Ideas on How to Become Rich - Roads to Financial Success

Ideas on How to Become Rich - Roads to Financial Success -Intro

Hi everyone . It has been sometime since I wrote on my blog. I have been busy lately giving talks on financial independence and how to achieve success in our short stint on earth.

Today I have something to share about some roads to take all of us to financial success and wealth.

Many of us often wonder why there are so many poor people in the world. Don't they go to school? Don't they want to achieve wealth and riches? If only poverty does not exist, then all of us would be very very rich. Unfortunately this disparitybetween the rich and poor is growing and is real in this world because each one of us has different ways of looking at things and different endowment of talents and skills. The worst of all, many people with skills and talents do not put theirs to good use. Instead many squander their talents away or bury them in the deepest part of their lives and go about being poor all their life... sad but true.

They are many ways I mentioned before , to riches and wealth. I was born poor, having to share with lots of other people when I was a child. My dress was a "pass-down" from the elder siblings and my books were old, tattered and torn. Today my children can afford books whichever they want, meals in expensive restaurants and go about in cabs or driven by me, the main chaffeur in the house . However there are many friends whom I know , who are still living from hand to mouth today. They came from the same background as I and yet, today they are still living in slums and wondering what had happened ...

It is true that everyone can be rich. The question is how? The question is also when and what?

Today I will shed some lights on the how to become rich and provide clues to the roads to achieve this greatness and for you to accummulate immense wealth at your own hands slowly but surely.

To acquire riches and power, you can do several things:

a) Dream big and start a business;

b) Take over a successful business - small but growing business

c) Jump onto some rich people's wagon and learn from them till you master the skill or trade;

d) Become a celebrity by winning the American Idol competition or some other contests so that you can acquire fame which leads to wealth;

e) Marry a rich person like what Marilyn Monroe wanted to do

f) Use other people's money if you can - follow Robert Kiyosaki's methods

g) Invent something which is useful and can be used by millions

h) Check out any unused or old farm land which may not be lucrative now but who knows , your land could be the answer to the next alternative source of energy..

i) the last method is the oldest way of all... save all you can from today if you have no other roads to take..

The roads mentioned above may not be suitable to some of us or all of us but it is still good to ponder and think about them because thinking itself will enable our brains to function better - like some Chinese who look at gold fishes everyday and dream of wealth, eventually wealth comes their way because "what the mind can conceive and believe, it can be achieved"!

Why wait, do the dreaming now and then. Then decide which path is suitable to you .. and go forward.

I will share the details of each road or path in my next few blogs because the journey of a thousand miles must begin with a single step. The ship cannot reach distant and beautiful places without first leaving the dockyard in which it was built...

So be patient and wait for the right timing and take the right road which is comfortable to you to tread it because nothing achieves like success when you accomplished....

Cheers and have a great day

Sally Klaus

Ideas on How to Become Rich

Ideas on How to Become Rich - Living with wealthy thoughts

Ideas on How to Become Rich - Living with wealthy thoughts

Hi, I have been away for sometime and here I am back again to write about ideas on how to become rich. 

Today I would like to share some insights into living with wealthy thoughts. 

This is because there is abundance of wealth in the universe for all of us to gather and use wisely.

I will show you the abundance of living a wealthy life with wealthy thoughts and abundant joy in harnessing of such riches from the universe.

There are lots of opportunities in this world for all of us to gather riches, treasures and material things. Many people who are poor do not undersrtand the mystery of this universe. The world has lots of resources both in the water around us and on the land surrounding us and on which we live.

From precious metals such as gold, silver, oil and minerals of sorts, there are treasures under the deep ocean and in the land beneath our feet. I want to share my brother-in-law journey from rags to riches because he was able to understand the wealthy thoughts of harnessing the resources of the land.

15 years ago, when people do not really bother about the investment in mining minerals in the desert of Australia, he actually went into this venture. Of course lots of people looked at him, thinking he was mad. Yes, he was mad to think that one of these days some of these unwanted minerals or resources could become so precious. Materials such as uranium, bauxite etc.. have today become lucrative for many kinds of industries - mainly mlitary and economic.

So instead of getting angry with the circumstances, my brother-in-law used all his savings and invested wisely in such ventures. Patience paid off because today he is jet-setting from country to country , enjoying life with his family.

