Six Quick Book Reviews

I was going to write an individual post reviewing in depth each of the six books listed below. But since I’m a bad citizen and have given in to the fact that I will never find enough time to do so, I’m going to give a quick review for each of them here. So in the order I’ve read them…

The Real Estate Coach by Bradley J. Sugars.
This book was kind of hard to read at first. It is written in scenes, staring the made up characters Brian and Sarah as they learn from their Real Estate coach. The dialog is not well written and rather tedious. I’d pick out the best (or worst) example, but I don’t want to spend the time and I probably don’t have to. Here is an excerpt chosen at random from page 16.

As they sat back down with fresh drinks the Coach began again.

“What we are going to look at now are the types of property deals that you can do. You see, they will figure in your rules when you go out looking for properties to buy. So what are the different types of deals, then?”

Brian looked up at the ceiling for a while, and then replied: “I have heard about negatively geared deals, Coach. Is this what you mean?”

“Exactly. Any idea what the other two are?”

First, what do I care that Brian and Sarah have “fresh drinks”? In any other Real Estate book, this section would have looked like this.

Type of Real Estate Deals

  • Negatively Geared Deals
  • Quick Cash Deals
  • Positive Cashflow Deals

To be fair, I didn’t know a lot about real estate before reading the book and I definitely learned a bit from it. I just feel I could have learned as much in 10 pages instead of 200. However, for those of you out there who have a hard time reading textbook like
books about real estate, this might be the book for you. You’ll be tricked into thinking your reading a novel, but you’ll really be learning about real estate!

The content of the book is very introductory and doesn’t go into as much detail as you will need before actually going out there and getting your hands dirty in real estate. And that’s not such a bad thing since the main point of the book is that a “coach” is going to help you more than any book. So after reading this go out and find a coach. Peeps with a basic understanding of real estate concepts can pass on this one or look for education elsewhere.

Become the CEO of You, Inc. by Susan Bulkeley Butler
Susan spoke at an Accenture get together last Summer. Susan had worked for Accenture for a while back when it was Arthur Anderson Consulting and worked in the CEO’s office through the Accenture IPO. She was largely responsible for the establishment of Accenture’s “Change Management” division, which now accounts maybe 1/5 of Accenture’s consultants (just a guess there).

Susan’s message at that get together, and in this book too, was more applicable to women trying to excel in the traditional business culture. However, there was a bit us guys could learn from her too.

We were all given a copy of her book, compliments of Accenture. I read about the first third then lost interest and moved on to other reading. The truth is I put the book down because of it’s focus on women (which is okay if you’re a woman) and because of an exchange I had with Susan at the Accenture meeting. I introduced myself to her and told her I worked on an investing and business blog. I let her know that I could review the book on the site and possibly drive some sales her way. She seem very disinterested and brushed me off. At the time I got this feeling that she just had something against member of the opposite sex. I’m sure she’s a great person when you get to know her and wonderful in her private life, but this is the impression I got from her then. And it dissuaded me from putting too much effort into writing a review for the book.

I’m a punk for airing this in the public here. I know that. But it’s why I don’t have much more to say about this. If you are a woman, working in the business world, Susan probably has a lot to tell you. She could be a role model for you. Her story really is incredible, going from the only woman at Accenture to one of the highest positions in the company. For me, eh…

Built to Last by Jim Collins and Jerry I. Porras
Here’s a good one. This was recommended by Chris, and I read it while on vacation in Maine last Summer. The book relates a study of some of the greatest companies of the last 150 years: GE, HP, 3M, Merk, Ford, Wal-mart, Disney, and a few others. The research tries to get to the heart of what made (and makes) these companies so great. What makes these companies “visionaries”?

For someone who is in the middle of a startup, Built to Last helped me think on a higher level about our company. Activities like writing mission statements and lists of core values are great, but the important part is to actually live up to them. Here are some of the chapter titles, which do a great job of summing up the ideas behind the book.

  • Clock Building, Not Time Telling
  • Preserve the Core, Stimulate Progress
  • Big Hairy Audacious Goals
  • Cult-Like Cultures
  • Try a Lot of Stuff and Keep What Works

The first of that list really resonates with me. Great companies are those that build clocks, rather than tell time. While working on the next new feature for WineLog (telling time), it’s important (and very difficult) to keep perspective and remember to devote time and effort to developing the WineLog company itself (clock building).

The guys at 37Signals are a great example of a company that clock builds instead of time tells. Sure they have a lot of great software applications, but they are focused on building their company into a fine-tuned software building machine. Ten years from now, when Basecamp is but a memory (or maybe a ubiquitous development tool), 37Signals the company will be still chugging along doing their thing.

Built to Last might be a help to investors looking for some ways to sort well-managed companies from poorly-managed companies. There’s even a few stock charts in there. The book is far more useful however to entrepreneurs and business professionals in management positions.

