Answer These Three Questions to Rate Your Broker
In native cultures, medicine men wield power because their communities believe they have magical powers.
To reinforce their mystique, these crafty connivers invent words and phrases that their followers can’t understand. The idea is something like: “If you don’t understand what I’m saying, how can you doubt my power?”
Modern-world medicine men – doctors, lawyers, and, yes, brokers – sometimes do the same thing. [cid-link]Like their primitive predecessors[/cid-link], they often wield power over their clients by verbally intimidating them.
Many people (consciously or not) put their brokers on pedestals of reverence. As a result, they are reluctant to question the advice they get, or worse, they feel compelled to follow it out of some sense of submissive gratitude.
The truth is that brokers are nothing more than tradesmen. They have the knowledge and skills that they sell. To earn their fees, they must work hard and well for you.
So starting today, I want you to change the way you think about your broker. Promise yourself that you will not let him bully you – that you will actively and consciously be the boss. Rather than think “Gee, he’s such an expert,” think “I am paying this guy good money. If he doesn’t prove to me that he is an expert, I will fire him.”
And when you get advice, instead of thinking “I had better do what he says,” think, “This guy may know his field, but he doesn’t know me. I am the best and sole judge of what is best for me. Only I am qualified to decide what I should do.”
It starts with these three questions…
- 1) Does he give you advice that is easy to understand?
A good professional feels obliged to communicate clearly with his clients. That means translating the arcane language of his profession into advice that can be readily understood.
You can determine whether your broker has a commitment to communication by asking yourself:
Do I feel like I spend enough time with him? Or do I feel like he is usually busy and I’m taking up his precious time?
When he sends me documents, does he often attach a cover letter that explains, in layman’s terms, what the documents say?
Do I frequently feel lost or confused when he gives me advice? (This should rarely happen. And when it does, you should feel free to ask questions and get clear, understandable answers.)
- 2) Does he understand and care about your concerns and needs?
A good professional doesn’t treat all his clients exactly the same. He understands that each client has his own specific concerns, worries, problems, and needs. A good professional takes time to understand this and tailors his advice accordingly.
If you feel like you are getting cookie-cutter advice from your broker – or if you feel like he doesn’t really care who you are – he is not doing his job.
- 3) Does he make you feel like you are in charge?
A good professional relationship is one where the client is the boss and feels like the boss. You should be able to figure out how you feel about your broker instantly.
If you don’t feel in charge, you aren’t. If you don’t feel you can speak frankly about any fears and concerns you have, you are not in charge. If you don’t feel free to criticize him, you are not in charge.
Here’s what you need to understand: The only way you can feel like the boss is if your broker feels like you are the boss. If he doesn’t – if he thinks you are just another schmuck who needs his help – you will never be in charge.
How do you feel about your broker now? Are you feeling upset? Are you realizing that you’re getting less from him than you deserve?
If so, here’s what I suggest…
Call or e-mail your broker and tell him you want to have a 15-minute meeting about your “professional relationship.” If he asks why, say that you want to talk about whether the value you’re getting is worth the money you’re paying.
If he refuses to have the meeting, you don’t need to put another thought into it. He isn’t doing his job. Get rid of him.
If he does give you a meeting, go in prepared. In a few sentences, tell him exactly how and why you are dissatisfied. Don’t be judgmental. Express your concerns as statements of your future expectations. Don’t say, “You talk in an intimidating way.” Say, “I want crystal-clear explanations of all your advice and full and clear answers to all my questions. Can you provide me with that?”
That’s all you have to do. If you end up “firing” him, don’t spend a moment regretting it. Just go out and find someone better. You can do that by interviewing a few different ones and list your expectations and ask if he can meet them.
Be the boss. It’s your money.
The Three Secrets of Self-Made Billionaire Investors
Warren Buffett was born in 1930 and became a child of the Great Depression. Today he’s worth in excess of $75 billion.
George Soros was born the same year and became a child of the Great Depression, the Holocaust, and WWII. According to Forbes, he’s worth nearly $10 billion.
Carl Icahn was born in 1936. He was once so broke he had to sell his car to feed himself. Forbes says he’s worth around $20 billion today.
It all started with nothing. All wound up billionaires. All did it by investing.
At first glance, they don’t seem to have much in common… Buffett buys stocks and whole companies and says his favorite holding period for investments is “forever.” Soros became a billionaire by making huge leveraged trades in stocks and currencies. Icahn buys controlling stakes in public companies and badgers management to sell assets, buy back shares and do anything to realize hidden value.
