Tuesday, October 13, 2009

Lessons and learning

It is a never ending process of increasing your base knowledge.

Sometimes through reading and studying others,

Sometimes 1st hand experience

At other times from seeing the way others operate

Sometimes it takes doing something (right or wrong) yourselves to re-enforce what you thought you already knew!

This process shall never end and nor shall I ever wish it to end. I believe over time I shall grow to be a wise old investor. I hope I don't get to cocky to many times in the future and think I'm better than I actually am.

Friday, October 2, 2009

Money Management

One of the things I have learnt is that there is always way's to make money, making money is not the hard part. Keeping it is.

Many people I know have been destroyed financially by this global crunch, some with much more wealth before it than me, some less so. So what did they do differently from me. I guess not acknowledging the changing times and moving with it. Some will never start investing or trusting the property/stock market again.

Having said that, some people saw the coming change and managed the times a lot better than me.

So I guess the take away lesson is this;

Making money is the easy part, keeping it and managing it in a reliable safe manner is so important, but so easily over looked. Most people (myself included) focused purely on making it, not keeping it.

Like Warren Buffetts famous 2 rules

Rule No.1: Never lose money.
Rule No.2: Never forget rule No.1

So am closely following cash flow positive transactions now, and keeping my cash flow at a constant positive rate.


Well as the GFC is diminishing into the background as these famous 'green shoots' take effect, what are the lessons to be learned for me personally

Well to be honest I believe this whole experience has been a great thing for me, even though I lost a fair bit of money last year, this recovery has been good to me.

I think the main lesson is research, research and more research. To follow a plan and stick to it and to have rules that govern my investing behavior. Not to just get into something because it seems like a good idea.

I have come though this, still standing with a reasonable portfolio left, not like I started with, I was forced to sell 2 properties and numerous share holdings. To pay down debts, like so many individuals and corporations. But everything is now on a much more secure footing. And am happy with my approach.

Am going to focus more on cash-flow and less on capital gains, Cash-flow is king. Capital gains can't pay the bills without selling or re-financing, cash-flow can.