REAL Assets...

[IanF]

Every time I check out rent, i tend to think of the old Victorian landlords, and I can only shake my head. But you are the first person I know to be vocal about this,

Alta
I have dealt with 2 landlords since being in business and both don't think about renting as a long term partnership. They just try to screw the tenant for every last cent. My long term plan is to own my own business premises. Which is also a nice retirement fund.
I struggle with the 10% escalation demands and have offered CPI +1% I got nowhere a they were scared of inflation going into deflation. I try to explain the standard 15% they got in the eighties was fine as inflation was 25% if remember correctly so you got an effective 10% decrease yearly.
How do others see owning their own business premises.

[Norri]

Don't think me funny but a speed dating venue would bring you a good return if you advertise properly. There is a huge need out there for that, and you can hire a venue, and sit back and relax. Payment is made beforehand, so you will have the capital to pay for the venue, no riks. I am a low risk, high return girl.

There is nothing crummy about this, just a lot of people who don;t have time to go out there and meet people, this is a well known fact. Listen to Yvonne, find the need.

I will try and think of some more ideas, but I am not big on ideas for get rich quick schemes, I believe that you have to find your passion, and just go for it. Universal Laws will take care of the rest, and you can find many, many an example. But keep on studying......that is your key out!!

Also anything to do with a health or organic prefix is seen as a need today.

Good luck!

I think that's a great idea, Alta Thanks for the suggestion! And for bringing the thread back on-topic!

It's little things like that that we might never have thought of on our own that brainstorming in a community like this can really help bring out.

I don't see these things as a get-rich quick scheme but rather a get-rich-slow scheme, providing cashflow for larger investments and business developments.

Following Kiyosaki's Cashflow 101 game -- my idea is to counter my expenses with money-making assets until such time as I'm out of the "rat race" and can invest without fear of not eating next month

[Alta Murray]

Well, for one I think Ian, do the math! If you can find the property in the right area, you pay off your loan at a cheaper rate than your rent!! And there is something else -- the time value of money to take into account when it comes to owning your own business premises, it might seem terribly expensive at first, but as time value increases the monatory value decreases, and the value of the property increases. If you can sub-let you are in.

In my area you see this happening a lot, but it is in answer to landlords who don't give a fig. They do nothing to market the complex, and they are supposed to do that, as most of them charge you for it anyway -- its there hidden in the rent. They think that you are dependand on the 'feet', so you will cough up.

In our area, all the Accountants,attorneys, dr, dentists, and software people refuse to give in, so you will not find us near the complexes. People buy up small holdings, one bit is for the business and you have your home right next to it, or attached to your business premises. So we turn the tables on them, our businesses are situated just off the landmark complexes, so directions are a breeze, and they are not seeing a cent off it.

If you then go off on pension, which I don't believe in by the way, you have rent coming in as a latent income. You see, the great big old buzz with rich dad poor dad was that it is only when you own a second property that you are creating income. Duh! We all knew that. We only had to look at all the Jewish and Indian business people, and it remains my dream to have my business downstairs and living upstairs. Just like the old Dutch clockmakers

So if you can do it, go for it, even if it means selling your current home ouch, and getting a new property which can serve a dual if not multiple purpose. We are living in the age of 'The Feminine' by lack of a better word, so you must have one thing that can perform multiple functions, see all the trends today.

Oh, and I checked out your accounting package, though I couldn't see what it looks like, apart from the fact that it seems to be for a small business, I can tell you this : If you are happy, and it does what you want it to do, you are set. The price is very reasonable, so I hope you stay happy!

As for numbering accounts -- you just click on a button and you can be on names only, but it is a very bad practise, and I will break any student or programmer working for me if they dare go without unique numbers.

Anyway, subtract the rent from your financial figures, and just look at the picture you get from your business, then start adding a rent figure, and see when the business is screaming at you. That is the rent you can afford, and you can use that figure to work out the repayment you can make on a new home *and* business premise. Trust yourself Ian, people with financial skills always make it seem so difficult, but we all can count, so rest easy, you can do this!

By the way, we have printing bus. in our area operating from their homes, even art galleries, and it is not a common cheap area. If you have any other questions, just fire away!!

[Alta Murray]

Ooh, Norri, let me share this lesson with you -- as part of my father's studies they had to play the stock market, just play, and at the end of the year, they compared notes. Now if there is one thing my father taught me it is this, and i gladly share it with you -- never ever give your power away, and that is what you do when you 'invest' and you have no power over your money. Providing cashflow for the big ouks? I worked 3 jobs at one stage, so you can do it too, but give your power away to someone whom you have no control over? If you are willing to do that Norri, I have the best deal for you -- a lovely game farm in Zim

Seriously, the fact that you are a *thinking* individual, out there trying to find new ways, hats off to you, you are a minority my friend. Most people don't get it, they sit on their butts and complain. You are doing something, and that is wonderful, and don;'t you dare give up.

The second lesson from my father -- never compromise your freedom. So don;t do that either. What is good advise is to sow in the morning and in the evening, for you never know which one will bring you the harvest. But YOU sow, not someone else, they work for you and you remain in control. If you are not in control, you have no freedom, therefore you can not make choices.

Answer me this -- what is your passion? What grabs you? And don;t tell me money, it's the currency of this world, we all want money. What makes you forget about time? What makes you feel alive and in sync? For me it is analysis and diagnostics, for me a business is a live entity and I can actually hear and feel it speak to me, sounds crazy, but it is my passion. It's what I am good at, I don;t need to strain to make it happen, it just does, so what is that something for you?

Americans are successful for two reasons 1) they follow their passion whatever it is 2) they are extreme optimists. Now they might not be the smartest people on this planet, trust me, but see what a difference it made for them?

If you try to make choices for your life based on a poverty foundation, ie. I need the money, you are screwed. Hard work alone will not do it for you either. I have known many a hard working poor person. So what is your passion?

But onto ideas -- the other thread we had going was about how hard it is to follow a healthy diet, so I was hankering for healthy lunch deliveries.

Also I think we should start doing an analysis on what people need today -- you have the mom's taxi services springing up all over the show, picking kids up from school and then driving them to extra-mural act. etc. You have students for ex math students going out to homes and tuitoring kids with math problems in their homes in the afternoons.

The greatest success story of our times -- Virgin -- al he ever did was to go through a day and see what was lacking, then he started a bus. that supplied the lack. For the next few days I will make notes of what I find lacking and perhaps we can sompare? But I need the answer to your real passion first

[Alta Murray]

Oh, and your expense should be on your *own* asset that then brings in a return for *you*

[Norri]

Thanks for all the great advice, Alta

My passion is the reason I'm doing all this investing -- so I can have time and money to study without trying to feed us at the same time. My passion is guitar and music in general.

The investments I'm talking about aren't restricted to the stock markets or anything like that.

Can we focus this thread on systems-based investments that work? I'm a systems guy, been programming for maybe 9 years now -- systems are easy for me. Perhaps we can start a separate thread based on following your passion. I could sure do with any advice I can get but I don't want to derail the brainstorming on this thread.

[Alta Murray]

Let me try again, we are having conneco problems today sigh. Slapped wrists for me sorry to veer off topic, but on this forum I have noticed that it is okay to steer off topic or is that just me?

We have all been were you are right now, short of cash, trying to make ends meet, so I do feel very sorry for you. Do I ever remember the days?

No, sorry, I can not try and figure out business ideas if I don't know from whence you come, easy reason bein that you will work harder when its something that you like and feel passionate about.

Programming for 9 years? What language, what type of systems? Something must be wrong if you have not made some good money from your current skill, please advise.

