What's your job profitability? Do you know?
Many business owners are unsure of their profitability at a company or job level. They "think" they are making money because they have a few dollars in their checking account. Having money in your checking account doesn't mean you are profitable. It might simply mean you haven't paid all the bills yet, so you have a little cash. Cash and profit are two different concepts. If you don't know your exact income and expenses for each job and your overall business, then how can you know whether you are making a profit? And, if you aren't profitable, your business won't last long.
Analyze Each Job
Regardless of the size of your business or your industry, profitability is something you should be monitoring on a monthly basis. To determine your profit, you must know how much you make and spend on each job. Expenditures should be tracked for direct labor and material costs on each job. In addition, you should also be tracking overhead costs and allocating them to your various jobs as applicable. There is always going to be some general overhead, but too often dollars are thrown into general overhead, when those dollars could easily be attached to specific jobs.
Intuit's QuickBooks software program has easy-to-use features that allow you to do job-costing for time and materials, so you don't have to worry about having to track it all manually. Rely on tools to help you run your business more efficiently and effectively.
Are you curious how you are doing with job costing measurements? Here are some quick and easy questions to gauge your job costing performance:
1. Do I track each customer's revenue information through a detailed invoice?
2. Do I have a way of breaking down my direct job materials cost by customer?
3. Do I associate all time spent to each job accurately with actual dollar amounts?
4. Do I have access to reports to monitor profitability on each job in a timely manner?
5. Do I have a way to trend the fluctuations in job profitability from job to job, month to month, etc?
If you answered "no" to any of these, then it's time for you to take an objective look at your financial goals. It's time for you to implement a job costing mechanism to help you answer "yes" to all these questions. How can you track your profitability and long-term growth plans if you don't have detail at a job level?
QuickBooks Can Help
Here are some easy ways to utilize QuickBooks effectively to help you with your job-costing process:
1. Set up the QuickBooks Item list so that you'll have both an expense and an income aspect to each of the items. This will allow you to track your costs and your income, and will provide you profit by item.
2. Record your sales through the invoicing or sales receipt process. This will record the income aspects of the items.
3. As you purchase the product or service items, make sure that you utilize the Items tab so that it will record the cost to the appropriate item. In addition, make sure to assign your customer/job information to each line item so that you'll have the costs associated to the appropriate customer/job for job-costing.
4. Utilize the time-tracking mechanism in QuickBooks so that you and your employees can track time by item and customer/job. No dollar value is associated with this time until you actually pay the employees within QuickBooks.
5. QuickBooks has preformatted reports that you can access to have job-costing information right at your fingertips. These are found under the Reporting menu and the Jobs/Time/Mileage option.
6. QuickBooks has the ability to provide reports for any time period you select. This will allow you to have a variety of detail over the growth of your business and to produce trending reports. You can modify the report as needed to meet your needs.
A good accounting professional can help you understand what these reports are telling you, in terms that you can use. Reports alone don't provide value if you don't understand them. So it is key that you understand the reporting information and how you can use that information to assist you in decision-making as you grow your business profitably.
Job-costing is easier when you set-up your accounting/bookkeeping software package and know how to use it. So, challenge yourself today to become more adept at running a financially savvy business through job-costing. Then, you'll know, without a doubt, whether your company is profitable.
Tuesday, October 28, 2008
How to Prepare a Business Plan
If you're about to start a business (or approach a financial institution for funding to expand your existing business), then you must have a business plan. Your plan allows you to set your goals, assess your strengths and address your weaknesses.
You wouldn't set out on a journey not knowing where you were going, yet many people establish a business with no real concept of what they want to achieve or how they'll achieve it.
The outline below shows what you need to include in your business plan; use it to gather the appropriate information so that you get your business off to the best start.
EXECUTIVE SUMMARY
Quote (about your vision for the business)
What already exists
The niche -- as you see it and benefits your business will bring
Type of business proposed -- benefits you will bring to the market niche
Overall financial goals -- anticipated sales and profits
Funds required to start up business
BUSINESS PROFILE
Business name
Principals
Description of business: • what it aims to do• its target market
Vision -- ultimate goals
Mission -- value, service you'll offer
Competitive advantage you have -- e.g. flexibility, able to draw on wide base of talents, connections in the industry etc.
SWOT analysis [Strengths Weaknesses Opportunities Threats](Be honest with these, but only put in threats, weaknesses that you know you can meet and overcome successfully)
Objectives:• at the end of the first 12 months of operation• after 12 months
PRODUCT AND MARKET ANALYSIS
Product / Service -- description of what you're offering
Features
Benefits
Price structure
Industry description and outlook
Market demand -- percentage of market you think you can capture; competition share you think you can take etc.
OPERATING PLAN
Resource requirements:• what you need in order to operate• what this will cost
List items and specify prices (tables etc)
MANAGEMENT PLAN
Manning levels:• details of staff required• training needed
Experience of managers and their skills
MARKETING PLAN
Divide this into: Internal - how you'll win repeat customers and referrals
External - how you'll get new customers
Impact - how you'll target specific groups
Detail how you'll go about targeting and selling to each group e.g.
Service levelsVouchersHand-outsMusicDecorEntertainmentSpecial add-onsEtc.
Publicity and direct approaches you'll make (specify targets e.g. music schools etc)
Promotion (e.g. freebies, discounts, buy one get one free, every 6th something free, charity performances, openings etc)
The actual product / service you're selling
FINANCIAL PLAN
Details:• Projected sales• Projected costs• Projected profits
Give SPECIFIC details e.g. break down into gross profits, overheads, net profits etc.
ACTION PLAN
Use table to show:• Activities to be carried out• When these will be done • Who will do each
Give a chronological sequence of action to show how you plan to start and develop the business.
Provide plenty of graphs (use different styles), tables, facts and figures.
Get info from Bureau of Statistics on demography, socio-economic groups, age etc etc.
Have AN appendix and include any extra details (for example: newspaper cuttings about bands bemoaning the fact that they can't get their CDs cut etc).
By following this outline, you'll have a realistic goal for your business ... and your bank manager!
You wouldn't set out on a journey not knowing where you were going, yet many people establish a business with no real concept of what they want to achieve or how they'll achieve it.
