Radio Silence, where have I been?

It has been about a week and a half since I have posted, and I'm going to put up a few short posts today and likely have another short period of radio silence before I can begin posting regularly again.

If anybody has been curious, or cares for that matter, the explanation is as follows:

• I'm changing jobs,
• moving cities (and countries for that matter),
• taking an intensive pre-work course for my new job,
  
• renting an apartment
  
• buying a car, and
  
• having a baby.

Other than that, i've had a lot of free time on my hands. I haven't left the blogosphere, just needed to spend a little bit more time down on earth for a few weeks.

Which path will lead to YOUR early retirement?

Motley fool writer Rex Moore has just put up a piece on how to retire faster in three easy steps. I'm going to add two more, because I think execution is crucial.

1. Sit down. He suggests sitting down with family or friends to make it an easier and more pleasant activity.
   
2. Brainstorm ways to cut $100 in expenses.
3. Capture those methods and put them into an IRA.
4. R@T Addition: Write down your expected savings and goal. Put these in a place you will see every day. A written goal you see every day becomes a contract with yourself that is much more likely to be fulfilled.
5. R@T Addition: Check back at least every year to see how you did on your goal (this is going to be much easier if you automate tracking of your finances with Quicken)
   

Once you have done these things, it is absolutely essential that you CAPTURE the savings immediately. Use automated transfers to your advantage here, and set them up immediately after you have decided to make a spending change.

This is the cost-cutting approach to a faster retirement. Another approach, and the one I prefer, is to keep costs stable and grow income. Some ways to do this (and please share others if you can think of them):

1. If you are paid hourly, work a few more hours a week and put that money into your IRA.
   
2. Invest in education applicable to your current or future job (the education has to have a Return on investment, otherwise it isn't an investment in future income it is a leisure activity). Example: Getting an MBA vs. Taking a class on sushi cooking. Unless you're going to use your sushi skills to bring in money somehow, that's leisure not investment.
3. Start a side company or business. If you can't work more hours for more pay, you can always start a side business to generate extra income. If you start spending your leisure time becoming an expert in something, and studying how people make money there, and more importantly where arbitrage opportunities exist (If you study vintage clothing for long enough, chances are you could turn an hour into a thrift store and $30 into $100 on eBay).
   
4. Create more value for your boss, and the company you work for. Then, ask for a raise based on your increased importance to the company. At the end of the day you create $X in value at your job, you are paid $Y. $x - $Y = $P the amount of value you have created for the company after they have paid you your salary. If you increase $X, then there is more $P and $Y for you and the company to share. This, of course, doesn't always work. But even if you can't get a raise in your current job, this will put you in a better position to get a promotion or to get a better offer at a competitor. As a general rule, the more value you create, the more you get paid.
5. Next time you get a raise, forget you got it and put that money into your 401k, or IRA.
   

In the end, all four of these boil down to one thing - create more value.

Just like in spending less, when you are creating value to accelerate retirement: Capture is essential. You have to somehow make sure that you don't start thinking of this extra money as spending money. I like completely separate accounts, and tracking this money as either investment or property in Quicken (if it is cash flow, then there is a chance it is going to flow out again).

If you want to retire earlier, you have two options: Live more frugally, or create more value. Obviously these can be combined, but most people it seems focus more on one or the other. While I have now started watching my Lattes, I am unwilling to compromise my standard of living too much to meet my goals. Thus, I'm left with creating more value.

Which path are you taking to meet your goals?

Retire at 30 subscriptions top 50

As of last night there are 50 people subscribed to the RSS feed from this site.

I know for a lot of personal finance and investment bloggers out there 50 is just a drop in the bucket, but for a newbie like myself, it's something to get quite exited about.

To everyone who reads my blog, thanks! Before starting this I never knew how enjoyable anonymously blathering on about personal finance and investment could be.

If anyone has any suggestions or criticisms about the blog, I would love to hear them. Post a comment if there is something you would like me to write about, anylize, do better, etc.

Whoo hoo!

