Kiyosaki: Recession is near, buy silver.

Yesterday, thanks to Yahoo!, I read Kiyosaki`s article “Staying High and Dry in a Recession.”
He is sometimes criticized for being too simple and repetitive but I really enjoy his views on money making.
If you work for somebody, you`ll never get really rich. For 90 % of people it is correct unless you are someone who`s been working for Microsoft for 25 years or so. You have to generate positive cash flow in a different way. Setting up own business, investments or property should help you more.

Kiyosaki has favoured real estate for many years. I must admit I`m never enthusiastic about the idea of putting all eggs in one basket what he tends to support too often.

However, this time I agree with him.
Federal Reserve is in a trap. If they lower interest rates, the dollar will collapse finally.
If they make them higher to save $, stock exchange and economy might crash.

A difficult situation, really. He suggests you should get rid of dollars and invest in other assets like silver. Gold seems more risky because the current price looks quite high too him.
I like his idea because I started buying silver coins in August. So I`ve got a pal at least.

How to invest profitably?

I always try to estimate profit/risk ratio before any investment. If it`s 3:1 or better 5:1, I never hesitate to go hunting.
If you think there`s nuclear physics behind it, you`re wrong. I guess the best way would be to present it in a real transaction I made.
In September and October I bought eight silver coins Haczow 20 zl.



I paid $37, 40 (95 PLN) for each one. That was at their issue price because I got them from the Polish State Mint.

As you could painfully experience in any gas station, commodities are really hot now. People try to run away from US dollars and search for some better shelter. Silver and gold coins are one of the possibilities.

In Poland the market is soaring now. The prices really went mad.
However, I suspect if you pay $100 for some coin which cost $ 50 only six months ago, you might be hit by some correction movement.

In the case of Haczow the risk is rather small and I would be surprised should the price go below $31, 5 (80 PLN). My conclusion is that the maximum risk is $ 5, 90 (15 PLN).
I use dollars here for your convenience but in Polish currency it means psychological level of 80 PLN.

Now it`s time to multiply 15x3= 45 PLN. Then I add 95 PLN + 45 PLN = 140 PLN. Here we go.
If the price reaches 140 PLN ($55), I`ll call my investment successful.

Is it possible?

In a Polish silver coins catalogue Fischer 2008 experts predict 150 PLN ($59). They could be wrong, of course. In that case, I would have to wait longer. I don`t mind, though.
Patience is the key to success.

Microsoft : The "Halo" effect

"Halo 3" drives Microsoft ( MSFT) to the sky. Now the stock price is 9 % above yesterday`s close (around $35). The financial results were great. Most analysts look amazed with them.

Anyway, IT sector seems very good and I`ll take it. Forget banks, crude oil or real estate ! Play Halo 3 and make big bucks. Enjoy !

I`m not a good example being neither a player, nor a Vista user. The only thing I know is that Nasdaq market is the place to look for real bargains in the forthcoming Christmas shopping season.

Portfolio - update

US dollar`s collapse might make me a millionaire sooner than I expected.

Portfolio total value : 5419,15 PLN ( 1590,21 PLN + 1456,94 PLN + 2270 PLN + 102 PLN)
5419,5 PLN = ~ $2,130

Stocks 1590,21 PLN

Mutual Funds 1456,94 PLN

+ 0,217549 DWS Akcji

Silver Coins 2270 PLN

Foreign Curriences 102 PLN
+ 20 GBP

In the last five days I bought some units of 1 mutual fund ( 120 PLN) and 20 GBP.
I`m gradually building my assets. No rush.

Gas price kills me !

Today I had to go to a gas station. A yellow light in my car warned me yesterday so I couldn`t help it. I filled up my car`s tank and had to pay $65 for it. I really didn`t like it.
When I come back home I wanted to check how it was in the past.

I found a nice article in the Times. You can follow crude oil prices from 1861 till now.

Well, shall I ride a bike tomorrow ? I wouldn`t mind but it`s too cold and windy to convince myself. I will keep saying "it`s very healthy". Maybe it`ll work.

Anyway, I have to think about a smaller car.

Check this out

Amazon.com ( AMZN ) takes stock market higher

You can buy some staff from Amazon even here at my modest blog.
Unfortunately, so far I can`t tell you any successful story as a thriving affiliate, but let`s wait and see.

Today the company announced its quarter results and they were very good. The profit of $80 mln compared to only $19 mln last year looks very impressive.

The shopping season is about to begin and I hope Amazon`s profits will soar.

