The 13 Most Interesting Facts In Business

Cash is more important than profit.

Even a profitable company can struggle without generating sufficient cash flow. I worked with a highly successful residential plumbing company for several years- who doesn’t need plumbing? Clients must be falling out of the sky, right?

But there was a problem: the firm had taken on a huge commercial plumbing project, and the firm had lost money on the client. It was so much money (and lost cash) that the firm struggled to make payroll each month. Eventually, the owner brought in a partner, who invested the cash needed to operate each month.

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Businesses have to forecast and monitor cash- it’s more important than profit.

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Why Do So Many Young Entrepreneurs Think Their Ideas Are Worth Billions?

I like to refer to my son as a “hit and run” cook, because he makes a big meal and leaves a huge mess. He means well- and the food’s good- but the process isn’t well organized.

I see a lot of entrepreneurs who use this same approach, because some of them seem to be driving 70 miles an hour in a 30 MPH zone. These people have an idea, they’re in a hurry (because it’s a billion dollar idea) and they don’t think about the business carefully.

Thinking is hard.

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How To Take Charge Of Your Investment Asset Allocation

Choosing the right investment strategy is the key to reaching your investment goals by reducing risk and generating more revenue. The first step is to understand the definition of asset allocation, a term that will help you choose the right strategy and generate better returns.

What is Asset Allocation?

Asset allocation is the strategy of classifying and dividing the portfolio, into asset classes. These asset classes can be stocks, commodities, currencies, bonds, and money market securities.

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The One Accounting Skill All Stock Market Investors Need

Wall Street Two Signs

Investing and accounting go hand and in hand. Yet while many investors spend time looking at balance sheets and income statements, there’s one accounting skill that isn’t often talked about. And in my experience, it’s incredibly important to security analysis investing success!

So what is this mysterious accounting ability? Well, to put it simply, it’s about translating business accounting ratios and popular financial metrics into an easy-to-understand narrative that describes what’s happening. And although this can take some practice, it’s probably easier than you think.

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Is School Useless?

How many times is that guy going to say the word “congruent”?

I was sitting in a Panera a week ago, and overheard a conversation between two people in their early 20s. I wasn’t eavesdropping- the dude with the earnest look on his face and the goatee seemed to be talking a little too loud on purpose. Like he wanted people to hear him…

I tried to tune it out and listen to music on my headphones, but after the second use of the word congruent, I turned off my music. Now I was eavesdropping, but I kept the headphones in so I wouldn’t be noticed (c’mon you’ve done it too).

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What Lottery Tickets And A Range Rover Teach Us About Personal Finance

I saw a guy walking to his brand new Range Rover as he scratched off lottery tickets he’d just bought at the gas station. As I filled up my Honda, I watched as he got into his Range Rover- because I just wanted to convince myself that it was his car.

Now, I came up with these pressing questions and I really wanted to investigate:

  • Is he wealthy? Maybe he’s leveraged to the max and only leasing a Range Rover.
  • If he’s wealthy, did he get that way by playing the lottery? Odds are that he didn’t. This website states that the odds of winning the Missouri Lottery (my home state) are 1 out of millions, depending on the game you play. So, the answer is probably a no.
  • Did he get wealthy through some other means (work, inherited wealth, etc.) – and he simply plays the lottery for fun? That’s probably it.

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How Can I Make A Living By Starting An Online Business?

After years of struggle trying to build a business presence online, I’ve started to have a little success based on one key point:

Succeeding online isn’t a whole lot different than building a “brick and mortar” product or service business.

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Now, I’ll grant you, the delivery method online is very different from delivering a product or service from a storefront or through word-of-mouth referrals.

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What Ron Burgundy Teaches Us About Mutual Funds (Hint: It’s not an old wooden ship)

Wall Street Two Signs

Ron Burgundy believed that diversity was old wooden ship, but diversity is also a great reason to invest in mutual funds. (kinda wish that they would have asked Brick Tamland for his opinion).

I answered this question on Quora.

To answer this question, I’ve explained mutual funds and also provided a tool you can use to find the best performing mutual funds. Prateek Mehta makes a great point in his Quora response, which is that there no specific mutual fund for every investor. Also, keep in mind that past performance does not guarantee future performance.

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What Is The Best Way To Make Money?

There are many money-making paths you can go down, but you’ll be miserable if you pick the wrong one. If the path you choose feels like drudgery, you probably won’t succeed.

I loved how Mladen Adamovic started this answer to this question, because it illustrates how we all have our own biases about business ideas. Remember the advice Dustin Hoffman got in The Graduate?

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What Are The Best Investment Blogs and Websites?

Skimming the online version of The Wall Street Journal each day will have a massive impact on your ability to understand investing.

“Well, that’s a pretty bold statement.”

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