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From and to parents - parental advice to our children on personal financial management and life.
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Archive for November, 2007

Keeping accurate investment records and its impact on investment “luck”

Friday, November 30th, 2007

I have been losing money in stocks and shares ever since I started “investing”. However, I never kept track of my investment losses (or the very few and very far in between gains).  

In late 2004, I decided that this was not on and formulated a system to keep track of my investment activities. 

First, I thought about and wrote down my investment strategy. 

Second, I opened a separate bank account (joint account with my wife), for this purpose and deposited the seed money into this account. 

Three, I used an Excel file and created 4 sheets. 

a)    One for my monthly balance sheet and benchmark comparisons. The items in this sheet are:-

Benchmarks   

i)                  Monthly closing of the KLSE Composite Index, 

ii)                Monthly change in the Index (%) 

iii)             Cumulative change in the index for the year to date (%), 

iv)              Monthly % change in my “Investment shareholder funds”, which is (ix) below plus or minus the realized and unrealized gains / (losses)  

v)                Cumulative change of (iv) for the year to date.  

This shows me where I stand every month against the benchmark index as well as against my targeted investment returns goals.    

Balance Sheet 

vi)              My account, which would represent drawings from or extra contributions to the bank account,(excludes the seed capital) 

vii)           Bank account  

viii)         Cost of shares/stocks owned at month end

          a.    Add / Deduct Marking to Market 

ix)              Start up capital (my seed money)

         a.    Add / Deduct Profit / (Loss) – Realised

         b.    Add / Deduct Profit / (Loss) Unrealised, i.e. marked to market. 

b)    Sheet Two shows the details of the bank account, all deposits from sales of shares/stocks as well as additional contributions or withdrawals I make. This also includes dividends and interest received. 

c)     Sheet Three is for the details of my account 

d)    Sheet Four is on monthly stock transactions I make.

    This sheet shows:- 

    i)        Date of transaction,

    ii)       Stock Name,

    iii)     Number of shares bought and at what unit price,

    iv)     Total cost,

    v)      Market price as at end of month,

    vi)     Profit / (Loss) for sales done during the month 

At the end of each month, I close off the month’s transactions by inserting a new sheet and naming it by month. The profit/(loss) for the month + the balance as at the end of the previous month is carried into the balance sheet as realized P & L.  

All these may seem cumbersome and complicated, but it takes me only about ten minutes a month to complete the recording for the month. After all I do not have many trades a month.  

My records and benchmark comparisons are based on the month ending closing buying prices. I ignore brokerage and stamp duty for purposes of balance sheet. 

This system has resulted in some changes in my investment management. Seeing the index’s change against the changes in my “investment shareholder’s funds” gives me a clear indication on where I stand for the month. In fact, it is a snap to do this at the end of any day I choose.  

And knowing where we are is clearly the first step to getting to where we want to go.       

At the end of the year, I just close off the year’s results by deciding how much I should use as the opening seed capital for the next year. The difference between the amount of seed money for this year and the decided seed money for the next year is knocked off against my account.

If I have a credit, then I withdraw the amount and it is banked into other accounts, like paying off our mortgage or car loan etc, or a small celebration. 

This is the system I have followed since 1st January 2005 and it has proven very useful. This includes details of every stock transaction that I have done since the above date. 

Though my “funds” were down by 10.91% against the index’s decline of 1.90% for 2005, they were up 95.45% against the index’s 21.83% gain for 2006. Thankfully, 2007 also looks good so far.  

The absolute amounts involved, will not put me amongst the “markets movers and shakers”, anytime soon…..Sigh H

However, this ability to see and gauge my actual performance against benchmarks and against my internal targets has made a difference in my investment “luck”.

One of my goals for 2008 is to impart to my children the two most important PF lessons that I have learnt.

Thursday, November 29th, 2007

My wife and I have 5 children. The girls are, Along, 21, Azah, 20, Nana, 12 and Ain, 9 and our only boy, Abang, 13. 

We are just as concerned as any other parent that our children should grow up stable, well rounded, respected and respectful members of the community we stay in. And personal finance is one area we want to make sure our children, if not excel, should at least do well.

Imparting these lessons has been one of my wife’s and my goals for some time now, or rather a wish. A strong wish, no doubt, but still just a wish. 

I call it a wish, as it had no specifics, had no measurable metrics and no time limits.  

Not any more. Thanks to the knowledge learnt from the pf blogs I follow and some serious thought, this wish has now crystallized into SMART goals for my wife and me.  

This is my story. 

The two most important PF lessons that I have learned, are:- 

a)    Paying myself first or living below my means and 

b)    Having a peer group with PF as an “agenda item”. 

I believe that if a person masters or is comfortable with (a) and has a good peer group that avidly discusses personal finance, then he or she is well on his/ her way to financial independence. In fact having (b) should also lead to (a). 

My wife and I have set ourselves the following goals as part of our goals for 2008. 

i)      To ensure that the 2 senior girls, form or join a peer group with PF as a core subject, and  

ii) To ensure that the 2 younger children learn to pay themselves first. 

And our plan to achieve these goals:- 

i)      Goal (i)  

-         We have tried asking them to form a peer group themselves, it has not worked. They are in college now, and though they have made some solid friendships, none of their friends seem interested in this idea now.  

-         I have enjoyed great positive effects from reading pf blogs. Since my daughters belong to the generation that is very comfortable with the Net, I have given them a list 5 pf blogs that I think they may find interesting. It is possible that my girls may well decide that some other pf blog is more their type. This will be fine with us. 

-         We have offered them monetary rewards for every comment they make on these blogs. These comments must be accepted and published by the blogger.   

-         My children have to email me the URLs so that I can keep abreast of their comments. 

-         To comment, the girls have to read the posts. I am sure that some interest will be generated, from posts which should be close to their hearts now, for example those on career guidance, tips on facing the interview, etc.  

-         Over time, we expect (and hope) our children to start having an interest in the lessons these bloggers post, and for this interest to grow. These blogs will then become their peer group.    

ii)     Goal (ii) 

-         Give the younger children (except the youngest), a weekly allowance.  

-         Sign an agreement with them on this allowance. They have to keep accurate and neat accounts and save at least 10% of the amount, (they can save easily by taking packed lunches to school).  

-         Thanks to another pf blog, I have a great model to follow for this agreement. Used by none other than John D. Rockefeller himself, and edited to suit our purpose. I forget the name of the blog that pointed this out. I am sorry. 

-         Fixed targets have been set for their savings for the year. At the end of 2008, we shall go to the bank and deposit their savings in a bank account. I have agreed to contribute 300% of their savings as a top up gift. (So as you can probably guess, the targets are modest….baby steps, baby steps first) 

Do our goals meet the benchmarks for well set goals? Let’s run through the checklist.

Do we have a strong desire for the goals? But, of course! Our children’s education is very high in our list of priorities. 

Are the goals specific? Yes, they are. 

Are they measurable? Yes, the elder girls have to post comments, which can be counted. We have not set any numbers on the comments they should post. We believe we should leave it to the girls to decide for themselves.  

The younger children have a target amount to save and a date by which to achieve it. 

Are the goals achievable? Yes, they are. All our children now accept that goals are something that they want to do, as opposed to being forced to do. (Or are they just saying it???) 

Are the goals realistic? I think they are. 

Do the goals have time limits? Yes, the target dates are 31 December 2008, and we shall have periodic reviews.  

Will we achieve the goals?  We feel well prepared and are looking forward to marking off these goals as done. 

Nevertheless, my wife and I have to delicately balance our wishes and plans against the comfort levels of our children. It is likely that many,  if not, most of our children’s friends’ parents would not be doing anything similar, so there might be some negative peer pressure from their friends at school or college.  

Time will tell. My wife and I just have to find their “switch”.  

We’ll appreciate any ideas, comments or advise from like minded parents out there, who have walked this path before.     

Cosmetics – Is there a way to lighten this outflow from many a lady’s wallet?

