The Numbers Are In!!

The numbers are in and we are officially at 50.4% return for the investments that we've recommended for clients. And it's annualized 27% since I began in 2008. This is great news, I believe only one mutual fund in the country has a higher return over that time period according to Morningstar's Fund Screener tool.

Now we don't operate as a mutual fund, nor do we manage money of clients. Where we get our numbers from is with our investment consulting services. With our investment consulting services we help our clients make decisions in what stocks (bonds, mutual funds, ETFs, etc) that they may want to incorporate into their investment portfolios. They either take our advice or leave it. How we got our numbers are by using the date and price of the stocks that we've recommended it and tracked the price movements by using Updown and Google Finance. So, if you're thinking pictures or it didn't happen...

We announced last month that we are going to begin to offer stock recommendations on a monthly, quarterly, and yearly basis by subscription only. This feature to our site will come in the form of password protected pages for each time interval. We are currently working on how to fairly choose our price price point for the feature, as well as how to integrate passwords into the site. We are expecting our paid stock recommendation feature to go live on New Year's day.

Strength Behind Numbers: HP's future

When we “crowd-sourced” the idea among other investment professionals and individuals that like to do their own investing, HP(Hewlett Packard) was a fools gold kind of stock. One that had all the pieces in place but given it’s industry in commoditized printers/computers as well as its late start into the smart-phone market, it doesn’t have much upside. I beg to disagree.

What I see in HP, is a company that’s still beating Wall Street estimates even after it keeps acquisitions on the up and up. Better than that, the companies that they’ve been acquiring have yet to positively attribute anything to their bottom line (most notably Palm, all they are doing so far is sucking up R&D, administrative, and production dollars).  And they’ve still not come out with an webOS based product in the year of 2010.  Buying companies that currently increase expenses and not revenue, yet still beating estimates are a testament to their management’s efficiency, and their price’s undervalued potential.

On the upside...and I mean UPSIDE...HP announced that they will debuting tablets, cellular devices, and printers installed with webOS in 2010.  Along with their regular numbers (which already place it as one of the largest tech companies in the world),  these added features and capabilities to their product line will allow it to stand head and shoulders above others in their competitive industry.

Looking at the R&D numbers from their last three quarterly earnings reports, you can see that they are investing heavily in the development of new products.  This increase most likely deals with the Palm acquisition last year.  R&D will undoubtedly help them gear up for the new webOS releases and foray into the smartphone market.

All in all we see HP taking a small piece out of the pie that is the smartphone market. We see it’s continued dominance in the printer market. Also, we see it making quite a bit of headway in the tablet market once it releases one running webOS.  As for earnings and the fundamentals, HP has a steadily rising EPS over the last four quarters, as well as a treasure chest-esque amount of cash on the balance sheet.  Even if they fell into trouble with a flop in the smartphone arena, they still have the cash to effectively counter the effects on their future operations. At revenues of $33 billion, we don’t see that happening anytime soon. We have a price target of $70 on HP by October of 2011.

Message to the Veteran's

Hats off to everyone who has served in the armed forces. There is no possible formation of words in the English language that could tell you how much we appreciate your sacrifices to serve our country. No matter where you've served, or in what capacity you've served, we are eternally grateful.

An Undervalued Aspect in Investing

The most undervalued aspect of investing is the area that remains shrouded in gray.  Most believe that investing (and personal finance in general) is black and white. Either you invest in risky equities, or you invest in safe, bond-like securities. Either you spend as much as you make; or you hold on to every nickel and dime that you come in contact with. But what about the gray area? Or the area that you purposely shade in gray?

The gray area in investing would be asset allocation; for personal finance, the zeroed-out budgeting system. The so called “sweet spot” in either is usually identified by a financial planner (or someone of that kind of profession), or by an individual who is self-educated on what works best for their age and lifestyle mix.

In our opinion the most undervalued aspect of investing is due diligence. We harp on it time and time again, because with due diligence we have found Amazon, Apple, and Netflix to have unbelievable high returns over the last 2-2.5 years.  Through due diligence you’ll see that HP(Hewlett Packard) is poised to set the investing world on fire with it’s future earnings. Take into account it’s 2010 acquisitions and you will see the breadth of its product line is about to get more intuitive than ever before. More on that later.

Due diligence is what makes the world go around. And lucky for investors of the technology age, it’s easier now than ever to come across proprietary information. Sure the larger institution have their super-computer algorithms. But, people tend to have a way of adapting and adjusting in a way that an algorithm may not due to it’s mechanical nature. Always remember that when considering due diligence; management shifts, acquisitions, and financial statements can exploit some gray areas that computers themselves cannot take into account.

Why You Should Take Notice Of Facebook Now, and not later

News recently hit the web about Facebook setting off a chain of events that will split their stock forward 5-1and set up a $2,500 fee for any current stockholders who wish to sell their shares.

On the surface this decision looks like a simple one - meant for private eyes - and not really taken seriously by the public. What we see are indicators. . . major indicators.

1) The $2,500 fee for the transference of private company stock, as well as the 5-1 split, is meant to lower the company’s stock valuation. This decision is so that when Facebook does go public, their shares will be accessible to anyone, thus enabling their price to rise even further with the more investors that will buy and sell ownership of the company.   

2) The transference fee informs the company's CEO and other higher-ups how much the shares are worth to outsiders.  If someone is willing to pay $2,500 extra on top of of the already high valued stock, they can see that this investor expecting to make a return of at least the purchase price, plus the extra fee.  

You can see that even the smallest things can give away a large aspect of a company's internal strategy or future earning potential.  A number of articles detail news in the tech industry, but we are not a company that is biased in towards technology related stocks...we just see it as an indicator of future trends in the global economy. More on this later.

Stock Twits Gets iPhone App

The Twitter equivalent to financial news and information, Stock Twits, has recently released an iPhone app for its website. The app has the same functionality of their flagship website, which uses Twitter’s API to relay financial decisions and analysis within 140 characters to the public. It will incorporate its Chart.ly web service that was specifically designed for StockTwits. Chart.ly will allow users to see screen-casts and charts streaming from traders and their investment strategies. 

We really like StockTwits. We use it as a real-time crowd-sourced investment idea pool. If we see enough updates with the same symbol and trading transaction, we pay attention. This strategy usually leads us to discover a valuable company to put on our watch list.  

Future Advisor: A new way to assess your finances

We are constantly asked, "what makes your company different than all of the other wealth managers/investment advisors/financial planners out there?" The answer to that is simple. We don't pretend like to know everything. We try to pull in as many outside resources, theories, and ideas as possible to give our clients the most well-rounded experience in our industry.

That said, here's a tool we recently found that helps assess your retirement prospects by aggregating a few characteristics and performing an analysis. The name of the tool is Future Advisor, and from what we've heard, it's very useful and practical for anyone wanting a quick and fairly thorough analysis.

Setting goals for your financial independence

There's something we don't understand. Why people choose not set goals for themselves? Furthermore, why people don't have financial goals in place?

If it's hailed by all of the "experts", both self-proclaimed and acclaimed, that people with goals end up more successful than those without (the majority of the time)..why is it that the majority of people don't make tangible goals? To make this more personal our goal is to become profitable in three years. The goal of Cloud 9's founder is to have an annual salary of $100,000 before he turns 35. He turned 21 a few weeks ago.

