Owner: Personal Financier URL:http://personalfinancier.blogspot.com/ Join Date: Wed, 03 Oct 2007 17:32:33 -0500 Rating:0 Site Description: Articles on personal finance, economics, business and Investments: How-to's, opinons, commentaries and strategies
Site statistics:Click here
Understanding the difference bewtween investing and gambling 2007-11-03 11:20:00 While this title sounds intuitive many so called investors are in fact gamblers. In order to substantiate the difference
between the two we need to a closer look in to the basics of investing.When we invest money in a financial asset we are basically risking a sum of money for potential future return. Financial assets vary by risk and return. The latter two are tightly bound in a reverse relationship the higher the risk the higher the potential return. For example, some of the least risky financial assets (or risks free) are cash deposits and government bonds where the chances of losing your investment are slim and returns are known at the time of investment. At the other hand we have options and derivatives which offer high risks with high potential returns.Now, what exactly is risk of a financial asset? Think about any raffle or draw. A financial asset is very like one. A coin toss for example has a 50% chance to land on tails or heads. Buying a specific financial asset holds the sam Read more:Understanding
Creating and managing effective teams in the workplace 2007-11-03 07:18:00 Teams have the potential of exponentially empowering an organization as every member completes the other and in turn creates synergy. Creating
and managing effectiveteams
is a challenge worth taking on as the benefits of synergy are a great reward.This article will offer tools and thoughts on how to create and manage effective teams in the workplace.Management theory identifies a team as 3 or more members with the opportunity to create hierarchies and interactions amongst them (therefore a large group of people is not a team).There are three distinct types of teams:1. Organic teams - Teams which are supported by an organizational structure.2. Project teams - Teams which are assembled for a specific project.3. Non-organic teams - Teams which are assembled in an organization for a specific process or task or multi-disciplinary teams.In every team the manager plays a role in which professional as well as procedural guidance holds an extremely important place.Effectiveness of teams can be
How to manage change in business 2007-11-02 05:33:00 Many potentially good initiatives fail due to a lack of strategy and misunderstanding. How should change be managed?While the purpose of the initiative is often clear the way to implement it is shrouded in mist. Many organizational change initiatives often fail at implementation. While the benefits of the process are usually very clear and understandable it is a whole other matter getting the organization to willingly adopt the change.As any process organizational change must begin with a strategy. What is the purpose of the change process but also: How to market it, how to introduce it to the organization and how to ensure employees and co-workers will willingly adopt it?A few common mistakes in managing change have been mentioned in Laurent Keller Johnson’s article for Harvard Business Monday Morning (Leading Change and Succeeding). The following are common mistakes of poorly managed change processes:1. Take the time to study organizational cultureChange will not happen on its meri
Common sense advice for credit card use 2007-11-02 04:49:00 The use of credit
cards is very convenient but without a good level of consumer awareness might become a highway into financial distress.Credit cards are a very efficient payment method as you can keep track of all your purchases, make use of promotions and of course do without cash and checks and the logistics involved. However, for the unwary, credit cards are also means of encouraging higher consumption which is not always needed.Educated consuming is always recommended and is strongly advised in the case of credit cards as well.A couple of do’s and don’ts for a more efficient use of credit cards:DON’TS 1. Do not pay on installmentsPaying on installments often helps buy that desired item today instead of in a couple of months. But paying on installments also has a few major disadvantages. Paying on installments creates an illusion of extra funds which, in turn, can be used to purchase another item, on installments of course. This method of purchase quickly leads to lose of con Read more:Common
Content Sites Compared: Helium, Associated Content and Constant Content 2007-11-10 05:44:00 This blog started out as a series of articles written for Helium. I discovered Helium by mistake and immediately discovered the joys of writing. After posting several personal finance articles to Helium and after starting my own blog I found associated content and Constant
-content. The following is a summary of the comparison of these content publishing sites: Constant Content
Constant Content strategy simplified is selling quality articles for publishers for either usage, unique of full rights use.Constant Content has high quality standards and examines every article submitted. Authors name their price for either usage, unique or full rights use and get paid when publishers buy their articles. Prices for 500 word article vary for usage (7$-15$), unique (50$-70$) or full rights (70$-90$). Authors are paid 65% of the price. Constant Content is more suitable for competent established authors which have the ability to produce quality content.HeliumHelium’s strategy simplified is generati Read more:Sites