Thursday, November 29th, 2007

Sometime ago we talked about preparing our children for the onslaught of advertising that they would face daily in their lives.  

Billboards, newspapers, magazines, TV, internet ads – the advertising industry is a mighty formidable one.  The basic premise is that without using or owning the product being advertised, we are inferior in some way…..and their product would fix this. 

There are many ads for some really useful products, but, many, many more needless ones. 

One big sector is cosmetics, and as parents of 4 girls, my wife and I have to address this.  

In the days of old, almost all cosmetics were based on folk remedies and very light on the budgets. Not anymore.  For a young girl starting off in her career, where she would be mixing with mature men and ladies, the pressure to look good (as in air brushed cover girl good) is incredible.

A significant part of the monthly budget goes into buying cosmetics. What about going back to the days of old?  Those days when home  remedies and natural cosmetics were the norm. The ladies of old were as lovely as any of the models that we see today on glossy magazine covers. 

Even some doctors are advising us not to spend too much on personal care products. Read the Frugal Duchess’ story on this here.  

Will my daughters even consider this option at all? How do we start?  

There are resources such as Indian Home Remedies and books like Natural Beauty at Home, More than 250 Easy to use Recipes for Body, Bath and Hair. 

I suppose this is something they have to be comfortable with. As parents, we just want to point out to them that there are other cheaper and possibly better options to just buying the latest cosmetic that is advertised.

Guerrilla PF and Life Experts – Meet Mr. Kumar

Wednesday, November 28th, 2007

Kumar (not his real name), dropped out of school at 12 and by 14, he had bought 40 acres of land. 

I met Kumar last year. He works as a security guard, not exactly a profession, where you find too many financially independent people. A chance remark by him to a close friend that he had just bought his son a restaurant aroused my curiosity and I asked to interview him.  

Kumar’s story is inspiring. He started with almost nothing 3 times in his life and each time he got up, continued plodding and succeeded.  

Kumar’s father worked in a rubber estate. Having 15 children (Kumar was number 7), he told Kumar to stop schooling and take up a job at a tender age of 12.  Kumar worked 2 shifts a day tapping rubber, a tough job even for   able bodied adults. He earned about Ringgit 2.50 a day. This was in 1956 in Alor Star, a small town in north Malaysia.  

Even then he had cultivated the habit of saving, steadily building up his funds in the Post Office Savings Bank.  

Having seen the financial benefits, the rubber tree owners enjoyed, every chance Kumar got, he would scout for land. And he found them at the then prices of Ringgit 40 per acre. Over 2 – 3 years, he had bought 40 acres. Mind you, these were land, overgrown with secondary jungle, and in the middle of nowhere. Since Kumar was familiar with agriculture and rubber planting, he bought the land for what he could do with the land. 

He worked the land, cleared them and planted them with rubber. Being underage, he could not get his name registered as the owner, so he gave the land to his father.

In 1970, when he got married, he asked for the land back from his father. Kumar does not want to go into details, and he just says that his father told him that there was no land. 

So in 1970, he uprooted his family, and left with his wife and the clothes on their backs and moved to another smallish town in Malaysia, Teluk Intan.  

Here, he started all over, as a weeding contractor, again working in the estates. As a weeder has to work with poisonous herbicides, this was also not exactly a job that many people were eager to do. For 12 years, he slogged at this. Over time, he came up with his own formula for the mixing of the herbicides, and started earning more.  

Though Kumar kept accurate and detailed records of his income and expenditure, all the money was held by the wife. He just grins and says that was to make sure there would be no temptation to “overspend”. 

His interest in land was still strong. He bought 5.5 acres of land which he planted with oil palm.  In 1990 - 1994, oil palm prices were so low that the estate owners were just ignoring their estates. Kumar’s livelihood as an oil palm land smallholding owner and a weeder was sorely threatened.

By then the family had grown, with four school going children.  

Kumar left his family in Teluk Intan, and went to Kuala Lumpur, Malaysia’s capital, where he found work as a security guard.  He says that he gave the family a monthly sum of Ringgit 200. His wife worked in a factory, while the children worked in Kentucky Fried Chicken outlets after school. Their earnings brought food to the table, and for other household expenses. So the family was taken care off. 

