Category Archives: Building Wealth

The Golden Rules to Building Wealth

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Building Wealth, along with good health and emotional well-being, can be viewed as an important component for a happy life.

However, it is important to remember that wealth cannot by itself buy or guarantee happiness or love, but it can help us get peace of mind. It can offer us the freedom to do what we enjoy (which can lead to happiness), and let us take care of our physical, emotional and mental well-being.

Wealth means having enough personal capital to achieve financial freedom, to do what you want, when you want.

Here are three keys to successfully building wealth:

    • Wealth Building Mindset: Life is measured by the value we create for others –our family and friends, stakeholders, and society at large – and the useful things we do in life. For instance, Warren Buffett still makes a lot of personal wealth each year but donates 99 percent of it to the Bill and Melinda Gates Foundation. Wealth gives us the freedom to make the world (or even a tiny portion of it) better. It enables us to let our family members live a life of comfort. Yet, creating wealth is not an end in itself, but a means to an end, which is to make life better for ourselves and others and for making an impact in the world.
    • Continue to learn and grow (know your “circle of competence”): Just because you invested in the market doesn’t mean the market is obligated to generate wealth for you. It’s your duty to improve yourself continuously. The best ways to do this are to study the history of investing, to learn the strategies of successful investing and to sharpen your circle of competence. The market functions to an extent like Nature does – according to its own rules, regulations, laws and sentiment. It’s your duty to build the required skills to succeed in the market and build your “circle of competence,” a term coined by Warren Buffett. In his 1996 letter to shareholders, Buffett explained: “You don’t have to be an expert on every company, or even many. You only have to be able to evaluate companies within your circle of competence. The size of that circle is not very important; knowing its boundaries, however, is vital.” A circle of competence is a subject area that matches our skill or expertise. To be successful, we must leverage it, which means we must focus on depth in specific areas that we understand well instead of superficial breadth. Understanding your circle of competence helps you avoid problems, learn from others, and make better decisions. That’s when the market yields to you and lets you generate wealth.
    • Mindset, Focus, Patience and Discipline are quintessential traits: The market is volatile and will always remain volatile. And, you won’t last in it ifii you cannot handle the market’s volatility and manage your emotions. Doing this means reining in knee-jerk reactions and instead, building long-term perspectives and sticking to them. This is why mindset, focus, patience and discipline are your best friends if you want to generate long-term wealth. You must become immune to impulsive emotions of fear and greed, learn to temper the craziness around you, and to focus on the long term. When you learn to rein impulsive emotions, you build: 1) The astuteness to identify valuable businesses worth investing in, 2) The discipline to buy them at attractive prices, and, 3) The wisdom to stay the course when the majority of the market changes direction impulsively.

It’s been the patient, disciplined and focused on the long term investors that has had the best success building wealth over the long term

References:

  1. https://www.smevalueadvisors.com/blog/index.php/wealth-creation/

10 Rules of Success According to Oprah

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Oprah Winfrey is known as one of the most successful individuals globally and her estimated net worth is almost $3 billion! To her degree of success and power, it took a lot of perseverance and wisdom.

Here are the ten rules of success according to Oprah Winfrey.

