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Point 1:

Investment fundamentals

One principle that is most prized in the world of money making is not just how to make money but on how to multiply money and how to keep money. The ability to multiply money and keep it is the pinnacle of the wisdom of money making. I will go straight into explaining the fundamentals that would determine the success of a business that grow into making more money (cash) and serve as a strong attraction. These may not be all but they are strong principles that cannot be ignored.

Advice No 1:

Do not go into a business that exists in a dying trend:

Warren buffet, the world’s richest investor of all times invested in Berkshire Hathaway at a time that textile business was dying in America. Today, a lot of people in Nigeria still build cyber cafes in a time when the sale of internet enabled and dynamic phones are exploding. Do not invest in a dying trend.



Advice No 2:

Management is business.

You have to either invest in a business with a great management or build a business with great management. A great management is one where its administrative and operational managers have good business track records. A great business is one that records a great business management, it is one whose controlling board has a great business record. My advice is for you to invest in a business who has existed for at least ten years, and has had a steady financial growth over these years.

Advice No 3:

The financial statement and balance sheet speaks volumes.

The financial statement of a company speaks a lot about the connected healthiness of a company. It speaks of the financial healthiness of a company or its financial cancer. To do this, you need to learn to study financial statements. In a simple definition, a financial statement is a statement showing the assets and liabilities of a company. A company with more liabilities and less of assets that produce cash is not financial healthy.

Advice No 4:

What is their corporate culture and vision?

Without biases, in the financial sector i will choose GTBank.

GTBank is a financial institution with one corporate vision of continuously searching for new innovative ways of bringing banking services to the ease of its customers. When you look at GTbank products and services you will see a strong vision to create a 21st century and ICT age bank that is surely a force to reckon with.

Advice No 5:

What is their capital base?

Base is like saying ‘’foundations”. When the foundations of a building is threatened, it’s a red light sign to a potential investor. Too many business that fly shining colours on the outside are actually in a financial red. Many of them are on loans and bad debt. Many of them are run by inexperienced managers. It is advised to run from such companies.

A company with good management and great products, growing market trend and steady inflows of investors with a capital base of N400billion is sure to be financially stronger than one with N100 billion Naira.

Advice No. 6:

Invest in Reputation and Integrity. Look at Microsoft, Apple, Dell, Facebook, Virgin group, Birkshare Hathaway and many other great companies of this world. They enjoy the massive financial leverage of investors because of their great business reputation and integrity. Any business that cares less about its reputation and integrity is a potential business crisis waiting for the right time to manifest. Business reputation is a financial leverage. It is a safe haven where customers flood in.

Point 2:

Cash flow mentality

Albert Einstein, one of the greatest scientist that has ever lived said, ‘’compounding is the third wonder of the world, and one of the greatest forces of the Universe’’. The road to the multiplication and retention of wealth is a road hidden from more than 97% of the world population, it is called compounding. An entrepreneur limits costs and maximises profits. Today, most global companies have their headquarters in China. Do you know why that is? I will tell you. These companies want to supply their goods and services at the minimum cost and maximum profit through economics of scale.

A young man with a good job that earns a lot of cash monthly who refuses or ignorantly do not plan his financial future will almost definitely fall into economic disaster, the disaster of growing financial responsibilities on the wings of increasing inflation and rising cost of living with static or reducing cash flow.

In today’s world of fast changing trends, it makes little sense to sit on one cash flow and then start raking in liabilities. The ability to save money and then learn how to turn this money into cash producing assets that produce more income that is also saved and intelligently used to produced more cash producing assets, assets that also produce more assets is known as compounding. Wealth is created when one wisely creates a financial system where money comes in exponentially while expenses grow arithmetically.



Point 3:

The difference between riches and wealth

Wealth is the wisdom to create money, especially out of nothing. Wealth is the ability to multiply money. Money is multiplied on the leverages of time, knowledge, networks, and God’s grace and favour. Third leverage, ‘’network’’ has three components, these components include infrastructure, human resource and systems. A computer research company can develop a new innovative product and rather than passing through the painful process of setting up the company can simply sell the product to an existing system such as Dell Inc., Microsoft Corporation, Google, and IBM.

Human resource simply means leaving the best people to work together as a team to achieve the objectives of the company.

For the third component infrastructureture, Markzuckerberg spun out a multibillion dollar company by simply placing his website, facebook in an existing global internet infrastructure. Already, the internet was available globally, so placing a remarkable idea such as facebook that solves a global problem of reaching and connecting people on the internet instantaneously makes it accessible by the world. And this is how facebook creates its wealth. So wealth is created faster on the platforms of human resources, infrastructure and systems.

Wealth is also defined as the ability to retain money. The retention of wealth is largely linked to the level of financial intelligence that one possess. The ability to solve problems defines one of the fundamentals of being an entrepreneur. The ability to see investment opportunities is one of the cares of an investor. Money that is retained is money that does not depreciate, like putting your money into savings and paid an interest of 3% in the face of an 8% inflation. This means your money loses 5% value every day.

So, when you have N10 million, you can be called rich, but for you to be called wealthy, you are able to create new money with the money out of nothing or more money with the money you have, multiply it very fast, using the leverage at your disposal and then retain it to be passed onto other generations.

Point 4:

You must learn to sell

One of the primary and fundamental qualities of an entrepreneur is the ability to sell. You must learn to sell your product or service. The ability to sell come with ability to communicate effectively. This communication is such that brings positive feedback. It is such that makes the customers to buy your product or service. The ability to communicate your product comes from your belief in your product. It also comes from your understanding of the solutions your product offering brings to the customers. You will have to come out with ingenious, remarkable and innovative ways to attract customers in your target market. Your target market are your potential customers. For instance, if you sell cosmetic products, then your potential customers are mostly young ladies with high spending power.

A good salesman is one who can convince people in new castle to buy coal, he can sell ice to an eskimo. There are great books on salesmanship written by successful sales authors.




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