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November 20, 2024

 Managing personal finances effectively requires a well-crafted monthly budget. A functional budget is not merely a record of income and expenses; it is a strategic tool that empowers you to achieve financial stability and reach your goals. Below, we provide an in-depth guide to creating a monthly budget that truly works.

1. Understand Your Financial Goals

Before diving into numbers, define your short-term and long-term financial goals. Whether saving for a house, paying off debt, or building an emergency fund, your goals will shape your budgeting priorities. Write these goals down and categorize them by importance.

2. Track Your Income and Expenses

Identify All Sources of Income

List all your income streams, including:

  • Salary or wages (after taxes)
  • Freelance work or side hustles
  • Passive income from investments, dividends, or rental properties

Record Every Expense

Break down your expenses into fixed and variable categories:

  • Fixed expenses: Rent, mortgage, insurance premiums, and utility bills.
  • Variable expenses: Groceries, entertainment, dining out, and discretionary spending.

Use tools like expense tracking apps, spreadsheets, or even a simple notebook to ensure no detail is overlooked.

3. Categorize Expenses for Clarity

Organize your spending into clear categories to visualize where your money goes:

  • Essential expenses: Rent, groceries, and utilities.
  • Savings: Emergency fund contributions, retirement savings, and investments.
  • Debt repayment: Credit card payments, student loans, or personal loans.
  • Non-essential expenses: Entertainment, subscriptions, and hobbies.

This categorization helps prioritize spending and highlights areas for adjustment.

4. Determine Your Monthly Budget Structure

The 50/30/20 Rule

A popular budgeting framework divides income into:

  • 50% for necessities (housing, food, transportation)
  • 30% for wants (leisure, subscriptions)
  • 20% for savings and debt repayment

This structure provides flexibility while maintaining financial discipline.

Custom Percentages

Adjust percentages based on your unique needs. For instance, if paying off debt is a priority, allocate more than 20% to debt repayment and reduce discretionary spending.

5. Set Spending Limits for Each Category

Assign realistic spending limits to each category. Use historical data from your expense tracking to set achievable targets. For example:

  • Groceries: $400/month
  • Transportation: $200/month
  • Dining Out: $100/month

Regularly compare your spending against these limits to stay on track.

6. Automate Savings and Bill Payments

Automate Savings Contributions

Set up automatic transfers to your savings or investment accounts. This ensures consistent contributions without the temptation to spend.

Schedule Automatic Bill Payments

Automating fixed expenses like rent and utility bills prevents missed payments, late fees, and credit score impacts.

7. Adjust for Irregular Expenses

Plan for irregular or seasonal expenses, such as:

  • Annual insurance premiums
  • Holiday gifts
  • Vacation costs

Create a sinking fund by setting aside a small amount each month to cover these expenses without derailing your budget.

8. Build an Emergency Fund

A robust emergency fund safeguards against unexpected expenses like medical bills or job loss. Aim for:

  • 3 to 6 months’ worth of living expenses in a separate, easily accessible account.

Start with a modest goal (e.g., $1,000) and gradually increase the fund as you progress.

9. Monitor and Review Your Budget

Weekly Check-Ins

Dedicate 15–30 minutes each week to review your spending. Ensure you remain within limits and make adjustments as needed.

Monthly Reviews

At the end of each month, assess your budget’s performance. Identify any overspending and adjust categories for the next month. Consistent reviews keep your budget aligned with changing financial circumstances.

10. Cut Unnecessary Expenses

Eliminate Subscription Fatigue

Cancel unused subscriptions or memberships. Services like streaming platforms, gym memberships, or magazines can add up over time.

Reduce Dining Out

Cooking at home is significantly more cost-effective than eating out. Plan meals in advance to avoid impulsive food purchases.

Shop Smarter

Leverage discounts, cashback apps, and coupons. Opt for generic brands instead of premium ones without compromising quality.

