The Three Ways of Making Money In Business

There are three ways to make a lot of money in business.  Typically, most businesses that are successful at making money do it in one by focusing on one of three models.  They either: Sell many things at a low price Sell few things at a high price Sell many things at a high price By way of example, let’s look [...]

from Joshua Kennon

A Few Reminders About Money and Financial Success

Financial success consists of putting together a collection of assets as well as improving your personal skills to sell your time for a much higher rate, so that you are able to generate constant gushers of cash, stay out of debt, give to charity, and fund new investments that result in your income and net [...]

from Joshua Kennon

Making Money: Nothing Happens Until Something Is Sold

As Gene Bedell wisely reminds us, nothing happens until something is sold.  That is one of the greatest business truths you can ever learn.  Get it engraved on the back of a watch, keep it in your pocket inscribed on a small sheet of paper, or repeat it to yourself silently, but learn this principle so [...]

from Joshua Kennon

The Red Ring Problem – Getting Rich Too Late in Life

This article deals with people who want to be rich.  Not just financially independent or reasonably well-off, but actually rich relative to the average American; the folks who want to be able to write a check for a Lexus or live in a nice house, in a neighborhood with great schools, without worrying about it, [...]

from Joshua Kennon

Investors Could Learn a Lot By Studying Farmers

This Halloween evening, I am sitting at one of the desks in my home, drinking a cup of Costco coffee, and penning About.com content for the Investing for Beginners site.  I’m going to try and pre-write the next few months’ worth of articles and set them to automatically publish themselves due to the upcoming time crunch [...]

from Joshua Kennon

The Secret to Making Money: There Are Only Two Levers You Can Use

If you want to know how to make money and begin making more money, I’ll tell you the secret.  There are only two levers you can pull.  To understand this simple truth, let’s start at the beginning.  To grow richer, the formula looks like this: The cash flowing into your life (income) - The cash [...]

from Joshua Kennon

Mail Bag – Once You Become Rich, How Should You Handle People That Wouldn’t Give You the Time of Day in the Past?

How do you deal with people that treat you differently once you have money?  That is today’s mail bag question.  I promoted this question from a comment submitted from Frat Man after he wrote me on Facebook asking if I’d respond to it sooner rather than later, so it was pushed to the front of [...]

from Joshua Kennon

How Much Money Does It Take To Be In The Top 1% of Wealth and Net Worth in the United States

There had been some confusion about the methodology involved in calculating the top 1% of wealth in the United States.  This article is updated with the “sticker” net worth for the top 1% as published by The Federal Reserve (assets – liabilities since that is what the typical American thinks of when they hear the [...]

from Joshua Kennon

How To Be a Success In Your Profession: Testable Fluency in the Basics

The key to being fantastic at your chosen field is to reach what Charlie Munger called “testable fluency” in the basics so that you are able to perform the higher ideas like a meastro. This concept is simple: Mozart was able to compose so brilliantly because he could play almost anything by sight or ear. [...]

from Joshua Kennon

Why Aren’t More Athletes Like Jamal Mashburn or Ulysses Bridgeman, Jr.?

The Internet is buzzing with a clip from Terrell Owens’ reality show on VH1.  In a recent installment of the program, T.O. begins to cry about the money troubles he faces after discovering that his finances aren’t adding up, his credit score is in the 500′s, he has mortgages due on real estate and he [...]

from Joshua Kennon

Building Wealth Is the Process of Converting Human Capital to Financial Capital

When you begin your career, it is probable that you will start with no money of your own if you are like the typical world citizen.  That means your entire net worth consists of your so-called Human Capital, which is the productive capacity of your labor.  The value of this asset ultimately depends, in part, [...]

from Joshua Kennon

You Can’t Buy Back Your Life

A Lesson On Life and Money from Big Daddy Pollitt In the film adaptation of the Tony winning Tennessee Williams play Cat on a Hot Tin Roof, Big Daddy Pollitt (Burl Ives), a very wealthy planation owner in Mississippi who built his fortune from nothing, learns he is dying from an inoperable cancer.  There is a [...]

