Monday, November 29, 2010

Some Notes on Using Crossover or Straight-through Ethernet Cables

UTP Cables for 10BASE-T and 100BASE-TXJust to make it easier for me to remember how cabling works specifically for Crossover and Straight-through I've decided to jot down a few notes for quick reference...


Ethernet straight-through cable connects using the following combinations:
  • Switch to Router
  • Switch to PC or Server
  • Switch to WAP (Ethernet interface)
  • Switch to LAN Networked printer
  • Hub to PC or Server
  • Hub to Router
  • Hub to WAP (Ethernet interface)
  • Hub to LAN Networked printer

    Ethernet crossover cable connects the following:
    • PC to PC, Server to Server, PC to Server
    • Hub to Hub
    • Switch to Switch
    • Switch to Hub
    • Router to Router
    • Router to PC, Server
    • Router to WAP (Ethernet interface)
    • Router to LAN Networked printer
    • PC or Server to LAN Networked printer
    • PC or Server to WAP (Ethernet interface)
    • LAN Networked printer to WAP (Ethernet interface)
    • WAP (Ethernet Interface) to WAP (Ethernet interface)

    It may also help to think of it using the following tables :

    Devices That Transmit on pins 1,2 and Receive on 3,6
    • PC, Servers
    • Routers
    • WAPs (Ethernet interface)
    • LAN Networked printers
    Devices That Transmit on pins 3,6 and Receive on 1,2
    • Hubs
    • Switches
    A device connected to another device using the same pin assignments must use a crossover cable, otherwise use a straight-through cable.


    A simpler way:



    Crossover Cable
    Switch-Switch
    Switch-Hub
    Hub-Hub
    Router-Router
    PC-Router
    PC-PC

    Straight-Through Cable
    Router-Switch
    PC-Switch
    Server-Switch
    PC-Hub
    Server-Hub

    Why Facebook Wants Your E-Mail

    Why Facebook Wants Your E-Mail
    Published with Blogger-droid v1.6.5

    Saturday, September 18, 2010

    My First Week in my Telecommunications and Internet Technologies Class

    I never thought I'd say this, but my first week wasn't exactly a walk in the park. I have a few things against me:

    • The instructors had a "European" English accent, the kind that girls in the US probably think is cute. I find it hard to understand them, given that I grew up watching Hollywood.films. I bet it wasn't easy for my American classmate as well, who by the way, is from Kansas. Yes, think of Dorothy and Toto. Howdy pardner!
    • I was the only one with a non-IT background. The rest of my classmates graduated from Internet Technologies, Computer Networking, Electrical Engineering, etc... courses. When it was my time to introduce myself, I managed to blurt out that I graduated with a Chemical Engineering Degree and have no background in IT. I did say that I have a very strong interest in learning about telecommunications and internet technologies. That managed to draw some looks that seems to say"Huh?! Are you sure you want to be here?!"
    • Hunger. The moment I leave work, I have to move it and get going. I have an hour to get to class.It turned out that my classmates don't seem to mind not eating. I can't do that. Food is my fuel. It gives me energy for physical and mental work. Our class is from 6pm to 9pm, and it seems like we have nor breaks. I need to eat something while I commute to class. A sandwich... maybe a nice juicy burger. There is just no other way to do it if I want to arrive in class on time.
    These are a few of those things. It seems I have a lot of catching up to do....

    So let's go! (in Zohan accent)

    Thursday, September 16, 2010

    My IT Battleplan

    In every war, there should always be a battle plan. As quoted from the Art of War by Sun Tzu:

    "Hence the saying:  The enlightened ruler lays his plans well ahead; 
    the good general cultivates his resources."
     
    I'm no soldier. Just an Entreprengineer. I have limited time on my hands, but 
    I want to live a balanced life. Man is afterall, multi-dimensional. Therefore, 
    have no to make use of plans and force myself to execute them as violently as I can.
     
     Let me see:
     
    
    • Learn new CMS. I decided it will have to be Joomla! for now.

    • Get a degree in Telecommunications and Internet Technology. 


    • Study Internetworking via Cisco's CCNA (Cisco Certified Networking Associate). 
    • Get myself CCNA certified (Thanks to Dennis and Arnold for introducing me to this wonderful company)
     





    I hope to finish all these in 2-3 years through professional and educational institutions. I already enrolled myself in a specialized university here in  Vienna which thankfully teach in English (I imagine myself to be totally devastated, defeated, and broken if these courses were taught in German. I can speak Deutsch but just a little. I frankly sound like a preschooler, but it get me by for now.

    Hmm... so far the plans looks all good from here. The question remains if I am really built for this. Let's see if the Entreprengineer can make it in IT.

    Wednesday, September 1, 2010

    How do I start Trading Stocks?

    This is a question I always get from everyone I know who's interested in learning about stock trading in the Philippines. I'll share what I know about the Phil Stock Market and how to trade it.

    I've actually began my adventure from learning about financial planning before trying to master stock trading. I have to insist that everyone learn this first. It will lay down your financial foundation and protect you from your inner greed. Everyone has one.That's also the reason why not many succeed in stock trading.
     
    Let's begin by reviewing the basics. I have an article on this somewhere on this blog. Oh well, let me

     
    1. Insurance - Protect the goose which lays the golden eggs. No goose, no golden eggs. Of course, that goose is  you. When the unforeseeable happens, you should also be ready for the defense. We all die, we all can have accidents. No one is exempted.  Only immortals don't die. You should prepare for this just in case.
     
    2. Debt management - To maximize growth, eliminate negative interest-bearing instruments first. Debt. You can't grow a 20% annual interest investment with a 36% yearly interest of debt. Eliminate debt. Otherwise, the negative interest on your credit card will just eat up whatever you earn from investments.
     
    3. Emergency fund - This should be 6 months to one year of living expenses (depends on where you are). In the Philippines, we compute it to be 6 months. How does this work? When you get laid off or if your business loses money, you still have some money to recover from such a disaster. It will cover your expenses while you look for a new job or start a new business. It will also cover other "emergencies" like medical expenses when necessary. This way, you don't have to apply for more debt or touch your investments.
     