Now to the meat of this post. Establishing financial goals for your future can prove extremely beneficial as well as useful. What it does for an individual is that it puts a tangible, attainable, relevant, and time sensitive  "assignment" on their time horizon. It's a constant reminder to reach for the stars, a constant alert that you are slacking, it takes the place of a nagging wife (so-to-speak). And as human beings, setting up accountability parameters is always of the utmost importance when dealing with something as urgent as financial independence.

Microsoft stock splits

 Disclaimer: We pulled this post in it's entirety from an outside source. This is not our original writing. The original article from Mashable, is linked in the title.

Microsoft’s Stock Has Split Nine Times

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Microsoft has split its stock nines times since it went public back in March 1986. Put very, very simply, a company will generally split its stock when its share price becomes too high.
Since Microsoft has had six 2-for-1 splits and three 3-for-1 splits, one original Microsoft share would now be equal to 288 shares today. Interestingly the price of Microsoft’s stock at its initial public offering was $21 a share, at the time of writing a share is now around the $23 mark. One original MSFT share would now be worth over $6,000. 

I bet you're wondering, "why would they post content that isn't theirs?" Well, we wanted to write a post about stock splits and how you can look past a company's stock and see how they've faired over history, just by using their history of stock splits. This is just a reference article.

A little trick with coupons

 A few weeks ago I was helping a family friend move in Tennessee. We were talking, and somehow got on the subject of how most people overlook coupons to save money. Then she gave me an idea that as a self-proclaimed personal finance whiz (aka I can always find a way to help someone cut costs without losing quality of living), I had never even considered.

Her idea was simple, yet genius. She told me to tell clients to buy a Sunday paper on Monday...

Easy enough, right? On Monday the $1.50 newspaper (when purchasing on Sunday) is sold for $1.00. If you do the math, purchasing two Sunday's newspapers on Monday will save you $1.00 on newspapers. And those two dollars spent could save you up to $50 in food per week. Think about it :)

What grinds my gears...

What grinds my gears is the "over-the-head" language that financial planners speak to their clients with. I feel like most of them have the same disease that the majority of college professors have...they believe that the client is there for them, not the other way around.

How wrong they are!

Clients of financial planners aren't required to employ a specific planner. The planner is there for the client, and should treat them as such. Talking over your clients' heads does make you sound smarter. Yet, it fails to accomplish the reason they are even there. Financial planners are there to teach and guide their clients. And if I remember correctly teaching and guiding requires simple explanations to complex problems. That's why if you've read this blog before, I try my best to convey certain theories and strategies in the most simplistic manner possible.

How the broker got rich: A cautionary tale

Story is a paraphrased excerpt from Ric Edelman's "the Truth about Money":

Here's the story of a broker who attracted new clients by demonstrating his ability to pick winners every time.

How did he do it? Each month, he'd mail letters to 100 prospective clients. Fifty of the prospects would receive a letter telling them to "buy" a stock; the other fifty to "sell" the same stock.

He would then take the list of picks he got correct, split them and apply the same logic from the previous paragraph. He would continue this process for four rounds(four months). Afterward, he would send a letter exclaiming his ability to go 4/4 in his previous stock picks. Attempting to persuade the list's occupants to give him money to actively manage. And they would.

Needless to say when the broker was exposed, he was banned from the securities industry. We wanted to post this story to detail some of the crafty plans people will design to "steal" your money.  If you ever hear of an investment deal that is too good to be true, perform extensive due diligence and research. Also, always take a stranger's claims with a grain of salt, no matter how credible they seem to be.

What I think about Skype...

I, the founder- Stephen Alred,  am writing this post on a whim. I see that many investors are not giving Skype much attention at the moment because of their not-so-high margins from their IPO filings. While I don't normally spotlight a company...I think I may add it into my subject matter. Mainly due to the fact people may wonder what a finance "professional" personally thinks about a specific company.

I think Skype is a great company. Not because of what they've done, or because it's the only reason that my company runs for as little required overhead as it could muster. I like it because they have a user base of 500 million plus, and they've only converted 6% to paying customers.

What I see in this, is a gold mine.

If Skype can just use a simple adsense revenue model, the most basic of basic, they could make quite a sizable amount of cash. I stay updated with tech blogs. And from what I'm reading, Skype is configuring new features that may be only accessed by premium users. With these two simple revenue sources they could significantly increase their bottom line, which would then eventually show up in the market's evaluation of their stock price. However, Skype won't do a simple adsense model, and the model that they come up with will undoubtedly bring in even more revenue.

Keep an eye on Skype, I think that they may surprise people with their five year numbers. As well as with their future financial performances.

One instance where quantiy over quality is a good thing (part one)

What's an investment strategy that seems to go over the heads of most investors? The concept that investing is more about how many shares you own, less about how much they are worth.

For example: having one share at $100/share rise $10 is all well and dandy. But, if you have 10 shares at $10/share($100 value) rising $2/share...you end up profiting more for a lot less work.

110(or 100+10) < 120 (or [10*10]+[10*2])

If you've  invested much at all you know how easy it is for the $20 gain to be negligible (mainly due to commissions on the buy and sell execution). As you raise the scaling of the amount of shares, say quadruple it, the playing field alters dramatically. Quadrupling the shares (putting each at a value of $400) would increase the marginal difference to $40. And so on and so on until you reach a scale that will effectively render the higher stock price useless.

As an investor in the market, many of you know how easy it is for a lower priced stock to jump $2; and how hard it is for a higher priced stock to jump $10. Don't worry my point is coming up.

The reason for this illustration was to show how even with an unrealistic advantage (jumping $10 while lower price only jumps $2); the scenario where lower share prices are involved generally procure more earnings, even at a lower dollar return.

(part deux coming soon)

R&D: The true metric behind investing in innovation

Many investors, especially "common" investors, overlook the most important "tell" about a company's future.

Cash is king
This "tell" is a significant increase in R&D (research and development). R&D tells a story that most financial statements cannot share. Sure, a lack of cash may signify some spending. But, an anomaly in two or more quarters may require more attention to be paid to the cash flow statement.

When looking at the cash flow statement look at what they are spending on and categorizing in the "investing" section. If they purchased a building that seems rather excessive in size, dig a little bit deeper.

Follow the Expenses
Whatever you do, do not forget to analyze 6-month (or two quarters) income statements. Here you may see major increases in "equipment" or "payroll" expenses. If the two correlate, don't be alarmed. It's probably just the company purchasing items for new staff. However, if they seem to be blown way out of proportion (exponentially increase)...dig way deeper. They could be hiring new product engineers or specialty types for a new product innovation push. Which brings us to the last point.

Investing in HR
Job boards. Career pages. If you have time, the hiring information are readily available on thousands of websites; look at the hiring of the company you wish to invest in. Two things could be the cause of hiring outside of their industry: 1) they are looking into developing new products 2) they have a lot more cash than usual. The latter reason won't show up in plain sight on financial statements (after they have hired new employees). Who a company is hiring is a major sign of what direction they are headed for the future. If a major company like HP starts posting jobs for "cellular engineers" or "wireless architects"...something is coming. 

Conclusion
Always stay aware of what's going on under the radar. If something odd is happening in a company for two consecutive quarters, always dig deeper for signs of internal innovation. R&D can be an investment in people (job boards/hiring push), extra cash (investing into producing for different market segments), or expenses (buying equipment so that new hires can produce new products for different market segments).