, Associated Content
Basic Human Rules for Creating World Wide Movements 2007-11-10 05:17:00 Tim Castree has recently created a difference. Mr. Castree is the CEO of Leo Brent Australia and has successfully turned the lights off at Sidney Australia for one hour – “Earth hour”. 2.2 Million People participated in this initiative that resulted in a decrease of 10.2% in Sidney carbon emissions.According to Castree there are seven basic human rules for creating world wide movements such as facebook or Earth hour which are first and foremost about marketing:1. The need to be a part of something – People are imprinted with a strong urge to belong and follow.2. Identifying with successful people – Recruiting celebrities for people to identify with.3. Self expression – People need and want self expression. Creating
a buzz and excitement is necessary. An issue should be made accessible to people.4. Work is not divided equally – Game theory describes how people tend to do less in larger groups. The wisdom is letting passionate people lead and others to join.5. Motivation an Read more:Basic
, Rules
, World
, Movements
Make yourself a Desired Employee 2007-11-08 15:44:00 I doubt there is such a thing as an ideal employee as everything in life is context related. There are however key characteristics of employees which are most desirable by organizations.Positioning and branding one self as having these characteristics is a right step on the way to success:1. Professionalism – First and foremost an employee is hired to perform a task or service. Professionalism is the very fundamental requirement from any desirable employee.2. Curiosity – An employee should be curious of his job and his surroundings. Employee
and organizational evolution stems from employee curiosity and the drive to explore processes and methodologies.3. Solution oriented – A solution oriented employee is an asset. Most people tend to focus on the problem and to seek guidance and counsel. Some, if mentored, can understand and adopt solution oriented behavior which requires self-confidence and assertiveness. When given an assignment or issue to address a solution oriented employee
Outsourcing: Why Outsource? Potential Benefits and Risks 2007-11-15 16:04:00 Outsourcing has quickly become a commonly used tool in organizations. What has made outsourcing so popular? The popularity of outsourcing is well justified as it generates significant advantages. However, outsourcing has some inherent risks which should be identified and dealt with preemptively.Why Outsource
then? Organizations make use of outsourcing when a certain function has a potential to become more economic with little strategic cost to the organization. Outsourcing is usually used if one of the following applies to the specific function required:1. Special skills are required and it is unwise to invest in their development within the organization – It is wise to outsource if it is not economically sound to invest in developing a set of skills. Another consideration should be the quality of skills developed in comparison to those available outside the organization.2. Not a core-competence of the organization – If a specific function required to an organization is not a part Read more:Outsourcing
, Potential
, Benefits
, Risks
How to Measure a Blog Posts Popularity - A Novel Idea 2007-11-14 11:34:00 I've been posting quite a few about content sites. I've recently thought about an interesting idea of how to measure which topics are more interesting to readers.I've been posting on Associated Content and Helium for about a month now. It occurred to me that Associated Content's Page Views or Helium article earnings can be used to measure the popularity of certain topics or issues. This can only be achieved, of course, if you have enough articles with relatively constant quality on various subjects.In my case I found the following results which surprised me quite a bit:1. 2 out of 25 articles, both dealing with managing employees, generated 33% of page views. 2. Further down the list 16 investment related articles generated another 50% of page views2. Last came other personal finance issues like credit cards and mortgages with 7 articles for 18% of page views.This astounds me as the two articles on managing employees where of the same relative quality as the others.This finding ha Read more:Measure
, Popularity
Economies of Content: Should you Post your articles to a personal Blog or to Content sites such as Helium or Associated Content? 2007-11-13 15:11:00 This blog started out as a series of articles written for Helium. I discovered Helium by mistake and immediately discovered the joys of writing. After posting several personal finance articles to Helium an obvious thought occurred to me. Why not take these articles and start my own personal finance blog?Having set up my blog I continued writing at Helium and also began posting the articles I’ve written to my blog. A couple of weeks later I found associated content and Constant-content and began to ponder the wisdom of posting to content sites vs. posting to your own blog.Obviously the following tradeoffs need to be considered:1. Exposure – Starting your own blog is easy. Getting exposure is the hard part. Posts to content sites gain exposure quite rapidly (depending on quality of course). Getting regular readers for you blog is another matter entirely which requires to put in extra time and marketing efforts.2. Profitability – If you are posting for additional income a careful co Read more:Content
, Associated Content
