Business Systems / Network Marketing

As a philosopher I naturally dislike vagueness. Vague terms, vague concepts, and vague ideas all basically annoy my philosophical mindset. This was increasingly apparent to me this morning as I had a business discussion with a former student and her husband about getting involved in a passive income "business system." While I am 100% sold on the idea of passive income (of which investing is but one variety), I am admittedly rather skeptical of most non-traditional business schemes.

The basic idea behind the "business system" in question was a combination of affiliate marketing and direct marketing, attempting to capture the money from retail sales that traditionally goes towards distribution by streamlining or eliminating elements of the product distribution process. In theory, this is a brilliant idea and has been used by such successful strategies as Amway and other network marketing schemes.

So already familiar with the concepts involved, I patiently sat through a twenty minute presentation designed to sell one on the concepts involved in this "business system" (notice my persistent scare quotes). What were lacking were any form of specifics about this novel business system, which of course can be learned by attending a free seminar on the business system itself.

While as a teacher I appreciate the need to get across the big idea before specifics, when I asked for the quick and dirty version of what the "business system" was all about, I was consistently referred to the free seminar as a place where my specific questions could be better addressed. This brings up an interesting feature of all such business systems and network marketing systems: they have a distinctly cult-like nature due to the tendency towards secrecy rather than full disclosure about what one is getting involved in. While this strategy may be useful in convincing someone who is completely unfamiliar with all things economic, for anyone with above average economic intelligence this brushing aside of one's questions will only serve to dissuade one from wanting to get further involved in such a "business system" (which after 45 minutes on the phone I still only have a vague definition of; see above for how much I enjoy vagueness).

So will I attend the free, no-obligation seminar? Probably. I have never been one to turn away from a genuinely good business idea, although I was somewhat annoyed by the aforementioned vagueness and brushing aside of my most basic questions about what this "business system" is all about. Plus, I just bought a brand new, shiny GPS navigation system, and this will give me a chance to go for a drive and play with my new GPS toy. So I will probably go to the free seminar to learn about this "business system," but as a true philosopher I will attend with a healthy dose of skepticism.

For the newbies out there, long-term investing through a diversified portfolio of ETF's or mutual funds is a far better way to ensure one's future financial success. I would put money on the fact that the majority of people participating do not even have something as basic as a Roth IRA or a 401(k) (the bare minimum) set up for themselves. Do not forget the basics, folks. All the cleverest business schemes and systems amount to nil if you do not have sound personal finance habits in place.

Investment Metaphor #11: D-Day

No, not that D-Day. I mean "Dissertation Day." Today is my first official D-Day. You see, in addition to being an up-and-coming personal finance writer, I am also a Ph.D. candidate in the philosophy department at UC Santa Cruz. I have been a grad student now for approximately six years, from 2001 until now, and it is time for me to be finished. Most of my grad school career has come quite naturally for me, from completing my coursework, writing an M.A. thesis, and achieving the rank of doctoral candidate. The only remaining hurdles to jump through are the completion and defense of my dissertation (the D-Word).

Up until now the dissertation has seemed to me to be an insurmountable task, filled with anxiety, anguish, skepticism, inadequacy, struggles and general loathing for academia. I have viewed my dissertation as some nebulous non-existent future entity, whose completion was nowhere in sight. So to counteract the heavy dissertation burden, I have decided to change my mindset. Rather than viewing my dissertation as a future, uncompleted project, I have decided to think of my dissertation as the very stack of writing sitting beside me right now. True, it is not finished; true it is still incoherent; true it is still amateurish; but it exists; I have a dissertation.

And so in the interest of having a finished dissertation, I am devoting every ounce of free energy I have to dissertation work; hence "D-Day." Today I have secluded myself in the local coffee shop with nothing but my new laptop and my dissertation materials. I have given myself the goal of having a completed dissertation in six months from now. By the end of March 2008 I will have a completed dissertation with only the oral defense of my dissertation left until I am Dr. Z. I have been here at the coffee shop for the last six hours, and I have written twelve pages or so. In total I have 23,495 words of my dissertation sitting beside me in a stack so tall it makes it easy to believe the project will be done in six months. I need your help dear readers to keep my optimism, to stay focused, and to finally be done with the grad school nightmarish hellhole.

I suppose I did promise you a substantive investment metaphor, so here's a quickie for you: it is easy to view retirement like I have been viewing my dissertation, as some nebulous non-existent future entity. However, it is the steps you take today that will lead to the retirement of your dreams, and there are indeed steps you can take, no matter what your financial situation, to stay on the straight and narrow path to your final goals. Just as it is the short-term and immediate goals and work that I am pursuing right now that will someday lead to a completed dissertation and a Ph.D. in hand for me. Do not procrastinate, do not waver, take small user-friendly and bite-sized steps, and your goals will be reached if only out of sheer tenacity and stick-with-it-ness. Ph.D. or retirement, do not ignore the little steps that lead to the successful completion of a seemingly endless voyage.


See below for previous installments in my series on investment metaphors:

Investment Metaphor #10: Trout Fishing
Investment Metaphor #9: Truthiness
Investment Metaphor #8: World of Warcraft
Investment Metaphor #7: Commuters
Investment Metaphor #6: Live 24/7 Webcasting
Investment Metaphor #5: Johann Sebastian Bach
Investment Metaphor #4: Investment Blogging
Investment Metaphor #3: Potatoes Revisited
Investment Metaphor #2: Fractals
Investment Metaphor #1: Cane Toads

Third Quarter Dividends

Now that the third quarter (and my money-strapped summer) is finally over, here is an updated dividend list with my third quarter dividends. I received my distribution from Advantage Energy Income Fund (AAV) around the middle of last month, and I received my distributions from my Russell 2000 index fund (IWM) and my dividend index fund (PEY) at the end of the quarter. I should be receiving my third quarter S&P 500 index fund (SPY) dividends next month sometime, so stay tuned. So without further ado, here is the updated dividend chart, showing all my dividends (and their growth) since I became an investor in January:

Roth IRA Dividends:

iShares Russell 2000 Index ETF (IWM):

03/29/07: ($0.64)
07/05/07: ($0.86)
10/01/07: ($1.58)

S&P 500 Index "Spiders" ETF (SPY):

04/30/07: ($1.27)
07/31/07: ($1.62)

PowerShares High Yield Dividend Achievers ETF (PEY):

04/30/07: ($1.11)
05/31/07: ($1.38)
06/29/07: ($1.39)
07/31/07: ($1.82)
08/31/07: ($1.82)
09/31/07: ($2.29)

Money Market Fund:

02/21/07: ($0.47)
03/21/07: ($0.53)
04/23/07: ($0.64)
05/21/07: ($0.26)
07/23/07: ($0.36)
08/21/07: ($0.37)
09/21/07: ($0.26)


Taxable Account / Emergency Fund Dividends:

Advantage Energy Income Fund (AAV):

03/19/07: ($0.87)
04/18/07: ($0.91)
05/17/07: ($0.94)
06/19/07: ($0.99)
07/19/07: ($1.01)
08/17/07: ($0.99)
09/19/07: ($1.05)

Money Market Fund:

02/21/07: ($0.35)
03/21/07: ($1.55)
04/23/07: ($3.25)
05/21/07: ($4.62)
06/21/07: ($2.68)