The biggest hit is "Harry Potter and the Deathly Hallows". 2.5 mln copies have been sold. Have you got yours ?

I am a bit too old for that but on the other hand I bet you are too young to get a copy of CD by Bruce Springsteen.

iPhone boosts financial markets

Yesterday I went to a cell phone shop. I was really amazed. There were about fifteen young people cramped in a small space. Most of them look really excited playing with different gadgets and exclaiming some phrases I didn`t understand.
Although teenagers aren`t the richest people in the world, I guess the owners make a pretty good business there.

The buzz hasn`t been left unnoticed by the Street.

Yesterday Apple Inc. ( AAPL)
announced their financial results. They look really impressive.
Analysts expected earnings around 86 c per share in the previous quarter. They equal $1.01 ( 2006 - 63c ).

Stock market isn`t a history textbook so we`re rather more interested in the future prospects.
In this case, the key word is iPhone.

image source




The company reported they had already sold 1.39 mln of them.
At a conference call Apple`s CEO Tim Cook said:
“It took us over two years to achieve a comparable number for the iPod, so we're thrilled here”
So are we :)
I think a weak dollar will help the sales even in rather poor countries.
What`s more the best IT shopping season is just coming now.

The market reacted enthusiastically. In the afterhours trading Apple shares went up 6.88 % and finished at $186.35.

Here I should tell you there`s one thing that concerns me a little. P/E ratio around 44 is a bit too high. I hope Steve Jobs and his company will boost sales again and the ratio will go down substantially.

Fed official wants you sleep well

Today, Randall Kroszner, a Fed official assured everybody that they are ready to take all necessary steps to prevent any damage to American economy. NYSE bounced back on the news but I`m a bit anxious. Everytime some big fish tells me everything is alright I suspect something really fishy.

Poland more attractive for investors after elections on Sunday

According to exit polls, the main opposition party the Civic Platform won receiving about 43-44 % of votes. It`s more liberal and market oriented than the currently ruling party Law and Justice.
What`s more, two anti-market, populist, anti-European parties Self - Defense and Polish Families League were thrown out of the Parliament.
It`s all good news for me as an investor. I prefer more credible and predictable authorities in my country.
Poland remains divided into two main camps - the Civic Platform and the Law and Justice, but I like that communists didn`t come back significantly ( around 13 %) and that the free market approach has won Polish hearts and souls.

10 million millionaires

I want to become rich. Don`t you ?

For me it means the day when I wake up and I don`t have to go to work because I`ve got a cash flowing into my account to cover all my expenses. At the moment they amount to about $2,500 a month.

Currently in Poland the inflation rate equals 2.7 %. I can get 7 % from the best bank deposit here. Roughly speaking I need $ 700,000 in my account to stop worrying about keeping my job. So being rich for me now is only more or less $700,000. You might say it`s a lot. Really ?

It`s nothing special these days.

According to the article in the latest issue of BusinessWeek there are 4.6 million American households enjoying net assets worth at least $1mln.
What`s more, there are 2,300 households with $100 mln or more.
The slides show the richest nations. I wouldn`t call them surprising for me.

However, there`s one exception – China. Did you know that there are 310,000 households in China with net value at least $1 mln ? I guess we will all be learning Chinese soon. It`s good to speak to your boss in his/her mother tongue, isn`t it ?

Anyway, for the time being I have to be happy with a few banknotes in my pocket :

John Chow made me laugh today

Today I found a funny article by Michael Kwan at
John Chow`s site.
If it`s there, it means John Chow approves it at least, right ?

In short, some guys want to borrow money from you and gamble betting on sports.

They say they guarantee 15.5 % rate of return a year.

So if I give them $10,000,
after 5 years they make it $ 20,554,64 …
10 years $ 42,249.33 …
15 years $ 86,841.99 …
20 years $ 178,500.60 …
25 years $ 456,901.60 ..
30 years $ 744,153.11
35 years $ 1,550, 134.74

You can check it yourself using a calculator

Yes, you will get $ 1.5 mln giving them just $10,000. Forget your IRA or 401s pension plans. These guys are far better.

At the end of the article, the author probably realized that it`s a bit controversial product he advertises and started to criticize it slightly but I still feel really amused.

How much would you take for such a review on your blog ? I can write similar for at least $ 5,000.
I guess, not many people would ever come back here so I would need a good renumeration to cover my moral damages.

What shall I do on Black Monday ?

