Want To Start A Business? Avoid This Costly Mistake…
I posted a quote in my Instagram page that says, “The trouble of winning the rat race is that in the end you are still a rat.”
For people who are trying to get out from the bondage of their employer and work solo and own a business, they know what it meant.
But one comment was “How do you win a rat race?”
So I explained that winning the rat race could be getting that corner office that you’ve been eyeing for a long time, or you are finally promoted to the Managerial position that you been dreaming for the past decade.
The example above could be situations of winning the rat race, but the problem is that, you are still working for somebody else. The rat race is the daily grind of getting up to work, work, and go home. You want to get out of that cycle.
I have nothing against people who work so hard for their employee. These people are great. But in the end, my goal is to own my time, not exchange time with dollars.
In my previous post, The Myth Of Compounding, I explained what we read or hear from the mainstream media, the advise to invest, and re-invest the interest, and increase the pot of money through compounding, maybe is a sound advise.
It sounded like compounding interest will make you super rich.
It will probably, in the long run, but are you willing to wait 70 years, working for somebody to have have a million dollars?
That’s why I argued that starting a business is one of the best way to reach financial freedom (and you have to define, in your own terms, what is financial freedom.)
And I would argue also, that the best way to achieve your goals is an on-line business.
I started with eBay, Amazon selling (Private Label), Stocks, Forex and Options. It was frustrating because I win some, and I lose some. It wasn’t consistent.
I lost money with Amazon and Options. I still own stocks but won’t make me a millionaire soon. Forex, I’ll study those again in the near future (or not).
One of the costly mistake that I made based on my mentor’s or coach’s advise is that I entered the retail business. My mentor didn’t say this directly but the return of investments in a retail business is razor thin.
If you do your research and everything, having a 60% return of investment in a retail is a killing, but I don’t think it is the norm. When I did Amazon, 10% was my profit. For every $10 spent, I would spit $1.
In lean months, l’m losing money, after calculating my spend in advertising and other expenses.
In stocks and Forex and Options, it’s the nature of the financial universe that you may have returns. Your returns could be that of the market if you do index funds. You can have higher returns by owning a risky portfolio (and the risk of losing also increases).
The best advise that I got is to start with an on-line business, and sell information. My formal training is chemistry, and I sell information to parents who needs help in chemistry or science related topics. They take this information to teach their kids.
The best thing about this, is that the material I made costs so much less. Compare that to outsourcing it to China (Alibaba) to get the lowest possible cost of the goods.
The cost of shipping my products now, my information, is virtually nothing (I do videos on-line and send emails). Compare that to sending a physical product and goods from your on-line store. It eats up the profit dramatically.
My advise is start with on-line business, research your niche and go into the information business.
Reserve your aspirations of owning a retail business when you are retired (or not even go there).