Associated Content's Clout Index and Helium Stars: Brilliant Motivators 2007-11-12 14:46:00 I've been posting articles to Helium and Associated Content
for a while now. While this might lack complete economic reason the joys of writing are many. However, I've recently began to reflect upon AC's CloutIndex
and Helium's Stars as marketing tools.It is fairly obvious content sites must have a way of distinguishing authors of quality. Helium awards stars as a function of ranking and quantity and AC has their clout index to indicate how many view an author has received. The simple ingeniousness behind establishing these indicators is creating another motivation for authors, other then money to posting quantity and quality.If you've been posting to Helium or AC stop and think about it. Haven't you been trying ranking and writing for more stars for the sake of the stars themselves? Haven't you been posting to AC like crazy to receive recognition in the form of a little Saturn like dots? Haven't these indicators became a goal in themselves?As humans I believe we constantly l Read more:Associated Content
, Brilliant
Valuation Methods – Discounting Cash Flows vs. Using Multiples 2007-11-12 09:58:00 Discounting cash flows (DCF) is the preferred way to valuating a firm’s worth but is a lengthy process which requires skill and expertise. Using multiples for valuations is convenient and straightforward but it can also be very misleading. And that is an understatement.In DCF a firm’s future cash flows are used to determine its current value by adjusting for risk and time. Multiples
such as profit, capital, assets and sales are used to determine values of companies by comparing similar companies to one another and by direct multiplying. Multiples are also used to compare various companies in terms of profitability, effectiveness and more. The most common use of profit multiples, for example, is in comparing valuations of similar companies in the same industry.For a better understanding of valuation techniques and the appropriate use them a look into the pros and cons of each valuation technique is required. Obviously the shortfalls of one technique are the other’s advantages. Her Read more:Methods
, Flows
Israel to Support New Electric Car Initative 2007-11-11 09:28:00 The Israel
i government has announced its support of an electric car initiative named "Project Better Place". The initiative is headed by Shay Agasi, a former senior VP in the software giant SAP. The initiative has already raised approximately 200 million dollars from strategic investors.The innovative strategy adopted by the company is to create a business model very much the same as the one used by cellular companies. The company will deploy a vast network of charging stations across countries which will enable it to sell cars cheaply with binding, long term, recharging contracts.This strategy will be complemented by its implementation in small, island like countries such as: Japan, Denmark, Hong Kong and Israel.In my opinion this will be a very interesting initiative, well worth observing. The potential benefits of this initiative are obvious to everyone - reducing green house gas emissions and, of course, reducing global dependency on fossil fuels and the countries that produce them Read more:Support
, Electric
Motivation Through Job Enrichment: What Are The Key Components? 2007-11-19 14:26:00 Motivating employees is always one of every manager’s goals. Motivated employees contribute to productivity thus directly increasing profitability for the organization. Structuring jobs and roles correctly is very important in elevating the motivation of employees.The main stream theory on motivation in general is based on Maslow’s needs hierarchy. Maslow’s constitutes a hierarchy of needs made of: Existence, Security, Social Relations, Esteem/Reputation, Autonomy and Self Realization. Every person strives to progress in the pyramid from existence to self realization. Motivation stems from the next unattained level. Each step forward is accompanied by satisfaction and each step back with frustration.As most employees have realized the basic need in the hierarchy as existence, security and social relations motivation stems from the attempt to attain esteem, autonomy and self realization. Hence efforts to increase motivation should concentrate on providing employees with the proper Read more:Components
The Carnival of Personal Finance #127 - Hosted by Moolanomy 2007-11-19 13:06:00 I'd like to take the opportunity and thank Moolanomy for hosting The Carnival
of Personal
Finance #127 and choosing to include my article on Investing mistakes to avoid. I've personally found the following posts very interesting:1. The Dough Roller presents Slow Motion Retirement (or Retire Early, Retire Often)2. Home Finance Freedom presents Payoff Mortgage v. Invest Stocks: Housing Myths Part 123. Advanced Personal Finance presents The Most Misunderstood Tax - The Estate Tax
Read more:Hosted
Update of Freelance Writing Income Online 2007-11-18 14:48:00 I've updated my online freelance writing income.I've been quite successful at constant-content and have sold 6 articles for usage licenses. It is really quite profitable as sums of 10$-25$ an article are very hard to get elsewhere.On Helium there hasn't been a lot of personal finance publishers lately and page views have generated very little income so far (about 4.5$).Associated Content's page views update every week so I'm unable to update page view income from AC.My blog has began to generate some traffic (approx. about 20 visitors a day). Hopefully this will enable me to learn which content is more sought after by my readers.