    4. Investments - mutual funds, ITF's, stocks, etc... This is mostly done after you have covered the first three.
    So please keep these in mind before going into stocks. 

    Here are useful news resoureces.

    For news (they serve as catalysts):
     

    http://business.inquirer.net/ - and other local business news sites are ok.
     
    For international news, I use the following:
     
     International events have an impact on investor/trader sentiments, and can be used as signal for entry/exit  points while trading.
     
     There are two major philosophies in trading. Technical and Fundamental analysis. Technical analysts follow price movements, chart patterns, etc... to determine valid entry and exit points while trading. Fundamental analysts need to know what caused these price movements and gauge if the current stock price is cheap or expensive based on business fundamentals. One of the most famous and successful user of fundamental analysis is Warren Buffet, one of the world's richest men. He's known to have built his wealth purely from investing in stocks.


     
    If you want to learn technical analysis check out these links I found on the web.

    http://www.informedtrades.com/trades.php?page=school
    http://www.swing-trade-stocks.com/
    http://thepatternsite.com/

    There are more but these are the coolest ones.

    For the Philippine Stock Exchange and PSE graphs:
    http://www.pse.com.ph/

    There's even a cool Pinoy Community with seasoned traders, brokers, or fund managers willing to help out.
    You can check from the Online Trading and Brokerage Feedback Topics for advice on which
    companies you can use.

    http://financemanila.net/ - the forum is where most of the veteran traders hang out
    http://www.traderspizza.com - another nice forum with its own gurus as well.

    http://tsupitero.com/selection.htm - the broker (you can find his profile on this page too) he hangs out at financemanila.net as well

    I only use BPI Trade but they said COL is better (they have their own graphs and tools). I might shift to COL as soon as I get back to the Philippines. If you want to open a BPI Trade account, ask the nearest BPI near you on how to open one.
     
    Below is Citiseconline's website.

    https://www.citiseconline.com/


    Of course we can then chat, and share trades and learn which are possibly good ones or not. 
     
    Good luck on your trading!

    Thursday, August 26, 2010

    Content Management System

    I have been recently tasked at work to make a website for the company I work for. And to be honest, I had zero experience in making a website from scratch. The only thing I knew was to make blogs from Blogger, Wordpress, and Multiply.

    Luckily for me, I found out that Wordpress has CMS (Content Management System), which is also offered by Joomla and Drupal. And to top it off, all three are open-source, which is a fancy term for being free. BTW, I am sure there are others out there but these three came out on top.

    In case you don't know what CMS means, Webopedia has the definition as follows:

    Abbreviated as CMS, a content management system, also called a Web management system is software or a group or suite of applications and tools that enable an organization to seamlessly create, edit, review and publish electronic text. Many content management systems offer a Web-based GUI, enabling publishers to access the CMS online using only a Web browser. Also, a CMS designed for Web publishing will provide options and features to index and search documents and also specify keywords and other metadata for search engine crawlers.

    Some advantages cited in using CMS are as follows:

    • Increased control over the web site
    • Improved speed to market in terms of content changes
    • Lower cost per page
    • Decreased total cost of maintaining the website

    In short, CMS just made my life easier. Although I still need to learn a few HTML and CSS commands, I can now design and create a real website with almost no knowledge of both HTML and CSS. Yup you heard me right. A real live customized website.

    Tuesday, July 27, 2010

    Quotes from Reminiscences of a Stock Operator

    I did precisely the wrong thing.  The cotton showed me a loss and I kept it.  The wheat showed me a profit and I sold it out.  Of all the speculative blunders there are few greater than trying to average a losing game.  Always sell what shows you a loss and keep what shows you a profit.

    If all I have is ten dollars and I risk it, I am much braver than when I risk a million if I have another million salted away.

    I’ve got friends, of course, but my business has always been the same – a one-man affair.  That is why I have always played a lone hand.

    What beat me was not having brains enough to stick to my own game – that is, to play the market only when I was satisfied that precedents favoured my play.  There is the plain fool, who does the wrong thing at all times everywhere, but there is also the Wall Street fool, who thinks he must trade all the time.  No man can have adequate reasons for buying or selling stocks daily – or sufficient knowledge to make his play an intelligent play.

    It happened just as I figured.  The traders hammered the stocks in which they figured would uncover the most stops, and sure enough, prices slid off.

    For one thing, the automatic closing out of your trade when the margin reached the exhaustion point was the best kind of stop-loss order.

    The game taught me the game.  And it didn’t spare me rod while teaching.

    Fourteen Steps in Making Analytical Decisions

    Whenever I am faced with too many alternatives and feel lost about what I'm supposed to do,  I turn to this book by Sam Deep and Lyle Sussman called Smart Moves. It's filled with tons and tons of lessons on management.

    1. Perform a situation analysis. - Check for trends and conditions. Identify what is exactly giving rise to the need for a decision.

    2. Determine the decision objective. - What are the why's?  What do you hope to gain?

    3. Quantify expected results. - If you make the decision, what new conditions will arise and ask if those are desirable for you. You must try to evaluate the quality of a decision with a quantified target.

    4. Identify available information. - Garbage in, garbage out. The quality of your decision is as good as the quality of information going into that decision.

    5. Identify other resources. - Which are available? Which can you generate more of if necessary? Where will you look and by when?

    6. Establish decision requirements. - What are the conditions that must be met before you can make a decision?

    7. Determine desirable features. - If decision requirements are the "musts" ; desirable features are the "wants."

    8. Rate desirable features. - Not all wants have the same level of importance.

    9. Generate alternatives. - What are other available choices?

    10. Test alternatives. - Measure each alternative against your list of requirements and reject those that don't meet your requirements.

    11. Evaluate alternatives. - Compare desirable features of the remaining alternatives and give each alternative a comparative rating on each feature.

    12. Compare alternatives. - Generate a total score for each remaining alternative and compare. Multiply the rating earned by one alternative for each feature by the weight assigned to that feature in step 8. Like for a rating of 1 to 10, you assign 5 to a feature (like sturdiness, or even supervisory resposibilities) which you might have assigned a weight of 30% (5 x 0.30). Do this for each feature on each alternative. Then compare total scores for each alternative. The highest score becomes a tentative choice.

