Tag: making money

investment, Stock Market

The Simplest Way to Invest #1

by Enes Öner2 Comments on The Simplest Way to Invest #1

People think investing is dangerous, risky or scary. But the only thing to do is to learn how to invest without worrying. Investing cannot be learned overnight. Still, it is something you can move forward quickly. It is possible to create the right portfolio by looking at very simple indicators and making very simple analyzes.

You need to create a portfolio for risk sharing. Professional investors say “don’t put all your eggs in one basket”. Because if all your eggs are in one basket, you may lose all your eggs when something happens to your basket. In this case, you have nothing else to compensate for your loss. Novice investors often make this mistake. However, when things go wrong, you should be able to balance the loss from one investment with another. If you have many baskets, it won’t be a big problem if one of your baskets falls. That’s why we must diversify our investments and create a portfolio.

As the first step in creating a portfolio, we should look at the P/B ratio of the companies we will buy shares. This ratio helps us to have an idea about whether the lot we will buy from that company is cheap or not. If the ratio of Market Value (P) and Book Value (B) is less than 1, the share is cheap. When it is higher than 1, we say the share is expensive. But of course this is not always the case. Sometimes, even if a company’s P/B ratio is 4, we consider that company’s stock cheap. Because the industry of the company may have started to improve. As a result of this, all profit rates and market values of companies in that sector increase. While the ratio of the company we are looking at is 4, the P/ B ratios of other companies in the sector may have reached values such as 8, 10, 15. Then we can think that the share of this company is cheaper than other companies for now and will be valued. However, the reason why a company’s stock is cheap is important. Is this company not yet valued in the industry or does this company have a problem? Did the company borrow money but couldn’t pay its debts? Was there a negative news in the media? Does the company have foreclosed assets? Is the owner / CEO a bad reputation?

It’s easy to learn all this. After typing the name of the company and “P/B ratio”, search on google. In the results, there will be sites showing the company owner, company executives and company partners. You can also search those names on the internet. Explore, find the site you can read most comfortably. What you have to do is google the code of a company that has publicly listed shares on the stock exchange. On the Internet you will find announcements, postings and notifications made by the company. Check them out too.

Let’s say you looked at company executives, company’s announcements and investments; you did not see anything negative. While the company’s P / B ratio was 4, the others in the same sector were 10, 15. If you haven’t seen anything negative, you can say that the shares of this company are cheap for now even though the P / B ratio is higher than 1. The cheaper will be valued. You can now add this company to your portfolio for medium term investment. But remember, don’t put all your eggs in one basket.

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Book Recommendations

Three Ways to Learn How to Own a Business

by Enes ÖnerLeave a Comment on Three Ways to Learn How to Own a Business

Most of the successful business owners have learned to be a business owner by working in companies. This is a form of on the job training. Those who pass family professions on from generation to generation raise their children in the same way. Unfortunately, very few people can get this type of education.

For those who don’t have the chance to work in companies, there are several ways to learn how to own a business.

Management training programs are prepared only to train CEOs. Learning to own a business is something different.

Those who want to have a business firstly follow the path of being self-employed. Most people cannot skip this stage. Because they cannot develop a solid system. So, they become part of a system. Successful business owners have been able to develop systems that operate on their own.

Here are three ways to pass the path and become a business owner:

Finding a Mentor

A mentor is someone who has followed the same paths and has achieved success. Mentor and counselor are different. The counselor tells the client what to do and how. However, they often have no experience in the area they advise. The number of consultants who teach how to be a business owner or investor is quite high. I suggest that you follow the advice of those who have tried and succeeded. If you don’t know someone who owns a business, find and read the biographies, interviews, books or articles of those people. 

You need to learn systems and leadership. Not being a CEO. CEOs may tend to belittle their subordinates, but leaders are aware that they often lead people who are smarter and more talented than them.

I strongly recommend you to read Michael Gerber’s E-Myth Mastery. It’s a unique book to learn the basics of building your own business system.

Probably the traditional way to learn systems is to study undergraduate in economics. In this way, accounting knowledge is acquired and the relationship between company systems and finance is learned. But of course, undergraduate education in the department of economics does not provide business knowledge that will enable to create and build a proper company order.

In order to learn all the systems of a company, it is necessary to work for at least 10-15 years in a large company and learn different aspects of a business. Then you stop being an employee and become a business owner. Working in a company with good systems is like getting paid from your mentor.

Franchising

Another way to learn about systems is to buy franchises. When you buy a business franchise, you are purchasing a system that has been proven to be successful. With a good market research, you can find a lot of very good franchises in the market.

When you purchase franchise instead of setting up your own system, you have more time to train your employees. By purchasing a system, you eliminate one of the uncertainties on the way to own a business. It will also make it easier for banks to lend you money. Normally, they don’t like giving credit to a startup small business. However, banks are aware of the impact of systems on success and know that the risk is reduced when a franchise is purchased.

In order for a business to be sustainable and grow, there must be a harmony in its system. Failure of only one unit leads to crash of the entire system. For example, if the fuel system of an airplane in flight fails, the plane is likely to crash even if everything else is fine. A problem in a person’s circulatory system can cause that person to die, even if all other systems work well. This rule is the same for companies. 

Buying a proven system allows you to learn about unknown or overlooked factors. This is why professional investors tend to support those who will use systems that have proven to work.

Network Marketing

Network marketing is also known as multilevel marketing or pyramid selling. In the beginning, network marketing businesses were deemed illegal as well as franchises. In some countries, those who set up network marketing were penalized. New systems or new ideas may seem strange and suspicious at first.

Many people have been able to build successful network marketing companies. These people have changed the lives and financial situations of many other people thanks to their business. This makes the network marketing system even more valuable. It is possible to become a customer of an established system and starting a business with very reasonable fees. Those who start their businesses thanks to the marketing network don’t suffer from the difficulties of establishing small businesses in traditional ways.

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investment, motivation

How Can You Prepare Yourself for Economic Changes and Your Retirement Days? Don’t Stuck In Case You Lose Your Job

by Enes Öner1 Comment on How Can You Prepare Yourself for Economic Changes and Your Retirement Days? Don’t Stuck In Case You Lose Your Job

I met a few people on social media recently. The lives of these people and what they do in one day seemed very interesting to me. Let me introduce two of these guys to you:

At first glance, these guys are firemen. So, they are public officials. They probably didn’t have any higher education. They only work two days a week. They have employment security, regular salaries and retirement plans. They also invest professionally three days a week. Their “side income” is quite high. These people have made great fortunes with their investments. Lastly, they can relax and spend time with their families two days a week.

One of these men buys old houses and rents them out. Currently, he owns forty-five houses with a monthly return of ten thousand dollars after paying debt installments, taxes, maintenance and repair costs, management and insurance expenses. His salary as a fireman is approximately 1200 dollars. He is five years into retirement and his goal is to increase his annual income to two hundred thousand dollars when he is 56 years old. Not bad for a public official with four children.

The other person does company analysis and deals with stocks and long-term transactions. Its current portfolio is over three million dollars. If he turns it into cash, he gets ten percent interest per year, which equates to three hundred thousand dollars. In all market conditions. But be sure his annual income is much more than that. Not bad for a public employee with two children.

Both of these men could have retired in their forties after twenty years of investment. But they chose to work and take advantage of retirement as public officials. Now, they have the advantage of operating in both areas, both as employees and investors.

I know many people who have a lot of money in their retirement accounts but don’t feel secure. They make up their retirement savings from the money they earn by working. Unfortunately, they know very little about investment. They wouldn’t know what to do if their savings melted away and their working life ended.

In times of major economic changes, wealth changes hands. Regardless of your economic situation, it’s important to invest in financial education. Because when time and conditions change, it is necessary to be prepared for the new situation. So you won’t be afraid. Although no one can see the future, it is good to take precautions and be prepared for all conditions. Therefore, it is necessary to start obtaining information as soon as possible.

Economic changes have already begun due to company sales and mergers. A businessman who recently sold his company had fifteen million dollars in his account, but those who worked with him had to look for new jobs. In such cases, anger is felt along with sadness at farewell parties. Employees realize that they make their bosses rich, not themselves, in return for years of hard work.

