Category Archives: 401K

Top Stock Market Alternative Investment Ideas

In today’s lightning fast age of digital information fortunes can be made or lost in the blink of an eye. Extensive research and having access to relevant, timely information give the professionals on Wall St. the advantage when it comes to investing money. Investing in the stock market is serious business. If you don’t approach it in that manner, you may as well take your money to Las Vegas and bet on all the favorites and whatever longshots you feel good about.  Chances are you won’t be successful. The typical American doesn’t have the time, access to information and sophistication to successfully manage a stock portfolio so they rely upon these professionals to make safe investments for them in the form of managed fund accounts. While taking this alternative investing approach to individual stocks may disperse some of the risk and already be conveniently packaged as allocation choices within your 401K, they are still heavily reliant upon the financial markets and therefore presents itself as the basket in which all your eggs lie. When it comes to investing money for the long term, the cycle most Americans follow is the Financial Market Roller Coaster. Optimism as the stock market climbs, panic as the market crashes, skepticism over the next few years while re-investing to cover previous losses then the cycle starts over again. For those who want to get off that roller coaster, click alternative investing ideas to learn more about tangible businesses and real estate options.

The political climate has a huge influence on the overall financial markets therefore the volatility of your individual savings rest in the hands of external influences. History has taught us that just as fast as the financial markets go up, with absolute certainty, they will crash back down exacting revenge upon all who weren’t highly informed as to the impending market crash and or swift enough to bail out with minimal damage.  The current political climate is positive and according to a Politico Magazine article Bill Ackman, the billionaire founder and CEO of Pershing Square Capital Management LP, said this of his market bullishness and the Donald Trump presidency. “My thinking is as follows; the United States is the greatest business in the world and it’s been unmanaged for a very long period of time. We now have a businessman as the president and he has power because Republicans control Congress. He’s going to launch a major infrastructure program. He’s going to take corporate taxes down to a sensible level and get rid of loopholes. He’s going to get a lot done and nothing has gotten done in a very long period of time. And if you are an activist investor, you want someone to come in, take over and get things that need to get done, done.” While information such as this fuels the optimism segment of the Financial Market Roller Coaster, very little is discussed regarding market volatility and exit strategies prior to significant impact by an inevitable bear market. Alternative investment ideas outside of the stock market allow investors to consistently achieve a desired rate of return regardless of financial market performance. Investing money into tangible businesses and real estate puts a higher level of control back into the investor’s hands.

Once an individual has decided to embark upon an alternative investment approach, where to invest money now becomes a function of identification and evaluation of investment opportunities within your immediate realm. Unlike financial market dependency upon a fund manager’s information, judgement and discretion, the information and research necessary to make an intelligent decision can be as close as first hand. The ability to geographically choose where to invest money can also influence your decision of the best way to invest money (tangible business or real estate). Investment into an area in which you have intimate knowledge of the demographics, service needs, real estate trends and competition will allow you to maximize your investment opportunity. You do not need to become an expert in all those areas but becoming an expert in building your team of experts will make you very successful. Working with a highly skilled business consulting firm will allow you to tap into their pool of Franchise Concepts and Real Estate networks drastically shortening your ramp up time and increasing your efficiency. By choosing to open a franchise rather than start from scratch with a new business idea, you can take advantage of brand recognition, a track record of existing franchisee’s success and a fully developed operation system with your profit built in as an expense item.

Safe investments are as safe as your individual risk tolerance says they are. When it comes to investing your money, alternative investment ideas to the stock market such as tangible businesses and real estate provides you with a higher level of investment control as well as a tangible asset connected to your investment dollar. If you want to learn more, register for the webinar “Protect Your Savings Outside The Stock Market” or contact an expert business consulting firm for assistance.

9 Steps to Financial Prosperity

 

1. Make up in your mind that you want to control your own destiny:        Complaining and placing blame regarding your current situation doesn’t change anything. Any sort of physical discomfort causes a physical reaction. The same is true with mental discomfort. When you’re not happy and don’t feel good about where your life is going, realize you can change it. Just make up your mind.
2. Peacefully reflect on what types of things really interest you:
Quiet, peaceful thought allows you to hear yourself without the interference of the outside world. Find that quiet place, relax and allow yourself to hear what makes you happy, what you really like and are interested in. Make a list of these items. There is opportunity to profit in everything that gives you pleasure but you must first find out what that is.
3. Identify what your true and natural skill set is:
We all have gifts. Some of those gifts we were born with, others we have developed over time. What are they? You may be creative, analytical, mechanical or even charismatic. Whatever your talents are, identify them and list them.

