Tuesday, February 3, 2009

Making the Tough Decisions during Troubling Economic Times

Yet another week and the uncertainty continues to grow. The time has come to do something proactive; I mean, you can't just sit on the sidelines and hope you aren’t affected. Chances are you are already affected at some level. If you own your own business then you must simply take a step back and decide what it will take for you to weather this economic storm. Success is measured by your ability to hold on through the rough times and prosper in the good times.

I’m sure you’ve heard the saying “You have to make hay while the sun shines,” well, that time is over and now you have to preserve and be ready for tomorrow. You don’t have to live in tomorrow but you do have to position yourself correctly. How do you do that? That’s easy, you start identifying areas of the economy that will have to succeed; areas that people will spend money in no matter what is happening.

But before you do that you need to make the hard decisions, you have to decide what keeps you going and do it. Don’t be paralyzed by the decision. Don’t push off tomorrow what you can and should do today because if you do you won't be around tomorrow. Those that make these tough decisions now will be well-positioned in the future.

For those of you who are currently employed, your mission is simple. Do whatever is necessary to help your company and your boss keep the doors open. You do that by recognizing and understanding that the company may be suffering tough economic times too. Look around for areas of the business that may be wasting money or areas than can be streamlined. You must do whatever it takes even if that means offering to take a pay cut. If needed then so be it, but remember the boss will remember that when it comes down to layoffs. Your boss needs people around who take ownership in what they do, and aren’t there just to collect a pay check every two weeks. I can assure you that those days gone.

Here are the alternatives in these tough times. At some point your company will start to evaluate the assets and resources and if you have the shortest seniority, your name will come up sooner than later but that’s okay. If you know it then that gives you an advantage, the ability to develop a “plan B.” But remember this, if you are thinking about finding another job rather than sticking around and helping your current company, be careful. First, jobs are very difficult to find today and if you are fortunate enough to locate a company to hire you, they are probably facing the same volatile economic conditions that your old company was experiencing. Just keep in mind; you will be the newest member of the staff in the new company which means you have absolutely no seniority. So, what were the benefits?

I recommend that you stick it out right where you are; as long as you are making money in the good times and willing to help out in the bad times you should have a win-win situation. There is plenty of hope out there but we all have to be proactive. The economy will continue to sink and with it the consumer confidence, but yours doesn’t have to. If you don’t already have a plan now is the time to develop one. Once you have your plan then you can start to work on it. Cut unnecessary spending, where applicable. Our country will be moving to more of a saving mentality than the “spend now and pay later” attitude of the last 25 years.

We have to pay sometime and now the time has come. Regardless of all the changes and solutions the new political administration sets forth, the U.S. and global economies are still going to have to run their course. This year may be tough but I believe 2010 will show promise. We may see a prolonged recession, maybe upwards of a decade or more, but some of the most profitable times in our country’s financial history have been when the economy is moving sideways. Just like the markets, if there is a sideways trend there is great opportunity to get in at the lows and get out at the highs and you can do that several times during the cycle.

Find a good network where you can share ideas with likeminded individuals and then use that network to help you and your fellow investors succeed. Remember that www.jdfn.com is a great source for such a network; it’s free and there are lots of investors bouncing ideas off one another. Right now the site is focused on FOREX trading. The Forex is a solid alternative to the stock market and a great potential source of new wealth. I encourage everyone out there looking for a change to try paper trading this amazing market place. Paper trade the Forex until you feel confident enough to trade “real” money. I know lots of people that have decided enough is enough and have shifted to the thinking that they want to control their own financial security, thus becoming full time foreign currency traders. You can easily learn to do this yourself.I am always updating good information to help you in your financial struggles, most of this is at your finger tips free of charge and you can access that at my web site www.jamesdicks.com.

As always,

Happy investing,

James Dicks

Value Added Goals

If you have read my articles for any length of time, you know that I am a zealot when it comes to goal setting. I constantly set my personal and professional goals. I write them down and watch them come to life and I hope you do the same. But one thing you should keep in mind is that your goals must match your personal value system. If any projected goal doesn’t mirror what you personally believe then your chances of success diminish greatly. Your core values, your personal desires and what you believe in are all intertwined. If you forget about one of them, the whole thing tumbles to the ground. Goal setting then becomes pointless.

