Does Greatness Require Failure?

The Importance of Failure

Q: What do Henry Ford, Emily Dickinson, Thomas Edison, Winston Churchill, J.K. Rowling, Abraham Lincoln, Michael Jordan, and Ludwig van Beethoven have in common?

A: Failure.

The 11 Best Articles for Your Financial Health (Mar. 2018)

The 11 Best Articles for Your Financial Health (Mar. 2018)

"If instant success is the only option, we will be disappointed 99% of the time."
http://www.montanamoneyadventures.com/why-we-should-avoid-the-success-stories/

"...the Western mindset sees a “crisis” as something negative, the Chinese word includes both – the danger and the opportunity."
http://www.financial-imagineer.com/2017/12/13/why-you-should-learn-how-the-chinese-manage-wealth/

"...monetary policy is reaching the end of its efficacy...central banks have needed to take more desperate and more frequent actions as those actions become less effective."
https://www.greedometer.com/interactive-greedometer/marketcrash2018/

"Investments with these five characteristics have been profitable over time, but typically are not very exciting...We are in the business of helping to maximize the wealth of our clients, not the financial services industry."
https://ezinearticles.com/?Five-Excellent-Investment-Characteristics&id=8734136

"The Nightmare on Wall Street is only a spooky story told to drive media ratings."
http://jlcollinsnh.com/2018/03/16/stocks-part-xxxii-why-you-should-not-be-in-the-stock-market/

"As you can see, compounding doesn't really do much during the first few years...The longer your money remains invested, however, the more powerful compounding becomes."
https://www.getrichslowly.org/power-of-compounding/

"...there was a hot new company everyone was talking about called the South Sea Company...Sir Isaac Newton noticed, and wanted in on the action. So he bought in...Newton, being no dummy, figured things were getting out of hand and quietly started eyeing the exit even as more idiots were jumping in. He got out...netting a cool 207% gain...He knew this was a bubble. And he knew a crash was coming. But then something strange happened. A crash...didn't come.

"...he bought back into the bubble, KNOWING it was a bubble...when the dust had settle[d], Newton had lost over £20,000. It was Sir Isaac Newton's entire life savings."
https://www.millennial-revolution.com/invest/workshop-invest/investment-workshop-27-bubble/

"By developing creativity, resilience, adaptability, and perseverance, I was able to...retire decades before everyone else--even people who grew up rich...Privilege makes people soft."
https://www.millennial-revolution.com/build/privilege-makes-soft/

"Innovation is good; financial innovation is bad...the robo[-advisor] industry, looking for extra sources of revenue, is therefore beginning to move away from the passive-investing ideals that excited so many of its early adopters."
https://www.wired.com/story/beware-roboadvisors-wealthfront-betterment/

"Caplan calculates that at least half of the 67 percent premium earned by the average college graduate can be explained simply by the talent, knowledge, and discipline that they already had when they arrived for freshman orientation. Much of the rest, he argues, is merely a signal to employers..."
https://www.washingtonpost.com/business/why-higher-education-has-little-incentive-to-deliver-better-value/2018/03/08/a02684e0-224a-11e8-94da-ebf9d112159c_story.html

Everybody makes mistakes; what's important is that you learn from them:
"A credit card is not an 'income stretcher'...The interest rates will cripple you."
http://makingmomentum.net/stupid-money-mistakes/

BONUS:
If you're interested in discovering a variety of great blogs, check out this list of great bloggers (including me!): https://websitepromoter.co.uk/finance-blogs/

If you're interested in getting help with SEO, here's an option: https://websitepromoter.co.uk/seo-services/

Are We Headed for Another Big Market Crash?

Are we headed for another big market crash?

Betteridge's Law of Headlines says no. But history—and the perceptive blogger Wealthy Accountant—says yes.

Over the past few months, I've been getting a bad feeling about the market. When everybody marvels at how well the stock market is doing, that's not usually a good sign. When dealing with something like the stock market, which is partially driven by irrational speculation and knee-jerk reaction to unpredictable events, the best play is to zig where others zag.

But hey, don't take it from me. Take it from the most successful investor alive:

Wise counsel, Warren Buffett...

