By Sacha Tarkovsky
The turtles were taught to become financial traders and none of them had any previous financial experience.
Before you say I couldn’t do that read on because like the turtles you can because trading financial markets can be learned by anyone who is prepared to apply themselves to learn the right knowledge.
First let’s look at the advantages of financial trading:
1. The major advantage is you can leverage your investment this means that if you have 10,000 you can trade on leverage of 100:1 or more, so you get to trade a million.
2. Financial markets trend in one direction for a sustained period of time for long periods and these trends can be spotted and traded for profit.
3. Human psychology is constant so it shows up in repetitive patterns that can be traded for profit.
The key of course is to learn a method that cuts loses and runs profits – and turtles learned this and the discipline to apply a method.
The turtles were taught by trading legend Richard Dennis, to prove to his partner that traders were made not born and he proved the point with stunning success.
Dennis taught them all a method they could have confidence in and showed them how it worked.
From this inner confidence that the method would achieve success came the discipline to apply it, which all traders need to ride out periods of loses.
It took just 14 days, these traders became trading legends and piled up millions in real time profits.
Not everyone who trades of course is going to make millions, life simply isn’t like that.
However the potential to become a successful trader is open to anyone.
You can trade futures or global currencies and make money both markets will grant you more than enough leverage to increase your gains.
All you need is an internet connection, the motivation to learn how to read a chart and in under an hour a day you could be trading for big profits.
Financial trading represents one of he few ways for traders to start with small stakes and make money quickly and build serious wealth.
So did they do it when 90% of traders lose?
The fact is the majority of traders who lose lack the three basics for success.
1. They consult guru’s and try and buy success, without doing learning the method themselves.
This means they lack confidence in the method and cannot apply it with discipline in losing periods.
2. Discipline is the key as without the ability to apply it you have no method in the first place and this means knowing how and why your method works.
3. Money management is the other key.
It doesn’t matter how good your method is, if it lacks sound money management when you trade on leverage you won’t preserve your capital.
Most traders focus to much on the profits they can make rather than protecting what they have.
If you want to win trading financial markets you need to play great defense first and let your offense take the opportunities when they emerge.
Many traders also work hard but they don’t work smart and learn the wrong way to trade.
The turtles are proof that anyone can trade and anyone with a bit of seed capital can make money.
If you are serious about making money, and a willingness to learn, you can take advantage of the opportunity to trade financial markets to.
GRAB 3 X FREE ESSENTIAL TRADER PDF'S AND MUCH MORE!
On all aspects of becoming a profitable trader including features, downloads and some critical FREE Trader PDF's and more FREE Forex Education visit our website at http://www.net-planet.org/index.html
Friday, August 31, 2007
What’s the Secret to Becoming a Millionaire? It’s Your Team
By Loral Langemeier
There is no way I’d be a multi-millionaire today without my team. Having a team reduces your risk, increases your knowledge, and gives you access to opportunities and funds you would never have on your own. When investing, I have found that collective knowledge and experience lowers risk and accelerates diversification.
Those first starting with Wealth Cycle Investing will very likely be working alone. They’re out on the street, hunting down decent real estate deals, or flying solo in researching and finding other investment opportunities. That’s fine, as you’ve got to start somewhere.
However, putting the right team together will accelerate your learning; and, more importantly, it will accelerate your wealth accumulation. It’s going to take you time and energy to put the right team together, but it’s a necessary part of learning and growing as an investor.
What might take the typical investor 10 years or more to learn, you can learn in one or two years with the right team in place. Then, there are the opportunities and funds that suddenly become available with the right team.
There is no lack of opportunities in my life – deals returning well over 20 percent are common. These opportunities exist because I took time – and yes, money – to build and lead my team.
There are two aspects to having a wealth team on your side:
Building your team. You’ll have to find the right team members, and sometimes that means spending a little more money than you want.
Leading your team. It’s up to you to lead your wealth, and that means leading your team.
Who’s on your team?
The list of team members will vary for everyone, but here’s a general list of the kinds of people you’ll want to consider:
The Leader
The leader of your Wealth Cycle Investing team is you. You find the team members, and you lead the team members by directing them towards your goals. Even while you’re in the steep learning curve of initial Wealth Cycle Investing, you have to maintain control of your team.
In other words, although you’ll want to abdicate control to “more experienced” team members, you’ll have to push yourself to maintain control – even firing team members if they won’t follow your plan. You drive your wealth; you are responsible and accountable for everything.
Field Partners
The wealthy have always had field partners. These are individuals who are in the same industry, company, town, or even street in which you are investing. Essentially, they are the local experts – the eyes, ears, and legs that keep you informed and make things happen.
The best way to find these people is through networking. Ask others who are in that business, industry or town. Shop around and do your homework. Imagine that you’re the CEO of a major corporation and you’re hiring your new CIO; or that you’re the manager of a professional sports team and you’re looking for the perfect position player.
Mentors
It’s unfortunate that as people move ahead in their learning curve, they feel that they don’t need mentors. I’ve always had mentors, who eventually become peers and associates. Then, I look for new mentors. These are people who know more, have done more, and are skilled and successful in the areas in which you’re currently learning.
Professionals
You can’t run a multi-million dollar business without a team of professionals who appreciate what you’re creating and understand the Wealth Cycle Investing principles. Your mentors are excellent sources of referrals for professionals, such as: lawyers, accountants, and bookkeepers.
Utility Players
What if you hired people at $20 an hour to handle all the mundane tasks that take time away from you earning ten times that amount? Utility players clean your home, mow your lawn, pay your bills, handle your files and correspondence, and run your errands.
You want these utility players so that your time is spent where it will make the most difference. An errand that takes you two hours to complete keeps you from spending two hours researching and closing a deal that could net you thousands.
Remember that millionaires don’t clean their own homes or run their own errands.Wealth Cycle Investing requires time, patience, and your leadership. If you truly want to be wealthy, then you will build a team; and, you’ll lead that team. There is no other way.
There is no way I’d be a multi-millionaire today without my team. Having a team reduces your risk, increases your knowledge, and gives you access to opportunities and funds you would never have on your own. When investing, I have found that collective knowledge and experience lowers risk and accelerates diversification.
Those first starting with Wealth Cycle Investing will very likely be working alone. They’re out on the street, hunting down decent real estate deals, or flying solo in researching and finding other investment opportunities. That’s fine, as you’ve got to start somewhere.
However, putting the right team together will accelerate your learning; and, more importantly, it will accelerate your wealth accumulation. It’s going to take you time and energy to put the right team together, but it’s a necessary part of learning and growing as an investor.
What might take the typical investor 10 years or more to learn, you can learn in one or two years with the right team in place. Then, there are the opportunities and funds that suddenly become available with the right team.
There is no lack of opportunities in my life – deals returning well over 20 percent are common. These opportunities exist because I took time – and yes, money – to build and lead my team.
There are two aspects to having a wealth team on your side:
Building your team. You’ll have to find the right team members, and sometimes that means spending a little more money than you want.
Leading your team. It’s up to you to lead your wealth, and that means leading your team.
Who’s on your team?
The list of team members will vary for everyone, but here’s a general list of the kinds of people you’ll want to consider:
The Leader
The leader of your Wealth Cycle Investing team is you. You find the team members, and you lead the team members by directing them towards your goals. Even while you’re in the steep learning curve of initial Wealth Cycle Investing, you have to maintain control of your team.
In other words, although you’ll want to abdicate control to “more experienced” team members, you’ll have to push yourself to maintain control – even firing team members if they won’t follow your plan. You drive your wealth; you are responsible and accountable for everything.
Field Partners
The wealthy have always had field partners. These are individuals who are in the same industry, company, town, or even street in which you are investing. Essentially, they are the local experts – the eyes, ears, and legs that keep you informed and make things happen.
The best way to find these people is through networking. Ask others who are in that business, industry or town. Shop around and do your homework. Imagine that you’re the CEO of a major corporation and you’re hiring your new CIO; or that you’re the manager of a professional sports team and you’re looking for the perfect position player.
Mentors
It’s unfortunate that as people move ahead in their learning curve, they feel that they don’t need mentors. I’ve always had mentors, who eventually become peers and associates. Then, I look for new mentors. These are people who know more, have done more, and are skilled and successful in the areas in which you’re currently learning.
Professionals
You can’t run a multi-million dollar business without a team of professionals who appreciate what you’re creating and understand the Wealth Cycle Investing principles. Your mentors are excellent sources of referrals for professionals, such as: lawyers, accountants, and bookkeepers.
Utility Players
What if you hired people at $20 an hour to handle all the mundane tasks that take time away from you earning ten times that amount? Utility players clean your home, mow your lawn, pay your bills, handle your files and correspondence, and run your errands.
You want these utility players so that your time is spent where it will make the most difference. An errand that takes you two hours to complete keeps you from spending two hours researching and closing a deal that could net you thousands.
Remember that millionaires don’t clean their own homes or run their own errands.Wealth Cycle Investing requires time, patience, and your leadership. If you truly want to be wealthy, then you will build a team; and, you’ll lead that team. There is no other way.
Oktoberfest: The perfect excuse to promote Germany’s many beer varieties
By Stephen Beaumont
If you were to conduct a survey to determine the most popular occasions for beer-based promotions in American bars and restaurants, the top two positions would no doubt belong to St. Patrick’s Day and Oktoberfest.
But while the former is immediately identified with a single, widely recognized variety of beer—dry stout—much less is known about the German-style beers that go with that country’s famous festival.
And so, with Oktoberfest season fast approaching, the time is right for an overview of Germany’s varied array of lagers and ales.
Although it now ranks second in popularity to wheat beer, the style of golden lager known as helles is without question the beer most readily associated with Bavaria, even if it is more often known on this side of the Atlantic as simply “pale lager.” The German word hell means “pale” or “blonde.”
Usually just off-dry, with modest bitterness and a quenching, approachable character, it is the brew Bavarians quaff by the mass, or one-liter stein. It is differentiated from its northern German cousin, pilsner or pils, by its slightly fuller, maltier body and generally less-aggressive hop bitterness.
Around this time of year, a brew known as Oktoberfest or fest or märzen—the bigger, bolder cousin of the helles—is often sighted. Similar to a helles but slightly sweeter, more intensely malty and even a bit honey-ish, the festbier is one of Bavaria’s most versatile food beers.
It pairs well with roast pork, sausage, rich stews and even sauerbraten. It does deserve extra notice from staff members, though, since its strength, usually in the range of 5.5 percent to 6 percent alcohol by volume, can be deceiving to customers not used to drinking higher-alcohol beers.
On the darker side of German beer are the brown-hued relatives of the helles, known as dunkel or “dark lagers,” which have faintly sweet and roasty, even a bit chocolaty characters. Also dark in color are bocks and doppelbocks, which have significantly higher alcohol contents—6 percent to 6.5 percent and up—and rich, malty sweetness.
German ales are fewer in stylistic number, but begin with Bavaria’s most popular beer style, the weizen or “wheat beer.” Gentle in both flavor and body, with a fruity, spicy character, they are considered in Germany as ideal picks to accompany light lunches or midday snacks.
From the north comes kölsch, the city of Cologne’s classic golden and faintly fruity ale, and altbier, Düsseldorf’s trademark dark ale with an earthy, dry, and quenching character.
Any of the above would, of course, be welcome at any and all Oktoberfest celebrations, as would their locally brewed interpretations, which sometimes are superior to the originals.
Or you could simply catch a flight to Munich at the end of September and experience the one and only Oktoberfest firsthand.
If you were to conduct a survey to determine the most popular occasions for beer-based promotions in American bars and restaurants, the top two positions would no doubt belong to St. Patrick’s Day and Oktoberfest.