    13. Test the tentative choice for consequences. - What will happen in the short, mid, and long term for this decision?

    14. Make the final decision. - If it passes step 13, implement it. If not, proceed to the next highest scoring alternative.

    Return to step 1 if you haven't found a suitable choice, begin the whole thing again and make sure you don't miss anything.

    7 Most Effective Exercises Slideshow

    Here's nice link from Webmd.com:

    Click Here

    These exercises deliver results, given that one pays close attention to form.

    1. Walking - No equipment necessary. Start at 5 to 10 minutes then increase it to 30 minutes per session. Increase your speed and level of incline as you go about challenging yourself.

    2. Interval Training - It always challenges your body if you vary the intensity of your activity. Push the tempo for a minute then simmer down between 2 to 10 minutes.

    3. Squats - Works on multiple muscle groups at the same time (gluts, quads, and hamstrings).

    4. Lunges - Also works out multiple muscle groups like squats, plus it helps improve balance.

    5. Push-ups - Strengthens the shoulders, chest. core muscles, and triceps.

    6.  Abdominal crunches - Strengthens your core muscles.

    7.  Bent-over Rows - Benefits the lower, mid, and upper back.

    Rules of Business from a Strip Club Owner

    Alan Markovitz owns a new Penthouse Club in Philadelphia, and even spent 5 million dollars just for adornments. He also revolutionized the compensation model that instead of paying his models, they pay him a fixed fee nightly and get to keep everything extra they made.

    He has the following rules to guide him:
    • Wisely choose your business partners.
    • Never stand still - keep innovating, upgrading, inventing, expanding...
    • "If you sleep with your help, you might need help."
    • Believe that you can manage through any crisis.
    • Look for extra ways to turn the buck.
    • Experiment and try new ideas.
    Here's a link to the original write-up in CNBC.

    How to Fight Aging

    Here is from one of my favorite sites Webmd:

    1. Produce - Fruits and vegetables especially blueberries and leafy greens like spinach. Berries are full of vitamin C and anti-oxidants, keeping your skin smooth while protecting your cells cancer, heart disease, and diabetes to Alzheimer's, arthritis, and osteoporosis. Dark leafy greens. These veggies are prime sources of lutein and zeaxanthin, plant pigments that protect your eyes from the harmful effects of ultraviolet light and they are rich in vitamin K which helps reduce boneloss.

    2. Protein - Muscle mass which is a key component in boosting your metabolism can be maintained by getting enough protein from skinless chicken and turkey breast, lean beef and pork, eggs, beans, dairy, and seafood. Calcium also cannot build bone without enough protein.

    3. Omega-3-Rich Fish - If you don't like fish, omega-3 can also be found in walnuts and flaxseed. They fight chronic inflammation while improving mood and attitude among healthy people.

    4. Whole Grains - Found in whole wheat, oats, and brown rice, bread, cereal, and others made from them. They fight against diabetes, heart disease, stroke, colon cancer, high blood pressure, and gum disease due to the vitamins, minerals, plant chemicals, and fiber that work together and promote health.

    5. Exercise - It maintains muscle mass, boosts metabolism, and keeps your heart and lungs strong. The recommendation? 30 minutes or more of moderate aerobic activity 5 days a week plus twice a week of strength training to maintain your muscle mass.

    6. Red Wine and Other Drinks - Red wine has resveratrol, which is a potent antioxidant, inflammation damper, and artery protector. Limit yourself to one glass per day. Coffee fights type 2 diabetes, Parkinson's disease, and heart disease. Tea can lower heart attacks, strengthen your immune system, protect tooth enamel, and help fight memory loss.

    7. Nuts and Dark Chocolate - Suggested as "snack" items. Nuts have protein and keeps you full which helps you eat less later on. 20% of its fat and calories don't absorbed by the body. Fi you're craving for something sweet, try Dark Chocolate have anti-oxidants.

    How to Choose Mutual Funds

    Mutual funds! How do you choose among the many options? Can you just pick them up from shelves in a store, read their labels, and put them in your basket of investments? Probably not. But in a way, you can.

    I have compiled below what I have read so far about how to choose mutual funds. These come from different sources and I have weeded out what I think do not apply to to the Philippine market. Compared to learning the stock market behavior, this topic is relatively easier to absorb. So read on...

    1. Read up. Keep learning. Read my blogs or any material that can carry past what you're learning here. Knowledge is power. And knowing is half the battle.

    2. Settle on a suitable asset allocation. After you drew up your battle plan for investing (determined your risk tolerance, growth strategies, etc...), purchase your funds according to this strategy. It would come out pretty useless if you would just ignore this plan wouldn't it?

    3. Discover the many research tools that are readily at hand. Ok we have books, magazines, newspapers, the internet. Everything is there. Look for fund performance, rankings, etc...

    4. Check on no-load. These so-called loads, only mean commissions. There is one no load mutual fund I know in the Philippines and that is the Prosperity Money Market Fund. Performance-wise though, I see no growth there. 3.88% on the 3 Yr. Investment Return makes almost no difference to a time-deposit.

    5. Look for funds with low annual expenses. You really have to check this out. This could be eating up your profits. Please make sure your fund performs well enough to cover the expenses and outperform the index fund over a long period of time.

    6. Look for fund managers who have been in place for at least 5 years. Managed funds are run by people not computers, and you have to know who these people are. When the top stock picker leaves, so does the talent that goes with him/her. Or make sure the team left is well-trained by these investment wizards. Team-managed funds are normally managed by a real shot caller. This person must be identified at all costs. Hehe. Stick with funds whose lead managers are specifically identified.

    7. Look for superior prior performance. Previous good records aren't predictive themselves. But this is an indication that the manager is good. Your quarry is always the manager not a particular fund.

    8. Compare the fund with its peer group. The fund should outperform its peer group as well as a general market average.

    9. Check for consistency of investment style. Style is defined by the kind of stocks or investments it invests in. You want them consistent. What they say in the prospectus should always be what they should do in the real world.

    10. Consider the Fund's Size. It's size should be congruent with its investment goals. Managers sometimes announce that they're going to close their funds. That's no time to buy. It simply means the fund has attracted more new money than it can handle, which means performance might fall off.

