Moneywise24 Personal Finance

CFA stands for Chartered Financial Analyst, and its designation is gaining popularity within the world of finance. The CFA is a certificate, which can be obtained at the CFA Institute. On its website, the CFA Institute states the following:

“CFA Institute is a global, not-for-profit organization comprising the world’s largest association of investment professionals. With over 100,000 members, and regional societies around the world, we are dedicated to developing and promoting the highest educational, ethical, and professional standards in the investment industry.”

Source: http://www.cfainstitute.org/about/strategy/Pages/index.aspx, 8 June 2011

But what does the CFA mean for candidates? What does it do, and what does it not do? How much does it cost, in terms of money and time, to complete the CFA program and to become a CFA member? And most importantly, how does the CFA enhance one’s career perspective? Read the rest of this entry →

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I am currently visiting my parents for Christmas in my home town in The Netherlands, where I occasionally meet up with old friends while I am here. Yesterday, I met up with a very good friend of mine, and we started discussing our intentions for 2010, as New Year’s Eve is approaching. Besides the well-known health issues, and our intentions to do more sports, we had a long discussion about money. My friend had recently read a number of books and articles on career making and growing wealth in general, and his idea was that we had simply learnt many wrong things from our parents and relatives.

We are both from non-entrepreneurial families, and our belief of earning money is that of taking on a paid job, and earning one’s money through employment; in the end, this is what we had learnt from our parents our entire lives. In a sense, I can still hear my parents tell me to get a good education, work for a large and multinational company, work hard, and the rest will follow automatically, I can be assured of that.

Although this might have worked in the 1950′s (and I know it did, since this is what has made my parents pretty wealthy), they do not apply in the modern world. Young, well-educated men and women graduate from university, apply for jobs with titles bearing the word ‘manager’ in 80% of them, only to find out that the title “International Customer Relationship Manager” is virtually the same as “call-center clerk”. Additionally, a request for a salary raise during the annual review meeting is responded to by

You know the economic situation is a difficult one, and I will never be able to obtain approval from my superiors. You have done an extraordinary job, but 1.5% is the most I can give you.

1.5%? I am sure last year’s inflation was at least 2.5-3%.

The world’s globalization has simply brought countries closer together, more and more people have the opportunity to go to college or university, and corporations are simply faced with an increasing offer of well-educated employees on the one side, and on the other side the competition from companies from low-wage countries is increasing.

As we were talking yesterday, my friend made an extremely interesting point:

Who we are today is the result of our learnings and experiences in the past; What we do today will define who we are tomorrow. But how the hell does a person break out of the downward spiral of being a regular employee, if this is all he knows?

And let’s be honest: college and university will teach you everything about doing business and entrepreneurship, except for how to be one yourself. So, how does someone, who has been taught to deliver hard work through employment only, break this habit?

I believe it is not an easy task, with which many men and women are faced nowadays. The most feasible method for most people is to create an additional income, at the side of any regular income. A popular strategy is investing in stocks, stock options, futures, real estate, or any other form of investments. The anticipated income is firstly the growth of the investment value itself, second the yield it generates year after year. Additionally, many people attempt to earn a regular second income. Many people choose the internet as their preferred method, since the investments are extremely low. The boom in blogging sites is a great example of this phenomenon. Moneywise24 Personal Finance is also a blogging site following this example, but still it does not (yet) generate revenues. This is in itself the great challenge of starting up something online: you think you have a great idea and insight, thinking you are taking charge of your own life and ready to make a difference, only to find out that everyone else is already doing the same.

I believe the next ten or twenty years or so will be very exciting; we see that trends are coming and going fast, we are experiencing a growing competition on the international marketplace, we recognize that the old and proven methods for making a career do not work on-demand, and we are in search of new methods for achieving personal growth and development.

How it will end? I honestly do not know…

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I had quite an interesting flashback lately; as I was sitting on my couch and letting some things pass through my mind, I was struck by the fact that there are so many things I could have done much sooner, and thereby enhance the quality of my life and my personal financial situation. Then, why hadn’t I? Quite simple really: I just didn’t know… or at least I didn’t know they were that important.

In order to help some of the younger readers, I have compiled my personal top 10 list of things I wish I knew when I was a teen. I sincerely hope that for some of you it would mean a positive change of where you are at, and where you are going.

#1 – I wish I had learnt earlier to set my goals in life. It may seem a bit stupid, but during my teens my top priority seemed to have a lot of fun, while at the same time I didn’t really know where I was heading. I had no real goal in life, which at a later age resulted in me trying out many things which were not going anywhere. Now, at the age of 32, I realize that what I do isn’t really what I want to be doing, and it is much harder to change the entire structure of my life.

#2 – I wish I had studied more. I focussed on the ‘fun factor’ of life so much, that I really didn’t realize the importance of a good education. At present, I have a bachelor’s degree, and I realize that many jobs that I really want require a Master’s. Also, graduates or even post-graduates earn much more than bachelors.

