Saturday, March 17, 2018

Entrepreneurial spirit for investors

In the previous post, I discussed that it may take a different attitude when running your own business. Many Calgarians and other Canadians are used to work for large companies that take care of their employees from cradle to grave or lay-off. That is what most of us may believe is the role of corporate Canada and they desire the ‘security of employment’. We groom our children to aspire for high marks on elementary school, then high school and then finally at university. Now nearly every well behaving kid is at university and I don’t think there is much ‘thinking outside the box’ left at those universities.

After all, for most of their life, the university millennials have been indoctrinated to work hard at school, be the teacher’s pet, don’t upset the establishment, believe in climate change and political correctness. Then, the most well-behaved teacher’s pets of high school will spend their last days of youth on corporate grooming at liberal universities to fight for summer jobs which are only earned by the top 10% graders, i.e. super academic teacher pets. No wonder freedom of speech and thought is so frequently frowned upon at our universities and true innovation is no longer found within our large corporations. We all know that many large oil companies don’t find oil or discover new technologies any longer. They buy out the small companies once those are successful and large enough. Neither is big Pharma doing a lot of research any longer despite all those PhDs they employ. Instead they buy out smaller research companies that developed FDA approved or nearly approved drugs and their patents. 
With such a large oversupply of conventional thinking university graduates, we lack often the competence of crafts people. This is really starting to show.  We’re paying $100 or more per hour for a good plumber or car mechanic while with our academic degrees we work for minimum wages in Starbucks or at dying companies that used to be Chapters, now Indigo and then bankrupted by Amazon. Bill Gates and Steve Jobs were university drop outs!  In many oil companies the conventional university thinkers are good enough for daily operations but how many do truly have a creative job? 
You want to find real entrepreneurs and creative innovations? You have to go to the small consulting companies and the little exploration companies. The same is true for gold miners. The problem is, how many are real and how many are just money raising schemes.  I truly petty the investors in large corporations who are being lied to by respectable-looking CEOs who are full of themselves but never did one creative thing in their lives.  They are really not that different from our political leadership. In fact, any politician who has the guts of standing from the crowd would quickly be labelled ‘bigot’ or ‘ incorrect’. Some CEOs are worth their salt and aren’t corporate robots that are filled with smooth, correct sounding but misleading statements. Fortunately, those are not yet labelled as their sincere counter parts in politics. 
Oh… and if you truly crave the corporate perks then please realize that you are only part of the team until the hour you are laid off because of yet another management fumble. It is not the CEOs and Sr managers who pay the price of their management mistakes. It are the corporate drones who are discarded just as all other corporate debris. First seduced by employee benefits and then discarded like worthless trash. True trash ends up in the landfill. But ex-employees are like addicts.  They can’t wait to get back onto the corporate benefit drugs.  They work from 9 to 5, then they forget about everything except what is on tv at night or invest their savings in the shares of large public companies or risk them investing in small enterprises as if it were casino chips.
You think I am a bit harsh?  Who is telling you to invest in their ETFs, to stay in the market at all times, to invest in stocks and bonds. Who is not telling you about real estate other than conventional home ownership and their mortgages insured by the government?  Who is telling you to put all your savings in RRSPs and employer shares or options?  The big banks, the brokerage companies and your employers!  So you stay dependant. Have you ever heard your ‘wealth advisor’ tell you about anything else than investing in corporate stocks and bonds or in ‘safe’ GICs so that those same banks and brokerages can turn around and lend it to you in the form of credit cards and mortgages that have much higher interest rates than you receive?  Do they ever tell you to invest in yourself?
Yes, there is a place for parking your money in stocks and bonds. I do so. But… far from all my assets. They say, a paper security is for money that, in theory, you can afford to lose.  So you don't get upset about poor returns. Well, I for that matter hate losing money. That is not what I saved it for. There is no such money that you can afford to lose.  Those ‘advisors’ really are there for one thing and that is filling their wallets with your money. Said ‘advisors’ are only interested in selling to you their employers’ sh-t so they can keep their jobs. Many are within-the-box conventional thinkers indoctrinated from childhood and often with less market experience than yourself. They just repeat their corporate mantras.
Why not believe in yourself and shake of the shackles of employment?  Why do you think your employer hired you?  You must be worth something and they make a profit of you!  So why shouldn’t you do it on your own?  Many corporate rats when laid off go back to school to be even further indoctrinated in their only core competence, i.e. to be a nice little employee for their next corporate owner. Others start ‘consulting’ because they don’t know what else to do and the most passive ones stay on the dole until they are picked up by another corporate pusher of employee benefit drugs. The ones that consult will likely jump the consultant-ship at the fist possible opportunity. They lack the true confidence that they are capable of taking care of themselves. Corporate drugs are so much easier and convenient than proving what you are really worth. So you get a big salary and you are sucked dry by the governments through numerous taxes and then you’ve been given all those unnecessary benefits so that by the time you take home your salary, more than half is gone. You ‘lower’ your taxes by putting money in RRSPs that in the end rob, sorry tax, you blind on the ‘profits’ you accumulate over many decades and typically skimmed by your wealth ‘advisors’ and your friend the bank. Really!