  1. Rather than overwhelming yourself with the big picture, ask yourself what the next right move is. It’s easy to feel intimidated by everything on your plate, so instead of facing such an enormous proposition, take things one step at a time. Make the best next move you can, then make the next move, and then the next one, each time going as carefully and as thoughtfully as you can. Success isn’t one giant leap — it’s a series of baby steps. And, if you make one misstep, understand that your life and your career won’t be defined by that one mistake. You have more steps to take, and you’ll arrive at success eventually.
  2. When you see an opportunity, take it. Success has been a result of grace and blessings, but there’s also been opportunity. The key to being successful is to recognize when opportunity is in front of you and seize it.  “Luck is preparation meeting the moment of opportunity,”
  3. Forgive yourself for your past mistakes. You’re not the person you were five, ten, twenty, or more years ago. A lot of wisdom just comes with age, so don’t beat yourself up for youthful transgressions. You didn’t know any better — but you know better now! Look at those past mistakes as teachable opportunities, learn as much as you can from them, and then move forward.
  4. Never stop improving yourself. This means continually working on your personality, your skill set, and your network so that you are in the best possible position to make a difference. You always need to be improving if you want to get ahead. If people are saying that about you, take it as a compliment. You’re doing a lot, and others are noticing.
  5. Go as hard as you can. Recognize and take responsibility that you have control only over your own performance. You can’t control what others are doing. All you can do is the best you know how, all the time. It’s like a race: you just run hard until you read the finish line, and all you can do is make yourself run more quickly, not make your competition run more slowly. That’s what brings you success: building yourself up, not looking behind you to see where your competition is.
  6. Don’t just dream — believe. It’s OK to have big dreams for yourself; we all do. But if you’re going to be successful, you’ve got to do more than dream. You have to believe that the life you aspire to lead will one day be yours. Winfrey always knew that she would live a big, fulfilling life; she had that strong belief in what her future held. Do the same, and hold firmly to that belief, even in the most difficult of times, and you’re likely to get exactly where you want to be.
  7. Remember that people are more alike than they are different. We’re all seeking the same thing, We all want to reach our fullest potential. Sure, we all go about that in different ways, because we all have different skills and different passions, but at the end of the day, we all just want to be true to ourselves and be, the “truest expression” of ourselves.
  8. Find your purpose in life. If you’re going to be successful, you need to figure out why you’re here on Earth. Most entrepreneurs already feel like they know their purpose, but if you don’t, stop! Put everything on pause, take some time for genuine soul searching and self-reflection, and find your purpose. Find your why!
  9. Keep yourself grounded and centered. It’s easy to get lost in your work, and it’s easy to let your ego inflate, but if you keep your focus, stay compassionate, and always seek to understand and connect with others, you’ll improve your chances of success substantially.
  10. Try to remember that everything will be OK. If you’re aiming for big time success, you’ve got to be patient and take the long view. Yes, it’s natural to be a little scared, but never lose faith that everything will work out just fine.

Source:  https://moneyinc.com/10-rules-success-according-oprah-winfrey/

Nicotinamide Riboside

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Nicotinamide adenine dinucleotide (NAD+) is a coenzyme found in every living cell in your body.

Nicotinamide riboside fuels your body from within.

Your health starts with your cells. Everything you do in life depends on the constant cycle of using and regenerating energy throughout your cells. Scientists have known for decades the importance of a coenzyme (a molecule that binds with proteins) called NAD+ (nicotinamide adenine dinucleotide) plays a vital role in the processes of your body. NAD+ helps create cellular energy and support cellular repair throughout your trillions of cells—and organs—throughout your body.

NR to NAD

Your NAD+ supply declines with age as well as in response to stressors on your body including alcohol consumption, intense exercise, and lack of sleep. However, in 2004, Dr. Charles Brenner discovered a naturally-occurring vitamin in milk called nicotinamide riboside. This micronutrient increases NAD+ levels by 40-50%.

While nicotinamide riboside can be found naturally in certain foods, you cannot get anywhere near the amount you need through a normal diet to effectively increase NAD+.

A coenzyme is a small non-protein molecule that works with an enzyme to speed up a specific chemical reaction.

Coenzymes and enzymes are like two peas in a pod. You have thousands of enzymes in your body, each working as a catalyst for a different biological function.

For example, amylase (saliva) breaks down carbohydrates into smaller molecules in order to be easily digested by your stomach and small intestine.

However, enzymes don’t just break down molecules. They help build molecules as well. You see one of the best examples of this in cellular energy production, where important enzymes work alongside NAD+ to help produce your body’s energy.

Why is NAD+ important?

NAD’s primary function is in your cells’ mitochondria. Mitochondria are often called ”the powerhouse of the cell.” They earn this nickname because of their ability to produce energy for all of your cellular functions. 90% of your body’s energy is made from your mitochondria.

NAD+ is the ignition to these continuous power turbines, the mitochondria. They help kickstart your “cellular engines.”

Without it, cellular energy production would come to an abrupt halt. You need NAD+ to keep you breathing air into your lungs and pumping blood into your heart.

How does NAD+ help in energy production?

There are several ways your cells and mitochondria produce energy. However, the most efficient way is a process called the electron transport chain.

