10 MUST Do’s

  1. From now on, every time anyone asks you how you are, the out loud answer is always and forever a very, very positive positive! [Great!  Terrific!  Fantastic!] NO MATTER HOW YOU REALLY FEEL!  It doesn’t matter!  You are trying to change you!  FOREVER!
  2. From now on, you commit to taking full and total responsibility for your circumstances, your results and how you feel! It will always be your responsibility and that of your brain cells and no one else’s!
  3. From now on, you will always learn new things everyday!
  4. From now on, you will stop yourself from completing any and every negative thought or words, and turn them into a positive, before you go on to anything else!
  5. From now on, you will always every day do something new, strange, crazy, silly, out of the box, embarrassing, or that is otherwise “not like you”.
  6. From now on, you will always, set a goal by putting it down in writing.
  7. From now on, you will willingly and eagerly fail at something important every day—and learn from it!
  8. From now on, you will every day of your life, tell at least two people that you love them. (One should always be you, even if you don’t believe it yet!)
  9. From now on, you will every day of your life, do an exercise regimen for your brain or your body. (Preferably both!)
  10. From now on, you will stop and look to see what everyone else is doing, and then choose to probably do the opposite!
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Mind map of Richard Branson thinking

And signed by him to boot…  Click to Expand.

Sir Richard Branson's Signed Mind Map.

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Avoiding SCAMS

The last several years, I have seen an increasing number of people defrauded by investment scams, probably made easier because of all the money everyone is making in the stock market. But before making any investment, you should ask the following 10 questions:

1. Is the investment audited by one of the major international accounting firms? Real investments are audited by one of the large international accounting firms; indeed, a real investment will hold this out as a selling point. On the other hand, a scam investment will not be audited by anyone, or by a small firm nobody has heard of (and may in fact be a sham).

2. Is the investment registered with your state securities commission or with the SEC? Real investments must be registered with your state securities commission, or with the U.S. Securities & Exchange Commission. This is true of offshore investments which are marketed to you in your state — they must be registered as well, and avoid anyone who says they are “exempt” because they are offshore. Avoid unregistered investments.

3. Is the investment listed in the Wall Street Journal, London Financial Times, or similar well known financial publication? Real investments will be listed in a major financial publication, or findable in some other major financial resource. You typically can’t find scam investments in these publications. Beware “CUSIP” numbers as an “authentication” of the investment — anyone can get a CUSIP number for just about anything so this doesn’t help you.

4. Is everything about the investment out in the open? Real investments are completely “transparent”, meaning that you can clearly see and understand each and every step of where your dollars go and how they grow. Scams hide or obfuscate one or more parts of the plan, speak in terms of secrecy, may allude to a “secret banking system” or similar nonsense, and might even require you to sign a secrecy or confidentiality agreement prior to seeing the plan (it will almost always be a scam if you have to sign such a document).

5. Are you allowed to seek independent legal counsel prior to making the investment? Real investments will encourage you to seek independent legal and financial advice prior to making the investment. Scam investments will give you bizarre reasons why you shouldn’t talk to someone, such as “CPAs are trained not to speak of this!”, and they may even require you to sign a secrecy or confidentiality agreement which will discourage you from consulting anyone before making your investment.

6. Is the seller licensed with your state securities commission or with the NASD? Real investments are sold by licensed stockbrokers who are registered both with your state security commission and with the National Association of Securities Dealers. Scam investments are sold by scam artists who are not registered with anyone, or perhaps with some phony-baloney foreign stock exchange (or more recently, “cyber-exchange”).

7. Does the promoter have a good background? A real promoter will be “clean” and you can verify this by hiring a private investigation firm to conduct a basic investigation. A scam artist will often be using an alias, and will often have a criminal background (though not always).

8. Does the investment “make sense”? Avoid all unregistered investments which are “guaranteed” as this is a sure sign of a scam (if the guarantee would be real, it would be registered). Avoid investments which make representations which are unusually high, i.e.,funds and programs which promise to pay more than 50% per year, or promissory notes and CDs which promise to pay more than 10% per year.

9. What does law enforcement say about this investment? Don’t hesitate to call law enforcement, such as your state security commissioner or attorney general, before you invest. A real promoter will have nothing to fear if investigated (and can probably clear it up with a phone call). This is just a part of doing business for them. On the other hand, a scam artist probably will not stand up to this scrutiny.

10. Is it too good to be true? If you have to ask yourself this question, it probably is.

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SCAM Alert

When trawling around for investments, you always need to keep a look out for possible scams.

Recently this article was printed in the New York Times. It should send a warning signal to most people.

Don’t you get caught investing in something that simply looks too good to be true WITHOUT going through some of our processes like ASSESSING an investment.


November 8, 2005 — The Securities and Exchange Commission suspended a speculative frenzy in the shares of little-known Cameron International yesterday, after the stock’s price went from 5 cents to more than $90 in one day.

How Cameron’s stock price got above its longtime nickel price level seems puzzling enough.

The Santa-Monica, Calif.-based company’s SEC filings reveal it had barely $14,000 in revenue, two board members, and was seeking to sell even more stock to raise enough money to hire employees and launch a Web site.

