Christmas review

I'm in Singapore as I write this using my old keyboard, typing on my old computer table. It's been with me for 11 years. Time really flies. I've typed a lot on this keyboard, including school assignments as well as working product code that I'm selling till this day. So welcome to my almost end of year review.

This year has been a dreadful year in terms of the world economy. Personally I've made some horrible dreadful mistakes this year on investments and have lost a lot of money. Enough to live several years on. It's been a series of expensive mistakes, which I hope I'll learn from. I'm pissed off at myself for losing that amount of money, but I know I'll get over it and make it all back someday. As someone said before, it's okay to make mistakes as long as you don't repeat them. The bright side is that my business has grown again this year. Frankly I find that unbelievable in this economic climate, but well, that's the truth. Business was bloody fantastic the first 6 months, and fell off after that but I still managed to end with double digit growth. And I didn't really touch on my business this year, it's pretty much handled itself automatically. I think that's pretty damn awesome and I must be doing something right. I think one of my downsides is that I don't really count on money being such an important thing in my life, I'd rather help others in the biggest possible way that I can, in the shortest possible amount of time and then being rewarded for that. So if I lose money, I don't feel as much pain, but I know how painful it can be if you're poor and broke, that's why you always need to save for a rainy day. Saying that, I do keep a spreadsheet of my net worth so I know where I stand. I think it's important to know where you stand.

This year is also the first year where I've made in the region of 6 digits in a single year. That's a monumental achievement for me, considering my age. I've done it through getting a "real job" with a "real company" and also previously working on my own software company, not by focusing on how much money I can make but how much value I can deliver to the end user. I'm above my peers in the financial stakes, but I don't compete with them, I only compete with myself. Many of my peers have no idea how much money I really make. Well that's fine, I don't want to be robbed nor do I want them to be envious.

Next year's predictions

These are my predictions for next year. It's not looking rosy at all and it's going to get worse. I'm not a pessimissit, but I am a realist.

• The Greater Depression will arrive in the USA, so probably a 50% fall in my business would be very likely, if not worse. If that happens, there's nothing I can do, I'll just do what I always do, create software to solve peoples' problems. Unemployment in the US will be worse than the Great Depression, the figures just keep getting worse and worse.
• The housing bubble will get much worse. Option ARMs will reset and many more people will lose their homes.
  
• There's going to be a huge world restructure. The US dollar will collapse and go into hyperinflation. This will happen sometime in August - September.
• The Dow Jones will collapse to the price of 1 ounce of gold. I think the US dollar will collapse first, which means the Dow Jones will be something in the region of 40,000 points, random guess, a large number, but mostly rendered useless because of the worthlessness of the dollar. The stock markets in other countries will fall as well, however they will recover as soon as people realise that they do not need to USA as part of the world economy. I don't know when will this happen. The US will most likely not recover for decades. Stocks are still a no buy in my opinion.
  
• Gold will reach at least $2000 sometime next year, possibly even higher, due to economic uncertainty and endless printing of money. If the Dow reaches 40K, Gold will reach 40K. People will lose faith in currencies.
• Commodities will get substantially more expensive after the deflation period is over. Standards of living will drop, people will be able buy less with their paper money. More countries will go into recession due to rising commodity prices. People will spend less money and save more.
• Lindsey Williams said that the Arab countries will dump the dollar. I don't know if this will happen, but he did say oil will go to $50 a barrel in July and it did happen in November this year. The problem with this is not only will it render the US worthless, but China and Japan, the world's largest holders of US bonds, will lose a huge amount of money as well. I am unsure of the repercussions of this. Australia's hugely dependent on the progress of China.
  

That's all for now. What I can see right now is a huge transfer of wealth to the Asian countries. I don't know how it's going to end, but what I know is that in 20 years, the world's landscape will be very very different.

With that, I'm going to end with...

Merry Christmas to all!

Entrepreneurship is...

NOT
- a written course that you can take
- a roadmap to success
- obtaining venture capital
- writing detailed business plans
- a Phd in entrepreneurship
- a career path

IS
- being a contrarian
- belief you will succeed no matter who says what
- action over lip service
- the creation of value (over money)
- saving of time (over money)
- pain reduction (over money)
- solving of problems (over money)
- making the world a better place (over money)
- a lifetime of commitment to your ideals (over money)

In other words, entrepreneurship is a mindset.