    11. Check the fund's performance in down markets. Some funds drop further than the general market average, then spring back - growth funds. Others go down less but may not turn up fast - value funds. Are you daring? Conservative? Choose the funds that makes you happier.

    12. Check the minimum investment. Here in the Philippines. Some start at Php 500. Others at Php 10,000. Choose your pick. Be practical. What can you realistically afford? Additional investments you want to purchase can then vary per fund.

    That wraps it up for now.

    Asset Allocation Diversification

    Hi Everyone!
    Just a few more notes on diversification. This is for those who want to improve their portfolio.

    Diversification is a good defense/protection strategy for those who aren't as versed quite well with the market. And I suspect, that's for most of us here. Not everybody is a seasoned stock broker. And even these professionals make some mistakes and lose a lot. If you don't have enough money to throw away, don't put all your eggs in one basket.


    Diversification comes in at least the following 3 ways:

    1. Diversify your risks. The following have varying degrees of risks. Generally the higher the risk, the higher the profit. That's one of the basic laws of investing. The trick is to diversify on the different type of investments that you have. - invest in equities (stocks), bonds, mutual funds, real estate, pension plans, time-deposits

    2.  Diversify your currencies. If you invest in just one, you might gain in the share prices 9captial gains) but lose in the currency conversion rate. If you diversify, you offset your other investments' losses.  Strong currency investments can offset weak currency investments. (like in the relationship between the Peso and the US Dollar). - There is the Euro, the Dollar, the Peso, etc...

    3. Diversify your companies. Each company has a different fund manager, hence different investment strategies. Their strategy could spell the difference between your success and your failure. If you're not too familiar with the fund managers, I suggest you diversify on this as well. - Philequity, MAA, Prudential Optima, Grepalife Assets, AyalaLand, Crown Asia, etc...

    If you know the best approach, they say it is better to concentrate. I agree. But if you can't predict the future, safeguard your portfolio. Don't pretend to know what will happen. Play it safe. It's always better than be sorry.

    Five Keys to Predicting Forex Market Movements

    Five Keys to Predicting Forex Market Movements

    To profit from Forex trading here are the five key factors that affecting a currency's value.

    In order of importance, they are:
    • Interest Rates
    • Economic Growth
    • Geo-Politics
    • Trade and Capital Flows
    • Merger and Acquisition Activity
    If you can predict how each of these factors affect your currency trades, you have the foundation to make serious returns.

    1. For interest rate here are some of the techniques:

    - Buy currencies from countries with high-interest rates and finance these purchases with currency from countries with low-interest rates.

    - As country's interest rate rises, the value of the country's currency also tends to rise. You profit from the increased value or capital appreciation.

    2. Economic Growth.

    The stronger the economy, the greater the possibility that the central bank will raise its interest rates to slow down inflation. And the higher a country's interest rates, the bigger the likelihood that foreign investors will invest in a country's financial markets. More foreign investors means a greater demand for the country's currency. A greater demand results in an increase in a currency's value. Simple law of supply and demand. This is usually represented by the GDP value.

    3. Geo-politics.

    Yup currencies represent countries. Any bad news on a country would pull down the currency it is carrying. And as a general rule of thumb, politics always beat economics since speculators always run first and ask questions later thus affecting the "demand" for the currency.

    4. Trade and Capital Flow.

    First classify a country if it is dependent on wither trade or capital flow. Some countries are more sensitive on one or the other.

    Let's differentiate the two first. Trade flow refers to how much income a country earns through trade. Capital flow refers to how much investment a country attracts from abroad. Then of course you look for policies affecting either the trade or capital flow.

    5. Mergers and acquisitions.

    Merger and acquisition activity occurs when a company from one economic region wants to make a transnational transaction and buy a corporation from another country.  Take note that a buyer has to convert it's currency to the one he's buying in another country. Of course this raises the "demand" for the currency.
    In conclusion. Make sure you check for all these factors when making your investment decision. If there is a conflict, it very well depends on the strength of each opposing factor. And that's the hard part.

    That's it pancit. Just some stuff I want to share...

    Stocks and Bonds Diversification

    Here's a very simply rule on how to diversify your stocks and bonds (fixed income).

    According to Fast Money Trade School, you can make it easy by following this simple rule.

    The percentage of fixed income in your portfolio should mirror your age. So if you're 30% years old, it means that 30% of your portfolio should be in bonds and the rest in stocks.

    What can you see here? From what I see it means that the younger you are, the more percentage you can invest in more aggressive investments like stocks.

    Like if you're 20 years old, you can put 80% in stocks. But if you're 30%, you can put only 70% in stocks.

    Of course, this is only a general rule.

    Happy investing!

    Secrets of the Millionaire Mind - Being true to your mission

    This is from the book -  Secrets of the Millionaire Mind.

    Secrets of the Millionaire Mind
    Secrets of the Millionaire Mind
    "Your life is not just about you. It's also about contributing to others. It's about living true to your mission and reason for being here on this earth at this time. It's about adding your piece of the puzzle to the world. Most people are so stuck to their egos that everything revolves around me, me, and more me. But if you want to be rich in the truest sense of the word, it can't only be about you. It has to include adding value to other people's lives."

    This extract just really touched my heart. I connected to this and I feel like what I'm really doing right now in IMG is my piece of the puzzle to this world. In my company, it's really about the mission and changing people's lives for the better through financial education.

    Our country lacks this, and there are so many lives wasting away because people are too caught up doing the things that don't really matter, and yet they wonder why they are still in the rat race... working so hard but getting nowhere financially. They own the best toys thinking that their retirement plan would come easy when they're older.

    That's way too wrong!  Wake up. It doesn't . You may earn more when you're older but it will only be harder to save since  your lifestyle also changes, you spend more. And before you know it, you haven't really saved anything significant.

    What will you do then? Keep working after 60? Depend on your kids for your needs? Guess when all the illnesses will come in? That's right! When you're old and if you lacked the foresight, you probably didn't save enough either. Too bad.

    A Personal Mission Statement

    What Should a Mission be?

    The joy of life can't be just good food, nice clothes, fancy cars, and a happy family.
    It includes the pain of defeat, the hurt of endurance, the fear of trying, the giving, and the sacrifice for a cause that benefits others.

