Constant Random Change

This got into my mailbox a few days ago:

This is the third time an Indian dude (I checked the IP address) took time to go to my contact page and answer the CAPTCHA just to send spam about SEO; I think it’s a good time to speak my mind about SEO in general.

But first, let’s talk about how wrong this approach is.

If you’re going to offer to do business with me, you should have at least read my About page. There you should have realized that (a) I’m not doing this site for money, popularity, or the like and (b) I am an experienced software engineer and I could probably do better than you in SEO if I put some effort in it.

This display of ignorance alone is enough to make me throw your mail into the spam folder of my mailbox.

And now, back to the topic of SEO.

–

To me, Search Engine Optimization is like investing in stocks. You can go the slow-and-steady Warren Buffett way, or you can go the “get rich quick” day trading way.

Most SEO (including the spam I got) falls under the latter; both this “hardcore” SEO and day trading promises huge profits for little effort. In reality, it’s the opposite—in the long run, the costs of using these two approaches often overshadow whatever profits you would gain.

A better approach for both SEO and trading would be to stick to the basics and take things slow. Here’s just some of the basics:

• Make your site SEO friendly, but don’t go overboard. For a WordPress site, this would mean getting a domain with your name on it, enabling pretty permalinks, installing All in One SEO Pack and Google XML Sitemaps, and adding either Google AdSense or Google Analytics somewhere in your themes. Anything beyond that is overkill IMO.
• Write interesting posts. Getting people to want to read your posts is really the best SEO you could do.
• Rubbernecking or writing stupid controversial things are fine (hey, it’s your site!), but I personally won’t recommend it. You might get a lot of hits at first, but don’t expect that to last once you get labeled as a douchebag.
• Join relevant communities and talk to people. If you’re nice and interesting enough, you don’t even need to advertise your site address—they’ll be the ones to look it up.
• Be consistent. You don’t need to post something everyday, but try not to leave your site un-updated for more than a few months.

Granted, some of the basics take a lot of effort (like writing interesting posts) and may even take more time and effort than “hardcore” SEO, but you’ll be more certain of getting higher exposure in the long run. The key here is that you shouldn’t focus on putting your site on the top of the result lists. Instead, you should focus on the quality of your site: getting on the top of the result lists will automatically follow.

This one’s going to be a bit harder than the previous post.

Know your financial situation.

It is common to see people living beyond their means just because they aren’t aware that they’re earning less than they’re spending. You don’t need to read books to know that the obvious solution to this problem is to be aware of one’s financial situation.

However, personal wealth is more than just your paycheck and bills. In order to paint a better picture of your financial situation, you must track down other aspects of your finances and your life.

For this tip, I’ll be asking you to take note of the following for the next month:

Your passive income.

This is the money you’re getting in a month that doesn’t require any work. The simplest example would be collecting rental fees for a house that you leased to other people. Other examples would be interest on bonds, valuation increases in stocks, and profit from businesses you’ve invested in.

If you’re a normal twenty-something professional, this should be zero.

(Spoiler: financially independent people have a passive income higher than their expenses.)

Your wealth.

To simplify things, just ignore your “assets” and just focus on your wallet and your bank accounts at the end of this month.

Your current wealth should be the sum of the money in your wallet and all of your bank accounts (credit limit not included since it’s not real money) minus all of your debts. Credit card balance counts as debt and should be subtracted from the total unless it’s on a 0% monthly installment (then it should be counted as part of “expenses” below). Also, if someone owes you a substantial amount of money, add this to your wealth.

The normal value for a twenty-something professional would be at most at the low 5 digits (Philippine Pesos) to around negative 5 digits.

Your income.

This should be easy. Just get your paycheck and take note of your gross income.

The time you spend for your income.

This is a key point from the book Your Money or Your Life. The obvious example would be to compare a person earning PhP 5,000.00 for 40 hours of work to a person earning PhP 2,000.00 for 10 hours of work. Even if the two are set in the same time span (say, a week), the latter is more appealing because it’s 200 pesos/hr compared to 125.

The not-so-obvious way of thinking stated in the book is to take into account the other hours you spend for the sake of work. There’s commuting. There’s the hours you spend dressing up for work or shopping for work clothes. There’s the work-related meals. There’s the “decompression entertainment” and vacations to keep you sane. There’s the visits to the doctor due to work related stress.

It won’t be surprising to find out that a person who works 40 hours a week spends another 30 hours a week on the average to support his job.

So for this step, track down how many hours you’ve spent this month as a side effect of your job.

Your expenses.

Here’s the hard part:

Track down and itemize every expense you make down to the peso.

I would suggest you go low-tech for this one, using a small notebook or hipster PDA then transferring it to a simple spreadsheet instead of being tempted to find an app for your expense tracking. The problem with the latter is that their classification systems are usually inflexible. You’ll have more freedom classifying your expenses when you do it manually.

Yes, it’s annoying and yes, it’s easy to fall off the habit after a few days. However, knowing your financial situation depends on how accurate you track down your expenses. This is the only way you’ll see if you’re spending too much on certain things like food and clothes.

This process might also cause some feelings of guilt, especially if you notice that you are spending too much on stuff like food and clothes. Don’t feel guilty about your expenses (yet). You’ll just fall into the same trap as binge eaters who feel that they need to compensate for their overeating but just end up in a worse condition in the long run. At this point, just spend as you would spend normally.

–

Next month, I’ll write a follow-up post to discuss what to do with those numbers.

Ignoring for a moment that this video comes from an MLM guy and that I hate MLMs with a passion, the following video is a must-watch in my book.

