A Purpose Driven Life

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“Cherish your visions and your dreams as they are the children of your soul, the blueprints of your ultimate achievements.” – Napoleon Hill

What’s the purpose of your life? Or to be more specific, what is it that adds meaning and satisfaction to life? What is it that gives us a sense of purpose?

Like many people, you might feel that you’re simply existing in life, going through the motions without understanding what it all means. 

In living the “a purpose driven life”, you’ll start to find meaning in every moment of your life. You’ll learn to deepen your love for yourself and others, find the unique purpose you were made for, and prepare yourself for a meaningful life.

Jack Hawley writes in Reawakening the Spirit in Work, “Our life direction is about moving into the vacant upstairs flat.”

Purpose is that home within, that place where our talents, values and service to others-drive reside. It’s there all the time, waiting for your arrival. You may have been too busy “living your life downstairs” to even notice.

Successful investors and wealth builders tend to be purpose driven. They tend to have a clear vision about what to focus on and a plan on how to accomplish their wealth building and investment goals.

They have deadlines and milestones, and stick to them, holding themselves accountable for their progress or lack of progress. They focus on the prize and literally speak their reality into existence. Once they say they will do something, they do it!

People aren’t successful by chance.

People choose to be successful and then make it happen by first having a vision and written goals. They don’t ask for permission and they don’t search for acceptance from others. They win by not getting angry or making excuses. They clearly know what they want and take responsibility for for their progress or lack of progress.

No matter who you are or what you do, within, there is a purpose for life. Life may throw you heartaches and failures but your purpose drives you to persist, improve, learn and grow.

You can strive to “be better/do better”, which means to always try to be better day after day. It may only be a small percentage of improvement, but small improvements over time can compound into big changes.

Living a purpose driven life may help you to live longer, as research suggests. Scientists found that those individuals who have a purpose in life had a reduced mortality risk. In short, finding meaning in one’s life promotes positive aging and longevity.

Why is so important to have a sense of purpose?

Feeling that you’re making a difference, that what you’re doing has a meaning, can have a great impact on your life.

Having a sense of purpose can make all the difference in your life! It can help you to get up each morning, feeling excited about the upcoming day. Even more so, it can help you to confront difficulties and overcome even the biggest obstacles that lie in your path.

Personal Mission Statement

Here’s a quick way to get a sense of your life’s purpose.

By reviewing the kind of person you are and the abilities that come naturally to you, even if they got you into trouble in the past, you can gain insight into your life purpose, says psychotherapist Tina Tessina, Ph.D., author of The Ten Smartest Decisions a Woman Can Make after Forty. Do so by writing down a list of descriptions about yourself in each of the following categories:

Personal qualities (e.g., friendly, intellectual, a good communicator)

Your talents (e.g., painting, motivating people by public speaking, athletics, mentoring)

The circumstances that tend to repeat in your life (e.g., do you wind up teaching others, listening to people’s problems, working with children or technology?)

Your desires (e.g., traveling, cleaning up the environment, running for political office). If you’re doing something you’re not interested in or passionate about, you’re usually doing it with a bad attitude, a lazy demeanor, or doing the task grudgingly.

Then take the answer that is most important to you in each category and complete the following sentence:

I ________________ (your name) am designed to be a ________________ (insert personal quality) who can ________________ (insert talent) and I find myself ________________ (fill in recurring patterns or circumstances) often, because I am supposed to ________________ (desire).

Example: 
I, John Smith, (your name) am designed to be a good communicator (insert personal quality) who can motivate people through my experiences and expertise (insert talent) and I often find myself listening to people’s problems (fill in recurring patterns or circumstances) because I am supposed to operate an executive coaching company and improve their circumstances (desire).

References:

  1. https://www.success.com/8-principles-of-purpose-driven-leadership/
  2. https://www.planetofsuccess.com/blog/2016/living-a-purpose-driven-life-11-effective-tips/
  3. https://www.lifeadvancer.com/purpose-driven-life/
  4. https://www.success.com/answer-6-questions-to-reveal-your-life-purpose/

Credit Report and Score, and Credit Cards

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Credit is one of the most vital factors in building wealth and achieving financial freedom.

Building good credit is one of the first steps in creating an infrastructure for achieving financial freedom. Your largest purchases are almost always made on credit. People with good or excellent credit save tens of thousands of dollars on these purchases through lower interest rates and better terms.

There are two main components to your credit: your credit report and your credit score.

A good or excellent credit score can save you hundred of thousands of dollars in interest charges. Since if you have a good or excellent credit, it makes you less risky to lenders, meaning they can offer you a better or lower interest rate on loans such as mortgage loans and automobile loans.

