Black Swan Management, LLC

Investments and Strategies for the Future of Business

Posts Tagged wealth creation

Real Estate Commission – A Corrupting Influence

Aug 18

Posted by Peter Mericka in real estate | No Comments

Real estate commission is the way in which real estate agents are paid for the services they provide. They receive a percentage of the price received for the property. Effectively, the real estate agent requires the seller of a property (the vendor) to sign over to the real estate agent a part of the property being sold.

Another way of looking at it is to say that the real estate agent, through the wording of the listing contract, effectively has his name added to the title deed of the vendors property, so that the real estate agent becomes a part-owner of the property. When the property sells, the real estate agent receives a payment that represents his share in the vendors property.

Most readers will be aware of the arguments in favour of real estate sale commissions, so I wont discuss those here. My focus is on the ways in which the sale process can be skewed against all parties involved, when the motivation to win a commission takes precedence over more important considerations.

Commission is a winner-takes-all, loser gets nothing situation. This increases the pressure on the real estate agent to secure a sale. Time is also a problem. If the real estate agent cannot secure a sale within a time acceptable to the vendor, the vendor may take the property off the market, or away from the real estate agents agency. This will result in a total loss for the real estate agent.

Finally, the vendor becomes an obstacle between the real estate agent and his commission goal. In order to receive payment for his share of the vendors property, the real estate agent must receive an offer to purchase within the available time, but the offer must be accepted by the vendor. If the vendor decides that the offer is not acceptable, then the real estate agent loses.

In order to win the gambling game that is real estate sales, the real estate agent may decide to tip the odds in his favour and there are numerous ways in which this can be done.

At the listing stage the real estate agent may use improper means to win the listing contract. These include over-quoting on valuation, and offering dodgy sales figures.

During the sale process the real estate agent may be tempted to tell potential purchasers things that are untrue. I have seen many sale contracts with clauses designed to protect real estate agents against the consequences of false statements. Known as porkies clauses, they invariably state that the purchaser acknowledges that any information provided to the purchaser by the real estate agent is provided on the understanding that the purchaser will not be relying on it for any purpose.

When a purchaser has submitted an offer, and the purchaser cannot be convinced to increase her offer, the real estate agent may be tempted to pressure the vendor into accepting what would otherwise be unacceptable. Observations, such as the market has softened or the market has spoken to us are used by real estate agents to convince vendors that the real estate agents high estimation of value can no longer be relied upon, and that the vendor should now accept what the vendor believes is an unacceptably low offer.

For some years now, I have been arguing that real estate services should be provided on a fee-for-service basis.

I will explore the replacement of real estate sale commissions with a fee-for-service structure further in future articles.

Author: Peter Mericka
Article Source: EzineArticles.com
Provided by: Programmable Pressure Cooker

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Entrepreneur Home Business Challenge

Jul 13

Posted by admin in business | No Comments

The best course of action to take sometimes isn’t clear until you’ve listed and considered your alternatives. The following paragraphs should help clue you in to what the experts think is significant.

Entrepreneurs are constantly looking for opportunities to be able to work at home and save on overhead cost.Young parents who want to be with their children when they get home from school are now becoming entrepreneur home business owners. Are these home business entrepreneurs making good money? Of course they are or they would not stick to such business at all.

Working from home has many advantages. First, you can work on you own time. You can work as early or as late as you want and nobody will ever call you attention to your working habits. If you don’t feel like working, you can always take the day off and go somewhere to relax and unwind. When you work at home, you don’t have to bother with dress code. You can work in you pajamas if you like. Anyway, it’s your output that your clients will be after not how you looked when you did the work.

Most of this information comes straight from the entrepreneur home business owner pros. Careful reading to the end virtually guarantees that you’ll know what they know.

Becoming an entrepreneur home business owner is a good option for young parents. Working from home would give you more time to be with your kids and supervise their daily activities. You can wake up with them early in the morning a join them for breakfast before they leave for school and go back to bed after they left if you want. You can even walk them to school and get that needed exercise. When the kids come home from school, you can always be there to welcome them. Work at home parents can spend as much time as they want with their kids as there are no fix rules or working hours if you work from home. The only thing that you should be concerned of is making enough sales to give you financial independence and to enjoy comfortable living. The idea of working at home is to earn without sacrificing quality time with your family.

How does one become an entrepreneur home business owner? There are many business areas where an entrepreneur can engage. Your guide would be your personal interest and your existing resources. Why personal interest? If you like what you are doing, you would not mind putting in a lot of time and effort to make things happen. Wanting something is already a big step towards achieving something so try to work within your sphere of interest and not jump into something you are not familiar with. Familiar things give you more confidence as entrepreneur home business owner. Aside from working with familiar things, you should always take into considerations the resources you have at your command. The scale of your business undertakings should always depend largely on how much resources you have so make sure you know what you have to prevent overexposure. Spending within your means is a cardinal rule for entrepreneur home business owners.

Now might be a good time to write down the main points covered above. The act of putting it down on paper will help you remember what’s important about entrepreneur home business owner.

About the Author
Gaetane Ross creates a great opportunity for people interested in working from homeFind out all about it TODAY at:http://www.4instant-online-business.comhttp://www.4instant-online-business.com/pips.html

Article source:
Entrepreneur Home Business Challenge

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Early Stage Capital is One of the Quickest Ways to Get Your Project Running

Jun 23

Posted by Terry Hart in venture capital/funding | No Comments

Early stage capital or seed capital is one of the fastest ways to make money in this industry. There are literally millions of investors looking for that new world beating idea to invest in and sadly, there are not that many good ideas around. If you do have a good idea, it pays to invest in the early stage capital or seed capital.

The presentation. This by far is the most vital point of any new business venture or start up. Finding investors with synergistic interests in your idea is just part of the battle and you can find many such investors by simply approaching your local lawyer or accounting firm who will have many people on their client books that may have expressed an interest in such an investment.

Spending money on the presentation is vital. As an entrepreneur, you are part business wo/man part showman. Selling the idea is the point of the presentation once you have found a few potential investors. The presentation must be a series of factual presentations delivered in a confident manner.

An entrepreneur can sell an idea outright just by offering the right back up and supporting statistics coupled with a good presentation. Imagine spending $1000 on doing a great presentation and offering quality printed prospectus and coming out that afternoon with a check for $100,000 for the rights to that idea.

That’s one way to make money but most entrepreneurs, if they recognize the huge potential of their new idea will want to be in on the profits which would expectantly be significantly more. Getting seed capital to get a project off the ground is not that hard if you know how to make a good presentation and offer supporting evidence in the form of statistics from credible sources.

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Author: Terry Hart
Article Source: EzineArticles.com
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Branding The Ford Motor Company

Jun 3

Posted by admin in Companies | No Comments

Have you seen the new commercial and re-branding from Bill Ford and the Ford Motor Company? As you know Ford is in big trouble. So they seem to be changing their positioning and re-Branding. Here’s the brilliant re-positioning they came up with (and it pretty much includes everything):

1. American Auto Industry is facing new challenges and fierce competition: Ya think Bill? Maybe the writing has been on the wall for the last 15 years? Maybe Bill Ford was on a golf course somewhere counting his millions. You’re too late Mr. Ford! Telling us that you’re behind is like leaving the barn door open…we know it.

2. Ford is making new investments in R & D: Wow, Ford, you’re blazing a new trail…By the time you catch up to BMW, Audi, Mercedes, Lexus, Toyota, Honda they’ll be out with their futuristic space age models that fly which will again put you 20 years behind. Face it Ford, we don’t buy your cars because of R & D. We use to buy your cars because they were American made and RELIABLE. Now they’re made everywhere and they are not RELIABLE (hmmm, am I hinting at the correct positioning Bill?). Since you can’t have the luxury, sports car markets why don’t you make your cars more RELIABLE.

3. Hybrids: Here’s what I think of Hybrids: It’s like when you go to a vending machine and look at the choices. You can pay an extra quarter and get some trendy healthy tastes bad power bar or you can reach in and grab old comfortable Snickers. Since we’ve branded a national vending company we already know the answer. Here it is; People say they want to eat healthy and they scream for it but when it comes time to buy they buy unhealthy. Same will apply to Hybrids (see Diesel cars).