Finding the Hot Spots by David Riedel
I read this book back in Fall 2006. The subtitle for this book is “10 Strategies for Global Investing”. I can’t remember what any one of them is, but the book does have 10 chapters… I guess that fits. Here are the chapter titles/tips:

  1. Invest Internationally for Yourself
  2. Think Globally, Invest Locally
  3. Diversify–Don’t Put All Your Eggs in One Basket
  4. Understanding Relationships: Who is Benefiting from Current Trends?
  5. Invest in Line with Government Goals
  6. Don’t Buy Regulatory Structure
  7. Know the Shareholders
  8. Buy the Banks
  9. The Impact of Currency
  10. Don’t Be the Last One In

FTHS is a quick read, and so a decent book for people who are thinking about getting dirty with international equities. The main points I got from this book were (1) you need to invest internationally since that’s where 20% of stocks are and (2) you shouldn’t be so scared to invest in foreign stocks; in fact it’s easy! The didn’t get much more of substance from the book.

Jim Cramer’s Mad Money – Watch TV, Get Rich by James J. Cramer with Cliff Mason
Confessions of a Street Addict is a great read for anyone. Jim Cramer’s Real Money (my review) is a good read for any investor. Cramer’s most recent book Watch TV, Get Rich is a book to be read by Jim Cramer fans only.

If you watch Jim’s show, you’ll love the book. It goes behind the scenes into the meaning behind most of Jim’s catch phrases and sound clips.

He also details how the lightening round is run and encourages readers to do lightening rounds of their own as a way to train their investing muscles. It’s actually a decent plan and might help you at least sound more intelligent about stocks. It will take a lot of time, but I bet you will have a better “feel” for the overall market if you follow Jim’s plan. If this idea turns you on, go to a book store and read the lightening round chapter; you don’t need the whole book for just this.

The other addition in this book is a new version of Cramer’s Cyclical Investing and Trading chart. The chart has recommendations for which sectors to be rotating into and out of at different times in an economic cycle. If there is interest, I might write a seperate post on this. Again, I’ll try to contact Jim’s crew to see if we can post an image of the chart. We didn’t have any luck last time though.

The Only Three Questions That Count by Ken Fisher
I’m only about two thirds through this whopping 365 page book, but I can already recommend it. It is different from most of the investing books I’ve read, coming at investing from a higher level and yet still managing to be relevant. I won’t keep you in suspense any longer; here are the three questions:

  1. What do you believe that is actually false?
  2. What can you fathom that others find unfathomable?
  3. What the heck is my brain trying to do to blindside me?

The first two questions revolve heavily around efficient market theory and the idea that the best way to make money in the market is to know something that others don’t.

Question 1 involves a lot of debunking of commonly held investing beliefs… like high P/Es are bad for the market, a federal deficit is bad for the market, an inverted yield curve is bad for the market. Fisher gives convincing arguments against these beliefs. And while you don’t necessarily want to go out and bet against these theories when you find they are wrong, you can at least avoid betting with them.

If everyone else is wrong, how do you find a winnable bet? Questions 2 is an exercise for finding “investing technologies” you can use to inform your investing decisions. And the key here is to find an indicator or strategy that no one else knows about. Actually even better is when everyone knows about it, but they’re still not using it. Fisher uses his “discovery” of the price-to-sales ration (or PSR), which was hugely successful for him in the 80s and supposedly a big deal. The idea is/was that low PSR stocks outperformed higher PSR stocks.

When PSR values had to be calculated by hand and were relatively unknown to investors, the strategy worked well. By now the technology has been priced into the market since everyone knows about and believes in it. For this reason, we should always be working to develop our next strategy. Fisher’s book kind of gives you the base tools to do this.

Question 3 discusses behavioral finance and some common mistakes that investors make that results in lower returns for the average investor. Fisher prefers to explain a lot of these concepts in the frame of evolutionary biology. He talks a lot about our “prehistoric brains” and anecdotes around why cavemen would have been more fond of big things than small things for example.

One of the main points Fisher makes with question 3 is about how cavemen (and all of us to this day) busy ourselves with “accumulating pride” and “shunning regret”. Back when we were hunter-gatherers, both pride and regret kept the hunting males hunting. If they caught 2 big mammoths while hunting, their pride would send them back to that hunting ground. If they didn’t manage to catch anything, they would blame the lack of a catch on factors like the weather or a random saber tooth tiger that scared the animals away. If the hunter could convince himself that it wasn’t his own fault he didn’t catch any food, he would try again the next day. I think Fisher explains it all better than I have, but maybe you get the point.

So overall, I think Three Questions is a good book for investors. If you’re well read, a lot of this will be familiar, but I’m sure everyone could learn something from the book. The greatest thing this book will do for you is teach you to think for yourself. And if you can use the three questions to develop and test your own strategies, you’ll be placing better bets and setting yourself up to outperform.

Tools for the Startup

Back in July, I left my job to become a full time entrepreneur. In addition to helping InvestorGeeks grow, I spend my working day incubating a few projects through my design and development firm Stranger Studios.

