Archive for February, 2007

Did you make money yesterday? I found myself cheering for the market to drop as I held defensive position in DXD (Double Short Dow) but then I found myself cheering for the Dow to recover because I held callable option positions in SMH and was eager to make another $750 in profit. Either way, it was profitable for me. I hope it was profitable day for you.

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On February 8th, I wrote a post entitled, “What’s wrong with this picture?” which was a graph of the Dow moving diagonally up almost at a straight 45 degree angle. Folks, a chart like that is a big warning sign that something is a miss and today proved that point.

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Because that chart looked way out of whack, I took a defensive position and bought 100 shares of DXD to capitalize on the discrepancy. Today I sold off my 100 shares and made a cool 3.5% profit in under 30 days. DXD is an ETF that is double short the Dow and it came in mighty handy today.

Yet another reason I love ETFs!

After raving about Washington Mutual, I received a notice today that included some fairly significant changes in their fee structure and I’m disappointed.

First the good news, WAMU will be dropping fees for the following:

  • American Express Gift and Traveler’s Cheque Fees $0
  • ATM Mini-statement Fee $0
  • Bank Check, Money Order, and Foreign Draft Purchase $0
  • Counter Check Print Fee $0 (Limit 4)
  • Coupon Redemption Fee $0
  • Notary Fee $0
  • WAMU IRA Annual Trustee Fee $0

Now for the bad news, WAMU seems to have restored some fees for some previously free services and created some questionable fees altogether…

  • Account Abuse Fee $10 – I wonder what constitutes abuse?
  • Excess Activity Fee $10 (per occurrence) – What the hell is excess activity?
  • Wire Transfers $10/$20 – These were previously free.

There are a bunch of other fees that I won’t list here but overall I’m disappointed with WAMU.  They still over 5% high yield online savings and Free Checking but I wonder if they are doing this because few people actually use wire transfer and more customers likely use travelers checks and money orders.

I planted a money tree back in early December. The first harvest (in December) brought in about $850 in cash. The tree bore another fruitful harvest of about $750 in February. My money tree (SMH) spiked up close to 2% and if the trend continues I’ll likely get called at $35 in mid March during options expiry. If SMH stays above $35, then I’ll earn an additional $750 on March 16th. This would bring total cash flows from December thru March to $2,350.

The rate of return is roughly 6.8% in 4 months. Not too shabby. To learn more about this strategy, click on over to http://www.etfcoveredcalls.com for insight.

There is a new round of “don’t buy that Plasma TV” posts making the PFBlogger circuit and I’m writing about looking at the issue from a slightly different perspective.

What started me along this path was the following news item about Feds taking over a credit union because of possible insolvency. The article begs the question: What would happen if ALL financial institutions went insolvent?  What if citizens lost faith in the US Dollar?

Assume for a minute that the US Dollar became worthless overnight.  You might have had $10,000.00 “saved” in your bank account but that’s now only worth $10.00 in purchasing power.  What would you do?  Where would you get the money to buy food or medicine?

You can easily see how a person with numerous material possessions (Plasma TVs, Luxury Cars, Jewelry, Clothing, Crystal Vases, Art work, etc) would be in a fairly good position to be able to barter for food, medicine and other items in the event of a crisis whereas a person with paper wealth would be broke.

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I’m not advocating everyone go out and load up on things they can’t afford but I am saying that material possession has a purpose as PRESERVATION OF WEALTH.  Whether you buy gold bullion, diamonds, Plasma TVs, real estate or luxury cars they all help preserve your wealth.

Early in your career, you will likely take the “shotgun” approach to job hunting. Essentially, you’ll blast your resume to every job board, e-mail it to recruiting agencies and perhaps send it over to friends, family and acquaintances in the hope of getting a hit, a call back and a possible interview to hopefully land a job.

As you progress in your career however, you’ll need to switch from “shotgun” mode to something a little more narrow. I like to call this the “laser” approach. High level, high profile management positions aren’t exactly a dime a dozen as you climb up the corporate ladder and you need to be highly selective of the type of company you want to dedicate the next few years of your life.

Key things to look vary for person to person but here’s what I look for when trying to find a new career:

1. High growth potential for organization

2. Cash rich / positive cash flow

3. High percentage of Sr. Management owned shares in company

4. Employee Stock Option Plan

5. Solid growth industry

Are amongst just a few of the things I look at during my search. Of course, this is just the beginning of the research. Once I find some potential candidates, I take a look at their SEC filings, all the research: news commentary, analysts reports, credit reports, Dun & Bradstreet/Hoovers reports, stock charts, graphs, insider trading info, balance sheet, cash flow statements, income statements, etcetera to formulate a holistic view of the organization.

Essentially, I’d like to become a part of a company of which I think highly of as an investment. A company of which I can have a vested interest in the success of the organization. I’ll post more on some exciting changes in my life coming soon!

I love shopping at Costco.  They have high quality and unique products along with a wide selection of wines from all over the globe.  This past weekend I went shopping at Costco primarily for wines and a few groceries.  Out of curiosity I looked up all the wines I purchased on the internet to comparison shop.

