A Wealth Method Part 4: The Rules of Risk and Reward

A Blog Mini Series

Part Four

Accept small losses as being okay and as a part of life. Expect to experience several while looking to make a large gain.

Ideally we should welcome small losses, because they protect us from the large ones. I know, I know, who does cheerfully welcome losses? I don’t know much people that do either. But at least accept those small losses with good grace and as a fact of life.

In reality this mentality provides us with excellent protection. Get in the habit of taking small losses. If a venture does not work out, get out and try something else. Don’t get trapped on that sinking ship.

Of course, much like the majority of the rules pointed out, this one isn’t easy to achieve either. A way to look at this as being a fact of life is to think of the small losses the same way you do as expecting to pay taxes or electric bills, for instance.

It takes practice to come over these skills and overcome the challenges they come with. When you do, you’ll likely be amazed of the “thick skin” you have grown, and the rewards that come from following the rules of risk and reward and taking on risk head on.

Forecasts

“Human behavior cannot be predicted. Do not trust anyone who claims to know the future, to whatever extent.”  Continue reading

A Wealth Method Part 3: The Rules of Risk and Reward

A Blog Mini Series

Part Three

Once in a while you will regret walking away from a winning venture. Looking back, your decision of quitting will look like a wrong one as you watch a winning set continue on going without you. This situation happens to every speculator from time to time and may be very depressing.

But on the bright side, in the long run you make more money when you control your greed this way. You may have made the decision to quit early a couple of times resulting it turning out to be the wrong choice, but there will be a lot more times when it turns out right.

So, as it is said, “Always take your profit too soon.” What does this mean? Don’t ever try to squeeze every last dollar out of a venture. Always cash out before a winning event has reached its peak. Do not worry about the possibility of a venture still having a long way to go. This creates the fear of regret-do not fear regret. Since no one can tell the future, it is not possible for you to know when a venture is at its peak. So, you must assume it is close rather than far. Get out and take your profits. Remember (again): no one ever went broke taking profits.  Continue reading

A Wealth Method Part 2: The Rules of Risk and Reward

A Blog Mini Series

Part Two

Always Play For Stakes That Are Meaningful

You have probably heard the popular phrase, “Only bet what you can afford to lose.” You see it in investment type books, money management, in casinos, etc. Let’s take a deeper look into it.

Surely this approach is adopted by the majority. I don’t blame them, because it assures safety and prevents worry, a common need for human’s emotional well being. But what is an amount that you can “afford to lose?” For most it would be interpreted as “an amount in which if I lose it, it won’t hurt,” or “if I lose, it won’t make a significant difference in my general financial well-being.” A safe mentality, which leads to poor results.

So, what is that amount? A few dollars? A few hundreds or so? Common replies from the majority of speculators, if they happen to speculate at all. But think about this, say you risk $500 and you double your money, you’re still poor. Or, start a pooper scooper service business. You’ll make some money, but you have to work hard for it.

The best bet to beat the system is to Continue reading

A Wealth Method Part 1: The Rules of Risk and Reward

A Wealth Blog Mini Series

Part One

Everyone wants to win. But not everyone wants to bet, and there lies the difference. It is understandable that most people want to win without betting. It is within our age old teachings that causes this way of thinking. We are taught that risk taking is a foolish thing to do.

All of life is a gamble whether you see it that way or not, but it’s a realistic truth. Most people who understands this usually tries to find ways to place as few bets as possible. But there are a few who take on the opposite route and rather take risks head on and figure out how to exploit it and manage it. These are the people who are likely to become a part of the 20% of Pareto’s 80/20 Principle described in the blog The 80/20 Rule: Not Just About Smarts and Looks.

This blog mini series is about taking risks in its broadest sense. References to currency and speculation in the stock market will be used often, but the same rules apply to other markets such as real estate, art and/or antiques, metals, etc., and even life itself, if you shift your paradigm to see it. Continue reading

Lack of Time Equals Lack of Priorities

“Being busy is a form of laziness-lazy thinking and indiscriminate action.” -unknown

The 9-5 Illusion

There was some sort of tradition created in which made employees seem to need 8 hours a workday, usually from 9:00 AM. to 5:00 P.M., to accomplish their jobs and tasks. Often there is no incentive to use that time well. So, what do most people do? Since they’re stuck in that position for that amount of time, they are compelled to create activities to fill that time. In result, time is wasted because of the abundance of it. It is an age-old tradition in the work culture and has become one of those challenging habits to break. Think about it, how in the world does everyone need exactly 8 hours to accomplish their work?

Parkinson’s Law

You have an 8-hour workday, you fill those 8 hours. You get a 12-hour workday, you fill those 12 hours with “stuff” to do. Now, you forgot that you had to pick up your kids at 2:00 P.M. and it’s already 12:00 P.M. You miraculously complete all your work that is due that day within those 2 hours.

This phenomenon relates to Continue reading

The 80/20 Rule: Not Just About Smarts and Looks

The Axiom

Vilfredo Pareto (1848-1823) was an economist who explored the “law” of income distribution which is to be known as “Pareto’s Law,” “Pareto’s Distribution,” and recently became popularly known as the “80/20 Principle.”

The mathematical formula he used was to demonstrate a predictable distribution of wealth in society-80% of the wealth and income was produced or possessed by 20% of the population. This principle was also applied outside of economics also. Some examples are:

80% of peas are produced by 20% of the pea pods.

80% of the consequences flow from 20% of the causes.

80% of the stock market gains are realized by 20% of the investors.

The list is infinite when relating this principle to the world. You can see it in a large picture in an economic structure or in a business where 80% of profits come from 20% of the products and customers. On a small personal level, you can see it in your production where 80% of the results come from 20% of the effort and time.  Continue reading

Anticipate and Embrace Change

“Change is a sign of a vibrant life.”

I have written a few blogs so far that may or may not have “clicked” for you. They may have inspired you to take on a new perspective and possibly act upon them and use some of the information in your lifestyle and/or thinking. If none of the publishings so far haven’t, don’t shy away from this one too quickly.

Some of the publishings may have inspired you to change the way you think or live your life. That’s great because that is what I aspire to do, to shift your paradigm. I’m inspired to do this because I want to help and serve people.

I look to open people up to information to help them to live a successful and meaningful life. I have embraced all of what I’m sharing with you to build successful businesses (Tree Trimming Honolulu), lead a happy and fulfilling life, and be content with all of it.

But, one of the fundamental things you, as a reader, should understand is change. As you may want to change your thinking and lifestyle, it is not likely to come easy for most of you. So, let’s take a look at the essence, axioms, and the challenges of changeContinue reading

You Afraid? Deal With It!

The Axiom

There are two ways of dealing with fear. One is passive and the other is active. When you are in passive mode you seek to avoid any situation that causes any anxiety. This could be things like putting off certain decisions in which you would hurt someone’s feelings. Or it could be opting for everything to be safe and for you to feel comfortable in your daily life so that no amount of messiness can enter. You feel this way because you feel that you are fragile and would be damaged or affected by anything you dread.

The other way people deal with fear is the active variety. Most of us have experienced this in our lives. It’s the situations that bring up the risky or difficult situations that we fear. Examples would be a natural disaster, the loss of someone close, losing a huge amount of fortune, a life-threatening situation, etc. In these situations, we have no choice but to deal with them. We fear them, but when we do come across them, we find the inner strength to overcome it and in the end we usually find it wasn’t so bad. And then what happens? After a while we forget about these situations, only to fear them once again. Crawling into our little shells and going back into the passive mode. A recurring event that results from our own human habits and fear.

Your Fears Are Nothing  Continue reading

The Becoming of Irrational FEAR

In the beginning, fear was a basic, simple emotion for us humans. For any animal, this emotion provided a protective function. It allows for us to take notice of dangers and get away from it. For humans it poses a benefit, allowing us to remember dangers and avoid them next time. Fear is the oldest and strongest emotion known to man and is something deeply “programmed” into our nervous system and subconscious.

However, overtime fear has evolved. Through our history, actual dangers that we used to face gradually lessened in intensity as we began to take more control of things and our environment. So, you would think then that fear would lessen in a result of this. On the contrary, fear, since then began to multiply and intensify.

These days Continue reading

The Dumbest Generation

I remember one day back in 2008, after an afternoon of playing basketball with some guys, we were casually conversing about random things. During that time there was the presidential race going on. So, I went ahead and asked them their opinion on the candidates for president. One of them blurted out “Who’s running?”. Shocked by his reply I just looked at him with a dumbfounded look, until, a guy who appeared to be a friend of his changed the subject as it seemed he didn’t know either.

A couple of days later, I came across the same group of guys on the basketball court. Shooting around to get warmed up for a game, one of them excitingly asked “Who do you guys think is gonna’ be the next American Idol?”, referring to the popular television show. As I didn’t participate in the debate I listened to their enthusiastic conversation of “he/she deserves to win because…, he should’ve been in the final…, I’m going to vote for…” and so on it went.

As I recall this event in my thoughts, I am brought to think about the broader view of things and where the younger generation (30 years old and younger), the future leaders, are headed for the years to come. Realistically thinking, I begin to theorize that a generation of know-nothings will jeopardize our future. The decline of literary reading, the influences of today’s digital media, and the deficit of knowledge makes this theory a likely outcome.  Continue reading