Becoming a Better Investor - The Art of Fishing

Japanese love to fishing. It is part of their social culture. When the Japanese fishing, they always want to catch the big fish. And to catch the big fish, you need the small fish to be bait. But, the interesting about these Japanese is, they didn't buy the small fish from the market. Instead, they buy the small shrimps. I wonder how they able to catch the big fish by those small shrimps, knowing the big fish do not eat the bait. The trick is, they use the small shrimp to catch the small fish, and by then using the small fish to catch the big fish. If you think the way they doing such way is because they want to save money by direct buying small fish from the market, then you are wrong. The main reasons for them to doing this are:

1. The small shrimp are indeed cheaper, yet by using small shrimp to catch the small fish, it horn the fishing skill - you can't catch the small fish, what make you think you can catch the big one. It is more economic by using the cheap shrimp to train how to fish rather than using the expensive small fish.
2. The big fish are smart, the Japanese know they like to eat live fish rather than the dead one. By using the small shrimp to catch the small fish, the Japanese got the live small fish as bait for the big fish. The chances for the big fish to eat the bait greatly increase.

The Japanese know, in the art of fishing, it is not about the bait, or the tools, or the location that destine the outcome. It is the "know how" and "How do". The Japanese is focusing on how to become a better fisher than the fishes.

It apply to the point that I been emphasize: " The sophisticated Investor is focusing on becoming a better investor rather than what investment he or she want to invest in."

*Thanks to my friend Mr. Zaidi Abdul Karim for his knowledge about Japanese fishing

Building Your Keel before Erect Your ship

I am hull structure engineer for shipbuilding. I find it interesting to explain the financial aspects by related to engineering approach.

In ship construction, the most important part is keel. It is the back bone to the ship. The stronger the keel, the bigger the ship can be erected.

Same apply to financial intelligent. Most of people are easily fall into the trap of what investment you should invest rather than what kind of investor they want to become. When come to a bad deal, people tend to blame the investment. But, the truth is, you as the investor is the one who choose the investment. Regardless what you are invested in, if you are a good investor, the deal will work. Contra to that, if the investor him or herself is not competences, the deal will not work.

By hastily choose a investment portfolio to invest in without doing your home work, is like erect a ship without the keel. Imagine, if a ship is built so big, but without a strong keel support, the ship will failed. And it will failed hard. It is why, there are some armature investors who purchase a good well run real estate, but run it to foreclosure. Like the it is said: " an idiot is an idiot regardless what he or she invested in."

By building a strong keel, or metaphorically mean building up your financial literacy, is the key of the success in business world. The ship might failed, but the keel will not, which you can erect a new ship again even though you failed. The true investors focusing on how to become a better investor, the average investor only focusing on money. It is the "how-do" that make the different. Ask yourself if you lost everything you owned today, can you or do you has the confidence to make it back in shortest time? Do you has the "how-do" answer? During early 1900s, when Henry Ford was a Millionaire, people ask him if all his wealth is taken away, his reply was:" no problem, I'll make it back in less than 5 years!" - That's is the power of know "how-do". The power of building your strong keel before erected your ship!

*Acknowledgement for Friend of mine Mr. Zaidi Adbul Karim of his explanation of Shipbuilding

Tom Wheelright - Richdad Advisor talk about Taxes

Taxes

Taxes is the single largest expenses for everyone in the modern civilization. You are taxed when you work, spend and even die. Taxes are different when you are in different quadrant. When you are a employee, you have no choice. The government will make sure they get their share before you do. The higher you earned, the more you been taxes. That's why earned income is consider bad income for the rich. But, if you are running a business, you have more control in term of taxes. You will have more deductibles.

The major different between business and employee is that, for employee, the first column of your expenses is taxes, but for businesses, the last column of the expenses is taxes. It simply mean, if you are business person, you can spend, invest and then only taxed on the remaining - the net profit. The employees are taxed at the gross income which is the highest tax bracket in all type income.

So, by understand the rule of taxes and consult your competences tax advisor, you be able to move yourself to the quadrant that government is giving you incentive in term of taxes - business, real estate. Once you able to take control of taxes, you wealth will increase!

Accounting

Accounting is very important n business and investing. Accounting isn't just about credit, debit, addition, subtraction, multiplication and division. Most of people learn about accounting at school, but failed to understand the essence of the subject. Most people concentrate only on the formal format of accounting and the numbers. The numbers itself is not important, but the vocabulary, the story behind the numbers that is count.

Generally, accounting consist of 4 column: Income, Expenses, Asset and Liabilities. The fundamental of accounting is the accountability. For instance, how to define assets or liabilities? It is hard to know whether a house or a car or a Rolex watch is an asset or liability when we do not see from the perspective of income and expenses. Well, the bank will list those stuffs i mentioned in assets column, but it is your asset or the bank asset. This is why we need to see the accountability of accounting format as a whole. The key point is the cash flow. Where is the cash flowing? It is flowing in and out of the expenses column or flowing in to the income column. Rule of thumb, when the cash flow in, it is a asset, and when it flow out, it is the liability. For example, a house or your home, if it make you pay the bill, the taxes, the amortization every months (Cash flow out) it is a liability. But , for the same house, if you rent it out, and generate positive cash flow after expenses, it is a asset. This the key, why most people are poor. Because they mis-understood the concepts of accounting. They bought the stuff they thought is an asset but in truth is a liability. They spend to make them poorer, but the rich spend to make them richer.