Knowing what you truly believe is extremely important to create a listing of goals that actually mean something to you. Your values are standards that guide your conduct, your personal relations with those around you and give you the focus and direction needed to excel in your career. Look at it this way; it’s simply your moral fortitude - those feelings that help distinguish right and wrong and help you live your life in a meaningful way.

You must also determine who you are and understand your strengths and weaknesses. Evaluate your abilities and consider your accomplishments and failures. Knowing who you are and what you are capable of prevents you from creating goals that underestimate or overestimate your expertise and directs you toward realistic, attainable goals. Hey, shoot for the moon but if you create realistic goals you are more likely to succeed. Inaccurate direction can cause you to lose many valuable assets including time, motivation and self-esteem. Believe me; you don’t want to go there! Goal setting is a positive exercise so try to maintain your constructive attitude and examine your situation logically.

Be prepared to update your goals to mirror what is important in your life right now. Things change and so should your goals. Update your aspirations and objectives now and again to help you achieve the things you need to do right now. If your situation changes but your goals don’t, you could lose your drive to achieve the desired results. Increase your chances of success by defining what is important to you. Develop your goals based on personal values, desires, and innermost beliefs, and create your achievement expectations to match your circumstances. If you skip any of these steps, you could weaken your motivation, fail to work up to your abilities, and reduce your opportunities for success.

Developing a road map for life will help you no matter what you do, personally or professionally. When your goals are reasonable and emulate your values and desires, you will become extremely motivated. I guarantee it. When you become motivated and work hard to attain your value-oriented goals, you will more than likely succeed. When you succeed, your motivation will continue to expand, and drive you to set new realistic and attainable goals, which will allow you to continue to achieve. Know who you are, know your current circumstances and desires, set your realistic goals, and start to succeed. Do it today!

Markets go up, markets go down – How is it affecting you?

Routinely, the stock and bond markets pretty much follow the sentiment of the day. And, at times, it actually gets to be pretty ridiculous. For instance, the stock exchanges were extremely weak the other day based upon the idea that the Asian and European economies were beginning to show some definite weakness. So, it’s not enough for us to concern ourselves with our own economy, now we have to worry about what’s happening in China? Investors seem to worry about just about everything. Some things are actually happening (the war in Iraq, poor earnings reports, weak economic numbers, and economic stimulus packages) and some things are yet to occur (possible future terror attacks or what Mr. Bernanke “might” say to some congressional committee next week).

Look, our day-to-day routines with our families and our jobs normally guarantee a steady stream of decisions to make and problems to solve. So, why worry about the financial markets. Most of the events that change the direction of the markets are completely out of our hands anyway. What we should be concentrating on is how we can create a portfolio that is relatively immune to these outside events. Create a portfolio that can weather the storm of global uncertainty.You’ve heard all of it before. Diversification and proper money management are the best methods of insuring that your investments (no matter what they are) will be protected from the highs and lows in the markets. In a diversified portfolio, should one investment react poorly to negative national or international events, you can normally count on another investment to make up the difference.

Examine your personal investment model on a semi-annual basis, or at the very least, annually. Really explore what you are invested in. Do your holdings include stocks, what about interest rate instruments, mutual funds, real estate, commodities, the foreign exchange markets? Choose the opportunities that give you the most comfort. If you can’t sleep at night worrying about your investments, then you shouldn’t be invested in them. Learn as much as you can about the investments you don’t understand that could possibly help your future financial growth. For instance, if you don’t understand REIT’s (Real Estate Investment Trusts), read about them, ask questions, study the topic before you make any monetary move.

Once you are involved in a particular investment, make sure you follow its progress. If you are trading stocks or Forex, always set your stops and limits to guard against losses. If you are investing in a 401(k) plan at work, study your investment options often and rebalance, when necessary. The key to a positive investment life is education.You can count on the world situation being volatile today, tomorrow, next week, and probably for the rest of your life. The financial markets will continue to show weakness on some days and strength on others. If you meet the challenge of creating a balanced portfolio through diversification you most likely will worry less and definitely have more time to enjoy the most important things your life has to offer, family and friends. It really is that simple.

