Wednesday, January 28, 2009

Where To Purchase My Books

I have received many queries from interested readers throughout the country on where they can get hold of my books. For those interested readers, I wish to advise that I am working with the following bookshops:

* Theodist Limited, Port Moresby

* Christian Books Melanesia, Mount Hagen

* Christian Boosk Melanesia, Wewak

Readers in other centres can purchase copies from me. I normally add K10 to the price of each book to cover postage anywhere in Papua New Guinea. I do not know what prices the bookshops are selling the books at. My price is K40/copy for "Success After Graduation", "Young Money" and "Be Your Own Boss" (K50 including postage).

I have not sold any books to oversears buyers yet. But I am aware that some people have bought the books while in the country and taken them to other countries.

My 4th Book

My 4th book is titled "Why Study Hard?". It is provides 12 reasons why students need to do well in school. I wrote it to motivate students to really do their best because there are many benefits to them, their families and their children later. I am confident that many students who read the book will feel empowered to give their best shot at their studies.

"Why Study Hard?" is the first of a series of 4 books I plan to write, all aimed at motivating students to do well. The second book ("Study Skills For Enhanced Academic Performance") talks about how students can receive good grades. It covers subjects such as goal-setting, study planning, preparing for classes, tips on note-taking, revision, assignments, preparation for exams, sitting for exams, time management, etc. This will be followed by a book which discusses the major distractions which students are faced with, and suggestions on how to deal with them. Some of the distractions are boy-girl relationships, sports, student politics, religious activities, alcohol and drugs, etc. The final book is to be titled "25 Benefits for Bookworms". It discusses the personal benefits students can realise by reading books.

"Why Study Hard?" is with the printers right now and is expected to be out in March 2009. The others will follow thereafter.

Saturday, January 10, 2009

Three Simple Steps To Building Wealth

Here is an article by William Artzberger on building your personal wealth. Enjoy.

Building wealth - it's a topic that sparks heated debate, promotes quirky "get rich quick" schemes and drives people to pursue transactions they might otherwise never consider. "Three Simple Steps To Building Wealth" may seem like a misleading title, but it isn't. While these steps are simple to understand, they're not easy to follow.

The Steps
Basically, building wealth boils down to this: To accumulate wealth over time, you need to do three things:

· You need to make it. This means that before you can begin to save or invest, you need to have a long-term source of income that's sufficient enough to have some left over after you've covered your necessities.

· You need to save it. Once you have an income that's enough to cover your basics, you need to develop a proactive savings plan.

· You need to invest it. Once you've set aside a monthly savings goal, you need to invest it prudently.

Step1: Making Enough Money
This step may seem elementary, but for those who are just starting out, or are in transition, this is the most fundamental step. Most of us have seen tables showing that a small amount regularly saved and compounded over time can eventually add up to substantial wealth. But those tables never cover the other sides of the story - that is, are you making enough to save in the first place? And are you good enough at what you do and do you enjoy it enough that you can do it for 40 or 50 years in order to save that money?

To begin, there are two types of income - earned and passive. Earned income comes from what you "do for a living," while passive income is derived from investments. This section deals with earned income. Those beginning their careers or in the midst of a career change can think about the following four considerations to decide how to derive their "earned income":

* Consider what you enjoy. You will perform better and be more likely to succeed financially doing something you enjoy.
* Consider what you're good at. Look at what you do well and how you can use those talents to earn a living.
* Consider what will pay well. Look at careers using what you enjoy and do well that will meet your financial expectations.
* Consider how to get there (educational requirements, etc.). Determine the education requirements, if any, needed to pursue your options.

Taking these considerations into account will put you on the right path. The key is to be open-minded and proactive. You should also evaluate your income situation annually.

Step 2: Saving Enough of It
You make enough money, you live pretty well, but you're not saving enough. What's wrong? There's only one reason why this occurs: your wants exceed your budget. To develop a budget or to get your existing budget on track, try these steps:

Track your spending for at least a month. You may want to use a financial software package to help you do this. If not, your checkbook is the best place to start. Either way, make sure you categorize your expenditures. Sometimes just being aware of how much you are spending will help you control your spending habits.

Trim the fat. Break down your wants and needs. The need for food, shelter and clothing are obvious, but you also need to address less obvious needs. For instance, you may realize you're eating lunch at a restaurant every day. Bringing your own lunch to work two or more days a week will help you save money.

Adjust according to your changing needs. As you go along, you probably will find that you've over- or under-budgeted a particular item and need to adjust your budget accordingly.

Build your cushion - you never really know what's around the corner. You should aim to save around three to six months' worth of living expenses. This savings prepares you for financial setbacks, such as job loss or health problems. If saving this cushion seems daunting, start small.

Get matched! Contribute to your employer's 401(k) or 403(b) and try to get the maximum your employer is matching. Some employers match 100% of the participant's contribution, and this can be a big incentive to add even a few dollars each paycheck.

The most important step is to distinguish between what you really need and what you merely want. Finding simple ways to save a few extra bucks here there could include programming your thermostat to turn itself down when you're not at home, using plain unleaded gasoline instead of premium, keeping your tires fully inflated, buying furniture from a quality thrift shop and learning how to cook. This doesn't mean that you have to be thrifty all the time: if you're meeting savings goals, you should be willing to reward yourself and splurge (an appropriate amount) once in a while! You'll feel better and be motivated to make more money.

Step 3: Investing It Appropriately
You're making enough money and you're saving enough, but you're putting it all in conservative investments. That's fine, right? Wrong! If you want to build a sizable portfolio, you have to take on risk, which means you'll have to invest in equities. So how do you determine what's the right exposure for you? Begin with an assessment of your situation. The CFA Institute advises investors to build an Investment Policy Statement.

To begin, determine your return and risk objectives. Quantify all of the elements affecting your financial life including household income, your time horizon, tax considerations, cash flow/liquidity needs and any other factors that are unique to you.

Next, determine the appropriate asset allocation for you. Most likely, you will need to meet with a financial advisor unless you know enough to do this on your own. This allocation will be based on the Investment Policy Statement you have devised. Your allocation will most likely include a mixture of cash, fixed income, equities and alternative investments. Risk averse investors should keep in mind that portfolios need at least some equity exposure to protect against inflation.

Also, younger investors can afford to allocate more of their portfolios to equities than older investors, as they have time on their side.Finally, diversify. Invest your equity and fixed income exposures over a range of classes and styles. Do not try to time the market. When one style (e.g., large cap growth) is underperforming the S&P 500, it is quite possible that another is outperforming. Diversification takes the timing element out of the game. A qualified investment advisor can help you develop a prudent diversification strategy

Building wealth over time depends on the successful execution of three steps:

1) having enough income;
2) saving an adequate portion of that income; and
3) investing what you save prudently.

Getting on the path that leads to wealth begins with a thoughtfully constructed plan and diligent execution of that plan. An investor who stays on that course should in time find that he or she is successfully building wealth.

by William Artzberger
Bill Artzberger, CFA, is an entrepreneur and investor in Houston, Texas. Before striking out on his own, Bill worked for more than five years at a privately held trust company. He has an MBA from Rice University and undergraduate degrees in marketing and journalism from Southern Methodist University.

Stop Keeping Up With The Joneses - They're Broke

Here is an article by Lisa Smith on 'Keeping up with the Joneses', which means trying to emulate other peoples' lifestyles. Enjoy.

It used to be that spending money on status symbols for the sake of flaunting your wealth was an activity reserved for celebrities and millionaires. That has all changed. Conspicuous consumption, what was once referred to as "keeping up with the Joneses", has brought the lifestyles of the rich and famous to suburbia.Just as most people consider themselves to be above-average drivers, most people assume they aren't the ones doing all this needless spending. They aren't wearing ten pounds of gold chains, or gowns created by famous designers. Four-hundred-dollar haircuts, sprawling mansions, Rolls Royces and private planes aren't in their budget, so they assume their spending is reasonable. However, a closer look at what you're spending might put your own lifestyle in a different light.

The Trappings Of Success
The competition is on. Everyone is looking for the smallest phone, the cable provider with the most channels and the television with the biggest screen. Add in desktop computers and high-speed internet access and you've created a list of America's growing "necessities". According to a 2006 survey entitled "Necessity or Luxury" by the Pew Research Center, 33% of Americans now view cable or satellite TV as a necessity. In 1996 that number was 17%. Also, 51% now can't live without a home computer, up from 26% in '96. Some items that were seen as fads or didn't exist in 1996 have also jumped onto the necessity list:

Cell Phone: 49%
High-speed internet: 29%
Flat-screen TV: 5%
iPod: 3%

Even huge sport utility vehicles are now being justified under the guise of safety. There are now so many of the behemoths on the road, it feels like the only way to be safe in a crash is to make sure you're driving one too.Weekly maid services, private contractors and landscapers are clearly not necessities, yet they have become quite common. In all of these instances a little elbow grease could lead to huge savings. Cosmetic surgery, pleasure boats,
restaurant quality kitchen appliances, professional quality home gym equipment, and second homes are a few items that still qualify as luxuries in most people's minds, but that hasn't hurt their popularity. How long will it be before these items make the jump to the necessity category, too?