At my old job, huge IT budgets were the norm. My salary depended on them. But everyone knows that the pioneers of Web 2.0 are capable of building huge applications and entire businesses on pennies. In any case, it is a lot cheaper than it used to be.

Below is a list of tools I use for my own projects and why I find them useful.

Prerequisites

  • A browser with tabs. I recommend FireFox.
    Most of the applications I use these days run in my browser. And if I’m going to have my email, a spreadsheet, a calendar, and an RSS reader open at the same time, I want to be able to keep my taskbar as clean as possible. It takes a little getting used to, but once your switch to a browser that has tabs you’ll never go back. It sounds like a small change, but it’s really one of those things that will change the way you work on the computer… for the better. One of my favorite features is the ability to “quietly” open a link in a new tab. The new tab doesn’t take control of the browser, and so I’m free to get to those pages at my leisure if I’m still interested in the page I’m already looking at.
  • A computer laptop with a lot of RAM.
    Whether you use it to work at the airport, at the cafe down the street, or on your couch in your apartment, a laptop is a great investment. A mid-range laptop will probably be powerful enough to run all of the software you need and is likely cheeper than you remember from college. Just be sure to max out the RAM on your machine (2gigs is typical). FireFox is a memory hog, and all of your applications will run smoother. When you spend 12-16 hours a day at your computer the seconds add up, and you’ll appreciate the speed more than you would an extra 100 gigabytes of hard drive space.

Phase 1: Planning

  • Google’s Personalized Homepage
    This is my base of operations. It’s my homepage for FireFox. Google has just added tabs to their homepage, which makes this product even sweeter. I have a tab for my investing interests, a tab for tech news, and a tab for all things related to WineLog.net. Google homepage has a lot of nifty widgets you can use to keep tabs on the weather or the stock market. Be sure to add the RSS feeds of your favorite blogs for quick access.
  • Gmail
    I’m rough on my computers. They crash often. I backup less often. I trust Google with my data more than myself. If my computer crashes again, all of my email is safely stored online. As a bonus, I’m able to get to those important emails from the library while I’m vacationing in Maine. I like the Gmail interface a lot. Its integration with Gtalk and the other Google products is another nice bonus.
  • Gtalk
    IM software is as crucial as email software these days. AIM and MSN are still staples in the business and college worlds. While Gtalk has a smaller base, I like it for its integration with Gmail. Again, for those times you are borrowing someone else’s computer, it’s nice to be able to message someone right from your web-based email.
  • Google Calendar
    If you have goals, you’re going to need a place to schedule them. I haven’t tried other online calendars, but Google’s offering is great. It is easy to view and manage multiple calendars at a time. I have a separate calendar for each project I’m working on. My girlfriend has access to my personal calendar so I know when I need to be home for dinner or ready to go out.
  • Google Spreadsheet
    I use spreadsheets to keep track of expenses, invoices, and other number-heavy documents. Google Spreadsheets makes it easy for me to share these documents with my partners. The features are good enough for most simple spreadsheets. For more complicated works, I fall back on Excel and email attachments. However, using Google Spreadsheets has forced me to keep my expenses and invoice documents simple… which is a good thing.
  • A Wiki. I recommend PBWiki.
    Wiki’s are great for planning. A Wiki will basically replace your paper notebook. However, it’s better than that because a Wiki is like a notebook that everyone can write in at the same time. And easy hyperlinking makes sharing complex ideas a piece of cake. You’ll want to use attachments to share important documents and files. Watch out though, as PBWiki is only free up to a certain amount of hard disk space. To get around this, you can upload files to another server and link to the files instead of attaching them into the Wiki.
  • Online bookmarking service. I recommend del.icio.us. Check out Ma.gnolia too, which has a few more features.
    In the spirit of keeping everything online, you might as well keep your bookmarks there too. If you’re doing heavy amounts of research, you’ll likely bookmark a lot of page. The ability to tag and later retrieve saved pages by tags will save you a lot of time. Newer services, like Ma.gnolia also offer groups, thumbnails of the sites you bookmark, and more community features.
  • Skype
    For contacting those long distance team members and partners. “Skype-out”, the ability to call someone’s “real phone” from your computer, is free through the end of the year. “Skype-in”, a phone number people can use to call your computer from their phone, is relatively cheap as well.