NAD+ loosely binds with the mitochondrial enzymes through covalent bonds.But this bond is temporary, breaking after NAD+ transfers electrons with the enzymes.

These electrons help catalyze a chemical reaction, triggering the production of cellular energy. It’s called a chain because multiple enzymes work together like an assembly line, passing the electrons down to the following enzyme.

NAD+ participates in this process by acting as a delivery mechanism, donating and accepting negatively-charged electrons to and from several enzymes that sit patiently in the mitochondrial membrane.

NAD+ essentially powers your mitochondria. Without it, the electron transport chain would not start. Like an abandoned factory, the enzymes in the mitochondrial membrane would remain unused and barren.

How does NAD+ help in cellular repair?

NAD+ has other roles with other enzymes in the cell as well. For example, sirtuins and poly (ADP-ribose) polymerases (PARPs) are classes of enzymes that require NAD+.

Sirtuins are the regulators of the cell, while PARPs play an active role in DNA repair.

Things like overeating, drinking, lack of sleep, lack of exercise, can all cause damage to your cells. Your sirtuins and PARPs are vital to repair the damage.

How do we get NAD?

Coenzymes are either naturally created in the body or provided in the form of vitamins. However, not all vitamins are treated the same.

Some vitamins, like folic acid and vitamin Bs, help the body produce coenzymes by providing the building blocks to construct them.

Other vitamins like Vitamins C and E require no assembly; they act on their own, in this case, as antioxidants.

NAD+ is naturally produced by every cell in your body. Methods such as fasting and exercise can increase the production of NAD.

But NAD+ gets its primary building material from foods with vitamin B3. Cow’s milk, mushroom, fish, green vegetables, and yeast are all sources of vitamin B3 that can help construct more NAD+ in your body.

NAD+ is not a great standalone supplement.
Direct supplementation of the molecule NAD+ is only modestly effective due to its inability to enter cells directly.

A paper in the Journal of Nutritional Science and Vitaminology shows that your body breaks orally administered NAD+ down to smaller molecules in order to be used.

Once in the cell, they will need to be reassembled again. This breakdown and reassembly require extra energy and time, making direct supplementation of NAD+ an inefficient way to boost your body’s NAD+ levels.

Taking vitamin B3 is the best way to boost NAD+ levels.

The best way to increase your NAD+ is through vitamin B3 supplements. Vitamin B3s are NAD+ precursors, meaning they are smaller molecules used as building blocks to create NAD. There are three main forms of vitamin B3: niacin, nicotinamide, and nicotinamide riboside (NR).

  • Niacin (NA), the earliest form of vitamin B3 used for commercial purposes, is the easiest to find and is most commonly found. However, niacin isn’t the most favorable vitamin B3 because it can cause the unwanted side effect of flushing (redness of the face) at high doses.
  • In contrast, nicotinamide (NAM) has no visible side effects. But a study published in the Journal of Biological Chemistry shows nicotinamide inhibits sirtuins, an important class of enzymes that promote cellular repair.
  • Nicotinamide riboside (NR) is the latest addition to the vitamin B3 family. Although related, NR is structurally and biochemically different from niacin and nicotinamide.

NR’s novel discovery as a vitamin became a critical turning point in NAD+ research because of its unique property of elevating NAD+ levels far more efficiently than its vitamin B3 predecessors.

To date, NR reports no attributable adverse effects during published clinical trials.

References:

  1. https://www.truniagen.com/science/
  2. https://www.truniagen.com/blog/science-101/what-is-nad/
  3. https://www.truniagen.com/blog/our-ingredient/is-nicotinamide-riboside-really-an-anti-aging-supplement/

Longevity and Healthy Aging

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Aging, the world’s leading cause of death, is responsible for over two-thirds of deaths globally—more than 100,000 people every day. ~ Wired Magazine

The chief risk factor for most of the modern world’s leading killers is the aging process: Cancer, heart disease, dementia, and many more health problems become radically more common as people get older, according to Wired Magazine.

It’s common knowledge that factors such as smoking, lack of exercise, and poor diet can increase the risk of chronic diseases, but these are relatively minor compared to aging. For instance, having high blood pressure doubles your risk of having a heart attack; being 80 rather than 40 years old multiplies your risk by ten. As the global population ages, the magnitude of death and suffering caused by aging will only increase.

