Investing and Starting a Business

The most sought after choices of individuals wanting to earn more aside from their job is investing while those who have decided to let go of their jobs started out their businesses. There a number of considerations that should be observed before going through the desired path but taking a specific path does not mean that you could not pursue the other, some even took both paths at the same time. Knowing what you are up to would really help you in the long run. Both paths had their risks that if you have the knowledge and the technical know-how, the risks could be minimized unlike in settling for paycheck, you are foregoing the risks of earning more and securing your future and even the future of your generation.

Of the two, many prefer to go to into investing because the risk is not too high as compare to putting up a business because you may control as to how much you are willing to invest and as to what kind of securities you would prefer. It could be in the form of bonds or treasury bills where the term ranges from 3 – 5 years and would net you a fixed amount of interest at maturity or in the form of equity securities wherein you would earn through dividends while still holding the shares and also through the buying and selling of the shares of stock in the stock market.

Many people are eager to go into investing in stocks but are hindered by their fear of losing than gaining. In the stock market, you should be able to monitor and project the movement not only of the shares you are holding but also the other shares in the market. If you cannot monitor such events, much better for you to hold those equity securities in the long run because the value of the shares in the market would eventually result into a gain after a decade or so. Once the value of your securities have ballooned, you can easily sell it since equity securities are highly liquid instruments, meaning they are easily convertible to cash.

Trading and holding are the two options you can use in the stock market and both methods can generate you good amount of earnings but would not guarantee that every done deal results to a gain. Some people who do not know how the market behaves suffer losses in trading and some also have been complacent on the securities they are holding not knowing that there have been events that resulted to losses of the Corporation that resulted in the decline in the value of their shares of stock.

the-stock-market-has-erased-nearly-all-of-this-mornings-losses

Business on the other hand is riskier but is more rewarding. Establishing your own business would open up new opportunities for you as long as you know how to operate and plan your business. Putting up a business requires research, observation, planning and even innovating. Businessmen who tends to lax have turned out to fail on their businesses because they do not mind the feedback of their customers or have been complacent once they are satisfied to the earnings of the business they have put up.

Common mistakes of businesses is settling for less wherein the earning potential of the business has not yet reached the peak because of poor marketing. Putting up an identity to a business would make it credible, recognizable and distinguished as compared to common business establishments. Starting up in creating a brand is a big advantage over competitors because your product would be distinguished to the other generic products. Having a custom design or logo would give you an identity and would prompt your market as to what products and services you are offering on the table.

Other mistakes are also in financial management, some businessmen tend to sell on credit rather than sell on cash because they are thinking that they would lose sales by letting go of a sure buyer. This is true for some but may not be applicable for those enterprises whose business depends on liquidity. Selling on credit would also mean you have lost the opportunity to use the money to run your business and a few days of not having the cash to purchase the goods in running your business would be a factor in losing customers and also earnings.

Earning in business though is better, unlike in investing that could give around 5% to 20% as return on investment, a feasible business could give 60 – 100% growth or more. The growth and earnings in establishing a business does not have a limit, the only limit is your imagination. As long as you have great ideas, drive and determination to earn more, it is possible. Some new businesses have grown unexpectedly fast because of their hard work, objective decisions and motivation to succeed.

If you would look into the Forbes list, you would observe that it has been a common ground for entrepreneurs and investors. No employee have been into the list. Starting up as an employee does not mean that you should end your life as one. We will all die on our time and it is much better to die knowing you have left something for your loved ones, thus taking up one or both of these paths would not hurt your future but more likely to secure your future and your generation.

You may lose some of your hard earned money but you should feel happy that you have tried. Failing once does not mean you would not fail, you might fail more but at the end of the day, what matters more is that you did not end up a loser the rest of your life not even trying to go out of prison called employment.

Luxury or Security

In my half a decade of life in the corporate world, under three organizations and being in touch with hundreds of people, I have seen how people think and make choices in their lives and also their spending habits. How their early life decisions have become their big problems and rants in their current situations. How down they were that they let their dreams past them and how desperate they are in chasing their dreams but they have become prisoners of the corporate world.

The trend for youngsters has been the same, newly hired employees would always want something as a reward for their hard work. When looking through my news feeds on social networking sites, I would see some of my colleagues who now have a car or house of their own at the early stages of their life. I feel happy for them, but on the other hand I wish them luck on their decisions. I may a feel a little envious, but thinking deeper, I come to realize that they have made the wrong choices.

Yes, buying a car may be a luxury, but buying a house is a need for some but for me, both are just luxuries in the thought that given the amount of money you have been paying for the car or house or both, most of what you are paying for goes to interest. The longer you pay, the bigger the interest.

