Rich Dad Education Blog

Home, sweet home ... but is it really as sweet as it could be? If you’re like most homeowners, there is a lot of sweetening that could be done to your home if you only had the time and the money. Well, if you do the proper planning, you can accomplish numerous projects around your home in less time than you think. All it takes is to plan ahead, block out some time and start. Sounds easy, so let’s get going.

Here is a list of several projects that can usually be accomplished in a weekend. Depending on your skills and desire to do the work yourself, you can save a lot of money. But hiring the work out is always an option, and with a lot of folks looking for work, you might find that you can get the job done without breaking the bank. Some jobs will require the use of professionals, especially more extensive projects involving wiring and plumbing. But for now, let’s concentrate on projects you can do yourself.

The Miracle of Paint

By far, this is one of the most cost effective home improvement projects you can do, especially if you do the painting yourself. Inside painting can brighten up a home and add new life to virtually every room in the house. Exterior painting can give your home that curb appeal you’ve always dreamed about ... one that says come on in.

Let’s focus on interior painting. The key to a successful painting job is to plan, prep, and paint. If you are going to do the job on the weekend, plan your project and get all the material you’ll need during the week. That way, you won’t spend half your weekend running back and forth to the hardware store.

First of all decide what room you want to paint and choose a color. Light colors brighten up rooms and make them look larger. However, there are times when darker colors can add a touch of elegance. You should have a basic theme throughout your home. Although it can be fun to paint a child’s room a, fun color, different colors in too many rooms will give your home that Easter egg look.

The next thing you need to do is take a good look at the walls, ceiling, windows and doors in the room. What condition are they in? Do they need repair work before they can be painted? Nothing looks worse than painting over old paint if the surface is not in good condition. If repairs are necessary, determine what materials will be required for example plaster, sandpaper, scrapers, window calking, etc. The finished paint job will look no better than the preparation work you do, so don’t neglect this area. Spend as much time as you need to do a good job. Professional painters probably spend more than half of their work time in preparing a room for paint.

Once all walls, ceilings, windows and doors are repaired, it’s time to get out the tape. Tape off the window glass, floor molding, lighting fixtures, etc... A good taping job will make your finished paint job look very professional and will save you one heck of a lot of work in clean up. You can get special painting tape at the hardware or paint store that makes taping much easier than using standard masking tape.

Now it’s time to paint. There are all different types of equipment that can be used, from spray equipment to power rollers. Most of us will just use a standard roller. Get some painting tips from your local paint or hardware store on how to apply the particular paint you choose. Find out if you need to apply a primer first. Some new paints do not require primer. Don’t be afraid to ask for instructions.

Add a New Look to Your Kitchen

One way to add a great new look to your kitchen (other than a nice new coat of paint) is to replace the cabinet hardware. You will have dozens of choices at your local home improvement center. There are many decorative knobs and handles, so go have fun. Then it’s just an afternoon with a screwdriver and your kitchen will take on a new look for a moderate cost.

Make Your Home More Energy Efficient and Save Money All Year

1. Attic Fans – One of the best ways to lower your energy bills during the summer is to install attic fans. Attics with no air circulation can get very hot, with temperatures rising to well over a hundred degrees even on days that are not that hot outside. Direct sunlight on the roof will increase the temperature in the attic during the day. The trapped hot air will continue to heat the ceiling of a typical home way into the night, making it more difficult to efficiently cool the home.

The solution: install attic fans that force the superheated attic air out and draw in the cooler outside air. There are many different types of attic fans. These days, one of the best choices is a solar power attic fan. They don’t use any additional electricity, like the plug-in varieties, and are just as effective. The drawback is that they do cost more than the standard plug-in models so your budget will have to dictate which type you purchase.

Once you have decided which type of attic fans you are going to use, read the installation instructions carefully. If you don’t feel you have the skills to install them yourself, hire a professional. If you choose a plug-in model, you will need to have an electrical box installed near each of the fans. That’s another advantage of the solar powered models, no electrical connections are required.

If you tackle the project yourself, look outside your home to see where the attic vent openings are located. Measure the openings so you can purchase the model that fits the openings. You may need to enlarge the openings in some situations.

On the day of installation, it is best to begin your project early in the morning, before the attic has started to heat up for the day. During the day,the attic temperatures are not only very uncomfortable, they can be downright dangerous. Always use caution when working in enclosed spaces.