The outline below shows what you need to include in your business plan; use it to gather the appropriate information so that you get your business off to the best start.
EXECUTIVE SUMMARY
Quote (about your vision for the business)
What already exists
The niche -- as you see it and benefits your business will bring
Type of business proposed -- benefits you will bring to the market niche
Overall financial goals -- anticipated sales and profits
Funds required to start up business
BUSINESS PROFILE
Business name
Principals
Description of business: • what it aims to do• its target market
Vision -- ultimate goals
Mission -- value, service you'll offer
Competitive advantage you have -- e.g. flexibility, able to draw on wide base of talents, connections in the industry etc.
SWOT analysis [Strengths Weaknesses Opportunities Threats](Be honest with these, but only put in threats, weaknesses that you know you can meet and overcome successfully)
Objectives:• at the end of the first 12 months of operation• after 12 months
PRODUCT AND MARKET ANALYSIS
Product / Service -- description of what you're offering
Features
Benefits
Price structure
Industry description and outlook
Market demand -- percentage of market you think you can capture; competition share you think you can take etc.
OPERATING PLAN
Resource requirements:• what you need in order to operate• what this will cost
List items and specify prices (tables etc)
MANAGEMENT PLAN
Manning levels:• details of staff required• training needed
Experience of managers and their skills
MARKETING PLAN
Divide this into: Internal - how you'll win repeat customers and referrals
External - how you'll get new customers
Impact - how you'll target specific groups
Detail how you'll go about targeting and selling to each group e.g.
Service levelsVouchersHand-outsMusicDecorEntertainmentSpecial add-onsEtc.
Publicity and direct approaches you'll make (specify targets e.g. music schools etc)
Promotion (e.g. freebies, discounts, buy one get one free, every 6th something free, charity performances, openings etc)
The actual product / service you're selling
FINANCIAL PLAN
Details:• Projected sales• Projected costs• Projected profits
Give SPECIFIC details e.g. break down into gross profits, overheads, net profits etc.
ACTION PLAN
Use table to show:• Activities to be carried out• When these will be done • Who will do each
Give a chronological sequence of action to show how you plan to start and develop the business.
Provide plenty of graphs (use different styles), tables, facts and figures.
Get info from Bureau of Statistics on demography, socio-economic groups, age etc etc.
Have AN appendix and include any extra details (for example: newspaper cuttings about bands bemoaning the fact that they can't get their CDs cut etc).
By following this outline, you'll have a realistic goal for your business ... and your bank manager!
Trading Computers for Profit
My own core business is in reselling computers for regular fast profits. In fact the business reached the seven figure mark a few years ago. Now I resell repossessed and liquidated PCs, Notebooks-Laptops on a daily basis having established an elite core of reliable suppliers, in Europe, UK, Canada and the USA. In fact, you can operate the business in any democratic country in the world.
It's a very simple business and there's really nothing to prevent you from starting your own liquidated resale business just as I have done.
Your chance to produce an annual income from your own home, or even from a commercial unit, reselling computers and software for profit is a definite possibility. Not only that but I will also tell you in this article where to lay your hands on valuable merchandise at rock-bottom trade prices.
Unlike most other businesses which require a great amount of starting capital, there is a proven method you can use to make money almost from day one. No fancy premises are required. Very little capital is needed, as it is possible to start with just a couple of notebooks to resell and then to accumulate seed capital from initial profits made which can be as high as 150 percent on liquidated items.
You can operate a computer trading business from premises or from the comfort of your home. This business is unaffected by slumps and recessions which tend to hurt most other businesses. Our own trade-training website at Beauforts.biz has been up and running for over six years and to date it has been responsible for training over ten thousand dealers to date. Not all of them have been successful, that would be an impossible scenario, but a significant number have, and several have become wholesale dealers themselves.
Sales of computers and computer software remain buoyant despite recent peaks and troughs and show no sign of reaching a peak. In fact it is growing worldwide at a staggering rate. More and more men and women are needed to help in the promotion and marketing of computers and computer related products.
If you haven't done any selling previously don't be concerned about it, there is no shortage of eager, willing buyers. All you need the desire to make regular cash profits. There is definitely no hard-selling involved . . . enthusiasm and a little common sense is really all you need to make good money in the business.
Whether you are a beginner or a pro in the computer business, it is essential when writing to the suppliers and other contacts to type your letters on your business letterhead. Many of the listed contacts will ONLY deal with TRADE and some will need PROOF of your credentials as a bona-fide trader.
You will come across some wholesale ads which specifically state TRADE ONLY. Therefore, you should WRITE on printed business headed notepaper first.
To operate the Business during the Initial stages, you will need nothing other than a couple of duplicate books for sales and purchases, but when progressing into TRADE PURCHASES you should have made sufficient profits to up-grade your business and to afford the costs of ordering printed business letterheads
If you write to a Trade Supplier, it is highly unlikely that they will respond to your letter if it is written on a plain sheet of paper. Remember, as a Trader you have an image to establish . . . your stationery can build up your image or tear it down. Never write to any source in handwritten form.
Never indicate in any letter to any source that you are new to the business . . . this does not infer that you should be dishonest in any way - you simply have no need to tell them anything about your new business other than that you are interested in obtaining trade supplies.
As an example just consider the kind of letters some suppliers receive a scribbled handwritten letter which states "I am thinking of starting a computer dealership ..." He'll still be thinking of it in years from now and such letters are considered a complete waste of time by trade suppliers. What you should do, (even if you are "just thinking about it"), is to write stating that you "intend" to start dealing in computers asking to be placed on their e-mailing list for price-lists, etc.
It's a very simple business and there's really nothing to prevent you from starting your own liquidated resale business just as I have done.
Your chance to produce an annual income from your own home, or even from a commercial unit, reselling computers and software for profit is a definite possibility. Not only that but I will also tell you in this article where to lay your hands on valuable merchandise at rock-bottom trade prices.
Unlike most other businesses which require a great amount of starting capital, there is a proven method you can use to make money almost from day one. No fancy premises are required. Very little capital is needed, as it is possible to start with just a couple of notebooks to resell and then to accumulate seed capital from initial profits made which can be as high as 150 percent on liquidated items.
