For love of money and love of game (The Financial Athlete, #1)

“There’s a purity in tennis in that you cannot cheat your way into winning. A champion must play smarter and more skillfully than his opponents.” –My tennis instructor.

Can successful investing be executed with the purity in tennis, by playing smart and skillfully and not cheating? Yes.

In the history of the world much wealth has been gained at the expense of others through conquest or cheap labor or excessive taxation or outright fraud. Even under the enforcement of just laws, money will always attract the unscrupulous like maggots to a freshly dead corpse. The love of money to the degree of placing greater importance upon it than people and nature, and the willingness to inflict irreparable harm to these in pursuit of money…this attitude is the root of all evil.

Money itself is not evil. On the Contrary, having financial freedom is good. Lack of money (poverty) causes suffering.

The first step to successful investing is to enjoy the process, which I call the game. Love the game, and allow success to follow. Without love for game, there’s little motive to learn the craft.

One of the quickest ways to get to know someone is to see how he behaves when it comes to money.
–pastamanvibration (Ao)

“Money is your means of survival. The verdict you pronounce upon the source of your livelihood is the verdict you pronounce upon your life. If the source is corrupt, you have damned your own existence. Did you get your money by fraud? By pandering to men’s vices or men’s stupidity? By catering to fools, in the hope of getting more than your ability deserves? By lowering your standards? By doing work you despise for purchasers your scorn? If so, then your money will not give you a moment’s or a penny’s worth of joy. Then all the things you buy will become, not a tribute to you, but a reproach; not an achievement, but a reminder of shame. Then you’ll scream that money is evil. Evil, because it would not pinch-hit for your self-respect? Evil, because it would not let you enjoy your depravity? Is this the root of your hatred of money?”
–Ayn Rand (I’m not an Objectivist, but she got it right on this one.)

(Last image by Christian Science Monitor cartoonist Clay Bennett, taken from claybennett.com, a repository of funny, political cartoons)

How to get rich by screwing up

Now there’s a way to make millions by being a complete failure! The trick is to convince a company’s board of directors you’re the perfect candidate they seek for CEO and to hire a good CEO employment attorney to back you up.

Before you go on on that executive job interview, it’s handy to read The Dictionary of Corporate Bullshit to refresh your memory on the intricacies of business terms. Confidently spew out those fancy words during the interview, but lean on your trusted attorney to negotiate compensation for “termination without cause,” which is a nice of way saying, “You’re fired!” He’ll argue you deserve accelerated vesting of stock options and/or a massive amount of shares when they figure out you’re worthless. Don’t worry about no self-respect or damage to your reputation. Compensation for termination without cause has become standard practice. Think of it as a severance package.

Stir clear of interviewing for companies with a corporate culture of meritocracy. You’re above pay-for-performance and require downside protection just like professional athletes and movie stars demand in their employment contracts.

Lastly, after you land that coveted executive position and you don’t know what to do, just flip a coin for guidance. Don’t worry about the consequences of your decisions. You’ve got the only get-rich-quick scheme to come with a guarantee!

Fed to lighten credit card debt load

On Friday the Federal Reserve Board proposed new regulations to prohibit lenders from arbitrarily raising interest rates on credit cards. Two exceptions are allowed for: 1) a promotional rate expiring; 2) the borrower being more than one month late on payment. Other rules would end “double-cycle billing” (calculation of one month of fees based on two months of activity on the account), limit how lenders compute balances, and divide payments equitably whereby balances under discounted rates are not paid off first. The new regulations are not expected to be finalized until January 1, 2009.

On behalf of the lenders, Edward Yingling, president and chief executive of the American Banking Association piped in, “We are deeply concerned that these rules will result in less competition, higher consumer prices, few consumer choices and reduced access to credit cards. In short, everyday consumers will bear the real cost of these proposals.”