Phase 2: Development and Marketing

  • Branding: logo and business cards.
    Business cards are important for networking, but they do something that is more important than that. Establishing a brand by creating a logo and copy for a business card will make you feel like you have a real business. It will get you in the mood and motivate you to follow through with your plans of world combination.
  • Website. Hosting: 1and1. Design: find a free template at OSWD or hire me.
    At some point, you’ll want to setup a website for people to learn more about your company or product. It’s good to have something ready so you can put the URL on your business cards. Websites are great conversation enders: “Just go to InvestorGeeks.com to find out more.” And like branding in general, being forced to come up with copy for a website will get you thinking about your business. 1and1 is a good, cheap hosting company. Their up time is great, and your site won’t crash when you get heavy traffic. User and DB management is a little clunky through 1and1, but you can do just about anything you would want to do with a web server with them.
  • Blog. I recommend WordPress. Pick a theme here or design your own.
    Google rules internet traffic, and blogs are perfectly designed to obtain a high “page rank” with Google. Because of this, blogs are great marketing tools if executed well. Write about your company’s product, community, or niche. Create some buzz about your project. The motivational factor is there as well. When you promise on your blog that you’ll have something done by next week, you are more likely to get there.
  • PayPal
    I do invoices through PayPal for clients who need to pay by credit card or just don’t feel like bothering with a check. The fees can cut into your profits a bit, but you might be able to charge that back to your clients. The convenience is usually worth it.
  • Adsense
    If you’re in the online publishing business, Google’s ads are still the king. They are the best context-based ads (and probably the only ones you can sign up for as Yahoo!’s and Microsoft’s are still invite only). I wouldn’t build a business around Adsense. At this point, Google cares more about the advertisers than the publishers, especially if your site is smaller. If you are suspected of click fraud, Google will disable your account with no prior notice and no explanation. You’ll be forced to convince them to re-activate your account, and when they do, all of your earnings will have been returned to the advertisers. I think Google is doing an admirable job managing click fraud and growing their system, but that’s just too scary a situation to put yourself in a position where you rely so heavily on one company. In any case, Adsense can be a great way to bring in a little cash and also gain user data for when you switch Adsense out for more lucrative ads.
  • Adwords
    This is the other arm of the Google advertising empire. I haven’t actually used it yet, but thought I would throw it in here for completeness.

That’s is. There is a lot of Google up there; maybe I’m a fan boy. In most cases I’ve tried other products, but come back to Google for their slick interfaces and interoperability with other Google applications. Astute readers will note that while I don’t trust Google with my Adsense earnings, I trust them with my email, which can be as important as money. For sure, you’ll want to find a way to backup all important email and documents.

One great thing about these tools is the cost. The tools in the planning section are all free for basic use. While you might have enough money to purchase Microsoft Office for all of your employees (and you probably should anyway), using free software means that you will be able to bring any new resource up-to-speed quickly since you won’t have to obtain licenses.

Also, readers should note that this is just my list. There are many applications out there that do the same things. There are many types of applications that I didn’t even mention (invoicing programs come to mind). Please share your thoughts in the comments.

Update: Here are a few I missed first time arround.

  • Google Groups
    A great way to setup a mailing list. Nice archiving.
  • SlimTimer
    A simple task manager you can use to keep track of time spent on projects. Could have better reporting.

Pheedo: Ads for Your RSS Feeds

PheedoPheedo places text ads into your RSS feed. Publishers are paid for click-throughs and ad impressions. For publishers with a substantial readership through RSS, this is a great option for monetizing traffic that may not always make it to your site.

We have integrated Pheedo into our RSS feeds here at InvestorGeeks and think that you should consider it for your own sites. (Apologies to any of our feed readers who may have witnessed some anomalies in our feed as we switched things over.)

The Problem
An RSS feeds main intention is to bring your readers content without forcing them to come to your site. This can be a problem as publishers would like readers to come to their sites; that’s where all the ads are.

A friend of mine, Andrew Cantino, runs the site AbsurdlyCool.com, which posts daily lists of “freebies” found on the web. The site is a perfect candidate for RSS, as users love the prospect of displaying a list of freebies in their favorite feed reader. Since the site’s only source of revenue was through Google ads displayed at AbsurdlyCool.com, Andrew was hesitant to add feed access that would remove any reason for visiting his site after setting up the feed. Still, users want to be able to access your content through feeds; it’s just too convenient. On top of this, the viral nature of RSS feeds can help your product grow faster than it would without them.

Some Solutions
Publishers in this predicament have a couple options:

(1) They can keep some content out of the feed, forcing readers to visit the site to get the whole scoop. For instance, we typically put only an excerpt of an article our feeds. This means that interested readers need to visit our site (and bare witness to our advertising) to finish the article. Conversely, putting just the excerpt in our feed lets readers quickly determine if they are in fact interested and avoid loading a page for an article they won’t read anyway.

For a site such Andrew’s however, which is mostly a list of links, there isn’t enough content to hold back. This is where option (2) comes in. Services such as Pheedo offer a way to monetize your RSS readers without them even seeing your site. Andrew ultimately decided to add RSS support to the site and monetize them through Pheedo. He tells me he is happy with the decision, and I’m sure his users are too.

Revenue
We will see as time goes by, but I’ve heard RSS ads can generate revenue comparable to webpage-based text ads. My guess is that click-through rates will be lower, but CPM (cost per 1000 impressions) rates will be higher. I don’t have data to support this yet, but it makes sense as our feed readers are subscribing primarily to read our content. Thus they will spend more time staring at our writing, which is good for CPM rates. Conversely, they are less likely to click on ads as our site visitors are (who may be coming from a search engine and really looking for a site such as those in our ads).