You can operate a computer trading business from premises or from the comfort of your home. This business is unaffected by slumps and recessions which tend to hurt most other businesses. Our own trade-training website at Beauforts.biz has been up and running for over six years and to date it has been responsible for training over ten thousand dealers to date. Not all of them have been successful, that would be an impossible scenario, but a significant number have, and several have become wholesale dealers themselves.
Sales of computers and computer software remain buoyant despite recent peaks and troughs and show no sign of reaching a peak. In fact it is growing worldwide at a staggering rate. More and more men and women are needed to help in the promotion and marketing of computers and computer related products.
If you haven't done any selling previously don't be concerned about it, there is no shortage of eager, willing buyers. All you need the desire to make regular cash profits. There is definitely no hard-selling involved . . . enthusiasm and a little common sense is really all you need to make good money in the business.
Whether you are a beginner or a pro in the computer business, it is essential when writing to the suppliers and other contacts to type your letters on your business letterhead. Many of the listed contacts will ONLY deal with TRADE and some will need PROOF of your credentials as a bona-fide trader.
You will come across some wholesale ads which specifically state TRADE ONLY. Therefore, you should WRITE on printed business headed notepaper first.
To operate the Business during the Initial stages, you will need nothing other than a couple of duplicate books for sales and purchases, but when progressing into TRADE PURCHASES you should have made sufficient profits to up-grade your business and to afford the costs of ordering printed business letterheads
If you write to a Trade Supplier, it is highly unlikely that they will respond to your letter if it is written on a plain sheet of paper. Remember, as a Trader you have an image to establish . . . your stationery can build up your image or tear it down. Never write to any source in handwritten form.
Never indicate in any letter to any source that you are new to the business . . . this does not infer that you should be dishonest in any way - you simply have no need to tell them anything about your new business other than that you are interested in obtaining trade supplies.
As an example just consider the kind of letters some suppliers receive a scribbled handwritten letter which states "I am thinking of starting a computer dealership ..." He'll still be thinking of it in years from now and such letters are considered a complete waste of time by trade suppliers. What you should do, (even if you are "just thinking about it"), is to write stating that you "intend" to start dealing in computers asking to be placed on their e-mailing list for price-lists, etc.
How To Write The Right Business Plan!
A concrete idea is the first and most important step in regard to any new venture, but there are definitely other distinct components necessary for propelling a business to success. The first is coming up with a good business plan. Although there are many uses for a business plan, the most obvious reason is for the purpose of attracting the attention of investors, financiers or loan companies.
Where Should You Start?
Getting started on a business plan may at first seem like an overwhelmingly difficult challenge but with the proper preparation you can have a great plan together without too much difficulty. One of the best ways to start is by keeping copious notes that refer to every aspect of your new venture. Even if the thoughts that occur to you seem insignificant, keep your ideas in a simple notebook so that when you're ready to put your plan together, all your ideas are in one place.
Description Of Your Business
A description of your business will come under the overview or summary section. Included in this section you will define what your company is about, what it does and what it hopes to achieve. Offer data that explains why you believe you will reach your goals, why you believe you are a sound investment, and why your company has what it takes to make a dent in the marketplace.
This section should also include where you're presently at in your business, your goals and your future intentions as well as your growth potential. As you move forward with your plan be prepared to make revisions.
Product Information
A Product/Service section should include all the details pertaining to your particular product or service. These can include everything from the benefits of your product to the uniqueness of the product to how this product will make a difference in someone's life. This section is very important since a wise investor will quickly see whether there is an inherent return on the money he or she invests.
Marketing Strategies
An extremely important part of a business plan is your marketing strategy. In this section you will explain how you intend to reach your target audience. Keep in mind that it is precisely what it claims, a marketing strategy. Therefore you will be presenting ways in which you plan to promote your business. Whether it's through a web site, press release, advertisements, sales letters, television, radio, direct mail, newspaper or magazines, give precise examples.
The marketing strategy section gives you the opportunity to show how you intend to get the word out. It is the perfect tool you'll need for convincing someone of your ability to reach your target audience.
Competition
You don't have to be afraid of sharing who and what you may be competing against since your business will have a specialty all its own. So be sure to research your competitors. Give examples as to whether your competitors business is growing or diminishing and why.
Perhaps your business is so unique you have no competition, which of course makes you an even more attractive possibility for a loan. In that case you must define why you think this newer service or product will be a success.
Bios
If you have a team of people involved in your organization, they are the most important resource of your company therefore you should include their strengths and experience in addition to what role they'll play in your company. Include bios of all the key decision-makers as bios show an investor how you and your team's experience will help grow your new venture.
Target Market
If you're targeting a specific market here is the place to illustrate who and what that specific market will be. Spell it out in detail. Will it be to the private sector or government contracts? Are you seeking retailers or wholesalers? Are you searching for distributors? If the target market is unlimited, meaning you have no limitations regarding age, profession,income levels or gender, make sure to explain that as well.
The Financial Section
The financial section of your plan is the one that will receive the most detailed scrutiny and investigation. As a beginning place you should ask yourself the following questions: How much money will I need for my start-up venture and how much money will I need to stay in business? Be sure to include complete financial assumptions, statements and projections. A Banker, Investor or Loan Company will carefully review your future forecasts and earning potential so don't skimp on the financials. These calculations will either invite investors or turn them away. It is highly recommended that you utilize the services of an accountant to make sure your financials are done correctly.
In Conclusion
A well put together plan will ensure that you'll be taken seriously, so before you submit your plan to venture capitalists or investors, be sure you convey yourself as dynamic, professional and enthusiastic. Highlight your key points and be prepared to answer any and all questions a potential investor might ask.
Obviously, this is only a brief summation of what a business plan requires. You can include other sections as you progress, but start with these and add as you move forward. Remember, your presentation is of the utmost importance and can mean the difference between attracting the right investor or failing to be heard.
Where Should You Start?
Getting started on a business plan may at first seem like an overwhelmingly difficult challenge but with the proper preparation you can have a great plan together without too much difficulty. One of the best ways to start is by keeping copious notes that refer to every aspect of your new venture. Even if the thoughts that occur to you seem insignificant, keep your ideas in a simple notebook so that when you're ready to put your plan together, all your ideas are in one place.