4. Working with Volvo to find new safety innovations: Man oh man, why is it that company’s think they have to be everything to everyone. People who buy a Volvo buy it for the safety and for nothing else. What a great brand identity and brand image Volvo has. Kudos to Volvo for doing it right. But Ford, are people buying Ford’s for the safety aspect? I think not. Why is it anyone buys a Ford? That’s your secret weapon. Draw your line in the sand and then build your new Branding!

5. Retake the US roadways and as always innovation is leading the way: This coming from the worst innovative carmaker in the world. Here’s what Americans want from Ford. A good, RELIABLE car made in good old USA. Stop trying to be everything to everyone and your re-Branding will pay big dividends (wink, wink).

About the Author
Scott White is President of Brand Identity Guru http://www.brandidentityguru.com a leading brand consulting and market research firm located in Boston, Massachusetts.

Article source:
Branding The Ford Motor Company

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Wealth Building Simplified – An Easy Guide To Financial Planning

May 26

Posted by Ravi Kumar P in wealth | No Comments

Everyone wants to build wealth. Some people find this very interesting and devote a great deal of time and effort in understanding and trying our various options to build wealth. But a lot of others who want to build wealth don’t have the inclination or time to go into the details to make great investment decisions. What is needed is a simple and systematic way to build wealth at a decent rate of return (willing to sacrifice some spectacular returns for the benefit of minimum efforts!) that does not demand too much attention from the potential wealth builder. No worries; there are a few fundamental things that one should keep in mind and as long as this is taken care of, wealth building can be done with a minimum of fuss!

I have come up with 5 C’s that one should keep in mind for a peaceful and successful wealth building effort:

1. Compounding

Explanation: There are 2 way to provide interest on an investment; Simple and Compound interest. Simple interest is when an amount is paid as interest on the initial amount (Principal) at a fixed percentage. For e.g, for Principal of 100, Simple Interest for 2 years at 10% per year would mean 20 as interest (10 per year multiplied by 2 years).
Compound interest is when the Interest earned is added back onto the Principal and the next year’s Interest is paid on the enhanced amount. For e.g, for Principal of 100, Compound Interest for 2 years at 10% per year would mean 21 as interest (10 for 1st year and 11 for 2nd year).

Bottom-line: Compounding is GOOD! It means the money works harder and earns more. Just to drive the point home, consider this: An amount of 100 invested at an interest of 10% per year on Simple Interest would end up as 200 at the end of 10 years while if the same is invested at 10% per year Compound Interest, it would end up as almost 260 after 10 years! So, always give preference to an investment where compounding applies!

2. Continuity

Explanation: Whether one invests in the Stock Market or in Bank deposits, the best way to do regularly over a long period of time as opposed to big chunks of stop-start investments. Therefore, aim to invest continuously over a longish time frame, say 25 years of your working life, from the time you are 25 years old till you are 50. Needles to say, the earlier you start and the longer you do it, the more wealth you will end up with.

Bottom-line: Do it over a LONG TIME FRAME! And invest continuously and regularly over this time frame. As much as possible, do not disturb the investments.

3. Consistency

Explanation: Along with continuity, fix and invest a consistent amount at consistent time intervals, say every month. A consistent amount (at least 10% of monthly income) invested every month over the long time-frame discussed above will ensure decent returns and a very good corpus.

Bottom-line: Just TOP-UP every month and let compounding work its magic!

4. Calm

Explanation: If the above C’s are followed, then the most preferred investment avenue is Equity investments. By their nature, equity markets are fickle and will move up and down. But long term investors should not really worry about this as over a long time horizon (10 years or more), equities are almost certain to give positive returns. So, invest in equities for the long term and keep CALM!

Bottom-line: Traders who want to make some margins everyday are the ones who should worry about the market movements everyday. For Continuous and Consistent investors, the short term market movements are best ignored.

5. Caution

Explanation: Be wary of new investments ideas that are thrown your way. If you don’t understand it, ruthlessly avoid it.

Bottom-line: Caution is better than regret. So, err on the conservative side.

