Archive for category Leadership

Life Lessons From Leaders

Zig Ziglar has been quoted as saying “People often say that motivation doesn’t last. Well, neither does bathing – that’s why we recommend it daily.” Inspirational quotes and sayings can help us stay motivated as we deal with life’s ups and downs.  Perhaps that is why some people subscribe to Reader’s Digest—for the inspirational stories that can provide a new perspective for our daily challenges.  Following are some of the best inspirational quotes and sayings and some commentary on the life lessons offered by these quotes and their authors.

Tomorrow is often the busiest day of the week.” – Spanish Proverb

Why is tomorrow the busiest day of the week?  Well, in my experience it is human nature to procrastinate and many of us postpone taking action, preferring to ‘do it later’.  We all know tomorrow is not promised, yet we tend to put off taking action until some unspecified, later date—usually euphemistically termed ‘tomorrow’.  This quote inspires me to take action today.

“Things may come to those who wait but only the things left by those who hustle.” – Abraham Lincoln

Hard work and hustle are more valuable than a high IQ, a degree from the right school, or any of the so-called factors that most people attribute success to.  Abraham Lincoln is remembered as a hard worker, yet few people discuss the fact that he overcame obstacle after obstacle before he finally became the President of the United States.  Lincoln was born into poverty and faced defeat and setbacks throughout his life. He lost eight elections, failed twice as a businessman, and suffered a nervous breakdown.  He began working at the age of the age of seven to help support his family, went bankrupt at 24, spent the next 17 years repaying his debts, but never gave up.  Although I may never be President, this quote inspires me to hustle and never give up.

Don’t find fault, find a remedy. – Henry Ford

Henry Ford, often credited with revolutionizing industry and perfecting mass production methods, was an expert at using other people’s ideas and making them better.  Other people made cars before Ford but Ford made better cars and sold them for less. Other people designed and built car factories but Henry Ford built the biggest factory of his time and made the entire factory a moving production line.  How did the son of a farmer (Ford’s parents fled the Irish potato famine in the 1840s) achieve all this with little formal training?  Henry Ford developed the attitude of a problem-solver.  When others saw insurmountable obstacles and problems, Ford saw opportunity.  Where others saw failure, Ford recognized an opportunity to learn from his mistakes and try again.  When he realized he didn’t know enough about electricity to pursue his dream, he took a job working at an electric company.  When his investors backed out on him, Ford raised funds by selling shares of stock. When his assembly line workers were unhappy Ford bucked the entire industry standard and increased pay while cutting hours.

Henry Ford’s story is inspirational because it proves that hard work, finding creative solutions, and remaining persistent even with repeated failures is the key to solving life’s problems.  In fact, Ford’s attitude laid the foundation for his success.  He knew that every big problem is really a collection of smaller problems.  Instead of dwelling on the problem and placing blame, Ford faced his problem and focused on solutions.  Henry Ford knew that placing blame on others, external circumstances, or life in general only makes the problem worse. Henry Ford inspires me to see ‘problems’ as opportunities.

One secret of success in life is for a man to be ready for his opportunity when it comes. – Benjamin Disraeli

Benjamin Disraeli entered politics (unsuccessfully) in the early 1830s but did not hold elected office until 1837.  For the next 31 years it always seemed he was on the verge of wielding power and influence but somehow, things never worked out in his favor.  He stayed the course and in 1868 finally became the British Prime Minister due to a resignation.  However, later that year in the general elections he was unseated.  It wasn’t until 1874 that he got another opportunity to implement his political ideas.  Two years later, once again Prime Minister, he was recognized by Queen Victoria with the title of Lord Beaconsfield and continued to shape his government’s policies.  In addition to a successful political career, Disraeli also gained renown as an author, solicitor, and social figure.  His words provide inspiration because Disraeli exhibited patience and preparedness long before he reaped the rewards others enjoyed.  He was (and still may be) the only British Prime Minister of Jewish heritage and achieved social recognition even though he was not wealthy like many of his political peers and was often at odds with some politician or another.  We can take note of his words because he lived accordingly, waiting patiently for many years for opportunity to come his way.

