web analytics
December 20, 2014 / 28 Kislev, 5775
 
At a Glance
Blogs
Sponsored Post
8000 meals Celebrate Eight Days of Chanukah – With 8,000 Free Meals Daily to Israel’s Poor

Join Meir Panim’s campaign to “light up” Chanukah for families in need.



What a Fast Food Franchise Can Teach You About Managing Your Own Money

When I recently interviewed Michael E. Gerber, author of The E-Myth, on the Goldstein on Gelt show, we spoke about the techniques for running a business that can be applied to managing your own money. Interestingly enough, Gerber uses the famous McDonald’s fast food chain as a great example of optimum business management.

Gerber told me that, “Given the failure rate of most small businesses, he [Ray Kroc, the founder of McDonald's] must have realized a crucial fact: for McDonald’s to be a predictable success, the business would have to work, because the franchisee, if left to his own devices, most assuredly wouldn’t!…Once he understood this, Ray Kroc’s problem became his opportunity… Forced to create a business that worked in order to sell it, he also created a business that would work once it was sold, no matter who bought it… a foolproof, predictable business…. A systems-dependent business, not a people-dependent business.”

I believe that investors need to see their own portfolios as a franchise opportunity. It’s not that they will actually franchise their stocks and bonds. Rather, they must have a portfolio that is scalable, based on a dynamic asset allocation that can be quickly adjusted if their goals change or if the market situation varies. All of their investment decisions must be based on a set of rules that can be easily documented and explained to someone else. Financial plans and investment policy statements correspond to the manual that an entrepreneur would write about how to run every aspect of his business.

Additionally, you should follow the principle of, “Work on your investments, not in them.” Just as The E-Myth advocates business owners working on their businesses, not in them, investors should concentrate their efforts on the larger picture of the goal of the investment portfolio, and not become bogged down in the daily details of researching stocks and funds and making decisions on trading. Study after study has shown that when people manage their own accounts, they do more damage than good. So why do individual investors continue to be their own money managers? It’s because they think that they must oversee and trade their investments themselves. That mistake alone has cost people billions of dollars.

In summary, managing your own portfolio is like managing a small business. What other comparisons can you think of? Send me an email about other types of comparisons you have seen between running a business and running your portfolio.

About the Author: Douglas Goldstein, CFP®, is the director of Profile Investment Services, Ltd, a financial planning and investment services firm located in Jerusalem. He specializes in working with clients who live outside of the United States and want to maintain a U.S. brokerage account. Doug’s newest book, co-authored with Susan Polgar, about how using chess strategies to improve your finances, Rich As A King can be purchased at www.richasaking.com. He is a licensed financial professional both in the U.S. and Israel. Securities offered through Portfolio Resources Group, Inc., Member FINRA, SIPC, MSRB, FSI. Accounts held at Pershing LLC., Member NYSE/SIPC, a subsidiary of The Bank of New York Mellon Corporation. Neither Profile nor PRG gives tax or legal advice. Before immigrating to Israel, it is advisable to consult with a tax attorney who is knowledgeable about Israeli law. Contact at doug@profile-financial.com


If you don't see your comment after publishing it, refresh the page.

Our comments section is intended for meaningful responses and debates in a civilized manner. We ask that you respect the fact that we are a religious Jewish website and avoid inappropriate language at all cost.

If you promote any foreign religions, gods or messiahs, lies about Israel, anti-Semitism, or advocate violence (except against terrorists), your permission to comment may be revoked.

No Responses to “What a Fast Food Franchise Can Teach You About Managing Your Own Money”

Comments are closed.

SocialTwist Tell-a-Friend

Current Top Story
Posted to Twitter in Ferguson, MO by St. Louis County Police: "Bricks thrown at police, 2 police cars burned, gun seized by police. Tonight was disappointing."  Their motto is, "To protect and serve."
Prosecutor in Ferguson Case: ‘Witnesses Lied Under Oath’
Latest Blogs Stories
Alan Gross (L)

Did Cuba apologize for their spies the way Israel apologized for Pollard?

Torah scroll. (illustrative only)

Nothing binds Jews together more than Torah observance; Or so one would think.

tinsel-314750_1280

Sukkah tinsel decorations enjoy a robust market but are invariably manufactured for “another”holiday

PM Benjamin Netanyahu with Yishai and Tamar Fogel, survivors of an Arab terror attack which killed their parents and 3 siblings.

A number of Israeli papers regurgitated a biased AP article on settlement growth, but they should have read it more carefully before hitting publish.

Many of the battles of the Maccabees were right here in the Shiloh area.

Both Labor and Likud are expected to get more seats in the upcoming elections.

Get a straight answer from Edward de Bono to the question: What is lateral thinking?

Jewish communities worldwide commemorate Yehudit during Chanukah by eating dairy foods in her honor

Israel’s problem isn’t Indyk, Obama, UN, NGOs or even the media; Our problem is much closer to home.

None of the attacks on Jewish & property should come as a surprise in light of the Temple Mount.

No surprise! Israel is now being blamed for Ziad Abu Ein’s death.

How does the new U.S. tax amnesty affect American citizens living in Israel and abroad?

The party chiefs are acting drunk and childish – making stupid mistakes and inadvertently showing their true selves – just like on Purim.

A day dedicated to Torah&tradition; a day of great joy and of great sadness- a brit and a burial.

Who was this Minister of Rage, Ziad abu Ein, and what did he do to qualify for his position as a senior minister in the PA?

JoeSettler explains the electoral mess we’re in, and a possible solution for fixing it.

More Articles from Doug Goldstein, CFP®
Doug Goldstein

Get a straight answer from Edward de Bono to the question: What is lateral thinking?

Doug Goldstein

How does the new U.S. tax amnesty affect American citizens living in Israel and abroad?

Emerging adulthood and how young adults can achieve economic independence in today’s financial world

Doug talks with Steve Repak about the nature&meaning of wealth and how you can eliminate your debts.

How can you turn your physical books into E-books?

Find out how to set goals and take better care of your finances.

Today”s discussion: “The effects of current geopolitical situation around the world on investing.”

Printed from: http://www.jewishpress.com/blogs/goldstein-on-gelt/what-a-fast-food-franchise-can-teach-you-about-managing-your-own-money/2012/07/31/

Scan this QR code to visit this page online: