Friday, April 25, 2008

Invest In People: 3 Steps to Invest in Yourself

In my first post of the "Invest In People" series, I talked about why the concept of investing in people matters. And of course, the first person you should consider investing into is you yourself. To follow it up, I'd like to point out three steps that can get you started.
  1. Make Serious Investment In Your Hobby. A hobby, by definition, is something we love to do but don't spend a lot of time doing. Because we don't spend a lot of time on our hobbies, we usually are not very good at them. A profession, by definition, is something we usually dislike to do but spend a lot of time doing. Because we dislike our professions, we usually end up not perfecting them even though we spend a lot of time on them. To remedy this, it will require you to spend more time in your hobby. But you say, "we only have 24 hrs a day." I then say to you, "I think we have 1,440 minutes in a day." No, the idea is not to trick you to think we have more time by converting hrs to minutes; the idea is to give you an admonition: stop procrastinating and utilize every minute. Block several hours during your alertest tint for your hobby/the thing you most love/most important to you. Squeeze errands to the discrete minutes slots. It is the same idea as paying yourself first. We hear people talk a lot about asset allocation, we can use the same idea to allocate our time. Of course, if you can afford spend less time on your disliked profession (I suggest you do this strategically), you then can spend the time on your hobby. The same idea as taking out money from a low interest account and depositing into a high yield saving account. The ultimate goal is to turn your hobby into a profession, and moreover, to perfect your hobby. The resulting benefit is that you can generate income by sharing/teaching your hobbies to others. To give you an example, I've been learning Tango dancing for 8 months. I do it on M, T, F, Sat, with at least 2 hrs each day. It is like pursuing a degree. People joke about it when they hear it. "Yeah, it is like pursuing a master degree." I usually tell them that, not only because I love Tango, but also because I know it can generate a stable income after I become good at it. Besides investing more time in your hobby, it is necessary to invest money in them as well. If you want to turn your hobby into a profession, you will have to pay your due first, meaning spending money learning it from the best teachers out there. What if you don't have a hobby? Find one. Pick anything and just do it. Find out later whether you have the passion for it or not. If not, simply stop doing it and find something else.
  2. Get a higher degree from the top schools. This is true especially if you are like me, 20 some year old, just out of college. Don't settle for a job even the job appears to pay you a huge amount of money comparing to the old school years. Don't let this fool you. Start preparing for the GRE and grad school applications while you are at the job. Don't waste your youth and talent on the minor petty tasks at work, aim high. Actually, that's why I was absent for a week. I was busy with getting myself in the track of getting into grad school. After considering my undergrad education, my academic interest, and money prospect, I came up to this clear goal: a finance PhD in Columbia. Once your goal is set, the rest is just to work for it.
  3. Learn how to negotiate. This is something that I discovered just recently. The truth about human beings is that we all want things are going according to our wills at all times. Often times, our wills are in conflict with others'. When this happens, if you are smart, you will have to ask yourself what the most important to you, and comprise on the things that are unimportant to you. This is the art of negotiation. It is an art as well as a skill, and like many other arts and skill, it requires both inspiration and practice. One may need lifetime to keep perfecting it. The benefits it hence brings will be huge.

Saturday, April 19, 2008

iPhone Giveaway

Ben's Bargains currently runs an iPhone giveaway. The offer ends on April 25th.

To enter, you need to:

1. Reply to this post.
2. Have at least 10 posts posted site wide by April 25th.

Please note: in order to post, you will have to be registered to Ben's Bargains forum first, which is free and straight forward.

Thursday, April 17, 2008

Make Money While Flaunting Your Prophetic Ability

Have you ever bet on a football or basketball game with your coworkers or colleagues betting on the rival team? Do you still remember the last time you won the bet and feeling great about being able to foresee a result that many others are not able to? Ever since year 2008, you probably have already talked to your friends relentless about how certain the oil price will break $120 by the end of August 2008, how certain France will be the first country to announce a boycott to the Beijing Olympics, and how certain Obama will win the democratic presidential nomination. Now, instead of talking about your predictions, you can start making money off of them, under the condition that your predictions are more accurate than other people's.

Thanks to Predictify, a company lets you input to their website your predictions about the outcomes of future events. You may be compensated if your prediction comes to be right or close to be right. The idea was so intriguing to me that I waited no time to join it. By the way, the joining is free and all you need to do is to provide an email address, a user name and a password.