Thinking about time

I think. A lot. I don't think that's bad. I simply can't stand not thinking. About the future, the past, the present. I dislike talking about crap, small talk and wasting time. I prefer doing things, talking is a waste of time! If people talk less and did more, the world will be a better place. Many people spend their lives floating away their time. Doing absolutely nothing other than their job, with no aims, no dreams, nothing. That's none of my business, but I find that absolutely tragic.

People always think the "next generation" after them is always better. Oh really, in what way? Lifestyle? No, it's just different. Finance wise? No we're becoming poorer if you take into consideration inflation. If you don't put energy into your children or society, entropy results. It's like this. Poor kid becomes rich through hard work. Rich kid now has a family, transforms into rich dad and provides everything for his children because he "really loves them". Children have no concept of hard work, money, etc and think everything "falls from the sky", having the benefit of born into a rich family. Children never learn the concepts or understand what working is from their parents. Rich dad passes away, leaving children will all the money. Children will inevitably squander all that money, and so the cycle repeats.

Look around you, you can see this is at work. Many children from rich families have absolutely no concept of money or hard work because they think, hey if my parents die, I can have all this money, so really why do I need to think about finances? This is extremely evident in western society. I wouldn't say it is the same for Asian countries because the mentality is very different with saving an important habit in almost every family. Western society thinks social benefits are an obligation, that they deserve it. Heck no wonder they are getting poorer. Managing money is much more important than receiving it.

Millionaire mindset or winning a million dollars? You decide.

At my age, I realise time is more valuable than anything. We're all given limited time on Earth, but unlimited everything else. Time flies, literally. For me anyway. See.. in life we don't really run out of anything, except time. Everyone can be a millionaire, with enough time. Time is more valuable than anything else. Everyone gets the same amount of time in a day.

Spend time wisely.

Finances and the US economy

I haven't written in this blog a while so I thought I'll do an update. Financially this has been my best half year ever in terms of my business. I had thought the present economic environment posed a challenge to my business but I was wrong and underestimated either the consumer and/or myself. Obviously I am not counting my chickens before they hatch, as the year end has not been reached yet, but the previous 7 months have been outstanding in terms of profits. Will the next 6 months be the same? I highly doubt so as I have a gut feeling the US stock market will crash within the next 6 months due to the amount of ridiculous awful decisions the US government is making. If I were an American I would march up to congress and demand that all the politicians except Ron Paul, resign immediately. What the heck is the government thinking bailing out Fannie Mae and Freddie Mac ?? Every American household now owes at least $400,000, an amount increasing day by day. If you are an American you need to own gold and silver now as the one surest way of protecting your wealth, if you do not do this you will absolutely be finished when the dollar collapses. And I mean zero, kaput. Get out of stocks now before it's too late. The stock market is still far far off from a bottom. The analysts from Wall Street have been calling a bottom since the beginning of the year. If you'd listen to them you would've been losing a lot of money and that's just from the beginning of the year till now. I feel the US government should allow the economy to collapse and then rebuild, which will inevitably happen. There is so much credit and excess which needs to be gotten rid of. If a house is worth 400K, giving people more money will not make them want to spend that money on the house! The prices have to go back down to reasonable levels before people will consider buying them again. People are so scared of losing money but the fact is that money never existed to begin with, it's all numbers and inflation. If everyone each had a house was worth 400K and each house rose to 500K, did everyone make 100K? Are people "richer"? No, because everyone's house has the same value to begin with. You are only wealthier than everyone else if everyone else does not have the same amount of money as you do. The more there is of something, the less value that something is. So what if the economy collapses and people lose money? Money... there is so much money in the world, it is literally unlimited. Which is why I do not believe in working for cheap. If you make yourself cheap you are just saying to others, my only competitive advantage is that I am cheap so you should hire me. I believe in doing things right the first time and charging a premium for that. Afterall if I do a good job once, it's cheaper than hiring someone else and getting them to do it multiple times, after which it will probably be more expensive anyway! You should always set a high standard and charge whatever you think it's fair, but definitely not on the cheap. It's good to be competitive but if cost is all you can compete then you're going to go nowhere up. My software is the most expensive of its kind in the world. I do not compete on price, I compete on quality and having happy customers. Who cares about competition when I am constantly competing with myself?

Coupling and cohesion - software and society, a short discussion

One of the principals of building good software is to build loosely coupled components, that is, software components which exist independently of each other and do not rely on each other.  Doing so would make software easier to maintain and change, as code changes made to component X would not affect component Y.  In contrast, tightly coupled software would mean components are reliant on each other, and changes made to component X may affect the behaviour of component Y.  This is not ideal as it would make maintaining code harder because it would be harder to isolate bugs or erratic behaviour, as well as make it harder to test the components separately.

