Uncommon Cents: The Biggest Mistake Of Entrepreneurs
-
Entrepreneurs make mistakes. It’s our job. We are pretty much professional mistake-makers. So long as we learn from our mistakes (and don’t repeat them) it’s all good. Everyone successful entrepreneur has built their success on big piles of fail.
However, there is one mistake in particular that I’m seeing more and more that is concerning, simply because of ramifications of this mistake. I’ve watched a lot of business owners crash during this recession, many of which fell prey to this one mistake.
And that one big mistake is simply this:
“Leveraging yourself up to your eyeballs with liabilities!”
Ever heard of “other people’s money”? OPM? Leverage? They all mean the same thing – borrowing money. Debt. That’s it.
Now, I’m not anti-debt. I’ve used it before, with great success. It has helped me get to where I want to be, and faster. Borrowing money to purchase (or gain a controlling interest in) an asset can turn good investments into great investments.
I also use credit every month to bridge cashflow. It makes it much, much, MUCH easier to get bidness done. So I’m pro-debt and pro-credit. The problem comes with the intelligent application of this tool. And the consequences can be huge.
“He who owns one’s debt owns one’s ass”
I know debt can be a sensitive subject, as it is intensely personal. However, if you can stick with me for just a bit, I’m going to show you the incorrect and correct applications of leverage. And if you’re struggling to keep your head above water, I’m gonna show you why you were probably set up to lose this game right from the get-go…and how to turn the tables starting today. Let’s lay a little groundwork first…
A Boring (But Potentially Life-Changing) Math Lesson
Do you like math? I don’t. In fact, I used to pick on kids in school who liked math (because I was TERRIBLE at it). However, just as knowledge = power, ignorance = weakness. Not knowing some very basic stuff makes you a great target for getting pwnd by the entire financial industry indefinitely. If you want to get out of the rat-race, you gotta know a few things about math and money. So stop trading pigs on farmville and two-fisting that sandwich for a minute and pay attention!
Do you know the difference between an asset and a liability? If you said “yes”, then good for you. Most people who are struggling with debt know the difference. The problem is not one of knowledge, it’s one of application.
In case you don’t know, an asset is something that puts money in your pocket. A liability is something that takes money out of your pocket. Assets make you money. Liabilities cost you money. Assets make you rich. Liabilities make you poor.
The biggest problems comes with using leverage to buy liabilities. Things like:
- Cars
- Vacations
- Homes
- Clothes
- Entertainment
Etc.
Now, there’s nothing wrong with any of these things. I’m all about having a great time. The problem arises when we use LEVERAGE to have a good time, as leverage introduces interest into the equation. We’ll discuss leverage in a minute – but first thing to realize is that cars, vacations, and your home all cost you money. They do not make you money. You take money out of your pocket to get them…and they don’t put money in your pocket. That’s point 1 – assets make you rich, liabilities make you poor, and you have been conditioned since the day you were born to buy liabilities (I’ll talk about that in a few minutes).
Compound Interest – The 8th Wonder Of The World
That’s exactly what Albert Einstein called compound interest – the 8th wonder of the world. I’ll go through the math now, and then give you a shortcut after. **NOTE** Even if you hate math, this information can change your life. Once you put it to work FOR you instead of AGAINST you, then everything changes. Here’s how it works:
There are five variables in the equation:
P is the principal (the initial amount you borrow or deposit)
r is the annual rate of interest (it’s a percentage – and interest rate)
n is the number of years the amount is deposited or borrowed for.
A is the amount of money accumulated after n years, including interest.
Finally – there is the number of times the interest is compounded (one per year, once a month, etc).
When the interest is compounded once a year, it looks like this:
A = P(1 + r)n
However, if you borrow for 10 years the formula will look like:
A = P(1 + r)10
This formula applies to both money invested and money borrowed.
But what if we increase the number of times it is compounded? What if interest is paid more frequently?
Here are a few examples of the formula:Annually = P × (1 + r) = (annual compounding)
Quarterly = P (1 + r/4)4 = (quarterly compounding)
Monthly = P (1 + r/12)12 = (monthly compounding)
Now, I’m too damn lazy to work the figures long-hand. Thankfully, the world is populated with geeks that make this stuff easy for us lazy gits:
Ahhhhh…sweet technology to the rescue.
So let’s play with an example on that:
Say we borrow $1,000 for a year at 7% interest, compounded annually. Means we’ll pay back $1,070. No big deal, right?
It’s not – until we extend that timeline. That’s when the magic happens.
If we take our crappy little $1k loan out to 10 years, 7% interest compounded annually for ten years, we’re paying back a total of $1,967.15. OMG! That’s nearly a 100% ROI in ten years for doing nothing but using compound interest. That’s like getting TWO ham sandwiches for the price of ONE!
Now, let’s get a little more personal.
Let’s say you have a credit card that charges you 18% APR, and you put a $5,000.00 vacation on the card. Then, let’s say you add an extra $100.00 to that card every month ($1,200.00/yr) for five years.
That vacation and measly $100.00/month addition costs us a total of $21,569.15 after five years. If we ignore it another five years, the total grows to $59,475.35 (chokes on ham sandwich).
Let’s make it bigger still – $250,000, 20 years, 7% APR = $967,421.12.
Are you seeing the power of this?
Small decisions over time have big consequences. HUGE consequences.
Now let’s say for a minute you’re on the other side of the table. You use that principal to buy assets instead of a vacation, and we leave the numbers the same. You turned $5,000.00 and $100.00/month for ten years into $59,475.35.
Now you might say “OMG, there’s no way I can find a return like that out there!”
Well, your credit card company has found a way to get that kind of return at your expense. In other words, you are their asset. They are your liability. So it’s more than possible – it’s happening – right now – every day. If they can do it, why can’t you?
That leads to another very important point: this is a ZERO SUM GAME. Your asset is someone else’s liability. Your liabilities are someone else’s assets. Sum zero.
Now that might sound harsh when you think about it. If you’re a nice person, you don’t want to be creating liabilities for other people!
Thing is, we ALL need liabilities. Take your home for instance. Your home is your liability. It costs you money – you don’t make money on it. Nonetheless, we all need a roof over our heads (and a way to keep out all these damn leaf gecko’s). So you buy a rental home, and provide it to someone needing a place to stay. It’s your asset, their liability, and a win/win situation for all parties.
(Note: I know your “financial advisor” might tell you differently about your home being a liability, with appreciation, tax write-offs, etc. You work the math all out and see how much you “make” with your home when you are financing using compound interest. My bet: you lose money, but I’m not a tax advisor, so go see a qualified professional if you want that kind of advice).
Recap
So to sum to this point:
- Many people get poor with the incorrect application of leverage
- The incorrect application of leverage is the purchase of liabilities instead of assets
- Assets make you money, liabilities cost you money
- The purchase of assets and liabilities is a zero-sum game. Your assets are always someone else’s liabilities, and your liabilities are always someone else’s assets
- When you finance liabilities (which cost you money) with compound interest, you lose even more money
Inevitably, there are two questions that come up at this point:
1. “How do I know for sure if something is an asset or a liability?”
2. “How do I start using this principle to make money?”
Let’s take the first things first: there is no such thing as a “sure bet” in this world. In other words, no risk = no reward. We all long for security, but the truth is that there is simply no such thing. Security is like the leprechaun that resides at the end of the rainbow with his pot of gold and delicious Lucky Charms. Many have searched for it and failed. Reason? It doesn’t exist. There’s no sure thing in this world, and that fact alone keeps most people stuck in their ruts. Even if someone is in a bad situation, it’s a situation they are familiar with, and it’s easier to stay there than step into an unknown scenario, even if it could lead to a better life.
So there’s no sure thing – but how do you know you’re using your money wisely, and allocating your resources to put yourself in a good position?
First – your biggest asset is YOU. So if you are investing in yourself and your skill-set, that’s a good indicator that you are making a smart choice. (Note: it’s not a sure bet. I’ve known people who have invested $200,000+ in self-improvement stuff, and not done a damn thing with them. You have to use your investment in order to see a return. Don’t continually invest in learning stuff without applying it).
Ultimately, YOU are the reason a good investment is good…or a bad investment is bad. I said earlier that cars are typically a liability, right? While that is generally true, I have a friend that makes himself a cool $20,000 of extra income every year buying and selling cars on craigslist. He knows cars. He has mechanical skills. And he uses that knowledge to turn what is typically a liability into an asset for him.
Second thing is that you make money when you buy, not when you sell. You can make money with anything if you buy it right. You can lose money with anything if you buy it wrong (i.e. overpay). There’s no such thing as the perfect asset. People make money with stocks, real estate, and bonds. People lose money with stocks, real estate, and bonds. It’s not that they are “bad” or “good” – it’s all in how you buy ‘em. So when you are buying something, keep in mind that whether you make or lose money will depend upon how you buy it.
