How to Start Investing

This weekend I spoke with someone interested in investing and realized my experience might help others. I'll give some back story on what I've done and then make specific suggestions at the end. Feel free to skip the backstory.

Backstory

I'm allergic to milk, but I'll always have a soft spot for pizza. When I was in the 7th grade (1995) my uncle and cousin took me to a pizza place in Chicago. They were discussing some sports star who had just gotten a $6 million dollar contract. My uncle asked "What would you do with a million dollars?"

I don't recall my answer, but my cousin's fascinated me: I'd invest it and live off of the interest. 6% on a million dollars is $60,000 per year. I was blown away. At that time I was probably spending about $200 a year (thanks mom and dad!) and couldn't fathom having let alone spending $60,000 dollars!

Since then I've been interested in investing.

Learning by Doing, Retirement Investing
My freshman year of college (2000) I opened my first retirement account when I started my internship with the State of Michigan. They had a 401K plan. That tax year but in Jan of 2001. My dad recommended opening a Roth IRA which I did with MSUFCU. It earned a fixed % (I believe 1.4)

During this time I began reading Forbes magazine and another investor magazine.

In 2002 I decided to move my Roth IRA from MSUFCU to Fidelity and put it into 'the market' I had no idea what I was doing and didn't get specific recommendations from anyone. I think people were afraid if they recommended xyz and I lost money I would be mad. I maxed out my IRA contribution (3K or 3.5K something like that), cashed out my MSUFCU money and opened a Fidelity account. Why Fidelity? Because my dad had a Fidelity account :) Without recommendations from anyone I decided to invest in some type of healthcare mutual fund.

For the next few years I maxed out my Roth contributions putting them in various mutual funds. Some while later (2006?) I realized this was not the best strategy. I learned about index funds and that they were better than mutual funds. Around this time I invested new IRA money in a NASDAQ Index fund (FNCMX) and what I thought was a S&P 500 Index fund, SPY (I later found out this is an ETF. Thanks Jason!)

Around 2012 or so I realized my mutual fund returns had been crap and decided to move everything into the S&P, which many investment vehicles benchmark again. As I was consolidating I realized my NASDAQ index fund had outperformed S&P so I left that alone (probably a mistake)

Now my retirement account consists of about 40% FNCMX and 60% SPY.

Other Investment Experience
I don't recommend any of these ideas for beginners, but I want to show my rounded out investment experience.

• Business Loan (2003-2009)
• Real Estate Purchase (2005)
• Landlord (2007-2012)
• Individual Stocks (mostly tech) (2012-2014)
• Selling options (mostly tech (2012 0 2014)
• Private Business Investment (2013)
• Arbitrage (2013)
• Bitcoin speculation (2013 - current)

Specific Suggestions

1. Pay off high debts first. Think about returns. SPY returns about 8% / year. It doesn't make sense to earn 8% on investments while paying more than 8% for loans (ie. a credit card at 20%) However on the flip side it can make sense to borrow at low interest rates if you can loan out at higher rates. However this can be a dangerous game. It's something to keep in mind but a more experienced play.
2. Credit card loans may be paid off more quickly with bank consolidation loans at lower interest rates, Lending Club or Prosper loans at lower interest rates, or 0% credit card balance transfers.
3. Be aware retirement funds (401K, traditional IRA, Roth IRA) generally can't be used without penalty until retirement age. There are exceptions for things like first time home buying and medical emergencies.
4. Have a cushion (1-2 months) of expenses in the bank before investing. It can be dangerous to invest funds into a brokerage account with Fidelity or OptionsHouse and have no cash in the bank. Then a car repair, medical expense, home repair, etc. can put one in a cash crunch needing to pull out their investments or use loans to cover the gap.
5. Many employers have 401K retirement plans and will match employee contributions. Sometimes employers even match dollar for dollar up to a cap. This is a 100% risk-free return, probably the best deal anyone can get in their life.
6. After maxing any 401K match money employers offer consider investing in a Roth IRA or traditional IRA. Open an account with Vanguard and invest in their S&P500 index product: VFINX.

Additional Information:

• What is a traditional IRA? - Contributions reduce your taxes now, you pay taxes on withdrawals at retirement. See Investopedia for more information.
• What is a Roth IRA? - Pay taxes now, at retirement time withdraw taxes now. See Investopedia for more information.
• A book advocating this strategy:  The Little Book of Common Sense Investing: The Only Way to Guarantee Your Fair Share of Stock Market Returns

Startup Grind Coming to Lansing!

