A Business Endeavor Verses an Investment Asset

Think of your business enterprise as having a bathtub (your organization) and you are trying to fill it up with warm water to bathe in it (enjoy the net revenue).

You must do it right and in a timely fashion, otherwise, the warm water will cool off (the market will change) and you will be left with nothing.

If the tub has holes, (your company has a lot of expenses), you will not only pay more for the water but it will take you a lot longer to fill it up.

You are not only fighting to get enough water volume in the tub, but you are trying to do it fast, so you can have time to sit in the warm water before it drips out or cools off.

So the amount of work and volume of effort we expel to bring in income (Just like the work one does to fill up the tub), is only valuable if the number of expenses (leaks) are reduced or stopped (plugged) fast

The goal is to get the maximum income into the organization while spending the least amount of expenses, all while keeping a watchful eye on the clock because the game will change (just like the water temperature)

I want us to get enough warm water into the tub (income into the enterprise) fast enough to enjoy it, before the temperature (market) changes and we have to start the game all over again. This can only happen by:

1) increasing income

2) reducing expenses

3) doing it fast

In the business world, timelines are even more important than budgets.

In the investing world, however, the assets are like the tubs. Each asset (tub) has some warm water (revenue) trickling in, while some leaks are causing some water to drain out (associated expenses).

But more water is trickling in, than seeping out (positive cash flow).

Usually in a good investment, like a good commercial building with a great Tenant, you are already in the tub (already have the asset) and are enjoying the steady continued warm water flowing in (steady cash flow) against the small leaks of water coming out (controlled expenses).

If you just watch keep your eye on the asset (the tub) and constantly react to any increase of outflow vs. the inflow water (money), you will do fine over a very long period of time.

I do business to increase my portfolio of investment assets and never the other way around.

I am as you should be in the business of investing.

Sincerely,

Cherif Medawar