Josiah Mackenzie

I just came accross a great post on the Signal vs. Noise blog, and I thought I’d pass it along….

The most innovative software designed over the next 10 years will 1. be web-based, 2. will come from small teams, 3. will come from self-funded companies, and 4. will be for the “side-business” or 1-10 person business market…..There’s an endless supply of 1-10 person companies. Who cares about the Fortune 500? It’s time to care about the Fortune 5,000,000. Forget the enterprise market. Forget the mid-sized company market. Build for the smallest of small companies and you’ll find a thirsty, neglected market waiting for you.

The whole article is so good I feel like pasting it here. But you better head over to their site and read it there!

Since my first visit to Wall Street six months ago, I’ve learned alot about the stock market, and achieved a decent paper profit of 25%.

But My Favorite Company Isn’t Publicly Traded
The most valuable stock I own is issued by Josiah Mackenzie & Company, future NYSE symbol JMCO.

My Corporation Outperforms the S&P 500
When investing in stocks, I try to beat the S&P 500 index, which averages about 10% per year. Investments I make into my company routinely give a 200% (or more) return within weeks. One of my ventures gave me a 10,000% return on my money within four months. People are in love with Google because it doubled. I smile.

My Hypothesis
I believe that it is far more profitable for the entrepreneur to invest money into his business, rather than stocks. An entrepreneur has direct control over how profitable his company is. A stock investor is not. If you’re a savvy businessperson, you’ll do well. No guessing is needed.

A Radical Plan for Retirement
One of the major reasons people invest in stocks and mutual funds is so they will have enough money for retirement. I don’t agree with that. My plan is to build such a flow of residual income so that I don’t need a retirement account. Whether it be through real estate investing, network marketing, or licensing, it is possible to create enough channels of residual income to last far beyond your lifetime.

That’s what I’m working towards. To be a successful entrepreneur, you must lose the employee mindset.

4 out of 5 young entrepreneurs I meet began their career with a web design business. Including me. I ran NetScripter from 2001 to early 2004.

The Advantages are Obvious
Basic website creation is something fairly easy to learn. Startup fees are low, if any. Many jobs come through word-of-mouth referrals. Web design work can be fairly flexible, and it is easy to balance school and work on the side.

These Small Businesses become Successful Quickly
Since a website is a great assest for any business, it is easy to charge several thousand dollars for a simple design. After doing a couple of these, it is easy to feel confident about yourself.

But Then One of Two Things Happens
For some of these entrepreneurs, web design projects come in faster and faster. They don’t have the time it takes to do quality work for all their clients. Fatigue sets in, and their hobby — web design — turns into a slave master, and something they despise. The business closes. This can be avoided, however, and I’ll write on this later.

The other group of web designers has a very different problem, but equally fatal. Their method for geting new clients — word of mouth referrals — becomes exhausted, and you have no more work. Unsure how to market your business to a larger audience, the business closes. Fortunately, this too can be avoided.

Web Design Provides Good Experience
The time that I spent with my web design company provided me with some valuable skills I still use today. The ability to put together websites is valuable for an entrepreneur. Web design also gives you a taste of working for yourself — without risking too much of your own money. What a person does with that experience will be a major factor in their success as an entrepreneur.

In a couple days, I’m going to share with you an exciting business idea I have which is related to the web design industry. Since so many of us have experience it in, it believe the idea has much potential.

Stay tuned!

Unfortunately, the Chipotle IPO was a little too successful. I had a buy-limit order placed at $23, but it opened at twice the expected price: $45 per share.

Oh well.

Chipotle will go public tomorrow, with shares opening between $18-$22.

I would encourage you to read an article written by my friend Joe Urgo on this IPO: Chipotle Mexican Grill IPO

Since I recently incorporated, I was looking for a way to keep all my documents organized. Several companies offer corporate kits, which include a binder with sections for articles of incorporation, bylaws, meeting minutes, stock certificates, and a corporate seal.

After shopping around a bit I ordered Fastkit’s Standard Corporate Kit.

It turned out to be a very good deal for the $45 it cost. The binder is solidly constructed, and Fastkit even threw in extra forms for small business owners, such as the form for obtaining an Employer Tax ID number.

The nice thing about a corporate kit is that it helps you to maintain all the corporate formalities associated with a corporation. And if I had to recommend a corporate kit to you, I would have to go with Fastkit.

I don’t understand people when they say the stock market is risky. In addition to carefully analyzing your stock picks, there are things you can do to prevent losses. One of these is the Stop-Loss Order. Basically, this says, “If my stock drops below X price, sell it.” You can set this just below the price you paid for it, or a small percentage below to allow for market fluctuations. The nice thing is that you are only charged a commission when the stock sells, so it’s like a free insurance policy!

Last August, I purchased Google’s stock at $287. It was the highest priced stock I had purchased to date, so I wanted to make sure I didn’t lose money on it. I placed a stop-loss order on it. Fortunately, the stock climbed considerably after that, so I modified the sell price frequently.

Yesterday, Google started a steep slide that would continue into today. My stop-loss order was executed, and I sold off without losing excessive amounts of money.