Think of it like this, you have applied for a car loan or a housing loan then a casualty happens, you badly needed money and you haven’t save up anything because you have put your money as initial payment to the car loan or housing loan. Your monthly salary is being eaten up by your loan amortizations that would take years or even decades (in case of a house loan) to end. In short, you are messed up. You have exchanged your financial security for a luxury that you may have at a latter stage of your life. You might even apply a personal loan for the sole purpose of taking care of the said casualty. This has been the wrong mentality people has been doing for generations.

The price you have to pay in exchanging your financial security for your luxurious ideals will eat you up in the long run. I have met a lot of people who have made their lives miserable a few years after applying for their loans. I am not saying this for you to avoid loans, but rather to think carefully. I am just feeling sorry for those people who have to drag themselves to work because they have nowhere to go but to the organization they are working for because if not, their house and all other properties might be repossessed by the bank or any financial institution.

If you would ask me what should be done on the money you earn during your early working days, I would definitely say that you save it on the bank and have it ready for any casualty that might come up. Worst things comes to worse, you are sure that you would have something that can be used to cover up for those scenarios. If nothing bad happens, you still have your money in the bank and by the time you have spent a decade or so working and saving, you now have come up with a business that you want to put up.

Having your own business is a hard thing to establish but could generate more than what you are earning as an employee in the long run. Many businessmen started out at their early age. They never doubted their ideals, some never pursued being an employee. The world would not run out of opportunities, you just have to discover, innovate or pursue your passion. Good employees are being recognized by the organization but good businessmen are being recognized by the world.

Starting up a business hands-on is also better than letting your investments to be managed by individuals who never worked for the money you have invested. You would be in touch with your employees and will be exposed to the challenges of your business. Once the business have gained growth through the years, you would be pleased that you have not traded any Luxury for Financial Security.

Marketing and Finance

It has been an old age battle, a battle that either both suffer or both end up as a winner. It’s like a Celtics-Lakers rivalry that goes through the ages but both share the same success. A never ending confict that both parties would depict. Contradicting parties having diferrent views but had the common goal, but different objectives known to many as Marketing and Finance.

Being in a small enterprise or a multi-national corporation, these two departments would always have an argument. The Marketing would always want to sell as more as possible whereas the Finance people are looking on to save as much as possible. Being in the corporate world for almost half a decade, and being on the Finance side, I do always observe the cold shoulders between these two departments.

Being a Finance person, our concerns would always be on “how we can minimize a specific cost”, “is it better to hold or sell a particular property”, “are we going to earn on the proposal at hand” and among others. This has been a norm, the concern of Finance people is the net income or net profit.

The sales person on the other hand would always tell you that “we can generate this amount of sales increase because of this project”, “we would be serving more clients if this deal would push through” and among others. Their concern is their ability to sell. As long as they are getting clients to transact business, they are doing great.

The two departments usually collide because the Finance people would look on the bottom line. Whereas the Sales people would look on the top line which is the Sales. Both have their own objectives, the Finance people would look on to the effect on the bottom line while the Sales people would look on the top line. Their concerns usually collide because there will be proposals that are costly to make and would only result to little earnings over the project cost.

Sales people usually are optimistic type of people who are always looking forward that great things are going to happen and their projections would come to results. They would dare to enter risky decisions to attain their objective of providing more sales to the organization. Managers who have come up with a new idea of engaging into a new venture would want to talk to sales people because they would feel that there are opportunities for the venture and would not want those opportunities to be wasted.

Finance people on the other hand are pessimistics, they might seem to appreciate an idea but are keen on giving an opinion because they are thinking of the risks that have to be overcome. They would always question an opportunity’s ability to generate results. Managers would also want to talk to them upon coming up with a new business idea because of the things that was not considered before making up the idea or the company’s resources are insufficient to pursue the idea.

Decisions have to be made in business and the concern of both parties are both considered. It is up to the CEO or the Management to choose to decide as to what actions are to be taken care of. Managers usually weigh the concerns of the two divisions because if they would keep on listening to the Sales team, they might engage into projects or ventures that would not result to profits. On the other hand, if they would keep to listen on the views of the Finance people, they might have let opportunities to earn slip through their hands.

Usually, what good managers do is that they weigh the concern of both parties and come up with solutions that would result to more sales and eventually more profits to the organization. Listening to only a few persons with the same objective would give you one result whereas listening to persons with diferrent objectives can open up the possibility of earning more and minimizing the risks that have to be gone through by way of technically studying the decision to be cared of.

MMORPG: A businessman’s GAME

During the early 2000’s, the emergence of MMORPG’s or Massively Multiplayer Online Role Playing Games has been a hit. I for one has been addicted to these kind of games for some reasons but able to learn a lot of things. With these kinds of games, you would learn and expose yourself on the subject of Economics only in a video-game environment.