Here is how Predictify works. There are two kinds of events available for you to make prediction on: premium and free.
  • Premium: The payout money pot for the premium events are greater than $0. (I've seen ones raging from $500 to $3000 so far.) Each premium event has a limit on how many people could participate. You also have to give a little demographic information such as gender, race, and age (basically like taking an anonymous survey). The payout you receive depends on how accurate your prediction is and how early you sent out your prediction. There are new issues added every day and premium issues tend to be fill up quite quickly. So far, I participated in two premium events, and not sure of my payout yet since these two events are still running.
  • Free: The payout money pot for the free events is $0, which means that there is no cash payment involved. You will instead receive member points and hence rankings if your prediction comes close. Why do you want a high ranking, because with a higher ranking you can earn a bigger bonus in the premium events. With the highest rank, "Guru," you can earn 3 times of your payout in an premium event. See here for details.
The events listed cover a broad range from sports to pop culture, from politics to economics. For example: the outcomes of the democratic presidential final nomination or the sale price of a house. Even better, you can create free events that you want public opinions for others to predict. Of course, you can create premium events as well, which will cost you $1.00 x the number of participants you allow. By the way, creating events can also increase your member points.

Finally, with your prediction you can add a comment explaining your reasoning behind and you can change your prediction as long as the poll is not closed.

Sunday, April 13, 2008

Eating Out Getting More Expensive?

I haven't been eating out for 3 months, and I am very proud of that record. So when I sat down with four other friends in a modest Thai restaurant on Saturday night, the first thing I noticed was that the prices on the menu are relative high: a soup cost around five bucks, and a red curry costs $12. I ended up ordering the red curry (did I mention that I didn't order any drinks but ice water?). The final bill added up to $16.90 including tax and tips. On Sunday night, I went out with two other friends to a modest Chinese restaurant. Again, I drank water and ordered one dish. The final bill came to $14.00 including tax+tips.

Have you been dining out lately? How much did you spend?

Friday, April 11, 2008

Sirius, This Time Looks Serious

I started buying stocks four years ago when I was a sophomore in college. Sophomore comes from the Greek words: Sophos (wise) and Moros (foolish). So it really means "you thinks you are wise but in fact your are very foolish." I was such a sophomore. At that time, Howard Stern signed contracts with Sirius, and that news alone pushed up the stock price from $5 to about $9 within a period of a few months. I got in around $6 and with the conviction that the stock price will double. Well, four years past, SIRI's price is less than half of what I bought at. It hit a new low today, with after market trading ending at $2.49. During the course of four years, its stock price faltered but never reached $6 again, let alone my wished target $12. I sold half of my positions around $4 to take a loss, leaving the other half to take on the long term bet. Earlier this year, I was hoping the merger ride can give it a boost, but with the final word still yet to come, people seemed to have lost their patience. I think that's why we saw the price drop during the past two days. Since it's a small amount of money left, I will leave it there and continue bet on the long term. But the lesson should be learned: Never Never Never buy anything unless you done your research. Pig can never be a bull, and a pig only gets slaughtered.

Wednesday, April 9, 2008

A Free Dinner or A Trap: A New Type of Mutual Fund That Pays Predictable Income

If the following type of mutual fund is offered in your employer sponsored 401k plan, are you going to consider to add it to your portfolio?

Predictable Lifetime Income. You are guaranteed for life an annual income payment whenever you decide to start taking income withdrawals. The income payment is calculated off the highest value your mutual fund has ever achieved. For example, suppose your income is set to be 5% of your asset value, and suppose your initial asset is $10,000, and it hit $12,000 and then falls back to $8,000, your guaranteed annual income will be 5% x $12,000.

The 40-60 Allocation. The fund will invest 40% of its asset to fixed income products such as bond and 60% to stocks.

Flexibility. You can add funds or withdraw funds at any time, and ultimately pass your assets onto your estate without penalty.

Low Cost. The annual cost for the fund is 1.00%.

I was asked to fill out a survey regarding to this type of fund today. After going through the survey, my first reaction was that the mutual fund companies are really hurt by the recent market turbulence and hence have to come up with "new" products to attract potential investors. Though the idea of guaranteed lifetime income sounds appealing, I have several major concerns before expressing my accolades:
  1. The idea of the guaranteed lifetime income essentially adds to the fund a saving account feature, and thus makes the fund appear to be less risky. For us investors, we need to concern whether this guaranteed income rate is a fixed rate set when the fund is initially purchased and remains fixed during the course of withdraws or it actually fluctuates. We also need to concern whether this guaranteed lifetime income is calculated in a compounding manner.
  2. 1% annual cost is not that low. There are plenty of index fund out there that have cost below 0.5%. We need to ask about the turn over rate and hence the estimated associated commissions because these are another huge cost when it comes to investing in mutual funds.
What's your take on this?

Tuesday, April 8, 2008

PineCone Research Opens Its Panel Again

I've talked about my online paid survey experience before, and PineCone Research is the one I highly recommend due to its survey frequency, apt payment, and free sample trial out. Click here for details. One non convenience about it is that you cannot join anytime out of your own will, you can only join through referral.

