KrantCents

Making Sense of Money

The 3 R’s of Success

The 3 R’s of Success

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The 3 R’s of Success is the eighteenth in a series of articles to help you reach your goal. What are your goals? I know you thought about it! You know, it is your dream, wish or resolution you made! Before you can get to where you want to be, you need to know where you are going. You wouldn’t get on a bus, train or plane without knowing where it was going.

Background

When did I become money crazy?  I don’t remember!  I do remember my mother telling me I was money crazy though.  I will admit I was never crazy, but I do find money absolutely fascinating and I made a career out of it.  My earliest experience earning money was renting parking spaces for the humongous sum of ten (10) cents without a time limit.  It was a very long time ago (early 1950s) and I probably under priced it.  This was my first experience with generating revenue.  I learned a lot that year because the next year, I raised my fee to twenty-five (25) cents.  Price was not a problem because they had no choice.

It takes money to make money!  I am sure you have heard that statement before.  When you need it, you can’t get it and when you don’t, people are happy to loan it to you.  Money is a resource and it is not inexhaustible!  The best way to build up your resources is to have a savings account.  You draw it when you need it or invest it.  You can use it to increase profit, buy assets or reduce expenses.  Human capital is another excellent resource.  Having the advice and support of family, friends and professionals will support your efforts for success.

How do you measure success?  One way is return on investment which is a performance measure used to evaluate an investment.  Before I started to invest in real estate, I was looking at a variety of businesses and investments.  I compared the return on investment percentages to determine which made the most sense.  Real estate was one of the very few and yielded income as well as growth.  In addition, you could depreciate the assets to shelter some of the income.

Revenue

Revenue is the amount of money received by an organization for goods sold or services provided during a certain time period.  This could be monthly, quarterly or annually.  There is a huge range of entities that generate revenue from small businesses to large public companies.  Remember, revenue is the money received for just selling products or services.  Profit is what is left after you pay for the expenses.  The more revenue, generally speaking the more profit.  Of course, everything is based on good management skills and controls.

Resources

Resources is a supply of money, materials, staff and other assets that can be drawn on by a person or organization in order to function or thrive,  Rich and successful people always have more resources than the rest of us.  They can draw on savings, investments, assets, professionals, etc to achieve success.  Human capital is just as important as money, it is as important as skills and knowledge.  How are you building up your resources?

Return on Investment

Return on Investment is a return on invested capital expressed as a percentage.  It is measure of a corporation’s profitability that indicates whether or not a company is using its resources in an efficient manner.  For a given use of money in an enterprise, ROI (return on investment) is how much profit or cost savings is realized.  It could be for an investment in real estate, assets or equipment that will reduce expenses.  The results may not be immediate, but should grow over time.  It is a way of measuring the profitability of your choice.

Final Thoughts

This is the eighteenth article in the series about success; I expect to publish throughout 2012. There will be twenty-six (26) of them, one for each letter of the alphabet. The 3 R’s of success are revenue, resources and return on investment. I think everyone wants success in life; business and career; however it takes a concerted effort to reach success. The difference between the impossible and the possible lies in a man’s determination.” Tommy Lasorda sums it up much better than I can!

I started this series because I run into so many people who have difficulty reaching success. They want to know my secrets! So I thought I would share them in a format that will be most helpful. I also think this format may make it more interesting and easier to use. My goal in these articles to provide useful and interesting information that will help you succeed. The 3 R’s of Success is now a series.

Photo by:  Francesco Schwarz

Comments

  1. Success is often hard for some folks to grasp because they have an underlying fear of it. I see folks sabotage their own success all of the time and have even done it myself. Thanks for the article ill go back and read from the beginning.

    • Most of the time, I see people give up too soon. The only time I see people sabbotaging themselves is with diets and quiting smoking.

  2. I agree that people are nervous about success but it’s only an anxiety about the unknown. The real problem is people can’t take the constant struggle and disappointment on the way to success. They feel it’s a waste of time and fatigue is a real problem. The become exhausted because of the large effort they put in without seeing any results. They give up over and over again.

    • I wonder, if they really wanted to achieve their goal? For me, that is most of the motivation.

    • My parent’s second home had ten (10) acres so there was plenty of room for parking. It was along a country road near a cemetery. Each year, there was something that had overflow attendance. I took advantage of it.

    • Interesting choices! Isn’t success a reward? Rigor? Does it have have to be difficult to be worthwhile? I get to pick three (3) words, but there are more with some letters and very few for others. Tough choices to say the least!