What is Possible?

I have been thinking recently about this idea that there is a threshold in our thinking between two extremes of possibility that bifurcates the course of our lives into two completely different directions. We all fall into different ranges but the end result is that everyone having thoughts more or less than fifty percent one way or the other will be grouped with everyone else of like mind. The fascinating thing is that it appears people in each group do not see what the other group see despite occupying the same world and even interacting with each other.

The distinction that separates us is based on this world view.

Side A: Life happens to us because it’s outside our control and

Side B: I’m learning how to navigate life because this is what I choose.

This was sparked by several recent conversations I had with people while they were telling me about problems they were having in their life. For each case I explored with them some actions they could take to get advice, explore and test options, re-evaluate the role of the cause of the issue in their life. I was just exploring some ideas not trying to lecture or preach but I noticed they would always reset the track at the beginning each time and restate the problem statement as they had begun it. I tried backing up the context to come to some common ground because I felt the point I was trying to explain was being overlooked but in those moments at least these strangers didn’t want to let go of the way there story was told.

Did their problems really matter? Absolutely they were real problems that would drive anyone crazy. Has anyone else had the same issue and resolved them? Yup but it seemed simply describing an option to them did not change their intention on what they planned to do.

If you are not looking for change or new possibilities you will not find them. This gives the people in each group the illusion that the world only exists the way they see it.

On the extreme end of side B people exhibit a force of will that is total with complete disregard for feedback from their experience of reality. Their goal is all consuming and they view it as the only thing deserving of their attention. When or if their goal doesn’t materialize they don’t even observe it. These people can appear crazy to everyone in the middle.

The opposite end of the spectrum side A are extreme pessimists. They don’t try stretch goals, settle with what they think they can have without ever contemplating change. They view people who take risks as foolish and others with excess as completely unrelated to their way of thinking.

Obviously this is a generalization and we as individuals fall into different levels of this spectrum for each area of our life. What I have noticed from past experience is that the crazy things that seem beyond impossible actually happen for real when you hold them in your mind as certain to such a degree that there is nothing else. And conversely it’s impossible to move from a mindset of lack being placed on us by others into prosperity. No matter how much effort you put into, the universe meets that force with an equal opposite pushback. Thats the interesting key to me, how do you take the things in your life you believe to be impossible that you want to have or explore and cross the threshold? It’s hard, when I start out on one or the other it trends toward the extreme in that direction. Crossing back requires a big commitment, the ability to let go to things that feel essential and a leap of faith. It’s almost as if the trends towards helplessness become a part of you so letting go of them really is like jumping off a cliff.

 

 

Game Night

Many years ago I worked at an internet geography company as a software developer. There was a woman there who said to me in conversation something to the effect that if you intend for things to happen to you, they will. This was about eleven years ago and while people do on occasion mention things like the law of attraction now in my recollection this was very rare back then. It would have been a few years after the book ‘the secret’ came out. The woman left her position later that week.

Several years later I had reached out to a friend of mine that I worked with at a job even previous to the geography company. I received an invitation to a game night hosted by an investment company and asked my friend if he wanted to go, and he joined me. The game was like monopoly with a board where players would roll dice to move positions with the goal of earning enough game money to retire and win the game. This was supposed to be a metaphor for win the game of life. The distinction in this game from monopoly was that all of the money earning activities were very specific deals and they required each player to keep a ledger to balance cash flow and expenses. Mid way though the game I apologized for bringing him to what felt to me like a math party. It was just hours of number crunching and weighing strategy for buying and selling assets and business as we each took turns moving our player pieces around the board. He seemed to accept it for what it was and didn’t show any sign of regret.

All in all it was a really meh evening from my point of view however at the end of the game the results surprised me. My friend who was suffering from pretty high student loans, a separation from his girlfriend and a drastic drop in the value of their condo they could not sell, coincidently suffered the worst luck in the game. Every turn he would get a bad roll or a bad deal and for the several hours we played he never had a chance to accumulate enough capital to really participate. It was a really crappy game for him, and I recall him saying, “story of my life” and laughed it off.

Then I noticed that same woman I used to work with at the geography company there at another table with her husband. She was so pleased by the results she told the hosts and said ‘I had a baby in the game and I’m having a baby in real life!’. She then showed off her belly to prove it. It was clear to me how everyone was seeing game results that reflected their lives. My game bothered me though. Unlike my friend I didn’t have bad luck, I did earn enough to play the game but I was too conservative and before I knew it the evening was over and I missed my chance to win it all. For me at the time this was also true in my real life. I was doing ok, working hard at work and side businesses but not winning it all.

This observation I had that night seems to be what the opposite side of law of attraction looks like. Where one side is pushing outwardly a desired idea or feeling and seeing it come back the other is simply observing all of the different parts of your experience as they reflect back to you what you have been thinking and to some degree who you are as a person.

Looking back now I am ok with the way I played the game of life. While I didn’t win it all in the short timeframe the game took place it certainly paid off in the end. I will write more about that another day.

 

Weight Lifting

gym-weights

A physical activity that I really enjoy is weight lifting at the gym. I have been going on average three to four days a week and have learned a few things about avoiding injury first through trial and error and then by seeking professional advice. I find that lifting weights regularly makes me feel better day to day and also helps me get to sleep at night as long as I go regularly. I think it is important to stress that this feeling better is personally the most important aspect of weight lifting and it definitely outweighs most other activities in my life that contribute to my happiness.

I noticed that my body will quickly adapt to different workloads, in the past I was going five days a week for about 1.5 hours and recovering in time for the next day. Right now going for about 45 minutes only three times a week gives me the same positive benefits but it does take me longer to recover after each session.

