So What is Good?

So Ningpo makes a good point, I never really discuss what I think "good" is vs. "great" So what is my definition of "good"?

First off, when doing this comparison, I'm going to talk strictly from a financial sense. There is not good or great without great friends, family, and if you are lucky enough, someone to share your life with. So that being said, this is what I consider to be a "good" life. A good life is a life where you are very comfortable, have all the things you need, and with a little bit of work, will continue this way indefinitely. This implies

• Having no debt outside of your primary residence (bonus if you have none of this).


• Having a job you like.


• Having a job or income source that allows you to live an upper-middle class life and afford a few luxuries.


• Having enough savings such that you could choose not to work for one or more years and still be OK.


• Having a savings plan that,if continued, will allow you to comfortably retire at your current consumption level by the age of 60.

So what makes something great?  Having all the above, but not having to work at it anymore but taken to a whole new level.  You can quit your 9-5 job, and just enjoy doing whatever it is that you want to do, even if that is to work.  You can afford pretty much whatever reasonable luxury that you want i.e. you could afford the BMW but maybe not the Ferrari.  You are probably "good" if you are in the top 15% of the population in terms of income and wealth, you are probably great if you fall into the top 1%.

So what is your definition, from a financial perspective, of good vs great?

Budgeting time

One of the thing I find myself struggling with is how to appropriately budget time for this project. With a goal as nebulous as "make money by any and all means necessary" you can sink a lot of time into trying to make something work and at the same time feeling like you didn't accomplish all that much. Despite the fact that I'm not working, and already have my next job lined up, I find that I feel very busy all the time because I'm thinking about this site. How can I get traffic up? Does my design look right? What should I write about next? Etc.

Lucky for me I am a program manager. We are used to dealing with ambiguity and hectic project schedules. But still I find, when you are doing something for yourself, people like myself will tend to overextend themselves. I am not going to try and budget my time better over the next few weeks. This is going to become absolutely critical as I start my new job and I don't have all the time in the world to devote to this journey. So starting today, I'm only going to devote one or two hours during the week to this, two or three hours on the weekend. It will be focused work rather than the kind of helter-skelter approach I have taken so far. My primary focuses will be:

1. Drive traffic up - This includes features added to the website to do this as well as visiting other people's blogs


2. Pick stocks -Since I won't be trading as frequently, I don't need to spend as much time poring over my stocks. Also, I have gotten most of what I need to learn to analyze charts down, just need to apply it now.


3. Writing - I'm going to concentrate most of my writing on the weekends, and then space out my post during the week.


4. Coming up with other money making ideas - Last but certainly not least. Will set aside at least one of my sessions per week to try and come up with something I haven't tried yet.


5. Working on my website - It is for the most part set up now and the way I want it to be. Will work no more than once a week making improvements or tweaking the site from here on.

That's my project plan, hopefully I can stick with it now. Do you have any ideas on how I should budget my time or things I should be focused on? How about you, have you found you are spending too much time on your website?

Fannie Mae Cut's Dividend

As often as I can, I'm going to try and talk about Just One current event and how I would play that event in the market.  I'm  going to try and be as concise and possible each time.  So if you want the one piece of news you need to know that day, this will be it.  More often than not, it will be a financial story, but sometimes I may just talk about something completely random.

Fannie Mae today announced that it will cut it's dividend by 30% and also  sell stock to raise capital.  Fannie helps finance almost 20% of all homes in the United States.  They also announced a significant loss for the quarter and had a relatively bleak outlook for the housing market going forward, signaling we have not quite hit the bottom.

Why is this the story of the day?   I think it has tremendous impact on the rest of the financial sector.  First off, companies hate lowering their dividend.  Doing so means that Fannie Mae is very serious that it needs to raise capital and maintain liquidity.  As bad as the housing sector news has been, I think its going to get worse from here as the rest of the nation catches up with the slumps in Florida, California, Nevada and other hot housing markets.  Fannie is down after hours and I think it has more to go.  I do not think you buy in.  I do not think the financials are done bottoming (but it is coming soon).  I stay out for now, and wait for some further drops.

Going From Good To Great

Jenny gave me a book a few years ago called Good to Great by Jim Collins.  When she gave it to me she said, "I saw this on the shelf, and I just thought of you."  It was one of the nicest compliments I ever got.

While the book is mainly how good companies become great companies, it has made me think about how I can personally make the jump from good to great.   I recognize, and am thankful, that I have a good life.  I've gotten to the point where I am in a great relationship, have awesome friends, a new job that excites me, lots of savings, and no debt.  It's hard not to be happy in this situation, and I am.  :)

However, even though I'm happy, I'm rarely if ever content.   I have started reading a lot of similar blogs about personal finance and jobs.  While I really enjoy them as I think I can add a lot to them because of  my own personal experience, they are all focused on getting to where I am today.  How do I make it to the next step?  How do I go from good to great?  Where is the information on how to do this?

When Tyler talked about finding your niche on the blogosphere, it got me thinking where would I find my niche.  Certainly not in the "make money online" space or the personal finance space.  Those are pretty crowded areas.  What isn't crowded is the space I'm looking for,  people who have found success but want to take the next step.  I know I'm not alone in this.  Rick is trying to get there with me (and while I have a good head start, I think he will beat me to the finish line) as are most of my friends.  Hopefully, as we go on this journey together, we can figure out just what it takes to go from good to great.

