All News: 2015

Monday, 14 September 2015

Spending Wisely. The Sniper's Approach

Kenneth Ewoigbe
Motivational Speaker, Business Entrepreneur/Developer,
Webmaster, Internet Entrepreneur, Manpower Developer,
Human Capacity Developer,
Systems Consultant, Content Writer,
Fashion/Car Enthusiast

"If you can count your money, you don't have a billion dollars."
- J. Paul Getty

When it comes to investing, I prefer the 'sniper' approach as opposed to the 'machine-gun' approach.

A sniper is a highly trained marksman who targets from concealed positions or distances exceeding the detection capabilities of enemy personnel.

One of the key secrets of a successful sniper is patience, good mastery of their weapon and self- control. A sniper can remain in the same position for hours or days if need be to achieve his objective.

On the other hand, 'machine-gunners' blaze in. They shoot sporadically at everything in sight, waste ammunition, sometimes fail in the mission and get killed in the process.

When it comes to investing, you do not want to be a 'machine-gunner'. Be a sniper.

A business tycoon, in his early days in business started learning to trade Forex online. He "...took the 'machine-gun' approach quite stupidly." he said.

He continued, "Ï refused to sleep for days and was constantly in and out of trades with 'cannon-type' position sizes and two things happened quite naturally:

1. I ran out of ammo. (I quickly emptied $6,500 plus -very quickly I must confess!)
2. I killed my investment portfolio and ran it into negatives on my accounts."

You see, although he must have used the 'Sniper' strategy long before he started trading forex, without knowing it, he never really understood it this way until I started trading forex.

To be 'sniper', you must first create a set of rules which will be your operating guidelines.

What's the point in planning to make a lot of money if you have no plan for keeping at least some of the money?

I have made this mistake many times. And I don't want you to make the same mistake, that is why you should create a set of rules to guide you.

Here is a guide for creating your rules. Rules will differ from person to person based on your age, education, religious orientation, personality traits etc

For instance there are people who can loose 15,000 in a deal and sleep soundly. There are yet others who will have a near nervous break-down if they were to loose 5,000.

Tomorrow, I shall break down different rules on which you can identify with at least one which you can run with. But until then, ponder on these, digest them or meditate on them; and if you like my articles, share my link, refer people to benefit from my blog. Share share share!!!

Until then, I say unto you my good friend. Bye bye!!

Thursday, 10 September 2015

You Can Invest Without Money

Intangible vs Tangible Investments

Over the years, I have met so many people who just won't move because they have no money. Agreed, you need cash when investing, but is it always?

My answer to that is no. There are intangible investments you can engage in that have an overall effect on your pocket. For instance, attend seminars (there are tons of free seminars).

Read books. Try to read at least one book a month. The average book will be 300pages. 'Book redox thinking'. Read ten pages a day. If that is too much work for you, get the audio version of the books and listen.

See http://audible.com - as I write this, I am almost completing a book by listening.

Learn a new language. Learn a new skill (manufacturing, animal rearing, programming, fashion design, etc). Meet people and get to know what they do. You never know when you will need a link or connection in your investment plan.

Read financial newsletters, spend time on financial websites. Just cut a little of your social media time and re-channel) etc.

Until I write to you again my good friend, I say unto you, have a wonderful day!

Spending Wisely (Good Investment)

Redox Thinking

Mr. Rabbit has a goal of 1 million in 24 months. His monthly income is about 200,000. And to achieve his goal, he hatches a simple plan.

To buy lower priced parcels of land in areas on the fringe of development over a 2 year period and wait for appreciation. He gets good deals and gets plots of land nobody wants to buy at the moment for 60,000 per plot with a negotiation for 24 plots. Over the next two years, he pays 60,000 monthly as debt repayment with a payment plan of 60,000/mo which is 30% debt monthly.

4 years after, development reaches his lands. He flips the lands at 400,000 each, and banks 9.6 million which he uses to repeat the process. That's good debt at work.