Injuries

Early on probably 6-7 years ago when I started to push heavy weights I ran into nerve problems by failing to stretch and warm up with lighter weights first. The problem first appeared in my elbow where the Ulnar nerve was not sliding properly through a protective sleeve as it normally does. It was tugging and causing a great deal of pain. A physical therapist fixed the issue in thirty minutes but I have to get massage therapy every year in areas around my neck and arms for this reason. I have found that stretching and doing a set of weights at 50% of my max before full weight reduces these nerve problems.

Another common injury I experience is more unique and unlikely to affect many others but I will cover it anyway. I have very weak tendons and this does cause joint problems. Normally your tendons hold bones into a controlled track as they move but in my case it is easy for them to slide out so that the joints don’t track properly. This mostly applies to my knees, hips, elbows and shoulders. As an example your knee joint can rotate forward and back as well as rotationally allowing your foot to point left and right. But in my case just a little bit of force will cause my tibia to rotate to the side left and right. This means that I can not use a leg extension machine at all even with light weights. Because the machine isolates your knee so effectively slight imbalances in other leg muscles pull the joint to one side or the other and I end up with joint pain for several days. The solution is to do free weights and in the knee example this means squats and deadlifts.

It is probably useful for others in general to use free weights in addition to machines because it helps strengthen surrounding support muscles to give you more balanced strength. If you overuse machines it can be easy to rely on the hinge and push on one side or the other overdeveloping one side of the support muscles. When using the joint in daily activity it will tend to be pushed to one side and cause joint pain.

Muscle Growth.

I have found an efficient way of developing muscle mass is to do two or three sets of ten or fifteen repetitions at the maximum weight you can safely lift. This is only after warming up with a set at 50% of course. In some cases I will break up second sets into parts because I can’t physically to them in a continuous set.  I will test my maximum by adding weight in small increments, if I can’t push more than five repetitions I will back off on the weight. If I experience joint pain within twenty four hours of lifting I will also reduce the weight at the next session.

This makes effective gym sessions very quick. After cycling through three sets of each muscle group i’m about fourty five minutes in and I just leave.

My recovery time varies depending on how frequently I stress the muscle group. If I was going to compete in a sport that used certain muscle groups I would work the area daily or alternate days at 100% of my capability. I’m not too motivated to increase my absolute physical strength at this point in my life, I just use the maximum safe weight to make my sessions efficient for time. If I wanted to though I would do more research in that area and be very systematic with training strategy and diet.

Going forward my current goal is to increase the strength of my shoulders as they are a current weak spot. I’m using twice as many exercises that focus on the shoulders as I normally use on other muscle groups to achieve this.

Schedule, Price and Clothing

I find what works for me is to go to the gym after I finish work.  After I get home walk my dogs, eat then head out to lift weights.

The gym I go to only costs $20 per month and since there are so many around it makes it convenient from a location perspective. I used to lift free weights at home and I find the gym makes it easy to isolate muscle groups that would be a challenge without all of the machines and cable pulleys. The separate location also makes it mentally easier to push through a session.

I bring running shoes and plain shorts and t-shirt. I have tried exercise breathing clothing before but I usually don’t like the way they fit and they are more expensive anyway.

Cardio. 

I used to compete on a cycling team and prefer the stationary bike over a treadmill. Hopping on a bike and riding outside is by far a better experience but it also requires maintaining a mike and changing with breathing cloths, shoes, helmet does take extra time. I will usually do ten minutes of cardio at the beginning of a session. I do walk about an hour a day in addition to the gym. This means that my level of cardio ability is very low but that is by choice right now.

Stretching

It is a good idea to stretch daily and it helps with mobility, circulation and reducing risk of injury. It is the unexpected fall or collision that can cause injury if your body can’t move or have the strength to dampen the impact.

I have plans for new goals in the next year so I will post more as I get started and see how it goes.

 

Minimizing Your Risk When Investing In Bitcoin

OneLife_Slider2

When the price of Bitcoin hits all time highs, as it has been for the past few months, people often ask me how they can buy. But then they worry that the price is about to drop once they do buy for the first time.

This happened to several people I know during the 2013 spike where the price peaked $1100 USD then proceeded to drop below $300 over the following three years.

2013

Now that the price is $4200 up from $1000 six months ago, how do you gauge the likelihood the price will drop? It is possible to do market research and make an assessment of what the price will do but ultimately there is no surety it will go up even if all signs point that way.

In order to protect yourself from price drops you can use a hedging buy strategy to accumulate Bitcoin over the long term in a way that reduces your losses when the price goes down.

Here is a buy strategy that will reduce the effect of declining prices after purchase. This will reduce the amount of time where you are holding a loss on your purchases and also reduce the amount of loss when the prices drop so that you have more equity in case you need it unexpectedly. 

On a regular interval, once per month, make a regular investment of a fixed amount of dollars into two parts, one use to buy Bitcoin on an exchange at the current market rate and the other half portion set aside a pool of cash. Each purchase make an entry in a spreadsheet to keep track of the date, purchase amount, cash pool contribution and then calculate your average purchase price from all of your purchases.

If the price rises continue adding equal portions to new BTC purchases and your cash pool. If however the price of Bitcoin falls below the average purchase price from your past buys then in addition to making your regular BTC purchase and cash pool contribution make an extra BTC purchase using your cash pool. The amount to purchase can be up to the same ratio of the total available cash pool as the drop in value of BTC relative to the amount you paid for it. For example if the price of Bitcoin drops to seventy five percent of what you paid for it use 25% of your cash pool to buy more BTC at the lower level.

This will have the effect of reducing your average purchase price because. When the market makes large drops for extended periods of time this gives you the opportunity to make use of the cash pool to purchase at a lower price. In the event that you need to pull out BTC or cash unexpectedly you will have both cash and BTC that you can sell at a price closer to the market.

It is important to make purchases on a regular schedule however and not make these cash pool purchases too frequently or you risk disrupting your allocation from small market corrections.

