Wednesday, May 13, 2009
Unless you proceed slowly and carefully, taking the time to do plenty of research before starting a business, even the most prepared businessman would run into problems. Common start-up mistakes destroy an entrepreneur’s chances of having a successful start-up and the sooner they are avoided the better.
Not having a clear vision is one pitfall many people slip into adding that lack of vision amounts to sailing in troubled waters without a compass. If you cannot have a vision of where you want the business to be in some years, then, you may not succeed. Having a vision involves planning and this comes with a basic business plan, but in that plan, do not just think now, but think as far down the road as possible.
Common mistake that a potential entrepreneur can make surrounding yourself with people who do not believe in your ideas, whether by accident or because they are family members. Surrounding yourself with people who do not believe you will succeed is bad, especially when they discourage you on the idea without actually giving their opinion. You need to be around positive feedback all the time because it makes you more determined. Allowing the negative disposition of those around you to bring you down would affect your dreams of starting your business. One of the most common mistakes of start-up is to underestimate the amount of money required to start your business, adding that business plans are there to help you determine what you want to do, how you would do it and how much it would cost to do it. Entrepreneurs should be careful of over spending and under spending. You should be weary of spending your precious start-up capital unnecessarily. This will help guide against over spending. It is also a mistake to be too stingy with your cash adding that frugality should not get in the way of efficiency. This would help guide against under spending.
Buy decent equipment when it is clear you would get your money’s worth. You do not have to overspend on fancy furniture, but get functional furniture that helps you be more productive. It takes time to develop the wisdom to know when you are being too tight or too loose with your cash, so, if you are just starting out, get a second opinion; if you cannot justify the expenditure to someone you respect, it is probably a mistake. There are situations where it is hard to justify not spending the cash.
Another common start-up mistake is doing it alone and not seeking the help of mentors and more experienced entrepreneurs. Trying to do it all by yourself and not asking for help is also one of the reasons why people find it hard to start a business. Start-up entrepreneurs should look for more matured and successful business men to help them through the challenges of starting a venture. Having a much more experienced entrepreneur that can give you some valuable advice is so important especially when you are a young and ambitious person with so many challenges to meet on the way to success. Creating a successful business will take a lot of time, effort, patience, dedication, a clear plan and vision. Having a mentor will help you through.
Another common start-up mistake is not to market your business, expecting that people will naturally start patronizing you. Serious marketing is needed to keep the business up and running.Losing momentum is yet another start-up mistake. Entrepreneur should constantly improve products and services by researching the changing market and competition. This will promote innovation and sustain the business.
Other common start-ups mistakes that should be avoided include but not limited to the following: Starting a business without really understanding the market; failing to focus on value creation, and not knowing your strengths and weaknesses as an entrepreneur.
In all, with determination, prayers and God’s guidance, success is guaranteed for all entrepreneurs. You can make it if you believe that you can make it.
The root cause of being poor, is an acronym that’s derived from the word poor itself। POOR – Passing Over Opportunities रेपेअतेद्ली. A man/woman is poor not because of his/her background, not because of a deformity, not because of location, not because of his/her background, where he/she grew up or his/her family. A man or woman is poor because he or she passes over opportunities repeatedly.
Same and equal opportunities come to us all. We all get equal chance. What however determines whether our opportunity will cascade into a defining moment for us, is whether we utilize them or not. A poor man does not see opportunities when they come, or he sees them, but does not count them as such. Have you ever tried hard to convince a dear friend about a good idea that you believe would be useful to him, and he couldn’t just see it? Have you ever tried to talk to a colleague about an opportunity you stumbled on and rather than seeing the opportunity he/she immediately sees a problem? The ultimately poor man or woman, is the one that has gone through life passing over opportunities repeatedly. A few opportunities passed do not make a man poor, but when the habit is formed, he is stuck.
