The Path to the Pegasus Letter is the winner of my Entrecard Contest I run in May. As a price, there was 1000 EC, 125×125 banner spot on my blog for 1 month and blog review. Credits and banner spot are already delivered, now it is time for a review.

What it is about?

If you are a new visitor to The Path to the Pegasus Letter, you might be confused for a while by not knowing the subject of the blog. I didn’t find any about page and there is no simple tagline explaining what this blog is about. Anyway, when you start reading any of the posts for a while, you will get sure this blog concerns investing, finances and money – few of my favorite topics.

User Experience

The blog has two sidebars, left and right, mostly filled with ads. Personally, I prefer sidebars only on the right side, but it is a matter of taste. The most useful things there are Blog Archives and, if you are an Entrecard user, Entrecard plugin.

What I definitely like is a big, clear space for main content – posts, especially a lot of posts right there on The Path to the Pegasus Letter are long. There are no ads within posts which is another advantage concerning posts reading.

On the other side I really miss an easy access to labels and some kind of ’top post’ or ‘best of’ page. These things are usually the first pages I visit on any new blog I read and can really help to find out if the content is interesting for me.

Content is King

Here is exactly how this blog snuck into my RSS reader. A quality content presented in an interesting style. Ok, maybe typography is not exactly the way I like it, but this paragraph is not about that. I mean a writing style. I really do enjoy reading such posts, especially when they provide value. And posts on The Path to the Pegasus Letter definitely do this job. Maybe I can’t always agree in 100% with author’s opinion, but this only stimulates me to deeper my knowledge about finances and stock market and it also provides an additional perspective to the topic.

Summary

If you are interested in stock market and finances, you should give it a try. Of course, not everybody would find this blog interesting and useful, but somehow it made a way to my group of investing blogs I read regularly. Maybe The Path to the Pegasus Letter will also fit to you. Enjoy.

One of my readers, Wesoly Terrorysta translated my post about food habits to Polish and published it on his blog (of course with my permission). He added his own opinion in his post. In general he agreed with all points except the last one, which is:

Sleep more. You don’t eat or spend money then.

I definitely don’t have the feeling that I have to defense my advice, but this made me into short reflection mode.

First of all, this last point was mainly for fun. One of my former co-workers was a big fan of shopping. He always spent a lot of money this way. In order to decrease expenditures, he tried to apply two rules:

1. Work a lot of time at office.
2. Sleep a lot.

Whether you work or sleep, you don’t spend money. Sounds funny, doesn’t it? Of course he didn’t take this approach 100% seriously.

I liked it so much that when I was writing my post about food habits, I decided to add this one as a final point. That’s it.

Sleep more. You don’t eat or spend money then.

But there is a lot of truth in this point. Many people sleep not enough time. This is really bad for health and in future it can cost them a lot of money.

Another point is that I’m much more productive after calm, long, rejuvenating sleep. It is very important for me to sleep well and enough time, especially as I do a lot of workouts almost everyday.

Before sleep, it is good to slightly decrease temperature in your sleeping room. Turn down your heating. This helps to fall asleep easier and you also save money. When you sleep, you don’t use lights, computer and TV, so you are also saving money on electricity.

Last but not least, if you have any source of passive income, you simply earn when you sleep. Amazing.

Probably, there are even more interesting advantages related to sleeping. One thing for sure, I hate when I have to start a new day after sleeping not enough hours.

Good night.

photo credit: said&done

One week ago, Frugal Dad started a new series of posts called Sunday Conversation, dedicated for random ramblings.

In the second edition of Sunday Conversation, Frugal Dad was giving answers to questions from his readers. I took the opportunity and asked him a question about success:

“What is your greatest success as a Frugal Dad so far?”

Frugal Dad:

Kacper, this was an interesting question, and one that caused me to really stop and think about the answer. Because I now attempt to compartmentalize various areas of my life (writing, family and full time career) I have a couple different answers.

As a Frugal “Dad” I would say that my greatest success is sharing in raising two wonderful children. My wife and I have worked hard to instill values in them at an early age that will carry them through the remainder of their lives.

From a frugal perspective my greatest success has been breaking the cycle of credit card usage my wife and I began to rely on to compensate for living on one income. The elimination of this lifestyle debt, and the credit cards than went along with it, has been a “freeing” experience, financially. Dave Ramsey wasn’t kidding about experiencing Financial Peace.

As a blogger, my greatest success has been convincing 900 strangers (and a few friends) to follow my writing in just four short months. I never dreamed so many of you would subscribe and I am humbled by your numbers. When the subscriber count reached 500 or so I began feeling pressure to put out top-notch content - after all, FIVE HUNDRED people were reading everything I wrote! That was a growing pain that went away after I realized what people really wanted was the same thing I want from a blog - just an informal conversation about money, living frugally, raising kids, being a better employee, etc. Sometimes the fear of performing can be lessened by the realization that none of us are perfect. Some days I’m more “in the groove” than others, and sometimes life happens and I’m just not particularly in the mood to be overly inspiring. One of the great things about interacting with so many of you is that just about the time I start to feel that way I’ll get a nice email or comment with some encouraging words to lift my spirits.

You can find more Q&A from Frugal Dad in last Sunday Conversation.

I definitely love reading different success stories. Each one has a lot of value and can help us to achieve and enjoy our own successes. If you have an interesting success story, don’t hesitate and send it to me. I will gladly post it on my blog.

Diversification is a technique of managing portfolio. Investing into multiple various assets helps to reduce risk and ensure more balanced performance.

Positive results of good investments weaken the negative effect of worse. This way, not predicted and extremely poor performance of some investments can be reduced. Of course, such diversified portfolio’s rate of return would be lower that rate of return of your best performing asset.

Diversification can and should be done on different levels:

• type of investments (stocks, funds, bonds),
• risk level,
• type of industry/market,
• time.

For most beneficial results, it is important to keep relatively uncorrelated assets.

photo credit: eurok

Fortunately, I learnt about diversification at the very beginning of my journey into world of investing. As my knowledge about stock market was close to zero, I started with putting my money into different funds. These funds were already diversified among various types of investments, but I had a feeling that I don’t want to invest all my money only into one. As far as I remember, I chose five, best performing. It was about 2 years ago and results provided by such funds in Poland were pretty impressive. Stock market was going up, so the diversification wasn’t so important in that case, but it was a good time to develop it as a habit.

These good times on market couldn’t last forever. About summer 2007 funds were giving worse and worse results. I started thinking about changing my investing strategy. Meantime, I was of course learning some basics of investing in stocks; especially I was focusing on technical analysis.

Finally, I had no doubts, that I should quit funds as they were only slowly sucking my money. Somehow I forgot about diversification at all. I started picking single stocks and hoping for the best. I was so stupid.

It is not possible to pick only well performing stocks. Failures happen. We have to accept it. We cannot expect to earn on each investment.

Good for me, I pretty quickly learn from my mistakes. After a few poor picks where I lost few hundreds of zlotych (1$ is about 2,5zl), I had a stroke of genius. Diversification. I must diversify.

I started opening multiple positions on stocks from different types of industry. Few of my shots missed, but this loss was covered by good picks. Brilliant. Rate of return wasn’t too high, but it was my very beginning of investing in stocks. When you gain more knowledge and experience, you start to pick better and better stocks more often, and less time you open poor performing positions. But no matter how good investor you are, diversification is very important technique.

As you can see on my case, it worked in the past when I was focused on funds and it works right now, when I invest in stocks.

If you are concerned, I also diversify by type of investments keeping some money on my saving accounts and from time to time, I invest in other types of assets.

Remember; don’t put all eggs into one basket.