Leap of faith assumptions needs to be identified and tested early on so that the company can make better decisions instead of incurring significant expenses by going down the wrong path. Unfortunately, our government does not subscribe to testing assumptions before spending billions of dollars of taxpayer money. For example, take the main assumption that […]
When I grew up in Massachusetts, I remember reading a story about Joe Kennedy. He would go up to owners of older drafty apartments in downtown Boston and make them a unique proposition. Many of the units were poorly insulated and cost a small fortune to heat in the winter. Joe would agree to insulate
Capturing Value in Nontraditional Ways Read More »
It is always good to have some investment funds so you have the ability to execute when you see a good deal. One of my boys bought his motorcycle with cash after he bought a Ford Ranger with a blown engine the owner could not afford to fix. He bought the truck for $500 and
Seed Money – How to Grow Rich Read More »
Are you risk adverse? Most people work hard for their money. Therefore, when it comes to investing their hard earned money, they tend to play it very safe and conservative. Entrepreneurs know that money doesn’t come from work but from ideas and one’s personal knowledge. They know that even if they lost all their money
Safe vs. Calculated Risk Read More »
Most people believe that money is meant to be spent for articles of instant gratification as a reward for their efforts. These same people usually live beyond their means and fund their lifestyle with debt. They spend their leisure time in activities that have no real value, such as watching sports or reading novels. Entrepreneurs
Money is for Spending vs. Investing Read More »
I think we would all agree that making a profit is the incentive to take risk through investments. Moreover, it takes investments to stimulate innovation. But innovation creates productivity gains, which in turn eat into profit. For example, a tractor that costs as much as the labor cost for 150 workers, but which can do
Who Really Benefits Most From Business Investments? Read More »
The rule of 72 is a simple tool to calculate how long it takes to double your money. Your money will double in value if the product of multiplying the interest rate by time equals 72. The formula is Interest x Time = 72. So given a 10% annual investment rate it will take 7.2
The Rule of 72 for Doubling Your Investment Read More »
Investments made in your own business or in the stock market have investment risks that can be broken down into seven distinct types of risk.
The Seven Types of Macro-Environmental Risk Read More »
3 types of Investment risk. Greater risk = great rewards. Range = Inventory, least risk/reward, thru production equipment, to innovation most risk/reward.
Understanding the Investment Risk Continuum Read More »
Robert Kiyosaki, the author of Rich Dad Poor Dad, uses a model he calls the Cash Flow Quadrant to explain different ways income is generated. The last quadrant is Investor. As an investor, it is all about having your money work for you. As an investor, you can spread your investment money around to achieve
Investor – Cash Flow Quadrant Read More »