Hesitation
I have to say that at first I too was very hesitant to place ads in our feeds. In my mind, RSS feeds are “pure”. They are meant to be very flexible, for people to use as they wish, and I hate to exert too much control over them. I saw RSS as a way to move data, and advertising isn’t the data core to this site. Our writing is core.

But as I thought about it more, I realized that web pages were pure once too. At first, they were simply a means to move data. The world wide web was commercialized in the early 1990s, and now web pages are more like store fronts and newspapers than data streams. RSS is going through the same kind of evolution, and it is important to view our feeds not just as data streams, but as an extension of our site.

Money is important too. The primary purpose of this site is to educate, both ourselves and our readers, on how to become better investors. The money we earn doesn’t only go towards our liquor cabinets and expanding waistlines. Actually, all of the money we have earned so far has gone towards expanding the site. We have used our revenue to purchase subscriptions to Morningstar and TheStreet.com’s RealMoney, not-so-cheap services that will aid in our research and help inform our writing. Money earned is also used to attract more writing talent and to build up the technology behind the site.

The last reason I decided to move ahead with Pheedo is their customer service. Pheedo reached out to us and was genuinely interested in bringing us into their network. They were also very responsive and helped us through some technical issues with integrating with Feedburner. I think they have a great company and are running it well. If they wouldn’t have treated us so nicely, I’m not sure I would have gotten over my initial prejudice against RSS ads.

RSS ads in our feeds is an experiment. Let us know what you think. If you are a publisher yourself, you should check out Pheedo to see if it can work for you. (Feedburner has a similar service in the works but is so far open by invitation only.)

Virtual World Entrepreneurship

Virtual WorldsThe size of virtual worlds like Second Life and World of Warcraft (Wow) are making them more and more the target of entrepreneurs and investors. The stats are hard to calculate, but each world has about 4 million “inhabitants” and growing1. Here is a quick round up of some of the business going down in these new markets.

I wonder if any of our readers have thought about making business in these “developing nations”. Using Snow Crash (a great book by Neal Stephenson that revolves around an advanced virtual world) as a basis, what needs do these virtual world inhabitants have that we can provide for at a profit? Assuming the population of these worlds continues to grow at 50% per year (completely arbitrary number I just made up), what businesses will become viable?

As InvestorGeeks, these are exactly the type of opportunities that we could get a jump on over the typical “suits” we compete against in the investing world.

References
[1] Census data for Second Life and World of Warcraft.

Should You Submit Your Blog to TheMoneyBlogs.com?

Howard Lindzon “smells a rat” at TheMoneyBlogs.com:

I called [the owner of TheMoneyBlgs], who picked up his own phone and asked him some questions. I immediately smelled a rat. Trading Markets will take my content and brand it in moneyblog design and keep all the advertising dollars from the aggregated data.

I love blogging and don’t mind doing it for free, but this is just plain sneaky.

If you run an investing, personal finance, business, or “money” blog, you’ve probably gotten an email from TheMoneyBlogs.com. InvestorGeeks got one, and we initially signed up since we’re proud of the relationship we have with a similar service pfblogs.org. But once we found that TheMoneyBlogs would not include a link back to our site the original article, we immediately removed ourselves from their network.

So how can you make these aggregators work for you? Find out how some people are trying to make TheMoneyBlogs work them. More importantly, I’ll go through some questions you can ask yourself to determine up front if a blog aggregator is really offering a win-win situation.

First, a recap of the discussion on TheMoneyBlogs.com
Some people have gotten around the no-link policy of TheMoneyBlogs, like Larry Nusbaum who comments on Howard’s article:

Within the body of every post I include my blog link. I also edit my posts that they pick up because I find lots of technical issues with their site.

I wonder if it’s worth the hassle. TheMoneyBlogs doesn’t seem to be giving out traffic numbers. So I did a little digging around.

As of this writing, TheMoneyBlogs.com’s rank on Alexa.com is 1,120,721 (of all users using the Alexa toolbar, they are the 1,120,721 most visited site). For comparison, InvestorGeeks.com has an Alexa ranking of 120,592. This is all complicated of course by the fact that “www.themoneyblogs.com” redirects to “themoneyblogs.tradingmarkets.com”, so all direct traffic to the site would be lumped in with the ranking for the tradingmarkets.com domain, which has a very healthy rank of 10,536. Though it’s hard to tell how much of the traffic to tradingmarkets.com comes from TheMoneyBlogs, in theory there is potential there to increase the exposure of our articles.

Then again, even if you are getting a link back to your blog (as with pfblogs.org), is it still worth it? Trader Mike has some arguments against applying to any blog aggregator:

Finally, the part you didn’t mention is that his site, like other blog aggregation sites, is likely to have higher PageRank than the blogs of the contributors. That means that Google will likely rank articles on MoneyBlogs higher than the articles on the authors’ sites. So when people do a search that would normally bring visitors to the authors’ sites they will instead end up at MoneyBlogs b/c it’ll be ranked higher. Google may also actually punish the authors’ sites because they will appear to be copying (stealing) content from MoneyBlogs — GOOG doesn’t like duplicate content.

