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by Henry

November Financial State of the Twins

December 2, 2006 in Education, Investing, Money Making Ideas, Wealth

Here’s a quick update on the financial status of my twin and I. We have both chosen and gone permanent in our company. That just means my brother and I have each chosen a professional career path as engineers in the company we work for.

Now onto our businesses and investments. Below are screenshots of my twin’s and my adsense accounts for last month. This will most likely be the last time we’ll post earnings. After talking with our lawyer and accountant, we have finally incorporated. That just basically means the money we make from our businesses and investments are separate from our professional work income. On my other site www.zerotocash.com, I use to sell a book where I taught buyers how to make money starting from basically nothing. I also stopped selling it until I had reached the next level. However, I still do not think I want to sell out, so I set a new financial goal for my twin and I before I will reconsider selling the information.

If asked how did I make and create my extra income, I would have to give about 51% credit to Robert Kiyosaki and his teachings. His books do not give much technical details about how to make money, but it is the motivation that he inspires that are priceless espcially to engineers. As Toni Montana in Scarface put it, I think most over educated people have their heads up their ass. Not very nice to say but I know I was one of them til I had some sense kicked into me. Even if my book is written with a technical base having step by step instructions on how to create money from almost nothing, the truth is I know most will just not do it because they are just not motivated enough. This is the reason why people like Robert Kiyosaki and Anthony Robbins get paid so much and have so much success – its because they are extremely good at motivating people.

Twin1's adsenseTwin2's adsense

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by Henry

Motley Fool

November 15, 2006 in Investing, Money Making Ideas, Stock Market, Wealth

When I first thought about becoming rich or getting more money I gave investing in the stock market a shot. I really didn’t know what I was getting myself into at the time and thought that making money in the stock market through trading was going to be a piece of cake. You can now open an online trading account and start buying stocks within a day. You can even invest online without having to communicate with brokers on a telephone to execute your orders.

Have you ever considered investing in the stock market? Or just try day-trading? Or considering to subscribe to investment articles like the Motley Fools, Smart money, or IBD (Investor Business Daily)? If you have, please read on because I want to share with you my personal experience with trying to make money in the stock market. Right now I do not own any stocks but I still have money controlling stocks in the market. Nor do I physically trade as in have to call in an order or actively search for €œgood stock deals, yet I know orders will and are being executed in my account. I’ll explain all of this later.

I honestly think that trying to make a consistent, large (over 50% a month), and relatively stress-free return on the market is very difficult, time consuming and almost impossible if you do not have the right system in place and are thinking in an Employee mindset. However, if you recently went into the market or plan to make some easy money in the stock market because of the Dow passing 12000, my best advice to you right now is Stop. Don’t do it. Unless you got someone close to you who has been there and done it and is now able to setup your stock market money making machine for you. Let me begin by saying that I have already been through your Typical stock investor journey. Now I can honestly say and believe that making money in the stock market is just like any business. There is a right way and there are a lot of wrong and hyped up BS ways. Many of these bogus (or amateurish) methods just fatten the wallets of those who really can’t hack it in the market and just teach others to do what they think can make money for them. Anyway, here is my story:

I started out about 3 years ago when I wanted to make more money (*Duh!) and I listed all the ways I thought I could achieve my targets. In the back of my mind, the stock market was a scary and unknown world to me but I also had the notion that Rich people had stocks to take care of them or middle income people could become super rich in a short amount of time with the stock market. I had about 10K that I wanted to test in the stock market and see how much I could make out of it. Needless to say, my first few months cost me an Alienware Computer instead of putting money into my account. My twin on the other hand better success. I remember that I was very whimsical in my stock picks and when I heard people talk about a business I looked into the news of the company and bought some shares of it. I bought high and sold low even though I had the intention of doing the opposite. I remember that I liquidated my account one day to just get a clean start. I then subscribed to Motley fool’s hidden gems, stock advisor and IBD’s articles. But after about 4 more months, I knew that this was not the way. They were marketing their articles to middle income people who thought that beating the S&P is GODLIKE. I really don€™t understand why people cheer or are pleased with such weak returns. Seeing that people just wanted to beat the S&P€™s average in the forums, I knew that these guys have it all wrong if they were aiming for that low of a target. I also noticed how much work I was doing in order to make a profit and that it was not at all automated. It was less stressful though.

Next I moved into technical indicators to buy stocks. But I didn’t have good exit strategies and usually held stocks that initially had good returns in the first few days or weeks but after that evened out. I then saw that trading stocks in itself was just not the answer to making the type of money I want after putting 8K into google for 4 months and getting a return of only 20% after all was said and done. I remember how stressful it was too and how I constantly checked the price of GOOG. The price did not just go up-up-up but dipped lower than my initial entry at times. My next phase of the stock market was playing with stock options. I knew the concepts but was just too afraid to execute them. My first options that I bought were Nivida (NVDA) call options.