I'm stoked to announce Startup Grind is coming to Lansing in January 2015!

Startup Grind is a global (55 countries, 125 cities) startup community designed to educate, inspire and connect entrepreneurs.

Powered by Google for Entrepreneurs, Startup Grind recently launched in Lansing. Our first event will be in the second half of January 2015 featuring a rocking local entrepreneur. I hope you join us!

We host monthly events for Lansing entrepreneurs.  Each event features a successful local founder, innovator, educator or investor who shares personal stories and lessons learned on the road to building great companies.  We offer yummy food + drinks and spend an hour filming an informal, intimate fireside-chat-style interview with our awesome person of the month followed by a Q&A and mixer.

Each event gets archived on www.startupgrind.com – some of the past interviews were with biz legends like the founders of Nest, Capital One, Pinterest, Stripe, SoundCloud, Words with Friends, Intuit, Indiegogo... the list goes on and on.  These interviews are a unique peek behind-the-scenes at the life, journey and insights of those who have gone before, and are incredibly engaging and inspiring events.  Startup Grind was recently featured in Forbes magazine and is quickly becoming known as the Ted talks of the entrepreneur world.

Lets Build This Together!

I'm excited to be involved in bringing Startup Grind to Lansing. To take full advantage of this opportunity it is important to involve the community.

Please email me to get involved!

• If you want to attend our first event.
• If you want to volunteer to help.
• Ideas on how Startup Grind can help Lansing.
• Local media contacts to help spread the word! (name & email or phone)
• Speaker suggestions (include speaker name, company, contact email,  & contact phone number)
• Sponsor suggestions (include company name contact name, contact email,  & contact phone number) Ideal sponsors are those who are avid supporters of the local entrepreneur community or those who have services founders can benefit from. 

I'm already working hard with a team of people to line up killer speakers and put on valuable events. This is going to be an exciting addition to the already vibrant Lansing business community!

David Smith
Director, Startup Grind Lansing
www.linkedin.com/in/davidssmith/

Apple Migration Assistant - Days to Minutes

I had a frustrating time using Apple's Migration Assistant. After some Google searching and the help of local vendor, Capitol Macintosh the process was quick. After the migration I was amazed at how seamless it was. I've checked all the apps I thought would be difficult like Inkscape and Gimp, but they transferred seamlessly.

The process worked so well that on my first login after migration all my windows were open just like I'd left them. It was just like using my old system.

Quickly Migrating Data

Context

I recently purchased a new Macbook Air since my previous one had a bad screen.

I was excited to upgrade from 4 GB RAM To 8 GB RAM, but not looking forward to installing my apps and getting the system configured like my old one.

Updating in Minutes instead of Days

I found out during the migration both computers are unusable. This is a problem when the process takes many hours or even days over WiFi.

Following these steps would have migrated me in under an hour instead of days:

1. Get a Thunderbolt Cable
2. Update both systems to the latest version of OS X.
3. Turn off sleep mode (Energy Saver)
4. Turn off WiFi on the new system (to ensure the process is using the Thunderbolt cable)
5. Plug in the Thunderbolt Cable to both systems.
6. Restart the old system and hold the T key on the keyboard.
7. Launch the Migration Assistant from the new computer.
8. Follow the prompts.

Other Tips

1. If you need to stop the migration assistant press Command Q.
2. If you need to restart the migration assistant and it keeps continuing where it left off restart the system.
3. While migrating the computer goes into a special mode and can't be used for anything else.

Rant

Why oh why did Apple make this process so difficult? After I put in a couple hours of trial, error, and Googling it worked great. But why hide this information? Computers are great at sequencing tasks and knowing not to go to sleep in the middle of important operations. 

There are no prompts are hints to discover how to massively speed up this process. It is frustrating I had to learn everything by trial, error, and the help of local Apple Authorized Servicer Capitol Macintosh to understand the best way to transfer the data. How hard would it have been to put the 8 steps above into software to walk users through the process?

I won't go deep into the usability issues, but for starters putting total estimated time up front via various methods (WiFi, Thunderbolt, etc.) would have helped loads.

