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Warren Buffett’s Consumer Monopoly Investments

According to the famous book, Buffettology, Warren Buffett looks for companies to invest in that he considers consumer monopolies. The companies usually have most of the following characteristics:

· The company show strong earnings with an upward trend for the past 10 years or so

  • The company usually has a strong brand name with good consumer loyalty
  • The company is conservatively financed and holds little debt. So it is prepared for setbacks and opportunities if they present themselves.
  • The company must earn a high rate of return on shareholder’s equity
  • The company must be able to retain earnings and not have to spend it on current operations

Consumer monopolies tend to experience a large increase in long-term economic value. The trick for Warren Buffett is to find the consumer monopoly at a discounted price and then he holds the stock for long periods of time letting the earnings and growth compound year after year.

While most investors are short sighted, buying on good news and selling on bad news, Buffett takes the long view and it has made him the richest man in the world.

More expert ideas on stock investing you can check out the section Investing for Beginners at www.shortoncashflow.com .

posted by shortoncashflow on Sep 18, 2009 8:34 AM | 1 comment
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How to Overcome Your Fear of Investing in Real Estate

Investing in real estate to get monthly cash flow seems like a good idea to you but you are not sure you are ready to take that step yet. What if you are not able to deal with it? What if a natural disaster destroys your hard-paid property? What if you can’t rent it out and are left only with expenses? What if the renter breaks everything or don’t pay the rents?

The main reasons why you would fear something is because you are not familiar with it and you don’t have the support of the people around you because they are not familiar and they are afraid of it too! So you can start by finding information on the Internet about legal aspects, how to buy a property, what types of protection against dishonest renters or natural disasters exist, etc. As you get acquainted with the topic, start contacting agencies or sellers directly in order to take your first step in the process: visiting properties that are for sale. You don’t need to sign any purchase agreement right away! Just start becoming part of this world and when you feel more comfortable, take another little step. You’ll see how things are less scary from the inside than they look like from the outside.

When you are ready to buy, make sure you pay the right price so that you are not stuck with mortgages you cannot face later (I wrote another article about this specific topic).

Once you own a property and you want to rent it out, you want to implement a smart screening process to lower the risk of unpaid rents. It is also recommended that you take insurance coverage against that issue. Make sure both the renter and you sign a written agreement that meet current regulations so that you can assert your rights in court if necessary (usually, insurance coverage against unpaid rents include coverage of the related legal expenses). There is insurance coverage for about everything but the two you really need are coverage in case of natural disaster and coverage against unpaid rents.

You know how they say the best way to learn is by making mistakes? Maybe that’s what holds you back: you want to invest but you certainly don’t want to pay a heavy price for your mistakes. Well the good news is that Fred and Sally already made the mistakes for you and are telling all about it at www.shortoncashflow.com . Don’t miss the opportunity to learn from their mistakes about investing for beginners !


posted by shortoncashflow on Jun 12, 2009 4:59 AM | 1 comment
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Want to Be Rich? - Get in Debt

This is no big secret here. We all want to be rich. The question is how you go about making it happen. We some people would tell you in order to do this you must first get in debt. Now I know that might sound crazy to you but it does make since when you think about.

When I say get in debt I don't mean that you should get a bunch of credit cards and buy like crazy or acquire multiple loans for cars and jewelry you don't need. Those kinds of debts cost your money. All those product depreciate in value and you end up paying way more than what they were worth. Even things like vacations, as fun as they may be, will cost you in the long run once it is all over.

If you really want to be rich you need to get debt that will make you more then what you borrowed. For example, if you got a loan from the bank to start a business and the business started to grow then that debt would be considered a good debt. Your business is worth more that what you borrowed. A student loan for college is another good reason to get in debt. Once you graduate, your education will give you the opportunity to make a good living which will also be worth more than what was loaned out to you. That is the kind of debt that you need if you want to be rich.

Too many people like the idea of looking rich. They buy a lot of stuff to impress there friends into thinking that they are rich only to get in debt to deeply. Why would someone spend so much money trying to look rich when they could put that money into something that may actually make them rich? If you are guilty of doing this then stop right now before you get way over your head.

Now that you know how to get in debt you can then be on your way to achieving this. You want to be rich with debt that goes up in value not down. I know that it not always possible to never carry a bad debt but the more good debt you have the better the chances of success.

If you are looking for ways to make money that will not put you deep in debt and give you a chance at become rich then go to our . For more business opportunities then go to: http://www.allproman.com/product-reviews/ .

posted by shortoncashflow on Jun 12, 2009 4:56 AM | 1 comment
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