Inflation Hedges

The following post is a direct quote from Investopedia's article on "How to prepare for rising interest rates." We wanted to feature a post on the same topic; but found the way they fleshed-out this particular paragraph  was infinitely better than we could:

"Tangible assets like gold and other precious metals tend to do well when rates are low and inflation is high. Unfortunately, investments that hedge against inflation tend to perform poorly when interest rates begin to rise simply because rising rates curb inflation. The prices of other natural resources such as oil may also take a hit in a high-interest environment. This is bad news for those who invest directly in them. Investors should consider re-allocating at least a portion of their holdings in these instruments and investing in stocks of companies that consume them instead."

Many investors are uninformed on how trends tend to differ with something like rising interest rates, or foreign exchange values when compared to the dollar. They believe the only circumstance that affects their investment portfolio are the consumers who buy a firm's product/service.  In reality, everything affects the potential outcome of quarterly earnings.

A problem as small as the Swiss making exports more expensive could influence a company like Kraft (chocolate rates rising =Cadbury having to raise their prices= Less consumers buying Cadbury sweets= Kraft's net income suffers= shareholder value suffers). Keep an eye out on all economic news, domestic and foreign.  We live in an age where companies are providing their services on a global scale. A seemingly small glitch could severely affect their bottom line.

Extracting project management efficiency

We know we are a financial company. We know you're probably thinking, "why are they talking about project management?"

Here's our reasoning, we're all about saving anyone as much as possible, and inefficient project management is a quick way to form a drain of cash.   There are many effective project management characteristics. We going to address a few: employee satisfaction, automated systems, and optimized database management.

We have yet to master any of these. However, we believe that soon after implementing efficient project management, we will be able to optimize each of the factors. Optimization leads to significantly reducing overhead. And we love the costs saved from reducing overhead.

Employees that get tasks done in a quick, excellent, and enthusiastic manner will produce great results for all parties involved. Customers will be satisfied. And even when things go horribly wrong the right employee can make it all right with attitude, actions, and words.

The automated systems will help improve efficiencies all over your firm. These systems can help make transactions faster, and employee jobs easier. When jobs are easier, more tasks can be accomplished. When more tasks can be accomplished (as long as in great quality), more revenues can be generated. And everyone knows that when more revenues, everyone is happy.

Lastly, data management can make receipts, invoices, proposals, tax records, bookkeeping, employee retention either work for your company or against it. Choosing the right software/system for optimizing data management is of paramount importance.  It can mark the difference between losing a lawsuit and having a case thrown out, or having the IRS breathing down your neck after misreported invoices and payroll. And no one wants an IRS audit, it lowers employee moral and doesn't look good when customers see people flipping through important records.

Remember to keep up with the changes in technology. It seems like everyday that our company hears about a new firm, that has successfully exploited an untapped market and provided an excellent service to benefit entrepreneurs. And with each exploit, finds a way to make our company run more efficiently as well as with more agility.

How investors should think vs. how they do think

Investors always believe that it's a great idea to sell sliding stocks, but they never think of true implications.

When you sell investments just to save face on the principal it ends up coming back to bite you. And this is not a case where the bark is worse than the bite.

If someone were to tell you that a few houses in an upscale neighborhood were on sale for 50% off, what would you do? Assuming you had the liquid capital, you would start picking off real estate lots like sitting ducks (during hunting season)! Now that we are on the same page...why is it that when stocks are cut by 50% in a "down" market; no one buys and everyone sells? Seems a bit counter-intuitive don't you think?

Make sure you think about this the next time great stocks such as Apple or Amazon are on "sale"(the latter of which one of us made over $100 in four hours last fall after buying super low).

Google Games may be a calm before the storm

With rumors swirling about Google possibly partnering up with  online-gaming company, Zynga, stockholder value may be in jeopardy.

Every recent deal, from energy trading to mobile advertising has put Google on regulators' radars. Anti-trust investigations seem to come with every new venture that Google takes on. Both here and abroad. We think if their growth into other markets continue to be dominant, the government (or EU commission) may rule that it's gotten too big.

So what will be the straw that breaks the camel's back? Will it be another acquisition? Or, will it be Google venturing out on its own?

The answers to these questions are virtually irrelevant. How an anti-trust suit will affect stockholder portfolio, is.  If Google is ever ruled against in a suit of this caliber, stock traders will see an effect similar to when Microsoft was told to sell its assets. While, we don't see this as a problem looming over the company's head. We definitely see it as a near future possibility at the rate Google is growing.

A move into the online gaming field isn't the red flag that investors should be looking for. However, if you look at the last 18 months: you'll see ventures into energy trading, mobile advertising, travel (not to mention in-house location based services as well as operating systems), and now rumors of online gaming. We don't have holdings in Google but we wanted to write an article for those of you that do. Stay alert. Google is a great and innovative company.  However, if it is deemed anti-competitive, investors may change their minds about investing in their stock for the long haul.

The next generation of financial planners

In March, the Alpha Group was invited by Texas Tech University to speak in an open forum over the course of two days.  The Alpha Group, is a consortium made up of former financial professionals, the majority of which are ex-executives. The group was formed as sort of a round table of experts who look to research new investment and financial planning ideas. From the visit, we saw a Q&A that pretty much encompasses why Cloud 9 Financial Consulting opened its proverbial doors:

Question (TTU student): "As the next generation of planners, what should we be focusing on to serve our clients best?"

Answer (former T. Rowe Price executive): "Think about the technological world that we live in. None of this was available when we started out. When we communicated with clients, it was by phone or face-to-face. You have amazing technology so that you can work with your clients anywhere, anytime and anyplace. While your clients have access to anything and everything, our clients needed to work though us to get important financial information.

Through technology, you will find new and innovative ways to work with middle-market clients, people who really need your advice."

This is why our company was formed. We saw a large gap between how other industries leverage new innovations. and how the financial industry uses that same technology. These innovations have allowed us to provide excellent financial planning services that can reach any client, anywhere, anytime.

Earning in Real-time

For many day traders, investing information site earningsBuzz will be an invaluable asset. The most benefited group of individuals, are those whose trading trategies stem from market-timing.

The idea behind earningsBuzz is to aggregate real-time news about stocks stemming from twitter updates. You may think that this is remarkably similar to StockTwits. On the contrary, earningsBuzz makes sure that all if the updates are relevant to the task at hand. Its news aggregator only tracks news from companies with an earnings report from present day, yesterday, or tomorrow.

This will help traders realize earnings potential (or shortcomings) in real-time; and allow them to adjust their trading decisions accordingly.

The best and most underused tool for individual investors

The stop-loss. The equalizer for individuals to compete with those lightening quick super-computers a large, international brokerage firms.

In a nutshell, stop-loss trading is a sell side decision that allows the investor to dictate at what price a company's share should be sold. Once the share price hits that number, the system triggers an automatic sell of those shares.

The major benefit of putting a stop-loss on all shares is to curbs potential losses, or maintain present gains. For example: you buy a stock at $25.00 per share. If the share price dips, you create a stop-loss at $22.50 to keep your losses to a minimum (while also giving the stock a chance to return to the initial price). When the stock hits $22.50, the system immediately sells the number of shares that you indicated in your stop-loss for that holding. On the positive side, if a share jumps to $30.00 and you want to preserve your present earnings,  use a stop-loss at $28.00 per share.  This will ensure that you will get out ahead regardless of the share price's fluctuations.

