I’ve written a lot about health and fitness on this blog, but have infrequently ventured into the land of wealth, finances and mastery over your bank account! This is an area of passion for me (I went to school for finance after all) but have rarely brought up these topics with friends or anyone else I socialize with (outside of my vision board activities).

I don’t know why I haven’t ventured into this topic. I’ve certainly applied these skills to my own financial life. I just felt is was inappropriate or taboo to bring up money with others. I know for many people, financial matters are more of a touchy subject than ANY OTHER PART OF THEIR LIVES. People would rather talk with someone they don’t know about inner details of their relationships than even mention their salary! (There is research showing this….just don’t know where I read it).

Anyway, I am going start discussing more topics related to wealth and wealth mastery in this blog. I think it is critical for EVERYONE to at least get a basic knowledge of finance. It doesn’t matter if you are in debt, have no income or are a millionaire. The same rules apply and it doesn’t have to be that hard to get control over your financial matters.

There are also some very simple things that people can do to save more money EASILY, reduce debt and make smarter investment choices. The problem is, 99% of the population does not do these things. It is not because these people are stupid. In many cases it is simply because:

• They are unaware of a better way
• They are aware of an alternative, but think their way is better…or
• (I love this one!) They keep telling themselves they are too busy and will worry about it later!

So…going forward I’ll be sharing some insights and tips I’ve been applying when it comes to financial matters. I’ll also point out some observations I’ve made that might be useful for some of you.

Now….I need to go swimming through my money pit.

Think about your five closest friends. These are the people you spend the most time with, either in person or via e-mail, Facebook, MySpace and phone conversations. According to popular wisdom (and it proves to be correct in my life), these five people will define, over the long term:

• The level of your bank account and your salary
• Your overall health and fitness
• Your willingness to take risks and go on adventures
• Your career level and aspirations
• Your overall level of happiness and well-being
• Your attitude and demeanour while relating to other people
• etc.

This is a very unscientific, but highly demonstrable truth. Think about it. Your peer group defines not just who you are, but who you become. Choose your friends wisely.

I think I have pretty high standards. Mark McGoldrick is off the charts….at least when it comes to money. Unfortunately, I am puzzled as to how someone who seems to have it all, can still not realize that wealth and happiness are not perfectly correlated.

Mark works in the world of high-finance, at one of the most prestigious firms in his field. He is by definition a trader, but unlike many traders who operate using sophisticated mathematical models, he focuses on buying severely distressed assets, and later selling them for substantial profit.

He is so good that Goldman Sachs paid him $70 Million in total compensation….for a single year. Yet, he feels robbed. So much so, that is leaving his current firm to start his own gig. The funny thing is, as outlandish as this salary might seem, top hedge fund or private equity financiers make this much or in many cases, much more.

What is truly odd, is that it appears <from the article at least, I do not know Mark or know anyone who does> as if he is a walking basket case. He is working 21 hours a day, worked through a hacking cough for 6 months due to bronchitis (no doubt brought on by stress and lack of sleep), gained weight and probably is suffering in many areas of his life outside of his bank account.

“Around the same time, Mr. McGoldrick got sick. Frequently on the phone or on an airplane, he developed severe bronchitis, with a hacking cough. He couldn’t get through a phone call without throat lozenges for 100 consecutive days, a person familiar with the matter says. He visited his doctor in London, who ordered him to change his grueling lifestyle.“

I admire Mark’s ability to achieve results and capitalize on opportunities; but would never ever want a life that was pushed this close to the edge. I  hope that his new gig gives him the freedom <and courage?> to adopt  new standards for working…that help him not only successfully ply his trades, but provide a platform for him to bring his health and work-life balance back into order….and keep it that way.

I’ve been working with the Seattle PowerGroup on Wealth Mastery. This is more than just coming up with money making ideas, it’s about changing the way you think and feel about money.

For me, I’ve lost a sense of what value money really has. I’ve always been fairly frugal, have never been in debt and having graduated with a degree in Finance, definitely know what value money has intellectually. The problem is, in the modern economy, I hardly ever touch or see medium or large amounts of money.

I pay for my lunch using a smartcard (at Microsoft). I shop in stores using a credit card. I pay for most of my bills electronically or using check. I buy things online using paypal. My paycheck is directly deposited to my bank account.

All of this means I rarely have more than a $50 in my wallet at any given time.

In the process, I seem to have lost touch with what value a dollar really has. When was the last time you held several hundred dollars in your hand? For me, it has been years.