This 3rd start was the toughest. There were times when his salary was not paid and he had to struggle to feed himself. He had to charge his land to take a loan to finance his son’s education.  

Then his break came, when he was assigned to a company, whose boss noticed his integrity and dependability. This boss took him as part of his own office staff and Kumar has been with him ever since. 

This boss paid well, time and was also generous with tips every now and then. Most of which, Kumar’s inbuilt frugal nature made him save and sock away. 

His children are all graduates now. 3 are married. All of them hold respectable jobs, while his only boy, an engineer, runs the restaurant. (Kumar proudly says that his restaurant workers are probably the best paid workers in the industry in the country.) 

Each one of his children have followed Kumar’s example and have saved enough to own real estate assets of their own. 

Oil palm prices are now on a roll now, and give Kumar a nice tidy sum monthly. 

Kumar no longer has to work for a living. He now works for fun, and to occupy his time. Even now, whilst he may be able to afford a driver and a car, he rides his motorbike to work. 

What can we learn from Kumar? 

First, he worked hard. 

Second, he focused on doing things he knew well, i.e. agriculture, and things which other people were not beating to the door to do. 

Third, he maintained his brand as “a person of integrity”. 

Fourth, he kept accurate records of his income and expenditure. 

Fifth, he saved diligently. 

Sixth, he was disciplined in his spending within his limits. 

Seventh, he accumulated income generating assets. 

Eighth, he compounded his wealth over the long haul. 

It doesn’t look all that difficult, does it?  Well, I felt ashamed listening to his story. Though I have a so called university education, and have been exposed to so many opportunities, Kumar was so far ahead of me.  

Stories of people like Kumar, who has overcome obstacles that may have knocked off many other lesser beings, are really inspiring. 

It is an honour and my pleasure to induct Mr. Kumar as a distinguished member of Fathersez’s Guerilla PF Expert Club. I hope this story will inspire other readers as much it did for me.   

What advise can I give my college going children on forming a peer group for personal finance management?

Tuesday, November 27th, 2007

The power of peer groups to exert influence, both good and bad, on its members has been well documented.  

In one of my earlier posts, I have rated the two most important personal finance lessons I have learnt being:- 

a)    Paying myself first, or Living within my means and 

b)    Forming a peer group with personal finance as an agenda item. 

I have also posted that (b) would be the most important PF lesson I could give my 2 elder girls now.  But, exactly how do they go about forming a peer group?  None of their friends in college are interested in this “oh! so boring” subject.  

Man! I lost almost 15 years of compounding benefits, bumming around and burning off almost all my earnings. Only after my family and financial responsibilities got heavier, did I consciously start thinking about sorting my finances out.  

And as a responsible parent, I have to try my best to make sure that my children do not make the same mistakes I did.  So I have to find a way. A way, which will get my children start thinking and working on bettering their financial position from day one. A way, my children will be comfortable with.  

I believe that advise from the parent may not work. It has to come from people with whom my children are comfortable with and who have the same likes, dislikes and problems, real or perceived.  

I have tried asking them to form their own peer group. This has not worked. 

I have now given them a list of 5 personal finance and personal development blogs, and have asked them to read and start commenting on these blogs.  

I have proposed a fee for every comment of theirs which is accepted by the blogger. My children have to email me the URLs so that I can keep abreast of their comments. 

I have been an avid follower of PF blogs for about 3 months now. The impact on me has been powerful. I have made many changes and adjustments to my financial and personal life, some small, others major.

In fact, I almost feel that I participate in direct discussions with some of these bloggers and have actually formed mental images of some of these people. 

If the blogs have this effect on me, they just might have the same effect on my children.  If they try out this method, they may actually get to like it and start participating, not because they can earn some money from me, but rather because they can and want to learn something. 

Then, by golly, they would have their peer group! 

And if they don’t like the pf blogs, then back to the drawing board shall we go.  

