Imocia

2 Little Quizes on How To Be A Cold-blooded Investor!

2012-01-14T06:18:00.000-08:00

It’s been ages since my last blog! I have been reading and researching a lot of psychology and finance papers, thus i want to share some of my thoughts on them.

We, human, have been claiming to be a rational being. We tend to think that we have calculated every risk and return before taking any decision (financially of course!). In fact, we are trap in those thoughts and act irrational instead. How so? You are to pick two (A or B) gambling choices.

A: If head, you would receive $100. If tail, you would pay $50.

B: Forfeit the gamble and receive $20

A: If head, you would receive $50. If tail, you would pay $100.

B: forfeit the gamble and pay $20.

Believe me, there are quite a few researcher that have used this experiment and they have consistently found remarkable insight out of it. Most of people would pick B for the first quiz and A for the second quiz.

Disposition theory by Daniel Kahneman is the answer! People tend to take safer choice when faced with a “sure-win” choice (#1: B) regardless how big the profit. In contrast, people tend to gamble when faced with a “sure-lose” choice (#2: B).

Let me give you time to swallow the bitter pill and after that allow me to humbly congratulate you on becoming a cold-blooded investor. Proficiat!

P.S: It would help if someone can give me the mathematics explanation on both quizes :D

Get Richer with Personal Money Cycle

2009-10-11T21:14:00.000-07:00

The common understanding of the terminology "rich" is an abundance of valuable resources or material possessions. This definition is taken from Wikipedia.

Today I want to emphasize the more thorough understanding of rich in the financial world.

The word "rich" is supposed to mean one that has financially secured throughout his/her life. But, how can it be achieved? Simply understand the Personal Money Cycle and you are good to go!

Personal Utilites
This is the first station where your money would go once you acquire your pay. This station consists of food, gas, and utility bills.

Financial Utilities
This is the second station that consists of your financial liabilities, such as loan interest, car installment, home installment, and many more.

If your money journey ends here, then you are called a Mr./Ms. Right Now. Why so? It is because you are only aware of what you want and need for the time being. If you feel like you're one of these people, keep on reading this post!

Insurance
This is the third station. If you are here, then you have thought of surviving. Good for you! This station consists of life, car, home, and business insurances.

Saving
This is the fourth Station. Old folks understand the philosophy of saving. Should we honor the old folks? We should. There is a general rule that says that we have to save 10-30% of our earnings.

If your money journey ends here, then congratulation because you are now entitled as Mr./Mrs. Right Dad/Mom. This is the track how to be as successful as your mom or dad. This is how your mom and dad made their life in their time. But that is not enough! Today is different from our mom and dad's time back then.

Investment
If you still have some left, this is where your money should go next. Nowadays, investment products are highly accessible. There are bonds, time saving, stocks, foreign currencies, property, commodities, futures, indexes, and many more. Every products have their own risks and gains. I will emphasize each of them later.

If you fulfill all stations, then you are what mother and father in law is looking for. You are the Mr./Mrs. Right One. Be proud of yourself because you are on the right track to become the next rich men/women.

Pros and Cons of Working on Campus

2009-10-04T23:08:00.000-07:00

Have you ever given thoughts of working for your own school? Working in campus does not mean, that you are financially distressed (read: desperate). Inversely, your own school acknowledge your skills.

For those who think that your pocket money needs some upgrade, here are my thoughts.

Flexible working time
Note that some companies (and positions) do not tolerate a flexible working hour. However, on campus, working is not our main priority. It is one way of spending our free time on campus. This way, it is not a secret that working in campus is the ultimate (in some way lol) job.

Resume
For those who want to get a job right after graduation, good resume is a must. Working on campus, say as a research assistant or a teaching assistant, is a plus for your future employer, especially in a consultant company, a research institute, or an educational institute.