    My mission is to deliver the world's financial wake up call... towards achieving financial freedom...







    The Financial Wake-Up Call



    magnify
    Please ask yourself the following questions below:
    • Is your income temporary or permanent? How about your needs?
    • Do you see people losing their income due to retrenchment or business failure?
    • Do you feel that the prices of commodities increase faster than your income?
    • Do you feel most people don't have enough savings?
    • Do you know anyone that has salary loans?
    • Do you know anyone who has to borrow money or sell properties to pay for health-care, children's tuition fees, debts, etc.?
    • Do you feel that lending companies become richer while the borrowers become poorer?
    • Do you see people trapped in an endless cycle of financial frustration because of lack of financial information?
    "Most people don't plan to fail, they just fail to plan."
    If you want to change your life, change your mindset. When a man is exposed to good information and understands wealth building, they can change their life and their family life. If a man has a wealthy mind, eventually he can be wealthy. But a man who lacks a wealthy mind, even if he wins the lottery, will eventually be poor.

    We must plant the seed of wealth into people's minds and show them the way. Then they can complete the journey.

    The Secrets of the Rich - Accumulating Wealth



    They say, it's not how much you earn but how much you keep. This applies to individuals, companies, and even countries.


    What does that mean exactly? Let me explain.

    It is said that there are USD 38 trillion being exchanged in transactions at any given point in time. There will always be money being exchanged between parties. Businessmen with all their creativity, device systems so that they can capture some of this money floating around. They do this in such a way that the net exchange will be favorable to them. These systems are called businesses.

    As a consumer, you pay like P65 for a P35 burger to let's say Mcjollibug. The net exchange is that Mcjollibug earns P30 from the consumer. As you can see businesses are like money magnets attracting money from consumers!

    In all this, there will be winner and a loser. One who earns from the net exchange of money and one who loses. Looking at the bigger picture, and when you really look at it, it is the consumer (who doesn't keep/save/invest) any money that loses. The income he gets from his employers, just passes through him and into the hands of another business.


    Then let's look at investors. Businesses need to expand. For what reason? More money of course. They need to expand, gain market share, etc.. and to do that you need some money money to spend for their operations. If a business doesn't have money, it will look for investors willing to earn from the business expansion. So in this exchange, the investors earn from the earnings of this business. Want an example? Let's look at stocks. When you buy shares of stocks of a company, you become like an owner of that company. If the company earns, the price shares also increase. When you sell the shares, you as the the investor then earns. Hope that's clear.

    Good businessmen, like most of our Taipans try to keep as much money as possible. If they have an airline, the food gets served by one of his food and restaurant companies. The bookings are done by his travel agencies. Most of his businesses are insured by his own insurance company. His expansions are funded by his banks. His condos tie up miles to his airline. His malls sell his own products. His banks and franchises rents in his malls. This goes on... But you do get the picture right?

    As you can see, the good businessman knows how to keep his money. In the case above, it just revolves around his group of companies. This almost never goes out. But when it does, it becomes a small percentage of what he actually earns from his businesses. See the difference in the attitude of the common Pinoy consumer and the rich businessman? I'm not really surprised why the rich get richer and the poor gets poorer.

    Now what am I saying? If you want to become wealthy or something close to it, adapt this mindset. Learn to save and invest. What's that I hear? You can't afford to save? But I say, during these times everyone cannot afford not to save. More so now since the percentage of middle class is disappearing into the poverty line.

    Furthermore, when a person gets old and unproductive (like most of us mortals) what next? He could only rely on what he kept. If there are none, through the money of other people (relatives, children). If you love these people, act now. Save soon and save smart. Invest soon and invest wisely.

    Bear-proof your Retirement Portfolio

    This article is by Eric Petroff. Diversification is one of the most fundamental concepts in financial planning. I highly recommend that your read and learn. Nowadays in the information age, power belongs to the ones with the most knowledgeable and open minds and to the ones who put this knowledge into action. Happy reading!

    It is simply a reality that market conditions play a significant role in retirement planning for almost everyone. Generally speaking, the more diversified you are, the less impact market events will have on your retirement plans.

    If you happen to retire immediately before a prolonged bull market, there really isn't anything to worry about. However, if you end up retiring prior to a bear market, your retirement dreams could crumble if your portfolio is unprepared. Regrettably, there is no way to determine if you''ll be retiring into either a bull or bear market. With that in mind, let''s take a look at how to prepare your portfolio no matter what the market throws at you.

    Rate of Spending vs. Rate of Return
     To begin, keep in mind that a successful retirement portfolio is one that provides a steady and growing stream of income. To accomplish this, you must set a realistic and sustainable spending rate - the percentage of your portfolio that you remove each year to pay for living expenses. The spending rate must allow your portfolio''s growth to offset inflation. Generally speaking, most investment professionals would consider a 4-5% spending rate to be a realistic target, implying a total return needed of 6.5-7.5%, assuming 2.5% inflation.
    In order to achieve this rate of return, a substantial allocation to equities is necessary; probably about 50% of your portfolio. Unfortunately, when you shift from fixed income into equities, you significantly increase your portfolio''s overall risk. This increased risk translates market value and spending volatility.
    Retirement certainly isn''t a time when you want to have huge swings in your income level. Because there is no way to know in advance if you''re retiring into a market upturn or downturn, it is best to prepare your portfolio by seeking as much diversification as possible.

    How To Get There
    Fortunately, achieving a meaningful level of diversification really isn''t all that hard as long as you keep a few fundamental ideas in mind.

    1. Don't rely on individual stocks and bonds. Individual investors (and brokers) are sometimes ill-equipped to research and monitor enough individual securities to provide proper diversification. Serious investors, like colleges and foundations, hire money managers (or mutual funds) to achieve diversification. Take a lesson from them.

    2. Never use a single mutual fund family regardless of how good it seems. Generally speaking, mutual fund families tend to have a consistent investment process across their products even though the names of their funds are different. Though their process may be worthwhile, having professionals with different viewpoints on investing is another essential aspect of diversification.