The first step to living well is to live with wealthy thoughts. This is what my in-law did. So what is wealthy thought? It is the willingness to believe that you are worthy of greater wealth than you have today. You are worthy of greater joy than what you enjoy today.

I will highlight some of the powerful wealthy thoughts which you can harness for a greater riches and greater joy in life. Start thinking rich today.

Cheers

Sally Klaus

Ideas on How to Become Rich

Ideas on how to become rich - Financial Management - what the rich do in a down market - SUMMARY

Ideas on how to become rich -
Financial Management - what the rich do in a down market - SUMMARY

Here is a quick summary of the various ideas on basic financial management:

Don't let your financial or retirement or money plan be an accident
Everyone needs an advisor - and there are different kinds of advisors
Build your financial house based upon your financial personality
Combine your dreams into a plan
Have the two major strategies to win the battle for investment survival
Know where you are going
Mix and don't match
Do not be your own enemy - mind your mind, and thereby mind yourself
The jockey matters as much as the horse
Ride out financial storms
Build your house on rocks
Use numbers to calm your mind and calm yourself
Don't smother your own personal/ financial dreams
Take the road less travelled
Remember to ask and answer the right financial questions *Who are you?*
Determine correctly your investment outlook and selection *What works for you?*

You can also access easily the articles on financial management by Sally Klaus below:
Financial management part 1
Financial management part 2
Financial management part 3
Financial management part 4
Financial management part 5
Financial management part 6
Financial management part 7

Special thanks to Sally Klaus for her kind and invaluable contributions on Financial Management: What the Rich Do in a Down Market.
More investment knowledge and important concepts, finance or investment articles, data, and other finance/ investment-related ideas to come here in future posts... thanks for staying here with us. Thanks for reading!

Ideas on how to become rich!

Ideas on how to become rich - Financial Management - what the rich do in a down market, last part

SALLY KLAUS AND HER FINANCE IDEAS:

FINANCIAL MANAGEMENT: WHAT THE RICH DO IN A DOWN MARKET
Last part

Welcome back, dear reader. This is the last part of Sally Klaus' invaluable contribution to my finance, investment and money site. She writes about: "Financial management - what the rich do in a down market". The last article follows:


Take the road less travelled

Your dreams are worth major efforts and you do have a choice: you can go to the financial market without any idea of what investment can and cannot do for you, buy on whim and cobble together an investment portfolio that has no purpose, except vaguely to make money; or you can decide what you want specifically, and learn enough to know what is available on the market, and thereby make calculated decisions and take the correct risks.

There is a lot of finance and investment information out there but do take in the right investment information that will enable you to make good decisions and take the right choices – do be selective and use financial information wisely. Be an informed investor!

Remember to ask the following questions:

Who are you?
Determine your investment profile. What kind of risks can you bear?
How old are you?
How secure do you feel about your ongoing streams of income?
How many years more before your retirement?
What is your life expectancy after retirement?
What is your source of investment capital?
What are primary investment objectives?
When do you expect to need money? Do you need the money now, or later?
Are you aware of the potential risks and benefits of your investment portfolio?
What is your tax status?
What changes to your lifestyle do you have to make?
What is your current net worth?
What steps are you taking to protect your financial assets, your income earning assets, and earning potential?

What works for you: Determining your investment outlook/selection

How does your desired return compare to your risk profile?
Do you prefer growth or dividend income oriented investments?
Do you understand financial risks and rewards?
Is it easy to buy and sell your investment assets?
What are your choices for buying this particular asset?
What are your costs and fees associated with buying and selling this asset?

All the best, and I hope that you have learnt and benefited immensely from all the information and advice in this investment and financial series. Thank you for reading!

End of the last part of this “financial ideas” series
Special thanks to Sally Klaus for her contributions on financial management, which were particularly interesting and memorable for the extensive use of metaphors. I am thankful because I have many economics research papers and she has saved me time and effort to write, and furthermore her financial advice contributions have been very useful and illuminating. A summary of financial advice and more comments follow in the next post. Thank you for reading and cheers.

Ideas on how to become rich

Ideas on how to become rich - Financial Management - what the rich do in a down market, part 6

SALLY KLAUS AND HER FINANCE IDEAS:

FINANCIAL MANAGEMENT: WHAT THE RICH DO IN A DOWN MARKET
Part 6

Hello and welcome. Here is part 6 from Sally Klaus' ideas on finance and financial management - what the rich do in a down market.