The Stupidity Tax & Flesh Eating Bacteria

I'm fully expecting click throughs from rss readers to skyrocket with this post.

The expected value of every dollar spent on the lottery is $.50 (or a 50% loss). If that isn't enough to convince people not to waste their time, Jeffery over at personal finance advice offers this tidbit:

"the odds of winning the lottery are 18 to 120 times less than dieing from flesh eating bacteria"

For more of Jeffery's take on the famed stupidity tax, see his full post here.

Penny Stock Spam Performance

Just read an article on Kiplinger's about the performance of penny stocks that you get spam email about http://www.kiplinger.com/personalfinance/magazine/archives/2006/01/pennystocks.html.

In the article they claim that Joshua Cyr tracked their performance over about a 6 month period. Net result: Down 52% during which time the Russell 2K was up 12%.

This begs the question, why are people spamming these stocks if they are going to plummet? Spammers aren't usually malicious people, they are usually people trying to make a quick buck - so my bet is that stock spamming is a pump and dump tactic.

So, the expected performance is:
Pre spam price = x
Post spam price = y
6 month price = z

Thus, knowing that they are spamming, it is rational that x < y. But it doesn't make sense to me why z would be less than x. It makes sense that z < y because the price change is driven by an artificial increase in demand and not improving fundamentals.

Great article, but i am left wanting more. I think I will just have to set up my own spamfolio to track the stocks I get spammed about and see what the results are.

If there is a definite discernable negative pattern to the performance of these stocks, then hot stock spam tips might just be the best contra-indicator you can find. I don't know much about short selling, but if 60% negative over 6 months is a generalizable phenomenon, I would kiss the idiots buying the stocks and the assholes sending this spam. Looks like I have two new projects for my to-do list.

If anybody who reads this is familiar with this topic, please post a comment with your knowledge. I know nothing about this beyond what I just read.

Carnivals for week of 1/9/06

Carnivals are up.

• The Carnival of Investing is hosted by Free Money Finance, and contains my post Value Investing Ideas Site
  
• The Carnival of Personal Finance is hosted by All Things Financial, and contains my post Budgeting Made Easy 2 - Buy Quicken
  
• The Carnival of Debt Reduction is hosted by Personal Finance Advice, and although I didn't submit it, Jeffery was kind enough to include my post Budgeting Made Easy 2 - Buy Quicken
• The Festival of Frugality is hosted by Okdork.com
  
• The Carnival of the Capitalists is hosted by The Social Customer Manifesto

A flaw in Quicken - How to make QIF files work with post 2005 software

I love quicken. It is an amazing program that helps me immeasurably, but I was quite dismayed to learn recently that they have handicapped data interchange using older formats. How did they do this? By disabling the ability to import older .qif files.

Example: I was trying to download transactions from my paypal money market account. I signed on, downloaded the .qif file with all of my information, and then tried to import it into my quicken account. But, I can't download for checking, savings, credit card, 401k, or brokerage accounts.

WTF? Why hamper your users like that? Sure QFX is a more powerful standard, but backward capability HAD TO BE DISABLED when they brought out their 2005 version of the software. They don't want you to use it, so they don't let you. And to make matters worse, they obfuscate that they charge a fee for banks to use the .qfx standard and try to sell this as an improvement (it's not a bug it's a feature). I'm going to stop complaining now and tell you how to work around this.

The Solution
So, what is a user supposed to do? In this case, paypal only supports .qif downloads. The solution to the problem is simple, Use a cash account type instead of a checking/savings/money market account. Then you can import QIF transactions into that account.

If you have a 401(k) or other brokerage, I am not sure how to help you. However, chances are you aren't moving as much volume through those so you should not have as onerous a burden to transfer by hand. If you are trading all the time, and your institution doesn't support QFX, I don't know how to help you other than say 1) stop trading so much, 2) change institutions, or 3) don't buy quicken. Their return on investment tracking is horrible anyways.

Value Investing Site

A friend tipped me off to this site last night: www.valuedog.com. Run by a prof at the U. Michigan Business School, it runs a number of value investing screens and makes the results public.

