Just Trade It!

If you want to become professional golfer, what would you need to do? Just Swing it! It takes practise , practise, and practise to improve your golf skill to achieve a higher and higher level and become good at it. No one is born as a Pro. That's the reason Tiger Wood become #1 ==> because he practise golf every single day. To become a successful trader in stock market, what would I need to do? Just trade it. Make mistakes, correct it, improve it and become a smarter and informed trader next round. Few weeks ago, I was reading about the subject writing covered call to generate extra income for the stock I already bought. The idea sounds enlightening. But I tell myself, if I don't do it, I won't learn it. So last week, I jump in and write my first covered call for this stockAHR Even now, I still don't know sure if I make a right decision by writing 2 contracts on this stock. Regardless of the result of this trade, I"m learning and I practise. I get to see how broker credit premium to my sold options. The options will expire in few days and it seems that most likely the option will expire worthless. This means I could have the opportunity to write again next month! So, whenever you learn idea about investing, the best advice to start small, expected to make some mistake and correct from it. This learning process is priceless to build your wealth tonight.

Don't Diversifiy, Concentrate into high perofrmance investment

Many people said diversify is the key to succeed in investing world. I do not completely agree with it. Especially, when you're young, you should consider take more risk since time is on your side. I'd rather concentrate my capital and energy into some higher risk AND potentially higher reward investment. For example, let's say you have a set amount of capital (say 30,000) to invest in Mutual Fund. It's normal for most people to invest 5 or 6 Fund to diversify. But I believe the more effective way to build wealth in a shorter period of time is to concentrate into high performing Fund. I'd do the research and analyze which fund will have a higher chance to increase in value. After I'm confident on my research, I'd concentrate all my seed money in it. I 'd buy no more than 3 Fund and watch how good or bad my picks are. I will go back and learn the mistake I make from the research and analyze if my fund go down in value. So, next round I can be more informed and make a better selection. So, diversify is the easy and lazy route. You could reach your goal when you're 65 or 70. But if you want to build wealth tonight, we should learn and train ourselves to select right investment with the right market to maximize our return.

Create Value in Real Estate

When I buy a stock, I ask myself "What can I do in this moment to increase the value of the stock I own?" Answer: Tell all my friends to buy the stock I own and hope my friends will tell his / her friends to do the same, and eventually, the stock's demand increase and it's price value increase. This is certainly not very practical if not impossible. Basically, the answer is NOTHING. One of the biggest advantage in investing real estate is the buyer can have many many ways to increase and create value of the property he / she already bought. It's only limited by imagination. Tonight, I want to share a few classical ways an investor can do to add value to the pieces of property already owned

• Add number of bedroom or bathroom. The more rooms your property has, usually the more it's worth
• Convert a open carport into a enclosed garage
• Remodel the kitchen and bathroom. If you have limited budget for remodel, always start with kitchen or bathroom first. These are the two places most buyers pay attention
• New paint, New Carpet, New fixtures, New lighting. A minor improvement detail could significantly add value to the property.
• If your property is rental or multi units, research into the rental market and consider increasing the rent whenever possible. Increase rent could increase the property's value dramatically. Vice verse, reducing your monthly expense will have a positive impact to the value as well.
• Consider an expansion, especially if you 've big lot. You must get permit to make it legal and recorded properly with the county to make it official approved. Careful budgeting is vital to monitor the anticipated value increased after expansion is more than the cost itself.

These are just few example I've considered to use. The goal is to THINK VALUE. It's only limited by our imagination. Let me know what have you done to increase the value of your property?

Do you have a PLAN?

In order to build wealth tonight, we must have a PLAN. Let me break it down and I hope you could start Planning your success tonight.
P stands for PASSIONATE. We must love what we do to become successful. One reason I couldn't see myself get a promotion from my job is because I really don't like my job. So, find something you're passionate about, that you really love to do. Money will follow.
L stands for Leverage. Leverage other people's resource (time, money, skills, talent, knowledge, network, creativity, reputation, the list is really endless..) to help them help you. Communicate your vision to inspire other people to join your team to help you achieve things that would otherwise be impossible by doing it yourself. Focus on long term relationship than short term profit. No one can become successful without other people's involvement in one form or other, so use Leverage!
A stands for ACT. Take massive action no matter you're ready or not. The prefect someday will never come, Take Action now.
N stands for Never give up. Never never give up. Winner never quit, quitter never win. Learn from the mistakes we make. Mistake should help us become smarter, not weaker. The only way we lose in build wealth game is we quit, so don't quit.
What's your PLAN right now?

Increase your net worth by increase your network

There is an old saying "your net worth is the average of 5 people you hang out with every single day" One of the critical factor to increase your net worth is to increase your network. I work in a traditional company where most people around me are employee type and has not much interest to create extraordinary financial success. Therefore, I like to go to seminar to meet with people, who has the similar desire like I do to get ahead financial life. Every weekend, I like to go on http://www.craigslist.com/ under event section, I search for real estate, stock, Internet business opportunity, networking group to attend. Most of the event are during weekday 529pm. I make a habit of going to event at least once a month (although I should have gone more often) to meet and network with more people. Some of the people I met become my good friend. It is fun, educational, and could be a rewarding way to spend your 529pm to develop relationship and expand your circle of friends who may give you a helping hand to build wealth. You may consider doing this activity at your 529pm.

Formula of Wealth

As we're in process to build wealth tonight, we should put some thought on what does wealth really means to us? How is it calculated? I put in some thought and want to share this simple formula of wealth which make sense to me.

Wealth= ((Money + Time) * Return) - (Inflation + Tax)

This formula apply both investing and starting a business. As you can see, one must put in either time or money, not necessarily both, as our initial contribution to build our wealth. Without either of these two components, wealth can hardly be built. The money is the amount you willing to set aside to invest or start a business. The time is the amount of time you willing to spend to do things that could help you closer to your financial goal, ex, reading my blog (529pm) :D ! The return could be postive or negative. Different vehicle offer different return, we just have to train ourselves to select the best one match our objective and yield the highest postive return. Inflation is a factor which we can't do much to control. It varies from countries to countires, in U.S, we're sitting around 4% a year. TAX is another big enemy which will erode our wealth. We must always think how to legally and ethically reduce the tax effect from the build wealth formula. There you have it, does it makes sense to you?

3 simple steps to win our money game

Tonight, I want to share the 3 simple steps I used five years ago that help me to get ahead money game. I believe you can achieve if you can keep this 3 simple steps in mind to build your wealth.

Step 1) Define my dream (as specific as possible)
Step 2) Know where I'm (how much money and time I have, what is my strength and my weakness, what do I enjoy to do)
Step 3) Find a Vehicle(s) to make it happen. (Real Easter, Stock, network marketing business, etc)

It's like getting a map to travel. First, you need to know where is your destination. Next, you need to know where you are. And Finally, find a vehicle to take you where you 're to where you want to go.