Here's a link to the Wealthy Accountant's perspective. He does a good job of telling people not to time the market, but his caution against picking this moment to jump in with both feet is wise.

I left a comment on this article, to the effect that I suspect that a severe correction will occur in 2018. I hope I'm wrong, but the behavioral indicators (combined with the ever-increasing surge in the stock market) are veritably screaming that a downturn is coming.

From http://www.macrotrends.net/1358/dow-jones-industrial-average-last-10-years. 

Ten-year history of the Dow Jones Industrial Average as of January 29, 2018. 

Check out that recent uptick! Looks like the makings of a bubble to me...

And here's a link to one summary of Joe Kennedy's famous (and possibly apocryphal) story. "When the shoeshine boys have tips, the market is too popular for its own good."

I haven't seen any shoeshine boys lately, but I have seen a proliferation of blogs and other Internet "experts." I wonder how long they'll all last if the Dow Jones' 177-point drop of January 29th, 2018 precedes a continuous, month-long drop...

Long-term, my advice has been—and remains—to stay the course. But short-term...well, I'd recommend caution.

It's foolish to put all your eggs in one basket. Doubly so now that the stock market is almost certainly approaching the end of an impressive run!

In a time of exuberance about the market, you should not follow the herd. The greater stability of bonds are probably the better move at the moment.

But after people have lost lots of money and the general attitude about the market is somber...that's when it's especially important to remember that in the long-term, the market always goes up.

***

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The Perversion of Capitalism

“If you had hard times in your family, would you ever consider laying off one of your children?”

https://www.ted.com/talks/simon_sinek_why_good_leaders_make_you_feel_safe 

Grit: Hype or Substance?

Is Grit All It's Cracked Up to Be?

I've promoted the concept called "grit" on this blog in the past...more than once!

https://media.licdn.com/mpr/mpr/AAEAAQAAAAAAAA0nAAAAJDcyNmVhMTU2LTVkY2ItNDYyYS05YmNmLWFhYzg3N2YzMDBkNA.jpg

What IS grit?

Is College Worthwhile?

Two successful serial entrepreneurs are not optimistic about the future of higher education. In the videos linked below, billionaire Mark Cuban and multimillionaire Howard Tullman share their thoughts on the current trends in higher education. Their entrepreneurial histories demonstrate that these two are usually ahead of the curve.

http://www.inc.com/howard-tullman/playbook-4-year-degree.html

http://www.inc.com/mark-cuban/video-student-loans-bubble.html

Royalty-free picture from https://pixabay.com/en/businessmen-men-people-office-42691/

Links for your financial health, January 2017

Links for your financial health

Confused about the difference between Roth IRAs and regular IRAs or 401(k)s? Mr. Tako explains clearly and succinctly at http://www.mrtakoescapes.com/give-yourself-the-gift-of-wealth/:

"IRA / 401(s) — Don’t pay taxes now, pay later!

Roth IRA — Pay taxes now, but don’t pay taxes later!"

The above link at mrtakoescapes.com provides a great resource on wealth-building--a recommended read! Some other interesting and important thoughts for your financial health:

• Want a free guide on how to invest? Paul Merriman provides actually free downloads of some of his work--you don't even have to give him your e-mail or anything!  http://paulmerriman.com/how-to-invest-series-complimentary-download/
   
• This is also great advice! Don't follow the hype, even if it is coming from "trusted" sources. Just stay the course, and let your money do the work for you! http://collegeinvestr.com/5-things-every-new-investor-should-know/ Similarly, this is how "buy low, sell high" works:  http://tenbucksaweek.com/im-terrible-investor
   
• Do experiences really make you happier than tangible possessions? https://www.keepthrifty.com/2016/07/14/experience-or-stuff.html Chris at KeepThrifty provides a balanced view on the topic, and I think his reflections are quite valuable to consider! Also see TJ Pridonoff's piece on the same topic.
   
• Does working in a well-respected position in a corporation mean you're successful? http://www.livingafreelifetoday.com/blog/side-corporate-job/ Not if you're not happy, as Living Free notes!
   
• An outstanding allegory for the #1 skill you'll need to succeed:  http://www.wealthwelldone.com/change-your-life/  A well-done piece; be sure to read this one!
   