My first budget meeting with my wife

Monday, November 26th, 2007

My wife and I have been happily married for 24 years now.  

Ever since an almost tragic accident happened to our second girl, when she was 3 months old, my wife and I decided that she would be a full time mother and home manager, whilst I brought home the bacon, so to speak.  

It was accepted that I’ll be the general and she the major. So she made all the major decisions, while I made the general decisions. 

Though we never make any significant purchases without consulting each other, (now we consult our two elder girls, too), my wife and I have never sat down and drawn up a family budget together. 

I took the plunge this year.

I fortified myself with a wealth of advise and ideas from :- 

a)    LazyMan’s “How to have a successful budget meeting with your spouse”, 

b)    Yahoo Finance’s Five-point peace plan to help couples avoid a war over finances, and

c)     Millionaire Mommy Next Door’s “How to make money management a family affair”. 

I am the accountant in the family, so I drew up the monthly list of expenses, expected for 2008, and discussed it with my wife. (I think this is also the first time, my wife has a clear and complete understanding of the expenses of our family).  

We have now agreed that we shall have a budget day every month to review actuals against budget. 

I am glad and actually feel a sense of relief that we have done this.  I am looking forward to the day when the family is comfortable with the monthly budget day, and we can then move to Stage 2 - Implementing the Millionaire Mommy’s great ideas to make our family money management a family affair. 

I am sure that many couples do not have family budgets. Perhaps because of earlier experiences or disagreements on spending etc. After all women and men do not think alike, do they? 

I ask you to persevere. I am sure only good can come out of this joint facing of the major issue of family expenses.   

Cool skills to learn/Habits to form for personal development – Rising Early

Friday, November 23rd, 2007

For the longest time, I have had a goal of getting up early and exercising. I am ashamed to admit, that, year after year, this goal has just been carried forward. Sometimes, I’ll rise early, but not exercise. On other days, I exercise but not in the mornings etc. But most days, I’ll get up late. 

I think the best description of the benefits of early rising, is the saying …”early to bed, early to rise, makes a man healthy, wealthy and wise”. 

(Though the poor worm may have been caught by the early bird, I tell myself this is the worm coming back from its previous night’s frolics, whilst the bird is part of the “Early to rise……. fraternity.)  

Rising early allows for more productive hours in a day, the early dawn is an excellent time for spiritual rejuvenation, and we can get a lot of tasks done uninterrupted. 

Now exactly how do I make rising early an unshakeable habit? I looked to the blogosphere for inspiration as well as guidance and found ample. I read the following blog posts (by the way, all of whom are down and out fervent supporters of the early to rise habit) and summarized their “how to’s”. 

a) Kronikulz.com’s Being an Early Riser, 

b) Steve Pavalina’s How to become an early riser,  

c) ZenHabits’ 10 benefits of Rising Early and How to do it,  

d) Dave Cheong’s Waking Up early – 15 Tips that work,  

e) Real Women’s Fitness’ How to get up early everyday,  

f) How to wake up Early’s tips on how to sleep well, waking early and what to do then.   

The main factors they had in common were:- 

a)                Get enough sleep / rest. Before bedtime, do something either mentally or physically exerting, so that your body wants to rest.   

Our body has its own inbuilt mechanism to tell us if we don’t have enough sleep. We’ll just feel sleepy. So this should not be a problem to follow. 

b)                Have a good reason/(s) to get up early. Set yourself a morning ritual or a list of tasks that you want to do. Make yourself a promise to get up early and/or use your subconscious mind to remind you of the reason to get up.  

This makes a lot of sense. We get up early without any bother when we have something lined up like an early flight or an important meeting etc. So we have to have a set of things to do, things we can look forward to, so that there is an inbuilt “desire” given to the mind to get us up early. 

c)                 Set the alarm a little away from the bed so that you can’t just shut it up and go back to sleep. Jump out of bed as soon as the alarm rings. No matter what!  

This may be a tough one, as it is very, very tempting to shut the alarm up and then sleep for “ten more minutes”. We all know that this ten becomes twenty and thirty.

