Investment in Stocks

Archive for the ‘Passive Income 101’ Category

As an author on Money, people like to talk to me regarding this ‘$ubject’. Some people ask me how to have more of money, some asked me why have I choose the path to evil since money is the root of it. Different people have different perspective of money.

Not too long ago, I was talking to a person who was close to me and was trying to convince him how important it is to manage our money well and to invest part of our money. Our debates were heated and I cornered his every argument. As I was more well read and had actively practiced what I learn about Money, I could win the argument, but I just could make him “see the light”. He agreed with my logic, but i sensed that  deep inside, he just wanted to brush me off and stop talking about the topic.

He reminded me of children at times. It is so difficult to explain logic to children because they just couldn’t see what we can see as adults. I remember when i was young, my mum used to say

“Don’t watch too much TV, you will spoil your eyes and become short sighted.”

Wow! What a wise advise. And it makes total sense… to a adult. Logically speaking, whenever my mum say this, I should rush over and give her a hug of gratitude, saying, “Thank you so much for warning me mummy! I love you!” But is that what I did? Well, you might have guessed that I was an angry young boy whenever my mum nagged and I continued to glue my eyes on the TV set. What immaturity. It is no surprise that I am wearing glasses now…

I was thinking through and wonder what is it that makes a person mature? I came up with a thinking that it has got to do with how “far” we can see into the future.

Just like the event of me watching TV. In this event, my mum considers a longer time frame than myself. She is probably looking at a 5 to 10 years time frame where I will have to bear the consequences by getting poor eyesight. But for me, I am only considering a 30min time frame when I want to finish the TV programme. In this case, my mum is obviously more mature than me.

Another example was the time i was in Secondary School and my mum nagged at me to study hard because this affects “my future”. She could see how my actions will affect my future. But for me, i couldn’t care less… Missing a soccer session with my friends today will be the end of the world for me. What immaturity!

Now in terms of Finances, i have met many Financial Babies. All they can think of is “today”. They make financial decisions based on “NOW!”

“Buy NOW while stock last!” “The discount is only TODAY!”

Don’t get me wrong, i love to purchase things when they are on a bargain, but i do not jump at every single one of them. And of course, before I purchase anything, i look at the longer time horizon and ask myself if i really need it and if i could afford it.

Again, these financial babies can never see how they determine their destiny with the next $1 spent.

Before I proceed further, i want to add that there are some people who are mature in thoughts, but are like babies in behaviors. An example is my friend Dan. He KNOWS logically that over eating is going to make his body look like a balloon, and he does not want THAT to happen. But guess what Dan looks like today? Yes a balloon, all because he had mature thoughts, but immature behaviors.

So i have also met many people who read Rich Dad Poor Dad by Robert Kiyosaki, Multiple Streams of Income by Robert G Allen and even Winning the Money Game by… ahem, ME! In their heads, they KNOW what to do, BUT, (when there is a but, it is usually a one), they don’t do it!!!!

So really, how far can you see with regard to your finances? And how does your action correspond to your vision? Lets take your last paycheck as a reference. How did you use you paycheck?

Financial Adults will take the first 10% to save and invest. They will use the 10% to buy assets (things that grow in value and produces income). These group will eventually become very wealthy.

Financial Young Adults would pay their bills and save the remaining. These group are responsible people and they will not get into much financial trouble as long as things remain stable.

Financial Teenagers would spend whatever they make and wait eagerly for the next paycheck.

Now, lets talk about Financial Babies… These group spend MORE than they earn. They overspend on their credit cards and couldn’t pay on time. Then they will find “creative” ways to cover the credit card debt by borrowing from somewhere else….

For each group, their financial decision is based on how far they can see the consequences of their decisions. For Financial Babies, the could see past the latest offer or whatever item that is dangling in front of them. They can justify their actions with good arguments, but their actions reveal how immature they are.

Regardless which group you are, you can and should grow. The question is: Are you ready to grow? If you are, come and join us in our FREE workshop to learn a time tested, powerful method to invest – Value Investing.

Click HERE to book a Free Investing Workshop.

To your dreams,

Sean Seah

Master Trainer (Value Investing Options Strategy)
Investment in Stocks Blog
Value Investing Academy – the Warren Buffett Way
http://www.investment-in-stocks.com,

Dear Friends

This is Part 2 of a series of articles that I will be writing. In case you have missed out Part 1, please read the article at http://www.investment-in-stocks.com/financial-intelligence/passive-income-101-part-1-how-you-too-can-be-financially-free before you continue to read.

Done reading the above article?

That’s great.

How should you get started now. I will provide some simple steps as a guide for you based on my personal experience:

Step 1: Which area of investment interests are you passionate about (Eg. Stocks, etc.). This interest will sustain you in a long run since we are investing long term.

Step 2: Are your investment interests able to generate more Return of Investment (ROI) than the inflation in your country? If not, search for another investment vehicle.

Step 3: Are you educated in your investment interest to a level that you are willing to put your hard-earned savings into it and you can sleep peacefully at night without worrying? If not, get the knowledge first. You may register for a FREE ‘How to Achieve Financial Freedom Using Only 15 Mins Per Month’ Workshop at http://www.investment-in-stocks.com/free-investing-workshop.

On this article, our focus will be in investing in Stocks or Shares to help you achieve your financial freedom.

Before I start, I am going to assume that you are a new in this area. As such, I am going to use very simple terms. Get ready!

In simple terms, a holder of stocks (a shareholder) is an owner of a company. Ownership is determined by the number of shares a person owns relative to the number of outstanding shares. For example, if a company has 1,000 shares of stock outstanding and one person owns 100 shares, that person would own and have claim to 10% of the company’s assets. This leads to our Secret #2.

SECRET #2 – Stocks are businesses, NOT numbers in the stock charts

Most investors or people who claimed that they are investors looked at share prices every day, every week or every month thinking that they are monitoring the stocks. May I ask you: “If you are buying a business, do you want the business to make money or lose money?” The answer is obviously YES.

However, how many people out there who are buying/selling stocks truly knows what are they buying? Is the company that they are buying making money? Unsure? Then you are speculating.

If you are just looking at the fluctuation of the share price every day, then you are speculating.

Do you dare to put your entire savings into that company and you are able to sleep peacefully at night? You can’t? Then you are speculating!!

REMEMBER! In order to protect your hard-earned savings, you MUST see stocks/shares as a business and NOT just numbers fluctuating on the chart which leads us to SECRET #3…….

SECRET #3 – Invest, DON’t Speculate

So what is REALLY the difference between Investing VS Speculation. An INVESTING attitude is that you invest in an asset and you look at the returns that the asset is giving you. Eg. If you invest in a Coca Cola, you want to know how much money is this company bringing you, versus looking at the price regularly without knowing about the asset, that’s pure SPECULATION.

So which one works better, Investing OR Speculation? Look at the most recent Forbes Richest List at http://www.forbes.com/wealth/billionaires/list where it list down the current Billionaires. Focus on the TOP 10 and ask yourself this question: “Are there any investor or speculator in the TOP 10?” The answer is YES, there is an investor by the name of Warren Buffett but no speculators. If the Wall Street speculators are really that spectacular, why aren’t they in the Forbes List? We can infer one thing – an INVESTMENT attitude works, simply because results tell the truth.

By the way, Warren Buffett started investment in stocks as young as 11 years old and he is now 81 years old. 70 years of solid investment wisdom with a current networth of US$50 Billion. So is he just lucky for the past 70 years or is he skillful? If he is really that skillful, how did he do it?

In the next few part of this series, I will share with you how he does it. A SNEAK PREVIEW is available at www.facebook.com/valueinvestingacademy. “Like” us and get 2 Investment EBooks and Our Exclusive Interview with Mary Buffett.

Do come and join us for our free workshop show you how turn this time into the chance of a life time to be wealthy and financially free!

Click HERE to book a Free Investing Workshop.

Cayden Chang
Founder & Director, Mind Kinesis Management International
BSc(Hons), MSc
Lifelong Learner Award 2008 Honouree
Co-author, “Do You Have What It Takes To Be BOSS?”
Join our Fan Page on Facebook at www.facebook.com/valueinvestingacademy
www.nlpinsingapore.com

Last weekend, I had a wonderful time with friends on the yatch.

And I was asked to give some investment tips.

The first investment tip i gave was to never accept any investment tips from anyone… blindly.

And then, i shared a G.S.T framework for analyzing investment opportunities.

Below is the video, if you want to join us to learn how to do it live, you can join us at our next free workshop.

Click HERE to book a Free Investing Workshop.

I do hope you learnt something from the video. The key is to really first learn how to invest properly before putting your money to work. To learn to invest properly, join us at our next free workshop.

Click HERE to book a Free Investing Workshop.

