Showing posts with label Entrepreneurship. Show all posts
Showing posts with label Entrepreneurship. Show all posts
Millionaires Next Door
Posted On Wednesday, April 13, 2011 at by Sun Jun
The Millionaire Next Door: The Surprising Secrets of America's Wealthy
by: Thomas J. Stanley, Ph.D. and William D. Danko, Ph.D.
In this book, the two authors set out to look for and find out the profiles of the truly wealthy in America. They have discovered who the wealthy really are and who they are not. For one, they figured out that many people living in expensive houses and who drive luxury cars do not actually have that much wealth. They defined wealth as the amount of assets that you accumulate. This is different from your income which is the amount of money that you receive. In essence, those that have high incomes does not necessarily translate to wealthiness. So who therefore are the truly wealthy? Who are the millionaires of the world? Read on to find out and receive interesting tips for would-be entrepreneurs at the end of this post.
According to doctors Thomas Stanley and William Danko, it is "seldom luck or inheritance or advanced degrees or even intelligence that enables people to amass fortunes. Wealth is more often the result of a LIFESTYLE of hard work, perseverance, planning, and, most of all, self-discipline."
Furthermore, they found out that affluent people share seven common denominators in their lifestyles that made them accumulate more wealth.
LIVING BELOW THEIR MEANS
These wealthy people know how to live below their means. They are frugal and not wasteful. Being frugal is the cornerstone of wealth generation. People are led to believe that affluent people have high consumption lifestyles. This is false. Affluent people are actually very frugal. They only spend what they can afford.
In the study, the authors also pointed out the both parents or spouses must posses this quality in order to make it easier to amass wealth for the household. Even if only one spouse is a high consumer, it would a lot tougher to accumulate wealth.
ALLOCATING TIME, ENERGY, AND MONEY EFFICIENTLY.
Millionaires know how to plan, budget, and control expenses. They set out daily, weekly, monthly, and yearly goals. They stick to the plan and push through with it. They became millionaires and maintain their affluent status through this.
In order to build wealth, we must learn to minimize our realized or taxable income and maximize our unrealized income. We can do this by investing in instruments that appreciate in value over time without a cash flow. Examples of these are availing of pension plan, buying commercial real estates, or buying shares of stocks.
On a side note, most millionaires actually don't trade in the stock market. Most actually have a "Buy and Hold" strategy. They buy shares of promising companies and hold them for the long-term.
FINANCIAL INDEPENDENCE RATHER THAN SOCIAL STATUS.
Millionaires are willing to sacrifice a social status and a high consumption lifestyle with financial independence. These people don't actually look and dress like millionaires. They live in not so affluent neighborhoods, they don't drive luxury cars, and they don't wear a suit and tie to go to work.
These millionaires don't accumulate wealth so they can change their lifestyles. They don't want to change the way they live, they just wan to be financially independent.
NO ECONOMIC OUTPATIENT CARE.
Economic outpatient care refers to "substantial economic gifts and acts of kindness some parents give their adult children and grandchildren." Most self-made millionaires didn't receive economic outpatient care from their parents.
According to the book, the more outpatient care the adult children receive, the less likely are they to accumulate wealth. This is because they think of the money they receive as part of their income to spend. As a result, they become high consumption individuals and they tend to spend beyond their means. They also become dependent to their parents and become unproductive individuals.
As enumerated in the book, here are the consequences of providing economic outpatient care to your children:
- Giving precipitates more consumption than saving and investing.
- Gift receivers in general never fully distinguish between their wealth and the wealth of their gift-giving parents.
- Gift receivers are significantly more dependent on credit than are nonreceivers.
- Receivers of gifts invest much less money than do nonreceivers.
CHILDREN ARE SELF-SUFFICIENT
Most self-made millionaires have adult children that are economically self-sufficient. They have children that don't need economic outpatient care. As a result, the entire household can accumulate more wealth.
The book provided suggestions for parents in order to help raise kids into productive and self-sufficient adults:
- Never tell children that their parents are wealthy.
- No matter how wealthy you are, teach your children discipline and frugality.
- Assure that your children won't realize you're affluent until after they have established a mature, disciplined, and adult lifestyle and profession.
- Minimize discussions of the items that each child and grandchild will inherit or receive as gifts.
- Never give cash or other significant gifts to your adult children as part of a negotiation strategy.
- Stay our of your adult children's family matters. (Ex: Grandchildren's education, allowance, etc.)
- Don't try to compete with your children.
- Always remember that your children are individuals. They differ from each other in motivation and achievement.
- Emphasize your chlidren's achievements, no matter how small, not their or your symbols of success.
