I said last week that money doesn’t generally buy happiness, but the lack of it can buy absolute misery. This, by the way, is not just my personal observation. It is the conclusion of some of the most respected happiness researchers (Yes, there is such a thing — read my book.)

The trouble is that we have to pay attention to money more when we lack it than when we have it. This doesn’t seem fair, but the Lord works in mysterious ways. Most people are invested in the stock market, either directly or through mutual funds, pension plans or some other vehicle. So it is hard not to be part of the Panic Crowd. But I ,in all my financial wisdom, have two golden rules to offer. These may not make you rich, but they will keep you happy.

Number One: Place your investments in the safest vehicles possible (Do as I say, not as I do!) and forget about them. When the next recession ends, take inventory and see that you still have investments. Most of us don’t get a rush out of watching our investments plunge or yo-yo up and down. Most people are happier when they forget they even have investments.

Number Two: If you are one of those people with a terminal case of Itchy Trading Finger, then you probably would not be happy ignoring your investments. Place aside what you need for the long term, such as retirement if your heart lasts that long. Don’t play with this money. Don’t touch it. Trade only with “extra” money. The rest of you are asking, “What’s that?”, but Itchy Trading Fingers know what I’m talking about. They view stock trading as a sport.

In fact, stock trading is a sport. Much more than, say, hunting. Think about it. In a sport, two equal opponents square off against one another. “Let the best one one win.” Each faces the same challenges. Each is armed with the same weapons. Each has an equal chance of feeling the thrill of victory and the agony of defeat (unless, of course, you happen to be the Tampa Bay Devil Rays).

Imagine the play-by-play if hunting truly was a sport: “Man is closing in. He’s coming up from behind and rounding to the south side. He’s raising his rifle. Deer doesn’t even appear to notice. Oh, I can’t watch. This is going to be a massacre. Wait! Deer has just bucked up and twisted. He spins around a tree, and — look! Deer has a rifle too. He aims. He shoots! He Kills!!! Man is down. What an upset, ladies and gentlemen.”

In real life, Deer doesn’t win very often. In fact, I estimate that Man is about 4.3 gazillion times more likely to be defeated by his own team mate than by the opposition. We call this “friendly fire”.

Contrast this to Itchy Trading Finger, who stands an equal chance of striking gold or of moving into a cardboard box on the street corner. The stock market truly is sport, for those who choose to treat it that way. Which is why it is so important to put aside — in safe, secure investments — the money you feel you need for your future. That way, when Itchy Trading Fingers retire, they can move out of the cardboard box.

For the rest of us, we are happier getting our sport watching monster trucks crush WWF actors. Oops! There I go again, mixing my sports and my metaphors, not to mention ignoring several federal safety standards. May your investments be safer than my WWF friends, and may you sleep well at night.

About The Author

David Leonhardt is The Happy Guy. He is an energetic motivational speaker and author of Climb Your Stairway to Heaven: the 9 habits of maximum happiness. Visit him at

http://www.TheHappyGuy.com

dleonhardt@attglobal.net

Tags: Business, finance, investing, stock investingBusiness, finance, investing, stock investing

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Compounding is one of few wonders in the world. Albert Einstein said it himself. I tend to agree. It is so powerful that it doesn’t take much to accumulate vast amount of wealth. Yet, so many people complained that they did not have enough money to invest.

Quick questions. How much does it take to be a millionaire? That depends. If you are in your early 20s, all it take is $ 2 a day and 10.5 % annual return on your investment. Hey, stock market can gives you that. The stock market indices has given that to investors since world war II. When you are 30 years old and you expect to retire by the time you are seventies, you need to invest $ 5 per day with 10.5 % annual return. How about when you are forty? You need roughly $15 per day or $ 450 per month. This is a little heavy for some.

However, as you can see, time is your friend. If you just graduate from college, you can be a millionaire with a mere $ 2 a day. The minimum wage for most state is $ 7 per hour. You think you can set aside $ 2 each and every day? Sure, you can! But still, how many people has to depend on their family when they can’t work?

No matter how old you are, you can still add considerable amount of money by investing a dollar a day. If you are twenty years away from retirement, one dollar a day will give you an extra $ 22,000 when you retire. That is about six months in living expenses for normal folks!

Do you need ideas on how to raise $ 1 a day? Oh, come on. Don’t make me come and get you. Just take that $ 1 bill from your wallet and put it someplace away from you.

Get your free investing idea by visiting our commentary section at http://www.noviceinvesting.com

Tags: Annual Report, finance, investing, Sample Portfolio, stockAnnual Report, finance, investing, Sample Portfolio, stock

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I’ve been involved in online trading, specifically with stock and index options, for several years. In this time, I’ve spent a great deal of time thinking about value and the fact that anything, be it a stock or currency or even a house, is worth exactly whatever someone else will pay for it. Sure, there are a million and one pricing models (especially in financial markets) that will tell you precisely what something should be worth. But in the final analysis, if nobody will pay that much, then it’s not actually worth that price.

Let’s illustrate this concept in a very simple fashion. I’m an American so I’ll
use U.S. currency to make my point.

What is a $20 bill worth? Without over thinking it and talking about inflation,
exchange rates, etc. let’s just say that it is generally believed to be worth
$20.

Would you pay me $20 for a $20 bill? I’m going to guess probably not, as there
would be no real reason to do so. You would have to go to the trouble of
getting me your $20 and I would have to go to the trouble of giving you my $20
bill, and neither of us would be in a better position than we were before.
Therefore, I would like to present the idea that a $20 bill is not actually
worth $20 since nobody would likely pay $20 for it!

So how much would you pay for a $20 bill? Would you pay $19.99? Is it worth
the effort for 1 cent? No? How about $19.50? $19? Shall I keep going?

In a free and fair market it is the market itself which determines value, and
given a large enough market, that value should be fairly accurate. I read an
article online some time ago about someone who decided to conduct an experiment
just for fun. He put a new $5 bill up for auction online and began the biding
at 1 cent. He crafted a creative description of the note, and waited to see the
results. When it was all said and done, the bill did in fact sell - for
slightly over $3. He then spoke with the winning bidder, who said he had made a
profit many times online by purchasing currency for less than face value
(including a $20 bill for less than $10 as I recall).

The conductor of the experiment left it at that - nothing more than a somewhat
humorous exploration into what people think something is worth. But to me this
meant so much more.

A dollar is not actually worth a dollar… so what is it worth? What
would you trade for $1? For $20? For $100? $1,000? And if a dollar isn’t
actually worth a dollar, is a share of stock worth $50, or in fact anything at
all?

The answer is yes. At any given moment it is worth precisely what someone is
willing to pay for it. No more, no less. Money and value are merely ideas,
they are not absolutes.

Consider this carefully the next time you are convinced that the stock, option,
currency, house, or anything else you want to buy, is worth what you’re about to
pay.

Jonathan van Clute is a full time investor, educator, speaker, and online
options and sports arbitrage trader. In addition to his business activities, he
is also a musician, video editor/animator, and one of the world’s greatest
Segway Polo athletes. He can be reached via email at jonathan@PMLinvestments.com
and is speaking at an upcoming teleseminar, visit
http://www.snurl.com/vcfmv for details.

Tags: coaching, finance, information, investing, money, options, profit, psychology, stocks, trading, wealthcoaching, finance, information, investing, money, options, profit, psychology, stocks, trading, wealth

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