But while the former is immediately identified with a single, widely recognized variety of beer—dry stout—much less is known about the German-style beers that go with that country’s famous festival.
And so, with Oktoberfest season fast approaching, the time is right for an overview of Germany’s varied array of lagers and ales.
Although it now ranks second in popularity to wheat beer, the style of golden lager known as helles is without question the beer most readily associated with Bavaria, even if it is more often known on this side of the Atlantic as simply “pale lager.” The German word hell means “pale” or “blonde.”
Usually just off-dry, with modest bitterness and a quenching, approachable character, it is the brew Bavarians quaff by the mass, or one-liter stein. It is differentiated from its northern German cousin, pilsner or pils, by its slightly fuller, maltier body and generally less-aggressive hop bitterness.
Around this time of year, a brew known as Oktoberfest or fest or märzen—the bigger, bolder cousin of the helles—is often sighted. Similar to a helles but slightly sweeter, more intensely malty and even a bit honey-ish, the festbier is one of Bavaria’s most versatile food beers.
It pairs well with roast pork, sausage, rich stews and even sauerbraten. It does deserve extra notice from staff members, though, since its strength, usually in the range of 5.5 percent to 6 percent alcohol by volume, can be deceiving to customers not used to drinking higher-alcohol beers.
On the darker side of German beer are the brown-hued relatives of the helles, known as dunkel or “dark lagers,” which have faintly sweet and roasty, even a bit chocolaty characters. Also dark in color are bocks and doppelbocks, which have significantly higher alcohol contents—6 percent to 6.5 percent and up—and rich, malty sweetness.
German ales are fewer in stylistic number, but begin with Bavaria’s most popular beer style, the weizen or “wheat beer.” Gentle in both flavor and body, with a fruity, spicy character, they are considered in Germany as ideal picks to accompany light lunches or midday snacks.
From the north comes kölsch, the city of Cologne’s classic golden and faintly fruity ale, and altbier, Düsseldorf’s trademark dark ale with an earthy, dry, and quenching character.
Any of the above would, of course, be welcome at any and all Oktoberfest celebrations, as would their locally brewed interpretations, which sometimes are superior to the originals.
Or you could simply catch a flight to Munich at the end of September and experience the one and only Oktoberfest firsthand.
Thursday, August 16, 2007
The Universal Law of Command works positively or negatively.
From LifeSkill Institute, Inc
If you affirm a negative outcome with feeling, you will get that too. Many experiences of failure and unhappiness can be traced to the operation of negative affirmations or negative commands.
These negative affirmations are usually put into operation unconsciously by simple statements expressing negative outcomes.
For example, negative affirmations like I can’t do it, I know this won’t work out for me, or I always catch cold when the weather changes, become self-fulfilling prophecies. Negative affirmations tend to originate in your feeling nature, in how you feel about yourself.
These negative feelings about yourself tend to subconsciously focus your thoughts on the negative outcomes expressed in the negative affirmation. These negative outcomes manifest in your life experience as failure, lack, limitation, and ill health.
The most devastating aspect of negative affirmations is that they are usually expressed on a subconscious level.
Seemingly idle words and harmless statements, especially those which confirm negative feelings you have about yourself, can become negative affirmations established in your thoughts, and manifesting in your life. Isaiah 55:11 states:
“So shall my word be
that goeth forth out of my mouth;
it shall not return unto me void,
but it shall accomplish that which I please . . .”
Thus internalized negative affirmations, based on negative feelings about yourself, become stumbling blocks to your progress, and short circuit the manifestation of your vision—a better, more fulfilling life.
If you affirm a negative outcome with feeling, you will get that too. Many experiences of failure and unhappiness can be traced to the operation of negative affirmations or negative commands.
These negative affirmations are usually put into operation unconsciously by simple statements expressing negative outcomes.
For example, negative affirmations like I can’t do it, I know this won’t work out for me, or I always catch cold when the weather changes, become self-fulfilling prophecies. Negative affirmations tend to originate in your feeling nature, in how you feel about yourself.
These negative feelings about yourself tend to subconsciously focus your thoughts on the negative outcomes expressed in the negative affirmation. These negative outcomes manifest in your life experience as failure, lack, limitation, and ill health.
The most devastating aspect of negative affirmations is that they are usually expressed on a subconscious level.
Seemingly idle words and harmless statements, especially those which confirm negative feelings you have about yourself, can become negative affirmations established in your thoughts, and manifesting in your life. Isaiah 55:11 states:
“So shall my word be
that goeth forth out of my mouth;
it shall not return unto me void,
but it shall accomplish that which I please . . .”
Thus internalized negative affirmations, based on negative feelings about yourself, become stumbling blocks to your progress, and short circuit the manifestation of your vision—a better, more fulfilling life.
Hard Knocks School of Bartending
From The American Mixologist
Bartending is a challenging occupation, and when done right, it’s a sight to behold. Getting to that lofty elevation requires humility and a resolve to excel. Few have become consummate professionals behind the bar without making every mistake in the book, perhaps more than once.
To make the trip a bit less frenetic and painful for your bartenders, here’s some constructive criticism gleaned from the featured curriculum at the Hard Knocks School of Bartending. These pitfalls cut short careers and give managers conniptions.
Maintaining a “Me First” Perspective — Success in the bar business requires a pervasive team attitude and looking out for the house’s best interests. That entails a cooperative effort, people helping each other to accomplish the stated objective, even when there may be no direct financial compensation pending. Prima donnas should pick another trade.
Disregarding Specified Serving Portions — The misconception that “heavy” gratuities result from pouring“heavy” drinks is a costly one. Over-portioning liquor jacks up cost, swells alcohol potency, and increases liability. Pouring heavy shots puts the other bartenders on the staff, who pour according to the rules, in a bad way. Their drinks will suffer by comparison.
Serving an Inferior Product — In the heat of the rush, quality is typically the first casualty. Make sure that mixes are well-prepared, and juices taste fresh. Fruit garnishes should be cut daily, and be used only in good condition. When it comes to the business’s product, don’t take short cuts.
Inadequate Short-Term Memory — Fault lies in the undeveloped ability to recall customers’ names, and what they’re drinking. While people appreciate bartenders remembering their names, they fully expect bartenders to remember what they’re drinking.
Scattered Priorities — Working a high-volume bar requires the ability to “take care of first things first;” waiting on bar customers before washing glasses, or preparing drink orders for servers before finishing a conversation with a regular. Prioritizing tasks according to their highest and best use of time is a proven method of wrenching order out of chaos.
Preferential Treatment — While its natural to prefer serving some people over others, it’s a fundamental mistake to act upon those sentiments. Treating select customers like second-class citizens is not part of the job description. Your attitude and demeanor can betray how you feel as clearly as inattentive service.
Being an Order Taker — Don’t be complacent just filling orders, make things happen. Suggest new drinks, new products and energize your guests. There is no more effective form of marketing than the enthusiastic efforts of servers at the point of sale.
Letting Professional Demeanor Slip — Crank up the pressure and even common courtesy quickly disappears. Regardless, bartenders must maintain their composure and remain in control of their emotions. Stress and frustration must be internalized, not vented onto the clientele or co-workers.
Jumping Off the Learning Curve — All too frequently bartenders reach a degree of competency and level-off. Excellence requires intellectual curiosity and the pursuit of continuing education. There’s a great deal to learn behind the bar and no room for mental complacency.
Fixating on Gratuities — Making a decent living is best achieved through rendering prompt, competent service. Concentrating on tips during a shift diverts your concentration from the job at-hand. Take care of your guests and the tips will take care of themselves.
Bartending is a challenging occupation, and when done right, it’s a sight to behold. Getting to that lofty elevation requires humility and a resolve to excel. Few have become consummate professionals behind the bar without making every mistake in the book, perhaps more than once.
To make the trip a bit less frenetic and painful for your bartenders, here’s some constructive criticism gleaned from the featured curriculum at the Hard Knocks School of Bartending. These pitfalls cut short careers and give managers conniptions.
Maintaining a “Me First” Perspective — Success in the bar business requires a pervasive team attitude and looking out for the house’s best interests. That entails a cooperative effort, people helping each other to accomplish the stated objective, even when there may be no direct financial compensation pending. Prima donnas should pick another trade.
Disregarding Specified Serving Portions — The misconception that “heavy” gratuities result from pouring“heavy” drinks is a costly one. Over-portioning liquor jacks up cost, swells alcohol potency, and increases liability. Pouring heavy shots puts the other bartenders on the staff, who pour according to the rules, in a bad way. Their drinks will suffer by comparison.
Serving an Inferior Product — In the heat of the rush, quality is typically the first casualty. Make sure that mixes are well-prepared, and juices taste fresh. Fruit garnishes should be cut daily, and be used only in good condition. When it comes to the business’s product, don’t take short cuts.
Inadequate Short-Term Memory — Fault lies in the undeveloped ability to recall customers’ names, and what they’re drinking. While people appreciate bartenders remembering their names, they fully expect bartenders to remember what they’re drinking.
Scattered Priorities — Working a high-volume bar requires the ability to “take care of first things first;” waiting on bar customers before washing glasses, or preparing drink orders for servers before finishing a conversation with a regular. Prioritizing tasks according to their highest and best use of time is a proven method of wrenching order out of chaos.
Preferential Treatment — While its natural to prefer serving some people over others, it’s a fundamental mistake to act upon those sentiments. Treating select customers like second-class citizens is not part of the job description. Your attitude and demeanor can betray how you feel as clearly as inattentive service.
Being an Order Taker — Don’t be complacent just filling orders, make things happen. Suggest new drinks, new products and energize your guests. There is no more effective form of marketing than the enthusiastic efforts of servers at the point of sale.
Letting Professional Demeanor Slip — Crank up the pressure and even common courtesy quickly disappears. Regardless, bartenders must maintain their composure and remain in control of their emotions. Stress and frustration must be internalized, not vented onto the clientele or co-workers.
Jumping Off the Learning Curve — All too frequently bartenders reach a degree of competency and level-off. Excellence requires intellectual curiosity and the pursuit of continuing education. There’s a great deal to learn behind the bar and no room for mental complacency.
Fixating on Gratuities — Making a decent living is best achieved through rendering prompt, competent service. Concentrating on tips during a shift diverts your concentration from the job at-hand. Take care of your guests and the tips will take care of themselves.
Sunday, August 05, 2007
Home Myths Meet Reality: Builders Were Supposed To Handle Downturn; What Went Wrong?
By MICHAEL CORKERY
Recently, the nation's largest home builder, D.R. Horton Inc., reported the first quarterly loss in its 15-year history as a public company.
Yet, only two years ago, Donald Tomnitz, Horton's chief executive, declared confidently: "We can earn our way through any economic cycle, except one like the Great Depression.
" The Great Depression hasn't hit -- but Horton's earnings have declined more severely than most anyone imagined. Another big home builder, Beazer Homes USA Inc., was beset by rumors the past week that it might be filing for bankruptcy-law protection. Beazer firmly denies the rumors.
Still, housing analysts are fretting that banks will clamp down on lending to some builders -- squeezing them of cash just when they might need it. It wasn't supposed to happen like this.
Today's home builders were thought to be better-capitalized, savvier and more geographically diverse than many of their predecessors in the last downturn, in the early 1990s.
While many are expected to weather the slump, concern is mounting about the balance sheets of a growing number of companies.
Amid a broad retreat in housing stocks on Friday, Horton shares fell 4%, Beazer plunged 13% and Hovnanian Enterprises Inc. sagged 9.4% in 4 p.m. New York Stock Exchange composite trading.
What's going wrong? An array of business assumptions that both builders and housing analysts propagated have turned out to be misguided.