• A fair point: http://www.someecards.com/confession-cards/money-solves-all-problems-funny-ecard Don't just wish for it: make it happen!
   
• Might the disenfranchisement of most Americans be an impetus for the growing FIRE movement? http://www.huffingtonpost.com/robert-reich/why-so-many-americans-fee_b_7150874.html
       -Oh, and on the topic of disenfranchisement, this well-done long-form piece provides a well-argued economic explanation of how free trade led to the rise of Donald Trump's presidential candidacy: http://qz.com/840973/everything-we-thought-we-knew-about-free-trade-is-wrong/
   
• At risk of sounding like a broken record, the lack of financial literacy education is a HUMONGOUS problem in society today: http://collegeinvestr.com/what-high-school-didnt-teach-you/
• You know how all those personal finance bloggers tell you to plug your ears and ignore the news reports? This research illustrates EXACTLY why we preach "set and forget" index fund investing: http://www.marketwatch.com/story/how-retirement-investors-hurt-themselves-2014-05-07
      -Vanguard lays out a compelling case for investing in index funds:
        https://personal.vanguard.com/pdf/s296.pdf
   
• I want to nitpick this piece: http://collegeinvestr.com/beginner-finance-where-to-begin/  Smart parents (and kids) won't wait until age 18 to get their first checking OR savings accounts!
   
• The cost of divorce can be higher than the cost of life during marriage! An excellent, excellent post by iVigilante for Physician on Fire: http://www.physicianonfire.com/top-5-ways-derail-financial-independence-early-retirement/
       -Also see http://www.realworlddivorce.com/Introduction, brought to my attention by commenter "John" at this page. A thoroughly alarming eye-opener, for sure!
   
• This. So much this -> http://www.millennial-revolution.com/freedom/how-i-built-a-seven-figure-portfolio-and-retired-at-31/ No, seriously. this is exactly on point! People over ~age 50 are giving us advice based on what worked for them. But times have changed, and the old models don't necessarily work anymore--a topic that I've been thinking/writing about for a while (with intent to eventually turn into an e-book). The TL;DR: Listen to your parents at your own risk...
   
• Crazy? Or crazy like a fox? http://penniesanddollars.com/smart-people-save-money/ [I happen to think I'm crazy like a fox... :)]
   
• Good advice from a financial professional and author! A bit on the dry side, but packed full of highly useful information: https://www.youtube.com/watch?v=Bin_9svYcjI
• Just made this meme today [1/23/17], and here's an excuse to use it :)
   
• A little meme fun about college financial aid: https://s-media-cache-ak0.pinimg.com/564x/66/7e/a4/667ea42fdc15cdcc1dcde750f8a35f8e.jpg
   
• It is important to have control over your money, but even more important to have control over YOURSELF: http://www.budgetsaresexy.com/2016/12/financial-confessions-i-became-so-obsessed-with-being-rich-that-im-now-sitting-in-prison/ Money is important, but it isn't everything!
   
• When is 'enough' enough? http://www.makingyourmoneymatter.com/2017-year-theme-enough/
   
• Planning to catch on FIRE? [FIRE stands for "financial independence, retire early"] Here's a good guide to help you begin the journey: http://www.poweroverlife.com/retirement-basics-permanent-vacation/ Also see http://www.poweroverlife.com/investing-ultimate-collection/ Long articles, but plenty of useful stuff!
   
• Are your friends' social media accounts turning into personalized commercials? Seeing your friends' luxuries can tempt you to spend more; don't take the bait! http://thefinancialdiet.com/how-unfollowing-my-friends-on-social-media-helped-my-finances/
   
• Point #6 (embrace inconvenience) is right on the money! The whole piece is worth a read: http://www.mysterymoneyman.com/30-kick-ways-improve-your-finances-2017/
   
• "Fees of 1% on my investments aren't that bad, right?" WRONG. https://www.nerdwallet.com/blog/investing/millennial-retirement-fees-one-percent-half-million-savings-impact/

Links June 2016

"I never wanted anything handed to me. I wanted to prove myself every year..." --NFL great Jerry Rice, discussing his intense workouts and his unflagging preparation, year after year, even after helping the San Francisco 49ers to 4 Super Bowl championships in 12 seasons!

