Aside from building businesses, another passion of mine is investing in assets. Both of them are a means to make more money if you know what you are doing, but how money is made between the two are very different.
I’m going to simplify the difference for both of them for you right now by sharing my perspective: In business, to make money you need two critical assets: Customers and Employees. While in Investments, to make money you need two different kinds of assets: Money and Experience.
Let me elaborate, the key to making money in business is that you have to concentrate on selling to your customers. Even if you have no money to begin with, even if you have no experience to begin with, as long as you can find a customer willing to buy something from you (emphasis on buying from you) then you are in business. And the more customers you have, the more business you have. If you have no customers, then you are not in business regardless of how much products / services you have to offer or how many branches you have.
Next, you can not properly maintain a business on your own, sooner or later your business will grow, you will have more customers and you will need help, and so the next critical asset in making money in business is to have very good and very loyal employees.
Now finding and maintaining really good employees is very critical to your business’ success. It is not easy but once you have assembled a great team of superstar employees, trust me, your business will be making money during good times and even bad times.
Now, let’s explore the world of Investing. Let me ask you, do you think you need customers and employees as an investor of say paper assets like stocks, mutual funds or bonds? What about real estate? Or more liquid assets such as currencies? Think about it, and you’ll realize that you don’t.
What you should know in the world of investments, is that instead of customers, you will need money and instead of employees, you will need experience. Why? because the main way to make money in investments is to “convert” your money into “something else” that will make you even more money. This is the world where the now famous line of Robert Kiyosaki comes in: “The rich do not work for money, the rich make money work for them”. But to make your money work for you, you need to find that “something else” that will make you money without you having to work for it, and to do that without being scammed or duped requires experience.
In my business classes as well as my investment classes, I ask my students if it is really businesses that they want to pursue or would they rather pursue investing because I explain to them that you do not have to be a business person to be an investor nor do you have to be an investor to be a business person. The two roads are mutually exclusive and you do have a choice to pursue one or the other (or even both).
So I’ll ask you my dear reader the same question. “To make more money right now, and given a choice, would you like to start a business, would you like to learn how to invest?, or would you like to learn both?”
To help you decide on which road to take first, let me share some more practical advice. If you love people (customers / employees), if you do not have a lot of money to spare but you have time and a willingness to make sacrifices as well as learn along the way, then I suggest that you pursue the road of business ownership. It is a tough and challenging experience but should you overcome the many hurdles and obstacles, I assure you, you will be a cleverer person because of it.
On the other hand, if you have a job that you love and that pays you well, or already a business owner and you have some money to spare. (money that you can afford to risk) I suggest you pursue the road of the investor. There are many seminars on investing out there right now, most of them free, but be careful on which seminars you attend as it may cost you more in the long run.
For me, I am both a business owner and a seasoned investor. It has taken me a little over 10 years to get to where I am, and having traveled both roads, and exploring both worlds I would like to wish upon you the same rich experience that I have and the kind of success that you deserve.
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Hello, can you please tell me if I can place some ads on your blog and if I can, where? If you don’t allow it that’s ok.
Hi Bill, thanks for the question, I had to remove your links before approving it, but sure, we can talk about advertising on my blog, but I do want to chat with you first, send me a quick email on where I can contact you by phone. send your email to markso@zerocapitalclub.com
Mark, on your investments comments above I disagree in one area. It is impossible to run a Real Estate business without customers, and employees. Who would sell the houses/apts to you have just built???
Who would rent them if you were in the rental area of the market. You need staff to do so, and customers to rent or buy. Yes you can buy land and sit on it, and trust that in 10 years it’s worth more than you paid. But to run an everyday business, it’s impossible. Whilst I agree with your other comments I do not agree with the R/E one.
Rgds,
Daniel.
Thanks Daniel! yes, I agree with you if you are running a real estate business, key word “business” but if you are investing in real estate and waiting for land appreciation for example, then my view would still hold. I know that this is a gray area and I am trying to make things more black and white (very difficult) he he, thanks again for the comment
I understand your point. Whether its a business or an investment, it will need customers and sellers. But the difference would lie in your role or involvement (direct or indirect).
But like what someone here told me, if you intend to run a business – you think of the customers first – then build a business from there.
To answer your question as to who will sell the houses/apts, or who would rent them – let me share something about real estate.
The old adage when it comes to what influences consumer purchasing decisions were product, price, place, & promotion.
All too often, the location is an afterthought or a decision made out of expediency rather than after careful consideration.
