A distribution of a portion of a company’s profits to the shareholders, payable in cash, stock or other property. Profits that are not distributed remain with the company as retained earnings. Start-ups and high-growth companies rarely offer dividends because their profits are reinvested to help sustain higher-than-average growth and expansion. Larger, established companies tend to issue regular dividends to maximize shareholder returns in ways aside from capital growth.
Category: Money & Wealth Page 3 of 14
An investment scheme, book, seminar, webinar, website, software, trading system, video or other training that promises the public that anyone can become rich in a short period of time by following their “simple and easy system” that is top secret and only known by a select few people. The peddlers of these schemes often have the appearance of validity, can appear widely endorsed, with a compelling image of a lavish lifestyle, working 3 hours a week, while sitting beside the beach in their underpants. Often what is taught is largely pop psychology with very little genuine money, financial and investment advice. Ask anyone who is genuinely successful and they will tell you that success takes hard work and long hours of commitment over a long period of time. Dig a little deeper and you will discover that many of these people use sleazy sales tactics, manipulation, hyperbole, put people down, call people losers, lie about their backgrounds and fabricate entire sections of their lives. Some of the most popular speakers and authors are the most guilty.
The growing scale, profitability, and level of importance of the finance sector relative to the rest of the economy. In the United States, employment and total sales of the finance industry grew from 10% of GDP in 1970 to 20% by 2010. The emphasis has shifted from making things to making money from money. The effects of this change are felt by everyone in the following ways: 1. Increased level of importance of money and finance in our everyday lives. 2. Increased complexity and level of sophistication required to understand and manage finance. 3. Increased income inequality due to the widening gap become making money from labor, making and selling things, to highly leveraged financial products that make money with money. 4. Increasing debt and the risks associated with the asset and debt bubbles, which when they collapse, cause massive financial destruction to everyone.
1. The state or quality of being just and fair. 2. Ownership interest in a corporation, property, or another asset, usually calculated as the value of the holding after subtracting any debt or liabilities. 3. Shares of stock. 4. The value of a brand’s reputation. 5. Representing an ownership interest: an equity stake. 6. Subordinated to all other claims on income, earnings, or assets.
1. To take advantage of. 2. To use as or convert into capital. 3. To supply with capital or investment funds. 4. To authorize the issue of a certain amount of stock. 5. To convert debt into equity. 6. To calculate the current value of future cash flows. 7. To include expenditures in business accounts as assets instead of expenses.
A strategy where a product or service is sold at a price below cost, or given away for free to stimulate other sales of more profitable goods or services.
1. A metaphor for a dairy cow that has calves annually, produces milk daily for life while requiring little maintenance. After the initial capital outlay has been paid off, the cow continues to produce milk and birth more cows that produce milk and more cows for many years. This is an example of an initial investment that grows geometrically over time. The Cash Cow Formula: 1 Cow + 1 Bull + 1 paddock + food + water = an exponential supply of cows and milk. Limited only by the supply of resources (paddock, food, and water.) 2. Products or services that have become market leaders, provide positive cash flow and a return on assets that exceeds the market growth rate. These products produce profits long after the initial investment has been repaid and help to fund company growth, leverage expansion and increase creditworthiness.
1. To convert an asset, talent, passion, event, object or transaction into money by selling, licensing, packaging, or using it as security for a loan. Can include any form of currency or something with transferable value; stock, equipment, financial instruments, etc. 2. To convert into a source of cash flow. 3. To express value in terms of money. 4. To establish something as a currency, especially by minting coins. 6. To convert an economy from a barter system to the exchange of money.
An asset that an individual, team, or business has that they are unaware of or don’t recognize their true value. These assets are not listed on their financial statement or balance sheet and include relationships, customer base, vendors, investors, systems, ideas, know-how, specialized knowledge, marketing strategies, technologies, excess capacity, talent, capability, free time, creativity, written off inventory, custom software, current expenditure, unexplored markets, wasted resources, etc. and ways these assets are valuable to others and can be monetized.