Use numbers to calm your mind and calm yourself

Investment success is attainable, but not guaranteed, no matter how well conceived the asset allocation plan. The odds of achieving wisdom and success can be enhanced and improved upon through practical thought and reflection. Along the way to achieving your investment goals, you need to pay attention to certain investment guidelines and principles intended to shape and sharpen your efforts.

Knowing yourself and coming to terms with such knowledge represent difficult but highly worthwhile investment goals. Warren Buffett has repeatedly advised investors to find and develop their own circle of competence and stay within it. Knowing yourself is also an ongoing process where you learn to discern the 5 physical senses and train your mind to process enormous amounts of information and filter all down to what is essential. Asset markets may change, technology may change, but the usual human response has tended to remain similar through the ages. If something does not feel right, let it pass. It is not wise to allocate assets and invest based purely on instinct and yet it is equally unwise to ignore your gut instincts when doing so.

Remember, it is not a real financial mistake if you really learn from it.


Don’t smother your own, personal, financial dreams

Being unaware of the financial risks you are taking is one of the quickest ways to find yourself on the road to financial perdition.

Never take comfort in crowds – if everyone is making investment losses, you may feel good that all are suffering together, but it is not the right thing to do. Do not follow others blindly because it is your money, your investments, your life. It is all about your dreams and not about others.

Chasing financial performance alone is not sufficient to determine whether that asset is good or bad. Sometimes we give up a good asset and later regret it because it is not performing. That wrong decision could cost lives and money.

Not using the correct investment advisor is another step to investment ruin. Learn to trust someone who is an investment expert and then ask around for good investment advice so that you can learn on the way to success.

Do not let emotions rule your financial decisions. Fear and greed are the two greatest emotions that lead to ruin in an investor’s life.

End of the sixth part of this “financial ideas” series

More financial advice, financial education, and money ideas to come in the next post. Special thanks and acknowledgements to Sally Klaus for her invaluable contributions and ideas on financial education. Thanks for reading and cheers!

Ideas on how to become rich!

Ideas on how to become rich - Financial Management - what the rich do in a down market, part 5

SALLY KLAUS AND HER FINANCE IDEAS:

FINANCIAL MANAGEMENT
Part 5

Welcome back to this financial management series here on my ideas site - what the rich do in a down market, by Sally Klaus.


The jockey matters as much as the horse

The selection of the fund manager, or stock broker, is as important as your investment assets themselves. Who is riding the horse, on what kind of track, and what kind of race are all important questions for you, as it is your investment money we are talking about here.

Is it possible to have exactly the right asset class and have your investment returns ruined by choosing the wrong investment manager. Yes, therefore it is important to select the right investment jockey for your investment horses. Whether you do it for yourself or use an investment advisor to seek out the best investments for you, you will be evaluating how well they know the financial track and how they have performed under different kinds of financial and economic conditions in the past.

Passive investing is not as good as active investing, where the goal to do well is part of your life, whereas passive investing is mostly relying on the investment choices and investment paradigms of the fund managers or the jockeys. Active investing gives you direct control of your financial choices and enables you to be able to judge your investments better. The flow of financial information is also better and more direct.

Yet, sometimes, you do not have the time to invest directly, so it is indeed necessary for you to get a fund manager or a metaphorical financial jockey. So some of the questions would be, if you are not going for active investment but for passive investment:

What are the ethics of the fund manager, his investment philosophy and his investment or financial discipline…?

If you discover that your jockey is not doing well, you may have to change jockey mid stream to prevent future investment losses or poor management of your assets. In the long run, you have to monitor the investment manager’s performance closely; perhaps, even closer than you monitor your own financial asset allocation mix. It is essential to make sure that your investment portfolio has a good day at the investment track and is working hard to make your investment dreams a reality.


Riding out financial storms

Be prepared for the inevitable. And financial storms are definitely inevitable, just like the immutable law of gravity. What does up must come down, and vice versa. Be aware of market cycles and the financial movements of all those up and downs which may be out of our prediction and control. The need to protect yourself is there, just like insurance – how much coverage do you want? How high is the value that you are insuring? The higher the value of the asset and the lower the deductibles, the more the protection will cost. The more you cover, the more it costs, so you have to weigh the pros and cons of your coverage. You must always ask yourself: what is it that you want at the end of the day?