 Believe in yourself. In your ability to do things on your own other than raising just another crop of corporate rats that may not even be capable of making a career for themselves in the onslaught of cheap Chinese labor and automation. Please, wake up and become an entrepreneur. Become your own man!  Yes, you consulted during the bad times what about staying away from the corporate teat and work on your own during the good times as well?  Yes, on paper your salary may look less than your corporate fake-stub, eh… pay stub. But on an after tax and after benefit deduction basis you may do just as well or better being self-employed. Invest in yourself rather than in some piece of sh..t that thinks he/she is your boss and you better listen just like they suck up to their bosses.  Nothing more than a Ponzi-scheme that lives of your energy. Did you know that research, already decades old such as provided in a book titled: “The millionaire next door” shows that most real millionaires are self-made small business owners? Cheap as hell and married to a nurse or teacher. Oops, your wife is not a nurse or teacher?  Well…  😊  You’ll lose your corporate rat kids?  Well… 😊
Just kidding. You know that lately another big pay-stub guy went broke? Somebody that hauled in millions but didn’t know what to do with it. Yep, the Pirate of the Caribbean could not take care of himself. Well he was not good at thinking for himself either, always following that stupid magical compass!  He was a great talker, eh… actor just like his corporate brothers but what was he worth on his own? Well, I don’t really know what Johnny Depp is about, but isn’t that a great analog?
 Most wealth is not scarce. There is an endless supply of wealth and it is not tied to things or objects.  A piece of coal or a barrel of oil is useless. In it self it isn’t worth anything unless… YOU use your brains or better men use their brains and figured out what to do with it. And when you run out of oil or coal, then we use our brains again to figure out how to get more out of less oil or coal. That is what the oil-shale revolution is all about.  It is not the thing, which maybe scarce, but it is our brains – our creativity that builds wealth. Our creativity is without limit and thus so is our wealth. Corporate bureaucracy destroys your creativity and your endless wealth goes out of the door with it! We’re taught to retire at 65 and to do so you need to give all your savings to banks and insurance companies and wealth-managers who will give you a meagre return so they can use your money to fill their wallets – preferably by lending you back at a much higher rate your own money in the form of credit cards and other loans.  Does that make sense?
It is just as crazy as us Canadians opposing our oil and gas industry. An industry which produces that stuff a lot more environmentally responsible than Venezuela or the Saudis. Then we pay those countries to export their stuff to us, so that they can support their dictatorships and fund terrorists that try to kill us (thank the lord with not that much success). You are the source of a lot of wealth and what do you do? You farm out that wealth to corporate bosses that get rich of you! Why?  Because you don’t have the confidence to take care of yourself? Really!
Yes, the entrepreneur has no steady income and he/she is often not just the CEO but also the cleaner and the worker. Form partnerships and taste the good and the bad. The good is you can be there for your kids and your wife during anytime of the day. But maybe not on such a scheduled basis as the corporate rat.  You are more of your own boss, but in the end, your client is your boss.  How much? That depends a lot on your own confidence.  Because nobody cares if you work or not. But... it will affect your take home money. Your company builds up inventory that may decrease in value overtime, but you can always make new inventory with your brains. So overtime, your company does become more valuable but you must have a way to monetize your products.  That is true for you and it is true for Google.  So, again use those brains, figure out how to turn your products into money.  Yes, when you start during a downturn you may stand on your head and don’t get income. But, everyday you are making product. The difficulty is whether you can turn those products into income. You may have to wait for some time, say until the downturn is over.  And, like any investment make sure your product is indeed sellable or can be turned into money in other ways. 
For example: my company does geological evaluations.  I have to be very creative to get staff without taking-up cash flow. And, with the downturn in oil, it is very tough to sell those evaluations.  Several of my evaluations are in the famous Montney play in Alberta. One of the hottest oil plays on the continent but plagued by pipeline capacity. Yet, thanks to this work I know where many operators in this play are active and how good their lands are. Great to know as an investor. I know their reputation as oil and gas operators. I only have to check their balance sheets on-line and I know in which companies to put my faith. Yes, it may take a while but… I know that overtime I will do well. Also, I may still sell those studies in the future during good times. And… I build up expertise and a reputation of competence in those plays for future consulting.  It is risky, no doubt. Yet the rewards can be big. Of course, I have diversified my investments.  Stocks, bonds and real estate provide cashflow during these meagre times. I am my own man.
It was not easy, but I likely will keep on going until the end-of-times (so to speak) because I am a financial adult. I have accumulated sufficient assets to be able to live of them whether my company will work out or not. It is important to have many irons in your fire, so that you can do what you feel is worthwhile doing in your life. You may have to work for an employer to build enough funds. But rather than spending it on instant gratification use it to build your future. Think ahead five, better 10 or 20 years. And when you work as an employee building up your expertise in your future area of business, when you build towards your financial adulthood, then you never may want to retire, do the things you love and getting ultimately paid for it. This way, you don’t work, even during employment for a boss. You work for yourself and you don’t care about praise from others (other than for product quality control) because you work for your own goals. Your success is defined by you not by your annual employee review. I don’t work for others, but I do work with others.
Some people poison their lives doing things they don’t like; just for a paycheck to get by. That is leading a life of the living dead. I invest to provide assets and cash flow to do what I want. To do what I think is worthwhile for me and those close around me. There is no scarcity or lack of brain power. I can always figure out a way to make money to do what I want. You can do that too. Life is too short to be not your own man or woman.  That is what this blog is all about. Help you to become your own man or woman. Do find that entrepreneurial spirit inside you. Then make your plans and… most importantly execute. It may take a while but you know where you’re going and if you ever find out that we’re truly becoming immortal you will never be out of means to do what you feel makes your life worthwhile.

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