Lenders charge you more or less for a loan depending on you score and credit history, which signifies how safe or risky you are.

Once a year, by law, you’re allowed to obtained a copy of your credit report free from the major credit bureaus: Experian, Equifax and TransUnion.

It’s important to plan now to monitor, manage and improve your credit before you need the auto or mortgage loan three to five years in the future.

And, never forget that one of the most important factors in improving your credit is getting out of debt and paying your bills on time.

Credit Cards

There has been a great proliferation of credit cards and people owning multiple credit cards over the past decade and more. And, the competition for consumers among competing credit card companies has become fierce.

Credit cards provide convenience and flexibility. And if you pay your credit card bill balance in full and on time each month, they can be utilized as a free short -term loan. They can help you track your spending much more easily than cash and you can download your transaction history.

Additionally, there are many benefits and rewards associated with credit cards such as cash back and travel rewards. But beware, most of the best rewards credit cards have annual fees. Only if you spend thousands of dollars per month on your credit card, the annual fee for the rewards might be worth it.

If you’re booking travel or eating out, use a travel card to maximize rewards, writes Sethi. For everything else, use a cash back card.

If you don’t completely pay off your credit card bill balance each month, you’ll incurred an enormous amount of interest at an high annual percentage rate (APR) that compounds.

It’s very easy to overuse and overspend with credit cards and find yourself in debt. One of the biggest problems with credit cards is the hidden cost of using them, says Ramit Sethi, “I Will Teach You to be Rich”. Many Americans have over spent and carry large credit card balances. The average credit card debt in the US in 2021, was $5,525, per Experian’s report. This was nearly 7% lower than the $5,897 in average credit card debt that was recorded in the same report in 2020.

To maximize the credit card benefits like cash-back, gift cards, air miles, discounts at the gas pump, or other rewards. And perks like free roadside assistance, free car rental insurance, or a free credit score and minimize the cost of credit cards, Sethi recommends:

  1. Pay off your credit card bill balance monthly. The single most important thing you can do to improve your credit score is to pay your bills on time. You’ll save thousands of dollars. If you miss one payment on your credit card, your credit score may drop, your APR can increase, you’ll be charged a late fee, and your late fee can trigger a rate increase on your other credit cards.
  2. Try to get fees on your credit card waived. A month before your new annual fee kicks in, call your credit card company and ask if they will waive the fee.
  3. Negotiate a lower APR. Call your credit card company and ask them to lower your APR. If they ask why, tell them that you’ve been diligently paying your bill in full on time for the last several years and there are a number of credit cards offering better rates.
  4. Keep your main cards for a long time and keep them active. Lenders like to see a long history of credit. Thus, the long you hold an account, the more valuable it is for your credit score.
  5. Get more credit. Do this only if you have no debt and you consider yourself financially responsible. You obtain more credit to improve your credit utilization rate, which is simply how much you owe divided by your available credit. Lower is preferred because lenders don’t want you regularly spending all the credit you have available. It’s too likely you’ll default and not pay them back.
  6. Use credit card’s secret perks. If you have very good credit, call your credit cards companies and other lenders once a year and ask them what advantages you’re eligible to receive. Often they can waive fees, extend credit and give you private promotions.

Call your credit card company and ask them to send you a full list of all their rewards.

References:

  1. https://www.iwillteachyoutoberich.com
  2. https://lanterncredit.com/credit-cards/average-credit-card-debt
  3. https://www.creditwww.com/Edu/credit-card-costs-and-benefits/

Thought of the Day

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It’s a lot harder to get somewhere in life if you don’t know where you want to go…no Definiteness of Purpose.

Take some time and think about what you really want in life. When you know, the wind will start blowing.

Inflation and Time Value of Money

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As time passes, the value of money declines.

Consumer-price inflation rose to 8.6% in May, its highest in forty years. This tax on households and businesses threatens the overall health of the U.S. economy. Deficit fiscal spending and supply shocks and Russian invasion are the primary causes of the current historic inflation.

Inflation is defined as the decline of purchasing power of the U.S. Dollar over a certain period of time. Inflation is usually expressed as the change in prices over a one-year period.

Purchasing power means how much your money can buy—its “buying power.” You lose purchasing power when prices go up (inflation) and gain purchasing power when prices go down (deflation). Inflation changes the value of a currency over time.

Inflation, risk and opportunity cost together reduce the value of the dollar as time passes. And, when inflation increases, the purchasing power of the U.S. Dollar decreases.

Inflation is rampant, the Federal Reserve seems poised to raise interest rates even higher than previously expected, financial markets are free falling, and there are fears of recession in the air. All this signals economic pain ahead for Americans.

A recession is my no means certain, with a strong jobs market and consumers still flush from pandemic fiscal government handouts. But inflation is sapping consumer and business confidence.

A tax increase would reduce investment and further restrict supply, which would arguably increase inflation.

Inflation is a cost spread over every American. Unemployment, a byproduct of a recession, lands especially hard on specific Americans and American families. Thus, it natural for economists to accept a little more inflation to protect employment and strive for a soft landing.

Blossoming federal role in directly supporting the consumption of a vast number of Americans is a primary driver of fiscal deficits and persistent inflation.

  • 75 million receive a combination of Medicare, Medicaid and Social Security
  • 98 million receive veteran and retired federal government benefits, college aid, rental assistance, Obamacare, food stamps, etc.

These transfers are financed by chronic fiscal deficits. To remedy the problem, politicians would face the career ending choice of benefit cuts, tax hikes or increase borrowing regardless of the worsening effect in inflation.

If prompt and effective actions are not pursued by the Federal Reserve and Administration, the nation may revisit the Stagflation of the 1970s which persisted more than a decade with great consequences to society and the economy.

References:

  1. https://debtinflation.com/how-does-inflation-impact-purchasing-power/
  2. https://www.acorns.com/money-basics/the-economy/what-is-purchasing-power-and-how-does-inflation-affect-it-/

Immunity Boosting Foods

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Food is medicine.

Food, along with exercise and adequate sleep, are done of the most powerful tools you have to help prevent disease and improve your overall health. And, a healthy body and mind begins with a healthy immune system, writes Angie Ferguson, an exercise physiologist and Tony Robbins Results Coach.

In addition to developing healthy lifestyle habits, the food you eat can help to reduce the risk and severity of infections, cardiovascular disease and diabetes. In short, healthy, nutrient dense “food can be medicine”.

When trying to stay healthy, it’s best to cut back on foods that lead to inflammation (processed meats and foods, saturated fats, refined carbs, sugary foods and beverages) and instead fuel yourself with foods full on nutrients, antioxidants, vitamins and minerals.

  • Citrus fruits – vitamin C is an antioxidant
  • Garlic – contains the antioxidant allicin, which has antibacterial properties and strengthens your immune system
  • Ginger – has anti-inflammatory, antioxidant and antimicrobial properties
  • Mushrooms – packed with vitamins and minerals and bio-active compounds called beta-glucans known to boost immunity
  • Green leafy vegetables – provide anti-inflammatory antioxidants, vitamins and minerals
  • Berries – rich in vitamin C and anthocyanins, which possess antioxidants agents, anti-inflammatory properties and support a healthy cardiovascular system
  • Turmeric – contains cur cumin which is an anti-inflammatory, antioxidant, anti-bacterial and detoxifying ingredient that’s amazing for digestive health.
  • Sweet potatoes and carrots – excellent sources of beta carotene which can reduce inflammation and boost immune function by increasing disease fighting cells in the body.
  • Olives – this fruit is an antioxidant powerhouses, which reduces inflammation and fight bad bacteria. Studies have shown that eating olives can raise levels of glutathione, a powerful antioxidant which acts as a defense against bacteria that cause airway and stomach infections. Olives possess a monounsaturated fat called oleic acid, which prevents heart diseases like atherosclerosis, heart attacks, plaque build-up, and strokes. The oil of olives is where this oleic acid is located; it can lower blood pressure and cholesterol, which reduces the chances of cardiovascular complications and general stress on the system.

Enjoy these nutrients dense foods in their different forms and see how healthy they can make you feel!

Reference:

  1. Ferguson, Angie, “First Line of Defense”, Florida Times-Union, , June 7, 2022, pg 1D.
  2. https://www.organicfacts.net/olives.html

Angie Ferguson is an exercise physiologist and Tony Robbins Results Coach.

Your Health is Everything

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Health is the greatest wealth!

People who’ve been sick and infirm understand that your health is everything and without health, nothing else like wealth and financial freedom matters.

You may wonder what being in good working order that has to do with wealth. Well, for starters, you can’t build wealth if you’re falling apart at the seams.

How bitter would it be to discover that your physical health is in tatters by the time you’ve achieved your wealth building and financial freedom goals.

So keep it simple: A healthy diet, regular exercise, sufficient sleep and regular doctor and dentist visits for checkups and at the very first sign of a problem.