I really didn’t know what I was doing but thought that nivida was going to move up strong in the next months to follow. I bought 10 call contracts and in less that 2 weeks made a 200% return on my investment. So I found out that options can be used for what I want. Even though I hit a big win with my option trade, I did not put anymore money into the market for about a year because I still saw the flaws of trading options. I researched more on options and saw that it is the same thing for stocks. Just Googling more information returned countless market experts or professional traders trying to sell their picks, subscriptions to exclusive option trader forums, and predictions that are promised to return 500%, etc.

I did not see any immediate solutions that could solve the flaws in making money with stocks or options. The only way to make consistent cash is to have a business around options trading. The best solution is using platform or system trading brokers such as Etrade, Interactive Brokers, Tradestation etc. However, the entrance fee for such solutions can be substantial for most working people. And like all easy money, you have to work hard for it. It may seem like a paradox but for those who ever setup a system or business, you know that the hard (brain) work comes up front before any real work is acted upon with precision, confidence and organization. After that, the money just pours right in with little or no effort. So do you want to work hard for the rest of your days in the stock market, or take care of it once and for all? Those high returns that originally lured you in the stock market game is possible, and are already being made everyday by people who have setup their money making stock machines. Don’t put another dime into the market until you have done your homework and know for a fact you are going to get a return you expect. Once you do, you are in the top 1% playing to win. The rest of the people (99%), are just gambling.

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by Henry

The Money Making System

November 7, 2006 in Investing, Money Making Ideas, Wealth

Go to any University offering an engineering degree today and you will see that Systems Engineering is probably the highest ranked or most popular area of concentration by engineering students. It’s one of the toughest too, with bright kids eager to learn and impress their professors. In my college, Systems Engineering was seen to be very useful in the real world. Students thought that being a Systems Engineer would secure them a safe and high paying job after college. I had a taste of Systems Engineering in the real world with a job assignment in the SE group not too long ago. Now I know why SE is ranked so high or looked so highly upon. These SE guys design the overall system for a project or mission. Experienced systems engineers are almost indispensable to a company. They can see the “Big picture”, translate what the customers want to do or achieve into systems requirements, model systems, evaluate systems, and design/modify a system to solve the customer’s problem. 

In my workplace I have meet several talented systems engineers who can basically solve a problem in 15 minutes the equivalent that will take me weeks to accomplish. They are just in another level than me when engineering a solution for a customer is concerned. I quite often ask myself this question whenever I work with or meet a genius level system’s engineer: “Why don’t you design a system to generate millions of dollars a month for you?” I mean these guys have the skill to design things like guidance systems and systems used in space ships, why don’t they actually go on to design a money making system? The truth is most engineers shy away from money or business and most have a mindset of being paid first and working for a customer – not for themselves or their own projects. And most of the ones I met are actually quite happy doing what they do – they say they like the challenge. However, lots of money making systems have actually been designed and exist today. Some are hyped up, some are ok, some are marketed as automated systems but in reality require huge amounts of manual labor, some work and some just suck buyers dry and fatten the creators/owners. Part of your job is to find them, analyses profitability, ease of use, automation, and potential of such systems.

Black box

 You can even build your own money making system today if you really wanted to or have the time to do it. 

The word system my scare some of you away, but in plain English, a system can be seen as a “black box” with just an input and an output. You put stuff into the input and you will get something out of the black box. So a money making system is one that you put stuff into and you get a profit out of it. Some common money systems today are franchises, small and large businesses, websites, real-estate, trading platforms for stocks, FOREX, or options, autoresponders, events like music tours or faire, MLM, and affiliate marketing. There are lots of money making systems out there now that many people are talking about. But remember, profit is the total or gross amount made minus the expenses. Here is a list of things you should consider when buying, making, or renting a money system of your own: 

- What are my inputs? The most common and effective ones are Money and Time. You can put garbage, humans, words, water, soda, videos, dogs, cats, grand parents, cars, babies etc into a system. Did I say babies? Who knows? That’s why they call it a “black box.” It’s your job to find out what that money system of yours needs to crank out dollar bills for you. Do your homework or you won’t get an “A” class output with the wrong inputs. This brings us to the next question you need to answer below. – What is the timeframe or how fast does the system get a positive output? Do you see a profit every month, day or minute? Or do you see no profits until you sell it? This also deals with how well you can track the parameters of your system. In order to improve the design and efficiency of your system, you must have access to detailed reports important to your system. On a side note, many people buy systems that they think will make money for them. But in reality these systems just suck time and money from the owner. 

