Thursday, August 27, 2009


One of the things that always happens during the audit busy season is teams pool money together and buy lottery tickets. It’s sort of a little ticket of hope as you work those late nights. Well the lottery is extremely high at the moment (204.6 million) so my team has gone back to this practice. We essentially have an agreement that if we win we will pay for the team to go to Greece for a month; with a minimum of a one day excursion on a yacht. We then asked eachother the question of what would you do if you won.

I’ve always had an answer for what I would do if money weren’t an object and I could do something for a day, but couldn’t keep anything afterward. I would fly a bunch of friends and family to a cool destination (Italy or Spain) and fly world famous chefs in and throw a monster party. Since I have one day I would want to maximize the happiness of as many people as possible.

If I won the lottery I’m not sure what I would do. I know I would invest roughly 50-80% of the earnings. I would set aside some to donate to causes that I care about. I actually would like to think that I would stick with my job. I enjoy what I am doing now and where I am going. If I had a better idea I would be doing it. I would probably drop my ’99 CRV (I KEEP IT CLEAN) for a new vehicle; maybe go live in a foreign country for awhile. It’s hard to say though what you would do when you get THAT MUCH money. 1-3 million is one thing, but 200 million is ridiculous.

I’ve often read that if you have a clear cut picture of what you would do career wise if you won; that you should pursue that career because that is what you are passionate about. People who are passionate about what they do are the most successful in their industry. So ya I’m not 100% sure what I would do, but I’ll let you know on Saturday.

PS. The lottery is a REALLY REALLY bad investment; entertainment purposes only!

Tuesday, August 25, 2009

Moving to Australia?

I met with my PML last week. For those of you not familiar with the inner workings of my Company that is a partner who serves in a guidance role for your career. We hadn’t met before so I had mixed emotions about it. I liked my old one a lot and he had gotten me into the gig I wanted so I had no complaints. We were forced to switch from managers to partners so this would be interesting.

As we sit and talk we end up having some random things in common. His wife is from the city my grandparents have lived most of their lives and where my father was raised. The pastor that married them is the church pastor of the church my grandparents attend. I worked on the pastor’s house for a summer and knew the pastor fairly well. We talk about my goals and he asks me if I am interested in overseas travel. Of course I am, but I state not until manager because I’ve heard that it is best to wait financially.

He stops me, and says that he left his 2nd year as senior (would be next year for me) and went to Australia. Told me how it changed his life. The weird thing is that I have wanted to go to Australia or thought about it for about 5 months now. If you don’t know me that well; I’m a big believer in synchronicities which is that things happen that lead you toward the correct path. If something is right then you start to see signs.

Let me briefly go over the weird things that have happened:
• Started rock climbing found out that really good climbing/outdoor activities in Australia/New Zealand. Become interested in visiting
• Started teaching Sunday School where the director is from Australia
• Toyed with playing rugby again
• Almost schedule a month long trip to Australia but decided last minute to hit up Europe because it was cheaper
• Get involved in foreign accounting (IFRS) which places me on an Australian client
• Have a performance partner that lived in Australia for two years

He lets me know that Australia is awesome, he knows tons of people with the firm in Sydney, and he recommends going while I’m young so I don’t have to put my life on hold knowing that a 1-2 year foreign trip is coming along. Wow, take a deep breath. He lets me know that we will revisit in 9 months and if I’m down he’ll get me involved in the global mobility program and we’ll do it.

This puts a kink in my plans as I was going to take the GMAT and explore doing a doctoral accounting program. Working in a foreign country was more of a 3 or 4 year down the road plan if I stayed in public accounting. This changes things and in a big way. It’s something I have dreamed about doing, and to have someone who has been there in the exact same situation as me makes it a lot more tangible.
So perhaps in a year I will be sitting here talking about my preparations for Australia. As I set and thought about that and the many ideas I have had I was thankful. I’m in a place right now where there are so many options for me that. Which one will I choose? Which one should I choose?

Thursday, August 20, 2009

Teaching Sunday School

This Sunday I start teaching 6th graders at First Baptist Church. It should be an exciting experience to say the least. I’m really looking forward to growing spiritually. I agree with the statement that you learn the most when you teach. It forces you to study the material in depth; you have to have an organic understanding rather than just a base level or picture understanding.

