Leverage Consulting

Sorry...

I've been out of town...sorry for not posting!

Humans are irrational?

I learned about irrational stock markets in college.  The idea is that day-to-day fluctuations in the stock market are generally irrational.  Stocks go up-and-down unnecessarily because institutions and/or individuals use their emotions erratically to make business decisions.  I have taken this foundational information and viewed it from a different angle; everyday life.

What I have concluded is that most humans are generally irrational.  This is because we make decisions that are generally irrational.  Think about it, that guy/gal you see losing their temper in public; irrational.  Somebody cutting in line at the grocery store or in traffic; irrational.  Your reaction to them cutting in line; irrational.  Drinking too much alcohol; irrational.  Most everything you do once you have drunk too much alcohol; irrational.  Anytime you try to prove you are right when it really doesn't matter; irrational.  War for oil; irrational.  War because we think there are WMDs; irrational.  Hell, the divorce rate is 50%; obviously an irrational decision was made there.

Big or small, we are all guilty of making irrational decisions.  And we can't possibly eliminate irrational behavior from our own lives, much less society.  So the best we can do is to attempt to minimize our irrational behavior.  Just ask yourself at the end of the day--how many times was I irrational today?  It will help you to determine what actions were irrational behavior, and knowing, (as they say) is half the battle. 

Buy Gold!

Sorry for not posting 3 days this week...out of town.

I was sitting on a plane the other day listening to other people talk (like I always do) and the two gentlemen next to me were having a classic investment conversation.  They talked about their 401ks, their homes, and then of course, what's 'hot'.  In particular, I got a real kick out of the 'what's hot' segment. 

It went a little like this:  the one guy says 'i've made a killin' investing in gold the last couple of years, you should look into it'.  The other responds 'i got a call from my broker about that, i was getting ready to take the plunge'. 

Rule #1:  never invest in anything that is 'hot'.

Rule #2:  definitely never invest in anything that is 'hot' that a broker calls you about.  Remember they need you to be doing something in order to get paid;  transactions-pay, for the luxury house on-the-bay.

Investing isn't about hopping on the latest trend.  It's about patience and facts.  The fact is that you need more time than money to be rich.  We could all be multi-millionaires if we just had more time for the compound interest to snowball.  The fact is that 4 of every 5 mutual funds do not outperform the S&P 500 annually; think about how many will over a 20-year period...nearly none (for starters most mutual funds don't even exist for 20 years).  So just because a gold stock or fund has returned 50% in the last year, doesn't mean that it will over the long term.

In fact, gold in particular is talked about frequently as an investment.  It is actually a horrible investment.  Over the long-term it has only kept up with inflation.  Meaning that one dollar invested in gold for a long-period of time (20 years or more) is worth roughly one dollar after inflation.

When it comes to investing, if it sounds like a gimmick, it is a gimmick.  The only way to invest is by using patience and facts...

Email me with your investment questions:  jw@leverage-consulting.com

Hopefully you don't need this website...

In this blog I not only want you to leverage your personal finances, but I want you to leverage all information to help you in life.

As I mentioned in a previous blog entry, I had my wallet stolen...they also got my Blackberry...SOBs, anyhow I called my carrier (Verizon) and was able to leverage a new contract on one of my other cell phones to obtain a replacement phone. 

But in the meantime, I did some research to try and find a solution to this issue w/o succumbing to Verizon's choke-hold contracts.  So I found this website that sells used phones w/o a contract.  Much cheaper than ebay or trying to purchase a new phone through your carrier w/o a 2-year contract.  They specifically have the phones sorted by price and as you can see, they have several phones under $60, but they also have Blackberrys for $100.

You may also want to reconsider insurance you have on your phone.  By the time you pay a monthly fee and a deductible, you might be better off 'taking your chances' when you can get a basic phone fairly cheap from the site above.  This would especially be true if you just have a basic phone.  If you carry one of those 'mercedes' phones, you might be better off with the insurance/deductable.

Don't let the carriers take advantage of you with ridiculous pricing on their phones, leverage this information. 

Your ideas...

I want to remind you that you have several reasons you can email me...

• questions about personal finances
• questions about a business idea/concept
• questions about your IRA
• questions about your 401k
• subjects you would like for me to write about
• books that you think I should read/review
• or just blat out anything

So please feel free to email me... jw@leverage-consulting.com

You can also post anonymous comments for any post.  This gives you the chance to tell me to 'gotohell' without me knowing who you are!  I truly appreciate an objective viewpoint, so if I am being too one-sided on a subject, tell me about it!

It's more patriotic to not fly a flag...

...from your car, that is.

President Bush spoke about cutting our gasoline use by 20% during his State of the Union address. 

Here's a link to an article about it...

It's a 10-year goal.  I have a way to speed up the process. 

Two things:  Stop flying flags from your car and start checking your tire pressure monthly. 

Both of these items combined could decrease your gasoline consumption by 6% (3% each). 

So next time you think it will be patriotic to fly an American flag from your car to show your patriotism, think about the extra money spent on gasoline and where that money goes! 

Your wallet was stolen?!

I recently had my wallet stolen and it was quite an ordeal...but it could have been worse.

I am hoping that my time lost will be your gain by taking my advice. 

My biggest mistake...I kept one blank check in my wallet.  Along with my check was 2 debit and 3 credit cards.  I immediately called and closed my checking and canceled my debit cards.  The burglar(s) did not get anything from my checking accounts--not that they didn't try--I just fortunately got them canceled in time. 

However, they did make purchases on all 3 of my credit cards.  The purchases totaled nearly $1500.  Of course, fraud protection has taken care of all the fraudulent charges.

Now back to my biggest mistake...the blank check.  I literally had 17 things tied directly to my accounts...company payroll, fidelity accounts, ING Direct savings, credit cards, student loans, satellite radio, ebay, paypal, and on and on...  I had to re-do all of these because of one blank check that I kept in my wallet for emergencies; ironic how it basically caused an emergency instead of preventing one. 

Along with never keeping a blank check in your wallet, here are a few other things you should do to make life easier if you should be so unfortunate:  make a list of the cards in your wallet, on that same list write down the credit card number, and the 800# on the back.  This will speed up the cancellation process and believe me, every minute counts! 

Also on the back of your cards, use a sharpie and write 'Ask for ID' preferably on the signature stripe.  This way if they actually do check the back, they will then ask for ID.  Although I have found that Cracker Barrel is much better at asking for ID on my $8.00 biscuits and gravy, than is Best Buy on my $500 purchases; somewhat defeating the purpose...but hopefully it works when you need it to!

Anyhow, one man's pain can be another man's gain...(and I'm talking about you...not the burglar!)

What can I do for YOU?

Leverage Consulting offers fee-only personal financial advice. 

Fee-only advice is the only advice that is 100% objective and always puts your interests first. 

I have no connections with any financial institutions of any kind, i.e., my advice is 100% my advice.  There is good and bad with that; the good:  as mentioned above there is outside influence on my advice;  the bad:  I don't physically manage your money.  So, you still have to physically manage your accounts, but I can also help you with that. 

I have found that most individuals just need help with their IRAs, 401ks, or Rollovers.  These accounts are so easy to manage yourself if you know what to buy.  That is where Leverage Consulting comes in;  I will help you put together a portfolio of funds based on your individual needs.  You can either use my blog postings as your guide (and read a few books, etc.) or you can utilize my expertise to help.  Either way, when you take control of your finances my goal has been met.

My fees are based upon your needs and 100% individualistic to your situation.  Email me at:  jw@leverage-consulting.com for more information.

Leverage Consulting also offers small business consulting.

This is an area that is highly-undefined.  I can help you with everything from business plans to transitional strategy for existing businesses.  Every business has unique goals and one of my goals is to help you get to your goals.  Email me to discuss your situation and together we can decide where Leverage Consulting fits in.