Retirement Ready Income Programs

Web 3.0 is Value and Ethics

Submitted by Teo Graca | RSS Feed | Add Comment | Bookmark Me!

As we move away from the Web 2.0 standard, what is next? Well, as it develops, it is being called Web 3.0, but it still hasn't come into it's own. Sites like Craig's List and WikiPedia have shown us the proper direction, but other leaders in the social networking industry are still floundering and missing certain points of common sense and ease-of-use that we will discuss in this article.

If you look at the history of the web, most of us have come to recognize and hate SPAM. Yet I still see it coming to me from industry leaders. For example, when I receive emails reminders from social networking sites stating that people I used to work with at Lockheed Martin are interested in connecting with me, is that value or SPAM? Well, I worked with exactly 11 people there and when it is suggested that the other 10k+ employees or contractors are trying to connect with me, I realize immediately that these emails aren't coming from people I worked with - these are unsolicited emails - this is SPAM.

What about importing lists from sites like LinkedIn? This is truly valuable, but how can a site implement something like this so it is easy and not potentially malicious? Well, if a site other than LinkedIn asks me for my LinkedIn user name and password to transfer the list, this may be easy and convenient, but it's potentially malicious. As an information architect, I can tell you that there are other ways to do this that are not potentially malicious. Why would a company require your user name and password if they don't have to?

I tend to put the answer to these types of questions into two categories - ignorance or malicious intent. Neither is good, but bad practices through ignorance is much better than bad actions through malicious intent. Since I like to focus on the positive, I tend to give companies and people the benefit of the doubt and like to believe that bad practices are the result of ignorance rather than malicious intent whenever possible. This being said, let's look at some other bad practices that are currently being perpetrated by leaders in the industry.

Another process I find very annoying is when a company offers something for free, sets up a multi-step process and then surprises me with a requirement for payment or credit card information. This is at least deceptive. If something is promoted as free, it should never require a credit card number. Companies should be up front about the process so you can decide whether or not you want to engage the process prior to starting. What I have learned over the years is that if a company opens up the relationship with a requirement for payment before any value is delivered, it almost always ends up being a waste of time.

Another issue at hand that I ran into in 1998 with MCI is the requirement of installing ActiveX components to experience a web site. Even in 1998, the technology was available to provide most functionality without forcing people to install software on their computers. Let's take Webinars as an example. There is absolutely no reason to force people to install something to participate in a Webinar. Technologies have been available for many years where companies can build their services in a way that it doesn't require the installation of something to participate. Let's imagine that you attend 20 different Webinars and install 20 different applications on your computer - and then it crashes. It's probably one of those unnecessary programs.

I think as we move forward, Web 3.0 will say that forcing installations unnecessarily to get value and the subtle deceptive practices I have described above will be viewed as unethical.

Reader Commments:

Mar 29, 2008
Another great article from Teo. On a subject he really knows, computers and the internet. I know him well and he practices what he preaches. SEyA
- comment by Stephen Adler

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Risk Management: Income, 401k, and IRA Programs

Take a tour of a professional investment managers' private SEP IRA program during ten years surrounding the financial crisis:


In developing the investment plan, personal financial goals, objectives, time frames, and future income requirements should all be considered. A first step would be to assure that small portfolios (under $50,000) are at least 50% income focused.

At the $100,000 level, between 30% and 40% income focused is fine, but above age 50, the income focus allocation needs to be no less than 40%... and it could increase in 10% increments every five years.

The "Income Bucket" of the Asset Allocation is itself a portfolio risk minimization tool, and when combined with an "Equity Bucket" that includes only Investment Grade Value Stocks, it becomes a very powerful risk regulator over the life of the portfolio.

Other Risk Minimizers include: "Working Capital Model" based Asset Allocation, fundamental quality based selection criteria, diversification and income production rules, and profit taking guidelines for all securities,

Dealing with changes in the Investment Environment productively involves a market/interest rate/economic cycle appreciation, as has evolved in the Market Cycle Investment Management (MCIM) methodology. Investors must formulate realistic expectations about investment securities--- by class and by type. This will help them deal more effectively with short term events, disruptions and dislocations.

Over the past twenty years, the market has transitioned into a "passive", more products than ever before, environment on the equity side...  while income purpose investing has actually become much easier in the right vehicles. MCIM relies on income closed end funds to power our programs.

To illustrate just how powerful the combination of highest quality equities plus long term closed end funds has been during this time... we have provided an audio PowerPoint that illustrates the development of a Self Directed IRA portfolio from 2004 through 2014.

Throughout the years surrounding the "Financial Crisis", Annual income nearly tripled from $8,400 to $23,400 and Working Capital grew 80% $198,000 to $356,000.

Total income is 6.5% of capital and more than covers the RMD.

Managing income purpose securities requires price volatility understanding and disciplined income reinvestment protocals. "Total realized return" (emphasis on the realized) and compound earnings growth are the key elements. All forms of income secuities are liquid when dealt with in Closed End Funds. 

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Please read this disclaimer:
Steve Selengut is registered as an investment advisor representative. His assessments and opinions are purely his own and do not represent the views of any other entity. None of his commentary is or should be considered either investment advice or a solicitation of business. Anyone seeking individualized investment advice should contact a qualified investment adviser. None of the information presented in this article is intended to be or should be construed as an endorsement of any entity or organization. The reader should not assume that any strategies, or investments mentioned are any more than illustrations --- they are never recommendations, and others will most certainly disagree with the thoughts presented in the article.