This post is from a new course called “Investing In Small Businesses -The Best Investment Ever Invented” and I wanted to share parts and pieces of it with you.
The reason why I am sharing it with you is that this includes putting money into your own company as well. As a Profit Consultant, I can’t think of anything better to put your money into than your own business!
It seems obvious but I speak with business owners that are complaining about their investment portfolios going down while their own business is going well. HELLO, how about saying to heck with your stock broker and put that money into expanding your own business?
I have decided upon some requests for more specifics that over the course of the coming weeks that I am going to give you a primer for investing in small private companies and learn how to blow away our minimum 21% return (which is our benchmark with clients for another business that I work with that I may tell you about later) .
But perhaps more importantly, I am going to show you how not so lose any more money and to keep what you have!
In that in the next several years I think that we are going to be entering a fairly deep deflationary period and recession and we will see yields on bonds and such hover around 2% and the stock market is going to be a pretty scary place to be, I thought that I would show you how to invest in my all time favorite investment and that is basically smart, ambitious, hard working entrepreneurs.
If the market really thought that the bailouts were going to work, they would have skyrocketed on the news and point in fact, they have mostly gone down.
In that right now about 90% of all new job creation in the US ( and in all of the world for that matter) is done by small businesses and the government is not only ignoring them, but it is making life more difficult for them, they are currently and for the foreseeable future in dire need of capital.
My observation on this is that the problem for Entrepreneurs is that Governments and Politicians whom as a collective whole since Roman times and before have never been the sharpest tools in the shed and normally are quite short sited and self-serving and look at Entrepreneurs and Small Businessmen and Women as grains of wheat. They know that it feeds that masses and themselves, but there are lots of them and they are so tiny. Whereas Big Business is more like a giant pumpkin. It grabs attention and they can get their arms around them and they can show them off and cater to how big and orange they are. Little grains of wheat, not so much even though in the end pumpkins no matter how big are not the food and fuel that a nation or government runs on. It is the labor and ingenuity of 10’s of thousands of small businesses that employ people, that pay over 90% of all tax revenues. Yet, they are taken for granted and more than likely trampled on by those very same politicians, governments, and even investors on their way to the Great Pumpkin patch.
The great news is that because of this opportunity abounds. Profitable small businesses to invest in are everywhere! This huge vacuum is your opportunity!
If the Feds were suddenly able to use some of the 1.5 trillion (or is it 2 trillion?) they are talking about handing out to buy a clue, they would give half to Warren Buffet to invest and actually make money with and the other half to small businesses in the US and you would see the economy turn around and take off in less than 6 months. That and lower the corporate tax rate to 10% and they would have more money to waste and spend irresponsibly than they ever thought possible. And no I am not considering that political commentary. Just a dream that I have.
OK, back to reality and back on point here.
I am going to put this course into videos here shortly but I am on the road at the moment in Sunny San Diego and this will do just fine for now.
So you have figured out that you are tired of getting creamed on Wall Street and you want to take control of your your own financial future. First off, congratulations!
The other thing I want to drill home is that if you are reading this, you can do this and win the game.
You are smart enough, and have the ability to blow away what nearly any financial adviser can do for you.
Step 1.
The first thing you need to do is to figure out how much money you want to invest? Did you listen to me last Spring and liquidate your portfolios and go to cash? If so you probably have a lot more money than those that did not.
Now the great thing is that you can do this with 401k and Roth account money. In fact, if you are going to do it with Retirement funds, I would do it now, rather than later. There are some rumblings about nationalizing Retirement accounts that I did not put much weight in when I first heard them, but, now I am not so certain. For more information on how to do this with your retirement accounts, look at my post on Equity Trust. Speaking of which, do you already have a small business? Are you doing OK or actually pretty good but more cash could help you do better? Why not use your own money and take it out of the hands of Wall Street and put it in your own business or find another one and diversify? For some reason, a lot of small business owners never think of this.
Step 2.
The next thing you are going to do is either online or on your computer or on a piece of paper, write down the number you have to invest and stick with it.
Depending on how large it is, you probably want to invest no more than half into any one entity or business or perhaps no more than 10%.