The truth is that bosses are not supposed to make their employees rich. Their responsibility in this regard is only to ensure that salaries are paid. Being rich depends on everyone’s own will and effort. What to do to become rich starts when the salary is received. If a person is not good at managing finance, he cannot continue to have wealth, even if he has all the money in the world. He eventually loses it all. The important thing is not to gain wealth and prosperity, but to sustain them.

If you can manage your money wisely, educate yourself about being an investor or a company owner. So, you are on your way to achieving personal wealth and financial freedom.

The difference between someone who is rich and can maintain it and someone who is not, is basically the way they use their money and leisure time.

Learning to invest and allocating time and budget for it saves much more free time and money in the long run. Do your best while at work, but also make sure you make efficient use of your wage and free time after work. It is not very wise to enrich others with your lifelong labor. If you make a commitment to work for yourself, you can achieve financial freedom in time.

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Formulas That Leads to Being a Billionaire

by Enes ÖnerLeave a Comment on Formulas That Leads to Being a Billionaire

Leverage

Control

Creativity

Growth

Predictability

One of the basic formulas of achieving great wealth is this step-by-step process. If you’ve studied the lives of successful entrepreneurs or investors, you’ll likely find a similar pattern or process there. Warren Buffett also uses a similar process when deciding which company to acquire. However, there is a different point in Buffett’s case. Buffet uses analysis instead of creativity. Warren Buffett’s genius analyzes a business and sees its current and future value. Therefore, whenever he acquires a business, he rarely sells it.

Many investors nowadays buy any asset just to sell. They want to buy at low prices and sell at high prices. They invest to earn capital income. In the stock exchange, these types of investors are known as short-term traders. In the real estate market, when a person constantly buys and sells, he is known as a hand changer.

The formula above may seem easy, but it is not easy to make it a reality. Most people do not attempt to follow the process indicated by the formula because they are unaware of its existence. Most people have no idea how some millionaires can gradually increase their wealth.

Some people who knew the formula tried to apply it and failed. Some of them were rich at first but later left broke. The formula has left them alone for the rest of their lives for some reason.

And for some people, this formula has become their life. This formula is their game. It always requires a challenge. It’s their fun, it’s their excitement. Applying the formula can almost be the purpose of their life. Usually these people are the ones who earn nine tenths of the money.

This post is about the decisive moments in one’s life when she makes decisions that will change her life. We all experience moments like this. These are the moments when we discover our characters. We become heroes or cowards; we become honest ones or liars; we either go forward or backward.

I want to show you DMD:

Desire

Motivation

Discipline

Some people have desire. However, if someone has the desire to get rich but lacks motivation, discipline, or both, he cannot gain wealth.

Here is PAS:

Passion

Attitude

Skill

Some people are passionate but never develop their skills. This is because they often have a negative attitude.

And EPE:

Education

Practice

Experience

There are people who are well educated but lack experience. Because of their lack of experience, they may not perform well, get things done on time, and achieve results.

Lastly, my favorite one, MHSH:

Modesty

Honor

Sense of humor

Happiness

Some people seem successful, but they have reached their position in dishonorable ways. Some people are successful but don’t even know what modesty is. Some people lack a sense of humor that they cannot laugh at themselves. Some people are also very successful, but they are also very unhappy.

These factors have enabled rich people to become successful businessmen and continue their lives that way. I say “continue” because as I have emphasized many times, the trick is not to get rich, but to maintain it.

Think of your own life. What are your feelings and attitudes? Do they help you succeed? Or are they stopping you from doing something? Be honest with yourself. Honesty brings clarity, and clarity brings the opportunity for change. By starting to see your life more clearly, you can reach another decisive moment where you will take control over your own life.

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motivation

Getting Rich More Quickly

by Enes ÖnerLeave a Comment on Getting Rich More Quickly

Study the lives of billionaires who came from nothing. You will find that the reason almost all of them can quickly move to financial freedom is investing or owning a company. Because there is legal convenience for people who earn income in these ways. So, it’s easier for investors or business owners to get rich quick. You can also achieve your financial freedom faster in case your money works for you.

Achieving Financial Freedom

Debts and taxes are two barriers to many people’s financial freedom. To quickly achieve financial security or freedom, it is necessary to own a company or to invest. For this, it is necessary to know that the important thing is not employment security but financial security and financial freedom, and also to understand the difference between them.