Happy Investing,

James Dicks

It's the Little Things that Create BIG Savings

It’s the small things that will add up; some obvious things like saving on your electric bill or re-evaluating your other monthly bills. Take a few moments to go over your personal budget and examine all the money going out and all money coming in. A few simple strategies, like using fewer Christmas lights and limit the time they are on during the holidays (See my last blog), reducing unnecessary expenses around the home or office, car pooling to work and less or more creative types of entertainment. These are all areas where you can begin to save money.

If you are saving money, then you are making money so remember it's pretty easy for anyone to start making some cash, just save a little. A few other areas that you can look to making a difference are areas such as your insurance; we all have a tremendous need for insurance in all areas such as home, health, automobile, life, and disability. Meet with a trusted insurance agent and review your policies to see where you can make some changes that will keep you adequately insured but not over insured. Insurance is an area that many of us simply buy buy buy!

Top goal for 2009 review what you have in insurance and what you need.

Those of you that are in a mortgage and not upside down, this will be the year to refinance. The rule of thumb is 2 points. If the mortgage rates have dropped by at least 2 points then it is worth refinancing, but hold out because we have a ways to go before we see the bottom of the long term home interest rates. You will be able to make a significant savings by refinancing so pay attention to the rates and be ready to refinance when the time comes.

Remember, if you’re saving money, you’re making money!

Happy Investing!

James Dicks

Wednesday, January 7, 2009

Defeating Dyslexia

On my way into work today and I heard a news report where Hollywood actor, Tom Cruise, revealed that the teachings of the Church of Scientology helped him beat dyslexia. Cruise said at the age of seven he was diagnosed as having this language-based learning disability that can include problems in reading, spelling, writing and pronouncing words.

He said, "Nobody gave me a solution and I wanted to know why the system had failed. Finally, as an adult I learned to read perfectly through the method of [Scientology's late founder] L. Ron Hubbard."

In the United States, researchers estimate the prevalence of dyslexia to range from three to ten percent of school-aged children, and are more common in boys though some have put the figure as high as 17 percent.

I think this is fantastic that yet another person has overcome this sometimes debilitating disorder and I should know since I was diagnosed with it in the early 80’s. I wish it had been sooner. I had all the classics symptoms; poor spelling, placing decimal points in the wrong place and making basic number switch mistakes. It was difficult for me to read, I would become bored, had headaches, my level of comprehension was extremely low and the words were blurry and hard to read. I could easily look at a magazine article and lose focus.

But I, like Tom Cruise, did learned to read perfectly, and even better. I now read at an average rate with 100% comprehension level. Best of all I didn’t have to follow the teachings of Scientology to do it. Great for Tom but its probably not for everyone. Let me share my story on dyslexia in the hope that it will help someone else, pay it forward I ask you do the same.

I remember heading out on the town one night and while riding in a friend’s car I grabbed his Ray-Ban sunglasses that had a yellow tinted lens in them like a shooting safety glass color. I put them on and as I looked at the road signs coming up I was amazed at how clear they were and how big and bold the letters on the signs appeared. I asked my friend what type of prescription he had and to my amazement he laughed and said there was no prescription. I couldn’t believe it! Seriously it made that much of a difference, and this was well before I had any idea of about my dyslexia. I certainly struggled through school and had all the classic symptoms. In fact, I had made it through to my late teen years before ever really reading a book from front to back.

I actually borrowed my buddy’s sunglasses and began wearing them all the time; I still have them today. He may still want them back - hope he isn’t reading this. My uncle saw me wearing them one day and asked me why I was wearing them indoors so I began to tell him the story and he smiled. He began to tell me about The Irlen Method.

The Irlen Method is the only research-based color method backed by over 4,000 school districts. Used by educators since 1983, this patented method and color-based technology was discovered by Helen Irlen, MA, LMFT, the nation's leading expert in perceptually-based reading and learning difficulties.The Irlen Method is a non-invasive, patented technology that uses colored overlays and filters to improve the brain's ability to process visual information. It is the only method scientifically proven to successfully correct the processing problems associated with Irlen Syndrome.

