Getting Out The Climbing Gear

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  • November 20, 2008

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Getting Out The Climbing Gear

Josh has one of the highest required annual compound growth rates, which indicates that he needs to take an ‘entrepreneurial path’; as you will see, though, his heart is in the stock market (with some business interests, as a clever way of raising cash) … I see Josh’s slogan: “the next George Soros or bust!” … it can be done, it will just need some hard work, huge cajones, and a LOT of luck …

Or, is it possible that we can work with Josh to shift his priorities somewhat? Decrease his compound growth rate as much as we can whilst staying true to his Life’s Purpose; improve his business model a little; and, decrease the risks on investments a touch, to still get to his Number, albeit at a later Date?

Ultimately, though, this is all up to Josh and where his heart and head lies …

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If the number we set for ourselves is a mountain, then this would be a great time to decide on the appropriate gear needed to get to the top. Of course each mountain is different and should be approached as a unique entity, demanding patient thought and planning in order to assure success.

In the case of the 7MIT’s, we’re gearing up with the latest technology and strategies, incorporating proven techniques as well as our secret weapon, the guy who’s taken the journey himself and is giving hints on what gear is needed and how to properly use it. This is the foundation I plan to build on to achieve the number I need to live my Life’s Purpose.

The main piece of equipment I will use is the stock market. I both enjoy and succeed in investing (speculating, gambling, etc…Whatever you want to call it) and plan on making most of the money doing this. One thing I must admit at this time is I strongly dislike real estate. Besides eventually purchasing my own residence in the future, I cannot imagine spending the time, effort and money needed to make a wise real estate investment decision on a regular basis. This is besides the liquidity problem when compared with stocks. This investment vehicle does not fit my personal preference and will not be part of my climbing gear at this stage.

I have also recently launched a drop shipping business, which has begun to have some success in the past few weeks, but still needs large amounts of time and effort on my part in order to grow. Of course the proceeds from this venture as well as future ventures will be deposited into my brokerage account or reinvested in whatever can give me the best possible return; well, anything but real estate.

In conclusion, it’s amazing to look back at this past year and consider how naive I was financially. It reminds me of my Organic Chemistry professor when he would tell us, “I can tell you guys (us students) are becoming more and more sophisticated every day.” It’s my general goal to become more and more sophisticated in matters of finance, something I hope will aid in our success.

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November 20th, 2008
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Comment Number:
1
Written by:
Debbie
Posted on:
November 20, 2008 at 7:20 pm

How old were you when you first tried out the stock market? Just curious…

So, everyone around me is talking about the economy and how they’re losing money left and right in the “market” or their 401k plans, or whatever other investments they have – and here you are talking about making the stock market your primary gear to climb your mountain. Does that worry you at all?

Comment Number:
2
Written by:
Josh
Posted on:
November 20, 2008 at 8:52 pm

Debbie, that’s I great question and I’m so happy you asked it.
There are so many amazing companies that are on sale right now, as in today 20 Nov, 2008. It’s actually incomprehensible how cheap so many great companies are, the prices are actually ridiculous. And this is probably 10% + less then what Warren Buffet has paid for these same companies. I don’t know exactly where the bottom is, but I do know these are great prices and I’m excited to have money to buy.
I was eighteen when I bought my first shares, lost a bunch of money cause I had absolutely no idea what I was doing (reference quote from Buffet “Risk comes from not knowing what you’re doing.”). So I read a few books, formulated a few theories of my own, read a little more, did a little more trading; basically after a few good trades your confidence grows.

I’m not worried but excited because the potential to make extraordinary profits in well known, perfectly stable, low risk companies is here right now.

Comment Number:
3
Written by:
AJC
Posted on:
November 20, 2008 at 9:20 pm

@ Josh – My first experience was with market timing in Aus:

I was working for a Big Computer Company and happened to be in the elevator with a couple of the old ‘dead wood’ guys who still worked there because nobody else would have them. One said to the other: “now’s a great time to buy stocks … the market’s really going up”.

I had no real experience with stocks at that time, but I instinctively knew: if they’re talking about getting in, it’s time to get out!

Surely enough, within just a couple of weeks it was the Crash of ’87 …

@ Debbie – … so, if everyone who does NOT know what they are doing is talking ‘doom and gloom’, you know what to do! 😉 But, you need to be a little bit patient (it could a while to get the returns) and, it’s probably best to ‘stage’ your purchases so that you are buying 25% now and 25% in 3 months and so on.

Comment Number:
4
Written by:
Diane
Posted on:
November 21, 2008 at 8:17 am

@Josh – sounds like a good plan, but regarding real estate (which I also was backing away from as “way more” than I wanted to get involved in (complicated, etc.), I think the way you approached the stock market is the same way to approach real estate: Read a lot, make a few forays, expect mistakes and growth, persevere and learn how to do better.

I would guess you are using this approach for your drop-and-ship business. How did you know that was the right business investment for you? The books Adrian’s recommended in RE investing stress that it is also a business. How quickly could you liquidate the drop-and-ship business?

If you haven’t yet read another book he’s recommended (E-myth Revisited or E-myth for contractors, talking about entrepreneurs, not on-line “myths”), that would go a long way to helping you avoid what Adrian and Tim Ferris (4-hour work week) say about killing themselves working their own business.

Sounds like you are well on your way!!

Comment Number:
5
Written by:
Josh
Posted on:
November 21, 2008 at 11:50 am

Hi Diane, I actually got the drop shipping business idea from T4HWW. Timothy mentions two other business idea’s that he prefers, both of which involve information property, which I would like to be involved in soon, but I wanted to start something right away, which is why i defaulted to the drop shipping.
I’ve also read the E-Myth, great book. I do need to start utilizing virtual assistants to supercharge my productivity.
Thanks Diane