The Difference

  1. Employment Security
  2. Financial Security
  3. Financial Freedom

What most people believe is to complete higher education, start a job and retire in that profession. A large segment places emphasis on employment security in this way. They think that employment security is financial security, until they see that they lose their job and cannot find another job. None of them even consider the possibility of losing their job. However, wealthy people do not even speak of the term employment security. They talk about financial security.

Employment Security

People who care about employment security do their jobs very well. Most of them have devoted many years to training and gaining work experience. Although they have retirement plans, they do not know how to invest. They don’t feel safe because they are only trained to work or fulfill their profession.

It’s Always Good to Have Two Legs Instead of One Leg

To get more financial security, you will also need additional income and it will be important to educate yourself to earn those extra income. Whether you are an employee, a company owner or an investor, if you trust your skill, you will naturally feel more secure even if you don’t have much money. Knowledge means power… All you have to do is wait for the right opportunity to use that information and then you will have money anyway.

That’s why we were created with two legs. If we were one-legged, we would always stall, we would not feel safe. A person who is both actively working and investing with his savings is two-legged. Having knowledge on both sides gives us confidence. Those who know nothing but their job or profession are one-legged. Every time the economy goes down, they suffer far more disruptions than two legged ones.

Financial Security

Rather than investing the money in a retirement account and waiting for the highest return, self-taught people to be both employees and investors value financial freedom. I suggest you learn to be a professional investor in the same way we study at school to learn a profession.

The question that the reporter mentioned in the previous post had to ask the investor who earned a million dollars in the asset column but did not pay taxes was actually this:

“How did you get a million dollars?”

This was the main question. It is easy to find legal opportunities to avoid paying taxes. However, earning a million dollars is not easy.

Let’s also take a look at financial security through the eyes of “self-employed” people:

The average American millionaires are self-employed, live frugal, invest long-term.

The path from self-employment to company ownership is followed by big entrepreneurs like Bill Gates. While it is not easy, it is perhaps the best.

Operating in Different Fields

So being educated in more than one field gives more advantages than being well educated in just one. Did you know that wealthy people earn, on average, seventy percent of their earnings from their investments or companies, and the remaining thirty percent as employees or self-employed? No matter how much money you make, knowing how to increase your money will increase your assurance. Financial security is the ability to earn income from both sides independently of each other.

Financial Freedom

This path leads to real financial security, because there is one thing in common between those who earn income as company owners and those who earn as investors: they have people who work for them and make them earn money. Also, they make their money work for them. They work if they want, they don’t work if they don’t. Thanks to their knowledge in two areas, they do not have to work physically.

This is the path the billionaires take. This path shows the revenue models of Bill Gates from Microsoft, Rupert Murdoch from News Corp., Warren Buffett from Berkshire Hathaway, and Ross Perot.

Warning: Owning a company and being an investor are very different. I have seen many successful company owners who have sold their companies for millions of dollars. They like to think that their money is an indicator of how high their intelligence is, so they step into becoming investors and lose everything. A different game is played in each income generation model, different rules apply. Therefore, I strongly recommend that you be informed.

Just like financial security, operating in two areas will provide more stability to the person in the world of financial freedom.

You may want to read: WHICH PATH ARE YOU MORE INCLINED TO? (EMPLOYEE, SELF-EMPLOYED, EMPLOYER OR INVESTOR)

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Why Nine-tenths of Enterprises Fail

by Enes Öner1 Comment on Why Nine-tenths of Enterprises Fail

“The beginning is the most important part of the work.”

Plato

All business owners and even employees should think big and make plans for expansion. In order to start a job, a strong reason, in other words a source of motivation, is required. This part requires thinking big, and unfortunately most people fail at this step.

Ray Kroc, unlike most people, was able to think big and realize his plans. He got into the hamburger business. But if he had chosen another business, he would probably have done well there too. Many small business owners tend to keep their business small. Ray Kroc developed a system for his small business, then expanded his hamburger business into a huge company.

The triangle below is the one that Robert T. Kiyosaki often emphasizes in his books. The purpose of this triangle is to help focus thoughts and teach the eight main topics that will make a business successful.

Statistics show that, nine out of ten businesses fail in the first five years. Nine-tenths of businesses that can continue for more than five years end before they see the tenth year. Here is the 90/10 rule of money again.