The cure of poverty is good news. Information is power. Good information is more powerful Know that you are just one decision away from your next breakthrough. To migrate from poverty to wealth, feed on good information. Know who you can be. See the opportunities around you. Know that nothing is impossible to one that believes, know that whatever you want to do is achievable. Know you are just one decision away from your next breakthrough. Know that you can be all you dream to be. Feed on good information, and watch yourself gradually transform. Do not do it alone. No man is an island. The people you know or the company you keep will, to a large extent, determine how far you will go in life. Live responsibly. No knowledge is a waste. Form a team or join one. Ask questions from those that have gone through the process.
People quit on their dreams because they have forgotten why they wanted their dream in the first instance. Once you stop focusing on the "why," you start focusing on your obstacles, then get discouraged, and finally quit. The key to becoming self motivated is to find your why and to constantly focus on it. If you do that, discouragement can't get a foothold in your life and you will not quit.
Many people set goals without having a clear, compelling reason for them. You need to have strong "why's" to back up your goals. A powerful "why" is what separates a goal setter from a goal achiever. The "why" becomes the driving force that gets you into action. The "why" is the motivation. But it is up to you to become the starter, the spark plug, if you will, for your "why". Once you get the ""why"" going and the "why" will get you going.
The best way to effectively use your "why" to become unstoppable is to create a "why" card written specifically for you. You will read your why card every morning and evening with power, passion, and conviction over and over for some minutes. That's how you "jump start" your why. If you do this every day, your why will automatically drive you to take massive action in the pursuit of your dream.
Fear of failure keeps most people from realizing their dreams. Reading your why card will give you the courage to take action in spite of your fear because if your why is big enough, the facts don't count.
Write your why card in the present tense, it needs to be filled with action verbs, and it needs to make you feel empowered and strong. If it doesn't, you are not dreaming big enough. Your dream needs to take your breath away. If the though of your dream doesn't make you get up at a different time, make you read the books, listen to the tapes, and hang around different people, it's not big enough.
Your why will empower you to act differently. To motivate yourself. To carry yourself differently. To do things radically different from the normal way. It will change you. It will make you better. That's why your dream needs to be bigger than you currently are. It has to make you grow. The dream gives your life a purpose.
Stop focusing on your past. Start focusing on your why. Remember, you have enormous God-given power to make your dream a reality. You just have to believe that you were created to make your dream a reality. Do yourself a favour. Step out in faith, write and use your why card, so you can build and create a better life. Use your why card to make you relentless in the pursuit of your dreams
Monday, May 11, 2009
Like in all investments, remember that the higher the return, the higher the risk. Above all, remember to invest what you can afford to lose. Remember also the advice of Brain Tracy “the future belongs to the competent”. The future belongs to those men and women who are very good at what they do. Pat Riley says in his book - The Winner Within - “If you are not committed to getting better at what you are doing, you are bound to get worse”.
Many investors only look at the profit side of investments forgetting that a sword has two edges. While there are lots of benefits derivable from stocks investment, there are risks involved. That is why it is very necessary for investors to understand the risk before staking their funds in the stock market. However, experts believe that what is highly risky to one individual may be no problem to another.
If you have decided to be a smart and intelligent stock trader, the following tips may be of assistance to you:
1. Make a Plan – Before you invest any money, make an investment plan and stick to it at all times. This will help you become disciplined and will also help you organise your time and investments. Keeping things simple will result in less stress. Your plan should consist of the investments you are going to make and why and how much you are investing in stocks. It should also include your exit point and also the time you want to allocate for your investments each day.
2. Money – This is not just the money that is sitting in your bank account. It is not the money that you use to pay for your rent, your car or your food. Penny stocks can be extremely unpredictable and although you might make a great deal of money it is also true that you may lose everything. So it is important especially when you are starting out with penny stocks that you only use money that you can afford to lose. After you have built up a nice profit, you can re-invest your profits from past trades which will snowball your earnings.
3. Knowledge – This is without a doubt the single most important factor in determining whether your budding career as a penny stocks investor will be a spectacular triumph or a dismal failure. If you are a new comer to stock investing of any kind, there are various guides you can buy and it is a good idea to read several of these before spending any money. These are all good and although they will not help you with specific decisions such as whether to buy a particular penny stock, or when to sell, they give you a good background on how it all works and are invaluable in building a good knowledge base.
