Category: Retirement

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Country Wisdom & Investing

country barnCountry wisdom is the collection of practical experiences gained by generations of pioneers, farmers, and ranchers as America transformed from a vast frontier to the world’s greatest economy. That experience – the result of constant trial and error – was passed from parent to child in plain language that left no room for misinterpretation. Living on a farm or ranch miles from the nearest neighbor meant solving problems on your own, making do with the materials around you, and accepting whatever happened and moving on.
 
Country people know that worry is like riding a rocking horse – it’s something to do, but gets you nowhere. Excuses and explanations count for little if the seed is not in the ground by the spring rains to make a crop. You don’t blame the cow when the milk gets sour, but change the pasture where she eats.
Country Sayings to Invest By
 
The wisdom gained over years of self-reliance in a lonely, often hostile environment remains just as applicable today in our modern, urban setting as at the turn of the century. The lessons of a country life – expressed in simple, understandable language – are especially pertinent for a beginning or inexperienced investor seeking to negotiate a confusing, constantly changing terrain of potential investments and prices. The following country proverbs are tested and true bits of wisdom you can apply equally to your investments and your life.

1. “The Quickest Way to Double Your Money Is to Fold It Over and Put It In Your Pocket”

Everyone expects to make money in the stock market, but few have realistic expectations of probable returns. Inexperienced investors frequently buy stocks on the advice of acquaintances or friends who brag about their experiences, implying that investment success is easy.
 
Everyone expects to buy the next Apple or Microsoft, allowing them to retire at age 30 or 35. However, doubling your money in a single year is highly unlikely, and becoming wealthy overnight a pipe dream for most people.
 
Here are two keys to stock market success and long-term financial independence:

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Picking and Dickering: America’s New Hobby

antiquesOwning a piece of the past has universal appeal. According to philosopher and antique dealer Leon Rosenstein, it’s the value, uniqueness, and beauty of older items that attracts us, along with their historical and cultural associations. For some, buying and selling tangible pieces of history is a business – for others, it is a calling. Mike Wolfe, one of the stars of the television show “American Pickers,” says that discovering and restoring old relics from the past to their former glory is akin to saving America’s history, one piece at a time.
 
While lots of people are familiar with antique collecting, many are unaware of the growing market for other collectibles, from cars, to toys, to comic books, to folk art. According to the U.S. Economic Census of 2012, the industry accounts for more than $13 billion in revenues for almost 20,000 businesses, from one-man shops to giant online auction firms such as eBay and Heritage Auctions.
 
Everyone, it seems, has a touch of nostalgia from time to time, a sentimental yearning to return to days of past happiness. Antiques and collectibles are tangible evidence of history, monuments of a slower, simpler age when the future was bright and obstacles seemed easy to overcome.
 
Unlike most retail experiences, acquiring pieces of the past requires diligent searching followed by old-time price negotiation – “dickering” – between buyer and seller. Value is in the minds of the two parties, rather than any objective analysis, since many items are one-of-a kind. As a consequence, a successful acquisition requires a discerning eye and disciplined negotiations. For many, the opportunity to joust over price, pitting one’s wits against another’s, is as rewarding as acquiring the items themselves.

The Appeal of Picking

Finding old treasures can be both financially and emotionally rewarding. While the majority of pickers buy older pieces for their artistic or nostalgic appeal, many have found searching flea markets, garage sales, and old barns and houses to be exceptionally profitable. For example:
 
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How to Write and Update A Will

will1While you can’t take your property with you when you die, you can direct how your assets will be distributed by making a will. Unfortunately, some people never get around to the task, and instead die “intestate” – a legal term dictating how all property greater than the sum of your enforceable debts and funeral expenses, in the absence of a will, is distributed. Surprisingly, almost half of all adults die without a will, according to a 2012 Rocket Lawyer survey. In such cases, state law determines who gets what – including custody of minor children.
 
It is not just the poor and uneducated who die intestate. Celebrities such as Howard Hughes, Pablo Picasso, and Sonny Bono all failed to have wills, as did Swedish author Stieg Larsson, best known for “The Girl With the Dragon Tattoo” series of novels. As a consequence, distribution of their property to loved ones and business partners was delayed and expensive.
 
Unfortunately, even those with the foresight to prepare a will often forget to update its provisions as their circumstances change over the years—the birth and maturity of children, accumulation or divestiture of assets, or changes in personal responsibilities, for example. Therefore, the transfer of their assets may be inconsistent with their final wishes, overly expensive, and a source of emotional pain and frustration for their loved ones. In the worst circumstances, the estate passes (escheats) to the government, an undesirable result for almost all people.

Creating a Will

Some people elect to postpone or avoid writing a will because they falsely believe that taxes and administrative expenses may reduce the amount of funds (what lawyers call the “corpus” of the estate) that will be distributed to their heirs. However, a will does not complicate the distribution of an estate, but is intended to facilitate the passage of assets and maximize the benefits of the parties. Failing to write one only complicates matters for those who will be left to pick up the pieces.
 
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How to Prepare to Sell Your Business

sellbiz1New job applicants get haircuts, shine their shoes, and practice their interview skills while preparing to hopefully land a position. Those seeking to sell a home often repaint inside and out, primp the landscaping, and clean from top to bottom before hosting an open house.
 
And a business owner who hopes to receive a fair price for his or her company would be wise to engage in such “dressing up” activities as well. While it may go without saying, putting your best foot forward is always the best strategy to maximize the value of any sale.

The Importance of Seller Objectivity

Achieving a sale at the price you want means that you should look at your company as objectively as possible, problems and all. This prepares you to counter any buyer’s objections or degradation of your company’s value, and allows you to maximize assets and minimize (or at least be prepared to handle) flaws.
 
Recognize that it is easy to get an inflated sense of importance, especially when a stranger comes calling with an interest in buying your company. After all, starting and running a successful company is not an accident, nor a matter of luck. Long-term business success requires a combination of intelligence, guts, and hard work.
 
As a consequence, many owners assume interested buyers understand the business opportunity and profit potential of their company. They presume that an acceptable offer will be forthcoming, only to be surprised when the would-be buyer tells the owner that their baby – the company – is ugly.
 
Getting the highest price for your business requires a thorough understanding of the opportunities and threats facing your business. Potential buyers focus on the future of a business, not its past. Accordingly, why would any potential buyer be interested in your company? Does it offer unique products or services? Does it dominate its geographic and industry markets? Does it have capabilities and capacity that are difficult or expensive to replicate?
 
Buyers are most interested in those companies whose products and services are in growing markets with unrestricted pricing flexibility or obvious expense reduction possibilities. They seek under-utilized – but valuable – assets that can be exploited, especially by the potential purchaser. Similarly, any threat to the business must be identified, quantified, and strategized.
 
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