peace workshop part 2

Goal/Commitment Based Life/

Wealth Managementfor Peacemakers

My Way/Our Way Life Retirement Plan

“Relaxing & Enjoying Life”

A financial plan’s job is to support and add efficiency to your life plan.

“Money, which represents the prose of life, and which is hardly spoken of in parlors without an apology, is, in effects and laws, as beautiful as roses.”

– Ralph Waldo Emerson

Fame or integrity: which is more important?

Money or happiness: which is more valuable?

Success or failure: which is more destructive?

If you look to others for fulfillment,you will never truly be fulfilled.

If your happiness depends on money, you will never be happy with yourself.

Be content with what you have; rejoice in the ways things are.

When you realize there is nothing lacking,

the whole world belongs to you.–Tao Te Ching

“I’m a great believer in luck, and I find the harder I work the more I have of it.”

– Thomas Jefferson

“Courage means being well aware of the worst that can happen, being scared to death, and the doing the right thing anyhow.”

– William Sloane Coffin

I grew up among the Sages.All my life I listened to their words.Yet I have found nothing better than silence.Study is not the goal, doing is.Do not mistake “talk” for “action.”Pity fills no stomach.Compassion builds no house.Understanding is not yet justice.Whoever multiplies words causes confusion.The truth that can be spokenIs not the Ultimate Truth.Ultimate Truth is wordless,the silence within the silence.More than the absence of speech,More than the absence of words,Ultimate Truth is the seamless being-in-placethat comes with attending to Reality.

– Shimon ben Gamliel

The Zen of AbundanceIf we are to grow in our awareness of the global economic reality, it is necessary for all compassionate Zen students to expand their financial understanding beyond a personal level.

Look at healthy communities. They are either a democracy or ruled by an enlightened leadership who encourages creativity and communication. People are productive and happiest when involved in work and relationships that benefit the community. Economics is the fundamental reality of their relationships.

Envy, greed and laziness are the three archenemies of both community and individuals. They are abundance restrictors, hampering individuals from pursuing beneficial relationships. Societies work if people are responsible. The wise leader says to the lazy: please work. To the greedy: please share. To the envious: go away if you are unwilling to cooperate.

A Zen Master in his late nineties fell ill and bedridden. He refused to eat, citing the explanation, “In our community, to eat today, you must work today.” His students pleaded with him, “Master, we will share. Please eat.” To which the Master replied, “To eat today, work today.”

The students were unable to persuade him until they finally lifted the Master’s bed and placed it in the garden, tossing out the scarecrow. Productive again, the Master spent his last days throwing rocks at crows and munching on juicy tomatoes fresh off the vine.

The bountiful river of life demands work and balance. Our personal success in living in the real economic world is no matter of luck and happenstance. Right effort, engaging skills and the production of something useful leads to happiness, financial success and a healthy community.

Of 515 senior executives analyzed by the search firm Egon Zehnder International, those who were primarily strong in emotional intelligence were more likely to succeed than those who were strongest in either relevant previous experience or IQ. In other words, emotional intelligence was a better predictor of success than either relevant previous experience or high IQ. More specifically, the executive was high in emotional intelligence in 74 percent of the successes and only in 24 percent of the failures. The study included executives in Latin American, Germany, and Japan, and the results were almost identical in all three cultures.

Emotional Intelligence

Research by the Center for Creative Leadership has found that the primary causes of derailment in executives involve deficits in emotional competence. The three primary ones are difficulty in handling change (Flexibility), not being able to work well in a team (Social Responsibility), poor interpersonal relations (Interpersonal Relationships).


Optimism is another emotional competence that leads to increased productivity. New salesmen at Met Life who scored high on a test of “learned optimism” sold 37 percent more life insurance in their first two years then pessimists. (Seligman, 1990)


At L’Oreal, sales agents selected on the basis of certain emotional competencies significantly outsold salespeople selected using the company’s old selection procedure.

On an annual basis, salespeople selected on the basis of emotional competence sold $91,370 more than other salespeople did, for a net revenue increase of $2,558,360.

Salespeople selected on the basis of emotional competence also had 63% less turnover during the first year than those selected in the typical way.