To your dreams,

Sean Seah

Master Trainer (Value Investing Options Strategy)
Investment in Stocks Blog
Value Investing Academy – the Warren Buffett Way
http://www.investment-in-stocks.com, http://www.nlpinsingapore.com

Dear Friends

Great that you are reading this. Starting from this Part 1, I will share in a very practical way how you can GENERATE PASSIVE INCOME and be financially free.

I was training about 120 airforce personnels this afternoon and when I shared that I could stop work any time and still get paid, most of them stared blankly into space and one of them ask me “How is that possible?”.

Ask yourself these 2 questions – “Do you know what is the inflation rate in Singapore or in your own country?”, “What did you do with your savings after you get your pay-cheque?” & “What is your annual increment in your pay?”, “How much your money working for you in your bank?”

Got your answers? If not, let me share with you some of the data that I have obtained:

1. Singapore’s inflation rose unexpectedly to 5.4% y-o-y in July (vs. 5.2% in June) driven by costlier housing, transport and food.

2. For an average Singaporean, average annual increment is 3%

3. Bank generate annual interests of less than 1% Eg. Fixed Deposits.

Based on the above points, are you making enough money to pay for inflation? NO. If not, what happens to you and your money? The answers are brutal: 1) You become poorer each day because whatever you make or save is insufficient to cover the rose of goods, 2) Your money depreciates across time which means a dollar today will worth less a few years down the road.

Next question – “What are you going to do about it?” & if you are seriously about becoming FINANCIALLY FREE, “How?”

But wait …….. who the HECK IS CAYDEN and why should I be taking his ideas? Read about me:

1) My profile at http://www.mindkinesis.com/index.php?option=com_content&view=article&id=49&Itemid=66 & www.facebook.com/caydenchang.nlp

 2) I am the Founder of Value Investing Academy, the 1ST Value Investing Academy in Singapore with a 1ST Value Investing Programme that is Recommended by Mary Buffett, Internationally Acclaimed Author & Speaker of International Best Sellers such as “Buffettology”, “New Buffettology”, “Tao of Warren Buffett”, “Management Secrets of Warren Buffett”, etc.

3) I AM FINANCIALLY FREE!!!

CONVINCED? Are you READY? Across a few Blogs, I am going to share with you HOW YOU CAN DO IT TOO! 

I am going to share with you all my personal experiences and how you can apply in your real life and these are the SECRETS

SECRET #1 – Poor People Buy Liabilities, Rich People Buy Assets

Look at your what is left of your pay cheque every month. Do you noticed that most have been spent on things like car, mortgages, transport, food, clothing, education, family ….. and the list goes on. So what are things such as Cars, House, Boats, Planes, etc.? These are called LIABILITIES. What are liabilities? Liabilities are things that TAKE MONEY AWAY from your pocket. So is your house a Liability? Ask this question – Is the house paying you or are you paying for the house? You are paying for the house, it’s a Liability. So what makes a person poorer? Every time they get a pay cheque, they buy Liabilities. They more they buy Liabilities, the more the expenses that you have to pay and the poorer they get.

So what do the Rich do? They buy ASSETS. So what are assets. In simple terms, assets are things that PUT MONEY INTO your pocket. So what are examples of assets? I have listed some here:
1) Properties – if they give you some form of rental income
2) Business – Eg. Insurance, Real Estate, Direct Selling (provided you are at the upline), franchises, etc.
3) Books – royalties
4) Education – put to use what you have learnt
5) Stocks/Shares – Capital appreciation & dividends
… and so on.
There is no ‘which one is better?’. It all depends on what is your interest/passion and you are willing to learn that set of skills.

If you constantly and consistently purchase assets, you will have more and more CASH coming in and when these CASH or PASSIVE INCOME EXCEEDS your TOTAL EXPENSES, you are FINANCIALLY FREE or FINANCIALLY INDEPENDENT!

GOT IT?

So how do you get started to generate your FIRST SOURCE OF PASSIVE INCOME?

I am going to share more SECRETS in PART 2 of my BLOG. A SNEAK PREVIEW is available at www.facebook.com/valueinvestingacademy. “Like” us and get 2 Investment EBooks and Our Exclusive Interview with Mary Buffett.

Do come and join us for our free workshop show you how turn this time into the chance of a life time to be wealthy and financially free!

Click HERE to book a Free Investing Workshop.

Cayden Chang
Founder & Director, Mind Kinesis Management International
BSc(Hons), MSc
Lifelong Learner Award 2008 Honouree
Co-author, “Do You Have What It Takes To Be BOSS?”
Join our Fan Page on Facebook at www.facebook.com/valueinvestingacademy
www.nlpinsingapore.com