Posted in Pursuit of Excellence

November 16, 2016

Donald Trump has secured the White House and investor attention is quickly turning to finding companies perfectly positioned to profit from his plans. While no one can know for certain what’s in store, Trump’s plans to ramp up infrastructure spending could make this the right time to pick up shares in Chicago Bridge & Iron (NYSE:CBI), Caterpillar Inc. (NYSE:CAT), and Cliffs Natural Resources (NYSE:CLF). Trump’s vision for America involves rebuilding bridges, roads, and railroads. It’s estimated that $3.3 trillion is needed to fund this process. Chicago Bridge & Iron has its roots in bridge-building, but the company, which now goes by the name CB&I, has transformed itself into a major player in energy and water infrastructure. This company receives 70% of its revenues from US Projects so it could be a good buy if infrastructure spending increases. Industry watchers target EPS of $4.54 in 2017, and that means that investors can buy shares for less than seven times next year’s estimates. 
Caterpillar’s machines are a staple of construction sites everywhere, but slow global economic growth has caused a downturn in the company’s business over the past few years, and that’s been a drag on its shares. Last quarter, North America sales, which represent about half of the company’s global revenue, fell 20% year over year because of lower infrastructure and mining demand and lower oil prices. If Trump can kick-start U.S. construction activity, then Caterpillar’s North American construction equipment and diesel and natural gas generators revenue should climb. If the company can properly manage its expenses, and its global demand doesn’t decline, then Caterpillar could be a good addition to your portfolio during the Trump presidency. Cliffs Natural Resources is an iron ore company that is the largest producer of iron ore pellets for American steel companies and producers. Over the past year, the company has reduced its debt and cost of goods sold which means a higher net income. The author recommends these stocks, but I encourage you to seek more than one source when adding to your portfolio, and another factor to consider is are you holding to sell or are you holding to hold onto forever? I’d research to see if these stocks are paying a dividend, and if they aren’t what is your exit strategy when you buy this stock? Ultimately ask yourself am I investing for cash flow or capital gains?

Due to the value of the author’s content, there is heavy quotation:

You may dream of having $1 million, but if you got it what would your tax plan be? One school of thought says just get the money and you can figure out what to do then. I reject that idea and I’ll show you why – the goal should be to keep more of what you make. Let’s start by thinking about professional athletes and entertainers, who often come into large sums of money but find themselves in a different situation regarding taxes. If they are considered independent contractors and not employees, then they would receive their million dollars without any taxes taken out. With even more up-front money in gross income, they could end up spending even more money, only to receive a surprise at tax time when they find out how much they still owe.

In the 1980s I met someone whose boyfriend won $4 million in the lottery. He opted to take the payments whereas most people take the lump sum payment. Was that a good idea? Today, if you take the lump sum in a $1 million lottery, your total federal income taxes are estimated at $356,875. Instead, let’s look at what happens if you take the million dollars as 20 payments of $50,000. Your total federal income taxes are estimated at $5,684. You have saved $243,195 over the 20-year period.

Total Winnings  $1,000,000 $1,000,000
Payments 1 20
Paid Out in Year 1  $1,000,000  $50,000
Taxes in Year 1 $356,875.00 $5,684
Total Received in 20 Years $356,875.00 $113,680
Savings $0 $243,195

This example above shows the power of delayed gratification, and at the same time how much taxes can affect the money you receive. When someone says, they make $50,000 a year, ask yourself is this amount gross income, take home (gross profit) or net income? Most of the time the number is gross income. This amount is before taxes and deductions, so your actual take home pay is a lot loss. In the above scenario, if you were given only $4 million to live in, would you be able to manage it properly to grow or would you spend it all? When you’re investing in assets always think of cash flow, and return on investment. How long will it take for me to get my money back when I put it in on an investment? Remember it’s not about how much money you make, it’s about much money you keep and what you do with it afterwards. With a financial checkup, I can help analyze how much your net income is, and I can show you what I look for when it comes to cash flow.

If you need a financial checkup you can reach me in the contact me section.

For this week, I’ve included Marcus Lemonis’s Top 10 Rules For Success from Evan Carmichael’s YouTube channel.

“If you think you know it all, you’re a fool for sure; real survivors learn wisdom from others.” Proverbs
28:26 MSG‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬

Posted in Pursuit of Excellence

October 26, 2016

The franchise model has long been a way for companies to rapidly expand beyond what might be possible if they opened every location on their own. But rapid expansion can be just as much of a curse as it can be a blessing if a franchisor rushes into an unproven concept without the ability or the gumption to assist unhappy franchisees in hard times, according to serial entrepreneur Marcus Lemonis. Four common pitfalls to avoid are: don’t rush to expand an unproven concept, don’t ignore fanchisees, don’t under-equip franchisees, and don’t try to franchise something you’re not passionate about. When converting, a store into a franchise don’t do it until you have a proven model. Your business isn’t to just sell franchisees, it’s to have a model that you can first turn a profit and then build a system around. If you focus on expanding too quickly you could be left with a lot of debt that can’t be paid. When you have someone buy a franchise from you, you are obligated to be available to make sure they are successful. They are investing their money, time, and energy to buy your system, and they’re doing it to replace their current income or supplement income. Franchisees want to succeed. Ensure that you equip your franchisees with enough tools to succeed, and be willing to take in the franchisees input. A franchise is a business system and if that system isn’t working properly then the system will over time fail. Marcus makes a good point when it comes to any business you start, and especially one you want to franchise. “Why get into a business that you’re not excited about?” Lemonis asked. “You just want someone to feel passionate about what they’re doing. If you don’t have passion for it, it’s going to show to the customer,” and ultimately any potential franchisees.

