Think Like a Rich Person - Part 5

Welcome in the part 5 of Think Like a Rich Person. You come here after reading part 1, part 2, part 3 and part 4 and in this part you will learn what you did not learn in past parts. So, come to the part 5 learning.

Thinking of a Rich Person

(A) Rich People Focus on Opportunity 

Rich people thinks every time about the opportunity in different type of business model. But it does not mean that they are blind to invest in everything. It only means, they calculate the risk and return and practical try to take such risks. Even they know step back opportunity and learning lesson opportunity. Let me explain with my personal example.

Few months ago, I invested my some money in the partnership as sleeping partner. Everything is great. Partnership is great and is giving me 8% net profit on my investment. I have invested the money. I got only 4% profit on the investment. Actually active partner is very clever. He gave me greed of 8% on my investment and also tell me all expenses which deduct from it. I see its opportunity and I invested money without participating product sales management. After closing the month, I see, there was not accountant there to calculate unsold stock of my investment.

As my skill of accounting, I myself calculate unsold stock and calculated my profit. But sale was only 50%. Now, active partner wants to give me same profit on sale because it was real investment which earns. I also did not clear about this. So, I accepted and Noted my Learning Opportunity and my other opportunity from this deal.

(i) My First Opportunity : I learned Practical Difference between Return on Investment Vs Return on Sale 

As investor in partnership, I have right to get return on investment but I did not clear in the deal. So, I got only return on sale. Due to this, my return has decreased 50%. How?

I invested Rs. 10,000

if there is return 8% on 10,000. Monthly return must be 800

But I did not clear on this and did not written agreement on this. Due to this, Active partner has given me 8% on Sale.

Active partner sales capacity is only 50%. Actual sale done is = Rs. 5000 and I got Rs. 400 and loss of my return of Rs. 400

I accepted my mistake. I accepted my accountability and I am seeing great opportunity. How to Deal better in future.

If I am sleeping partner. My invested money is my power.

(a) I must right to get return on investment not on sale. Because it is the capacity of seller not me. If I invest same money and I use my skill to sale, I can sell 100% my products and I got 8% + return part of active partner.

(b) I have cash money and as investor, I have unlimited opportunities. Active partner depends on me and I am not depends on the active partners.

So, I can say,

I will get 8% return on Investment money not 8% return on Sale. If not give me 8%, give me 6% and if he will ready, I can be in profit of Rs. 200

I can say only with self confidence if I did above mistake. So, start to do more and more mistakes and learn from mistakes as your thinking that it is my practical learning opportunity.

(ii) My Second Opportunity : I learned Practical about the Importance of Audit Independent 

Whether you invest in small business of other or in partnership or in Company, its audit is must because there is two benefits

(I) To finding Stealing During Sale

(II) To finding Cheating of Other Partners

(III) To Find Net Profit and Sale

One of great thing, I also learned that there is also cost of independent auditor. Who will pay to him. I did all myself. I maintained the accounts and I audited and spent my lots of time. It has also value which has decreased my return from 8% to 0% because investment is less and fixed expenses are more in this deal.

(iii) My Third Opportunity : I learned Practical that  Never Do Fool Business 

It is simple accounting rule that if your fixed expenses are more than your income, you will get loss in the business. As good businessman, you must leave this business because same loss will eat your biggest money can time capital

Money capital : You will sell your asset and pay same fixed expenses bill

Time Capital : You will become fool and doing this fool business when you know that you are losing your time and energy and getting only loss.

In my case, I invested Rs. 10000

Sale was Rs. 5000

My Fixed return on Sale was 8%. so, I got 400

I loss return on investment  4% because I got only 400 on my investment Rs. 10,000 and it is Rs. 400

I invested my time to maintained its account as accountant and also audited as auditor. Whose minimum fixed expenses is Rs. 50,000.

(iv) My Fourth Opportunity : I learned Practical that  Never Invest More in Fool Business Due to Greeding in Mind 

One of the weakness of human being is greed. If anybody gives you money as profit, it is natural, you will be greedy. I am getting money but as per above accounting, I have shown that it is loss of capital of time. Time capital is more valuable than money capital.

Even after knowing that my partnership is suffering loss, I invested Rs. 5000 more capital for buying new material. Even, I know the active partner has only capacity to sell 50% and I will get only 4% on it and I will spend my Rs. 50,000 value time on it.

When I focused on it after taking this decision. I have found opportunity to stop this fool business because its practically learning is enough for enjoying my happy life. I captured my all material of Rs. 15000 and make the plan to sell myself online by overcome my greed. Greeding is the son of your mind's fear that you if you will not get same money, I will have less money and I will not survive.

Simple Equation of Greed 

I am Greeding = I am fearing if I will not greeding, I will not have money or same thing and I will die

Instead becoming warm of greed. I have started to beleive in myself and my ability that I can sell it online and earn good profit and stop to involve in this fool business partnership.

I have taken above as my educational risk.

Thinking of a Poor Person

(A) People Focus on Barrier 

It is truth that poor people always focus on barrier. Because they do not learn from life. They do not learn from mistakes. They do not focus on self improvement. They always do the fool business. They start to complain, they have lack of capital, they have no higher education, they are weak. They have not good health, they have big competition. All happens due to their laziness and waste time in useless things  Because they

1. They Do not invest time to learn Accounting Skill

Learn Your All Accounting Skills from My Accounting Course

With this, they can find why my capital decreasing day by day even, I am getting profit and cash.

- By Comparing Physical Unsold stock and Books Unsold stock, we can find. The loss of material which is our invested capital has decreased due to stealing by thieves

2. They Do not Invest Time to Learn Audit Skill

Learn Your All Audit Skills from My Auditing Course

With this, they know How to Find Accounting Mistakes and accounting frauds.

3. They Do not Invest Time to Learn Self Confidence Skills for Overcome Fears 

Learn Your All Self Confidence Skills from My Self Confidence Course

With this, they will focus only goal and not on fear. If you will not learn to boost self confidence, your thinking will be fear of not taking new risks. Your thinking will be like a poor person who will be doubtful regarding what is wrong and what will wrong. Poor people focus  that if situation will bad, he or she will die.

4. They Do not Invest Time to Learn Sales Skills

Learn All Sales Sales Skills Sales Motivation Books Set 

With this, they learn to save from loss of sales opportunities

Download Think Like a Rich Person eBook

Related Contents

Part 1 | Part 2 | Part 3  | Part 4






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Accounting Education: Think Like a Rich Person - Part 5
Think Like a Rich Person - Part 5
Accounting Education
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