Economic

I love world history. The more I study about world history, the more i realize, the world history is about study of economic.

On early century of human civilization, everyone is a entrepreneur. People able to survive by starting own small businesses and trading. There are no factory, no big corporation that provided jobs. No one own the land but the king and baron.

Not until 1492, the story of great explorers begun. Ferdinand Magallen, Cortez, Christopher Columbus, they sailed out to ocean blue of Atlantic ocean and found America. But the fact is, they are not out looking for new land for prosper with, they are out to search for new faster trait route to far east - a new economy to prosper with. However, the because of America is founded, the world has changed dramatically, the industrial age is started.

Ferdinand Magellan
Born	1480 Sabrosa, Portugal
Died	April 27, 1521 (aged 40–41) Cebu, Philippines
Other names	pt: Fernão de Magalhães es: Fernando de Magallanes
Known for	Captained the firstcircumnavigation expedition.
Signature

Industrial age begin. It is the age of creativity. Steam machine is introduced. The productivity has increased significantly. Small business is wipe out by machine. No one wiling to risk their venture in small business to compete with the giant corporation. Employment culture emerged.

The golden age of industrialization continue growth over 400 years. On 1905, Henry Ford had made Ford - the peak of industrial age. Continue by more and more large company is established during 20 century such as General Electric by Thomas Edison. Then, on 1939, war world 2 explode and end on 1945. The rise of cold war age. During the cold war, the weight of your warhead that counted, how much payload it can generate. The world is controlled by 2 super power, living in fear of nuclear war - The world War 3.

Henry Ford
Henry Ford, c. 1919
Born	July 30, 1863 Greenfield Township, Dearborn, Michigan, U.S.
Died	April 7, 1947 (aged 83) Fair Lane, Dearborn, Michigan, U.S.
Occupation	Business, Engineering
Net worth	▲$188.1 billion, based on information from Forbes – February 2008.
Religion	Protestant Episcopal
Spouse(s)	Clara Jane Bryant
Children	Edsel Ford
Parents	William Ford and Mary Ford
Signature

Not until 1989, 500 years after Columbus sail out to America, the tumble of Berlin wall, it a mark of the end of industrial age & cold war, and the "world wide web" went up - the Information age. During the industrial age, big is better, but during information age invisible is best. During the information age, the warhead and payload is not counted, what counted is the speed of your modem. During the cold war, the world is controlled by 2 super power. During the information age, no one is in charged. The world become smaller. Money can move in the speed of light. It means, today you might be the tip of the pinnacle, but tomorrow, your business might be wipe out of you are not in "speed".

Today, we see billionaires in their twenties such as the founder of Google.,inc Sergey Brin; founder of Facebook, Mark Zukerberg and many more. Their empire is not the skyscraper but in the virtual world created invisibly to our eye with the speed of modem and information.

Mark Zuckerberg
Mark Zuckerberg in Paris in 2008
Born	Mark Elliot Zuckerberg May 14, 1984 (age 25) White Plains, New York, USA
Occupation	Co-founder, CEO & President ofFacebook
Net worth	US$4 billion (2010)[1]
Religion	Atheist[2]

By study the history of the economic, we aware of changes. And by understanding the nature of the economy, we be able to prepare ourself to think and act to prosper. Many of us are still in the industrial age idea, which will cost them lifetime and left behind by those who evolve and change.

5 Pillars of Financial Literacy

Every building require a strong foundation. The foundation is the core support to the building to be erected. The higher the building to be erected, the stronger the core pillars is required. Here are the 5 main core pillars:

1. Economic Study
2. Accounting
3. Taxes
4. Investment Planing
5. B-I Triangle - Structure of Business

Entrepreneur Must Know Skill: Sales

Sale is isn't about how much you can sell. It basically is a art of your capacity to handle rejections, objections and noes. The key of winning in sale is to fail. The faster you fail, the faster pace you horn your sale skill. 99% of business failed in 10 years, mainly is because the entrepreneur do not know how to sale.

Here are the effective platform to building up your sale skill:

1. Corporate Company that provide professional sale training program - ie Xeror
2. Charities and non profit organization to help raise fund
3. Multi level marketing - Network marketing

How to Raise Capital: Entrepreneurship No.#1 Skill

Raising Capital is a learned skill, it is essential skill for an entrepreneur. Often when we heard about people said it need money to money, it is not true. The following video will reveal the secret of it take no money to make money!

The Cone of Learning

In school we been taught by reading and lecturing. In the Cone of learning, developed by Edgar Dale, 1946, its explained the worst way of learning is through reading and lecturing. Edgar advocate that simulation is a much effective way of learning since we be able to try and error multiple time in action.