So Should I Submit My Site to a Blog Aggregator?
In the end, you’ll have to weigh the pros and cons of submitting to a particular blog aggregator. Here are some questions to ask yourself:

1. How much new traffic will the aggregator drive to your blog?
Traffic is the currency of the blogosphere. Make sure there are noticeable links to your site.

2. What quality of reader are you likely to get from the aggregator?
Will the aggregator’s readers be likely to subscribe to your blog for further reading? Will they be likely to click on your adSense links? Make sure the topic of the aggregation site is closely aligned with your target audience.

3. Will your postings on the new site eclipse your site in search engine results?
This is one of Trader Mike’s arguments against aggregators. Limiting the content on the aggregating site to just an excerpt will help here in two ways. (1) Since your site will have all of the content, it will have more “meat” to bring in the search engine traffic. Also it should be more apparent to Google and others that your document is the original. (2) Even if a searcher gets to the aggregator first, they will have to link back to your site for the entire article. As long as the aggregator is providing noticeable links back to your site, you’ll be god here.

A related question you have to ask here is “Is the loss in search engine traffic acceptable considering the increase in referral traffic?” If you are getting 1000+ visits for each posting in the aggregator, you might be willing to give up the SEO mojo. This is something I’d like to do some more research on though.

In Conclusion…
Hopefully this article can help you with your decision to join a blog aggregator or not, whether it’s TheMoneyBlogs or any other aggregating site. You’ll have to determine if the site is only interested in using your content for its own gain or if they are truly offering a win-win proposition. The questions above are a good way to start, as sites which offer noticeable links back to your site, are built around a topic that is closely aligned with your readership, and accept article excerpts instead of full posts are more likely to provide that win-win opportunity.

Further Reading
How to Read Alex Traffic Ratings: Alexa Traffic Rank Heats Up by Benjamin Pfieffer

Career Allocation … Asset’s Estranged Cousin

One of the reasons I really get into stock investing is that I like to live vicariously through my investments. Say what? Yes, I live vicariously through my stock holdings because I imagine that I’m the owner of the company — hard at work building it. I become an intimate stakeholder of the business by owning its stock; as opposed to investing via mutual funds. But how many investors out there feel that their miniscule ownership can actually affect changes like Warren Buffett or Carl Icahn?

Nevertheless, I’ve trained myself to evaluate businesses with an owner-like mentality as part of my investing habits. Deep down inside, I like to think entrepreneurially and want to run my own business. I am currently working on my own projects. Investing also helps me learn about what great companies are doing to drive their business and it’s less costly to learn from other people’s mistakes than it is to learn from your own. But for a lot of people out there, they’re simply content with being an employee, and there’s nothing wrong with that!

Career Allocation?
In the investing world, financial services companies advocate asset allocation. The basic premise of asset allocation is that there are 3 basic asset classes:

  1. Short-term investments
  2. Bonds / Debentures
  3. Equities

Investors always hear the gospel that they must to distribute their portfolio among these 3 classes. As you move from short-term investments to equities, the risk factor steps up but with more risk comes an increase in potential rewards as well.

But what if we thought about our careers with the same risk vs. rewards analysis? Would it look something like this?

  1. Employee
  2. Investor
  3. Entrepreneur

Employee
For the most part, being the employee is being Steady Eddy; except when you encounter corporate downsizing. This unknown factor means that there isn’t a perfect analogy on our list for short-term investments. However, provided that those incidents don’t happen to you, the role of the employee will serve adequately as the guaranteed income stream needed to fund your lifestyle.

And don’t delude yourself into thinking that you’re not making an investment as an employee! How else do you explain that paper degree hanging as decoration? What about those who feel that they need to persue a PhD or an MBA in order to advance in their career? You often need to invest in yourself should you have ambitions for that higher pay-grade.

Investor
I was tempted to make the Investor related to short-term investments since retirees’ can remain an investor and use that income stream. However, more and more people are working past retirement. As well, that income stream is really in jeapordy because of the lack of personal finance knowledge in the majority of the population. In fact, the general public often perceives more risks associated with being an investor. (An argument to be written in a future post!)

The investor role can also serve as the bridge between employee and entrepreneur. Some companies feel that empowering employees as owners via share ownership will help them be more aligned with the board of directors. Why they choose to do so with stock options rather than stock grants is another matter of debate.

Entrepreneur
I nod my heads to entrepreneurs everywhere. It’s not easy to forge your own trail. Many out there can attest to the countless sleepless nights, sweat and toil that went into building their business. Even fewer are able to form a business empire. But with all the risks can come rewards of the highest caliber. Indeed, only a handful on the Forbes list of billionaires made their fortune through investing. The vast majority of billionaires broke out because of their business ventures, and use investing as a means to diversify and maintain their riches.

