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15
Feb
2010
Explain you credit organization vision
Once you commit to partnership, you must invite your partner into the strategic planning process with you. KLM and Northwest Airlines do joint strategic planning for the marketing of the flight schedules. Coca-Cola and McDonald’s launch promotional activities as a result of strategic planning. To get additional value from the partnership, the partners must engage in some strategic thinking and thus planning in order to achieve the outcome they both desire.
The Strategic Framework is a format I’ve used to help partners get the greatest value from their partnership. Based on the Holistic Organization Model, it explores both the material and ethereal realms of each business. With this format you can see how these two separate realms complement and support each other as they create the outcome: the product or service they want to deliver. Starting at the top of the model I ask the partners to explain their organization’s vision.
7
Jan
2010
Insurance that will reduce your credit risk
Your life insurance policy may have a cash value against which you can borrow. The interest rate for borrowing your own money, in effect, is usually lower than almost anywhere else you could borrow the money. If yours is a whole life policy, this may be a possible source of money that you could use in the development of your product. If it is a term policy, there will be no cash value option. Check with your insurance agent to see if this is a possibility for you. Be certain that borrowing against the cash value will not reduce the benefits to your family should something happen to you. No matter how great your invention and how much faith you have that it will be a fabulous financial success, the financial security of your family should be your first priority, not funding your invention. You can find creative ways to plan for expenses or obtain funds for your invention without putting your family at financial risk.
5
Jan
2010
Credit card interest rates are high for high amounts
If you do not have personal savings with which to fund your invention, you could use your credit cards. This is a slippery slope, however. Never charge more than you can easily pay back within a reasonably short time. Credit card interest rates are among the highest and using credit cards for large amounts that must be paid back over an extended period of time is not a wise course of action. It is appropriate to use your credit card for small purchases of prototype materials or prototyping services, for example, especially if you are like us and like to get air miles for nearly everything you purchase.
4
Aug
2009
The 3 Steps of Investing
To get from the chaos of your investment life to your comfort zone, you need to take three steps: study the emotional content of different investments, study your own emotional makeup, and match your emotional makeup to the appropriate investments.
To avoid confusion, I have divided this book into three steps rather than three parts:
Step 1: Chapters 3 through 7 set out the emotional content of the different investments. Step 1 requires study but no writing or analysis. The material in Step 1 will also be used as a reference when you reach Step 3. Per the discussion in Step 1, saving, investing, and speculating are different activities. However, throughout this book, the term “investor” is used to signify a person engaged in all three activities unless otherwise specified. The term “investment” also includes savings, investments, and speculations unless clarified. Among other things, Step 1 is about learning the difference between a saver, an investor, and a speculator.
Step 2: Chapter 8 shows you how to study your emotional makeup. It requires writing and analysis. Step 2 is the workbook section of Comfort Zone Investing.
Step 3: Chapters 9 matches you to the appropriate investments.
23
May
2009
Investing Abroad
A few years back I was shown a property by Craig Donnell, a colleague who consistently ferrets out opportunistic deals, in Melbourne, Australia. The building was located directly opposite the University of Melbourne, and comprised 12 stories of student accommodation (277 rooms) along with ground-floor retail space and a basement. (See Figure 22.1.) There was a new 10-plus-5-plus-5-year lease in place to the university at a starting rental of A$950,000 per annum, with annual reviews in line with the consumer price index (CPI). To an outsider looking at market cap rates, returns, location, strength of lease, and in deference to the fact that the building had been completely renovated, it appeared as though the building was being offered at a price substantially above market. This would also explain why it had not sold.
However, this building also highlights the need to conduct thorough due diligence. It turns out that despite the recent renovations, the building did not comply with the fire code. Before long, the students had to be evacuated and relocated, and the university commenced legal action against the owner. We were informed that an offer would be entertained by the owner, who was eager to extricate himself from the situation.
27
Apr
2009
Panama Real Estate Possession Rights: Buyer Beware
Not all properties in Panama are in the private domain. Many beachfront properties, islands, and real estate in special tourism zones and historically protected areas are owned and managed by the national or local municipal governments. In those areas, possession rights are granted for a determined period of time. Two such protected areas are the archipelago of Bocas del Toro (mouth of the bull), which to many visitors fits the description of tropical paradise, and Portobelo, a beautiful harbor on the Caribbean visited by Columbus and the final resting place of Sir Francis Drake. Some beachfront property is available for purchase but is subject to the law that all beaches are public. All beachfront properties must provide a right of way starting twenty-two lineal meters from the highest tide to the property line.
Because of the lack of uniformity regarding the granting of possession rights, possession rights should be approached with caution.
When considering properties located in such areas, you should ensure that the possession right has in fact been granted by the relevant national or local government authorities and that the length of the time right is adequate for the purpose of the investment. The possession right should also contain a complete description of the property, including boundaries, encumbrances, and any other significant features or details (with an accompanying complete blueprint drawn and approved). You should make sure that any anticipated construction, activity, or improvement is acceptable by the national or local government. Transferring a possession right can take up to six months, depending on many factors, such as the date of recognition of the possession right and inspection by the granting entity.