Best Practices For A Great Return On Investment

Best Practices For A Great Return On Investment

People are no longer guaranteed a pension when they retire so now they have to rely on themselves to invest their money and to find a great return on their investments.  Unfortunately most people don’t know how to find a good return on their investments, instead the by lottery tickets and pray.  Needless to say that’s a pretty bad retirement strategy.  Here are some best practices to find a good return on investment.

Fear

Most people are so terrified of losing money that they invest “not to lose” instead.  The problem with this strategy is that they never win either, and they don’t get rich either.  The notion that financial security comes from living frugally and working hard so you can contribute to a mutual fund isn’t working.  Most financial planners will tell you that diversification minimizes risk, but Warren Buffet who is probably the smartest investor ever says differently.  He says that “diversification is protection against ignorance”.

Losing Money

Finding an investment that loses money is pretty easy.  Simply buy a car, you will lose money before you even drive a mile.  Buying property can give you the same result if you’re not careful.  However one of the best returns comes from educating yourself.  You have access to some of the best financial teachers in the world and there is nothing stopping you from learning.

Understanding Money

Finding a great return on investment starts with understanding money and how it works.  There is no magic formula for getting rich, despite how many ads you see promising you something different.  If you want to find that perfect investment vehicle start by educating yourself.  One of the first things you need to learn about is cash flow.  If you want to be rich you need to focus on finding investments that give you cash flow.  Finding an investment that makes you money and generates cash flow is no easy task.  Properties or stocks can both generate cash flow in the hands of the smart investor or lose horrible with a bad investor.

I have helped clients who are now financially independent and working part time, because they keep the idea of cash flow in the forefront of their minds when investing.  Start by focusing your energy on educating yourself, read books and articles and learn absolutely everything you can about finances.  Then put together a clear investment strategy.  With the right education anyone can achieve financial freedom.

Business Finance Management Tips

Business Finance Management Tips

When you set up your business the goal at the end of the day is to turn a profit and to continue to grow.  Profitability is the goal for most of use, but in order to do that you need to focus on business finance management.  Here are some business finance management tips to ensure that your company makes money and continues to be sustainable.

Raise Capital

You need to raise capital and lots of it.  Whatever you think you need to get your business off the ground, double it.  You’re going to need money for expenses, unexpected problems and you need a little set aside for when opportunity rears its head.  For every business you have heard of that started with a shoestring budget there are a thousand that closed because of underfunding.  Prepare feasible business proposals and when you have the chance to pitch your business do it like your life depends on it.

Be Cautious Buying Things

Don’t give yourself any additional expenses if you don’t have to, unexpected things will come up and having all your capital tied up could spell the end of your business.  You may need additional equipment, but buying it doesn’t have to be your only option.  Some things are worth spending good money on.  Marketing, for example, needs to have a big budget.  Search Engine Optimization, Email Marketing, Direct Mail Marketing, Custom Sign Marketing, and more all should be done aggressively if you do them at all.  Look into renting or leasing equipment, it may be more practical to rent in the short term than it is to buy.  Here is a video explaining why it is better to lease than buy.

Keep Everyone Informed

In business you need to keep investors and others aware of what is happening in your business, good or bad.  No you don’t need to publish your financial statements for the world to see but your bank, investors, suppliers and the tax man do need to know.  It will also help build good relationships with all concerned.  Keeping them involved will help keep them invested in your success.

Don’t be Afraid of Negotiations

There will be times where you will have to negotiate with suppliers, investors and customers.  Don’t limit yourself to rigid and uniform business deals, be open to suggestions made by others, it could benefit all parties concerned.  Open yourself to business opportunities that can help you down the road.

Maintain a Rigid Repayment Schedule

If your business involves extending credit to your customers taking someone’s word isn’t enough anymore.  You will need to do thorough checks first.  Make very clear processes for credit to be paid and stick to those policies.  Set specific deadlines and realize that every product put on credit can turn into a loss for your business.

Those are just a few business finance management tips to get you started.  You need to manage your money very carefully no matter how well financed your business is.