While most people around us are slaving 24/7 working for multinational corporations, a large number of people have turned their attention towards making some money from the luxuries of their home. This might seem to be a mere engagement, but some people have taken it very seriously. A large number of people who have tried their hands in home based business opportunities have achieved moderate to huge success. With the help of turnkey marketing programs over the Internet, many have been able to become financially independent. It can be concluded that this kind of business works. However, listed below are some of the key points that will justify the statement made.Most people look for instant wealth through home based business opportunities. Their primary and only intention is to make money fast. But, they soon get disillusioned, as they do not get to see any instant remarkable results. This makes them strongly believe that home based working programs are simply hoaxes and do not work at all. But the ones who avidly keep on going without the thought of the end result are the ones who make it work. Whether it is a land based business, or a home based one, to make it work, a certain amount of labor input and dedication is necessary.Most people are so carried away by the thoughts of material reward that they do not even think twice of what they are plunging into. They usually end up starting with the very wrong business idea. A thorough research is very essential before you begin with such a vital venture. If the people are expecting super fast results but end up failing, they blame the system. You should study the home based business opportunities that are capable of generating the desired amount of cash. There are countless such opportunities, but only a few of them can deliver what people look for. You should be fully sure of the fact that you are going to get pleasant return from your investment.Many people are of the opinion that home based business opportunities do not need anything to be done. This very thought is the beginning of their failure. These people belong to that category that choose to make a slight investment, with no work at all and were hoping to get paid handsomely. No business, much less home based ones will yield or better thrive without being worked on. You need to work and work hard on making your business a success.Sadly, people investing in home based business opportunities belief in the pathetically failed strategy of hoping for early results. Thomas Edison had rightly said that mans biggest failure is the failure to understand their proximity to success. Many people give up out of disappointment, when they are very close to success. You need to keep enough patience and farsightedness in any enterprise you undertake.
Take Action For Success In Your Home Based Business
To realise your dreams and success in your Home Based Business is a journey and a process, not a happening, you can only be successful if you understand this journey. We must learn the principles from other businesses and apply it to our own Home Based Businesses in order to reach our destination.The starting point of any journey is to have the end in mind and to stay focussed and motivated to reach that end you set for yourself. Where do you want to be, go or what do you want to achieve? The end of the journey can be seen as your dream. That goal or dream must be worthwhile, reachable and realistic. When you achieve it, it must make you happier, give you more pleasure than your present situation, or solve a problem that you have now, whatever it might be. You must be willing to sacrifice on this journey to reach the destination. This sacrifice must be less than the “pleasure” or fulfillment that you will realise as part of the dream you set for yourself. A very important factor to remember when starting your new venture or Home Based Business is that you must feel personally fulfilled with what you will be doing on a day-to-day basis. It should not become just another “job” you’re doing, but rather an enjoyment to improve or change your current and future circumstances.With a Home Based Business, many people have achieved their dreams of financial independence and/or having a lifestyle that they prefer and earn a sustainable income stream. Others have done it, you can too. You must have a clear dream and believe in your dream and you must take the following issues into consideration in the planning of this journey. If you follow these guidelines, you will be able to achieve your goal on your journey as a Home Based Business owner.The question is: What in your present situation is not acceptable? We want to assist you on the journey to achieve your dream. Let us guide you in planning your journey. The destination of the journey is worth a sacrifice to achieve it. Have a passion to live your dream as part of your journey and believe in yourself.To have a dream, without a destination or goal, and without being willing to take action will be futile.I do believe that you have your dreams.
I am convinced that the goal you set yourself is worthwhile to achieve.
I do believe you want to or need to change and improve your present situation.Then it is time to make a decision and take action. Without action, you will not achieve your dream. This journey must start with action and must be action orientated.Critical Planning for the Home Based Business JourneyHow to start:Start with yourself. What is your passion? What do you care about in life? Make a list.
Take a few minutes to do a personal inventory of your dreams, goals and the problems that will be solved once you have reached your destination.
Define the resources you have: money, knowledge, experience, equipment and your own time. Make a list.
Decide how much time you are willing to spend every day, week or month on your new venture. What are you willing to sacrifice in the process? Maybe spending less time with friends and family, whatever it might be. How much of the other resources are you going to make available? Make this decision in advance.Innovate:Develop new ideas on how to do things, or develop better products or processes. If you do not have new ideas, just start with what you have on a small scale.