Description Of Your Business
A description of your business will come under the overview or summary section. Included in this section you will define what your company is about, what it does and what it hopes to achieve. Offer data that explains why you believe you will reach your goals, why you believe you are a sound investment, and why your company has what it takes to make a dent in the marketplace.
This section should also include where you're presently at in your business, your goals and your future intentions as well as your growth potential. As you move forward with your plan be prepared to make revisions.
Product Information
A Product/Service section should include all the details pertaining to your particular product or service. These can include everything from the benefits of your product to the uniqueness of the product to how this product will make a difference in someone's life. This section is very important since a wise investor will quickly see whether there is an inherent return on the money he or she invests.
Marketing Strategies
An extremely important part of a business plan is your marketing strategy. In this section you will explain how you intend to reach your target audience. Keep in mind that it is precisely what it claims, a marketing strategy. Therefore you will be presenting ways in which you plan to promote your business. Whether it's through a web site, press release, advertisements, sales letters, television, radio, direct mail, newspaper or magazines, give precise examples.
The marketing strategy section gives you the opportunity to show how you intend to get the word out. It is the perfect tool you'll need for convincing someone of your ability to reach your target audience.
Competition
You don't have to be afraid of sharing who and what you may be competing against since your business will have a specialty all its own. So be sure to research your competitors. Give examples as to whether your competitors business is growing or diminishing and why.
Perhaps your business is so unique you have no competition, which of course makes you an even more attractive possibility for a loan. In that case you must define why you think this newer service or product will be a success.
Bios
If you have a team of people involved in your organization, they are the most important resource of your company therefore you should include their strengths and experience in addition to what role they'll play in your company. Include bios of all the key decision-makers as bios show an investor how you and your team's experience will help grow your new venture.
Target Market
If you're targeting a specific market here is the place to illustrate who and what that specific market will be. Spell it out in detail. Will it be to the private sector or government contracts? Are you seeking retailers or wholesalers? Are you searching for distributors? If the target market is unlimited, meaning you have no limitations regarding age, profession,income levels or gender, make sure to explain that as well.
The Financial Section
The financial section of your plan is the one that will receive the most detailed scrutiny and investigation. As a beginning place you should ask yourself the following questions: How much money will I need for my start-up venture and how much money will I need to stay in business? Be sure to include complete financial assumptions, statements and projections. A Banker, Investor or Loan Company will carefully review your future forecasts and earning potential so don't skimp on the financials. These calculations will either invite investors or turn them away. It is highly recommended that you utilize the services of an accountant to make sure your financials are done correctly.
In Conclusion
A well put together plan will ensure that you'll be taken seriously, so before you submit your plan to venture capitalists or investors, be sure you convey yourself as dynamic, professional and enthusiastic. Highlight your key points and be prepared to answer any and all questions a potential investor might ask.
Obviously, this is only a brief summation of what a business plan requires. You can include other sections as you progress, but start with these and add as you move forward. Remember, your presentation is of the utmost importance and can mean the difference between attracting the right investor or failing to be heard.
Wednesday, October 15, 2008
"Who Else Is Tired of Life 'Punching' Them in the Face?"
Remember the bloodied face of Randall "Tex" Cobb?
He was a boxer who fought in a championship bout against then heavyweight champ Larry Holmes in June of 1982. It wasn't pretty.
He was beaten so badly his face was barely recognizable after the fight.
As a matter of fact, it was so gruesome that Howard Cosell, the famous sports broadcaster who announced the fight, vowed never to do another boxing match after witnessing such an atrocity...and he didn't.
But "Tex" never went down. Despite the pummeling which featured repeated direct blows to his face, he never hit the canvas. "Tex" Cobb refused to lay down and quit.
"Tex" became something of a cult hero after that performance. He actually became a movie star of sorts. He's made dozens of TV appearances and you may have seen him in such classic films as "Raising Arizona," "Police Academy 4," "Naked Gun 33 1/3," "Ace Ventura: Pet Detective," and many more.
So what's all this got to do with you? Plenty!
Well, how many times has life "punched you in the face" repeatedly?
- You've made plans and then at the last minute your boss needs you to stay late.
- Your relationships may be strained because you work too much.
- Then you don't get a raise for all those late nights because the economy is bad...you're told you should be happy to have a job (what a bunch of B.S.!).
- And somebody else gets the promotion - not because they deserve it - but because they're a butt-kisser and you refuse to play that game.
Do you know what I mean? Surely something like this has happened to you. It's happened to me more times than I care to remember.
Everybody knows life's not fair. Bad things happen to everybody - short or tall, fat or skinny, married or single, male or female.
Disappointment, failure, and loss have no favorite targets. Everyone has an equal opportunity to experience these things. And the good news is this: just like failure...
SUCCESS PLAYS NO FAVORITES
We all have an equal opportunity...no matter what your current situation.
You see, it's not what happens to us that determines success or failure. It's how we respond to the things that happen to us (especially the hardships) that determines our success.
We're surrounded by opportunities, we just have to open our eyes and embrace them. Who would've thought that "Tex" Cobb would be on the silver screen after being knocked senseless on national TV?
That's happened to countless others (both literally and figuratively)over the years and they had the some opportunity as "Tex." They just didn't recognize it and more importantly - they didn't take action to make a positive change in their life.
Well, now you've got another opportunity, another choice to make, another fork in the road.
If your life is perfect in every way, this isn't for you...
But if you're like most people, you know life has more to offer...so if you're tired of being "punched in the face" and you're ready to take control, I can show you several opportunities within your grasp and you can just pick the one you like best. Is that fair?
He was a boxer who fought in a championship bout against then heavyweight champ Larry Holmes in June of 1982. It wasn't pretty.
He was beaten so badly his face was barely recognizable after the fight.
As a matter of fact, it was so gruesome that Howard Cosell, the famous sports broadcaster who announced the fight, vowed never to do another boxing match after witnessing such an atrocity...and he didn't.
But "Tex" never went down. Despite the pummeling which featured repeated direct blows to his face, he never hit the canvas. "Tex" Cobb refused to lay down and quit.