Attic fans do a great job of circulating air in your attic. They are controlled by a thermostat and come on when the attic reaches a preset temperature. Once installed, they should give you years of service with little maintenance and help lower your overall energy costs.

2. Insulate Hot Water Pipes – Insulating your hot water pipes reduces heat loss and has many advantages. Water temperature can be raised two to four degrees F as compared with non-insulated pipes, which means you can set your water heater at a lower temperature setting. You also won’t have to wait as long for hot water when you turn on a faucet or showerhead, which will help conserve water.

This project can be very simple if you have an unfinished basement and access to the pipes. If your basement is finished, it will be difficult to get to the pipes, but you can still insulate the pipes coming from the water heater until they disappear into a wall or ceiling.

There are several types of insulation that can be used. One of the best (and the easiest to install) are the pipe sleeves made with polyethylene or neoprene. The 5/8” thick wall will give you a good R factor. Match the sleeve’s inside diameter to the pipe outside diameter for a snug fit. The seam in the sleeve should be facing down after the installation. The sleeves come in fixed lengths and can easily be cut to the length you need with sharp utility knife. Tape or use a wire tie every foot or two to create a good tight fit around the pipe.

This simple project will pay you back many times over the years.

3. Insulate your Water Heater – This is a relatively easy project and shouldn’t take more than an hour. Water heater insulation kits are available at most home improvement and hardware stores. The kits come in various sizes and simply consist of an insulation blanket and the tape to hold it in place. However, there are a few water heater manufacturers that don’t suggest using an insulation blanket, so call your water heater distributor to make sure installing insulation on your particular water heater is recommended. Follow the insulation kit instructions to ensure a safe installation.

4. Install New Water Saving Shower Heads – This simple project can save you more money than you think. A typical older shower head uses up to 5.5 gallons of water per minute (gpm). The new water saving shower heads have a fine spray that uses only 2.2 to 2.5 gpm. If your daily showers average 5 minutes you can save 15 gallons of water per shower and a whopping 5,475 gallons per year per person. A family of four could save over 20,000 gallons of water a year. That’s also 20,000 gallons of water you don’t have to heat. Plus, these new shower heads look nice and really provide you with a nice shower experience. What more could you ask for?

5. Seal and Insulate Heating/Cooling Ductwork – This is an area that can also save you a lot of energy dollars. Unless you have a fairly new home, chances are that your heating and cooling distribution ductwork is not insulated. Your home’s ductwork carries the air from your furnace or air conditioning unit to each room in the house. There are also return ducts that bring air back to the furnace. Non-insulated and leaky distribution ductwork can add hundreds of dollars to your energy bills each year.

If you have access to the ductwork, you can inspect all of the joints for leaks and use duct tape for a quick fix. Turn the control to fan only during your inspection.

Fiberglass is the most common material used to insulate heating ducts. It is available in different thicknesses and densities and comes on rolls that can be simply unrolled for installation around circular and rectangular ducts. The outside foil face on the insulation prevents the fiberglass from absorbing any moisture and compromising the effectiveness of the insulation. Each manufacturer will provide you with installation instructions.

This project may take a few days, but the ongoing energy savings will make it worth your while.

These are just a few simple ideas for home improvement projects that will add value and enjoyment to your home and also make it more energy efficient. The important thing now is to decide what you want to tackle first. Develop a plan, get your materials, set aside a weekend or two and get to work.

Posted 04:28 PM | Permalink

Trading is considered a business for a professional. Yet not all people who trade the markets treat it as a business. Do you want to know if you are a serious trader? Here is a simple litmus test: Can you recall the entry date, price, size, total profit and loss, exit date, and the reason behind why you made your last five trades? If the answer is no then you have a lot of room for improvement in getting organized.

I have coached hundreds of students over the past few years and one constant remains: The students who keep good records do better on average than those who do not. Record keeping can include many different styles, ranging from tracking your equity curve month to month, writing out your trading rules, and keeping a trading plan for each and every trade you enter.

Discipline is an absolute requirement if you expect to do well in the markets. Intelligence, education, common sense, and a good approach help too. Above all, you must be disciplined. In fact, if you stay disciplined and outlast the initial learning curve then you are destined to succeed.

Let’s define discipline the following way: It is disciplined trading if you refrain from emotional trading, overleveraging, and trading against your trading system. The first step is to create a trading plan, write it down, and follow it. The old adage of “plan your trade and trade your plan” fits perfectly here. So what information do you need to keep, and where do you keep these records?