An Australian Chardonnay from Rosemount Estate “Show Reserve” 2005 cost $13.89 at Costco while $16.99 on the web.

A Spanish Wine from Vinas Viejas Solanera cost $10.99 at Costco and $10.99 on the Web.

A Chilean Cabernet Sauvignon 2004 from Montes Alpha cost $17.49 at Costco and was $16.99 on the web.

An Argentinian Cabernet Sauvignon 2004 from Terrazas de los Andes cost $14.59 at Costco while $13.99 on the web.

A South African red from Grangehurst 2000 came in at $16.99 at Costco while $21.99 on the web.

Overall, some wines came in cheaper at Costco while others were more expensive but the net result was cheaper wines from Costco than on the web but there is one big exception!

When shopping on the web, you will usually get a discount for purchasing a case of a particular wine of up to 15% where as that discount doesn’t exist at Costco (as far as I know).

Bottom line is if you find a wine you really like and want a case of it, buy it from the web (for the discount) otherwise single bottles at Costco will be similarly priced or slightly cheaper than on the web.

This week, I’ve regaled you with the prospect of building your very own money factory, money forests, money trees and money farms and I hope you learned something new. Last week, I saw various top xxx blogger lists floating around the PF Blogger world and the trend seems to be to attract as big of audience as possible. To that end, I’ve been getting requests from various bloggers to cross link and while it’s somewhat flattering and perhaps beneficial I’d really rather not do it except for a few bloggers that I personally enjoy reading and die hard “capitalist” bloggers.

With the exception of www.pfblogs.org, I have never asked to be linked nor will I ever ask to be linked on another blog. Anyone claiming to be me is lying if you get a request to cross link! If anyone wants to link to www.getrichslick.com by all means do so but it’ll be difficult for me to reciprocate.

I was shocked to find that I was on one of those Top xxx blogger lists. It was never my intention to attract such a large audience. I’ve run some stat reports and my traffic has been growing exponentially since I started blogging in May 2006. I have yet to complete a year and the traffic keeps coming!
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My blogging is intended to target higher net worth individuals seeking useful financial data and ideas. I plan on offering subscription services to some products and services currently under development.

I welcome everyone but I don’t have the time or energy to focus on all aspects of personal finance such as those suffering from high indebtedness and I worry that these readers will attempt to utilize some of these money making activities to their detriment.
You won’t see google ad sense ads or amazon icons on my web page offering some gimmicky (and questionable) stuff. If you do see something advertised, you will see it there because it is a product or service that I have been happy with or heartily believe in.

For now, you can check out www.ETFCoveredCalls.com to get some ideas on how I’ve created my first money tree.

A money factory involves harvesting the fruits of your labours on an industrial scale. It will become rather impractical for you to focus on the day to day operations of every money farm, money tree and money forest you are cultivating.

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Setting up a money factory involves a team of workers that help you deal with all the “headaches” of managing your empire. You’ll have one or more managers (lawyers, financial advisers, investment banks), foremen (brokers, bank reps, insurance reps, etc) and various workers (tax accountants, real estate agents, etc) working in your factory.

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The goal at this point is to focus on finding the right people to keep your empire running efficiently and effectively.  You’ll want to focus on the really bigger picture:  The things that are truly important in life for you!

Whether you decide to focus on charitable activities, personal endeavors, your family or focusing on creating even larger global money making ventures, the world will become your oyster.  The only thing keeping you from all of it is you.

By now, you’ve learned how to build a money farm and a couple of money trees. The next obvious step is to build a money forest.

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Let’s take a quick review.

You learned that by leveraging 0% APR credit cards offers, you can start your very own money farm. You wisely borrow money from a bank for free and invest that money in a high yield savings account. You start with borrowed seeds and end up with a harvest. You ALWAYS prudently repay your lender (for repeat business) and wisely utilize your harvest profits.

You learned that it’s possible to take that farm harvest money and build a money tree. Your first tree purchase may be small or large depending on how big your farm harvest was and you begin to pick fruit from the tree. You know that the tree is a delicate and precious resource and can die at anytime so you remember to always pick fruit quickly and regularly and you tend to your money farm as a backup RENEWABLE resource.

You also learned that there are different types of trees. The first tree has been yielding some wonderful fruit (ETF Covered Calls) and you decide to diversify your growing forest by investing in different more robust trees (Real Estate). You purchase a small or large tree (Real Estate) depending on how fruitful your last tree harvest was during the last season. Your new robust tree has the potential to grow dramatically over the long term as long as you tend to it and you can easily collect the fruit every month.

The next logical step of course is to make sure that you that as you reap harvests from your money farm and money trees is to continue to cultivate more acres and expand your operations.

Eventually, you will find it necessary to hire a few farm hands to handle your money farm and perhaps a few hands to help you with your money trees. You’re on your way to building your money forest. You now stand at the top of the hill overlooking your money farms and money forest.

You decide it’s time for the next step: A money factory!