Predicting Economic Crashes Through Architecture

An interesting story came out recently in The Christian Science Monitor. According to research by Mark Thorton, an economic crash in a particular country or region can be predicted by a spate of ‘world’s tallest buildings’ in that area. It seems tallest buildings are usually a result of factors often leading up to economic slumps - interest rate and price distortions, and a feeling that things can only ever keep on improving.

Known as “The Skyscaper Index”, this chart reveals that such an analysis isn’t foolproof - but it does get things right more often than not.

Source: The Christian Science Monitor

This may be a classic case of Warren Buffet’s maxim, “Be fearful when others are greedy. Be greedy when others are fearful”. Time to short against China, anyone?

The $5 Trick to Saving $5,000

I was speaking with an investment adviser the other day, and he let me in on this little tip to save $5,000. For lack of a better name, we’ll call it the $5 trick.

A woman recently walked into his office with $5,000 cash, and asked him for advice on putting it on the sharemarket. She explained that she was on welfare benefits, with two small children, and wanted a nest-egg that could eventually help her own her own business. My friend was impressed - it is difficult for many of us even on full-time incomes to raise $5,000 for investments. If she didn’t mind him asking - did she do it on welfare payments?

Easy, she said. Each time she was given a $5 note in change, she put it aside, in a special place she wouldn’t spend it. It wasn’t long before $5 became $100 (only 20 notes), then $500 (100 notes), and then $2,500. Before she thought it possible, she had raised the desired amount.

This trick worked firstly because she had a goal amount and a purpose for the money. Her plan also worked because we have to break larger bills every day, and chances are you will receive a $5 bill on most days. $5 is small enough that you won’t miss it - yet large enough to make a difference (if you are on a higher income, why not try this with a $10?). If you can do this most days of the year, you will have $1750, without breaking a sweat. Combined with other saving tips, like automatically reserving a section of your paycheck, that $5000 investment fund is looking closer by the minute.

How To Earn $20,000

There’s an interesting thread over at Namepros, which is the leading forum for investing in internet domain names, but also talks about other aspects of making money on the internet. The question was what was the easiest way to make a nominal $20,000 a year online, and some of the most experienced contributors chimed in with their thoughts.

A $20,000 Scrabble board with a $6/hr security guard.

A few of the top tips that were mentioned:

• Don’t try to sell domain names in tough economic times, and certainly don’t try to sell low value names to other domain name investors. The hourly rate won’t be worth your effort. Your best bet will be contacting business owners directly who might be interested in your names. For most names a $499 - $399 price range will work well.

• If you want to buy and sell domain names, stick to the top end of the market, or finding the names of expired websites (that still have existing people traffic passing through them). The latter has inherent value as it can be converted into customers, if directed to a monetized website. Trading such names can be profitable during any economic cycle.

• Consider developing websites to make money, but do it wisely. Get the best possible name that you can afford for your site. Save money by finding a reliable, inexpensive web host. Pay for good design - services like Pagetopia offer $199 websites, so it needn’t be expensive. Write about what you know and are passionate about, and offer real value every day.

• Paid subscription sites can work well if you offer a good service. Consider a monthly subscription fee of around $4.95 to $15.95.

• Find out what is working in any online investments. Remember the 80:20 Rule (link it!). Developing one website well is better than a larger number done badly. Everything has its critical mass level.

I’m sure a few of them won’t like me letting out their trade secrets, but you can read the thread and more about the various strategies here.