Ask yourself: “What is my advantage or area of excellence that differentiates me from my competitors?”
Think of your product, service or the online business you want to promote or sell and work those thoughts into your business plan that you set up for yourself to start a home business.
Test your ideas with friends, family or acquaintances and apply their feedback with your marketing strategy you had in mind.Experimentation:You will make mistakes, so take small steps. If you do make mistakes, make sure that the cost is not too high. You cannot afford to lose too much time or money in this learning process.Action:Now, put your ideas and experimentation into action to get customers and make some sales!
Market your product or service to publicize your business by internet, marketing, advertising, promotions, referrals, and word of mouth.Failure:We all set high expectations for what we want to achieve, but when failure occurs are you mentally ready to deal with it and put your strength back into what you have started?
The only way you will learn is by doing things, taking action and making mistakes. Learn from that and move forward with the next baby step.
Eliminate any negativity that might cause you to fail and keep those positive thoughts and the outcome of your journey in mind.Believe In Your Home Based Business JourneyI am a great believer in the principle of spending time to study many possible Home Based Businesses, instead of jumping to the first because the big salesman has promised me a jackpot. Later you will find that there is no gold in that pot.I will give you reviews on different Home Based Business possibilities or programmes with the pros and cons in order for you to make a decision on what will suit your requirements best. Dreaming of owning your own business and the excitement it is much different from actually putting it all into action.With your excitement, your motivation and the experience and knowledge of the group of experts that I am associated with, we will show you how to stay motivated and assist you with each step to reach your dream.You can dream-it-plan-it-do-it and achieve your goals. Join our community to receive more information on how to become financially independent and finding the right solution.
Learn From Your Investment Mistakes
Every one makes investment mistakes. From the time we were born, we learned from the mistakes we made. As investors, we need to learn from our investment mistakes by recognizing when we make them and make the appropriate adjustments to our investing discipline. When we make a losing investment, do we recognize our investing mistake and learn from it, or do we attribute it to some outside factor, like bad luck or the market? To make money from your investments and beat the market, we must recognize our investing mistakes and then learn from them. Unfortunately, learning from these investing mistakes is much harder than it seems.
Some of you may have heard of this experiment. It is an example of a failure to learn from investing mistakes during a simple game devised by Antoine Bechara. Each player received $20. They had to make a decision on each round of the game: invest $1 or not invest. If the decision was not to invest, the task advanced to the next round. If the decision was to invest, players would hand over one dollar to the experimenter. The experimenter would then toss a coin in view of the players. If the outcome was heads, the player lost the dollar. If the outcome landed tails up then $2.50 was added to the player’s account. The task would then move to the next round. Overall, 20 rounds were played.
In this study there was no evidence of learning as the game went on. As the game progressed, the number of players who elected to play another round fell to just over 50%. If players learned over time, they would have realized that it was optimal to invest in all rounds. However, as the game went on, fewer and fewer players made decisions to invest. They were actually becoming worse with each round. When they lost, they assumed they made an investing mistake and decided to not play the next time.
So how do we learn from our investing mistakes? What techniques can we use to overcome our “bad” behavior and become better investors? The major reason we don’t learn from our mistakes (or the mistakes of others) is that we simply don’t recognize them as such. We have a gamut of mental devices set up to protect us from the terrible truth that we regularly make mistakes. We also become afraid to invest, when we have a losing experience, as in the experiment above. Let’s look at several of the investing mistake behaviors we need to overcome.
I Knew That
Hindsight is a wonderful thing. As a Monday morning quarterback, we can always say we would have made the right decision. Looking again at the experiment mentioned above, it is easy to say, “I knew that, so I would have invested on each flip of the dice”. So why didn’t everyone do just that? In my opinion, they let their emotions rule over logical decision-making. Maybe their last several trades were losers, so they decided it was an investing mistake and they become afraid to experience another losing trade.
The advantage of hindsight is we can employ logic as we evaluate the decision we should have made. This allows us to avoid the emotion that gets in our way. Emotion is one of the most common investing mistake and it is the worst enemy of any good investor. To help overcome this emotion, I recommend that every investor write down the reason you are making the decision to invest. Documenting the logic used to make an investment decision goes a long way to remove the emotion that leads to investment mistakes. To me the idea is to get into the position where you can say “I know that” rather than I knew that. By removing the emotion from your decision, you are using the logic you typically use in hindsight to your advantage.