"Tex" became something of a cult hero after that performance. He actually became a movie star of sorts. He's made dozens of TV appearances and you may have seen him in such classic films as "Raising Arizona," "Police Academy 4," "Naked Gun 33 1/3," "Ace Ventura: Pet Detective," and many more.
So what's all this got to do with you? Plenty!
Well, how many times has life "punched you in the face" repeatedly?
- You've made plans and then at the last minute your boss needs you to stay late.
- Your relationships may be strained because you work too much.
- Then you don't get a raise for all those late nights because the economy is bad...you're told you should be happy to have a job (what a bunch of B.S.!).
- And somebody else gets the promotion - not because they deserve it - but because they're a butt-kisser and you refuse to play that game.
Do you know what I mean? Surely something like this has happened to you. It's happened to me more times than I care to remember.
Everybody knows life's not fair. Bad things happen to everybody - short or tall, fat or skinny, married or single, male or female.
Disappointment, failure, and loss have no favorite targets. Everyone has an equal opportunity to experience these things. And the good news is this: just like failure...
SUCCESS PLAYS NO FAVORITES
We all have an equal opportunity...no matter what your current situation.
You see, it's not what happens to us that determines success or failure. It's how we respond to the things that happen to us (especially the hardships) that determines our success.
We're surrounded by opportunities, we just have to open our eyes and embrace them. Who would've thought that "Tex" Cobb would be on the silver screen after being knocked senseless on national TV?
That's happened to countless others (both literally and figuratively)over the years and they had the some opportunity as "Tex." They just didn't recognize it and more importantly - they didn't take action to make a positive change in their life.
Well, now you've got another opportunity, another choice to make, another fork in the road.
If your life is perfect in every way, this isn't for you...
But if you're like most people, you know life has more to offer...so if you're tired of being "punched in the face" and you're ready to take control, I can show you several opportunities within your grasp and you can just pick the one you like best. Is that fair?
Identity Theft: How to Protect Yourself
Identity theft encompasses a wide range of deception, from a stolen credit card used to charge purchases to an existing account, to stolen information used to impersonate the victim, open new accounts (even ones for utilities), and rack up thousands of dollars in debt. With over 500,000 new cases each year (and some say upwards of 900,000), identity theft is one of the fasting growing crimes in America. In many states it isn't even illegal, or hardly punishable if it is. Often the perpetrator goes uncaught and unpunished. Worse still is that it takes on average 12 months for the victim to realize he is a victim and by then it may nearly impossible to climb back out of the black hole of damaged credit, costing hundreds of hours and hundreds of dollars to try to fix it. Sadly, since much of this goes unpunished, companies often write off the bad debt and then charge you and me higher interest rates and fees to cover their losses. So we all are indirect victims of identity theft. The more vigilant we become, the better off we will all be. What can you do to protect yourself from becoming a victim of identity theft? There is no absolute guarantee, but the more precautions you put in place, the harder it will be for someone to steal your information and use it illegally. What follow below are some ideas that you can use to start protecting yourself now. 1. Check your credit reports annually. This is your first and foremost line of defense. Contact the three major credit reporting agencies www.equifax.com, www.experian.com, www.transunion.com every year to obtain a copy of your credit report. Some websites also offer a 3-in-1 report. Go through them carefully, looking for any inaccuracies. Report any problems immediately. Consider asking them to require your permission to issue new credit lines. 2. Protect your Social Security number. Many companies ask for your Social Security number (SSN) to use for recordkeeping. Ask if you can substitute a different number. This is especially true of driver's licenses and health insurance cards. Never give out your SSN to anyone over the phone or internet if you did not initiate the contact. Don't carry your Social Security card with you and don't have your SSN preprinted on your checks (or your phone number either). 3. Protect passwords and PINs. Always protect your passwords and PINs from being seen by others, especially at ATMs. Don't write them down and carry them with you. Do not store passwords on your computer's hard drive. If you need to write them down, store them somewhere else. Passwords should be hard to discover (bad choices: mother's maiden name, birthdates, last 4 digits of SSN or phone number, or a series of consecutive numbers). When possible use a mix of upper- and lower-case letters, numbers, and symbols. 4. Know your billing cycles. Know when to expect your bills. If any of them is late, call the company or agency and check on its status. A late/missing bill could mean that someone has stolen your information and changed the billing address, leaving you unaware of the charges that may be racking up. 5. Shred everything with your information on it. All those credit card applications you receive in the mail and throw away are an open invitation for someone to open an account in your name. Invest in a good cross-cut shredder and shred all documents with any financial information on them, including credit card receipts. Then put the remnants in the yuckiest, ickiest trash you've got to discourage dumpster-divers from stealing them and putting them back together. 6. Make the post office your ally. Deposit outgoing mail at your local post office or in a locked post office drop box. Thieves actually patrol neighborhoods, stealing mail out of mailboxes. A little acid wash, and voila!, they change the amount and the person being paid. Don't give them the chance! If you're going out of town, have the post office put a hold on your mail. Consider getting a post office box or ask your post office about getting a key-operated community mailbox for your neighborhood. 7. Technology doesn't beat everything. Don't give out personal information over cellular/mobile/wireless phones, or cordless phones. (This includes telephone banking.) Their radio frequencies can be easily intercepted, overheard, and hacked. Surfing the internet puts you at risk from hackers breaking into your system; consider purchasing a "firewall" program to protect your computer from outside access. When divulging personal information on the internet (for example, when making a purchase) always look for privacy policies and the little "lock" symbol that indicates your information is secure. Don't use your email address for user IDs on websites; there are "robots" that specifically search for this on sites like eBay to try and trick you into divulging your personal information. You may receive an official-looking email asking you to "verify" or "update" your information. Remember that anyone who already has your information will not ask you to verify it. Always be suspicious of such tactics. The same goes for people who call you and claim to be somebody like a bill collector, government agent, utility worker, etc. If in doubt, call the company they appear to be representing. If you use a laptop computer use a strong password (combination of upper/lower-case letters, numbers, symbols); don't use automatic login; always log off when finished; and don't store financial information on it unless absolutely necessary. When disposing of your personal computer, deleting your personal information usually isn't enough. Use a "wipe" utility program to render files unrecoverable. 8. Be aware of the opportunities to steal your information. Think of all the places that store your personal information, such as the offices of doctors, dentists, accountants, loan officers, health insurance, schools, courts, etc. Ask them how they protect your information. Request that they shred anything with personal information on it when disposing of it. Keep your wallet or purse in a safe place at work; not all of your fellow coworkers are trustworthy. Be aware of the "Good Samaritan" scheme where your missing wallet is returned (after one of your several credit cards is removed; you have so many that you probably won't notice!). Only carry a minimum number of cards and identification with you. 9. If desired, subscribe to a credit monitoring service. If you're really worried about identity theft, consider subscribing to a credit monitoring service. They will regularly notify you of your credit status and anything suspicious that might be going on. 10. Make a list and check it twice. Make list of all your credit card numbers, banking account numbers, and driver's license number with their customer service numbers and keep them in a safe place. That way you'll have a starting place if something should happen to you. Remember, the more vigilant we all are, the more protected we all are. For more information regarding identity theft , see the federal government's website at www.consumer.gov/idtheft.