Decent Pay
Do you not want to get paid by the institution where you have spent your money for your education? In addition, you can buy a new laptop, an ipod, or even a gadget that can utilize your study (what a noble purpose). For instance, as a teaching assistant, I received about IDR 100,000-150,000 (USD 10-15) for one lecture. If you think that it is underpaid, please consider it as an investment for a better CV and thoroughly a better future.

Social Networking
Do you think that being a professor's buddy is lame? No, it's not. It is a huge investment. When you have problems with an assignment, who will you ask? A computer geek, a basketball star, a hot chick, or a cute guy? (pardon me for the scapegoat).

I hope this post sheds a light on you guys. Thank you.

4 Quick Examples of Making and Selling Small Things

2009-09-20T08:45:00.000-07:00

Remember my previous post on “5 Things To Earn Money Young?” I did mention on making things and selling them. Here are 4 things that came into my mind recently.

1. Musical Skills

Our parents definitely encourage their children to play some musical instruments as young as possible. We may think that this idea is a bit pushy and we hate it, but after we think about it, it is not a bad idea. Therefore, believe me these skills are not only ‘healthy’ for our brain development but also ‘healthy’ for our pocket. For what reason I say that? The reason is because all parents want the best for their children. Because the demands for music lessons are never bearish, we could sacrifice thirty or sixty minutes of our free time to teach music.

2. Recycle

Go green campaign is a virtuous movement for both the earth and the piggy bank. How so? From now on collect all your receipts, toll tickets, and unused cellphone vouchers and trade them to a local recycle center for a small change. For a bigger amount of money, exchange your empty paint cans or plastic bottles. How cool is that doing good deeds for our beloved earth and our beloved piggy bank.

3. Handicraft

Internet is the paradise for clueless people. Do not be ashamed of yourself if you have no skills in art or whatsoever. Try google or youtube, for instance, and insert some keyword that starts with "tutorial", "how-to", or "guide" about all the things you want to know.

4. Sportmanship

For those who are children of a hardwood, an iron grid, or maybe a green grass, be happy! Because sportsmanship requires persistence and perseverance that can affect your attitude not only on the field but in the marketplace as well. You can be both sport stars and financial stars. How so? Be a trainer, coach, consultant, or maybe a masseuse. The word fun and profitable can be a quite combination, can't they?

5 Things to Earn Income Young

2009-09-17T20:56:00.000-07:00

Let me ask you, how old are your parents when they bought their first homes? how old are they when they have you? And here comes the ultimate question, how did they earn that much money at that time?

Well, we don't have that much time to mingle with the problem any longer, because we are going to give out some pointer on how to generate cash from now. Earning money can be anytime and anywhere if you understand the know-how. This blog point out five know-hows. By reading this blog, you have already pass the first know-how. Congratulation! Here are they:

1. Broaden your knowledge on opportunities and strength. (DONE :D)

2. Work on your school. (e.g. librarian, administration staff, assistant researcher, waiter)

3. Make something and sell them. (e.g. music, painting, writing, handicraft, food)

4. Become guinea pig. (well, you gotta know some reliable source for this one)

5. Do online review or survey (awsurveys, payperview, and many more)

Detail on each know-how will be specifically written on other occasion. Thank you.

Financial Analysis Newbie Guide

2009-09-17T04:51:00.000-07:00

I have been learning the art of analyzing financial statement for almost four years now and finally come up with an easy trick. For a starter, let's check on this Du Pont Ratio on Return on Investment (ROI).

The ratio consists of three main part, which are the operational indicator, investment indicator, and leverage indicator respectively. The operational indicator highlights the effectiveness of company's sales strategy. The investment indicator focuses on the company's asset productivity and the last one emphasizes its debt advantages to leverage the performance.

After we calculate the three indicators, we can compare it horizontally among the industry's performance and market leader's indicators. The significant differences will be our signal for thorough measurement in the accordance ratio.

Now you can find me in Scribd

2009-09-17T04:11:00.000-07:00

You can see and download my university works on scribd now!

Final English Presentation : Scribd Download

International Finance Paper : Scribd Download