I attended a Tea Party in Idaho Falls, ID today.  Some of the people I was with asked how this whole Tea Party thing got started.  I tried to explain about Rick Santelli’s speach on the Chicago Board of Exchange floor.  I thought it would be better if I just showed them.  So here it is.  Enjoy

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I’m not sure what this is… or even what these people are doing, however I thought this is a good firework tribute for the 4th of July, and the greatest country in the world.  Ironically, I’m almost 100% sure this isn’t even in the USA.

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For almost 5 years I spent my career at a large Financial firm with one of it’s main offices here in Salt Lake City. I watched people make and lose millions on a regular basis. There were times that a chimpanzee with a dartboard, could make money investing. There were other times where the fabled King Midas himself couldn’t have made a dime in the market.
I remember one particular day in October of 2008. I had to step out of the office for a few hours to attend my Grandmother’s retirement party. It was good to get out of the office. For the second time in a week the Dow Jones Industrial average was on it’s way to dropping more than 700 points in one day. The entire floor was in a state of shock. At one point I remember one of my co-workers just laughing, uncontrollably, he couldn’t believe this was really happening.
As I walked from my office to the retirement party, my thoughts turned to my Grandmother. She had worked hard her entire life. Each paycheck she dutifully put money away into her companies retirement plan, just as everyone told her to, with the hopes that someday she would be lucky enough have adequate money put away to retire. However because she chose to retire in October, instead of July, there was a possibility she wouldn’t be able to. Isn’t there more to building your financial life than luck?

Should your financial future be based simply on the whims of the market?

I’ve been asked countless times, “What should we do in times like this?” I’m a firm opponent of blanket advice for the masses. I believe that everyone’s situation differs, so should the advice. That being said I believe there are a few things that everyone can do to continue to prosper no matter the economic condition. The key is to shift your thinking completely from they way most people are used to investing.

Take Responsibility of Your Investments

If your portfolio fails, you must take responsibility for that. Stop believing that Fund Managers, or the financial professionals worry about your money as much as you do. At my former firm, I used to ask my clients if they were “autopilot investors.” Meaning they knew nothing about the market, had no desire to learn about the market and wanted someone else do investing for them. If you don’t care enough to manage the growth your money, then you shouldn’t care when you lose money. You must be engaged. Ironically as the famed mutual fund manager Peter Lynch said, “Understand what you own, and why you own it.”
Imagine some one comes up to you and offers an excellent stock tip. There is a water buffalo ranch in Nepal that you should invest in. Unless you know considerably more about Water buffalos than the average American, I would hope that before you agreed, you would at least do some considerable research on Water Buffalo Ranching in Nepal.
What are the problems that you see with this investment? Well first what do you know about Water buffalos? What do you know about Nepal? Do you know what makes one ranch succeed when another might fail? Most likely you don’t. Yet when people make some investments they do essentially the same thing.
Let’s look at a couple of common investments. First let’s look at Mutual funds for example. Do you know what companies they actually invest in? Do they invest with companies that you can morally support? Are you aware of what fees you pay, for simply participating in the fund? With stocks that you invest in, have you been educated on how to really evaluate companies for investment, or are you simply chasing a return? Do you have an exit strategy on the investment? If are investing in real estate are you familiar with the area? Do you have an expertise in real estate or have you just gotten your interest from watching house flipping shows on cable television?
Most people don’t know the answers to these questions. Yet they are more than willing to throw their money at these basic investments that everyone tells them are the way to go because they’ve been told, this is the “right way” to invest. Find out for your self if these are truly YOUR right way to invest.
One commonly over looked investment is You. It seems overly simplistic but what a great place to invest. If you’re a photographer are there additional classes or marketing that you can invest in to improve business? If you’re an insurance agent are there additional classes to take or licenses you can acquire to improve your business? If you’re a small business owner are there areas that you can put your money into that will make your business more efficiently and effectively.

Ask Questions

Make sure you ask your self the same types of questions about your self as any other investment. Do you have control over where your investment money is spent? Do you have an expertise in your space professionally? Do you know what it takes to make your self better?
I help my clients look at investing in themselves all the time. It still must be done the right way just as any other investment. It not an easy thing to do, it requires hard work, but the potential for gains unlike most investments is unlimited.
You have worked hard to earn to what you’ve achieved. Doesn’t it make sense to protect your life as well? Imagine that you could protect it so well that you didn’t worry about economic slowdowns, or even job loss.
The first way to protect your self is with a cash reserve. Build an emergency fund with easy to access cash. If you work on a salary build that emergency fund to include the equivalent of at least 6 months of your annual salary. If you’re a business owner, build it to include an entire year’s income. Imagine the freedom that this simple investment would provide. Having this emergency fund provides added confidence no matter the economic condition.
When most people think about protection they think of insurance. The problem with most insurance is that people don’t know how to use it or how it really works. Insurance is a tool. Like any tool you need to know how to use it, in order to maximize its effectiveness. Learn how it works and maximize it in your life.