Sunday, October 12, 2008
For some investors, it's time to get back into stocks
The four most dangerous words for investors are: This time is different.
In 1999, technology companies with no earnings or sales were valued at billions of dollars. But this time was different, investors told themselves. The Internet could not be missed at any price.
They were wrong. In 2000 and 2001 technology stocks plunged, erasing trillions of dollars in wealth.
Now investors have again convinced themselves that this time is different, that the credit crisis will push economies worldwide into the deepest recession since the Depression. Fear runs even deeper today than greed did a decade ago.
But in their panic, investors are ignoring 60 years of history. Since the Depression, governments have become far more aggressive about intervening when credit markets seize up or economies struggle. And those interventions have generally succeeded. The recessions since World War II, while hardly easy, have been far less painful than the Depression.
Now some veteran investors, including G. Kenneth Heebner, a mutual fund manager who has one of the best long-term track records on Wall Street, say that the sell-off has gone much too far and stocks are poised to rally powerfully if the downturn is less severe than investors fear.
"The fact is, there are a lot of tremendous bargains out there," said Heebner, who manages about $10 billion in several mutual funds. Indeed, by many measures stocks are as cheap as they have been in the last 25 years.
He pointed to Chesapeake Energy, a natural gas producer that he owns in his CGM Focus mutual fund. In July, Chesapeake traded for $63 a share. On Friday, it fell as low as $11.99.
He says that investors with a stomach for risk and a long time horizon should consider following Warren Buffett, who in the last three weeks has invested $8 billion in Goldman Sachs and General Electric.
Heebner expects world economies to contract over the next year. But he said the market plunge in the last week was no longer being driven by rational analysis. Stocks are probably falling because of a combination of panic and forced selling by hedge funds that must meet margin calls from their lenders, he said.
Heebner's funds have not avoided the carnage this year. The CGM Focus fund is down about 42 percent so far in 2008. But his long-term track record is impressive. In the decade that ended Dec. 31, 2007, CGM Focus rose 26 percent a year, including reinvested dividends, making it among the best-performing mutual funds.
Heebner is not alone in his optimism.
"I think in years to come — I wouldn't say months to come — we will perceive this as being a great value-buying opportunity," said David Stowell, a finance professor at Northwestern and a former managing director at JPMorgan Chase. "Two and three years from now, it will seem very smart."
Even before their jaw-dropping plunge of the last month, stocks were not expensive by historical standards, based on fundamentals like earnings and cash flow. Now, after falling 30 percent or more since early September, stocks in stalwart, profitable corporations like Nokia, Exxon Mobil and Boeing are trading at nine times their annual profits per share or less. Many smaller companies are even cheaper. Some of those stocks are trading at five times earnings or less.
Those ratios are historically low. Over all, the Standard & Poor's 500-stock index is trading at about 13 times its expected profits for 2009, its lowest level in decades. In contrast, at the height of the technology bubble in early 2000, the stocks in the S&P traded at about 30 times earnings, the highest level ever. At the same time, the 10-year Treasury bond paid about 6 percent interest, compared with less than 4 percent today.
Investors have fled stocks in favor of government bonds, insured bank deposits and other low-risk investments because they are deeply afraid of the worldwide economic crisis, said Stephen Haber, an economic historian and senior fellow at the Hoover Institution. But he said he believed that fear might have gone too far.
"If there is good and wise policy, and government moves effectively, this need not play itself out in ways like the Great Depression, which is the image that is playing itself out in people's mind," Haber said. Government action typically does not work immediately, and banking crises around the world often require multiple interventions, he said.
Still, optimists remain in the minority on Wall Street. Most investors seem to believe that the credit crisis will do substantial damage to stocks and overall economic activity.
"We have never before seen for such sustained periods of time such a sustained turn away from risk taking," said Steven Wieting, the chief United States economist for Citigroup. "This has broken out of the boundaries we've seen." Economic activity appears to have slowed sharply in September, Wieting said.
The panic last week took the biggest toll on financial companies, as well as companies that are highly leveraged. But stocks fell 10 to 30 percent even for companies typically thought to be resistant to economic downturns, like the manufacturers of consumer staples.
For example, Newell Rubbermaid fell to $12.82 on Friday from $17.34 on Oct. 1, a 26 percent decline in 10 days. Newell Rubbermaid now trades at its lowest levels since 1990, and just eight times its expected earnings for next year.
Yet Newell Rubbermaid, whose brands include Calphalon, is profitable and insulated from the credit crisis, said William Schmitz Jr., who follows household products companies for Deutsche Bank. "There's really no balance sheet risk," Schmitz said. The company also pays a 6 percent dividend.
Newell Rubbermaid said in July that it would earn $1.40 to $1.60 a share for 2008, excluding restructuring charges. For 2009, stock analysts predict it will make $1.53 a share. And while a slowing economy may mean that people will be buying fewer products from Newell Rubbermaid, the recent plunge in oil prices will reduce its costs, Schmitz said.
"The way the stock's reacted, you'd think they were going out of business," he said.
Martin Whitman, a professional investor for more than 50 years, said that as long as economies worldwide could avoid an outright depression, stocks were amazingly cheap. Whitman manages the $6 billion Third Avenue Value fund, which returned 10.2 percent annually for the 15 years that ended Sept. 30, almost two percentage points a year better than the S&P 500 index. The fund is down 46 percent this year.
"This is the opportunity of a lifetime," Whitman said. "The most important securities are being given away."
In 1999, technology companies with no earnings or sales were valued at billions of dollars. But this time was different, investors told themselves. The Internet could not be missed at any price.
They were wrong. In 2000 and 2001 technology stocks plunged, erasing trillions of dollars in wealth.
Now investors have again convinced themselves that this time is different, that the credit crisis will push economies worldwide into the deepest recession since the Depression. Fear runs even deeper today than greed did a decade ago.
But in their panic, investors are ignoring 60 years of history. Since the Depression, governments have become far more aggressive about intervening when credit markets seize up or economies struggle. And those interventions have generally succeeded. The recessions since World War II, while hardly easy, have been far less painful than the Depression.
Now some veteran investors, including G. Kenneth Heebner, a mutual fund manager who has one of the best long-term track records on Wall Street, say that the sell-off has gone much too far and stocks are poised to rally powerfully if the downturn is less severe than investors fear.
"The fact is, there are a lot of tremendous bargains out there," said Heebner, who manages about $10 billion in several mutual funds. Indeed, by many measures stocks are as cheap as they have been in the last 25 years.
He pointed to Chesapeake Energy, a natural gas producer that he owns in his CGM Focus mutual fund. In July, Chesapeake traded for $63 a share. On Friday, it fell as low as $11.99.
He says that investors with a stomach for risk and a long time horizon should consider following Warren Buffett, who in the last three weeks has invested $8 billion in Goldman Sachs and General Electric.
Heebner expects world economies to contract over the next year. But he said the market plunge in the last week was no longer being driven by rational analysis. Stocks are probably falling because of a combination of panic and forced selling by hedge funds that must meet margin calls from their lenders, he said.
Heebner's funds have not avoided the carnage this year. The CGM Focus fund is down about 42 percent so far in 2008. But his long-term track record is impressive. In the decade that ended Dec. 31, 2007, CGM Focus rose 26 percent a year, including reinvested dividends, making it among the best-performing mutual funds.
Heebner is not alone in his optimism.
"I think in years to come — I wouldn't say months to come — we will perceive this as being a great value-buying opportunity," said David Stowell, a finance professor at Northwestern and a former managing director at JPMorgan Chase. "Two and three years from now, it will seem very smart."
Even before their jaw-dropping plunge of the last month, stocks were not expensive by historical standards, based on fundamentals like earnings and cash flow. Now, after falling 30 percent or more since early September, stocks in stalwart, profitable corporations like Nokia, Exxon Mobil and Boeing are trading at nine times their annual profits per share or less. Many smaller companies are even cheaper. Some of those stocks are trading at five times earnings or less.
Those ratios are historically low. Over all, the Standard & Poor's 500-stock index is trading at about 13 times its expected profits for 2009, its lowest level in decades. In contrast, at the height of the technology bubble in early 2000, the stocks in the S&P traded at about 30 times earnings, the highest level ever. At the same time, the 10-year Treasury bond paid about 6 percent interest, compared with less than 4 percent today.
Investors have fled stocks in favor of government bonds, insured bank deposits and other low-risk investments because they are deeply afraid of the worldwide economic crisis, said Stephen Haber, an economic historian and senior fellow at the Hoover Institution. But he said he believed that fear might have gone too far.
"If there is good and wise policy, and government moves effectively, this need not play itself out in ways like the Great Depression, which is the image that is playing itself out in people's mind," Haber said. Government action typically does not work immediately, and banking crises around the world often require multiple interventions, he said.
Still, optimists remain in the minority on Wall Street. Most investors seem to believe that the credit crisis will do substantial damage to stocks and overall economic activity.
"We have never before seen for such sustained periods of time such a sustained turn away from risk taking," said Steven Wieting, the chief United States economist for Citigroup. "This has broken out of the boundaries we've seen." Economic activity appears to have slowed sharply in September, Wieting said.
The panic last week took the biggest toll on financial companies, as well as companies that are highly leveraged. But stocks fell 10 to 30 percent even for companies typically thought to be resistant to economic downturns, like the manufacturers of consumer staples.
For example, Newell Rubbermaid fell to $12.82 on Friday from $17.34 on Oct. 1, a 26 percent decline in 10 days. Newell Rubbermaid now trades at its lowest levels since 1990, and just eight times its expected earnings for next year.
Yet Newell Rubbermaid, whose brands include Calphalon, is profitable and insulated from the credit crisis, said William Schmitz Jr., who follows household products companies for Deutsche Bank. "There's really no balance sheet risk," Schmitz said. The company also pays a 6 percent dividend.
Newell Rubbermaid said in July that it would earn $1.40 to $1.60 a share for 2008, excluding restructuring charges. For 2009, stock analysts predict it will make $1.53 a share. And while a slowing economy may mean that people will be buying fewer products from Newell Rubbermaid, the recent plunge in oil prices will reduce its costs, Schmitz said.
"The way the stock's reacted, you'd think they were going out of business," he said.
Martin Whitman, a professional investor for more than 50 years, said that as long as economies worldwide could avoid an outright depression, stocks were amazingly cheap. Whitman manages the $6 billion Third Avenue Value fund, which returned 10.2 percent annually for the 15 years that ended Sept. 30, almost two percentage points a year better than the S&P 500 index. The fund is down 46 percent this year.
"This is the opportunity of a lifetime," Whitman said. "The most important securities are being given away."