Building your house on rocks

The stronger the foundation, the better and more solid the house will be. This is commonsensical and thus it would be crucial to decide how your human capital is going to turn into your financial capital at the end of your own personal investment journey… it depends on several things. How much you earn, how much you spend, your lifestyle choices, your plan for taxes and inflation … all these are important financial questions that you need to ask yourself.

It is important to keep in mind that each of us is different and the investment path for converting our human capital into financial capital will not be as smooth as what we hope it to be. Still it is vital for us to build up a steady investment/ financial conversion journey so that we allocate investments properly.

End of the fifth part of this “financial ideas” series

Special thanks once again to Sally Klaus and her invaluable contributions to financial education on Ideas on How to Become Rich. She has been a great help to my finance, money, and investment blog. Thanks for reading and cheers!

Ideas on how to become rich!

Ideas on how to become rich - Financial Management - what the rich do in a down market, part 4

SALLY KLAUS AND HER FINANCE IDEAS:

FINANCIAL MANAGEMENT: WHAT THE RICH DO IN A DOWN MARKET
Part 4

Here we continue the financial management series with more ideas on how to become rich.

Mix and don’t match

In investment and asset allocation, plaids do go with stripes. What goes up must come down and vice versa. What do these strange aphorisms mean? Applied to investments, the concept of mean reversion states that, after a period of several investment cycles, most financial asset returns will tend to generate their long term average investment returns. This is best illustrated with a concrete example for understanding. For example, Japanese equities’ returns in the mid to late 1980s were far greater than their long term average and at some point it became increasingly likely that they would revert to their mean returns by producing returns that were near to their long term average.

All we have to do is to watch the numbers because numbers don’t lie. The whole point of asset allocation and investing is to protect your capital and earn a satisfactory return. Your investment return may come from dividends or interests or appreciation of investment assets in real estate or stocks. Some returns from some financial asset classes are fixed in amount while others are less predictable and more market dependent.

Our minds - our selves – do not be your own enemy

One of our investment pitfalls is that we suffer from varying degrees of overconfidence. We think we are better at something than we actually are. Stereotyping ourselves sometimes limits our views to possibilities and opportunities. Many people, when they have made some money from the stock market, think they are investment geniuses and forget that they may only be lucky for once. There is a need to know that we must not confuse investment luck with investment skills.

It is okay to get lucky, but don’t assume a lucky financial gain can be repeated because you are “so smart”. Sometimes being smart was not the cause of the lucky financial gain. The market is in fact not controlled by one person or a group of people. Mistakes can be made by being inflexible, and stubbornness can sometimes really make you pay. We need to be aware of what the behavioral finance types call framing. Framing is simply how we look at our investments. When we get a phone call about our investment idea involving some new wonderful boom-bang investment, do we get caught up in the excitement without considering how it affects our overall investment plan?

Do we know what exactly is happening financially and how well we know the financial developments?

We need to be realistic in our approach to investing. Be methodical and careful in your investment approach. Do your homework. Keep the short term business news in perspective and focus on the big picture. Know your investment weaknesses as well as your investment strengths. When you hear about a new idea that sounds interesting or exciting, ask how it fits in with your plan. Remember all the earlier materials that we covered in the other sections of this financial series? Your plan may not be the same as your neighbour’s or your family member’s plans. By focusing on your goals, avoiding highs and lows of your emotions you can structure and manage your asset allocation plan to take advantage of others’ emotions and mental mistakes instead of getting them richer because of your mistakes!

End of fourth part of this “financial ideas” series


Special thanks to Sally Klaus and her valuable contributions to my finance, investment and money blog. More to come from Sally Klaus in future posts; stay tuned!

Ideas on how to become rich!

Ideas on how to become rich: Financial Management - what the rich do in a down market, part 3

Ideas on how to become rich: Financial Management - what the rich do in a down market, part 3

SALLY KLAUS AND HER FINANCE IDEAS:

FINANCIAL MANAGEMENT: WHAT THE RICH DO IN A DOWN MARKET

Part 3

Welcome back. In this part of financial market survival strategy, we delve into the subject further. There are two strategies to win the battle for investment survival: (A) a long term investment focus (strategy) and (B) a short term investment focus (tactics). It is commonsense to use the current financial environment to keep the big picture of investment in focus.