Let me explain this relating to society.  In society, we are all linked to each other in some way or another.  The six degrees of separation experiment tells us this is so.  In a family with young children, the children are highly dependant on their parents, which is akin to tight coupling.  As the children grow up, the dependence lessens as they become independent, which is loose coupling.  Based on software engineering principles, this tells us that if society was modeled upon software engineering, it would be better if everyone were independent of each other.  Society would be easier to "maintain".  But is this true?  Well, not so.  It would be easier to maintain if you were thinking about record keeping and statistics of the person, which would be behaviour and data in a software model, as you only contact the single person for any source of 'data' relating to that person.  However in real life, no person is truly independent because they take on behaviour shaped by society and is reliant on the same society for different needs.  For example, each of us has bank accounts.  To deposit money, we go through the bank, in that way, we are reliant on the bank.  Humans are reliant upon each other for social needs.  This is evident in humans as well as in the animal kingdom.  In many cases, a strong tightly coupled society is good.  Software code has no feelings and no basic requirements, so they can exist independently.  The question to ask is then, why not promote tight coupling in software?  As said previously, tight coupling leads to hard to maintain code.  However tight coupling is acceptable if the components are highly cohesive, i.e. related to each other.  For example, a wheel and axle.  The wheels and axle can be loosely coupled and exist independently, with an interface between the two which allows any type of wheel to be used with any type of axle.  This interface is tightly coupled between the two components.  Making changes to the wheel will mean changes to the interface, but not to the axle.  The interface would be like a cashier working at a bank.  The bank, and the customer, exist as separate entities not strictly dependent on each other, i.e. loose coupling  To deposit money, the customer goes through the cashier, the intermediary.  There is tight coupling between the customer and cashier, and cashier and bank, but loose coupling between the customer and bank.  In the strict loosely coupled ideology, the customer would be his own bank and maintain his own finances.  Not very ideal as that would mean everyone would require a bank each.

So in designing software, it is important to think of coupling and cohesion, and find a balance between the two.  In society, no one can truly exist on their own.  Cohesiveness has to exist somewhere.  In building software, reflect on the principles of how society is built, and taking that approach, think about how you can build your solution better.  I find it astonishing how many many things we learn are all linked to each other in some way through abstract thinking.

And to conclude, you can bring about better cohesion in your life by ringing your mother this Sunday and wishing her Happy Mother's Day!

Spirit of Enterprise 2008

I've been nominated for the Spirit of Enterprise 2008 award in Singapore. The award seeks to recognise entrepreneurial spirit, and the voting is open to public in July. I'm flattered that someone actually nominated my company. I don't expect to win but it'll be good to. :) I'm now living in Australia so the interview was conducted over Skype.

With regards to my last post, I am not sure if I panicked too early, but this year's first quarter financials were the highest so far in any year. With today's unstable economic outlook, I am not sure this can be repeated for the 2nd quarter but we will see how it goes. The hardest thing to predict is human behaviour which can be completely irrational at times. I'm still saving most of my money, I don't spend a lot other than food and rent.

This is going to be a short post, don't have much to rant except that I'm still doing alright financially.

Sign of things to come?

So almost 3 months into the new year and it is not looking good for my business. Sales in the past week have dropped drastically, I have had no sales for the past week, despite having the best ever start to any year. Nothing has changed in download count or search engine results. Last week has been a crazy week in the US. With the economic situation not improving anytime soon I have a really bad feeling about all of this. What frustrates me is that I cannot do anything about it, other than lowering prices (which I doubt will do much).

Right now... I can only wait. It would be good if sales could resume to what they were before but I doubt so. The zero sales in the past week has never happened before, not even when I was making almost nothing a month back almost 8 years ago. More will unfold in the next month, however I do not expect an improvement with regards to the present situation.

My present plans right now are to

- Save, save and save financially since my business is currently making nothing and I will have to rely on my "real job" with Boeing. Previously I have hardly, if ever, spent a cent of my salary with them, looks like that's going to change. :(

- Learn programming on the Mac, after which I will port over at least one of my software to the popular platform. I've started to learn it, it's different from Windows programming but from what I have learnt so far the changes are a good change.

- Investigate into different products which I can develop. Not all segments of software are affected, it will seem I will have to extend my product line to include other kinds of software. I don't look forward to this as it would mean specialising outside of my product niche, but we will see if I will.