This applies to:
- Advertising
- Houses
- Vehicles
- Stocks
- Bonds
- Precious stones
- Numismatic coins
- Foreign currency
- Raw materials
- Leases / contracts
- Jewelry
- Art
- Anything
If you’re trying to make money, you make it when you buy, not when you sell.
So the question is…are you feeling the pressure yet?
When someone sees that THEY are their own best investment, and that they can make money with anything is purchased right (i.e. at a discount) or lose money with anything purchased incorrectly (i.e. at a premium), it can easily lead to paralysis by analysis.
Why? Because it’s easier to do nothing than do the wrong thing. It’s easier to keep “searching”, or keep “learning”, or keep “studying” than do something risky (i.e. productive) with that knowledge.
So here’s how you can start:
1. Save
If you are going to buy anything, you’ll need some money to do it. Start saving your duckets. George Clasen recommends paying yourself 10% right off the top of your revenue, to be yours to keep. I HIGHLY recommend his classic The Richest Man In Babylon if you haven’t read it.
If you can’t save 10%, save something. If you can’t save anything, make more money. You can always get a part-time job. Here are 14 ways that explain how to make legitimate money online if you’re short on ideas. Save that coin for an opportunity to buy something when it’s undervalued, and you can get it at Wal-Mart prices.
2. Get Knowledge
You need to know the value of things in order to establish what is considered an “under-priced” asset or an “overpriced” asset. You also need to understand the potential risk/reward of an asset.
For example, if I am buying advertising, I need to understand how I am going to turn that advertising into dollars and cents.
If I am buying a rental property, I need to understand the price of that property relative to other similar properties, the local market demand for rent, factor in taxes and repairs, to see if it’s a good or poor investment.
In other words, you need to be an educated investor. I don’t mean that you need to go to ever seminar available about a subject, but you do need a cursory understanding of your niche if you expect to make money in it. A library card goes a long way in this endeavor.
Key = START SMALL
Don’t go big if you’re just getting started. Go small. Minimize your risk. You are guaranteed to make mistakes (newbie!), because that’s the only real way you get knowledge and experience. Just make sure you make small mistakes. You do this by betting small – don’t bet the farm if you don’t have experience. Learn from your mistakes, and repeat the process. That’s how you turn the tables so that you have your resources working for you, instead of working for your resources.
Just remember – don’t leverage yourself for things that take money out of your pocket (liabilities). If you keep your overhead low, you can accomplish amazing things. You have options. When you’re liquid, the world is your oyster.
Two Final Points
First, this type of thinking is very different from what you’ve been conditioned to think. We live in a society that applauds the purchase of liabilities. I’m all about the invisible hand, but I’m also a big fan of delayed gratification. Yes, you can have everything you want. But can you wait a little bit to get it? Can you control yourself to not gratify your immediate urges to acquire liabilities, but get assets first? This simple shift can change your entire life. Just waiting to get your liabilities until after you have a strong asset base can make all the difference.
Go ahead – get a private jet and a gold-plated iPad. Live a little! Just do it after you have the assets to pay for it.
Finally – I believe anyone can become independently wealthy. But it may require you change some of your financial habits (at least short term). No matter if you have a million bucks of personal debt and you’re making minimum wage, I believe you can turn it around. You need to take action NOW to change the behavior that got you in that situation, but time and applied effort can work wonders (remember – compound interest’s most astounding work is done with the application of time).
There’s always hope. And there’s no reason you can’t completely change your life and financial future. It may take some short-term sacrifice, but you can do it. You’ll live. Most of the world lives on less than $3.00 per day. You can survive…thrive…and eventually, rise…if you’re willing to make the sacrifice.
REMEMBER: it’s a zero-sum game. Do the right thing.
-
DancingMooney
1
June 23, 2010, 4:41 pm
-
Top“if you are investing in yourself and your skillset, that’s a good indicator that you are making a good choice.”
These words are like music to my ears! Being a small business owner/artist, it’s hard sometimes with this economy to reason with myself in buying new materials that could possibly make me more sales, when in fact, i have to order those supplies on credit. I try to spend wisely, or not spend at all… I try to use what I have and make the most of it, but sometimes the saying is true, that you have to spend money to make money.
I have never been big on material things, so even though it’s nice to have a car {mine is paid off, yay!} we have a mortgage, and a few small bills, but for the most part the economy in general, as well as making the leap from being an employee to self employed, I have learned what I need most, and to not worry about the rest. Live simply, work hard, play hard.
-
007
2
June 24, 2010, 1:21 am
-
TopI believe that one big mistake, ie. leveraging oneself up to one’s eyeballs, was one of the primary causes leading to a little thing we like to call the Great Depression.
-
Mariusz Orzel
3
June 24, 2010, 2:39 am
-
TopI know about that, have read Robert Kijosaki`s books but it is hard to start investing when people are totally green and need a good mentor, a person who won`t rob you of money but will teach you how to invest and make a profit, small investment, small profit, step by step. Does exist such a person?…I don`t think so…That`s why we have a lot of people who want go out from “rat race”,they had “mentors” bur after training time “mentors” earned money and student lost everything…
-
admin
4
June 24, 2010, 6:50 am
-
Top@Mariusz – finding good mentors is similar to finding a good spouse…it may take you a while to find a keeper, but you once you do you’re set. Some mentors are shady, some are jokes, some know their stuff and do help others.
-
Ron Lacker
5
June 24, 2010, 9:00 am
-
TopSuch a good article about biggest mistakes of entrepreneurs. Best policy in my opinion is save as much by cutting extra cost and never take big risk. Only calculated risks are acceptable.
-
Angela Thompson
6
June 24, 2010, 11:51 am
-
TopHey. Thanks for the tips. As always, very helpful and informative. I fell under that category many years ago and luckily, I’ve learned my lesson. I am not only an enthusiastic entrepreneur, I am also quite thrifty and a bit cautious as well. So, I think I’ll be fine, it may take me a little longer to get to the top, but, I’ll get there!
-
Prasin Prathap
7
June 24, 2010, 11:22 pm
-
TopIts a nice article about biggest mistakes of enterpreneurs. I only thing about this after when I read it. its very useful
-
Destiny
8
June 25, 2010, 3:18 am
-
TopThis articles are an eye opener as a lot of people believe in investing without doing their home work and risk a lot in the bargain. This article has explained everything about entrepreneurs and entrepreneurship very well.
-
Aishwarya
9
June 25, 2010, 7:50 am
-
TopIt is a very good article about the drawbacks of entrepreneurs.Finding good mentors is really a hard thing.We should be able to ascertain the risks associated before making the real investment. In this regard mentor plays an important role.Long term investment should be made only after taking a careful study.
-
gyan sagar
10
June 25, 2010, 12:02 pm
-
Topit is really a nice piece of text about the mistakes made by enterprenuers.I really appreciate your research in this regard.
-
Aethec
11
June 25, 2010, 2:20 pm
-
TopVery interesting article, I learned something new today
-
Pavithra
12
June 26, 2010, 7:09 am
-
TopReally, this is an interesting blog. The biggest mistakes of entrepreneurs will be very useful for all people. Awesome blog.
-
ankit
13
June 27, 2010, 1:05 pm
-
Topit is really a very nice research work and very informative. i think that the enterpreneurs should not take big risks. they should play in safe zone
-
Tara
14
June 27, 2010, 3:53 pm
-
Tophmm…..what to say? I don’t think this article is only applicable for Entrepreneurs’..It’s applicable to all those people who are living a lavish life on debt and becoming a liability. Every human being is doing this mistake of taking a debt and paying huge interest and principle amount instead of saving the same money for a year not paying interest for a year and buying a assets. If we really follow the tips which was given in this article no one will be under debt and everyone will be living a debt free life with lots of assets adding to his/her life is what I feel. Save Interest and principle and buy what you want with principle amount and buy a bonus gift for yourself with the interest
)). Thank you for the article, it’s really help full to all the human liabilities
-
Jesse
15
June 27, 2010, 7:29 pm
-
TopIt is so true that entrepreneurs mistakes creat a better outcome. Learning from these mistakes is key to become rich. Whenever a new entrepreneur comes into business they should read this bloag, it makes very much sense.
-
Jacqueline
16
June 27, 2010, 7:45 pm
-
TopI really like the “sum zero” concept. It is a good way to remember that it is better to have more assets than liabilities in order to come out ahead. Sometimes, it can be hard identifying an asset from a liability because most time you have to spend money to buy something of value that could be considered an asset. But if I can buy an asset for less than its true value, then sell it for its true value or more, then I will come out ahead. That’s always the goal!