I really enjoyed the training class and am excited about the team I will be working with. Everyone was just so excited and passionate about it. And I realized that is one of the benefits of participating in volunteer activities; every single person wants to be there. I couldn’t help to think how this translates over to the business world. There are days when I don’t want to go to work, but of course I do because I have an obligation. When it comes to volunteer activities though I am there because I want to be. A business where every single person in your organization wanted to be there would be amazing. Creating this culture is obviously not easy. And it’s a huge post to even scratch the surface, but feeling that energy is always exciting.

Almost everyone teaching is married including the young people. Prior to this training I was only involved with the singles group. I was excited to find out that 2 of the people teaching were members of Christian Business Leaders with me. We had a lot of time to talk during training; I especially enjoyed talking to the married guys. All of them were within two years of me, and during conversation they mentioned that they envied me being a single guy. They said they enjoyed talking to me because they get to live vicariously through me. I probably take for granted the level of freedom being single allows. It’s great to know you have the freedom to make decisions without consultation. You are responsible for you. It seems obvious, but I didn’t realize that it was something that was missed. Made me want to be a little more cavalier with my bachelorhood.

An idea I have wanted to implement was a blog for the youth ministry. I had shared some ideas with the youth leaders, but didn’t bring it up during training. I was surprised when someone else brought up the idea. I wrote three posts for the blog yesterday as a test run in my excitement. Blogs are great for developing accountability and my hope would be that eventually it would be taken over or heavily contributed to by the students. If you want to develop someone you get them involved in the planning; let them make it their own. I’m excited for the possibilities.

Finally, I’m excited about exploring what motivates kids and how to convey a message in a way that has an impact. I have a lot of theory; with little practice. So I’m curious to see what kind of affect I can have. Sixth grade was an extremely tough year for me. My parents got divorced and my support system fell out from under me as my mom moved us to the other side of town. My parents were harboring so much anger toward each other that it left me with little guidance or direction. I really want to be a rock for someone else.

Tuesday, August 18, 2009

Dollars and Sense- How I Invest

This is the third post in our series called Dollars and Sense. See part 1 here.

This post isn’t going to be long, because investing the right way is simple. It’s human nature to want to have the very best portfolio and maximize your growth. Countless studies have proven that individuals generally end up minimizing gains and maximizing losses. Not to mention that winning stocks aren’t even picked by 80% of brokers in any given year. Of the remaining 20% of brokers who do beat the market almost all of them don’t repeat the feat in consecutive years. There are very few individuals who have beaten the market on a regular basis (about 3) in the HISTORY of the stock market.

One of those individuals is Warren Buffett. Berkshire Hathaway, currently trading at $99,000 a share, is Buffett’s holding Company. Unlike many investors Buffett engages in very few trades and instead attempts to identify businesses that he believes will profit in the long run. The highlight of owning Berkshire Hathaway is the yearly stockholders meeting which is an open forum for all shareholders to ask questions. This annual meeting is widely covered and many business deals are done at this meeting.

EVERY year people ask Buffett for investment advice. He always says the same thing. The average American should invest in index funds because it gives a diversified portfolio at very cheap operating costs. An index fund or exchange traded fund are typically managed by computers to track a group of stocks (S&P 500, Dow Jones, etc.). As I said above a broker will typically not beat the overall market; additionally when you factor in broker fees (the cost to buy and sell shares) then any profits you would make are eaten up. Brokers make money when you trade, so the more “tips” they give and the more you buy the more money they make.

So what do I personally do? I listen to Buffett and want my money to grow over the long term. I want a highly diversified portfolio to minimize individual stock risk. Therefore I put my money in a no load very low fee mutual fund. Since I have a schwab account right now I am investing in SWPPX. This is Schwab’s version of the low cost S&P 500 index fund. The fees are very low and there are no trade fees. I can buy shares whenever I want for NO COST. This is huge as every dollar I invest goes into the fund.

I invested a large sum when the market was down, but I got lucky. The best way to win over the long term is to invest a set dollar amount on a regular basis take better advantage of the stock market than people who attempt to time the market. Using automatic entries I can set up this through my Schwab account. I use their online banking system (no atm fees anywhere, high interest rate) to collect my paycheck and then allocate funds automatically between credit card, savings, and investing.

