The business of investing made simple with entrepreneurship

We must look at everything through the eyes of an entrepreneur, including our investments. We look at everything as a business. The business of investing made simple.

Every investment is a business

We must view everything we do through the lens of entrepreneurship.

What exactly does that mean?

In the world of investing, it means that every investment is a business. It has its own income statement and balance sheet, must have sales and marketing driving it, must be profitable to survive, must have a team behind it, and must have a purpose for existing. These are the fundamentals of a successful business, and they are also the fundamentals of a successful investment.

Maybe at this point, some of us are saying, “Yeah, but we are just buying a few shares of stock. We don’t need all those things.”

Perfect example. What does every stock represent? A stock is a share of company. Does a company need sales and marketing, accurate financial statements, a strong management team, a purpose or mission, and a good revenue stream to succeed throughout the years? Yes, of course it does! Yet how many people do their homework and research the fundamentals of the company they are investing in before buying a share of stock in that company? Very few. But we can tell that Warren Buffett does. However, someone that just buys a stock and holds it for long term is not an investor at all, that person is just a trader according to the tax department of USA. Knowing the difference between an asset and liability, trading and investing, good and bad debt, active income and passive income, and investing with the eyes of an entrepreneur, then that makes up an inside investor. One of the difference between the poor and the wealthy is that the poor calls a liability an asset and often time what is an asset they see it as a liability. Having the right financial education is key in order to become a successful entrepreneurs and inside investor. Remember, all investments are a business, they have a financial statement and we must know how to read them to tell whether is a sound or negative investment.

The 4 rules of every investment

Through the eyes of an entrepreneur, here are the investment rules I live by:

1. The investment must put money in our pocketFirst, we look for cash flow. Second, we look for appreciation. Remember, a good investor is in the business of building our asset column. Any investment that doesn’t put money in our pocket isn’t an asset — it’s a liability.

2. The investment must stand aloneAn investment cannot survive off the cash flow or funding of another investment. In the world of business, we cannot use the wealth of one business to keep a subsidiary business alive. Each business must be profitable in and of itself. The same is true for investing.

3. We want to control the investment whenever possibleIn real estate and my businesses, we control the income, expenses, and debt. With investments such as privately-held businesses and commodities where we don’t control these things, we do our best to actively monitor and stay on top of what is happening. Never stop looking at ways to improve the investment and increase its value or the value it returns to us.

4. Every investment must have an exit strategy or exit optionsThe rule is: know when we will sell before we buy.This may be based on price, date, certain market events, or personal events.For example, we tend to hold onto our real estate investments and not sell. Yet, we know what it would take to sell. When the real estate market was at its peak, if we are were offered an extremely high price for one of our apartment buildings that is operating at maximum cash flow. We can sell that property and moved the profit into a larger apartment building that give us a much higher return on investment.

5 reasons why women should invest in business

If we are still sitting on the sidelines when it comes to investing, it’s time to step onto the field. We all know that a man is not a plan, and we cannot rely on others — including our family or the government — to take care of us. Here are five reasons why now is the time for women to get into the game of investing:

1. Avoiding dependency. We don’t go into a marriage expecting a divorce. We don’t begin a new job expecting to be laid off. But it happens, and today with more and more frequency. We have said this before, but, we should not depend on anyone for our financial future. They simply may not be there. Too often we may not even realize just how dependent we are until we’re faced with our own personal wake-up call. Learning to invest allows us to depend on oursleves, not on others, for our financial well-being.

2. No glass ceiling. In the world of investing, the markets don’t care if we are male or female, black or white, a college grad or a high school dropout. The markets only care about how smart we are with our money and OPM other people's money. The key is financial education and experience. The smarter we are with our investment choices, the greater our success as an investor. There are no limits, no ceilings, glass or otherwise, for women in the world of investing.

3. No limits on income. We may not like it, but there is still a glass ceiling and wage inequality in the work world for women, and because of this a woman is often limited in the amount of income she can make as an employee. In the investment world, we are completely responsible for and in control of the amount of money we make.

4. Increased self-esteem. Personally, we think this is one of the greatest benefits to all inside investors. It’s not unusual to have our self-esteem linked to our ability to provide for ourselves. I’ve seen people's self-esteem soar once they know how to make it on their own financially. And when anyone's self-esteem rises, then relationships around them tend to improve, their life improves overall, and they feels good about themselves. Increased confidence leads to higher self-esteem. Higher self-esteem leads to greater success. And greater success leads to financial freedom.

5. Control of your time. As an investor we are in control of our time. Investing is something we can do part time or full time. It is something we can do from home, from the office, or from anywhere. It is also something into which we can include our children. Many mothers have told me they take their children to look at properties or potential business investments. And a big plus is that when we include our children in the investment process we are actually teaching them to be investors as well.Leave a comment

Moving beyond average

At the end of the day, we can become very successful as inside investors precisely because we view each investment as a business. Most average investors don’t do this, and as a result, they have average results. We inside investors also love the perks of the lifestyle, including all five of the aforementioned benefits.