Have you gotten tired yet of paying the five, ten or twenty thousand dollars a year that you’re currently paying your financial planner?
You should think about taking a do-it-yourself approach to financial planning. By following a handful of steps, you can actually plan and manage your personal finances yourself. And as long as you’re thoughtful and careful, the job you do will beat the performance of about 99% of financial planners and registered investment advisors.
Seriously, firing your financial planner is easier than you think. You simply need to follow five steps:
Step #1: Learn to Invest Passively Using Index Funds
The first step in firing your financial planner or investment advisor is learning how and why passive investing works–and then committing to using passive investing as the foundation of your wealth-building.
If you don’t use a financial planner or investment advisor to pick your investments or make investment recommendations, you’ll need to come up with your investments. And passive investing provides an easy, powerful way to do this.
In a nutshell, with passive investing, you don’t try to pick the best investments. Rather, you buy all the possible investments. And, the weird thing is, you actually do better using passive investing because the cost of making bad investment choices is less than the fees a financial planner charges.
You can begin your research into passive investing by reading about index funds on various investment web sites. But you should also take the time to read one or both of a couple of books, The Random Walk Guide To Investing by Burton G. Malkiel, an economics professor at Princeton University and The Little Book of Common Sense Investing by John Bogle, the founder of the Vanguard Group, a mutual fund company powerhouse.
Step #2: Get Serious About Retirement Saving
After you learn how passive investing works–and why you’ll always use an index fund if you have the choice–you need to get serious about your retirement saving.
Specifically, if you work someplace where your employer provides a 401(k) or similar retirement savings option, you need to participate. At a minimum, you want to participate at a level that means you get any “free matching money” the employer provides. And if you can save more money, even better.
If you work someplace where your employer doesn’t provide something like a 401(k), you need to use (and ideally maximize contributions to) an individual retirement account.
Almost always, people who use 401(k)s and individual retirement accounts to invest in a small handful of index funds build wealth much faster and with much less risk than people who use financial planners.
Step #3: Play Worst-case Scenario with your Finances
Here’s a third step you should take. Grab a pencil and pad of paper and list your family’s financial worst-case scenarios. You’re going to include scenarios like “loss of income due to death of the breadwinner,” “catastrophic medical expenses,” “disability of breadwinner,” and so forth.
To the extent that it’s practical, you want to buy cheap insurance to mitigate these worst-case scenario risks. For example, you want to buy cheap renewable term life insurance for the family’s breadwinner(s). You want to buy major medical insurance for family members. And, if possible, you want to acquire long-term disability for the family’s breadwinner(s).
Cheap insurance–which insurance agents often don’t like to sell–provides an effective way to minimize your biggest financial risks.
Step #4: Keep Your Finances Simple
A fourth quick step: Work to keep your financial affairs simple. Don’t put money into complicated investments. Don’t buy complex financial products. Don’t let your finances get disorganized.
Complexity doesn’t save you money. Complexity costs money. Furthermore, complexity leads to mistakes.
Step #5: Make Sure You’ll Pay Off Your Mortgage Before Retirement
A fifth final tip or step: Make sure you’ll have your mortgage fully repaid before you retire–and preferably well before you retire.
Related to this point, if you receive a windfall–perhaps an inheritance or an unusually large bonus from an employer–use part of the after-tax proceeds to accelerate your mortgage pay down.
Paying off your mortgage well before retirement should mean that you’re in good shape to retire when the time comes. And “siphoning off” a portion of any windfalls for accelerated mortgage repayment will mean that at least some part of any financial windfalls you receive get used for wealth-building.
This article compares previous research on gluten free e-demand in the Americas and Europe with analysis of major Asian countries using a re-developed GFP Matrix model. This model uses gluten free search term volumes in Google in specific communities to estimate the community’s gluten free market maturity. The matrix plots the raw gluten related search volumes versus ‘Adjusted celiac searches’ and finds a linear relationship between the two variables. The analysis looks at what defines a mature gluten free market as well as what products people in different countries are searching for and why.