The 'Cash Machine' Fallacy
One big assumption had to do with their cash flow: The common wisdom among some analysts was that builders would turn into "cash machines" in the event of a housing downturn, because they would pare construction and land buying. In reality, most builders haven't been able to stockpile as much cash as expected.
That is partly because they have had to keep building large housing developments, even though demand dropped off sharply.
"Once you start putting in the plumbing hookups and the roads, you can't abandon these projects halfway," says Nishu Sood, a housing analyst at Deutsche Bank, because a half-built development risks angering homeowners and local officials.
Also eating into that cash flow: the sharp drop in sales and home prices. After several years of double-digit annual increases, some builders say their average prices are down 7% to 12%.
The incentives that companies are using to sell homes are so large that they are crippling profits.
Take Miami-based Lennar Corp., which said its average incentives were $43,700 on houses worth an average of $342,000. That is up from a year ago, when incentives averaged $24,700. And Lennar has one of the best cash flows in the industry. Others are in a different boat.
As of April 30, the Red Bank, N.J., builder Hovnanian had negative cash flow from operations for the trailing 12 months, according to Moody's Investors Service. "We are confident that we will be cash-flow positive in the fourth quarter," said Hovnanian's chief financial officer, Larry Sorsby.
"We have been a little slower to generate cash than some of our peers because we were one of the fastest-growing home builders. It takes a little longer for us to slow down the train."
Analysts say luxury-condo developer WCI Communities Inc. could also face cash-flow problems, because they expect a growing number of buyers to cancel contracts to buy condos.
WCI declined to comment, saying that it hasn't released its second-quarter earnings.
Of course, not everyone is in this pickle. Some builders, including KB Home, have good cash flow, partly fueled by the sale of it stake in a French home builder. Centex Corp. also adjusted early to the downturn.
Too Much Land
One thing that tripped up builders during the previous slump was that they owned too much land. This time, builders protected themselves by using options to secure land, rather than paying for it outright.
In many option agreements, a builder puts down a deposit on a parcel with the option to buy the land in the future at a set price.
In theory, this should have let builders buy land only when they needed it, while giving them the right to walk away if they didn't need it.
The builders would also be helped by the overall scarcity of developable lots in many markets, Citigroup analyst Stephen Kim wrote in a bullish March 2006 research report.
"The linchpin to our bullish thesis has been the emergence of land constraints," Mr. Kim wrote at the time. "This will allow the builders to outperform expectations in any given demand scenario."
But as it turns out, some builders still ended up owning too much land. Horton says it has a 5.4-year supply of land.
That's up from a 3.5-to-four-year supply of land when the downturn hit. Mr. Kim still believes land constraints will help the builders in the long run. "But when housing demand drops as much as it has, the supply constraint cannot save you from near-term pain," Mr. Kim said in an interview.
Many companies were also acquiring land based on growth rates of as much as 15% and 20%. The options helped reduce some risk, but many builders still bought lots of land outright because they could get higher returns.
"Their discipline broke down," says Mr. Kim. When growth slowed and home sales fell, they were stuck with a glut of land.
Wanted: More Diversity
Builders believed they could protect profits by building in numerous markets across the country. With geographic diversity, they figured that if some markets slowed, others would likely remain stable.
But while the biggest builders did achieve geographic diversity, many didn't achieve profit diversity. In other words, much of the builders' profits came from the markets hardest-hit by the recession.
According to a Credit Suisse analysis, 32% of the builders' profits at the peak of the boom in 2005 came from one state: California. Florida, also an extremely strong market during the boom, was responsible for 14% of profits, and Nevada was responsible for 10% of profits.
Markets that were doing relatively well, such as Texas, bring only moderate profits, in part because home prices are low and those markets are open to enormous competition from thousands of small builders.
Bad-News Bankers
Until recently, many analysts believed banks would be forgiving of the builders. But it now looks as if some companies could run into trouble with their banks.
That is because some builders' net worth is eroding so quickly -- as they write down the value of land -- that some may be getting close to tripping contractual agreements that limit their level of debt in relation to tangible net worth, which is typically their assets minus liabilities, goodwill and intangibles such as trademarks.
As of March 31, WCI had the smallest net-worth "cushion" before it tripped its debt limit, according to Moody's, which recently downgraded its credit rating of the builder.
The banks recently cut Beazer's credit line in half. Beazer said in a conference call with analysts that it didn't need as large a credit line as its previous one.
And while most builders' credit is unsecured, the banks gave Tousa Inc., a Florida builder, a secured line late last year. The company declined to comment.
Recently, the nation's largest home builder, D.R. Horton Inc., reported the first quarterly loss in its 15-year history as a public company.
Yet, only two years ago, Donald Tomnitz, Horton's chief executive, declared confidently: "We can earn our way through any economic cycle, except one like the Great Depression.
" The Great Depression hasn't hit -- but Horton's earnings have declined more severely than most anyone imagined. Another big home builder, Beazer Homes USA Inc., was beset by rumors the past week that it might be filing for bankruptcy-law protection. Beazer firmly denies the rumors.
Still, housing analysts are fretting that banks will clamp down on lending to some builders -- squeezing them of cash just when they might need it. It wasn't supposed to happen like this.
Today's home builders were thought to be better-capitalized, savvier and more geographically diverse than many of their predecessors in the last downturn, in the early 1990s.
While many are expected to weather the slump, concern is mounting about the balance sheets of a growing number of companies.
Amid a broad retreat in housing stocks on Friday, Horton shares fell 4%, Beazer plunged 13% and Hovnanian Enterprises Inc. sagged 9.4% in 4 p.m. New York Stock Exchange composite trading.
What's going wrong? An array of business assumptions that both builders and housing analysts propagated have turned out to be misguided.
The 'Cash Machine' Fallacy
One big assumption had to do with their cash flow: The common wisdom among some analysts was that builders would turn into "cash machines" in the event of a housing downturn, because they would pare construction and land buying. In reality, most builders haven't been able to stockpile as much cash as expected.
That is partly because they have had to keep building large housing developments, even though demand dropped off sharply.
"Once you start putting in the plumbing hookups and the roads, you can't abandon these projects halfway," says Nishu Sood, a housing analyst at Deutsche Bank, because a half-built development risks angering homeowners and local officials.
Also eating into that cash flow: the sharp drop in sales and home prices. After several years of double-digit annual increases, some builders say their average prices are down 7% to 12%.
The incentives that companies are using to sell homes are so large that they are crippling profits.
Take Miami-based Lennar Corp., which said its average incentives were $43,700 on houses worth an average of $342,000. That is up from a year ago, when incentives averaged $24,700. And Lennar has one of the best cash flows in the industry. Others are in a different boat.
As of April 30, the Red Bank, N.J., builder Hovnanian had negative cash flow from operations for the trailing 12 months, according to Moody's Investors Service. "We are confident that we will be cash-flow positive in the fourth quarter," said Hovnanian's chief financial officer, Larry Sorsby.
"We have been a little slower to generate cash than some of our peers because we were one of the fastest-growing home builders. It takes a little longer for us to slow down the train."
Analysts say luxury-condo developer WCI Communities Inc. could also face cash-flow problems, because they expect a growing number of buyers to cancel contracts to buy condos.
WCI declined to comment, saying that it hasn't released its second-quarter earnings.
Of course, not everyone is in this pickle. Some builders, including KB Home, have good cash flow, partly fueled by the sale of it stake in a French home builder. Centex Corp. also adjusted early to the downturn.
Too Much Land
One thing that tripped up builders during the previous slump was that they owned too much land. This time, builders protected themselves by using options to secure land, rather than paying for it outright.
In many option agreements, a builder puts down a deposit on a parcel with the option to buy the land in the future at a set price.
In theory, this should have let builders buy land only when they needed it, while giving them the right to walk away if they didn't need it.
The builders would also be helped by the overall scarcity of developable lots in many markets, Citigroup analyst Stephen Kim wrote in a bullish March 2006 research report.
"The linchpin to our bullish thesis has been the emergence of land constraints," Mr. Kim wrote at the time. "This will allow the builders to outperform expectations in any given demand scenario."
But as it turns out, some builders still ended up owning too much land. Horton says it has a 5.4-year supply of land.
That's up from a 3.5-to-four-year supply of land when the downturn hit. Mr. Kim still believes land constraints will help the builders in the long run. "But when housing demand drops as much as it has, the supply constraint cannot save you from near-term pain," Mr. Kim said in an interview.
Many companies were also acquiring land based on growth rates of as much as 15% and 20%. The options helped reduce some risk, but many builders still bought lots of land outright because they could get higher returns.
"Their discipline broke down," says Mr. Kim. When growth slowed and home sales fell, they were stuck with a glut of land.
Wanted: More Diversity
Builders believed they could protect profits by building in numerous markets across the country. With geographic diversity, they figured that if some markets slowed, others would likely remain stable.
But while the biggest builders did achieve geographic diversity, many didn't achieve profit diversity. In other words, much of the builders' profits came from the markets hardest-hit by the recession.
According to a Credit Suisse analysis, 32% of the builders' profits at the peak of the boom in 2005 came from one state: California. Florida, also an extremely strong market during the boom, was responsible for 14% of profits, and Nevada was responsible for 10% of profits.
Markets that were doing relatively well, such as Texas, bring only moderate profits, in part because home prices are low and those markets are open to enormous competition from thousands of small builders.
Bad-News Bankers
Until recently, many analysts believed banks would be forgiving of the builders. But it now looks as if some companies could run into trouble with their banks.
That is because some builders' net worth is eroding so quickly -- as they write down the value of land -- that some may be getting close to tripping contractual agreements that limit their level of debt in relation to tangible net worth, which is typically their assets minus liabilities, goodwill and intangibles such as trademarks.
As of March 31, WCI had the smallest net-worth "cushion" before it tripped its debt limit, according to Moody's, which recently downgraded its credit rating of the builder.
The banks recently cut Beazer's credit line in half. Beazer said in a conference call with analysts that it didn't need as large a credit line as its previous one.
And while most builders' credit is unsecured, the banks gave Tousa Inc., a Florida builder, a secured line late last year. The company declined to comment.
The Smart Way to Use Your Home Equity
By Loral Langemeier
While it may be true that in many parts of the country, the real estate boom has ended, many people are left with hundreds of thousands of dollars in home equity. Unfortunately, few people know how to use this excess home equity to become wealthy.
I meet regularly with people through my Team Made Millionaire seminars, Loral’s Big Table and my Live Out Loud business who are cash-poor, but have a lot of money tied up in their home and an IRA or 401(k).
What I tell them is the same thing that I’ll tell you here: you won’t ever become wealthy by keeping your money in these “lazy” assets. You’ve got to do something constructive with your assets, and that includes your retirement accounts and your home.
For example, Mick and Mary earned about $150,000 annually between them, but had very little money after taxes and expenses. They had $200,000 equity in their home, which was just sitting there.
After identifying their lazy assets, Mick and Mary decided to pull out $100,000 from their home and do what few people ever think of doing with their home equity. With the $100,000 from their home and another $40,000 from their mutual funds, they invested in several cash-flow producing real estate properties.
What’s interesting about Mick and Mary was that they weren’t particularly interested in becoming full-time real estate investors. Many people find themselves in this situation, and believe that the only way out of the rat race of their corporate jobs is to become real estate investors. That’s simply not true.
Mick and Mary’s real estate investments, which they were able to purchase with the equity in their home, simply allowed them more freedom to pursue other cash-flow producing opportunities that were closer to Mick’s interests.
As a consultant, for example, Mick was more interested in investing in businesses – not through the stock market, but by actually investing in the business itself as a partial owner.
The money Mick and Mary made from their cash-flow homes enabled Mick to scout out other deals, the first of which involved a private-label nutritional products manufacturing and distribution business.