Another option is a target retirement fund. What this does is allocate assets based on your target retirement between stocks and bonds. I don’t personally use this because I want all my money right in the stock market, but it’s a great way to take any guesswork out of your future retirement planning. These funds are also computer managed and incredibly low cost.

Any large investment group (Fidelity, Vanguard, etc.) will have similar funds mentioned above. If you want more information let me know. My hope is with this post it spurs you into action. You can literally get started immediately. Call the help line for any of investment group mentioned above and they will literally walk you through the process.

Friday, August 14, 2009

Europe Man

Me and David are going to Europe for a month. Of course I'm starting a blog about it. Check it out!

Wednesday, August 12, 2009

2009 Texas Aggies

I love college football. More importantly though I love Texas A&M football. I grew up an Aggie; both my parents went there and I recall spending Thanksgiving day watching A&M vs Texas. It didn’t hurt that I grew up in the 90’s which is A&M’s best decade. Back when the wrecking crew defense was something to be feared. I’ve missed one football game in 8 years (2002 Oklahoma sadly); so ya compared to the average fan I’m a die hard. So forgive me if you don’t enjoy this post, but frankly it’s for me. Here is my season prediction for all to see. First our schedule:

9/5/09 New Mexico
9/19/09 Utah State
9/26/09 UAB

10/3/09 Arkansas (at Dallas)
10/10/09 Oklahoma State10/17/09 @ Kansas State
10/24/09 @ Texas Tech
10/31/09 Iowa State
11/7/09 @ Colorado
11/14/09 @ Oklahoma
11/21/09 Baylor
11/26/09 Texas

*Home Games in Bold

Heavy Favorites
Prediction 3-0

New Mexico, Utah State, UAB

Obviously all of these are must win games and in my opinion the key to a successful season rest in these first three games. Just like last year this year’s team is young. We need guys getting reps in the worst way early in our schedule. Therefore we need to have substantial leads against all of these teams. If we can get guys reps then we set ourselves up to hopefully a strong finish (ie. 7 or 8 wins). The Aggies should be able to do just that.

Prediction 2-0

@Kansas State, Iowa State

Both of these schools have new coaches. Of the two Iowa State is the easiest game both based on personnel and location. Iowa State has had horrendous recruiting and isn’t returning much either. I expect them to be at the bottom of the big 12 cellar yet again. It’s funny to see them trotting around in their USC like uniforms. I could pair this in with the heavy favorites above; though, since they are a big 12 opponent I will give them the dignity.

Kansas State lost Josh Freeman who single handedly came back and beat us down the stretch. He was a good QB and great leader. If last years season taught me anything it’s that regardless of how easy a transition a new coach has there are still growing pains. Kansas State will have some. We have the edge in this one though it's not a huge edge by any means and this game is very close to being a swing game.

Swing Games
Prediction 2-1

Arkansas (in Dallas), @ Colorado, Baylor

All of these games are winnable. None of the teams on here are world beaters. The easiest game on this list is Baylor. Ya Robert Griffin is back, and I must admit I actually like the guy. He’s a good leader. He spent a lot of the offseason competing (and owning) in hurdles. That’s valuable offseason time he didn’t focus on football. Will he be better yes, but he could carry a little more healthy weight on his frame. Don’t discount either the loss of their top 2 pick tackle Jason Smith. He had Griffin’s backside all year and did an excellent job. I see the offensive line struggling a little bit for them. That said the A&M linebackers have to come through as there will be a lot of backfield movement. We have the talent to be better last year, but that’s not saying much of anything. The home field advantage in my opinion gives us the edge and the Ags ultimately pull it out. One more thing how does a team going 4-8 (Baylor) all of a sudden become the Cinderella of ESPN. I’m lost for words. The upside is that if Baylor does have a good season Briles is gone.

Playing at Colorado is tough. For the Ags it’s a combination of the altitude and the cold weather. We just aren’t used to it. Colorado will not be a good team this year, but the altitude and cold is a tough adjustment. This game is winnable; hopefully the Ags come out and break the Colorado curse they have suffered up in Boulder. If Colorado wins it will be with the running game as I feel that our secondary is more than adequately able to deal with their passing game which is mediocre.

Arkansas is an interesting matchup. Old SWC foes doing battle again in the metroplex. Both teams are retooling for the future. Arkansas is the favorite though as they have more experience on both sides of the ball. The Aggies should have the advantage in the stands and ideally will be less beat up and more prepared. Arkansas is playing both Alabama and Georgia prior to this game while the Ags have UAB and Utah State. Ideally, Arkansas upsets ‘bama and sets themselves up for an upset game. What this game does offer is a prestige win due to national exposure against a very winnable team. Winning this game would go a long way in terms of getting the Ags back in the media and would set up an exciting Oklahoma State Matchup.

Prediction 0-2

Oklahoma State, @ Texas Tech

A&M will come in to both of these games as underdogs. Both of these teams have a lot to prove; though the real pressure is on Oklahoma State. They have set themselves up for a great season. When teams rise up from the middle ranks you always watch and see how a team handles the pressure. This will actually be Ok States second challenge as they face a very talented Georgia team to kick off the season. They have an off week right before playing the Ags so will come up fresh. That doesn’t bode well for the maroon and white. Interestingly enough though A&M has always played well against Ok St. We tend to outplay them. Last year we self destructed with 5 turnovers to Ok St 1. You take those away and the offensive numbers are almost identical (402 yards for A&M to 401 yards for Ok St). We did a good job containing Dez last year as well. If we can use a little Kyle Field magic we can pull the upset. Don’t count on it though.

If the Aggies traditionally play well against Oklahoma State they play horrendously bad against Tech. Tech has circled A&M as a must win every season and delivered all but once in the last 14 or so meetings. Due to Leach’s system Tech tends to reload every year and put up big offensive numbers. Sherman has focused on getting quicker guys on the field so that could help, but with a lot of young guys it becomes hard to learn Tech in a week.

Heavy Underdogs
Prediction 0-2

@ Oklahoma, Texas

Texas is the easier game of the two and it’s not even close. Texas is our big game. We tend to play above our heads (see 2006 and 2007). So it’s not out of the realm of possibility. That said Texas is stacked this year and is set on making a national championship run. Don’t see them overlooking us especially if they are coming in undefeated. They’ll want it real bad. Additionally, neither team has a bye week as in years past and Texas definitely has better depth.

Oklahoma would be a heavy favorite either way, but in Norman an upset is unlikely and frankly would shock the nation. Oklahoma has retooled their offensive line, but they are locked and loaded with NFL level talent at almost every position. It would be a miracle for sure.

Three Keys to the Season
1) Start the season out strong and get guys reps
2) Take care of the football
3) Improve improve improve

Our biggest weakness this year will be our interior defensive lineman. Right now through the first week of camp they aren’t surprising anyone and we’re currently trying Chris Lathrop at DT to try and pick up some of the slack. That’s bad news for our guys in the trenches. Hopefully, Matt Moss can come off the other end to give Von Miller some room to work. Otherwise, Miller won’t be able to have as huge of an impact. Our most improved position should be linebacker. We’ve got some natural playmakers back there. They won’t be world beaters, but they will be much better then what hit the field last year.

I can see anywhere from 5 to 8 wins. What all Aggie fans are waiting for is that year when we play above our talent level and surprise some people. We haven’t had a season like that since the 90’s. If we can make a statement in the big 12 it will do wonders for our already exceptional recruiting class. Either way I am counting down the days ‘til September 5th.

Tuesday, August 11, 2009

Dollars and Sense- What is the Stock Market

This is the second in our series called Dollars and Sense. See part 1 here.

Last time we talked about what money actually is. Now let’s talk about what exactly is the stock market.

The stock market is an exchange where individuals go to buy and sell shares of a company. Shares of a company represent a percentage ownership in that Company. So for example if a Company has 1,000 shares outstanding then you essentially own 1/1000 of that Company for each share you own. The total value of a Company’s outstanding shares at any given time is called their market capitalization. This is the total “value” of the Company as determined by Wall Street.

One thing to note is that a Company does not directly benefit from the value of their shares going up. The stock market is a secondary market where individuals trade shares. Only when Company’s issue new shares or when a new Company undergoes an initial public offering (IPO) is the Company receiving the money. Occasionally, if a Company feels their stock is undervalued the Company may purchase their own shares and resale them later or purchase them for stock awards for their employees.