I am going to show you how to set up a dashboard that shows you exactly how things are going with your investment.
I will also show you some of the tools from Anderson’s Arsenal that will make this a breeze and allow you check and see how things are doing from a computer no matter where you are.
Step 3.
The next thing is to figure out what you know about. This may be your current or past job, your hobbies or something that you know something about or at least have an interest in.
What products do you see yourself, your friends, and your family buying in the coming years? Write all of them done and do not filter them by thinking such things as the is too silly and whatnot. Just make your list.
Then I want you to take a look around you and figure out which of the things that you have knowledge of, or are interested in, look like they are going to do well in a tight, tight, economy from your list.
People have to eat, they will still drink, they will still want some forms of entertainment, and they will want a better life for their children are some of the obvious things to take into consideration.
What else are people going to be wanting and buying? There is no right answer here by the way. You need to feel comfortable with the area you pick is the only correct answer and remember common sense will go a long way here.
Step 4.
Once you have a general idea, then I want you go Google it and and spend at least 10 to 20 hours researching it. You need to do this from multiple sources to get a proper perspective. Find out what is going on in the market. Find out who are some of the big players. And while I would like at the first page or two’s listings, dive into page 17 or so and skip some of the higher ranked pages. Sometimes all the higher ranked pages have going for them is that they know Search Engine Marketing or SEO and do not particularly have any real expertise in the subject matter at hand.
I am going to insert one Rule that I would not waver from. Put twice as much time in doing research as you do watching TV. If you don’t watch TV them good for you, you are ahead of the game. I might also suggest that if you do watch TV you quit watching the news. It will give you a false sense of doom and gloom if you watch the Bobble Heads too much.
So now you have found the area you are interested in and done your preliminary research to make sure you know the market.
The other thing that I have to warn you about though is that if you do decide to do this, you could end up having an enormous amount of fun here and you may forgo ever putting money into the regular stock market ever again.There is one other little part of the lesson that I would like you to do and it may seem silly at first but, it is important, and it actually has some scientific underpinnings.
Step 5.
I am borrowing this term from T.Harv Eker because it works and a bit of something from NLP or neuro-linguistic programming. Now before you ask ‘why is Anderson having me do this’ and you say it is silly, I ask you this. Are you making over 21% right now and if so do you want to learn how to make more? Then secondly ask yourself what do you have to lose? Besides you are by yourself and now one will be looking.
So here goes, I want you to think of a time when you have done really well with an investment and you made money. If you have not done that before think about when you found money or someone gave your money. Maybe it was the tooth fairy or for your birthday or even when you got your first paycheck. Think about how good it felt. Let that feeling run through you for 30 seconds or so and remember how it put a smile on your face and whatever other feelings were associated with the event. OK, while you are thinking of that I want you to touch your pointy finger to your thumb and press it while you are remembering how good getting the money felt and say to yourself “I am a money magnet”.
Now that was not so hard was it? Now repeat this exercise right now 4 or 5 times. Think about how good you felt when you got the money, have your finger touch your thumb, and repeat “I am a money magnet“.
The point of this every time you find money, even if it is penny, or a quarter, or you make a good investment or even get your paycheck, I want you to do this exercise. The great part about it is that soon or maybe even now if you have done it several times, try just touching your finger to your thumb and you will find that it brings back that good feeling when you got money. Try it, kind of cool isn’t it!
I will discuss that psychological reasons for doing this and why it is so important in Part 2.
Remember, you are a money magnet.
OK, quick recap here.
- Figure out how much money you have to invest.
- Write down the number.
- Figure out where your interests and skill levels lie and choose the area you want to invest in.
- Do at least 10-20 hours of research in the area you chose and figure out the market and the players.
- Remember that you can do this and that you are money magnet and do your exercise whenever you get money.
Now looking back at what I have put up there so far does this make sense? Are you able to follow along so far? It was not that tough now was it? Well good!
It really is this easy.
In lesson #2 I will show you how to find the type of company you want to invest in and the mechanisms that I use to grade them and how to use my dashboard and what software I use to manage your investment.
In the meantime, do the steps above and get ready to take control of your financial well being and get ready to have fun.
Cheers,
Andrew Anderson