(Spencer & Spencer, 1993; Spencer, McClelland, & Kelner, 1997)


Slaski and Cartwright (2003) found that training in emotional intelligence resulted in increased EQ-i scores and improved health and well-being.


Where do you want to be in ten years?

• Goals • Commitments• Values

Concept:Our career’s job is to supply us with the life we want and is (can be) part of our mission .

Financial dysfunction is when we forget that:

Our work/income/wealth’s job is to supply us with the life we want.

Kissing the Ugly

1. Do I pay my bills late?

2. Is my credit card debt increasing each month?

3. Am I losing sleep worrying about money issues?

4. Am I arguing with my spouse / partner a lot about money?

5. Do I feel envious of what others have?

6. Am I hanging out with people I like or people who support behaviors that really are not “me”?

Kissing the Ugly

1. Am I working more hours than I really want to?

2. Am I lazy? $10.00 hour is better than 0.

3. Am I living in reality? What do my friends say?

4. Am I justifying spending on the basis of societal expectations?

5. Do I feel ungrateful when people help me?

6. Do I say “thank you” less than I should?

7. Am I grateful to those around me and for the help they give me?

Financial inefficiency is when we do not have a financial plan and good objective advisors to guide us “most high functioning people will be fine-financial planning just adds efficiency towards achieving financial goals” ..intention..

Risk Management

Facebook risk

Association/friend (?) risk

Habit’s

REPUTATIONAL CAPITAL

Reputation = Value

We judge people based on their

ability to keep commitments!

Reputation = Value

We judge people based onhow they treat others!

Reputation = Value

We judge people based on how they treat themselves / their bodies, their minds, their emotions their spirit!

Risk ManagementPrivacy• Use your business address or post office box for newsletters, magazines and subscriptions

• Use your initials and your last name with credit cards, if they will allow this.

• Have credit card statements, even the personal ones, sent to your post office box or office address.

• Conduct your business only with companies that have a reputation for high degree of honesty, sustainability and that have an impeccable reputation

• Be honest in all of your business dealings and in all aspects of your life

• Ask yourself “If My Mom, Dad, Rabi, Shaikh / Priest, or a person I respect most saw this on U-tube or a face book account would I be ashamed or embarrassed?”

Risk Management

Get a passport for everyone in your family

Risk Management

Debt Management• Think liquidity.• Have a budget with a margin of safety of 10% to 40%.• Your total debt payments should not exceed one third of your income.• Think balance. • Take advantage of tax-deductible debt.• Never pay down your interest rate by paying points.• Set a goal of being your own banker so that you can pay cash for the items you want. Being debt free is nice & allows flexibility.• Maintain control over your credit cards.• Do what you say you are going to do.•Do not wait for a crisis to get your debt liquidity life in order; do it now.

Risk Management/Insurance

Some risks you keep

Some risks you avoid

Some risks you insure (large items)

Risk Management/Insurance

Life Insurance

Who is dependent on your wealth or income to survive?

If you died, would your assets be sufficient to provide for them-if not you might need life insurance.

“Never stand begging for what you have the power to earn.”

– Miguel De Cervantes

Legacy Planning

Your friends, parents, siblings kids or grandkids will not remember that you paid for their college, bought them something, with amore’.

They will remember that you took them on a walk, to dinner, a picnic, camping and river raft trip in the Rockies … or to Europe, a cruise, Ethiopia to build schools...

Legacy Planning

“The greatest gift we can give someone we love is our

time.”

–Thich Nhat Hanh

Life Planning

Describe your ideal My Way/Our Way lifestyle…

• in years 2 to 5

• in years 5 to 10



• in years 30 and beyond

Investing

The best return on investment tends to be:

EducationSkill development Personal development

Investing TIME & MONEY

We trade time for money and money for time

Investing Time

For most of us; balancing education, skill development,

work, family and personal time is where the natural tension often is.

