Richard Branson Think Big : Advice for Entrepreneurs

Richard Branson Think Big : Advice for Entrepreneurs.

Since Branson founded Virgin in 1970, the company has grown from a small record outlet to a global powerhouse. Can the brand continue its success without him?

Question: What is your advice for entrepreneurs?

Richard Branson: I think the most important thing about running a company is to remember all the time what a company is. A company is simply a group of people. And as a leader of people you have to be a great listener and you have to be a great motivator. You have to be very good at praising and looking for the best in people. People are no different from flowers. If you water flowers they flourish, if you praise people they flourish. And that is a critical attribute of a leader.

Question: What has been the most difficult part about running Virgin?

Richard Branson: There is a very thin dividing line between success and failure. Most people who set off in business without financial backing they fail at some times in their lives. I’ve only just stayed at the right side of that dividing line. For instance, just after… You know we had a record company. I was fed up flying on other people’s airlines. I felt that the experience of flying on other people’s airlines was an unpleasant one and I decided to set up an airline. Well our bank went into a complete panic attack and when I came back from doing the inaugural flight of Virgin Atlantic’s very, very first flight from London to New York I came back to find the bank manager sitting on my doorstep and informing me that they were going to close Virgin down on the Monday and this was the Friday and that I had two days to effectively pay them off the monies that they’d loaned us and I remember pushing the bank manager out of my house, telling him he wasn’t welcome, which is a dangerous thing to do to your bank manager and then spending the weekend ringing around the world to all of the distributors of our music asking if they could give us a temporary loan to get us through the following week, which they were good enough to do and by the end of the week we had changed banks and we actually managed to find a bank that was willing to lend us 30 times the overdraft facility that our bank had lent us and we managed to survive. And I think the moral of that story is actually don’t think of your bank as somebody that you’re beholden to. I mean don’t… You know people just don’t move from one bank to another. Sometimes you need to be willing to step up and move your banks in the same way that you should step up and move your doctor on occasions and anyway, I learned from that lesson.

Question: Can Virgin continue to be successful without you?

Richard Branson: Virgin does work very well without me. I mean I use myself to build the brand, to build the sort of three or four hundred companies around the world, but I also learned the art of delegation. I have a fantastic team of people who run the Virgin companies, give them a lot of freedom to run the companies as if they were their own companies. I give them the freedom to make mistakes and the Virgin brand is now maybe one of the top 20 brands in the world, well respected. And when my balloon bursts Virgin will continue to flourish. And maybe I add the icing on the cake on occasions, maybe they’ll have to spend a bit more money on marketing, but fortunately Virgin is in a state where it can live on healthily without me.

July 28, 2020

Everything You Need to Know About Finance and Investing in Under an Hour

Everything You Need to Know About Finance and Investing in Under an Hour 

Uses a lemonade stand example to provide an overview of the financial aspects of a business (revenue, profits, valuation, growth, pricing, balance sheet, income statements).
Concentrates on investing, including the following key points
In the example, the owner starts with $750, with $250 of that coming from a loan.
Here's an income statement tracking the healthy growth of the lemonade business. By year five, the company has seven stands, supported by an increased margin on products, and makes a profit of $2,311 (earnings before tax).
With some compound interest examples, he highlights the importance of starting early so your money can grow early over time).
He tweaks return assumptions to show how long-term outcomes are impacted by changes in how much your investments return.
Save $10,000 and earn 10% each year, you would have $602,000 after 43 years.
Earn 15% per year, you would have over $4 million after 43 years.
Importance of not losing money as drawdowns can have significant negative effects on returns.

A business owner can take money from a lender, who profits from interest on his loan, or an equity investor, who buys shares in the company. An equity investor stands to make much more money than a lender due to the level of risk involved — if the company doesn't make money, neither does the investor.

What are keys to successful investing?

Invest in companies that are listed on the stock market (liquid, well-known).
Avoid investing in start-up businesses where prospects are not well known.
Invest in businesses that you understand.
Invest at a reasonable price.
Invest in company that could last forever.
For instance, an investor makes a small amount of interest from government bonds because the risk is low — the US government is more secure than any corporation. An investor makes a large amount of interest from loans to business owners because the risk is high.
What kind of businesses last forever? (Examples: Coca-Cola, McDonalds, candy business).

Equity is a "residual claim" because debt must be paid off before investors can profit. Shareholders may make money from company profits called "dividends."

When a company has grown significantly, its owner can sell it for a typically large sum of money, in exchange for control of the business and a shot at future profits.
Sell a product that people need.
Sell a unique product (not a commodity).
Elicit brand loyalty that consumers are willing to.
Find a company with limited debt.
High barriers to entry.
Immune to extrinsic factors.
Has low reinvestment costs.
Generate high amounts of cash flow.
Avoid businesses with controlling shareholders (one shareholder holds majority of company stock).
Instead of growing a business further, an owner can pay himself dividends to put cash in his pocket rather than in the company.
At a moment of strong growth, the business owner can either share profits with a private investor or go public.
When a business files for an initial public offering (IPO), its owners offer a portion of it to the general public, which raises cash, and the company gets listed on an exchange. It requires being transparent and, in the US, reporting to the Securities and Exchange Commission.


When are you ready to start investing?

When you have money you won’t need for 5-10 years.
After paying off credit card debt and student loan debt.
Have 6-12 months of emergency funds set aside.

Psychology of investing.

How to withstand volatility.
Be financially secure.
Don’t get spooked by short-term fluctuations.
Do your own research.
Invest at a reasonable price.

If you don't have the time or desire to invest in individual stocks, you can invest in mutual funds, large pools of funds managed by a professional investor.
Mutual fund companies.
Pros.
Portfolio diversity, even for small investment amounts.
Managed by professional investor.
Cons.
Choice: Over 10,000 to choose from.
Research is required to pick a good manager.

You can also outsource your investing to a money manager.
Reputation for integrity.
Easily explain investment strategy (“the two minute test”).
Has a value approach.
Long-term track record.
Consistent approach.
Invests own money in the fun.

July 11, 2020

How to Ask Rich People for Money

How to Ask Rich People for Money.

Fundraising for charity is an important part of any nonprofit group's work. In the U.S. alone, donors gave almost $287 billion in 2011. Many people who work for nonprofits feel uncomfortable asking donors for money, but without their help most nonprofit groups would not be able to carry out their missions. Learning how to effectively and respectfully ask wealthy individuals for money can help you ensure your charity or favorite nonprofit, federally recognized as 501 (c) (3), group prospers and is able to help those in need.

Part 1 Planning Your Donation Request
1. Compile a list of donors. Before you begin asking for money, it's best to have an idea of who you're going to ask for donations. If you're going door-to-door, that may be as simple as deciding which neighborhood(s) to work in. If you're soliciting donations by phone or by mail, though, you'll need a list of prospective donors to contact.
If you can identify past donors on your list of people to call or write to, you may want to prioritize those individuals as "best bets" - these are people who, given their history of donating in the past, will most likely contribute again to your cause.
Try to identify which people on your list are the most financially stable. You can do this by interacting with the individual to get a sense of his or her finances, or if going door-to-door, look at the houses residents live in and the cars in their driveways. People with large, elaborate homes or flashy sports cars most likely have more disposable income. (Though of course this doesn't guarantee that they will give donations.)
You can also look for potential donors by their other areas of spending. For example, does the prospective donor attend fundraisers for other organizations or individuals? If so, that prospective donor probably has the means to donate to your organization, if properly persuaded.
Consider using analytical software and services, such as Donor Search, to identify which potential donors are more wealthy and more likely to donate.
Remember to think "ABC" when identifying donors: Able to make a gift, Belief (known or potential) in your cause, and Contact/Connection with your organization.
2. Get to know your donors. If your organization has dealt with donors in the past, you or a colleague will probably know what strategies work best in making your appeal. Some people want to know how the money from last year was spent, while others may simply want to know how much is needed. Certain donors may have fears or reservations about donating, and it's important to learn to recognize those fears/reservations so you can address them in advance.
Some donors may need to hear particular terms or phrases in order to be persuaded to donate. If you know this to be the case, make some indication of this on your list so that when you call or approach that person, you'll know what to say.
Any time a donor seems reluctant to give but gives anyway, make a note of that situation on your list or in that donor's file (if you have one). Listen to what the individual says when he or she is reluctant, and try to find ways to assuage those fears - not just for this year's fundraiser, but for future years as well.
Be aware that many well-known philanthropists hire other individuals to manage donations and contributions. Because of this, you may not get to speak to the actual donor himself/herself. However, the employees hired by a philanthropist probably have the same concerns that the philanthropist does, and you may have some luck appealing to the philanthropist's interests through his or her employees.
3. Find ways to present your organization. People who have donated to your organization will no doubt be familiar with who you are (as an organization) and what you do. But what about people who have never donated before? How will you describe what you do to an outsider? This is important, as it may determine whether the individual will listen to the rest of your pitch. If possible, try to compile some data on what your organization has done in the past, the problems you hope to address after this fundraising drive, and how that prospective donation would help your cause.
Try to present your organization in a way that both explains what you do while also highlighting the issue you seek to change. For example, you might say something like, "Did you know that [the issue your organization addresses] affects a significant portion of the city, and we are the only organization solely committed to addressing these issues in a comprehensive way?"
It's not a requirement to have data compiled, but for individuals who aren't familiar with your organization, it may be very helpful to know that information.
Consider printing out a brochure or having a reusable chart to illustrate both the improvements you've made and the improvements you hope to make.
Think about what you might say if someone doesn't understand your organization's goals, or what you might say if someone was dismissive of your organization. Try putting yourself in those shoes - imagining that you were someone who didn't want to help the organization - and what you might say to the organization. Then imagine how you might respond to hearing those words.
The better your donor base understands your organization - and the better you understand your donors - the more likely you'll be to build a long-term relationship with that donor.
4. Practice your appeal. One of the best things you can do to strengthen your appeal for donations is to practice what you're going to say. That doesn't just mean knowing how to actually ask for money, but also knowing how to initiate the conversation, practicing scenarios, anticipating potential responses, and knowing how to direct (or re-direct) the conversation.
Remember that the best appeal will educate the potential donor, rather than making a simple sales pitch.
Practice your appeal out loud. Get comfortable with the speech, and learn to adapt it to your own style of speaking. Make it your own speech, and try to make it feel comfortable and unrehearsed (even though this may take a lot of rehearsal).
Practice in front of a mirror if you will be interacting with donors face-to-face.
Try recording yourself, either with a tape recorder or on video, and study your mannerisms and your speech patterns. Does it sound honest? Do your vocal patterns and your physical mannerisms communicate the message of your organization, and the urgency of what you're trying to solve?