from Joshua Kennon

Eight Questions Every Business Owner Should Ask Himself or Herself

If I were thinking about starting a small business from nothing or I were actively operating a small family company, there are eight questions that I would immediately ask myself about any entrepreneurial idea I had.  These eight questions are: How do we make money? (What product or service do we provide at a profit? What [...]

from Joshua Kennon

Making Money Is Easier When You Figure Out How to Monetize Your Passion and Do What You Love

The older, and more experienced, I get, the more convinced I become that financial success and making money comes easier if you spend your time doing what you love.  The reason is startlingly simple: If you are passionate about the process of your job, and take pride in doing excellent work, you are likely to [...]

from Joshua Kennon

Not All Your Investments Will Work Out at First … Just Look at The Buffalo Evening News and Berkshire Hathaway

In 1977, Berkshire Hathaway invested nearly 25% of its net worth into Buffalo Evening News, a newspaper in upstate New York. Buffett and Munger paid $32.5 million for the company, which had only earned $1.7 million pre-tax in 1976. The theory was the paper could launch a Sunday edition and increase profits substantially. A judge [...]

from Joshua Kennon

A Visual Picture of the Kennon Green Enterprises Business Model

Getting rich is simple but that does not mean it is easy.  As you make money, it becomes progressively easier and easier because your money is capable of working for you.  Our business model is based upon going through life collecting things that throw off value.  We either create these assets, such as our first [...]

from Joshua Kennon

Even I Am Not Always Perfectly Rational When It Comes to Money … I Paid Off a Nearly Free Car Loan This Morning

This is one of those articles I write because I want you to understand that sometimes, there are things more important to emotional happiness than amassing the largest net worth possible. Because I hate debt so much, even I am not always perfectly rational when it comes to finances, though I try to be.  It’s [...]

from Joshua Kennon

Why Do the Rich Get Richer?

If you want to know why the rich get richer, the answer was written down a few thousand years ago in what I consider to be the single most useful verse in the entire Bible. “My people are destroyed because of a lack of knowledge” When it comes to getting rich, the rich get richer [...]

from Joshua Kennon

Creating and Using Synthetic Equity to Make Money

Several of you asked how it was possible for us to earn between $80,000 and $100,000 a year during college despite not having full-time jobs and being self-made.  The response was too long to put in the comments because it involved an explanation of something called synthetic equity; I’m publishing the follow-up response here, as its [...]

from Joshua Kennon

How We Made $100,000 a Year as Full-Time College Students

This is one of those posts that I am writing because I know that some of you, especially the younger ones, will benefit from seeing tangible proof that the ideas I write about are completely do-able and I speak from experience.  My family hates it when I write stuff about my own life but this [...]

from Joshua Kennon

How to Measure Your Wealth

Specifically, today, you might hear someone say, “He has a net worth of £5,000,000.”. This tells you how much should be left if the person in question sold all of his assets, settled all of his debts, and put the remainder in a checking account at the local bank. This was popularized by the rise [...]

from Joshua Kennon

The Hierarchy of “The Rich” in the United States

I’ve written a lot about the economics of household income over at Investing for Beginners at About.com, a division of The New York Times.   Most economic data, as I explained there, comes in the form of regular households that are easily understandable to the average worker.  For example, to be in the top 5% of [...]

from Joshua Kennon

How I Approached the Financial Side of Buying My First House

When I was 25 years old, I began looking for a house back in Kansas City to be near my parents and serve as my primary residence.  The search continued until a few months after my 26th birthday when the papers were signed and suddenly my balance sheet included a townhouse. I had told the [...]

from Joshua Kennon

How to Increase Your Net Worth

There are only four ways to increase your net worth.  No matter how difficult or complex growing your personal fortune may seem, at the very core of the process of building wealth and saving money is a great truth.  To increase your net worth, you must do one of these things: Increase the assets you [...]

from Joshua Kennon

Songwriter Franke Previte Still Collects Six-Figure Royalty Checks on Two Hit Songs Written Nearly 25 Years Ago

Reuters just published an awesome article about songwriter Franke Previte, who lives in New Jersey, and wrote the hit songs “Time of My Life” and “Hungry Eyes” for the movie Dirty Dancing. The copyrights have turned out to be a lottery ticket for the composer, providing him with a substantial stream of profits upon which [...]

from Joshua Kennon

The Younger You Start Investing, the Richer You Get

When it comes to investing and compounding your money, you know that time is the most important consideration, followed by the risk-adjusted rate of return you earn, followed by the amount of money you regularly put into your investments.  Those three things combined determine how rich you end up at the end of your life. [...]

from Joshua Kennon

How to Be Rich by 30

A younger cousin of mine sent me a question on Facebook about something my siblings had said regarding their investments. This is my response to her. When I was 10 years old, I had a light bulb moment when I was reading One Up on Wall Street by Peter Lynch. I can still see it [...]

from Joshua Kennon

Think Like a Spider Web, Not an Organizational Chart

Here is the best thing I heard all day … Life is not an organization chart. Life is more like a spider’s web. Things happen in strange ways. – Ross Perot There is a lot of truth in this. You cannot think lineally about your life or business. You need to think in three-dimensions. This [...]

from Joshua Kennon

How Do You Get Rich? Do What Is On Your Desk and Do It Well

A fantastic passage from page 97 of The Richest Man in Town: The Twelve Commandments of Wealth.  It talks about how success in life comes down to execution of the work that is sitting your desk, right now.  That means getting it done right, getting it done quickly, and getting it done with pride so [...]

from Joshua Kennon

Free Trade Isn’t Always Fair Trade

A few days ago, I wrote a five-part essay called How to Solve the Trade Deficit in response to a reader question about trade policy in the United States. The reader, Adam, responded on his blog.  Here is my followup to his commentary. I Would Love to Run Trade Surpluses But It Isn’t Going to [...]

from Joshua Kennon

Are You an Average American Worker?

A Word on the “Average” Worker The universal law of mathematics is that half of all citizens must be above average and half must be below average.  (Our job is to try and increase that average over time so that someone who is “average” today is richer than someone who was “average” 100 years ago). [...]

from Joshua Kennon

How I Structure My Day

When I come into the office, I begin by sitting down with a white pad of narrow-ruled paper (very small lines – smaller than college ruled because that is how I like it), and set out everything I want to achieve that day.  If I knock off the top 5 things, I consider it a [...]

from Joshua Kennon

The First $100,000 Is Hardest

“Munger has said that accumulating the first $100,000 from a standing start, with no seed money, is the most difficult part of building wealth.  Making the first million was the next big hurdle.  To do that a person must consistently underspend his income.  Getting wealthy, he explains, is like rolling a snowball.  It helps to [...]

from Joshua Kennon

Does Geographic Location Influence Success?

I was speaking to a relative of mine when this person (who shall remain nameless) expressed horror that after living near New York for so long, I would buy a house near my parents in the Midwest.  “I thought you were going places!” they basically decried in exasperation. It was then that I realized how [...]

from Joshua Kennon

Where Do Most Decamillionaires Get Their Money?

Most decamillionaires attribute their wealth to owning and investing in their own, rather than in other people’s, businesses, which include the ones listed on the various stock exchanges.  The millionaires state that they can control their own businesses, but they can’t control or dictate policy to public corporations, let alone determine prices in the stock [...]

from Joshua Kennon

Here Is One of My Secrets to Making Money (Or, How I Once Bribed Women to Code for Me with Diamonds, Rubies, and Chanel)

The Secret: Strike Deals Where Everyone Has Limited Downside and Harness the Super Power of Incentive Some of you have been writing to me privately and asking about the early days when we started out and were trying to build our companies.  I thought it would be useful to share some of the things we [...]

from Joshua Kennon

“Dreams Become Reality One Choice at a Time” – A Lesson on Life, Business, and Money

Isn’t that a fantastic quote?  I got it from Tara Beth Workman a few days ago and I’ve been thinking about it since.  I realize that it is entirely true and that my life is a reflection of that.  All of our lives are reflections of that.  Let me explain. This afternoon, Aaron and I [...]

from Joshua Kennon

Ozzy and Sharon Osbourne Certainly Know Their Real Estate

When it comes to real estate, business acumen, and interior decor, Ozzy and Sharon Osbourne have my admiration.  Not only are their properties flawless in appearance, they use them as cash generators. According to one of my favorite blogs, Mr. and Mrs. Osbourne purchased this 4,500 square foot, 5 bedroom, 5 bathroom beachfront property in [...]

from Joshua Kennon

How Much Money Is Rich?