One of the main concepts in this article is ‘Adjusted Celiac searches’ which is based on raw gluten search term volumes. These values are then adjusted (increased) to account for internet usage in a country as well as the probable total search engine gluten queries (using specific country Google Market share as the basis). This adjusted value thus estimates the total gluten searches as if 100% of a country had internet access and all search engine results were used.
This intermediate value is then divided by (community population divided by 100) to gain a monthly ‘adjusted celiac search’ value. That is, assuming that that the average celiac rate is approximately 1 in 100 people (diagnosed and undiagnosed), this hypothetical value estimates on average, if all celiacs searched for gluten free products, how many times they searched for them each month. Note that as celiac diagnosis in advanced countries may be as low as 20%, the actual number of times internet using celiacs currently search may be five times as much as the estimates predict!
To assist analysis, gluten related search terms were divided into seven groups as shown below. Only the top 50 terms were used for detailed statistical analysis, but in most cases, these fifty terms represent 95% of all terms.
Gluten Group Composition:
Generic GF Product: This group of search terms all involve the word gluten and are generic in nature, such a gluten, gluten free, gluten free products, gluten free meals. This group is also segmented into core and non-core terms. Core terms are those shown above, while non core terms are those such as: gf breakfast, gf snacks, gf desserts, gf gifts. Gluten Diet: These are terms that are related to the specifics of gluten free diets such as: gluten free diets, celiac diet. Gluten Free recipe: Terms such as gluten free recipes, gluten recipe, gluten free baking, wheat free baking Celiac related: These are terms related to information on the disease such as: celiac, celiac disease, gluten intolerance, gluten allergies Wheat free: Terms such as: wheat free, wheat gluten, wheat allergy GF Locations: gluten free stores, gluten free shopping, gluten free restaurant Specific GF Foods: gluten free bread, gluten free pizza, gluten free cakes, gluten free muffins
A summary of the ‘adjusted celiac searches per month’ ratings of specific communities for Dec 2008 were:
4.2 Australia 2.7 USA 1.9 China English speaking 4.9 China Traditional 2.0 China Simplified 1.6 India English 1.0 India Hindu 5.5 Indonesia English 1.0 Indonesia Indonesian speaking 1.3 Japan English 1.4 Japan Japanese speaking 6.7 Singapore English speaking
Overall, the control groups, USA and Australia, remained higher gluten search countries than the highest ‘raw searches per population’ countries of the Asian countries analysed, except for the Singapore English speaking community. Singapore has one of the best telecommunication systems in Asia and its internet penetration is similar to the US and Australia. It is believed that of those people who do search on the internet in Singapore, they search long and hard for what they want. With this high search level, the searches conformed to GFP Matrix conditions that suggest that high raw search communities have a high proportion of generic gluten searches. In this case, 65% of all searches were in the generic group of which 85% were core searches. As per the GFP Matrix trend, the ‘celiac’ group was also high. Its eleven terms and 8% of top 50 searches was only 2% behind the second highest group ‘gluten diet’.
In statistical terms, China traditional language, and Indonesia English speaking communities are called ‘outliers’. That is, most other data points fit a linear relationship between raw searches and adjusted celiac searches, except for these two communities. The common trait of these two communities is that they have very large populations and very low internet penetration and low Gross Domestic Product per person (associated with low wage and lower standards of living). This might typically suggest that these communities would have a low celiac diagnosis rate – however it is likely that any English speaking community in any under developed country, is likely to have more affluence and access to better medical facilities than the main population. If we assume that the resulting high celiac searches are correct, then clues to why this is so can be found in detailed analysis of the communities.
China (Traditional Chinese speaking) had a massive 2.6 million searches. This is similar to the US but China has a much lower internet penetration, resulting in a higher celiac search estimate. The typical high celiac search community has a high generic gluten search proportion of the top 50, whereas ‘China traditional’ has only 38% of volumes. However, it does follow the trend of having the ‘celiac group’ as the second highest search group (30%). So it would appear that ‘China traditional’ genuinely has a high celiac search community. The rise of the Chinese economy, particularly in the large cities is likely to have spawned a community hungry for information and funds to seek medical facilities and buy gluten free products.