Investors that use the stop loss effectively will use a stop-loss on every trade and continue to adjust it based on how a company's share is faring. If the aforementioned stock jumps to $35.00 per share, you would adjust your stop-loss from $28.00 to $32.00. The adjustment will guarantee that you will maintain your earnings of $7.00 per share from the original price of $25.00, and not allow you to only earn $3.00 ($28-$25) from your first stop-loss order.

Like everything, there is a disadvantage to stop-losses in your portfolios. The automatic trigger that is set off to sell your shares of company does not take into account market volatility.  Meaning, if you set a stop-loss at $22.50, it is very unlikely that the preferred price will be the same as the market price (you may sell at $22.00).

A lot of investors, investment advisors, and stockbrokers refuse to take advantage of stop-loss orders due to pride on the loss of initial clients' investments. If they had, the losses on the majority of their clients' portfolios could have been minimized amid the financial crises. In our investment consulting sessions, we will always ask and recommend that each client put a stop loss on all of their equity accounts.

Contrarian Logic: Why buying really low could be beneficial to you

What I love about being an investor, is that you can develop unconventional strategies that happen to work. With contrarian logic you can channel your inner Buffet and make wealth grow from seemingly daunting situations.

Contrarian
For this post we are going to explore the idea of investing in mutual funds using a slightly different metric. We are going to suggest that you look at the worst performing mutual fund in the "balanced funds" sector. This fund should have holdings in blue chip as well as tech stocks. These two types of stock will represent both, speculative and fundamental markets.

Logic
Everyone and their grandmother wants to grab the hot mutual fund. When a mutual fund is considered "hot", the influx of investment capital always pushes it into the stratosphere of earning potential. So let me ask you a question...why wouldn't  you want to buy the worst mutual fund with the most profitable stock holdings?

On one side, you enter into the investment right after the fund "pops." When a fund "pops," the value of the fund (percentage-wise) jumps by a sizable amount. That jump signifies that the fund has won the proverbial, popularity contest among casual investors. At this time expect the exponential increase in value to level off. This leveling off of earnings is where most individuals investors jump in. That is where all investors agree, jumping into a fund while it is flying high is buying high. And buying high is a major no-no for investors looking to retire with a sizable amount of income.

On the other hand, we are recommending investing before the fund pops. The contrarian way, is to invest in undervalued funds with holdings in outperforming companies.  Your return will be substantial for the lowest amount of invested capital. Even if the return isn't that high for the first few years, by following our process and selecting a fund with a manager with more than 7years experience, you'll see improvements. Our logic is that recession-tested managers will be researching to see what other (higher-performing) funds are holding, as well as the best company for future earnings. This research will show them what they are doing wrong and how they can improve upon their fund's performance. So while they may not be rolling in dough when you first invest, they will be soon enough. When you invest at the bottom for a fund with our criteria, the only place to go is up. And when they roll in dough...so do you.

The Process
The metric to follow contrarian logic begins with going to a fund screener. Once there, screen for funds that have a very poor 3-5 year performance. Among those direct your attention to the funds with the highest  10-15 year performance. Once those funds are populated, look into the holdings of each fund. If the fund holds only blue chip and technology stocks (U.S. Only) write that fund down as one of interest. Here's the last and most important step in contrarian logic: look at the tenure of the funds managers. A  manager that has been there for too long may not be willing to change with the times. Managers with little experience may either be awfully brash or incredibly unlucky. You want neither. We recommend a manger that has survived the recession? But not one that still believes that GE or P&G are the best stocks they will ever invest in.

Conclusion
That's it for contrarian logic. Keep in mind this is a theory of investing strategy, it is not proven nor is it agreed with by accreditted organizations. We have been testing it out, and will continue to  in the next few years with our personal cash (we want to make sure that we lose cash before you do). We think that this investing strategy probably has an official name somewhere; but until we find it, we are going to name it "contrarian logic."

Think about it, if you were to buy low with great stocks, what happens? Now, what do you think will happen if you diversify your  buying low by investing in a fund with over 25 great stocks? Yeah...that's what we thought.

To Maximize or Not To Maximize

Maximizing an investment portfolio is the most important thing to the majority of investors. However, Cloud 9 goes in the opposite direction. We support portfolio optimization over maximization.

Portfolio maximization is the process of making investment decisions in order to earn the highest rate of return. It generally takes risk into account, but accepts it in return for profit. Banking on the common phrase, "high risk=high reward", maximizers' ROI fluctuate in step with market volatility. Only actively managed funds come out positively when putting its first priority on making the most money.

On the other end of the spectrum, portfolio optimization, does its best to perform out of step with market volatility. The key principle behind this style of investing is to make the most profit while taking on the least amount of risk. Historically advisors that manage their clients' cash using optimization, annually earn less than maximizers. But the overall return is a different story. For example, advisors who bet strongly on the high-earning sub-prime field saw their earnings overshadowed by their recent losses. Optimizers were able to minimize their losses by only using investment vehicles that are low in risk but still maintain a moderate return. A little fluctuation is substantially better than a proverbial "tidal wave" sweeping through your portfolio every ten years; potentially wiping out all earning gained through previously outperforming the markets.

Truth of the matter is: every investment(including savings accounts) decision involves risk. Optimization only serves to lower that risk.

The reason we so adamantly support portfolio optimization is simple. Our mission claims that we want our clients' money "to work for them, not the other way around." The mission says it all...We want our clients' money to experience growth during the long-term, while always trying to minimize losses(even in down markets).  Even though Cloud 9 consultants do not manage our clients' money, we still apply portfolio optimization theory to our investment consulting services whenever applicable.

Indinero: a small businesses' Mint

Strategic budgeting has always been a sore spot for entrepreneurs. Indinero launched, on this past Thursday, with the goal to make this spot disappear.

Indinero is a solution to the complicated accounting software provided by companies like Intuit. Indinero shares the same goal as personal finance website, Mint, the company recently acquired by Intuit. The purpose of both companies are to make tracking, budgeting, and financial planning relatively easy. Indinero provides a very easy-to-use user interface that will make any small business owner satisfied.

Indinero is a Y-combinator produced start-up, founded by two computer science grads from Berkeley. These grads, Jessica Mah and Andy Su,  saw a great opportunity after noticing the problems that regular business owners have with accounting. Either the software was too expensive, too complicated, or not comprehensive enough to act as a stand-alone resource.

Indinero tracks spending by connecting bank cards with real-time information, and then graphs out the trends in spending habits. The site gives the user a great looking dashboard, as well as useful tabs (Income, Spending, and Trends). And the company has even announced a plan to add a "forecasting" feature to the menu.

We use Mint, and we believe that if the launch of Indinero is done correctly, it will greatly benefit small businesses all-over. It is slated to be a one of a kind experience. Who knows...Intuit could see the startup as a threat and decide to buy, leading it to walk in the footsteps of Indinero's predecessor for personal finance(Mint).

Wesabe gets the cold shoulder

Wesabe the website for personal finance has decided that the shoestring budget that it operated on, was not adequate enough for the customers it served.

The site after opening in 2005, was very innovative it its approach but was simply outshined by Mint. Wesabe was meant to provide secure tracking of spending for its customers.