    3. Don''t put all of your money in one style of investing such as value or growth. These investment styles will go in and out of favor depending on market conditions. Diversifying against these market trends is very important, as these trends can easily last five years or more and produce vastly different rates of return.
    In addition to these diversification tips, you need to be extremely conscious of fees because they represent a structural impediment to success. For example, retail mutual funds may charge 1-2%, and brokers may charge 1-2% as well for wrap accounts. This means total fees can be between 2-4% per annum, which comes directly out of your investment performance. One great way to avoid fees is through an index fund provider or ETFs, which can generally provide a fully diversified portfolio for about 0.50%. Moreover, by investing in index funds you will achieve very broad degrees of diversification within a given asset class.

    Conclusion
    It is essential for investors to realize that market conditions, and timing thereof, can play a major role in their retirement plans. Since it is impossible to anticipate how markets will behave, diversifying your assets is simply the most prudent course of action. Take an active role in your portfolio, and do it by diversifying your assets and picking good mutual funds in which to invest your money. Such activities are most likely the best use of your time.

    Seven Reasons to love Mutual Funds

    Mutual funds are long-term investments. They are not individual stocks and you simply cannot simply treat them like that. According to Jane Quinn - Financial Planner and author, a stock fund will serve you better than any other financial investment for long-term growth.


    I'm giving below a list of 7 Reasons to love mutual funds.

    1. You get full-time money management from the person who runs the fund. You don't get that from stock brokers. Their job is to sell, not to take care of the overall shape of your portfolio.

    2. You can pick the level of market risk you want to take.

    3. In an index fund, your investments are guaranteed to do just about as well as the market. A promise no other investment can make.

    4. You share in the fortunes of a large number of securities rather than owning just a few.

    5. You can check a fund's past performance record.

    6. You can participate in the stock market's long-term gains without having to think of which particular stock to buy or sell. You mutual fund manager does that for you.

    7.You can automatically reinvest your dividends and capital gains. Steady compounding doubles and redoubles your returns.

    What is a Mutual Fund?

    What is a mutual fund?

    A mutual fund is an investment vehicle that pools together the funds of various investors---both individuals and corporations. The pool of funds is managed by a professional fund manager who uses the funds to create a diversified investment portfolio consisting of various investment instruments such as stocks and bonds.

    What are the benefits of investing in a mutual fund?

    For an affordable initial investment amount, you gain access to various potentially higher yielding investments normally available to investors with much larger funds to invest.  A mutual fund makes this possible because it pools together the funds of hundreds or even thousands of small investors.  The pool of funds is therefore large enough to access these potentially higher yielding investments.

    Mutual fund investors also benefit from the investment management expertise and market knowledge of the team of professional fund managers that manages the pool of funds.  These fund managers ensure that the funds are optimally invested and diversified at all times. Therefore, you don’t need to watch the markets yourself since there is a team that is already doing it for you.

    How much will I earn if I invest?

    Mutual funds are not time deposits and therefore do not pay out a fixed rate of return. Mutual funds invest in stocks listed on the stock exchange as well as bonds issued by the government and corporations. As a result, the value of your investment fluctuates daily depending on the performance of the underlying investments.  Because of this, your return cannot be guaranteed. Your actual rate of return depends on many factors such as the performance of the underlying investments as well as general market and economic conditions.  However, over the long-term, investments in mutual funds outperform traditional time deposit placements.

    Is my principal secure? Can I lose money? What are the risks of investing?

    As with all other investment instruments, investing in mutual funds involves a certain amount of risk. Stock and bond prices go up and down daily.  So as the value of the underlying instruments in which the pool of funds was invested fluctuates, so does the value of your mutual fund investments.  Depending on market conditions, there may be periods in which you may lose money.  However, until you actually liquidate or withdraw your investment from the fund, these will simply remain “paper losses” which can be recovered when market conditions stabilize.

    Moreover, the fund managers of the fund also do several things to control and minimize risk. First, they analyze all investments thoroughly before including any stock or bond in the portfolio.  Second, they ensure that the fund is properly diversified, i.e., invested in many different stocks or bonds.  As such, a drop in the price of one investment may be off-set by gains in another. Third, the fund managers are subject to regulatory and internal investment restrictions that prevent the fund from being invested from certain speculative investments and encourage proper diversification.

    While there are risks in mutual fund investing, the returns can also be rewarding in the long-run. There is always a risk-return trade-off in any investment.  What is important is to know how much risk you are willing and able to take and select an investment whose risk profile matches yours.

    What is diversification? Why is it important?

    Diversification simply means “not putting all your eggs in one basket”.  This is especially important in investing.  In a well-diversified portfolio, losses from some investments can be off-set by gains in other investments.  This reduces the overall fluctuations or volatility of the value of the portfolio. By investing in a mutual fund, you gain instant access to a diversified portfolio of investments. It is, however, also important to realize that not all risk can be diversified away. There are certain economic, market and political factors which may affect all investments adversely.

    How do I invest in a mutual fund?

    You can participate by buying shares of the mutual fund.  The price of these shares, also known as the Net Asset Value Per Share or NAVPS, changes daily depending on the performance of the underlying investment portfolio.   As the NAVPS increases, the value of your investment also increases.  The mechanics of investing in a mutual fund are very similar to buying shares in the stock market.

    What is the net asset value per share, or NAVPS?

    The net asset value per share (NAVPS) is the value of each share of a mutual fund. A fund's NAVPS is calculated daily and is the price used when purchasing or selling mutual fund shares. To determine the value of your shares, simply multiply the number of shares you own by the NAVPS.

    How do I withdraw my money from the mutual fund?

    You simply need to sell your shares in the mutual fund.  The price at which you sell these shares is the NAVPS for the day.  You will get the proceeds of your withdrawal within seven (7) banking days.

    What happens to my investment if something happens to me?

    Your shares in the mutual fund will form a part of your estate and will be distributed to your heirs (usually surviving spouse and children) accordingly. Rest assured, your investment will not disappear, or be "taken back". To ease the transfer of the fund shares you may want to consider opening a joint account or trust account.

    Is my investment covered by the PDIC (Insurance covering bank accounts in the Philippines)?

    No. A mutual fund is not a deposit product and is, therefore, not covered by the PDIC.  However, when you invest in a mutual fund, you are considered a shareholder and in effect are entitled to your proportional share in the total assets of the fund.  The PDIC, on the other hand, only insures up to P250,000 of your total deposits with a bank and not your entire investment amount.