11. Plan for Debt Repayment

Prioritize High-Interest Debt

Tackle debts with the highest interest rates first to reduce overall costs. The avalanche method targets high-interest debts, while the snowball method focuses on clearing smaller balances for quick wins.

Consider Debt Consolidation

Consolidating debts into a single, lower-interest loan simplifies repayment and reduces monthly obligations.

12. Incorporate Financial Cushioning

Leave a small buffer in your budget for unforeseen expenses. This cushion prevents budget blowouts from minor unexpected costs like a car repair or emergency supplies.

13. Stay Committed to Your Budget

Involve Family Members

If you share finances with a partner or family, ensure everyone is on the same page. Discuss financial goals and encourage collaborative decision-making.

Reward Yourself

Celebrate small milestones to maintain motivation. Achieving a savings goal or reducing debt warrants a modest treat that aligns with your budget.

14. Utilize Technology for Budget Management

Leverage budgeting apps like:

  • Mint: Tracks expenses and categorizes spending.
  • YNAB (You Need a Budget): Focuses on giving every dollar a purpose.
  • PocketGuard: Prevents overspending by showing how much is safe to spend.

These tools simplify tracking and provide real-time insights into your finances.

15. Plan for Long-Term Financial Health

A monthly budget is a stepping stone to lifelong financial wellness. Once your budget becomes second nature:

  • Invest for the future: Explore stocks, bonds, or mutual funds.
  • Focus on retirement: Maximize contributions to retirement accounts like 401(k)s or IRAs.
  • Reassess goals: As life evolves, adjust your budget to reflect new priorities.

In conclusion, crafting a monthly budget is a dynamic process that requires commitment and adaptability. By following the steps outlined above, you can create a personalized financial plan that aligns with your goals, ensures stability, and empowers you to make informed financial decisions. Take control of your finances today and pave the way for a brighter, more secure tomorrow.

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April 23, 2020
First, some definitions
The debt market is the market where debt instruments are traded. Debt instruments are assets that require a fixed payment to the holder, usually with interest. Examples of debt instruments include bonds (government or corporate) and mortgages.
The equity market (often referred to as the stock market) is the market for trading equity instruments. Stocks are securities that are a claim on the earnings and assets of a corporation (Mishkin 1998). An example of an equity instrument would be common stock shares, such as those traded on the New York Stock Exchange.

How are debt instruments different from equity instruments?
There are important differences between stocks and bonds. Let me highlight several of them:
Equity financing allows a company to acquire funds (often for investment) without incurring debt. On the other hand, issuing a bond does increase the debt burden of the bond issuer because contractual interest payments must be paid— unlike dividends, they cannot be reduced or suspended.
Those who purchase equity instruments (stocks) gain ownership of the business whose shares they hold (in other words, they gain the right to vote on the issues important to the firm). In addition, equity holders have claims on the future earnings of the firm.
In contrast, bondholders do not gain ownership in the business or have any claims to the future profits of the borrower. The borrower’s only obligation is to repay the loan with interest.
Bonds are considered to be less risky investments for at least two reasons. First, bond market returns are less volatile than stock market returns. Second, should the company run into trouble, bondholders are paid first, before other expenses are paid. Shareholders are less likely to receive any compensation in this scenario.
How large are these markets?
It seems that the average person is much more aware of the equity (stock) market than of the debt market. Yet, the debt market is the much larger of the two. For example, in September 2005 (the most recent data available at the time this answer was written), about $218 billion of new corporate bonds were issued, as compared to slightly under $18 billion in new corporate stocks. Chart 1 compares new issues of corporate bonds and corporate stocks in the United States for the past ten years.
Another way to compare the size of the two markets is to think about total amounts of debt and equity instruments outstanding at the end of a particular period. According to “Flow of Funds” data of March 2006, published by the Board of Governors of the Federal Reserve System for the fourth quarter of 2005, there was approximately $34,818 billion in outstanding debt instruments and about $18,199 billion in outstanding corporate equities. Thus, the size of the debt market as of the last quarter of 2005 was about twice that of the equity market.
Why are these markets important?
Both markets are of central importance to economic activity. The bond market is vital for economic activity because it is the market where interest rates are determined. Interest rates are important on a personal level, because they guide our decisions to save and to finance major purchases (such as houses, cars, and appliances, to give a few examples). From a macroeconomic standpoint, interest rates have an impact on consumer spending and on business investment.
Chart 2 below shows interest rates on select bonds with different risk properties for the last 10 years. The chart compares interest rates on corporate AAA bonds (highest quality bonds) and Baa bonds (medium-quality bonds) and long-term Treasury bonds (considered to be risk-free interest rate).
The stock market is equally important for economic activity because it affects both investment spending and consumer spending decisions. The price of shares determines the amount of funds that a firm can raise by selling newly issued stock. That, in turn, will determine the amount of capital goods this firm can acquire and, ultimately, the volume of the firm’s production.
Another aspect to consider is the fact that many U.S. households hold their wealth in financial assets (see Table 1 below). According the data from “Survey of Consumer Finances” published by the Federal Reserve System, in 2004, 1.8% of U.S. households held bonds (down from 3% in 2001), and 20.7% of U.S. households held stocks (down from 21.3% in 2001). Table 1 shows financial asset ownership data for 2004. In addition to this direct ownership of stocks and bonds, it’s important to remember that there are households who hold these instruments indirectly—in retirement accounts, for instance (more than half of U.S. households held retirement accounts in 2001). Poor performance of equity and debt markets reduces wealth of households who hold stocks and bonds. This, in turn, reduces their spending (via the wealth effect), slowing down the economy.