Find The Best People as your Personal Board of Directors

Ronald Regan once said, “Surround your self with the best people you can find…” Bill Gates has been known for doing the same thing. It’s a simple idea, but highly effective. Develop your own board of directors.
Set up for your self a group of respected professionals that you can go to for good advice. Find people who are truly experts in their field, who share similar philosophies as you do, and can truly assist you in looking out for your interests. Keep in mind you’re going to them for advice, not to let them take control! You still need to call the shots.
There will be a cost to work with experts such as these, but the benefit of working with individuals like these far out weigh the cost of trying to slug this out on your own.
Don’t worry about my Grandmother. She’s doing well and enjoying retirement. She has a solid plan in place to provide income for her throughout retirement. My Grandmother is smart, she didn’t depend on luck. Don’t let your financial success rely on luck either.

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Last Sunday, 60 Minutes ran a story on people’s 401Ks. I think that this is worth watching. Watch this and ask yourself… “Is there a better way?

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When we find an article that we think would be useful…we’ll pass it on. If you have one you think is useful…email me at steve@endyogroup.com I’ll republish it. So keep the articles coming!!

This is an article I read several months ago. It really explains what happened to get us in this mess in the first place. It’s from Investor’s Business Daily, and titled Congress Tries to Fix What it Broke.

Congress Tries To Fix What It Broke

By INVESTOR’S BUSINESS DAILY | Posted Wednesday, September 17, 2008

Regulation: As the financial crisis spreads, denials on Capitol Hill grow more shrill. Blame an aloof President Bush, greedy Wall Street, risky capitalism — anybody but those in Congress who wrote the banking rules.

Such denials won’t hold against the angry facts banging on their doors. The only question is whether the guilty party can keep up the barricade until Election Day.

A visibly annoyed House Speaker Nancy Pelosi rejected suggestions that Democrats share blame for the meltdown. “No,” she snapped at reporters who dared ask.

Stick to our narrative, she scolded: The bursting of the housing bubble was another story of market failure and deregulation.

“The American people are not protected from the risk-taking and the greed of these financial institutions,” she said, while calling for investigations of the industry.

Only, the risk-taking was her idea — and the idea of all the other Democrats, along with a handful of Republicans, who over the past 30 years have demonized lenders as racist and passed regulation after regulation pressuring them to make more loans to unqualified borrowers in the name of diversity.

They were the ones who screamed — “REDLINING!” — and sent banks scurrying for cover in low-income neighborhoods, where they have been forced to lower long-held industry standards for judging creditworthiness to make the subprime loans.

If they don’t comply, they are threatened with stiff penalties under the Community Reinvestment Act, or CRA, a law that forces banks to make home loans to people with poor credit risks.

No fewer than four federal banking regulatory agencies are responsible for enforcing the law. They subject lenders to racial litmus tests and issue regular report cards, the industry’s dreaded “CRA rating.”

The more branches that lenders put in poor neighborhoods, and the more loans they make there, the better their rating. Those lenders with low ratings can not only be fined, but also blocked from mergers and other business transactions needed to expand.

The regulation grew to monstrous proportions during the Clinton administration, obsessed as it was with multiculturalism. Amendments to the CRA in the mid-1990s dramatically raised the amount of home loans to otherwise unqualified low-income borrowers.

The revisions also allowed for the first time the securitization of CRA-regulated loans containing subprime mortgages. The changes came as radical “housing rights” groups led by ACORN lobbied for such loans. ACORN at the time was represented by a young public-interest lawyer in Chicago by the name of Barack Obama.

HUD, in turn, pressured Fannie Mae and Freddie Mac to purchase more subprime mortgages, and Fannie and Freddie, in turn, donated to the campaigns of leading Democrats like Barney Frank and Pelosi who throttled investigations into fraud at the agencies.

Soon, investment banks such as Bear Stearns were aggressively hawking the securities as “guaranteed.” Wall Street’s pitch was that MBSs were as safe as Treasuries, but with a higher yield.

But they weren’t safe. Everyone in the subprime business — from brokers to lenders to banks to investment houses — absolved themselves of responsibility for ensuring the high-risk loans were good.