Let’s deal with where you keep records first. I prefer to keep my records on my computer in a spreadsheet. It is easy to enter and keep organized. You can keep them in a notebook as well, but if you do, I recommend you get a notebook that you set aside and use only for this purpose.

Some traders like to keep their records in the trading software they use or their brokerage account. You can make that work, but a word of caution: Being able to go back and look at your trade fills and executions is not the same as keeping a trading journal and writing out a trading plan for each trade. There are very real differences. First, it takes time to track down the old trades and figure out when and where you made the trade. Second, even when you do find them, you may not remember the details of the trade and why you made it. Lastly, it just screams of laziness.

Once you decide where to keep the records, the following information will be needed. Keep in mind that this is just a basic model and you can chose to track other information as well. However, these are the basic components of each trade log:

1. Trade Number
2. Entry Date
3. Long or Short
4. Ticker
5. Size
6. Entry Price (Including commissions.)
7. Total Cost Basis (The price multiplied by the size of the trade adding in commissions.)
8. Stop Loss/Risk Management Plan
9. Trade Target (What is your goal in profit, pattern, or underlying security price? How are you going to manage the trade as it moves?)
10. Pattern of the Stock. (Basic technical characteristics. This is kept for your own benefit so that when looking back in review, you will remember some of the things you were looking at.)
11. Reasoning Behind the Trade (Why did you enter the trade?)
12. Exit Date
13. Exit Price
14. Total Gain or Loss
15. Final Analysis (Did you execute the trade based on your trading rules? Did you learn anything from this trade?)

You can retool this list to fit your personality and trading system. For example, if you are an options-spread trader, you may want to include columns including maximum risk and margin requirements. But the basic framework above will work for most traders.

The most important thing to remember is that you are putting in this work for your own benefit. Learning from our mistakes is vital. In order to effectively assess where we are making mistakes, we need to log our decisions in detail.

When you enter the trade, you will need to do some initial record keeping, as you have seen above. Two of the most important things to write out are stops and targets: where you are going to exit on profits or losses. This does not have to be a specific decimal point, but you should have a pretty good idea of what you expect to happen in the position.

A stop loss is an order that you place with your broker that tells the broker when to exit your position. Stop losses can be set on any instrument and traders traditionally use them to mitigate risk. They are very important in a trading system. Some traders tend to set a mental stop, while others write one down on paper or put it in their trading log. This can work, but most (especially those who won’t be watching the market) will need to learn to place a stop on their trade through the broker.

Placing a stop loss is one way to mitigate risk as it gets you out before more losses occur. It’s not the only way. You can also control your risk through your position size, your strategy selection, and by using vehicles like options and futures creatively to create hedges. If you are new to trading, you will want to focus on stops and position size.

If you decide not to set a stop, you still need to write down in your trading log where you will exit the trade if it goes against you. In my experience the types of trades that hurt accounts are those where a trader refuses to sell it on a loss. The best advice I have ever been given in trading is to cut losses short and let your profits run. Good trading requires that you sell losing trades. You can not just hold them and hope for the best. Hope is a wonderful thing, but it is not a trading plan.

Targets are set to have some picture of where we want to get out of trades on profits. You will not want to run away from successful trades. Letting your profits run and develop is a very smart thing to do. It will be important that you learn the signals to watch for that tell you when to get out. Setting an initial target is a starting point that can and will be adjusted as the trade develops.

Finally, remember that keeping records and being organized will help you become a better trader. It’s a sign of professionalism and will keep you focused on the task at hand.

Posted 04:26 PM | Permalink

It keeps us from pain—but also keeps us from growing

“Fear’s like a giant fog. It sits on your brain and blocks everything…But you lift it and, buddy, you’re in for the ride of your life.”

That quote came from Albert Brooks’ Defending Your Life, a film with a simple premise: fear holds us back from becoming our better selves. And the F-word takes its greatest shape in avoidance and denial. If I don’t deal with it, I don’t have to feel embarrassed. No, you just have to spend your life running away.

Avoid Avoiding

But how do we avoid, well, avoiding? It begins by giving ourselves a more enticing alternative. The convincer for dealing with pain is finding a greater pleasure as the reward. Find a moment in your life when you decided to do something you were unsure of and the result was positive. For example, Phil Goglia, a nutritionist and author of Turn Up The Heat, says visualizing previous success in eating habits is the key to future health improvement. “We all can get lazy for a while,” he says, “but when you remember how good you felt when you achieved your goal with healthy eating it can get you to give it another try.”

