American Express Black Card

The American Express Black Card is supposedly an example of a self-fulfilling urban legend.

The story goes that it originally was a legend that American Express had a secret, exclusive card for rich people. They fielded so many inquiries that they decided to create one.

Now, whether or not that story is true, the fact remains that they do offer a Black Card, but do not talk much about it.

You cannot apply for a Black Card - you must be invited. It is known that one of the criteria is that you must have charged at least $250,000 on an AmEx card in the last year.

The Black Card has no limits, and there are stories that people have charged Bentleys and even a private jet to the card.

Daniel Craig uses one when he arrives at an exclusive resort in "Casino Royal". A lot of rap singers have mentioned it.

The Wikepedia entry for Black Card has some good stories.

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What's Holding you Back?

Rich Schefren, the marketing guru's guru, asked people to post on his blog about what is holding them back from building their on-line business?

Some background: he just showed some interesting free video in which he talked about how, at the start, a company is just one person and so should focus on building revenue and cash flow.

Once the business reaches a certain stage of momentum, the owner needs to switch his focus from running the business to growing the business. He needs employees, projects (one time tasks) and systems (recurring tasks) in place to take the burden off him.

Anyway, after this video, he asked people to comment. The comments are really interesting. They show that people are going from one guru to another, buying books and courses but, when it comes to execution, they are overwhelmed, can't pull the trigger, and/or lost technically.

Even though everyone says you don't need to be a programmer to build websites, etc., there is still a lot of little technical things that you take for granted once you have been online for a while.

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Video Game Sweat Shops

Wow! I just read this article from the New York Times.

This is an amazing example about the creativity that opportunistic capitalism can unleash - we ain't in the 20th century anymore.

"Worlds of Warcraft" is a popular on-line, multi-player "Dungeons and Dragons"-type game. It seems that Western gamers are impatient to build high-level characters, and the Chinese have figured out a way to exploit this.

They now have "Gold Farms", where young Chinese make a living by "playing" Warcraft 12-hours a day. They kill monsters, get gold, magic items, and experience. The companies pressure them with quotas.

Then, through ads, the companies sell gold and experienced characters to gamers in the West.

This is outsourcing meets Dungeons and Dragons ;-0

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Ratio Alternatives to Constant Value Investing

Rebalancing stocks or funds to ratios is an alternative idea to constant value investing.

The only thing is that, instead of considering your cash as a single pool, you have to track your cash separately for each of your positions.

Constant Ratio Investing: Rebalance the stock or fund periodically to a constant ratio (i.e 65%).

Variable Ratio Investing: Rebalance the stock to a different ratio, depending on the stock's performance. Since we want to buy low / sell high, we balance to a higher percentage as the stock goes down.

So, instead of 65%, we can use a formula like 1 - 0.5 *(price/high) to get the percentage.

Here, "price" is the current price while "high" is the highest price seen so far. When you start trading a stock, high = price. Whenever the price makes a new high, high changes.

1 - 0.5 * (price/high) will make you 50% invested at the highest price, while you would reach 100% when the stock reached 0.

For example, let us say you buy a stock at 5. Now price = 5 and high = 5.
Then, the stock goes to 2. the formula now says you should own 1 - 0.5 * (2/5), which equals 80%.

So, at a price of 2, you want to be 80% invested in the stock.

You may want to use the formula 1.5 - (price/high) instead, especially for a fund.

This would still have you 50% invested at the high price, but it would reach 150% at price 0, which means that it would have you 100% invested when the stock dropped 50%.

Yet another option is to use (high - price) / (high - low), where the high and low are chosen based on technical or historical price points. This way, you would be completely sold out at the historical high, completely in at the historical low, and partially invested at in-between prices.

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How Much Money From PayPerPost

So far, I have made about $700 from PayPerPost, the blog marketing company that pays bloggers to post about their advertisers, and have another $200 or so pending, which will be paid after 30 days. My start-up and monthly expenses? $0 with Blogger.

I can't stress how powerful this is when you are getting started in internet marketing / blogging, because a lot of newbies spend money on websites, marketing courses, etc. and then don't make much. Their business is in the red, and they are discouraged.

Last week, I was attending a free "infomercial" seminar, and an older man on there said how he was talked into paying $20/month for an autoresponder, and ddn't even know what they did.

I went through all this offline 14 years ago, when I bought the get rich quick and direct marketing courses. I bought into a turn-key business to resell books, and I lost about $2,000.