In 1987 I was a careless teenager. I lived in a communist country where the stock exchange was considered evil, the place where the newborn babies are eaten alive. I remember one day in October. I was watching the news on Polish state TV, when suddenly a cheerful announcer exclaimed that New York Stock Exchange dived 20 %. He insisted that it was the proof that the capitalist system would soon collapse.
Ironically, two years later Poland wasn`t a communist country anymore. On the other hand, Americans have been able to enjoy their democracy up till now.

Why am I writing this right now ?

Yesterday the stock market plummeted more than 2.5 %. Now many inexperienced investors feel scared. Mass media are full of terrifying stories about Black Monday ( video inside) anniversary, expensive crude oil or weak dollar. So the following question appears :

“ What shall I do ?”.

First of all, don`t panic. Make a plan and be consistent. Just stick to it.
It doesn`t mean you shouldn`t react when your capital starts to melt down.

The only thing you can control are your losses, not market moves.
I simply cut my loss when it hurts more than 2 % of my whole capital in a single transaction. It`s still a bit risky.
I would call myself rather a longterm investor so I need quite a big margin at a start - about 20 % of the initial value.

Therefore, had I bought a Google ( GOOG) stock yesterday at $645, I would have put my stop-loss at around $ 500. Similarly, if I had picked iphone manufacturer Apple( AAPL) at $170, I would run away no sooner than at around $140.

Next week I may be forced to sell my Polish stocks - MCI. In that case, I would wait at least one week before making another purchase. Hasty decisions in a stock market tend to be wrong.

Today is Saturday. It`s a good time to make your investment plan. It could be only for the following week now and later you can work more to expand it. Just get started.

Make money work for you.

Good luck !

Google stocks closer to $700 powered by AdSense

You can see AdSense everywhere these days. If you make some decent income using Google`s system, congratulations! I`m rather improving my ego that I work for Google ( LOL) than getting any real money.
Of course, I`m not going to moan now but I felt a bit jealous yesterday when Google announced their record breaking profits in the previous quarter.
It`s a very impressive achievement because they managed to break $1 bln in revenues in a slow summer season. The stock closed at $639.62 in regular trading and even at $643.50.
Guys who bought them for $85 a piece in August 2004 can`t complain, huh ?
So what`s the good news for you ? If you use Adsense, soon you may expect some substantial increase in revenues, too. Internet advertising is blooming. You gonna make big bucks provided your site adds some valuable content for the Web. Then you will surely enjoy more traffic and more cabbage from ads. So, let`s get to work !

Silver coins are soaring

Polish stocks had a bad day today.
However, I read some very exciting piece of information that Netmedia (a Polish e - commerce public company) took over one of Polish leading coin dealers emonety.pl. I hope bigger players are entering one of my favourite markets now. It could mean better prices and profits. Yes, profits belong to my desirable words at the moment. I need them.
I saw a new catalogue with experts` price predictions for a new year. They say Haczów will be valued 150 PLN ( ~$57). More than 50 % profit in a less than a year would be great news.

p.s People who write about iphones get extra traffic even if they have nothing to say. Yes, I have nothing to write about iPhone :)

My fast path to a financial success

I doubt whether a secret formula of achieving success fast really exists. However, there are many examples of people who sky rocketed in a nick of time. Blogger community has its own heroes like John Chow, David Rowse or Jeremy Schoemaker .

I `m sure their careers are exceptional and most bloggers just have their personal diaries read only by themselves and a small circle of friends and relatives.

Here I must admit my chances are even lower. My friends and relatives don`t speak English. I don`t reside in the USA. What`s more, I`m not a native English speaking person. I live in Poland, where taxes are high, broadband expensive and the weather tends to be simply lousy.
Now, you can ask me : “ Hey, man, why are you complaining ? If you don`t like it there, just move west, get a job as a Tesco mopman in the UK following your pals and stop moaning.” The answer is “ I `d rather stay here. Such obstacles make our life more challenging and exciting, don`t they ? “
Have you heard about a famous Polish blogger writing in English ? I haven`t.

Now, I hope you can see my point.

I started writing my two blogs simultaneously both in Polish and English only about a month ago. Yesterday I had 121 feeds from my Polish blog. I am a hopeless IT dumb. I don`t know the difference between HTML and NFL so for me it`s something.

So far I am very satisfied. I have been able to write at least one post day by day for 30 days in a row. I hope they have some content, too. This is what I needed. Discipline. I need a lot of discipline while investing. Blogging really helps a lot. In September I got rid of my credit card debt and it was one of impulses to motivate myself to avoid going red again. It works.
I started to apply theory in my personal investments. If I could sell every page I`ve read about economy and investments for just 10 cents, now I would be another mogul. If I am so smart, why I still drive a cheap car and live in a condo ? Fortunately, I started asking such questions myself. It`s high time.

