You have undoubtedly heard about the power of compounding interest. It is said that Albert Einstein called it ‘the eighth wonder of the world,’ and Warren Buffet, one of the best-known investors of all time, knows this concept well. He has earned 99.7% of his current net worth after he turned age 50 and approximately 86% after turning 65. None of us aspire to become as rich as Buffet, nor… Read More
The Business of Money – Self-Serving Bias
I am a big golfer, and I like to say that golf is a microcosm of life. Sometimes you hit a great shot, but get a bad break, and the ball ends up in an undesirable location. Other times, you hit a poor shot but get a good break, or as we would say on the course you “get away with one”. Most of the time, the result follows the… Read More
The Business of Money – Lessons from In-N-Out Burger
I recently read an article [1] profiling In-N-Out Burger, a fast-food chain based in California that has a cult-like following for their burgers and fries. In-N-Out recently opened their first restaurant in Colorado, and the wait time on opening day was up to 14 hours [2] at one point in the day. Customers at the end of the line would not reach the drive thru window before the restaurant closed!… Read More
The Business of Money – Survivorship Bias
Survivorship Bias is a term used in the investment analysis community to describe the potential overstatement of success for a set of investments due to only looking at the investments that have ‘survived’ the observed period of time for the data set. When looking for average performance, survivorship bias ends up overstating the success of the data set by not including the investments that failed completely in the time period…. Read More
The Business of Money – Assessing the Luck Factor
“There is no such thing as luck. There is only adequate or inadequate preparation to cope with a statistical universe.”―Robert A. Heinlein In the book, The Success Equation, by Michael Mauboussin, the author attempts to separate out luck from skill in the areas of business, sports and investing. Many of us might wince at the use of the term ‘luck’ when referring to business success in particular, but at the… Read More
The Business of Money – Exit Strategy – Maximize Legacy
We have outlined three different methods to consider when you think about your exit strategy – maximize price, maximize continuity, and maximize legacy. We will now take a deeper dive into each strategy and how you can approach thinking about each one. The final exit strategy to discuss is the Maximize Legacy strategy. This strategy takes internal succession one step further. The end goal is to pass your business to… Read More
The Business of Money – Exit Strategy (Maximize Continuity)
We have outlined three different methods to consider when you think about your exit strategy – maximize price, maximize continuity, and maximize legacy. We will now take a deeper dive into each strategy and how you can approach thinking about each one. Very few business owners end up pursuing a maximize price exit strategy. In general, that strategy gets balanced out by other non-monetary factors that are important to the… Read More
The Business of Money – Exit Strategy – Maximize Price
We have outlined three different methods to consider when you think about your exit strategy – maximize price, maximize continuity, and maximize legacy. We will now take a deeper dive into each strategy and how you can approach thinking about each one. We start with the strategy that might first come to mind when we think about selling a business – Maximizing Price. You should consider this strategy if you… Read More
The Business of Money – What is Your Exit Strategy?
It may not be an overstatement to say that it is never too early to start thinking about your business exit strategy. Your exit strategy can influence how you manage your business and what strategic decisions you make to get closer to your end goal. The closer you get to a possible exit without thinking through your end game, the more you are leaving things up to chance and allowing… Read More
The Business of Money – Retirement Savings and Risk
If you own a successful business, you may wonder why you would do anything other than continually reinvest back into that business. It is most likely the best investment you have ever made! When we think about investing, we need to take into consideration the risk/reward tradeoffs of our decisions. When we see more potential reward in an investment, we should immediately begin to identify what additional risks are coming… Read More