A Global Phenomenon
The western countries are well known for their excessive consumption, but the emerging middle classes in China and India are working hard to join the crowd too. While these major players gain the bulk of the attention, they are far from alone. From blue jeans in Russia to satellite dishes in Iraq, people around the world are coveting their neighbors' lifestyles.

Why We Do It

There are a variety of factors driving consumption:

  • The desire to show off our success
  • The need to have what other people have
  • Prolific advertising and product placements
  • Easy credit
  • A society that favors instant gratification over hard work

The Joneses Are Broke

Many of the people driving around the suburbs in their giant SUVs while talking on their new cell phones are deeply in debt. If you ask them how they are doing, they will tell you that they are just barely getting by. According to a Federal Reserve Board study, 43% of American families spend more than they earn. Statistics from the Federal Reserve Board also show that, in 2005, household debt was at a record high when compared to household income. Not surprisingly there was also a record number (2,039,214) of consumer bankruptcies filed in 2005 according to the American Bankruptcy Institute.

As mentioned earlier, the grim outlook isn't limited to America either. A survey conducted by Newspoll Market Research indicated that nearly two-thirds of Australians say they cannot afford to buy everything they need. Yet, the World Bank cites Australia as having the twentieth highest per capita income in the world according to the publication "World Bank Development Indicators 2006". Luxembourg, Norway and Switzerland took first, second and third places. The U.S. came in at No.6 and Canada at No. 19. Why so much debt and such a grim outlook from areas of obvious affluence? It's simply a matter of people spending far more money than they should. If you can "afford" life's luxuries but aren't funding your 401(k) and maximizing your retirement savings, you need to reevaluate your financial situation.

Trim Your Needs
Most people don't use all of the features on their cell phones. Nobody watches all of the stations that they pay for. You may need a car to get to work, but you don't need a luxury vehicle, and you certainly don't need a gas-guzzling sport utility vehicle. Remember, one person simply can't drive two cars at the same time, so there's no reason to own more than one. The big homes, expensive toys and other goodies seem nice, but in reality they are unnecessary from a practical perspective, and will only make you happy for a very short period of time before the next "must-have" item rolls around.

Set Your Priorities
Remember when you were little and mom told you, "Don't worry about others; mind your own business and worry about yourself"? It's one of those lessons we all seem to forget as we get older. If you've got a healthy nest egg stashed away or an endless supply of cash, by all means spend. However, if you're concerned about the future, you need to curb your spending today.Take a page from low-income America, and limit your "needs". The same survey that found iPods were a necessity for 3% of people, found that the less you earned the fewer items you listed as necessities - items you could not live without. The lesson is, you shouldn't worry about what other people have; it's your money, so spend it wisely.

By Lisa Smith

Under 30 And Financially Secure In 10 Steps

Below is an article by Ken Hawkins which I thought would be helpful for young people under 30 years of age. It was written for readers in the US, but the ideas are applicable everwhere else. Most of the ideas are also in my book "Young Money". Enjoy.

Being financially secure enough to enjoy your life in retirement is the last thing on the minds of those under 30. After all, with the stress of all the expensive "firsts" that often come about during this period, like purchasing a car, buying a house and starting a family, it's hard to even think about saving for the future. However, working toward financial security need not be an exercise in self-deprivation, as many people assume. Attaining this goal even has some immediate benefits, as financial insecurity can become a serious source of stress - something 20-somethings have enough of already. So can you achieve long-term financial security without sacrificing your short-term goals? Read on for 10 tips on how to do just that.

1. Have Fun
Enjoy yourself while you are young - you will have plenty of time to be miserable when you are older. Living a successful, enjoyable and happy life is about achieving a proper balance between time with family and friends and between work and leisure time. Striking a proper balance between your life today and your future is also important. Financially, we can't live as if today was our last day. We have to decide between what we spend today versus what we spend in the future. Finding the correct balance is an important first step toward achieving financial security.