As she said "good place to find ideas."

Budgeting Made Easy 2 of 4: Buy Quicken

The second step to an easy budget is: Buy Quicken (or MS Money). Either one works. Then auto-download your bank statements and categorize your spending.

Now that you are using electronic transfers as was covered in part 1 of this series, it is time to centralize and streamline your budgeting and money management.

I know many people who are concerned with budgeting and personal finance are skidish about forking over $60 for a piece of software. I'm not going to pretend like $60 is a drop in the bucket for everybody, for many people that's a fair chunk of change. But, you need to look at Personal Finance software as an investment.

You can justify this by looking at the opportunity cost of maintaining a budget by hand, or you can look at the productivity gains, etc. I'm not going to make these arguments, even though I agree with them.

I'm going to justify this expense a different way. Buying personal finance software will help you cut your frivolous spending in other areas.

You are your own worst enemy when it comes to financial planning. Those $3.95 lattes that I can't live without, the $60 treat for doing something well, the $45 cheer me up that you buy when you are depressed, the "oh, it's only $XX a month for 24 months, I can afford that" thinking, and the simple words "charge it:" These are the things that are going to keep you from reaching financial prosperity.

You can be a millionaire on $40K a year, all you have to do is live below your means (don't belive me, read Eight Steps to Seven Figures, The Automatic Millionaire, and/or Richest Man in Babylon). What kills many of us is that we spend beyond our means and we don't realize just how bad our spending habits are until we're declaring bankruptcy (my parents made $200k a year and declared bankruptcy last year - not because they weren't making enough that's for sure).

In business, a common saying is "you get what you measure." If you measure people on revenue, you get more revenue. If you measure people on profit margin, you get higher profit margins. If you measure the time it takes to fulfill an order, chances are you're going to get shorter order fulfillment times.

The first step in fixing a problem is knowing that you have a problem. It wasn't until I realized I was spending north of $500 a year on Lattes that I sat down and thought, hmm... perhaps I would be better off cutting off that Latte and saving the money instead. I didn't cut myself of entirely, but I now only have 1 or 2 a week. What was a commodity is now a luxury that I enjoy even more. Drip coffee gets me through most of the week, and now a Latte is a treat. (i'd love to go into the psychology of this, but this post is already way to long already)

If you record and categorize your spending, you're likely going to be shocked and appaled at how much you spend on things that you previously never noticed. $20 here, $15 there, $25 another time can add up very quickly to overtake some of your major expenses.

This doesn't just have to be for scrimping and saving. Once you know how much you spend on each item, you can ask yourself if you could get more enjoyment by shifting your spending a little. Eating 1 really nice dinner a week vs. 3 trips to Denny's? You'd be surprised what kind of "luxury" items you can afford if you avoid spending your money on mindless things every day.

Bottom line: You have to know what your spending money on to make a budget work. Quicken and MS Money are easy to use, fast, and can download and categorize your spending in about 30 minutes a month (setup should take a few hours, and analysis will likely take another 30 minutes). You can see changes in spending habits over time, and spot problems before they pull you under. But most of all, once you know what you are spending your money on you can, in a reflective state every month, figure out if what you're doing with your money is really creating the most value for you.

Budgeting Made Easy Series:
Budgeting Made Easy Overview
Budgeting Made Easy 1 - Electronically Pay Yourself First
Budgeting made Easy 2 - Buy Quicken

I love Jack Welch

I just finished listening to Jack Welch's autobiography Jack: Straight from the Gut (audio), and I love the way this man thinks.

The book chronicles his ascent to the top job at General Electric (GE) and the things he did during his 20 years running the company as Chariman and CEO. There aren't a ton of take-aways that I could see - for me they were: strive for excellence, always keep learning and challenging yourself, I want to work for GE, and I want to own GE stock. More than anything else, the value of this book is in the role model/motivational aspect of the story. Jack Welch's love of excellence is infectious and you can't help but want to match his enthusiasm with enthusiasm yourself.