Commit to a life of slow and steady wealth building, not the hope of a sudden windfall.

You might need to institute some austerity measures at first, which sounds neither fun nor glamorous. But some of the wealthiest people in the world have accumulated wealth without flaunting it.

Like a healthy diet, wealth creation must become an integrated part of your lifestyle. You’ll want to invest and build wealth for the long term. This doesn’t imply that you make an investment and hope it’ll grow miraculously on its own. Like a home, car, your kids or pets, you need to care for your investments, measure them, research them, feed them and adjust them.

Physical health is built through the long-term compounding of daily actions:

  • Exercise—daily movement
  • Nutrition—mostly real and natural foods
  • Sleep—good sleep habits

It’s never too late to start building—or restoring—your physical wealth.

Healths is wealth!

References:

  1. https://bestlifeonline.com/best-wealth-building-tips-ever/

“The trouble with most people is that they quit before they start.” ~ Thomas Edison

The Power of Dividends

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Dividends account for about 40% of total stock market return over time

Value of dividends

There are 2 ways to make money in the stock market: capital appreciation and dividends.

Capital appreciation—an increase in a stock’s price—gets most of the attention, but dividends can be surprisingly powerful.

Fidelity Investments’ research finds that dividend payments have accounted for approximately 40% of the overall stock market’s return since 1930.

What’s more, dividends can help prop up returns when stock prices struggle. For example, stock prices in the S&P 500 fell during the 1930s and 2000s, but dividends almost completely offset the decline. In the 1940s and 1970s, when inflation surged, dividends accounted for 65% and 71% of the S&P 500’s return, respectively.

“From a multi-asset income perspective, I am always seeking investments that pay a high enough level of current income to help cushion the blow during down markets. Conversely, in rising markets, this income component contributes to the overall total return of the investment. In this regard, companies that pay a sustainable and growing dividend have the potential to grow their income to keep up with inflation,” says Adam Kramer, portfolio manager for the Fidelity Multi-Asset Income Fund

References:

  1. https://www.fidelity.com/learning-center/trading-investing/inflation-and-dividend-stocks

Thought of the Day

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“You ask, what is our aim? I can answer in one word. It is victory, victory at all costs, victory in spite of all terror, victory, however long and hard the road may be; for without victory, there is no survival.” — Winston Churchill

Purchase Price Matters

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“If you think about the environment we’ve been in for the past 10 years, purchase price has not mattered.” Marc Rowan, CEO & Director, Apollo Global Management, Q4 2021 Earnings Call

The profit of an investment is often determined by the purchase price since “Price is what you pay; value is what you get”, quips billionaire investors Warren Buffett.

The price of a stock is determined by human characteristics and emotions, such as fear and greed, market tendencies and other factors. All of these things affect the price of a stock, sometimes to a large degree but rarely do they significantly affect its value.

“If you think about the [stock market] environment we’ve been in for the past 10 years, purchase price has not mattered”, said Marc Rowan, CEO & Director, Apollo Global Management. “The more risk you took, the more outrageous, generally the higher the pay off.”

Rowan and Apollo Global Management has consistently followed the investment philosophy that “purchase price matters”. Although, over the past decade in the equity stock markets, their strategy of “patient, value-oriented, disciplined approach to capital deployment” had not been consistently rewarded.

Share Price and Intrinsic Value

“Losing money can happen when you pay a price that doesn’t match the value you get. Look for opportunities to get more value at a lower price.”

Before purchasing a stock, it’s essential to compare the market price of a stock to its fair intrinsic value. When you find a company whose stock’s price is trading lower than the company’s intrinsic value would mark the opportune moment to purchase the company. Since value investors believe that an undervalued market priced stock will eventually climb to reach its fair, or intrinsic, value.

This is a process known as value investing, a type of investing that puts the utmost importance on the valuation of a company and uses various metrics to determine whether the valuation is low, high, or where it should be.

Some of the most important metrics include:

  • Price-to-Earnings Ratio (P/E Ratio). The P/E ratio compares the price of a stock to the company’s earnings per share (EPS).
  • Price-to-Sales Ratio (P/S Ratio). The P/S ratio compares the price of the stock to the annual sales, or revenue, generated by the company.
  • Price-to-Book-Value Ratio (P/B Ratio). Finally, the P/B ratio compares the price of the stock to the net value of assets owned by the company, divided by the number of outstanding shares.
  • Price-to-Free-Cash-Flow Ratio (P/FCF Ratio)

Before buying a stock, you must attempt to compute the intrinsic value of the company. If you’re following the value investing strategy, you’ll want to make sure the stocks you buy are undervalued compared to their peers.

