It is difficult to restructure, but still want to live better. And this desire, in the absence of knowledge about the fundamentals of investment and entrepreneurship, in most cases leads novice “businessmen” to the complete loss of all invested efforts and funds.
Here are the main mistakes of people who want to do away with work 40 hours a week and live for the income from their business or investments.
1. Pledge your own housing and invest in your own or someone else's business.
Unfortunately, many start-up entrepreneurs, without having start-up capital, make this typical mistake by mortgaging their only housing into a mortgage to banks, financial organizations and private lenders and investing this money in a new business. But it may not "go." Even if you worked in the same field, but did not look at it through the eyes of your employer, you will not know many difficulties that await you on the way.
The vast majority of newly established businesses closed in the first three years. Even if your does not close, the income from it may be less than expected. And he is unlikely to overlap the next loan payments.
Even worse - microcredit. A business based on them is always doomed, except when you give them yourself. And soon the problems of debt become a problem for your whole family, and even the whole environment.
Therefore, if you yourself could not earn start-up capital - never invest borrowed money and, moreover, do not mortgage your housing to get it. Otherwise, you can thus lose not only housing, but also family, and freedom, and even life.
2. To think that your business will surely bring you more money than work.
In addition to income, there are costs. Taxes, rent, fixed assets, working capital - as soon as you become the owner, all these problems become yours. And its business, especially in the early years, can be unprofitable or bring much less income than the salary of a qualified specialist. Or the main work plus part-time job.
Large and well-known companies want to work with the same, and may not come to you just because you are a novice and a kid in your market (even if you have worked with them for years, working in the staff of a corporation). If you do not have the “iron grip” and natural qualities of a manager, business and financial knowledge, it will be very difficult for you to manage your business. You need to be able to bargain, save time, get the maximum price for your product (or professional service). If you will be shy, cruel, afraid, you can not do it.
Therefore, highly qualified specialists often receive not less, and even more entrepreneurs, in fact, while bearing less responsibility. The employee risks his salary and reputation, while the entrepreneur risks everything.
3. Give your money to the uncontrolled management of others.
Sometimes you can see color ads on the posts: “I am looking for an investor. From 50,000. 50% per annum. " Or announcements: “Trade money on Internet sites with the help of brokers and live on the islands while they work for you.”
There are more sophisticated methods of attracting “investors”, to the extent that an imitation of vigorous activity is created specifically for the “deal”: an office is rented, some people are sitting at computers and you, the future millionaire, are a well-dressed person inviting you to make your first investment in Field of Dreams.
In general, any investment of money with promises of high profits and a lack of control over money on your part, guaranteed only by the “high reputation” of their recipient, is very, very risky. Be sure: “investing” money in this way is the same as playing roulette.
It is better to spend them in your own pleasure than to lose them, giving them to those who spend them on their pleasures, not yours. There is a category of people who live off other people's money, taken to invest in "business projects". Only to bring them to criminal and material liability for fraud is very difficult.
4. Invest in something that you do not understand.
If you are not an auto mechanic and do not know anything about the structure of the car, you will not try to repair it yourself. But in matters of money management, everyone is a great specialist.
Look for ways to earn us something that you know well. Look at this area in a new way. You can make some changes to the existing course of things and occupy your niche in the market. In general, it comes down to two ways:
- identify existing customer needs and meet them;
- or make them an offer that has not yet been and which will be a new need for them.
Mobile phones existed when the IPhone was invented. You can bake not just cakes, and cakes without sugar. Look for adjacent and new niches in what you know well. Even if you earn less at first, a bird in your hand is better than a crane in the sky.
5. Intuitive investing excluding income and expenses.
Dreamer investors are rushing from one sphere to another, looking for ways to get huge kushi, investing all their savings to the last and even borrowed funds. They see how other people in the same field earn good money and even become millionaires. But the lack of business skills, some psychological qualities and a vision of the situation through rose-colored glasses lead such unfortunate investors to collapse, whatever they do, be it at least brewing, even arms trading.
This includes, first of all, those who do not keep full records of income and expenses, dream of future income, without taking into account mandatory and potential expenses and risks. Even if the money invested by them makes a profit, it is made by other people (lenders, business partners or intermediaries), and the dreamer investors remain in poverty.
For example, one person sold two apartments and opened his own restaurant on the first line of the beach, in a passing place. Although he had never been involved in the restaurant business before. He made an excellent renovation and grand opening. The restaurant was full. But the cook and the staff could not cope, visitors were unhappy. It turned out that the cook cooks tastelessly and deceived in the resume about his qualifications. The owner was a soft, fearful man. Six months later, the restaurant had to be closed. Losses amounted to 300 thousand dollars.
Be always attentive and prudent. Your wealth is only in your hands.