Saturday, January 29, 2011

Generation Earn...

The book of the week was Generation Earn by Kimberly Palmer. I loved it. I whole-heartedly believe that if this book had a bigger marketing budget and was really put out there, it would be a New York Times Best Seller right now. Palmer's writing style is very impressive; flows very nicely and nearly zero repetition. This book is absolutely a guide for the new era of finances we have stepped into within the last five years. Many people have had to make adjustments to lifestyles and a lot of those transitions were not planned. People have been thrown into these new lifestyles and Palmer really captures these different aspects of 'today' living: the good and the bad.

Palmer has her book broken into three sections: Building Your Life, Creating a Home, and Giving Back. All great sections. And my favorite part of the book is the "Quick Tips" throughout the book that give all kinds of helpful ideas that relate to the chapter (Reminds me of a Tim Ferris 4HWW style). There are several parts of the book that I really like, so I am just going to dig into a few.

There is an upside to debt. This is right on. Debt is not always a bad thing. It depends on your situation and the kind of debt you are using. For example... Student Loans: Great... 20% Credit Card holding balance: Bad.... Home Loan: Probably Good. Debt gets a really bad reputation because the people that end up trash talking debt are the ones that don't know how to use it effectively. Debt has lots of power and in the words of Uncle Ben (Spiderman reference) "With great power comes great responsibility." It is so easy to get out of hand with debt if you aren't smart about it. Some types of debt allow for easier mistakes. Credit Cards are culprits of being the easiest to abuse. Regulatory Laws on credit cards change every few years and recently lawmakers have tightened the reigns on CC companies. However, it's still really easy to get a higher limit and even easier to swipe that card on anything you want. Student Loans are relatively difficult to 'abuse' and Palmer even gives the suggestion of using income smoothing, which is using student loans to boost your standard of living while in school or underemployed because after you graduate and get a job you will be able to pay that loan off easily. However, she does make a point to say that doesn't mean you can go out to a concert every weekend or spend a few weekends in the tropics. Smoothing is about going out to a few nice dinners and avoiding ramen on a regular basis. Lastly, Home Loans... I love home loans, but if you aren't smart about doing your homework, you could get burned on purchase price or mortgage rate or points. Just do your due diligence and you'll be fine.

Something else I liked in the book was the idea of parents or grandparents being the source of a loan with interest to a kid or grandkid. If you do this, then you avoid anyone defaulting and it gives the parent or grandparent a good rate of return on their money. This is especially handy in such financially unsettling times. The only thing I would want to address is the emotions involved. Don't fork over your life savings if you will be ruined without it... When giving to family, it's best to only use money that you will be okay if you never see it again. The last thing you need it a rift between family members and money has a tendency to do that. Just make good decisions for your own situation.

The last thing I want to write about is philanthropy. Palmer throws out some shocking statistics. Well, I believe it, it just saddens me. "College graduates donate, on average 2.4 percent of their annual income." Now why the heck is this? I understand that people have childcare and cars to fix and debt to pay off, but 2.4%? If anything that number should be much closer to 5% although 10% is the goal. According to the author of The Happiness Project, people that donate money are actually happier because when you have money away you convince yourself that you are doing pretty well. So, switch to basic cable or go the bars less often and feed some hungry children or give it to one of God's churches instead. God is the best business partner you will ever have and all he wants is 10%. And now I am stepping off the soap box.

Generation Earn is an awesome book with some new world financial ideas. I highly encourage picking this one up! As always, if you have any questions on the book don't hesitate to ask. I would be more than happy to help anyone that wants it.

Saturday, January 22, 2011

The Sales Bible...

The book of the week was The Sales Bible by Jeffrey Gitomer. This was a hefty book to read in a week... 340 pages later, here I am. I am not a salesman, but everyone uses sales. You can even think of some of the ideas in this book as negotiation techniques. When you go into a negotiation either you sell them on yes or they sell you on no. Sales are no different.

Within negotiations, there are very basic forms of communication that are effective and some that aren't. This book is very well-rounded in keying in on the effective ones. I play some of the communication techniques out in my head as if I were talking to a girl at a bar. For example, think of questions that build your rapport. Analyze the situation and the environment and ask questions about things you can infer are important to her i.e. her job, her hobbies. Another similarity is joke telling. It lightens the mood and it makes you appear more personable. And my favorite similarity between selling a product/service and selling yourself to a lady at a bar... tickets. Tickets to sports events, movies, theater, or in the case a lady, dinner. The only difference is when you give tickets to clients you can't assume that you are the +1, but with a lady, you probably should be. The reason these two sales events are similar because both are meant to sell a relationship. If you are able to build a relationship in sales then you get yourself a customer. And customers come back. The book says "I'd rather have a 100 satisfied customers than do business with 1000 prospects."

I was sold recently by one of my friends. I realized after reading this book that I would not have said yes if he didn't follow up. Following up is very important in sales. Too often it's just easier to ask the first time and when you leave on an uncertain note, give up. If you follow up with a 'maybe client' you are more likely to get a yes the second or third time. Come up with a system to follow-up too. If your system is as simple as putting it on a calendar or even a post-it... come up with an organized system to not allow any of your leads slip through the cracks.

Lastly I want to talk about networking. More important in sales than almost any other business field (although very important in all). A lot of sales positions have you write down 100-150 leads before you even start. They want a list of every family member, friend, colleague and so forth. You use these leads to pitch your first 100-150 sales... but then it's all about networking. If you don't network, your sales end at those people, but if you ask each one of those people to refer you to a friend you turn 100-150 in to 200-300. You have to be persistent though and never let the leads run out.