The area where it may have made distinguishable mark is its "groups" section, which happens to be the feature they are keeping operational. It allows individuals from all walks of life, join in and ask for advice on certain topics. The community emphasis on Wesabe was definitely a focal point, and is what kept the site up for as long as it did.

There's nothing to worry about, because there are many sites that are clamoring to be the replacement of Wesabe. Such sites consist of the powerhouse HelloWallet. HelloWallet is a financial "guidance" site that operates independently of all banking institutions. It charges fees to each user, but without ads, there's no telling how will be received by the public.

Pay attention to your surroundings

In entrepreneurial life, or life in general, there are a lot of ways to become successful. You can make a lot of money, be the smartest individual in your workplace, or do a combination of anything in between. However, the common denominator to successful people is that they carefully choose the people they have close relationships with.

We've heard age-old adages such as, "if you want to be rich, befriend and study rich people." Ironically the same thing goes for success in life. Relationships that bring you down (or constantly discourage you) are going to steer the focus on success in another direction. And losing focus is the worst thing you can possibly do when on the road to success. When you lose focus...you crash.

The problem for a lot of entrepreneurs is that they tend to believe, they owe it to everyone else to  stay socially coherent.  In reality it's the other way around, they owe it to themselves to stay focused on the task at hand (whether that be to build a company or work towards financial independence). The relationships that center around a debt, are usually not the kind of relationships to continue when attempting to become successful. We've been there, done that, and even built a monument for it.  Unhealthy relationships will keep anyone's focus from the task at hand. And in doing so, prevents the ability to succeed among the fierce competition.

Our company was really built when I, Stephen Alred(founder/CEO), decided to take a full 3-months away from family and friends and work. Keeping my focus only on my company. Of course family understood what I was trying to do, but many of my closest friends didn't understand. They thought it was a waste of time and said it was "unhealthy", and rather I get out and have a great time with them. But, by surrounding myself with a lot of healthy relationships I was encouraged to build my dream, one stepping stone at a time. The reality is if I would've stuck with those that discouraged me, I would've never gotten where I am now. Not to say socializing is a bad thing, dreams just happen to come first. If you were to look at the friends who encouraged and the friends who laughed, you would see an interesting difference. Those that encouraged (great modelling career, fashion week; one of two American representatives for the Shagya breed worldwide; three have their own companies; one has a very lucrative corporate job), those that discouraged (work at a summer camp; trapped in a 9-5; can't decide on a career; unrealistic goals for the future).

Success is a very unforgiving entity. You focus, you see your dreams realized. You don't focus, you see those same dreams, dashed against the rocks. A key nominator of the focus equation is the quality of individuals you surround yourself with. Low quality people= low quality focus. High quality people=high quality focus.

Your Own Worst Enemy

We wrote this article to detail how managing your own investment portfolio can sometimes hurt more than help if not managed correctly. We’ll quickly go through some reasons why individual investors, on average, lose money when they invest themselves.

Overconfidence
Every investor believes they are above average and can, therefore out-smart the self-correcting markets.  The trait of overconfidence is usually observed in single men. Mainly, because men do not have very many financial obligations, which frees them up to take certain risks when investing to make a positive outcome. The down side is that they usually produce a negative, or neutral return after trading commissions are factored in.  

Excessive Trading
Excessive trading does nothing but rack up commissions for the brokerage/advisors that manage your trades.  Generally excessive trading result from individual investors getting a “tip” from leading analysts. What they do not realize is that millions of people received the exact same advice.  This negatively affects their trading strategy, as everyone moving at once will only serve to raise or lower market prices.

Stubbornness
Investors who are stubborn tend to not realize when they have actually lost out on potential earnings.  They tend to embody the last two attributes and are overconfident that their trade is the right one.  Not admitting when you’re wrong works in investing just like it works in real life. You lose out on beneficial opportunities by not seeing the big picture.

Conclusion
These are just a few mindsets that may get you into trouble when investing for yourself.  Taking advantage of professional advice may limit your margin of error; but it will not completely eliminate losses incurred by the attributes listed above.  

Our reference article for this post was written by David K. Randall of Forbes.com.

Using revenue to repay loans, Revenue Loans is orginal

On its website, Revenue Loan proclaims, "Revenue Loan provides funding to companies in exchange for a small percentage of future realized sales. This is Revenue Based Finance"

From the get-go we see great things for future entrepreneurs and this company. Revenue Loan has no interest (no pun intended) in taking board seats, or equity in a company. It simply settles for a percentage of the borrowers revenue until the loan is paid back plus interest.

Best thing about this arrangement...they aren't primarily concerned with the payback period.  This takes most of the pressure off of the company's owner. In turn it allows the owner to concentrate on growing revenue during the start-up phase; all while it takes a cut out of that growing revenue. Revenue Loans does, however require up to 5x the amount of the borrowed funds to be repaid. This number may seem a bit too high. But it is a fair multiplier considering the owner doesn't have to give up equity, control, or focus when borrowing.

All in all, we think this is a breath of fresh air for any interested business owners. With the exclusivity of venture capitalism, and the scarcity of banking loans...the repayment structure(revenue based financing) of Revenue Loans seems to be the answer.

Right now Revenue Loans is currently in series funding, but keep it in mind as you search for new funding sources.

Toro!! Don't dodge the bull market

Etoro got its start in 2007, and has since been called the "Zynga for men." Its goal is to make investing fun and social. The trading platform supports in commodity, currency, and index markets only.

There are two options to "socially investing" on Etoro: trading accounts and practice accounts.  A fringe benefit to having a trading account, weekly trading challenges where the winners receive reward bonuses(in cash).

Here's the kicker, Etoro offers not only in-house trading guides and tutorials on the website. It offers the ability to follow better performers, as well as ask more experienced traders for investment counsel.  The personal trading coaches (for beginners) and the personal account managers (for professionals) are also a nice touch in winning over potential users.

Etoro currently has 1.5million users, and employees spanning four different countries. There's nothing like making something as stressful and hair-pulling as investing, fun and social.

Become the banks, without all the economic meltdown "stuff"

Peer-to-peer lending is one potential investment opportunity that many financial professionals don't include in a client's portfolio. But why? Any client can lend their money at as much as 21.64% APR, where else can you get a definite 20% return on your initial investment?  There are some risks of default but it's very rare on this site considering that borrowers have to show, and update their credit scores.

The two major lending sites are Prosper and Lending Club. These two companies have taken advantage of the fact that banks have dried up most of the resources for consumers, and entrepreneurs to borrow money.  In a lot of cases, these two sites serve as a place where average consumers can borrow money at a lower interest rate to pay off other debts.  A refinance of sorts, but for consumer debt.  They each have a collections process in case an account becomes delinquent, and Lending Club even has an in-house "No-fee" IRA account option. 

For the investor, the sky is the limit with these two companies.  With both internal and external collections agencies on call, they are able to make sure that the principal is returned to the lender.  Where Prosper has claims of ROI's high as 16%, Lending Club offers risky loans as high as 20%.  Of course this wouldn't be a blog post of ours if there wasn't a way to creatively implement an investment portfolio at a no-cost basis. How would it sound if you can potential borrow at 6% from Lending Club, then turning around and lending that cash out at 20% (with only 0.7% going to processing). How does a 13.3% return sound with no cash coming out of your pockets? We can hear the cash registers ringing in your head.