But hold it. Don't just run off and start getting into debt. Every investment has an element of risk. In my next article, I will explain Risk to Reward ratio of investments, and give you some tips to smell a bad deal. I will also explain more on different types of investments.

Until then, I say unto you my good friend, Chao!

Wednesday, 9 September 2015

Good Debt vs Bad Debt - Tangible vs Intangible Investment

Good Debt/Bad Debt

So what exactly is good debt vs bad debt, and how can you use it to your advantage?

Good debts are debts that are necessary, sustainable and which have the capacity to improve your life, that is productivity and pocket. On the other hand, bad debt is not just unnecessary but totally unsustainable.

Examples

If you borrow to go to school and prepare yourself for a better future, good debt. You can't quantify knowledge, and your knowledge can return what you borrow in multiple fold.

Consumer purchases are NOT investments; beds, cars, tvs, kitchen gadgets, clothing, - anything that naturally depreciates. When you borrow to get such items, you can safely classify as bad debt.

Now, let me make it simpler. Good debts are those things you cannot afford to pay for without wiping out your cash but which can return in multiple fold after you have them.

A good example is property. You've got 300,000 - the property is 300,000. Instead of wiping out your cash reserve, you do a down payment of 50,000 and service the rest over 12 or 24 months. Now that makes sense. Same goes for machinery for your business. Egg incubators for your farm, tractors, drilling machines etc.

Now, don't confuse yourself into thinking your tab is good debt if all you do is view movies and play games on it. Good debts generally have an inherent ability within them to pay for their own cost.

Playing games and seeing movies won't pay the bills. Or will it?

How do you use good debt in your favour?

Simple. Go into debt for things with a super ability to jump start your bank balance/networth. How? Till I write to you again tomorrow.

Until then I say unto you my good friend, Chao!

Monday, 7 September 2015

Spending Wisely

Parkinson's Law

In 1955 - C. Northcote Parkinson, made an observation which today is known as Parkinson's Law and I rephrase in a simple, easy to understand way: "Your expenses will always rise to meet your income"

Unfortunately, we have a basic instinct to obey this law absolutely. Here is how it works. You earn 30,000 per month and you are happy and comfortable. You exist within the limits of 30,000.

Suddenly, there is a raise and you are booted up to 55,000 a month. Within a week, the scales fall off your eyes and you realize that you should have more than one shoe.You suddenly realize that drinking water directly from the well or tap isn't so in vogue and you start buying 'bottled water'. You suddenly discover that you should add beverages to the menu.

Then you need a gas cooker, hot plate burner and a microwave oven which then needs a generator to power it if you live in Nigeria-which means changing from small to a bigger one, and then you need to spend money to buy more fuel and pay for maintenance cost. You need a tab and a good phone to match the status of the job promotion too!

Get the drift?

And then a jump from 30,000 to 55,000 which you were ecstatic about 30 days earlier now looks like a curse because you are now spending more than you used to and the situation is worse than ever before.

Because your expenses has risen to match your income and exceeded it, you start borrowing and go into debt, and this is where the trouble really starts.

What happened?

You obeyed Parkinson's law to the later.

In truth, sometimes it makes sense to borrow. A lot of the time however, it doesn't.

In my opinion, the total debt you are paying in a month should not be more than 25-30% of your monthly income. If you are currently doing more than this in debt (especially towards servicing bad-debt), sit down and check it again.

It is very easy to spend more than you make. Very, very easy. In fact, no matter how much you earn, your expenses will somehow blow up to match your income and then exceed it, which leads to a state of deficit. That is why you need to consciously DISOBEY Parkinson's law! And for good.

Till I write to you again tomorrow, I say unto you my good friend "have a great day!"

If this blog is a plus to you, and you think it can do good to others, share! share!! share!!! Or you can copy the link and send to as many as you want.

A Good Time To Borrow

Good-debt vs Bad-debt, Intangible vs Tangible Investment

Parkinson's Law 1955 - C. Northcote Parkinson, made an observation which today is known as Parkinson's Law and I rephrase in a simple, easy to understand way: "Your expenses will always rise to meet your income"