Part 2 Asking for Donations.
1. Start a conversation. Don't just call and start running in with your pitch. Work on creating a dialogue with the potential donor, which may mean making some polite small talk at the start. It can be as simple as asking the person how his or her day is going. Anything to start a conversation should help disarm the individual, and make the person realize that you're a caring and concerned member of the community.
If the prospective donor is a known philanthropist, he or she may prefer to have someone who heads the foundation ask for a donation. Statistically, donors are more likely to give money to a recognizable figure affiliated with an organization, rather than to a fundraiser who contacts them on the organization's behalf.
Initiate the conversation by getting the prospective donor to acknowledge an existing problem. If you're raising money for a local organization, you might open the conversation by asking what he or she thinks is the greatest crisis facing your region.
2. Make your intentions known. You shouldn't just introduce yourself by asking for money, but you should make your intentions known near the end of your small talk. Start by asking how the person is doing, or commenting on the weather, and then use that as a lead-in to say, "I'm working with _______, and we're trying to help _______ be able to ________."
If the individual feels like you're just having an aimless conversation and then suddenly he or she is asked for money, it may create tension and cause the person to feel like you're shaking them down. Be calm, friendly, and casual, but don't drag your feet about making it clear that you have a purpose.
3. Let the other person speak. Chances are, if you launch into your usual appeal to a person on the street who's never donated before, that person will walk away. But if you have created a dialogue, and made room for the other person to speak, you may be able to get that individual to feel engaged and a part of the solution.
Try asking a Question : . Say something like, "What do you think is the biggest problem our community faces?" Once the person has answered, instead of simply saying, "Yes, you're right. Will you consider donating?" try a more nuanced approach. After the person says what he or she sees as the problem, just say, "How interesting!" and keep silent while remaining interested.
People fear silence, and the person will probably fill that gap by elaborating on why that issue is important. That potential donor may go on to talk about how a family member has been affected by those issues. This gives you an in to take the specific concern he/she has and run with it. It's no longer an abstract concern, but a specific problem that may have affected the individual personally.
4. Make a specific request. If you leave a donation appeal open-ended, the person may not end up donating, or may only give a few dollars. But if you ask for a specific amount, it takes a lot of guess work out of the equation for that individual, and makes it easier to commit to your request. For example, if the person seems interested, say something like, "Well, we can make a difference. For just _____ dollars, you can help accomplish ___________."
Another way to ask for a specific amount is to put the ball in their court. Ask something like, "Would you consider a gift of _____?" or "Is ______ something you'd be willing to consider to help tackle the problem of __________?"
5. Be persistent. Many people will say no right off the bat, but others may simply need to be persuaded a bit more. Perhaps someone might say that the amount you requested is too high. If that happens, let the person know that any donation amount would be a big help, and ask if there's a slightly lower amount that the person would be willing/able to donate.
Don't be aggressive with your appeal, but do be insistent that your cause is worthy and that any donation amount would help that cause.
6. Thank the person either way. If the individual is willing to donate, then it's cause for celebration. You can thank the person and let him or her know that that donation will go a long way towards solving or addressing the issue at hand. But even if the person is not interested in donating, you should still be polite and appreciative of their time. Simply say, "Well, thank you for your time and have a wonderful day."
Expressing gratitude and courtesy can go a long way. Just because someone isn't interested in donating, that doesn't mean the situation won't change. Perhaps next year the people who said no will have heard or read more about your organization, or perhaps the individual will have been personally affected by the issue you're seeking to address. Making a good impression now, even when turned down, may be what helps you get a donation next year.
7. Follow up with donors. If someone gave a donation, you should absolutely express gratitude. Send the donor a thank-you letter and a gift receipt (in case they want to write it off on their taxes or simply have a record of the donation). It's best to send these items as quickly as possible so that the donor knows that the contribution was greatly appreciated and will be put to good use.

Community Q&A.

Question : How do I ask a rich person for 50,000 dollars?
Answer : Follow the instructions listed in the article above. However, they will likely say no.
Question : How can I get money if I need it urgently?
Answer : Get a job, start a blog, make something, or ask for a small loan.
Question : How can I get help with my power bills and the foreclosure on my house?
Answer : There are probably social services nearby that can help.
Question : How can I raise money for my wedding?
Answer : Ask friends and family members if they are willing to pitch in some money to help fund your marriage. In return, send them invitations.
Question : How can I find money for my daughter's marriage?
Answer : Loans, relatives, friends, or you could try planning a wedding that won't cost you much!
Question : Where can you apply for a small business loan with bad credit?
Answer : You can try becoming a member of a credit union and try for a loan there.
Question : How do I ask for money if I am about to be homeless with an autistic son?
Answer : Ask family and friends, and tell them your situation. Look for government programs that can help, and depending on the age of your son, you may be able to get financial help for him. You can also ask family and friends if the two of you can stay with them while you get back on your feet. That way, you have an address while you look for a job.
Question : I need a loan to deal with a parent's sickness, what can I do?
Answer : Loans are not the only solution to sickness, there are organizations that provide affordable medical care. Search for these in your area. You might also consider launching a donation campaign through Kickstarter or another fundraising website.
Question : How can someone fund me to help me spread the word of God?
Answer : Try doing a simple fundraiser, like a lemonade stand or a car wash.

Tips.

Many people are more motivated to help you with money if they sympathize with your goals or interests. Try to tailor your appeal to each individual donor, based on how that donor seems to respond to the issues you address.
Always send a thank-you note to your donors, regardless of how much they sent you.

July 02, 2020

How to Stop Being Broke

How to Stop Being Broke.

If you're sick of being broke, it's time to take control of your finances! Whether you need to work on your spending habits, learn how to save, or find ways to earn more money, you can find a way to stop being broke. Follow these steps to start working towards financial freedom and better peace of mind.

Part 1 Getting into the Right Mindset.
1. Set goals. If you want to change your financial situation, you need to get specific about want you want to accomplish. Think about exactly what you want your finances to look like and what you can do to achieve those goals.
Setting short-term goals in addition to long-term goals can help keep you motivated by providing you with a sense of accomplishment.
Create a budget for non-essential items and hold yourself accountable for it each month. If you go over-budget one month, tell yourself that your budget for the next month is reduced as a result.
2. Stop comparing yourself to others. If you're spending beyond your means because you feel that you need to keep up with your friends or show others that you can afford a certain lifestyle, you're not doing yourself any favors. Stop worrying about what others can afford and think about how you can live within your means.
Stop equating your self-worth with your ability to buy things. This kind of thinking will make you extremely unhappy in the long run and will probably get you stuck in debt forever.
3. Track your expenses. To understand exactly where all your money is going, keep careful track of every dollar you spend. You can do this with a pen and paper or electronically if you use a card for everything, but make sure to account for everything. This simple habit will help you spend more wisely.
Try categorizing your expenses and adding them up on a monthly basis. For example, you could create categories for food, housing, transportation, utilities, insurance, entertainment, and clothing. Then calculate what percentage of your income you are spending on each category. You might realize that your expenses in some of these categories are way too high.
To understand how much you can afford to spend each day, subtract your fixed expenses from your monthly income and divide the remaining amount by 31.
4. Make a plan for getting out of debt. If you are broke because you have credit card debt, a car payment, or student loans, think about what you can do to pay off these debts faster.
Making even a few extra payments each year can help you pay off your debts much faster.
5. Start saving. This may seem impossible if you are always broke, but planning for the future will help you get out of this cycle. Start small by just putting $50 in an emergency fund each month.
Don't forget to save for retirement! Take advantage of the 401k offerings at your company or open an IRA account.