Retailers looking to replicate the efficiency of bigger players like Apple would do well to focus their attention on one key measurement of success, according to entrepreneur Marcus Lemonis. Advising struggling New York-based Bowery Kitchen Supplies on the latest episode of CNBC’s “The Profit,” Lemonis reveals straightforward ways for any merchandiser to improve profits and evaluate its progress. Three simple techniques to increase sales are: develop a merchandising plan, lead with recognizable brands, and simplify the store’s layout. In the case of this business, the company experienced a loss due to having too much inventory that was spread throughout the store, and the products were acquired based off the desires of the owner vs. profitability of each department. A way to develop a merchandising plan is through analyzing sales data and from this data determine what departments are necessary and structure inventory around this data. After identifying the key departments customers appreciate most, Lemonis develops a strategy centered around “anchor tenants” — products meant to boost profits for a entire department by establishing the product offering’s legitimacy. By anchoring a department with well-known brands, you can then add brands that aren’t established with good margins. The final step is simplifying a store layout through clear signage and organization which will make the shopping experience easier for the customer. The more comfortable and visible the experience, the more likely you will generate sales.

If you need a financial checkup you can reach me in the contact me section.

For this week, I’ve included Design Your Dream Life Through Passive Income from TEDx Talks YouTube channel.

“If you think you know it all, you’re a fool for sure; real survivors learn wisdom from others.”

Proverbs 28:26 MSG‬‬‬‬‬‬‬‬‬‬

Posted in Pursuit of Excellence

October 5, 2016

Before you hire an outside party to distribute your product, think twice — they might be unnecessarily costing your business an arm and a leg. That’s the lesson Max Kater, CEO of Murchison-Hume, learned on this week’s episode of CNBC’s “The Profit.” Over the past few years, Kater had been using a convoluted process to get her fleet of upscale, nontoxic cleaning products — ranging from glass cleaners to dish soaps — from the factory floor to consumers’ hands. The business had been creating the product in Skokie, Illinois and then sending the product to a third-party logistics center in Dallas, Texas. This distance was costing the business an extra 50 cents per unit. Even though this amount seems insignificant; in the wholesale business it will add up. “Murchison-Hume, like any wholesaler, sells to retailers at twice its cost, meaning that the 50 cents turns into $1 by the time it gets to the retailer,” Lemonis explained. The retailer then marks up the product, so that $1 becomes $2 in the eyes of a customer. As a result, the price of Murchison-Hume’s product becomes $9. A price that will cause customers to pass on the product. To solve the problem, Lemonis suggested Kater work with a partner that manufactures, packages and distributes products all under one roof, streamlining the process and saving Kater an extra 50 cents on the cost of goods sold. This change creates a 22% savings to the customer which means a more affordable product. It’s important in business to not just price your product, but to properly price your product. It’s important to understand logistics and figure out how to improve processes. Ultimately it’s about how to properly manage working capital and more importantly manage human capital.

There’s a reason we are comfortable sacrificing it all to make our businesses a reality: We assume we’ll get a break tomorrow. To paraphrase Orphan Annie, tomorrow is always a day away–but meanwhile we could end up being useless to the very people we say we are sacrificing everything for. Consultant Alan Weiss calls this the Oxygen Mask Principle. If you’re in an emergency situation on an airplane, you are told to put your oxygen mask on first before assisting a less competent companion. He breaks it down in his podcast, The Way I See It:

You can’t help the client or your family, you can’t do pro bono work, you can’t help others in the profession, you can’t help anyone unless you yourself are comfortable. You need a healthy selfishness.

Rest is extremely important. If the human body was intended to work 24-7, then you wouldn’t see people with health issues or in some cases, die from exhaustion. Personally, I’ve taken on the habit of engaging in work 6 days a week, but I also take one day of rest. Rest for me may be going to church, sleeping, or doing some form of relaxing. I encourage you to make sure that you take the time to rest so that you can recharge and be more effective. Mr. Brown’s tactics to putting on his Oxygen Mask is to build in minimum viable days, create blank spaces in his schedule, and say “no” early and
often. Honoring the principle of rest will allow you to enjoy life more, and you’ll find that you’re still productive even with the rest.

If you’re in need of a financial checkup you can reach me in the contact me section.

For this week, I’ve included The Profit Principles with Marcus Lemonis from CNBC Prime YouTube channel.

