Posts Tagged ‘Joint Ventures’
I found the following article in an email sent to me by Success Resources and I wanted to share it with you. Jeff and I use the same principles in our own life, and in our Real Estate Investing. Take a read and then let me know what you think! Norma
Properly applied leverage can multiply the results you get from your efforts, whether you are moving boulders or building your finances. Unless you have liquid assets from your family or other resources; if you’re working in some sort of regular job, then you need some leverage to lift you up over those first daunting barriers that you encounter.
When you get nearer to your goal, you will find more obstacles but your progress on the road to success will give you the ability to get support from others; banks, partners or joint-venturers. Together, you will be able to build greater, more powerful levers.
There are three parts to a lever.
You have to have something that you need to lift. That is the objective that you don’t have the strength, right now, to lift by yourself. Some investors will seek any available advantage, without any regard for the effect on other people that are involved. But, for our peace of mind and fullest satisfaction, there’s no choice but to maintain high ethical standards and give due regard to how other might be affected by our actions.
Next is the solid support on which the lever pivots and from which it draws its strength. That’s your vital role, giving the necessary height and strength for the lever to work to its greatest effect.
Of course, the other part is the lever. That must be as long and strong as possible. A short, strong lever will work but be much less effective than a similar longer one. A weak lever is as bad as no lever at all. The longer the lever, the greater the lift and the quicker the results.
That works the same with investments
If you work at a regular job, then your payment is ruled by the amount of time you put into the job. Put in more hours, at the cost of family and other social commitments (even your health), and you will get a little more money.
But, it is always a struggle for someone in that position to get more money for the same amount of work. They may do a great job but, unless they have hard to find skills, they cannot exert much leverage. There are probably many other people who are readily available and willing to do the job in their place and for even less money! You are probably not physically able to increase the amount of time that you put into your job by very much and you probably already gave your best efforts, whatever the rate of pay that you get.
The only way you can raise your standard of living is to increase the return that you get for the amount of effort and time that you already supply.
When a painter produces a painting, they get one payment from one person and that’s all. However, a best-selling author has leverage because their publisher sells thousands, or even millions, of copies of the book. The author can claim a tiny percentage of the profit from each sale.
That is just the start for them!
The book can spawn other products and opportunities (not all apply to all types of books);
- Sequels, translated versions, audio version and even movies in rare cases.
- Appearances on television, radio and magazines that may lead to offers of more work in those areas.
- Lectures. – Consultation work.
- Licensed products based on characters in the book.
Bearing that in mind, this principle is actively used by people involved in almost every type of productive activity.
For example, with the widespread acceptance of the Internet, many authors are finding a ready market for their books without having to battle their way to the top of the traditional publisher’s slush pile.
They’re submitting the book to publishers whose whole business is online. The book is sold through a website and buyers pay for it by credit card and then download a copy to their computer immediately!
Some authors, even those who have just written their first book, are setting up their own website and publishing their own book themselves entirely online. They deal directly with the buyers (their readers) and they get to keep almost the entire selling price of every copy they sell.
That requires a bit more work on their part but the returns can make it worthwhile.
They have leverage because they are in full control of the promotion and distribution of their book. They can also do it from their own home while wearing their pyjamas, if they want to. There are even people who published their books online, and were then approached by a traditional publisher who was interested in paying them for the rights to publish a printed version!
Leverage magnifies the effect of whatever amount of effort that you apply to a task.
Other People’s Money
Similarly, you’ve probably heard of “Other People’s Money” where you harness the power of other people’s greater financial assets to help you get started on projects that are bigger than you could undertake with your own current resources.
Many people have used this and, by being very selective about the ventures that they take on being within their capacity and not just their dreams, while also focusing strongly on the task, have built their own assets through this method much faster than they expected.
Other People’s Experiences
It’s also important to use “Other People’s Experiences” because you can’t afford the time or expense to make all the mistakes yourself!”
The ideal situation would be to work for an already successful person in the area that you are interested. You might think, “I don’t know anybody like that and I don’t have those sort of contacts.” But, work hard and keep your eyes open – these people are often looking for people with the right attitude (that’s not finishing work at 5pm every day!) and you might stumble over that opportunity at the moment you least expect. Norma’s Note: I also suggest volunteering to work for them, even occassionaly for FREE!
You also need to find a competent accountant. As you start to climb toward your goals, your heavy workload will increase rapidly. If you plan to do your own accounts and you don’t have a first-class system in place, then you’ll have to devote time that you need for the central parts of your venture – or both the venture and your accounts will suffer. An accountant can almost certainly do your books much more quickly and with fewer errors than you. They also are able to keep current with Tax and other regulations which you probably haven’t studied much – ignorance is no defence. So, get the accountant now even if you think you can probably handle your accounts by yourself for a while yet – it’s an investment for your future.
You also should mix with other people that are, or were, involved in your area of interest. Of course, systems change more rapidly today than before, but the veterans often have useful knowledge than can still save you time and reduce the potential problems you deal with. There’re a lot of good books on your field too along with seminars (both live and recorded). Other People’s Ideas Never stop learning!
You can get someone’s lifetime of experience in a couple of hours and at low expense using another valuable concept –
Other People’s Ideas
Many people have great ideas that they don’t have the resources or, perhaps, just the time to use. You will pick them up at seminars, in books or even just casual conversation. If you get the chance to interview or even just buy a cup of coffee for an expert in your field, don’t hesitate – that small expense could provide you with an idea you could turn into thousands.
Associating with successful people will also help you to absorb their focus and their passion. They will motivate you just by their proximity and their lifestyle will encourage you to have bigger dreams that can lead you to greater success than you ever thought of before.
Other People’s Time
The next asset which you can acquire is “Other People’s Time”. You might have to pay some people for their skills or knowledge but if that small investment gives you a high return because they can do work that you must get done better and faster, or you acquire knowledge or skills from them that you can draw on for years in the future, it’s money well spent.
Sometimes, you can team up with one or more people and each of you contribute your particular special skills or resources to a common effort. That automatically leverages your efforts.
You will also be able to access their network of contacts, opening more opportunities for valuable collaboration. These people may also bring you other potential deals that you would not have even heard of otherwise.
Other People’s Efforts
Make use, also, of other people’s efforts. Some people want the security of an assured hourly rate for their efforts. You might pay someone to do work that you need done but which would rob you of time that you can leverage to return you much more than you will have to pay the other person. Try to use all these “levers”, where appropriate, so that you get the maximum return in the least time.