They were able to easily repay the home equity loan, and take extra money from Mick’s consulting business for investing in these other opportunities. Mick and Mary were smart to leverage their home equity into multiple cash-flow generating opportunities.
Do you see the difference between what Mick and Mary did compared with what most people do with their home equity? Most people will take out a home equity loan to purchase toys (cars, a boat, vacations), pay credit card debt, or to remodel the house.
Mick and Mary, on the other hand, were able to use their home equity to purchase cash-flow producing assets. These assets in turn created enough cash for Mick and Mary to pursue other opportunities, repay their credit card debt, and eventually have the same amount of money available for toys, should they wish to do so.
That’s the smart way to use your home equity. Instead of letting it sit as a lazy asset, especially in the current “down” real estate market, you want to intelligently pull out equity to buy cash or equity-producing assets.
Wealth accumulation is a business of asset accumulation. Wealthy people use their assets to buy other assets, and those assets in turn fuel their leisure activities. Eventually, Mick can quit his consulting job if he wishes, or continue to consult strictly on his terms and on his schedule.
Wouldn’t it be great to have the freedom and flexibility to do what you want, when you want it, working in a field that gives you great satisfaction? Perhaps the place to start down the Wealth Cycle path is with your home equity.
Use it wisely though, everyone’s situation is different and each of us have different money rules established. Identify your lazy assets, do your due diligence, follow your money rules and put those lazy assets to work! That’s how millionaires do it, and it’s how you can do it from now on.
While it may be true that in many parts of the country, the real estate boom has ended, many people are left with hundreds of thousands of dollars in home equity. Unfortunately, few people know how to use this excess home equity to become wealthy.
I meet regularly with people through my Team Made Millionaire seminars, Loral’s Big Table and my Live Out Loud business who are cash-poor, but have a lot of money tied up in their home and an IRA or 401(k).
What I tell them is the same thing that I’ll tell you here: you won’t ever become wealthy by keeping your money in these “lazy” assets. You’ve got to do something constructive with your assets, and that includes your retirement accounts and your home.
For example, Mick and Mary earned about $150,000 annually between them, but had very little money after taxes and expenses. They had $200,000 equity in their home, which was just sitting there.
After identifying their lazy assets, Mick and Mary decided to pull out $100,000 from their home and do what few people ever think of doing with their home equity. With the $100,000 from their home and another $40,000 from their mutual funds, they invested in several cash-flow producing real estate properties.
What’s interesting about Mick and Mary was that they weren’t particularly interested in becoming full-time real estate investors. Many people find themselves in this situation, and believe that the only way out of the rat race of their corporate jobs is to become real estate investors. That’s simply not true.
Mick and Mary’s real estate investments, which they were able to purchase with the equity in their home, simply allowed them more freedom to pursue other cash-flow producing opportunities that were closer to Mick’s interests.
As a consultant, for example, Mick was more interested in investing in businesses – not through the stock market, but by actually investing in the business itself as a partial owner.
The money Mick and Mary made from their cash-flow homes enabled Mick to scout out other deals, the first of which involved a private-label nutritional products manufacturing and distribution business.
They were able to easily repay the home equity loan, and take extra money from Mick’s consulting business for investing in these other opportunities. Mick and Mary were smart to leverage their home equity into multiple cash-flow generating opportunities.
Do you see the difference between what Mick and Mary did compared with what most people do with their home equity? Most people will take out a home equity loan to purchase toys (cars, a boat, vacations), pay credit card debt, or to remodel the house.
Mick and Mary, on the other hand, were able to use their home equity to purchase cash-flow producing assets. These assets in turn created enough cash for Mick and Mary to pursue other opportunities, repay their credit card debt, and eventually have the same amount of money available for toys, should they wish to do so.
That’s the smart way to use your home equity. Instead of letting it sit as a lazy asset, especially in the current “down” real estate market, you want to intelligently pull out equity to buy cash or equity-producing assets.
Wealth accumulation is a business of asset accumulation. Wealthy people use their assets to buy other assets, and those assets in turn fuel their leisure activities. Eventually, Mick can quit his consulting job if he wishes, or continue to consult strictly on his terms and on his schedule.
Wouldn’t it be great to have the freedom and flexibility to do what you want, when you want it, working in a field that gives you great satisfaction? Perhaps the place to start down the Wealth Cycle path is with your home equity.
Use it wisely though, everyone’s situation is different and each of us have different money rules established. Identify your lazy assets, do your due diligence, follow your money rules and put those lazy assets to work! That’s how millionaires do it, and it’s how you can do it from now on.
Should I Go To Bartending School?
By Jeremy Sherk
Bartending is one of the few job skills always in demand, and portable worldwide. Even though Bartending is one of the oldest known professions, the skills and knowledge required changes constantly. That is why if you have little to no bartending experience I would suggest attending bartending school.
Do your homework when selecting a bartending school. The best way to do that is to compare all of the bartending schools in your area. Not all are what they are cracked up to be, and you should find one with a low student to teacher ratio. Ask to see the classroom, and pick the one that, to you, best simulates a bar environment.
Here are a few things you can expect to learn at a good bartending school: Basic bar setup, glassware, basic bar ingredients, the art of mixing, equipment handling, speed training, memory training, customer service tips and tricks, private party hosting, and employment tips.
Questions that you should ask the bartending schools before enrolling are: How long the bartending school has been open? How many graduates have found jobs after taking the bartending course? What are the names of bars, restaurants, or establishments that hired from the bartending school?
How many hours of class instruction is included with enrollment? What resources are available after graduation to help you find a job? How long will the job placement service be? Do the bartending school have a program where students can guest bartend for experience at an establishment?
A bartending course generally takes about 2weeks (40 hrs) to complete. You should be given a drink manual or textbook to study from during that time. Make sure the book is not old. The names of drinks can change over time. Within the course at least one day should be reserved for alcohol awareness education.
The program should be called TIPS, that is the best one. You can expect that 1/3 to 1/2 of the time in bartending school will be hands on practice making the drinks. Picking up the actual bottles and working with the soda gun uses muscle memory which is good for people with little to no restaurant/bar experience.
Bartending school instructors should give introduction seminars on wine, liquors, spirits and beer. This is general info from how wine is made to what are the most popular brands from vodka.
Sometimes a test is involved in bartending school, especially from state education certified schools where you have to make a number of drinks correctly in a certain amount of time. Be wary, however, because many bartending schools try to get you to believe that a bartender certification is needed in order to be hired as a bartender.
Secondly, they all will try to convey that their school is the best. Most states do not require you to go to bartending school, so you need to find out if your state requires certification. Again, do your homework and look at each of the schools in your area and compare them.
Pick the on that you feel is best based on the criteria I have described. Once you have completed bartending school, WHERE you get a job is the most important thing. Most bartending schools have job placement programs, but be careful because you don't just want a job, you want the best job.
That is why you always should ask the names of the establishments that have hired students from that particular bartending school. You can make a lot of money as a professional bartender, but professional bartenders work at professional places.
Do you think you are going to make a lot of money at a dive bar with dollar drafts? Or a packed night club where drinks cost $8+ a piece. Your tips are usually a percentage of sales so you want to be employed wherever they are selling the most drinks consistently.
If you learn solid interview techniques and how to build a great resume, even coming right out of bartending school, you can get and excel at a great bartending job. One that brings you a lot of income!
Bartending is one of the few job skills always in demand, and portable worldwide. Even though Bartending is one of the oldest known professions, the skills and knowledge required changes constantly. That is why if you have little to no bartending experience I would suggest attending bartending school.
Do your homework when selecting a bartending school. The best way to do that is to compare all of the bartending schools in your area. Not all are what they are cracked up to be, and you should find one with a low student to teacher ratio. Ask to see the classroom, and pick the one that, to you, best simulates a bar environment.
Here are a few things you can expect to learn at a good bartending school: Basic bar setup, glassware, basic bar ingredients, the art of mixing, equipment handling, speed training, memory training, customer service tips and tricks, private party hosting, and employment tips.
Questions that you should ask the bartending schools before enrolling are: How long the bartending school has been open? How many graduates have found jobs after taking the bartending course? What are the names of bars, restaurants, or establishments that hired from the bartending school?
How many hours of class instruction is included with enrollment? What resources are available after graduation to help you find a job? How long will the job placement service be? Do the bartending school have a program where students can guest bartend for experience at an establishment?
A bartending course generally takes about 2weeks (40 hrs) to complete. You should be given a drink manual or textbook to study from during that time. Make sure the book is not old. The names of drinks can change over time. Within the course at least one day should be reserved for alcohol awareness education.
The program should be called TIPS, that is the best one. You can expect that 1/3 to 1/2 of the time in bartending school will be hands on practice making the drinks. Picking up the actual bottles and working with the soda gun uses muscle memory which is good for people with little to no restaurant/bar experience.
Bartending school instructors should give introduction seminars on wine, liquors, spirits and beer. This is general info from how wine is made to what are the most popular brands from vodka.
Sometimes a test is involved in bartending school, especially from state education certified schools where you have to make a number of drinks correctly in a certain amount of time. Be wary, however, because many bartending schools try to get you to believe that a bartender certification is needed in order to be hired as a bartender.
Secondly, they all will try to convey that their school is the best. Most states do not require you to go to bartending school, so you need to find out if your state requires certification. Again, do your homework and look at each of the schools in your area and compare them.
Pick the on that you feel is best based on the criteria I have described. Once you have completed bartending school, WHERE you get a job is the most important thing. Most bartending schools have job placement programs, but be careful because you don't just want a job, you want the best job.
That is why you always should ask the names of the establishments that have hired students from that particular bartending school. You can make a lot of money as a professional bartender, but professional bartenders work at professional places.
Do you think you are going to make a lot of money at a dive bar with dollar drafts? Or a packed night club where drinks cost $8+ a piece. Your tips are usually a percentage of sales so you want to be employed wherever they are selling the most drinks consistently.
If you learn solid interview techniques and how to build a great resume, even coming right out of bartending school, you can get and excel at a great bartending job. One that brings you a lot of income!
Saturday, August 04, 2007
Ten Ways To Torpedo Your Sales Pitch
By Maureen Farrell
A wise man once said: "Investors don't like you, or your company. They don't care about your products. They just need to know how they're going to make money--or they'll get fired if they don't."
In this case, that man is Jimmy Treybig, partner at venture capital firm New Enterprise Associates, and he speaks for his ilk.
You see, it doesn't matter whether you've hit upon the next eBay (nasdaq: EBAY - news - people ), iPod or MySpace; if you don't know how to convey the brilliance of your idea--and more to the point, how it will make you and your investors a heaping pile of dough--then you might as well pack it in.
There are myriad surefire ways to torpedo your pitch. One common killer: Focusing on the details rather than on the overall market and your company's prospects within it. "People get mired in how sexy the technology is," says Pete Selda, a serial entrepreneur and CEO of Sunnyville, Calif.-based Idengines, a software firm.
Selda, who sold an anti-phishing software company to Symantec (nasdaq: SYMC - news - people ) in 2005, admits that skimping on details in favor of a broader, more compelling storyline is a constant challenge.
"I sometimes get so excited about what I want to accomplish that I get into lots of detail," he says. A second way to blow a hole in your pitch is by delivering multiple messages.
Whether you're stumping for capital or selling an advertising campaign, make sure that you can convey a tangible, two-minute story.
"Venture capitalists don't have long attention spans," says Treybig. "You need to get them excited." Ironically, a lot of information overload stems from the very tool that was supposed to simplify the presentation process: Microsoft's (nasdaq: MSFT - news - people ) PowerPoint software.
While PowerPoint is ideal for flashing useful charts and graphs, too much text is a turn-off. "Detailed slides are a great way to lose the audience," says Gary Hankins, author of The Power of the Pitch.
