THE WORLD DECLINE!!!!

I'm not shouting when I capitalize the title, but rather drawing attention to the fact that human society is declining all around us. Is anybody else reading the news lately? Europe's unified monetary system is crashing country by country while being offered bailouts from the (USA) 'International Monetary Fund'. I mean, who are these people? Where did they get enough money to buy up a country's debt and collect compounding interest payments for the next 1000 years? Why in this crisis did Taylor #1 only post once this year while I was having my midlife crisis breakdown? Doesn't having infinite investing knowledge and world economic degrees make him the man responsible for blowing the whistle on this decline? Does he care about the small guy, or is he hoarding his millions in a snow cave in northern Canada in the backyard of his investment property?

Of coarse, lets not forget the End Time prophesies:


Wars and rumors of wars
Cataclysmic events fortold: flooding, locusts, frogs, rising oceans
One world language and monetary system
The Mayan calendar ends Dec 21 2012 with


Are all these world events (physical, fiscal and natural) pointing to an unavoidable end? Should we rely on governments to handle debt crisis when they are voted in by people who can't even balance their cheque-books between paydays? Nobody wants to lose government services, or pay more taxes but if something isn't done soon then even us in Canada could be the next in line to accept a handout from the IMF. What happens in the end? Is the next era the one where societies are bank-run? Oh, but banks are bailed out by government with their own money on loan. Oh my, what a conundrum!



Here's the Stats:

Canada owes over 814 billion dollars to the Bank of Canada which equals to $25'000 per man woman and child. My immediate family owes $150'000.

In Zimbabwe, a baby is born into $36'000 debt with what chance to repay? 34% of working age adults are inflicted with AIDS. What chance do they ever have of paying off that debt?

Germany has a national debt of 1.8 trillion, meaning every citizen owes roughly $22'000 per citizen.

The Police States of America owes $25'000, roughly the same as Canada, only we're better looking.

The IMF loans money at the astonishingly low rate of 3.5%. That's fine if you're buying your first car or even house, but Canada, if bailed out would still owe $28b a year just in interest, roughly $863 per person. So basically the IMF is a debt consolidator on a global scale.

So as the world financial system collapses around us, what are we going to do?

Teachers are Salesmen and Salespeople

From a letter to a friend who is a teacher, but who said about himself "I'm not much of a salesperson." I just had to disagree as follows:

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Well, here's the cold hard facts: if you are planning to make any money other than 'job money' you have to learn sales skills. Thankfully, you already have them from teaching. I don't differentiate teaching and selling. With teaching, you are getting paid to 'sell information' to the students. You have to convince them that what you are teaching is correct and you're trying to get them to retain it. With selling, you're teaching them about a product or service and you are convincing them that it will fill a need. In either case it takes people skills, speaking skills. It's just that on one side (teaching) your salary is capped and you get more vacations (maybe) while selling can give you greater financial gain but involves usually a learning curve and other things. Catch my drift? So I think the main question that you need to answer is not whether you are to be teacher or salesperson but more what are your financial goals and what's the best way to get there. Also, I know lots of great teachers who also have businesses - no contradiction there. In fact, some of the best business owners and trainers are teachers, [because they have the ability to convey information so recipients 'get it'].

What I learned in 2008 - A BLIP Investor's Perspective

Well, it certainly has been hard times for many people, including some BLIP members. I hope others will pipe in with their personal challenges so that we can collectively grow and share our wisdom.

What I learned in 2008:

1. It's very, very hard to be an investor while simultaneously run a retail operation.

A retail business is an extremely capital and time-heavy investment. It sucks every last minute of your day and every last dollar from your bank during startup. No one could have prepared me for all the unexpected expenses that I encountered such as equipment problems, stocking, relentless royalties, surprise GST payments (they come every three months), payroll and other labour costs, downswings in sales cycles (slow near the holidays in our area), and more. In short, I ran out of capital 3 times in 8 months and had to borrow more each time. All the while, I was consumed with the relentless demands of running the business. This left little time to read articles on investing, keep up with the global trends before they hit, or basically just sharpen my investing axe. So, it was a double edged sword. On the one side, I didn't have enough time to properly study investment and then when I did and had the sure-fire confidence that I sometimes get, I didn't have the capital to invest! One such event was Maple Leaf meats. I read about it, I studied the situation, I knew they would pull out of it and I said to myself, "Self. You need to quickly buy Maple Leaf stock while they are rock-bottom." But self had no money left because of the retail operation so all self could do was watch the opportunity sail by. And self's prediction was right about Maple Leaf. Time and money are completely consumed when you start up a retail operation. Be sure this is the correct direction for you.

2. CashFLOW is king.

Cash is good, but cashflow is king. Being a wise steward of whatever cashflow you have is the key to not getting nailed. During up times, I spent too much. I didn't prepare for a downswing. Then, when we swang down, I needed to borrow more to get the cash flowing again. Meanwhile, I could have/should have started analyzing my expenses in extreme detail and cutting them earlier.

3. Focus on Net worth.

Thankfully I learned this while sharpening my axe. A few of us read a couple of good books that suggest that a person who desires to be financially free should not focus on income but instead on net worth. I agree wholeheartedly with that because although I can't rub two pennies together on certain days, my money is certain occupied with building greater net worth. However, this MUST be balanced with #2, cashflow. Net worth is of no value if you can't make your payments and lose the asset.

4. Make an exit strategy (and stick to it)

This is something I've known about for a while but is very easy to forget. Sometimes we hold onto our investments for emotional reasons. In my case, I have a great tenant so I am hesitant to ever sell the property. In another case, I like my coffee shop and the customers so it is already hard to consider giving up that new part of my life. And then there is our own house....it's always emotional to try to move or sell your principle residence. But, we must make these hard decisions and separate our emotions from our investments. Pride can also be a scary enemy of our success. Sometimes we know we should exit but our pride doesn't want to let go because, perhaps, we've already lost something on it and don't want to admit it, or, we've already spoken to lots of people about how good it is and don't want to have to back-peddle.

5. The Work/Play Balance (aka keeping the sabbath holy)

We need to rest. I don't recall smelling many roses in 2008. In fact, it may go down as one of the hardest years of my life for work and stress. Certain weeks when we took over the store I was working 7 days a week. We need to secure that sabbath day and make sure we don't get lured into more work. As an investor, it's tempting to want to make every minute 'useful' but in reality, rest is more useful!

And those are the main things I've learned through the challenges of 2008. All I can hope for is that this will translate into practical wisdom and that 2009 will be much better on every front as we start a fresh year.