Wednesday, June 18, 2008

Random thoughts and some blahblahblah

I usually write about my trades and my positions but if you have been a reader of this blog and resident of wallstreak, you would have guessed already that I'm holding some Oil stocks, Ag stocks, CSIQ yadayada.

Quite frankly, I'm tired of writing about my trades now. So today, I will write about a topic that has been closed to my heart. I'm talking about simple living. A topic that I have mentioned in my post earlier this year.

My journey towards learning everything about simple living led me to discover about a new concept to me called life style designs, frugal living and stress-free living. Who knew that such concepts exists these days.

I will not teach you about how to live your life. I will simply state my observations and to point out the lessons I have learned as it applies to my family and to myself as a person and as a trader.

For me, simple living is not about completely overhauling your life but it is about refocusing your life towards areas that are most, self fulfilment and health. But don't forget about building wealth which should be a natural extension of simple living. I have visited a few personal finance blog sites in the last few months. These blog sites can be grouped as follows
  • Debt-free living which I totally agree with.
  • Wealth-building which is as it should be for every one.
  • Frugality which I also agree. Live within your means.
  • Extreme savers which borders living like a caveman. Who know people still try to live within $25K / year?

And just like any other blog site, there are also offers of how to cut down your expenses and other excess such as

  • Buying a rundown car instead of buying a new car to save from car payments. I would rather be comfortable siting in a traffic inside my brand new Benz or BMW planning my next big trader rather than in a old second hand car trying to think on how I can cut down $10 in my next grocery budget.
  • Spend most of the time looking for ways to save. I would rather spend more time looking for ways to earn more and just try to live within a reasonable budget.
  • Buy clothes from thrift shops or get hand me downs. I don't know about you, but I grew up wearing hand me downs courtesy of being a financially challenged parents. If you think your kids are having fun wearing those clothes, you are delusional.
  • Having money does not make you happy. So is being poor. I would rather be happy and wealthy.

"What's up with Pinoytrader talking shit and stuff?", you might say but do know this, how you look at things should dictate your trading methodology and philosophy.

You see, if you are an extreme saver type, as a trader, it will be very difficult for you to watch your gains disappear during price retracement if you are going to hold the position for a bigger payday. Savers look at things around them as say a $50K/year world and anything they can get out of the $50K is gold to them. To put this in a trader's perspective, if your positions immediately gave you a $1000 gain, any retracement from that $1000 high point mark is a loss that could have been a savings. It might be better for saver to lock several small gains and not let retracement eat his/her gain.

As for me, I'm not a saver type but rather an earner type. I actually think that taking small gains is a waste of my time and effort because I am always looking for the big payday. My temperament allows me to sit through retracement because I don't look at the small gain as a money that I could have had but rather as a business expense (risk) that I can use for the home-run gain. Just like the example above, I will not look at the retracement from that $1000 high point as a loss but rather a launching pad for the next $3000 gain. Another example of this attitude is when I try to diversify to dilute the portfolio risk into several positions. Seeing small gains from several positions makes me impatient and thereby making me consolidate my position and focus my resources to make bigger gains.

That's all.


Anonymous said...

Please post more often man !

Stewie said...

i like that post.

Blue said...

I manage to live in Silicon Valley with no debt and a house I bought last Oct. for under $25k a year.

I agree Pinoy, it's not about how much you can save, because then you will never focus on how much you can earn. Eventually your job income becomes capped and your savings decrease due to rising costs of living and inflation. You end up losing money going into retirement which you can't afford to take.

To secure a future for my children I know I MUST become financially independent. I'm working towards having a constant revenue stream no matter if I'm working, sleeping, eating or playing. I read years ago that Bill Gates was making approx. $250 a min. Not bad making $250 a min. as a result of following your dream.

We need to constantly evaluate and deprogram all the bs we were spoon fed growing up.

To thine own self be true!

bl said...

Must say I love going to Goodwill and procuring 2.50-5 shorts and long sleeve work shirts for my contracting biz. Why buy a $20 item only to have it destroyed in 1day. Shorts and blue shirt is my outfit!

Ragin' Cajun said...

great stuff Pinoy!!!!

Gio said...

PinoyTrader! kumusta ka? Nice post, especially coming from someone who got money. I think you'd enjoy Carnegie Mellon Professor Randy Pausch's last lecture. He really makes you think twice about life.


MC said...

@Anon, I'll try my best.

@Stewie, thanks.

@Blue, I agree with you on that. We need to expand our income stream rather that limiting our view to what we already have.

@Bl, you seem to know how to handle you finances. I agree with you on buying the less expensive option as more practical.

@RC, you the man.

@Gio, thanks. I have been following his lectures since it became a sensation. What a great man.