Virgin Day One : Woke up this morning and desperately wished that there was some site some forum some anything that will supply me with a menu for b/fast, sschool and uni lunches, lunch and dinner plus the shopping list. Healthy meals that are relatively quick to prepare. One can even order(index) it in cheap, middle-class and the connoiseur(I don't even know how to spell that so that ought to make me cheap) classes. Most women work nowadays, so it becomes a real pain to think what are we having for dinner ugh!! I find that with a menu I am better prepared, and don;t mind it so much, but to go through the supplies and think up something is such a bloody bother. I had a housekeeper at one stage, and she did all of that for me, what a blessing, but she got sick and I could never find someone to fill her shoes. Also important that my daughter actually *see* me doin some cooking as she and Bonita believed that white women don't cook yikes! No role model there and I know for a fact that woman struggle with this issue. Perhaps u can check to see if it is out there already? That is a real, real need.

What did you find?

[IanF]

Well, for one I think Ian, do the math! If you can find the property in the right area, you pay off your loan at a cheaper rate than your rent!! And there is something else -- the time value of money to take into account when it comes to owning your own business premises, it might seem terribly expensive at first, but as time value increases the monatory value decreases, and the value of the property increases. If you can sub-let you are in.

Oh, and I checked out your accounting package, though I couldn't see what it looks like, apart from the fact that it seems to be for a small business, I can tell you this : If you are happy, and it does what you want it to do, you are set. The price is very reasonable, so I hope you stay happy!

As for numbering accounts -- you just click on a button and you can be on names only, but it is a very bad practise, and I will break any student or programmer working for me if they dare go without unique numbers.

Alta
Thanks for the reply, I am a reformed accountant who decided against the corporate world eventually.
I must start looking around as it may be the right time now, just my target area around Sandton/Rosebank the prices are high.
On the accounting package why I don't like account numbers is that they are inflexible if you want to sort by them. I still remember in the 80s being told of the magic of relational database compared to a normal database. The package I use does use have account numbers which are sequentially and allocated when you open a new account. From some one who hates doing accounts it works great for me, and I know my bank has reconciled. When I get bored, easy when doing bookkeeping I go dyslexic and you can imagine the hassles this causes with account numbers.
Why do accounts packages still need sequential numbering for account numbers when you can sort on any field?
Hopefully I can further my knowledge here.
Ian (now a RA)

[Alta Murray]

You asked for it You do for ex. if statements on your numbers to determine what figures you are working with, for ex if ACCNO.Value < 1000 AND ACCNO.Value > 800 then.... doesn't work so lekker on a string I Find also it prevents duplicates, for ex MUR001 and MUR002 for two Murray clients or creditors blah-blah...very easy to allocate no automatically, so it's not a problem. Importing bank statements easy too, but your normal way of doing it the system posts it automatically, so you just have to put in bank costs, that's all. You can still do it according to name and skip the no. hassle.

Relational databases are the shit, so you heard right. You can sort on any field irrespective of whether it's relational dbf's or not, you can even sort on mulitple fields, so you get a better picture of the file you are sorting, but that has got nothing to do with relational databases.

A relational database means there is a relation between certain fields with another database for ex and this is a -- hold your breath--- a real live example form my system.

Figures->NO;Name and then the relation with CashBal->NO;Name, the rest of the fields then differ, but Figures have a relation with the first file Company and yes you guessed it NO;Name fields. Then what you do is to filter your records and you don't use SQL for it sucks and voila!

An Accountant? I love accountants, they always seem to be so precise & they have such a bookish air about them. Just love that, so why did you quit, it's a cool job.

I hate doing accounting by the way, I think it sucks and mine is never ever up to date. And to think that accounting is based on algebra and developed by a monk. Yeah, right I would get bored too being celibate, so I have sworn at the poor monk many a time.
I only love analysis They shoul dhave kept it at algebra!

I have just finished with cash flow and I absolutely hated doing it, comprises of
Sales and Cash Collections (predictions in relation to sales blah blah)
Cash Collections
Cash Disbursements
Net Cash Inflow
Cash Balance
All with graphs.

Now I am onto the last bit of my system which is the cost of financing.

Oh, how come I thought you were down in Durbs? Ouch for your area, it is pricey, but like you say it might just be the right time now to buy.

I hope you understand your relational dbf now as you shall be taking an on-line exam shortly

Alta ( Now a CSD)

[Norri]

No, sorry, I can not try and figure out business ideas if I don't know from whence you come, easy reason bein that you will work harder when its something that you like and feel passionate about.