I suppose now I owe it to myself to investigate the counter arguments, to look into all of the people who are critical of Welch. But, first, I'm going to finish listening to his new book Winning (audio). I'm an hour in and this book already promisses many more kernels of wisdom and advice than his autobiography. The books are a great 1-2 punch: what I did and then how I did it and what you can do.

Carnivals for week of 1/2/2006

Since I've been away, I didn't submit any articles this week to the carnivals. But here they are.

• The Carnival of Investing is at Consumerism Commentary
• The Carnival of Personal Finance is at The Real Returns
• The Carnival of Debt Reduction is at Frugal Duchess
• The Festival of Frugality is at Frugal For Life
• The Carnival of the Capitalists is at Chocolate and Gold Coins

Lots of good reading. Enjoy!

Happy New Year!

Happy New Year!

You may have noticed I haven't been posting much this past week. I've been away with friends and won't really be back into the swing of things until next week.

Here's to a happy and prosperous 2006.

Million Dollar Idea #1 - Pixels for Sale

This is post #1 in the series Million Dollar Ideas. The structure of this post is explained here.

Idea:Sell pixels on your website
Example: www.milliondollarhomepage.com
Value of Idea: $1,000,000 - 5 years hosting (likely free) - Taxes (likely around 30%) = $700,000
Time to Million: 6 Months
Replicable: Not really, but it has been tried dozens of times. Replication potential in Niche content areas, other geographic regions, and especially other major languages (spanish and chinese come to mind).
Sustainable: Yes and no. You can pull this stunt once, but after that it is hard to create another million dollar page. It is a one-time stunt.
Passive: Yes.
Extendible: No.

Why it Works:
This is a fascinating example of how one person can create $1,000,000 in wealth for themselves by creating value for other people in a new and previously un-recognized manner.

This site serves as a coordinator for two groups: 1) people looking for something on the internet and 2) sites trying to get traffic.

What the creator of this site has done is solve a connection problem. There are millions of poeple who are just surfing the net looking for some form of interesting stimulation without caring what it is. There are also countless millions of sites out there providing entertaing or somehow valueable products that these people would like. They connect procrastinators with websites.

Users: If there were a random button that people could push to get an interesting site, many would. This website functions as a novel approach to creating a random button.

Advertisers: On the other side of the coin, the internet is largely a numbers game. The more people who visit your site, the more people who are likely to find your content interesting and do something that will make you money (buy a product, join a community, further click on your ads). In the physical world the addage "Location Location Location" came from this fact: the more people who walk past your storefront --> more people comming in --> more people buying things.

This site's value derives from the fact that they connect people who are just looking for something to do with sites that just want traffic.

The major obstacle to implementation here is a coordination problem. If there are enough random sights, then people will come. If there are enough sites, then sites will advertise.

I am not 100% clear on how this site overcame that problem, but somehow they did. Once they reached critical mass on one side, they then got critical mass on the other and the site became self perpetuating.

Congratulations to the owner of this site. You became a millionaire by having a great idea that nobody else before you saw.

It is a rare mind indeed that can render the hitherto non-existent blindingly obvious. The cry 'I could have thought of that' is a very popular and misleading one, for the fact is that they didn't, and a very significant and revealing fact it is too.
Douglas Adams

Million Dollar Ideas - Structure Explained

This is going to be the structure of my posts in my Million Dollar Ideas series.

I'm going to be evaluating these ideas and structuring the posts as such:

Idea - brief synopsis of what the person has done.
Value of Idea - brief calculation of what the net increase in wealth of the idea was. Roughly speaking this is their profit = revenue - costs.
Time to Million - how long did it take this idea to make its first million. The faster the idea makes it to a million, the more effective it was.
Replicable - Can you take this idea and use it for your own? If so, in what instances? For example, a patented product can't be replicated. A service in a narrow geographic area can be replicated in another area.
Sustainable - Will this idea continue to produce money and value into the future? Or, is it a flash in the pan that is going to wither away? Put another way, this section answers two questions: Will the idea be able to be maintained? And, will the idea continue to throw off profit into the future?
Passive - Does this idea require a large amount of continued maintainance once it gets off the ground? Patenting and licensing something is passive. Creating a company you maintain is not. This section measures how much of your time, capital, and energy would be required to continue opperating this idea (if it is sustainable)
Extendible - Can you use this idea as a jumping off point to launch other ideas? Basically, once you create a brand around this idea can you extend that brand to other related products? Put another way, will implementing this idea make implementing other profitable ideas in the future easier?