-
Goodtimes
17
June 27, 2010, 9:52 pm
-
TopI think you hit the nail on the head. You shouldn’t take out loans just to make the ends meet.
It’s one thing to use the loans interrest as a tax write off, but is it actually saving you money? Chances are it’s not .
When times were good, it was hard not to think about growing your company buy borrowing money and “putting it to work.” But then the market turned around, quickly, and the businesses doing the best are those that weren’t built in a day.
-
Ricky Brown
18
June 28, 2010, 3:39 am
-
TopWawww… Great tips, very helpful and informative. I’ve learned my lesson. Myself not only an enthusiastic entrepreneur, but also quite thrifty and a bit cautious as well. I’ll get there! Long term investment should be made only after taking a careful study….
-
Lathea
19
June 28, 2010, 1:05 pm
-
TopThe most interesting thing about this article is the section on compound interest. I had no idea it would amount to so much over time! Its something I will look at from now on.
-
cangel
20
June 28, 2010, 1:07 pm
-
TopThe beginning of your blog peaked my interest and made me want to continue reading. There are many people in today’s economy who are trying to start businesses on their own. The information about leverage is very important. Small mistakes help us to improve. Large ones, especially with money as you suggest, can be devistating.
-
Angela Cooper
21
July 22, 2010, 12:07 pm
-
TopI think the best asset is property. Of course we need to invest in a house or property that we can manage to pay for and maintain with our income. I also think that investing in Jewelry as an asset will really help in the future because over time, the value of gold and precious stones only increases.
-
postparty82
22
July 22, 2010, 1:00 pm
-
TopGreat article. I think you simplified the mathematical portion of calculating the cost of debt into business in a very easy to use way. Really enjoyed the article!
-
Pradeep
23
July 22, 2010, 1:15 pm
-
TopNo wonder Albert Einstein called Compound interest the 8th wonder.Its indeed an amazing calculation and this article has presented it in such a way that even a child who is 8 years old can easily master compound interest calculation
-
Ankit Sharma
24
July 22, 2010, 3:27 pm
-
TopIt is a very nice article. Yes, it is true that entrepreneurs makes mistakes and it is that mistakes from which they gain experience. If they do not make a mistake than it would be impossible for them to see the ups and downs in business. If they make a mistake than they will get the experience and in future they do not repeat that mistake.
-
nasfin
25
July 22, 2010, 6:17 pm
-
Topstudents need more freedom. Dont think that the only thing they know is to study. They have many other qualities, try to understand them. Give them more chances to prove their talents. They need to be made good in every sense as they are going to lead the future.
-
kamlesh vijay
26
July 22, 2010, 9:01 pm
-
TopFirst of all very nice blog. I want to say here that nothing can be gained without taking chances in life so entrepreneurs has to take risk than only they can grow …………
-
mayuri
27
July 22, 2010, 9:17 pm
-
TopThe article is such an eye-opener and very informative. What i think is It’s all learning experience to get better each day.
-
kanisk pandey
28
July 22, 2010, 9:26 pm
-
TopThank for giving such a nice lesson to me. I think, this article is very helpful and informational.I have learnt here about liability and assets. I like the section “Compound Interest – The 8th Wonder Of The World” very much. And the section “And that one big mistake is simply this” is also good. All the sections are good.
-
stephenedwards
29
July 22, 2010, 11:14 pm
-
TopGreat elobrated description and examples of debt which effects the business in tremendous way.In this crisis every businessman must be very careful with their and need a extra efforts to reduce them and you explained a excellent strategy. The beginning of your blog raised my interest and i kept reading to the end with atmost curiosity.Every Small mistakes help us to improve and become more efficient but Large money dealing especially with money and property can collapse the business.Great and very informative article to read.THANK you for sharing:)
-
adnan
30
July 22, 2010, 11:41 pm
-
TopIt is a nice and informative article about the biggest mistakes of the entrepreneurs. Great information , I learned a lot from this.
-
Gopinath
31
July 23, 2010, 12:13 am
-
TopIt’s a great article, not only many businessmen even a common public doing this mistake. They should think before invest huge money in the starting stage of the business. They should know about the market and risk factor before investing money.
-
joseph john
32
July 23, 2010, 1:17 am
-
Topi should utter this whole article to most of my elders.making problems after problems not knowing the long term consequences.thanks for the great article.i would like to add that efforts like this(your article) should be posted on every known media.that might save a few from potential suicide.
