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Sitting down with Kurt Rosentreter, he was talking about the most common investing mistake he’s seen in all his years as an advisor…that is buying an investment product rather than being committed to a process and seeing the “big picture”.

I’m as guilty of this as anyone else. I’ll walk into my advisor’s office and say “I want to buy XYZ retirement vehicle” instead of saying “I want to ensure I’m financially secure in retirement.”

There’s a big difference between the two statements. There may be only one XYZ retirement vehicle but there are hundreds, maybe even thousands of ways to invest for retirement. Stocks, real estate, insurance products, you name it. Immediately narrowly the choice down to one pretty much ensures that I don’t get the optimal results (unless I get lucky which believe me doesn’t happen too often).

Also being transaction focused means that I don’t have any synergies between my different transactions. I’m treating them all separately. So I could buy a mutual fund for retirement with a big REIT component, buy a rental property separately, and be paying off the mortgage on my personal residence. Wowsers, all my money is going into real estate. I’d have to be pretty confident in that sector.

Or the transaction could serve the one purpose but not serve another. I’m thinking investments purchased for purely tax savings. Yeah, I’ve done this, invested in something that saved me taxes but lost me money overall. I would have been better off financially paying the taxes.

That’s why its important to have goals and to be able to look at our financial decisions as part of a comprehensive plan.

"I had a mother who taught me there is no such thing as failure. It is just a temporary postponement of success."

- Buddy Ebsen

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Had the privilege of hanging with Kurt Rosentreter, expert on wealth management for the affluent. Rosentreter talked about the four stages of wealth building. They are;

Phase One: Emerging Wealth
Individuals in this phase are focused on short term goals like paying off debt, buying their first homes, and getting their careers on track.

Approximate
Net Worth Level: Zero to $100,000
Age: 20-40

Phase Two: Wealth Creation
Personal income is raising and so is the temptation to upscale (bigger house, vacation home, etc). Shorter term goals are being achieved and longer term goals are added like investing for retirement.

Approximate
Net Worth Level: $100,000 to $750,000
Age: 30-60

Phase Three: Wealth Management And Preservation
The wealth has been built and now the individual wants to keep it. The goal switches from growing funds to not losing money. Most major goals are met. The kids are settled.

Approximate
Net Worth Level: Greater than $750,000
Age: 50-80

Phase Four: Wealth Transfer
This is when the investor starts to feel elderly (me on Monday mornings). Perhaps health is an issue or a spouse has passed away. Will and estate planning become a priority.

Approximate
Net Worth Level: Not Applicable
Age: 70-100

Note: Not everyone goes through all the wealth building stages and the approximate age and net worth (including the value of the personal home) guidelines are just that, guidelines. My dear Mom (love her to death but she’s financially challenged) is still at the wealth creation stage. Her net worth is currently negative. At 35, I see myself slipping in the wealth management and preservation stage (sigh, old before my time, that might account for my gray hairs).

"No great thing is created suddenly."

- Epictetus

Rich Woman.com is hosting a Book Study through Rich Woman, a book on investing for women, by Kim Kiyosaki. Click here for the overview and full book study schedule. Each Monday, a new thread is started on the Rich Woman forums for the current chapter being discussed. Grab yourself a copy of Rich Woman, follow along and join the discussion with other like-minded women!

I have a friend who insists that if only she got on the tv game show Deal Or No Deal, her financial woes would be over (‘course I also have another friend who wants to build a rocket in her backyard ala The Astronaut Farmer). I did a little digging to see if this was a viable plan.

Surprisingly the average contestant has earned $138,928.80 over the first 93 games. That is not a bad day’s earnings, even when I deduct taxes (a buddy won the showcase once on the Price Is Right, the tax man wanted his share immediately before she could even take her cars home and she had to struggle to come up with the fast cash).

So once my friend gets on, her odds of a payday are pretty darn good.

It’s getting on the show that’s difficult. The recommended way is through the open castings done throughout the country. And by calling them castings, that’s exactly what they are. Ya gotta be half decent looking (you don’t have to be as gorgeous as the case models but it certainly helps).

The casting calls I hear (haven't actually seen them) are American Idol styles long (remember no age restrictions and no talent required). I didn’t find any U.S. stats on becoming a contestant but in the UK (with a much smaller population), the odds are 1 in 70,000.

Is it possible to swing a win on Deal Or No Deal and be financially set? I guess so. Just like its possible to win the lottery and oh, yes, build a rocket in your backyard. Dreams are great (and to be encouraged) but its best to have alternative plans just in case.

"Low self-esteem is like driving through life with your hand-break on."

- Maxwell Maltz

First off, I should disclose that I’m not Jewish so I don’t have an in depth understanding of the faith. I apologize in advance if I get the concepts wrong.

That said, having read many, many, many finance books, I find that Jewish authors like Rabbi Nilton Bonder, author of The Kabbalah Of Money, have some of the best advice on investing in an ethical, non-harmful to rest of the world, way.

One concept heavily promoted is that of win-win or win-not lose. Bonder states that it “is the duty of every one of us to expand wealth – and not only our own – into the world around us.” To do that, we need to build abundance without causing a scarcity.