If you can dream it, you can do it. – Walt Disney

Many people are familiar with some of Walt Disney’s various accomplishments— pioneered the animation field, created Mickey Mouse and the world’s first synchronized sound cartoon, held the patent for Technicolor for two years, Academy Award-winner (48), Emmy Award-winner (7), Oscar Award-winner (26), winner of the Presidential Medal of Freedom, creator of the first full-length animated musical feature (as well as numerous other classics), first to present full-color programming, inventor of the multiplane camera, etc.—however one of his most inspirational characteristics was his vision.  Walt Disney had the ability to see something that didn’t exist yet, harness his energies, and turn his vision into reality.

Disney supervised and orchestrated the acquisition of 43 square miles of swampland –twice the size of Manhattan Island–in the middle of Florida. He planned to build a “Disney world” of entertainment which would include an amusement park, resort hotels, and his Experimental Prototype Community of Tomorrow (EPCOT). Crazy?  Not to Walt Disney.  In fact, people willingly sold him their property thinking it to be near worthless.  Eventually he used dummy corporations and cooperative individuals to avoid a burst of land speculation that could derail his dream project.  In return for leading economic development in central Florida, the governor gave Walt Disney the authority to establish an autonomous quasi-government giving Disney full control over building codes, zoning, planning, and the like.  Walt Disney World required $400 million and 9,000 workers to build, and Walt Disney passed away before seeing it completed, but it doesn’t matter—Walt ‘saw’ his dream come true long before any of us did.

Following in the footsteps of successful people is a great way to get started on your personal path to success, however, searching a little deeper to see what makes them ‘tick’ can provide you with even more motivation.  From time to time your friends at Black Swan Management will give you a sneak peak at what makes us tick, and the lessons we’ve learned from individuals we admire and respect.  Like the great Zig Ziglar once said, “success is not a destination, it’s a journey.”  So enjoy the journey. We are.  As always, happy investing.

About the Author

Anthony Sills, M.B.A. formerly traded FOREX from the Atlanta Financial Center and has worked for stock advisory services, brokerages, Fortune 100 companies, and national banks.  Mr. Sills is currently a licensed loan officer and freelance writer.  You can reach him at anthony@BlackSwanManagementLLC.com

10 Most Influential People on Wall Street

The 10 Most Influential People on Wall Street

http://www.cnbc.com/

10. Gary Cohn 

President and COO
Goldman Sachs Group

As the sole president and COO of a team-obsessed firm that likes to see “co-” in executive titles, Gary Cohn is widely viewed as an heir apparent to the gilded Goldman Sachs throne. The 49-year-old former currency trader has long been at the side of CEO Lloyd Blankfein, going back to their days at J. Aron. In recent years, Cohn has helped Blankfein run the firm’s trading and principal investing operation, which has powered Goldman’s profits. In March, Cohn told a conference audience that the investment banking business was alive and well and that Goldman, for one, had no intention of changing its business model, even if it had become a bank holding company. Declared Cohn: “Wall Street is not over.”

9. Kenichi Watanabe 

Chief Executive Officer
Nomura Holdings

It was what the Japanese might call daitanfuteki — daring. When Lehman Brothers collapsed last year, Nomura CEO Kenichi Watanabe promptly acquired the bank’s international operations for $225 million — and committed to paying an additional ¥140 billion ($1.5 billion) in bonuses to keep the Lehman bankers on board. At a stroke, Watanabe, 56, boosted Nomura’s head count by nearly 50 percent, to more than 25,000. And in December, Nomura said it would spend almost half of the nearly $5 billion the firm had raised in October to boost its U.S. presence in a bid to achieve Watanabe’s goal of becoming a true global investment bank

8. Anshu Jain

Head of Global Markets
Deutsche Bank

As one of the engineers of Deutsche Bank’s transformation into a powerhouse in global investment banking, Anshu Jain, 46, is often touted as a potential successor to CEO Josef Ackermann (see No. 3). Nevertheless, the Indian-born Jain may well be quietly relieved that his boss has delayed his retirement until 2013, since that will give Jain plenty of time to distance his global markets division from its €7.4 billion ($10.9 billion)  loss in the 2008 financial crisis. In the first nine months of 2009, revenue nearly tripled in Jain’s sales and trading operation, to €9.9 billion. Although Jain was named to the bank’s governing Vorstand in March (along with three other potential Deutsche CEOs), rumors surfaced in June that he might go to Citi, and he wound up affirming his allegiance to Deutsche. A cricket lover, he will need the sport’s virtues of patience, persistence and fair play to land the top job in a competitive field.