"People spend too much time creating PowerPoints and not enough time developing the key points of a presentation." Hankins' advice: Follow the "six by six" rule.
If you are going to use text, keep it no more than six bullet points per slide, and no more than six words per bullet. Another word on technique: Never turn your back on the audience for more than a second or two.
If there's a chart or graph you need to explain, remember the three T's: touch, turn and talk. Use a pointer to call attention to a certain fact or figure, but then make sure to face the audience when you're making your point.
Flat, uninspired presentations are also killers, though there's a fine line between infectious passion and irrational exuberance. Miscalculations, overly zealous projections or failure to explain missed numbers are all deadly.
Make sure your story tracks the market and the numbers you present; investors don't want to work with a management team that doesn't have a firm grip on reality. Consistency is particularly critical if you've met with the same investors several times.
"Assume that capital providers are very smart individuals with long memories," says Robert Warshauer, managing director at Kroll, a financial advisory and security consultant. "What you told them a year ago, they will remember."
You should remember, too, that all business ideas have inherent risks. Don't ignore them and don't pretend they aren't there--it's insulting, and savvy investors (and customers) won't stand for it.
Instead, identify the risks and explain how you plan to deal with them, and perhaps even turn them to your advantage some day.
Finally, don't forget the knockout punch. Every good presentation needs a good closer--and not merely a summation of points and a simple thank you, says Hankins. Get feedback: If you don't, and the audience has objections, "you could get dismissed without the opportunity to disprove them."
In Pictures: 10 Presentation Killers
In Pictures: Podium Tactics From 28 Public Speaking Pros
A wise man once said: "Investors don't like you, or your company. They don't care about your products. They just need to know how they're going to make money--or they'll get fired if they don't."
In this case, that man is Jimmy Treybig, partner at venture capital firm New Enterprise Associates, and he speaks for his ilk.
You see, it doesn't matter whether you've hit upon the next eBay (nasdaq: EBAY - news - people ), iPod or MySpace; if you don't know how to convey the brilliance of your idea--and more to the point, how it will make you and your investors a heaping pile of dough--then you might as well pack it in.
There are myriad surefire ways to torpedo your pitch. One common killer: Focusing on the details rather than on the overall market and your company's prospects within it. "People get mired in how sexy the technology is," says Pete Selda, a serial entrepreneur and CEO of Sunnyville, Calif.-based Idengines, a software firm.
Selda, who sold an anti-phishing software company to Symantec (nasdaq: SYMC - news - people ) in 2005, admits that skimping on details in favor of a broader, more compelling storyline is a constant challenge.
"I sometimes get so excited about what I want to accomplish that I get into lots of detail," he says. A second way to blow a hole in your pitch is by delivering multiple messages.
Whether you're stumping for capital or selling an advertising campaign, make sure that you can convey a tangible, two-minute story.
"Venture capitalists don't have long attention spans," says Treybig. "You need to get them excited." Ironically, a lot of information overload stems from the very tool that was supposed to simplify the presentation process: Microsoft's (nasdaq: MSFT - news - people ) PowerPoint software.
While PowerPoint is ideal for flashing useful charts and graphs, too much text is a turn-off. "Detailed slides are a great way to lose the audience," says Gary Hankins, author of The Power of the Pitch.
"People spend too much time creating PowerPoints and not enough time developing the key points of a presentation." Hankins' advice: Follow the "six by six" rule.
If you are going to use text, keep it no more than six bullet points per slide, and no more than six words per bullet. Another word on technique: Never turn your back on the audience for more than a second or two.
If there's a chart or graph you need to explain, remember the three T's: touch, turn and talk. Use a pointer to call attention to a certain fact or figure, but then make sure to face the audience when you're making your point.
Flat, uninspired presentations are also killers, though there's a fine line between infectious passion and irrational exuberance. Miscalculations, overly zealous projections or failure to explain missed numbers are all deadly.
Make sure your story tracks the market and the numbers you present; investors don't want to work with a management team that doesn't have a firm grip on reality. Consistency is particularly critical if you've met with the same investors several times.
"Assume that capital providers are very smart individuals with long memories," says Robert Warshauer, managing director at Kroll, a financial advisory and security consultant. "What you told them a year ago, they will remember."
You should remember, too, that all business ideas have inherent risks. Don't ignore them and don't pretend they aren't there--it's insulting, and savvy investors (and customers) won't stand for it.
Instead, identify the risks and explain how you plan to deal with them, and perhaps even turn them to your advantage some day.
Finally, don't forget the knockout punch. Every good presentation needs a good closer--and not merely a summation of points and a simple thank you, says Hankins. Get feedback: If you don't, and the audience has objections, "you could get dismissed without the opportunity to disprove them."
In Pictures: 10 Presentation Killers
In Pictures: Podium Tactics From 28 Public Speaking Pros
Despite Volatility, Stocks Are a Good Deal
By Donald Luskin
WHILE IT'S BEEN a turbulent couple of weeks for stocks, the resiliency of the market in the face of rampant panic and pessimism has been very encouraging. That means two things.
First, at these prices, even though stocks are still near all-time highs, they are nevertheless bargain-priced. Second, the credit crisis that has triggered the recent volatility really isn't all that threatening.
First, let's look at value. The S&P 500 may be near all-time highs, but that only puts it approximately where it was at the last high, in the year 2000, a full seven years ago. Back then, aggregate annual earnings were about $479 billion. Today, with stocks at about the same price, earnings are $820 billion.
That's right. Today you get $820 billion in earnings for the same price you used to have to pay for $479 billion. OK, a lot of that may be just that stocks were overvalued in 2000. But with earnings 71% higher now compared to seven years ago, there's no case whatsoever that stocks are overvalued today.
I think they're undervalued. Those earnings just keep pouring in. Over the last year, S&P 500 earnings have grown 11.5%. The consensus estimate of analysts is that they will grow 13.3% over the coming year (and, by the way, the consensus estimate has been a very accurate forecast the last several years).
Now how about the crisis in credit markets triggered by the collapse of subprime lending? The real issue for markets here isn't whether there are losses in certain mortgage investments (although those losses could be considerable), or whether defaulting borrowers are thrown out of their houses (although some will be).
Though difficult for those who experience them directly, those are small adjustments in the grand scheme of things, and the economy can easily absorb them as part of its dynamic process.
The real risk is a systemic collapse of credit markets. I don't mean a waterfall of defaults, each one triggering a further default. I mean an overall loss of confidence. Freely flowing borrowing and lending is absolutely essential to any modern economy, and it is entirely built on confidence.
Not just confidence that loans will be repaid, but confidence in the structure of credit markets themselves — which have become very complicated in recent years. Credit markets today are dominated by extremely complex derivative securities.
It's no longer just a matter of "I'll loan you a thousand dollars, and you pay me back in two years plus 5% interest." The new derivatives allow the risk of lending money to be structured optimally and spread out among many different kinds of investors who have different needs and risk appetites.
It's all good. But their complexity is daunting, and in times of sudden change, that complexity can make it hard for market participants to know where they stand — and that leads to a loss of confidence.
Many subprime mortgages have been packaged in complex derivative securities called CDOs — collateralized debt obligations. A CDO issues shares to investors, and promises to pay interest and principal over time as a function of the performance of the mortgages it owns.
CDO investors buy different "tranches," or slices, of the same underlying security. One investor may choose a senior tranche, which has first claim on all the income from the underlying mortgages. Junior tranches are only paid when the senior tranches are satisfied first.
That means if some of the subprime mortgages in the CDO go into default, the investors with senior tranches will probably do just fine. But those holding junior tranches could lose everything.
When you hear news stories about how CDOs holding subprime mortgages were rated AAA — the highest investment-grade rating from the bond-rating agencies — it may seem absurd, but it really makes sense.
It's the senior tranches that are highly rated — not the subprime mortgages themselves — because those tranches are in a very strong position to get paid. Now with default rates higher than expected, the junior tranches are getting wiped out.
There's a lot of wailing from the speculators who bought those, especially those who did so on leverage. But the reality is that the major institutions who bought the senior tranches are going to do just fine.
But because these structures are so complex, and because they do not trade on organized markets, nobody really knows for sure where they stand. Am I a winner or a loser? If I'm a loser, how much have I lost? If I'm a winner — for now — how close am I to bearing losses in the future?
So the CDO market is frozen. Many billions of dollars of borrowing and lending flow through that market, so that means that the credit markets themselves are severely impaired.
The problem flows into a related form of security — the CLO, or collateralized loan obligation. They work the same way as CDOs, but instead of mortgages they hold corporate loans, such as the loans made to private-equity firms doing corporate buyouts. No subprime mortgages here — but the complexity of the CLO structure has everybody spooked.
Many billions of dollars committed to buyouts are now at risk because the CLO market has shut down. That puts major investment banks on the hook to come up with the money for the buyouts some other way — or put it up themselves. Failing that, they will have to pay billions in "break-up fees."
So it's a mess to be sure. But it's not a real mess — it's just a psychological mess. Investors have to get comfortable with where they stand, what their losses are, and what kind of risks they will be willing to bear in the future.
That's a totally different thing than a cascading wave of defaults that wipes everybody out one after another. That's simply not happening. That means that after a brief period of adjustment, investors and speculators will do what they do. They will invest and they will speculate.
The credit markets will ease up, with or without CDOs and CLOs (I strongly suspect it will be with them, not without them). Why? Simple greed — and greed is good. Investors invest and speculators speculate in order to make money.
There is money to be made in mortgage lending because people need mortgages — there will be lending. There is money to be made in financing corporate buyouts, because it's smart to do corporate buyouts — there will be financing.
Stocks will have to live with a little uncertainty, while we see just how "brief" this brief period of adjustment is. But the credit markets will repair themselves and stocks will be at new highs before you know it.
Donald Luskin is chief investment officer of Trend Macrolytics, an economics consulting firm serving institutional investors. You may contact him at don@trendmacro.com.
WHILE IT'S BEEN a turbulent couple of weeks for stocks, the resiliency of the market in the face of rampant panic and pessimism has been very encouraging. That means two things.
First, at these prices, even though stocks are still near all-time highs, they are nevertheless bargain-priced. Second, the credit crisis that has triggered the recent volatility really isn't all that threatening.
First, let's look at value. The S&P 500 may be near all-time highs, but that only puts it approximately where it was at the last high, in the year 2000, a full seven years ago. Back then, aggregate annual earnings were about $479 billion. Today, with stocks at about the same price, earnings are $820 billion.
That's right. Today you get $820 billion in earnings for the same price you used to have to pay for $479 billion. OK, a lot of that may be just that stocks were overvalued in 2000. But with earnings 71% higher now compared to seven years ago, there's no case whatsoever that stocks are overvalued today.
I think they're undervalued. Those earnings just keep pouring in. Over the last year, S&P 500 earnings have grown 11.5%. The consensus estimate of analysts is that they will grow 13.3% over the coming year (and, by the way, the consensus estimate has been a very accurate forecast the last several years).
Now how about the crisis in credit markets triggered by the collapse of subprime lending? The real issue for markets here isn't whether there are losses in certain mortgage investments (although those losses could be considerable), or whether defaulting borrowers are thrown out of their houses (although some will be).
Though difficult for those who experience them directly, those are small adjustments in the grand scheme of things, and the economy can easily absorb them as part of its dynamic process.
The real risk is a systemic collapse of credit markets. I don't mean a waterfall of defaults, each one triggering a further default. I mean an overall loss of confidence. Freely flowing borrowing and lending is absolutely essential to any modern economy, and it is entirely built on confidence.
Not just confidence that loans will be repaid, but confidence in the structure of credit markets themselves — which have become very complicated in recent years. Credit markets today are dominated by extremely complex derivative securities.