Rice was never one of the most athletically gifted receivers to play the game. There have been plenty of talented receivers who were stronger, faster, and could jump higher--but nobody could outwork Jerry Rice. That is what made Jerry Rice the greatest receiver ever to play the game of football,

And it's that kind of work ethic and dedication to improvement that can make a mediocre talent into a great achiever in any field. I've written about grit before, and it bears repeating: grit, not talent, is the key to success!

Focus on building wealth slowly. That's what I (and many other personal finance bloggers!) have been saying for a long time :)

What does your college tuition get you that you can't easily get elsewhere?

What are dividends, and why do financial experts keep talking about them?

Don't settle for a job or a salary that's less than you want. Keep your mind open to other options!

Phroogal is doing their 10,000-mile Road to Financial Wellness again this year [at a more leisurely pace, this time!]. A road trip winding across the United States is always a big undertaking; kudos to them for doing it to raise awareness and get the conversation going about money!

What Makes a Great Analyst?

What Makes a Great Analyst?

In conjunction with Quandl, a data analysis website that provides financial and economic data 
in a variety of formats that allow analysts to use several different tools. 
They have a collection of free historical data for over 600 futures contracts--currently the largest 
such collection on the Internet! If you're not sure what futures are, see this link for a concise explanation.

Data analysis website Quandl (www.quandl.com) came to me and other finance bloggers with the following question: what separates a good analyst from a great one? 

How the Rich Get Rich

Much has been written about how to get rich, and this pattern will likely persist until the end of the human race. Some of the books and articles are worth your time; many aren't. The ones that are worthwhile, however, tend to be less earth-shattering than we expect.

Secrets of success: Develop your grit like a SEAL

Secrets of success

Develop your grit like a Navy SEAL

I've posted about grit as the key to success before. The nice thing about grit is that you can increase it through practice! If you want to be successful, you'll need a good helping of grit-so it's helpful to start practicing now!

Picture courtesy Navy SEAL website:

http://www.sealswcc.com/slideshow/albums/album-257722/lg/SWCC-photo-socr-sb22-0155.JPG

Around the web, 4/10/15

As I work furiously to finish my thesis before the end of the spring semester, I haven't had much time to put into the blog. Priorities!...

Anyway, I have been on Twitter, sharing some of the best content I found. Here are my favorites:

-This one is targeted squarely at recent college graduates, who may be struggling with whether it's better to rent an apartment, or try to buy a home and take on a mortgage in addition to the student loans! A tough question, tackled here: http://squaredawayblog.bc.edu/squared-away/grads-with-student-loans-rent-or-buy/

-These 15 money-saving hacks can apply to anyone! My favorites from this list are tips #1, 5, 7, 10, and 15. http://fundingmyway.com/15-simple-money-saving-hacks/

-This is Investment 101: Investing for the Real World. Put some money into dividend-producing investments (as part of a properly diversified portfolio, of course!). Reinvest the dividends, and...poof! It's like getting free money! http://misfitmoney.com/investing-for-beginners/dividends-are-the-easiest-way-for-you-generate-additional-income/ Remember, millionaires make their money work harder than they do!

-What if you want to start investing, but you have barely any money to spare! On her excellent blog, author Stefanie O'Connell dug up a couple no-minimum investment options: http://thebrokeandbeautifullife.com/where-to-start-investing-when-youre-broke/

-In fact, you don't have to be broke for years while taking on a monstrous student loan debt! If you aren't traditionally academic (you didn't enjoy your classes in high school, or you didn't do so well in tougher courses), you can take a quicker and cheaper route to a nice salary while solving people's practical problems! [The alliteration was unintentional, but I'm keeping it anyway!]
A number of blue-collar professions are in-demand and can't be outsourced. Some examples include electrician, mechanic, carpenter, roofer/builder, plumber, paramedic/certified first responder/emergency medical technician, or other professional trade. Don't count out working in the military, either--they need help in a number of non-combat areas, like working in logistics, intelligence, or repair.
You might find it more rewarding--on several levels--to work in one of these fields instead of trying to figure everything out while accumulating debt in a traditional four-year college. Stefanie O'Connell discusses that here: http://thebrokeandbeautifullife.com/how-to-make-six-figures-before-thirty/ *Disclaimer: working in these fields won't guarantee that you'll make six figures. In fact, you probably won't, unless you start your own business. But the point stands that there are a variety of rewarding, well-paying alternatives to college--going into one of these fields can help you avoid burdensome student loans!