Nonsense! — with one exception: reduced access to credit cards for unqualified borrowers. The credit card industry, which has pumped unrelentlingly dubious plans hidden in the fine print, had this coming. It goes to prove how government regulation is necessary to reign in greed.

With or without the new protections, consumers should only use credit cards wisely. The government cannot protect you from yourself, who may be your worst financial enemy. Unless an emergency, only use a credit card if you can pay off monthly charges to a zero balance. Benefit by charging a credit card with rewards such as airline mileage or rebates. Let the lenders make money off the transaction fees charged to the vendor, not your interest payments which are not tax deductible. Americans need more than government protection from financial predators; they need to practice money management skills.

PharmaSCANDALcals

Don’t let Pharmas fool ya with their aggressive television advertising blitz. Their strategy to increase the bottom line: convince healthy people to buy old drugs for “symptoms” they really never had noticed before or shouldn’t worry about. The ads clearly exploit people’s anxieties and insecurities.

GlaxoSmithKline’s commercial for RLS (Restless Legs Syndrome) runs more like a Saturday Night Live skit. We’re to believe millions are suffering from this — to quote Justin Rohrlich — “extremely rare condition discovered in 1945 by Swedish doctor Karl Ekborn.” Who ever heard of RLS before this ad was broadcast?

It’s not just harmless symptoms they make out to be disastrous, they also target normal behavior like teen rebelliousness, now dubbed by a pharma as “ODD (Oppositional Defiance Disorder)”.

TV ads for pharmaceuticals often give the illusion you will enter a Jehovah Witness artist’s rendition of paradise only by swallowing the pills, scenes of happy people strolling in a beautiful nature setting. Calm and almost hypnotic music downplays the warnings of serious side effects, which can cause a very real hellish experience. Indeed, a sharp contrast to the serene images of paradise subtilely suggested.

Advertising for smoking is banned for good reason. Adversting for prescriptions should be banned as well. Let the medical doctors dispense drugs without undue influence from the marketers.

“Think rich to get rich!”

So says T. Harv Eker in his book, Secrets of the Millionaire Mind. Others who write about the thinking patterns of the rich such as Robert Kiyosaki, the author of Rich Dad, Poor Dad, would agree that our “money bluebrint” (thought processes regarding money) has a major impact on our net worth.

I find books on how to think rich entertaining…it’s sort of a reverse Lazarus story. You’d think the rich have halos around their heads. Nevertheless, I also believe they can be instructional on how to have the proper mindset to receive abundance. There’s nothing wrong with abundance. It’s what you do with it that reflects your character, like being condescending to the poor.

Here are Eker’s “Wealth Files” discussed in Secrets of the Millionaire Mind:

1. Rich people believe, ‘I create my life.’ Poor people believe ‘Life happens to me.’

2. Rich people play the game to win. Poor people play the money game to not lose.’

3. Rich people are committed to being rich. Poor people want to be rich.

4. Rich people think big. Poor people think small.

5. Rich people focus on opportunities. Poor people focus on obstacles.

6. Rich people admire other rich and successful people. Poor people resent rich and successful people.

7. Rich people associate with positive, successful people. Poor people associate with negative or unsuccessful people.

8. Rich people are willing to promote themselves and their values. Poor people think negatively about selling and promotion.

9. Rich people are bigger than their problems. Poor people are smaller than their problems.

10. Rich people are excellent receivers. Poor people are poor receivers.

11. Rich people choose to get paid based on results. Poor people choose to get paid based on time.

12. Rich people think “both.” Poor people think “either/or”.

13. Rich people focus on their net worth. Poor people focus on their working income.

14. Rich people manage their money well. Poor people mismanage their money.

15. Rich people have money work hard for them. Poor people work hard for their money.

16. Rich people act in spite of fear. Poor people let fear stop them.

17. Rich people constantly learn and grow. Poor people think they already know.

Below: Artist’s depiction of Lazarus and the rich man. In the top picture, does Lazarus have small pox or he is just hairy?