How I lost 6 pounds in 5 days doing almost nothing.

This week I lost six pounds (170 => 164) with minimal diet changes and no working out.

My Effort:

1. 3 hours on Sunday reading 20% of The 4-Hour Body
2. Eating eggs for breakfast instead of fruit
3. Eating beans and spinach instead of fruit, potatoes, bread, and rice.
4. Being thoughtful about what I ate at 3 meals outside of my home this week.
5. Turning the shower on cold for a minute or so (not sure if this contributed or not)

The diet primarily consists of eating meat, legumes, and vegetables

Surprise
I'm still somewhat skeptical, but I'm proving myself wrong by doing it. I didn't think I could lose that much weight in such a short time frame and especially without major effort. In fact I may have eaten more than usual this week. I'm not sure how this will go, but I'll be happy to update in the future with continued progress.

Backstory
A few weeks ago my pants were getting tight on me. In 2012 reading The 4-Hour Workweek changed my life more than any other book I'd read (thanks Brian!) and knew the author had a weight loss book that promised maximal change with minimal effort. I was interested in losing weight, if I didn't have to eat stuff I don't like, work out, count calories. Basically I wanted to lose weight without expending much effort or changing my diet much. This diet fit me perfectly because I like to eat a lot and I like to eat a lot of meat.

Going forward
The book advocates a cheat day where you ignore the diet and today is my cheat day so we'll see how it goes (fruit and beer) )

As my experiment progresses I'll post updates on this blog. If it is successful I'll have before and after pics :)

Don't use Video Clips when Presenting

I recommend do not play video clips in your presentation. Find a different way to deliver the message.

Over the past year I've attended a few presentations where the presenter played a video clip. Often these clips range from two to five minutes.

Here are the problems with the video clips:

1. I am here to watch the presenter. If I wanted to watch that clip I would watch it on the computer.
2. Sometimes the clips are excerpts of shows or movies and don't make sense without the context.
3. Audio can be hard to hear and video can be hard to see because of the lighting.  Often there is scrambling at the beginning of the clip to adjust the audio volume. It works fine on the presenters computer at home, but is then presented on a different projector and probably even a different computer.
4. During the video clip the presenter often stands awkwardly to the side of the presentation area or look at their computer screen. This loses the audience.

Find a way for you to deliver the message instead of the video clip.

Free conference calling

Have you ever needed to setup a conference call without access to a corporate conference calling number?

This summer I had just such a need. For four months I used freeconference.com for weekly morning conference calls. Instead of scheduling a meeting every week I used their reservationless conference feature to have a conference call always ready to go! This enabled the meeting notices to have the same dial in number and access code and alleviated me from having to manage the meetings through their software. No  need to hand out codes to attendees each week.

This software has worked so well I hadn't logged in since I set it up. Fortunately my password manager saved my password so when I accessed the site today I didn't have to dig around for my credentials.

Never forget another password

In 1994 when I got on the internet in the sixth grade I had one username and password. I can remember one username and password. Life was good. Fast forward to 2011 I have no idea how many usernames and passwords I have: 50 , 200? Who knows. I've had to use forgot password buttons, forgot login buttons, had my accounts frozen for months, written passwords down in documents, had to call help desk support for assistance. I don't have to do any of that anymore.

What changed? I installed a piece of software called LastPass. This handy software remembers my usernames and passwords for me. I have it set to automatically login to sites I visit requiring passwords. It works by using a master password. I have my master password set to a passphrase, something easy to remember but impossible for computers to guess, like "myfavoriteteacherwasMrs.SavageIn7thGrade"

There have never been any security breaches of LastPass, but I don't use it to store my financial passwords just in case. This means I only have to remember 5 passwords, one for everything non-financial, and then one password per financial institution.

Try LastPass it is free and makes your life better.

Becoming a Better Listener

Today I received my first downvote on StackOverflow (a programmer question and answer site).  This means the downvoter said my answer sucked.  Fortunately they left a comment explaining why.  Immediately I thought "Hey! I'm right!" My answer is technically correct.  I think?.  I read the other two provided responses and noticed they both referenced a 50x50 Green square.  Mine did not.  Then I read the question again.  Oh, they want a green 50x50 square.  I didn't realize that!

