Last week, I suggested that it takes more than an idea – even if it’s a really fantastic idea – to attract potential investors. You need to prove that your idea has legs by turning it into a working model.
From rags to riches. Redemption. An exciting story. A happy ending. These are things that make good movies, not good stocks.
Were you tempted to buy Bank of America, GM, or GE? Or wannabe giant-killer American Micro Devices that had Intel on the ropes for a few shining months?
One of the most commonly asked questions we get at ETR from would-be entrepreneurs is: “How do I get money for my business idea?”
We’ve answered it before, but it’s worth answering again because the question keeps coming. Let’s start with a bit of harsh truth: It isn’t easy.
Professional investors got taken to the cleaners by the former head of NASDAQ, hedge fund manager and scam artist Bernie Madoff. They should have known better. But before you point fingers at these supposedly sophisticated investors who lost billions to a cheat, ask yourself this: Do you do even the minimum due diligence before you invest in a fund? (I don’t care who told you about it. Trust no one except yourself.)
I’m an entrepreneur, and I’ve been involved in at least a dozen profitable enterprises over the years. But the business I’ve been in for the last five years is by far the best. Let me give you an idea of just how powerful this business is. After the costs of creating and selling my products, I am still able to bring in a 95 percent profit. What’s more, this business has proven to be successful… even in a struggling economy. (In 2008, though the economy was crumbling, mine continued to bring in about $12,000 a month.)
I just spent a week with family – mostly my sister’s boys and their wives and kids.
I was sitting in my sister’s living room, watching the grandnieces and grandnephew play (ages 2, 4, and 6) with rambunctious glee… and I realized that all the adults were reading books.
What does your office say about you? That you are orderly and businesslike? Messy but creative? Hopelessly overwhelmed?
On Sunday morning, I was reviewing my daily motivational quotes when I stumbled across this one: “Enjoy life. Treat it as an adventure. Care passionately about the outcome, but keep it in perspective. Things are seldom as bleak as they seem when they are going wrong – or as good as they seem when they are going well. Lighten up. You’ll live longer.”
Getting steady income from dividend-paying stocks is getting harder. During the entire year of 2007, only seven companies in the S&P 500 cut their dividends, and only three did away with them entirely. 2008 was a different story. 39 companies cut their dividends, and 22 suspended them. 2009 promises to be just as bad.
Why do some people retire rich and most people retire poor? This question has fascinated philosophers, mystics, and teachers throughout the ages. There have been so many men and women – hundreds or thousands, maybe even millions – who started with nothing and became financially independent that people are naturally curious to know why it happened and if there are common rules or principles that others can apply to become wealthy as well.