Author - semi retired business entrepreneur leader who is now a senior citizen. Current posts are about his current business experience and learnings. A former lecturer at a top GSB in the PHL for more than a decade. We had great successful entrepreneur graduates
Nation building via learning and being the best in business
We know how many zillionaires came to being: by correctly predicting the next big thing: Bill Gates taht the software si more valuable than hardware in the PC market, Steve Jobs that the next central platform for entertainment: shows music knowledge would be via mobile phone (not PC or TV as billion dollar investments were poured into this)
There was a knowledge platform Megatrends before (what happened to this) that focussed on changing socio economic trends to predict the next big thing. Now we have the AI hype but which is now showing mix results. Others say we will have more leisure time, but most will be out of job. But even minor tasks being assigned to the AI like writing a business plan, marketing plan is showing a lot of mistakes.
Generals kings before consulted oracles before going into a large batttle. How we wish there were oracles of Delphi before making a big bet on new technology or next big thing
Nation building via learning and being the best in business
1. You are the business. You have your own story, your brand, your grit, your energy. Show your face
2. Raise the bar, or burn the bar down SJ was violent about standards, simplicity That is why customers love Apple. What habits are you tolerating low standards? Be careful of what you tolerate.
3. From star wars. Build the parts of your vision before it happens (Eg Lucas - who built their sets for the galaxy that never exist. Can you do that for the business you envision)
4. Conviction beats consensus. E. g Bernard Arnoux (LV) 50 year vision
5. Delete before you improve (Schumpeterian - you have to destroy before you build)
Destroy before you start. Return to basic principles.
A E Del
Automate
Elimnate
Delegate
A Del2 (Automate, Delete, Delegate
6. Energy of start ups build empires (Alexander the Great)
7. Draw the dream and build the machine. Eg. Disney Land. Drew the dream and built it.
Nation building via learning and being the best in business
You can build your wealth through compounding. That is doubling your money every x years using the rule of 72. (72 /9 = 8 years to double your money). That is why higher yields (less risk) make you double your money faster.
Compounding is one of the greatest feature (others say invention) of modern finance. Others say returns on stock investment is marvelous but there could be bad days/months. Psei again returned to 6,000+ level. How many were slaughtered at Phil stock market My daughter stopped talking about her stock portfolion several years ago
Rule in investing - DONT LOSE. Is paramount.
However taxes can take a bite of your returns, Lower the returns and the compounding slows down and takes longer At todays rate at banks, if in savings this will take 144 years. At 3% on time deposit (gross) 2.4% net, this will take 30 years.
This video outlines several tips on how to beat the tax bite on returns so that your PHP can compound:
1. Tax free investments - There used to be CBCIs I wonder whether there are still available There seems to be none
2. Borrow still die strategy - Borrow against your stock sleep on it, pay off interest with your dividends. Dont sell or liquidate.
3. Hold off selling and pay capital gains when you do. Those who sell and who are on salary basis pay cgt year after year.
However for RE in PHL it seems to be a losing battle for real estate flippers. Its because of the regular increase in Zonal Valuation and having the real property classified as capital goods subject to 12% vat. No wonder, leases are popular, and flipping is slow, as seen in the 3 years worth of inventory of condos. No wonder a fmr senator Sec of DOF gets so much hated Mr. Tax Man. Mr VAT
There was this condo offered in Cubao for mere P7 m (market was 12) But after computing for cgt, interest, and CUSA, the margin for the flip in case was merely P500,000 or just a little over 10%
which was minimal. We could get that return elsewhere.
4. Depreciation in commercial property.
Though there is capital appreciation commercial properties can charge depreciation for 10 20 years And thus, tax due is lesser and ROI becomes bigger.
5. Tax free employee plan for retiremen;
Tax free income for retirement fund, stock options and the like
6. Index fund - several transactions gathered togehter as fund, lesser CGT or transaction tax.
7. Wrappper, corporate veil by placing your investment under a corporation, holding company, or trust, you shiled our personal risk via a corporate veil. Only the corporation, trust or holding company gets the hit.
8. Geographicala arbitrage - Lesser tax bureden abroad, lesser cost of living, lesser cost of investing in the Bahamas, Switzerland, Cayman islands, lesser cost of livng in Thailand, the PHL,
Vietnam
Nation building via learning and being the best in business
1. You can do stock transaction in 10-15 minutes and only one deal either buy or sell
2. Real Estate is more complicated and takes a lot of time You deal with the owners who could be varying in ideas about the property and one complication lead to another. It takes time to sell real estate: you have to find agents, you have to list this, nego for the dp, arrange for the bank financing, and it takes time. One issue leads to another. There could be dead owners, unpaid electircity bills, etc. It is complicated. It is not a simple business transaction. It is a lot of head ache
(We have a case of seller suing us for alleged fraudulent docs They received the full payment. what is there to sue for?)
Nation building via learning and being the best in business
When this post was starting out as a businessman, it was an advice to hold on to somebody as a role model. And one of my lodis was Jack Welch. I bought books about GE, Jack Welch. And the whole world idolized him. He made GE a mega business
But lately, there are news and allegations that actually destroyed GE. His moves did not make GE unsustainable And by making 50% of GE more of a finance company via GE Capital GE was exposed to financial and capital market risk that required more than a hundred billion bail out.