The mortgage lenders didn’t care, because they were going to sell the loans to other banks. The banks didn’t care, because they were going to repackage the loans as MBSs. The investors and traders didn’t care, because the MBSs were backed by Fannie and Freddie and their implicit government guarantees.

In other words, nobody up and down the line — from the branch office on main street to the high-rise on Wall Street — analyzed the risk of such ill-advised loans. But why should they? Everybody was just doing what the regulators in Washington wanted them to do.

So everybody won until everybody lost, including the minorities the government originally mandated the banks to serve.

The original culprits in all this were the social engineers who compelled banks to make the bad loans. The private sector has no business conducting social experiments on behalf of government. Its business is making profit. Period. So it did what it naturally does and turned the subprime social mandate into a lucrative industry.

Of course, it was a Ponzi scheme, because they weren’t allowed to play by their rules. The government changed the rules for risk.

In order to put low-income minorities into home loans, they were ordered to suspend lending standards that had served the banking industry well for centuries. No one wants to talk about it, so they just scapegoat Wall Street. Even John McCain has joined the Democrat chorus on this.

The FBI is now investigating 24 large mortgage lenders for alleged abuses. But who will investigate the pols and the lobbyists and the community agitators who made the bad decisions that ultimately forced businesses to make their bad decisions?

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There are two predominant mindsets that people have:  Abundance or Scarcity.  These can also be called “good” or “bad”, positive or negative, etc.  The scarcity mindset is permeating society and has been increased due to the current economic situation.  The scarcity mindset has existed throughout time and really accelerated during The Great Depression and has been passed along through generations ever since.

A scarcity mentality is seeing the world as limited.  There are limited resources, therefore I need to consume as much as I can before the next person can get to it.  This mentality is fueled by fear; fear of not having enough, fear of being less than, fear of failure.  Those with a scarcity mindset also live in an either/or universe.  They cannot have both.  There is always a choice between things.  The most common is that I can either be “spiritual” or have money.  I cannot have both.  The rich are not spiritual and the spiritual give up all possessions to a greater purpose.  A scarcity mindset also breeds victimhood.  Someone else is always to blame.  This then leads to feelings of entitlement.  I am entitled to certain things like government assistance, employee benefits, tax breaks, whatever.  And lastly, the culmination of all these behaviors results in greed.  Since scarcity limits us so much, we then look to quick fixes to problems.  We focus on rate of return instead of financial principle, we take advantage of others to make money or get ahead and we forget about the value of others all together.

The abundance mentality on the other hand sees limitless possibility in all things.  There is no need to consume in the face of fear.  Value creation for others is the primary focus.  Abundance exists in a “both” universe where we can have everything.  You can be spiritual and rich for example.  We take 100% responsibility for all aspects of our lives, knowing that we are the creators of our existence.  There is no entitlement.  Producing is the solution.  And a win/win outcome exists in all transactions.

Here are some action steps you can take to if you are unhappy in any area of your life and to what begin creating a more abundant mindset:

• Script out your ideal situation (career, relationship, etc.) in complete detail
• Create a specific timeline with benchmark dates to reach your goals
• Create and exit strategy (Ex. When leaving a JOB and moving on to entrepreneurship)
• Create your Personal Board of Directors
• Build your financial foundation

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In this episode Nate and Steve discuss the dangers of leaving your life in the hands of someone else.  Take control of your life.  Don’t settle for the pot-holes that life sends you along it’s road.

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This is a time when politicians, the media, people you meet on the street all seem to be saying, nothing can be done because of this economy.  All of these economic nay-sayers could not be more wrong.  Some people are getting together and proving it.  Here’s an example of one company that has done just that:

U of U Joint Venture Designed to Make Utah Home of Clean Carbon Energy

Headwaters Clean Carbon Services is the U’s first USTAR startup

February 24, 2009-The Utah Science Technology and Research Initiative (USTAR) is paying off in a big way for Utah. The University of Utah (the U of U) and Headwaters Incorporated (NYSE: HW) have entered into a joint venture to offer carbon management services to CO2-emitting companies, from carbon storage engineering to risk and liability management. While global concerns about the effects of carbon dioxide (CO2) emissions are reaching a tipping point, many experts believe CO2 storage is one of the best ways to significantly decrease CO2 emissions without adversely impacting our standard of living.

The first project for the joint venture, Headwaters Clean Carbon Services (HCCS), will be to develop and operate a regional CO2 storage site that will serve several power plants in central Utah. HCCS engineers estimate that the proposed regional CO2 storage site could permanently store as much as 1 billion tons of CO2. That’s enough storage to sequester the emissions from at least six 500-megawatt coal-fired power plants for 50 years. This project should create jobs and expand the tax base in Utah. In addition, because of its location, the state’s School and Institutional Trust Land Administration should be able to collect lease fees for CO2 storage, which will help fund Utah’s school systems.