7. Thomas Montag

President, Global Banking and Markets
Bank of America/Merrill Lynch

Bank of America Corp.’s controversial purchase of Merrill Lynch & Co. may have cost BofA CEO Ken Lewis his job, but Tom Montag, 52, is doing his best to demonstrate the logic of the deal. Montag’s global markets business booked $6 billion of net income on $17.2 billion of revenue during the first nine months of 2009 — virtually all of the bank’s profits and 18 percent of overall revenue. Montag, a 22-year veteran of Goldman Sachs Group who had co-headed that firm’s powerful trading unit, largely succeeded in holding Merrill together during a tumultuous period. Now he needs to prove that his bankers and traders can use BofA’s balance sheet to win deals and consistent profits as markets recover.

6. James Gorman

Chief Executive–designate
Morgan Stanley

James Gorman, CEO-designate of Morgan Stanley, has taken temporary offices on the firm’s trading floor. Gesture or not, this sends a strong signal that the 50-year-old Australian lawyer with a Columbia MBA and a background chiefly in strategic planning (McKinsey partner) and asset management (head of private clients at Merrill Lynch) is committed to trading and other investment banking activities. He affirmed that palpably in late December by naming Paul Taubman and current CFO Colm Kelleher as co-presidents of institutional securities, Morgan’s biggest business. Hired in 2006, Gorman oversaw the creation of Morgan Stanley Smith Barney, now the world’s largest brokerage firm, to balance the volatile investment banking business. He succeeds John Mack, who becomes chairman, in January. The onetime consultant’s mission: to restore Morgan — still one of Wall Street’s most powerful firms — to its former glory after a decade of management turmoil.

5. Brady Dougan

Chief Executive Officer
Credit Suisse

Unlike his arch-rivals at UBS, Credit Suisse CEO Brady Dougan managed to avoid a government bailout during the financial crisis by raising capital in the Gulf. Nonetheless, the big Zurich bank experienced a rocky 2008. So with markets reviving strongly in 2009, Dougan, 50, prudently dialed down risk and cut back on proprietary trading and structured product activities to concentrate on flow business in bonds and equities and on gaining market share in prime brokerage. Credit Suisse has bounced back impressively and is once again solidly in the top tier of global investment banks. Even the private banking arm raked in money, despite U.S. officials’ probe into offshore tax evasion by Americans. The big question now: Will Dougan ramp up risk-taking, when conditions permit, and open CS’s hefty checkbook for acquisitions?

4. Robert Diamond Jr.

President
Barclays

Never let a crisis go to waste. It’s a mantra of the Obama administration, but few have taken it to heart like Bob Diamond, an erstwhile supporter of John McCain. A former bond trader, Diamond, 58, turned Barclays Capital, the bank’s securities arm, into a global debt powerhouse in a decade, but that was just a prelude to his biggest move: buying the U.S. subsidiary of the bankrupt Lehman Brothers in September 2008, and gaining a franchise in equities and M&A. Now ensconced in Lehman’s old Times Square headquarters, Diamond is determined to make Barclays a top-three firm across the board. Given his track record, no one on Wall Street dares dismiss his ambitions

3. Josef Ackermann

Chief Executive Officer
Deutsche Bank

In 2008, Deutsche Bank suffered its first annual loss since World War II. For CEO Josef Ackermann, 61, it was a wrenching experience. But having led the bank through the worst global financial storm in 70 years, he stands to reap the fruits of recovering markets. Deutsche’s profits have rebounded strongly, and Ackermann has been able to renew his contract for three more years. A rare breed of player-coach, he combines managing a global investment bank with chatting up clients. Long active in industry associations, he has spoken out on, among other topics, the justification for bankers’ compensation. Now Ackermann is well positioned to lead Deutsche from trading powerhouse to balanced financial services firm and perhaps ensure his legacy in the process.