Why it works - This is where I analyze the idea. The forces that lead to its profitability, the needs it fulfilles, who it creates value for, etc. This section will cover economics of the idea, strategic implementation, etc.

Furthermore, these ideas are measured in impact to the individual. If 2 guys make $2 million from an idea, that counts. If 20 people make $1,000,000 jointly, that doesn't. There will be a focus on ideas that one person can implement and less on ideas that require an extensive business to create (more books and patents. less google and ebay).

Why it's called $.02 worth

Have you ever wondered why it is called $.02 worth? When somebody says "it's only my 2 cents worth but..." why do they start off like that?

There are some histories out there that claim that this goes back to when pitching in $.02 was the ante for poker. Well, they are wrong.

$.02 worth comes from the fact that most people who publish opinion blogs on the internet and use google adsense get approximately $.02 per day. (I have yet to reach this threshold on this humble blog. I am currently grossing a mindblowing $.01. On a good day.)

Some general principles of economics state that people are paid in direct accord with the value of their contribution to society. I tend to agree with this statement. Therefore, thanks to google adsense, I can tell that I have added $.02 in value to society today. (today has been a banner day)

And my ex girlfriends called me worthless. Ha - now i can prove them wrong.

Assuming no growth in income or readership, and a 4% decrease in the value of money due to time and assuming 3% inflation (yielding an 7% discount rate), I can further tell that as it stands today my opinions on this blog will be worth $104.28 for all of eternity. And those are real dollars.

$.02 * 365 = $7.3
$7.3 / .07 = $104.28571428571428571428571428571 (round that down to .28, carry the four, I'm worth a hundred bucks!)

Now, all I have to do is live for eternity and I'll realize that.

So, what this definitively shows is that my opinions are not worthless. They have scant value, yes. But a complete lack of value, no. Well maybe the blog in general has value, I can't say that this post has a whole hell of a lot of merit. Significantly less than $.02 at any rate.

Carnivals for week of 12/25/2005

Since it has been a long Christmas weekend I have not been blogging much, nor have I submitted as many articles as I normally would tothe carnivals. But none-the-less, they have continued on their merry way and most of them are up now:

Finance and Investing:

• The Carnival of Investing #2 - received 19 submissions, a very gratifying second week for a carnival that was started right here at Retireat30. Thanks to JLP of All Things Financial for hosting.
  
• Carnival of Personal Finance
• Carnival of Debt Reduction
• Festival of Frugality
• Carnival of the Capitalists
  

Errata:

• Carnival of the Vanities
  
• Bonfire of the Vanities
  

End of year stock-cleaning - could this method avoid the wash-sale rule?

There is only one week left to make stock-trades that will effect your 2005 taxes (although oddly there are still months to make 2005 contributions to IRAs), so this means that it might be a good time to start selling off a few loosers to offset capital gains.

But what to do if you have a stock that is loosing for the year, but that you really like and think is being overly punished by the market? Whatever you do, don't sell to take the tax-loss and then buy within 30 days - that type of transaction is called a wash sale and will negate any tax-losses you take. Also, if you re-establish a substantially similar position (buy a call option, sell a deep-in-the-money put option), you'll also trigger a wash sale (according to this article).

But what if you write an at-the money put? Would that still trigger the wash-sale rule? Take Avaya (AV) for instance. It is currently trading at $10.7, down from around $16 earlier this year (52 week high, 17.74 on Jan 5, 200). You could sell a $10 strike february 05 put for around $.25. To do this you would tie up $1,000 per contract for two months for each $25 you get in options premium so in many cases this needs to be a volume strategy.