Even when following other investing strategies, it’s important to avoid purchasing overvalued stocks because the market has a history of correcting overvaluations with price declines. Because in the long term investing, purchase price does matter.

Growth at a Reasonable Price (GARP)

Overvaluation will ultimately matter. In the short run, stock prices are based on hype and current news. Over the long term, valuations will ultimately matter when the hype declined and the market will correct the price.

When a stock is falling in price, it’s difficult to purchase a stock when it’s out of favor and widely being panned by the crowd.

References:

  1. https://www.apollo.com/~/media/Files/A/Apollo-V3/documents/apo-q421-earnings-call-transcript.pdf
  2. https://www.moneycrashers.com/factors-buying-stock-price-value/
  3. https://www.forbes.com/sites/forbesfinancecouncil/2018/01/04/the-important-differences-between-price-and-value/

Mindset, Discipline, Patience, Opportunity

  • It’s about process and being contrarian to current market sentiment and the crowd’s emotion
  • Why the hype: Optimistic vs. Pessimistic

When you purchase a stock, you are buying a Piece of a Company, not just a Ticker Symbol.

Every Investment is the Present Value of all Future Cash Flow.

Do you understand how the company makes its money (e.g., revenue, profit and free cash flow)

If the share price is surging; but the company’s corresponding fundamentals correlating and are skyrocketing.

Free Cash Flow – the true life blood for a company :

  1. Pay down debt
  2. Buy back stocks
  3. Pay shareholders’ dividends
  4. Acquisitions
  5. Organic growth

Start Early to Build Wealth

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The single most important thing you can do to build wealth is to start early. Getting started is more important than becoming a financial expert and the easiest way to manage your money is to take one small step at a time.

You, like most people, do not need a financial adviser to help you build wealth. Instead, you need to set up accounts at financial institutions, such as Fideltiy or Vanguard, automate the day-to-day money management (including bills, savings, investing and paying off debt). And, you need to know a few things to invest in, and then be patient and wait thirty years for your money to grow.

But, that’s not cool or exciting. Instead of listening to the noise of the financial entertainment media, instead you want your money to go where you want it to go in accordance with your goals and values. You want your money to grow automatically, in accounts that don’t nickel-and-dime you with excessive expenses and fees.

It’s essential to start today to learn about building wealth and take small steps to save, invest and manage your money. You don’t have to be a genius or financial expert to build wealth. Successful wealth building takes time, discipline and patience.

What do I want to do with my life–and how can I use my wealth to do it!

Investing early is the best thing you can do; ‘doing nothing’ ranks right up there with trying to drive a car without tires; it’s a bad idea and it won’t get you anywhere.

The single most important thing you can do to build wealth is to start early.

Here’s a great example of why investing early matters, that puts it in numbers:

  • If you invest $5,000 every year (which is $417/month) for 10 years, from age 25 to age 35 and then never invest again, you’d still have more money at retirement, than someone who starts at age 35 and invests $5,000 every year until they retire.
  • The 25 year old starter invests $55,000 and ends up with $615,000 (given an 8% annual return, which is close to the average return of the stock market per year). The 35 year old invests $130,000 and ends up with $431,000.

So, remember the adage “The best time to start building wealth is twenty years ago. The second best time is today.” You can save and invest modest amounts, like $20 a monty, and over time realize thousands of dollars in gains.

There are a lot of societal problems, but it’s important to focus on what you can control. Don’t be a passenger in life. It’s a lot more fun to be a captain of your own ship, even if you go off course a few dozen times. Building wealth does require some work. But, the benefits and rewards will surpass the effort.

Take a long term view. The economy grows and contracts in cycles ( business cycle). Fear is no excuse to do nothing with your money. You cam automate your saving and investing, thus you can continue to save and invest whiles others respond to emotions of fear.

Investing for average stock market returns (8% to 9%) is great since most retail and so call smart money fail to beat the average returns of the stock market. Moreover, theses investors tend to do the things that guarantee their failure: trade frequently, make outlandish investments, incur high taxes and pay unnecessary fees. The single most important factor to building wealth is getting started.

The challenges and opportunities with building wealth, and the corresponding solution, are you. Your mindset, behaviors and actions are the number one problem.

  1. You’re the only one responsible for your financial problems.
  2. Know how much money you have coming in and then automatically direct it where you want it to end up.
  3. It’s essential to start early and to start investing today, even if it’s just $1.

References:

  1. https://fourminutebooks.com/i-will-teach-you-to-be-rich-summary/