Entrepreneurship - The Failure of the Economy Has Brought America Back to Its Roots

By S Koonopakarn

"Being busy does not always mean real work. The object of all work is production or accomplishment and to either of these ends there must be forethought, system, planning, intelligence, and honest purpose, as well as perspiration. Seeming to do is not doing."

Thomas Alva Edison, American, Inventor & Entrepreneur, (1847-1931)

If the first thing you do when you get home from a hard day's work is to flip on the evening news, it is no wonder to me why we, as a nation, have lost our edge in leading the world economically, technologically, and spiritually. We have lost our way. We were once the nation that was responsible for the creation of the telephone (Alexander Graham Bell, 1876), the automobile assembly line (Henry Ford, 1913), the airplane (Wilbur & Orville Wright, 1903), the light bulb (Thomas Alva Edison, 1879), and even discovered electricity itself. However, there has been a steady decline in American inventiveness that has lead to us to this moment in our collective economic history. Rather than nurturing our greatest asset (creativity) and continuing to lead the world on the strength of our intellectual and creative genius, we have devolved into nothing more than a nation of consumers of foreign products. This is a documented fact that has resulted in an ever growing trade deficit that, unless we drastically change our ways, will keep us in national debt, forever.

For the past few decades, we have only mastered the appearance of being busy. We have given up on all our dreams, found a "comfortable", minimally stimulating job with good pay and "benefits", and turned off our creative brains. Although as children, we imagined, created, composed, and envisioned fantastic solutions to problems we encountered, as adults, we keep busy at our jobs, in front of our idiot boxes, and in our super-sized malls consuming, that we can not even imagine having time to think for ourselves. And in this way, advertisers and big business have us where they want us.

"Nearly every man who develops an idea works it up to the point where it looks impossible, and then he gets discouraged. That's not the place to become discouraged."

Thomas Alva Edison, American, Inventor & Entrepreneur, (1847-1931)

America still creates and develops the most incredible and cutting-edge intellectual property and products in the world, however it is big business with Wall Street connections that dominates the vast majority of these creations. Huge corporations like Microsoft (with billions of dollars in stockholder and investor money) would acquire all the rights to any potentially promising (or competitive) programs only to impart its corporate brand of mediocrity to it. The eventual result is a product that has been limited in vision and stripped of all its heart and creative passion. This is how we, as mutual fund investors, are subsidizing America's creative failure and promoting our national indebtedness. This is invention in the new, consumer nation of America.

In this new corporate, Wall Street-run state, the inventions to change the world for the better are fewer and further between. And the creators who imagine them, who put their blood, sweat, and tears into them, and who dream of the better world ahead because of their invention are seldom familiar with the ways of business and copyright law and other measures of intellectual property protection. And to them, a few hundred thousand dollars would make a significant and immediate difference in their life. And all too often, the unfortunate end of the story is an idea or invention squandered, a few hundred thousand dollars mismanaged and lost, and an American economy that is incapable of competing against nations that nurture their intellectual talent.

Plenty of creative people hold on to their ideas, however without financial capital, many world-changing ideas die on the vine. Where is the financial support for these ideas that would elevate our economy, as well as, our national pride? Why are we spending billions of dollars bailing out banks and huge corporations that have failed by their own unethical actions without considering that financial support for entrepreneurs and small business, who make up over 50% of the American economy and employ millions more people than big business, would be substantially more effective in keeping our economy from failure? The determining factor was and is that there aren't millions of dollars spent on lobbying for small businesses and entrepreneurs.

Bailouts for big business is not the solution for an economy that has been languishing since we have displaced our focus from creating and developing intellectual property and products; it will be the entrepreneurs and small businesses that will power the economy back to strength. However, this can only happen when policy makers create a more supportive environment for entrepreneurs and small businesses. As the credit market continues to be extremely tight despite the big banks being recapitalized by our tax dollars, small businesses, the employers of millions of Americans, suffer to maintain their business operations and pay their employees because of limitations imposed by their big bank creditors. It is a case where those companies who acted selfishly in the first place, were entrusted with tax payer money to act differently-should we really be surprised by their same old selfish actions?

"Be courageous! Have faith! Go Forward!"

Thomas Alva Edison, American, Inventor & Entrepreneur, (1847-1931)

Although all seems like doom and gloom, it is as Thomas Edison said: "Have faith!" Entrepreneurs do not have the luxury of a lot of things, most of all, pessimism. In spite of the concerns of small businesses and entrepreneurs having thus far fallen on deaf ears, this is not enough of a reason for the true entrepreneur to become discouraged. So, I am incredibly encouraged when I see that in this depressed economy, more and more people are seeing and seizing the opportunity. Since the beginning of massive layoffs and the stock market collapsed on the news of the coming recession, there has been an increase in the number of small businesses started. See what happens when creative Americans unplug from their daily "busy work" and have time to dream and imagine again!