Recently, I received an email from them asking me to make referrals. They are growing and hence opening up their panel again. So if you'd like to try it out, please click here to join. For more information, please refer to the following pages:

What is PineCone Research

Privacy Policy

Friday, April 4, 2008

Invest In People: Enrich Yourself First

With the economy going into a recession, the housing market still in a turmoil and the stock market being turbulent, what is the best place to invest your money and time?

The answer is you and the people around you.

The nobles and lords in China two thousands years ago knew the importance of investing in people. They fed, clothed and sheltered those so called "wandering intellectuals," and in return, those intellectuals provided services ranging from all areas of life such as bodyguard (using swords), estate management and financial planing, strategic plans for the nobles to ascend to higher ranks, and etc. Nowadays, we hear many companies shouting out "invest in people" as well. But this idea of "investing in people" does not prevail when it comes to a modern individual. When we talk about investment, we often, if not always, focus on conventional investment types such as stocks, bonds, mutual funds, ETFs, Golds, Real Estates, and etc. We seldom even think of investment in people, let alone having a strategic plan for doing so. One reason might be that it is hard to measure the returns. The other reason might be that we refuse to consider a friendship or a relationship as an investment because doing so will make us feel that we are too mercenary and hence guilty or shamed as a human being. Whatever the reason might be, I hope I can convince you, by the end of this series of articles, the importance, the legitimacy, the beauty and the ways of Investment In People.

The closest person available for you to start investing immediately is yourself. I suggest that you take a look at yourself, and start to get to know yourself in an honest way. Knowing oneself is an arduous and continuing process. Thus you will need to ask yourself specific questions. For instance, you may want to ascertain whether you explored a certain talent or faculty of yours such as dancing. And it takes a second for you to find out that you've never danced before. Instead of saying "I don't know how to dance," you say "wow, this area is waiting for me to develop, and I'd like to look into it." (The same thing a developer would say to himself when he spots a piece of land.) So you look into it, and found yourself fall in love with tango. Then you decide to take some classes. You discovered that you are not a genius in tango, but you sure have some potential. Then you realize that your tango instructor lives off of teaching tango, and this makes you wonder, "what if I seriously learn and practice tango, then by the time I retire, I may be able to teach and keep receiving income as well." Once you realize this, dancing tango becomes an investment for you, and you are the investment. By the way, this is an actual case happening to me, and I can tell you so far the investment has been great. Yeah, this is the one great thing about investing in yourself, its value will increase as long as you work hard on it.

Thursday, April 3, 2008

Save Time & Save Money On Textbooks

Recently I've decided to study GRE and Mathematical Finance. I've got a list of good books on these subjects, but they would cost a fortune if I buy them. So here is what I did:
  1. Check with the local library. I was agog to discover that my local library carries all the GRE related books on my list. There are two good reasons of using borrowed books to study the GRE: (a) these books are valuable only temporarily and will be worthless after I took the test; (b) a return date will help stop me from procrastinating.
  2. Use ILLIAD. ILLIAD is a system that allows you to borrow books from all participating libraries nation wide. Since lots of university libraries are participating, it is a good way to borrow textbooks. The only disadvantage is that the book loan length is usually 3 weeks, and sometimes the whole borrowing process can take a month before the book is delivered to your hand. But hey, it is free textbook. I used this service to borrow some of the mathematical finance books on my list, and of course, 3 weeks is not enough for me to go through the book thoroughly, but it will tell me whether it is worth to buy it. Once I decide it worths the money to buy, I then go to the following website.
  3. What this website does is to compare all the offering prices of the book you are interested in listed on all the online book stores and give you the best one. Moreover, if you are buying a bundle of books, then it can compare all the prices of them at the same time and give you the store combination that will cost you the least. Then you can purchase them individually through each particular store. This saves huge time and big money. I've got two books via this website.
  4. Free Downloads: This website provides tons of links for free download for technical books such as math, engineering, programming, etc and popular magazines. Registration is free (you only need to provide an email) and required to see the download link. I strongly suggest to check this site before you buy any books.

Admonition of Recession

On Wednesday April 02, the day after April fool's, Bernanke conceded for the first time in front of a congressional panel that U.S. economy may slip into a recession. On the same day, Dell announced to follow its job cutting plan to close down its Austin manufacturing facilities and lay off 8800 employees. On the same day, my company also decided to close down 10 offices and kick out about 200 employees. I wasn't asked to go, though the Austin office I currently work at is to be shut down. I was actually quite agog over the second and the third news for the following reasons:
  1. Amid the housing turbulence nation wide, Austin housing prices actually appreciated 0.3% over the past year. This makes Austin one of the few most active housing market nation wide. I've been shopping around and looking for bargains, but there are hardly any. The dell job cut will definitely have a negative impact on the local market, which will be good for me.
  2. The closure of our office means working from home, which saves gas and time to travel. Plus, this will enable me to move to a cheaper apartment which is far away from my current office, which is located in the most expensive area in Austin.

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