My English blog has been a bit of disaster so far. I didn`t care much about its layout, neither about any proofreading. The traffic here could be compared to that in the Sahara Desert. I have to get to work.

How to repay my credit card?

Many people just don`t want to know that their credit card debts take a lot of their income. In fact, an average household in the USA has about $9,000 card debt. It doesn`t look very much but if you start to analyze it, the situation seems more serious.
An average interest rate on your card should be around 12 % a year. Not very bad. However, most of customers get different penalty fees from their banks for late payments etc. That makes a big difference.
I suggest you should face reality and just check how much in real cash you paid for say last 6 months. Isn`t it more than $500 ? If so, wouldn`t be nice to have that funds in your pocket to buy some nice Christmas gifts ? The shopping season is almost coming !
You can ask now: “What shall I do ? “
My answer is : "read this great article now and tomorrow will be a nice day to start your better part of life.

How to make a million dollars ?

In most cases, people simply start with two million bucks, but I`m not going to tell you any funny stuff now.
Let`s start with some easy strategies :

1. Win a lotto game – in this case probability is very low and the only thing you can do to improve your chances is just to buy more tickets.
2. Marry a rich person – this strategy has been very popular for thousands of years, especially among some pretty females
3. Inherit –upper classes usually apply it willingly and in many cases their young generations tend to lose a lot of that kind of wealth
4. Get some insurance – many people insure different things and sometimes they receive enormous amounts of cash, but it often takes years and in extreme cases you might go to jail.
Personally, I tried only the first one and , as you can see on the left in my current portfolio, I wasn`t much successful.

Now it`s time to think of more sophisticated ways to make a million.
Personally, I believe the best way to become really rich is to start a business, improve it and finally sell it after IPO.
However, at this moment I can`t imagine myself doing it so I turned to a different strategy. Every week I`ll try to invest even tiny amounts of money. I don`t want to become an obsessed person driving from one mall to another and looking for a carton of milk which is 5 cents cheaper, but simply put aside some funds.
I believe in the power of the compound interest. Now my principal equals $2,000. If I just save $5 a day, I will make about $ 130,000 after 20 years on average 10 % profit basis. Why is the compound interest so powerful ? If I am lucky and make it 24 %, I will get that million. Of course, depositing funds in the bank is out of question. Banks aren`t institutions designed to save money. They only protect us from the inflation rate.
The most important things for me now are to be consistent and NEVER to touch my funds until reaching my goal. Now, it`s easy at the level of $ 2,000, but later it will become more and more difficult. I know.
This blog should help me to keep accurate records and stay focused on my investments.
I wonder if there are any more readers on the same path ? If you have any ideas and tips, go ahead.

Portfolio- update

Currently, I`m focused on three main investment activities. I systematically buy Polish stocks, Polish mutual funds and Polish silver coins. A bit too many Polish things, huh? Well, for the time being I will stick to them until the portfolio expands to a more reasonable size and then I may purchase something abroad.
Now here is the question how an English speaking reader could benefit from this stuff here ? I`m not sure exactly, but if you`re into silver coins, I can tell you there is a real raging bull market in Poland. Just have a glance at these last auction prices
(In Poland allegro auctions are much more popular than ebay)

I`m not a big fish, neither any coin expert. Therefore, I decided to buy mainly directly from the Polish State Bank at their issue price. Among my coins there are eight of these :


And three of those:


Should I lose any money in this market, I will still enjoy them. They look much nicer than just a plain bank statement.


Portfolio total value 5163,65 PLN ( $1,970):

Stocks 1629,54 PLN :

2x MW20 = 775,84 PLN + 31 MCI x 26,81 PLN = 831,11 PLN + cash 22,59 PLN

Mutual Funds 1263,61 PLN

Silver coins 2270 PLN

Updated 13.10.07

New layout

I`m sorry that I haven`t written anything for a couple of days but I`ve been really busy with my Polish blog. Now I`ll try to improve this modest blog.
I hope you enjoy the layout much better. Now it`s high time I made some updates and improvements here.

$54,000 to win ! Just write !

You can win nice prizes at this blog.
During next seven days you may get some nice gadgets and cash. Here is the full list.
You just have to participate so finally I think there are some moments when it`s fun to be a blogger :)
Just remember it finishes on 9th October.
Good luck and have fun !