    5 Insurance Policies Everyone Should Have and 15 that You don't need!!!

    I just  read this article by Lisa Smith. Seems like a real necessity in the field of financial planning. After all, we need to balance protection and investments. 

    Protecting your most important assets is an important step in creating a solid personal financial plan. The right insurance policies will go a long way toward helping you safeguard your earning power and your possessions. In this article, we'll show you five policies that you shouldn't do without.

    1. Long-Term Disability Insurance
    The prospect of long-term disability is so frightening that some people simply choose to ignore it. While we all hope that, "Nothing will happen to me," relying on hope to protect your future earning power is simply not a good idea. Instead, choose a
    disability policy that provides enough coverage to enable you to continue your current lifestyle even if you can no longer continue working.

    2. Life Insurance
    Life insurance protects the people that are financially dependent on you. If your parents, spouse, children or other loved ones would face financial hardship if you died, life insurance should be high on your list of required insurance policies. Think about how much you earn each year (and the number of years you plan to remain employed) and purchase a policy that will replace that income in the event of your untimely demise. Factor in the cost of burial too, as the unexpected cost is a burden for many families.

    3. Health Insurance
    The soaring cost of medical care is reason enough to make health insurance a necessity. Even a simple visit to the family doctor can result in a hefty bill. More serious injuries that result in a hospital stay can generate a bill that tops the price of a one-week stay at a luxury resort. Injuries that require surgery can quickly rack up five-figure costs. Although the ever-increasing cost of health insurance is a financial burden for just about everyone, the potential cost of not having coverage is much higher.

    4. Home Insurance
    Replacing your home is an expensive proposition. Having the right home insurance can make the process less difficult. When shopping for a policy, look for one that covers replacement of the structure and contents in addition to the cost of living somewhere else while your home is repaired.
    Keep in mind that the cost of rebuilding doesn't need to include the cost of the land, since you already own it. Depending on the age of your home and the amenities that it contains, the cost to replace it could be more or less than the price you paid for it. To get an accurate estimate, find out how much local builders charge per square foot and multiply that number by the amount of space you will need to replace. Don't forget to factor in the cost of upgrades and special features. Also, be sure the policy provides adequate coverage for the cost of any liability for injuries that occur on your property.

    5. Automobile Insurance
    Some level of automobile liability insurance is required by law in most localities. Even if you are not required to have it and you are driving an old junker that has been paid off for years, automobile liability insurance is something you shouldn't skip. If you are involved in an accident and someone is injured or their property is damaged, you could be subject to a lawsuit that could cost you everything you own. Accidents happen quickly and the results are often tragic - having no automobile liability insurance or purchasing only the minimum required coverage saves you only a small amount of money and puts everything else that you own at risk.

    *Bonus Tip For Business Owners: In addition to the policies listed above, business owners need business insurance. Liability coverage in a litigation-happy society could be the difference between a long and prosperous endeavor or a trip to bankruptcy court.

    And in relation to this I'll also share a similar topic. That tells us some policies that we don't really need.

    1. Private Mortgage Insurance
    The infamous private mortgage insurance (PMI) is well-known to homeowners because it increases the amount of their monthly mortgage payments. PMI is an insurance policy that protects the lender against loss when lending to a higher-risk borrower. The borrower pays for this insurance but derives no benefit. Fortunately, there are several ways to avoid paying for this unnecessary policy. PMI is required if you purchase a home with a down payment of less than 20% of the home's value. The small down payment is viewed as putting you at risk of defaulting on the loan. Put down at least 20% and the PMI requirement goes away. Alternatively, you can put down 10% and take out two loans, one for 80% of the sale price of the property and one for 10%, although interests rates can prevent the economics of this maneuver from working out in the homeowner's favor.

    2. Extended Warranties
    Extended warranties are available on a host of appliances and electronics. From a consumer's perspective, they are rarely used, particularly on small items such as DVD players and radios. If you purchase a reputable, brand-name product, you can be fairly certain it will work as advertised and that the extended warranty is statistically likely to be unnecessary. If you spend $5,000 on a giant, flat-screen television, the policy is still unlikely to pay off, but might make you feel better. For everything else, forget it.

    3. Automobile Collision
    Collision insurance is designed to cover the cost of repairs to your vehicle if you are involved in an accident. If you have a loan out on the car, the loan issuer is likely to require that you have collision insurance. If your car is paid off, collision is optional; therefore, if you have enough money in the bank to cover the cost of a new car, collision insurance may be an unnecessary expense. This is particularly true if you are driving an old car, because cars depreciate so quickly that many vehicles are worth only a fraction of their purchase price by the time the loan is paid in full.

    4. Rental Car Insurance
    Most auto insurance policies offer additional coverage for the cost of car rentals, touting it as a useful feature if your car is ever involved in an accident and needs to spend some time in the repair shop. This may sound like a good idea, but in reality, most people rarely rent a car, and when they do, the cost is relatively low and hardly worth insuring against. Although rental car insurance is relatively inexpensive, amortized over the course of a lifetime you are still likely to spend far more than you will benefit.

    5. Car Rental Damage Insurance
    Many auto insurance policies already cover rentals, so there's no need to pay for this twice. Check your policy before you pay. Depending on where you rent the vehicle, you may also be able to pay a small fee for insurance on your rental when you pick it up at the rental center. If this fee is less than what you'd pay for a year in your old policy, choose the fee over the policy.

    6. Flight Insurance
    Flight insurance coverage is completely unnecessary. Despite media portrayal, airline accidents are relatively rare, and your life insurance policy should already provide coverage in the event of a catastrophe.

    7. Water Line Coverage
    Water companies have made an aggressive push to sell policies that cover the repair of the water line that runs from the street to your house. The odds are in your favor that you will never use this coverage, particularly if you live in a newer home. If you live an average suburban neighborhood and you do need to repair the water line, the distance to the street is short, the likelihood of a problem is low and repair costs are a few thousand dollars or less. The same goes for policies offered by other utility companies.