The Truth About the Falling Dollar - How You Can Still Make Money
Please - whatever you do - don't let the depressing facts about the dollar keep you from making money in 2008. What the pessimistic press isn't telling you is how you can profit from the lowest dollar in 15 years. There is a extraordinary opportunity heading your way if you know how to seize it. But first let me explain how the falling dollar really works. Then you'll see with your own eyes how you can profit. A falling dollar does two things: * Makes foreign imports more expensive * Makes US exports cheaper on the world market The chain reaction not only increases sales of U.S. goods around the world but also creates more jobs for Americans. The end result increases the profits of U.S. multinationals. And that's just the half of it. Because a cheaper dollar makes foreign products more expensive, Americans buy more American goods as well-creating even more U.S. jobs. On a purely psychological level, it does even more than that: It creates greater investor and consumer confidence, as more Americans are working, more consumers are spending, and more American companies are profiting. On top of that, a falling dollar has one potentially bigger benefit. It reduces the trade deficit, further strengthening the economy. And while there are others who might take exception to my simple explanation, they'll certainly agree on this: American exporters will make out like bandits. And it's all because American goods become much cheaper and the world buys more of them. The only unfortunate thing being that Oil is at an all time high also and has depressed some sectors of our economy. Consumer Confidence being one of them, but overall the low dollar has helped our economy. Have you noticed that whenever the dollar hits a new low, the price of oil reaches a new high? It's no coincidence. As the U.S. economy slows, the Fed is cutting interest rates to shore up the housing market and stave off the credit mess. But in so doing, the Fed further weakens the U.S. dollar's value. This is something the Fed needs to be careful about. The faster they cut interest rates, the weaker the dollar gets, which fuels oil's rocket-ride skyward. That's because crude oil is traded in U.S. dollars. When the dollar is low, other currencies are stronger, which basically means that people in other countries can buy more oil for less money. And that's what's happened. Although the weak U.S. dollar/rising crude oil correlation has been with us since late 2002, it really became noticeable in 2007. This correlation has been utterly amazing to the point that if the U.S. dollar slips during the day, you can expect crude oil prices will correspondingly rise. Yikes! Clearly, the OPEC folks do not care if the dollar weakens, since the more the dollar falters, the more profits they see. So what the Fed needs to watch out for is cutting interest rates too much, because the dollar will likely weaken further, and then oil could soar past $150 per barrel. $5 per gallon gasoline seems very likely this summer-certainly, no one wants that! In a similar way, almost all commodities are traded in U.S. dollars, so as the U.S. dollar weakens, commodity prices have soared. According to the Bank for International Settlements, the dollar is involved in 86% of the $3.2 trillion in daily currency transactions around the world, often as a middle step in exchanges between two other currencies. While this is down from 90% in 2001, no other currency comes close to impacting currency and commodity transactions. Clearly, thanks to the fact that the U.S. dominates commodity trading, there is really no other global currency with enough excess reserves to supplant the U.S. dollar as the world's largest reserve currency. As a result, as the dollar softens, commodity and oil prices rise correspondingly. As the falling dollar makes American goods cheaper all over the world, the U.S. agricultural sector will take off. How can this be? Because the American agricultural industry lies at the crossroads of three global trends: 1. the falling dollar 2. rising food costs 3. rising oil prices. As a result, the manufacturers of farm equipment as well as the producers of fertilizer and genetically engineered corn seeds will be take-to-the-bank winners. Our three top performers in this sector will make money hand over fist. However, the biggest moneymakers of all will be the producers of improved seeds for growing crops. The reasons are quite obvious. To understand why demand for corn and corn products is rising exponentially and our #1 pick could double your money in 12 months, you need only consider these two simple factors: First, we eat fairly well here in the U.S., both China and India face food shortages brought on by population growth, water shortages and smaller harvests. As the old saying goes, "If you give man a fish, you feed him for a day. If you teach him how to fish, you feed him for life." This is why I believe that the biggest opportunity lies in genetically modified seeds. The reason is simple: Genetically modified seeds not only increase crop yields, but also increase nutritional value while reducing susceptibility to crop-killing pests. Because growing your own food increases your country's food security, demand is exploding. Today, more than 8 million farmers in 17 million countries grow genetically engineered crops on 200 million acres-a 20% increase from a year ago. However, this number is expected to double by 2010, driven by China's expected approval to grow genetically engineered crops. That's just one reason why corn prices are exploding. As you can see the weak dollar isn't all bad especially for the smart investor. There are plenty of Investor Newsletters out there that will give you more detailed information on which companies and which markets will explode due to these current factors. Currencies are still a good option here because of the historical data showing that the dollar will bounce back at some time and that it will be a major move. If you chart the dollar versus the Euro you will see that soon we will be in the prime position to invest a little amount of money and ride it up to Thousands of Dollars.
Mind over Money
Success in America means different things to different people but generally comes down to achieving our desires, or how much control we have over the important things in our life, whether it is acquiring real estate, spending time with family or the freedom to pursue your dreams. To quote a very successful author, “There is no desire that anyone holds for any other reason than that they believe they will feel better in the achievement of it. Whether it is a material object, a physical state of being, a relationship, a condition, or a circumstance—at the heart of every desire is the desire to feel good. And so, the standard of success in life is not the things or the money—the standard of success is absolutely the amount of joy you feel.” - Esther Hicks, Ask and it is Given A study of thousands of financially successful and unsuccessful individuals revealed that the difference between them derived more from the difference in their personal financial philosophy than from the work they did or the particular investments they made. So, what is a personal financial philosophy? The definition of philosophy is a love and pursuit of wisdom by intellectual investigation and moral self discipline. A personal financial philosophy then is our personal relationship to money and how we intend to use it to achieve the things or situations we desire, or that make us feel good. From birth we have been preoccupied with acquiring wealth, from toys to houses, helping define our current financial philosophy. For example, you may have been raised with all the money and possessions one could want, or maybe you came from a single-parent home where money was tight and you had less than most of your peers. You may have injured someone using the power that money and wealth can give, or you may have been injured by someone using financial advantage in a ruthless or unprincipled way. All of these experiences have helped define your personal financial philosophy. Other common beliefs that may have helped shape your philosophy are: money is the root of all evil, money doesn’t grow on trees, he who has the GOLD makes the rules, it is easier for a Camel to fit through the eye of a needle than for a rich man to enter heaven and so on. Each of us has a unique financial philosophy either because we were given one by our parents or developed one through our personal life situations. Regardless of how our philosophy evolved, each of us has the personal responsibility to identify what our personal financial philosophy is, and then ask ourselves if our current philosophy is inline with our goals and desires. Gandhi stated, “A man is but a product of his thoughts, what he thinks he becomes.” It is our responsibility to project the feelings, emotions and thoughts that reflect the results we desire in life—this is how to put mind over money.
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