Also note that this strategy implies that you are speculating on future price actions. While this strategy does better than buying 100% Bitcoin of your monthly contribution if the price goes down, it will not return the same gains if the price continuously goes up. You are trading some upside potential for downside risk protection.

Feel free to adjust the recipe to your taste and let me know how you do with it. Other possibilities would be to invest the cash pool in another liquid asset that will return interest.

Why do this? It’s extra work but if you compare it to other investment options it may be a good fit if you want to claim a stake in the cryptocurrency market but are not comfortable with the psychological effects of a massive market downturn right after you buy in for the first time.

How does it perform? If you were to start investing at the market peak in December 2013 as an example and simply put $200 aside each month where $100 goes to purchasing Bitcoin and the other $100 into a cash reserve you would end up with the following month to month gains:

Bitcoin Market Value Bitcoin Gains Cash Reserve Amount Invested Invested Gains
$100.00 $0.00 $100.0 $200 $0.00
$163.55 $-46.89 $200.0 $400 $-36.44
$275.40 $-36.67 $300.0 $600 $-24.59
$300.97 $-124.79 $400.0 $800 $-99.02
$348.69 $-198.61 $500.0 $1000 $-151.30
$424.95 $-242.32 $600.0 $1200 $-175.05
$645.06 $-123.97 $700.0 $1400 $-54.93
$775.77 $-93.68 $800.0 $1600 $-24.22
$854.94 $-115.27 $900.0 $1800 $-45.05
$868.31 $-205.36 $1000.0 $2000 $-131.68
$776.22 $-414.75 $1100.0 $2200 $-323.77
$784.58 $-531.99 $1200.0 $2400 $-415.41
$963.04 $-467.16 $1300.0 $2600 $-336.95
$880.85 $-680.18 $1400.0 $2800 $-519.14
$761.81 $-966.09 $1500.0 $3000 $-738.18
$905.85 $-971.69 $1600.0 $3200 $-694.14
$971.69 $-1055.28 $1700.0 $3400 $-728.30
$995.69 $-1187.72 $1800.0 $3600 $-804.30
$1145.67 $-1180.93 $1900.0 $3800 $-754.32
$1301.41 $-1157.91 $2000.0 $4000 $-698.58
$1649.25 $-922.68 $2100.0 $4200 $-450.74
$1371.18 $-1339.30 $2200.0 $4400 $-828.81
$1518.44 $-1322.99 $2300.0 $4600 $-781.55
$1997.18 $-952.61 $2400.0 $4800 $-402.81
$2271.77 $-781.29 $2500.0 $5000 $-228.22
$3322.65 $168.12 $2600.0 $5200 $722.65
$2963.19 $-290.33 $2700.0 $5400 $263.19
$3424.88 $70.87 $2800.0 $5600 $624.88
$3541.65 $87.07 $2900.0 $5800 $641.65
$5569.32 $1983.19 $3000.0 $6000 $2569.32
$5521.94 $1809.35 $3100.0 $6200 $2421.94
$4940.52 $1115.27 $3200.0 $6400 $1740.52
$5307.50 $1366.10 $3300.0 $6600 $2007.50
$6095.08 $2026.52 $3400.0 $6800 $2695.08
$8553.84 $4310.38 $3500.0 $7000 $5053.84
$9344.36 $4914.58 $3600.0 $7200 $5744.36
$10111.96 $5485.55 $3700.0 $7400 $6411.96
$11112.97 $6274.96 $3800.0 $7600 $7312.97
$16094.53 $10938.43 $3900.0 $7800 $12194.53
$26040.85 $20343.25 $4000.0 $8000 $22040.85

After investing $8000.00 over four years your net assets would be worth $30,040.85. This is a 93% yearly return on total capital thanks in part to the uptrend at the end of the run in 2017.

Notice that when using the 50/50 cash/Bitcoin buys the Invested Gains is higher than the Bitcoin Gains when the market is negative. This is what you are gaining with the cash reserve.

The purpose of hedging each monthly investment in cash is to reduce the amount of losses each month where you are holding less in market value than you invested. However by doing this you are reducing some of the upside gains if the market goes up. If you had invested all of the $200 each month in Bitcoin your net assets would be worth: $52,081.70 a 162% yearly gain on total capital.

When using the cash reserve to buy during times when your market value is lower than your purchase price puts you somewhere in the middle of these options returning $43,510.60 using a small purchase amount. Although this reduces your ongoing cash reserve as you as using it to buy Bitcoin when the price is lower.

These different buying strategies illustrate to me how asymmetric the Bitcoin market has been. While you can reduce your monthly losses with a cash reserve by about 50% (up to $600 in some months) the overall cost in this particular time frame is $22,040.85 as this is how much more you would earn buy putting $200 per month into Bitcoin rather than $100. That is how much you are paying to hold more liquid assets thought the four years.

Disclaimer: This is not investment advice and is only my personal thoughts on possible options for purchasing Bitcoin. One of the challenges on choosing an investment strategy in Bitcoin is that because the market is so volatile even small changes in the timeframe of past data will give you a very different result. This makes it very easy to choose a strategy that works on past data but doesn’t necessarily take into account future trend possibilities. In other words, make sure you do your research and be certain you are comfortable with the results if the market goes down, up or flat.