- Does the system you buy or rent come with a manual or guide on how to operate it – what does it need (inputs) to run correctly? Does that manual come with instructions on how to grow it? Sell it? Keep it running? – Is it automated? If not how much effort, time, energy does the system need to churn out money once the inputs are put in? Will you be the one working IN the system or will you hire someone? This is often over looked by small business owners and the “Do-it yourselfers” out there. Know what you are getting yourself into. There is a big difference between working “in” your system and working “on” it. Entrepreneurs who have the talent, may want to work on their systems by developing it and growing it. They are working in it but know that their efforts will pay them in the future. On the other hand, those who work in their system, just trade their time for money. If they do not work then they will not get money now or later. 

This is known as “Buying your own job” or being self-employed. If you wake up one day and find this out, get out quick. Don’t walk, run out or it will suck you dry. Being a self-employee is the most risky and toughest route to becoming financially free. Its name implies that YOU must work for money, or that you are the system.  – What does the system produce other than money? I know that a money system is ultimately in it for the money, however a money system MUST also provide something of value as a side affect. Why? I believe that all successful systems, in the end, ultimately must provide some form of value in return for its existence. If not, it is a cursed system that will ultimately fail in the end. This leads to the next question or thought you must answer and decide for yourself. 

 

- This is probably the most important one for me and for you too because it is one of personal choice. Does the system fit your style? It is basically feeling good about what you do, your system, its side effects, how it affects others, and your attitude towards money. Does it make you happy to have it all set up? Or do you live in fear that people will put you behind bars if they find out? Can you sleep in peace at night? Can you take a vacation or play games all day knowing that money is just flowing to you? Or do you feel guilty? Remember, be honest with yourself. No one knows your style and what you want, except you.

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by Henry

Quick Money Or Easy Money?

October 27, 2006 in Investing, Money Making Ideas, Self Development, Wealth

There is an excellent story by Robert in an introduction to his book. The story goes something like this:

It tells of a village that wants water supplied to its people. Two villagers decided to talk with the leaders of the village. They both get contracts to supply their village with the water after the meetings. The first villager immediately gets two buckets and starts making rounds to a river stream 2 miles from the village center.

The work was tough but the pay was good. He also felt good because he held one of the only two contracts to deliver water for the village. The villagers were happy with the supply of water that the first villager was supplying but had some complaints. Such as not having water in the weekends the first villager did not work on weekends. The second villager talked with the rest of the villagers and hears all this. He soon leaves the village and was not heard or seen from after the talks. This left the first villager all alone to supply as much or little water as he wanted to in a day.

A few years passed by, and the first villager was now happy and content making money hauling buckets to and from the river. The work is not that bad he says. The second villager now returns with a business plan, backed by a group of close investors, and cheap labor. A large pipe was being constructed from the stream of river to the village under the second villager’s plan. When the first villager saw this, fear set in and he immediately hired some workers, made his son work for him, brought more buckets and long poles to hoist multiple buckets with each trip, and worked harder and longer. The villagers were more content now with the amount of water being supplied by the first villager and his workers.
When the water pipe was finished being constructed, clean water was immediately being pumped to the village – day and night, weekdays and weekends. The villagers rejoiced at the endless flow of water that was clean and drinkable. The village leaders were also happy with the cost of the water being only a fraction of what the first villager charged. Hearing this, the first villager bought covers for his buckets to keep dirt from falling into the water, cut pay, made his workers work on the weekends, and made more trips a day to the river.

The second villager collected a fraction of the money per bucket of water supplied by his water pipe and the rest of the profits were shared with his investors. He soon left that village and began construction of other water pipes to villages in need of water. Each time improving and growing the water pipe. One day the first villager turned to his son and said €œLook around, all of this can be yours one day. But his son quit and went to the city to get a college degree. The villager could not understand his son’s decision. The second villager lived happily ever after while the first villager worked hard, fought with unions, and lived miserably ever after.

The story is a good one because of several lessons it teaches. So are you hauling buckets or building pipes to fortune and wealth? Do you work for only money or is there something else behind your efforts? Do you take the paved path, easy route or do you expand your thoughts and look for innovative ideas that are hard at first but easy at the end? Do you want security or freedom?

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by Wilson

Does It Take Money to Make Money?

October 26, 2006 in Investing, Money Making Ideas, Wealth

          Lots of people think that they can not make money or extra money because they "don’t have money" to begin with. They limit their thinking in terms of what they have and what they can afford and don’t even attempt to expand their thoughts to the possibilities of what could be. It’s a mentality of lack and survival. Their brains are shut off immediately when they say "I can’t make more money. I need money to start making money," or "It takes money to make money." Or "I’ll try that idea out when I get more money." The problem with that kind of thinking is that it robs the person of their time. Motivation comes from thought and when you stop thinking because of these highly negative attitudes towards money, you will eventually slip into pessimism.