2. Recognize Your Most Important Financial Asset: Yourself
Your skills, knowledge and experience are the biggest asset you have. The value of your future earnings will dwarf any savings or investments you might have for most of your career. Your job and future career is the most important factor in achieving financial independence and security. For those just entering the work force, future career opportunities are as bright as they've ever been. The large number of retiring baby boomers is expected to create labor shortages. There will be room for advancement as companies scramble to fill the positions held by these aging baby boomers. Those who are in a position to take advantage of these opportunities will benefit the most.Look at yourself as a financial asset. Investing in yourself will pay off in the future. Increase your value through hard work, continual upgrading of skills and knowledge, and making smart career choices. Efforts to improve your career can have a far bigger impact on your financial security than tightening your belt and trying to save more.

3. Become a Planner, Not a Saver
Research has shown that those who plan for the future end up with more wealth than those who do not. Successful people are goal oriented: they set goals and develop a plan to achieve them. For example, if you set a goal to pay off your student loans in two years, you'll have a better chance of achieving this goal than you would if you merely said you wanted to pay off your student loans, but failed to set a timetable. Become a planner. Set goals and develop an action plan to reach them. Even the process of writing down some goals will help you to achieve them. Being goal oriented and following a plan means taking control of your life. It is an important step toward improving your financial independence and security.

4. Set Short-Term Goals - Long-Term Goals Will Take Care of Themselves
Life holds many uncertainties - and a lot can change between now and 30 years into the future. As such, the prospect of planning far into the future is a daunting task and in many ways, it's often an exercise in futility for young investors. Rather than setting long-term goals, set a series of small short-term goals. These goals could be a simple as trying to pay off credit card debt or student loans in a matter of months. Maybe your goal is to contribute to your company's pension plan with a set salary reduction contribution each month. Setting short-term goals that will help you to advance in your career is important in helping you get ahead. Remember, these short-term goals should be measurable and precise. You can't win a race if there's no finish line. As you achieve your short-term goals, set other short-term goals. Maybe you want to buy a house, earn a promotion at work or buy a new car. The constant setting and achieving of short-term goals will ensure that you reach your longer-term goals. If your goal is to be worth a million dollars by age 40, you cannot achieve this without first achieving smaller goals like having $10,000, $50,000 or $500,000.

5. Planning For Retirement: Fuggetaboutit?
Just out of school, retirement planning is the last thing on your mind. So, if you have to for now, just fuggetaboutit. If you follow the other tips, you will not only be more financially secure and prepared in the short term, but you will also be financially prepared for the distant future as well. However, if you take a few steps now to start saving, like setting up automatic monthly contributions to a retirement plan like an employer-sponsored pension plan, compounding will work in your favor, which makes reaching your goal much easier. If you implement this pay yourself first ideal, you won't have to worry about how much you're contributing; the most important thing is to develop the habit of saving. The rest will take care of itself. You can increase your contributions when your income rises or when you've achieved more of your short-term financial goals. (To learn why starting now can save you thousands later

6. Make Sure Your Lifestyle Costs Lag Your Income Growth
Many new graduates find that in the first couple years of working they have excess cash flow. Still used to their more frugal student spending habits, it is easy to make more money than they need. Rather than using excess income to buy new toys and live a more luxurious lifestyle, this excess could be put toward reducing debt or adding to savings. As you advance in your career and attain greater responsibility, your salary should increase. If the cost of your lifestyle lags your income growth, you will always have excess cash flow that can be put toward paying down debt, making investments, saving for a home, or achieving any other financial goals you may have.Where many people get into trouble is that they feel entitled to a standard of living that exceeds what they can afford. However, if you keep your standard of living below what you earn, you won't have to cut back to accumulate money; instead, you will naturally have excess cash flow because you earn more than you need to live on. In addition, keep in mind that trying to keep up with the Joneses is always a recipe for financial failure. For all you know, you may make more than the Joneses, who may be funding their lavish lifestyle with debt anyway.The good life should be a reward for your hard work, good fortune and successful planning, not something that you are entitled to. Once you have established a certain lifestyle, it is psychologically difficult to lower it. It is very easy to raise it.