 

 

Cryptocurrencies

bitcoin
This is a brief summary of my thoughts on cryptocurrencies specifically Bitcoin as an investment. Going forward I will add more about different aspects of the currency and surrounding products/markets as well as alternatives.
I am buying Bitcoin now at regular intervals because I believe that the price two years from now will be higher than it is now.  If the price four weeks from now is down ninety percent I will not be bothered. It dropped ninety percent between June and December 2011 and seventy five percent between November 2013 and August 2015. Aside from those notable drops it also saw fifty, forty and thirty percent declines many times. If you are going to buy Bitcoin be prepared for drops like these.
So why buy when the price plummets like Humpty Dumpty? Well in my opinion only because Bitcoin has always put himself back together again and in the process accumulated more users, new use cases and higher demand. Over the few years that Bitcoin has been available and trading the rate of returns is significantly higher than most if not all other options.
Why I think Bitcoin is going up:
1) It provides strong utility that will likely be useful in a wide variety of areas including: international settlement, peer to peer payments, trust-less money transfer contracts between remote parties, store of wealth, etc. Before Bitcoin there was no method of distributed transactions that did not require a third party that I am aware of. Given the current trend, more people will use and adopt Bitcoin in the future and with a fixed supply the value of units should be bid higher. I will expand on use cases and potential opportunities in the future.
2) User adoption numbers are going up. Google trends results for people searching for ‘Bitcoin’ is increasing 400% per year, ‘what is bitcoin’ 150% and ‘buy bitcoin’ also at 150%. Each year more exchanges open with better infrastructure funding options and trading services. Stores and payment processors are also opening slowly allowing people to buy and earn Bitcoin from their work.
The experience of most new users is good, while some leave and some stay,  the ones that stay are usually hooked. Some or a lot of people obviously bought at the peak times and then watch the price plummet and want to get out. Based on number of users active and signing up for exchanges, wallets web and forums, the user base is growing year over year.
3) Legality. In the early years of Bitcoin there was a lot of uncertainty that it was legal. The closest thing to Bitcoin, E gold and others were shutdown for violating money transmission laws in the US. Because Bitcoin doesn’t fit any traditional definition of money creation and transmission it was uncertain that it would be legal to use, own, trade, earn or buy using Bitcoin. Since then many countries have issued statements and guidance as to how they will allow and regulate the markets adding some level of certainty to investors and users.
Bitcoin is illegal in some countries however so you should check with your local authorities to ensure you are compliant with the law.
Criticisms of Bitcoin:

1) Deflation is Bad.

The issuance of Bitcoin is set at a fixed rate that is cut in half every four years until 2140 when it will stop and the only source of the currency will be that of existing owners. In the next ten years the rate of inflation will drop from 4.2% to 0.8%.

The concern is that during increased demand for currency, its availability will shrink because of a perceived higher future value. People will hold off purchases because they expect to get more bang for their buck by waiting. This will cause economic velocity to go down and prevent new lending and future growth.

This is what happens to dollar based economies. The comparison doesn’t hold though because a dollar economy is based on fractional reserve lending that has a different dynamic applied to the supply that is not applicable to Bitcoin. All dollars are created by banks as debt with interest attached but the interest that needs to be paid was never created. There is an ever expanding amount of debt attached to all actors in the dollar system. In the event of deflationary changes in the dollar economy all available liquid cash would not be enough to even pay the interest on debts let alone living expenses like food, rent, clothing. This causes all available supply of currency to quickly go to zero. Banks cant lend because they don’t have enough reserves and individuals can’t lend because they have to pay everything they have to cover existing interest payments.
This wouldn’t happen in a Bitcoin based economy to nearly the same degree. Granted during an uptrend most people would presume a higher future value of the currency but the supply would likely only contract in a linear fashion. People will still buy things, just at an adjusted value, probably.
2) It’s Too Volatile.
Bitcoin is volatile so be careful. If you are not comfortable losing your investment in Bitcoin do not buy any. If you can set aside some funds to buy without any exception on timeline for withdrawal, Bitcoins historical high rate of return and potential future expansion could outweigh the risks provided you can commit to a plan. The plan should help you avoid the case where you feel tempted to panic sell after a price drop.
Volatility in the several markets are a really good aspect to Bitcoin in my opinion. It means that users have the ability to buy and sell at prices they choose any time they decide.
There are strategies for mitigating market volatility like dollar cost average purchases and sales over time so that highs balance out lows.
3) Criminals and Drugs.
A lot of people only associate Bitcoin with drug dealers on the dark web committing crimes. They don’t want any part of something associated with criminals.
The bottom line is that a currency for everyone has to work for everyone or it wouldn’t be valuable. Regardless of how you feel about it, you can’t control what others do. I believe Bitcoin is helping people and will continue to do so in new ways. Obviously using it is a form of support and you are entitled to choose not to use it if you feel that is the right choice for you.
4) Not a Real Currency and People are just Speculating.
Some say buying Bitcoin is not an investment it is gambling because you are betting that the price will go up just because it has gone up in the past. You shouldn’t assume that past performance is an indicator of future returns. Sure but the distinction between investment and gambling is a grey area of one slippery sliding slope. Based on someones opinion all investments have some level of risk of collapse and assumption of growth based on past performance. Most people just don’t think about the risks because they may happen infrequently. Most people recommend buying stocks and government bonds because stocks are often evaluated based on past performance and bonds are still subject to default or devaluation risks.
The fact is people are using Bitcoin as a currency. People are right now earning income in Bitcoin, buying everyday things with it and trading it with others.
Some people say that Bitcoin has no intrinsic value. My thought is that nothing has intrinsic value. Everything is relative and depends on relationships with everything else. The network that connects Bitcoin users really is the essence of its value.
Detrimental factors affecting the price:
1) Inflation Rate
New currency is issued with each new block on ten minute intervals. This new currency is issued to miners and results in an increase to the total supply of Bitcoin. When the new currency is sold on exchanges it creates additional downward pressure on the price. Every four years the number of Bitcoin issued for each block creation is cut in half, reducing this downward pressure.
Back in 2013 at the peak around $1000 there were 25 BTC issued every ten minutes. The price dropped after that peak but for comparison the value of currency created each day was $3,600,000. When I started this article in July  the daily created value was $4,860,000 and by the time I finished it the price had risen resulting in a daily value of $6,120,000.
While this value is high the currency is traded world wide so dividing this dollar amount by the increased number of participating traders makes this a more optimistic metric.
The most interesting observation about the amount of this newly created currency will be to compare it to the inflow of currency which I am sourcing now.
2) Technical Risks.
Bitcoin could fail catastrophically for unforeseen technical reasons. Or something new could come out tomorrow that makes it irrelevant. My estimation of this actually happening is very low because the mechanics of the currency are used in a lot of diverse and time tested systems.
3) Crime and Safety
Holding cryptocurrency involves a certain level of risk as criminals could steal your holdings using malware. It is important to understand the risks and proper use of cryptocurrency to ensure you keep it safe.
4) Regulatory Legal Risk.
While this is a much lower concern now than it was years ago, in the future government agencies may place restrictions on your ability to buy, hold and sell cryptocurrencies. As adoption grows and government agencies from around the world make their position known it is becoming clear that road blocks of this type are minimal.
My Strategy
My strategy in the past has been to buy when the price is historically low and going up then sell when the price is historically high and going down. This allows me to accumulate during periods of undervaluation and take some profit during periods of overvaluation.
Currently I am buying small amounts every pay cheque to accumulate an amount over a fixed period because I believe there with be growth over the next year.
I have built and use a web service that tracks top cryptocurrencies and reports on different metrics. I also have a trading bot that I can test against historical data. Despite my best efforts so far the best strategy is still to buy and hold when you have capital and to buy regular amounts over time if you have income.
As a final thought. Personally I find crypto currencies very interesting but if you want to invest there is a lot you need to know to use it properly and even with precautions it is very risky. This is not financial advice and I do not recommend that you invest with money you are not willing to lose.