The goal of longevity and healthy aging is to slow down the hands of the biological aging clock with specific interventions and, in some cases, to reverse the biological aging clock.

Biological age is different from chronological age. It is a measure of the body’s ageing, based on the effectiveness of the mechanisms that keep cells young and on markers of the functionality of organs and apparatus.

There are epigenetic mechanisms that can repair DNA damage, increase longevity and reduce the risk of disease.

Studies conducted in recent years in the field of the biology of aging and longevity suggest that we can reach an advanced chronological age without getting old biologically.  We can age chronically without losing our physical and cognitive abilities, maintaining our current level of performance and, perhaps, recovering what we have lost.

References:

  1. https://solongevity.com/en/longevity-news/biological-age-is-not-based-on-years/
  2. https://www.wired.com/story/drugs-aging-medicine-biotech/

Cryptocurrency are Frauds

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Almost a quarter of new cryptocurrencies launched in 2022 exhibited characteristics of “pump and dumps”—a form of fraud—according to new analysis from blockchain intelligence group Chainalysis.

Pump and dump tactics have a long history in the stock market, where they are a form of securities fraud.

In “pump and dump”, investors will hold a stock and promote it to pump the price, and then dump it at inflated levels on unsuspecting investors who buy in on the hype before it all comes crashing down.

This is a classic example of the “The Greater Fool Theory”.

References:

The 10-Year Treasury Bond Yield

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The 10-year Treasury bond yield is closely watched as an economic indicator of broader investor confidence.

An economic indicator is a piece of economic data, usually of macroeconomic scale, that is used by analysts to interpret current or future investment possibilities, according to Investipedia. .

This 10-year bond signals investor confidence. The U.S Treasury sells bonds via auction and yields are set through a bidding process.5 When confidence is high, prices for the 10-year drop and yields rise. This is because investors feel they can find higher-returning investments elsewhere and do not feel they need to play it safe.

But when confidence is low, bond prices rise and yields fall, as there is more demand for this safe investment.

This confidence factor is also felt outside of the U.S. The geopolitical situations of other countries can affect U.S. government bond prices, as the U.S. is seen as safe haven for capital.

  • BecauseTreasury securities are backed by the U.S. government, They securities are seen as a safer investment relative to stocks.
  • Bond prices and yields move in opposite directions—falling prices boost yields, while rising prices lower yields.
  • The 10-year yield is used as a proxy for mortgage rates. It’s also seen as a sign of investor sentiment about the economy.
  • A rising yield indicates falling demand for Treasury bonds, which means investors prefer higher-risk, higher-reward investments. A falling yield suggests the opposite.

Changes in the 10-year Treasury yield tell long-term investors a great deal about the economic landscape and global market sentiment. Professional investors analyze patterns in 10-year Treasury yields and make predictions about how yields will move over time.

Declines in the 10-year Treasury yield generally indicate caution about global economic conditions while gains signal global economic confidence.

Prices (and therefore effective yields) change for bonds almost constantly. That’s because a bond’s price is inversely related to yield: When demand is high and Treasury prices rise, yields fall—conversely, when demand is low Treasury prices fall and yields rise. This ebb and flow ultimately creates the Treasury pricing market as people flock to (and then from) Treasuries based on the economic environment they find themselves in.

It’s important to remember, all U.S. Treasury securities are regarded as risk free—since they’re backed by the full faith and credit of the United States government, which has never defaulted on its debts.

When investors get worried about the economy and market risk, they look for safe investments that preserve capital, and Treasuries are among the safest investments out there.

One of the foundational principles of finance is that risk and return are correlated. When markets are booming and the economy is expanding, the appetite to take on risk and generate returns is high. Risk-free Treasuries become much less appealing because of their lower returns. Demand declines and Treasury notes sell at less than their face value.

References:

  1. https://www.forbes.com/advisor/investing/10-year-treasury-yield/

Half of Americans Say They Are Worse Off – Gallup

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According to a new Gallup poll, 50% of Americans say they are worse off than a year ago, compared to only 35% who say better.