As a teen-ager, my high school friends introduced an MMORPG game and I was able to learn it quickly and definitely loved it. I would save my allowance even though I am starving just to have some money left to play the game for a straight number of hours just to get my characters stronger and richer. It was fun to see how your character gain strenght for every level it gains. From a regular past-time of playing video-games, it has became a part of my life. I never regret that part that I became addicted to such games because I have learned a lot too in playing such a game.

During our Economics class in high school, the game showed me first how the demand and supply works before the theoretical was introduced to me. I am even business strategies like hoarding and price undercutting in-game before knowing that businesses uses the same strategies to earn and sell more. It was really fulfilling to be exposed to those things before learning the theoretical part because it is hard to understand what an economics book is trying to say to a teen-ager whose mind is too raw to be introduced in the complicated world of business.

Through time, I were able to identify the benefits that MMORPG games taught me that can be used in business as follows:

  1. Earning requires doing the same thing repeatedly at the same time developing ways on how to be efficient. MMORPG’s would not only require you to do quests or kill monsters for your character to be stronger. You should also collect items and in-game money to buy better equipments that would give you better opportunities to produce more earnings that you can spend in the future. The same goes for a business, you should continuously do the things that generates you more money and think of ways on how you could maximize your earnings with less effort.
  2. Every item has its worth. This also applies in real life, every item you got right now could be worthless as of the moment, but as time passes by, it might worth a lot. Many people does not realize the use of what they have, be it a skill, talent or tools that they can use to earn, they only care for money whereas they can make money.
  3. Growth does not have limit. I have come to a point where I think that I have all equipment I have dreamed of in-game then suddenly I saw someone having a better items and artifacts and still won’t stop until he owns the game, then I told to myself, I need to have those also. The same goes to business, the MORE the BETTER. If you have the ability to earn further, you should pursue what your heart desires because it does not have a limit.
  4. “Nothing in this world is constant except change.” This phrase is true in the digital or even in the business world. Price changes would favor you or not but you can do nothing about it but to adjust and to cope up with it. Being unable to cope up with these changes might end up unfavorable on your part. You might be holding to worthless products and services because there are betters out there in the market.
  5. Be updated in the market. Trends and changes happen on both the video-game and real world. You should always be updated on the latest hapennings around you. Never get involved into something that would eventually be off in the future because of a new rule or law to be implemented. Always check on the up and coming products that might affect your business or products that might help you earn more. Being updated with the current trends give you an edge over your competitors.

These are some of the thing I have learned during my playing days that are applicable to business. If you have some other thoghts, feel free to comment on this blog and if you were unable to appreciate this, I challenge you to play an MMORPG game and you would know what I am saying here.

The Unforeseen Treasure: The By-Product

With the emerging products that is being discovered here and there, business institutions nowadays would not settle on one product or service as their only source of income. Successfull business-owners did not stop thinking day in and day out just to come up with an idea that would make their business more profitable. Business-owners would not settle for the same results in the long run, there will come a time that they would feel that they are not maximizing their resources and that the business has become stagnant.

A stagnant business can be compared to a day job, you are earning a fixed income for a fixed amount of time and no business-owner would want that. You have decided to put up a business because you want to expand and multiply your income. If you would just have the same income over the years, better yet go for a day job and spend the rest of your life waiting for your monthly pension to come after you retire. A good entrepreneur should not be running out of ideas, if you are into providing a product or service, think of ways on what other product or service can you offer.

Having a by-product that would give you more opportunities to earn is a simple thing that can generate great results. The earnings from your by-product could be able to handle your operating costs or even provide another source of liquidity if you are into selling high-value products that are normally payable in form of installments.

We have seen how small things unnoticed can be great things when compounded or developed. The same thing goes for a business, imagine if you are a provider of printers and you are not maximizing your oportunity to earn through the ink and cartridges or a repair shop but do not provide spare parts to your customers when you can do so. Even the trending product of smartphones do require a power bank for many smartphone owners in the corporate world need to make sure that their phones won’t die when they are out in a meeting and needed to make a crucial phone call.

A litte observation or inquiry from your consumers and customers can make your business more profitable. You just have to interact directly to your customers and know their needs, wants and expectations to maximize your resources and earnings. It may be hard for you to handle unsatisfied customers and consumers but listening to them would be good not only for yourself as a business-owner but also for the profitability of your business. Do not stick to the usual products and services you are offering, never stop to learn new things that you could use to develop your business.

A business entity with continuous development would ensure success, what more if during the course of operations you were able to produce a by-product that would complement your main product. Having a by-product for some is a necessity specially if the by-product is consummable. A by-product also provides continuous earnings even though you are having a hard time selling your main or core products.