Rich, Safe and Comfortable

cliff_face

This is a follow up on the idea that everyone wants to be rich but most people don’t prioritize it and don’t achieve it. I touched on this in yesterdays post titled Financial Independence that discusses a life transition I am starting.

The order of priority is important. Robert Keyosaki wrote in his book Rich Dad Poor Dad that we all want to be rich but not everyone achieves it. Most people put comfort and security ahead of being rich. Most people underestimate the potential upside of choosing rich heavy actions and overestimate the risks associated with those actions.

It costs money to be safe and comfortable. You end up trading opportunity in time, options, learning and raw capital that could be used on investments that return a higher rate. My suggestion is to sacrifice comfort and security in the beginning of your investment timeline. This will hopefully allow you to make higher returns with most of your resources then buy back your comfort later and be way ahead of those other guys who paid for comfort from the get go.
A lot of people worry about what would happen if the don’t have the safety of a regular job or guaranteed and stable returns from low risk investments. Most people don’t want to deviate from the investment strategy their friends, colleges and family use typically stocks and bonds invested through a fund at a local bank.
If you were to go against the advice of your peers and fail you may not only lose your investment but potentially feel foolish. But that’s actually in reality not such a bad thing. The idea of going to maximum growth up front means that if your strategy fails you can try again and again a few times learning as you go and you still have the opportunity when you are older to invest with time to save for retirement when you need it.
Iterations on ideas, strategies and investment types.
The more times you do something the better you get at it. There is a saying, when a man with money meets a man with experience, the man with experience ends up with the money and the man with the money ends up with the experience. Cheeky but the point is that while you may fail at your investment plan at first as long as you keep trying you will improve and overtake the vast majority of people who passively invest in the market.
Because of compounding most investments really pay off at the end so it doesn’t really make sense in my opinion to sit on investments without high potential when you are starting out or have a base net worth of zero.
Having a risky asset class or a risky allocation of only a few asset classes carries lower inherent risk when carrying a lower net worth. So the benefit of diversification or the type of investment you choose plays a smaller role than most people assume. For example if you are investing your first one thousand dollars and decide to buy Bitcoin rather than a stock index fund and plan on saving two million dollars for retirement, exactly what is the difference in the long run between those two options? The stock market could double or triple in thirty years, Bitcoin could go up five or ten times. Nobody knows but as you continue to invest you will have the opportunity to keep adding to each of these different asset classes and give yourself the most amount of time exposed to the highest gains you can anticipate.
Risk weighted against opportunity.
A lot of people look at risk factors in isolation but what should matter more is the ratio of risk relative to estimated gain.
Investing to be rich rather than safe can look like investing in an asset you think will return the highest after ten years rather than a good investment that will return a fixed consistent amount each year. The ten year play may sit at a loss for nine years and only pay off when its ready. This is where the price of comfort and safety is paid by you. If you need the money unexpectedly or want the reassurance of steady growth you will have to make do without or make other arrangements. But when the long term plays pay off you can usually buy 10x the safe consistent investments you would have otherwise because your investment capital would be smaller and spread out.
The method.
If there are fundamentals in an asset class or patterns that repeat the buying into undervalued assets and selling or reallocating overvalued assets is a good option.
When starting out in a wealth accumulation phase rather than a safe wealth preservation phase, I would invest in asset classes I think will have the highest risk weighted return. Currently in my opinion some precious metals like silver and cryptocurrencies fit into this bucket. I will explain in another post the some factors that could affect these asset classes both negatively and positively.
My personal strategy:
Buy assets with strong estimated future fundamentals. I.e. things people need that are rare or becoming more rare. Buy when the price is historically low and going up, Sell when the price is high relative to historical trends and starting to go down. Use the money to buy other assets that are undervalued. Use a ten to twenty year price history if available. Trade small amounts over time relative to the rate the price rises and falls in the past and based on your target allocation.
Examples: 
Some Random Asset Categories:
Realestate: REITS, Investment properties. In Canada the housing market is at a 100% fifteen year bull run.
stocks: Index Funds. Markets in the US and Canada are also in a ten year all time high.
bonds: National both foreign and domestic. Interest rates are low so these pay out low interest.
Structured Notes: Banks offer options for gains with some investment protection.
Private Quity: Business opportunities sold as Investment Bonds,  TFSA and RRSP eligible.
Precious Metals: PMs used in industry are at a ten year price low and could potentially become rare in the future.
Crypto: Bitcoin, and alternatives. Seeing increased user adoption and upward trending.
Allocations:
Rich- 
90% High
0% med
10% safe
Safe-
30% high
30% med
40% safe
These allocations illustrate a possible interpretation of investing for gain vs. safety.