Many business ventures fail because at least one of the eight sections in Kiyosaki’s triangle is weak or lacking in these ventures.

A Business Needs A Very Strong Mission to Be Successful

In the triangle, the “product” is uppermost; but it has the smallest area. The “mission” is at the bottom but is one of the three items with the largest area. Mission is at the base of the triangle. Undoubtedly, the most important item in this triangle is mission.

I’ve heard a lot of people who want to be entrepreneurs say, “I have a great idea.” These great ideas sometimes have a chance to come true. The world is full of great products that have failed. This is because the base of the triangle is not strong. When you ask those who want to be entrepreneurs about their mission, most of them answer you: “I’ll make money!” If the focus is on making money rather than enterprise, the result is likely to be disappointing.

Mission is the most important thing to the business. Mission is the soul and heart of a business. The lack of Mission, means the lack of power to tackle tough road to tread.

When the most successful businesses studied, you’ll see a well-based and solid triangle. Their mission is motivating, leadership is well executed, managers are competent and work in harmony, cash flow and finances are good, sales and marketing communication are effectively provided, the system established for employees works efficiently, legal documents and contracts are clear and understandable, and of course the product produced – as a result of all of them – very good.

The System Is a Major Difference Between Small Businesses and Big Businesses or Companies

Most of us can make more delicious burgers than McDonald’s burgers. But how many of us can build a better system? The system is a crucial difference between small businesses and big businesses. In small businesses, the owner of the business is the system itself. Things don’t work out in his absence. Many businesses operate in this way depending on people.

Big businesses and companies operate on their well-designed systems. Employees or leaders can change over time. However, thanks to the system, the same process continues. McDonald’s works the same all over the world.

When businesses with well-educated, high-salary, hardworking employees who still achieve little are analyzed, it is seen that these businesses depend on people. A system has not been developed for these enterprises. Even a business with well-educated and highly paid employees will fail unless there are well-functioning systems.Entrepreneurs are the people who have to build great racing cars. CEOs are the pilots of those cars. A great pilot can’t win a race with a bad car. There are very few people who produce racing cars and become their drivers at the same time. Bill Gates, Michael Dell and Steve Jobs are such people. We’ve seen these guys all building and driving excellent racing cars.

You may also read my THE DIFFERENCE BETWEEN YOUR WORK AND YOUR BUSINESS post if you are interested.

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You are the Person to Take Control of Your Investments

by Enes Öner1 Comment on You are the Person to Take Control of Your Investments

Rich people use much more leverage than poor people. If you want to get rich, you need leverage. If you really want to get rich, you need a lot of leverage.

We mentioned about leverage before. Now let’s talk about another thing we need to achieve a better economic situation, control power.

People who earn are careful about their thoughts. They don’t think they can’t. They don’t say “This is too risky.”. They don’t back down by saying “I cannot afford this.” Instead, they ask “How can I do this?” or “How can I reduce my risk?” or “How can I afford this?” People who invest to earn money are also extremely careful when choosing people for financial advice. Just as Olympic athletes should be careful when choosing foods that go into their bodies, investors who invest to earn must be careful with advice that will enter their minds. This process may sometimes involve cleansing your mind from old thoughts.

Control Power

Investors who invest to earn want control as well as leverage. People think investing is risky because they have no control.

Think of a car. A car with steering wheel, brake, accelerator, gear and engine. Just imagine if you could drive without any of these. If you got into a car without a steering wheel, could you drive that car?

Many people think investing is risky because they lack control. Imagine investing in mutual funds, stocks, bonds or savings accounts without any knowledge. When you invest in these tools without being able to answer the questions of what will happen next, how they will be traded, or how they will be affected by price volatility, you have almost no control over them.

Interestingly, most of the people who invest are not trained in this field. Driving a car requires at least a driver’s license to show that the driver has been trained and can drive a car.

The lack of control of uninformed and inexperienced investment advisors, financial planners and stockbrokers also makes things worse. For this reason, they make recommendations “Diversify, diversify, diversify”. Diversification is something you will need when you are out of control. Warren Buffett doesn’t diversify because he’s investing in a controlled manner. It buys either all or most of the shares of a business.