Avoid/Run/Avoid/Run

Cash value life insurance

Annuities

Broker sold (hedge) funds of funds

General partnerships

Investing Concepts

Live on the eggs… not the chicken

Investing: a Picture is Worth a 1000 Words

Dividend Yields: S&P Dividend Yield and Future Stock Performance

Note: Between 1926 and the end of 2005, 41% of the S&P 500’s total return was due to the dividends being paid out. An investment of just $10,000 in 1926, held until 2005 without dividends, would have made $1,013,000; with dividends (reinvested) it would have netted $24,113,000!

S&P 500 Yield 6 Months 1 Year 2 Years 3 Years

Below 3% -1% -5% -10% -1%

3 to 4% 1% 4% 9% 12%

4 to 5% 7% 14% 21% 26%

5 to 6% 4% 11% 33% 56%

6 to 7% 6% 12% 32% 45%

Above 7% 8% 29% 42% 63%

Investor Psychology 101

Stock Market Math

It is all about the present value of future cash flow. If people want higher compensation for taking the risk of investing in stocks, then stocks go down in price; when they feel more optimistic, they demand less future returns.

Stocks’ Total Return

Stocks’ Total Return

Capital Appreciation

Capital Appreciation

Cash Dividend Yield

Cash Dividend Yield

P/EExpansion/

Dividend Yield Expectations

P/EExpansion/

Dividend Yield Expectations

Earnings &Dividends

Growth

Earnings &Dividends

Growth

Earnings Yield

Earnings Yield

Cash Dividend Payout

Cash Dividend Payout

TODAYFUTURE

Starting P/E Matter: Inflation and Stocks*

*Inflation has a dramatic effect on all asset class returns: stocks, bonds, real estate and commodities. Many do not realize how rising and high inflation is especially detrimental to stock prices. Many advisers actually say stocks are a good inflation hedge. They certainly are not in light of this chart. The bottom line: Favor stocks or any asset when prices are low and at bargain levels. The possible peak P/E to trough P/E loss on Standard and Poor’s is given to illustrate the loss possible and does not include dividends that would reduce the total loss somewhat. P/E indicated the price you pay for earning. Low P/E equals low price. P/E is often substituted for earnings yield, which is the actual yield that can be compared with bonds, certificates of deposit, etc. A P/E of 6.7 equals a 15% earnings yield and a P/E of 46.5 equals an earnings yield of 2.15% or a speculative valuation extreme. Price matters with investing. This table shows by ranges of inflation the corresponding average historical P/E ration, peak P/E ration and trough P/E ration for the Standard and Poor’s 500 Index companies. P/Es are based on trailing 12-month earnings. This table is one input to the investment decision process. P/E equals price/earnings.

Inflation Average P/E Peak P/E (Mania Overpopulation)

Trough P/E (Mania Undervaluation)

Possible Peak P/E to Trough P/E Loss on Standard and Poor’s

<2% 21.4 46.5 13.1 -72%

2-3% 20.3 36.8 12.5 -67%

3-4% 18.4 33.3 11.0 -66%

4-5% 14.8 20.3 9.4 -54%

5-6% 14.4 19.2 8.9 54%

6-7% 11.4 15.9 7.7 52%

>7% 8.8 12.0 6.7 44%

Be Early: Bear MarketsAverage Annual Return Following Bear Market

12-Month Period

21-Month Period

36-MonthPeriod

If fully Invested after bear ends

47% 28% 20%

1 month of cash after bear ends

33% 22% 17%

3 months of cash after bear ends

18% 16% 12%

6 months of cash after bear ends

11% 13% 10%Note: This table illustrates the importance of “being there” when stocks (or other assets) are bargain-priced. The key is to start buying when stocks are cheap, using price/earnings, dividend yields, price/earnings to expected growth, price/earnings to inflation and other valuation techniques; and to be well invested when the bear market ends. Whether you achieve this, of course, is only known after it does end, so you must buy as the investments become bargains over time. The term “fully invested” is represented by total monthly returns of the Standard and Poor’s 500 Index, January 1926 through December 2002. Cash is represented by total returns of the 30-day Treasury bill. The 14 bear markets analyzed are defined as periods with cumulative declines greater than 10% and a duration of at least six months and do not include the current market. Past performance is no indication of future results. This table is one input to the investment process.


