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| CEO, Skooba Pools Agency, Dr. Oluwafemi Adejuwon James |
First off, do
you know what assets you have? I mean you to include both long-term assets
(fixed assets) and short -term assets (current assets). The fixed assets are
the ones it would take you a while to turn into cash and the current assets are
the ones easily converted into readies. Have you listed them? If not, do so now.
I’ll wait.
you know what assets you have? I mean you to include both long-term assets
(fixed assets) and short -term assets (current assets). The fixed assets are
the ones it would take you a while to turn into cash and the current assets are
the ones easily converted into readies. Have you listed them? If not, do so now.
I’ll wait.
Back already?
Got your list? I hope it has some of the following on it:
Got your list? I hope it has some of the following on it:
• Property
• Land
• Motor vehicles
• Pension funds
• Cash
• Goodwill
• Works of art,
antiques ete.
antiques ete.
• Investments
• Money owed
• Furniture and
other possessions
other possessions
• Patents
• Stocks and
bonds
bonds
• Intellectual
properties.
properties.
If you have a
business it may also include things like:
business it may also include things like:
• Stock
• Work in
progress
progress
• Raw materials
• Plant and
machinery
machinery
• Equipment
• Trade marks
• Mailing lists
“If you own something, borrow against it to buy more
and then borrow against that to expand further. All businesses are expanding or
contracting, they are like plants, flourishing and growing or wilting and
dying, you choose”.
Once you start
writing it down as a list you begin to see endless possibilities for using
assets to make more money. Basically the personal advice is:
writing it down as a list you begin to see endless possibilities for using
assets to make more money. Basically the personal advice is:
• Don’t let an asset sit idle – if you
own property, rent it out. And I don’t just mean buy-to-let. Some enterprising
people have rented garages or small bits of land they don’t use in areas where
there isn’t enough parking for commuters and so on. Think laterally and don’t
discount anything!
own property, rent it out. And I don’t just mean buy-to-let. Some enterprising
people have rented garages or small bits of land they don’t use in areas where
there isn’t enough parking for commuters and so on. Think laterally and don’t
discount anything!
• No asset is beautiful unless it is working for you – it has to be
accumulating, increasing in value, to be worth keeping.
accumulating, increasing in value, to be worth keeping.
• Never leave cash sitting around – it tends to
get bored and wander off. Make it work.
get bored and wander off. Make it work.
And on top of
those the business advice is:
those the business advice is:
• Keep stock and
raw materials to a minimum – more is less.
raw materials to a minimum – more is less.
• Depreciation
is a dirty word – keep its use to a minimum and then excuse yourself every time
you use it. But if you don’t depreciate equipment you are fooling yourself
about net worth.
is a dirty word – keep its use to a minimum and then excuse yourself every time
you use it. But if you don’t depreciate equipment you are fooling yourself
about net worth.
• If you own
something, borrow against it to buy more and then borrow against that to expand
further. All businesses are expanding or contracting, they are like plants,
flourishing and growing or wilting and dying, you choose. (I know I said
earlier don’t borrow, but you can borrow against assets – don’t borrow for revenue
expenditure.)
something, borrow against it to buy more and then borrow against that to expand
further. All businesses are expanding or contracting, they are like plants,
flourishing and growing or wilting and dying, you choose. (I know I said
earlier don’t borrow, but you can borrow against assets – don’t borrow for revenue
expenditure.)
• It is a false
economy to extend the life of plant or equipment past its safe-to-use date; the
legal ramifications are enormous.
economy to extend the life of plant or equipment past its safe-to-use date; the
legal ramifications are enormous.
• Don’t give
more credit than you need to – money owed is money wasted.
more credit than you need to – money owed is money wasted.
• Chase debtors.
From The Book; The Rules of Wealth by
Richard Templar
Richard Templar
(Read Rule
78 of Rule of Wealth tomorrow on Asabeafrika)
78 of Rule of Wealth tomorrow on Asabeafrika)
Read-to-Wealth Series
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