It’s also important to figure out where the avoidance truly comes from. Was it a childhood trauma? Did your background convince you it wasn’t possible to attempt? Did your parents approve or disapprove of what you’re avoiding?

One vital point to understand is that avoiding doesn’t allow for growth. Thomas Edison could have avoided trying out all the light bulbs that didn’t work, but then he never would have gotten to the one that did. Because embarrassment of failure is a leading cause of avoidance, it should be noted that men are more likely to avoid than women.

When evaluating avoidance issues you must decide if you’re being cautious or paranoid. Avoiding drag racing is probably a good idea; avoiding giving a presentation which could further your career probably is not. Which is more important?

A good strategy for overcoming avoiding is to read books or take courses which allow you to overcome your fears. One of the greatest fears for human beings is speaking in public—joining a Toastmasters organization to practice speeches or reading Dale Carnegie’s Public Speaking For Success can easily make you wonder why you were avoiding in the first place. Another method is to find a mentor who is an expert in the area you’re having trouble in. They may even admit to you that they were once scared or doubtful about the subject they have since mastered.

The Cost of Denial

Denial can actually be a strong tool. It can allow us to push forward, even when the obstacle seems impossible. It allowed Michael Jordan to become the best basketball player ever, even after he got cut from his high school team. It allowed Sam Walton to become the richest person in America, even after he lost his first store by not considering the specifics of his lease. Many probably said their goals seemed a bit unrealistic after their setbacks. Still, denial can also keep you from seeing the writing on the wall, even when it’s in large block letters and follows you wherever you go.

Sometimes quitting, in fact, can be the best thing you can do. For Ron Shelton, a once-promising minor leaguer, it was difficult to give up the game but by letting go, it ultimately made his career. As writer and director of baseball film classic Bull Durham, he was nominated for an Oscar and is considered by many to be the top sports director of all time, also helming White Men Can’t Jump and Tin Cup. “It was tough to realize it wasn’t going to happen,” Shelton admits. “But I had to be realistic and think about my future. I’m happy with where it led me.” So how do you tell when it’s denial? First, ask a group of friends you truly trust who will give it to you straight about whether or not you’re being honest. Choose people who don’t have a stake in the outcome other than wanting the best for you.

Also keep in mind the cost of this possible denial since not all denials are worth a great deal of attention. Are you a weekend painter who dreams of being Van Gogh? No big deal. Are you literally painting away every hour of your life, instead of holding down a decent job? Very big deal. A little dreaming can be a good thing, but a lot of heartache can be a nightmare.

Denial in many cases can be due to refusing to move on for fear of failure. Returning to Sam Walton, former Wal-Mart President David Glass was quoted as saying of his wealthy boss: “…he is less afraid of being wrong than anyone I’ve ever known. And once he sees he’s wrong, he just shakes it off and heads in another direction.” If one of the most successful Americans who ever lived refuses to be in denial (except maybe about that lease), then perhaps all of us should consider a similar path.

Yet it’s not just how denial holds us back but how it can hurt our health. Studies indicate that denying stress exists actually leads to poor health. For men in particular (who tend to bottle things up) this can be a deadly combination. It may be easy to fool other people, but who pays the cost? If we deny feeling pain or loss it can build up or even create new complications from established medical conditions.

Denial can also kill relationships. If you tell yourself something a partner is doing isn’t irritating you when it is, this can build up into resentment. How many times have we heard someone give a eulogy for a fallen friend and say, “And they never complained.” And this is a good thing? Though you don’t want to turn into Debbie Downer, to never admit when you’re bothered or share it with the offending party is not a positive quality. Resolution is a critical part of the human experience and to becoming closer to the people who mean the most in your life.

The Common Bond Of Regret

Avoidance and denial have a major common trait: regret. It has often been said that we don’t regret the things we do but the things we don’t do. Time is limited on this earth and can only be maximized by learning and moving forward with the knowledge we have. Think about your biggest regrets in life and ask yourself whether avoidance or denial played a part. More than likely, they did. Of course, you may be one of those people who says they have no regrets. Like the person who never complained, you are unusual. And probably in denial.

Posted 04:24 PM | Permalink