It's no longer just a matter of "I'll loan you a thousand dollars, and you pay me back in two years plus 5% interest." The new derivatives allow the risk of lending money to be structured optimally and spread out among many different kinds of investors who have different needs and risk appetites.
It's all good. But their complexity is daunting, and in times of sudden change, that complexity can make it hard for market participants to know where they stand — and that leads to a loss of confidence.
Many subprime mortgages have been packaged in complex derivative securities called CDOs — collateralized debt obligations. A CDO issues shares to investors, and promises to pay interest and principal over time as a function of the performance of the mortgages it owns.
CDO investors buy different "tranches," or slices, of the same underlying security. One investor may choose a senior tranche, which has first claim on all the income from the underlying mortgages. Junior tranches are only paid when the senior tranches are satisfied first.
That means if some of the subprime mortgages in the CDO go into default, the investors with senior tranches will probably do just fine. But those holding junior tranches could lose everything.
When you hear news stories about how CDOs holding subprime mortgages were rated AAA — the highest investment-grade rating from the bond-rating agencies — it may seem absurd, but it really makes sense.
It's the senior tranches that are highly rated — not the subprime mortgages themselves — because those tranches are in a very strong position to get paid. Now with default rates higher than expected, the junior tranches are getting wiped out.
There's a lot of wailing from the speculators who bought those, especially those who did so on leverage. But the reality is that the major institutions who bought the senior tranches are going to do just fine.
But because these structures are so complex, and because they do not trade on organized markets, nobody really knows for sure where they stand. Am I a winner or a loser? If I'm a loser, how much have I lost? If I'm a winner — for now — how close am I to bearing losses in the future?
So the CDO market is frozen. Many billions of dollars of borrowing and lending flow through that market, so that means that the credit markets themselves are severely impaired.
The problem flows into a related form of security — the CLO, or collateralized loan obligation. They work the same way as CDOs, but instead of mortgages they hold corporate loans, such as the loans made to private-equity firms doing corporate buyouts. No subprime mortgages here — but the complexity of the CLO structure has everybody spooked.
Many billions of dollars committed to buyouts are now at risk because the CLO market has shut down. That puts major investment banks on the hook to come up with the money for the buyouts some other way — or put it up themselves. Failing that, they will have to pay billions in "break-up fees."
So it's a mess to be sure. But it's not a real mess — it's just a psychological mess. Investors have to get comfortable with where they stand, what their losses are, and what kind of risks they will be willing to bear in the future.
That's a totally different thing than a cascading wave of defaults that wipes everybody out one after another. That's simply not happening. That means that after a brief period of adjustment, investors and speculators will do what they do. They will invest and they will speculate.
The credit markets will ease up, with or without CDOs and CLOs (I strongly suspect it will be with them, not without them). Why? Simple greed — and greed is good. Investors invest and speculators speculate in order to make money.
There is money to be made in mortgage lending because people need mortgages — there will be lending. There is money to be made in financing corporate buyouts, because it's smart to do corporate buyouts — there will be financing.
Stocks will have to live with a little uncertainty, while we see just how "brief" this brief period of adjustment is. But the credit markets will repair themselves and stocks will be at new highs before you know it.
Donald Luskin is chief investment officer of Trend Macrolytics, an economics consulting firm serving institutional investors. You may contact him at don@trendmacro.com.
With premium beers, the right glass can make all the difference in taste, presentation
By STEPHEN BEAUMONT
Cast a glance across the bar at almost any restaurant, cafe, pub or tavern and chances are you’ll find a wealth of glassware. For certain you’ll see wine glasses, in at least still and sparkling wine formats. You may even find individual designs for both red and white wines or even different, larger shapes for brandishing with the more expensive bottles.
There will be highball and rocks glasses, plus cocktail glasses for martinis and other drinks served straight up, and maybe another style or three for margaritas, brandies, and other specialty cocktails and spirits.
But for beer? Well, if the bar is like the vast majority of others in the county, ales and lagers in all their styles and permutations will be accorded but one lonely and, let’s face it, rather homely vessel: the shaker glass.
Frankly, beer deserves better. Walk into any cafe in Belgium, where beer is treated with the same respect as is wine, and you will find different glasses for not only each style of beer, but often every individual brand.
In Bavaria, pilsners are poured in one style of glass, pale lagers in another and wheat beers in a very stylish third.Even in England, where pints of best bitter and ordinary lager comprise the vast majority of all beer sold, pubs will stock specialized glassware for stronger or more full-bodied brews.
But aping the practices of the Europeans is not why it’s recommendable to break out of the single beer glass rut. It’s all about maximizing the flavors of premium beers and driving sales of the high-margin brews with eye-catching presentation.
As with wine, the numerous kinds of beer are better served in different kinds of glasses, rather than just in a shaker glass, because some glass shapes better accentuate certain beers.
Just as it has been proven that different wines simply taste better when presented in specific glass shapes, so too is there evidence that the taste of various beers can be altered by the style of vessel in which they are served.
With their robust aromas and assertively dry characters, for example, pale ales show their best side when poured into a straight-sided or slightly sloped glass with a wide mouth.
More effervescent pilsners, on the other hand, benefit from taller, thinner glasses for the same reason sparkling wines are offered in flutes: The design concentrates the bubbles and accentuates aroma.
Stronger ales and doppelbocks are at their best in rounded, snifter-like or tulip shaped glasses, so that their rich hues and robust aromas may be properly savored and appreciated.
None of this, of course, is going to happen in a shaker glass.
Further, where stronger beers are concerned, size can be as important as shape, since offering 16 ounces of, say, a 10-percent-alcohol barley wine is not necessarily such a good idea. Operators also can get a boost from the aesthetics of beer glassware.
Consider the effect of a half-liter of Bavarian-style wheat beer being carried across the room and served to the lucky woman at table 10. Elegant, statuesque and topped with a fluffy cap of pure white foam, the glass is going to catch customers’ eyes. Before you know it, premium priced wheat beers will be flying across the bar.
The same effect will hold true for barley wines, Belgian ales and even ultrapremium craft beers, each poured from the tap into their own signature glasses. Often, operators embarking upon a premium beer program for the first time have concerns about how to best make the customer conscious of the variety of beers being stocked.
Highlighting the beers in carefully chosen and properly presented glassware remains one of the most effective ways to maximize awareness, not to mention highly profitable sales of premium beer.
Stephen Beaumont is a veteran beer writer and author of five books on the subject. His writing on beer, drinks, food and travel appears in a wide variety of national and international publications.
Cast a glance across the bar at almost any restaurant, cafe, pub or tavern and chances are you’ll find a wealth of glassware. For certain you’ll see wine glasses, in at least still and sparkling wine formats. You may even find individual designs for both red and white wines or even different, larger shapes for brandishing with the more expensive bottles.
There will be highball and rocks glasses, plus cocktail glasses for martinis and other drinks served straight up, and maybe another style or three for margaritas, brandies, and other specialty cocktails and spirits.
But for beer? Well, if the bar is like the vast majority of others in the county, ales and lagers in all their styles and permutations will be accorded but one lonely and, let’s face it, rather homely vessel: the shaker glass.
Frankly, beer deserves better. Walk into any cafe in Belgium, where beer is treated with the same respect as is wine, and you will find different glasses for not only each style of beer, but often every individual brand.
In Bavaria, pilsners are poured in one style of glass, pale lagers in another and wheat beers in a very stylish third.Even in England, where pints of best bitter and ordinary lager comprise the vast majority of all beer sold, pubs will stock specialized glassware for stronger or more full-bodied brews.
But aping the practices of the Europeans is not why it’s recommendable to break out of the single beer glass rut. It’s all about maximizing the flavors of premium beers and driving sales of the high-margin brews with eye-catching presentation.
As with wine, the numerous kinds of beer are better served in different kinds of glasses, rather than just in a shaker glass, because some glass shapes better accentuate certain beers.
Just as it has been proven that different wines simply taste better when presented in specific glass shapes, so too is there evidence that the taste of various beers can be altered by the style of vessel in which they are served.
With their robust aromas and assertively dry characters, for example, pale ales show their best side when poured into a straight-sided or slightly sloped glass with a wide mouth.
More effervescent pilsners, on the other hand, benefit from taller, thinner glasses for the same reason sparkling wines are offered in flutes: The design concentrates the bubbles and accentuates aroma.
Stronger ales and doppelbocks are at their best in rounded, snifter-like or tulip shaped glasses, so that their rich hues and robust aromas may be properly savored and appreciated.
None of this, of course, is going to happen in a shaker glass.
Further, where stronger beers are concerned, size can be as important as shape, since offering 16 ounces of, say, a 10-percent-alcohol barley wine is not necessarily such a good idea. Operators also can get a boost from the aesthetics of beer glassware.
Consider the effect of a half-liter of Bavarian-style wheat beer being carried across the room and served to the lucky woman at table 10. Elegant, statuesque and topped with a fluffy cap of pure white foam, the glass is going to catch customers’ eyes. Before you know it, premium priced wheat beers will be flying across the bar.
The same effect will hold true for barley wines, Belgian ales and even ultrapremium craft beers, each poured from the tap into their own signature glasses. Often, operators embarking upon a premium beer program for the first time have concerns about how to best make the customer conscious of the variety of beers being stocked.
Highlighting the beers in carefully chosen and properly presented glassware remains one of the most effective ways to maximize awareness, not to mention highly profitable sales of premium beer.
Stephen Beaumont is a veteran beer writer and author of five books on the subject. His writing on beer, drinks, food and travel appears in a wide variety of national and international publications.
Friday, August 03, 2007
How to Find the Best Business Opportunities
Are you on the lookout for a new business opportunity? Business opportunities offer the chance to add to your income. If things go really well, you might even be able to fire your boss and provide completely for the needs of yourself and your family.
There is a huge variety of business opportunities available to match almost any interest and working style. They can be found in the real world and on the Internet.
What they have in common is that business opportunities have streamlined the creation of a business by providing a product, a service or the equipment you need to get started.
In most cases, a "business opportunity" is talking about a system that can be repeatedly sold to different buyers, not the sale of a single business. Once an independent business is sold, it's not available to anyone else.
The buyer can do whatever they want with the business they've bought and there are usually no continuing transactions between the buyer and the seller of the business. Business opportunities are usually a package deal. Most come with a specific product designed to meet a need.
If people need a product, that means there's a "market" for the product. It may seem obvious, but you should be sure that when you look at business opportunities, you should consider whether there is really a market for the product or not. Even if people need the product, there must be a way to let them know it's for sale.
Many business opportunities include a marketing program of some kind.Let's consider some of the advantages of business opportunities. They usually cost a lot less than a franchise to get started. But, like a franchise, business opportunities help you learn from the experience of others by using a repetitive system or proven product.
Some business opportunities include a complete training program and one-on-one consultation. You can join with others in cooperative advertising and marketing, and leverage the power of a larger company.You should be aware of some of the disadvantages connected with business opportunities.
First of all, it's your responsibility to investigate all aspects of the business opportunity. The company providing the business opportunity makes their money by selling you the opportunity. See if you can find out what their support is like after the sale.
Is there anything that might make it difficult for you to compete (like exclusivity clauses or territorial restrictions)? How's the business health of the business opportunity provider?
Calculate the impact on your operations if they happen to go bankrupt. Speaking of the company, how long have they been offering this particular business opportunity?
Do they have an unblemished reputation? Are they conducting business in a way that's compatible with your own ethics and standards? One of the best ways to evaluate a business opportunity is to talk to someone who's tried it out in the past. Find out if they were able to be successful with it.
If not, what were the obstacles? How much knowledge do you really have about the service or product connected with the business opportunity?