And I agree but I'm not looking for a business to LIVE in but a business to set up, systemise and enjoy the proceeds from. Read Michael Gerber's "The E-Myth Revisited". That's what I'm aiming for but on a much smaller scale (for now).

Programming for 9 years? What language, what type of systems? Something must be wrong if you have not made some good money from your current skill, please advise.

I've made lots of money programming. I just haven't done a particularly good job of keeping that money

Also, I prefer more freedom in my work than what programming for others normally allows. So, ideally, I'd like to reserve that skill for myself and my partners.

[Dave A]

Can we focus this thread on systems-based investments that work?

... sorry to veer off topic, but on this forum I have noticed that it is okay to steer off topic or is that just me?

It tends to wander back on-topic after a while - sometimes

I'm trying to keep things low touch and splitting threads can make things disjointed.

I was going to post somewhere along the way (may as well get it in now) that the problem with buying your own commercial property is the fairly high barrier to entry - generally banks will only finance 75%, which leaves a fair gap to fill from elsewhere.

I'm wondering in a more general way about that issue of barriers to entry when it comes to building "Real Assets" as per Robert Kiyosaki's definition. Can an asset sustain a high income stream if it has a low barrier to entry?

[Norri]

Can an asset sustain a high income stream if it has a low barrier to entry?

I would reckon not. But let's keep in mind that the financial barrier isn't the only barrier to entry. There's skill (technical, industry-specific, etc), time (to get it working, etc), and so on. There's always something out there that can be done on a low budget and eventually grown into something substantial.

Also, I would argue (sorry Dave ) that the goal doesn't necessarily have to be a high income stream. It can be any income stream, provided that the income is greater than the sum of the expenses. If you've achieved THAT and can duplicate your results, you have sustainable growth.

[Dave A]

We're thinking along similar lines... but here is the catch.

If the barrier is skill and you hope to duplicate your way up to better income, the skill has to be transfered. And doing that and keeping it in your system isn't as simple as you might think.

[Norri]

We're thinking along similar lines... but here is the catch.

If the barrier is skill and you hope to duplicate your way up to better income, the skill has to be transfered. And doing that and keeping it in your system isn't as simple as you might think.

I totally understand what you're saying here but my plan is a leetle more weekid

The idea is that I can use my skill(s) to build a system that makes me money. And then use other people who lack skills to run that system. ie: Affordable people

[Alta Murray]

True, but it depends on the industry, and Ian don't have to buy a commercial property where as you would have to, however, it is still a better option than putting your pennies in someone else's pocket, just do the math. If it is possible in your industry to do so, I would highly recommend it. We have 3 big clients in hydraulics who own their own properties, granted two of the three are second generation businesses, but the 3rd played it very smart and obtained his own property. Clever move, and all he did was to keep on doing the math, and check I am not going off topic, he obtained a fixed asset to generate the needed income. You can only do things like that it you have a holistic view of your business and you have the ability to do drill-down projections though. Capital outlay on fixed assets can not strangle the business, so it takes some time before you enter the break-even phase, so you have to take that into account. Life span of fixed asset too, for it will be a sad day if you break-even only then to replace the fixed asset at an expense again

Barriers are sometimes erected by people in a specific industry, and those are very difficult to scale.

High risk:= High return has held true for centuries now, so perhaps there is some wisdom in that. The only element I could find to pull that equation out of sync, is to have a product that is completely new, and time becomes an element with incrimental growth as a result as opposed to high risk. Being the first brings its own risks, but it can not be termed high risk.

Norri, I would love to do some more reading, but I have literally a stack of books I am working through at this stage, so it will have to wait, but I will try and find the gist of it along the lines. I remain a steadfast Caincross fan though, nothing much has changed since it's conception.

Sustainable growth? Mmmm.....too many elements impacting on that scenario, so I will never work on that as a given, no constant in that for me, but you might differ?

As for passing skills etc. on and keeping it as your own, that is easy as far as I am concerned. Intellectual property is protected and that is why we have lawyers.