A couple wrestles with the decision to sell their struggling rental properties after a sharp income drop. One caller seeks to align her investments with her environmental values, questioning sustainable investing options. Another entrepreneur weighs the risks and benefits of pouring more resources into her flourishing business. Throughout the conversation, insights on financial psychology, the nuances of responsible investing, and the importance of tailoring business strategies emerge, offering listeners a mix of practical advice and motivation.
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volunteer_activism ADVICE
Cap Rate Evaluation
Evaluate rental properties using the cap rate, which is the net operating income divided by the property price.
This represents the unleveraged dividend, similar to a stock, and helps assess the property's potential.
volunteer_activism ADVICE
Rental Income and Reserves
Raising rents to fair market value can offset financing costs like HELOCs, especially in rising markets.
Maintain cash reserves for vacancies or unexpected expenses to manage downside risk.
volunteer_activism ADVICE
Prioritization Framework
Prioritize tasks by ease, magnitude, and alignment with long-term goals.
Use a weighted average of these factors to make informed decisions, especially when facing financial stress.
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why most small businesses don't work and what to do about it
Michael E. Gerber
The E-Myth Revisited challenges the common assumption that most businesses are started by entrepreneurs. Instead, Gerber argues that most businesses are started by technicians who understand the technical work but not the business itself. The book introduces the concept of the E-Myth and explains that successful business owners must balance three roles: the Entrepreneur (the visionary), the Manager (the planner and organizer), and the Technician (the one who performs the technical work). Gerber emphasizes the distinction between working 'in' your business and working 'on' your business, and he provides strategies for systemizing and scaling businesses, including the concept of the Franchise Prototype.
#559: An anonymous caller, whom we name “Samantha,” and her husband are financially strained and feeling torn. Shortly after purchasing two rental properties, their income dropped dramatically. Should they sell?
Tina is a full-time environmentalist. She’s worried that her index funds don’t align with her values on sustainability. Is there a world where she can be a savvy investor and fight climate change?
Another anonymous caller, whom we name “Sarah,” is excited and uncertain about her growing business. Should she hold steady or invest more resources into it? And how does she know if she’s making the right call?
Former financial planner Joe Saul-Sehy and I tackle these three questions in today’s episode.
Join Joe for an exclusive live session all about the efficient frontier (aka the secret sauce of smarter investing). This 90 minute online event is Thursday November 21st at 8pm ET / 5pm Pacific. Head on over to http://stackingbenjamins.com/efficient to grab your spot.
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