Now,there are a few potential outcomes from this, but basically you have - option expires worthless, option gets exercised. Either way, you don't care. You like the stock, but sold it for tax reasons which means you are both willing to own it and willing to sell it.

If it expires worthless, you've just realized a gain on capital at risk of 2.5% for 2 months - about 15-16% anualized return. I'd take that.

If you get excercised into the option you now have a basis in the stock of $9.75, lower than the $10.7 you sold it for today. This is a stock you liked at $10.7, so chances are you'll like it even more 2 months from now for $9.75.

The red-herring is fees. That $25 you get could be more than eaten away if you only sold 1 contract - at my brokerage about $15 to write the contract leaving you with only $10 on $1,000 or 1% (8% or so anually). And, if you get exercised into the stock you'll likely have another $20 or so in fees thereby bringing your basis up to at least $10.05. Still less than $10.7, and still possibly getting you past the wash-sale rule. This math changes substantially in more volitile stocks (where the options are going to command a higher premium), or if you are selling more than 1 contract (with etrade each additional contract costs $3).

This shouldn't be illegal, and it shouldn't be a wash sale becasue you are closing a long position and opening a short position. But, I'm no investment tax expert. If you are, can you lend anyinsight into if this is legal or not?

Donations vs. Advertising - is clicking in our own self interest?

Many of you have already likely heard that Wikipedia is asking for $500,000 in donations in its year end fund drive. They have already raised $74,000 and are bringing in about $12,500 a day. No doubt contributors are thinking "I love this service, of course i'll donate, plus it's tax deductable." But why are people so willing to donate to wikipedia? And, on the flip-side of the content coin, why are so many people opposed to adds?

I have a sneaking suspiccion that a large part of the reason people donate so much to wikipedia is that they don't have advertising. Why is that? Why do we have good feelings towards sites that don't show us adds? Why do we have negative feelings towards sights showing adds, even when it is done tastefully and we really like what the add is selling?

People are willing to Donate their own money to wikipedia at a rate of about $.40 CPM (or $.004 per page view)* but they get offended by publishers saying, essentially, "click on this, it will cost you nothing but a few minutes and it is likely something you are already interested in and may want to buy" by putting up advertising.

We're willing to part with our own money to support a site we like via donations, but get offended at the proposal of taking money from advertisers and giving it to publishers when we see advertising.

I suppose that the optimal plea on a website would be something like a left column which says: "Like our site? Donate to us" and a paypal donate button followed by "Or, support us by visiting a sponsor if you see something that interests you." Based on the social norm of reciprocity, and what can be seen happening over at wikipedia, I think this would lead to an increadible increase in clickthroughs (if you haven't listened to The Power of Persuasion yet, you should - what I learned from that $2.95 and 1 hour will add a cool $3 or 4 million to my earnings in my life). Would this be against the adsense terms of service?

This also suggests an interesting self-interested action on websites we like. If it is a site whose content you value, and which doesn't throw offensive adds in your face, then it is in your best interest to briefly glance at the adds and click if there is something you find interesting. This is the exact opposite of what most experienced web readers do. We look past adds, parse them out, avoid them like the plague. Why? If we like the site, we can 'donate' for free by visiting a few sponsors. We can be "adsense patrons" of any site we like, and it doesn't cost us a dime.

NOTE: I am not asking you to click on my ads. I am only proposing, for discussion, that instead of parsing out ads, we should make an effort to look for them on sites we enjoy. Hypothetical argument, please don't throw me out of adsense. I couldn't live without that $.03 a day ($.04 on a good day).

* Wikipedia figures assume 1 million visits per day, 5 page views per visit, and $12,500 a day in donations. Stats from alexa.com, wikipedia.org, and metricsmarket.com.

Million Dollar Ideas - A new series

I have decided to start a new series on this site that I am calling Million Dollar Ideas. This series is going to highlight a number of ideas which people turned into businesses or patents which then grossed about a million dollars or more.