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What Millionaires Know and Everyone Else Should

High Net Worth Investors understand that real wealth is generated in the private markets rather than the public or common markets. The ultra-wealthy may gain a lot of their initial wealth from private businesses, often through direct business ownership or as an angel investor in private equity.images

If you’re disappointed with your portfolio’s returns and are looking for other options, there are alternative investments. Alternative investments are generally defined as anything that falls outside traditional stock and bond investments and whose role is to potentially maintain a positive position when the broader markets decline. The goal is to mitigate portfolio volatility, hedge against downslides and boost portfolio returns in a way that is not tied directly to the stock market’s performance.

The stock market, as measured by the Standard & Poor’s 500 Index, gained a meager 1.2 percent in 2015 (including reinvested dividends). So far in 2016, the S&P is in positive territory by less than 1 percent. The bond market’s returns, meanwhile, have languished in the range of 1 percent to 2 percent for at least five years. When you think of investing the stock market or other somewhat passive investments, returns of 10 to 20 percent per year on invested capital are normally considered very good.

The mistake in applying this type of logic to Franchising, as an alternative investment, is that normally the investment is not passive. You make two types of investments in a franchise opportunity. In addition to your capital, you are also investing a fair amount of your time and management talent as well. You should be able to achieve a good rate of return on both investments.

The capital you invest is static, and the returns you will earn on your invested capital are normally reasonable by passive investment standards. The real opportunity for leverage in franchising relates to the investment you’re making in your time and talent. This is where a great franchise system can utilize this asset to increase your returns dramatically.

The franchisor develops a system or method of operation that employs the franchisee’s time in a manner that drives the income from the business to levels that are not available from an investment of capital alone. These are the systems where a good operator can create annual incomes greater than 100 percent of the total initial franchise investment within a short period of time.

Warren Buffett’s winning strategy is remarkably simple: Focus on companies that generate robust annual cash flow, and make sure those companies are not at risk of technological obsolescence.

Millionaires understand that some of the best ideas don’t come out of costly research but out of a passion for making the world a better place. Always listen to that little voice that says to “pursue your passion and success will follow”.  Click Here to learn more.

Top 10 Things to Consider When Shopping for a Franchise

If you’re an investor looking to put some cash to work outside the stock market, investing in a franchise business is a very popular option that is worth looking into. As tempting as it may be to just type the word, “Franchise” in your favorite search engine to “See what’s out there,” you’re going to need to understand several things first. JPayton Consulting assist entrepreneurs and investors nationwide put their ideas into action. Click Here to learn more.tree-of-wisdom

  1. How Franchises Work

It’s been called the greatest business model ever invented, and has enabled hundreds of thousands of people that never owned a business before to do just that; become owners of their own business.

The premise is simple; someone comes up with an idea for a product or service, implements it, and starts a business. The business turns out to be easily replicated there for the opportunity for expansion is simplified. This person doesn’t really want to just use all of their own money to grow the business, so the decision to seek out investors is a smart choice.

It’s just that the investors in this case are not only going to buy into the business; they’re going to run it too. As franchisees. That’s right; the person who came up with the business idea is now going to be the franchisor, and will be using other people’s money, i.e., franchisees, to grow the business.

  1. My Personal Risk Tolerance

Investing in a business (franchise or non-franchise) is risky. There’s no way to completely mitigate your risk, but there are ways to lower it. Are you prepared to risk your own money in a business venture?

One thing you can do to make sure that you’re really ready to write a check to a franchise company is this: Look back at some of the major decisions involving money that you’ve made over the years. How were you able to handle the “risk” part of those decisions? Did you analyze things for weeks, maybe even months on end? Or, did you do some research, and make your decision relatively quickly?

Bottom line, calculate your risk and be comfortable with it.

  1. The Franchisor’s Rules

Franchising is not free from accountability to the franchisor,  it can’t be. Can you imagine going into your local McDonald’s for a Big Mac only to find out that the franchisee decided to discontinue it?

Before you commit to becoming the owner of a franchise business, make sure that you understand the rules. All franchises have them, and need them. Rules maintain the consistency of the products, the services, and the brand.

  1. Your Personality Type

Before you become a franchise owner, do a self-check. Telling yourself that you’ll follow the rules in a franchise business, then actually following them once you become a franchisee are totally different things.