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April 22, 2020

Introduction
The rule of seven is one of the oldest concepts in marketing. Although it is old, it doesn't mean that it is outdated. The rule of seven simply says that the prospective buyer should hear or see the marketing message at least seven times before they buy it from you. There may be many reasons why number seven is used. Why not rule of six or rule of eight?
Traditionally, number seven have been given precedence over other numbers by many cultures. Therefore, you may notice various things coming in number seven.
The important thing in the rule of seven is not the number, but the message. This simply tells you that you need to let the prospect hear and see your marketing message so many times before they buy it. There are many reasons for the need of repetition. Buyers just can't trust you and make the buying decision at the first time you show your message.
So, this simply means that your marketing effort should be repetitive and consistent. You cannot just run a couple of advertisements one time and expect the customers to buy the product. The hidden message of rule of seven is the continuous and repetitive effort that should be put in for marketing.
What Can You Do?
In order to enhance your marketing through the message of rule of seven, consider the following points:
1. The Noise
Today's world is an information world. People are overloaded with information. People have access to the best information source at all times, so you cannot fool them at all.
If you want to convey your marketing message to the people, who have been bombarded with information, you are having tough luck. It is never easy for a person or a company to be heard by the prospective buyers. For this, you may want to use some special tricks and strategies.
Due to the above reason, one should repeat their marketing message. In the first few times, a person will not notice the message. People are usually resistant to marketing messages by nature. Otherwise, people will be overwhelmed by the noise made by the marketing companies.
You have to compete in this noisy market. So, you need to repeat your message until they hear you out.
2. Customers may not need your product
You may be targeting the exact type of customers for your product or service. But there are chances that they may not need your product yet. In case if they see your marketing message once, they may not remember you when they want to buy the product by next week or next month. Therefore, you need to keep your marketing message in sight. Out of sight for marketing is out of mind.
Let me take an example. Most people do see and hear about great products or service and they make a mental note that they will buy those when they need it. But in reality, when they buy the actual product, they go with the latest marketing message they heard or saw. That's why you need to keep playing your record.
3. The price may be too high
Sometimes, people do not buy things due to the price. This is nothing to do with the price of the product or the service. This simply means that you have not been able to convince the customers fully about the value of your offering.
If someone sees the value of your product or the service, they find a way to buy it. They never worry about the price if it's the right thing they want.
Therefore, through your message, convince them about the value you offer. Through rule of seven, they will hear about the value you offer many times, so the money will not be a problem.
4. They don't know you
This is the main reason why people do not buy your products or services. Let them know who you are through rule of seven. More they hear about you, higher they will accept you.
Conclusion
Rule of seven is one of the oldest, but practical concepts in marketing. Similarly, rule of seven can be applied to many other areas, where the consumers are concerned. The main learning from rule of seven is the need to repeat what you do.