My uncle then told me that both my cousins were tested and had started using their color lens. He offered to pay for me to go for the tests. It was a little harder back then because I had to travel to get tested but it was definitely worth it. The testing was very easy and it worked. To my amazement, I ended up with a pair of glasses with a red lens, no prescription. I remember reading several books shortly after getting my glasses, including Clear and Present Danger by Tom Clancy, a 700 plus page book, and I was so excited. It was certainly the biggest book I had ever read cover to cover and all because of the research from Helen L. Irlen - thanks Helen.

If you would like to learn more or get tested then visit her site at http://irlen.com. Today they make it much easier for testing and will actually come to your home; it’s inexpensive but it’s priceless. Okay enough with that I am not selling her services I don’t need to they sell themselves, what I am saying is that you can spend a few hundred dollars and teach yourself to read versus following the teachings of scientology.

Here is another example. The other day I was at lunch with a friend of more than 15 years. We were working on a project and he was telling me how bad his eyes were killing him and that he had a headache. We started talking and I told him about the Irlen Method, I gave him my sunglasses which had a color tent, and told him to look at his computer screen he was amazed like it was the first time. I told him to go to an office supply store get a few color report covers, the see through ones, and place them over the text to see if it made a difference. I saw him the next week and he told me he got the colored sheets and was using them to put over his computer screen and explained that he was able to read more than he has ever read before and called Irlen and that they were coming to his house to test him and his younger son. He is now a believer for sure.

By the way, if you don’t have dyslexia it really won’t make any difference to you when looking through color sheets or lenses. Here is an example; if I put a news article into your word program we would see the same thing - or would we? We wouldn’t but if I told you to change the font size from say eight point to ten point and then make it bold that’s what I would be seeing when I put on colored lenses with no prescription, truly amazing.Recent studies indicate that dyslexia is particularly prevalent among small business owners, affecting roughly 20 to 35 percent of U. S. and British entrepreneurs. Researchers theorize that many dyslexic entrepreneurs attain success by delegating responsibilities and excelling at verbal communication.

Other world renowned celebrities who suffered from dyslexia are Richard Branson (entrepreneur ), John Chambers (CEO of Cisco), Keira Knightley (actress), Jay Leno (talk show host and comedian ), Guy Ritchie (film director), Orlando Bloom (actor), and many more.

Pay it forward -All my best,

James Dicks

Time for a "REAL" Change

Okay, so we have heard it for a year now, time for change. I got it, really I do; I need change as much as the next person. But I actually mean change this time - real change. Think about it for a moment, the population of this country has careened out of control with our mind set concerning credit. We are a nation of debtors not savers, and now it's time to pay the piper; it's time to repent for our financial sins. We have to take control of our own financial situation and that will mean putting the banks on notice that we are tired of being subordinate to their interest.

Credit can be like a drug for some people and once you get hooked…you are hooked, you can quickly find yourself spiraling out of control. Not to worry because there is always time to get on the right track. You just have to have a plan to take charge.

For those of you who can think back 20 years or so, remember when you had a change jar, literally a change jar, where you kept all those pennies, nickels, dimes quarters you had in your pocket at the end of the day. You probably would head out for the day only to return with a pocket full of change and you threw it in your change jar at the end of the day. You actually SAVED money back then, can you believe it?! But here’s where the twist comes in. Fast forward to today or the last couple of years and I’ll bet you can look at that change jar and notice that it hasn’t has gotten any bigger. That goes especially to those of you who have become addicted to your credit urges. You probably use your credit card, or if you are better disciplined your debit card, for all your purchases, even the small ones. Your debit card is okay since you are spending what money that you have in the bank but if you are using your credit card you are spending on credit.

Most times you pay all your credit cards off at the end of the month. But it is real easy to fall behind and then you are trapped and have to start paying that interest. Let’s eliminate credit and use debit, or better yet, let's go back to a cash society not a cashless society. Let's allow those change jars to fill up again. It is a good subconscious forming habit for saving and a measure of the people’s will to save or spend.So let's get back to change!

Happy Investing!

James Dicks

Are you a saver? If not - you will be!

Time for change is here. Yes I borrowed the line from our next president, but why not - it fits. To be successful in anything you have to be ready to accept change. In fact one of my favorite sayings is "if you always do what you have always done then you will always get what you have always gotten".