Read more:Update
, Freelance
, Income
Could You Tell If You Were Just A Brain In A Vat? 2007-11-18 14:36:00 Movies like ‘Total Recall’, ‘Vanilla Sky’ and of course ‘The Matrix’ have already posed that question. In these movies a hero is trapped in a virtual reality so real he could not know the difference between being and being a brain wired to receive stimulations that create an identical alternative reality.Being movies, they all ended happily for our prospected “brain in a vat” whether it is Kiano Reeves, Tom Cruise or Arnold Schwarzenegger. Schwarzenegger could tell it was no dream, Tom cruise chose to leave his lucid dream and Reeves, of course, took the blue pill.But could one really know the difference between being and being a brain in vat? The concept of brain in a vat is a known philosophical thought experiment. In this experiment a brain sits in a lab, wired to a computer of sorts, and receives electrical pulses which stimulate the brains neurons to create a virtual reality full of feelings, smells, sights and sounds. The brain’s previous owner is oblivious to Read more:Brain
The Causes of Organizational Commitment: How to Create the Suitable Environment 2007-11-18 11:41:00 Organizational commitment is very influenced by organizational design. In order to create commitment in the organization managers must create a suitable environment for it to evolve.In principal manager who wish to create a suitable environment for commitment must strive to adopt characteristics of an organizational design which reduces class identity and increases company identity.There are several, independent, ways to achieve higher levels of company Identity. In this article I will discuss some of the most common and effective ones.1. Fine hierarchy – The opposite of manager/ employee hierarchy is a type of hierarchy which is understated. A message of self efficacy should be relayed: “Everyone can become a manager”. As every message this message should be composed of three elements: The source, the message and the target audience. For example, in order to create a finer hierarchy, managers might adopt a more collective decision process such as consulting with a team. This doe Read more:Commitment
, Environment
10 Things You Probably Didn’t Know about Chinese Business Culture 2007-11-26 04:04:00 The recent awakening of the sleeping Chinese
dragon has drawn many foreign corporations to China. These foreign corporations are lead by foreign executives who are ignorant of the more colourful Chinese business culture.The Chinese government has taken considerable action to acquaint the foreign businessman with Chinese business culture. However, there is still some unexplored territory left.I read many stories of business meetings gone astray due to what appeared to be insignificant gestures. A senior executive was astound to see his efforts to stop by an important meeting on his busy schedule was actually taken as an insult. Another company handed out watches as gift to Chinese executives who where surprised by the reaction. Obviously these are more curiosities to be aware of then actual business but the lighter side of business is nothing to be trifled with.This article is about the less known aspects of Chinese business culture and environment. I do not presume to be some sort of e Read more:Probably
, Business
Economies of Blogging – Content and Blog Consolidation Due To Economies of Scope or: “Why I chose to change my blogging strategy” 2007-11-23 04:25:00 In economics the term economy of scope is used to describe a competitive advantage of one company as a result of efficiencies associated with marketing and distribution. Economies of scope usually result in:1. Reaching more people with each dollar spent2. Family branding and product bundling3. Further efficiency due to synergy between productsIn my opinion the world of blogging and content is a very good case study for economies of scope. If we take a close look at blogging and content we find a very unattractive market, so to speak. The threat of entrants is very high as everyone may start a new content site or blog with ease. Customer bargaining power is extremely high as amounts of free and alternative content is abundant and of course so is the threat of substitutes as a result.Nevertheless, out of hundreds of thousands of sites we see a few selected blogs or content sites emerge in every niche. How do they succeed where all others fail? The answer is two fold. Natur Read more:Content
, Consolidation
, Scope
, chose
Investment Basics Carnival #1: Mutual Funds, Investment Psychology and More 2007-11-22 08:49:00 Welcome to the first Investment BasicsCarnival