Yesterday, I decided to close out a bank account at a local branch I was hardly ever using since I now do all my banking electronically. The balance was $207.11. I asked to withdraw the money as cash….all of it…..in $1 bills!

The teller was astonished, and proceeded to ask me if I really wanted to do that. She had to run the transaction as a couple batches, and asked if I was cool with the machine bill counting the money instead of her. I was.

She placed five large stacks on the counter. I asked for an envelope, but the largest one was still pretty small, so I asked for a paper bag. Filled with cash, I walked out of the bank followed by stares by the folks in line. They probably didn’t see that the bills were all $1’s and not $100’s.

Here is what the stash looks like:

This isn’t really that much money. At least not for me given my current salary. However, it did feel very strange to hold all that dough. It definitely felt like a lot of money. It definitely made me think about my rent and other expenses in a new light. It definitely gave me a new appreciation for my paycheck every other week.

But the exercise doesn’t stop with just holding it. I ran across a blog a few months ago (can’t remember where….if you find it, let me know and I will link to it here) about a technique for helping one to get disciplined about saving. So until my $207 runs out…..I am going to do the following:

Every day, I am going to put $1 in each of three stacks. One stack labeled FUN. One stack labeled GIVE. One stack labeled SAVE. It will look like so:

Once I run out of money, I will take the FUN stack and go do something totally ridiculous with it. Like buy a bunch of candy, and blow the money on a sugar rush at the video arcade. Something I would totally never do under normal circumstances. I will take the GIVE stack and walk down the street to the homeless shelter and give it to the folks there. I will take the SAVE stack and deposit it in my brokerage account.

The point of this? To learn the value of a $1. To learn that money can be FUN. To learn that money can HELP those in NEED. To learn that money can help me SAVE for my future.

I was walking across Microsoft campus the other day and noticed a few security guards standing along the perimeter of our sports fields.

Yes, we actually have a gigantic sport field, with a few soccer fields, a ball field and a beach volleyball court. It’s pretty state-of-the-art; made out of “field turf.” This stuff actually feels like grass and has faux dirt (small bits of rubber) that give it a bit of added traction and bounce.

Anyway, after a few minutes, I noticed the guards run out towards the field. Were they gonna start an impromptu game of  touch football? Maybe do a few conditioning drills?

Nope.

A large ball of steel decended out of the grey sky, and our fearless leader hopped out.

Perhaps he woke up late for a meeting and traffic was a bit too severe? Perhaps he made a quick sandwich run to Red Hook? Maybe he was meeting with a VIP downtown?

Whatever the reason, you know you’ve made it when you show up to work in a Helicopter!

During Saturday’s PowerGroup meetup, we made vision boards. Unlike my Date With Destiny vision board, this one was much simpler and more visual. It has four key sectors 1) Wealth 2) Vitality 3) Adventure 4) Love.

How did we actually built these boards? During last month’s meetup, we went through a goal setting process to help people get clear about what they really want to ACHIEVE. This was great prep for the vision process.

The only real guidance for creating the boards were that they be:

• Visual: they should be easy understand
• Emotional: they should evoke excitement and interest
• Personal: they should make sense for you and really fit your true goals
• Current: they should be relevant for you given where you are right now in your life

Aside from these guiding principles, the process was very much free-form. Everyone brought magazines to help build their own giant collage. We also had poster board, markers and some other tools to make them personal.

Want to create your own vision board? Here are the steps we used.

1. Get clear about goals for the next year or so. This is by far the most crucial part of the process. Sometimes it helps to think of broad categories or “sections” that you want to represent in you board. For example, I had my four sections as mentioned above.
2. Start ripping out images from magazines that represent your goals. Lay these out (roughly) on the poster board.
3. Take post-it notes and write down any “power words” or motivational quotes. Place these on the board.
4. Cut out the images and align them.
5. Paste the images to the board. Don’t use Elmer’s glue, it will cause the images to ripple, use glue sticks that are safe for photos.
6. Write out any power words or quotes. Decorate your board in any other way to make it personal and powerful for you.

The board should be placed in a visual location. In fact, you should make a point to look at it and reflect at least twice a day.

Keep in mind, the purpose of a vision board is to help you achieve your potential as a human being. It is not meant to magically manifest anything you desire into your life. With this perspective, I am excited to track progress for myself and the powergroup as we continue to grow over the coming months.