This time, I wanted to go slowly - my mantra was "micro business" - be small but profitable and build.

So, that is what I have done, I created free Blogger blogs, wrote articles, and monetized them with Adsense and paid posts. While doing this, I have been taking advantage of all the free "infomerical" newletters, ebooks, and videos by the gurus.

Now, I'm taking the money I earned from PayPerPost and spending it on education, and buying lower priced ebooks and videos. I also want to take my payperpost earnings and use the money towards building/buying websites that can pay a passive income.

I think this can be a powerful strategy. So many newbies fail on-line because they spend their own money trying to build passive income websites. I found a way that, while not passive, allowed me to make money online with $0 start-up costs.

Now, I can try and convert this money into a passive income stream.

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Review of "The Rich Jerk"

I chose the "Rich Jerk" book because I read a good review on it, and saw that, since it's been out a while, the price went from $197 to $49.95, and now down to $9.95. I felt that I could justify this price.

I went to the website, read the marketing materials, and some of the stuff in the free forum, and I was laughing so hard! This "guy" is really wickedly funny and sarcastic.

I went ahead and bought the book. I also took the upsell, which is the deluxe collection of 60 mp3's that are a companion to the book.

I loved the book and mp3's!

"The Rich Jerk" is short and simple, with no fluff! It is packed with information - including affiliate sales, pay per click, SEO, creating info products, and even buying wholesale and selling on Ebay.

I also got an offer for a free affiliate website, lifetime updates to the book, plus lifetime access to the member's only forum.

The basic theme of the Rich Jerk is to think outside the box.

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Cool Definition of Simplicity

Simplicity — the art of maximizing the amount of work not done

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Improve Through Life-Long Learning

I just read a Chicago Tribune Magazine feature story on jazz pianist Ramsey Lewis.

What struck me from the article was that Lewis was taking lessons from a lady at the Chicago Synphony Orchestra. Then, he was working 1-6 hours a day on incorporating her techniques into his music.

Now, this is a 71 year old man who has been playing music for more than 65 years, who has 3 Grammy awards, and produced 80 albums (7 of which have gone gold).

Yet, he still feels the need to take lessons, study, and practice hard. He still has the need and desire to improve his craft.

Do you have this dedication to improving yourself, or your business? Do you devote time to continuing education? If not, the leader in your field probably does.

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Business Lessons From Goldman Sachs

Forbes Magazine had an article on Goldman Sachs in their January 29, 2007 edition.

If you haven't heard, Goldman earned $9.5 billion in net income in 2006, and paid a whopping $16.5 billion in bonuses to its employees!

Their success can provide lessons to us:

1. Leverage your strengths to feed off each other. Goldman operates in three areas: trading (68% of profits), asset management (17%), and investment banking (15%).

Even though trading provides the bulk of their profits, the company values all the parts. They believe that meshing them forms a "perpetual money machine", which is the key to growth.

For example, they might help set up a business, invest in it with the money they manage for others(as well as their own trading funds), and snag the business's CEO as a private banking client.

2. "Long-term Greedy" - Goldman is always looking to form long-term relationships, which may payoff years down the road. For example, Like a university, Goldman keeps in touch with its alumni, and gets them to be ambassadors for the company.

For example, when Goldman was interested in growing their business in China, they worked with John Thorton, their retired co-president who was now teaching at a university in Beijing. He is now on the board of ICBC bank. Goldman ended up taking a 6% stake in the bank and taking it public on the Shangai and Hong Kong exchanges.

Other famous Alumni include: the White House Chief of Staff (Josua Bolten), the Governor of New Jersey (Jon Corzine), Governor of Banca d'Italia (Mario Draghi), Jim "Mad Money" Cramer, Sears' Edward Lampert, and the current Secretary of the Treasury (Henry Paulson), as well as Clinton's Treasury Secretary (Robert Rubin).

3. Live on the Edge - Goldman's biggest margins are made with exotic new financial techniques and instruments. They have invested heavily in technology and "brainiacs". The company employs compliance lawyers to keep its people well-informed about the legal edge, so that they will not shy away from pushing the boundry.

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A Minimal Hemingway Story

I wrote about Hemingway and Ruthless Simplicity last month.

Today, I found a site with his short story "Cat in the Rain".

You can read it for free.

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IKEA's Success

I read this "compliment" about IKEA.  It puts their success in perspective:

It has even been estimated that one in ten new Europeans are conceived in an IKEA bed.

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