A strategic focus means looking at long term financial assets because there are many investments which take a long time to come to pass. It is like playing chess with the final checkmate in mind ultimately for the opponent. You need to see the end before even starting the investment game.

Assets such as real estate, mutual funds or even insurance schemes are for strategic investment purposes, because these take a long term investment perspective. It is our investment journey’s final destination; where do we stop for a rest eventually?

Use tactical financial plans which are the moves like tactical chess – moving the pawns first, one at a time. It is like a traveler who has to pause at stops along the long journey. Short term assets are useful for shifts in any financial market movements or asset valuations. When it is deemed appropriate to do so, you should execute various tactical asset allocation shifts by moving financial assets in convenient parking lots for you to manipulate short term financial movements.

The key thing is to be prepared for investment changes and financial market movements as the world is very volatile these days with economic, political and financial changes taking place almost daily.

Another point to note is: do you know where you are going? Every one of us needs a road map to check our direction and also to ensure we are moving in the correct path. Are you more afraid of losing money or missing out on an opportunity? What is your investment personality, once again? This is not a simple question but one that needs to be successfully answered. To successfully establish a portfolio, you have to take some time to get to know yourself and your money making goals. You need to honestly evaluate your financial conditions and the kind of investment goals or money making personality you have.

Do you plan for your children’s education or do you plan for a resort style living after retirement? Each of us has ideas of what we want our money to do, and how to do it, and how money making is important or not so important for us, so if you are going to need money in two to three years’ time, then you must automatically rule out certain long term financial assets, as you probably have no time to wait for them to give you investment returns.

For teenagers, five to ten years may seem a long time to wait but for a working professional in his 30 or 40s, these sorts of years are not a long term thing. You have to deal with risk factors, tax factor and also the investment returns you are envisaging for the next few years. There are many factors to consider!

The key reminder is to ask yourself: do you have enough money for a rainy day?

End of third part of this “financial ideas” series

Special thanks to Sally Klaus and her contributions to my finance, investment and money blog. More to come here on this site on Ideas on How to Become Rich; stay with me. Thanks and cheers.


Ideas on how to become rich!

Ideas on how to become rich: Financial Management - what the rich do in a down market, part 2

Ideas on how to become rich: Financial Management - what the rich do in a down market, part 2

SALLY KLAUS AND HER FINANCE IDEAS:

FINANCIAL MANAGEMENT: WHAT THE RICH DO IN A DOWN MARKET

Part two

Building your house

Your investment portfolio needs to reflect your personality. It is like buying a house with different rooms, for different purposes. Make sure your financial assets in your investment portfolio suit your personality, just as furniture suits your individual style and room design.

People have varying motivations and reasons for having investments and financial assets. These investment motivations and emotions could range from greed to fear, from comfort to excitement, the need to make money or the urge to make a quick buck, long term and short term goals …

Asset class ... and
Represents investors’ quest for...

Cash
safety and liquidity

Bonds
Income , reliability, predictability

Stocks
Ownership, value creation profits

Real estate
Tangibility, ownership, income and ego

Commodities
Exposure to price moves and human needs

Precious metals
Purchasing power protection, hedging

Venture capital
Capital growth, control over corporate destiny

Mutual funds
Trend exploitation, protection against market turbulence

Hedge funds
Finding and taking advantage of inefficiencies

Inflation – indexed securities
Inflation hedging and pp protection

Art
Prestige, ego, income and intellectual affirmation

Reminder: match the investment to your financial goals and personality.

Combining dreams into a plan

Your investment plan should be as specific and individual as your dreams. Many of us invest in certain assets because of what they can do for us. Most want their money safe from inflation or turbulence, and also want to fulfil their dreams of a possible future “good life”, which quite often requires a lot of money!

There are many objectives for investors.

The first is protection against the effects of inflation. When inflation rates soar, stocks may tend to get hurt. The rising costs of borrowing and doing business may make it difficult for them to grow faster than the inflation rate. In addition, many of the stocks tend to follow a certain trend.

The second reason for owning stocks is that we want to gain exposure to profitable companies and overall economic growth. In the long run, owning equity assets give us the investment opportunity to profit from economic growth .