For example, he differentiates between fair lending and lending as a form of “theft.” Lending to someone who can afford to repay at terms in tune with the market is fair.
(and right as money is meant to circulate)
Lending to someone who can not repay (causing the person more stress and unhappiness) or at a rate gouging the desperate is a form of theft.
(There’s also the fascinating concept of zero interest loans given to people who are poor but will eventually be able to repay the principal – a form of hand up, rather than hand out and similar to the microcredit concept in developing countries).

But why build abundance?

Because building abundance not only creates a better world but also frees up time to spend on spiritual (and charitable) pursuits. I don’t know about you but I would find it difficult to meditate and find my inner peace if creditors were calling every five minutes. And E and I couldn’t contribute to this blog if we were working five jobs to cover credit card debt.

During university, I spent a four month stint as a telemarketer. I was already working a full time job during business hours and needed something after hours. Telemarketing fit that time slot.

I worked on behalf of a charity (made me feel a bit better about calling people and yes, I made minimum wage). I’d call and ask for donations. After a month, I was promoted to call-backs. After a telemarketer would make a “sale”, I’d call back and confirm the information.

My co-workers included students like me (trying to keep out of massive school debt), the elderly (trying to supplement sometimes non-existent government pensions), and experienced sales folks volunteering their time training us.

Learning

Rejection happens. I always tell people that if they want to get over the fear of rejection quickly, work as a telemarketer (preferably for a charity). I’d make a hundred calls and get only a few donations. I know how to cuss people out in about 20 different languages. I know that a short, sweet rejection is better than a rambling, feel-to-guilty-to-hang-up-right-away rejection.

Telemarketing works (so does direct mail aka junk mail and of course, spam). Yes, the number of “sales” I made was low as a percent but they more than made up for the rejections. Companies and charities aren’t in the business of losing money. They wouldn’t be using telemarketing if people didn’t buy.

Charities attract some of the best mentors. I learned telemarketing and sales from the best. Generous, experienced salespeople eagerly shared their tips and experience to help both me and the charity. They were patient but tough and they made me a better businesswoman.

My baby sister is getting married this year. Okay, maybe she’s not a baby anymore but with a decade difference in our ages (as it is in large families, I remember changing her diapers), I still think of her as one.

This not-always-so frugal sister is borrowing all she can for the ceremony and reception. Veil, shoes, fancy pen, card box, you name it. She’s putting a touching spin on it as she is borrowing only from married folks (myself included), combining the years of happiness. Yeah, sweet but then she always was the sentimental one.

I, as the practical one, see this as a great example of how borrowing an object instead of buying it makes financial sense. My constantly traveling sister is only going to use it once. If she owned it, she’d have to store it or dispose of it. As it is borrowed, she can merely return it to the original owner.

My buddies have also done this with kids things, borrowing change tables and cribs (though ensuring that the crib is still up to safety standards) and even cloth diapers (yes, some women use them for their babies). What about those cute baby weeboks? The kid wears them for about a week.

My hubby brings borrowing into the garage. Our neighborhood shares tools. We know that next door has a lawn edger, we have a tree trimmer, the other side has a snow blower. We don’t all need to have each tool, not when we can merely borrow (we chip in for gas for the snow blower).

"Just don't give up trying to do what you really want to do. Where there is love and inspiration, I don't think you can go wrong."

- Ella Fitzgerald

Some buddies have contacted me worried about if so and so gets elected. Of course, this is not a political blog so we’re not going to discuss the big issues like the war or anything like that. We’re going to talk about elections and how it can help or hinder your finances.

In the U.S., life is simpler than in other countries because there are basically two parties.

Each party has a financial agenda. Maybe they want to raise taxes or lower taxes. Maybe they like certain industries and don’t like others. Maybe they like certain demographics (seniors or families or single moms etc) and don’t like others.

The parties are open about their finance-related platforms before they get elected (that’s what they campaign on). They offer voters their wish list of changes. Some changes are easily to implement and will be done almost immediately after election. Some changes take time and will be delayed. Some changes will never happen.

What I do is assign odds to each of the changes that might affect me. How I figure that out is reading up on each change (i.e. Googling the subject) and using the expert opinions. Most experts will be upfront about whether they think the change is going to happen.

I draft up a financial plan for each of the parties. If party A gets elected, I’ll put into place plan A. If the other party gets elected, then the other plan gets activated. If I put some time and care into the plans, I can usually arrange it so I profit either way.

Then I can vote based on the issues, leaving my personal pocketbook out of it.

"Accept yourself as you are. Otherwise you will never see opportunity. You will not feel free to move toward it; you will feel you are not deserving."

- Maxwell Maltz

One of the best pieces of work advice came from a former v-p. He told me that once a year, every year, regardless of how happy I was in the current job, to go on an interview somewhere else.

Going on a “look-see” does a number of things. It keeps the interview skills sharp, it gives me information about other industries and companies, but most of all, it shows me what I need to stay relevant in the ever changing working world.

Are most companies looking for someone familiar with ABC software? Then I had better take a course in ABC software. Is one skill set in most want-ads? Then I should obtain that skill. Because if all the other companies want that skill, you can be assured that my current company will soon want it also.

This reasoning also holds with financial advisors. Is my financial advisor still relevant to my needs? How would I know unless I dare to compare?

Most advisors offer a complementary first meeting. In that first meeting, I can bring in my current statements and get a second opinion. If I like what I hear, well, maybe I’ll consider leaving.

Last year, I went on my annual look-see with a financial advisor. No other advisor had ever tempted me to switch previously (I’d return to my current advisor happier with his service). This advisor (and his team) did. His concerns about my portfolio ran parallel to mine. His offerings were broader in scope (includes tax, business, and estate planning). Most of his client base is higher net worth.

I spent the last year trying to work out the issues (the biggest issue being my portfolio outgrowing my advisor’s skill set) with my current advisor (been with him 13 years). The past month, he gave up, not even returning my phone calls or e-mails.

So this week, after another couple meetings with the new advisor, the hubby and I have decided to switch our portfolio.

"The only time you ever have in which to learn anything or see anything or feel anything, or express any feeling or emotion, or respond to an event, or grow, or heal, is this moment, because this is the only moment any of us ever gets. You’re only here now; you’re only alive in this moment."

- Marianne Williamson

In an earlier post, I wrote about why I hooked up with a financial advisor (namely I was getting investment knowledge for $9 a year, less than the cost of a book). Lately I was asked by a buddy why I’m STILL with a financial advisor. Doesn’t it make sense to do it all myself?

Lets look at this from a purely mathematical perspective.

Say I had $1,000,000 in cash to invest. A financial advisor wouldn’t charge more than 2% to manage that. So 2% of a million is $20,000.

$20,000…sounds like a lot of cash, right?

Well, according to investopedia, the ideal portfolio size is between 20 to 30 companies (may be as high as 50). This is regardless of the dollar value of the portfolio. If the investor had $1,000,000 or $10,000, it doesn’t matter. The ideal portfolio size is still between 20 to 30 companies.

Tracking those 20 to 30 companies takes time (I can’t just buy the stock and forget about them). Jim Cramer insists that a minimum of an hour per week (every week, no vacations in the stock market) homework is needed per company. That means for the equity portion alone (not to mention bonds, or tax issues or…), I’m looking at 20 hours of work per week every week…minimum!

How does the advisor do it? An advisor profits from economies of scale. She researches a company for many portfolios. I only look after my own.

So I can easily spend the equivalent of a full time job looking after my portfolio. If I had a million dollars to invest, doing it myself would save me $20,000. I don’t know about you but if I was working full time on a job not even granting hard working me a vacation, I’d expect to get paid more that $20,000 a year.

But Kimber, you ask, I don’t have a million dollars to invest.

Then the do-it-yourself savings are even worse. The amount of hours you need to put in to manage your portfolio remains the same but the fees saved decreases. Self-managing a $500,000 portfolio (still very large) would save $10,000 in fees. That’s like working for less than minimum wage.

"It isn't what you have, or who you are, or where you are, or what you are doing that makes you happy or unhappy. It is what you think about."

- Dale Carnegie

This Thursday, I’m going to a Mary Kay party (i.e. sales presentation). I’m going because a friend asked me. I honestly don’t need the make-up but I will buy because…well…its understood that buying is the price of admission.

Of all the home based businesses (Tupperware, Pampered Chef, Regal, Discovery Toys, etc), I think that both Mary Kay and Avon are the most viable. Why? Because their products are consumed and need replacing. There’s only so much Tupperware that I need (actually I don’t need any as sometimes take-away containers are re-usable and microwave safe) but I use up make-up and yes, make-up has a best before date.

But Mary Kay is still sales. It requires an upfront investment (for the sample case), a wide range of contacts, but most of all, it requires a saleswoman personality. That means being a shameless self-promoter. That means creating an experience rather than merely giving a sales presentation.

One of the best Mary Kay saleswomen I know puts effort into making her parties a networking opportunity. She knows people (underestimate of the year, she seems to know everyone), people that want to promote their selves or their products too. So she will invite a semi-famous author friend and then invite booklovers or aspiring authors. Or she’ll invite a successful small businesswoman and invite other struggling entrepreneurs. Or she’ll invite accountants during tax season.

She’s not only selling cosmetics but contacts. I don’t know about you but a good quality contact is worth $100 in cosmetic purchases to me.

"Do not wait; the time will never be ''just right.'' Start where you stand, and work with whatever tools you may have at your command, and better tools will be found as you go along."

- Napoleon Hill

Rich Woman.com is hosting a Book Study through Rich Woman, a book on investing for women, by Kim Kiyosaki. Click here for the overview and full book study schedule. Each Monday evening, a new thread is started on the Rich Woman forums for the currnet chapter being discussed. Grab yourself a copy of Rich Woman, follow along and join the discussion with other like-minded women!

Often when I discuss my investing strategies with male friends (yes, guys, women can have strictly platonic male friends), the most debated topic is the use of investment advisors. Namely I use them and my male buddies often don’t. I always thought I was the odd gal out in the high net worth club until I read Millionaire Women Next Door.

Here’s what Thomas J. Stanley says about the differences between female millionaires and male millionaires… (the we, he mentions, being female millionaires)

“We are significantly more likely than our male counterparts to: develop a detailed accounting system for tracking all household expenditures; research more thoroughly the stocks we are considering as additions to our portfolios; hold stocks longer; use the services of investment counselors, especially those affiliated with trust or commercial investment companies and fee-based financial planners; have a well-defined set of both short- and long-term investment-return goals.”

So there you have it. We, women, like to use advisors (maybe because we play nicer with others?). We also are slow to buy and slow to sell (could have to do with having set goals).

We are different investors. That doesn’t mean our returns are better or worse. They might be exactly the same but how we get there is different. That’s why E and I started this blog. There are many great male financial bloggers out there, talking about their own investment strategies. But there aren’t as many personal finance blogger sisters and we DO invest differently. We think about money differently.

Because I spent my days talking to everyone in town (pretty much, it was a small town), rather different jobs fell into my lap, and as I was saving hard for school, I didn’t turn down many of them.

One was a very part-time job as a pollster for The Gallup Poll organization (I believe they call them consultants now). The Mayor (for some reason) was asked if he knew someone willing to conduct surveys in the area. Since I wrote a nice article about him the week before (not intentionally, he merely said some nice things that needed repeating), I got offered the job. I sent in my resume (polished by the high school admin staff) as a formality.

The hourly rate was great for this entrepreneurial girl but the jobs were few and far between (only two jobs in four years). However it was my first taste of marketing research. I would go from door to door, gauging demographics and consumption patterns. Being a smart girl (and easily bored), I started making predictions on what people bought based on how old they were, how much they made, how many kids they had. My results were half decent.

Learning:

People will tell you anything if you simply ask. I, a scrawny little high school student, would ask fairly personal questions (how much money people made, what type of tampons they used) and most people would answer me without hesitating (okay, some had their dogs chase me off their property…I learned to jump fences like an Olympic hurdler).

Information is valuable. The polling company would pay me good money to gather information. They would in turn sell it to other companies for even more money. And they would keep history. They’d ask me to return to certain houses for an update. They wouldn’t keep the information if it lost all value with time.

Individual results may vary but averages are consistent. Not every 30 year old mother of two buys ready to eat cereal but the average 30 year old mother of two certainly does.

On Wednesday, I talked about the Five Love Languages (Words of Affirmation, Quality Time, Receiving Gifts, Acts of Service, and Physical Touch), how each of us have a primary language that we show love in.

Uncovering which love language my friends and family speak has helped me not only make them happier but also save money on gifts. If a gift doesn’t make a person happy, then why give it?

I used to spend a lot of money on my mother-in-law for every special occasion (I wanted to impress her, make her love me). What a waste! A waste for me and a waste for her (she would smile, thank me, and promptly regift the item – regifters are usually not Receiving Gifts people). My mother-in-law, an Acts of Service person, couldn’t care less about gifts, they hold no meaning for her.

Now I do things for her. I’ll frame her favorite photo. I’ll not only give her a rose bush but I’ll plant it for her. Less cost but more time. She’s the person I save my meager craft skills for.

My hubby is a Quality Time person (secondary is Words Of Affirmation…I tell him I love him about 20 times a day). We don’t even really exchange presents anymore because for him, gifts don’t matter (he claims he can buy his own stuff). I could give him a Tag Heuer and get a casual thank you (happened once…I saved my pennies for years for that blasted watch). But spend an evening watching a movie with him and he’s all bright eyed with happiness.

Me, I’m a Physical Touch girl. If I never received another present for the rest of my life, I wouldn’t care (honestly). Show up at my birthday party and I might remember you for a few years. Give me a hug at that birthday party and I’ll remember you the rest of my life (being in business, I’ve trained myself NOT to hug people willy nilly). Oh, and for remote Physical Touch loved ones, something physical like mouth melting chocolate, other food products, or an ultra soft sweater is a half decent substitute.

I’m a big supporter of investors aligning their investing money with their spending money. The biggest reason for this is because if I’m personally interested in an investment, I will be more in tune with the business fundamentals. I will know if the company is doing well. I’ll also know if the company is about to derail.

I own shares in a certain beverage company. I drink the product. I shop for the product every week. I know the pricing. I know the competition. I know if stores are running out of stock. When I see ads, my eyes perk up. When I see it overseas, I’m interested. This is a huge amount of information that I gather without really trying.

That’s why for me the debate over whether or not I should own what I consider sin stocks (and everyone’s definition of a sin stock is different, for some it’s gambling, ciggies, alcohol, for others its environment suckers like styrofoam plate manufacturers) is a non-starter. If I don’t use the product, would never use the product, would never advise anyone to use the product, odds are I don’t know enough about the companies to buy the stocks.

Are there good profits in sin stocks? Of course. But there are good profits in almost every industry (remember investors can make money if the stock goes up or the stock goes down). Good profits is not a reason to buy an industry I don’t like.

Oh, and the old axiom that ALL sin stocks ALWAYS do well in a recession is not true. Lets look at Playboy Enterprises (Revenues dropping from $338.2 million in 2005 to $331.1 in 2006). The print business is being squeezed by the internet. The entertainment business is being squeezed by the cable giants (in turn being squeezed by the internet). Do you really think this trend is going to reverse in a recession?

I’ve been reading about how the rose shortage is increasing the cost of Valentine’s Day for some Cupids. Unfortunate but its money well spent, right? Isn’t love important and isn’t the gift of flowers the universal sign of that love?

That depends on the person. Marriage counselor Dr. Gary Chapman in his book The Five Love Languages explains that people show and receive love by primarily one of these five ways…Words of Affirmation, Quality Time, Receiving Gifts, Acts of Service, and Physical Touch.

Sound like new age hocus pocus? Well, this book changed my life (and especially my relationship with my mother-in-law).

My mother-in-law asks us at least once a day to do the most mundane things for her. Buy her sugar (even though she grocery shops everyday). Look up a fact on the internet (though she has her own computer). Call so-and-so (even though she had to call me to call so-and-so). It used to drive busy ol’ me absolutely crazy.

Until I realized that she was an acts of service person. It wasn’t about the task itself. Every time I did something for her, I was telling her that I loved her. Some days (like when she was sad or stressed) she needed to hear it more than other days.

My own mother is a gifts person. Her gifts have to be on-time or she feels she isn’t loved. On her birthday, she surrounds herself with her gifts and I can see the satisfied look on her face like she knows right then and there she’s loved. Doesn’t really matter what the gifts are as long as she has them (from everyone, no group gifts).

My hubby is a quality time person. I always tease him that he’s like Donkey from Shrek because his favorite phrase is “look at me.” We could be shoveling snow tonight for Valentine’s Day (please no) and if we’re shoveling together, he’ll consider it a great evening.

What I find interesting about the five love languages is that only one (Receiving Gifts) cost money (and even gifts can be had for free)…but then, the Valentine’s Day people don’t want you to know that, do they?

I’m filling a controller position while the company looks for a replacement. Last week, after about a month of interviews, the company made an offer.

The candidate turned it down (I am now working for one angry executive).

Why? Because she claims that her current company made her a matching counteroffer.

I’ve received many a counteroffer from employers over the years. I’ve never ever accepted one.

Primarily because before even going on interviews, if it’s purely a money issue (or maybe about one of my responsibilities or my title), I walk into my manager’s office and ask for what I want (using my techniques on how to ask for a raise). If I got the raise, it saved me a lot of hassle and grief. Interviewing is like a second job and remember I’m lazy.

If its not a money issue, then a counteroffer wouldn’t fix that, would it? No employer is going to offer me a new boss.

What if the manager initially says no to the raise but under the threat of me quitting, says yes? Well, my momma (a wise woman) always told me that a promise made under duress was not long kept. I know. I’ve offered counteroffers before. What is going through my managerial mind? “This might buy me some time to train a replacement before she leaves.” That’s right, I don’t expect the disloyal employee to stay. Actually I don’t want her to stay. Her dissatisfaction is often contagious.

So consider the implications of accepting the counteroffer carefully.

The Rich Woman site is hosting a Book Study through Rich Woman, a book on investing for women, by Kim Kiyosaki. Grab a book and follow along and join the discussion with other women!

This week we are talking about Chapter Three in Rich Woman, Kim Kiyosaki's personal experience starting with less than nothing and building up to success.

I love this chapter, because it is Kim's version- her life experience. The book that started it for me was Rich Dad Poor Dad, but to hear about Kim's thoughts and feelings etc. I thought was extremely interesting.

The portion that really stood out to me was when Kim was talking about 1985 being their year from hell:

"We were broke and without jobs or work. We had a long way to go before we ready to launch our business. At times we were even homeless, sleeping in a beat up Toyota Celica. I can honestly say 1985 was the worst year of our lives....

Have you ever heard someone say, 'Money can't make you happy?'... Well I can tell you first-hand that no money can make you miserable. I used to think that rich people were greedy, heartless and mean. But then I found out first-hand that those qualities are by no means reserved for the wealthy. When Robert and I had nothing we argued with eachother, blamed one another. Resentment built - we were definitely not at our best. We were stressed beyond belief." (Kim Kiyosaki page 41 Rich Woman)

Money is neutral- however, it lack of it or excess of it can really bring true colors out in people.

She has spoken many times of her first investment- but it cannot be repeated enough! She started with NO MONEY! She borrowed the money for the down payment on her first property. Too many times women think you have to have money to start and it isn't true.

Many people want to better their financial situations- they want to get rich quick- but business and investing are long term games. Like Kim says, not many people are willing to go through what they did to accomplish and have what they have.

I was just hanging with one of my girlfriends over the weekend. She is starting to think about money, business and investing. But she doesn't want to take the time to learn. I told her, "When the pain is enough, you will do something about it."

Why should it have to take painful lessons to get us to take control of our own financial futures? Can't we see whats going on around us and take preventative action now?

I believe the women here are doing just that! Cheers~

I recently hired a freelance editor to review my manuscripts. Why? Because in order to be even looked at by an agent or a publisher, the manuscript has to be in a publishable state. Ironically I need to hire an editor to be edited.

I am the first client for my freelance editor. She’s a student, taking editing courses. That doesn’t bother me. I’m not too fussy about grammar errors or spelling (MS Word is good at picking that up). My concerns are leaps of logic and things that don’t make sense. Anything that the reader stops and thinks “what happened there?” Anything that would make a discerning reader give up and throw the book at the wall (what writers call wallbangers).

As an untried editor with no references, she’s receiving $1 a page. That is the rock bottom entrance price for editing (actually I’m probably ripping the poor girl off). Any more experience or references and her price goes up.

Most editing is now done via e-mail which means that my freelance editor could be making $1 plus a page sitting on a beach in Bali. And the waiting lists are long. I’m on the waiting list for one former publishing house editor. He’ll edit my manuscript in 2008.

Freelance editors, like the student I hired, are being snapped up right out of class so taking an editing class is usually a good first step. Then suck up to the professor. They are usually the ones doling out clients.

Was reading the very well written novel Still Life With Husband by Lauren Fox and one of the telling moment in the young couple’s relationship is concerning buying a house.

Here’s an excerpt…

“Housing prices are on the rise, and interest rates are going up, and I was just doing some calculations, and if we want to Buy…” (these days Kevin says the word “buy” with a portent, a heft that clearly means he’s not talking about shoes) “…if we want to Buy in Deer Park or Lakewood, our salaries would have to increase by twelve percent this year, and I don’t know about yours, but mine’s not about to. Emily,” he says in a panic, barely stopping for breath, “that means, a house we can afford today will be beyond our means six months from now! If we don’t get on the ball here, we’re going to be priced right out of our first-choice suburbs!”

You see Emily isn’t ready to buy a house, at all. Kevin, her husband, is. And he gets himself in a panic thinking that if they don’t buy now, they might never buy. This puts stress on the relationship, assisting in its downward spiral.

I wish I could say that this is purely a piece of fiction. It isn’t. I know many couples in the same predicament (especially on the west coast). They may not be mentally ready to buy a home (or other large purchases/investments), they may not even be financially ready, but they feel the pressure to buy. They don’t want to “miss the boat.” And it causes real conflict in relationships and within themselves.

When I feel that way (and don’t we all at some point in our investing lives?), I know it’s my emotions talking (panic is pure emotion), not my reason. I try to take a moment to step back, cool down, before taking any action.

When I was going through high school, it wasn’t as cool to be a tech nerd. Not everyone had a personal computer (remember Commodore 64’s ?) and certainly not everyone could program.

Which meant that when my high school was looking for a data entry student to help convert paper records to electronic ones, they didn’t have high standards for applicants. And since I now knew everyone on the admin staff there (being the student reporter), I got the job.

I was also fortunate because the staff members, including the school principal, were very interested in helping their students succeed not just academically but in life. I went through three levels of interviews even though, I found out later, I was the only one being considered. The interviewers not only drilled me on the standard questions (What are your three greatest strengths? Name a weakness and how you’re compensating for it. Etc.) but they gave me valuable feedback afterwards (I should make eye contact. Smiling is important. I should ask at least one question). They nitpicked my resume to pieces.

And then I got my first taste of office life. I’d take lunch (a fresh experience for this usually self employed gal). I learned about office politics (critical for success). I used my freshly learned typing skills (they now call it keyboarding). I got paid.

Learning:

Who you know is often more important than what you know. I wouldn’t have even heard of the position if I hadn’t talked regularly to the office staff. They wouldn’t have considered me if I was merely another faceless student.

Criticism is difficult to take but critical for success. I disliked having every part of my interview, down to the shoes I was wearing, picked apart, but I knew that if I wanted to get ahead in life, I had to listen to the advice of people who knew more than me. At my age then, that was just about everyone.

Doing the job meant more than doing the job. I could have been the fastest, most efficient database manager (my temporary title) out there but if I hadn’t been nice to the right people, I wouldn’t have received a good reference. I learned that playing nice with others was an unwritten job requirement.

Jon's Job Learnings

There are many places to go for free investment advice, books, websites, blogs, tv shows, radio shows and around this time of year, free investment seminars.

I love my free investment seminars. Where else can I ask advice face to face from famous investment gurus (which mutual fund and investment companies “sponsor” i.e. pay so they can get an audience to sell their other services)?

Sure, I sit through the presentation. Sometimes I learn something. Sometimes I don’t. (They always try to sell me something though). But that’s not really why I’m there.

I’m there for the question and answer section, most especially the one on one time when the room has pretty much cleared out. Then I trot up to the front with my specific question that I had thought about the night before. I only ask the one question (no sense being greedy).

Now this is the important part. I listen, I take notes, but I do NOT run out and apply blindly the advice. The “guru” doesn’t know me. All she’s heard is my question and she will give me the answer she feels is appropriate for the average person. I’m not average, by any means. I bet you aren’t either. So what she advises may not be appropriate for me. Also, “guru”s are human and yes, they make mistakes and sometimes give out bad advice.

I use the answer given as a place to start investigating. I get second opinions. I Google the subject. I listen to the pro’s and con’s. I decide if it’s right for me. No matter how many advisors I have and how famous they may be, I am still ultimately responsible for the investment decisions.

Anthony Robbins

"Each player must accept the cards that life deals him or her. But once in hand one must decide how to play the cards in order to win the game."

- Voltaire

I was talking to a young buddy of mine. She is frustrated because she went to college for a fancy degree and her first entry job is reception (my first job also was reception). She isn’t using much of the knowledge she learned in school. She isn’t being paid much. She doesn’t have the title she thought she would have.

Another young friend is looking for a house. Her parents have a gorgeous four bedroom home filled with antiques, wood floors, a finished basement. My friend is upset because, when she looks for a similar house, it is way out of her price range.

The expectation is that we will start where others finish. That we’ll get our dream jobs immediately after graduation. That we’ll move into homes our parents spent their lives working up to (remember starter homes? Most of our parents had them and then traded up).

But who wants that?

I like to think that life stages happen for a reason. And that they are to be enjoyed.

I couldn’t have handled the job I have now immediately after graduation. I didn’t have the experience.

And looking back, I wouldn’t have wanted to. Sure, the salary and title and power are tempting. But it comes with high expectations and severe punishments for failure. No, I didn’t have the skill set to hold the title without stressing out and melting down. I had to work my way up.

The big house? It comes with a big mortgage, more time cleaning the four bedrooms you never even use, a yard that needs cutting every week, gutters that need clearing.

I have to think twice about flying off to Paris for a week. Or taking that exciting job which racks up the frequent flyer miles. Or moving across the country on a whim.

I never regret having my basement apartment (actually a room in a house but apartment sounds much more fancy).

I wouldn’t have wanted to stay entry level (I enjoy where I am now also) but I certainly look back to those years with fond memories.

"The successful person has the habit of doing the things failures don't like to do. They don't like doing them either necessarily. But their disliking is subordinated to the strength of their purpose."

- E.M. Gray

There have been four times in history that our personal savings rates (i.e. what we spend vs what we earn) have been negative for four quarters in a row…1932, 1933, 2005, and 2006.

Yep, that’s right. We’re currently living depression style savings rates. The Great Depression, a time when many people were out of work, farms were dustbowls, owners were walking away from houses with mortgages they couldn’t possibly pay. Individuals living through those years didn’t have much choice, they had to dip into savings. Even many of those doing well used savings to help their less fortunate sisters.

In 2007, we have no such excuse. We are choosing to dip into our savings, to spend everything we earn, to, in this time of plenty, leave ourselves with nothing for the difficult years ahead.

And difficult years will come. Moses knew that. Seven years of fat cows, seven years of skinny cows. There’s a reason that story is in the Bible. Not much useless fluff in that book.

Sure, I sometimes feel guilty about socking my money away, investing. I do give to charity. I do help out family and friends. But I always leave myself enough so I grow my portfolio at a healthy clip every year.

You see, I can’t force the rest of the country to invest their money, to live on less than they earn. All I can do is set an example and help out when the difficult times in life come. That’s my contribution.

"Everything you want in life has a price connected to it. There's a price to pay if you want to make things better, a price to pay just for leaving things as they are, a price for everything."

- Harry Browne

Saw a great presentation with The Market Guys (they offer free resources on their site at www.TheMarketGuys.com with an e-mail sign up). They discussed limiting losses.

We all suffer small losses from time to time. That comes with investing. It’s the big losses we have to look out for. Losses that we ride down to zero in the hope that the stock price bounces back up (yet it never does). Those can destroy a great portfolio.

That’s why The Market Guys are fans of the 1% rule. What that states is that any loss in a particular stock is limited to 1% of the total portfolio.

Say I have a $10,000 portfolio.

$1000 in 100 shares of X valued at $10 per share.
$5000 in 250 shares of Y valued at $20 per share.
$4000 in 40 shares of Z valued at $100 per share.

The 1% rule means that I could only lose $100 (1% x $10,000) in each position.
That means I would sell X if it dropped down to $9 ($10 - $100/100),
Y if it dropped down to $19.60 ($20 - $100/250),
Z if it dropped down to $97.50 ($100 - $100/40).

‘Course it looks ridiculous in the case of stock Y. A $0.40 move on a $20 stock? I might be out on the first day after purchase.

What does that mean? I shouldn’t have bought the stock in the first place. Because the 1% rule should be applied at the purchase.

In the interest of full disclosure, I don’t myself use the 1% rule. I probably should but I don’t.

"For every failure, there's an alternative course of action. You just have to find it. When you come to a roadblock, take a detour."

- Mary Kay Ash

And no, I’m not talking about those types of plants! Not the type you dry the leaves of and then smoke. Nothing illegal on this site.

My neighbor has a green thumb to be envied. She loves gardening and would suffer from serious withdrawal during the harsh winter months if not for her inside plants (which she fusses over and talks to like they’re her grandchildren).

And her pampering works. Her inside plants reproduce like rabbits (I raised rabbits once and yes, they actually do reproduce quickly) all winter. By March, she looks like she’s living in a tropical rainforest (unlike myself who, by default, specializes in drought resistant plants since I sometimes fly off to England for two weeks and forget about watering them).

Every spring, my sweet little old neighbor has a giant plant sale and sells out, making a healthy profit. She gets the earth from the city’s free compost program. Friends and neighbors (i.e. me) give her those green generic plastic pots they get with the plants they put in garden beds (which in my case die during that first summer drought because I again forget about watering them). The plants reproduce for free. In other words, all it costs her is some extra water and space.

Lets see…she gets joy from tending to her plants all winter, she makes money from giving them to good homes, and it doesn’t cost her a thing? Sounds like a good deal to me.

‘Course I’m mentioning this now (in February) because plants need time to grow.

"If you decide to go for it, do it with spirit: Sometimes success is due less to ability than to zeal."

- Charles Buxton

Today is Super Bowl Sunday. The perception out there is that today it's all about the guys. Women don't watch footballl right?

Wrong.

According to author Mary Brown (no, not the chicken lady), just under half of all Super Bowl viewers are women. That's right, almost half.

Sure, the guys typically watch the Super Bowl for...shocker here...the football and we, we usually watch it to hang with our loved ones (laugh our bellies sore when our men start yelling at the tv like the ref or coach can actually hear them) and for the ads.

That's why I expect to see more women friendly ads this year (though I understand the GoDaddy girl will be shaking her thing again). You see 80% of all household purchases are made by women. That makes us powerful. At least in the eyes of companies.

Maybe not so much on the football field.

My grade nine English teacher at the end of class one day announced that the local weekly newspaper was hiring a student reporter. This reporter would be paid by word.

Paid? By word? To write? This was a new concept to me. Instead of cutting lawns or cleaning toilets, I could sit in front of my computer and type.

So I applied. Everyone else sent in their resumes filled with great experiences and jobs. Sure, I sent in mine too but knowing that my ability to shovel snow wouldn’t exactly impress the editor, I added a sample article. I was the only applicant to do so. The article was printed and I got the job.

I had never taken any journalism courses. I wasn’t really a big newspaper reader (I was young and found them boring). Instead, I wrote what I thought were entertaining pieces about school activities, covering more than the facts.

They became such a success that the regional daily paper hired me on also. I covered…hold your breath…town council meetings (sitting in the press box). Again, I didn’t know what exactly I was supposed to write (not having read anyone else’s coverage of politics) so I again made my articles amusing and light.

I developed a cult following, had a head shot by my articles, and was stopped on the street by complete strangers (and once in a pharmacy while this very conscious teenager was purchasing feminine products…I wanted to roll up and die). I was also offered full time jobs from both of the papers upon graduating.

Learning:

Just because I wasn’t “the best” applicant, didn’t mean I wouldn’t get the job. If I offered something extra, something special, that might overcome deficiencies. If I tried harder and learned quickly, I could possibly make up for lack of experience.

Media and press coverage makes a difference. I could write about a person no one knew and all of a sudden he was a local star. I’d mention a restaurant and the next day, it’d be busy. It went the other way too. I unfortunately covered a comment from a councilmember. It was used against him in the next campaign and helped lose him the election. That was a difficult lesson to learn and today, I still regret putting his words into print.

I went out for drinks recently with a bunch of writers. Writers, actually most artists, are notoriously tight with their money. Many, when time is factored in, work for less than minimum wage.

Unfortunately, a few think that an acceptable way to trim costs is to withhold the tip. Not tip wait staff, hotel maids, and others. In fact, one of them resented the fact that I left a tip for our hard working waitress and was very verbal about it. It was a bit embarrassing.

Now I like to save money as much as the next person but the difference is…I don’t like to save money at the expense of the next person. I figure if I can afford to go out for dinner, I can afford the tip. I’m not going to stiff someone making minimum wage while I sip the refreshing beverages she cheerfully brought me. A tip is part of the cost of the meal.

Fodor’s has good guidelines for tipping in all countries, even the good ol’ U.S. of A.

Waiters receive between 15-20% of the bill and that’s the bill before coupons and deals. Just because I received my meal free (due to a birthday or a coupon) doesn’t mean that the meal magically appeared at the table, without the waitress’ help.

Hotel maids get $1 a day (I usually give $1 a day per occupant). I tip every day because the maids change from day to day. For some reason, I also receive more towels, shampoos, and fancy soaps when I tip daily.

I tip anyone that helps me (like my hairdresser, she deserves an Oscar for managing my crazy hair). I get a bonus at my managerial jobs when I (and the company) do well. I apply the same thinking to people I work with.

Part of becoming a successful investor is uncovering and working with our investing personalities.

For example: If I’m having a really great day, I feel like shopping and the market I shop at is the stock market. I’ll buy anything and everything that sounds good. If I’m having a really bad day, I feel like selling everything and sitting on my pile of cash (or even worse converting it into chocolate bars). I know not to buy or sell when my feelings at either extreme.

Two psychologists (Daniel Kahneman and Amos Tversky) examined the very human relationship between risk, uncertainty, and action. A simplistic explanation of prospect theory is that investors are less likely to gamble with profits than losses.

What does this mean?

If our investment goes up, we have a tendency to sell, locking in the gain. This might mean that we lose out on the upcoming future increases. For example, last year, I bought a little copper stock at $0.98. I strongly feel that this stock can go to double digits. When it reached $2.00, I sold half, pocketing my initial investment. Smart, right? Well, I am very, very tempted (still) to sell it all. Not so smart.

Now, if our investment goes down, prospect theory tells us that we are likely to ride our losses, unwilling to seal in our loss. That might mean that we ride it all the way down to zero. Yep, a big goose egg. I’m suffering from that currently with one of my stocks. It’s on a not-so-slow trip down to zero (I bought it for income so I’m torn as to whether to sell it or not).

A plan outlining when we should sell (on the upside or downside) helps prevent these emotional reactions. I’ll talk about one plan tomorrow.

Due to unforeseen circumstances, No Limits Ladies had to take a brief break. We apologize but hey, that’s the internet world. Stuff happens (that holds true for the “real” world too).

That said, I’ll be flying solo here for a bit. We’re real businesswomen, with real businesses and real investments. One of the reasons, we teamed up on this blog was so we could trade off on posting when off-line opps and situations came up.

We’ll also be turning off comments for a while. I do enjoy reading our legitimate comments (shout out to Matt!). However, I travel quite a bit, am working on a novel deadline, and honestly, would rather spend time on my posts than moderating the comments (99% of which are unfortunately spam).