Category: Book Recommendations

Book Recommendations

Three Ways to Learn How to Own a Business

by Enes ÖnerLeave a Comment on Three Ways to Learn How to Own a Business

Most of the successful business owners have learned to be a business owner by working in companies. This is a form of on the job training. Those who pass family professions on from generation to generation raise their children in the same way. Unfortunately, very few people can get this type of education.

For those who don’t have the chance to work in companies, there are several ways to learn how to own a business.

Management training programs are prepared only to train CEOs. Learning to own a business is something different.

Those who want to have a business firstly follow the path of being self-employed. Most people cannot skip this stage. Because they cannot develop a solid system. So, they become part of a system. Successful business owners have been able to develop systems that operate on their own.

Here are three ways to pass the path and become a business owner:

Finding a Mentor

A mentor is someone who has followed the same paths and has achieved success. Mentor and counselor are different. The counselor tells the client what to do and how. However, they often have no experience in the area they advise. The number of consultants who teach how to be a business owner or investor is quite high. I suggest that you follow the advice of those who have tried and succeeded. If you don’t know someone who owns a business, find and read the biographies, interviews, books or articles of those people. 

You need to learn systems and leadership. Not being a CEO. CEOs may tend to belittle their subordinates, but leaders are aware that they often lead people who are smarter and more talented than them.

I strongly recommend you to read Michael Gerber’s E-Myth Mastery. It’s a unique book to learn the basics of building your own business system.

Probably the traditional way to learn systems is to study undergraduate in economics. In this way, accounting knowledge is acquired and the relationship between company systems and finance is learned. But of course, undergraduate education in the department of economics does not provide business knowledge that will enable to create and build a proper company order.

In order to learn all the systems of a company, it is necessary to work for at least 10-15 years in a large company and learn different aspects of a business. Then you stop being an employee and become a business owner. Working in a company with good systems is like getting paid from your mentor.

Franchising

Another way to learn about systems is to buy franchises. When you buy a business franchise, you are purchasing a system that has been proven to be successful. With a good market research, you can find a lot of very good franchises in the market.

When you purchase franchise instead of setting up your own system, you have more time to train your employees. By purchasing a system, you eliminate one of the uncertainties on the way to own a business. It will also make it easier for banks to lend you money. Normally, they don’t like giving credit to a startup small business. However, banks are aware of the impact of systems on success and know that the risk is reduced when a franchise is purchased.

In order for a business to be sustainable and grow, there must be a harmony in its system. Failure of only one unit leads to crash of the entire system. For example, if the fuel system of an airplane in flight fails, the plane is likely to crash even if everything else is fine. A problem in a person’s circulatory system can cause that person to die, even if all other systems work well. This rule is the same for companies. 

Buying a proven system allows you to learn about unknown or overlooked factors. This is why professional investors tend to support those who will use systems that have proven to work.

Network Marketing

Network marketing is also known as multilevel marketing or pyramid selling. In the beginning, network marketing businesses were deemed illegal as well as franchises. In some countries, those who set up network marketing were penalized. New systems or new ideas may seem strange and suspicious at first.

Many people have been able to build successful network marketing companies. These people have changed the lives and financial situations of many other people thanks to their business. This makes the network marketing system even more valuable. It is possible to become a customer of an established system and starting a business with very reasonable fees. Those who start their businesses thanks to the marketing network don’t suffer from the difficulties of establishing small businesses in traditional ways.

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Book Recommendations, investment, Understanding Money

Advices from Babylon for Those with Financial Problems

by Enes ÖnerLeave a Comment on Advices from Babylon for Those with Financial Problems

If you are having financial problems or want to have an idea about finance, the first book you should read is The Richest Man in Babylon. Below you can find some summary of the recommendations given in the book.

So let’s start.

You must secure your source of income for your future. Look at the old people, remember that after a while you will be one of them. Invest your savings very carefully so they don’t get lost. Save money so your family can meet their needs when you leave this world. If you make small payments regularly, you will be able to provide such protection. A frugal person would never delay putting aside a large amount for such a clever reason. Consult knowledgeable people for ideas. Listen to the advice of people whose business is related to money. 

Although advice is given for free, it is important to pay attention to what advice is sought from whom. The cost of seeking advice from someone with no experience in savings may be to lose all savings.

A small safe return is always better than risk. High interest rates can cause you to lose all your money. Stay away from them. 

Wealth also grows from a small seed, like a tree. The first money saved is the seed of the wealth tree. The sooner this seed is planted, the sooner the tree of wealth begins to grow. If this tree is fed with regular accumulation, it will have a shade to lie under with pleasure as soon as possible.

Enjoy life while you’re here. Do not force yourself too hard or try to save too much. If you can only keep a tenth of what you earn, be satisfied with that. Do not be stingy while spending. Life is beautiful and full of things to enjoy.

It is necessary to spend only nine tenths of what is earned and accumulate the rest.

Personally, when I started using nine-tenths of my earnings, I didn’t feel like I had less money than before. And soon my money seemed to get more and more. Undoubtedly, the person who does not spend all of his earnings will get money more easily after a while. On the other hand, money escapes from one whose wallet is empty.

What do you desire most? Is it the fulfillment of all your wishes every day, jewelry, better clothes, better food, things that go as easy as they come? Or do you want more permanent things like gold, property, trade, income generating investments? The dollars that come out of your wallet allow you to get the first set of things, and what you leave in your wallet allows you to access the second set.

It is necessary to eliminate unnecessary expenses by making budget planning, so that you do not spend more than nine tenths of the money earned.

What we define as “necessary expenses” increases according to our income as long as we do not make the opposite effort. Do not confuse your desires with real necessary expenses. Each of us desires more than our earnings can deliver. Even if we use all the money we earn to meet our desires, we still have unmet desires. Man’s desires never end. Desires are usually instant pleasures, whereas accumulation helps for a lifetime.