I would encourage you to place stop-loss orders on all your stocks. It is the free insurance policy that can save you thousands of dollars!

The process of becoming wealthy begins with small descisions. One of those is developing the habit of saving and investing those savings. If you put some of this down on paper, the results are amazing.

To show you how amazing, I’ll illustrate using common expenses a young twenty-something encounters. For the illustrations, our savings will be put into an S&P index fund, which has historically averaged a return exceeding 10% over the past 70 years.

Case 1: College Texbooks
If you’re in college, you know how expensive textbooks are. It is easy to spend $500 on them each semester. Let’s say you bought all your textbooks used from other students, and saved $400 each semester, or $800 annually. (This is very possible — I do it routinely.) After investing the money you save each year, you will have over $3,800 when you graduate. But you didn’t miss that money during college, did you? So you decide to keep the savings in the stock market for the next 40 years. By the time you retire, you will have over $171,000 socked away! Amazing accomplishment from making one smart decision in college.

Case 2: The Cell Phone
Cell phones are great. They allow you to communicate with anyone, anywhere. But they can also be expensive. Let’s pretend that you were able to do without a cell phone and saved $100 for the phone and $50 a month for a 2-year contract. If you put that intial $100 into a stock account, then added $50 per month during the next 2 years, you would end up with $1,454.37 (assuming you would get the S&P average return of 10%). That’s a nice amount. But let’s continue our saving mentality. If you would keep that amount in your 10%-earning index fund for the next 40 years without touching it, you would have over $65,000 saved for retirement. So before you sign that cell phone contract, remember that it could be costing you $65,000 in future wealth!

Case 3: The Car
A car is one of the biggest purchases most people make. But it is also an opportunity for tremendous savings and future wealth. For example, instead of buying the average $25,000 new sedan, you could buy a car like the 2002 Chevrolet Impala on eBay for about $5,000 and invest the other $20,000. This time we don’t want to wait 40 years. We’ll just keep in the money in our investment fund for 25 years — until we’re 45. At the end of that time, we have over $216,000 — enough to buy a brand new Lamborghini and a gently used Ferrari on eBay!

And of course, we wouldn’t have to burn up all the money on flashy cars. We could leave it in our retirement fund, and withdraw over $905,000 at the end of 40 years.

Life presents many opportunities for saving. Whether you save by purchasing clothes on clearance racks or buying electronics used on eBay, the important thing to remember is invest the money you save. If you save money, then waste it on something else, the purpose is lost.

Train yourself now to save and invest. You’ll thank yourself later.

While reading Fortune magazine, I noticed an Vistaprint ad for 250 business cards for just $4.99! After you include shipping, the total is still under $10. You can use their templates, or upload your own design.

Here is what I ordered:

Here’s your link for the discount:
http://www.vistaprint.com/fortune

Enjoy!

I was talking to someone recently who said it is best to make goals for the new year, not resolutions. While I’m not sure there is a huge difference, I firmly believe in the importance of goal setting. The action (or inaction!) you take will determine how this year will turn out.

2006 will begin a gradual shift in my business endeavors away from internet marketing and software sales and toward discount clothing and real estate. While I presently don’t have the cash to fully and immediately enter those markets, I intend to begin small steps toward that goal now.

This year, I will work toward accomplishing the following goals.

Finish setting up my corporation, Josiah Mackenzie & Company Last December, Josiah Mackenzie & Company became an official Ohio corporation. Now I need to finish some of the final steps of incorporating, such as opening a bank account and issuing stock.
Projected date of completion: late January

Establish a solid presence at Cedarville University I have detailed plans in place to launch several small ventures that will be used by nearly every Cedarville student. I have to keep much of it secret until launch date, but CU students can expect to see “Josiah Mackenzie & Company” much more on campus.
Projected date of completion: March

Acheive $200 per month in passive AdSense income Generating a full salary from passive income sources is my #1 business goal. A small step toward that ultimate goal is to build my collection of small information sites that generate money from Google AdSense. I already have many of these in place — I just need to promote them more effectively.
Projected date of completion: June

Sell $10,000 worth of polos through HalfPricePolos.com As mentioned earlier, selling discount luxury clothing is a new venture that I hope will comprise a large part of my business empire in the future. I already have started to collect inventory, and my unique, targeted sales strategy should make this goal easy to accomplish.
Projected date of completion: September

Set up a scheduled investing program With the income I expect to earn this year, I will be able to start investing seriously. I plan to set up a scheduled program with Sharebuilder where money is automatically taken from my bank account and invested in index funds and ETFs on a monthly basis. This will make use of dollar cost averaging.
Projected date of completion: February

Buy a tax lien Because this can be a fabulous investing opportunity, I plan on attending several tax auctions, then purchasing some tax liens this year. Most likely, I will buy these in Michigan instead of Ohio.
Projected date of completion: July

Purchase an apartment In the fall, I plan on living in my own residence (as opposed to the college dorm). To do this, I will look for apartments summer, and hopefully find roommates that can be paying off my loan.
Projected date of completion: July