As with all of our creative investment processes that we present to our clients, there is a caveat. We would not recommend going through with any kind of lending procedure without consulting a lawyer to make sure the "terms of use" are fully understood by all parties involved. Also, an accountant wouldn't hurt either. They would serve to help you realize what this could do to your taxes come 2011. You wouldn't want to make just enough cash to bump you up into the next bracket, while still having the same income.  Lastly, due diligence is always the key to your investment success. Vet all options and make sure that the lender you choose is reliable. Even with each company having a collections agency on tap, there's still a chance of delinquency

Want to learn more about creative investment opportunities? E-mail a consultant at info@cloud9-financial.com for any questions.

Leveraging A Credit Card

We recently came across an article from MyBankTracker, concerning four steps to avoid credit card debt and decided to post a small "blurb" on the subject.

At many different financial consulting/counseling companies they don't approve of debt leveraging, or using debt positively due to its enticing features.  The most notable enticing features are the ability to borrow more than you actually can pay back on a loan, and being able to spend up to your credit card limit when you have low funds in other accounts.  This is the wrong way to go about debt leveraging.

The right way to take advantage of leveraging debt, is to consider all cons along with the pros. Yes, you have pretty much free money. And if used effectively you can make that money go to work for you.  For example...say you take out a $1000 cash advance on your Bank of America credit card. Bank of America typically charges a 4% transaction fee on the principal withdrawn, and interest rates accrues daily from the time of withdrawal. If you can find investments that have a higher return than the interest rate(and the initial 4%), you will effectively be earning free money. If you pay back your advance within the allotted time period, you could possibly raise your credit score in the meantime.

In reality, investments like these don't occur very often. But when they do, we recommend sound due diligence before any investing decision is made. Above, we explained just one way to leverage the established line of credit on your cards. As long as you pay the lender back, the more creative the uses, the higher the reward.  With that statement comes a caveat: the higher the reward, the higher the risk.

Cloud 9 consultants would only recommend creating unproven leveraging techniques if you are experienced in the field of financing.

Recognizable Financial Start-ups

Today, we want to cover two fairly new start-ups that have the potential to positively impact your bank accounts.  At Cloud 9 Financial Consulting, we like to explore different options that may not be proven opportunities. Actually, the two companies that we are going to cover today were finalists in a disruptive competition (for start-ups) that happened in May. We think that they can help you in your goal of retiring, millionaires.

First up to the plate is, Plantly.  According to their website, "Plantly is a web application that creates a diversified investment plan for you." It allows even the most common Internet users create customizable solutions for your investing needs.  They start out by asking a few basic, but core foundation questions. Then proceed to finding investment vehicles that suit your answers. Plantly is originally meant for everyone and provides a sense of control even though they recommend investments by name.  Their site is currently in Beta, and is not wide-open to the public just yet.

On deck is the groundbreaking, Betterment.  Betterment, allows users a very non-confusing account, that accomplishes its goal of simplifying the investment process.  It aims to revolutionize the current model of the institutional "savings account."  To do this, the user can choose their asset allocation using a simple meter, and the back-end of the site purchases and sells securities according to your choice of allocation.  Unlike Plantly, Betterment is a FINRA certified brokerage of investment securities. Meaning, that it sells instruments (stocks, bonds, mutual funds, etc.) through its site; Plantly makes you link accounts to an external brokerage firm.  Our major con to Betterment is that users cannot personally choose what securities their portfolio consists of.  However, with the returns that Betterment are promising, we don't see it as a major problem. Betterment does its job as a substitute for your savings account.  With no hidden fees, no minimum balances, and the simplicity of its user interface, Betterment can easily blow-up into a multi-million dollar company.

We love the ideas behind both sites, and see potential for their future relevance as long as they hold true to their core values.

New Volunteer/Networking Community

So, unbeknownst to most of the world, Tech Crunch Disrupt went down last weekend. One of the events there is the hack-a-thon. The hack-a-thon brings together some of the country's best hackers to pull an all-nighter, sponsored by Red Bull.

Out of this hack-a-thon came a website, Iwannavolunteer.org. We at Cloud 9, found out about this website while looking for new hot start-ups exhibiting at TC Disrupt (gotta keep up with modern tech).
Iwannavolunteer.org was born of Patriot Media, LLC, headquartered in Avon, Connecticut. Here's their brief description,"Instantly find volunteer opportunities near you! Search today, this week, this month... Put your extra time to good use wherever you may be." The service is made for organizations, or individuals that can post localized volunteer opportunities; then volunteers log on to see what new ways they can serve their communities.

We at Cloud 9 always advocate community services and charitable giving. We believe that giving away money is just as important as saving and investing it. It helps others that aren't as privileged as we are, and it provides financial perspective about our own financial means. Check out this site, it's brand new and we support it. I Wanna Volunteer

Free credit score...numbers included

For awhile now we've heard friends, family, colleagues, coworkers, mentors, authors, singers, acto....okay you get the point.  Anyways, there's always a complaint that getting your credit report is not the same as getting your credit score. And when getting your actual score, companies hound you to sign up for their service to keep your credit score available. Well no more...

Earlier this week the Senate voted to pass the enormous financial reform and in it, an amendment that requires credit reports to include numerical credit scores.  Now you'll be able to see exactly what number that loan officer will see when you apply for a business loan.  Or the mortgage broker that chooses whether or not to refinance your house. Most importantly, you'll have an idea of how much to save before attempting to leverage equity with debt.

When applying for a loan you never really know what your actual credit score is, although you can usually "guesstimate" and get within the ball park.  Now individuals will be able to correctly assess how much cash, or liquid assets, you will need in order to match the criteria for large and small loans. Even with the advent of the credit crunch and the crackdown on passing out loans and credit cards like candy;  you can still get to the "sweet-spot" on a banks' "yes" list.

When, better stay politically correct...if the reform passes, the people serious about getting loans will simply have to look at their credit score, ask for a loan quote, and then focus on improving their personal financial statements.  When the credit score changes after 4-8 months, ask for another quote to see if you are now a more favorable "risk" to lending institutions.  We would imagine an individual could in fact shop around to other banks to see who will be the best at the age old game, "who can give me the lowest interest rate."

A new start-up referred to simply as, Bank Simple, is in the running to change the way you bank.  It wants to make the relationship between your money and the institution itself, less....web like.  Where you never really know where your money is that you deposited for completing online surveys; because it's currently being lent at a 12% premium to the return you're getting on it in the first place.  All of these shadowy ways that banks make money on consumer deposits and risk of defaults is part of the reason that our global economy is in the state it is currently in. But, Bank Simple is here to alleviate that problem with transparency and ease.

Bank Simple is unique because it motto is, "don't suck."  This alone is reason enough for me as an consumer to lend an ear to what they are attempting to accomplish.  They are shooting for a bank that doesn't charge you hidden fees, or have lengthy and unreasonable customer service policies, a bank that realizes that if it takes extreme care of it's customers, money will undoubtedly come streaming in. 

In taking care of the everyday human being, Bank Simple offers no overdaft fees, no complicated and hidden product costs. It gives you one card that allows you to pull from checking or savings, or make purchases on a credit basis.  And makes it easy for you to deposit checks by allowing you to simply take a picture of it with your phone.

Bank Simple

Real-time Collaborations

The wave is about to overwhelm the people of the world as Google Wave is opened to the public. This move marks the day that collaboration (professionally and socially) is changed forever.