We should make our money work for us. We should increase our savings with investment. 

The first principle of a good investment is the security of the capital. Is it okay to aim for a bigger profit if your capital is likely to be lost? Obviously not. Don’t let your desires to get rich quick get you on the wrong track.

When investing with the money you have saved, take precautions and do not trust yourself. It is much better to take the opinion and advice of those who are used to using money to make a profit. Such recommendations are free and their value is the amount you are willing to invest. Because it will save you from losing that amount of money.

One of the remedies for a weak wallet is to not let your wallet empty after it is full. Only invest your money in ways that your capital is safe and you can get it back whenever you want. Consult the knowledgeable and experienced people for ideas. Their knowledge and experience prevents you from making precarious investments.

Have your own house in a neighborhood where you can pay the mortgage instead of sitting in a rental.

Someone who acts by the rules of wealth should think about the upcoming retirement days, must make fundraising plans and her investment must be safe for years. She should arrange them in such a way that she can easily access the money when she needs to use it.

Look to create an income now for your old age and for your family’s needs.

Generalized goals cannot go beyond weak wishes. A man’s desire to be rich doesn’t make much sense. But a man’s desire to have five grams of gold is a tangible goal, and therefore it is likely to be achieved. After obtaining five grams of gold, he can find 10 grams of gold, 20 grams of gold, and a thousand grams of gold with similar methods, and then he will be rich. By trying to achieve a small goal, he learns to secure a large amount. 

Wealth happens this way: first with small quantities, then more can be achieved with large quantities. Goals must be clear and defined. If goals are too much, too complex, or too difficult to achieve, they will not serve their purpose.

Work by nurturing your own strengths, become wiser, gain more skills, and respect yourself. Thus, you can gain the confidence you need to achieve your carefully shaped goals and increase your earnings.

The wealth that comes quickly disappears in the same way. Wealth that comes slowly brings pleasure and satisfaction to its owner, because it is the product of knowledge and persistent purpose.

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Book Recommendations, Financial IQ, investment, Taxation

Why You Need to Increase Your Financial IQ

by Enes Öner10 Comments on Why You Need to Increase Your Financial IQ

The average American today works for six months to pay taxes. This is a very long time. The more one work, the more she pays the government.

In this article, we’ll take a look at how taxes work in favor of corporations and the rich, and then discuss the power and advantages of corporations.

When the poor and middle class try to punish the rich, the rich do not bow down and react. Because they have money, power, and are determined to change things. They don’t just sit around and agree to pay taxes. They look for ways to reduce their tax burden, recruit skilled lawyers and accountants and persuade politicians to change laws and create legal loopholes. They have the opportunity to change the rules.

For example, the US tax law provides some possibilities to avoid paying taxes. Many people cannot access these opportunities because they are busy with their own work. These legal loopholes are details only the rich can see. For example, “1031” means the section numbered 1031 of the State Revenue Law. It allows the seller to delay tax on real estate sold to be exchanged for a more expensive property for the purpose of capital increase.

Real estate can offer great tax benefits. If you are not selling for disposal, you will not pay tax on your earnings as long as you trade them to increase their value. People who do not take advantage of the tax savings made possible by law miss the opportunity to grow their assets.

A high Financial IQ is required to be aware of and benefit from these opportunities. And raising Financial IQ only takes four areas of expertise:

  1. Accounting. We can also call this financial knowledge. This skill is a must to build an empire. The more money one takes the responsibility, the more careful one has to be. Otherwise everything will be ruined. Details matter. Financial knowledge is reading and understanding bank statements. This skill allows to identify the strengths and weaknesses of any organization.
  2. Investment. The science of making money. Strategies and equations are important for making the right investments. This skill is linked to creative intelligence.
  3. Understanding Markets. It requires knowledge of supply and demand. It is necessary to know the “technical” aspects of the markets. Whether an investment is right or not depends on current market conditions.
  4. Laws. A company with technical skills related to accounting, investment and the market grows rapidly. But a person who knows the tax law and is under a corporate shield can get rich much faster than someone working for someone else or just someone who owns a small business. This is like the difference between walking and getting on a plane. The difference is huge when it comes to long-term wealth.

Employees earn and pay taxes, and live with the rest. The company earns and spends money and pays taxes on the remaining amount. This is one of the biggest legal tax loopholes benefited by the rich.

This is easy to do if you have investments that generate good cash flow. For example, you can turn your vacation trips into board meetings in Hawaii. Automobile payments, insurance, repair expenses turn into company expenses. You can show your sports club membership fee as company expense. You can add most of the restaurant expenses to company expenses. There are many more advantages like this, but they should be done before paying tax.

The rich hide most of their wealth. They use companies or foundations to protect their assets from creditors. When someone sues a wealthy person, they face a legal protection shield, and often that wealthy person “has no property”. The rich keep control of everything, but they have no property. The poor and middle class try to own everything and lose them to either the state or other people.

In short, if you have legal assets, find out as soon as possible the benefits and protection shield a company can offer you. You will find many books written on the subject. Even if you look at the company establishment stages, you will get detailed information on this subject. The power of sole proprietorships is well described in Napoleon Hill’s book Think and Grow Rich.

Financial IQ is actually a synergy of many skills and abilities. But I think the combination of the four technical skills I listed above forms the basis of financial intelligence. If you have a desire to make a great fortune, then the combination of these skills becomes even more important.

As part of your overall financial strategy, my suggestion is to have your own company equipped with assets.

Please let me know what you think below.

Keep reading with WHY ACCOUNTING KNOWLEDGE IS NEEDED.

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