Conclusion

An investment option that usually combines all the above C’s is most of the good equity mutual funds. So, all one has to do is pick a good equity mutual fund, set up a systematic investment plan with this fund that ensures a fixed amount of money is invested every month directly into this from the bank account and then sit back and see it grow. Most funds charge some fees for managing the investments but this is a worth it given the convenience offered. Of course it is recommended that you track the funds’ performance every half-year, if not every quarter and if you see that the performance is slipping up consistently over a few quarters, then it is time to switch funds and set up a systematic investment plan with a different fund house. Another safe option to consider is Index funds which are linked to the market index. The management fee is very low but this will give just the market rate of return and nothing more. This is not bad but an actively managed fund, for a slightly higher fees, usually out-performs the market on most occasions. Good luck for a successful wealth building exercise!

Ravi Kumar is one of the founders of the Chennai-based e-commerce company, http://dilsebol.com, where users can create, customize and order their own t-shirts, mugs, mousepads, ceramic tiles, coasters etc. After graduating from IIMA, Ravi worked as Area Sales Manager with one of the world’s largest beverage companies and as Business Consultant with one of the big 4 Consulting companies before establishing DilSeBol in 2007. Ravi is interested in personal financial planning and the stock market and has been investing in the Indian stock market for the past few years.

Author: Ravi Kumar P
Article Source: EzineArticles.com
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Race Horses and Mutual Funds

May 19

Posted by Al Thomas in business, mutual fund | No Comments

For years investors have been taught to look
into the composition of a mutual funds. In other
words the “experts” want you to take the time to
analyze the stocks within the mutual fund
portfolio, categorize them by industry group and
try to understand the objective of the fund
manager. This is nonsense.

When I go the track I look to see what the horse
has been doing for the last several races. I
don’t give a hoot what he had for breakfast. All
I want to know is has he been fast? Is there a
good chance he will finish in the money in the
next race? I only want to know how he has been
performing.

Most mutual fund managers, except those who
follow index funds, are always trading. You have
no idea that what is in the portfolio today was
there yesterday or will be tomorrow. Some fund
managers trade more than others, but you can
prove this to yourself by looking at the fund
prospectus at the beginning of the year and one
of the updates that funds publish quarterly.
Many of the stocks will still be there, however,
you don’t know if the percentage holdings are
the same.

By the way, don’t bother reading a mutual fund
prospectus. They are worthless when it comes to
making money. Consider that most of the
information in it is about a year old by the
time you read it. Think about this seriously for
a minute. Is there anything you can find out in
the document that will show up in your bottom
line? I’ll wait while you think. OK? There
really wasn’t anything was there? All
prospectuses are basically worthless.

But you say the SEC (Securities and Exchange
Commission) in Washington approved this. No,
they did NOT. They don’t approve of anything;
they just read it to be sure it meets the
regulatory requirements for disclosure. There is
almost no difference between the prospectus for
the worst mutual fund and the best mutual fund
and both of them may have been read by the same
Dilbert in his cubicle at the SEC.

There is one excellent way to find out which
fund to buy. It is based on performance. How
much has the fund increased in price during the
past 12 months? Just 12 months. Many financial
analysts want you to look at 3-year, 5-year and
10-year performance. Remember that horse? I
don’t care how many races he won 3 or 5 years
ago. Can he run NOW? There are many publications
and web sites that tell you the best performers.
Investor’s Business Daily prints a list of best
performing funds each day. You might have to see
the paper every day as they sometimes just tell
about the long-term performance. You want the
last 12 months and the last 3 months.

Three years ago you could have bought the best
performing fund on the street and today have a
dog. I call a dog any mutual fund that is not
outperforming the S&P500 index.

If you were a jockey you would want to ride the
fastest horses because in many races you get a
percentage of the purse. The same applies to
mutual funds. You must own only the best
performing funds at all times. Like the jockey
you must pick the fastest horse if you want to
be a winner.

You should review your fund holdings monthly to
see that you are only in the best funds. It
might take you an hour, but you will find that
you will double the current return on your
mutual fund investments. Do it!

Author: Al Thomas
Article Source: EzineArticles.com
Provided by: Pressure cooker

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