7. Become Financially Literate
Making money is one thing; saving it and making it grow is another. Financial management and investing are lifelong endeavors. Making sound financial and investment decisions is important for achieving your financial goals. The more knowledgeable and experienced you are in financial matters, the fewer mistakes you will make. Research has shown that people who are financially literate end up with more wealth than those who are not. There is a strong monetary incentive for becoming financially sophisticated. Taking the time and effort to become knowledgeable in the areas of personal finance and investing will pay off throughout your life.

8. Seize the Opportunities: Take Calculated Risks
Taking calculated risks when you are young can be a prudent decision in the long run. You might make mistakes along the way, but remember, mistakes are the lessons of wisdom. You often learn more from your mistakes than from your successes. Also, when you are young, you can recover faster from financial mistakes, and you have many years to recover.

Examples of calculated risks might include moving to a new city with more job opportunities, going back to school for additional training or taking a new job at a different company for less pay but more upside potential. Starting a new company, working for a small start up company, or investing in high risk/high return stocks, is easier to do when you're young. Younger people can afford to take risk, and the same opportunities might not be available later in life. As people get older and assume more family responsibilities like paying off the mortgage or saving for the kids' education, many are forced to play it safe and are unable to capitalize on riskier opportunities that present themselves. Taking calculated risks when you can afford to do so is necessary to get ahead financially. Playing it safe might be the bigger mistake in the long run.

9. Borrow Money For Investments - Never to Finance a Lifestyle
As mentioned before with the Joneses, you should never borrow to finance a lifestyle you cannot afford. Using credit for a life you feel entitled to is a losing proposition when it comes to building wealth. The constant borrowing will assure that there is no money available for investing, and the added interest expense of borrowing further increases the cost of the lifestyle.

Borrowing money should be used only for investing - where your gain will outrun your borrowing costs. This might mean investing in the literal sense (for stocks, bonds, etc.) or it might mean investing in yourself for your education, extra training, to start a business or to buy a house. In these cases, borrowing can provide the leverage you need to a reach your financial goals faster. Borrowing to meet short-term desires is counterproductive.

10. Take Advantage of Financial Freebies
Not many things in life are free. If you belong to a company pension plan, take the free money it offers and make sure that you contribute at least up to the maximum of what your company will match. You can also look for (legal) ways to take advantage of tax laws. For example, contributing to an individual retirement account (IRA) will result in a tax savings - in effect, the government is giving you free money to provide an incentive to contribute. There is also an incentive to invest in stocks because of favorable tax treatment on capital gains and dividend income.

Achieving financial independence is a goal most people strive for. It is not necessarily easy, but it is achievable if you understand your priorities, set achievable goals and take the proper steps toward reaching them.

by Ken Hawkins
Ken Hawkins is a financial writer and vice president of Second Opinion Investor Services, an investment consulting firm that provides unbiased and independent investment advice. His experience spans the investment world of the private client investor as well as the world of the institutional investor representing pension funds, asset management companies, mutual funds and investment counselors. Hawkins is also co-author of "The New Rules for Retirement - What Your Financial Advisor Isn't Telling You" (2008).

Wednesday, January 7, 2009

Holiday Activities In The Village

My family and I spent the last 3 weeks of December 2008 in the village. This was the longest time we have spent in the village for a long time. And we enjoyed every day of it. In fact 2 of our children could have enough of village life so we left them there.

The holidays started with me speaking at a seminar orgainsed by the Western Highlands Students & Graduates Association. The topic I was assigned was Management. I started with personal management, followed by money and business. Indications are that the young people enjoyed it.

I also attended two bride price ceremonies and one funeral. I used these opportunities to speak to people about the need to be careful with traditional activities which are burdensome in today's world. I felt to highlight this because of the observation that people are so concerned about spending money on customary obligations to the detriment of their own well-being.

We had a large gathering on New Year's Day where I was the keynote speaker. I spoke on many issues related to community development and progress over a period of 2 hours.

Two years ago we initiated a project to connect electricity into the community. The project receivbed funding under the Government's Rural Electrification programme to the value of some K500,000. This project was the subject of much discussion. I encouraged people to get ready to connect power into their houses. I especially challenged young men to build better houses (semi-permanent and even permanent) within the next 5 years. The project will be opened in April this year.

I took the opportunity to approach PNG Power Limited about connecting power to another community. The response has been positive. The Provincial Manager and I visited the community to promised the people that initial survey work would commence in January 2009. I also approached the local Member of Parliament (Hon. William Duma) who made a verbal commitment to fund the project.