When Americans take the time to reflect on their personal financial situations compared to a year ago:

  • 35% of Americans say they are better off now than they were a year ago,
  • 50% of Americans say they are worse off now than they were a year ago
  • 14% of Americans say that their finances are  “the same” as last year.

(Per Gallup: Lower-income is defined as having an annual household income less than $40,000. Middle-income is defined as having an annual household income between $40,000 and $99,999. Upper-income is defined as having an annual household income of $100,000 or more.)

These financial self-assessments are the worst since Great Recession era and since Gallup first asked this question in 1976. It has been rare for half or more of Americans to say they are worse off, states Gallup’s Jeffrey M. Jone . The only other times this occurred was during the Great Recession era in 2008 and 2009.

Gallup regularly tracks Americans’ ratings of their personal financial situation as getting better or worse, as well as their views on whether the economy is getting better or worse.

Currently, more than four in five U.S. adults rate economic conditions in the country as only fair (38%) or poor (45%), with few describing conditions as excellent (2%) or good (15%). Furthermore, 72% of Americans say the economy is getting worse, 22% say it is improving, and 4% think it is staying the same.

The results are based on a January 2-22 Gallup poll. They follow a year of persistent high inflation, with the highest inflation rates since 1982. Stock market values declined and interest rates rose in 2022, but, on average, personal wages have increased.

In both 2021 and 2022, Americans were evenly divided between saying they were better off versus worse off, including a 41% to 41% split in last year’s survey.

High inflation and other challenging economic factors have not dampened Americans’ expectations about their financial situations in the year ahead. Sixty percent expect to be better off a year from now, while 28% predict they will be worse off.

High inflation, rising interest rates, and declining stock values in 2022 all likely took their toll on Americans’ financial situations, with half saying their situation got worse in the past year, Jones writes.  Lower-income Americans, who have consistently been most likely to report that higher prices are causing them financial hardship, are particularly inclined to say they are financially worse off.

References:

  1. https://news.gallup.com/poll/469898/half-say-worse-off-highest-2009.aspx
  2. https://news.gallup.com/poll/468983/cite-gov-top-problem-inflation-ranks-second.aspx

Building Wealth ‘One Brick at a Time’

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“Rome wasn’t built in a day, but they were laying bricks every hour.” – James Clear

Laying bricks systematically to build a city works similarly well for building wealth. Building wealth is a slow systematic process of investing over the long term and compounding returns over time for most savers and investors. Successfully building wealth is not an overnight success.

“Goals are good for setting a direction, but systems [habits] are best for making progress.” ~ James Clear

Benefits of Consuming Dark Chocolate and Cacao

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Dark chocolate can lower stress, inflammation and improve memory

Consuming dark chocolate and/or cacao has several benefits to brain function, including reducing stress levels and inflammation, and improving mood, memory and immunity, according to two studies. The natural stuff in dark chocolate and cacao is chock-full of ingredients called flavanols, antioxidant compounds found in cocoa beans.

Researchers at Loma Linda University Adventist Health Sciences Center in Southern California studied how consumption of dark chocolate with a high concentration of cacao — at least 80 percent — has positive health benefits and effects.

Tests revealed that dark chocolate or cacao can stimulate the body to produce nitric oxide. Nitric oxide relaxes blood vessels to allow an increased flow of blood and oxygen to the heart, brain, and other organs of the body.

In the past, research has shown that cacao is a major source of flavonoids. Because they are extremely potent antioxidants and anti-inflammatory agents, flavonoids benefit brain and cardiovascular health, the researchers said.

“For years, we have looked at the influence of dark chocolate on neurological functions from the standpoint of sugar content — the more sugar, the happier we are,” Dr. Lee S. Berk, associate dean of research affairs at Loma Linda and principal investigator on both studies, said in a press release. “This is the first time that we have looked at the impact of large amounts of cacao in doses as small as a regular-sized chocolate bar in humans over short or long periods of time, and are encouraged by the findings.”

Tests have found that the equivalent of four cups of flavanol-rich cocoa dramatically increased blood flow to the arms and fingers of people after only four days. Such an increase can help people fighting diseases ranging from high blood pressure, hardening of arteries, and stroke to diabetes, vascular dementia, and preeclampsia, a serious condition that affects pregnant women.