Part 2 Avoiding Money Traps.
1. Avoid lending to others. While you may want to help out your loved ones who are in need, you really shouldn't be lending money if you can't afford to pay your own bills.
2. Avoid payday loans. While they may seem like a good solution if you're strapped for cash, the interest rates are ridiculously high, so they will only get you further into debt.
3. Understand how much it will really cost. Before you take out any kind of loan or finance any purchase, be sure to calculate what your monthly payments will be, how long it will take you to repay the debt, and how much you will be paying in interest.
In some cases, paying interest may be worth it. For example, most people cannot afford to purchase a house without taking out a mortgage, but depending on the price of the house and the average cost of rent in your area, you might still be saving a significant amount of money by choosing to buy with a mortgage instead of renting.
Be especially wary of high interest rates for depreciating assets like vehicles. If you decide to sell your vehicle after you have owned it for several years, it may be worth less than what you owe on it. This can also happen with real estate when the market conditions are poor.
4. Avoid impulse buys. If you always have a plan for what you will buy, you will have a much easier time managing your finances.
If you have a hard time controlling your purchases when you go to the mall, try to avoid going to the mall at all.
Write out a list when you go shopping so you will always know exactly what you need to buy.
5. Use credit cards wisely. If you have a harder time keeping track of your expenses and sticking to your budget when you use a credit card, stop using it.
Paying with cash instead of a credit card will allow you to visualize how much of your available funds you are spending on a given purchase.
If you are able to stick to your budget when using a credit card, look for one that has no annual fee and will reward you with cash back or other incentives. Just make sure you always pay your bill on time or these incentives will not be worth the price you are paying in interest.

Part 3 Spending Less.
1. Assess your daily or weekly spending habits. Once you have a solid grasp on what you are spending your money on, you can start cutting out expensive habits.
2. Buy used items. You can save on everything from your next car to furnishings for your home by buying gently used items.
You can sometimes find really great clothes that have barely been worn at thrift shops for a fraction of the price.
3. Look for monthly expenses that can be cut. If you pay for monthly memberships or subscriptions, carefully assess how much they cost, how much you use them, and whether you could give them up.
Make sure you're not paying for services that you never use. For example, if you have premium cable channels that you never watch, you can cancel them without feeling like you are making any sacrifices. The same goes for your cell phone bill if you are paying for more data than you ever use.
4. Compare items or brands when shopping. If you're on a tight budget, you want to make sure you're always getting the best deal on absolutely everything. Take some time to compare prices for items you purchase regularly and for large purchases.
If you've had the same auto insurance carrier or cable company for a long time, there might be better deals out there, so be sure to comparison shop regularly.
Shopping for necessities online can be cheaper in some instances, but make sure you take shipping charges into account.
Use coupons to save some extra cash. Keep in mind that many retailers accept competitors' coupons.
5. Ask for a better deal. You can always ask your service providers for better deals, especially if you've been a loyal customer. The worst they can say is no.
Try this with your cable and internet providers, insurance companies, and cell phone carriers.
6. Spend less on entertainment or at restaurants. Whether it's dining out or going to amusement parks, entertainment can eat up a big chunk of your budget. Look for less expensive ways to have fun.
Learn to cook at home and keep the fridge well stocked with ingredients for things that you know you can cook from scratch when you come home late and don't have much time to whip up a grand meal.
Instead of going out to eat with friends, invite them over for a potluck.
7. Do more yourself. It may be convenient to use a laundry service or to have someone else shovel your driveway, but if you're physically capable of doing these things yourself. Think about the money you can save.
If you're not very handy, try to teach yourself to do more around the house. If you need a simple repair done, you may be able to watch a video online or take a class at a local home improvement store to learn how to do it yourself.
8. Save money on energy. Go green around the house to save money on your utility bills each month.
Sealing up air gaps can reduce your heating and cooling bills. If you own your home, investing in a properly insulated attic can make a huge difference.
Turning your heat down just a few degrees in the winter can make a big difference in your energy bills as well. A programmable thermostat will let you automate the temperature of your house so you won't spend money on heating the place to a comfortable level when you're not at home.
9. Avoid bank and credit card fees. Choose your bank and credit card providers wisely in order to avoid unnecessary fees.
Make sure to only use the ATM at your bank if you will get charged for using outside ATMs.
10. Aim to have a few no-spend days a month. After a while, it becomes a game: "How can I run my life today without writing anything down in my little blue book?" "How ingenious can I be to make do with the things, food, and resources I already have at my disposal?" See how often you can turn this into a habit.

Part 4 Earning More.
1. Get a better job. If spending less is just not enough, it may be time to get a better job that will allow you to make more money. Start by updating your resume, searching for listings online, and networking with other professionals in your field.
Don't forget to look for advancement opportunities within your company.
2. Do something else on the side. Using your skills to provide freelance or consulting services is a great way to earn additional income. If this won't work with your profession, get a part-time job or find creative ways to make some extra cash on the side.
You can make some extra money by performing jobs like mowing lawns, cleaning houses, or even walking dogs for people in your neighborhood.
3. Sell stuff you don't need. You probably have at least a few possessions that you no longer need or want, and you can turn those items into extra cash by selling them to people who do want them.
If you have lots of unwanted items, try having a yard sale.

Community Q&A.

Question : My family barely has any money. My dad has his own company, but it hasn't gotten any business in a long time. I have some money saved up, and I was think of leaving a little in my dad's wallet. What do you think?
Answer : Definitely do. Work as much as you can and give and much as you can. Also putting your family's money in a good, interest-bearing account can help a lot.

Tips.

To always have money in the bank to pay regular bills, add them up for the past year and divide by 52. Round up to the next 25, 50, or 100 dollars. Remember to add in quarterly or annual bills, too.
Buy clothes that can be used for several different occasions instead of only one-time events.
Use coupons on items whenever you can.
Start a Christmas Club account, but put in more than you expect to spend on gifts. The excess is great for a mini-vacation or special purchase.
Get a jar to collect your spare change. When it's full, take it to the bank. (Don't take it to one of those coin counters, as they charge for counting your change.)
Take it a day at a time. Start small, set goals, reward yourself (not with any type of shopping, of course) and enjoy playing the game.

July 02, 2020

How to Start Investing

How to Start Investing.

It is never too soon to start investing. Investing is the smartest way to secure your financial future and to begin letting your money make more money for you. Investing is not just for people who have plenty of spare cash. On the contrary, anyone can (and should) invest. You can get started with just a little bit of money and a lot of know-how. By formulating a plan and familiarizing yourself with the tools available, you can quickly learn how to start investing.