Lack of Control

Most people feel powerless because they have no control over their work. I know many people who lost their jobs not because they were bad employees, but because their companies were sold. More and more people feel like they are losing control, as there are many jobs shifting overseas these days. It is difficult to feel safe when you have little control over your job and salary and invest in assets over which you have no control, such as blind investments in savings accounts, stocks, bonds and mutual funds.

There are three reasons people find it risky to invest.

– They have very little financial education.

– They invest in investment instruments over which they cannot control.

-They get investment advice from salespeople and these salespeople have no control over the investment.

Once you understand the use of leverage, your next task is to make sure you have control.

Control is all about education. The more financially educated we are, the sooner we distinguish between advantageous and unfavorable situations. It is also much easier to sort out the bad ones among the good ideas.

Life is full of risks. We don’t have full control – at least not as much control as we think we have. But by getting educated, making reasonable choices, and having a positive attitude, we can reduce risk. Many people have achieved magnificent successes, even when “fortune is not on their side.” They have won because they have decided to take control of their destiny and refuse to give up.

One of the ways to gain control is to always have the big picture in your mind. When people talk about the big picture, I usually think of a tapestry. If you look from behind an extremely beautiful and invaluable tapestry, all you will see will be many knots. Sometimes it’s all that people can see, because they haven’t seen the completed design on the other side yet.

One of the ways to gain control is to always have the big picture in your mind. When people talk about the big picture, I usually think of a tapestry. If you look from the back at an extremely beautiful and invaluable tapestry, you will only see many tiny knots. Sometimes it’s all that people can see, because they haven’t seen the completed design on the other side yet.

Someone once told me that there are many knots in his life that he could not untie. I quickly realized that his problem was simply that he wasn’t visualizing his own tapestry. He was quite relieved when I told him about it.

Look at the situations from the other side. It will help you gain control and gain insight into how to deal with problems and people. At the very least, you have to be able to control what is going on around you as much as you don’t get stuck with your life being full of knots.

You may not have control over many things, but you can start with yourself. The real leverage is brain power. Winners accept responsibility and retain control.

Review your life today. Can you choose how you spend your day, or are you told how you should spend your day? Do you direct your financial investments or do you leave this business to someone else?

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Why Financial Security Is More Important Than The Employment Security

by Enes ÖnerLeave a Comment on Why Financial Security Is More Important Than The Employment Security

Take Risk

Low risk high return investments can be made. All you have to do is learn how to do it. Remember, when it comes to investing, knowledge always eliminates risk. Learning is not difficult at all. It is no different from learning to ride a bike. You may fall at the beginning, but after a while learning not to fall, investing becomes as natural as walking.

People who haven’t achieved their financial freedom are more likely to avoid financial risk. It is always better to learn to manage risk rather than avoid risk.

Risk takers change the world. You can see very few people getting rich without risk. Many choose to depend on the state to avoid the risks of life. At the beginning of the Information Age, the phenomenon of benevolent state has come to an end. We know that. The Benevolent state was costing dearly. Unfortunately, millions of people around the world will be in a very difficult financial situation as they depend on “their rights” and lifetime bonuses. The greatest requirement of the Information Age is that everyone is self-sufficient.

The idea of “work hard and find yourself a solid, secure job” is from the Industrial Age. We no longer live in that age. Times are changing. However, people insist on not changing their minds as rapidly. They still think they deserve something. They believe investment is not their business. They expect the state, companies, unions or their families to take care of them on their retirement days. I wish they were right.

If you have already achieved your financial freedom, I will just say “Congratulations!”. Please help others to follow your path. If they need guidance, do not hesitate to help. Guide, but let them find their own way. Because there are many ways to financial freedom.

Whatever you decide, please keep this in mind: Financial freedom may be free, but it is not cheap. Freedom has a price, it’s worth it if you ask me. The trick is that financial freedom requires neither money nor good education. It doesn’t have to be risky either. The cost of financial freedom is measured by dreams, will, and the ability to overcome obstacles along the way. So are you ready to pay this price?

Assurance or Freedom?

• Go to school, get good grades, then find a solid, secure job.

• Go to school, get good grades, then start your own business.

If all people in the world were given these two options, the results could have been halved. However, people have become so used to the system that they do not know what they want. Even if they know, they don’t have the motivation to bring it to life. After all, many unknowingly find themselves applying the first option.

