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Understanding
the Philosophy and Business Model of a Stock Investment
Business
Most people view their
investments in the stock markets as an investment play
and not as a business operation. While this may be okay
for most investments, it is important to realize that
there is a small but growing percentage of investors who
view their forays in the stock markets as a business
venture and who operate their investments accordingly.
These are the true professional investors and traders who
capture the privileges of reaping the best profits from
the market. In many ways their success is based on the
misfortunes of the large cadre of non-professional,
non-business investors.
The professional
business operator is more than just a self-controlled and
directed investor. This business operator is one who has
structured his operations, lifestyle and business around
the concept that there is no opportunity better than the
market to generate percentage returns for the time,
energy and money invested. She is therefore structured to
take advantage of this fact and the fact that the stock
market controls the economy, so as the stock market goes,
so goes the general economy, and therefore so goes every
non-publicly traded business. In other words even when
the stock markets go into a downturn it is very likely
that the entire economy including the private business
and investment world will follow. There is no retreat
from the dominance of the stock markets in modern
economies. The professional stock investment business
philosophy, business model, and plan is to maximize
operations in the one place that will eventually benefit
and lead the way in a boom economy. This place is the
stock markets, historically and theoretically.
This philosophy and
business model says that the ability to buy into already
successful companies, as much as you want, when you want
is a unique aspect of business development. When combined
with the capability to liquidate your ownership, assets,
holdings, and liabilities almost at will this model
becomes such a powerful model it becomes almost to good
to be believed. The experiential fact that the richest
people in the world have used it either directly or
indirectly to get where they are financially also says a
lot.
Like in any other
business the barriers to success in this business are all
about knowledge, persistence and hard work. The
difference between the professional investment business
and others however is the unlimited potential for true
wealth accumulation in this business.
The need for
significant amounts of money to get started is often
viewed as a barrier by many who falsely believe this is a
necessity. Many are deterred from the business of stock
investing due to this perception. In actuality it is one
of the few businesses in modern economies that can be
started with very little capitalization, and which can
intrinsically grow more quickly than other traditional
businesses.
Even those who
understand the potential of this business model often
feel like they must find significant capital from some
other business practice in order to have enough money to
be in the stock market. This fallacious reasoning is the
direct result of the traditional approach which most
investors follow treating investing in the stock markets
more as an investment for retirement play than as a
business vocation. This is in part due to the historical
reliance on full service brokers by most investors. With
the advent of the Internet and online investing the move
toward self-controlled and directed investing will
effectively increase opportunities and perceptions about
stock investing and trading as a business
vocation.
The simple truth of the
matter is that you will most likely have to raise monies
to develop the other business first anyway. Unless you
have a source of money restricted to a particular type of
business, any money raised would be better spent to
directly capitalize your stock investment business.
Entering into some other business with the ultimate goal
of investing the profits in the stock markets is probably
putting the cart before the horse.
The reality is that a
stock investment business can be started very small with
small amounts of money and like most other successful
business starting from scratch and growing with time. In
fact due to the many advantages of such businesses they
are more likely to be able to be started small and to
grow quickly into profitability.
However for the
entrepreneurial types certain traditional businesses do
work better alongside a stock investment business. These
businesses fall into the service category generally, and
into the brokerage and consultancy areas more
specifically. Brokering involves selling something that
someone else owns to another person, consultants sell
their expertise in specialized areas. Brokerage and
consultancy services obviously require some
capitalization however the need for significant
capitalization is not as demanding as in developing and
operating other types of businesses. For example a real
estate sales broker may be capable of making significant
commissions without the expenditure of significant
capital, as can a consultant who is paid more for his
knowledge, advice and or analysis than for the
capitalization of his business. These types of businesses
are therefore perfect complementary business for
individuals who recognize the power of stock investments
as their primary business venture, but who may need to
generate capital in other ways during the process of
initially building and capitalizing their stock
investment business. In addition, a stock investment
business works well alongside many traditional employment
opportunities, where working a job avoids the
vicissitudes of running another business. Developing and
operating another business many times may get in the way
of developing your stock investment business. Individuals
already established in their own business have perhaps
the best opportunity for developing and capitalizing a
stock investment business.