Financial Independence

Its been a while since I last posted and a lot has changed for me in the past couple of years. Going forward I am thinking about starting a YouTube channel for interactive dialog, both solo and with others, as it relates to some projects I am working on and in order to share progress and to create more fun experiences.

A big goal for most of my life has been to become financially independent so that I can spend all of my time growing personally, leaning what I really want and the skills I need to more effectively get there.
We are very fortunate to live in this time with so many other like minded people and also unlike contrasting ideas. We all make our own choices based on our desires and our understanding of what we want to achieve.
I have been thinking about this idea of effectiveness. Everyone has their own idea of what a fulfilled life looks like but not everyone can get there. While being happy or not is a matter of perspective in that a homeless person can live a life of ecstacey,
Eckhart Tolle comes to mind, and others with riches can feel perpetually empty, the take away is that we have lots of examples of others achieving different results from varied mindsets and actions.
One fascinating idea to me is that some people can make an obscene amount of money with very limited but targeted action. Being a software developer i’m familiar with a few other entrepreneurs starting successful online business that make a lot of money but primarily I think of Internet marketers who made staggering amounts of money buying ads to affiliate products. The market is always changing and these people rarely do it for long periods of time but the amount of money would set them for life.
Contrast that with someone who works a nine to five job from the time they finish school to retirement earning just enough to live, raise a family pay for all of the things most people buy like a nice house or condo, a car, a TV they spend every day watching, two weeks vacation per year, etc. In the social circle that I grew up in that is what almost everyone does and tells you to do. Go to school get a good job with benefits and work until you retire. Not bad but I can’t get excited about that. So what would it take for those few people who don’t go to work a nine to five every day and instead do something that makes them millions of dollars? Well they have to believe that they can find a way to make the money so they must spend their time learning about others that have different key pieces of information that they use in a plan and commit to it.
Someone always makes the comment, oh they were just lucky, implying the outcome they received just fell on their lap. This is the most tragic loss in my opinion. It reminds me of an anecdote I heard about an elementary school class experiment. They separated the students into two groups ordered my grade. Half of the top performing students on one side and the underperforming on the other. Each group was asked why they thought the successful students were able to perform so well. The students with the low score predominantly said they students with high grades were just born that way. The students with high scores predominantly said they received high grades because they work really hard. Thats the key, we all spend similar amounts of time awake living learning, trying, failing, changing, improving. By dismissing important pieces of information that especially pertain to skills or network opportunities is only to your detriment.
Everyone wants the same things, they just put them in a different order or importance. Do you want to be rich? Live in an ocean front mansion, traveling the world? Probably yeah. Do you want to feel safe and comfortable? Rely on a consist set of resources and routine? Have food and shelter? Probably yeah if I can put words in your mouth. But the ones that put being rich above security and comfort tend to get all of them to a much higher degree.
The Pareto principal applies so only certain actions result in your target goal. You can, and many do, spend their entire life working on things that fill a nine to five and never push them forward from their current more. Congruent beliefs with success are also required, If you don’t believe you can achieve your ultimate life changing goal why would you look for the opportunity and dive into the fear of actually committing to achieve it.
As for how this relates to me personally, I have made some investment gains over the past few years. It’s still early in my plan but so far I have paid off my living accommodations and in several scenarios have achieved financial independence. I have some investment diversification to do this year to reduce my exposure in some areas but if I was to lose my job tomorrow I would not likely have to find another one ever. My plan is to work for another year, make some planned investments then start a few ventures that I will document here in later posts.
Going forward I am approaching a life transition. Up until now I have been focused on my job but that has meant that my time is committed and my opportunity to pursure projects and experiences has been limited. So now instead of focusing on my particular job skills I will be expanding my social circle, committing time to new businesses outside the scope of my past work and leaning to have more fun.
I will be documenting these new business projects and the pieces that you can use as well as the investment opinions i hold and how I used them to achieve financial independence all coming soon.

Letting Go and Embracing Change

Rock-Climbing

Changing directions in life can be difficult. If you’re like me you can spend years working on a career path, a business venture, a personal or business relationship or an investment strategy.

These activities require a certain level of commitment. You can’t just put them down and pick them back up again and generally have to focus your energy, time or money to the exclusion of others.

At some point if what you are doing isn’t working out you will probably start to feel the uncomfortable sensation that something is wrong. You might recognize that you have to change but that would mean forfeiting money or abandoning progress towards your goal and starting over from scratch. There is also going to be uncertainty about finding a replacement and what that might look like in your life.

 

It’s easy to personally identify with a routine that we spend years with.  

In the past I have spent many years at a job that wasn’t right for me before finally leaving. I didn’t want to quit because I worried that I wouldn’t be able to pay my bills if I couldn’t find another and that if I did it would be another bad fit. In hindsight staying was a bad decision. I wasn’t satisfied, I was working harder to fit mismatched needs/skills and my employer didn’t know that they should be looking for a better fit for them.

I have also spent many years on several failed business ventures both individually and in partnerships. The moment when you realize that it won’t be viable can be challenging. All of the time and energy spent on something that will never pay off or meet expectations can be a let down.

The same applies to personal relationships. Over time our needs and expectations can change. Sometimes this means that once compatible matches become incompatible.

It’s interesting to think about what other ramifications in your life are caused by pushing through when you could always just go around.