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April 17, 2020

The three financial statements are: (1) the Income Statement, (2) the Balance Sheet, and (3) the Cash Flow Statement. These three core statements are intricately linked to each other and this guide will explain how they all fit together. By following the steps below you’ll be able to connect the three statements on your own.





Overview of the three financial statements:
1 Income statement
Often, the first place an investor or analyst will look is the income statement. The income statement shows the performance of the business throughout each period, displaying sales revenue at the very top. The statement then deducts the cost of goods sold (COGS) to find gross profit. From there, the gross profit is affected by other operating expenses and income, depending on the nature of the business, to reach net income at the bottom – “the bottom line” for the business.
Key features:
Shows the revenues and expenses of a business
Expressed over a period of time (i.e., 1 year, 1 quarter, Year-to-Date, etc.)
Uses accounting principles such as matching and accruals to represent figures (not presented on a cash basis)
Used to assess profitability

2 Balance sheet
The balance sheet displays the company’s assets, liabilities, and shareholders’ equity. As commonly known, assets must equal liabilities plus equity. The asset section begins with cash and equivalents, which should equal the balance found at the end of the cash flow statement. The balance sheet then displays the changes in each major account. Net income from the income statement flows into the balance sheet as a change in retained earnings (adjusted for payment of dividends).
Key features:
Shows the financial position of a business
Expressed as a “snapshot” or financial picture of the company at a specified point in time (i.e., as of December 12, 2017)
Has three sections: assets, liabilities, and shareholders equity
Assets = Liabilities + Shareholders Equity

3 Cash flow statement
The cash flow statement then takes net income and adjusts it for any non-cash expenses. Then, using changes in the balance sheet, usage and receipt of cash is found. The cash flow statement displays the change in cash per period, as well as the beginning balance and ending balance of cash.
Key features:
Shows the increases and decreases in cash
Expressed over a period of time, an accounting period (i.e., 1 year, 1 quarter, Year-to-Date, etc.)
Undoes all accounting principles to show pure cash movements
Has three sections: cash from operations, cash used in investing, and cash from financing
Shows the net change in the cash balance from start to end of the period
 
The 3 statements are intricately linked

Summary comparison

Income Statement
Balance Sheet
Cash Flow
Time
Period of time
A point in time
Period of time
Purpose
Profitability
Financial position
Cash movements
Measures
Revenue, expenses, profitability
Assets, liabilities, shareholders' equity
Increases and decreases in cash
Starting Point
Revenue
Cash balance
Net income
Ending Point
Net income
Retained earnings
Cash balance

How are these 3 core statements used in financial modeling?
As explained above, each of the three financial statements has an interplay of information. Financial models use the trends in the relationship of information within these statements, as well as the trend between periods in historical data to forecast future performance.
The preparation and presentation of this information can become quite complicated. In general, however, the following steps are followed to create a financial model.
Line-items for each of the core statements are set up. This provides the overall format and skeleton that the financial model will follow
Historical numbers are placed in each of the line-items
At this point, the creator of the model will often check to make sure that each of the core statements reconciles with data in the other. For example, the ending balance of cash calculated in the cash flow statement must equal the cash account in the balance sheet
An assumptions section is prepared within the sheet to analyze the trend in each line-item of the core statements between periods
Assumptions from existing historical data are then used to create forecasted assumptions for the same line items
The forecasted section of each core statement will use the forecasted assumptions to populate values for each line item. Since the analyst or user has analyzed past trends in creating the forecasted assumptions, the populated values should follow historical trends
Supporting schedules are used to calculate more complex line items. For example, the debt schedule is used to calculate interest expense and the balance of debt items. The depreciation and amortization schedule is used to calculate depreciation expense and the balance of long-term fixed assets. These values will flow into the three main statements