To be an entrepreneur is to be courageous. Not much is truly certain, however here is what is certain-lenders, by definition, will and must lend, and so, that day must come around again. And history has shown us that there is no better investment than the passion and drive of the American entrepreneur.

S Koonopakarn is the CEO and Co-founder of Saintly Assistance Financing & Equities Group, LLC, an Atlanta-based investing and consulting company that specializes in real estate and retirement investments. He has the investment plan that will get you back on track to an early retirement without depending on Social Security and without sacrificing lifestyle. Find more articles and creative investment solutions on his blog here at http://www.SecureYourFutureNews.wordpress.com

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Stock Investing Vs Real Estate Investing Profits

By James Leitz

Both stock investing and real estate investing have the same basic financial objectives. People invest money in both to make money from growth and/or income. Growth through price appreciation (increase in value or market price) is where you really make money, the big bucks. Here we compare the two investment options in terms of profitability and other factors.

Let's talk about a $20,000 out-of-pocket 10-year investment in both investment options investing by traditional standards ... like it has normally been done throughout the past 50 or so years. No unusual economic circumstances, no HEAVY leverage (borrowed money) involved. Now let's look at both investment options.

Stock investing: The stock investment is $20,000 invested in a no-load S&P 500 Index fund which tracks the performance of the stock market. Over the long term the stock market has returned 10% a year. This is our assumed return, plain and simple.

Real estate investing: Here you buy a house in Middle America USA for $100,000, putting down $20,000, the traditional 20%. You average 3% a year in price appreciation. You rent it out to maintain an even cash flow. In other words, your rental income covers your mortgage payments, all repairs and maintenance, fees, taxes and so on. Plus, to keep it simple we assume that what you have paid off on your mortgage is absorbed by other expenses over the 10 years. So, if you were to sell after 10 years we will say that you still owe the bank $80,000. Sorry, this investment option is not so plain and simple to describe.

Let's compare the profitability of these investment options.

Stock investing produced yearly average returns of 10%. Over 10 years $20,000 grows to $51,875 when compounded at 10%.

Real estate investing produced average yearly gains of 3% on $100,000. Growing at 3% a year the value of your house grows to $134,392 in 10 years. We are assuming that you still owe the bank $80,000, so the net value of your investment is $54,392. In reality you would owe less with a conventional mortgage. On the other hand this difference could easily be offset if extraordinary costs were incurred over the 10-year period.

You had $20,000 of your own money invested to make money. The score after 10 years: Stock investing grew your money to $51,875 and real estate got you to $54,392 under our traditional assumptions. In terms of profitability there wasn't much difference.

But you and I both know that when you invest money to make money your success really depends on how well you know and play the game ... no matter what arena you invest money in. For example, if you are good at selecting, improving, managing and financing real estate properties you can do much better than the above example.

You can also make over 10% a year in stock investing if you know how to invest in the stock market. The problem for most folks is that they don't know how to invest in stocks, they are uninformed. Hence, stock investing for most folks is risky business.

On the other hand, TRADITIONALLY (not so in 2007-2009) many people are comfortable with real estate investing because they are familiar with real estate (they see it every day and likely grew up in a house). Real estate properties have historically gone up in value without many violent downswings. The stock market usually experiences a downturn (bear market) every few years.

Other basic differences in our two investment options follow.

Real estate properties require active management, and lack good liquidity as an investment. Selling a property can be costly and time consuming. On the other hand, real estate investing has traditionally been a good way to invest money and make it grow without taking much risk. Various investing techniques can be employed to enhance profits ... financial leverage being among them.

Stocks offer high liquidity, meaning that you can sell a stock investment quickly and easily with low costs. No active management is involved; you just buy or sell over the phone or on your computer. On the other hand, you are inviting trouble if you try to make money here and haven't spent time learning how to invest in stocks. Risk is always a factor when investing in stocks, especially if you are uninformed.

A retired financial planner, James Leitz has an MBA (finance) and 35 years of investing experience. For 20 years he advised individual investors, working directly with them helping them to reach their financial goals.

Jim is the author of a complete investor guide, Invest Informed, designed for average investors or would-be investors of all levels of financial background and experience. To learn more about investments and investing and his new financial guide go to http://www.investinformed.com

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