But, if (a) and (b) are solidly anchored, I think this can be overcome.  

As I write and read this post, getting up early seems doable.  

For the past five days, this system has worked well for me. I think (and hope) that this habit can be continued.   

And to others, may you rise as per your desired times, with a spring in your step and a smile on your face.  

All we employees, shouldn’t we be starting our side businesses NOW - Part Two

Thursday, November 22nd, 2007

Overcoming the fears that hold us back. 

Earlier we have put forth our arguments on why every person with one source of income (employment income) should start a side business, whilst early in their financially growing years.  

What are the fears that hold most of us back from starting a side business? Fears that actually freeze us, till we do not even try to search for solutions.  

I believe that these fears should be listed and torn to shreds. Then the potential of so many wage earners to start and to excel in their side businesses can be “defrosted and unleashed”. 

Coming back to these fears.  The main culprits (I really think that it would be more of a combination), would be: 

a)  No idea what side business to do

This should rank up there as one of the principal fears, or maybe mental block to our starting. Many of us simply cannot formulate an idea of what we should do as a side business. This is indeed surprising, given the tremendous number of resources, (many of them free), giving ideas on what we can do to create another source of income. Websites such as ,

Startupnation.comEntrepreneur.com’s low cost business ideas,

and blogs such as

Dane Carlson’s Business Opportunities WebLog,  Yaro Starak’s Entrepreneur’s Journey,  Brian Armstrong’s blog on how to get out of the 9 – 5 grind,  Dmitry Davydov’s Uncommon Business Ideas that Work are,

but the tip of an iceberg of highly relevant and most useful resources when it comes to getting advise on what businesses we can do.  

In fact, when we read some of the success stories, very often, a spark will go off in our head, saying, “hey, I could have done that!” 

Well, the difference is we did not.   

b)   Lack of Capital 

This is another biggie. Thinking of a business, side or otherwise, often conjures pictures of the boss needing oodles of money to set up and run the business.  Since we are just starting off in our financial lives, and not having oodles of money, the wish or desire to start the side business just dies off.  

c)   How do I survive without my regular salary

It is immediately assumed that we have to leave our present jobs and work full time. Without the safety net of the employment salary to pay our daily and monthly bills, we just tune out. 

We end up saying to ourselves, “once I have $XXXXXX, I’ll start this business of XXXXXX.” And never ever start.

How do we overcome these fears? 

Just face them and eliminate them! 

All we have to do is to find a side business that :- 

i)                  Is based on a doable idea that we think up or even copy from someone else who has done it successfully, (I am certainly not talking about copyright violations here). Examples of these would be a successful side business done by someone else in another neighbourhood, State or Country, which we can emulate. 

ii)                Is based on skills (whether through our hobbies or formal training) that we already have. 

iii)             Has a demand in the area where we are. 

iv)              Can be done in the evenings or weekends when we are free, hence not affecting our day jobs. 

v)                Needs little capital. 

 Harrison in his Journey to Financial Freedom asks us bluntly if we have what it takes to start a side business. Whilst he acknowledges that external factors like capital etc., may be issues, the key requirements are all internal. He lists these as energy, desire, willingness to learn and take action, self discipline, a business plan, and family support. 

The history of personal financial management is filled with success stories of people who started off as gardeners, newspaper boys, drivers, tuition teachers, baby sitters, dog walkers, cooks, handymen, electronics equipment repairers, etc. All of which can be side businesses that fit the requirements listed above.  

Can’t we set up a side business along these lines, and make it our first step to diversifying our employment income? 

And to close off this post, please read this inspiring story about “How to build a four million dollar business with a hundred bucks”.

All we employees, shouldn’t we be starting our side businesses, NOW - Part One

Wednesday, November 21st, 2007

We must diversify our investments and income streams – I am sure no one will have any issue with this statement.  In case you have any doubts, you can read almost any book on investing or perhaps just this article, to refresh your memory.  

And it is not by idle chance that the wise people of olden times, have come up with the often quoted “we should not put all our eggs in one basket.” This sums up the concept of diversification perfectly. 