Edit: the video was taken down. -_-

Anyway, here’s the gist of things:

• Poor people waste their money on inexpensive but useless stuff. In the Philippine context, that might be cigarettes or cellphone load.
• The middle class are worse off: they spend money on stuff that drains them of money. Houses, cars, spending on credit but just paying the minimum per month, etc. Most of them only appear to be rich, but in reality they don’t have any accumulated wealth.
• The wealthy spend money on stuff that gives them money: investing on stocks, building businesses, etc. They actually avoid buying what the things the so-called “rich” people buy because they know it can jeopardize their financial independence.

It’s nothing new if you’ve read a couple of good financial management books. The good part about the video is it’s short enough to share to “busy” friends.

I could go out tomorrow and buy a copy of Windows 7 Ultimate; even though I am unemployed, I have enough money in the bank and credit in my credit cards to make the ~11k purchase look negligible.

But I won’t.

Because it won’t give me any value.

I have Windows 7 RC 1 running on my rig for months now and it has been working fine for me so far. The only reason I’ll need to upgrade is when the nagging screens start to pop up at March. Until then, I doubt that there would be problems sticking with this current installation.

Now think what I could do with 11-13k:

• books that could boost my knowledge
• games that could give me a break from the boredom of studying
• exercise gear that could convince me to start working out again
• office supplies that can help me organize my room/workspace
• visits to coffee shops whose pretentious environments could provide me sparks of creativity

Note that “buying new clothes” and “going out of town” isn’t on the list. Those things might provide value for you, but they definitely won’t work for me.

—

I’ll just get a copy of Windows 7 once I get some disposable income or when February rolls in, whichever comes first.

Back when I was still working, I never really cared about paydays. So while everyone else was looking forward to those two days in the month where their accounts would magically be filled with money again, I’d be actually be so oblivious about those dates that I’m often surprised when the ATM receipt says I have more money in my account since I last checked it.

Since I didn’t care about my paycheck, I didn’t realize that it was a very good indication of my financial stability until Lifehacker linked to The Simple Dollar post about living from paycheck-to-paycheck.

Paycheck-to-paycheck living happens when you are regularly waiting for your next paycheck before you make basic financial moves, like paying bills or buying food or doing something fun. It’s incredibly dangerous for a number of reasons:

While it has never been not be applicable to me, I know many of my friends have this mentality. Head over to the post and see if the advice there would help improve your financial stability.

The First Steps Away from Paycheck-to-Paycheck Living [from The Simple Dollar, linked by Lifehacker]

June 16 came and went last week without me realizing that it would have been my 5th anniversary in my former company had I not departed from it. Not that I had a reason to remember, though.

However, once I had realized it, I couldn’t help but ask myself the question:

If you would go back five years in the past, what advice would you give your past self?

Continue reading »

I find it odd that I failed to mention the relationship between Finance and Fitness in last night’s update of About This Site. It’s odd in the sense that these two seemingly unrelated categories share the same basic principles.

The most basic principle for personal finance is Spend Less, Earn More. For physical fitness, it’s Eat Less, Exercise More.

The similarities don’t stop there. Both basic principles are simple yet difficult to apply in real life. This often results in people getting into get-rich-quick scams (for finance) or trying out fad diets (for fitness) in the hopes of skipping the hard parts. However, time and time again, these two principles are often the only reliable means for people to reach their goals in personal finance and physical fitness.

Speaking about goals, both categories also require you to define realistic goals. Not only does this prevent you from the inevitable disappointment you fail to reach your goal, this also forces you to assess your situation and your target. Maybe your situation is more dire than you expected, or maybe you really don’t need to worry about your situation; either way, finding your starting point and your goal in both personal finance and physical fitness will allow you to determine the correct steps needed to get you where you need to go.

Even on the micro-level, there are still similarities between the two categories. Logging of all expenses and calorie counting are both very tedious tasks and yet they are among the most reliable ways for you to determine where you can trim off excess expenses/calories. Heck, these two tasks are so similar that you could probably log your calorie intake in a personal expenses logging software and vice-versa!

Another similarity is the importance of changing the way you think. You should change your perception about yourself by taking reality into account e.g. ignore how the media portrays “fitness”, you really don’t need to buy that gadget no matter how shiny it looks, etc. You should also understand that being both fit and financially stable requires a long term change in your lifestyle and not just a temporary one.

Of course, there are differences between fitness and finance, but my goal for this post is just to relate the two. You can’t blame me for not pointing the differences out.

(picture source: The Simple Dollar)

I’m sleepy so I’m going to make this short.

Ever wonder why some popular books are missing from the Personal MBA list? For example, both Built to Last and Rich Dad, Poor Dad are international bestsellers and yet they aren’t included in the list.

I don’t really know the exact process on how they choose books in Personal MBA, but I can see why those two types of books aren’t on the list.

Built to Last, In Search of Excellence, Good to Great, and practically every Toyota, Google, Starbucks, or [Insert big company or CEO here] book has been ripped apart by The Halo Effect. While the latter does not really turn all of those books into paperweights, it prevents you from having delusions that reading and following those books alone will turn your company around. (In some cases, THE does turn those books into paperweights, but I think you get the point. )

Robert Kiyosaki’s books, on the other hand, have been criticized by financial experts ever since Rich Dad, Poor Dad was released. Probably the most popular criticisms of RDPD in the Internet is John T. Reed’s criticism. I dare you not to be disillusioned about the book after reading that site.

As for other books, I think I can safely assume that they either have better alternatives already on the list or the book is still haven’t caught the attention of the PMBA community yet. Either way, if a book is missing on the list, it doesn’t doesn’t necessarily mean that it’s not useful. Continuing with the disclaimers, I won’t claim the list as infallible (I see a couple of books that aren’t applicable to our country).

In the end, whether or not you decide to follow the list when buying books, always read the books you buy with both an open and a skeptical mind.