2. Lloyd Blankfein

Chief Executive Officer
Goldman Sachs Group

It once appeared as if Lloyd Blankfein would be best remembered for his rock-steadiness during the 2008 financial crisis. No, he reassured an anxious colleague, this wasn’t like storming the beaches at Normandy. Although the markets didn’t turn against Goldman Sachs in 2009, everyone from Washington politicians to ordinary citizens seemed to, as the firm prospered conspicuously while millions suffered in the recession. Ex–commodities trader Blankfein, 55, who became Goldman CEO in 2006 when Hank Paulson moved to Treasury, didn’t help with the backlash any when he quipped to a London newspaper that Goldman’s lavishly paid bankers were doing “God’s work.” Now he may be linked forever to that cringe-inducing quote. Still, Blankfein is a genuinely liked leader. And it’s a sure bet that in the next financial crisis, the president will install a hotline to Goldman’s offices.

1. James Dimon

Chief Executive Officer
JPMorgan Chase & Co.

No other banking leader has emerged from the financial crisis with as much authority, or respect, as JPMorgan Chase CEO Jamie Dimon. Under his leadership, JPMorgan has vaulted to near the top of almost every global investment banking ranking. For 2009 its revenue and profits appear headed toward record numbers. Known for inspiring fierce loyalty among his subordinates and having a passion for detail, Dimon must now contend with a changed financial landscape, a swelling array of competitors (even Goldman Sachs is now a “bank”) and greater government intrusion into the everyday business of finance. And though only 53, he must ensure his legacy by providing for a strong successor. He has begun by naming Jes Staley, formerly chief of the bank’s asset management arm, head of Morgan’s investment bank and by grooming a generation of 40-something leaders, including newly named asset management boss Mary Erdoes and CFO Mike Cavanagh.

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Keys to Success (Part One)

“I do not have superior intelligence or faultless looks.  I do not captivate a room or run a mile under six minutes.  I only succeeded because I was still working after everyone else went to sleep.”
- Greg Evans

Why do some people ‘’make it” and others can’t?  What are the secrets to success?  Why didn’t all of that schooling teach you anything about money?  For the last 20 years, I have been observing and studying the lives of successful individuals and I have noticed some commonalities that may provide some insight for those of you looking to increase the odds of success in whatever endeavor you may be pursuing.  I will be talking about these insights in this series, which we at Black Swan Management, LLC like to call The Keys to Success.

Anthony Sills, CEO
Think about the last time you really accomplished something big . . . what was it? Why were you successful?

Some people believe that success is really about being in the right place at the right time, and they’re (kind of) right. But that’s not really success; it’s more of a mirage.  Successful people are in the right place at the right time…but not by accident.

Everyone wants success, but few find it.

Each year hundred books are published about your lack of success. And each year these books promise to get you on the right track for a life of achievement. Millions are spent on training materials, seminars, and courses. And while some are no doubt beneficial (I have read hundreds of these books and gone through dozens of these courses personally), much of the information is destined to collect dust on a shelf in the closet or to be sold as a used book at a garage sale for most people.

And the majority of the people who buy these programs and literature fail. Why?

They want to be successful….just not bad enough.

Think about it.  If you ask 100 people if they would like to be a millionaire, or if they would like a new car, many of them will say ‘yes’ but if you ask the same 100 people if they would be willing to work an extra ten hours a week to get that $1M or that new car, how many would say ‘yes’?

There is no ‘silver bullet’ to achieving your goals.  The real difference between those who ‘make it’ and those who don’t is HARD WORK.  The love of what you do, combined with your belief in what you do, will not determine your success. It will determine how hard you will work and how dedicated you will be to achieve it. Success just shows up from there.  Here are some suggestions from your friends here at Black Swan Management, LLC to get you started on your journey of personal development—and remember, the keys to success are hard work, belief in yourself and your abilities, persistence, and the determination to succeed!