-
Jayasree
33
July 23, 2010, 2:00 am
-
TopIt is a very interesting article and nice to read. It gives the informations about the mistake of entrepreneurs in the business.
-
Summy
34
July 23, 2010, 4:50 am
-
TopAmazing article… The most amazing part was explanation of all this this through compound Interest- calling it the 8th wonder of the world. A truly guiding article. Liked it a lot.
-
Matt
35
July 23, 2010, 6:39 am
-
TopGreat Article! You have a very good blog there!
-
Sinu
36
July 23, 2010, 7:02 am
-
TopThis is an excellent article for all the enterpreneurs.It clearly and interestingly explains the debt management and its importance in business.The asset, liability, leverage, the power of compounding,importance of savings etc are simply described by the author and also the author warns that the biggest problem is using leverage to buy liabilities.
-
riyaz
37
July 23, 2010, 8:37 am
-
TopNice article to know where things go wrong. Frankly speaking I like the way & depth of explaination about the mistakes made by entrepreneurs. The Bit of information considered I believe these articles helps in molding entrepreneurs. 5 stars
-
Prasin
38
July 23, 2010, 8:48 am
-
TopIts very lovable article and more use ful.I think the best asset is property. The information about leverage is very important. Small mistakes help us to improve. Large ones, especially with money as you suggest, can be devistating.
-
Miki
39
July 23, 2010, 11:42 am
-
TopYes, I agree that we all need liabilities. This article is interesting, and this math
-
James
40
July 23, 2010, 11:27 pm
-
TopHi, you are absolutely correct. ” Failure is the stepping stone to our success”. Most of the business magnets suffered in their early stages of business life and then they built their success. Your blog is really an inspiration for newcomers. than you thanks a lot.
-
Ravi Prasad
41
July 24, 2010, 1:51 am
-
TopGreat Article! Enjoyed every sentence. Will read it again and will also recommend to friends. Ton of thanks!
-
Sriram
42
July 24, 2010, 6:32 am
-
TopIt is true that there are some top entrepreneurs all around the world. without them, there are no business online and no development in economy. Every one makes mistakes and there is solutions for every problem. However very good informative article providing good information
-
Devesh Dhruv
43
July 24, 2010, 8:46 am
-
TopYou have very nicely indicated how people get trapped in the loans, especially the concept of compound interest which you have shown through calculations is very convincing. Some times we do ignore such vital statastics.
More importants I liked the concept of borrowing for productive purposes and not just for comforts. If I am buying a car which is very costly for me but if it is going to help me do extra hours work and earn me some more money then that borrowing is not liability.
I fully agree with you that if I am borrowing money for earning extra money then if is quite okay and otherwise it is going to lend me in trouble for the sure.
-
Madhavan
44
July 24, 2010, 10:56 am
-
TopUseful article. Informative and helpful. Very benefecial for emerging entrepreneurs.
-
yadavseenu
45
July 24, 2010, 11:15 am
-
TopSure one should understand that failures are not to keep us away from our business but practical lessons to pave our way to success. The max of new comers in every field leave their hearts to failures. Only a few convert them to victory. The challenge is to maintain a balance between success and failure and not getting them into our brains.
-
George Walker
46
July 24, 2010, 1:39 pm
-
TopQuite interesting and informative topic on the reason of failure due to financing liabilities through loans charging compoung interest. I alos hate math, but on reading your post, it did not appear so dull. Rather it made clear, why Einstein called it eighth wonder. The effect of compounding can be felt more as we allow more and more time.
Your post is really an eye-opener, why we should not finance liabilities out of loans. Rather we must try to build assests that brings money to out pocket. Your views on liabilities and assets, though goes against the definitions found in the books, are to be followed to avoid the pitfalls of failure.
Hope more like this from your stable in future.
-
John
47
July 27, 2010, 5:31 am
-
TopIt has all been said in the former comments…The article is good . Quite informative and educational. The facts put together in quite a precise and self explanatory form for even a layman to get an idea about the whole concept. Though the idea is similar to what is presented in the book “Rich Dad, Poor Dad”, but its better to read your article rather than reading the whole book , just to get the point across.
-
Deepa
48
August 1, 2010, 10:48 pm
-
TopIt’s very informative article about how entrepreneurs loose their life and they will end up into tragedy if anyone want to set up their own business or want to become an entrepreneur should have a look up this article especially the topic “Compound Interest – The 8th Wonder Of The World” is more informative.