#3 – I wish I had worked more. I know that parents are supposed to support their children up to a specific age legally, in The Netherlands it was up to 27. However, this also means being dependent one one’s parents. There were so many things I wanted, which I never got. In The Netherlands, everyone is allowed to work when they reach the age of 15, and I wish I had grasped that opportunity, to build on my own financial freedom. Additionally, when I went to college, I took a huge loan which was absolutely not necessary; I could have financed everything by working on the side… in stead I am now stuck with monthly payments which cut a big hole in my budget.

#4 – I wish I had aimed for independence sooner. I lived at my parental house until I was 21, then I moved out because I was going to college in another city. However, I could have moved out much sooner, enjoying all the freedom of living by myself. I am sure it would have done me good, and it would have relieved me of all the pressure at home; it would have made me more mature, and given me more energy.

#5 – I wish I had started tracking my finances earlier. I don’t even remember all the money I spent on drinks, clubs, going out, and other unnecessary items. Sure, a good social life is crucial, but if I would have tracked my finances carefully, I would have discovered that there was so much savings potential; I could have gotten most out of my money.

#6 – I wish I had started investing sooner. In stead, I used to park some of my money on my savings account, completely ignoring the benefit of higher return rates from investments. Investing some of my money would have allowed me to build wealth, and my future.

#7 – I wish I had done more sports. Actually, I had hardly done any sports in my late teens and twenties, simply because I had other priorities and I was lazy. However, doing sports regularly would have given me more energy, it would have kept me fit, and it would have built a routing, making it easier to do sports at a later age as well.

#8 – I wish I had discovered the importance of networking. I always tended to see networking as some form of superficial ‘blabla’, which I could do without; I wanted to take responsibility for my own successes. Now, I realize that networking is an integral part of life, making things easier, finding the good jobs, or even getting some tips and hints on things… and it is a great way to build a large social circle.

#9 - I wish I had become entrepreneurial sooner. It is much easier to ‘crash and burn’ when you are younger: your living expenses are much lower, and since you are not accustomed to a higher living standard, it is not difficult to give things up, or to re-build a life if things go wrong. The older you get, the more difficult it becomes. Actually, I started becoming familiar with website development back in 1998, when I developed my first website Dutchtrav.com. Too bad I had never really taken the time to develop it back then, it could have generated some nice revenues.

#10 – I wish I realized the value of time. I remember myself saying ‘I can do that later’, or ‘there is still so much time’. And before you know it, you’re 30, and you realize that you could have gotten so much out of your life. The years are literally passing by, and time is lost, it will never come back again. Therefore, I wish I had learned to enjoy every single moment in my life, and living it to the max.

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An outlier is someone who demonstrates extraordinary performance. He is someone who we call extremely talented. However, how are outliers born?

In his book Outliers, Malcolm Gladwell takes a closer look at what makes people so successful, and why. In an entertaining and well written way, Outliers explains the relationships between hard work, ambition, passion, and pure luck, using many real-life examples, such as that of Bill Gates. All examples and theories described in the book are the result of extensive research.

For those readers, who want to obtain a greater understanding about what characterizes success, I would greatly recommend Outliers, by Malcolm Gladwell.

ISBN: 978-0-316-05628-1

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I had a bit of a flash today: how many people are truly passionate about the kind of work they do? Actually, I was starting to have these thoughts when I saw a television broadcasting the other day about burn-outs and all sorts of mental disorders as a result of too much stress.  And to be honest, most people I know consistently complain about their work, their bosses, their companies, in one way or the other…

… and yet we keep doing doing what we do, just in order to enter another round of complaining tomorrow.

So how do we get to that point, that we do something that we are truly passionate about? And in the end, it really comes down to only three basic factors, if combined correctly:

• Which topics interest you? What is it, that makes your personal world go round? Be it languages, countries, personal finance, marketing, mathmatics, physics, research, education, family life, children, pets, sports, blogs, internet… anything you can think of. What is it, that you can spend litterally thousands of hours reading about?
• What do you love doing? What kind of activity do you love? Is it writing? Perhaps you would love to fly an airplane? How about researching, teaching, organizing things, leading people, managing projects, reading books, etc.

If you have these two areas of your life answered, you will most probably automatically come to the conclusion of what you are passionate about, or where you have the potential to develop a passion.

For example, someone who would love to fly an airplane and loves traveling would do good to become a pilot. Or how about someone who wants to become a writer, teacher, and knows a lot about the internet and how it works? Such a person might want to start writing a blog. And what if you love to research and you love sports? Perhaps a marketing research specialist at a sports company?

I believe too few people really spend time to figure out what they are passionate about. Worst, many people are simply chasing the money, completely neglecting the fun aspect of their work. Being truly passionate about what you do will keep you healthy on the long-term. But more importantly, it will make your life more fulfilling.

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