4. What is the Best Trader? –They control their emotions; do not allow fear and greed affect on their decisions. They understand the market, they know it is impossible to be winner in all trades but try to improve the winning per losing trade’s ratio. They stay in the present and view events truthfully, they are not regretful, review the past only to improve their performance in the future. There are many characteristics, but it does not mean that you must have all of them to become a successful trader.
5. Mistakes to Avoid –. Successful traders act without emotions and they have a strategy and follow the principles of their strategy. To succeed in the stock market, you should avoid some mistakes and learn some investment tips. A good way is to summarize investment advice in a list of rules.
6. Lack of Strategy – Having a strategy in the stock market is very important. You should know when to buy a stock, what the selling price is and how long you will hold the share. When you choose a strategy, follow its principles and do not change your strategy every day.
7. Waiting for Market – Many traders when they lose in a stock do not sell but stay till the stock price return to the price they have bought. This is one of the greatest mistakes that new traders make because they may lose much more money and time by holding a fail position.
8. Not Taking Profit – When a reasonable profit has already been made, overcome greed and sell the stock for profit.
9. Over-Trading – Many traders especially day traders feel the need to hold positions in the market at all times on every trading day. Often they will break their own rules in order to get all of their capital into the market. Sometimes, it is best to stand aside and avoid holding any position in the market at all.
10. Trading with the Money You Cannot Afford to Lose – Do not use money that you really cannot afford to lose. Examples of this would be money that is supposed to be used to pay the mortgage, bills or your child’s tuition. This is causing trading with fear and emotions.
11. Falling in Love with a Stock – Some people stick to a stock because they believe it is a good stock. They refuse to sell even when they lose money.
12. A Way to Get Rich Quickly – People will often expect to get rich in the market overnight, but they fail to realise that trading is like any profession; you must learn how to do it first.
13. Nor Adhering to a `Stop-Loss’ Position – A stop-loss is a predetermined price point at which a loss is accepted and an investor closes the position. Using this investment advice is not easy as much as you think. You must try in a regular way to apply this investment advice on your trading strategy.
14. Apply Investigative Journalism – Warren Buffett has always advised and will continue to advise investors to practice “investigative journalism”. This simply means that you personally take your time to find out all necessary details about a potential stock purchase on your own. No doubt you would have to ask questions, read materials etc. but the truth is that in the stock market, your best friend is yourself. Every other person out there especially brokers is interested in making a killing for themselves. As a matter of fact, brokers are more concerned about the commissions they charge you and as you know, commissions are charged whether you make a loss or profit. Don’t just listen to people who claim to have lost so much money and console yourself for also losing money in the process. Do you know what reason prompted them to invest?
15. Form or Join a Team – The decisions we make with respect to our investment are shaped by our association. Be it an association with a fellow investor friend or some stock analysis report you received in your mail or may be a tip from your stockbroker. You need to form or join a team of like-minds to discuss issues of common interest. Your present team will determine to a large extent the kind of individual you would be or kind of life you would live in years to come.
Wednesday, May 6, 2009
The recent global financial crisis is an ill-wind that blows no one any good. Recession comes with it tough survival strategies.
1. Reduce Wastes – Don’t buy things that are not of immediate benefit or use to you. Budget your expenses. This will enable you separate your wants from your needs and desires. Consider the amount spent on buying new festive wears (cloths, shoes, etc). Consider the amount spent on entertaining guests/visitors. Consider the amount spent in organising parties. Calculate annual savings on each of the above.
2. Manage Time – Time is a resource given equally to mankind by God. Are you self-employed or working for a corporation? It does not matter. The amount of time available to everyone is the same. Use your time wisely. Consider working additional hours so as to generate more fund.
3. Get a Job – Find a job that can generate income. If you are already employed, you can get additional job so as to generate more money. Identify places where you can work part-time or short-time. Consider taking your leave from your present employer and getting a holiday paying job during the period.