I answered the question in as little time as possible without making a good attempt at understanding what they were trying to do.  I don't even know if my code really solves their problem because I copy and pasted code from my blog and put a warning on my answer "this worked two and a half years ago."  I told myself it was OK though because I put a smiley face at the end of the sentence to feel better about submitting an untested answer.

What happened after that?  Two people took time out of their day to improve the formatting and clarity of my answer and then a third person took time out to tell me why my answer wasn't good.  My answer did not provide value to the community.  Better answerers came along and posted more concise answers that directly solved the problem.  I had wasted community member's time.  I deleted my answer.

In the real world I do the same thing.  When people talk often times I have a response ready before they are done talking.  When someone criticizes me I often interrupt stating why I am right.  Listening is key to communication and learning.  I am working on being a better listener, and if you catch me not listening, help me out :)

Geeking out in Lansing

In 2008 I lived in Detroit and struggled to find like minded individuals to hang out with.  Individuals who code for fun and want to fix problems in their communities.  I ended up spending quite a few nights in Ann Arbor which has a similar tech scene to Lansing but a bit larger.  I enjoyed new events like CoffeeHouseCoders, Ann Arbor New Tech, and the TechBrewery.

I'm happy to report Lansing now has similar events so I can get all the goodness I was getting in Southeast MI right here at home.

The inaugural Lansing CoffeeHouseCoders meeting is 1/19/2011.  If you like to code in your free time in a social atmosphere, this is the place for you!

Hackers & Hustlers is a group focused on startup culture.  Attendees will hear entrepreneurs who are actually doing it give a talk or a pitch on their product.  The first meeting is 1/26.

In 2010 Lansing also got a coworking space, Second Gear.  More and more businesses are enabling their work force to work whenever and wherever they want.  For me often times that means I need to be somewhere for an evening event and I spend the day in a coffee shop.  That works OK, but I like to work near other programmers so I can learn from them and bounce ideas off of them.  Second Gear is meeting that need for the Lansing community.

Back to Lansing!

Thursday September 9th was my last day at Sonoma Partners, the best Customer Relationship Management (CRM) Dynamics parter in the business.  Sonoma delivers projects on time, on scope, and on budget sometimes receiving amazing unsolicited feedback from satisfied customers.

Amelia Marschall and Jeff McWherter gave me the opportunity to work with talented individuals such as Scott Gowell, and Lauren Colton helping individuals in the greater Lansing area overcome technical challenges and giving back to the community by helping fight extreme poverty and cure preventable diseases, or  working to double the number of college graduates in Michigan.

I started at Gravity Works Design and Development on Monday September 13th.  I've already delivered some great value for customers and had some great times.  I'm looking forward to helping grow the Lansing and Michigan economies.

A Test of My Mettle

I attended my first Toastmaster's meeting last Wednesday and experienced special guest Ed Hearn deliver an inspirational thought provoking speech entitled: "The Courage to Try."

Mr. Hearn gave examples of individuals achieving seemingly impossible goals such as Wilma Rudolph winning three Olympic Gold medals despite having a severe physical disability as a child.  In each example the actors overcame daunting obstacles to realize fantastic goals.

During the speech I was thinking about people's opportunities in life, and how I did not have to struggle to complete High School, College, or get a professional job.  I've taken advantage of opportunities which were nearly given to me, but I haven't made my own opportunities.  Mr. Hearn's speech combined with some of my other experiences have made me realize the goals I attempt in life are low risk or low effort. When I take on large (1,000+ hours) personal projects I give up on the projects after investing a small (10-700 hours) amount of effort into them compared to the amount of effort required for completion.  I'm assuming I give up because I don't see results and overvalue the opportunity cost.  IE.  I think "Hmmmmmm...... I've spent 50 hours on this which I could have spent completing items x,y, and z on my todo list instead.  It may take another 500 hours to achieve my goal, or I may not even be able to achieve my goal," and sack the project.

I am not sure if this new thinking will bear fruit.  Unless I can talk myself into believing there is significant value in the act of trying I'm not sure I can justify the cost of the attempt.  Maybe because I plan for the worst and hope for the best.  Under this mentality I assume the 1000+ hours invested will not achieve the stated objective.

A new life with Microsoft Dynamics CRM...

Friday January 15th was my last day at Urban Science where I learned a lot about software development and made a lot of great friends.