The reason millions of people seek assurance is actually what they’ve been taught at home and at school.

Most of us are instilled with employment security, not financial security, at an early age. In addition, since we are taught little about money, both at home and at school, what could be more natural than clinging to the idea of employment security?

If you look at people who are poor and have not achieved their financial freedom, you will see that they have opted for employment security. If you turn your head and look in the opposite direction, the rich and the people who have fully secured their financial freedom, you will see that they act with freedom.

Falling into the Debt Trap

The reason why most of the population chooses the first option and works without financial freedom is because of what they learned in school. They get into debt shortly after they finish school. This is such a deep debt that they cling to employment security even more tightly in order to pay their bills.

There are many young people who graduated from university with their diplomas and education loan debt. When they see that the amount of debt is between $ 50,000 and $ 150,000, they get depressed. If the parents covered the tuition expenses, then the parents may have to pay a loan.

An article I read recently wrote that most Americans had credit cards when they were students and would be in debt for the rest of their lives. This is because they took part in a scenario that became famous in the Industrial Age. Here is the scenario:

The boy goes to school, graduates, gets a job, and soon has money to spend. Now he can rent an apartment, buy a TV, new furniture, new clothes and of course a car. One day, this hero meets someone special, they fall in love with each other, and after a while they get married. Life goes easier with a double income. By putting a few dollars aside, they plan to own their own homes as all young people dream of. One day, they find that house, withdraw the money they have saved in their savings accounts, deposit the house down payment, and go under mortgage debt. Well, the new house needs new items, and they enter the furniture store that advertises in talismanic words, saying “Furniture in installments with no down payment”.

Everything is great, they throw a party to show off their new home, new cars, new stuff and new toys. After that, they will live in debt until the end of their lives. Then their first child is born.

Every morning, this ordinary, well-educated, hard-working couple leaves their children at kindergarten, making their way to the company where they work intensely. Now, employment security has become even more important for them.

Do you still insist on choosing the first option?

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Financial Attitudes, investment, motivation

Earn More With Less

by Enes ÖnerLeave a Comment on Earn More With Less

The difference that separates a good investor from a bad investor is that the good investor can make more money with less money.

Leverages allow us to do more with less force.

The Key Is Leverage

People have sought to do more work with less labor since they lived in caves. When a child was old enough, he was taught to use a spear for hunting and defending himself. Spear has provided a great deal of convenience to human beings in their cruel environment. Over the years the spears have shrunk in size and the bow and arrow have been developed. This was a superior technology. Compared to a spear, the bow and arrow allowed people to do more with less.

As time progressed, man learned to tame horses. More distance could be taken on horseback in a shorter time and with less fatigue. It was an important convenience used not only in transportation and agriculture but also in wars.

When gunpowder was invented, the rulers who owned the cannons triumphed. Indigenous peoples such as the American Indians, the Hawaiian people, the Maoris of New Zealand, the Aborigines of Australia, and many other cultures lost to gunpowder.

Just a hundred years ago, cars and airplanes replaced horses. Once again, these new technologies have been used in wars and peacetime for some work. Telephone, radio, television, computer and internet networks all also enable people to do more with less. Actually, they are all levers. Each breakthrough new invention brings more power and wealth to those who have access to these tools.

If you want to be rich and not a victim of global changes, it is essential that you develop the leverage that is stronger than all others: Your mind. If you want to be rich and protect your wealth, your mind, your financial education, is your strongest lever.

You might say: “I don’t know anyone who can teach me finance. I haven’t heard of such an education. There is nothing to do.” Perhaps because of this mindset, your chances of reaching great wealth and, more importantly, protecting your potential wealth are extremely low. Your chances are low because you are using your most important asset, your mind, against yourself. You’re using your mind to find excuses instead of making money or finding solutions. Remember that your mind is your strongest lever. If you can’t control your mind, you can’t control your life. Excuses are easy to find. For this reason, unsuccessful people always have an excuse.

We Are All Born Rich

We are all born rich. Each of us has been given intelligence, the world’s most powerful lever. So instead of using our minds to make excuses, let’s use it as leverage to make us rich.