    8. Life Insurance for Children
    Life insurance is designed to provide a safety net for your heirs/dependents. Because children don't have heirs to worry about and, statistically speaking, most kids will grow up safe and healthy, most parents should not purchase life insurance for their kids. Instead, use the money that you would have spent on life insurance to fund an education plan or an individual retirement account (IRA).

    9. Flood Insurance
    Unless you live in a flood plain or an area with a history of water problems, don't even bother buying flood insurance. If none of the homes in the area has ever been flooded, yours is unlikely to be the first.

    10. Credit Card Insurance
    Purchasing coverage to pay your credit card bill in the event you cannot pay it is a waste of money. A far better idea is to avoid running up your credit cards in the first place, so you won't need to worry about the bills. Not only do you not save on the insurance premiums, you'll also save the interest on your debt.

    11. Credit Card Loss Insurance
    Federal law limits your liability if your credit card is stolen. Your out-of-pocket costs are limited to $50 per card and not a penny more. In fact, many credit card companies don't even try to collect the $50.

    12. Mortgage Life Insurance
    Mortgage life insurance pays off your house in the event of your death. Rather than add another policy - and another bill - to your list of insurance plans, it makes more sense to get a term-life policy instead. A good life insurance policy will provide enough money to pay off the mortgage and to cover other expenses as well. After all, the mortgage isn't the only bill your survivors will need to pay.

    13. Unemployment Insurance
    This coverage makes minimum payments on your bills if you are out of work, which sounds like an attractive proposition. A better plan is to save your money and build up an emergency fund instead. You won't have to cover the cost of the insurance policy and, if you are never out of work, you won't spend any money at all.

    14. Disease Insurance
    Policies are available to cover cancer, heart disease and other maladies. Instead of trying to identify every possible disease that you may encounter, get a good medical coverage policy instead. This way, your medical bills will be covered regardless of the problem you face.
     
    15. Accidental-Death Insurance
    Unless you are extraordinarily accident prone, an accident is unlikely. Major catastrophes such as car wrecks and fires are covered under other policies, as is any harm that comes to you while at work. Accidental-death policies are often fraught with stipulations that make them difficult to collect on, so skip the hassles and get life insurance instead.

    Shop Carefully
    Insurance policies come in a wide variety of shapes and sizes and boast many different features, benefits and prices. Shop carefully, read the policies and talk to the salesperson to be certain that you understand the coverage and the cost. Make sure the policies that you purchase are adequate for your needs, and don't sign on the dotted line until you are happy with the purchase.

    Hope you learned a lot from reading this.

    Important Questions to Ask Yourself Before Investing

    INTRODUCTION TO UNDERSTANDING INVESTING
    Before investing, you first should know the answers to basic questions including:
    • How much money do you want to invest?
    • What type of investment return do you expect to achieve?
    • How much risk are you willing to take?
    • What are the tax consequences of your investment decisions?
    • How does inflation impact your investments?

    Places I've Been To

    What is a Financial Analyst?

    Financial analysts help people decide how to invest their money. They work for banks, insurance companies, mutual funds, and securities firms. They often meet with company officials to learn more about the firms in which they want to invest. After the meetings, the analysts write reports and give talks about what they found out. Then, they suggest buying or selling that firm's stock.

    Financial analysts may specialize. Those in investment banking study the companies that want to sell stock to the public for the first time. They also might study the pros and cons of a merger (when two companies join together) or a takeover (when one company buys another). Some financial analysts are ratings analysts who find out if companies can pay their debts.

    Financial analysts usually work in offices. They may work long hours. They sometimes work on evenings or weekends. Many analysts face deadlines. Their day is filled with telephone calls and meetings.

    Money Cost Averaging vs Value Averaging

    This topic will be very useful for mutual fund investors.

    Money-cost averaging is a strategy in which a person invests a fixed amount on a regular basis, normally monthly purchase of shares in a mutual fund. When the fund's price lowers, the investor receives slightly more shares for the fixed investment amount, and slightly fewer when the share price rises. It turns out that this strategy results in lowering the average cost slightly, assuming the fund fluctuates up and down.

    Value averaging on the other hand is a strategy in which a person adjusts the amount invested, up or down, to meet a prescribed target. An example should clarify: Suppose you are going to invest P10,000 per month in a mutual fund, and at the end of the first month, thanks to a decline in the fund's value, your P10,000 has shrunk to P8,000. Then you add in P12,000 the next month, bringing the value to P20,000 (2*P10,000). Similarly, if the fund is worth P22,000 at the end of the second month, you only put in P8,000 to bring it up to the P30,000 target. What happens is that compared to money cost averaging, you put in more when prices are down, and less when prices are up.

    It is said in an article that it showed via computer simulation that value averaging would outperform money cost averaging about 95% of the time. "Outperform" is a rather vague. I wonder what they based that adjective on. From what I read, whatever the percentage gain of money cost averaging versus buying 100% initially, value averaging would produce another 2 percent or so.

    Warning: Neither approach will bail you out of a declining market with all of your monies intact, nor get you fully invested in the earliest stage of a bull market.  Makes sense right?

    Savings: Why bother, brother?

    Someone pointed out in a comment arguing that there really isn't any point to saving. He reasoned that we are a poor economy with limited resources and no matter how hard we try, saving isn't going to change our situation. We were born poor relative to the standards of first world countries and it will be likely that we'll live and die poor. So why should we even bother saving?

    To me, the best answer was by Dr. Johnny Noet Ravalo in and Inquirer article. He said "we judge how well we have saved by benchmarking it against the opportunities we would have lost out on had we not saved in the first place."

    Let's explore what I think he meant. I'm an engineer, and I'm more likely to be direct and just write things down in bullet points or list. So I'll do that.

    The Many Reasons/Opportunities Why We Need to Save
    - to extract more money for investments
    - to figure out how to quit a job, move, build a house, have a baby
    - to get out of debt
    - to prepare for big expenses like college, a new house, a vacation, a face-lift?
    - to retool your life after losing a job or becoming too sick to work
    - to keep money from slipping through your fingers
    - to be able to buy what you want
    - to prepare for the harder times

    Three Reasons Not to Save
    - You're rich enough to buy anything you want and still have plenty of money left over
    - I forgot the other two

    Hey, even rich people save. So why don't you?