Tag: Personal Finance

  • True or False? — It Takes Money to Make Money

    True or False? — It Takes Money to Make Money

    The short answer is YES; of course it takes money to make money. To make money in the stock market, you must have money to make the initial stock purchases. Starting a business requires money to buy inventory, marketing materials, office space and equipment. Even lottery winners have had to have the seed money.

    The ability to execute an idea

    Great inventors and industrialists became great, not so much because of their ideas, but because of their ability to execute. This is the crucial aspect.

    It Really Does Take Money to Make Money

    Now before discouragement sets in, I want to stress that it doesn’t necessarily have to be your money. As we all know, ideas have value. This value can be unleashed by using other people’s money (OPM). OPM, has launched many a fortune based on nothing more than a fine idea.

    What these great men had in common was the ability to execute, which as we’ve already determined, requires money.

    Ideas, however, are like sphincters—everybody has one (or more). Taking an idea from wishful thinking to a viable business enterprise requires (you guessed it) MONEY! In the not too distant past, finding the money to turn ideas into realties was an arduous task. Loans from friends and family, bootstrapping with your own assets and credit, angel investors and venture capitalists were the only available sources of capital.

    The process of turning an idea into a commercially viable product or service is known in the entrepreneurial community as execution. Great inventors and industrialists became great, not so much because of their ideas, but because of their ability to execute. Samuel Morse wasn’t the first to invent the telegraph; Thomas Edison was not the first to conceive the light bulb and the venerable Alexander Graham Bell wasn’t the first to envision the telephone. What these great men had in common was the ability to execute, which as we’ve already determined, requires money.

    History of these inventions

    If we delve into the history of these three inventions, we learn that an Italian, Antonio Meucci, was the first to develop a working telephone. He filed a temporary patent 5 years before Bell but poverty and poor health prevented him from paying the patent office the $10 fee required for the patent’s renewal.

    Heinrich Goebel was likely the first to invent the light bulb. In fact, he tried selling Edison on the idea but Edison wouldn’t bite. Goebel died a couple of years later and Edison bought the patent from Goebel’s impoverished widow for a song.

    A French inventor by the name of LeSage invented the telegraph 60 years before Samuel Morse. The idea didn’t take root in France but Morse brought it to fruition here in America.

    These examples demonstrate the important roles money and execution play.

  • Top Budget Hacks for Planning and Accounting

    Top Budget Hacks for Planning and Accounting

    Something most rags-to riches stories have in common is that a good budget is always needed to help anyone achieve financial security. If you want to significantly improve your credit, you have to learn how to pace your spending and increase your savings.

    Top notch advice

    There is no better medicine for bad spending than to see what you have to pay for in the future to live the life you want. In this article we’ll offer you some top notch advice on budgeting and accounting:

    # 1 – Keep Detailed Records

    Most people don’t keep track of every little expense they make.

    People usually rely on the online banking records to calculate their expenses. This is quite effective when it comes to having an overview, but it doesn’t help you keep an eye on bad expenses and avoidable spending.

    Make a folder on your computer, as not to waste paper and to be able to edit easily, and write down everything you spend in an ‘expenses’ file, while also keeping track of all incoming money on an ‘income file’.

    At the end of each month and each year you should check how much of your money went to avoidable, ‘bad’ expenses. Cut down on frivolous spending and watch your savings grow.

    #2 – Predict Large Expenses

    The number you’ll get will probably shock you, which is a good thing. There is no better medicine for bad spending than to see what you have to pay for in the future to live the life you want.

    It might sound like an obvious tip, but you’d be surprised how few people actually plan ahead for the major expenses during their lifetime.

    Buying a house or paying rent for life is one of those predictable, large expenses. Having a child (or many) is a predictable expense. If you include a few cars, a couple of large trips, furniture, college debts and similar big expenses, you can have a good look at what kind of money you’ll need to achieve the lifestyle of your dreams.

    The number you’ll get will probably shock you, which is a good thing. There is no better medicine for bad spending than to see what you have to pay for in the future to live the life you want.

    #3 – Make a ‘Get-Rich’ Plan

    Expert financial planners, like Dominique Brown, would advise anyone who wants to become rich to make a solid plan to achieve that goal.

    Riches rarely come to those that simply wait for them. This does not mean that it is takes extreme effort to become financially secure either.

    What you really need is diligence. Make a plan on your own, or get the help of a professional, and learn to stick to it as if it were a religion.

    Learning to live with a strict (if not tight) budget, will help you learn to keep frivolous spending in check.

    Remember that no matter how much money you make, you can easily spend it all on some luxurious stuff you don’t need and end up being poor again. Being truly rich for life means that you have to work for it and keep ahead of the financial game at all times!