A stocks price is determined by a lot of factors. First and foremost the earnings and performance of the Company affect the stock price. Anytime a Company has unplanned or unforeseen success the stock price will go up. The opposite is also true. Everyday though we see the market shifting. These shifts are related to the publics’ view of the economy as a whole as well as industry indicators, etc. Now I would be one rich man if I could tell on a daily basis how the market is going to perform, but that is really not possible. There are so many factors that affect stock prices that it becomes hard to predict market swings.

There are really two types of investing that I know of speculative and value investing.

Value investing is similar to what Warren Buffett does. Essentially, you study the financial statements of a Company and select Company’s that currently are undervalued. When Buffet started he worked with Benjamin Graham author of the Intelligent Investor and was able to find Company’s that had a book value (the value of all their assets less liabilities) higher than the stock price. This was guaranteed profit. You won’t see this today as information is too readily available. In today’s world what Buffett does is select Company’s he feels will grow (see more recently coca cola) over the long term due to their business model and management. Value investors are less concerned with the short term swings in the market.

The second type of investing is speculative. People who speculate attempt to time the swings in the market and therefore trade many stocks quickly with hope of getting small gains over the long term. They attempt to take advantage of the volatility of the market. It is important to note that no one has consistently been able to beat the market using this strategy. In fact, 80% of brokers don’t beat the market in any given year. Rarely does anyone do it twice in a row.

Our next Dollars and Sense Article will look at how I recommend the common person investing in the stock market. As always feel free to email any questions you have or any ideas for new posts.

Friday, August 7, 2009

The Snowball- Lucky to Be Me

…here is this barrel with 6.5 billion balls, everybody in the world, if you could put your ball back, and they took out a random 100 balls and you had to pick one of those, would you put your ball back in? Now those 100 balls you are going to get out, roughly 5 of them will be American, 95/5. So if you want to be in this country, you will only have 5 balls, half of them will be women and half men--I will let you decide how you will vote on that one. Half of them will be below average in intelligence and half above average in intelligence. Do you want to put your ball in there? Most of you will not want to put your ball back to get 100. So what you are saying is: I am in the luckiest one percent of the world right now sitting in this room-- the top 1% of the world.
-Warren Buffett

The quote comes from a 1998 presentation Buffett gave to Florida MBA students (quote above from video 10). It’s a great way of putting things too. Aside from my few readers outside the Country we are all United States Citizens and wouldn’t want to live anywhere else. We probably are happy with the sex we are. So that leaves you already in the luckiest 2 1/2 % of the world. We so often compare ourselves to our immediate environment.

A great example is I often consider myself a funny guy, and at work I can often kill the room. I’m one of the funniest accountants I know, but really as a group how funny are we… Put me in a room full of comedians and I’m the least talented of the bunch. When it comes to analytical skills though accountants are very high on that list. There are definitely people in my profession whose analytical skills surpass my own. Put me in a room with a bunch of comedians again and I’m probably the most analytical guy there. It’s all about perspective, and when you really sit down and think about it you’re in a really good place right now. You’ve been given more advantages than most in the world. Appreciate it and take advantage of it.

Another great point Buffett makes is that he had as much fun doing his job with $10,000 as he did with $100,000,000. It was never about the money. It was always about doing what he loved to do (which is allocating capital). If you have a passion go out and pursue it. If you don’t know exactly what your passion is (like me) then develop yourself. You’re one of the luckiest people in the world… take advantage of it.

Thursday, August 6, 2009


I have a confession to make. I’m not a natural giver. It’s not something that comes easy for me and I hate that. I have a sense of abundance, but often feel the need to not give enough. When I was in college I gave away 10% of everything I made like clockwork. That was before real bills and responsibilities kicked in. At the end of the day I knew my parents would always help me. Once I set out on my own the money was mine. I needed to invest it and save. I wanted to spend the rest on things I found fun and exciting.