But they do have some traits in common, a few core investing ideas that helped make them billionaires. Like every great secret of life, this one is hiding in plain sight. These three self-made billionaire investors…
- 1) Don’t diversify
Consider what is likely your greatest source of wealth generation: your career. You probably haven’t diversified at all in your career. Even if you tried many different careers, you were never doing several of them at once. And, even if you do more than one job, it’s highly likely you spend the great majority of your time at just one of them and that just one provides the great majority of your income.
Why should investing be any different?
For many years, Buffett had most of Berkshire Hathaway’s money in just four stocks: American Express, Coca-Cola, Wells Fargo, and Gillette. Today, most of Berkshire Hathaway’s money is still in just four stocks: Wells Fargo, Coca-Cola, IBM, and American Express.
- 2) Avoid risk
When Carl Icahn bought Tappan shares, he was paying around $7.50 each. But he knew by looking at the balance sheet that the company was clearly worth $20 if it were broken up. That’s a 62% discount to fair value, a very safe bet.
After Tappan, Icahn targeted a real estate investment trust called Baird and Warner. At the time he found it, the stock was trading for $7.89. Its book value was $14. That’s a 44% discount to book value, and a generous margin of safety.
Soros manages risk differently than Icahn and Buffett. He says the first thing he’s looking to do is survive, and he’s known to beat a hasty retreat when he’s wrong. He keeps loss potential in mind before trading. When he shorted $10 billion of British pounds in 1992, he first calculated that his worst-case loss scenario was about 4%.
- 3) Don’t care what anyone else thinks
Wall Street wouldn’t buy shares of the Washington Post when Buffett started buying it in February 1973. That’s true, even though most Wall Street analysts acknowledged that this was a $400 million company selling for $80 million. They were too scared because the overall market had been falling for some time.
Soros talks to lots of people to get a feel for where a market is going. But he never talks about what he’s buying or selling. He just does it.
Carl Icahn doesn’t need Wall Street, because he has his own research team. Icahn’s people comb through thousands of listed companies to find the ones that are right for Icahn’s corporate raider style. Icahn has to have his own research team. If he bought research from Wall Street, the whole world would figure out what he was doing, and it would become difficult to buy shares cheaply.
Think for yourself, avoid risk, and don’t attempt to diversify into a bunch of investments you don’t understand.
If you really want to get rich in stocks, those three rules are your foundation.
Everything you need to know about mining
Mining cryptocoins is an arms race that rewards early adopters. You might have heard of Bitcoin, the first decentralized cryptocurrency that was released in early 2009. Similar digital currencies have crept into the worldwide market since then, including a spin-off from Bitcoin called Bitcoin Cash. You can get in on the cryptocurrency rush if you take the time to learn the basics properly.
You can use great shortcodes for comparison between:
Which Alt-Coins Should Be Mined?
If you had started mining Bitcoins back in 2009, you could have earned thousands of dollars by now. At the same time, there are plenty of ways you could have lost money, too. Bitcoins are not a good choice for beginning miners who work on a small scale. The current up-front investment and maintenance costs, not to mention the sheer mathematical difficulty of the process, just doesn’t make it profitable for consumer-level hardware. Now, Bitcoin mining is reserved for large-scale operations only.
How Cryptocoin Mining Works
Let’s focus on mining ‘scrypt’ coins, namely Litecoins, Dogecoins, or Feathercoins. The whole focus of mining is to accomplish three things:
- Provide bookkeeping services to the coin network. Mining is essentially 24/7 computer accounting called ‘verifying transactions’.
- Get paid a small reward for your accounting services by receiving fractions of coins every couple of days.
- Keep your personal costs down, including electricity and hardware.
As a hobby venture, yes, cryptocoin mining can generate a small income of perhaps a dollar or two per day. In particular, the digital currencies mentioned above are very accessible for regular people to mine, and a person can recoup $1000 in hardware costs in about 18-24 months.
How block-chain works
Best known as the immutable database that runs underneath cryptocurrencies like Bitcoin and Ethereum, blockchain is poised to play a critical role in every industry imaginable as businesses seek ways to cash in on the distributed ledger technology’s promise of enabling a “trustless” consensus to validate transactions.
Earnings in the past year
Smart miners need to keep electricity costs to under $0.11 per kilowatt-hour; mining with 4 GPU video cards can net you around $8.00 to $10.00 per day (depending upon the cryptocurrency you choose), or around $250-$300 per month.
Chart shows our earnings in the past year.
Financial transactions are typically guaranteed by a trusted third party (such as PayPal) and blockchain can be used to automate that process, reducing overall costs by cutting out the middleman with autonomous smart contracts acting as trusted intermediaries between parties on the network.
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