According to its Yahoo! Finance profile, Cameron provided a variety of business and Internet-based marketing services. If Cameron raised $192,500, the filings said, it might generate revenues by the second half of next year.

The SEC’s release added that despite a 1,000 percent gain on Oct. 28, there was “no material information about the company [being] made public.”

After the close of trading that day, the company — which reported $4,000 in assets in June — had a market value of $133 million.

The SEC also said it had not received information requested for a spooky 30-1 reverse stock split, Cameron said on Halloween.

No one answered repeated calls to Cameron’s headquarters.

What’s more, running Cameron didn’t appear to be too taxing on Stephen Samuels, Cameron’s founder, who announced a week ago he was stepping down from the chief executive slot, according to SEC filings.

You may have heard of a “Boiler Room” scam. In fact there was a Hollywood move about this very topic, oddly, called Boiler Room.

Typically, a Boiler Room is a call centre full of people calling target investors. They explain that they are a stock-broker from some firm (sometimes the firm name is VERY similar to those that you might know). They go on to explain how they are selling a special deal, maybe shares in a pre-IPO company and would you like to get in early.

Whatever the story they spin, the bottom line is that some people pay – only to find out later that  the company is now bankrupt or worse, never existed. And all your investor money is gone.

Never buy a stock or make an investment from one phone call. Always follow your process to determine how much you can afford to place, what is it you’re investing in, etc. Good, simple questions.

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How to Build Yourself a Capital Guaranteed Investment?

First of all, what is a capital guaranteed fund? And why would you want one.

If you invest in a typical managed fund, say $10,000. Your money is invested by the fund and may or may not profit, in fact, recent history shows us that your initial money can reduce. After 2 years you might be faced with only $8,000 in your account. Hopefully, your account has gained!

A capital guaranteed fund essentially guarantees that your NEVER lose your initial money. So the fund can ONLY increase.

I’m sure that sounds good to most of you.

Most people like you, use these types of funds to “protect” a certain percentage of their total portfolio.

Most capital guaranteed products have average to poor performance. But, as stated, they don’t lose value.

“What about the capital guaranteed fund with above average returns?” I hear you ask.

Like most things in finance and investment, this strategy is not that complicated and whilst a particular outcome can never be guaranteed, you can put your investment capital into a strategy which has the potential to yield excellent results whilst not exposing your investment capital to undue risk.

Everybody is familiar with bank term deposits, such deposits are as about as risk free investment as you can get. So it is not hard to imagine a scenario where if you placed an amount on deposit after a predefined term you would get a predefined amount back.

If you are in the US, you would use zero-coupon bonds and not bank deposits for this exercise.

For the sake of this example assume you take your $10,000 which can be invested for a period of 10 years.

In this example, at the very least we want to receive our capital (the $10,000) back in 10 years time.

Using a financial calculator or a spreadsheet it’s a relatively easy function to calculate what amount needs to be invested at a certain rate to yield $10,000 at the end of ten years. At this point I would suggest you look a little bit further a field than the average bank term deposit. Obviously the better the rate the less of the $10,000 needs to be invested to get us back to $10,000 over the 10 years.

A couple of products come to mind that will expose your capital for only slightly more risk when compared to a bank term deposit but are yielding around 9%.

So by investing $4,224.11 at 9% over ten years we have our capital guarantee in place.

With the remainder of $5,775.89 we have plenty of options, the purpose of which are to generate high returns secure in the knowledge that in the worst case scenario we will still have our $10,000 back at the end of 10 years.

One option might be to invest this risk portion of our capital in a new mining company listing on the stock exchange in the hope that they strike gold.

Whilst I would never recommend such a strategy for all sorts of reasons you would still get your original $10,000 back if they didn’t.

A more appropriate strategy might be to invest in a high yield managed fund.

For the sake of this example I have picked managed funds because they have easily accessible historical data. If you had implemented this strategy 10 years ago using the Perpetual Industrial Share Fund (http://www.perpetualinvestments.com.au/) for the risk portion of your original capital $5,775.89 would have grown to $24,402.75.

Add this to the return provided by the capital guarantee and you have a total return of $34,402.75 or 13.15% pa.

In other words, that’s 13.15% every year for 10 years without EVER RISKING YOUR INITIAL CAPITAL

Obviously this assumes income is reinvested and the effect of tax, inflation and imputation credits has not been taken into consideration. Everyone’s personal financial situation is different and I would be remiss if I did not recommend that everyone seek their own advice in this area.

So there you have it. Your own, do-it-yourself, capital guaranteed fund which has provided a return of over 13% per year.

Essentially this is what the promoters of all the off-the-shelf capital guaranteed investments are doing without the bells and whistles and without all of the associated costs which seriously impact investor’s (your) returns.

This is just one strategy which you could implement as an independently minded investor.

Oddly, ASIC in Australia is not keen on capital guaranteed funds.  Therefore you’ll need to look overseas for these funds, if you don’t want to make on up yourself.

In Asia, they are THE most popular fund that is available for retail investors.


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