Rich people I know, fit into one of two categories. The first is wealth by assoociation through inheritance, family or close friends that have “helped them out.” The second is by working damn hard and taking big risks that most other people would run like hell from.

I don’t know anyone that just casually stumbled upon a boatload of money through an easy side business or online venture. I do know some people that joined start-ups at the right time, but they really fit into the second bucket of working damn hard and taking big risks (most start-ups never see the light of day).

I don’t know anyone that manifested millions of dollars through their sheer desire or just asking for the moola really really nicely. This trick might have worked to get a check-out-counter candy bar when you were a kid, but it ain’t gonna work in the real grown-up world.

I don’t know anyone that magically trippled their income by just hoping it would happen because they are one freaking nice person, and good looking to boot.

So basically, if you want to get rich you are really in for it. Better be prepared to work damn hard. What is damn hard? Harder than you have ever thought you’d have to work. Hard work can be fun, but it still takes time and effort. So next time you see a book with “Millionaire” anywhere in the title, just keep walking by. You don’t have time to read it anyway. You’ve got work to do.

During my recent trip throughout India, it struck me how stark the contrast is between the have’s and the have-not’s. The booming Indian middle class, buoyed and funded by technology ousourcing, are experiencing things that many in the United States (or those in any other developed economy) consider their god-given right to enjoy.

Modern shopping malls. New cars. Designer Jeans. Cell-phones. High-rise luxury condos.

The change is drastic. India is becoming materialistic. The poverty, however, is also rampant. Next to these new high-rises are sprawling stinking jam-packed slums. While India is quickly becoming the diabetic capital of the world (thanks to a westernized diet and sedentary work), many are struggling just to put food on the table.

The ideas was simple, charge advertisers $1 for each pixel on a single million-pixel page . The value proposition was equally simple, be part of internet history, Who could possibly pass that up?

The page was started in August 2005, and quickly sold out, netting the creator (Alex, a 21 year old student at the time) a boatload of cash. To get the ball rolling, Alex and his family bought the first few blocks of ad space. Once he had earned $1000, he wrote a press release that went viral instantly. Traffic to the site soared after the BBC started writing about the site. 300,000 pixels were sold in the first month alone. The advertisers (and of course Alex) all benefited immensely.

Start up costs? Probably zero or close it, just time invested to design the site and handle the customer transactions. Web Hosting and domain name would costs a little. Not sure if Alex did a deal with the web hosting company to place their logo on the site. If so, this cost would be taken care of.

This graph shows daily reach per million compared with a Om Malik’s popular weblog. The traffic peaked for about 4 months, but even today has a material number of hits (just under half the reach of Om’s blog in the past few months). Not bad. Wonder if Alex will be starting a 10 million pixel page anytime soon?

Some may look at kids making so-called “easy money” on the web and just bicker and moan. I on the other hand, look at this as a perfect of example of someone getting compensated for following through on a creative idea. Way to go Alex!

I was perusing the latest list of Forbes Richest People this morning. I really feel sorry for the poor fellows at the bottom of the list. Can you imagine, working hard to build a fortune (or just inheriting a boatload), developing an ultra competitive spirit and growing your wealth over your entire life…only to rank as ONLY the 300th or 400th richest person in the country? Come on!

I really do feel sorry for them. I especially feel sorry for all the chumps out there with only a 9-figure fortune. They won’t even show up on the Forbes 400 Richest Americans list . They might as well just give up; or at least buy Donald Trump’s “How to Get Rich.” Maybe they’ll find some tips to get them back on the path to success.

Then there are the 11 folks on the list age 40 and younger. I wonder how many times they had to deal with people telling them “you aren’t old enough to do that.”?

Richest Americans Age 40 and Under

Wouldn’t it be nice to be able to drive the world’s most exotic cars, any time you like? Perhaps it’s the Lamborghini Murcielago this weekend, and a Ferrari F430 Spyder the next. Feel a more chic night on the town….how about a Bentley Continental?

There are a number of exotic car clubs all over the world that allow you this privledge. While they are pricey, they are not out-of-this-world pricey. Costs do vary depending on the day you choose to drive, and the type of car. Most of these clubs are in the $10-15,000 range for annual memberships. This would include anywhere from 10-30 days of driving (again, depending on the type of car). Maybe my dream of “having” a Lamborghini and a Ferrari can come true sooner than I thought!

For more info…or to just drool, check out Classic Car Club, P1 Club, LuxShare Auto Club, Club Sportiva, Van Horrsen Group, ecurie 25, Oversteer Spain and Ascari.