How to Raise Capital: It is not a Gender Thing

10 Tips from the Rich to be Rich

Often we heard people talk about the virtue to be rich by poor people. How those people who are not himself rich be able to advice other to be rich? That's is why friends are important. Often wise man said, if you want to see your future, just look at the 6 closest person you hanging out with. Are there rich or middle class or poor. So, if you want to be rich, listen to the rich who been there, done it and successful.

Here the 10 Tips from the rich (Richdad Robert Kiyosaki):

1. Decide yourself to be rich
2. Set a goal
3. Seek competence advise
4. Find a partner to go along the path
5. Talk about money and enjoy it
6. Become both a gambler and banker
7. Seek mentor ship
8. Change your words and meet new Friends (Perhaps the rich and successful one)
9. Look at a deal a day
10. Set a retire date

Today School Don't Teach Financial Literacy - Part 2

School Today Don't Teach Financial Literacy

*Part 1...

10 Controls of Entrepreneurship

Control mean, you can decide on yourself to act upon it. It is important for especially entrepreneur to learn the important of control. Control is one of the primary factor that dictate the final outcome of every business and investment venture.

Today, we heard about investor who invest in mutual fund and diversify. They are handing out control to stranger who do not really care about the investor money, but instead just to make sure they get their commission. I personally do not invested in mutual fund is because i has limited control for the investment. I simply can't do anything that was going to make the price of the fund get higher. I only will hope the faceless stranger of fund manager will give me a good new on next new year eve. Once invested in investment that we hardly to control, we are losing at the first round at the beginning of deal. That is way, today, we heard about million are losing trillion in any stock market crash especially at recent 2008. They lose, is because primary they do not has control over the possession of their investment portfolio.

The best way to illustrate the control factor, imagine yourself as a passenger to a stranger's vehicle such as taxi, or public bus or even your friend car. When the stranger driver speed off, or emergency brake or never slow down at coming steep corner, your heart beat roll, you felt insecure and probably realize that, your life is on his/her stake of driving skill. Instead, for same circumstances in every detail about the scenario illustrated, only you become the driver of yourself, do you fell secure, or even more safer? When you in control, you even can decide the destination yourself without need to ask for "permission". You can change course by your own preference. You can stop whichever you feel like it. And drive at any speed you comfort with. That is what i mean by control!

Here the main 10 important controls that every entrepreneur shall preach:

Control over:

1. Yourself
2. Your income and expenses (assets and liabilities)
3. When to sell and when to buy
4. ETC (Entity, timing and characteristic)
5. Brokerage fee
6. Taxes
7. Management
8. Access of information
9. Terms and Condition
10. Philanthropy

If you do not know how to drive, learn to drive, or driving a car without license is even more dangerous than hire out someone driving for you!

Debt - A double edge sword

Debt - for most of people, it is always related to house loan, car loan, credit card or school loan. Yet, most of us never realize, it is the utilization of debt that make the different between rich to middle class.

Debt is like a loaded gun. It can be used or "AB"used. Thus, it must be treated respectably. The idea of old time classic thinker about become rich is the famous quote we often listen from our parent, grandparent :"study hard, get a high paid job, save money, get out of debt and live frugally". Live below your mean? Why should anyone believe that? Why should we work hard for the rest of our life, yet unable to enjoy life? Isn't it sound insane?

One of the answer of this question is the usage of debt. There is a good debt and a bad debt. Good debt make you rich and bad debt make you poor. The typical bad debt are such as liabilities and glitter luxury stuff we bought by credit ie car(s), expensive vacation, beech house, boat and on and on. It take money out of your pocket every months.

Good debt is the debt that will put money into your pocket. The best example in this case is investing on real estate by 90% of bank money. The investment by utilizing debt will generate not only monthly income of rental, but it also provide other advantages such as tax reduction, depreciation and appreciation which ultimately increase your personal wealth if you know what you are doing.

It best to illustrate how powerful debt will make the different is by asking yourself the question: "how long it is take for you to save a million dollar (any currency), and how long it is take for you to loan a million dollar?" and "who you has to be and what you need to know for you to go to the banker to ask for a million dollar loan, and has him/her to approve your loan by issue a paper for you to sign in 30 minutes?". Well, this is not a advertisement to promote getting into debt and spend all you can have. It is an alternative idea for you all to think about it. The idea might shake your core believe, but unless we are shaken, it will take even more difficult for us to change. To change for betterment.

7 Principles of Entrepreneur

Principle simply mean the fundamental truth or proposition that serves as the foundation for a system of belief or behaviour or for a chain reasoning. It is the key of a subject to sustain, growth and evolve, thus as an entrepreneur, profound principle will hold important key to success.

The following are the 7 key principle of entrepreneurship:

1. Identify what type of income you are dealing with - earned income, passive income or portfolio income.
2. Effectively turn earned income (50% income) to passive and portfolio income.
3. Only purchase positive return investment.
4. Let your mind become your own greater assets than liability - " it is the investor that matter in every investment deal. An idiot will still an idiot doesn't matter what investment he or she into."
5. Learn to trust when a great investment opportunity come, the fund will be right behind it.
6. Do not predict or prognosticate, instead to be always prepared for whatever might come across with.
7. Learn to weight between "rewards" and "risks"

The Power of Debt - Leverage

Real Estate: The Art of the Deal