- Tell your children that there are a lot of things more valuable than money.
PROFICIENT IN TARGETING MARKET OPPORTUNITIES
Millionaires are proficient in pursuing opportunities that exist in the marketplace. The book suggests that people who target the affluent often times become affluent themselves. Furthermore, the book elaborates that while these self-made millionaires are generally frugal, they are not nearly as price-sensitive when it comes to purchasing investment advice and services, accounting services, tax advice, legal services, medical and dental care for themselves and family members, educational products, and homes.
THE RIGHT OCCUPATION
So who are the affluent?
"Most of the affluent in America are business owners, including self-employed professionals. Twenty percent of the affluent households in America are headed by retirees. Of the remaining 80 percent, more than two-thirds are headed by self-employed owners of businesses. In America, fewer than one in five households, or about 18 percent, is headed by a self-employed business owner or professional. But these self-employed people are four times more likely to be millionaires than those who work for others."
Asked on which type of business to pursue, the authors had this to say:
"You can't predict if someone is a millionaire by the type of business he's in. The character of the business owner is more important in predicting his level of wealth than the classification of his business."
The book also showed negative bias for professions that require professionals to look affluent in order to look respectable and gain more clients. Examples of these professions are bankers, physicians, and lawyers. Although people with these profession earn a lot of income, they tend to spend a lot as well just to look affluent. They live in expensive homes, drive luxury cars, and buy expensive clothes. In effect, they tend to accumulate less wealth in the process. The book does not go overboard and say however, that one shouldn't be in this profession if one wants to be a millionaire. In fact, one can be a multi millionaire engaging in such profession. What the book stresses however, is the simple fact that in order to accumulate more wealth and become a millionaire, an individual's lifestyle choice is more important than the amount of income one generates.
For people who want to start their own businesses, the book has these to say:
"Dull companies with steady earnings growth may not make for stimulating cocktail party chatter, but over the long term they make the best investments (Fleming Meeks and David S. Fomdiller, "Dare to Be Dull," Forebes).
"What is risk? Having one source of income. Employees are at risk ... They have a single source of income." Most successful business owners will tell you that they have tremendous freedom and that self-employment is less risky than working for others.
"The most successful business owners we have interviewed have one characteristic in common: They all enjoy what they do. They all take pride in "going it alone.""
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Mang Inasal's Entrepreneurship is all about Attitude
Posted On Wednesday, October 6, 2010 at by Sun JunNothing is impossible with the right attitude. Do not be intimidated by problems. Instead, look at them as opportunities for growth.
Insights from Mr. Edgar J. Sia II, Entrepreneur of the Year 2010 Finalist, and CEO and Chairman of Mang Inasal Philippines, Inc.:
- Market research is helpful. Before putting up Mang Inasal, the company conducted market research in 16 different regions in the Philippines. The research purpose was to find out the different culinary traditions and eating habits of Filipinos nationwide. As a result, they found out that barbeque or inasal in Ilonggo was the type of food with the most potential and mass appeal.
- Early exposure to entrepreneurship is beneficial. Mr. Sia was lucky to be born in an entrepreneurial family. He was exposed to the family business early on at the age of 10. By the age of 20, he was already managing several businesses.
- Aiming high and Thinking BIG! While coming up with the business concept, Mr. Sia made it a point to start a business that had a potential to expand nationwide. In just 3 years he was already able to open 20 branches. And finally in 2005, he started franchising the business. Now, there are around 260 branches nationwide.
- Continuous improvement and development. Despite its success, Mr. Sia knows that a lot can still be done to make the business bigger. The company has a research and development team specifically tasked to ensure the consistency and quality of their food across all branches.
- And most importantly of all, he has that never-give-up attitude which was depicted in his statement above. With the right attitude, one can be a successful entrepreneur (or any other profession for that matter) like Mr. Edgar Sia II. "Attitude is Altitude!"
Source: Business World Online.
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An Entrepreneur's Mindset
Posted On Monday, July 13, 2009 at by Sun JunWhat sets apart a business owner from an employee? A lot has been written about what personalities and traits make up a good entrepreneur. On the first session of my Development of Enterprise class, that was exactly what was discussed by our professor. Coming from someone who is not only a business start up consultant but someone who actually started and managed a lot of businesses himself, I found some of his insights really interesting. Here are what he thinks encompasses an entrepreneur's mindset.
An Entrepreneur's Mindset
1. Ask
An entrepreneur knows how to ask. He is not ashamed to ask people, even those that he barely knows, what their secrets are. He is eager to learn trade secrets hoping to be able to apply them in his business ventures as well. Our professor also noted that you'll be surprised to find out that a lot of entrepreneurs are actually more than willing to share their knowledge if only people knew how to ask them.