On Monday January 18th I started a new job at Sonoma Partners.  We specialize in customizing and implementing Microsoft Customer Relationship Management software for our customers.

If you are a technologist, programmer, personal contact, or professional contact in the Chicago area give me a call and lets get together.

If you are a potential Microsoft CRM customer, give me a call and lets make a deal ;)

Delete a Blogger Comment

To delete a blogger comment, like spam, the easiest way I have found to do it is by

1. Opening the post I want to delete in Chrome (the technique should work in any browser, but Chrome is my favorite because it is much faster than IE and because I like the Google brand better than FireFox)
2. Right Clicking on the page and selecting "View page source"
3. Press ctrl+f to bring up the search box and enter "delete".
4. Look for the delete link.  It was the second search result on the page for me and looked like this: <a href='http://www.blogger.com/delete-comment.g?blogID=5094545033872573936&postID=6517665474722511356' title='Delete Comment'>
5. Click the link.
6. Follow the directions on the next page confirming the deletion.

There is probably a way to make the delete button show up on the page but I don't know how.

TEDxDetroit recap

My cousin, Gabriel Mott, turned me on to TED in 2005 by linking to what is still my favorite TED talk. I was excited to be accepted as an attendee of the inaugural TEDxDetroit event on 10/21/2009 at Lawrence Tech University.

The most beneficial part for me was speaking with other attendees such as Alex Fisher, Henry Balanon, Bret Kopf, Betsy Weber and meeting new people such as Lisamarie Babik, David Benjamin, Andrew Brown, Jamie Favreau, Lee Andros (bus buddy!), Janak Mehta, Rich Sheridan, and Dug Song.

Here are my take aways:

• Ask high quality questions.  High quality questions provoke thought.  An example could be "How can we generate y revenue through x technology?",  "How can social media help solve world hunger?"
• What can we do now given the current technology and environment?  If our plans depend on a change (new technology, etc) what if that change doesn't manifest?  If our plans don't consider the current environment (ie. culture) how will the implementation go?
• There are two ways to make money, by nickel and diming the competition or by taking big leaps over them.  Giants take big leaps.  Who are your giants?
• Users are not stupid. Designs are stupid.  Observer your users in their environment and reduce their pain.
• Some people are economic hurricanes.  Everyone has great ideas.  Those who execute on those ideas are the hurricanes.
• Research the problem before providing the solution.  When we have ideas we think of our solution and present that.  Instead of presenting that, present the problem inspiring your solution and see what others have to say.
• At a certain level of wealth problems are problems of perception.  This was a particularly interesting talk for me because I tend to think in functional terms instead of presentation.
• All value is relative.
• Persuasion is better than mandates.
• Contextual timely and immediate.

P.S. If you would like to attend a regional TED event, TEDxLansing is seeking volunteers.

Milton Friedman for your reading pleasure

These quotes made me laugh out loud. Not necessarily because I disagreed: http://www.brainyquote.com/quotes/authors/m/milton_friedman.html

Enjoy :)

My Personality Type

My type: ENTJ

Outgoing, logical and decisive, the ENTJ leads by providing conceptual structure and setting goals, rather than by detailing and enforcing procedures, codes and regulations. This “big picture” type rises naturally to conspicuous positions of power and responsibility in all organizational settings (business, military, educational, governmental.) Disorganization, confusion, emotion, inefficiency and illogic drive ENTJs to take charge of situations and institutions. Their intuition fuels their vision and defines their goals. They deal with the world boldly, in an assertive, analytical, objective and organized way which inspires others to salute them and do whatever the ENTJ needs done--including all the detail work! ENTJs certainly do get things done, both at home and at work, but often at substantial cost in terms of wear and tear on the human spirit, for they may neglect the importance of the personal element in accomplishing their purpose. More than any other, this type seems to struggle between an inner drive toward creative spontaneity and the desire for order in the universe.

Final Score: Extrovert: 7 Sensing:5 Thinking:9 Perception:1 Introvert: 2 iNtuition:4 Feeling:0 Judging:8

EDIT: I took a similar test on September 9, 2016 and my type was classified as INTJ

Introverted (I) 55% Extroverted (E) 45% Intuitive (N) 60% Sensing (S) 40% Thinking (T) 62% Feeling (F) 38% Judging (J) 53% Perceiving (P) 47%

INTJ - "Mastermind". Introverted intellectual with a preference for finding certainty. A builder of systems and the applier of theoretical models. 2.1% of total population.

Marketing Your Business in Detroit via Viral and Social Media

I went to my frist Model D event which was co sponsored by Open City. 

Charlie Wolborg and Terry Bean gave an captivating presentation on social media giving me a lot to think about over the past couple days.  It is why I signed up on Twitter as smithd98.

Here are my notes from the meeting:

Social Media Categories:

• Online Rolodexes
• Blogging
• Feeds - like magazine subscriptions
• Video
• Photos - Facebook has the most photos of any social sites.
• Podcasts
• Bookmarks
• Networks

Passion - be remarkable

In six months more content is uploaded to YouTube than has been created in 60 years of NBC and CBS programming.

Facebook's #1 growing demographic is 30 and older.  This means your customers are on or will be on Facebook.

1. Ready. Fire. Aim.  - it is most important to have a presence on these networks and refine the presence later than getting it right the first time.
2. Join All.  Participate Few.  - The flood of information from all the social sites will overwhelm you.  Find out which sites your customers use and play in that space.
3. Go to Where Your Prospects Play
1. LinkedIn --> web jobs --> simplyhired shows who works there.
2. MySpace - important for entertainers and artists
3. MotorCityConnect - if you are in the Detroit area.
4. Facebook - allows you to connect with your past.
1. People hang out on Facebook like it was a club.  This is different than transactional where users seek out a service from a site.
2. Fan pages can be created for companies and products.
5. Twitter - this is where you can go to initially make contacts.  These are the early adoptors.
4. Personal Brand Optimization
5. Social Media is a conversation not a sales pitch.
6. Feed Your Networks and stay visible.  FriendFeed can help
7. ROI or Die
8. Find your golden ratio - give value to these networks, don't just try to monetize them.
9. Build it before you need it - relationships take a long time to build and need nurturing.  Do that in advance of a need.
10. Tools are not the tactics - hire a professionals like Networked inc. 

Search for Detroit Software Developer Community

I ran across an interesting group this morning in my search for the Detroit Software Developer Community: the detroit software engineers' grotto. The group's goal is interesting for anyone to read. They are trying to rent a space for software engineers to work instead of their office. The space will have comfortable couches, chairs, and like minded individuals. It is modeled on a Writer's Grotto founded in San Francisco.

Unfortunately for me it states Windows is a legacy operating system, Web 2.0 is dead, and Mac OS X is the wave of the future. Interesting ideas.

I'm looking to get involved in the Detroit software developer community. We have companies with lots of developers here: Compuware, Electronic Data Systems (EDS), Accenture, and Deloitte come to mind right off the top of my head.

The Great Lakes .net Users Group, but as that is in Southfield I have to battle traffic to get out there. I came from the Lansing area which has a great developer community especially for the relatively low population of the area. Being involved in the Greater Lansing User Group .net continues to positively impact my life.

This morning I went looking for the Detroit developer community. My assumption is that it must exist given the larger population and I'm just not connected. Yet :)

Rudolf Melik, CEO of Tenrox speaks at PMI-MCAC

I'm the Vice President of Programs for the Project Management Institute Michigan Capital Area Chapter (PMI-MCAC). Our 2007-2008 program year inaugural meeting featured Rudolf Melik, CEO and one of the founders of Tenrox. He gave a great presentation on Empowering Your Project Workforce. During his presentation he mentioned how business is changing due to globalization, workflow tools, outsourcing, off shoring, and the internet. Mr. Melik discussed ways to avoid MESS (Meetings Email & Spreadsheets) to increase productivity. On a personal level he recommended committing to projects, de-commoditizing your job, leveraging other individuals, keeping up with innovations, and using 21st century tools.

Jing, a Free Image Capture & Screen Recording tool

TechSmith released a free image capture / screen recorder tool yesterday called Jing. I focused on the video recording features because we have SnagIt here at work. Jing is very easy to use. I installed it, configured it (setting up Screencast), and created a video in about 10 minutes. Jing is cool because it allows you to record your entire screen, an entire application or objects within applications. After recording one click sends your video up to Screencast and even puts the URL to your video in your clipboard!

We will probably use this tool for training.