And yet deep down part of me wanted to give back.
Biblically, I am encouraged to:

10 Here is my advice: It would be good for you to finish what you started a year ago. Last year you were the first who wanted to give, and you were the first to begin doing it. 11 Now you should finish what you started. Let the eagerness you showed in the beginning be matched now by your giving. Give in proportion to what you have. 12 Whatever you give is acceptable if you give it eagerly. And give according to what you have, not what you don’t have.
-2 Corinthians 8:10-12

I’m so blessed, I know I have more then I need, but part of me wants to take care of myself now. Giving is something all of us could probably do more of. I read a great post by Tim Ferris and he outlined some points for why giving now is a better idea than waiting and giving more when you are rich.

Here is a list of his main points:

1) Giving Back Now is Like Investing With Compound Interest
2) Prevention Cost Much Less than Cure and Is Ultimately More Powerful
3) Giving Makes You Feel Good
4) Changing the World is Cheap

These are all really good points. When I read it my eyes were opened to the benefits of taking action today. I started tithing again regularly a couple of weeks ago. Honestly, I thought it would be a big deal and seem like a lot of money, but really I haven’t missed the money at all. I feel fulfilled as if I’m doing my part to contribute to something I believe in. I feel even more abundance and thankfulness for what I have. We all have ideas and ideals, but a lot of times we never cross over into action. We read the feel good stories, but we don’t contribute to the cause.

Money isn't the only thing we can contribute; volunteerism is sometimes more valuable than any dollar amount. My grandfather does a lot for Habitat for Humanity (68 houses!) and helps build cabinets for various groups. When I help him not only do I learn something, but I’m blessed by the stories of the people I have helped. Last summer I spent my two weeks of vacation building cabinets for a preacher in Freestone just north of Huntsville. It was one of the best vacations I have ever had.

I don’t know if it’s me or our generation, but perhaps our mindsets aren’t in giving back. Heck we’ve all got our own problems. As I listen to older generations they seemed to help eachother out a lot more. Maybe it’s the technology of our world that takes our hand off the pulse of society. We can keep everything at arm’s length. Instead of relationships we have facebook friends and news articles. I don’t know what it is, but personally I’ve realized having been given so much I of all people need to give back.

Find out how much God has given you and from it take what you need; the remainder is needed by others.
-St. Augustine

Tuesday, August 4, 2009

Dollars and Sense- What is Money

This is the first article in a series. If you have questions on this article or would like me to discuss a money issue let me know either in the comments, by email, or facebook.

What is money? It’s a question that is rarely asked. What does it really represent? I want to give a brief overview of what money is and how this affects the risks associated with investing. Note this is far from complete or exhaustive, as the valuation of currency is very complicated. As an example things not mentioned here in depth trade deficits, government assets, etc.

What Money is Not
All of us have the image in our minds of the US hoarding a bunch of Gold at Fort Knox. Our money is at least partially tied to this right? The answer is no; gold does not factor into our currency. It’s symbolically meant to serve as some sort of hedge for the US Government, but in reality does not affect the value today. What the gold does do is represent the floor or minimum amount a US Dollar would be worth in the case of an economic meltdown. Truthfully though if the markets did collapse what little value the gold offered would be negligible.

What Money Is
What is money? This is a rather complicated topic so let me briefly touch on the main points.

Money Is the Value of Our Economy
Let’s talk about what that currency is ultimately tied to. The strength of the dollar is tied to our economies value as well as the relative value of our economy when compared to the economies of other world powers. As our economy becomes more globalized we are essentially benchmarked against the other world economies. If our economy (GDP, employment rate, world perception, etc.) increases relative to other countries then their products will become cheaper to us and thus the dollar is stronger. Additionally, if we have a large trade deficit then as our dollars are shipped overseas the dollar becomes slightly weaker as well. On the home front as Americans spend more, build more, create more our own demand for currency increases thus strengthening the value of the dollar. This is why you see consumer spending affecting the stock market. If fewer people are spending then the dollar is less in demand.

Money Is the Amount of Currency In Circulation
The amount of money in circulation is constantly changing, and circulation is controlled by the Federal Reserve and other branches of government through monetary policy. Examples of monetary policy include: changing the monetary base, reserve requirements, and interest rates. Through the use of government bonds the Federal Reserve can increase or decrease the amount of currency in circulation. If dollars are removed from the economy in place of bonds then the value of the dollar will increase and vice-versa. This is obviously done on a large scale and the mere act of doing it will cause the economy to react accordingly.