. This carnival is my initiative and will hopefully display great articles on investment basics. This first addition received a surprising 22 submission total. The selected entries are separated into categories. If you enjoy this carnival please help promote it on your website.MutualFunds
1. Larry Russell presents Where’s Waldo? - The illusion of superior professional mutual fund manager performance. posted at THE SKILLED INVESTOR Blog2. Steve Faber presents - How to Find the Best Performing Mutual Funds
posted at DebtBlogInvestment Psychology1. Silicon Valley Blogger presents Taking The Emotion Out Of Stock Investing posted at The Digerati Life2. Mark U Runta presents Breaking Rule # 1 of Investing posted at Smart Investing & Money ManagementTransaction CostsKCLau presents How to Minimize the Upfront Service Charge in Unit Trust Investment posted at KCLau's Money TipsPoetryMarket Poetry presents Ode to All Struggling Value Investor
Iran's President Ahmadinajad On The US Dollar: "Worthless Piece of Paper" 2007-11-21 15:38:00 Iran's president Mahmud Ahmadinejad said out loud what OPEC members have been discussing in closed doors (with an open mic, by accident). According to Ahmadinejad OPEC should stop selling and pricing oil in dollars as a result of the continuing weakness of the currency. Further more, OPEC members have experienced interest in converting reserves to other currencies.Ahmadinejad's remark actually resulted in increased negative pressure on the American currency. Iran is walking a very tight rope signaling possible retaliations to US imposed sanctions due to its nuclear program.The impact of OPEC converting to the Euro as a working currency is hard to predict. Oil is a commodity as any other. Commodity pricing should not change as a result of changing a currency. However pricing oil in euros combined with a continuing weakness of the US dollar will eventually result in higher oil prices which should up the pressures in the US for alternatives to fossil fuels. Is this a blessing in disguis Read more:President
, Dollar
Setting Goals for My Blog 2007-12-01 13:41:00 I’ve been writing online for three months now. I’ve experimented with writing at content sites such as: Helium, Associated Content and Constant content and also in maintaining my own blog here at Personal Financier.I’ve made the most money in Constant Content and Helium’s Marketplace but I get the most out of blogging. There’s something else about writing a personal blog and having a readership.As many self development and management sites teach us I’ve decided to post my goals for this blog for the 3 months to come. Here they are:1. Unique visitors: 120 unique visitors a day (currently at 25).2. Page views per visitor: 3 Page views per visitor (currently at 1.25).3. Feed subscribers: 70 subscribers (currently at 16).4. Article posts each month: 20 (18.5).I’d like to take this opportunity to thank my readers and encourage all to mail any suggestions, requests, comments or thought to me at: dorian.wales@gmail.com
Read more:Setting
, Goals
Understanding Important Hidden Psychological Aspects of Rent vs. Buy Comparisons 2007-11-30 04:29:00 This article, a third in a series, is about the softer side of rent vs. buy. These comparisons have become very popular and can easily be made using one of the many online calculators available. However, the psychological aspects of this comparison have yet to receive their deserved attention. (I still recommend reading this post about how to properly compare rent vs. buy financially as many calculators don’t make the correct comparison).As you may remember a correct comparison of rent vs. buy should be made for the same property in the same time frame where the two options are:1. Buy the property today and repay it through out the period.2. Rent the property today and buy it at the end of the period.The problem with the rent vs. buy comparison is, as always, the human factor. In order to compare rent vs. buy correctly some assumptions need to be made which are not at all easy to meet up with in real life.These assumptions are:1. We’re talking about the same property to either rent Read more:Understanding
, Hidden
Why Taking a Mortgage Is Leveraging Your Equity: Understanding the Potential Risks and Benefits 2007-11-28 13:11:00 Buying a property with a combination of equity and mortgage is actually leveraging your own equity. Leverage is essentially the use of borrowed funds to complete a transaction. Leveraged transactions hold significant potential benefits and, more importantly, significant potential risks. It is important to understand why leverage is the source of these risks and benefits.In order to simplify matters let’s look at the following example: 1. John has 1,000$ he wants to invest in ABC Inc. (ABC).2. We’ll assume two scenarios:a. One where ABC goes up by 10 and John gains 100$.b. One where ABC goes down by 10% and John loses 100$.Investing his 1,000$ John has either gained or lost 100$.Reading a blog post about leveraging John has decided to loan an additional 1,000$ at 5% from GoodWill-NoSoul Bank (GWNS). John now has 2,000$ to invest but he also has a loan to repay with interest. Let’s examine the results of the two possible scenarios:1. ABC goes up by 10%: John now gains 200$, repays Read more:Understanding