For every entrepreneur that succeeds, hundereds have seen their ventures fail, ending in bankruptcies or sale of their operations. With these considerations, entreprenurs certainly deserve to be ranked alongside equities as the riskiest career choice that holds the keys to potential riches.

As well, I’d like to lump anybody who’s pursuing their passion in this category. Let’s say you’re an avid photographer, and you love travelling in pursuit of snapping shots everywhere. Well, you might not be monetarily compensated, but your soul thanks you for that! There is a benefit, and a potential business should you ever discover a way to combine your career with your passion. Do bloggers count?

Is There An Allocation Model?
I don’t think any individual who’s graduated from high school or college in the past ten years has not heard the rumblings that job security is a thing of the past; that staying with a company for ten and twenty years is no longer the way to go. Just look at these 2 recent Dilbert comic strips.

Dilbert's Job Hopper Dilbert's Job Hopper Quits

Besides the fact that pensions are going the way of the dinosaur, there is now a better reason for people to start thinking about other streams of income. Ramit Sethi (a personal finance blogger that I enjoy reading) reminded young people that “now” is the time for them to make better use of their time for potential side projects and potential entrepreneurial aspirations. In that regard, career allocation is similar to the promoted asset allocation principles where time is on the side for those people who wish to take on more risk for the potential rewards.

What Is Your Allocation?
I’ll be the first to admit that I don’t believe these characterizations are right for everyone. Whether you are young or old, your career allocation should have a bit of investor in them. That’s why you’re reading this post right? As for making that high-risk leap to being an entreprenur, you have to find that passion that will allow you to triumph over adversity. I’m curious to hear from other’s about what the allocation is. If I were to give a simple approximation of my allocation, it could be:

75% employee
15% investor
10% entrepreneur

I definitely intend to increase that investor/entrepreneur portion over time. Now it’s your turn!

Living in Boxes: China’s Trade Deficit = Affordable Housing Solutions

The rapidly rising U.S. trade deficit with China has caused some US entrepreneurial homebuilders to “think outside the box”. Or rather – think “using the box”.

The Facts

China exported $243 billion worth of goods to the US last year (2005). The US exported only $41.5 billion worth of goods to China, leaving a trade deficit of a staggering -$201.5 billion. (Source: US Census Bureau – Trade in Goods with China)

As a direct result of this disproportionate balance, tens-of-millions of empty cargo containers are amassing on US soil. It’s simply cheaper to stockpile these containers than return them empty to the Far East. The problem has become so rampant, that many residential communities have forced local legislators to relocate this logistical waste to designated container junkyards. But as the trade deficit widens, the problem only increases. Major port communities, particularly in the LA and Long Beach, CA area have also been victims of this “plague”.

Entrepreneurs to the Rescue

Savvy entrepreneurs have discovered a solution to contain this container dilemma.

By recycling the containers into building materials, homebuilders can buy materials to supply affordable housing at a cost of approximately $10 per container. According to home improvement guru Bob Vila, “architects, designers, planners, and homeowners are finding renewed interest in these inter-modal steel building units (ISBUs) as they look for affordable, sustainable housing options for the 21st century.”

Empty containers are useful for both single structures, or as building blocks for larger structures. The units come in 40’ x 8’ x 8’ and 20’ x 8’ x 8’. There are pretty slick ISBU designs, and even architectural competitions.

For more information on building with ISBU’s see fabprefab.com.

8 Rules to Successful Partnerships

We’re starting a new category on InvestorGeeks called “Entrepreneurship” because we believe that every investor is an entrepreneur at heart. Investing is the process of making money through the active trading and investing in appreciating assets, and this process of building assets is what a successful business is all about.

There is a chronic personality flaw that I see in so many entrepreneurs, that unnecessarily impedes their true success — resistance to having partners. I’ve had partners in the past, and I know the difficulties that can be faced by having a partner that is not picking up their fair share. But the secret to success in business is not to exclude people! Having partners is essential when you want to elevate your wealth.

I know the stories: you get a partner, everything is great for a while and then the other person slacks off, and you end up carrying almost all the work and still are forced to split the trappings 50/50. Or my other favorite: you get a partner and everything works out great for while. You’re both motivated and smart, and you share the work equally — but you both want to be in control.

You both have some hang-up on attaining this mystical position of power called “CEO”, and the balance of power becomes disrupted. As soon as there’s some kind disagreement about the future of the operation, one of you storms off swearing to never work with the other again, and the relationship dissolves.

These are some of the unfortunate realities in the life of the entrepreneurs, but I’m sorry to say I believe they are necessary evils for people who are just starting out. When there are no personal assets to build a company from the ground up, we have to be willing to give up some control to build collaboration with others, even at the risk of something going wrong.

Even if you’re not crazy about the idea of having partners, and there are many of you, I don’t imagine it to be required your entire life — just to get off the ground. When stuck in the rat race, few of us can escape quickly without the efforts of many.