 

References:

  1. https://www.upi.com/Health_News/2018/04/25/Studies-Dark-chocolate-can-lower-stress-and-inflammation-improve-memory/3201524661285/
  2. https://news.harvard.edu/gazette/story/2007/02/cocoa-shows-promise-as-next-wonder-drug/

Small Cap Stocks Performance

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Historically, small-cap stocks have been shown to outperform the rest of the market over the long term.  And, small-caps tend to underperform during bear markets but outperform in bull markets.

Some of the best stocks to buy in the past 25 years started as small-cap stocks. Amazon was a $7 stock in 1998, and Tesla had a market valuation of just over $1 billion in 2010. Of course, not every small-cap company becomes a giant. Investing in small companies can be rewarding, but it also comes with risks that investors need to understand.

Over the long-term, small caps tend to outperform because of greater growth opportunities. A massive company is limited by its existing size. It’d be exceptionally difficult for, say, Apple Inc. to triple its revenues and free cash flow anytime soon.

However, a $1 billion company can much more easily grow to be multiples of its current size. Many small caps stay small because they have structural problems, management lacks the capability to grow the business, or their niche simply isn’t large enough to support a bigger enterprise. That said, many small caps can graduate to greater things, earning shareholders tremendous returns along the way.

Small-cap stocks tend to experience more price volatility and to suffer more stock price destruction than their larger cap peers during bear markets and when equities are broadly struggling due to inflationary and recessionary fears.

Small cap stocks typically underperform entering recessions and periods of economic weakness but outperforms coming out of them. In the long run, small caps tend to be winning investments. Yale professor Roger Ibbotson and financial consultancy Duff & Phelps analyzed nearly a century of data to find that small caps have outperformed large companies by 1.6% on average every year through 2020.

Fearful investors who throw in the towel during market downturns risk missing out on the rewards when the market possibly reverses course in 2023.

“This is one of the best times to invest in small company stocks that we’ve seen in a very long period of time,” says Gregg Fisher, founder of global small cap hedge fund Quent Capital, which manages $1 billion in assets. “The odds historically of a huge rally off this massive decline are high.”

The small-cap benchmark Russell 2000 Index (RUT) generated a total return (price appreciation plus dividends) of -20.4% for the year-to-date through Dec. 16. That trailed the S&P 500’s (SPX) total return of -17.9%.

No surprises there. Risker and “growthier” equities such as small-cap stocks tend to underperform when markets are volatile and headed south (bearish).

By the same token, however, small-cap stocks also tend to outperform the broader market when equities are catching a bid. No one can know for certain if we’ve already seen the bottom of our current bear market. Once the equity malaise lifts, however, the best small-cap stocks to buy should theoretically be among the market’s top outperformers.

To find the best performing small cap that have continued to grow through the bear market, Search for companies with a market value between $300 million and $2 billion that also had positive sales growth over the past 12 months and a share price of at least $5. Financial institutions, REITs, utilities, royalty trusts and limited partnerships were excluded, as were companies that have been public for less than one year.

Over time, small-cap stock prices tend to be more volatile than those of larger companies, and stock values fluctuate more dramatically. But, in general, the longer the evaluation period, the greater the likelihood that small-cap stocks outperform the large-caps.

in recent months small-cap stocks have fallen sharply amid a broader pullback on fears of a Federal Reserve Board rate hike, especially in high-priced growth stocks. Since small-cap stocks are more likely to be in their growth phase and are often unprofitable or minimally profitable, they get hit harder during “risk-off” moments like the one that started 2022. In other words, small-caps tend to underperform during bear markets but outperform in bull markets.

References:

  1. https://www.fidelity.com/insights/investing-ideas/small-caps-2023
  2. https://www.forbes.com/lists/best-small-cap-companies
  3. https://money.usnews.com/investing/slideshows/9-of-the-best-small-cap-stocks-to-buy-for-2023
  4. https://www.fool.com/investing/stock-market/types-of-stocks/small-cap-stocks/
  5. https://www.fool.com/investing/stock-market/types-of-stocks/small-cap-stocks/how-to-find-small-cap-stocks/