         Pessimist thinks so negatively about doing things correctly and all the possibilities of errors and setbacks that they question themselves and others repeatedly. Pessimism and the lack of action soon create a spiral of negatively, passivity and fear all feeding upon one another. Security or the sense of security is clenched tight by these individuals until time runs out on them, literally. These types of people can be heard once in a while saying phrases like "I could have or should have when I was younger."  

         I agree that not having money is a big obstacle when trying to make extra money or start something up to make money. However, there are many more factors that come into play when one really wants to make more money. So you can’t pay the ante or entry fee. So what? Do you sit out and do nothing? Researching, thinking, writing down ideas, and planning do not take money to start and do, but are necessary if you want to succeed. Does it take money to research investment vehicles like stocks, bonds, mutual funds? Does it take money to research more into your ideas? Or do you just push it aside because it makes you uncomfortable thinking about it or just don’t want to bother taking the time to learn? From my experience, the most important factors in determining whether or not you will actually get more money is:

1. Your committed decision to getting whatever it is you want – in this case money. Is it a whimsical decision or one that has been stewing in you for a while waiting for you to take a stand?

2. Determination in getting what you want. Do you give up at the first signs of trouble or fight back? Do you try one or two avenues of ideas because you feel comfortable with them and don’t even bother to shed some light on ones that elude you?

3. Insight, wisdom, or knowledge specific to what you are trying to accomplish or make successful.

4. Flexibility. Monitor your results and adjust for your actions. Don’t lie to yourself that it might get better later on. Make it so not hope for it. Fix any leaks or bail out of bad systems that you have no real control over.

5. The most important one: Confidence in your ability to make a profit on the type of money you want. You must KNOW that your system, idea, investment, or work is or will get you money. A good tree bears fruit. Don’t waste your time watering a bad tree that you hope may give you fruit one day. That day may never come. Confidence comes from experience and positive expectations.

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by Henry

Rich vs Poor

October 23, 2006 in Investing, Money Making Ideas, Motivation, Wealth

Here is an excerpt from Secrets of the Millionaire Mind: Mastering the Inner Game of Wealth (Hardcover)

1. Rich people believe “I create my life.” Poor people believe, “Life happens to me.”
2. Rich people play the money game to win. Poor people play the money game to not lose.
3. Rich people are committed to being rich. Poor people want to be rich.
4. Rich people think big. Poor people think small.
5. Rich people focus on opportunities. Poor people focus on obstacles.
6. Rich people admire other rich and successful people. Poor people resent rich and successful people.
7. Rich people associate with positive, successful people. Poor people associate with negative or unsuccessful people.
8. Rich people are willing to promote themselves and their value. Poor people think negatively about selling and promotion.
9. Rich people are bigger than their problems. Poor people are smaller than their problems.
10. Rich people are excellent receivers. Poor people are poor receivers.
11. Rich people choose to get paid based on results. Poor people choose to get paid based on time.
12. Rich people think “both.” Poor people think “either/or.”
13. Rich people focus on their net worth. Poor people focus on their working income.
14. Rich people manage their money well. Poor people mismanage their money well.
15. Rich people have their money work hard for them. Poor people work hard for their money.
16. Rich people act in spite of fear. Poor people let fear stop them.
17. Rich people constantly learn and grow. Poor people think they already know.

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by Henry

CASHFLOW 101 game

October 8, 2006 in Education, Games, Investing

Robert Kiyosaki’s game – Cashflow 101 is about getting out of the “rat race”. My twin and I bought it almost a year ago. The main goal is to get out of the rat race by first getting your passive income to be greater than your expenses. Once you have completed this, you will be on the fast track and the goal will then be to reach your dreams.

Cashflow 101 Game

I will not be giving a review of the game here just yet (maybe in the near future) but I wanted to mention the game because I have a hypothetical question: What if you created or invested to a point where your passive income is greater than your expenses? Would you stop working? In RL (real life) I already have created or invested in projects that have constant passive income streams that are greater than my expenses and I do not have any debt; fortunately also no college loans neither. So technically, I am officially out of the rat race if my RL financial statements were to be used in Robert’s cashflow game. In the game, the next step after getting out of the rat race is simply to move your playing piece to the fast track and smile a big relief that you no longer have to roll the dice and wait for another paycheck and instead you can play the real game which is trying to reach your dream now that money is taken care of. What would you choose to do if you don’t depend on a paycheck in order to live month to month? Would you continue working anyway? I believe you should continue to invest and create passive income while continuing your professional career to the point where your passive income is greater than your expenses and at least 3 times greater than your worked income. After that you should really evaluate what your dreams and goals are in life.

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