The ‘Indonesia English speaking’ community had a relatively low search volume of 325 thousand terms, however with only an 11% internet penetration this gives the community a celiac search rating of 5.5 searches by celiacs per month. The search group profile is non typical of high search countries. A relatively low generic group and the highest group ‘celiac’ used non-standard search terms. ‘Wheat free’ was also non-typically very high (16%). With ‘gluten free pizza’ being the highest specific food search, it appears that this community is more affluent than the indigenous community and has higher searchers. But they also use non-standard search terms as the Indonesian gluten online supply side is likely to be quite undeveloped.
All of the other Asian communities analysed were found in the very low search are of 1 to 2 adjusted celiac searches. Surprisingly Japan, (English and Japanese speaking) communities, were also found here. While they have slightly one of the larger raw gluten search volume values compared to all other Asian communities, their adjusted celiac search values are still only around 60% of the US and less than half of Australia’s. This could be caused by their predilection towards rice dishes and fish foods that don’t involve gluten. Japan English speaking had a low 100 terms and 187 thousand searches with the top four groups having similar search volumes around 18%. The very high searches for ‘gluten free restaurants’, and high ranking for the ‘celiac group’ suggests that there is an even spread between new diagnosed and sophisticated searchers.
Specific food terms of cakes, corn and muffins rather than food staples also suggest that Japan’s Japanese speaking people have risen above the need to find or make food staples such as bread. While the Japanese speaking community had double the searches of the English speaking community, they were located in virtually the same spot
on the GFP matrix. The main difference was that its search profile was completely different. The Japanese speaking searchers spent 43% of their 391 thousand searches looking for specific gluten free foods. The top specific searches were: cake, pizza, casein, cookies, chocolate and beer. Again, these are the hallmarks of sophisticated searchers in an affluent society.
The lowest ranking communities were India (English and Hindu), Indonesia (Indonesian speaking), and China (English and Simplified Chinese language). These countries all share the similarity of being very large, having a low economic status and being predominantly non English speaking with low internet penetration.
Specific information is provided on these communities in the individual community analysis. However it might just be that like Japan, these countries have a low amount of gluten in their diet and this may also be a reason for low or non-triggering of celiac disease issues. That is aligned to the theory that it is an continued ‘overdose’ of high gluten foods that triggers celiac disease in the first place in many developed nations peoples.
Specific ASIAN Community GFP Matrix ANALYSIS
China was analysed for three different language search segments: English, Chinese traditional, Chinese simplified. The Chinese traditional community not only had by far the greatest number of Asian raw searches, this community alone rated similar in search size to the US raw search size. However, the population of China is over 1.3 billion people and it has a relatively low internet penetration of 19% and Google market share of only 22%.
This community was assumed to comprise 15% of China’s total population. With 136 search terms and 155 thousand searches, when this is adjusted for the low penetration and Google share it equates to an adjusted search volume of 3.7 million for December 08.
While there were 16 terms in the ‘generic gluten foods’ group this group only accounted for 33% of top 50 volumes. The largest search term in this group was ‘free gluten free’ which accounted for 22,000 searches. The second highest group was ‘gluten diet’ group with 12 terms and 36% of top 50 searches. The third highest group with ten terms was the celiac group which accounted for 27 thousand searches with the top three being: celiacs 8,100; gluten sensitivity 8,100 and gluten allergies 5,400.
The specific gluten food group had four terms and only accounted for 11 thousand searches with the largest being muffins and oatmeal.
Chinese Simplified speaking
With 567 thousand searches this group was three and a half times bigger than the English speaking community. It follows the trend with the local (non English) community search terms in the ‘generic gluten food’ group comprising a much smaller proportion of the total (15% of the top 50) than the English speaking community above (33%). The largest group was the ‘specific gluten food’ group with 178 thousand searches- 44% of top 50 searches. Cakes and pizza had a combined volume of 37,000 searches, with the next four terms having 12 thousand searches each: casein; flour, cookies, chocolate and beer. This relatively refined search pattern suggests relatively sophisticalted afflutent searchers. Maybe in China one needs to be relatively afflutent to be diagnosed in the first place?
This community had a massive 2.6 million searches, second only to the US. The largest group was the ‘generic’ group with 9 terms making 38% of the volumes. Of the nearly one million searches within this group, 823 thousand were for ‘gluten free’. The core generic foods group accounted for six of the nine terms making up 98% of the generic group.