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April 12, 2020
An angel investor is a person or company that provides capital for start-up businesses in exchange for ownership equity or convertible debt. They may provide a one-time investment or an ongoing capital injection to help the business move through the difficult early stages. Unlike banking institutions that invest in already profitable businesses, angel investors invest in entrepreneurs taking their first steps in business. In most cases, they play an active role in the management of the new business as a way of protecting their investment and helping the owner build a thriving business. Also, some passive investors invest through a fund or Private Placement Memorandum and are not directly involved in the business.

There are three ways in which an angel investor can provide funds to a start-up business. The most common way is to offer the business a loan that can be converted into an equity position in the company once the company has taken off. In such a situation, the angel investor will require a 20%-30% equity interest that gives them a voice on the company’s board. The second option is to provide funds through a convertible preferred stock option and still be a member of the company board. The investor then defers the dividend payment for the stocks till a future date. The third option is to get an equity position directly, such as a 20%-30% stake in the company. To safeguard his or her interest, the investor may appoint one or two associates to help in managing the business.
 
 
Origin of the Angel Investor
The term “Angel” originated from the Broadway theater, where affluent individuals provided money for theatrical productions. The wealthy individuals provided funds that were paid in full plus interest once the productions started generating revenue. The founder of the Centre for Venture Research and also a professor at the University of New Hampshire, William Wetzel, coined the term “Angel Investor” in 1978 after completing a study on how entrepreneurs raised capital for businesses. He used the term to describe investors who supported start-up businesses with seed capital.
Silicon Valley is the home of modern angel investors and also home to the largest number of start-ups in the United States. Silicon Valley received 39% of all the $7.5 billion investments in the United States-based companies in Quarter 2 of 2011. Total funding reached $22.5 billion in 2011, $2.4 billion more than the investments in 2010. With platforms like AngelList, start-up companies can pitch directly to potential angel investors and secure funding for their business. Also, there are dozens of boot camps and conferences every year where entrepreneurs meet with investors one-on-one and pitch their ideas.
Contrary to popular belief, most angel investors are not millionaires. There are angel investors who earn $60,000 to $100,000. Some are retired entrepreneurs, doctors, lawyers, and successful people in business looking for ways to stay updated with the happenings of the business and earn an income on the side. Furthermore, they make use of their entrepreneurial skills, experience, and networks to help new entrepreneurs launch their business. Unlike venture capitalists, angel investors do not solely rely on the monetary returns for motivation. They are motivated by the persistence of young entrepreneurs to succeed and build an empire for themselves, and hope the money will follow.
 
 
Source of Funds
Unlike venture capitalists who invest using money from other investors, angel investors fund entrepreneurs using their own money. The funds may come from a limited liability company, business, trust, or investment fund. Angel investors mostly come in during the second round of start-up financing, after raising funds from family and friends. The funds from angel investors can range from a few thousand to a few million dollars, depending on the nature of the business. The leading sectors in terms of angel investments are technology, healthcare, software, biotech, and energy industries. In the United States, an angel investor must have a minimum net worth of $1 million and an annual income of $200, 000 as required by the Securities Exchange Commission (SEC).
 
 
Source of Angel Investments
The most common sources of angel investments are wealthy individuals, crowdfunding, and angel syndicates. The investments may go up to $500, 000 or even more. You can find such investors through referrals, local attorneys, and associations like the Chamber of Commerce.
Angel investors may also group themselves into a syndicate and raise potential investments for the group fund. The investors may then appoint a professional syndicate management team to identify business start-ups for possible investment. The team will also be charged with the responsibility of following up the investments and taking an active management role in the business to ensure that the funds are secure.
The latest source of angel investment is crowdfunding. Crowdfunding is an online form of investing where a large group of individuals contribute funds to a pool. They may invest as little as $1,000. The money is then used to fund multiple for-profit entrepreneurial ventures. In 2015, there were over 2000 crowdfunding platforms worldwide that raised over $34 billion.
An angel investor will look for not only an investment opportunity but also a personal opportunity. They have valuable business experience and may want to have an active role in the management of the business. Before accepting an angel investment, you should understand what the investor brings to the company besides money.
 