As a businessman, for every sale you would have a new concern, and for every concern you should take the opportunity to think of ways on how to address your concern. Having a by-product is one of the solutions I can offer. A simple, yet effective solution that has been tested throughout the years. Always take complaints as concerns for improvements, problems as obstacles and losses as new opportunities and success would be attainable. Having the right mindset in business is easy but taking it into action is a class act.

The Incorrect way of LIFE

It has been the trend for a couple or more generations nowadays. Our ancestors have developed the thinking that if you want to have a prosperous life, you should be a doctor, lawyer, engineer or any other profession that would make you respectable and admired by the common folk.

The trend is still continuous as many people are still going to various Universities and Colleges to hone their craft and practice their specialization, but many still fail. Is it because of the difficulty, the limited resources or personal matters that come in through the way that hinders the success?

It may be a factor but it may not be the reason. If we are to blame the difficulty, there are still successful people out there who have endured a great amount of hardships than those who are spending majority of their time reading and forcing their heads to understand what their books or their professors would want them to understand.

Limited resources would not be acceptable because many successful people started with nothing. The only thing they had back then was their idea, they pursued their idea and created something out of nothing. We are living on our own shoes, thus we should have our own identity and not go through the path taken up by our childhood hero but rather take up our own road to success.

Personal matters might hinder our success, but it should not result to failure. Those matters are just challenges and our attitude toward those challenges would determine if we are to be successful or not.

The only thing that keeps us away from success is our mindset. Looking up to the modern era, the trend has been the same, you have to go to school and study for the first couple of decades of your life, then have a decent work for the next decade and save up for your future, have lovely partner, get a house and build your own family without thinking that you could have done better.

To those who have taken up this way of living, nothing is wrong with the life you have chosen but you should have been more open to more ways of living our short-lived life here on Earth.

If you are to take the same trend of life, you would have a family, a house and probably your family car but the problem lies on the way how to get those riches at the early stage of your life and most would probably go for the burden of loans.

The sad thing about this trend is that if you have started to invest on those major purchases for your family, you are now bound to WORK. WORK. and WORK. You would now be dependent on your WORK. And at the latter stages of your life you would spend the rest of your life dragging yourself to WORK and by the age you retire, you would think that you wished you have read this blog before going through with your life.

Imagine the burden of paying the monthly amortization for your dream house for a couple of decades or so and you would end up unsure on the path of your offspring other than the house you have left him. Imagine yourself rugged, old and wasted after retiring from decades of working lining up in a queue for your monthly pension which was not even enough for your medical expenses. Imagine yourself being a burden to your sons and daughters or even to your grand children.

Because of the wrong way of life instilled to our minds when we were young, we would be a burden to our loved ones and to society. Which is why I would like to introduce the new way of life here.

 

The New Way of Life

We are now living in a fast-paced, industrialized and technologically dependent environment. We now have to adjust to the needs of the community to survive the ever changing world where we are now. Gone are the days that professionals are limited and every top Corporation are eager to have a fair share of the best personnel to run their organizations.

We are now on the stage where a thousand organizations can choose from a million persons to put on their organizations. The demand for workforce has been at its lowest and the only benefactors of this scenario are the top Corporations. Majority of the workforce are now unemployed or underemployed.

To the youngsters out there who are eyeing the top spot on a well-known organization, you must think of an alternative or contingency plan in case you will not be able to get into your dream organization. Let me help you on that plan by opening up your mind to be an Entrepreneur.

Not everybody got a crack at being an Entrepreneur but being young is a major advantage on this field. Starting in this field at a young age means you still had more time to learn, develop and innovate your product or service. The worst case scenario here is that you end up wasting your time for a chance to be successful businessman. But who cares, you would eventually waste your time the rest of your life working even though you did not take the path of Entrepreneurship.

Another good thing about being in business is that if you are knowledgeable on your chosen field, the chance for success is higher and failure is not even a consideration. Being an entrepreneur does not demand a decent academic attainment nor a set of training that would take a lot of time.

As long as you have the idea, the passion and the knowledge necessary to run your business, you would end up as a successful entrepreneur. There are even entrepreneurs who does not exactly know how to run their business but because they are eager to learn and passionate about their business, they were able to earn. Entrepreneurship is really not for everyone but it is not that hard to learn. You do not have to a CEO or COO to be a successful entrepreneur. As long as you know what you do, you would end up being a successful one.

There are many hardships you would encounter in choosing the field of Entrepreneurship but as we go through our life, we would still be dealing with those challenges and hardships. Might as well you battle the hardship with your hands on the steering wheel rather than being a passenger who would go with the flow and take a hit because of your drivers fault. Likewise in business, it is better to have the final say as to the direction you are to take for your business rather than relying on your boss’ decision without knowing where he leads you.