After reading this book I have much more appreciation for a 'good' salesman. There are so many angles to be aware of to negotiate yourself to a 'yes' response. This book is completely filled with everything sales related. You could dissect a different portion of this book each week and have enough material for several years. It's a lot to take in. As always, if you have any questions on the book don't hesitate to ask. I would be more than happy to help anyone that wants it.

Saturday, January 15, 2011


I did not read a book this week.... I know. I am shocked too. It's been about 80 weeks since I haven't read at least one book in a week. I just didn't want to this week. I had a lot going on with work and I was working on getting things rolling with an item on my Things to do Before I Die list. That item... Go do mission work in Kenya. I was all in for this trip to Kenya in March, however, yesterday morning I found out the trip was cancelled due to participants not being able to come up with enough funding. They pushed the trip back into the Summer... I much less convenient time for me to be going on vacation. I have had a lot of time to reflect this week on what my goal is with my money, this will be about this experience. If you expected a book this week, I apologize, not happening this week.

I went to a meeting on Thursday night for the Kenya trip. I had my heart set on this trip and was preparing my life professionally to be gone for a couple weeks. When I got to the meeting I was told that the trip was looking unlikely because people couldn't afford to come up with the money soon enough. I sat there at the conference room table while the girl told us about what we would have been doing and what need there is for people in that area. I sat there in my own world, disappointed and frustrated that the trip was really looking unlikely. It was at that point that I stepped out of my comfort zone and took a leap of faith. I told the girl in charge that I was willing to pay my own way plus at least two other people to make this trip happen. I left the meeting asking her to advocate to the committee making this trip happen with my funding.

The whole time I drove home from the meeting I was thinking about what I had offered. And even more surprising to to myself was that I didn't mind doing it. I was completely willing to not only forget about buying a house this year, but also hold a little credit card debt for a little while as well. Something many of you are aware, is something that makes me cringe. The idea that made me feel comfortable with this notion was the idea of my family. The main reason I want to build wealth and make myself rich is to provide an extremely comfortable life for my future wife and children. However, I do not want my children growing up in a world where I use money selfishly. I would rather them see money as a tool. Something that can change lives for the better. Great, we have what we need. Now what can we do to help others. My final thought on that drive home and before bed: I want to make this money to provide a comfortable life for my family, but I want to have a strong base of character before I attempt to be a head of household and the most difficult place in any person's life to round off character is what they do with their money.

So... What are you doing with your money?

Saturday, January 8, 2011

The Little Book That Makes You Rich- Growth Investing...

The book of the week was The Little Book That Makes You Rich- Growth Investing by Louis Navellier. I haven't posted much of anything on individual stock picking, mostly I have steered toward index investing. I have done this widely because, while there is money to be had in individual stock picking, it doesn't really interest me to spend that much time on that type of investing. I would rather have real estate be my "time consuming" investment within my portfolio. I put real estate in quotes because even though real estate is the most time consuming investment in my portfolio, it involves much less continuous work than stock picking. But let's get started...

First off, Navellier is much much smarter than I could ever hope to be, and a lot of what he is capable of doing within the realm of growth stock picking, I probably could never do. Mostly because I don't have the mind to be a number cruncher and to be really good at growth investing there is a good deal of number crunching to be had. Evaluating alphas and betas and growth rates and more. Navellier does a good job of breaking his strategy of investing down in this book... he makes a very difficult task easier to undertake with an analysis of eight key factors that drive performance... Here they are, with explanations straight from the book:

1. Positive earnings revisions: when Wall Street analysts indicate that business is even better than anticipated

2. Positive earnings surprises: announced corporate earnings that re higher than analysts expected

3. Increasing sales growth: continuous rapid sales growth of a company's products

4. Expanding operating margins: corporate profit margins that are expanding

5. Strong cash flow: a company's ability to generate free cash flow after expenses

6. Earnings growth: sustained earnings growth quarter to quarter

7. Positive earnings momentum: earnings that are accelerated year over year

8. High return on equity: high overall corporate profitability

Navellier walks the reader through each one of these factors and how to go about analyzing the data. If you enjoy number crunching and you enjoy looking up charts and graphs about different companies then you may really have a unknown passion for stock investing. And growth investing is not the only way to go either. Growth involves much more focus then other types of stock investing, but it also has potential for the largest gains too. The other types of stock investing are Value Investing- investing in stocks that are seen as undervalued and have the most long term potential and Balanced Investing- Just trying to maintain a balanced portfolio in terms of risk and return. If you want to give stock investing a shot, good for you. It does take a considerable amount of money to really start stocking picking on your own just an FYI. As always, if you have any questions on the book don't hesitate to ask. I would be more than happy to help anyone that wants it.

Saturday, January 1, 2011

The Real Estate Game...

The book of the week was The Real Estate Game by William J Poorvu. The author is a proffesor of Real Estate at Harvard University. If anyone is familar with Harvard Case Studies and enjoys them, then you will really enjoy this book. The book was about 300 pages and it was a lot of real world example studies.

I am not going to write another blog about basic applications of real estate investing and this book didn't have anymore to add then any of the other books I have read on the subject. I feel that reading real world stories is very handy because it helps the reader learn from other people's mistakes and even learn from their successes. Again, just because I am not a huge fan of this type of writing doesn't mean that you won't enjoy it because there is a lot of good information within these pages. It's just the presentation that doesn't mesh well with me.

I am going to be doing something a little different with this blog in 2011... I have intentions to complete at least 4 things off my List of Things to do Before I Die, and each time I do, I will not review a book that week, but tell you about my experience. Get pumped for some cool stuff... Now to figure out which things I want to do first.

I only got a few hours of sleep last night because it was New Year's so I am extemely tired, so excuse the errors (grammar, train of thought, absence of substance, etc.) As always, if you have any questions on the book don't hesitate to ask. I would be more than happy to help anyone that wants it.