When Google first debuted the wave communications platform, it was said that it would make all communications between parties more efficient. That goes without saying that two colleagues, on opposite sides of the planet, who can work on a looming project in real time will become increasingly valuable over the next few years.

Today is the day that social becomes closer than it was to being fully integrated both inside and outside of companies, no matter how big. I've used wave to play sudoku and chess with friends. And also to work on a project with a team back home, while I was on vacation in Puerto Rico. This platform is phenomenal and from what I've read about the updates...this Google labs product has gotten even better over the past 9+ months.

Youtube entering the fray

With the advent of potentially losing blockbuster to the rules of modern business, keep up with the times (or else), Youtube has recognized a possible market on in its own video viewing platform.

This market is movies for rent. From the time that Youtube started as an independent product, to now where it is owned by the tech giant Google; it has sometimes struggled to monetize it's large audience. Well that may soon change.

In January Google made a widely unnoticed move to rent 5 independent films on the Youtube website, possibly to gauge the demand from it's marketplace. If this test proved worthy enough to roll out a full-blown movie renting platform, the site could see a dramatic increase in revenue through all of its loyal followers. There are two keys to its future success: 1) Will Google be able to strike an advantageous deal with film companies to use their content on its website. 2) Will Google be able to provide a value to customers that exceeds Hulu, Redbox, Amazon, and Netflix (to just name a few).

If Youtube can offer these two keys there could be a major additions to the "black" of Google's bottom line. Keep your eyes on the lookout for more companies to start the foray into more immediate gratification type of offers. Currently Apple is the king and there are a few other companies that could be nipping on its heels in the next 2-3 years.

The success of these companies affect the end consumer more than anything else. Everyone knows that the more fierce the competition, the more the leaders have to proverbially "step their game up." If they do not then Myspace, AOL, and Blockbuster's will be happening all over the place. And when these companies do step up, the consumer gets their best effort at a valuable product. When consumers are happy, the financial statements look more appealing. When the financial statements are more appealing, investors absorb the benefits.

Since I am an investor, I welcome the advent of fierce competition in capitalist markets. In the end everyone is happy. Especially the everyday man investing in an early retirement.

Welcome to a new era

First Google, now Microsoft. This country's two power house companies are being challenged, finally.

Google:
According to Hitwise, during the week of March 8th Google was bested by a company that originally no one saw coming. Born from a night full of hacking and coding just a few years ago, Facebook posted a slim lead over Google in terms of visits to the site. This move marks the first time that a social networking site has bested the search engine giant. And it reveals that whether you like it or not social networking sites and applications are here to stay. Facebook's superiority was short lived as Google regained it's normal spot as the world's most visited site. But, if you truly think about it, that was the day when Facebook changed the world. That was the day that the culmination of being featured on smart phones, t.v. screens, video game consoles, and many music sites came to fruition. Consider the fact that when this company goes public, will you be ready? Investors generally get caught up in the semantics of established companies, in the process they miss out on the high-reward of a newly public, but established company. I think that history will be the same here so don't miss out on a chance to be apart of it. If Facebook goes public, be ready.

Microsoft:
Microsoft even as a software company has been pegged as the leader in it's market. However, it's reluctance to delve into the physical/hardware until recently (this year they are debuting Kin 1 and Kin 2 smart phones), has maybe hindered the chance it has to stay in the lead. On the heels of Microsoft is Apple. Apple is a company for the young crowd, and even though many business still stick with Microsoft operating systems, Apple's market capitalization is only $46 billion away from vying for the pole position in technology. Apple may very well complete the slaying of Goliath in the next year or so depending on the success of it's new iPhone OS 4.0 and the ubiquitous iPad.

Diversifying your portfolio is important in building and maintaining wealth, I would recommend that Apple and Facebook (if it goes public) are in the line up. I can't guarantee it...but these companies are on their way to being relevant for a very long time. Only time will tell if they stay on that path.

A different kind of insurance

History has been made...last week a sweeping health-care reform was passed. And whether you benefit (children being on parents' insurance until age 26), or lose out (business owners required to provide minimal amount of health insurance), the end goal should be to build wealth over your lifetime. When you build wealth by simply spending less than you make and saving the rest, then self-insurance isn't that far-fetched.

Self-insurance is described as a way of managing risk by minimizing insurance expenses and cash flowing "predictable" future losses. In many ways becoming self-insured is the only way to not be tricked by insurance companies. "Tricked" as meaning higher than average premiums/deductibles for differing levels of income earners. Although it is rare that anyone becomes exclusively self-insured, coupling minimum insurance policies with responsible financial management will indeed allow you save and invest more.

Insuring your self, or senior family member, will especially come in handy if you incorporate it early on in your financial planning. Incorporating early can help to afford the $10,000 a year health care for the elderly (whether nursing home or in-house nurse) and not have to go deep into debt in the process. Another way to self-insure against the cost of health-care is to save dollars in tax deferred or tax-free financial instruments. In states that don't have a state income tax, investing in short term municipal bonds. Municipal bonds will give a tax advantage while also allowing cash to grow faster than if it were in regular savings accounts. The taxes on interest is the exact same federally but with municipal bonds (in states without state income tax) you typically earn a higher rate of return than with commercial banks.

There are many other ways to plan financially for proverbial "rainy" days, here are just a couple of ideas to get your brain moving. With simple research into all of the different ways to grow your money, along with a knowledge of how these paths affect your taxes, you can create a customized savings and allocation plan that fits your family's needs.

Creativity in your planning is a must have. There are some forms of investing for the future that require outside-of-the-box thinking in order to hedge against unexpected losses.

Paradise Lost

It's only been a little while since Kraft secured the capitalization to buyout Cadbury PLC; and there are already allegations similar to those of when Bank of America merged with Merrill Lynch.

U.K. regulators are looking into comments made by Kraft executives that may have misled those that voted in approving the takeover bid. The alleged comments deal with the closing of a plant that Kraft was originally against. With all of the domestic ill will brewing during the takeover, closing the plant and displacing the jobs won't help endear Kraft to their new countrymen.

I believe that if a company says they are going to do something, they should do it. However, when a company merges with another, there may be unforeseen losses and costs, especially with an international merger. I seriously doubt that they will face severe legal repercussions, but as all companies know,corporate responsibility and public opinion go hand-in-hand.

And since the public affects their bottom line, Kraft should tread very carefully when making future decisions for Cadbury. They took on a lot of debt to finance the acquisition and it would be sad to see it turn into dead-weight over the next decade.

The Upgrade to Globalization

Google is taking steps to make the phrase “it’s a small world”, more prevalent than ever. Recent rumors indicate that the Nexus One may be subject to a ground-breaking upgrade. This upgrade will allow people speak in languages that they’ve never even heard, more or less learned. The only downside is that it may ride younger generations of studying about cultures other than their own. This upgrade will essentially translate a user's first language, to any language that he wishes. Yes, that means that if I(an english speaking person) wish to speak to someone in Finland (in Finnish) Google can make it so. Maybe not in live conversation, but the delay will certaintly beat having to refer to a Finnish dictionary for every word.