4. Diversify Your Investment – Consider investing in Bonds, Mutual Funds and Stocks. Do not put all your eggs in one basket, no matter the size of the basket. Invest for long-term benefits. There is also need to maintain a strong cash position.
5. Set Financial Priorities – Setting financial priority involves deciding or determining what is most important aspect of your finances and put that item on top. This involves a list of your basics – water, food and shelter. Determine what it takes to ensure that your basic needs are met. The main ingredient is a source of income to pay the rent or house payment, pay the utilities, and buy the groceries. Remember, having a savings can prevent the use of those dreaded credit cards and help in so many ways.
6. Sell Your Junk – Do you know that one man’s trash is another man’s treasure. Sell off old junks in your house. These junks include old furniture and fitness equipment, collectibles and clothing, old text books, cell phones and computers. Companies like Amazon.com, Craigslist and eBay are great sources for online hawking.
7. Sell Your Skills – Are you skilled and talented in a particular area? It may an avenue for you to make money. Can you teach music, art or sewing, arrange a regular dog-walking or baby-sitting, tutor students if you are academically minded, tutor another language or find a flexible translator position. Just re-discover your self, it can fetch you some cash.
8. Manage Your Accommodation – If you are living alone, consider getting a roommate. This could boost your income (and cut some expenses in half). You might consider renting out other spaces, too, such as your garage for storage or your parking space for commuters, if you live close to public transportation.
9. Manage Your Tax Returns – If you received a tax refund last year and your financial situation has not changed much, too much tax is being withheld from your pay cheque. Adjust your tax returns including your withholding tax payment. Consider getting the services of a tax consultant.
10. Track Your Expenses – You need to figure out what happens to all of your money on a monthly basis. There are many ways that you can do this, but probably the easiest is to put a piece of paper in your wallet and try, for a period of one month, to track every money spent during that period of time. You will be amazed, how you have been spending money on frivolities.
Monday, May 4, 2009
Knowing these money truths will go a long way to save you indebtedness:
Denial – Denial enables you to ignore the reality of your financial situation by refusing to think about a spiralling debt situation, or by compartmentalising the problem so that its impact on your total financial life is neither seen nor felt. Are you keeping financial secrets from the people closest to you? Do you find yourself denying-perhaps with a show of indignation that you have any financial problems at all, even when well-meaning friends or family members offer to help? These can be symptoms that denial is wreaking havoc with your sense of financial reality.
Entitlement – “I deserve it” is the three-word mantra that reveals that emotion’s influence over the way you handle money and credit. A sense of entitlement may be tied to a desire for status, to trying to keep up with the Phillips, to the feeling that you are smarter or better than others, or to a craving for respect and value in the eyes of others. People whose approach to money is distorted by a sense of entitlement rarely realise that hard work is needed to fulfil their desires. Instead, they expect good things to come without effort – a sure sign that they are out of touch with the way the world actually works.
Compensation – For many people, their first overdraft facility or credit card unleashes memories of unfulfilled childhood desires. They remember all the toys, clothing, and other things they could not have while growing up, or that they had to wait until Christmas or their birthday for. Now all those goodies are available just by handing over that little plastic card. Credit enables us to compensate for those early feelings of being deprived by indulging is immediate gratification now. But when this emotion from the past becomes a thoughtless justification for repeated indulgence, so that debts and interest charges build up every month, the deprivation of the past can actually begin to damage your future.
Delusion – Many people succumb to magical thinking about money. It manifests itself most often when young people get their first credit cards and discover they can by thousands of dollars worth of goods, but only have to pay back little monthly. They pay no attention to the interest that is accruing on the outstanding balance, which seems small at first. Lacking self-discipline, they make the minimum payment and then charge the same amount (or more) during the next payment period. The outstanding balance starts that slow-but-sure-creep upward. But the debtors deliberately (sometimes ignorantly) ignore that amount. They only number they see is the minimum payment amount, which lets them maintain the lovely delusion that they are able to afford this debt.
