Banjo Smyth

Last weekend I was lucky enough spend 4 days with Tony Robbins - what an amazing experience. I traveled up to Sydney to attend his Unleash the Power Within Seminar and it was well worth the trip. This was the first time I had seen Anthony and it was amazing to see one of the most influential educators of our time in person. There was more energy in the Sydney Entertainment Center than any rock concert I have been to. One of the best parts of the weekend was simply to be surrounded by thousands of people who have a similar mindset to me.

After coming home from Sydney I Was lucky enough to get a ticket to the AFL grand final and see my team (The Hawks) win their first premiership in nearly 20 years. 100,012 people crammed into the MCG even gave the Tony Robbins crowd a run for their money. As much as I love football I do find it kind of odd that thousands of people get more excited about 22 young men kicking a ball around the park than they do their own lives. Mmm slightly strange.

Less than two weeks to go to the marathon. Last week my knees were very sore so I have decided to keep my running to a minimum and do most of my training on the bike. The last few weeks are simply tapering so I should be fine for the big day. Sorry about the lack of Investment news but it will be coming soon I promise!

You are probably asking what does running a marathon have to do with Investment Strategies & Wealth Creation? For most people the answer would be NOTHING but for me the answer is EVERYTHING.

11 months ago I decided to fulfill a lifetime dream and complete a marathon. I have always been an active person and generally go for a couple of 4-6km jogs a week - a long way off the somewhat ridiculous figure of 42km that the marathon is. I see the marathon as the ultimate physical test, something that will push you into areas and feelings that you have never experienced before.

This is where I see the similarities to Investing and Wealth Creation. When you are beginning your journey towards financial freedom you are faced with ideas and concepts that are totally foreign to you. Dealing with the Stock Market, buying Real Estate to rent out and going into debt to create wealth are all concepts that are incredibly scary to someone that hasn’t experienced then before. Just like with the marathon these foreign ideas force you to choice one of two things. . . .

When your legs start hurting or you mind is getting confused you can either

Give up and stop running or stop learning about Investing

Or

You can keep going despite the fact that you feel completely spent, exhausted, confused and angry.

There is nothing better than going on a long run and getting to the point where you feel like you have to stop but you somehow manage to persuade yourself to keep going and finish. In that moment you have conquered the part of your brain that says “I can’t do it”. You have learnt that if you push through the pain barrier or that overwhelming feeling you get when learning about investing – you will succeed.

So after 11 months of training I am now only 4 weeks away from the Melbourne Marathon. 3 months ago I completed a half marathon (1:41:30) - 3 ½ minutes faster than my goal time. Since then I have slowly been building my long runs up and last weekend I completed a 35kn run in 3:15:00. My main goal for the marathon is to finish but I would love to do it in less than 4 hours. 4 weeks to go and I will let you know how I went.

When I tell people that I am doing a marathon they all tell me I’m completely crazy. To be honest I agree with them and that is the beauty of doing such a silly thing like running a marathon. It is such a long way to run that if I can finish it, surely I can do whatever I set my mind to?

So you want be rich but you don’t know how to get rich? Only a minor problem I’m sure you will agree – surely it can’t be that hard? First you will read Rich Dad Poor Dad then dream about getting rich quick and how you can become a millionaire whilst working from home. Next you might try some get rich quick schemes or get rich scams before you start to run out of ways to get rich. Unfortunately this will all happen before you become wealthy.

So can someone please tell me how to get rich because I’m impatient and running out of time!

Now before I bore you the secrets of how to get rich I want you to think about something. Do you ever catch yourself thinking about how everything is going to be ok when I’ve got this or everything is going to be ok when I’ve got that? Humans have a bad habit of always looking into the future rather than living in the moment.

The other day I was at the supermarket and I was making small talk with the guy at the check out. He told me how he was really happy because his shift had gone really fast and it was nearly time to go home. Nothing out of the usual but it got me thinking. We are only on this planet for such a short time that surely we should want every moment or minute or hour to last as long as possible. The idea of being glad that your day is over ‘quickly’ is a very weird concept. So what does this have to do with making easy money and becoming rich? Everything!

I am here to tell you that becoming rich is as much about your mindset as it is your wealth creation strategies. How many problems do you have today that you think would go away if you were to become rich? How many little annoyances each day would disappear if you knew how to get wealthy and were to become a millionaire? Well I have some good news and some bad news for you. . . .