Part 1 Getting Acquainted with Different Investment Vehicles.
1. Make sure you have a safety net. Holding some money in reserve is a good idea because (a) if you lose your investment you'll have something to fall back on, and (b) it will allow you to be a bolder investor, since you won't be worried about risking every penny you own.
Save between three and six months' worth of expenses. Call it your emergency fund, set aside for large, unexpected expenses (job loss, medical expenses, auto accident, etc.). This money should be in cash or some other form that's very conservative and immediately available.
Once you have an emergency fund established, you can start to save for your long-term goals, like buying a home, retirement, and college tuition.
If your employer offers a retirement plan, this is a great vehicle for saving, because it can save on your tax bill, and your employer may contribute money to match some of your own contributions, which amounts to "free" money for you.
If you don't have a retirement plan through your workplace, most employees are allowed to accumulate tax-deferred savings in a traditional IRA or a Roth IRA. If you are self-employed, you have options like a SEP-IRA or a "SIMPLE" IRA. Once you've determined the type of account(s) to set up, you can then choose specific investments to hold within them.
Get current on all your insurance policies. This includes auto, health, homeowner's/renter's, disability, and life insurance. With luck you'll never need insurance, but it's nice to have in the event of disaster.
2. Learn a little bit about stocks. This is what most people think of when they consider "investing." Put simply, a stock is a share in the ownership of a business, a publicly-held company. The stock itself is a claim on what the company owns — its assets and earnings.  When you buy stock in a company, you are making yourself part-owner. If the company does well, the value of the stock will probably go up, and the company may pay you a "dividend," a reward for your investment. If the company does poorly, however, the stock will probably lose value.
The value of stock comes from public perception of its worth. That means the stock price is driven by what people think it's worth, and the price at which a stock is purchased or sold is whatever the market will bear, even if the underlying value (as measured by certain fundamentals) might suggest otherwise.
A stock price goes up when more people want to buy that stock than sell it.  Stock prices go down when more people want to sell than buy. In order to sell stock, you have to find someone willing to buy at the listed price. In order to buy stock, you have to find someone selling their stock at a price you like.
The job of a stockbroker is to pair up buyers and sellers.
"Stocks" can mean a lot of different things. For example, penny stocks are stocks that trade at relatively low prices, sometimes just pennies.
Various stocks are bundled into what's called an index, like the Dow Jones Industrials, which is a list of 30 high-performing stocks. An index is a useful indicator of the performance of the whole market.
3. Familiarize yourself with bonds. Bonds are issuances of debt, similar to an IOU. When you buy a bond, you're essentially lending someone money.  The borrower ("issuer") agrees to pay back the money (the "principal") when the life ("term") of the loan has expired. The issuer also agrees to pay interest on the principal at a stated rate. The interest is the whole point of the investment. The term of the bond can range from months to years, at the end of which period the borrower pays back the principal in full.
Here's an example: You buy a five-year municipal bond for $10,000 with an interest rate of 2.35%. Thus, you lend the municipality $10,000. Each year the municipality pays you interest on your bond in the amount of of 2.35% of $10,000, or $235. After five years the municipality pays back your $10,000. So you've made back your principal plus a profit of $1175 in interest (5 x $235).
Generally the longer the term of the bond, the higher the interest rate. If you're lending your money for a year, you probably won't get a high interest rate, because one year is a relatively short period of risk. If you're going to lend your money and not expect it back for ten years, however, you will be compensated for the higher risk you're taking, and the interest rate will be higher. This illustrates an axiom in investing: The higher the risk, the higher the return.
4. Understand the commodities market. When you invest in something like a stock or a bond, you invest in the business represented by that security. The piece of paper you get is worthless, but what it promises is valuable. A commodity, on the other hand, is something of inherent value, something capable of satisfying a need or desire. Commodities include pork bellies (bacon), coffee beans, oil, natural gas, and potash, among many other items. The commodity itself is valuable, because people want and use it.
People often trade commodities by buying and selling "futures." A future is simply an agreement to buy or sell a commodity at a certain price sometime in the future.
Futures were originally used as a "hedging" technique by farmers. Here's a simple example of how it works: Farmer Joe grows avocados. The price of avocados, however, is typically volatile, meaning that it goes up and down a lot. At the beginning of the season, the wholesale price of avocados is $4 per bushel. If Farmer Joe has a bumper crop of avocados but the price of avocados drops to $2 per bushel in April at harvest, Farmer Joe may lose a lot of money.
Joe, in advance of harvest as insurance against such a loss, sells a futures contract to someone. The contract stipulates that the buyer of the contract agrees to buy all of Joe's avocados at $4 per bushel in April.
Now Joe has protection against a price drop. If the price of avocados goes up, he'll be fine because he can sell his avocados at the market price. If the price of avocados drops to $2, he can sell his avocados at $4 to the buyer of the contract and make more than other farmers who don't have a similar contract.
The buyer of a futures contract always hopes that the price of a commodity will go up beyond the futures price he paid. That way he can lock in a lower-than-market price. The seller hopes that the price of a commodity will go down. He can buy the commodity at low (market) prices and then sell it to the buyer at a higher-than-market price.
5. Know a bit about investing in property. Investing in real estate can be a risky but lucrative proposition. There are lots of ways you can invest in property. You can buy a house and become a landlord. You pocket the difference between what you pay on the mortgage and what the tenant pays you in rent. You can also flip homes. That means you buy a home in need of renovations, fix it up, and sell it as quickly as possible. Real estate can be a profitable vehicle for some, but it is not without substantial risk involving property maintenance and market value.
Other ways of gaining exposure to real estate include collateralized mortgage obligations (CMOs) and collateralized debt obligations (CDOs), which are mortgages that have been bundled into securitized instruments. These, however, are tools for sophisticated investors: their transparency and quality can vary greatly, as revealed during the 2008 downturn.
Some people think that home values are guaranteed to go up. History has shown otherwise: real estate values in most areas show very modest rates of return after accounting for costs such as maintenance, taxes and insurance. As with many investments, real estate values do invariably rise if given enough time. If your time horizon is short, however, property ownership is not a guaranteed money-maker.
Property acquisition and disposal can be a lengthy and unpredictable process and should be viewed as a long-term, higher-risk proposition. It is not the type of investment that is appropriate if your time horizon is short and is certainly not a guaranteed investment.
6. Learn about mutual funds and exchange-traded funds (ETFs). Mutual funds and ETFs are similar investment vehicles in that each is a collection of many stocks and/or bonds (hundreds or thousands in some cases). Holding an individual security is a concentrated way of investing – the potential for gain or loss is tied to a single company – whereas holding a fund is a way to spread the risk across many companies, sectors or regions. Doing so can dampen the upside potential but also serves to protect against the downside risk.
Commodities exposure is usually achieved by holding futures contracts or a fund of futures contracts. Real estate can be held directly (by owning a home or investment property) or in a real estate investment trust (REIT) or REIT fund, which holds interests in a number of residential or commercial properties.

Part 2 Mastering Investment Basics.
1. Buy undervalued assets ("buy low, sell high"). If you're talking about stocks and other assets, you want to buy when the price is low and sell when the price is high. If you buy 100 shares of stock on January 1st for $5 per share, and you sell those same shares on December 31st for $7.25, you just made $225. That may seem a paltry sum, but when you're talking about buying and selling hundreds or even thousands of shares, it can really add up.
How do you tell if a stock is undervalued? You need to look at a company closely — its earnings growth, profit margins, its P/E ratio, and its dividend yield — instead of looking at just one aspect and making a decision based on a single ratio or a momentary drop in the stock's price.
The price-to-earnings ratio is a common way of determining if a stock is undervalued. It simply divides a company's share price by its earnings. For example, if Company X is trading at $5 per share, with earnings of $1 per share, its price-to-earnings ratio is 5. That is to say, the company is trading at five times its earnings. The lower this figure, the more undervalued the company may be. Typical P/E ratios range between 15 and 20, although ratios outside that range are not uncommon. Use P/E ratios as only one of many indications of a stock's worth.
Always compare a company to its peers. For example, assume you want to buy Company X. You can look at Company X's projected earnings growth, profit margins, and price-to-earnings ratio. You would then compare these figures to those of Company X's closest competitors. If Company X has better profit margins, better projected earnings, and a lower price-to-earnings ratio, it may be a better buy.
Ask yourself some basic Question : s: What will the market be for this stock in the future? Will it look bleaker or better? What competitors does this company have, and what are their prospects? How will this company be able to earn money in the future? These should help you come to a better understanding of whether a company's stock is under- or over-valued.
2. Invest in companies that you understand. Perhaps you have some basic knowledge regarding some business or industry. Why not put that to use? Invest in companies or industries that you know, because you're more likely to understand revenue models and prospects for future success. Of course, never put all your eggs in one basket: investing in only one -- or a very few -- companies can be quite risky. However, wringing value out of a single industry (whose workings you understand) will increase your chances of being successful.
For example, you may hear plenty of positive news on a new technology stock. It is important to stay away until you understand the industry and how it works. The principle of investing in companies you understand was popularized by renowned investor Warren Buffett, who made billions of dollars sticking only with business models he understood and avoiding ones he did not.
3. Avoid buying on hope and selling on fear. It's very easy and too tempting to follow the crowd when investing. We often get caught up in what other people are doing and take it for granted that they know what they're talking about. Then we buy stocks just because other people buy them or sell them when other people do. Doing this is easy. Unfortunately, it's a good way to lose money. Invest in companies that you know and believe in — and tune out the hype — and you'll be fine.
When you buy a stock that everyone else has bought, you're buying something that's probably worth less than its price (which has probably risen in response to the recent demand). When the market corrects itself (drops), you could end up buying high and then selling low, just the opposite of what you want to do. Hoping that a stock will go up just because everyone else thinks it will is foolish.
When you sell a stock that everyone else is selling, you're selling something that may be worth more than its price (which likely has dropped because of all the selling). When the market corrects itself (rises), you've sold low and will have to buy high if you decide you want the stock back.
Fear of losses can prove to be a poor reason to dump a stock.
If you sell based on fear, you may protect yourself from further declines, but you may also miss out on a rebound. Just as you did not anticipate the decline, you will not be able to predict the rebound. Stocks have historically risen over long time frames, which is why holding on to them and not over-reacting to short-term swings is important.
4. Know the effect of interest rates on bonds. Bond prices and interest rates have an inverse relationship. When interest rates go up, bond prices go down. When interest rates go down, bond prices go up. Here's why:
Interest rates on bonds normally reflect the prevailing market interest rate. Say you buy a bond with an interest rate of 3%. If interest rates on other investments then go up to 4% and you're stuck with a bond paying 3%, not many people would be willing to buy your bond from you when they can buy another bond that pays them 4% interest. For this reason, you would have to lower the price of your bond in order to sell it. The opposite situation applies when bond market rates are falling.
5. Diversify. Diversifying your portfolio is one of the most important things that you can do, because it diminishes your risk. Think of it this way: If you were to invest $5 in each of 20 different companies, all of the companies would have to go out of business before you would lose all your money. If you invested the same $100 in just one company, only that company would have to fail for all your money to disappear. Thus, diversified investments "hedge" against each other and keep you from losing lots of money because of the poor performance of a few companies.
Diversify your portfolio not only with a good mix of stocks and bonds, but go further by buying shares in companies of different sizes in different industries and in different countries. Often when one class of investment performs poorly, another class performs nicely. It is very rare to see all asset classes declining at the same time.
Many believe a balanced or "moderate" portfolio is one made up of 60% stocks and 40% bonds. Thus, a more aggressive portfolio might have 80% stocks and 20% bonds, and a more conservative portfolio might have 70% bonds and 30% stocks. Some advisors will tell you that your portfolio's percentage of bonds should roughly match your age.
6. Invest for the long run.  Choosing good-quality investments can take time and effort. Not everyone can do the research and keep up with the dynamics of all the companies being considered. Many people instead employ a "buy and hold" approach of weathering the storms rather than attempting to predict and avoid market downturns. This approach works for most in the long term but requires patience and discipline. There are some, however, who choose to try their hand at being a day-trader, which involves holding stocks for a very short time (hours, even minutes). Doing so, however, does not often lead to success over the long term for the following reasons:
Brokerage fees add up. Every time you buy or sell a stock, a middleman known as a broker takes a cut for connecting you with another trader. These fees can really add up if you're making a lot of trades every day, cutting into your profit and magnifying your losses.
Many try to predict what the market will do and some will get lucky on occasion by making some good calls (and will claim it wasn't luck), but research shows that this tactic does not typically succeed over the long term.
The stock market rises over the long term. From 1871 to 2014, the S&P 500's compound annual growth rate was 9.77%, a rate of return many investors would find attractive. The challenge is to stay invested long-term while weathering the ups and downs in order to achieve this average: the standard deviation for this period was 19.60%, which means some years saw returns as high as 29.37% while other years experienced losses as large as 9.83%.  Set your sights on the long term, not the short. If you're worried about all the dips along the way, find a graphical representation of the stock market over the years and hang it somewhere you can see whenever the market is undergoing its inevitable–and temporary–declines.
7. Consider whether or not to short sell. This can be a "hedging" strategy, but it can also amplify your risk, so it's really suitable only for experienced investors. The basic concept is as follows: Instead of betting that the price of a security is going to increase, "shorting" is a bet that the price will drop. When you short a stock (or bond or currency), your broker actually lends you shares without your having to pay for them. Then you hope the stock's price goes down. If it does, you "cover," meaning you buy the actual shares at the current (lower) price and give them to the broker. The difference between the amount credited to you in the beginning and the amount you pay at the end is your profit.
Short selling can be dangerous, however, because it's not easy to predict a drop in price. If you use shorting for the purpose of speculation, be prepared to get burned sometimes. If the stock's price were to go up instead of down, you would be forced to buy the stock at a higher price than what was credited to you initially. If, on the other hand, you use shorting as a way to hedge your losses, it can actually be a good form of insurance.
This is an advanced investment strategy, and you should generally avoid it unless you are an experienced investor with extensive knowledge of markets. Remember that while a stock can only drop to zero, it can rise indefinitely, meaning that you could lose enormous sums of money through short-selling.