Conformity – This is the “everyone’s doing it, so why shouldn’t I?” mentality. It is strange when it comes to credit, some people who are otherwise level-headed and mature feel that irresponsible behaviour is acceptable because everyone they know has similar problems. Behind this irrational conformity may be a secret belief that other people may have discovered how to get their hands on “free money”. But, as every individual eventually discovers and as our society as a whole will one day learn, the supposedly free money that a credit card provides will have to be repaid, no matter how painful the ultimate price.
Over-Optimism – This smiling devil is the belief that somehow a financial problem will miraculously correct itself. A person saddled with over-optimism often thinks he or she is simply being “positive” about the situation and dismisses other thoughts as being “negative” or “gloomy”. It is a way of denying personal responsibility and absolving oneself of blame for short-sighted financial decisions. If you fall into this trap, you will find your cheery disposition keeping reality exactly where you want it at arm’s length even as your financial situation worsens.
Fear – The sight of rows of numbers makes some people react like a rabbit frozen in the headlights of an on-coming car. Some people suffer from a genuine financial mathematical phobia, more often than not it is affectation or excuse that enables people to run away from their financial duties sure give away.
Know What You Need To Do – The truth is that many people have a pretty good idea about what they need to do to fix their financial weakness – spend less, earn more, pay off debt, and accumulate savings. Take control of your inward emotional demons today and stop blaming someone or something else.
Before contemplating which of these options is to go for, remember the first advice and basic rule in investment –“ Invest what you can afford to lose”. Remember also that “the higher the return, the higher the risk”. Do not be in a hurry to reap high return in a short period. It pays to do research before investing.
When you are investing funds in bonds, you are technically lending your money to a borrower. Who can this be? Some of these are the Federal Government, a State, a Local Municipality or a big company. All these institutions need money to expand, to fund a federal deficit or to finance new ventures. So they borrow funds by issuing bonds. The price you pay for a bond is known as its face value. The issuer promises to pay you back in a particular day, at a fixed rate of interest stated on the coupon itself. You are safely investing in bonds; these bonds give you a yearly income until the maturity date. When the bond matures, the borrower pay you back the principal plus interest. In most cases, investing in bonds is a minimal-risk free decision.
A share of stock is a certificate of ownership purchased by individuals who are investing or buying a proportional share of the business. The more stocks you buy, the bigger the share of profits you get and the bigger your financial stake becomes. A stock’s value is affected by the financial situation of the company. Historical trends in stocks have shown that their value rises over time, although there are no sure guarantees. Also with stocks, the only assured return is if it appreciates on the open market. And while it is true that there are companies that give their stockholders dividends, they are not obligated to do so.
In this financial scenario, you join a group of investors in investing your funds to buy stocks, bonds, or anything else your fund manager decides is worthwhile. If you do sustain losses, these losses, are subtracted from the fund’s capital gains before the money is distributed to you the shareholder. The fund will not pass out capital gains to shareholders until it has at least earned more in profits than it had lost.
Wealth, however, has been described as “cash flow from other sources”. Wealth accumulation could take any of the following options:
1. Make your Money Work For You – What this means is that, you are not wealthy just because you earn a lot of money. You are only wealthy when your money works for you. To become wealthy, your main job is to acquire money and then put it to work making more money for you.
2. Add Value Continually – The key to creating wealth is simple. It is called “adding value”. Successful people are those who are always looking for ways to add value in some way to a person, a company, a product or a service.
3. Buy It Cheaper Somewhere Else – Another way to add value is to buy something in one place at one price and then make it available in another place for another price. For example, buying a product or service manufactured in Europe or Asia, importing it to the United States and making it available to people to whom it was not available before, is a way of adding value for which you can charge a higher price.
4. Improve The Life or Work of Others – All manufacturing and marketing is based on this principle of added value. All aims to add value. Performing a service that enhances the life or work of another person adds value. An accountant who saves a client’s money on taxes is adding or actually creating value. All financial success, is based on adding value. It is based on the old saying, “Find a need and fill it”.
5. Combine and Recognise the Elements of Value – All successful business is based on someone bringing together the factors of production, such as labour, capital, raw materials and management, and creating a product or service that a customer will pay a price for that is in excess of the cost of producing it.