Where Would We Be Without Supply Chains

Where Would We Be Without Supply Chains?

If you just started your investing journey

You may be tempted to think that just because you are a customer of a company, you know its true value. However, stop and think for a moment. Just because you’ve experienced stellar service or have experienced bad customer service, doesn’t mean that your individual experience is indicative of what has happened with other customers.

 

Every customer’s individual experience is subject to variation, this is because a company’s supply chain naturally creates output variation.

 

The best way to know if a company you like is a worthy investment is to combine your general experiences you had interacting with them and with their numbers. Look at their fanatical statements.

 

Try to gauge how much future revenue and profit they will gain. How are they fairing the public eye? Who is their competition and are they losing market share? Also, try to get information on their supply chain. Who in their ecosystem are they dependent on? What can you learn about these other companies? Can you invest in them as well?

 

If at the very least all you do is consider the possibility that it is unwise to gauge the value of a company based on your individual experiences, you’ll be in a better position as an investor. Also think about how their supply chain works and how it affects all of the customers involved, not just you.

 

If you then begin to do the homework, the real gritty research, you’ll be surprised by what you learn (not only about the company but, also about business overall).

 


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the-first-financial-goal

The First Financial Goal

Are you prepared?

Having a clear and attainable number, a visible financial goal, is extremely useful. Instead of saying to yourself, “I can’t wait to be rich.” Try saying, “I can’t wait until I have a net worth of $30,000.”

 

Even better try saying, “I can’t wait until I have $2,500 in an emergency savings fund that can be accessed at any time.”

 

Our financial goals don’t have to be ridiculous. It’s important to want to achieve your maximum potential. If that maximum turns out to be $1,000,000 or even $1,000,000,000 in net worth—great. However, if your maximum financial potential isn’t this high, maybe striving for something that’s simple, like being relaxed in any emergency is a better option.

 

Start with the small steps first. Then move up.

 

Get out of debt. Learn how to use debt to obtain assets. Get an emergency savings fund. Create a ROTH IRA or Traditional IRA. Hire a CPA. Learn how to reduce your taxes.

 

Then aim higher.

 


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how-much-do-you-keep

How Much Do You Keep?

“One-tenth of everything that I make is mine to keep.”

One issue that many of us have when we start making money is that we are focused on our income. We measure in hours and in monthly bank statements. Some of us fall into the trap of getting a credit card before understanding how to properly save money.

 

It doesn’t matter how much you earn for each hour of time you work if you aren’t keeping a portion of your money. There are hundreds of ways you can leverage money that you save to make it grow and to create wealth for yourself, however, the process doesn’t begin without having a general understanding of how to save your money.

 

Here’s a great way to spend your time during a quarantine: https://www.youtube.com/watch?v=wglndSWrvsM

 

You can also get a physical copy of the “The Richest Man In Babylon” by George S Clason here. If there is any personal finance book you will ever need to read, it’s this one. The classics always withstand the test of time.

 


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worries-changed-in-2020

How Have Your Worries Changed In 2020?

Worried and focused

My worries have changed over the years. In simpler times, I used to worry about graduating from college. I wanted to make my family, specifically my mother, proud of me. I had this constant fear of not being enough, not contributing my part to the family. After achieving my goal, my worries immediately morphed to making as much money as possible.

 

I was chasing the dollar and in a way I still am. However, after taking the time to really consider why I want money, I don’t worry about it in the same way as I used to. This year has shown me that there really only a few things that are truly necessary for my happiness:

  • Work that introduces me to unique challenges on a daily or weekly basis;
  • My family;
  • Good food;
  • Travel;
  • Anime and manga;
  • Books;
  • A place to sleep.

 

Everything that isn’t included in that list is just an extra luxury. For the most part, the biggest expense on that list would be having a home, being able to sleep comfortably without having to worry about where I will sleep tomorrow. And because of this list, my worries about earning a decent living have narrowed down.

 

I’ve been considering what do I want to use my money for when it comes to any surplus I may have after spending on my essentials. I don’t want to fall into the trap of not building wealth and more importantly, I don’t want to accumulate wealth without a strategy for how to use it. What’s the point of creating wealth if I can’t use it to help others, especially after I die?

 


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investing-in-the-culture

Investing In The Culture

A company’s value can also be derived from how cemented it is within our daily routines

“A stock is not just a ticker symbol or an electronic blip; it is an ownership interest in an actual business, with an underlying value that does not depend on its share price.”

— Benjamin Graham, The Intelligent Investor, Revised Edition.

 

Some of us are looking for opportunities within this chaos. During times of great pessimism, there are hidden opportunities. However, just because something looks like an unpopular opportunity you should still be wary.

 

If you’re new to investing, there are many resources you should use before investing your first dollar into a brokerage account. Of the hundreds of timeless principles that experts have provided to the commercial investor, two pieces of advice that I regrettably didn’t listen to when I started investing is this:

  • Don’t invest in anything that is posted as a hot tip, because if you’re reading it on a publication the value will be inflated by the time you make your purchase;
  • Know what the company is about before you invest your money.

 

One of the best ways to choose an individual company to invest in is to have a deep understanding of it. A good place to start developing this understanding is by considering how the company fits into your daily routine and more importantly, how it fits into your culture.

 

How often is the company discussed in the news? How long has it been operational? Do you know anyone who works at the company? What have they said about their experience working there? Is that company the only one that you use or do you also interact with its competition? All of these questions can lead to even more questions about the company, which is what you want. The value of a stock can be derived not only from its earnings report, reading “between the lines” in the financial statements.

 

Is this a company that will be a part of the conversation in the next 20 years or will it fall by the wayside as another innovator takes its place?

 


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