Here are some quotes I’ve come across the past few days online and elsewhere. What do you all think? … I’m not entirely decided on all of them … “Being rich is being able to buy whatever you really want, whenever you really want it.” - Robert Reich “There are two ways to be rich: [...]

from Joshua Kennon

Mail Bag – How Does Someone Start Creating Passive Income?

Among the thousands of emails and messages I receive regularly, I came across one today that was sent to me on May 17th by Cale P. Here is the question that was posed: I’m a pretty talented IT professional with great salary and a standard quality of living. I’ve known that I won’t be in [...]

from Joshua Kennon

I’m In Love with the Millionaire South Korean Coffee Goddess Grandma

Whenever we have a major project, there is always a television series or movie playing in the office.  It sort of serves as a deadline (e.g., “We need to get the new pen company launched by the end of the first three seasons of Friday Night Lights“).  For us, it works amazingly well. Right now, [...]

from Joshua Kennon

Why Don’t People Realize You Can Do This In Real Life?

During college, one of Aaron and my closest friends made a comment that still haunts me to this day.  I was explaining that if you own a share of The Coca-Cola Company, you actually receive a proportionate cut of the company’s profits on every single can of Coke sold.  This makes sense, after all … [...]

from Joshua Kennon

The Bosendorfer Strauss Grand Piano – A Real Life Lesson in the Time Value of Money

The Opportunity Cost of a Bosendorfer Strauss Grand Piano I’m going to teach you a financial technique that can help empower you to make informed choices about your own life and keep more cash in your pocket.  I’ve been using it since college and it’s done wonders from my bank balance and investments. From the [...]

from Joshua Kennon

The Housing Crisis Isn’t All Bad …

As Warren Buffett pointed out in this year’s letter to Berkshire Hathaway shareholders, for every house that falls in value and pushes one family into bankruptcy, another American family benefits from the lower prices as new households are created due to the younger generation graduating from college, settling down, and moving out of their parents’ [...]

from Joshua Kennon

The Kennon Retirement Insurance Plan

One of the Things That Helped Me … From time to time, you may come across reference to my “stupidity” insurance or my “reserve” fund.  I’ve had a bunch of readers write me over the years and ask about various comments I’ve made so I thought it might be useful to explain it.  My parents, [...]

from Joshua Kennon

The 5 Levels of Building Wealth

Early in life, I developed a theory that there were five levels of building wealth that most self-made men (and women) go through to reach financial independence.  It was started by my love for Carl Barks Scrooge McDuck comics.  When I started reading the Federal Reserve reports of consumer wealth, empirical studies, and other sources [...]

from Joshua Kennon

Business Should Be Fun … If It’s Not, You’re Doing Something Wrong

When I talk about the idea of tap dancing to work, in the words of Warren Buffett, I’m not kidding or making a joke.  You should wake up every morning and jump out of bed because you can’t wait to spend your time focusing on something that makes every part of you – physically, mentally, [...]

from Joshua Kennon

Focus on the Roots Before the Leaves

“The problem is that people, particularly younger people, have come to focus on the trappings of wealth over everything else – including the work or savings to accumulate the wealth to be able to reasonably afford luxury brands.  When we think about “rich,” we think about acting rich over being rich. The Mercedes Millionaire worked [...]

from Joshua Kennon

What The Rich Really Collect

from Joshua Kennon

How to Find Investment Ideas

Years ago, I wrote an article called Finding Investment Ideas for Your Portfolio for About.com, a division of The New York Times.  I’ve been thinking for the past few days about how it is that I seem to come across so many opportunities and then I realized that most people like me are always looking [...]

from Joshua Kennon