 
Angel vs Venture Capital vs Private Equity
Angel investors invest at the earliest stage, while Venture Capital (VC) firms invest later, and Private Equity (PE) invests last (generally speaking).
To learn more, see our guide to Angles, VCs, and PE firms.
 
 
 
 
 
 
Where to Find Angel Investors
The best place to start when looking for an angel investor is to look close to home or on angel investor network sites. Most investors will want to invest in local start-up businesses since it will be easier to track the progress of the business.
AngelList, Angelsoft, MicroVentures and Angel Capital Association have an online listing of angel investors who are members in good standing and are looking to invest in potential high-growth businesses. Check out the angel investors listed on the sites and find out what you need to make a pitch. Some sites allow you to send a pitch online at a fee. However, most investors will require you to make a presentation in 20 minutes or less before deciding whether to invest in the business or not. Also, keep track of angel investment conferences in your state that you can attend and meet potential investors.

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February 29, 2020
The stock market works like an auction where investors who buy and sell shares of stocks. These are a small piece of ownership of a public corporation. Stock prices usually reflect investors’ opinions of what the company’s earnings will be.
Traders who think the company will do well bid the price up, while those who believe it will do poorly bid the price down. Sellers try to get as much as possible for each share, hopefully making much more than what they paid for it. Buyers try to get the lowest price so that they can sell it for a profit later.
How to Invest in the Stock Market
Average investors can’t trade on the stock market directly. Instead, they must hire a broker-dealer to execute the trades. There’s a wide variety of choices:
  • Fee-only financial advisers who charge an annual fee, usually 1 percent of assets.
  • Online dealers like E-Trade, who charge a small fee per transaction. 
  • Large banks, like Goldman Sachs or Well Fargo Advisers, provide financial planning in addition to executing trades. 
  • Small brokers who just execute orders. 
Many investors buy stocks through mutual funds. These are companies that buy a collection of stocks. The investor buys shares in the mutual fund instead of owning the stocks themselves. They take advantage of the mutual fund manager’s expertise. Since there are so many stocks, this diversified investment has a lower risk than a single stock.
Most of the stocks traded are common stocks. But some investors buy preferred stocks. They pay an agreed-upon dividend at regular intervals and they don’t have voting rights. They are less risky but they also offer a smaller return.
Where Is the Stock Market?
The two largest exchanges in the world are both in the United States. The New York Stock Exchange lists 2,400 companies. Combined, they are worth around $21 trillion in market capitalization. That’s the value of all its shares. The NYSE is located on Wall Street. The Nasdaq has 3,800 companies with a market cap of $11 trillion. It’s located in Times Square.
Each exchange matches buyers with sellers, but they do it differently. The NYSE is a true auction house. It matches the highest bid for the lowest sales price. There is a market maker for each stock who will fill in the gap to make sure trades go smoothly. At the Nasdaq, buyers and sellers trade with a dealer instead of each other. It’s done electronically, so trades happen in split seconds.
A third exchange, the BATS Global Marketplace, was formed to create a more efficient technology. Its goal was to avoid a flash crash like the one that hit the NASDAQ in August 2013.
There are also many small exchanges to serve specific types of traders. For example, “Dark Pools” like Liquidnet, cater to high-volume, frequent traders like hedge funds. Dark Pools hide their client’s strategies from the competition. They not only ensure their anonymity but can also match up large orders to avoid suspicion. 
The major countries have their own stock exchanges for their domestic corporations. The five biggest are the London, Tokyo, Shanghai, Hong Kong, and Euronext exchanges.
Current Stock Market
The stock markets use indices to report their current conditions. The top three are the Dow Jones Industrial Averages, the S&P 500 and the Nasdaq. The DJIA tracks the stock prices of the top 30 U.S. companies. The S&P 500 tracks the stocks of 500 large-cap U.S. companies. The Nasdaq tracks the stocks on its exchange. Each of these also has many smaller indices that track specific aspects of the companies they track. For example, the Nasdaq 100 tracks the largest stocks on its exchange.
Each exchange around the world has an index that reports on its current status. The indices for the top five exchanges are the FTSE 100, Nikkei 225, Shanghai Stock Exchange, Hang Seng, and the Euronext 100.
In addition, there are many indices that report on various types of companies listed on the exchanges. The Russell 2000 reports on 2,000 small-cap companies. The MSCI Index reports on emerging market companies.
Advantages 
Companies sell stocks because it’s a good way to get an enormous sum of financial capital. However, the company itself must be generating a lot of income to make it worthwhile. Issuing an Initial Public Offering is very expensive. After that, there is no privacy, as investors review the company’s profits and strategy every quarter. The other ways of obtaining financing are private, through personal loans or private investors, or through bonds, which are loans traded publicly. The advantage of stocks vs. bonds is that a stock doesn’t require a monthly repayment of interest.
Individuals use the stock market because the returns, on average, outpace those of other investments, such as bonds or commodities. Stock market investing is an excellent way to make sure your investments do better than inflation.
The Stock Market Isn’t the Economy But Does Affect It
The stock market contributes to the U.S. economy. If investors believe the economy is growing, then they will invest in stocks. That’s because a strong economy helps companies improve their earnings. That’s known as a bull market. It usually occurs along with the expansion phase of the business cycle. Most commodities also do well. That’s because expanding businesses will demand more oil, copper, and other natural goods. The most recent bull market occurred from March 2009 until August 2013.
If investors think the economy is slowing or stagnant, they will invest in bonds, which are a safer investment. That’s because bonds give a fixed return over the life of the loan. Bonds do well during the contraction phase of the business cycle. When bonds do well, stocks lose value. That’s known as a bear market, and it typically lasts 18 months. The last bear market was from December 2007 to March 2009. For more, see Dow Closing History.


