February 13, 2022, 13:14 | Business
10 rules for dealing with money from a famous journalist who wrote about business and businessmen.
We all know very well that such concepts as absolute truth and absolute reliability do not exist, that's why everyone rushes around, arranging their affairs as best they can, before finding a path that suits them, informs Ukr.Media.
You can take a risk and offer some rules for people who have earned their money and do not want to lose it. Studies have shown that out of 100 businessmen, only 4 become rich and keep their money. Most people make money and lose it for various reasons.
Here are 10 money rules from Herbert Casson, a handsome journalist who wrote about business and often talked to businessmen
Rule 1. Buy only what you know
Almost every businessman, when he starts investing money, buys all kinds of junk, for example, acquires a share in a business in which he does not understand anything.
Every amateur investor is, to a greater or lesser extent, a hunter of mirages and invests his the first money is in useless paper, issued either by dreamers or swindlers, and their advertisements represent a superstructure full of miracles, which the play of the imagination erects over the basis of real reality. Everyone knows that a printer will print anything, no questions asked.
So, buy only what you know.
Buy a share in the business that is close to you. Invest in your own city. Do not pay attention to the numerous branches of the Tmutarakan regions.
Far away fields always seem greener. But you're twice as stupid as they are greener if you invest a decent amount of your own money in them.
The business you know is the least likely to be screwed over.
Everyone's money is at risk, and it's always harder to keep it than to earn it.
Rule 2: Never invest money under pressure
Every person who has any money should follow the principle:
Whenever you are asked about money, postpone your answer until tomorrow – this rule will save you from many losses. Thanks to the efforts of various swindlers, scoundrels, as well as the government, in the modern world the art of depriving people of money, and without the use of physical force, is highly developed.
They invent amazing projects, they shout: "Millions, millions! Hurry up and get the money.'' And people who are quite reasonable in other matters come up and give the callers their money. A few months later, the rascals find themselves with the money, and the people with the plans. There are many examples of this in our modern reality.
Therefore, in the world of finance, it is necessary to master the art of self-defense, you can never give in to the onslaught. One must cold-bloodedly ask oneself: "what and how will I get?»
One's benefit is a fundamental value, it is one of the pillars that supports the edifice of civilization, it is not something to be ashamed of .
It is known that the more fools, the more thieves there are, and therefore, if a person has become an owner, he must have a clear, sober head.
You should not give money when you cannot resist the pressure or when you are oppressed. Whenever there is a push for speed and urgency in financial matters, be suspicious until you establish for yourself the reason why you need to act quickly.
In all cases when it comes to investing your money and you are told: " ;now or never", answer: "never." By putting it off until tomorrow, you may indeed miss a golden opportunity once, but in all other cases you will save your money. Be as smart as you can when you do your own thing, play your game, but when it comes to parting with your money, be slow.
Rule 3. In the world of finance, everyone speculates
Everyone takes risks, everyone has their own ideas from which they either win or lose.
Any honest and optimistic person the initiator of the business can at any moment find himself in prison, and wonder how he got there. Security and risk are so intertwined that it is impossible to separate one from the other. All business initiators must take risks, they must make assumptions about the future.
There is no absolute rule by which they can act safely, but still one recommendation says:
Speculate on properties, not plans
Property is something that actually exists and a plan is an idea, it is an unborn child.
Most people prefer property plans. The plan excites the imagination, the plan is hope, optimism, desire, it has no relation to reality, difficulties, losses.
But the bottom line is that investing in plans is for those who can afford the luxury. It is not for people with disabilities and little experience. The probability of failure here is too great. Even wealthy people should allocate a small part of their capital (no more than 20% of their money) to plans.
Each commercial enterprise consists of a plan and property. The danger is when the plan becomes more than the property.
The fundamental difference between property and a plan is that property retains its value no matter who owns it, and the value of a plan depends entirely on the honesty and business qualities of the people implementing it.
The smarter a person is, the more he can rely on plans. The tighter she understands, the more she has to deal with property.
Until you are so rich that you can afford to lose money and not regret it, don't buy anything just because you like it. The more unique and unusual the property, the less likely it is to find a buyer. The more familiar the thing, the bigger the crowd of buyers. Ordinary people want ordinary things, and there are 9/10 of them in the world. You should try to make your goods look as much like money as possible from a financial point of view, then everyone needs them.
< p>Many buyers buy and will buy exactly when the prices are the highest. They buy because everyone around them is buying. And other people could sell, but stubbornly did not do it.
The main thing in business is profit, not the process itself. This means that if a trader can make more profit from the sale of his shop than from the sale of his goods, he should sell the shop. But then he will have to decide what to do next. This is the reason they don't sell and make a profit.