Asset Price at Peak

2 Years Later

Percent Change

Period Beginning

Gold 666.75 397.00 -40.5% 9/30/1980

Oil 39.60 21.71 -45.2% 9/28/1990

Commodities

291.90 220.80 -24.4% 3/30/1984

Dollar 117.64 91.11 -22.6% 5/30/1986

Large Stocks

1,517.68 916.70 -39.6% 8/31/2000

Internet Stocks

628.34 110.41 -82.4% 2/29/2000

NASDAQ 4,696.69 1,731.49 -63.1% 2/29/2000

Peaks Down

Note: Month-end values for all indexes. Large stocks represented by Standard and Poor’s 500. Internet stocks represented by IIX Index. This table is one input in the investment management process.


Bottoms Up

Note: Month-end values for all indexes. Large stocks represented by Standard and Poor’s 500. Internet stocks represented by IIX Index. This table is one input in the investment management process.

Asset Price at Peak

2 Years Later

Percent Change

Period Beginning

Gold 287.75 405.85 41.0% 2/28/1985

Oil 11.26 33.82 200.4% 11/30/1998

Commodities

213.30 306.02 43.5% 8/29/1986

Dollar 81.57 99.55 22.0% 7/31/1995

Large Stocks

815.28 1,114.58 36.7% 9/30/2002

Internet Stocks

62.74 146.40 133.3% 9/30/2002

NASDAQ 1,172.06 1,896.84 61.8% 9/30/2002

The Problem with No PlanAverage Returns From 1989-2008

Source: Dalbar

Investing Without Borders

• Invest without arbitrary restrictionso Asset classeso Country biaso Market Cap

• Investment process should be robust

Simple is notalways best.

Simplistic Investment Approaches

Restrict Opportunity

Money Must Be Managed

• Passive asset allocation does not capture excess returns

• S&P 500 is an index- not management

• World is dynamic, so is investing

• Busts and panics provide opportunity

Risk Management

• Looking at each investment objectively and actively reduces risk

• Situation and price matters

• Diversification and asset allocation by itself gives a false sense of reduced risk

• Avoid the 5 poisons +

• Realize the need for patience

The Hard Partis Balance

Living With A Goal

Living Without a Goal

Personal Time Professional Time

Today Future

First About Freedom

A healthy relationship with wealth = Freedom

Financial Savings• Raise

deductibles• Reduce

insurance and self insurance• Buy time• Sleep well

So you can say yes to vacations, college, retirement, time off, career change, family, charities, slowing down, hobbies and exercise

We trade money for time

Time Money

Adequate + Abundance Resources+ Attitude =

Freedom

We trade time for money

Wealth=Security

• If wealth is managed and part of a life plan

• Money’s job is to support us in the life we want

• In England they call the rich “100,000 pounders” not millionaires because bottom line is we live off income.

Eat Healthy and Exercise More

• Cookbooks and diet books are #1 and #2 best selling categories

• Diet Dejour

• Investing Dejour

25 Years of Success

• Not one year or four years of success

• Why?

• John Templeton

• Chuck Royce

• Benjamin Graham

• Charles Mackey

• Warren Buffett

• Peter Lynch

• Andrew Carnegie

• Napoleon Hill

• Wayne Dyer

• Learning more and more importantly applying their best practices

Volatility is RealityThe Cycle of Market Emotions

Volatility is a Reality• Seasons

o Winter/Springo Spring/Summero Summer/Fall

• Boom/Bustso A best practice system sees

opportunity in the cycle.o Long-term investors fail because

they fail to realize volatility is their friend and they panic at the wrong times.

Why Patience is Important

Average Returns From 1989-2008

Source: Dalbar

Volatility is a side effect of

long term investing

Risk Management• It is risky to try and time the

markets.