Part 3 Starting Out.
1. Choose where to open your account. There are different options available: you can go to a brokerage firm (sometimes also called a wirehouse or custodian) such as Fidelity, Charles Schwab or TD Ameritrade. You can open an account on the website of one of these institutions, or visit a local branch and choose to direct the investments on your own or pay to work with a staff advisor. You can also go directly to a fund company such as Vanguard, Fidelity, or T. Rowe Price and let them be your broker. They will offer you their own funds, of course, but many fund companies (such as the three just named) offer platforms on which you can buy the funds of other companies, too. See below for additional options in finding an advisor.
Always be mindful of fees and minimum-investment rules before opening an account. Brokers all charge fees per trade (ranging from $4.95 to $10 generally), and many require a minimum initial investment (ranging from $500 to much higher).
Online brokers with no minimum initial-investment requirement include Capital One Investing, TD Ameritrade, First Trade, TradeKing, and OptionsHouse.
If you want more help with your investing, there is a variety of ways to find financial advice: if you want someone who helps you in a non-sales environment, you can find an advisor in your area at one of the following sites: letsmakeaplan.org, www.napfa.org, and garrettplanningnetwork.com. You can also go to your local bank or financial institution. Many of these charge higher fees, however, and may require a large opening investment.
Some advisors (like Certified Financial Planners™) have the ability to give advice in a number of areas such as investments, taxes and retirement planning, while others can only act on a client's instructions but not give advice, It's also important to know that not all people who work at financial institutions are bound to the "fiduciary" duty of putting a client's interests first. Before starting to work with someone, ask about their training and expertise to make sure they are the right fit for you.
2. Invest in a Roth IRA as soon in your working career as possible. If you're earning taxable income and you're at least 18, you can establish a Roth IRA. This is a retirement account to which you can contribute up to an IRS-determined maximum each year (the latest limit is the lesser of $5,500 or the amount earned plus an additional $1,000 "catch up" contribution for those age 50 or older). This money gets invested and begins to grow. A Roth IRA can be a very effective way to save for retirement.
You don't get a tax deduction on the amount you contribute to a Roth, as you would if you contributed to a traditional IRA. However, any growth on top of the contribution is tax-free and can be withdrawn without penalty after you turn age 59½ (or earlier if you meet one of the exceptions to the age 59½ rule).
Investing as soon as possible in a Roth IRA is important. The earlier you begin investing, the more time your investment has to grow. If you invest just $20,000 in a Roth IRA before you're 30 years old and then stop adding any more money to it, by the time you're 72 you'll have a $1,280,000 investment (assuming a 10% rate of return). This example is merely illustrative. Don't stop investing at 30. Keep adding to your account. You will have a very comfortable retirement if you do.
How can a Roth IRA grow like this? By compound interest. The return on your investment, as well as reinvested interest, dividends and capital gains, are added to your original investment such that any given rate of return will produce a larger profit through accelerated growth. If you are earning an average compound annual rate of return of 7.2%, your money will double in ten years. (This is known as "the rule of 72.")
You can open a Roth IRA through most online brokers as well as through most banks. If you are using a self-directed online broker, you will simply select a Roth IRA as the type of account while you are registering.
3. Invest in your company's 401(k). A 401(k) is a retirement-savings vehicle into which an employee can direct portions of his or her paychecks and receive a tax deduction in the year of the contributions. Many employers will match a portion of these contributions, so the employee should contribute at least enough to trigger the employer match.
4. Consider investing mainly in stocks but also in bonds to diversify your portfolio. From 1925 to 2011, stocks outperformed bonds in every rolling 25-year period. While this may sound appealing from a return standpoint, it entails volatility, which can be worrisome. Add less-volatile bonds to your portfolio for the sake of stability and diversification. The older you get, the more appropriate it becomes to own bonds (a more conservative investment). Re-read the above discussion of diversification.
5. Start off investing a little money in mutual funds. An index fund is a mutual fund that invests in a specific list of companies of a particular size or economic sector. Such a fund performs similarly to its index, such as the S&P 500 index or the Barclays Aggregate Bond index.
Mutual funds come in different shapes and sizes. Some are actively managed, meaning there is a team of analysts and other experts employed by the fund company to research and understand a particular geographical region or economic sector. Because of this professional management, such funds generally cost more than index funds, which simply mimic an index and don't need much management. They can be bond-heavy, stock-heavy, or invest in stocks and bonds equally. They can buy and sell their securities actively, or they can be more passively managed (as in the case of index funds).
Mutual funds come with fees. There may be charges (or "loads") when you buy or sell shares of the fund. The fund's "expense ratio" is expressed as a percentage of total assets and pays for overhead and management expenses. Some funds charge a lower-percentage fee for larger investments. Expense ratios generally range from as low as 0.15% (or 15 basis points, abbreviated "BPS") for index funds to as high as 2% (200 BPS) for actively managed funds. There may also be a "12b-1" fee charged to offset a fund's marketing expenses.
The U.S. Securities and Exchange Commission states that no evidence exists that higher-fee mutual funds produce better returns than do lower-fee funds. In other words, deal with lower-fee funds.
Mutual funds can be purchased through nearly any brokerage service. Even better is to purchase directly from a mutual fund company. This avoids brokerage fees. Call or write the fund company or visit their website. Opening a fund account is simple and easy. See Invest in Mutual Funds.
6. Consider exchange-traded funds in addition to or instead of mutual funds. Exchange-traded funds (ETFs) are very similar to mutual funds in that they pool people's money and buy many investments. There are a few key differences.
ETFs can be traded on an exchange throughout the business day just like stocks, whereas mutual funds are bought and sold only at the end of each trading day.
ETFs are typically index funds and do not generate as much in the way of taxable capital gains to pass on to investors as compared with actively managed funds. ETFs and mutual funds are becoming less distinct from each other, and investors need not own both types of investment. If you like the idea of buying and selling fund shares during (rather than at the end of) the trading day, ETFs are a good choice for you.