Damn, Missed Activision

My first stock purchase on this journey was going to be Activision, ATVI. I even made sure I was up early today to check out the stock and look for an In today. I liked the stock because I have found it impossible to find Guitar Hero 3 for the Wii. There were also rumors that Vivendi might buy it up. That meant that I wanted to get in and out of the stock in the next 3 weeks, right before Christmas. I thought the two above factors would mean good price action in the short term, with a good long term story of a growing gaming industry and a hot game franchise.  The stock has rebounded since hitting a dip in November, so it wasn't too expensive and look ready to go up for a run.

Well, right before the bell Vivendi announced they were purchasing Activision. Stock Jumped 20% on the news. Since Vivendi has put a price on the stock now, it's pointless to try and get in. Would have been nice to get a quick 20% return on my money. Oh well, on to the next stock.

How to Get Into an Ivy League School

OK, so one of the keys to having a great corporate pedigree is to have attended and Ivy League School (And by Ivy League I do mean any of the top-tier national schools). For most people, it is too late to change this. There is always the option of going to get a graduate degree at a top-tier university, but for most people in the working world, that just isn't going to happen. This is for all the young people who are wondering just how I did it and what advice I may have. Remember my post about compound interest? The point of that post was to emphasize how doing a little bit now, can pay big rewards in the future. This is my view on how important it is to do well at an early age to get into the right school.

I want to be very clear about this point before I move forward. You do not need an Ivy League degree to get a good job or to be successful. Getting an Ivy League degree does not guarantee success. What it does do is present a signal to potential employers is that somehow, someway, you made it through a very selective process. This is an important consideration in many managers hiring process. My alma-mater accepts around 10% of all applicants. And this is 10% of an already very selective group. It reminds me of that Seinfeld episode where George is able to meet beautiful women because he has a picture of a model who is supposedly his dead fiancee. The women accept him because he has already been selected by another beautiful woman.

Every time I go into a job interview, at some point someone says to me, "Obviously you are smart, you went to Princeton..." This is an important point. By default I am assumed smart. I got accepted to Princeton more than a dozen years ago, and yet it still works and is paying dividends for me. It won't get me the job by itself, but it at least allows me to get my foot in the door. It's up to me to shove my way through.

So what do I know about getting into an Ivy League School? Well I got into several, I still do interviews for Princeton, and I actually had a college friend on the admissions board for a while. So what's the secret? Here it is, there isn't any. I can assure you that there is no magic formula for getting into the best schools. Each and every application is read, and read by multiple people. What catches the eye of one, may not catch the eye of another. That being said, here are the basics in order of what I believe is important.

Get good grades in the hardest classes. I want to emphasize hardest, because A's in classes that aren't challenging just don't carry as much weight. You don't have to get straight A's (I didn't. Got a handful of B's) and you don't have to be #1 in your class (I was #8) but it doesn't hurt. Your record has to demonstrate that you consistently challenged yourself and that you excelled in those challenges. Ivy League schools are looking for people who know how to tackle problems, get things solved, and aren't afraid of what might come their way.

Do stuff outside of class. Obvious but important. However, don't join every club for the sake of joining a club. Top schools prefer it much more if you can show you were committed and exceeded in a few areas than you spending an hour a week in twenty different clubs. This of course flies in the face of what I did, as I wasn't particularly talented in any one thing. Everyone at Princeton, besides being smart, tended to have one really good talent whether it be playing an instrument or being good at sports. Be well-rounded. I can't emphasize this enough.

Standardized test are important, but they aren't that important. This is coming from a guy who got 1560 on his SAT's and all 5's on the AP exams that my school saw. If you do well, great. It will just confirm the other facts. If you do poorly, you aren't sunk yet, the rest of your application is much more important. I knew people who got 1600 and didn't get in. I knew some people who were in the 1100's and got in. There were probably people even lower than that. So do your best, and as long as you are OK, then don't worry about it.

Be interesting. Don't do what everyone else does. This will come out in your application. These people read dozens of applications a day. Believe me, they all start to sound the same. If you have some unique talent or some special life experience, make sure it comes out in your application. However don't write about how winning the big game made your realize blah blah blah. They've heard it all before. At the same time, don't be too cute either. Chances are, among the thousands of applications over a dozen years, someone has tried the same tactic. Just be honest, and yourself.

Some things that aren't that important include your recommendations and your interview. Everyone gets a good recommendation. At worse, it can only be a small negative. The same goes for interviews. Don't stress over them. Most high-schoolers have never been in an interview, and they are very nervous going in. Believe me, it isn't weighted all that much. I didn't even interview with Princeton.  If you want advice on how to do well in your Ivy League interview, follow the preceding link.

That's all it takes, and a little bit of luck. Did I miss anything? If you have questions or want to know more about my experiences, feel free to leave a comment, and I'll try to respond.

The General Trading Guidelines

Next week I will begin to put my $20,000 into the stock market. I have let it be known that this type of trading will be a bit unusual for me as I'm not used to getting in and out of positions in a relatively short time frame. While I'm not going to follow any hard and fast rules, these are the general guidelines I plan to follow.

• I'll have no more than four or five positions at a time.


• I will stay in a position on average about a week or two but may hold on to some positions for a few months.


• I will find stocks that I think have a strong fundamental story, but I will only be in stocks that have strong technical indicators to suggest a short term rise


• I will short if I have to, but it will generally not be part of my game plan. Shorting can be very difficult and you can easily lose your shirt if you aren't careful.

Please do not try this at home :) I'm playing with real money, and things may get ugly. I'll give a week by week recap of how I've done and what my plan is going forward. Each stock that I pick, I'll give to the full reason why from both a fundamental reason and a technical reason. Sometimes, I may not have totally sound reasons, and I'll explain that too. Picking stocks can take a lot of time as can starting a new job, so it's going to be hard to try and balance everything out and still come out on top. Expect the first pick sometime in the middle of the week and we will go from there.