If there are threats to the global economy, investors also move toward gold and other safe havens. That usually happens along with a stock market correction, when share prices drop 10 percent or more. It’s even more apparent in a stock market crash when stocks can lose that much in a day. A bad crash could even cause a recession. The history of stock market crashes shows this is a frequent occurrence.
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January 13, 2020

People young and old complain that they want to start a business but have no money. If you have a viable business idea don’t let the lack of capital stop you.You might be asking “What type of business can I start with no money?”
Here are some brands that started with almost nothing:
  • Whole Foods Market – In 1978 John Mackey and Rene Lawson saved and borrowed money from friends and family to open their first store in Austin, Texas. After getting evicted from their apartment, the two lived in their first store.
  • Apple, Disney, Google, Harley Davidson, Hewlett-Packard, Lotus Cars, Mattel, Yankee Candle Company all started in garages.
  • Nike – Founders, Philip Knight and Bill Bowerman started selling training shoes from their car trunk.
  • Dell – Michael Dell started out as a dishwasher, making a whopping $2.30 per hour. Dell started selling PC out of his college dorm.

Keep your job.

Starting a business is risky. Starting a business with no money is even riskier. Don’t jeopardize your family’s financial well-being. The longer you keep your job the less pressure you put on yourself. When you start your business you are not ready to walk away from a steady paycheck. It’s true that you’ll have to work harder, but you can keep paying your bills as you grow your business. Once your business starts to generate revenue, you can start thinking about transitioning out of your job.

Stick with something you know.

Build on your passions and experiences. Instead of trying to start a business in a niche outside of your comfort zone stick to something you know. Build your business on your skills and knowledge. It is true that you can learn new skills, but it will take time. If you want to start a business quickly, you have to focus on what you can do now not years from now.

Learning new skills will require more time and additional expenses. You might have to take courses, get licenses, pay consultants, etc. Starting a business in a field familiar to you will give you additional confidence.

