Business vs Investment: Which one to choose?
When we hear the word "businessman", our mind automatically drifts to the entrepreneurial figure with all its dynamics, self-freedom, unlimited income potential, and so on. Euphoria has been doing business recently. Many people build a business or buy a franchise. But there is a phenomenon that in my opinion is quite interesting regarding the choice of life as a businessman.
In a seminar opportunity, I tried to explore further the motivation of friends who were actively building a business. When first asked: why do business? All answered straightforwardly. "Yes, if you rely on salary, it"s not enough. To increase income, we have to do business. The time is not having a business today?
OK, so business is mandatory, a must. "Today it doesn"t have a business ..." they said. Then my next question is: if the business does not produce positive cash flow, is the business going to continue? Their response was straightforward, "No, why are you going to continue if you lose!"
Well, then, in addition to the business itself, there are other things that are more important and fundamental that motivate someone to do all their activities including doing business, namely CASH FLOW. If cash flow is negative, we can be sure that the business will not be continued alias stopped. Likewise the opposite if what happens is positive cash flow. Thus, from this logic it can be seen that the concentration point should not lie in the business, but in the CASH FLOW.
So every action we have that has the potential to produce positive cash flow must be done. One of them is business. One of? Is there more than a business that produces significant cash flow, even greater? Yes of course there is. That is what is known as investment. We often hear news about national and even international companies that are saved by their net profit due to the brilliant performance of their investment portfolio, even though the company actually loses operationally.
Investment activities carried out by the company, through its treasury division, have saved the company from bankruptcy. The skill of the treasury manager in managing corporate funds with the aim of doubling the company"s finances has brought extraordinary performance, even exceeding the performance of the entire operational range of the company.
As a financially savvy businessman, we should imitate these steps. Never make our financial resources only from business alone. We must equip our financial legs through investment, so that the streaming income that we get becomes multiple and the risk of bankruptcy can be minimized from an early age.
It is our job to continue to hone financial intelligence so that our knowledge and skills in investing continue to increase. Remember, business is just one of the means we create cash flow. There are still many alternative investment instruments that can far more multiply our cash flow and assets. Not only financial investment instruments such as stocks, mutual funds, bonds, foreign exchange, and the like can be used as a mainstay. Other investment instruments such as property, gold, even franchises promise promising results if managed properly.
This combination of business and various investment instruments is what in my book - Quantum Resign | the Safe Formula for Stopping Employees - is mapped more structurally in a concept formulation called the Pentagon Income formula. The state of the art is when we are able to combine business and investment into an endless round of income. So choose between BUSINESS and INVESTMENT? If I personally choose both of them through a combination of Pentagon Income strategies. How about you?