The future of collaboration is possibly at hand, people. An age where people all over the world can almost instantly know what anyone else is saying. The effects on business and education will be limitless... From a business aspect, there would no longer be the need to hire employees that speak the native language of a foreign country I wish to serve. I could call them up, and have a frank conversation explaining why Cloud 9 is the way to go. But, what happens if I end up face to face with my subordinates, or clients in China. I would need the aid of the Nexus One in order to speak Mandarin to someone standing 5ft away from me. That to me, will ruin customer relationships with my company. I believe my company should have invested the time and money to find employees that can understand my foreign clients. How arrogant would I have to be to think, that just because Google gave me an amazing gift, I can all of a sudden give a Chinese client better financial counsel than someone native to their situations. Can you imagine how hard it would be for an American to understand them not having a car in their personal balance sheet? No...because I don't understand the culture in China like a native Chinese colleague does.


Although this "upgrade" would be a great step towards globalization and the integration of cultures on a global scale; is it really helping in the long run? The time-frame for decisions could be improved, but in the end only people that have a win-win situation are the phone companies and of course, Google. Because if I have to continuously stay on my GSM capable phone...minutes will be of the essence.

A little glimpse...

Question: Separating Personal/Business Finances

My wife runs her own photography business (6+ years). It has been successful (as far as sole-proprietorship 0 employees businesses go). The problem we have is that currently personal and business finances are mixed. This makes figuring out taxes harder than need be and puts a strain on personal finances when the business needs to invest in equipment/marketing.

We've known that we've needed to get things strictly separated, but are wondering when is the best time to do so.

My question is this:
Is it better to wait until the business is back in the black during summer/fall and then separate finances (ie: open business account with line of credit), or will there be much of a difference if we do that now and just transfer the balance?


Answer:
Have you considered treating them as totally different accounts? Like make it so that there is no confusion, I would personally just act like the company is paying your wife and keep the rest completely separate.

As for as the book, a beginner's college textbook or accounting for dummies may help, you can get that from half or abe books (both online)


Question: Student loans, investing, etc, any advice appreciated!!!

I am in the medical profession and make 300K/year. I owe 270K in student loans. This is the total amount for both my wife and I. We were in a private school for 7 years each. My wife is not currently working r/t having a baby boy at home.

My question is what is the best way to pay this off?

1. Should I make minimum payments and let it drag on for 20 years seeing how the value of the dollar is falling...
2. Should I increase payments to the higher interest loans?
3. Is there a way to consolidate all of these loans at a lower fixed interest rate that I am unaware of???
4. Any and all advice appreciated.

What are you people investing in??? I can’t see myself investing in stock market and when it’s time to retire getting taxed possibly 70% on that income.

Answer: This may be asking too much, but with all of the families that live on 30k a year....is there any way you can get on a serious budget and knock out the loans in two years? It shouldn't be too hard, with 270/2(years)=$135,000 in loans per year. 300-135= $165,000 leftover gross from your job. That should be easy enough to live off of. That's the simplistic but obvious approach and you can simply adjust the timeliness of paying off the loans with your taxes. I just did the math with what you gross.



Question: Is real estate business good money making?

Does real estate business make good amount of money? I want to become super rich in the future. If not, what other business do you recommend for good money making?

Answer: I'm not sure you'll get "super rich" in real estate if you aren't completely enamored and passionate about it. But if you start now, you may make a considerable amount of money if you can stay above water until the market comes back into full swing

CFP vs. Financial Consulting

CFPs (advisors on the sell side) tend to give their clients general advice and recommendations. Even when they personalize the advice, they tend to use software that provides one-time recommendations.

As one of my colleagues says "CFP is showing the client a recipe. While what we do is give the client the recipe and show them how to cook it."

Financial consultants have the ability to pool all of their resources in order to provide the client with the best planning. That's a major distinction. Consultants also aren't promising any type of outrageous returns per year, because they focus more on the long term education. The CFPs...the short term performance. This minor difference separates one losing their clients billions and one keeping their assets safe. Where CFPs are loyal to the client, they tend to have some conflict of interest situations if they work for a discount broker. These brokers give them commission (this is where those hefty bonuses come from) for the profitable trades they make, at the time of the trade. And more times than none, commission is even higher if they use one of the broker's affiliated products. Ever wonder why right before the economic crash banks dished out the largest bonus ever? Financial planners/advisors were selling the riskiest investments in bulk and it collapsed on their heads a short time after. However, even with the hurting market they made their money.

This money that these scrupulous advisors made our now coming back around to attack them. President Obama has now endorsed a $9 billion tax bill, for banks, over the next 10 years that will severely hamper bonuses. For those of you that don't know about the bill, he wants the banks to repay the taxpayers for the TARP money that was dished out during the recession. Even banks that have paid back their part of the TARP will be on the raw end of the deal.

Moreover, the greed of some affected the outcome of all. And now all have to pay for it including the honest and responsible CFPs. Don’t get me wrong, I use CFPs and other financial advisors to refer my clients when they need more specific investment recommendations. However, that’s only because we at Cloud 9 are not authorized to give specific stocks and bonds advice to our clients. People across the world we see more financial consultants (counselors) rise up and capitalize on the public doubts of current CFPs.

What does being a Millionaire really mean?

I recently read this article,$1 Million Does It Still Mean You're Rich?, and I decided to write something on it. Enjoy.

It seems as time goes on, money becomes more and more worthless. People who were millionaires in the 19th century would be worth a billion dollars now. On the other hand, people who are worth a billion dollars will only be worth a million by the time the next century rolls around.

Inflation. This word doesn’t mean much too many of those uneducated in financial literacy. They believe that a 5% return on investments is 5% more money. Au contraire, with an inflation of 7% you’re actually losing money at a rate of 2%. If you don’t follow, keep reading…

The cost of living for residents varies in almost every state. Even in some states the cost of living can vary vastly by just going 10 miles outside of the metro city limits. This is where millionaire status may mean next to nothing depending on where you live. If you live in New York, $1 million will get you an extremely small apartment (and this is getting even worse as years go on). On the other hand, if you live in Nebraska, $138,000 may get you a 3 bedroom (and 3 bath) home. These effects on the housing market are only magnified when inflation is taken into consideration. In years to come this gap between what you can afford based on where you live will widen. Fortunately for those in New York, the pay for simple jobs is probably way higher compared to Nebraska using the federal minimum wage.
In consumerism, the race to $1 million is getting easier and easier and less and less glamorous. Since being a millionaire is no longer an elite status, people tend to buy expensive “toys” to show how liquid there millions are (most millionaires are so because of their real estate holdings, not many have access to $1 million in cash).

Millionaire land is beginning to grow in population. And with such growth, being a millionaire no longer gives you the label of being “rich” or “affluent.” Those two are only used to describe those of true wealth, not just those with money.

Our Goals For You

Cloud 9 Financial Consulting does its consulting in a variety of ways. We can serve our domestic clients from anywhere in the world no matter where they are. And although international clients don’t have as many offered service packages as domestic clients. We will give you the same excellent service as we would if you lived only a block away.

We serve our clients with an emphasis on taking advantage of recent advances in technology. Here are some examples of these advances: cloud computing, Google wave, shared Google documents, and Skype, as well as WebEx. The different choices of technology separate us from almost every U.S. financial planning institution. While we will sometimes drive(and eventually fly) out to meet with you, our pride and joy is that we can meet with you virtually. We are also willing to provide consulting through phone calls.

Our consulting process is long but very thorough. The reason for this is that with more information, we can help you better than anyone else can. Our goal is to walk with you as you reach financial freedom, not to just send you on your way with a map.

Now, on to the good stuff.