If it's something new to you, will the company provide information and training to help you get started? Also, are you sure that there's a profitable market for the product or service being offered?
Remember that interested people and interested buyers are two different things. Just because there's a buzz about something doesn't mean it will sell.
How much income can you reasonably expect from the business opportunity you're considering? One the one hand, you want to make sure that your potential income is not limited.
On the other hand, you need to beware of claims that you can become fabulously wealthy in a short period of time with no work required. Before you jump into a new business opportunity, spend some time evaluating yourself as well. Do you have the financial freedom to invest in something new?
Are you passionate and excited about making it work? Keep in mind that business opportunities will still take a significant amount of time, even if they've done a lot of the groundwork already. How much time do you have and are you free to spend it on this new opportunity?
Business opportunities are everywhere, so it should be possible to find something that you can do. But don't make an emotional purchase and then try to justify it later. Carefully consider what's available and choose what's best for you.
Real business opportunities should be around long enough for you to make the right decision.This Business Opportunities article was produced for http://www.business-trader.com.au
There is a huge variety of business opportunities available to match almost any interest and working style. They can be found in the real world and on the Internet.
What they have in common is that business opportunities have streamlined the creation of a business by providing a product, a service or the equipment you need to get started.
In most cases, a "business opportunity" is talking about a system that can be repeatedly sold to different buyers, not the sale of a single business. Once an independent business is sold, it's not available to anyone else.
The buyer can do whatever they want with the business they've bought and there are usually no continuing transactions between the buyer and the seller of the business. Business opportunities are usually a package deal. Most come with a specific product designed to meet a need.
If people need a product, that means there's a "market" for the product. It may seem obvious, but you should be sure that when you look at business opportunities, you should consider whether there is really a market for the product or not. Even if people need the product, there must be a way to let them know it's for sale.
Many business opportunities include a marketing program of some kind.Let's consider some of the advantages of business opportunities. They usually cost a lot less than a franchise to get started. But, like a franchise, business opportunities help you learn from the experience of others by using a repetitive system or proven product.
Some business opportunities include a complete training program and one-on-one consultation. You can join with others in cooperative advertising and marketing, and leverage the power of a larger company.You should be aware of some of the disadvantages connected with business opportunities.
First of all, it's your responsibility to investigate all aspects of the business opportunity. The company providing the business opportunity makes their money by selling you the opportunity. See if you can find out what their support is like after the sale.
Is there anything that might make it difficult for you to compete (like exclusivity clauses or territorial restrictions)? How's the business health of the business opportunity provider?
Calculate the impact on your operations if they happen to go bankrupt. Speaking of the company, how long have they been offering this particular business opportunity?
Do they have an unblemished reputation? Are they conducting business in a way that's compatible with your own ethics and standards? One of the best ways to evaluate a business opportunity is to talk to someone who's tried it out in the past. Find out if they were able to be successful with it.
If not, what were the obstacles? How much knowledge do you really have about the service or product connected with the business opportunity?
If it's something new to you, will the company provide information and training to help you get started? Also, are you sure that there's a profitable market for the product or service being offered?
Remember that interested people and interested buyers are two different things. Just because there's a buzz about something doesn't mean it will sell.
How much income can you reasonably expect from the business opportunity you're considering? One the one hand, you want to make sure that your potential income is not limited.
On the other hand, you need to beware of claims that you can become fabulously wealthy in a short period of time with no work required. Before you jump into a new business opportunity, spend some time evaluating yourself as well. Do you have the financial freedom to invest in something new?
Are you passionate and excited about making it work? Keep in mind that business opportunities will still take a significant amount of time, even if they've done a lot of the groundwork already. How much time do you have and are you free to spend it on this new opportunity?
Business opportunities are everywhere, so it should be possible to find something that you can do. But don't make an emotional purchase and then try to justify it later. Carefully consider what's available and choose what's best for you.
Real business opportunities should be around long enough for you to make the right decision.This Business Opportunities article was produced for http://www.business-trader.com.au
Finding the Right Investments for a Truly Diverse Portfolio
By Loral Langemeier
The Live Out Loud community has some amazing wealth builders. They understand Wealth Cycle Investing and they work hard at creating diverse portfolios that generate high returns. They aren’t shy about bringing deals to the table and they have zero tolerance for anyone who is not honest and open about their deals.
While Live Out Loud is an educational company focused on teaching people about money, wealth, and the Wealth Cycle, like any educational institution, networks of peers naturally form.
In my community, which extends far beyond the Live Out Loud community, people are anxious to help each other achieve success in their financial investments.
Thus, finding the right investments is an essential component of this community. We emphasize individual responsibility in due diligence on any deal but will immediately oust anyone with a negative attitude, who lies about a deal, or doesn’t follow through on his or her promises.
I suspect that you’d like to get your hands on deals that produce an annual cash flow of 30 percent on capital or earn an easy 12 percent on money that’s just sitting there. Here are a few tips on how you can find the right investments for your portfolio:
1. Build your community. One reason wealthy people find good investments is that they are in community with each other. Imagine that the people you spend your time with are all deeply in debt and complain about the economy. Will they be a source of good investment information? Not likely.
That’s why you should become involved with successful people that are regularly investing in deals that earn higher-than-average returns on capital and/or appreciating at higher-than-average rates.
2. Participate in your community. Certainly, you can participate in your community as a passive investor. If you’ve got money in stocks, equity in your home or even a large sum in your IRA, you can re-direct this money into various investments. However, see if you can find other ways to participate in your community.
Tag along with one of your community’s real estate experts to learn how to find the best properties. Then, use your newfound knowledge and bring some deals back to your community. Learn and grow so that you can give back to a community that has given to you.
3. Educate yourself. Learn about the different kinds of investment opportunities. In my community, we’ve brought in an expert on oil and gas to teach us about the science and practice of drilling for oil.
As a result, many of us have invested in actual oil wells. Consequently, we’re experiencing very good returns and enjoying the tax advantages of investing in oil and gas.
4. Do your due diligence. When you’re presented with an opportunity (and you will be if you’ve done a good job building your community), it is your responsibility to investigate the investment opportunity according to your personal money rules. If it doesn’t fit, let go — even if senior members of your community bought into the deal.
5. Look for direct asset allocation. True diversity in a portfolio means that your investments are spread across several asset classes. This means that you’re participating directly in the purchase of land, the development of a high-end condo complex, the purchase of an oil well, or the purchase of a business.
You’re not just buying stock in these businesses — you’re buying the business (or a share of it).
6. Find both cash-flow investments and appreciation investments. To fully implement Wealth Cycle Investing, you’ll need cash to purchase your assets. Cash-flow producing assets will give you the money to purchase assets that will appreciate over time.
I can’t emphasize enough the value of a successful community of like-minded investors. You don’t want to hook up with loners who’d rather hide their deals. Seek established wealth-building communities of which you can become a part.
Remember that it’s just as important to have good people on your side, as it is to have good investments.
The Live Out Loud community has some amazing wealth builders. They understand Wealth Cycle Investing and they work hard at creating diverse portfolios that generate high returns. They aren’t shy about bringing deals to the table and they have zero tolerance for anyone who is not honest and open about their deals.
While Live Out Loud is an educational company focused on teaching people about money, wealth, and the Wealth Cycle, like any educational institution, networks of peers naturally form.
In my community, which extends far beyond the Live Out Loud community, people are anxious to help each other achieve success in their financial investments.
Thus, finding the right investments is an essential component of this community. We emphasize individual responsibility in due diligence on any deal but will immediately oust anyone with a negative attitude, who lies about a deal, or doesn’t follow through on his or her promises.
I suspect that you’d like to get your hands on deals that produce an annual cash flow of 30 percent on capital or earn an easy 12 percent on money that’s just sitting there. Here are a few tips on how you can find the right investments for your portfolio:
1. Build your community. One reason wealthy people find good investments is that they are in community with each other. Imagine that the people you spend your time with are all deeply in debt and complain about the economy. Will they be a source of good investment information? Not likely.
That’s why you should become involved with successful people that are regularly investing in deals that earn higher-than-average returns on capital and/or appreciating at higher-than-average rates.
2. Participate in your community. Certainly, you can participate in your community as a passive investor. If you’ve got money in stocks, equity in your home or even a large sum in your IRA, you can re-direct this money into various investments. However, see if you can find other ways to participate in your community.
Tag along with one of your community’s real estate experts to learn how to find the best properties. Then, use your newfound knowledge and bring some deals back to your community. Learn and grow so that you can give back to a community that has given to you.
3. Educate yourself. Learn about the different kinds of investment opportunities. In my community, we’ve brought in an expert on oil and gas to teach us about the science and practice of drilling for oil.
As a result, many of us have invested in actual oil wells. Consequently, we’re experiencing very good returns and enjoying the tax advantages of investing in oil and gas.
4. Do your due diligence. When you’re presented with an opportunity (and you will be if you’ve done a good job building your community), it is your responsibility to investigate the investment opportunity according to your personal money rules. If it doesn’t fit, let go — even if senior members of your community bought into the deal.
5. Look for direct asset allocation. True diversity in a portfolio means that your investments are spread across several asset classes. This means that you’re participating directly in the purchase of land, the development of a high-end condo complex, the purchase of an oil well, or the purchase of a business.
You’re not just buying stock in these businesses — you’re buying the business (or a share of it).
6. Find both cash-flow investments and appreciation investments. To fully implement Wealth Cycle Investing, you’ll need cash to purchase your assets. Cash-flow producing assets will give you the money to purchase assets that will appreciate over time.
I can’t emphasize enough the value of a successful community of like-minded investors. You don’t want to hook up with loners who’d rather hide their deals. Seek established wealth-building communities of which you can become a part.
Remember that it’s just as important to have good people on your side, as it is to have good investments.
Slow Food, Lingering Libations: For Frank Stitt, Slowing Down Is Imperative to Preparing Alabama’s Best
From Nightclub & Bar
Chef Frank Stitt began his illustrious career with the opening of Highlands Bar & Grill in 1982 in the Five Points area of downtown Birmingham, Ala. While Highlands’ more global approach to cuisine was rapidly successful, Chef Stitt ventured outwards within the same area of the city to open Bottega in 1988, Bottega Café in 1990 and Chez Fonfon in 2000.
Enticing the social, hungry customer base in Birmingham with global, Italian, Mediterranean and French experiences for more than two decades, Stitt has a growing list of accolades.
These include but are not limited to Highlands Bar & Grill being voted No. 5 in Gourmet magazine’s list of “The 50 Best American Restaurants,” a New York Times review, an award of “Best Chef in the Southeast” by the James Beard Foundation.
An induction into the Dining Hall of Fame by Nation’s Restaurant News and a spot on Food & Wine magazine’s list of “Top 25 Hot New American Chefs.”
Chefs around the country respect him for his skills at plating delectable cuisine, but Stitt always has married his philosophies on fine dining with his cocktails and wine selections. In these days of limelight for fresh limes, Stitt has the respect the country’s top mixologists when it comes to the “fresh” movement in libations.
The Philosophy
Frank Stitt’s background and world travels have contributed heavily to the fact that his restaurants and bars enjoy 35 percent of their total sales from beverages alone. “I love great bars, and when I fell in love with food in San Francisco in the ‘70s, the great bars of that city were a big inspiration,” he says.
“Some of the great bars did unusual things even for now, in that they had big bowls of fruit, and they would juice drinks to order.” Chef Stitt took notice of this and moved on to study wine in Provence and Burgundy, France, all the while combining ideals that would become his own personal beverage philosophy for both grapes and grains.
His focus on bringing the kitchen to the bar in each of his restaurants is flanked by a commitment that every bar should have its identity and atmosphere within the room. In every location he owns and operates today, there are large bowls filled with fresh produce, and more often than not, an errant orange or two rocking softly on the bar top.
