web analytics
April 23, 2014 / 23 Nisan, 5774
At a Glance
Blogs
Sponsored Post
Spa 1.2 Combining Modern Living in Traditional Jerusalem

A unique and prestigious residential project in now being built in Mekor Haim Street in Jerusalem.



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

Doug Goldstein

Share Button

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.

Share Button

About the Author: Douglas Goldstein, CFP®, is the director of Profile Investment Services, Ltd, a financial planning firm located in Jerusalem. He specializes in working with clients in New York, Florida, and Israel and is a licensed financial professional both in the U.S. and Israel. Securities are offered through Portfolio Resources Group, Inc., Member FINRA, SIPC, MSRB, SIFMA. 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. Doug’s newest book The Expatriates’ Guide to Handling Money and Taxes is available at www.expatguidetomoney.com. He hosts a weekly finance show, Goldstein on Gelt, on internet radio. Listen live or download podcasts. Toll-free from U.S. 1-888-327-6179, Jerusalem: (02) 624-2788. Follow on Twitter: @DougGoldstein or 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.

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

Comments are closed.

SocialTwist Tell-a-Friend

Douglas Goldstein
Current Top Story
Palestinian Authority Chairman Mahmoud Abbas. Who will he take to the dance?
It’s Prom Time, and Abbas Must Choose a Dance Partner – Israel or Hamas
Latest Blogs Stories
The IDF is creating a global interactive Holocaust Survivor Commemoration.

The IDF will take everyone’s #WeAreHere stories and create an interactive, dynamic honor to the Shoah survivors.

A woman sits next to the grave of an Israeli fallen soldier on Har Herzl.

Peace, true peace, isn’t up to us. We’ve offered it on gilded platters forever. Nothing we do will bring peace to our Land.

Community Surveillance.jpg

The Justice Department allows the FBI to use demographic mapping, but the NYPD no longer can.

The Trophy System creates a protective dome which shields tanks from anti-tank missiles.

Check out the IDF’s most innovative weapons (at least the ones they can tell us about.)

When will the State of Israel decide the Palestinian Arabs are a hostile enemy and treat them as such?

Like Hamas, Hezbollah also builds tunnels. Those tunnels pose a serious danger to IDF border patrols.

Visa has ads in an Egyptian magazine in which a story describes Jews as vampires. And worse.

World Council of Churches expresses solidarity with “Palestinians” ‘languishing’ in Israeli prisons.

The Seder: We starve (during the sometimes endless recitations and discussions) and we feast.

The unique skills of people on the autistic spectrum adds great breadth to IDF intelligence work.

Passover is a road that we still travel, a long journey from slavery to freedom.

In Iran, 131 offenses are punishable by death, including blasphemy, adultery and homosexuality.

Women must eat Matzah on Pesach too but that is also a time bound positive commandment.

Pro-Israel leaders on campus are as important as the troops in the IDF and professional hasbaraniks.

The seder reminds us of our freedom now that we are home again in the land of the Nation of Israel

IDF helicopters are ready to act on a moment’s notice to defend the State of Israel.

More Articles from Doug Goldstein, CFP®
Doug Goldstein, CFP

Factors that you need to take into account when deciding whether to rent or buy a home.

Doug Goldstein, CFP

The president of the Cambridge Satchel Company talks about the exponential growth of her company.

He won the Nobel Prize for chemistry, now Dan Schechtman wants to be president of Israel.

gnite Social Media created social media programs for companies such as Microsoft, Nike and Disney.

Learn how to navigate the new business paradigms so customers can find and purchase your products.

Stable banking systems: by design or by default?

In the first part of this week’s podcast, Diane Coyle, professor of economics at Manchester University and author of GDP: A Brief But Affectionate History and The Economics of Enough, talks about measuring economic progress. What is the GDP (gross domestic product), and is it really an accurate benchmark for understanding economic performance? Find out […]

    Latest Poll

    Now that Kerry's "Peace Talks" are apparently over, are you...?







    View Results

    Loading ... Loading ...

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: