AWD - Not the Same

I've always thought that AWD (All Wheel Drive) cars were the same and performed the same. Turns out I was wrong. This is a cool little clip to show you how different AWD's operate. It's biased, but still informative. Enjoy!

Facebook Phone - Buffy

Interesting. As people become increasingly more mobile, it seems like the the showdown is going to be over phones and reaching mobile users. According to some articles HTC has been tapped to create a phone for Facebook. Think about the implications of this. What right does an application / web based company have to explore something so out of it's core competencies? This wouldn't be the first time. We've seen Google create the android OS that has been wildly successful. Arguably though, without Apple pioneering the way, android OS might have just been another flop. Let's see what eventually happens with this facebook phone - codenamed buffy.

http://blogs.computerworld.com/19321/buffy_htc_facebook_phone_coming_in_2013_android_frag_fest?ua

Creating Fame Online

Borrowed from Mixergy

Creating an online marketing and creating an online presence is key to differentiating yourself. It so tough, this is good insight as to why.

Gold ATM

http://www.huffingtonpost.com/2011/09/29/china-gold-atm_n_987026.html

Yes, gold atm's in China. This is definitely a cool deal. You know gold is becoming so accessible when they've got gold ATM's

Investing - I've determined an asset allocation, so what now?!

Ok so you've determined your risk tolerance and asset allocation, so what do you fill it up with? Stocks? Bonds? Mutual Funds? Options? ETF's? Alternative investments? There are way too many things out there to invest in! So lets keep it basic. Most people will look at the following:
-Stocks
-ETF's
-Bond Funds
-Mutual Funds

Yes, yes I know...a bond fund is a type of mutual fund. Let's make the distinction in here so I can just refer to it as something different. Usually with mutual funds there are bond funds, equity funds and funds made up of both. Lets go over stock basics.

A stock is a share of ownership in the company. For instance, say you own a share of Apple. You are considered a shareholder and therefore have ownership in Apple. Yes, now Steve Jobs and the company need to listen to you! Ok, so maybe not that far yet until you have a ALOT of Apple stock.

Now that we've gone over what a stock is, lets define a mutual fund. A mutual fund is a basket of stocks.

An ETF (exchange traded fund) is also a basket of stocks, but it isn't actively managed...usually tracking an index. For example DVY is an ETF that tracks the Dow Jones.

A bond fund is a fund made up of bonds ( a basket of bonds.) A bond (not to be confused with a bond fund) is debt (almost like an IOU) that is issued by corporations and governments. The entity issuing the bond will usually provide interest semi annually to the bondholder (whoever lent them the money) and at the end of a specified term the entire amount borrowed will also be returned.

Now that you've got an idea of what is what, how do you decide what stocks or mutual funds to put in there? Before we decide on that we should look at how we want this money managed - Actively or passively? We'll get into that next time.

Breaking Out of a Career Rut

http://www.bnet.com/blog/tribal/how-to-break-out-of-a-career-rut/692?tag=content;drawer-container

Many people get stuck doing the same thing day to day and are stuck in a rut. This USC professor and TEDxUSC speaker talks about ways to break out of the rut. This is a must read article as it urges you to focus on the haves vs the have nots. Focusing on the have nots is something our culture really pushes us to do...which makes this article a breath of fresh air.

Chinese Green Bean Soup

http://www.mywoklife.com/2008/08/green-mung-bean-with-barley-dessert.html

When I was a child my mother used to make me this soup during the summers. I would consume this soup cold. The soup is supposed to have cooling properties on your body.

The Chinese culture believes in having an internal furnace and eating different foods that are of Yin and Yang will either cool or heat up your internal furnace. One example of this is if you're getting a lot of bloody noses its because your internal furnace is running too hot so you'll need to eat something that will cool you down. Something of Yin (direct translation is shade) nature will help cool the internal furnace down. Examples of foods are watermelon, green bean soup, pears and mangoes. So during hot seasons you'll see many Chinese eating food with a cooling effect. The opposite can be said during cold seasons. The Chinese will often be seen eating foods of a Yang (translation - sunny) nature that is supposed to heat up the internal furnace. I don't necessarily know that I subscribe to this theory in its entirety, but I love having this soup during summer because it nostalgically reminds me of my childhood.

Below is a modified version of the website I've linked you to. Try this recipe out, it should remind you of soupy oatmeal. This soup shouldn't be overtly sweet, it should be subtly sweet to mildly sweet. My mother used to add sago, so if you want you can add that too.

Serves 6
Ingredients:
200 gram whole green beans (about 1 cup)
100 gram of pearl barley (about ½ cup)
1 pot of water, 70% filled (about 2000ml)(approximately 6 cups of water)
1 big lump of crystal rock sugar (about 75gram)to taste.

Method:
1) Wash green beans in running tap water.
2) Place beans in a pot of water. Bring beans and water to a boil over medium fire. Cover with lid.
3) Briefly wash pearl barley, and place in the pot, when water boiled.
4) Reduce heat to low fire, simmer for about 45 min to 1 hour, or until beans have slightly expanded out of their skins. Texture of beans and barley should be soft and fluffy.

Mung beans seem to be present in eastern cooking, but not so much western cooking. Click here for Mung Bean nutrition info. Mung beans are a good source of fiber, vitamins, protein and low in fat and calories.

I hope you try this recipe out and I hope you enjoy it.

Cadillac SRX - Chinese Ad

This ad was shot in inner mongolia. Interesting to see ads for domestic cars outside the country. This ad portrays the freedom and spirit of the US. Yet the car's reputation in the US isn't particularly great. It really seems like Cadillac is really trying to improve their image domestically and internationally. China is the world's largest market for cars, so it isn't surprising to see a move like this. Enjoy the ad.

Chinese Car Designs

A land known for knock offs and lack of originality. China has gotten that bad reputation. China seems to be fostering more originality. The Scicar is pretty good looking without infringing on other car designs, but hopefully the engine is/will be reliable. I wouldn't be surprised if China became the next Korea in car manufacturing. Terrible anonymous and shoddy quality to cost efficient, reliable and relatively good looking. Although, it will be a while before we actually see that happen though. Check out the link.

http://m.wired.com/autopia/2011/07/this-is-chinese-automotive-design/?pid=1214&pageid=36965&viewall=true

Kelly Thomas Beating

I was told about this by a cabbie today. This is pretty gruesome. It's sad to hear this schizophrenic homeless guy scream for his dad. There is a pretty graphic picture at the bottom. I wont comment on this too much, but you can come to your own conclusions.

http://www.fullertonsfuture.org/tag/kelly-thomas-beating/

Apple Stoer

Yes, you read it right. Apple Stoer. This was a great post about Apple stores in China. Your intellectual property is not safe in China. The best part about this blog post is that the employees "all genuinely think they work for Apple." Scary stuff.

http://birdabroad.wordpress.com/2011/07/20/are-you-listening-steve-jobs/

TED

I recently had an opportunity to go to TedxSocal. Its independent of the actual TED conference, but nonetheless it was an excellent conference. It was full of ideas worth sharing. You can check out TED at www.ted.com.

The conference inspired me to browse www.ted.com for other inspiring ideas and I happened to stumble upon http://www.ted.com/talks/tim_harford.html . It makes a great point about how making sense of the world is pretty difficult. My personal takeaway was that you can create all the models you want and hypothesize all you want about what will and will not succeed, but until you try you wont know what works. Anyways, have a go at it and watch Tim talk about it.

Common sense

Isn't that the truth? It isn't always so common especially when investing either.

Investing 101 - Annuities

Is it time to buy an annuity?

http://online.wsj.com/article/SB10001424052748704681904576317351118089000.html?mod=WSJ_hp_MIDDLENexttoWhatsNewsTop

The above link is an article on www.wsj.com. Its a decent start, but doesn't discuss all the types of annuities available.

Longevity is a big problem for Americans. People are living longer in retirement. The life expectancy for a male is around 86. If you retired at age 60, you would have 26 years of not working. Retirement is longer than it used to be. Being alive for longer is a great thing, but you also have to have the money to be able to live. Having money in your 401k is great, but there is a possibility of depleting all your funds in a 401k. The burden is on Americans to fund their own pensions. Annuities are a good way to supplement and protect your income stream. There are many uses for an annuity. One of which is protecting your retirement account and helping you create a self-funded pension. Before we begin to delve too deep on to the subject matter lets define what an annuity is.

An annuity is defined as a fixed sum of money paid to your for the rest of your life. This is a pretty generic definition of what an annuity is. Times have changed and so have annuities. Traditionally people bought annuities and "annuitized" them to get a payment for life. Annuitizing means giving the insurance all your money in that contract and in turn the insurance company will give you money for life - this was a hard decision to make because you weren't sure how long you'd live. On one hand if you lived a long time and the sum of the payments the insurance company paid you was more than you put in to the contract then you would have possibly made a good investment. On the other hand, if you died before getting your initial premium back then that would have been a terrible investment. Thankfully things have evolved for the better. There are now ways to possibly get lifetime income and your money back.

There are two major categories of annuities - Fixed and Variable. Typically a fixed annuity is guaranteed by the insurance company's credit worthiness and in the worst case a certain amount is guaranteed by the state. The fixed annuity in general increases by a fixed percentage a year and allows you to take out a fixed percentage a year. A fixed annuity is similar to a CD except that it isn't FDIC guaranteed and is tax deferred. A variable annuity isn't guaranteed by the insurance company. A generic variable annuity allows you to invest in the stock market and allows you to defer the taxes. The value may go up and may also go down so there could be risk there. However, over the last 10 years the marketplace for annuities has evolved a lot and has more value to add than years before.

The purpose of this post was to introduce the idea of the annuity. Just like there are different models and trims and brands of cars, annuities come in all different types of brands, models and trims. Next time I'll dive deeper into the different types of variable and fixed annuities.

Disclaimer: The above post does not constitute as investment advice. If you need investment advice please see the professional advice of a financial advisor.

Investing 101 - Risk Tolerance

One of the very first things you should determine for yourself as an investor is how much risk you're really willing to take. The second is to know how much risk you're actually taking, but thats another topic for another day.

Often times I hear people say "I'm conservative." Sometimes thats the truth and sometimes thats further from the truth. I had someone recently tell me they were conservative. After looking at their holdings I realized they weren't. Their entire portfolio was the S&P 500 index...which consists of all equity.

So lets start this off right and lets figure out your risk tolerance. These aren't an exhaustive list of questions, but these questions are a good start. So questions you'll want to answer for yourself are the following:

1. How much investment risk are you willing to accept?
2. How important is it for your investments to keep up with inflation (the general rise in the cost of living?)
3. How large a decline in your account's value would you be willing to accept in any one year period?
4. How much turbulence can you handle in your account?
5. How many years do you have until retirement?

Generally the more risk you're willing to take the more aggressive you can invest your portfolio. However, if you have no time until retirement you can't actually be that aggressive. Even if you're pegged at aggressive, but you're already in retirement the most aggressive you should be is moderately invested - typically a 60/40 portfolio. 60% in equities and 40 in fixed income. As your risk tolerance goes up your portion invested in equities should generally go up too. Typically the maximum you'll want invested in the market for your portfolio is about 85%. Again, everyone is going to be different based on their needs. This post is a general guideline and not an absolute rule. The best thing to do is have a financial advisor help you review your portfolio and have them compare it versus your risk tolerance. Until next time!

One Square Meal A Day

One square meal a day makes a huge difference in your energy levels. When I say one square meal, I mean a good healthy meal and not burgers or other fast food junk.

Lately, I've been so busy with school and work that I rarely ever stay at home anymore. Out of the week I'm probably home about 2-3 nights. My home feels like a strange place to me now. With that also comes the lack of routine and lack of normalized meals schedule. For the past month all I've been doing is eating out and also eating random things at work. As a result my energy levels have been lagging. I realized how bad this was...

In an attempt to normalize my meals and meal schedule and increase my energy I got an industrial strength VitaMix blender. For the last week or so I've been taking raw veggies and fruits and coconut water and blending it into a smoothie/juice. This last week I was blending the following:

• 1 apple
• 1 orange
• 1 stalk of celery
• blueberries and raspberries
• 1 small baby bok choy
• 6-10 baby carrots
• a handful of broccoli
• 1 banana
• maybe a quarter cup of coconut water or just water

I usually make about 32 ounces of this concoction. You can't taste the veggies, it just tastes like orange and apple with a bit of carrot. I don't juice because you actually discard all the good stuff the veggies and fruits hold. Usually 12-13 ounces keeps me full like a small meal. The great thing about doing this is the amount of energy I've been getting back. Also, since it acts like a small meal replacement it doesn't give me food coma after lunch.

Although not a scientific journal this blog discusses benefits of blending vs juicing. http://alpha-health-plus.com/BLENDING_VS_JUICING_2.html

I hope this inspires you to incorporate more fruits and veggies into your own diet!

Oh yeah and on a random note, I had a reader ask that I write a mini series on investments. Look for that come in the upcoming weeks.

How much are you REALLY worth?

Recently I was asked the question, "how do I calculate my net worth?" People mistakenly tell me they're worth xxxx, which is basically what they have in their bank account. There are different ways for people to calculate their net worth, but the general formula used to calculate your net worth is Assets - Liabilites = Net Worth. On certain statements people put their car down as an asset. That can be true and that can be false. Certainly in this tumultuous period houses can also be both liabilities and assets.

Here is how to define an asset and a liability. You can generally define an asset as something you can liquidate / sell to put cash in your hands. A liability is generally defined as debt or something that will cost you money. Examples of assets are real estate, cash, stocks, bonds, gold, 401k's, IRA's and pretty much any of the major things you can sell to generate cash. I wouldn't include your dining table as an asset unless your dining table top is actually a Picasso. If in fact your table top is a Picasso, you're either really rich or really dumb.

A liability is something you know you'll end up owing money on. Good examples of this include your mortgage, credit card debt, car loan, student loan...etc...

Here's where lines sort of blur. People will often tell you that your house is an asset. They're right, but they're wrong. A house is an asset, you can sell the house and get cash in your hands. However, you probably didn't buy the house outright...chances are you probably took a mortgage. That mortgage is considered a liability because you owe money to the bank (presumably.) People commonly refer to a home as an asset because they're assuming a house's worth is more than what you owe on it. (Asset - Liability = $$$$) During the housing crash recently experienced in the US that might not be the case anymore. I've heard of people purchasing a home for $500k and taking out a mortgage of $450k and now the house is worth $350k. Your house has now become a liability of $100k. Scary isn't it? This isn't really a musing about real estate, but I may eventually touch on that.

To keep everything straight, I recommend using a balance sheet. Take out a pad of paper and draw a "T-Chart." On the left hand side put "Assets" and on the right hand side, put "liabilities." Anything that can generate you money put it on the left. Anything that will make you pay money out of your pocket put it on the right. A lot like a checking account you'll want to add and subtract your debits and credits. Add up all your Assets and subtract all your Liabilities and you'll get your net worth. I hope that helps in determining your net worth.

King of ALL Virgins

"I believe in myself. I believe in the hands that work, in the brains that think, and in the hearts that love." - Richard Branson

Richard Branson, the king of all Virgins. The brilliant entrepreneur behind Virgin United, Virgin Atlantic, Virgin Mobile, Virgin Brides, and many many more! Although admirable what he's done with his commercial Virgin empire, more impressive is what he's done with his non-profit arm - Virgin Unite. I'm lucky to have had the opportunity to see him speak recently. This man is incredibly humble despite all he's achieved. The quote above is one of my favorite quotes by Branson...but when asked about it he couldn't remember that he actually made the quote. Branson also jokingly said he was probably stoned when he came up with that quote.

The premise of Branson's visit to Orange County, CA was to discuss peace and his non-profit arm of Virgin. Their mission?

"We unite people to tackle tough social and environmental problems with an entrepreneurial approach. Our aim is to help revolutionise the way businesses and the social sector work together – driving business as a force for good. This is based on the belief that this is the only way we can address the scale and urgency of the challenges facing the world today. Virgin Unite also works on behalf of vulnerable young people across the globe."

www.virginunite.com

http://www.goodhappens.org/livingpeaceseries/branson/virgin-unite-working-groups

Virgin Unite attempts to tackle tough problems/topics such as AIDS, carbon emissions, and creating a sustainable economy for impoverished nations. Virgin Unite also tackles other less publicized social issues.

I had a chance to ask Branson about Virgin Unite and how Virgin Unite dealt with the evolution of philanthropy across different cultures. Branson's answer was that they only went where their lines of businesses operated. Once they determine a need, they partnered up with local organizations to ensure the philanthropic acts are a cultural fit.

It's hard to describe the vibe Richard Branson gives off, but he is definitely a revolutionary thinker and makes you want to "do good." So the call to action this week is to think about how you can make a difference in someone's life. How are your actions bettering the world? Step by step we can be better neighbors(globally and domestically)and create a better world to live in.

Goal Setting

The reason most people never reach their goals is that they don't define them, or ever seriously consider them as believable or achievable. Winners can tell you where they are going, what they plan to do along the way, and who will be sharing the adventure with them. - Denis Watley

It's that time of the year again. It's time to lose all that weight gained from the holidays, it's time to do this and it's time to do that. There's plenty to do, but it seems like everything you're doing is getting you NOWHERE. We all have that feeling of treading water and accomplishing nothing, but feeling tired and weary at the end. Why is that? Seldom few ever define their goals much less put them down on paper. People are whimsical, paper is not. Writing your goal down on paper allows you to benchmark your progress versus your goals. Writing your goals down allows you to focus on how to get there instead of coming up with excuses as to why you didn't succeed. Goal setting helps you avoid getting sidetracked with all the little projects that you think you want to do, but that really take you away from what you REALLY want to do. This person sounds familiar...oh wait, it's me. At the end of the day, we can all identify with this person.

I recently came across the results of a study sponsored by the Ford Foundation that claimed:

- 23 percent of the population has no idea what they want from life, and as a result, they do not have much.

- 67 percent of the population has a general idea of what they want, but they do not have any plans for how to get it.

- Only 10 percent of the population has specific, well-defined goals, but even then, seven out of the ten of those people reach their goals only half the time.

- The top 3 percent, however, achieved their goals 89 percent of the time.

Amazing huh? 90% have no idea what they want from life or have plans to achieve any goals they may have.

I decided to take the dive to define and write down my goals. How did I go about doing this? I sat there with a bottle of Jack and did a little soul-searching...Joking aside this is a soul-scouring process. Here are a few steps to start your own goal setting session.

1. Make sure you're alone
2. Be brutally honest with yourself and your goals - No BS
3. Break it down into a few sections (1 year goal, short term goal, mid term goal, long term goal, and finally life time goal)
4. For each of the sections stated in section 3) make sure you break it down to each segment of your life (Educational goals, monetary goals, work goals, personal development, spiritual development...etc)
5. Find pictures on the internet and create a collage of images that resonate with your comprehensive life plan
6. Create an excel spreadsheet with all the hours of the day you're awake and fill in what you're going to be doing every hour and make it a regular schedule
7. Post this up on your bathroom wall - this ensures you see it on a daily basis and friends that see it will keep you accountable

Most of you that have been over to my place can attest to seeing something similar to the above. Yes, I am a freak. You should have seen it when I was applying to grad school. All in all I was applying to 12 schools - my bathroom wall was completely covered with timelines and question prompts. Lately though, I've fallen off the goal setting and tracking thing.

One of my major goals for this year is to exercise 5 days a week for at least an hour at a time. After my surgery last year I never really recovered physically. Now that I'm fully healed up, I've made it my goal to get back on track and exercise like I used to. There. Out in the open, so now I have to really hold myself accountable to it. Good luck with your goal setting!

If there is a topic you're interested about and would like me to blog about, let me know! Until then, have a great week.

Retirement Accounts (IRA's, 401k's...etc)

I recently had someone ask me about retirement. Retirement is a pretty broad topic to touch on. I may make this multiple posts over time, but for now I'll touch on the most common facet of retirement. Most people working corporate jobs have access to a 401k, SEP or profit sharing plan. For others its access to an IRA.

Thats a whole lot of acronyms and numbers. Lets define 2 of them and discuss them.

1. 401k - name is derived from internal revenue code 26 U.S.C 401(k)
2. IRA - Individual Retirement Account

What is the purpose of an IRA or 401k?

The purpose of an IRA or a 401k is to allow for you to save for retirement tax deferred. Also, you can invest in stocks and bonds...etc.

What is the benefit to saving money into a "retirement account" versus a savings account or a standard brokerage account?

Saving money into a retirement account allows you to (1) possibly decrease your taxes (2) defer taxes on the growth of your money.

Can you give me an example of what you mean?

For example, if you make $50,000/year and save/defer $3,000 in an IRA or 401k, your taxable amount that year would be $47,000. This is good because it helps reduce your taxes for that year. In some cases deferring money can actually keep you at a lower tax bracket.

Ok, great I know what you're talking about, but whats the difference between a 401k and an IRA?

Fundamentally the two allow you to do similar things - save for retirement and defer your taxes on the money saved in the retirement account. The real major difference is the contribution limits and investment choices. A 401k usually has limited investment choices ranging from a few to dozens. An IRA is more flexible and you can choose the investments. 401k's by employers typically match contributions (you'll need to check your company's policy to determine how much and what the vesting period is.) IRA's do not match. Most importantly though, the limits are different. The maximum you can contribute to a 401k for 2011 and have it deducted from your gross salary is $16,500 for those under 50. For those 50 and above, you can contribute $22,000. IRA's on the other hand only allow $5,000 for those under 50, for those above 50 the limit becomes $6,000.

Other information regarding IRA's and 401k's

Keep in mind that in order to receive this benefit of deferring taxes on the contribution and the growth there has to be some "catch." The catch is that you cannot take the funds out and use it until 59.5 and after. If you take it out prior to 59.5 there usually is a 10% penalty on top of paying ordinary income tax on the funds. There are circumstances where you can take the money out prior to 59.5 such as disability, college, first time home buying, medical bills while unemployed...the list goes on.

In general, there are advantages and disadvantages to contributing to retirement accounts. One thing that might be good practice is to have 3-4 months of savings before you start to contribute significantly to your retirement accounts. Retirement savings are a great way to start to sock away for retirement, but for most people this should be the only savings you have for retirement.

Just as a disclaimer, this post is not meant to be specific investment advice. Please speak with your CPA, attorney and financial advisor regarding any legal/professional advice.