 

If what you are doing has become a familiar routine and acts as a your go to plan to achieve your goals it can be hard to let go. If you had to give it up right now then you’re back at square one and have to start from the beginning. If you know your path is not viable the worst thing you could do is just keep plugging away. This is known as the sunk cost fallacy. When you rationalize that you can’t quit now because you have invested so much already. Even if logically starting over is the better option. Its easy to see as an outsider but not so much as it applies to yourself.

Even if there is no obvious replacement the best thing to do is accept that what you’re doing isn’t working. Give yourself the full resources of time and mental faculty to work on finding a new better direction. Let go of what you don’t want to make room for what you do.

On the occasions where I pulled the plug on multi year projects, relationships, jobs and investments it was personally challenging each in a unique way. What helped me in these times is to refocus on my end goals and imagine what it will be like to achieve them instead of focusing on this gap between where I was and where I wanted to be. I formalized my new objectives to give them a place in my mind. I bought notebooks just for writing notes on each goal and carried them with me or kept them by my bedside table. Every time I think of an idea, I write it down. I cleaned up any loose ends with customers, contracts and other obligations so that I wouldn’t have to spend any more time on them. I also bought a pack of post it notes to write ideas and stuck them to a wall in my home. I would constantly add or remove and sort the ideas by best fit for me, practicality and other factors. Figuring out what I needed to do was the highest priority for me and I changed my living environment to reflect that. The post its on a wall are always easily accessible and act as a reminder to take action.    

There is an old joke about smokers saying they aren’t quitters as if to imply that quitting is bad. If follow through is holding you back then perseverance will serve you but there is no point going down the wrong road. Being clear about the difference between those two extremes is the key. Pushing though or letting go, thats up to you.

Dating 101

Young couple holding hands with sun-flare.

Finding and maintaining a fulfilling relationship partner requires the same set of skills as it does to achieve success in any other area of life.

The core ideas are to constantly improve your social skills, the way you present yourself to others, and cultivate a supportive network of friends. Don’t dwell on negativity, take action and reflect on your sticking points to improve on them. Learn skills that provide value to yourself as well as others. Compatible partner matches will enjoy the things you do. Learning skills that bring you happiness also add value to your relationships.

Most people don’t treat their relationships the same way they do as other important things in their life such as graduating from school or finding a good job. Relationships are much more personal and it’s easy to think of them without much reflection. If this is you and has worked out, great, but if not you will have to bring your skills and abilities up to a level that gets results. Without making a plan and constantly improving you are like a leaf floating down a river destined to end up where the water takes you, not necessarily where you want to be. Analyse what you are doing well and not so well to improve with each interaction.

Also you may not be sure of the specific type of relationship you want until you meet a variety of people and try experimenting with different activities.

Finding a partner:

  • Communication skills including conversation and body language are a big part of first impressions. Watch for bad habits like nervous ticks, unnecessary words, and bad posture. This can help with introductions when meeting new people. Often a first impression will stick with you and be hard to change. Meeting new friends is a great way to advertise the kind of relationship you’re looking for. Most people like to play matchmaker if they know someone they think would be compatible with you.
  • Confidence in at least some core areas of your life means that others will see you as someone that can be trusted and relied on to make decisions and function independently which is a great quality. Not being needy or dependent on others signals that relationships will be about fun and sharing not hard work and commitment like a job.
  • Clothing that looks good and fits well signals to others that you are aware of how others see you and are competent in at least that area of your life. If you are unsure about your wardrobe asking others for honest opinions is a good way to get another perspective.
  • Physical fitness is an attractive quality and making even little improvements will make you feel better and live longer. This makes it easier to enjoy life and relationships. Demonstrating control over your body also reflects positively on the way you treat other important areas of your life. Having standards for yourself can demonstrate to others that you have standards for them as well and in turn improve the strength of your connections.
  • Hygiene, It’s an easy thing everyone should be aware of and makes a big difference.

 

A lot of people believe that they are not worthy of a rewarding relationship because of personal attributes that can’t be changed. If you are self conscious about the way you look, or how much money you have first start developing skills and personal qualities that will bring more interested people to you.

If it’s hard to imagine yourself being successful in relationships it can be easier to start by seeing in others the qualities that make them attractive. It could be a positive attitude, social likeability, humor, style, posture, etc. Once you can see qualities you like in others it can become easier to imagine yourself improving in those areas.

Don’t worry about the things you don’t like about yourself that can’t be changed. They are often likable attributes to the right people. Fear can be paralyzing and prevent you from acting when you otherwise could.

A lot of people think certain qualities are universally attractive or unattractive. In almost every instance the qualities that most people find attractive change over time and immediately in the face of something different they haven’t seen before. Some people don’t work on improving their attractive qualities because they say they are ugly when in fact they could become a perfect match for someone and end up missing out. Unfortunately for most people they have to see it in order to believe it. From my personal experience the people I am most attracted to and would rate the highest are very different from what others would consider.

 

Starting relationships are all about finding the people that are compatible with you. Relative to our historical past there is basically an unlimited number of resources for meeting people. Just to name a few: Social activities, online dating, meetup groups, Facebook, etc. Hosting and entertaining is a great opportunity to share time with friends and meet new people.

When working on improving yourself remember to find things you will enjoy doing. Inspiration is what will give you the energy to follow through. A good partner will be interested in the things you like so don’t focus on learning things you think other people want.

Avoid negativity because it sucks the energy from an interaction. Relationships and meeting new people are strengthened by positive high energy.

If you are not comfortable in a situation, date or meeting new people you are not enjoying yourself by definition but the other person will pick up on the discomfort and have a negative reaction. It’s a double whammy. When stepping out of a comfort zone and trying new things it is okay to be bad at it at first. That’s the best way to learn and is far better than staying where you are and never progressing. Once you can become comfortable in new situations that’s when the synergy kicks in and you will see real results.