People need to think, but 9 out of 10 people prefer to go with the flow instead of thinking and getting rich. Money can be made by doing something out of the box, not the traditional way.
For example, you bought a cow for yourself for 2,000 hryvnias and on the way home you met a friend who offered to buy this cow from you for 5,000 hryvnias. Feel free to sell and you can be satisfied that the day was not spent in vain.
All too often people are overcome with suspicion when they are offered a high price for their goods. “If it is so highly valued, it will be useful to me,” they think. But this is not true, the point is to use every favorable opportunity to get a quick, sure profit. The time factor must be taken into account. It is better to make 100 monetary units per month than 200 per year.
Life is short. The future is always uncertain. Therefore, do not miss any of the opportunities that the present presents.
Almost everyone buys and sells , looking at the crowd. And this is one of the main reasons for losses. We do what others do because it's easier and more convenient, we don't want to be known as weirdos.
We go with the flow, we let our neighbors, fellow citizens, the press sway us, especially the press. Whether they know what they are talking about or not, they have to express themselves in some way every day. This incessant chatter affects the crowd.
Most people don't think, they only read, and are therefore easily manipulated by the press. Never buy when there are more buyers than sellers, you will probably overpay.
Never sell when there are more sellers than buyers, otherwise you will make pennies.
Buy yourself a straw hat in winter. Buy when the fashion is to sell, and sell when the fashion is to buy. There are always booms and depressions. The crowd never looks ahead, it thinks about today.
Rule 7. The movement of capital is much more important than its size
One of the reasons why firms can make low profits is that they have a lot of cash. The rate of profit depends more on the speed of sales than on the height of prices. It is more profitable to make 5% per month than 50% per year.
Many business people say they need more capital, but they are usually wrong. What they need is to speed up the use of the capital they have.
The rule of every prosperous trader should be:
Buy – sell, buy today – sell tomorrow. Do not buy and do not build extra. Always have more customers than goods, more business than offices. It is better to refuse a buyer than to stock up. Constantly keep money in circulation.
Rule 8. Take the courage to take out a loan
Many businessmen are terrified of debt. They do business using only what they have. They are reinsurance.
They go out into the ocean of commerce in a small ship and try to stay close to the shore, so they run into the rocks and that's the end of it. They later learn that the open sea is much safer. The most profitable thing in business is a reasonable risk, but for this you must have enough courage, you must have a sporting interest.
You must enjoy taking risks. It is better not to try to become a financier for a person who, after taking a loan, does not sleep at night. She should remain an employee, quietly work for a solid salary.
Money and brains – that's what makes money in business. Therefore, if a person is sure that he has brains, his next step should be to get money.
The development is that. to increase the size and performance of the business when there is an order for the future. Bluffing is about increasing prestige and making an impression. There are too many people who enrich themselves and bring their business to poverty. Every great businessman, starting his business, thought first about him, and then about himself.
The main thing everywhere and always in business is not what impression he makes, but what profit he makes.
New premises – this is what many companies lose out on. There is no doubt that business should be done with a good roof over your head, but the truth is that the building is much less important. than what we give him. Of course, it may be necessary for expansion. But you need to be sure that it is really so, and not to let dust in your eyes.
There is also such a thing as throwing away money on a fancy office and a complex management staff. It's all add-on, it increases costs, not profits.
As soon as it becomes known that you have money, you begin to face a number of difficulties. Parasites appear here. These are relatives, friends, strangers, women. All of them have one thing in common – to get hold of your money.
In this world, there is a constant war between creators and beggars. A happy businessman who married a woman who, like him, is a creator by nature. He can be sure that his successes will not be devalued. Well, if he married a beggar, then despite his intelligence and energy, in the end he will be broken. Saving money is no less difficult than “getting'' it.
Lending money is neither a gift nor an investment. This does not bring any thanks or chances to make a profit, besides, very often you can get nothing back. Demanding money back by resorting to power structures (like racketeering) is not recommended, because money can be obtained, but at the same time you will shine among these same power structures, a file will be immediately opened on you.
It is forbidden to give in owe money to persons who have used the services of law enforcement agencies, as well as “burned out” twice, even in different cases during the year, because a person does not feel the state of affairs, rushes around, is incompetent.
You can borrow to start your business. Even the physical presence of a person starting a business at the conclusion of an agreement is considered an act of lending. According to the tacit agreement, the presence of a prosperous person at the start-up's deal is considered a financial guarantee for the start-up. The financial responsibility for the newcomer rests with the prosperous businessman.