Fast Cash vs. Slow Equity
blog.nateliason.com
Fast Cash vs. Slow Equity
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Re: Fast Cash vs. Slow Equity
#2An investment strategy focusing on cash flow versus equity growth is also an important difference between most people who invest in businesses and venture capital.
Re: Fast Cash vs. Slow Equity
#3Equity business is thoroughly inaccessible to the vast majority of people, especially the IT people. It requires being an insider at least to a degree, and it requires apart from knowledge and skills, at least some luck.
I've seen a lot of extremely bright, talented and hardworking people trying to play that game - all failed, some ruined their entire lives simply for refusing to give up for too long. While those who went into cash business - as simple as an outsourcing shop - are almost all doing fine.
Nudging people to try for "equity business" is a dangerous advice to give.
Re: Fast Cash vs. Slow Equity
#4You can also have fast equity and slow cash. This is kind of oversimplifying business accounting. Learning some basic accounting may quite literally pay dividends for any project.
Re: Fast Cash vs. Slow Equity
#5You can also have fast equity and slow cash. This is kind of oversimplifying business accounting. Learning some basic accounting may quite literally pay dividends for any project.
Any suggestions for good basic accounting learning resources?
Re: Fast Cash vs. Slow Equity
#6I think a good chunk of services I receive from small businesses are underpriced due to people not realising the business they're starting has an upside similar to being an employee but with much greater personal financial risk and working stress. There's really not that much scalability to something without franchise potential.
Re: Fast Cash vs. Slow Equity
#7Equity business is thoroughly inaccessible to the vast majority of people, especially the IT people. It requires being an insider at least to a degree, and it requires apart from knowledge and skills, at least some luck. I've seen a lot of extremely bright, talented and hardworking people trying to play that game - all failed, some ruined their entire lives simply for refusing to give up for too long. While those who…
Could you elaborate on that? How come it requires being an insider? What constitutes an insider?
Re: Fast Cash vs. Slow Equity
#8A cash business can have quick linear growth, whereas an equity business will have slower but exponential growth.
...or not. Businesses do fail. A cash business and an equity business are just as likely to fail as one another. Working in the cash business means you're realising the value when it happens, rather than 'banking' it to realise a compounded value later. If the business fails for any reason you'll have been much better off working in the cash business. This is the downside risk of working for equity.
Re: Fast Cash vs. Slow Equity
#9Not exactly the same but this reminds me of Joel's Strategy Letter I [0] regarding knowing what kind of business you operate, and consequently how you should grow it.
[0] https://www.joelonsoftware.com/2000/05/12/strategy-letter-i-...
Re: Fast Cash vs. Slow Equity
#10Equity business is thoroughly inaccessible to the vast majority of people, especially the IT people. It requires being an insider at least to a degree, and it requires apart from knowledge and skills, at least some luck. I've seen a lot of extremely bright, talented and hardworking people trying to play that game - all failed, some ruined their entire lives simply for refusing to give up for too long. While those who…
It also requires you already have enough money to not need any returns for a few years.