Financial Tips | Debt Management

Cashspeak! Financial Tips | Debt Management
Custom Search

8/20/06

START WITH WHAT YOU KNOW!

by M. Angioni II

This entire time, I have assumed that everyone who visits this site already has an idea of his/her entrepreneurial venture. It has been brought to my attention that many new entrepreneurs have no idea where they want to begin their monetary quest. Many new entrepreneurs are seduced by the idea of being financially secure, closing the “big deals,” and making the “big bucks,” that they listen to every idea and think that they are all good. This can be a COSTLY mistake! We are all here to try to increase our cash-flow and pad our bank accounts, but this cannot be achieved through trying EVRY new idea that is presented or by investing in a product because the creator of said product is a friend or a member of your business family. As new entrepreneurs we have to be EXTRA CAREFUL in where we want to START our financial journey.

Start with what you know! If you are college educated with a B.A., B.S., etc. degree in, for example, English, do NOT dive into a real estate deal because you heard it was a “hot investment.” Start with what you know! Many people lose their saved investment capital on ONE deal because they took someone else’s advice and did not educate themselves on the subject. Recently, this country had a real estate boom. Hasty, hot-tempered, and careless new entrepreneurs lost a lot of money during this boom when they “got in” too late. The economy went down, the stock market tumbled, and interest rates soared! By the time these new entrepreneurs had closed escrow on their so-called investment property, the seller’s market had changed to a buyer’s market, and the dream of “flipping” the property went out the window. The new entrepreneurs were having trouble with making the mortgage payments and as a result had to “dump” the property, hopefully for a break even margin, but most likely, for a loss! DO NOT LET THIS HAPPEN TO YOU! Start with what you know! Going back to the example with the new entrepreneur with the B.A. in English; do not jump into an investment, venture, or project that you know nothing about. Play to your strengths! If you have a B.A. in English, why not try to find a literary work to publish. Maybe fund a writer to create a book, novel, novella, short story, play, or other production. The point is, start with what you know!

Educate yourself before making an investment. This does not mean that you have to obtain a college degree every time you want to try something new, but this does mean read some literature from some well known authorities on the subject you are interested in, talk to someone who has already “traveled the path” and has experience in your investment interest, and start small before dumping your life savings on a hunch! By simply educating yourself on your investment interest, you can avoid a lot of financial mistakes that will occur by investing on an uneducated guess. Does this mean that your investment risk will be eliminated? Of course not! As entrepreneurs, we decided long ago that we have a high risk tolerance and that we are willing to take that risk in order for the big reward. By educating yourself, you reduce the occurrence and likelihood of a “stupid” mistake. Members of your business family will help here also. For example, one member of my business family is well educated in commercial real estate. Taking a note from the previous paragraph, he would not try to produce a theatrical performance, but he would try to invest in a piece of land that could be developed into a strip-mall. I have real estate experience and as such, my business family would be more likely to listen to my real estate investment idea then they would about my new line of designer clothes. Which brings me to my next point...

Do not be afraid to say NO! As a new entrepreneur, ideas are going to be coming your way through many different channels. You will have some ideas, your business family members will present some, friends and family members will present ideas, colleagues, co-workers, and every other relationship one can have with another human, will present ideas to you. The problem most new entrepreneurs have is saying NO! If you do not like an idea, say so. It does not matter if your spouse presents the idea to you. Let them know whether or not you like the idea. Whatever you do, do not postpone your answer, UNLESS the idea has merit and some details need to be “ironed out” or you want to discuss the proposition with your business family. Accepting a bad project or considering doing a bad idea because the presenter is a friend or family member will lead to lost time and money! As a new entrepreneur we have little time and less money and cannot afford to lose either! Let me make one thing clear, I am not advocating you to be harsh, rash, or rude to a person whose idea you do not like. I am simply saying, do not waste time or money on a bad idea regardless of who presents it. Simply say something to the effect of, “that is not an idea that I am interested in right now.” It is not easy to say “no” but sometimes it has to be done. This situation will arise many times in your entrepreneurial journey and knowing how to decipher good ideas from bad one’s will be one key to you success.

As Alexander Graham Bell once said, "[t]he most successful men in the end are those whose success is the result of steady accretion... It is the man who carefully advances step by step, with his mind becoming wider and wider - and progressively better able to grasp any theme or situation - persevering in what he knows to be practical, and concentrating his thought upon it, who is bound to succeed in the greatest degree."

ss_blog_claim=d4b8d84b7cd435a046138bf77aefb499