Part 4 Making the Most of Your Money.
1. Consider using the services of a financial planner or advisor. Many planners and advisors require that their clients have an investment portfolio of at least a minimum value, sometimes $100,000 or more. This means it could be hard to find an advisor willing to work with you if your portfolio isn't well established. In that case, look for an advisor interested in helping smaller investors.
How do financial planners help? Planners are professionals whose job is to invest your money for you, ensure that your money is safe, and guide you in your financial decisions. They draw from a wealth of experience at allocating resources. Most importantly, they have a financial stake in your success: the more money you make under their tutelage, the more money they make.
2. Buck the herd instinct. The herd instinct, alluded to earlier, is the idea that just because a lot of other people are doing something, you should, too.  Many successful investors have made moves that the majority thought were unwise at the time.
That doesn't mean, however, that you should never seek investment advice from other people. Just be wise about choosing the people you listen to. Friends or family members with a successful background in investing can offer worthwhile advice, as can professional advisors who charge a flat fee (rather than a commission) for their help.
Invest in smart opportunities when other people are scared. In 2008 as the housing crisis hit, the stock market shed thousands of points in a matter of months. A smart investor who bought stocks as the market bottomed out enjoyed a strong return when stocks rebounded.
This reminds us to buy low and sell high. It takes courage to buy investments when they are becoming cheaper (in a falling market) and sell those investments when they are looking better and better (a rising market). It seems counter-intuitive, but it's how the world's most successful investors made their money.
3. Know the players in the game.  Which institutional investors think that your stock is going to drop in price and have therefore shorted it? What mutual fund managers have your stock in their fund, and what is their track record? While it helps to be independent as an investor, it's also helpful to know what respected professionals are doing.
There are websites which compile recent opinions on a stock from analysts and expert investors. For example, if you are considering a purchase of Tesla shares, you can search Tesla on Stockchase. It will give you all the recent expert opinions on the stock.
4. Re-examine your investment goals and strategies every so often. Your life and conditions in the market change all the time, so your investment strategy should change with them. Never be so committed to a stock or bond that you can't see it for what it's worth.
While money and prestige may be important, never lose track of the truly important, non-material things in life: your family, friends, health, and happiness.
For example, if you are very young and saving for retirement, it may be appropriate to have most of your portfolio invested in stocks or stock funds. This is because you would have a longer time horizon in which to recover from any big market crashes or declines, and you would be able to benefit from the long-term trend of markets moving higher.
If you are just about to retire, however, having much less of your portfolio in stocks, and a large portion in bonds and/or cash equivalents is wise. This is because you will need the money in the short-term, and as a result you do not want to risk losing the money in a stock market crash right before you need it.

Community Q&A
Question : I have low money, how I can get rich?
Answer : Expect it to take many years to get rich. Follow any or all of the steps outlined above.
Question : How do I find a broker to invest in the stock market?
Answer : There are several discount brokers online who charge a small fee for buying stock for you. There are also stockbrokers in most cities you can deal with in person. They charge a bit more, but they can offer you more personal service and help you choose stocks if you'd like.
Question : What if I have a stock in mind, but don't want a broker/brokerage firm? How do I actually purchase stock from that particular company, immediately?
Answer : Look online for the company's investor-relations department phone number. Call and ask if they offer direct stock purchases. If so, they will give you instructions for purchasing their stock. They may take a credit card, or you can write them a check.
Question : How do I start investing? Do I need an agent? Can Canadians invest in US Stocks?
Answer : Canadians -- and anyone else -- may invest in U.S. stocks. The typical way it's done is through a stockbroker. A good way to start investing is to consult with an experienced, fee-based financial advisor. A fee-based advisor does not make money by convincing you to make a particular investment.
Question : What is the difference between "ex-dividend date" and "record date"?
Answer : A "record date" is the date a dividend distribution is declared, the date at the close of which one must be the shareholder in order to receive the declared dividend. An "ex-dividend date" is typically two business days before the record date. When shares of a stock are sold near the record date of a dividend declaration, the ex-dividend date is the last day on which the seller is clearly entitled to the dividend payment.
Question : Is a financial planner really necesary?
Answer : Not if you can supply your own financial acumen and practical level-headedness. If you are not clueless about finances, or if you're personally acquainted with someone with considerable financial experience to share with you, there's no need to pay for advice. Having said that, however, the more money you want to place at risk, the more a fee-only advisor is worth hiring.
Question : How do I initiate an investment process after I open the account?
Answer : Your broker can explain the process to you. It's just a matter of telling the broker which investment(s) you want to buy. A full-service broker will help you make that decision if you'd like.
Question : I want to buy Exxon stocks right now online. What's the best way?
Answer : See Part 3 of Buy Stocks.
Question : If my company is closing, can I withdraw the 401k without any penalty?
Answer : Your 401k is probably "portable," meaning you can take it with you without penalty if you switch jobs. In your case, you shouldn't have any trouble removing the funds (assuming you plan to deposit them in another similar plan).
Question : Is it OK to connect my stock market account with my savings account?
Answer : Yes, that's a safe place to keep your money while you're not using it to buy stock.

Tips.
One of the most painless and efficient ways to invest is to dedicate a portion of each paycheck to regular contributions to an investment account. Doing so can provide some great advantages:
Dollar-cost averaging: by saving a steady amount every payday, you purchase more shares of an investment when the share price is lower and fewer shares when the price is higher. That keeps the average share price you pay relatively low.
A disciplined savings plan: having a portion withheld from your paycheck is a way of putting money away before you have a chance to spend it and can translate into a consistent habit of saving.
The "miracle" of compound interest: earning interest on previously earned interest is what Albert Einstein called "the eighth wonder of the world." Compounding is guaranteed to make your retirement years easier if you let it work its magic by leaving your money invested and untouched for as long as possible. Many years of compounding can bring astonishingly good results.

Warnings.

If you intend to hire a financial advisor, make sure s/he is a "fiduciary." That's a person who is legally bound to propose investments for you that will benefit you. An advisor who is not a fiduciary may propose investments that will mainly benefit the advisor (not you).
When looking for an advisor, choose one who charges you a flat fee for advice, not one who is paid a commission by the vendor of an investment product. A fee-based advisor will retain you as a happy client only if his/her advice works out well for you. A commission-based advisor's success is based on selling you a product, regardless of how well that product performs for you.

June 04, 2020

How to Get Money Quickly Without Borrowing It

How to Get Money Quickly Without Borrowing It.

It can be difficult to come up with cash at short notice for an emergency. Fewer and fewer people have secure jobs and savings accounts to rely on during tough times or unexpected circumstances. Fortunately, there are still ways to scrape together necessary funds quickly.

Method 1 Doing Odd Jobs In Your Neighborhood.
1. Advertise your services. Build your own website or post on online pages such as Craigslist.
Specify in your advertisement what types of jobs you can do (home repairs, plumbing, electrical work, yard work, cleaning etc.), what you charge, and when you are available.
Provide multiple ways to contact you. If you can be reached by both phone and email, you might have a better chance at getting work.
2. Build your potential customer base. Speak to nearby friends and neighbors first.
Tell them that you need money and are willing to do light housework and yard work in the area.
Ask them to tell their friends and neighbors too, and recommend your services.
Your neighbors and friends may very well end up being your first customers. Be sure to tell them to spread the word that you do good work when you're finished.
3. Charge reasonable rates for your work. The main reason someone might consider hiring you over a professional service is that you're a lot less expensive.
Ask for a small amount of money that you can live with, rather than a large sum.
A good way to estimate what to ask for is to set a low hourly rate, say $8 or $10. Also, prorate your work to the nearest half hour. In other words, if you work for 6 hours and 33 minutes, just bill for 6 hours and 30 minutes. That keeps things simple.
4. Act professionally. Dress in clean clothes and smile when people answer their doors. Offer a handshake when you introduce yourself. Make eye contact.
Be sure to describe exactly what types of services you offer, whether its small home maintenance, yard work, cleaning etc.
Be willing to do jobs on weekends and evenings.
Return calls and job offers quickly and promptly.
5. Bring your own equipment. If you have specialized equipment you can bring, such as a toolbox for house repairs or a rake for leaves and grass, bring it with you.
Heavier items like ladders and lawnmowers can be left at home, but be sure to mention you have access to your own.
Don't accept jobs that you don't have the equipment to complete.

Method 2 Finding Short-Term Jobs.
1. Think about what your skills are. You might be able to find a short term job more easily if you have certain skills.
Bookkeeping and accounting jobs are often short term or temporary. If you have skills as a bookkeeper, you can often find a well paying position on a short-term basis.
Offices and human resource departments often look for part-time workers when they have an increase in paperwork or filing.
If you have tech skills, some firms or websites may hire on a short-term basis.
2. Check the local listings for short-term jobs. The online marketplace Craigslist features an “ETC” category under the Jobs heading local newspapers also often carry advertisements for quick, temporary work. Check everywhere you can and think about what you're able to do.
Take a job as a sign waver. All kinds of businesses hire sign wavers to stand outside for 8 or 10 hours and wave a large sign at passing cars. Used car lots, payday loan stores, and furniture stores in particular use this marketing technique and often pay in cash at the end of the day.
Help out with event work. Browse listings for people and small businesses who need help setting up, running, and tearing down booths for local events like farmer's markets and street fairs. These jobs often start early in the day and often pay the same day. Be prepared to do anything from construction to running a booth.
3. Participate in studies or surveys. This isn't a reliable way to make a lot of money, but if you're just a few dollars short, it can make up the difference. A Google search will help you find some online surveys.
Be sure you qualify for the study before you apply. For example, you won't want to apply for a study that is looking at the effects of smoking if you aren't a smoker.
Apply in person to expedite the process. In the case of some surveys, you'll be able to show up and do a paid survey right then and there. Studies usually last longer, but may provide compensation before the end of the study period.
4. Join a temp agency. Temporary work agencies place thousands of employees with daily work. If you have specialized work skills or previous experience in a field, you might have very good luck temping. There are a number of tips to help you get started with an agency.
Visit the agency. Tell them you want to work, and follow their instructions. There will usually be an application to fill out, followed by an interview where you go over your work history and qualifications.
Bring a resume with you. It will help the temp agency sort out what types of jobs you are qualified for.
Dress for an office environment. Business dress shows you are looking to be successful and will fit in a professional setting.
Meet your agent. He or she will work to find jobs for you every day. Try to be pleasant and get along with your agent; it could help your chances some.
Take any job you're offered. Temp agencies can't work miracles; they don't find work for every temp employee every day. If your agent finds work that you can do and offers it to you, take it immediately.
Sometimes, a temp in a longer-term contract can get hired on as a regular employee, so always treat it like a “real” job.