Do all the work yourself.

Starting a business with no money means that you have to learn to do things that you would normally delegate to an employee or an outside company. I agree that it’s exhausting to do all the work yourself, but you don’t have the budget to hire help. Doing everything yourself you will be able to put every dollar back into your business. It will be tough, but it is the only way to build up a cash reserve when you start a business with no money.

Offer a service.

Some of the best business you can start with no money is a service business. You can start a service business with practically no money. Instead of money what you need is the ability to knock on doors and make sales. Even if you ultimately want a product business, owning a service business can help you get there. Use the service business to finance your dream business.

Here are some great product businesses that started out selling something else:
·    3M – Started as a mining company. From that, they went on to sell sandpaper, then masking tape, the “Scotch Tape”.
·    Microsoft – Started out by doing sporadic software development gigs.
·    37signals – Started out as web designers before they have created products like Basecamp.

Create a professional website.

If you’re offering any type of business service, a digital presence will help you get more clients and add to your professionalism. Websites can be setup for with little skill and cost, there are thousands of professional website templates online for free that can help get your business website up within a few hours. It’s essential you use a professional domain name for your business website, such as the name of your business or your own name. Online domain search tools like instantdomains.com will help you save time by checking if your website name is available for registration.

Make it public.

Starting a business with no money means that you have to work hard to get the word out. Don’t keep your business a secret. Tell as many people as you can. Call your friends. Explain it to your family members. Make it public. Telling people will help you in several ways. For starters, it will give you extra energy. More importantly, it might help you land some of your first customers. People in your network could make valuable introductions.

Invent something and license it.

If you are an inventor, you could license your patent to a company. In licensing deals you normally get a percentage of sales. The best way to license your invention is to seek out manufacturers. Technically, it is called licensing your patent rights.You want to start out by developing a list of manufacturers. Look for those that are already making products in your target niche. One or two manufacturers is not enough. Identify at least, 25 potential manufacturers.
You can find manufacturers by looking at product packaging, online research, networking, and visiting trade shows. Libraries have excellent resources to locate manufacturers. Thomasnet, WikiMachine, ManufacturerUSA are possible resources too.Reach out to manufacturers with a short message about your invention. Provide enough information to trigger interest, but don’t overwhelm people with data. LinkedIn can be an excellent resource to find the appropriate contact person.
Consult with an experienced licensing attorney before you enter negotiations. Ultimately, the licensing agreement will include details about upfront payments, exclusivity clauses, percentages, and infringement issues. You could really do yourself a major disservice by entering into an agreement without professional help.

Partner with an entrepreneur.

Many businesses are started by solopreneurs who quickly become overwhelmed. Most entrepreneurs would want you to buy yourself into a business partnership, but there are still ways for you to do this with little or no money.
You could find a business where the owner is about to retire. The owner of the business might want to sell the business, but the reality is that most businesses never sell.

Get a credit line.

Businesses are commonly funded by lines of credit. You might end up using a credit card to help you with your cash flow. The key with credit lines is it is no substitute for revenue. Use credit lines only as a temporary measure, not as an alternative to making enough money to pay your bills.

Use crowdfunding.

At a time when 98% of the business plans are rejected by VCs and accredited investors, crowdfunding offers a great alternative for entrepreneurs. Crowdfunding requires a lot of effort and dedication, but is a great option, especially for consumer product businesses. The great thing about crowdfunding is that it gives you access to capital without giving up equity.

Apply for government programs.

Apply to the Small Business Administration (SBA) and other government agencies for help and funding. There are business financing options for women, veterans, and minorities.Enter business plan competitions.

Avoid get rich quick schemes.

There are countless cases of “get rich quick schemes” both online and offline. They promise you everything you want to hear. Quick and easy money with little or no work. It simply doesn’t exist. You can start a business with no money, but you can’t start one without hard work, strategic thinking, and patience.

Don’t believe stories about overnight success. They are simply myths.
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