Self Congratulations
Whenever we make a winning investment, we congratulate ourselves for making such a good decision based on our investing prowess. However, if the investment goes bad, then we often blame it on bad luck. According to psychologists, this is a natural mechanism that we, as humans possess. As investors, it is a bad trait to have as it leads to additional investing mistakes.
To combat this unfortunate human trait, I have found that I must document each of my trades, especially the reason I am making the decision. I can then assess my decisions based on the outcome. Was I right for the right reason? If so, then I can claim some skill, it could still be luck, but at least I can claim skill. Was I right for some spurious reason? In which case I will keep the result because it makes me a profit, but I shouldn’t fool myself into thinking that I really knew what I was doing. I need to analyze what I missed.
Was I wrong for the wrong reason? I made an investing mistake, I need to learn from it, or was I wrong for the right reason? After all, bad luck does occur. Only by analyzing my investment decisions and the reasons for those decisions, can I hope to learn from my investing mistakes. This is an important step toward building genuine investment skill.
Luck Becomes Insight
The market is comprised of a series of cause and effect actions, which are not always transparent. This cause and effect has created some interesting behaviors by some very successful people. For example, some baseball pitchers are known to not step on the white chalk line when they are playing. I am sure you have heard of many “superstitions” that people hold to be true to help them perform well.
In an experiment by Koichi Ono’s in 1987, subjects were asked to earn points in response to a signal light. They could pull three levers, though they were not told to do anything in particular. They could see their score on a counter, but did not know that points were awarded completely independent of what they did. Nothing they did influenced the outcome in terms of points awarded. During the experiment, they observed some odd behavior as the participants tried to make the most points possible. Most subjects developed superstitious behavior, mainly in patterns of lever pulling, but in some cases, they performed elaborate or even strenuous actions. Each of these superstitions began with a coincidence. In some cases, the participants would pull levers in a particular sequence. In other cases, even more odd behavior was observed, including a person who jumped off a table and then later jumped up to touch the ceiling to “score” points. Keep in mind the points were awarded either on a fixed time schedule or on a variable time schedule, not based on the action of the participant.
The point of this is that as humans we tend to think that luck is insight. We fail to analyze effectively the situation and the real reason for our success or failure. In investing this behavior will lead to ruin. To help overcome our natural tendency, we must document our investing decisions and then assess the results. This assessment process helps us learn from our success and from our failures and is critical for each of us if we hope to become successful investors.
Learn from Investment Mistakes
To help avoid investing mistakes, what should you document before you make an trade? I like to look at three categories regarding a stock I am considering. First, I look at a series of fundamental information such as earnings yield, return on capital, revenue growth, insider holdings, sector, and free cash flow. The fundamental information helps me identify if this is a good company with growing earnings, good management and has potential. After reviewing the appropriate financial information including SEC documents, I identify the risks inherent in the company. These risks might include competition, market share, insider transactions, and any litigation that the company is experiencing. Here one needs to try to identify every possible risk and assess them critically. Finally, I look at the chart of the stock, seeking to identify support and resistance zones. This gives me potential entry points, exit targets, and the trailing stop loss. I complete these sections with a written trading strategy describing how I expect to make my trades. All these investment factors should be documented before making a trade. Once the trade is complete, I review them to see what I can learn so I can avoid any investing mistakes in the future.
To learn from our investing mistakes, we need to document our actions before we make the decision. We also need to be honest with ourselves when assessing our results. As we have seen, it is quite easy for each of us to put on rose-colored glasses and think we are better investors than we really are. We need to assess critically our investing abilities without distorting the feedback we receive from our decisions. Those of us who are able to learn this valuable skill will benefit greatly. Those of us who are unable to apply this learning will be destined to mediocrity at best and likely lose much of their capital before they quite investing.
Hans E. Wagner
I began investing in high school and have remained active in the markets. A graduate of the US Air Force Academy with an MBA majoring in Finance from the University of Colorado, I continued to invest throughout my career in the US Air Force, Bank of America, Coopers & Lybrand, and working for Ross Perot before retiring at 55. During that time I have gained a very good understanding of what works and what doesn’t. I hope to impart that knowledge to others so they can achieve financial independence as well.