Method 3 Selling and Reselling.
1. Think about selling your car. This isn't a practical step for many people, but if you're lucky enough to live somewhere you don't need a car to get to work or the grocery store, you're sitting on a huge mound of cash in the driveway. There are some helpful steps to complete this process.
Gather your car's information. Find the title and registration, maintenance receipts and records, and a car history report. Also know the features of your car (CD Player, seat controls etc.)
Having regular receipts and records for oil changes and routine maintenance can show that your car was well cared for and can help you get a good offer.
Set a price for your car. To find the right price, you can look up the value of your car with Kelly Blue Book or look in the classifieds section of your newspaper to see what price cars like yours are selling for.
Advertise the car online and in newspapers. In your ad specify the model and year of the car, its features, its true condition (if it is in need of repairs be honest), your asking price, and acceptable forms of payment. Include lots of photos and multiple ways to contact you.
2. Have a yard sale. Advertise it for free on Craigslist, or for a small fee in the local newspaper. Clean and organize everything you intend to sell, and lay it out in front of your house or apartment on the morning of the day of the sale.
This approach works best for people who haven't previously sold things for cash out of necessity, and still have a lot of items to sell. People are more interested in bigger yard sales.
Price everything slightly high, but be willing to haggle down. Most yard sale items will reasonably sell for 1/3 to 1/2 of the original price, if the item is in good condition.
Keep your prices in $.25 intervals to keep change handling simple.
To make up the difference, try to feature some bigger items, like furniture and exercise equipment, that you can get a bigger chunk of change for. Place these items at the end of the driveway or yard to lure in buyers.
Many neighborhoods have a coordinated yard-sale day. It is a good idea to hold your yard sale during this event because it will draw in a large crown of potential buyers.
3. Sell your belongings online. There are two basic ways to do this if you need to turn a quick profit: Craigslist and eBay.
On Craigslist, post your item for sale in the appropriate section of the site. Be sure to post pictures if you can; people often don't bother with listings that don't have photos attached.
Use the word “firm” if you refuse to haggle on the price; use “OBO” to indicate you might be willing to go down on it a bit.
On eBay, you can set various time and purchase options, which may have fees attached to them.
If you choose to sell it at a fixed price with the Buy It Now option, you will have to pay a flat fee of a couple dollars in addition to a percentage of the sale price. Buy It Now allows you to control your selling price.
If you choose to sell your item at auction, choose a period of time the auction will be active. Sunday evening is said to be the most lucrative night of the week for auctions by frequent eBay sellers.
4. Sell to a pawn shop. Pawn brokers are people who will pay cash for just about anything you own that isn't disposable or perishable. Pawn brokers tend to pay very low amounts and won't haggle.
Bring your items with you to the pawn shop. Most pawn shops keep short hours for security reasons, so go before 4PM to be sure you get in.
Decide whether or not to accept the offer. Expect to get $60 for a $500 bicycle, and on down the line proportionally. In most cases, you should only visit a pawn shop if you absolutely need money right now and have no other options available as you won't get a good value on your items.
5. Resell to collectors. There are collector's markets for just about everything with any cultural significance, from commemorative plates to video games and old toys. If you arm yourself with knowledge, you can make a killing buying items for cheap and selling them to collectors at a profit.
Specialize in one type of collectible. You might specialize in retro toys or specialized glassware. Start by seeing what collectibles you already own and build from there.
Know your subject. Do the research to find out what an item in good condition looks like and is worth. Know which items are commonplace or super rare. Rare items will get a better price.
Visit cheap places. Yard sales and thrift shops are your best friends as a collectables reseller.
Use computer resources. Websites that specialize in collectibles can help you to gauge what collectibles are selling for in your area.
Sell online. You'll often get a better price online than you will selling to a local collector, and this can widen your customer base.
Get to know dealers and insiders. These people can be great connections for you to advertise your collectibles and get to know vendors who can help you sell your items.

Method 4 Using Unorthodox Approaches.
1. Perform on the street. If you're lucky enough to own an instrument and talented enough, busking is the art of musical street performance. A good busker in a busy spot can make a nice little pile of cash in an hour or two of playing. The following are some helpful tips for busking.
Get permission. Some cities and communities have ordinances that require a permit or fee for street performance.
Choose a good location. Avoid areas where there are other street performers but still have high traffic. Choose busy downtown areas in safe locations as a starter.
Choose your repertoire carefully. A good time of year to busk is during the holiday season. Jazz and popular music are also successful themes.
Be polite to your audience. Be warm and friendly with everyone who crosses your path. Smile and nod whenever you make eye contact with anyone.
2. Collect scrap metal. Iron, steel, and especially copper can be sold to scrapyards by the pound. To make a significant amount of profit, you'll need to bring in quite a few pounds, so be sure you have a vehicle with space for the metal.
Look around abandoned lots and derelict buildings for pipes and metal fixtures. Junk bins outside tech and office firms may have bunches of wire or other components that can be sold as scrap.
Be very careful if you collect scrap. Wear heavy gloves, bring a partner, and don't hunt for scrap at night.
Don't steal or strip metal from anything that's still in use.
Search neighborhoods in the morning before garbage collection. You can often find items that can be used for scrap or fixed up and sold.
3. Go rock hounding. There are guidebooks available in most areas that show where valuable rocks can be found. Fossils, geodes, and semi-precious gemstones are all widely available in some areas. Keep in mind though that this may take time to find a collection and might not be a fast solution to your money problem.
Learn different gemstone grades. If you're hounding for semi-precious gems, remember that coloration and size can sometimes make them quite valuable.
Bring a shovel or spade, gloves, a hat, and a pail or bucket. Very often, to find the better-quality rocks and fossils, you'll have to dig down into the ground a little bit. Be sure this is legal where you are; most places marked in a guidebook should allow it.
Be careful to stay off of private property, including mining claims.
Sell your haul to a specialty store. You won't get a whole lot, most of the time, but it's next to impossible to sell raw stones online.
4. Sell plastic bottles for money. It's possible to collect bottles from other people's recycling and sell them for money.
You'll have to collect quite a few of them before you can make a profit, so be prepared to put some effort into this method.
You'll also have to find a national recycling buyer that purchases plastic bottles in bulk. A simple Google search should help you find companies that you can work with.
5. Sell you hair. Believe it or not, there is a market for your hair. If you have "virgin" (non-dyed or treated) lengthy hair, you can earn quite a bit of money for it.
Your hair is an outgrowth of what goes into you, so if you eat healthy and don't smoke, you can sell your hair for a premium.
An online tool exists to tell you how much your hair is worth.

Community Q&A.

Question : Where can I sell foreign coins?
Answer : A local coin dealer might be interested. Try Craigslist, too.
Question : Do people really buy hair?
Answer : Yes, they do! Some people don't have hair, so real-hair wigs are very popular.
Question : How do I sell old and rare postal stamps?
Answer : Find the value of the stamps by doing some research online first. Then, look for local auctions, swap meets, or even antique stores where you could find someone to purchase the stamps. There are also plenty of places online where you could sell them yourself once you've found the value, like eBay or Craigslist.
Question : How can you do this if you are a kid?
Answer : Start with scrap metal. It is easy to do and is free.

Warnings.

Don't steal, blackmail, or counterfeit to get money. If you think it's a lot of trouble being broke, wait until you're broke and standing in a courthouse on a felony charge.
You may have to pay income tax or other taxes on your earnings, especially if you are working a second, or even third job. Don't fall into the trap of getting paid cash-in-hand for more than you are legally allowed to earn as having to pay the Inland Revenue, IRS or other agency a large amount of back tax is not going to improve you financial situation in the long or short term.
Don't gamble if you need money. The odds are even at the very best (and only in craps betting); generally speaking, odds are that you'll lose. There's a reason people call the lottery an “idiot tax.”

June 04, 2020

How to Be a Successful Business Owner

How to Be a Successful Business Owner.

Most business owners will tell you that starting a business is both one of the most challenging and most rewarding ways to earn a living. Being a successful business owner requires a large amount of hard work and dedication, but also generally relies on a set of personal qualities and business practices that are common characteristics of successful entrepreneurs. These characteristics lie as much in a business's founding principles as in its day-to-day operations and dictate every decision the entrepreneur makes. By following these guidelines, you can up your chances of founding a successful business or getting your existing business back on track.

