Now, up to date we have learned the finances, the types of buisness and how to run it, but how do we gain cash for these buisness ideas? There are many ways people may achieve finance for their companies but today I would like to bring forth two ideas :
Debt Financing: This type of finance is money borrowed. This is money you are obliged to pay back by a certain time and date. You will usually incurr monthly interest rates, which may or may not be a fixed rate depending on the type of loan you are taking out.
Advantages of debt financing : You as the owner are able to raise funds without having to give any portion of control or ownership to the public, as you would have to do in Equity Financing. You will also sustain the amount of cash needed to run an operate your buisness daily needs.
Disadvantages of debt financing: Your business is serviced to a debt, and must oblige to all agreements or subject to default on loan. The interest on these loans may be relatively high as well.
VS
Equity Financing: This type of finance is also known as Venture Capital. This type of finance will require making a company public and selling shares and or parts of ownership in order to generate enough funds to start your business.
* Note Venture capitilist always expect a high return on their initial investment.
Advantages of equity financing: The business will not be listed as collateral incase of loan default. You will have suffiecent amount of funds to start up your business, as well as more finance for capital product.
Disadvantages of equity financing: Shareholders have some ownership in the company, and business profits must be given out in forms of dividends. You may also have to provide your venture capitalist with a large portion of ownership rights to all major decisions.
These are some ways to generate enough funds to operate your business successfully. Before opening a buisness you must look at all the cost, and go over it with your financial planner to decide which option is best for you, if you find that these may not be great options for you consider looking into Franchise's which are known as "Put the key in the door and start" business, where all is done for you.
Showing posts with label job. Show all posts
Showing posts with label job. Show all posts
Monday, March 4, 2013
Monday, February 18, 2013
Education, Experience , Excess Cash
The concept I left you with prior to this blog post was the Three E's : Education, Experience , Excess Cash. I would like to further your knowledge on why these three E's are extremely essential in your journey towards becomming rich, in the exact order they are placed in. We will start with :
Education : In life education is the key. Whether we would like to become great at something, or we would just like to further our knowledge about a subject , we do this by educating ourselves. "A Man willing to learn his whole life, will be the richest man."(Kiyosaki, 2013) Lets think of this logically, if you as a person are willing to never stop learning throughout the course of your life, do you believe that education can simply make you rich? No. It is how you use this education that will determine your success, this is where Experience comes in.
Experience: Now that you have based yourself with all the education needed to start your journey, well you must now put it to use. The easiest way to grasp the 3 E's is to put it in terms of your educational map. For all those who have went, plan to go or who are currently in post-secondary schooling, many of your programs may offer a co-op. Think of the three E's in terms of your program, first you need the Education so you have chosen your program, and are willing to educated yourself through it. Now that you have accomplished your first year and have furthered your knowledge it is time for your Experience this would be your co-op. Your school has set you up for success by using the three E's whether they knew it or not. Finally, once your co-op is done, your schooling is up, you've gotten all the Education and Experience you need, you have now set yourself up for the process of creating Excess Cash.
Excess Cash : Now we look at excess cash in the view of an investor, because in order to become a rich investor you need to have your assets pay off eachother, while your income your Excess Cash is exactly what it needs to be Excess. This is the money that when it comes in you can throw down on a worth investment , one that may take some risk , so this excess cash is money that can be lost, and it wont be needed to recover, because you've already bought assests that now pay eachother off and accumulate an income, where your excess cash generates its own income on its own.
I have laid out the three basics to further someones life in becomming rich. Now it is said that there is a rule called the 90/10 . This rule states that for every 90 Citizens only 10 will become rich. Why is that? If everyone knows the basics on becomming rich, learns the three E's , lives by them, what makes someone move from that 90 to the 10 % of those who become rich? I would like to encourage some feedback, on what you believe seperates someone between the 90/10 rule.
Education : In life education is the key. Whether we would like to become great at something, or we would just like to further our knowledge about a subject , we do this by educating ourselves. "A Man willing to learn his whole life, will be the richest man."(Kiyosaki, 2013) Lets think of this logically, if you as a person are willing to never stop learning throughout the course of your life, do you believe that education can simply make you rich? No. It is how you use this education that will determine your success, this is where Experience comes in.
Experience: Now that you have based yourself with all the education needed to start your journey, well you must now put it to use. The easiest way to grasp the 3 E's is to put it in terms of your educational map. For all those who have went, plan to go or who are currently in post-secondary schooling, many of your programs may offer a co-op. Think of the three E's in terms of your program, first you need the Education so you have chosen your program, and are willing to educated yourself through it. Now that you have accomplished your first year and have furthered your knowledge it is time for your Experience this would be your co-op. Your school has set you up for success by using the three E's whether they knew it or not. Finally, once your co-op is done, your schooling is up, you've gotten all the Education and Experience you need, you have now set yourself up for the process of creating Excess Cash.
Excess Cash : Now we look at excess cash in the view of an investor, because in order to become a rich investor you need to have your assets pay off eachother, while your income your Excess Cash is exactly what it needs to be Excess. This is the money that when it comes in you can throw down on a worth investment , one that may take some risk , so this excess cash is money that can be lost, and it wont be needed to recover, because you've already bought assests that now pay eachother off and accumulate an income, where your excess cash generates its own income on its own.
I have laid out the three basics to further someones life in becomming rich. Now it is said that there is a rule called the 90/10 . This rule states that for every 90 Citizens only 10 will become rich. Why is that? If everyone knows the basics on becomming rich, learns the three E's , lives by them, what makes someone move from that 90 to the 10 % of those who become rich? I would like to encourage some feedback, on what you believe seperates someone between the 90/10 rule.
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