• It is a waste of time and effort to time the markets

• You sell becauseo You find an investment you like

bettero It reaches its price targetso Or no longer compensates you

for holding it

• You buy because the price is right

FIM Group Process

• Monetary Policy

• Interest Rate

• Yield Curve

• Trends

• Risk/Return Analysis

• Capital Flow Analysis

• Stability Analysis

• Government Economic Policy

• Social/Cultural Analysis

National, International, Country, Regional Economic Analysis

• Management

• Judgment

• Discipline/Research

• Question Everything

• Over Analysis of Risk, to

Sleep Well

FIM Group Process

• Growth Prospects

• Barriers to Entry

• Competitive

Forces

• Sustainability

Industry Analysis

• Management

• Judgment




Sleep Well

FIM Group Process

• Financial Condition

• Capital Structure

• Comparative Analysis

• Balance Sheet

• Income Analysis

• Business Plan

• Franchise Value

Individual Security Analysis

• Management

• Judgment




Sleep Well

FIM Group Process

• Investor Behavior

• Extreme Optimism

• Rising Relative

Strength

• Extreme Pessimism

• Capital Flows

Technical Analysis

• Management

• Judgment




Sleep Well

FIM Group Process

• Client

• Goals/Constraints

• Balance Risk

• Control Costs

• Diversification

• Tax Sensitivity

Portfolio Construction

• Management

• Judgment




Sleep Well

FIM Group Process

• Monitor Each Position

• Monitor Economic and

Global Trends

• Adjust and Manage

• Control Costs

Portfolio Management

• Management

• Judgment




Sleep Well

FIM Group Philosophy

• All markets are cyclical

• Successful investors avoid overhauled assets and buy undervalued assets

• Price matters

• Avoiding significant capital losses is as important to long term total returns as achieving capital gains, interest and dividend income.

Our approach is characterized by flexibility, comprehensive analysis and

discipline

Safety• Accounts should be held by

SEC/NYSE regulated institution• Accounts should have

independent insurance to account value

• Accounts should be in your name• Investment adviser should only

have rights to make buy, sell, hold decisions, monitor account, authorize disbursement only to you, draw their fees from the account and manage the portfolio as needed

• Investment Adviser should be audited annually by independent firm

• Investment Adviser should be

100% all the time fee-only fiduciaries

• Investment Adviser employees should be 100% fee-only fiduciaries

• Company should have at least 10 years in business and reportable performance

• Investment Adviser goal should be aligned with clients

• Transparency about portfolio construction would be 100% all the time available

Investment Philosophies• Index (and don’t manage)• Have a core portfolio of index funds and

explore a few return-enhancing options; often called “core and explore.”

• Asset allocate as the “Way” to invest.• Buy and hold• Sector rotate• Large-cap stocks• Balanced indexing• Top-down• Bottom up• Do the “hokey-pokey”

A managers job is to manage…

“Nothing happens until something moves.”

-Albert Einstein

We suffer because we grasp and obsess;

We can do something about suffering;

We can live a spiritual life.

Neither shall they say, Lo here! or,

lo there! for, behold, the kingdom of God is within you. Luke 17:21

“Peace comes from Within; DO not seek it without.” Buddha

Suffering Exists

If you look at the Peacemakers that we know

from history and today; Joan of Arc, David,

Gandhi, Dalai lama, Mother Theresa,

M. L. King Jr., Nelson Mandela, Desmond

Tutu,

St. Francis, Fethullah Gulen, Malala

Yousafzai, they were willing to risk their

lives,

their social comforts and acceptance

to pursue virtue-infused ideals.

7 Social Sins

Wealth without WorkPleasure without

ConscienceKnowledge without

CharacterCommerce without

MoralityScience without HumanityWorship without SacrificePolitics without Principle

– Mahatma Gandhi

8th sin added by Arun Gandhi, his grandson:

Rights without Responsibilities

I grew up among the Sages.

All my life I listened to their words.

Yet I have found nothing better than silence.

Study is not the goal, doing is.

Do not mistake “talk” for “action.”

Pity fills no stomach.

Compassion builds no house.

Understanding is not yet justice.

Whoever multiplies words causes confusion.

The truth that can be spoken

Is not the Ultimate Truth.

Ultimate Truth is wordless,

the silence within the silence.

More than the absence of speech,

More than the absence of words,

Ultimate Truth is the seamless being-in-place

that comes with attending to Reality.

—Shimon ben Gamliel

Questions & Thank You

peace workshop part 2

Education

life plan

prose of life

zen master

ultimate truth

life wealth management

bountiful river of life

zen of abundance

absence of words