Part 1 Finding the Right Mindset.
1. Do what you know. That is, you should start a business that focuses on what you have experience in. That experience can be either prior work experience or a personal hobby that you're ready to turn into a career. Even if a business idea seems highly profitable in theory, don't start that business unless your heart is in it. While profit is important, it likely won't keep you coming in early every day and driving growth.
For example, imagine you have experience making coffee as a barista or waiter and want to turn your passion for good coffee into a small business. You would already know a good amount about the industry and be able to apply not only your knowledge but your passion to your work.
2. Start with a well-defined purpose. While the financial benefits of business ownership can be great, most successful business owners don't start with money in mind. To get your business off the ground, you'll need a clear purpose. This purpose should be something more intangible than money, like giving back to your community by creating jobs, solving a problem that you see in your daily life, or pursuing a passion. This doesn't mean that you shouldn't also strive for profitability, just that your primary goal should be the achievement of a greater purpose.
For our coffee shop example, your purpose would be serving the perfect cup of coffee to every customer. Alternately, it could be to form a community in your coffee shop where people can meet and spend time with friends.
3. Understand your customer. Before you get started, take some time to do market research and get to know your customers and your industry. The U.S. Small Business Administration provides a great deal of information on which services and products are in demand. You will also want to think about who will be buying your product or using your service and learn the best way to appeal to this population.
With the coffee shop, ask yourself: Am I trying to appeal to "coffee snobs" who don't mind waiting five minutes for their pour-over? Or is my focus on the people who are on their way to work and want to grab a cup and run? Or both? Understanding the people you plan to serve can help you serve them better.
4. Find a first step instead of a destination. You should always start with a business model that can be up and running quickly on a low budget. Too many small businesses start with grandiose goals that will require a large amount of startup capital and investors. However, successful businesses will have a model that can be used on a smaller scale. This proves to potential investors that your idea is a valid way of making money, and increases your odds of ever getting investment money (if that's what you're looking for).
For example, imagine that in our example, you want to start a large operation that sources, imports, roasts, and packages its own coffee beans that are then either sold or served to customers at its coffee shops. Rather than seeking huge contributions from investors to buy all of this equipment, you should start with a small coffee shop first, then maybe try sourcing and importing beans, and work up from there to build a brand.
5. Create a support network. One of the most important parts of successful business ownership is getting over your own ego and seeking help. Your biggest sources of advice are going to be your group of business associates and other professionals that share your goals. Surround yourself with knowledgeable and successful people and feed off of their ideas and enthusiasm.
Also seek general small business tips online; the web is a goldmine of information. Just be sure your information is from a reliable source.
6. Find a mentor. A good mentor in this case is someone who has already run or is running a successful business of their own. A good example would be a family member or family friend that has been successful in business. This mentor can help you with anything from knowing how to manage your employees to properly filing your taxes. Because their knowledge comes from direct experience, they're able to help you more personally than any other source could.
While your mentor doesn't have to have founded the same type of business you are starting, it would help. For example, another coffee shop founder would be the best source of information in our coffee shop example, but a restaurateur  could also be of significant help.

Part 2 Running Your Business Efficiently.
1. Focus only on your primary operations at first. That is, avoid being caught up in every business opportunity that comes your way. It's better to be perfect at one thing than mediocre at five. This applies as much to making decisions to diversify your business as it does to deciding to take on additional projects for yourself outside of your primary business. Focusing on one thing will allow you to commit all of your resources there and be more productive in that endeavor.
Continuing with our example, imagine that you see another coffee shop making money by selling customized coffee-related merchandise. This may make you want to jump into this market as well. However, doing so before establishing your primary objective, making coffee, would introduce significant risk, and may detract from your ability to focus on coffee quality.
2. Focus on cash flow, not profit. While making a profit should certainly be one of your goals, it should not be your main focus when you are starting out. Cash flow is far more important — many small businesses run out of money before they have even been around long enough to generate a profit, and must close their doors. Pay careful attention to your overhead costs and sales during the first years, and let profit take a backseat.
3. Keep detailed records. In order to be successful, you'll have to make a habit of recording each and every expense and revenue that your company has, as well as every dollar that flows through it. By knowing where exactly your money is coming in and where it's going, you're more capable of recognizing financial difficulties before they arise. In addition, doing this will give you a better idea of where exactly you can make cuts to expenses or increases to revenues.
For example, in our example, you would keep detailed records of how much coffee you bought and sold in a given month and what you paid for it. This could you help you identify if, for example, the price of coffee beans was steadily increasing and help you plan whether or not to raise your own prices or consider switching suppliers.
4. Limit expenses as much as possible. While this may seem obvious, just try to think of areas where you could generate the same effect by spending less money. Consider using pre-owned equipment, finding cheaper forms of advertising (for example, fliers rather than newspaper ads), or negotiating better payment terms with suppliers or customers to save a few dollars here and there. Try to maintain very low spending habits and only spent money when and where you absolutely have to.
In our example, this could mean starting out with used coffee grinders (as long as they still functioned well) and trying to get as many supplies as possible from the same supplier (cups, lids, straws, etc.).
5. Consider supply chain efficiency. Your costs, and therefore your profits, depend on a successful supply chain organization. By fostering good relationships with your suppliers, organizing deliveries, and consistently providing customers with timely service, you can increase your profitability and reputation. Successful supply chain management can also help you eliminate any part of your business with wasted resources, like raw materials or labor.
For example, our example coffee shop would want to be on good terms with its coffee bean supplier and have an organized supply chain structure for a number of reasons. This is especially crucial for ensuring that you never run out of coffee, but could also mean that you could get more consistent deliveries, try new types of coffee bean when they become available, or negotiate lower prices.
6. Consider finding strategic partners. Much like a good mentor, a strategic partner can provide you the boost you need to grow your business. Foster strategic partnerships by reaching out to businesses you think could benefit yours, whether they are suppliers, technology providers, or complementary businesses. A good relationship with another company can provide you both free advertising, lower your costs of doing business, or allow you to expand to new markets, depending on the partners you choose.
For example, your coffee shop could benefit from a strategic relationship with a supplier that gives you access to discounts or new products. Alternately, a strategic partner in a complementary business, such as a pastry shop, could help you both reach new customers and increase your revenues. This could be done either through recommending each other or by offering product's from your partner's business and vice-versa.
7. Be responsible when it comes to debt. It's very important that you realistically assess your ability to pay back any debt that you take on. While starting and running a business is always risk, try to minimize your liabilities by only taking out as much as you absolutely need. And when you do take on debt, be sure to structure your cash flows such that you are paying it off as quickly as possible. Prioritize debt repayment before you do anything else.
For example, if you took out $20,000 to get your coffee shop started, don't think about expanding your product offerings or upgrading your coffee grinders until you've paid that loan back.

Part 3 Growing Your Business.
1. Perfect your business pitch. Have a 30-second speech ready that explains your business as briefly and efficiently as possible, including information about your purpose, your service/products, and your goals. Having a practiced pitch that you can rattle off to anyone can help you in situations where you're trying to make a sale to a customer as well as it can when you're trying to bring an investor on board. If you can't explain your business in this short time, your business plan needs refining.
For your coffee shop, you'd want to explain what you do (sell coffee), your services (the drinks you offer), what makes you special (maybe the coffee you serve is rare or locally roasted), and what you plan to do next (expand to another location, new products, etc.).
2. Earn a reputation for good service. Earning a positive reputation is like free advertising; your customers will spread the word of your business to friends and come back frequently. Treat each and every sale like the success or failure of your business depends on it. This also means that you should be consistent with every action your business takes and every interaction with customers.
For your coffee shop, this may mean throwing out a burnt batch of coffee so that your customers are always served the absolutely best product you can offer.
3. Watch your competition closely. You should always look to your competitors for ideas, especially when you're starting out. Chances are, they're doing something right. If you can figure out what that is, you can implement it in your own business and avoid the trial-and-error they probably went through to get there.
One of the best ways to do this when you're starting out is to examine your competitors' pricing strategies. In our coffee shop example, it would be much simpler to price your coffee similarly to competitors rather than to experiment with different prices on your own.
4. Always be looking for growth opportunities. Once you've gotten established, you should always be on the lookout for places you can expand. Whether that means moving to a larger storefront, increasing manufacturing space, or opening a new location will depend on your business and goals. Successful business owners realize that one of the primary opponents to long-term growth is remaining stagnant. This means taking the risk of expansion rather than resting on your laurels at one, original location.
For our coffee example, maybe there is a nearby area that you find is underserved by coffee shops. Once your primary location is up and running smoothly, you should investigate opening a new shop in that area. This could also mean moving up from a small stand to a full coffee shop, depending on your circumstances.
5. Diversify your income streams. Another way to increase the value of your business is by seeking out other areas where you can make money. Assuming you've already established your primary business, look around and see where you could offer a different service or product. Maybe your customers frequently visit your store for one item and then immediately go to another store for a different item. Find out what that other item is and offer it.
Some easy diversification options for your coffee shop would be offering pastries, sandwiches, or books for purchase.

Community Q&A.

Question : How can I be successful in business generally?
Answer : Read a lot of books on business management and take all the information you can take. Then try to apply it practically. This article may be of use to you: how to become a successful businessman.
Question : How do I make myself CEO of my business?
Answer : If you start a business as a corporation, you (as the founder) can give yourself the responsibilities and title of CEO.

Tips.

Be prepared with 6 months worth of working capital in your business.
This article serves primarily as a guide for the business owner in getting the most out of their business. For more detailed guides that cover the minute details of starting a business, see how to start a small business and how to run a small business.
Pay all insurances up for the year, (I.e., liability, etc.) as soon as possible.

Warnings.
You can lose money if you are personally invested in your company.

June 04, 2020