The celiac group also had a large representation with five terms accounting for 30% of searches. Celiac and celiac disease accounted for over 700 thousand searches! While specific foods group was the third largest by volume (258 thousand), its 19 terms only accounted for 10% of the top 50 searches. The peak term was for gluten free bread (50 thousand searches) followed by gluten free cake and corn gluten, each on 22,000 searches. Note that these are much more simple food items than the non staple items searched for by the Simplified Chinese community.
India was separated into English speaking and Hindu communities. With the world’s second largest population of over 1 billion people and internet penetration of only 5.2% and Google share of 81%, raw gluten searches were expected to be low, but so were the adjusted celiac searches.
INDIA English speaking
The generic group had 20 terms and accounted for 65% (150 thousand) of top fifty searches. The top four terms were all between 25 and 18 thousand and were part gluten free phrases such as: is gluten free; and gluten free; gluten free in.
The gluten diet (11 terms) and celiac group (8 terms) each had 11% and 12% of top 50 searches respectively. A close fourth group with only five terms was the specific foods group. The largest volume in this group was taken by ‘gluten dairy’ 9,900 searches.
This community had 417 thousand searches nearly two and a half times the English speaking searches. The top FIVE groups had all very similar search volumes ranging between 18% and 23%. The ‘Specific foods’ group accounted for six terms and 23% of volumes. The top two searches were: gluten free bread 49,500 and gluten free cakes 22,200. The second highest group was the celiac group with four terms covering 20% of volumes. ‘gluten intolerance’ was the prime search term taking 49,500 of the groups 82 thousand searches.
As one of the most sophisticated economically strong first world countries it was expected that Japan’s search rate may rate high. However celiac disease may be lowly diagnosed in this country as rice and fish typically make a much larger proportion of their diet than wheat of other cereals.
Japan English speaking
With 100 terms accounting for 187 thousand searches this is a relatively low search rate per population, considering it has 74% internet penetration and a Google share of 39%.
The top four groups each ranged from 17% to 20% of top fifty volumes. Unusually, ‘gluten locations’ was the top group and had three terms and 36 thousand searches for its 20% share of top 50. ‘Gluten free restaurants’ was a very dominant 22 thousand searches.
The second highest group was celiac with 12 terms accounting for 19% (35 thousand) of top 50 searches. The terms ‘celiac disease’ and ‘celiacs’ both accounted for 8 thousand searches each. There was also a relatively high and even spread of other celiac search volumes. The ‘generic gluten free’ group had 15 terms (27 thousand searches) but only 17% of top 50 searches. With the groups median value of 1,600 and non-core generic terms accounting for 80% of generic searches, people were searching for more unique generic terms than usual. The top two non-core searches were variations of ‘gluten free desserts’ making up 9,000 searches. Specific gluten free foods had only six terms (24,300 searches) with the top three terms: gluten free cakes (6,600), corn gluten meal (6,600), and gluten free muffins (4,400).
The high value searches for gluten free restaurants, gluten free dessert(s), cakes and muffins suggests that this group is a fairly established small core of searchers. While there is a relatively high 19% of searches dedicated to finding information on celiacs, the high spread between the groups suggests that the GF industry may be already mature in Japan.
JAPAN Japanese speaking
Total searches were 391 thousand per month for the top 50, surprisingly only double the English speaking community. ‘Specific gluten foods’ was a very dominant 23 terms w
ith its 169 thousand searches accounting for 43% of top fifty searches. The top searches were: gluten free cake (22,200); gluten free pizza (14,800) and FOUR terms on 12,000 searches: gluten free casein; gluten free cookies; gluten free chocolate; gluten free beer.
The second highest group was the ‘generic group’ with six terms and only 13% (52 thousand) of the top 50 searches. The very dominant terms were: ‘what is gluten free’ (22,200) and ‘gluten free products’ (14,800). The third highest group was ‘gluten free recipes’ whose seven terms made up 11%, with the highest term search being for gluten free recipes (12,000). The celiac group had only two terms and 3% of top 50 searches.
