much more than this, I did it my way

Yes, there were times, I'm sure you knew
When I bit off more than I could chew
But through it all, when there was doubt
I ate it up and spit it out
I faced it all and I stood tall and did it my way

I've loved, I've laughed and cried
I've had my fill, my share of losing
And now, as tears subside, I find it all so amusing
To think I did all that
And may I say, not in a shy way,
"Oh, no, oh, no, not me, I did it my way"

For what is a man, what has he got?
If not himself, then he has naught
To say the things he truly feels and not the words of one who kneels
The record shows I took the blows and did it my way!

[instrumental]

Yes, it was my way

CNY 2010

Another year has come and gone. These shelves that were just standing against the wall were finally put up.

It was something I told myself I must do this year, amongst many other things. Chinese New Year is a welcomed break to the monotony of things, of life. More than just the food, ang baos, gathering and time off, it was, in itself, a harbinger of getting things in order and changes to come.

Change, however, occurs when Man makes it. All the promises of change amounts to nothing if we do not carry it out. At the last day of CNY, I have not made any changes except this wall and these shelves. I am still not in order, nor those other areas of my life.

Whoever is it that said that the only constant in life is change? Haven't you heard that nothing's changed?