2. Reciprocity
Entrepreneurship requires reciprocity. Based on his experience, he related that sooner or later you would be put in a situation where in you need to ask someone a favor. He then added that when that someone grants you your favor, be ready to return it someday. This is what he called reciprocity. I believe this is quite true. This even happens among friends. Although I do believe it, I'd like to think that there is a limit to the favor one can ask from somebody else, especially when the favor being asked from you is already encroaching on your moral values.
3. Opportunist
An entrepreneur is an opportunist. He strolls along and sniffs out opportunities available in his environment. He then capitalizes on these opportunities. Labeling an entrepreneur as an "opportunist" connotes a bit of negative image. I'd like to disagree with our professor and say that an entrepreneur is an "opportunity seeker" instead. I believe an entrepreneur is not only someone who knows how to start a business but is also someone who strives for what is good for the community. In this sense, although he seeks opportunities in the community, he should only try to grab hold and capitalize on opportunities that will be beneficial to all stakeholders.
4. Resourceful
An entrepreneur is very resourceful. Faced with a daunting task infront of him, an entrepreneur is able to adjust and to look for ways to accomplish the task. Amidst limited resources, he is able to find ways to produce enough for the task at hand.
5. Optimist
An entrepreneur is an optimist. He sees the glass as half full. He finds beauty and opportunity in everything. He is not easily discouraged.
6. Persistent
An entrepreneur is persistent. He knows that failure is part of every success. He doesn't let a minor set back discourage him. He perseveres and continues on with the journey until he achieves success.
As a final note, our professor commented that all these personalities are interconnected and that they measure how much you love your enterprise. Intensity comes with your passion and love for your business.
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Entrepreneurs have high Adversity Quotients
Posted On Sunday, August 24, 2008 at by Sun Jun
Go Negosyo Big Time: Entrepreneur 101 (Part 3)
An Entrepreneur has a HIGH Adversity Quotient (AQ)
Adversity Quotient is the ability to withstand adversity and not give up. (Resilience in times of failure)
Wrong Mindset: People with stable jobs need not need start a business.
- Your lifestyle can improve for the better if you start a business even if you already have a stable job. And who knows how long that job will be available to you. It can be gone from your hands as fast as the following day.
"What separates a player from the bigger players is CREATIVITY."
Go make your first MILLIONS!
A True Entrepreneur is an Innovator
Posted On Saturday, August 23, 2008 at by Sun JunGo Negosyo Big Time: Entrepreneur 101 (Part 2)
A True Entrepreneur is an Innovator: He looks for new things to offer the market.
Reminder: Your innovation should make a difference in the market place and to your personal finance (earns you profit).
MYTH: You need MONEY to start a BUSINESS.
- Capital is not always in the form of CASH. This can be a service or talent that you can offer.
- You can also avail of an advance payment from your customer. (Customer advance)
Go Negosyo Big Time: Entrepreneur 101
Posted On at by Sun Jun
What is an Entrepreneur?
- An entrepreneur is someone who establishes a new entity to offer a new or existing product or even a service into a new or existing market whether for profit or non for profit outcome.
- A loan word from French, an investor.
- Anyone can operate like an entrepreneur.
- Entrepreneurs are not born, they are developed. It starts with the three foundations of self-mastery, enterprise mastery, and enviromental mastery.
- Maritess Vistal started her business with only 10,000 pesos!
- Leo Aday started his "Taho" business with only 15,000 pesos!
- Passion
- Sustainable Market
- Consistent Delivery of Product or Service
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Choosing the right target Market is very important! Wrong target market equates to a wrong medium of advertisement and a wrong business set-up.
I am an Entrepreneur, I am a Hero
Posted On Friday, August 22, 2008 at by Sun JunI am an Entrepreneur
I am a Hero
I do what I believe is right
I do what I believe is good
I earn an honest living, I provide jobs
I make profit my friend.
I am a Hero
in a big way, in a small way
In my own way
I am a Hero
Stand up Now, Be a Hero
I am a Hero
I do what I believe is right
I do what I believe is good
I earn an honest living, I provide jobs
I make profit my friend.
I am a Hero
in a big way, in a small way
In my own way
I am a Hero
Stand up Now, Be a Hero
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I don't have political inclinations, regardless of yours, I hope you can get pass that and see the true message in this video. I love this project.
I don't have political inclinations, regardless of yours, I hope you can get pass that and see the true message in this video. I love this project.