Premises from which I will be working:

• You get money in this world by creating value. The more value you create, the more money you make. Therefore, these ideas all created at least $1 Million in value for other people.
  
• You often get money in this world by solving problems (another way of saying almost the same thing). Therefore, many of these ideas solved large problems resulting in at least a $1 Million increase in value for other people.
• You get money in this world by turning ideas into reality. All successful businesses were once ideas, all patents were once ideas, all music started as an idea. Many of us have $1 Million ideas but fail to act on them. The idea is a necessary but not a sufficient condition. You've got to implement the idea for it to actually be worth something.

Why am I writing this series? I wish I could say it was altruistic, but I am doing it mostly for my own benefit. I want to analyze ideas that have been successfully turned into $1 Million or more. Because I'm going to follow in these people's footsteps eventually, and studying what they did will likely yield some nuggets of wisdom which will help me turn a few of my ideas into $1.43 Million (read about the goal, and the plan). Slaving and saving away won't get me there in the timeframe I want to get there (though it works for people following David Bach's approach) so the only means I have left is to turn some of my ideas into $1.43 million realities.

Beyond just studying what these people have done, I am writing these posts for two more reasons. The first is again self-centered; writing about a topic forces me to clarify my thinking and to perform more stringent analysis. Secondly, I think that what I learn will also be valuable to others. The upshot is that I understand more and hopefully create some interesting content to read.

If you run across any Million Dollar Ideas you would like me to include in the series, just leave a comment below to let me know.

Update: I cover the structure of these posts here.

Million Dollar Idea #1 - Pixels for Sale.

---warning, self analysis and planning below ---

I won't be sharing many of my ideas in public just yet, unless I am looking for a partner (like in this post, sadly nobody has responded yet). I keep a journal of ideas I have. Most of them are ideas for products or businesses that I would like to see started. I notice a problem that I think could be solved profitably a 3 or 4 times a week. Of those, I'd say I 2 or 3 ideas are good enough and stay with me long enough make the journal every month. Of the ideas in the journal, I have acted on 4 of them and made preliminary inroads to act on 2 others.

Saying I have 16 ideas a month, 2 of which are good enough to write down - that gives 24 potential ideas a year. I make preliminary inroads on maybe 3 or 4 of those a year, and follow through to complete and establish 1 or 2 of those ideas. Thus far, however, the majority of this work was done during my days at University and therefore I have no profitable businesses to show for it, but there are a number of ongoing organizations from my days at school.

On average, 1 in 10 businesses fails. Now that I'm out in the real world, if I can put 1 or 2 ideas into action each year - call it an average of 1.5. And I make the 10% success bogey, then it will take 10 $1 million ideas for me to read my goal of $1.43 Million at age thirty. (1.5 * 7 *.1 = 1.05 successful ideas). But, given my current rate of idea success and these assumptions, to get that 1 success is going to require 1,344 sparks of thought (at 16 per month).

This Week's Carnivals

It's now Wednesday, and that means that the blog carnivals I watch and contribute to have now all posted.

Monday's Carnivals:

• Carnival of Investing #1 - includes my post on getting a Free Investing Education
  
• Carnival of Personal Finance #27 - includes my post on Using Real (inflation adjusted) Terms
  
• Carnival of Debt Reduction #14 - doesn't include a post of mine.
  
• Carnival of The Capitalists - doesn't include a post of mine, just an announcement of the Carnival of Investing.
  
• Bonfire of the Vanities #129 - includes a post of mine but I won't directly admit to that.
  

Tuesday's Carnivals:

• Festival of Frugality # 2 - includes my post on Getting Free Books
  

Wednesday's Carnivals:

• Carnival of the Vanities #170 - includes my post on getting a Free Investing Education, which I am quite proud of.

Thanks to: Political Calculations, MightyBargainHunter, Coyote Blog, You Need A Budget, Ravenwood, and Red Guy in a Blue State for hosting this weeks carnivals.