“We wanted to try to introduce people to things like Sazeracs, to Mint Juleps to Ramos Gin Fizzes –– some drinks that were real traditional New Orleans cocktails,” he says of his beginning days with Highlands in the early ‘80s.
“I think besides San Francisco, New Orleans is the great cocktail town. “One of the things that we really focused on was the bar being its own entity. Twenty-five years later, like last Tuesday night, the bar is still jam packed with bar regulars. And these are people who never eat dinner in the dining room, but it is like ‘Cheers,’ in that it is their bar.”
To build and increase this guest traffic of bar-only regulars, Stitt worked on twists of the classics and on creating signature touches that Birmingham’s night owls have come to associate as synonymous with his operations. “We have developed a Martini way before the Martini craze,” he says.
“We would use a wooden muddler and churn ice for about 20 seconds, so when you pour the Martini there is a little glacier-like freeze of ice on the surface. Then, we would make an extra big Martini and leave the shaker. Now, a lot of people have started to do that, but as far as I know, we were one of the first ones.”
Other ideals held dear at his venues include working with seasonal, fresh fruits beyond apples and oranges. Blueberries, blood oranges, house-brandied cherries and local strawberries all make the list, provided they are in season. “Right now,” Stitt says, “the fresh mint we have growing at each property is making a big presence at the bars.
In the blood orange season, December through March, they will be everywhere on the menu. “Each summer when the peaches come in June, I will have those. I learned from Harry’s bar in Venice how to squeeze the ripe white peaches by hand through a strainer to use for a Bellini.
Bartenders think I am crazy, but we will do the same thing with the watermelon juice –– just squeeze it by hand and put it through a strainer.”
The House Blends
“If anything with the direction we are going in now, there is a nationwide move toward more creativity behind the bar,” says beverage director and sommelier for all four venues, Sean Meyer. “Bartenders are now part chemist and part chef where you are mixing these things and there is also a real focus on flavor combinations.
It may be something as simple as serving a cucumber slice with a Hendrick’s Martini or something as complicated as preparing fresh juice for a much more involved cocktail,” he says. “What it does, is it draws a lot of appreciation.
You can see how excited people get when they are sitting at the bar and they see someone juice something in front of them. For me, I can’t watch someone juice something and not start salivating.”
One aspect of Stitt’s operations that may seemtoo involved for the majority of restaurant/bar operators is the approach to wine.
The focus is on smaller growers who are still very hands-on at their perspective vineyards, and for many years now, Chef Stitt has cultivated a growing relationship with Jim Clendenen of Au Bon Climat and Il Podere.
This group now makes specific house red wines just for Stitt’s venues. The Southside Red label is a barbera and refosco, and the vineyard also provides a signature pinot noir for them as well. Joseph Phelps, also out of California, has been providing the Birmingham business with its house chardonnay for more than 15 years.
Slow Food Finds a Friend
All of this attention to detail led Chef Stitt to a firm philosophy of taking the time to do things correctly, which in turn led him to become involved in a movement known as Slow Food International.
Begun in Italy, Slow Food International is an organization dedicated to reversing the negative effect of years of fast, cheap food with a return to the beauty and simplicity of sitting down to a table for a proper meal.
“It is all about celebrating taking the time with food and drink and trying and enjoying artisan products, whether they be olive oils, foccacias, strawberry jams, wines, grappas or bourbons,” Stitt says.
“It is taking the anti-industrial position of the last 50 years and saying, ‘Well, let’s go back and think about those ingredients that are time-honored and those animals that were grown because of their flavor and character,’” he says.
“It’s a whole philosophy that has to do with sustainable agriculture and sustainable eating, but more than anything, it has to do with the pleasure of being at table.”
Service with Sense of Pride
The pleasure of being at one of Stitt’s tables has become legendary, as has being at one of his barstools. Just as the vino is flown in from boutique vineyards, the meat and dairy are as well. The benefit of being in Alabama, Stitt says, lies in repeat customers and local farmers.
“All of our lettuce and herbs come from local farms,” he says. “One of our missions is to try to promote local farmers and to get more of our food from local sources.”
The extensive cost and time employed at Highlands, both Bottega concepts and Chez Fonfon is offset by the fact that these are fine dining establishments that can support longer ticket times and extensive mixology.
They also are blessed with being establishments that foster and empower skilled staffs. In each location on a rotating weekly schedule, Sean Meyer will host seminars for the servers ranging from topics on wine-producing regions around the world to bourbons to scotches.
“Because of the way we train the staff, we will see a steady overall gross instead of a spike in sales,” Meyer says. “We take a very holistic approach to beverage training. A lot of folks will train on an individual scotch or on an individual wine and tell them a whole lot about one product.
A lot of what we do is to give people the information they need to be able to glean from new products what to expect from the area and general characteristics.“We focus on the laws of production –– on what makes a bourbon a bourbon and what makes a Tennessee whiskey a Tennessee whiskey."
Chef Frank Stitt began his illustrious career with the opening of Highlands Bar & Grill in 1982 in the Five Points area of downtown Birmingham, Ala. While Highlands’ more global approach to cuisine was rapidly successful, Chef Stitt ventured outwards within the same area of the city to open Bottega in 1988, Bottega Café in 1990 and Chez Fonfon in 2000.
Enticing the social, hungry customer base in Birmingham with global, Italian, Mediterranean and French experiences for more than two decades, Stitt has a growing list of accolades.
These include but are not limited to Highlands Bar & Grill being voted No. 5 in Gourmet magazine’s list of “The 50 Best American Restaurants,” a New York Times review, an award of “Best Chef in the Southeast” by the James Beard Foundation.
An induction into the Dining Hall of Fame by Nation’s Restaurant News and a spot on Food & Wine magazine’s list of “Top 25 Hot New American Chefs.”
Chefs around the country respect him for his skills at plating delectable cuisine, but Stitt always has married his philosophies on fine dining with his cocktails and wine selections. In these days of limelight for fresh limes, Stitt has the respect the country’s top mixologists when it comes to the “fresh” movement in libations.
The Philosophy
Frank Stitt’s background and world travels have contributed heavily to the fact that his restaurants and bars enjoy 35 percent of their total sales from beverages alone. “I love great bars, and when I fell in love with food in San Francisco in the ‘70s, the great bars of that city were a big inspiration,” he says.
“Some of the great bars did unusual things even for now, in that they had big bowls of fruit, and they would juice drinks to order.” Chef Stitt took notice of this and moved on to study wine in Provence and Burgundy, France, all the while combining ideals that would become his own personal beverage philosophy for both grapes and grains.
His focus on bringing the kitchen to the bar in each of his restaurants is flanked by a commitment that every bar should have its identity and atmosphere within the room. In every location he owns and operates today, there are large bowls filled with fresh produce, and more often than not, an errant orange or two rocking softly on the bar top.
“We wanted to try to introduce people to things like Sazeracs, to Mint Juleps to Ramos Gin Fizzes –– some drinks that were real traditional New Orleans cocktails,” he says of his beginning days with Highlands in the early ‘80s.
“I think besides San Francisco, New Orleans is the great cocktail town. “One of the things that we really focused on was the bar being its own entity. Twenty-five years later, like last Tuesday night, the bar is still jam packed with bar regulars. And these are people who never eat dinner in the dining room, but it is like ‘Cheers,’ in that it is their bar.”
To build and increase this guest traffic of bar-only regulars, Stitt worked on twists of the classics and on creating signature touches that Birmingham’s night owls have come to associate as synonymous with his operations. “We have developed a Martini way before the Martini craze,” he says.
“We would use a wooden muddler and churn ice for about 20 seconds, so when you pour the Martini there is a little glacier-like freeze of ice on the surface. Then, we would make an extra big Martini and leave the shaker. Now, a lot of people have started to do that, but as far as I know, we were one of the first ones.”
Other ideals held dear at his venues include working with seasonal, fresh fruits beyond apples and oranges. Blueberries, blood oranges, house-brandied cherries and local strawberries all make the list, provided they are in season. “Right now,” Stitt says, “the fresh mint we have growing at each property is making a big presence at the bars.
In the blood orange season, December through March, they will be everywhere on the menu. “Each summer when the peaches come in June, I will have those. I learned from Harry’s bar in Venice how to squeeze the ripe white peaches by hand through a strainer to use for a Bellini.
Bartenders think I am crazy, but we will do the same thing with the watermelon juice –– just squeeze it by hand and put it through a strainer.”
The House Blends
“If anything with the direction we are going in now, there is a nationwide move toward more creativity behind the bar,” says beverage director and sommelier for all four venues, Sean Meyer. “Bartenders are now part chemist and part chef where you are mixing these things and there is also a real focus on flavor combinations.
It may be something as simple as serving a cucumber slice with a Hendrick’s Martini or something as complicated as preparing fresh juice for a much more involved cocktail,” he says. “What it does, is it draws a lot of appreciation.
You can see how excited people get when they are sitting at the bar and they see someone juice something in front of them. For me, I can’t watch someone juice something and not start salivating.”
One aspect of Stitt’s operations that may seemtoo involved for the majority of restaurant/bar operators is the approach to wine.
The focus is on smaller growers who are still very hands-on at their perspective vineyards, and for many years now, Chef Stitt has cultivated a growing relationship with Jim Clendenen of Au Bon Climat and Il Podere.
This group now makes specific house red wines just for Stitt’s venues. The Southside Red label is a barbera and refosco, and the vineyard also provides a signature pinot noir for them as well. Joseph Phelps, also out of California, has been providing the Birmingham business with its house chardonnay for more than 15 years.
Slow Food Finds a Friend
All of this attention to detail led Chef Stitt to a firm philosophy of taking the time to do things correctly, which in turn led him to become involved in a movement known as Slow Food International.
Begun in Italy, Slow Food International is an organization dedicated to reversing the negative effect of years of fast, cheap food with a return to the beauty and simplicity of sitting down to a table for a proper meal.
“It is all about celebrating taking the time with food and drink and trying and enjoying artisan products, whether they be olive oils, foccacias, strawberry jams, wines, grappas or bourbons,” Stitt says.
“It is taking the anti-industrial position of the last 50 years and saying, ‘Well, let’s go back and think about those ingredients that are time-honored and those animals that were grown because of their flavor and character,’” he says.
“It’s a whole philosophy that has to do with sustainable agriculture and sustainable eating, but more than anything, it has to do with the pleasure of being at table.”
Service with Sense of Pride
The pleasure of being at one of Stitt’s tables has become legendary, as has being at one of his barstools. Just as the vino is flown in from boutique vineyards, the meat and dairy are as well. The benefit of being in Alabama, Stitt says, lies in repeat customers and local farmers.
“All of our lettuce and herbs come from local farms,” he says. “One of our missions is to try to promote local farmers and to get more of our food from local sources.”
The extensive cost and time employed at Highlands, both Bottega concepts and Chez Fonfon is offset by the fact that these are fine dining establishments that can support longer ticket times and extensive mixology.
They also are blessed with being establishments that foster and empower skilled staffs. In each location on a rotating weekly schedule, Sean Meyer will host seminars for the servers ranging from topics on wine-producing regions around the world to bourbons to scotches.
“Because of the way we train the staff, we will see a steady overall gross instead of a spike in sales,” Meyer says. “We take a very holistic approach to beverage training. A lot of folks will train on an individual scotch or on an individual wine and tell them a whole lot about one product.
A lot of what we do is to give people the information they need to be able to glean from new products what to expect from the area and general characteristics.“We focus on the laws of production –– on what makes a bourbon a bourbon and what makes a Tennessee whiskey a Tennessee whiskey."
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