“If you think you know it all, you’re a fool for sure; real survivors learn wisdom from others.” Proverbs

Posted in Pursuit of Excellence

September 7, 2016

First I would suggest working on a budget. A zero-based budget allows you to clarify your personal financial (and life) priorities to make sure your money is going to the items that are most important to you. I personally recommend even finding a budget format that works for you. The point is to know how much you make and how much money you keep at the end of the month. The author then recommends a “debt snowball” payment method. In this type of payment method, a person pays the minimum payment on all but the smallest debt. When that debt is paid, you take the amount you were paying toward it, and apply it to the next smallest debt. Repeat this process until all debts are paid off. Another method you can use is to align all your debts by highest to lowest interest rates and target the smallest balance with the highest interest rate. Finally, the author recommends making changes to your lifestyle such as downsizing, and decreasing increases. The author also recommends increasing your income through part time jobs or side-gigs like driving for Uber. The process of getting out of debt isn’t easy but it begins one step at time. Focus on creating assets while you get out of debt. If you’d like to learn my techniques, reach me in the contact me section.

When it comes to running a business, you have to know your numbers, says Marcus Lemonis, star of CNBC’s “The Profit.” The serial entrepreneur, who puts his own cash into struggling businesses and tries to turn them around, would know. At this point, he’s invested about $35 million in companies featured on the show. There are three numbers that every business owner must know: annual sales revenue, gross profit margins, and expenses as a percentage of your gross profit. Marcus’s point is that you pay your bills with gross profit and not with revenue. Not knowing these numbers is the one big mistake that business owners make. Even in your own life, treat your life like a business. Know your gross income, expenses and net income and be as detailed as possible. Every penny matters. If you want to run a successful business, you have to know your revenue, gross profit and expenses “inside out,” Lemonis said.

If you have a prayer request, or if you’re in need of a financial checkup you can reach me in the contact me section.

For this week, I’ve included a video clip from the Profit called You Have to Take Care of Your People from the CNBC Prime YouTube channel.

“But those who want the best for me, Let them have the last word—a glad shout!— and say, over and over and over, “ GOD is great—everything works together for good for his servant.” I’ll tell the world how great and good you are, I’ll shout Hallelujah all day, every day.”

Psalm 35:27-28 MSG

Posted in Pursuit of Excellence

August 31, 2016

For Marcus Lemonis, the star of CNBC’s “The Profit,” a handshake is much more than a polite greeting. “The best advice that I was ever given was about shaking hands and making a deal,” the self-made millionaire and serial entrepreneur tells CNBC. Marcus learned this advice from his Mom. “She said: ‘When you shake someone’s hand, you have to honor the deal that you made, and you have to do what you say you’re going to do,'” Lemonis recalls. It’s refreshing and a sign of a person’s character when the person honors his word. From Marcus’s point of view agreeing to something with someone has to mean something. The handshake represents it. Marcus points out that people that want to get of a legal document will find a way to get out of it.  The handshake is a way of representing the sealing of a deal. “Ultimately, I do paperwork,” he explains. “But if you want to know what the movie’s going to be like, watch the preview. And that’s what the handshake looks like to me.” “Do to others as you would have them do to you.” (Luke 6:31 NIV)

Most Americans spend about a third of their day in bed, and yet few have a go-to brand for sheets. Paul Saunders wants to change that. After launching as a one-man operated e-commerce site from Saunders’s garage in Evansville, Indiana in late 2009, is now the fourth fastest growing company in America. Last year, the company posted more than $30 million in sales–a three-year growth rate of 23,619 percent. What prompted Saunders to start this business was buying a new set of sheets for his wife that were of a poor quality, and knowing he could do better. And with his background as an ex-Marine officer and Naval Academy graduate that meant working harder than anyone else to do it. He was able to quit his job when products began literally filling up his house. And those products quickly expanded beyond just sheets: Unlike upstarts in the mattress industry like Casper and Saatva, which only sell two or three products, now sells hundreds of items under the bed, bath, home, and garden categories (including mattresses). And despite starting out with a direct-to-consumer model, it now also has a growing wholesale business with a presence in hotel chains like Marriott, as well as government contracts for military barracks. The company separated itself even more by acquiring its mattress pad supplier, Regency Pad. Even though the company has high capital requirements, the company’s been able to post growing sales even without angel or venture funding. From its humble beginnings of a character loan, has expanded to the UK, Canada, Europe and will soon launch in Japan. Saunders says the company’s definition of success stems from the original 1806 Webster’s dictionary: a generous, prosperous, and kind person. “We take care of each other and try to do right by our customers and our community,” he says. Cox, who joined earlier this year, says that mentality is felt throughout the company. As a leader, Saunders understands that the nature of his business requires a high paced culture, which makes hiring the right people a necessity and to work hard and smart.


If you have a prayer request, or if you’re in need of a financial checkup you can reach me in the contact me section.

For this week, I’ve included a motivation video called Building Determination from the EndlessMotivation YouTube channel.

“But those who want the best for me, Let them have the last word—a glad shout!— and say, over and over and over, “ GOD is great—everything works together for good for his servant.” I’ll tell the world how great and good you are, I’ll shout Hallelujah all day, every day.”

Psalm 35:27-28 MSG