-
Thiru
49
August 2, 2010, 12:19 am
-
TopThis article is must for young entrepreneurs, before stating their venture, of course every mistake is a learning opportunity, They need to be made good in every sense as they are going to lead the future
-
Jeff
50
August 2, 2010, 7:14 am
-
TopThis is a great article and I could not agree more. Yes a certain amount of debt will probably be needed for start-up capital but the author makes a great point in what not to go in debt for..cars, vacations and entertainment. If one has to go in to debt for these three things this should tell you that you can not afford it and to continue to save for the purchase.
-
Crystal
51
August 2, 2010, 2:11 pm
-
TopThis is information that should be taught to kids in school. I wish someone had taught me…I learned my debt-gaining skills by watching the habits of my parents who are not living well in their advanced years…and fear that my fate will be the same.
-
The Mom Venture Blog
52
August 10, 2010, 1:21 am
-
TopTotally agree. I don’t like to use credit, but, as in my candle business, I don’t always have the cash to buy supplies until I sell some candles, but I need supplies in order to make and sell those candles. As long as I put the money from selling those candles toward paying back what I put on the credit, then it’s all good. The problem is that many people, including myself lack the self control not to use the credit for frivolous things, or “liabilities” instead of “assets”.
-
Suraj
53
August 11, 2010, 6:11 am
-
TopExcellent views on the mistakes that can be made by entrepreneurs. An Entrepreneur should learn from his mistakes. Otherwise his business will not succeed in the long run. He has to get over from his failures and start afresh single day
-
Josh
54
August 12, 2010, 8:26 am
-
TopTruly eye opening article.This is why middle class people stay in middle class .They just have to much liabilities and bills to pay.They keep creating liabilities instead of asset.
There is lot to learn from this article.Whoever want to get rich need to read this carefully.
-
Nadia
55
August 12, 2010, 10:03 am
-
TopI have done this mistake of creating huge debit once and somehow on this earth i sustained from that disaster and now doing ok.From that phase of my life i have learn a lot.
You have quoted Charlie Munger “He who owns one’s debt owns one’s ass”.Its very much true indeed.I have experienced it in my life.
-
Matt
56
August 12, 2010, 12:47 pm
-
TopYou make some excellent points in your article. It really amazes me how often people forget that they should always spend less than they earn. It’s an incredibly simple idea but apparently extremely difficult to follow.
-
Maggy
57
August 13, 2010, 4:00 am
-
TopMany so called entrepreneurs lack money management skill and they realize is only after creating lot of debit.I am speaking from my own experience.Now i count single single cent.
People who want to get rich or at list want to higher middle class life should read this above information.Very wise!
-
sid
58
August 13, 2010, 4:17 am
-
TopA very informative and knowledgeable article on why we should not take loans, at least for our comforts, which we cant pay. I like your idea of involving mathematical calculations to indicate the losses one can have by debts. Thanks for sharing such information.
-
urfriendsathish
59
August 14, 2010, 8:03 pm
-
TopBeing an entrepreneur, this article was really useful for me. This article clearly views the mistakes of entrepreneur. This article surely give hands to real time entrepreneurs as well as future entrepreneurs. Thanks for giving such awareness to us.
-
roma
60
August 15, 2010, 6:29 pm
-
TopVery very informative article about money management.Creating debit is never a good thing.Unfortunately many people create loads of liabilities and go bankrupt.
-
RAJESH
61
August 16, 2010, 11:58 am
-
TopThis is a nice article mainly focusing on the trends of the business going on now-a-days. Its a nice research article which educates most of us regarding the issues about the loans and debts
-
minnu
62
August 17, 2010, 7:04 am
-
TopThats a very nice and informative article, but I guess the title needs to be broadened. The article explains and provides vital information that is good for not only entrepreneurs but also everyone in general. If there is a possibility, I would mark this article as ‘must read’.
-
Char
63
August 17, 2010, 8:34 am
-
TopIt is absolutely true that it is easy to take the wrong road and make the wrong choice. Thankfully there is helpful information like this out there for people. Hopefully many stumble upon this. You make many excellent points.
-
elaiyaraja
64
August 30, 2010, 7:00 pm
-
TopMistake maker make good idea and best than other.this is giving more benefit.But i haven’t idea still see this statement. I was confused more about it now i clear from this doubt.thank you very much.And also this is
very important information for all people.
