Most people don't know if they're making money on their investments. We rely on heuristics, like "I sold it for twice what I bought it" or "The fund reported a 13% return this year". Neither of these statements give you a real answer to how hard your money is working for you. The first completely ignores how long you were invested and the second uses an arbitrary time span which has nothing to do with the amount and timing of YOUR investment.
We don't calculate return on investment because the math gives us a headache. Here's why. This is the conventional formula for calculating Return on Investment that you learn in high school or from some spammy website:
ROI = profit / amount invested / time
It's not that the formula is incorrect (although the simple version above doesn't take into account any compounding over time), it is that the formula just doesn't represent the real world. We usually don't just invest a lump sum then cash out after x number of years. Most investments involve continuous give and take. We invest a bit, then some more, maybe we sell down or take dividends (or reinvest them) or spend money on capital improvements - and we do this at all sorts of random time intervals.
It is difficult to recall a single approach I have done recently that hasn't been followed by an instant date, day two, number-close or (god forbid) a facebook-close. So what is the problem with that? Well for me, there are two.
Firstly, I'm trying to work. Dating is huge time sink and distraction for me because it triggers my creative mode that leaves me day-dreaming about dating even when I'm not actually on a date. Although I can get away without working for long periods of time, I actually love my work and it gives me a big sense of satisfaction.
Secondly, there aren't enough hours in the week to meet, date and close all of those girls you see on the street. Opening is fun and rewarding and a phone full of messages from cute chicks is very validating but not ultimately what you want. What you really want is to be the man she gives herself to and craves sexually. Or to put it another way, you want to spend the whole week fucking each other, leaving the house only to stock up on food, drink and contraceptives.
So here is what I am doing to get a hold of this problem.
A fellow psychology student, Lakecha, wrote some haiku's about my motivation app "The Game Of Your Life". They're kind of cute:
The Game of Your Life
Here are some screenshots from the latest update. Most of the concepts are in place now (Quests, Rewards, Bounties and Rules). You can also share your achievements to your favourite social network.
My new application has hit the market and this one may just transform your life. Based on research into human motivation and the brain's reward system, this application is designed to make improving your life fun. "The Game Of Your Life" turns your life into a game by helping you to create quests, set bounties, and give yourself rewards.
The objective of the game is to earn points for doing things that make you awesome. It's very simple - just set yourself some bounties and let the app sort them so you get the best return on your time. Once you complete an activity, you reward yourself the points and see your daily score increase.
I'm planning to move some of my money into a high dividend yield index fund for a few of reasons. Firstly I like dividends, secondly I like franking credits, and thirdly dividends seem to predict company health (and growth) pretty well. So here is the research I've done into the index funds / ETFs I've found on the Australian Stock Exchange.
The four ETFs I looked at are:
I can write software. In fact, I'm very good at it. But there's a catch.
I won't do it for money.
Well basically I feel deep dissatisfaction when I give my creative work away. Especially if it goes to a sinister money grabbing corporation.
When I look back on the jobs I have had in the past, it is the menial ones that have give me most satisfaction. I worked on a trawler when I was 18. It's a job that mostly involved sorting fish. I worked in a bar when I was 19. a job that mostly involved collecting glasses. I cleaned dishes when I was in university, and actually it was kind of fun.
Psychologists have recognised this as a common phenomena since the 80s. It is all a matter of intrinsic and extrinsic motivation. As it turns out, extrinsic rewards inhibit creative work but facilitate simple tasks.
After calculating my returns on ten years of investing in more or less whatever sounded good I realized that I really needed to learn something about investing.
So I read and read and read everything I could find about investment (not really everything - there is a whole aisle dedicated to investment at the university library). The idea of Value Investing grabbed me most. It's the method made popular by the world's most famous investor, Warren Buffett.
The idea is simple. Buy good companies at good prices. So first I went about finding good companies. To me these are those with
Here is a transcription which I made to learn Cuando Me Enamoro by Enrique Iglesias. It has the chords, rhythm and lyrics. Hope you find it useful.
Note that this transcription is in E so it can be played without a capo. The CD version is in Eb and uses a capo on the first fret with chords one tone lower. The chord progressions for the different versions are:
E (no capo): Em G D A Bm G
Eb (capo on first fret): Dm F C G Am F