-Speaking of those student loans: are they worsening economic inequality? A French economist argues that they are: http://bigthink.com/think-tank/hefty-student-loans-are-worsening-income-inequality

-Microsoft is finally surrendering to pirates!
They will reportedly allow people who pirated Windows 7 or 8 to upgrade to the legit Windows 10 when it becomes available--just like the people who are running the genuine versions! Microsoft appears to be bowing to the inevitable: nobody is willing to pay for an operating system anymore. Credit Microsoft for finally getting in sync with the times!  http://www.techrepublic.com/article/microsoft-gives-up-on-charging-for-windows-in-china/
Tech geeks might find it entertaining to debate whether or not this move will ensure that Linux never attains widespread use...
*UPDATE 5/24/2015: Despite numerous reports originally, it turns out that this is not true. http://www.pcmag.com/article2/0,2817,2484352,00.asp?

And, kids, this is your lesson:

http://weknowmemes.com/wp-content/uploads/2012/07/dont-believe-everything-you-see-on-the-internet.jpg

-This teen has her stuff together! She's helping her mother with the family budget--kudos to this young woman whose heart (and mind!) are definitely in the right place! http://canadianbudgetbinder.com/2015/03/16/ambitious-teen-helps-mom-with-family-budget/

-This is a common trait among entrepreneurs: they refuse to accept a "no." You might even say that entrepreneurs tend to have a lot of...grit!
Barbara Corcoran, an investor on the very entertaining show "Shark Tank," wrote an example of how she refused to take no for an answer--and that's why she got a spot on Shark Tank! https://www.linkedin.com/pulse/20140906172705-264544111-the-best-entrepreneurs-don-t-know-when-to-quit
Speaking of Shark Tank--if you haven't seen it yet, you should! Here's a link to an episode from season 6 (aired March 2015).
And, if you haven't heard, Bowling Green State University in Ohio has a similar production annually, called "The Hatch." It's a great educational opportunity for students there (and it's entertaining to watch)!

-Also on an entrepreneurial note, here's a peek behind the curtain of some of today's most successful and talked-about companies--before they were household names! https://medium.com/@todfrancis/what-did-billion-dollar-companies-look-like-at-the-series-a-e53ea8043a85

-Diversification is just as important in marketing as it is in investing, as this article makes clear: http://marketingland.com/unofficial-death-google-means-marketing-122696
There's one particular quote from this article that really struck me, and it dovetails nicely with an article that's been simmering in the back of my mind for months (but so far exists only as a title). The quote is, "...there's often more to be learned from failure than successes."
Very true--and, as many successful entrepreneurs will tell you, they often learned valuable lessons from starting businesses that failed early in their careers. [See the note on Barbara Corcoran's article two paragraphs above. Remember, failure isn't final!]

-Need a new lock for a broken door? You can make one yourself, for the cost of a used fork from a thrift store: https://www.youtube.com/watch?v=-lNFJt10w1E

-Sometimes, instead of trying to keep wages low and profits high while accepting an absurdly high salary, a CEO has compassion for employees and does something extraordinary to increase their happiness, like Dan Price of Gravity Payments! Read more here:
http://www.nytimes.com/2015/04/14/business/owner-of-gravity-payments-a-credit-card-processor-is-setting-a-new-minimum-wage-70000-a-year.html

Hope you found these links as interesting and helpful as I did! Happy saving!

The Key to Success

The Key to Success

If you're at all like me, you've often wondered what the secret is to success. Why do some people, who are so blessed with intelligence, physical talent, and/or social support, fail where others--who lack these advantages--succeed? I've never seen a satisfactory explanation for this.

Until recently.

What Billionaires Know

What Billionaires Know

Since I spend so much time talking about The Millionaire Mindset, it's only appropriate that I discuss what wealthy people understand about finances—and about life!

Image from a blog post at arlinghaus.typepad.com