Now it’s 2009 and I really don't think that we can wait any longer to make these changes. We have been living as a nation of spenders and now we are forced to start living as a nation of savers. I recently read that the piggy bank - that’s right the good old fashioned piggy bank – is making a comeback and people are starting to save again for the first time in decades. That's what needs to happen but you also need a plan; you can't just run out and start saving with no plan for the future.

A plan is like a road map; imagine if someone said to you, “I need you to drive to Alaska tomorrow” and you happen to be in Florida. Well it would be a long drive without a plan. For the trip to be easy, develop a plan, know how you are going to get there and once that is done you’ll arrive without a problem. Your financial future is no different.

The Dow was down about 34% in 2008, the S&P 38% and the NADAQ 40%. It’s going to be hard to make money in that kind of market, and you can be certain that it will continue to be volatile. Your plan is going to be unique and completely different for everyone else because each one of us has a different set of values and goals. If we try to create a plan outside our own value system we will fail. So take a moment and write down your goals, long term and short term, then start developing the right mind set to accomplish these goals. Make sure you write them down as that will embed them in the subconscious mind.

Now that you have a plan you have to figure out how to carry out your personal strategy; your mission is to change your financial future so that it works FOR you and not against you. Here are a few things that your plan will need to have for 2009.

Own a home, that's right I said it - if you don't own a home now then buy one. Home ownership is still the greatest investment opportunity in America. If you already own a home there are a few things that you will need to do. Long term rates are at historic lows and moving lower. Obtain a 30 year fixed rate and pay extra principal payments each month, if you can. This really needs to be one of the only things you need credit for; other than that, stick to a debit card. One other thing, if you can't afford to buy it – then don’t. That’s what got us in this economic situation in the first place.

If you already have a home then you will want to consider refinancing soon. If you are upside down in your home there are a few things that you can do. First, if you have any extra cash lying around you may want to consider making a lump sum payment to your mortgage company so that you can refinance at a lower rate. Since our home is probably our largest investment, anytime we can lower our interest rate by at least two percentage points, we should do so. More than any other strategy, you could probably save on your mortgage by lowering your rate and paying down your principal.

If you don't have the cash to pay down your mortgage (thus not being able to refinance your property) start off by calling your mortgage company’s loss mitigation or loss prevention department. Tell them that it's time for them to help you and that you need some assistance or your payments are going to start getting ugly. The mortgage companies are trying to help and, I assure you, it is in their best interest to help you as well. Let them know that you want a mortgage modification; your rate lowered and locked in to a 30 year fixed. You can even ask them to reforecast your loan which means that they will lower the principal so that you are not upside down on the loan. This works in both your favor and the mortgage company's favor because now they have a collateralized asset that is worth what the market says it worth and the mortgage company can now sell the asset if they need to.

The next step in becoming debt free, and a top priority, is to eliminate credit card debt and start using your debit card exclusively. It works great and remember if you can't afford the purchase then don't buy it. Remember, if you are saving money you are making money. The cash you have sitting around earning no interest at all may actually work to your advantage when you use it to pay off high interest rate credit cards and loans. This is especially helpful since most of your credit cards at 18% or more.

Let's say you have $10,000 sitting in your savings earning you one percent a year. That's $100.00 a year interest. Let's say you have $10,000 in credit card debt that you pay 18% interest on, that's 1800.00 per year. So your $10,000 sitting in your savings account can be immediately invested by paying off the credit card and essentially you make 1700.00 a year for that investment. It’s a great deal and keep in mind that you also just paid off your credit card and now have it for emergencies.

There are literally hundreds of simple financial strategies that anyone can use to increase their net worth and become financially fit. It is a common sense type approach but perhaps it’s not common knowledge. There are many people out there that talk about these financial strategies and they all have relatively good ideas and plans but what you need to do is find that one person who you have a connection with and then get motivated. You have to start changing the way you think of money and the methods of handling your personal financial affairs. It only takes one motivating person to help you change your financial life forever. If I am that person then I am blessed to do so and thank you for your confidence. If I am not, I sincerely hope you find your financial mentor soon. I look forward to our financial journey together.

Until next time have a happy prosperous 2009.

Happy Investing,

James Dicks