The bad news is that those little annoyances will probably be there no matter how rich you are they just might take on a slightly different form. The good news is that you can get rid of those annoyances and problems before you get rich and you can start today.

The even better news is that in doing this you will learn the number one secret to getting rich. You might be saying “hold on this doesn’t make sense; I don’t want to get rid of my problems before I get rich - I want to get rich so that my problems will be deleted automatically”. Well I’m sorry but you’re wrong. Learning how to get rich is about earning money and about creating a great mind set. To be truly rich you need to be happy because I don’t know about you but I don’ think it would be fun being really rich but really unhappy and sad.

So the first thing that you need to do is realize that you already have everything within you that you will need to become rich. Your mind is a wonderful thing and you can use it to create whatever you want. The first step in becoming rich is to become happy in your self. How do you do that? Simply start appreciating what you DO have rather than what you DON”T have. I guarantee that if you can start to become happy within yourself then your financial goals will become so much easier to achieve.

So stop living in the future and start living in the present. The quicker you can do this the quicker you will be able to learn how to become rich. Who knows you might even find out that you are already rich?

Who decided that options are too risky for the everyday investor? More importantly can somebody please explain why options are too risky? After years of research I have finally come to understand that there are 3 types of people that can be held responsible for the Myth that options are too risky. Who?

1. Financial Planners
2. Stock Brokers
3. Taxi Drivers

Is it possible for the uneducated investor to lose lots of money if they trade options? Yes of course they can, first of all the uneducated investor can lose tons of money using any trading instrument and secondly options are highly leveraged so if used incorrectly then they will increase your losses. So if this is the case then why an I saying that trading stock options isn’t risky?

The first thing that you must realize about stock options is that they were actually invested to reduce or manage risk. The whole idea of buying a put option to hedge you stocks is basically another form of insurance. When looking at your portfolio risk management options buying puts to ‘insure’ your stocks is one of the most conservative investment strategies that you can implement.

On the other hand selling call options on stocks that you already own (covered calls) is another incredibly conservative stock market strategy. This strategy actually increases your downside protection, so when used correctly the myth that options are too risky is simply not true. Of course if you start writing naked calls or naked puts then your risk levels are going to seriously increase but when used correctly options are an amazing risk reduction tool.

Let’s have a look at why financial planners, Stock Brokers, and Taxi drivers are giving Options such a bad name.

Financial Planners: If you go to your financial planner and say that you would like to include options in your trading strategies then they will almost definitely tell you that it is a very bad and risky idea. Why? Simply because 99% of financial planners wouldn’t have a clue how to use them. I recently spoke to a financial advisor who admitted that her entire financial planning degree only had one chapter on options and it was completely theoretical information. In their entire course there was not one bit of practical information about how to use options. So considering that most financial planners don’t actually know what stock options are let alone how to use them is it any wonder that their typical response is negative. Remember human’s beings fear change and looking stupid.

Stock Brokers: Surely Stock brokers don’t think that options are too risky? Aren’t they meant to be professional stock market investors? Unfortunately most stock brokers are exactly that ‘STOCK’ brokers not ‘OPTION’ brokers. To become a legal options broker there are additional courses that you need to complete so most stock brokers aren’t actually allowed to give you ‘option’ advice. Put yourself in their shoes for a minute – if a client came to you and said “What do you think of buying Options” then you are faced with two choices

1. Tell them that is a great idea but unfortunately you will need to take all of your money out of our accounts and go to another broker who is legally allowed to trade options, Good Luck with your investing.
2. Or you could tell them that options are too risky and you really should just stick to managed funds and stocks.

So what answer would you choose?

Taxi Drivers: Obviously this is a little bit of a joke but the point I am trying to make is that everybody seems to think that trading stock options is too risky. It is extremely important to remember to make up your own mind about investment strategies, whatever you do don’t take advice from a taxi driver about wealth creation.

“the most expensive advice you will ever get is free from poor people”

Kurek Ashley

So are Options too risky? If used incorrectly yes but perhaps the question you should ask yourself first is ‘what are stock options’? Before you dismiss something as being too risky or scary make sure you try to understand what it actually is and how it works. There are plenty of free resources on the internet so do some research and make up your own mind about stock options. The last thing you want to do is ignore something just because that is what everybody else thinks. After all are these people achieving the results you are after or are they still driving taxis?