  • You’re never done learning and school is NOT your only teacher. Most successful individuals are lifelong students.  What do they study?  Their craft, human nature, the world around them, history, business strategy, communication skills, and more.  If you are committed to achieving big things in your life you must also commit to staying abreast of developments in your field and learning how to be successful.  It wouldn’t hurt to know more than your competition either.  Comedian, Chris Rock only has a G.E.D. but he reads several newspapers every day.  Maybe that’s how someone with a high school education became one of the most successful (political) comedians.  If you think you’re not smart enough or you think you learned it all in school consider what Jim Rohn says:  “Formal education will make you a living. Self education will make you a fortune.”
  • Accept responsibility for your own success. Many people believe they deserve rewards before they’ve proven themselves through performance.  In fact, very few people accept personal responsibility for their success.  If you aren’t where you want to be in life ask yourself ‘why not?’  It’s not your spouse’s fault, your employer’s fault, or your family’s fault.  If you aren’t living the life you want to live it is no one’s fault but your own.  When you accept this universal law and come to terms with its implications, you will be light years ahead of where you are today.  Take a few minutes and think about problems you face in your life.  How many of them have you been blaming on other people?  Stop being a victim.  Grow up.  Take charge of your life and assume responsibility for your success and happiness.
  • Learn how to live with risk. I do not know anyone who has succeeded who has not been able to assess and take a risk and then live with the consequence – success or failure. Risk avoidance is a sure way to remain mediocre; being safe does not promote personal growth. Failure or making a mistake is not a bad thing; it’s proof you were exploring new ways to do something, and that’s better than safe success. We learn from our mistakes, not our successes. Really creative people embrace risk. They can sustain a high level of ambiguity; they do not need to know where they are. They do not mind being lost, for they call it just taking the longer, more interesting way around.
  • Persistence, Persistence, Persistence. Even when you don’t know how you will achieve your goal you must keep pressing forward.  Nothing says persistence like Ray Kroc, the kitchen wares salesman who in 1954, at age 52 and in poor health, began a new age in franchising, changed the American landscape, and, for better or worse, diets in much of the world.  If you don’t know, Kroc is the entrepreneur who became the national franchising agent for McDonald’s (which had one location at the time) and developed the system that would enable McDonald’s to expand worldwide. Missing the point?  Ray Kroc was no spring chicken when he began this phase of his career.  Many people doubted him.  He had disagreements with business partners, problems with franchisees, and many other challenges as he pursued his goal.  Did he quit? Of course not.  Today, McDonalds is the single largest owner of real estate in the world. It owns more property than the Catholic Church.  McDonald’s also serves more than 47 million customers each day all around the world! 
  • Discipline yourself to save money, even on the most modest salary. You will never ‘make it’ if you don’t have discipline.  And you will never become a successful entrepreneur, investor, or business owner if you can’t manage your money.  We at Black Swan Management, LLC believe wholeheartedly that one of the major keys to success is saving a portion of your income, even if it seems like such a small amount it won’t make a difference.  As The Richest Man In Babylon teaches us, a part of all you earn is yours to keep.  If you don’t save money, you are working for others, not for yourself.  Not to mention, you will be at the mercy of circumstance and other people which is a rough road to travel.

We’ll be discussing more tips and techniques for personal development and being successful in Part Two of The Keys to Success but for now just remember that, as Jim Rohn  says, “When you know what you want, and you want it badly enough, you’ll find a way to get it.”

About the Author

Anthony Sills, M.B.A. formerly traded FOREX from the Atlanta Financial Center and has worked for stock advisory services, brokerages, Fortune 100 companies, and national banks. Mr. Sills is currently a licensed loan officer and freelance writer. You can reach him at anthony@BlackSwanManagementLLC.com.

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Companies that have never had layoffs: How do they do it?

The current economic downturn has presented many challenges for small business owners and employees alike.  The following post contains lessons and strategies learned from some very unique companies.

*This article was contributed by bankruptcy Attorney Jonathan Ginsberg, our expert bankruptcy contributor whose website can be found at: http://www.thebklawyer.com/thebkblog/

As the feeling of job security is near-extinct for most people these days, here’s some news that may come as quite a surprise.  Fortune Magazine did a profile on 6 companies which have remained loyal to their workers and have never had a layoff. Wouldn’t it be nice if some other businesses could learn tips from these companies on how to avoid layoffs?  Without further ado, here’s the list:

SAS

Rated the #1 Best Company by Fortune Magazine, this business analytics software company has a shockingly low turnover of 2% and had never had a layoff. SAS has been able to avoid layoffs by instituting hiring freezes in all areas except Research & Development and Sales, which continue to grow. Also, the company relies on conference calls and video conferencing, which cuts back on travel and expenses.

Wegmans

Wegmans, a 94-year-old family-owned supermarket chain, believes people come first and focuses on employees in order to achieve business goals. All workers are given developmental opportunities should they wish to advance their careers. The company has been able to avoid layoffs because it maximizes staff skills by cross-training them for different jobs, making them adaptable to the changing needs of the business.

Mercedes Benz USA

As the recession hit many automakers hard, the U.S. division of the German automaker was able to survive the crisis without laying off any of its 1,612 employees. While Mercedes faced the same challenges as the automakers that went bankrupt, the company cut costs by eliminating non-essential travel, reducing temporary staff, and placing controls on overtime. When management realized that further cost reductions were necessary, the CEO and executive team, a total of 28 people, accepted pay cuts. These cuts resulted in a 10% total reduction of labor costs from mid-2009 to year end.

SC Johnson & Son

The family-owned and operated household cleansing products manufacturer has been able to avoid layoffs for 124 years because management believes that company employees are its most valuable asset.  In the recent economic slump for example, rather than resorting to layoffs, it delayed merit increases for all U.S. employees for six months, reduced spending, and temporarily froze hiring for positions open due to retirement or attrition.

EOG Resources
The oil and gas producer hasn’t had any layoffs since it was spun off from Enron in 1999. It maintains a low cost structure and keeps debt low, giving it the financial durability to weather the ups and downs of the economy. During the recent economic downturn, EOG adhered to its compensation plan and continued to pay bonuses, award merit increases, promote from within, and issue stock grants.

Baptists Health South Florida

The South Florida hospital system has never had a layoff, even during the recent economic downturn. Even if a job is eliminated, the affected employee has been given a position elsewhere in the company. To avoid layoffs during the recent economic downturn, CEO Brian Keeley kept a conservative eye on finances, focused on quality care and productivity, and stalled hiring. Even so, a total of 600 new jobs were created in all of 2009.

About the Author

Attorney Jonathan Ginsberg, our expert bankruptcy contributor has 22 years experience of representing consumer bankruptcy clients in the confusing and complex world of consumer bankruptcy.  His website can be found at: http://www.thebklawyer.com/thebkblog/

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The Art of Not Losing Money

The Art of Not Losing Money

Part One

“Rule No.1: Never lose money. Rule No.2: Never forget rule No.1”

–Warren Buffett

Follow these directions on your road to safety

Let’s take a moment and step away from technical analysis, stock tips, and high finance.  Let’s talk about something that’s not quite as ‘sexy’ but is infinitely more important in your day-to-day dealings as an investor.  Cash management and safety.

According to full-time trader and author Karl Denninger, “Return of capital is more important than return on capital.  Put another way, the first rule of investing is “don’t lose money!”  Everyone wants to chase a winner; this, unfortunately, is why most investors lose compared to the markets over time.”

The first thing an investor must master is The Art of Not Losing Money.

Most investors only focus on the possible gains to be made. Learning not to lose money sounds boring and we all want to make the big bucks when investing, but the fundamental skill that you must have as an investor is the ability to protect your capital and the patience to wait for the right opportunity in which to invest that capital.  Any full-time trader (or professional gambler for that matter) will tell you that it’s fine to have the know-how, but if you don’t have a bankroll—you’re out of the game!

Most investment books and magazines will have plenty of articles about investment strategies, investment gurus, and investment advice.  Few will tell you the naked truth—without something to invest, you will never be able to take advantage of the opportunities that come your way.

Karl Denninger feels that it’s “… fine to speculate with money you can afford to lose, but your core capital should never be exposed to a market that is trading on bubble economics unless you’re close to the door and can leave fast – and for most investors that’s not possible with their “long-term” funds.  The key to long-term outperformance (the real goal in any such portfolio) is to STAY OUT during times like this, and take advantage of long-term (and deferred) tax advantages during periods when the markets are trading on fundamental value.”

Think about this for a minute:  If you lose 50% in the market, you need to get a gain of 100% just to get back to even.  How often will the market go up 100%?  It will likely take many years.  But, if you lose 20% in the market, it only takes a 25% gain to get back to even.  20% is still a lot, but a 25% rebound in the market is certainly a reasonable expectation and can be achieved in one year’s time.


The Oracle of Omaha

Managing your cash really boils down to discipline.

Just remember that as an investor, your bankroll is your lifeblood. Without it you can’t invest – it doesn’t get any simpler than that. Despite this simple truth, many people don’t see mastering The Art of Not Losing Money as a skill of the same importance as being able to calculate ROI or analyze emerging markets. All the investment strategies and hot tips in the world don’t mean anything, though, if you don’t have money to invest.

About the Author

Anthony Sills, M.B.A. formerly traded FOREX from the Atlanta Financial Center and has worked for stock advisory services, brokerages, Fortune 100 companies, and national banks.  Mr. Sills is currently a licensed loan officer and freelance writer.  You can reach him at anthony@professionalpenwriters.com.





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7 Rules of Wealth Building:Practical Keys to Amassing Investment Capital

by Guest Blogger, Joshua Kennon of About.com

Statistics show that for the average person, the level of net worth they achieve in life comes down to a handful of key decisions they make about love, family, education, and occupation. Knowing what these are can help you make a conscience choice. Jan Stromme, Getty Images

Most parents want to teach their children responsibility – how to become self sufficient and succeed in life (after all, no one plans on raising a dead beat). However, very few actually accomplish this task. Why? Because, as parents, we are limited to the experiences our parents passed on to us; the antiquated notion that “responsibility” is simply getting a job, saving a little money, and maybe purchasing a car or some equally important item. Hopefully these seven rules will open your eyes and help you teach your children to avoid the traps that have stolen financial success from so many people.

Wealth Building Rule 1: Put Off Marriage

Your biggest obstacle to attaining wealth is YOU. Too often, people live their lives in a manner that is not conducive to creating riches and then get frustrated at “the system” when they only really have themselves to blame.

One of the most important financial decisions you will ever make is marriage (more specifically who you marry and when). By putting off the walk down the aisle for a few years, you can save a decade worth of frustration. Your first goal should be to become financially independent, with little or no debt, and have your investments in place. Once you have these three things, your odds of success are drastically improved by beginning your journey on a level playing field (after all, the number-one reason for divorce is financial trouble).

Wealth Building Rule 2: Debt is a Disease

With a few notable exceptions, debt is a form of bondage; a disease that enslaves the borrower. A few years ago, there was a young lady attending college who shot herself because she couldn’t pay back $2,300 in credit card debt. Although an extreme example, it is a testament to the power money has over peoples’ lives. Imagine your life without owing anyone anything; your car, your house, your education, all paid for in full. Like what you see? When you want it badly enough, you will make extinguishing your debt your number one priority.

Wealth Building Rule 3: If You Don’t Like Where your Parents Were at Your Age – Do Things Differently

The old cliché that “insanity is doing the same thing over and over expecting different results,” holds just as true today as it did when it was originally written. If you don’t like where your parents were at your age, stop what you are doing. During your childhood, they taught you all they knew about money. For many people, these early years established how they feel about their finances today. In order to become financially successful, you must do something different than they did. Otherwise, you will end up exactly as they are.

Wealth Building Rule 4: When you Begin a Job, Look at the Pay of the Highest Employee

Whether you are looking for employment now or are thinking about it sometime in the near future, one of the most important things for you to do is to look at what the top-dog gets at any company for which you are considering working. This will give you an idea of how high you can expect to climb in terms of earnings and promotion. If the CEO is making $30,000 a year, you have no chance to make six figures. Select a job accordingly.

Resources:
Transforming Debt Into Wealth Set By John M. Cummuta

This article was originally published as part of About.com’s Investing for Beginners Guide and was written by Joshua Kennon.  About.com is a part of The New York Times Company. All rights reserved.

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