Indonesia is the fourth largest country in the world with a population of 229 million. And like China and India it is classed as a developing country. While Google has a very healthy 71% market share there, the country only has an 11% internet penetration. The analysis was performed on English speaking and Indonesian speaking communities.
INDONESIA English speaking
With only 107 terms searched for over 325 thousand times, this is relatively low result for a country of this size. The popularity of the groups were fairly evenly spread with the main group of ‘celiac’ only having 8 terms and making up 21% of searches. Unusually, the two peak terms were not generic in nature: celiac sprue (22,200) and celiac disease symptom (14,800).
The second highest group was ‘wheat free’ whose six terms comprised 16% of top 50 searches. With a median value of 8 thousand, the top term was ‘wheat intolerance’ (18,100). The equal third group with 14% of searches was the specific food group. Of its 43 thousand searches the top ones were: gluten free pizza (14,800); gluten free pasta (6,600) and gluten free cakes (6,600).
With the relatively low search volumes, as expected the generic group searches were low – with its ten terms making up only 9% of top 50 searches. The non-core generic terms also comprise 84% of the terms. The median value was 2,900 and top searches were: gluten free dessert(s) (9,000) and ‘gluten free pantry’ (3,600).
INDONESIA Indonesian speaking
A very telling point of this low internet penetration country is that Google only listed 22 terms over the month and 173 thousand searches for the indigenous language. This is less than half the English speaking community.
In this community the celiac group was a very dominant 53% of top 50 searches. With only four terms the two main terms out of the groups 82 thousand searches were: gluten intolerance (49,500) and gluten allergy (27,100). This dominance of the celiac group suggests a country in the very early stages of celiac diagnosis.
The second highest group was the generic group of which the five terms were all core terms and accounted for 49 thousand searches. With a median value of only 1,300, the very dominant terms were gluten free foods (33,100) and gluten free products (14,800).
The third highest group (12%), specific gluten food, had seven terms and a total of 19 thousand searches. The top three terms were: gluten free cookies (12,100); high gluten flour (3,600) and gluten free oatmeal (2,900). Cookies are not necessarily a large luxury item, but it indicates that those who can search have some means to buy and search for items other than staples such as flour and bread.
Singapore has one of the best telecommunications systems in the world and one of the highest cellular uptakes, however the internet penetration is only cited as 70%.
Singapore is also one of the major economies in the Asia-Pacific region along with Hong Kong, Taiwan and South Korea. As its ‘per capita GDP’ exceeds that of most countries outside the US, it is expected that it would have the highest celiac search value too.
SINGAPORE English Speaking
With a population just over 4 million people, its total search (English) of 118 terms and 154 thousand searches is very impressive. This high search level is accompanied with 15 generic terms accounting for 99 thousand searches (65%) – of which only 15% of searches were non-core. The very dominant terms were: ‘and gluten free’ (27,100); ‘is gluten free’ (27,100) and ‘free gluten free’ (22,200).
The second highest search term group was gluten diet whose six terms made up only 10% of searches. Out of the 15 thousand seaches, the top searches were: ‘gluten free food list’ and ‘list of gluten free foods’ – 4,400 each.
While specific foods six terms only made up 5% of top 50 searches, it is useful to see that they were: oatmeal (2,900); and pizza and pizza crust at 1,900 terms each. This shows a balance between staples and luxury food mixes.
SINGAPORE Mandarin speaking
Mandarin is considered to be the dominant language in Singapore. As Chinese traditional and China simplified had essentially the same terms in the same order as Singapore Chinese traditional, it is considered that Google duplicated the gluten search results for Singapore. While Google has a very healthy 71% share between its dot com and Singapore specific engines, the results of 143 terms and 1.16 million searches was very inflated. That is, taking internet penetration and Google market share into account, the adjusted celiac monthly search volume would be 51 terms searched – if the data was true!
This suggests that while English community searches in Asian countries can provide an insight into the market development of a country, the main Asian language searches might not be able to be analysed.
GFP Matrix ASIA SUMMARY
None of us are perfect when it comes down to bad habits, but some are worse than others; not understanding your debt or finances is one of them. Kicking these bad habits into touch means that you can look towards becoming debt free:
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