Here are some rules I live by when building a partnership:

  1. Try to find two or three other like minded people; I find teams of 3 work best.
  2. Be willing to give new partners the benefit of the doubt, especially if don’t know them yet.
  3. Encourage communication and run all your important ideas by them.
  4. Be self-directed and take independent action day-to-day for the benefit of the project; expect the same from your partners.
  5. Be open and honest about how you feel — but do it constructively and for the benefit of the team.
  6. Try to keep the balance of power equal at all times. Ensure no one abuses their power.
  7. If you feel the balance of power is shifting either someone is taking too much or someone is participating too little, act quickly and assertively to resolve the problem.
  8. When it’s time to dissolve the partnership make sure you have everyone’s, not just your own, best interest at heart.

“But,” you may be asking, “why do I need partners? I can do everything myself!” I will not argue that point with you, since I used to find myself in that similar frame of mind, but the problem is that when you’re stuck in the rat race, or are very strapped by cash, time becomes a key concern. Either you have to work part-time to build your operation, or you have to quit and work rapidly to build critical mass, which is very labor intensive. You may be smart enough to handle every facet of the operation, but to put it mildly you simply do not have the time and sorry to say, there’s lot of equally smart people besides you! Don’t you want them to play on your team?

Let me share another secret with you; a lesson often ignored by many techies. There is often an economy of scale in brainpower when you get 2-4 people together to look at a problem. 2-4 people can figure out a problem a hell of a lot quicker and better than one. You each motivate yourself to think more clearly about your ideas, and you can rapidly bounce ideas off each other. To bridge the analogy, with partners you may be able to grow faster than by each of you individually.

If you have had problems with partners in the past, poor communication may have been to blame. Communication is absolutely critical to successful partnering. You must be willing to let down your guard and have both persons’ best interest in mind. Tell the others what you’re thinking, and be receptive to the thoughts of the other person. You are a team, and although compromise is sometimes necessary to get something accomplished, the benefits far outweigh the perceived cost.

I hope you’ll take a moment in your life now to think about where you’d like to go, and invite the smart, talented people whom you know to help you get to your goal, while offering to help them get to theirs. I’ve had good and bad experiences with partners, but making money in this world is to a large degree affected by our ability to deal with others — and in order to achieve your goals, having a partner can make all the difference.

The Importance of a Mentor

Becoming wealthy is a full-time job. Successful entrepreneurs have worked for years to build a deep knowledge base in areas as diverse as sales, marketing, accounting, stock investing, real estate investing, leadership, team building and personal finance. For someone who is still laying his foundation, finding a mentor can help him avoid potholes he otherwise would not have seen, and is an invaluable asset as both a friend and a counselor.

A mentor is someone who has already done what you have set out to do. Whether that means becoming a successful stock investor, or real estate mogul, your mentor is an expert and is willing to share his experiences. Just as professional baseball players have pitching coaches and managers have leadership coaches, so should budding entrepreneurs have a mentor that can help steer them down the right path.

While mentors or coaches can be found in various fields for a fee, it is vitally important that your mentor is actively involved in their field, and truly wants you to succeed. Financial planners and stock brokers can work for a commission, and may not actively invest in the products they sell you. Therefore these would be poor mentors. While their professional opinions may be extremely valuable, they may not always have your best interests in mind.

Unfortunately, finding a mentor can be easier said than done, but networking is likely the best way to find someone you can trust. So join an investment club or networking group; talk to family members and friends. Those that keep their eyes open will eventually find someone who not only shares their passion for the field but also is interested in spending time with someone just starting out.

Investing vs. Starting a Business

There’s a very important topic that I’d like to discuss briefly here, and it’s in regards to starting your own business. Fundamentally, a business is an investment. Any company’s goal is to generate profits for its owners, and in the case of a small business, a salary as well. The problem with businesses is that they’re a job. And not only are they a job, they also cause a lot of stress and a generally poor social life during the initial years.

Real estate has always been a passion of mine. Many people have made fortunes off real estate and growing up with a father in the business, I understand how the model works. However, getting started is a big effort, which involves management, construction, marketing, and all the other jobs associated with starting a business. This is not coincidence — buying investment property is a business.


I was very hot on real estate earlier this year, and ready to buy any reasonable property that came my way. At some point, though, I realized how much work and capital was going to be involved. While I have to admit that my passion for it has not diminished, I decided it would be prudent to educate myself on the full range of investment opportunities to see how much I can earn by investing. If I could earn 10% in mutual funds that require little oversight and are reasonably safe vs. 20% by starting a business that inevitably cause me a great deal of long hours and kill my social life, would it be worth a higher quality of life? That was and is my mission to find out.

The greatest fortunes are probably staked against going out on your own and building a company, but at what price? I urge those of you who may be reading this and have that familiar entrepreneurial voice in your head to silence it long enough to fully educate yourself in finance before you head out on your own.