, Taking
, Mortgage
, Equity
, Potential
, Risks
, Benefits
Rent vs. Buy: Some Assumptions May Have a Significant Impact on Your Decision 2007-11-27 11:46:00 Rent vs. buy comparisons are very common and have been already discussed in length. However, the impact of several common assumptions on costs and opportunities has yet to be fully uncovered and explained. I’ve recently compared the two alternatives and have decided to share my experience.We all know that in rent vs. buy the alternative cost of each option should be compared. When deciding to rent the primary cost is the rent itself. When buying a property the primary cost is the interest paid on the mortgage.However, there are no less significant costs and opportunities to consider. We usually refer to these as alternative costs or opportunity costs. When considering these costs and opportunities we usually make assumptions and let the internet calculator do its thing. You must be aware your assumptions greatly affect the end result. One must use sensitivity analysis in order to examine the impact of these assumptions on the comparison as a whole.When considering buying a property t Read more:Significant
Personal Finance Blogsphere Update 2007-11-26 14:54:00 Carnival of Personal
Finance #128 is up with some good posts. I was especially fond of the following:1. Why passive investing beats active investing - This post by everything finance blog discusses one of the basic mistakes of both novice and veteran investors. I myself have written quite a bit about this point.2. A healthy diet doesn't have to be expansive - This post by our family village refutes one of the basic myths about health foods. Indeed buying healthy food is expensive per product but it reduces the many expenses of unhealthy foods from candy and salty treats to health care.3. Lessons from the dot-com bubble - This post by the investors journal has some everlasting market truths. Which lessons will we learn next is an interesting follow-up question.The photo was taken by djinas
Read more:Update
Make yourself a Desired Employee 2007-11-08 15:44:00 I doubt there is such a thing as an ideal employee as everything in life is context related. There are however key characteristics of employees which are most desirable by organizations.Positioning and branding one self as having these characteristics is a right step on the way to success:1. Professionalism – First and foremost an employee is hired to perform a task or service. Professionalism is the very fundamental requirement from any desirable employee.2. Curiosity – An employee should be curious of his job and his surroundings. Employee
and organizational evolution stems from employee curiosity and the drive to explore processes and methodologies.3. Solution oriented – A solution oriented employee is an asset. Most people tend to focus on the problem and to seek guidance and counsel. Some, if mentored, can understand and adopt solution oriented behavior which requires self-confidence and assertiveness. When given an assignment or issue to address a solution oriented employee
Creating Organizational Commitment among Employees through Behavioral Change of Attitudes: Cognitive Dissonance as a Tool for Managers 2007-12-08 11:42:00 Employee behavior, as any human behavior, derives from attitudes toward various subjects or objects. These attitudes are in turn a result of beliefs held by the employee. In order to understand how to create or change employee attitudes we must understand how an attitude is created and what affects it.The two main attitudes in organizational behavior are work satisfaction and organizational commitment. These two basic attitudes are of extreme importance to both organizations and managers. From a manager’s point of view the employee’s attitude towards organizational commitment is more important as it directly affects employee productivity.A person’s beliefs and values create an attitude toward a subject or object which is basically a positive or negative approach towards it. Attitudes in turn affect behavior. For example, if a person believes that “work is no fun – work is a responsibility” then his attitude towards organizational commitment would be positive. In turn, in hi Read more:Creating
, Commitment
, Change
, Cognitive
, Managers
Recommend Site To A Friend