Some self-reflection is definitely warranted here. For example, in a corporate setting, there are always rules to follow. How did the rule-following work out for you? Were you generally comfortable with them, or did you have a problem following them? Did you feel that the rules that were in place didn’t apply to you? Dig deep here; either you’re a rule-follower, or you’re not.

If you don’t generally follow the rules, don’t buy a franchise. It probably won’t work.

  1. Your Finances

If you don’t know where you stand financially, you’ll waste an awful lot of time learning about and getting excited about franchise opportunities that may not even fit your budget.

Do a simple net worth statement before you start your franchise search. Add up your assets. Then add up your liabilities. The difference between the two is your net worth. You’ll need this information for the franchisors. (Most franchises have a minimum net worth requirement)

  1. Who Am I

Searching endlessly online for that perfect franchise may sound like the right way to find one, but it’s not. Trying to figure out what’s what without customizing your search can be a massive waste of time.

Instead, grab a legal pad and write down your top professional skills. In addition, write down some of the traits that tend to define you. Are you outgoing, or are you introverted? Are you highly competitive? Are you good with details, or are you a big-picture person?

  1. How to Find Possible Matches

Now that you’re armed with your top skills and some of your more dominant personal traits, it’s time to start your search for a franchise. Go to your favorite online search engine and type in “franchise opportunities,” or “franchises for sale,” and start digging in. You’ll see specific franchises come up, as well as a number of franchise directory type websites.

Here’s the trick; only request information from those that seem to be a fit for what you wrote down on your legal pad. See No. 6. And don’t forget to make sure that your net worth meets the minimum requirements.

  1. How to do proper research

Once you’ve found some franchises that could turn out to be a match, it’s time for you to do your research. You’ll find that some of your questions can be easily answered by your franchise development representative, while others can’t.

For instance, unless franchisee sales and earnings figures are clearly disclosed on the Franchise Disclosure Document, (which you’ll receive from the franchisor) your franchise representative cannot answer any earnings-related questions. But don’t worry; all you have to do is ask the current franchisees. In most cases, that’s where most of your answers about the business will be coming from anyway.

  1. You’ll need a business plan

Don’t even think of going into your local bank to apply for a small business loan without a formal business plan in your hands. The lender will want to see your projections and hear your story. JPayton Consulting can help you create one.

  1. The Process

The entire franchise discovery and research process will probably take two to three months to complete. Eventually, you’ll have to make a yes or no decision.

You’ll probably be a little nervous. After all, it’s not like your starting a new job. If you buy a franchise, you’re going to have real skin in the game, and it’s a game that you’re expecting to win.

You can win, if you focus on choosing an opportunity that’s really right for you, that you’ve done terrific research on, and that easily fits into your budget. Click Here to begin your search.

Your 401K and the Next Stock Market Crash, Plan Now!

It’s not a matter of if, but when the next significant market decline will occur. Utilizing a retirement vehicle such as a self-directed IRA can help you avoid serious loss. A self-directed IRA is an individual retirement account that gives you complete control over your investment choices. Stock market crash2Unlike other IRAs, you’re not limited to stocks, bonds, or mutual funds. This means you can take advantage of investing in alternative assets – such as a franchise, real estate, limited partnerships, and gold with your self-directed retirement account.

Opening a self-directed retirement account gives you the freedom to invest in almost any type of asset – meaning you have more flexibility in the amount of risk you take on and more potential for a higher rate of return.

The ability to diversify your portfolio by investing in alternative assets such as a franchise, real estate and precious metals can act as a hedge against market fluctuations and volatility.

Put your knowledge and expertise of a particular industry or niche to good use. Make investment decisions based on what you know and understand to grow your retirement savings.

Investing over time in a self-directed IRA that allows for tax-deferred or tax-free growth can significantly affect future wealth positively.

“Private Placements” is a term that refers to investing in privately held entities, such as companies or small businesses.  Banks have recently tightened their purse strings when it comes to lending to these entities, creating a higher demand for development capital from investors.

For those seeking funds, obtaining capital from a self-directed IRA owner can be simpler and faster than the loan process with institutional lenders. For self-directed IRA owners, this type of lending has the potential to bring higher returns than the stock market or CDs.

Providing private loans to businesses is an allowable way to diversify your retirement portfolio. Your self-directed IRA can invest in:

  • LLCs
  • C corporations
  • Private stock
  • Partnerships
  • Private placement memorandums
  • Businesses
  • Land trusts
  • Secured and unsecured notes
  • And more

To learn more about the different ways your IRA can invest in private placements, or to make a private placement investment, please Contact Us today.