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Thread: REAL Assets...

  1. #1
    Silver Member Norri's Avatar
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    Talking REAL Assets...

    According to Robert Kiyosaki, an asset is something that you own that makes you money. I tend to agree with that definition.

    The most obvious type of asset under this definition is a rental property. However, for a small-time or 1st-time investor like me, that's quite a stretch.

    My question to you, then, is what else can be considered an asset under this definition that can be attained for between R10k and R100k? Preferably something capable of bringing in R500 or more per month, with a little bit of maintenance.

    If possible, post a reason why you think it makes money and why it can be so affordable. A web site that makes R100k a month will not be sold for less than a coupla million, so please keep it realistic.

    I'll start the list...

    1. A small web site promoting an affiliate product. You can build one of these or buy an already-successful one. If you build one, expect to spend at least 3 months working on getting targeted traffic via SEO before it makes significant income. Buying is a great option, if you can get the seller to prove what kind of money the site makes.

    Over to you...
    Norio De Sousa - Done4U.co.za (Web Design & Copywriting)
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    Site Caretaker Dave A's Avatar
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    Education! What an ROI!
    The trouble with opportunity is it normally comes dressed up as work.

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    Return on Investment.

    If you had to aim for something that was going to bring you in only R500 per month, you are going to be exceptionally busy, aim higher - right from the onset - and try to develop something like a website that may start at R500 but has potential within a year or so of R100K

    Surely, purchasing shares is your best option? until you have built sufficient capital.

    Hoping for affiliate "Return" is similar to a pyramid scheme in my opinion?

    Said a thousand times before : Find a need and service that - at a financial return, and if you have the add on affiliate commission that is the "bonus".
    I do realise i am stating the obvious.

    Yvonne

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    Dave,

    I know this is a "how long is a piece of string" question!

    In your opinion what % profit return on investment would be considered as the criteria for claiming one has a succesful small business -
    rather than just "Creating the owners self employment" ?

    Yvonne

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    Site Caretaker Dave A's Avatar
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    I was thinking much the same thing when I first read the original question. I was going "Any small business that makes the owner some money is a winner" but it's not that simple, is it

    One of the problems with determining the return on investment in many (even most maybe) small businesses is that if the business owner was paying him/herself a regular salary equivalent to what they would earn as an employee, the "return" would actually be a loss.
    The trouble with opportunity is it normally comes dressed up as work.

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    Silver Member Norri's Avatar
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    Thanks for the replies so far guys

    Dave - I agree, education definitely gives the best ROI. Which is what I'm doing now. Educating myself about all the different types of assets I might not have thought about yet.

    Yvonne - I've done what you said. I started a site last year that, within 3 months, was earning between R1k and R1.5k. After about 12 months, it started earning between R5k and R6k. It's exciting and it's what I plan to do with ALL my little R500 investments (where possible).

    I'm a web developer but let's not keep this restricted to web-related investments. I'm trying to expand my horizons here and see what I like. The best way I can imagine to do that is to find out about as many different things as possible.

    Regarding building a site to R100k a month, I'm all for that but I'm going to be careful at what cost (time-wise) it comes. I'm not looking to start a business I need to work INSIDE 8 hours a day but a number of smaller businesses / investments I can work ON for just 1-2 hours a day. I've done it and I know people who do it, so I know it's possible. Now I just want to know different ways other people have achieved same.

    I'll continue with my second suggestion...

    2. Network marketing - Some ideas exist (The Passive Incomes magazine) where you can invest a small amount of money and a FAIR amount of time (ie: quite a bit) to get a reasonable ROI.

    NB: Network marketing is a touchy subject. Leave the arguments for another thread. Let's focus on ideas here.
    Norio De Sousa - Done4U.co.za (Web Design & Copywriting)
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    Many, many years ago, a group of my friends, my husband and I, used to have a get together evening every two weeks and brain storm business ideas.
    Bear in mind that this was 30 years ago!

    We had such amasing fun! The entire purpose was to be as idiotic as we could!

    We had a topic - how could we create a business that was based on using "Waste". Tyres etc.

    No-one was permitted to bring any negatives into the discussion - if they did they had to take a "Swig" of alcohol!

    Came up with some brilliant ideas - some of which are in use today!

    One idea was to use old tyres shredded for rural roads! Thereby not "burning" tyres!

    Portable car ports, made somilar to tent poles! and embedding a lever which did not permit the car to be reversed.

    A nursing sister - a consultancy to check hospital medical bills - unheard of argueing those in those days!

    Farm dam walls shored up with tyres filled with stones! (That possibly was in use - but we had never heard of it!)

    There were lots of other ideas, now forgotten!

    Sadly! to the best of my knowledge, not one single person in the group went on to do anything more than just think and talk about it.

    There is an excellent, excellent book called Thinkertoys - which I think would be perfect for you!
    For example: A lot of good ideas - come out of frustration! rather than just a perceived need which people are prepared to pay to resolve!

    Don't forget - any brilliant idea posted here, might be "hi-jacked"!

    Dave,

    I still would honestly like to know what you think regarding R.O.I.

    At a business valuation seminar - figures of over R100K per month profit were bandied about, after owners drawings!

    When drawing up a business plan for a new business, what clear pre-tax profit would be feasibly required to be of interest to an entrepreneur?

    Yvonne

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    Site Caretaker Dave A's Avatar
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    Quote Originally Posted by Yvonne View Post
    At a business valuation seminar...
    Yvonne, was this the "Prepare your business for sale" seminar by Mark Corke?
    The trouble with opportunity is it normally comes dressed up as work.

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    Yes! it was, but my comment, taken out of context of the entire seminar would be unfair!
    I found that seminar to be excellent, and unfortunately the discussions confirmed my opinion that we "own a job" rather than own a thriving business!

    I am just seeking an estimation of what profit one should be obtaining as a return on costs - and when can one consider a SME to be successful, based on % profit.
    An idea of what profit a company "should" be making, as long as all "owners" working in the company are only drawing an industry average salary plus benefits.

    I would think in the region of 20% of turnover, is that realistic?

    Yvonne

  10. #10
    Site Caretaker Dave A's Avatar
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    20% of turnover as profit before tax would definitely be good!

    There is a difference between profit margins as a percentage of turnover and return on investment, though. When it comes to sale time, I think it is that return on investment calculation that they pay a lot of attention to.

    I really must try to get to Mark's presentation on this next time he's around my way. If I was selling a business, he would be my "go to" man. Definitely knows what he is doing and seems to have the contacts.
    The trouble with opportunity is it normally comes dressed up as work.

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