 

If you are in a relationship there are a few keys to keep it healthy. Over time people change what they like and don’t like. If you give up the things in your life to suit others then you will be happy and if the relationship doesn’t work out your skills will have atrophied.

Build equity in yourself and regardless of what happens to any other person you can be happy and moving forward.

Maintaining a fulfilling relationship:

  • Maintain the things in your life that were important to you before your relationship. This includes time with friends and hobbies. Trading one form of happiness for another won’t make you fulfilled.
  • Stay healthy and active. Making time in the short term will pay off in the long term.
  • Try new things. If you become complacent and settle into a routine it can become boring. Over time our interests and needs change and it is important to explore new activities to discover and satisfy ourselves.

 

Be honest with yourself about what you really want. If you don’t know what you want or what you have to offer a partner you will find it hard to find someone or know it’s right for you when you do. This may involve reflection and acceptance of qualities you currently don’t like about yourself.
Take action with Incremental steps. It can be hard to make big changes in the way we approach relationships. Small steps help acclimate you to big ones by getting comfortable with individual parts as you build on them. Also take time to reflect and appreciate progress that you make along the way.

Subliminal Goal Achievement

Your environment is almost certainly affecting your mood and productivity. You can make big improvements and achieve new successes by making simple changes to your work and living spaces. The idea is to choose specific objects, words, imagery, smells and music that you have a positive association to and place them in the areas you live. The intention is to create subliminal triggers that subconsciously influence you to act and improve on goals. These could include working on business ventures, doing chores, thinking more positively, getting more exercice, generating a million dollars or eliminating bad behaviours. It’s a good way to start something new or improve on what your currently doing.

The process starts by choosing some goals and laying out reminders for yourself. For each of your goals come up with related written words and phrases, images or objects and place them in your work and home spaces to guide action. Make them part of your daily experience. The reminders you choose should be associated with a feeling you want to foster but can include itemized todo lists. This means using words and pictures that you would experience with the successful completion of your goals.

The magic of this exercise is that the mind absorbs your experiences and influences your thoughts and actions without you even being aware of it. The semantic meaning of written words and images doesn’t even have to be fully comprehended each time you look at them. You just have to be exposed to the reminders and your reaction will be subconscious.

This process will also help you remove blocks to a more productive day. If you find yourself deliberating on decisions then adding more positive influences will encourage action. 

Preparation is critical to success. Because we are purposefully trying to encourage automatic behaviours we need to make sure those behaviours are chosen thoughtfully ahead of time. The reminders placed in your environment will also form habits and allow your subconscious to anticipate and plan moment to moment what to do next. This creates a calming effect on your overall state.

We have an emotional budget of decision making power available to us each day. If we exceed our limit we hit burnout and start making bad decisions. When you’re running low on energy you slow down and loose focus. Optimize your day by dedicating time once a week to choose tasks for goals. I.e. if you want to start going to the gym every day but find it difficult remove some unnecessary steps. Keeping all of the things you need in a bag by your front door so all you have to do is grab it and your ready. Then when you decide to go everything you need is in that bad and there is no time for deliberation and hesitation.

You can support new actions with rewards while transitioning to new behaviours. This can include tasty prepared food items, music you enjoy and planned activities that have pleasant experiences like walking through a park.

Here are some specific ideas for implementing reminders:

  • Use post -it notes, a chalk or white board or custom paper/card stock to hang reminder words on the walls. You could also create artwork with pictures and large print words to serve both artistic and influential roles.
  • Set up your computer to cycle through motivational desktop pictures.
  • If you share a space with others and don’t want to disrupt the feel you can change the medium and format to fit. This might mean todo lists on notepads in an office and framed word art work at home.
  • Create a board and place on it all of the associated images and text goals that you are working towards.
  • The size of text you prepare can also be used to influence the priority you have attached to it. Place multiple reminders to reinforce the message.
  • When using descriptive words or todo lists include words you associate with positive feelings. This way you will think of the feelings along with action goal based words. Your subconscious is not logical like your conscious mint and thinks more in terms of feelings.
  • Smell and scents can act as powerful reminder.

Use location to your advantage so that the objects you choose support the type of behaviour you want for each areas.

  • Work – At work you may want to create a mood of alertness, concentration and low distraction. Some starting ideas: Supplement low light levels with a lamp. Ambient non vocal music or flowing water feature. Light energy rich foods. Organization folders.
  • Bedroom – In your bedroom you may want to create a restful calming mood. Some starting ideas: Add a dimmer light. Use words like Relax, Calm Rest. Add smells with plants or scents. 
  • Living Areas – In your living spaces you may want to create a mood for brainstorming, health or long term planning. Some starting ideas: Use words, photos that support income/achievement goals or activity planning. Prepare a gym bag or healthy snack food next to written words or other objects.

When using written words choose the ones that inspire and make you feel good as well as words that describe your goals. Identify specific goals that you would like to achieve and select the words and images for each. Imagine yourself having achieved the goal and choose words that describe that state.

Ideas for working options:

  • $ 10 K / mo
  • Millionaire
  • Enjoying Physical Fitness
  • 4 Dates Out Each Month

The reverse of positive reminders also applies to negative influences in your life. Try removing things from your environment that negatively affect your actions. This may be clutter, excess furniture, excessive noise, unhealthy foods, TV, destructive relationships etc.

Optimize for results. Every once in a while review how you feel about the spaces you have created. Try changing the wording and placement over time. Some things may not work for you so try new things and experiment.

I have found this exercise very useful for goal achievement after just starting recently and noticed a few things. It’s good to have lots of reminders everywhere so that a lot of your time is spent around them. I don’t pay attention to them often I just let them be. Most of the reminders are subtle and just appear to be decoration by others. The build quality of words and pictures on any wall make a big difference. When using post-it notes or low quality card stock I notice it feels like clutter after a while so i’m switching to using  frames and other materials.

Let me know if you try any of these and any improvements you notice.