-
souma_blader
65
August 30, 2010, 7:28 pm
-
TopVery good article! This article helps us to always learn from mistakes in entrepreneurship.
By learning from the mistakes we are able to prevent ourselves facing even make mistakes in the future.
Even the study did not need to hurry, we can start from small things. Little by little, then the longer will be a very useful
-
Sergio
66
August 31, 2010, 7:24 am
-
TopYes, these are the most common and more valueable mistake generally made by every Entreprenuer at the initial steps of his business developments.And one more piece to your article is “”Right move in wrong time also gives Disasterous result”".Every point in the article is well directed with what to do and what not to,In my opinion every entreprenuer must go through this article for total feedback about money management to Careful steps for their business.Nowadays the success in business can be done with perfect moneymanagement skills only.Buddy you gave a valueable and very important informative article,i must share this article with my Business friends.Thank you for sharing.
-
Daisy
67
September 2, 2010, 12:28 am
-
TopThe article is really insightful. I think an important lesson for entrepreneurs is not to be ‘Penny wise but Pound foolish’. Many Thanks the information was really helpful.
-
goldenscreen
68
September 4, 2010, 9:22 pm
-
TopThis is a very good article on the power of compound interest. The problem with society today is we are encouraged to spend and not save. Saving money is seen as a bad thing, but actually it is not. Just by saving a quarter of my income every month into a good unit trust, in two years I had grown my investment by 20%!
For every 20,000 I put in I have already made 4,000 in less than two years by doing nothing at all! Another thing is when they pay dividends, do not take out the money but just reinvest into your existing account.
-
Hmun
69
September 14, 2010, 11:49 pm
-
TopI really enjoyed reading your article. It is very important to save some money every month. When we save every month, we get good amount end of the year. I never borrow money and I will never borrow as I do not want to be in debt. I am a debt-free person and that makes me happy in life. Thanks for this informative article.
-
NAMRATA
70
September 15, 2010, 12:56 am
-
TopIt is so true that entrepreneurs mistakes creat a better outcome. Learning from these mistakes is key to become rich. Whenever a new entrepreneur comes into business they should read this bloag, it makes very much sense.
-
Silvana Felker
71
September 15, 2010, 4:33 am
-
TopWhen I recently discovered your website and started following along, I had been thinking I’d post my extremely 1st comment. I don’t know just what to express except that I really liked reading via. Good writings. I will continue to keep on visiting this web site far more frequently.
-
afrina
72
September 15, 2010, 6:40 am
-
Topdiz article gives d most important info dat many of dem really need to realize. getting dept is in return a loss for us..der are people who live lavish life on dept.. but dey don seem to understand dat dey can live a better life in d amount vich dey pay as interest. i guess every one who gets into a business MUST read dis article and get d best out of this article.
-
Mike
73
September 16, 2010, 2:57 am
-
TopGood reviews and ideas about the weebly and other kind of automated software. It really helped me in understanding about the frauds in the internet business. These articles are a real information and will help to avoid lot of mistakes from people in the internet. Thank you very much for your amazing articles.
-
IDrago85
74
September 16, 2010, 9:00 am
-
TopI totally agree with your comments Re: debt and leverage, and the problems this can cause. My only reservation though is how this is an obvious point to draw up towards the end of a recession where debt (and leverage) has been such a massive problem! In the good times this is pushed to the back of people’s minds, and that of entrepreneurs. What is needed is a wider debate on the use of leverage overall, in all economic times. Then we can start to give ‘debt’ a better reputation!
-
Yunas
75
September 16, 2010, 8:52 pm
-
TopIt is really a very nice research work and very informative. i think that the enterpreneurs should not take big risks. they should play in safe zone.These articles are a real information and will help to avoid lot of mistakes from people in the internet.Thank you for sharing.
-
praveen
76
September 22, 2010, 5:08 am
-
Topit was very nice to hear about enterpreneurs difficulty of shining up in life.
the steps what as been given for improvisation would really be very usefull
and important for all business people.
praveen
-
Gold Investing Expert
77
November 10, 2010, 2:35 pm
-
TopInteresting article
I know how profitable gold investing can be. My brother made really good money doing just that, and myself I am making good money investing in gold.
I recommend to anyone who’s thinking of starting to invest in gold to read a book or two on this topic, as there so many mistakes and blunders that are possible to make when you first start in this industry.
Thank you for sharing this with your us.