In real estate, the rules are different. Containing costs are important, but smart owners or investors remember that they make money from sales or rental income and no amount of public relations can make up for a lousy location.
A good location will sell itself and a good location will get rent itself.
ANSWER: Location
Comment on the Topic:
In this article, it was mentioned investing is “converting” your money into “something else” that makes more money.
Now, how does real estate work as an investment?
It works by turning “cashflow” from your job or business into “physical assets” that grows in value and gives off a cashflow of its own.
It’s surprising how many people just dive straight in to their first investment property before they have stopped to think about the big picture.
If there’s one thing I want to impress upon you today, don’t make the same mistake majority of so-called investors do. You should not just buy land and sit on it, and trust that in 10 years it’s value will grow.
Also, to not buy on price, but to buy on value.
Real estate, or any other investments for that matter, has risks. There is no such thing as a risk-free investment or an all profit business for that matter.
The key in investment is minimizing your risks – through KNOWLEDGE and TIMING. As with business, making sure your profits are greater than your losses.
You may be aware that there is a real estate boom in the Philippines, but which of these properties are the best for your financial present and financial future.
A purchase can lock you into a bad decision for up to 5 years or even longer. Surely, we would not want that to happen to anyone.
This is where having a good property consultant comes in. Someone who has up-to-date market knowledge that can get you the best properties at the right time. Perhaps someone that was promoted in six-weeks and belongs to a team that EXPERIENCED generating 2.1B Php in 2009.
Finally, is it possible to run a day to day real estate selling and renting business?
Yes it’s possible, and it’s being done already. Here’s who: the private investors that could be you or me.
The how… will be formed through building successful, positive, on-going relationships – all types of relationships – between a property consultant and an investor.
hello mark. very well said but too brief though. hehe
there is indeed a thin line between doing business and investing and if a person doesn’t recognize the difference, he/she will always confuse both and may make fatal (financially) mistakes.
btw, reg the BOSS plan, just preparing our papers.
anyway, i’ll see you soon.
thanks mate for the great share..keep it up….
Thanks!!!
nice discussion good job.!!!…what are other investment thing could possible be good to invest…thanks!!!….
There are many kinds of investments to name a few, there are equities, bonds, mutual funds, real estate, currencies. But more importantly as long as you can find anything to put your money in (without putting in much effort) that will give you a reasonable rate of return can be called an investment.
thanks mark for sending me this article, so interesting as well as the comments of others, will visit your office soon.
Hi Mark – Nice article. Let’s get this kind of wisdom an d information out to more people. Looking forward to working with you.
Ardy
Thanks Ardy. Talk soon buddy
hi…good evening… i want an advice from you. and my question is… How can i start a business in a small capital, i am an engineer. with only 1 3/4 years experience in my profession.. i want to have a business..how can i roll my small money to make it multiply.and what business should i go…
thank you.
jayr
Hi JayR To answer your questions read the following articles
1.) how to make money with Zero Capital http://wp.me/pjUVO-R
then read
2.) 100+ businesses you can start today
Keep reading, keep learning!
All the best!
-Mark
hi mark. re ur discussion on the difference bet business and investment, i think u hav make ur points very clear. right now i have my own business (retail store) but i do not have yet an investment which i am learning to do so in stocks, mutual funds, etc.i appreciate ur efforts in sending me ur articles. They r very informative and inspiring.
Thanks for writing in Raul, why don’t you also try currency trading. That is my specialty. Call 6874445 / 6873416 /6874645 look for Aiza King and ask about the free forex orientation. Hope to see you soon!
Sir Mark,
Gud Day. I’m an avid reader of your column in Manila Bulletin..I have 150,000php right now, i don’t want to just loose it to unneccesary expenses.
I’m turn b/w putting up a food business w/c i have a background in Culinary Arts or Investing it in Stocks(less stress) of w/c i have little knowledge.
Presently i work for an airline company.
Can u pls. advise me WISELY…To make my money GROW
Thank You Sir…Keep Inspiring
Jomel O. Villanueva
Hi Jomel, the Wealth flow project is designed specifically to answer your question, so be sure to sign up for the wealth plan on the site if you have not yet done so. The emails that you will receive will help you start from the ground up. So before you start investing in anything, educate yourself first.
Wow! Thank you! I always needed to write on my site something like that. Can I take a fragment of your post to my site?
I have work right now and I can say it pays well, at least compared to others.. hehehe.
I would like to focus first on saving and investing, then after having extra money to spare, I’m planning to start a business. Is this ok? or it should be the other way around?
Thanks for you article! God bless you.