The Federal Reserve mandates a reserve requirement for all banking institutions. The reserve requirement is the percentage of deposits a bank is forced to maintain in liquid reserves. The reserve decreases the amount of funds available for lending by banking institutions. Reserves were initially created to prevent another Great Depression. Today it is used to increase or decrease the dollars available for lending and thus affect the value of our currency.

Finally, the Federal Reserve issues a discount rate. The discount rate is the interest rate that the Federal Reserve charges to loan to other banks. When you hear on the news: “The Fed today raised interest rates…” the discount rate is the rate the Reserve is raising. The market tends to adjust accordingly based on the new interest rate. The lower the rate is the more banks will loan from the Fed which puts more money in circulation. Additionally, as banks have access to more money interest rates go down and more people borrow.

So now that we know what money, should we really be afraid of investing in the stock market? The answer in short is no. You are entering into a low risk transaction because a large part of the value of the money you carry is tied to the economy you are investing in. What investing does do is say “I’m not using this money right now, I believe that American business will continue to develop and my dollar will be worth more later. Please use my dollar to create value and I will get the dollar back when it is worth more.”

What About Total Collapse?
If you are a Chicken Little then yes if the market did totally collapse you would be screwed, but so would your money. To hedge against this you should actually buy commodities (gold, oil futures, etc.) as opposed to keeping your money in cash because if the market goes so does your money. But really ask yourself, if the currency markets were destroyed do you really think people will take your flakes of gold for groceries. If it gets to that point you have A LOT more to worry about then your investments.

In part 2 we will give a brief overview on what the stock market is and further discuss implications of investing.

Help Yourself Get a Job

Obviously in the current state of our economy I’ve noticed several friends looking for jobs. With the flood of applicants it’s increasingly more difficult to separate yourself from the crowd. So I thought if I were in this position what are some things that I personally would do to improve my marketability.

1)Join Toastmasters
I was first turned on to this idea by Steve Pavlina. What are the benefits? You learn to speak well in front of large groups and also develop leadership skills. Generally the atmosphere is very laid back and participants give you great positive feedback. Best of all, it’s about $54 dollars a year to join. Not much at all. I have already noticed a dramatic change in my ability to speak in front of others. Best of all, this translates to one on one communication as well.

2) Create a Blog or Examiner Site
Let your future boss know that you care and are following your industry. Take a moment everyday to accumulate a few story/ies from your industry and write out a brief synopsis or description, or write a post about a topic affecting your industry. A friend of mine uses to speak about his industry. Not only does this let your potential employer know you are continuing to follow your industry; it allows you to display and improve your writing skills. Go for quality over quantity and have an “editor” who will read over your work.

3)Get Involved in Your Community
Church, Habitat for Humanity, Soup Kitchens, Goodwill, Community Fairs, Retirement Homes, etc. The list is literally endless. You have the time so get involved and help make a difference. An added benefit is that often these community projects will enable you to develop connections with others in your community. If you sweat together with someone you’ve developed a connection. Those connections can lead to job opportunities.

4)Take a Life Changing Trip
This is an idea I read in Four Hour Week. Tim Ferris recommends going somewhere you have always wanted to go and just experience the location. Without time constraints a month somewhere is sustainable. Tell your boss, "I had the opportunity to travel to take the trip of a lifetime and I couldn't pass it up." In fact there are lots of ways to live somewhere for free once you’ve paid travel costs. Long trips can renew our spirit and strengthen our resolve to push forward.

5)Learn a new skillset
Depending on your industry there are probably some skills you could polish up on. Maybe developing some programming/web development skills could benefit you . Or perhaps you could start learning a new language. Take this free time to develop your biggest asset in life which is yourself.

I don’t think any of these suggestions are earth shattering, but they all reveal something. When a potential employer asks what you’ve been doing you can respond, “The increased free time I have had has enabled me to develop myself both personally and professionally. I’ve recently….” That’s gusto, that’s wow factor, that’s separation from the competition. I guarantee you very few if any of the candidates you are competing against are doing this. If an employer sees that you have gone to work since being out of work they’ll be impressed. Get out there and do something.