I’m an investor with a lifelong obsession for cash flow. If you’ve been reading PPC Ian for a while, you probably already know that (from my posts about topics such as Lending Club). I recently started a new role, one where I’m able to combine my passions for investing, marketing, leadership, technology, and general management. My passion for investing seems to enter all aspects of my role. Today, I want to share some thoughts on how you can approach business with the investment mindset.
There’s a big difference between investing and speculation. Investing is all about the long-term. Investors think five, ten, and even twenty years out. Speculators, those trying to earn a quick dollar, actively trade in and out of stocks (and other financial instruments). I’m here to argue that the patient, long-term approach is fundamental to both investing and business. Some practical examples applied to business:
- Treat people well and build long-term relationships that turn into friendships. It’s all about the people. You cannot carry the weight of the world on your own shoulders. Build long-term relationships, and build careers. Those very relationships will drive long-term results for you and the company.
- Integrate technologies and build systems that offer long-term efficiency and gains. Don’t write sloppy code, don’t build short-term bandaid solutions. You may have to invest more money and time (at the sacrifice of short-term results), but your efforts will drive compounded results in the long-term.
- Make smart decisions that provide predictable business growth over the long-term, not just the next few months. Do you want to experience super high-highs and low-lows, a roller coaster ride? Or, do you want to experience continuous, incremental highs over time? With the right long-term approach, you can smooth out volatility and create predictability. Those predictable investments are often the best ones. In parallel, there is nothing better than creating a solid, predictable business environment for growing one’s career and winning the trust of the investment community.
It’s All About Dividends and Cash Flow
I’m an investor who truly appreciates dividends. I’m of the "Show me the money" mindset. Those enterprises that consistently put cash in my pocket (in the form of growing dividends) are my favorites, and almost always turn out to be the best investments.
In business, nothing changes. Why are you in business? Aside from your top-level mission statement and charter, you’re in business to turn a profit, to generate cash. The quicker you turn a profit and the bigger the profit, the better. Whether you’re running digital marketing campaigns, analyzing a real estate opportunity, or making the case for a new hire, always understand the implications on your company’s cash flow. Generate increasing cash flow over time, and you’ve got a truly winning business.
Have a stockpile of cash on hand? Even if your business is privately held, you can pay out dividends. I have worked for several employers who have done just that, turning my career into a true investment!
Take Action When Others Are Not
In the investing world, industries fall in and out of favor. I like to take advantage of temporarily depressed industries, especially with big, sustainable dividends. When others are selling, I’m buying. That said, I’m also very careful not to catch a falling knife, so to speak.
From a business standpoint, I encourage you to face your fears head-on. Take advantage of those opportunities others are ignoring. Tackle the seemingly impossible. Is there a neglected are of your business, one that is really difficult and intimidating, or just plain mundane? Embrace those opportunities! Take a calculated risk when your modeling proves over-and-over that it is warranted. Don’t ever take the easy, safe route. Leaders forge their own paths and drive companies forward. Take action when others are not!
Note: I am not a licensed investment advisor and this article is not investment advice. This article is for entertainment purposes only.