In summary, the difference between cavemen and monkeys is leverage. The difference between the rich, the poor, and the middle class is leverage. The difference between savers and investors is leverage. A well-educated and disciplined investor can achieve higher returns by taking much less risk and spending less money. But this requires leverage. And in order to have leverage it requires you to train yourself and use your mind wisely.

If you want to learn more about investing, you may read my YOU NEED TO SAVE MONEY post.

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Debts, economy, Financial Attitudes, investment, Understanding Money

The Difference Between A Good Investor And A Bad Investor

by Enes Öner2 Comments on The Difference Between A Good Investor And A Bad Investor

Many people invest in mutual funds. When I ask someone, who is investing in mutual funds, he answers: “But I am also investing. I have a portfolio of mutual funds. I also have bonds and stocks. Isn’t this all investment?”.

Yes, saving is also an investment. Buying mutual funds, stocks or bonds is also an investment. But it is the kind of investment a saver would make, not an investor.

Let’s take a look at the passive investor philosophy. Most investment advisors provide a recommendation like that:

• Work hard

• Save money

• Get rid of your debt

• Make long-term investments

• Diversify your investments

This is good advice for a certain group of people – suitable for people with a savings philosophy or passive investors. In today’s circumstances, I believe this advice is riskier than any financial advice. It may seem as a reliable and wise advice to those who are financially inexperienced.

There is only one word to distinguish between a saver and an investor. That word is leverage. Thanks to leverage, you have the ability to do more with less.

Many savers do not use financial leverage. And if you don’t have enough financial knowledge or experience to apply leverage, it would be better for you not to use it. I will explain this to you later. Let’s take a look at these standard recommendations from the perspective of the saver and then the investor.

Work Hard

When many people think of “work hard” advice, they only think about their own hard work. The leverage effect on one’s own hard work is very small. Imagine if others will help you to get rich with their hard work. This is the power of leverage. States do not ask us to seek jobs, but to create jobs. If everybody starts looking for work, economies will collapse. For economies to grow, we need people who can create jobs.

Save Money

The problem with saving money is that the current economic system needs borrowers, not savers, to grow. In order for our economic system to continue to grow, it needs smart borrowers. The system does not need people who get poor by borrowing, but people who can borrow money and get rich. While 10 percent of the people who borrow money in the world benefit from their debts to be rich, 90 percent of them become poor with their debts. And this ratio is getting worse every day.

Get Rid of Your Debt

Many savers think that debt is bad and it’s smart to pay off mortgage loans quickly. And for many people, borrowing is bad and getting rid of debt is wise. However, if you are willing to devote some time to your financial education, you can use your debt to move forward. But if you are considering investing with debt, I would like to warn you once again that you should invest in your financial education first.

There is good debt and bad debt. Being financially smart is knowing when to borrow and when to avoid it.

In these economic conditions, savers are losers and borrowers are winners. For whatever reason, you should always be careful when using borrowed money.

Make Long-Term Investments

Look at this advice in terms of sellers: “Give me your money to keep me for years, and I’ll get certain payments from you over the long term.” The phrase “make long-term investments” is like the advantages that allow you to earn points. You become a loyal customer.

Depending on the payments you make to manage the fund, mutual funds may not earn you as much money as other investments.

Diversify Diversify Diversify

Warren Buffet, considered the richest investor in the world, says this about diversification: “Diversification is a safeguard against ignorance. It won’t make much sense if you know what you’re doing. “

Then the question arises: Whose ignorance do you protect yourself from? Is it your own ignorance or the ignorance of your financial advisor?

Diversification generally means that you should not put all the eggs in the same basket. Warren Buffet puts them all in the same basket. He once said: “Put all your eggs in one basket, but watch your basket carefully.”

Personally, I prefer to focus rather than diversify, and actually the reason I was able to move forward was focus, not diversification.

I saw an acrostic on focus in a book I read.

For many, diversification is a good strategy. This is only because it protects investors from themselves and inadequate advisors.

The traditional financial planning advice “work hard, save money, get rid of your debts, make long-term investments and diversify” is good for the average. This advice is also good for those who are rich but are not interested in learning how to become an investor. Many movie stars, wealthy professionals, or former athletes do that. Just remember that while following this path, you will have a very small leverage.

Are you interested in investment? Check out my other posts about investment here.

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