Surprisingly, while almost any discussion on investing will include at least some references to diversifying, people do not have the same stand on jobs. 

Almost all of us plan our financial future along these lines: 

a)    Work and earn money, 

b)    Spend less than we earn, 

c)     Invest the savings and make it grow.  

d)    Repeat till we feel we don’t need to anymore, or don’t want to anymore. 

Hence at the earlier stages of executing this plan, we only have our “work income.” This work income is the very foundation of our entire scheme for financial independence. (You can see why, FMF keeps reminding us that our career is our most important asset). 

This begs the question. Should we then not immediately work towards diversifying this “work income”, and hence reduce risk? 

This risk can come suddenly and in so many ways. Just ask any of the people who have lost their jobs in this sub prime mess, or read this story of an unfortunate, gutsy lady of ex-Taco Bell.

To be sure, we are diversifying this work income by investing and creating investment income. But this income stream comes only in trickles in the beginning.  

Lazy Man and Money has an interesting and very motivating post on side businesses. (Though he calls it alternative income). He likens ideas for alternative income to a virus that spawns itself and multiplies. One idea soon becomes two and this becomes four and so on. Thus setting  us on the way to financial abundance. 

The Lazy Man further reminds us not to sneer at ideas that result in what may seem to be small amounts, like $10 a month. This idea could be the bedrock for the next biggie. 

Brad Isaac’s blog, Achieve-IT, presents this same view with an interesting twist. He starts off by asking us “How to add some fun and excitement to our evenings and weekends and make some decent money too?” This is a powerful way of getting anyone to sit up and listen.

What can we do to diversify our work income at the early stages of our financial lives? 

Why, one good way is to start a side business of course.  A side business that meets most or all of the requirements for a business, except for those things that we, most probably, will not have at this stage in our financial lives………..example, ample resources.  

What, then are the fears that hold us back? We shall explore this in our next post.

Cool skills to learn/Habits to form for personal development – Speed Reading

Tuesday, November 20th, 2007

Today’s installment is on “speed reading.” 

Whenever, I go through the Simple Dollar’s book reviews, I wonder how he gets the discipline, energy and time to be able to read and write an in depth review of one book a week.  

The Simple Dollar modestly says that “he has taught himself to read quite quickly.” Well, I say that, the Simple Dollar clearly seems to be an accomplished speed reader.

I like YourDictionary.com’s simple definition of speed reading as a technique for reading texts at an extremely rapid rate with adequate comprehension. 

MindTools.com, an online resource for management, leadership and career training has this to say about speed reading.

Speed Reading helps you to read and understand text more quickly. It is an essential skill in any environment where you have to master large volumes of information quickly, as is the norm in fast-moving professional environments. And it’s a key technique to learn if you suffer from “Information Overload.”

In most executive or management level jobs, there is an awful amount of things to read. Manuals, memos, office email, letters, reviews of our products, reviews of other people’s competing products, industry updates…..well, you get the idea. 

Then there is the need to stimulate our minds by reading non work related stuff such as autobiographies, history, current news, religious / spiritual reading, etc.  

Then comes the reading of “fun books / magazines / articles.” Reading about our hobbies and fiction novels come under this classification. 

Even for those of us who actually want to read, this would take an awful amount of time.  

It’s no wonder that, many of us just give up and this is shown in some of the available reading statistics. See here and here.

Maybe, just maybe, this also stops us from reading and understanding some really important stuff.

Why don’t we learn speed reading? Whilst this may not completely eliminate the pressure of reading the tons of stuff that comes our way, in this information overload society, this skill will at least reduce this pressure. (The other skill is of course, to send the useless bits to the waste paper basket immediately.)  

There are lots of resources available for us to learn speed reading. Some are free, like that offered by Wikihow, a free collaborative writing project to build the world’s largest and highest quality how-to manual. They have a section on “How to learn Speed Reading.” 

Others can be learnt from CD’s, books and audio tapes that you have to buy. 

This investment should bring about ROI’s that should make any VC drool.  

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