Third reason is that we want some sort of investment return – to get paid for the hard work and our money. It is thus best to include dividend paying stocks, preferred stocks and REITs – real estate investment trusts. This is to protect you in the case of turbulence and times of crisis.

Many people own stocks because they want to ensure profitability as well as liquidity. But never use long term assets for short term investment goals and vice versa.

End of second part of this “financial ideas” series


Special thanks to Sally Klaus and her invaluable contributions to Ideas on How To Become Rich! Stay tuned for more financial and investment ideas, thanks and cheers!

Ideas on how to become rich!

Ideas on how to become rich: Financial Management - what the rich do in a down market, part 1

SALLY KLAUS AND HER FINANCE IDEAS:

FINANCIAL MANAGEMENT: WHAT THE RICH DO IN A DOWN MARKET

NB To my loyal readers, I am back from a long Economics examination period, and have completed my economic research on global capital flows. I might make it available here online for research purposes if the paper is released. Here is a series on financial management by Sally Klaus, my loyal reader, who contributes many good ideas and excellent materials for my Ideas on How To Become Rich site. Thanks for reading and cheers.


Each of these following financial rules would be discussed in future posts and in detail one at a time…

Don’t let your financial or money making plan be an accident
Everyone needs an “Uncle Frank”
Building your house
Combining dreams into a money making plan
Two strategies to win the battle for investment survival
Do you know where you are going?
Mix and don’t match
Our minds; our selves
The jockey matters as much as the horse
Riding out the storms
Building your house on rocks
7 quick ways to ruin
Take the road less travelled
Who are you?
What works for you?


Don’t let your plan be an accident

Asset allocation and asset planning are very important in the life of an investor. What is asset allocation or asset planning? First, you have to ascertain what kind of financial assets you want to invest and keep in terms of ranking such as how much cash you need, stocks you want to invest, unit trust, real estate, inventory etc…

It is not only to find out those financial assets that can grow, but furthermore that allocation is to find financial assets that will help you to have a balanced investment portfolio.

As the saying goes, it is not wise to put all the eggs in one basket, hence, it is thus vital for us to have many little baskets or few eggs in each basket so that at any time, we have both financial liquidity and profitability.

What kind of financial allocation or financial planning will depend on your financial goals in life, your financial circumstances and your personality. Today we are more fortunate in that we are exposed to a host of advisory and information from media and internet etc… unlike the investors in the past. It is thus easy for us to find out information very quickly and this will enable us to make quick decisions.

Think of the money or financial assets you have as players in your football team. Each has its strengths and weaknesses. You have your game plan. You know what you need from each player. So you need to think of the behaviours of each player before you make decisions to hold how many stocks, bonds, cash, or buy a piece of real estate.
So if you want to play offensive, you have to take advantage of economic conditions to buy certain financial assets or securities which are of higher returns or perhaps even inflation protected securities.

Since changes are fast and furious, your financial decisions have to be reevaluated now and then in response to market conditions so as not to be caught unawares.

One of the most fundamental elements of financial asset allocation is diversification. True diversification involves having several distinct kinds of asset classes that perform differently from each other in different kinds of economic or financial environments.

Some investments such as commodities or metals may thrive in a high inflation environment but others such as bonds or treasury bills or even mutual funds excel in a more deflationary environment.

Diversification will not only make the financial portfolio less volatile, it will also make your reaction to the state of financial markets more stable and less anxious.

Risk awareness allows us to ensure that we have discipline and also gives us the staying power to ensure our investment goals become a reality.

Everyone needs an uncle Frank – this idea means that we all need mentors or advisors, especially financially or investment wise

It is always a good idea to hear another’s views or opinions of financial markets, especially someone who is an expert or experienced in financial planning or financial markets. Knowledge is power and thus this person can help you to tone down your risk or quicken your steps in that he or she can help analyse luck and skills in investment successes.

Having a mentor also enables us not to make rash decisions or prevents us from becoming overly confident as he may play devil’s advocate and give you another side of the story. A good mentor will help you make better decisions because two heads are always better than one. It is also safer to travel in twos.

End of first part of this financial ideas series

NB special thanks to Sally Klaus and her contributions to Ideas on How To Become Rich – finance, investment and ideas site