Schematic illustrating the process of carbon capture and storage (also known as sequestration).

The concept of injecting CO2 into the earth is not new. Oil companies have been doing it successfully for 30 years to enhance the recovery of oil. Based on technical knowhow developed by engineers in HCCS, the company is ready to take liquefied CO2 from coal-fired power plants and store it at least a mile below the surface of the earth in porous rock formations lying under dense “seal” rock formations that will keep the CO2 in place forever, much like naturally occurring CO2, oil, and gas. With the nation getting half of its electricity from coal-fired power plants, this clean energy approach is a realistic way to help protect the environment while keeping energy costs down.

Headwaters Incorporated, the managing partner in the joint venture, is a strong Utah company dedicated to making more efficient use of natural resources, especially fossil fuels. The university decided to join this collaborative venture and license its technologies to Headwaters because the company has a proven track record for successfully executing large projects and has strong relationships with coal-fired power plants in the United States.

“CO2 capture and storage is a natural fit for us,” says Kirk Benson, CEO and Chairman of Headwaters. “Headwaters is doing everything possible to make the coal value chain cleaner and more efficient. We reclaim waste coal piles and ponds, we turn coal combustion products, such as fly ash, into green building products and now we are taking positive steps to solve the CO2 emission problem.”

The technology behind HCCS is a direct result of the Utah Science Technology and Research Initiative. The measure has provided funding for strategic investments at the U of U to recruit world-class researchers, and build state-of-the-art disciplinary research and development facilities and to form first-rate science, innovation, and commercialization teams. The carbon sequestration technologies were developed under the U of U’s fossil energy research team, led by USTAR faculty recruit Brian McPherson, associate professor of civil and environmental engineering.

Graduate students at the University of Utah’s Lassonde New Venture Development Center helped perform market research and developed initial business models for the carbon sequestration technology. The Lassonde Center was instrumental in identifying and bringing Headwaters into the joint venture.

The University of Utah is perfectly positioned to support high-tech startup companies. Since the establishment of its Technology Venture Development office in 2005, more than 60 companies have been launched to commercialize technologies developed at the university. For the second year in a row, the U of U has ranked 2nd in the country, behind only MIT, at starting companies from its research. University startup companies not only help move research forward through the licensing royalty revenue for the university, but they also provide jobs for the people of Utah and help strengthen the economy of the state.

“The university’s innovative culture continues to bring new technologies and ideas to enhance Utah’s economy,” said Jack Brittain, vice president for technology venture development at the University of Utah. “HCCS is exactly what the business community envisioned for USTAR. Utah ideas are being turned into Utah jobs.”

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We are currently witnessing one of the most turbulent economic times we have ever seen. This is also the time with the greatest opportunity. People are finally forced to see the myths surrounding traditional financial planning. Common ideals such as investing for the long haul, deferring money for retirement, IRA’s 401K’s are now being exposed. It is now easy to see how inefficient, and sometimes destructive, these strategies and products can be. Fortunately, we are forced to ask the question “Is there a better way to structure my personal finances”.

The answer is YES! It is time for you to become self-reliant and 100% responsible for your financial life. Stop giving your money to brokers, money managers and “retirement specialists” who are just product salesmen disguised as slick business men who pretend to care about your “personal needs”. The only way to rise above this and pave your own way is through increasing your financial IQ through education and utilizing your Human Life Value (your unique talents, abilities, passions, relationships, etc.) You are the creator of everything you have and will ever have. Not the stock market, not a fancy investment portfolio.

By creating a coordinated financial blueprint that takes into account every financial decision you will ever make, you will hedge all risk of any economy. Your financial life has to support your personal vision. We would love to tell you exactly what the answer is right here right now however there is no cookie cutter way to piece things together. What’s good for you is not necessarily good for the guy down the street. The answer is an individual, personalized strategy. By focusing on your Human Life Value as the creator of Property Value, you stand in a place of power and confidence. You are in complete control of your financial life!

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We were privileged this week to have Derek Bailey join us on Accredited Network Radio. Derek is a young and successful entrepreneur. Derek has grown up the son, and grandson of small business owners. He’s been directly associated with three Network Marketing companies. With Xango he was the youngest distributor ever to reach the “Premier” level. Most recently he’s been working with a company called MyO3World. He took time to meet with us about building a business. He also spoke to us Network Marketing, what makes it special and what it’s taken to be successful with that business model. Please feel free to contact us with any questions on today’s show.

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