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Are you investing in your business, or day-trading - Wedding Business Solutions Podcast with Alan Berg CSPAre you investing in your business, or day-trading?

Financial services apps make it very easy to buy and sell stocks, bonds, ETFs and more. That’s great as it levels the playing field for small investors. Some people do what’s called “buy and hold,” intending to keep the investments they buy for a long time. Warren Buffet, the famous “Oracle of Omaha”, and one of the richest people in the world, is known for doing that. Other people buy and sell quickly, looking to turn a fast profit (hopefully). They’re not interested in the fundamentals of the company, its management or long-term strategy. Those are called “day-traders” because they often buy and sell the stocks in the same day. How are you treating your business, as a long-term investment, or are you day-trading?

Listen to this 8-minute episode and find out.

If you have any questions about anything in this, or any of my podcasts, or have a suggestion for a topic or guest, please reach out directly to me at [email protected] or visit my website www.AlanBerg.com

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Below is a full transcript. If you have any questions about anything in this, or any of my podcasts, or have a suggestion for a topic or guest, please reach out directly to me at [email protected] or contact me via textuse the short form on this page, or call 732.422.6362

Please be sure to subscribe to this podcast and leave a review (thanks, it really does make a difference). If you want to get notifications of new episodes and upcoming workshops and webinars, you can sign up at www.ConnectWithAlanBerg.com


– Are you investing in your business? Are you day trading in your business? Listen to this episode and find out the difference. I was looking at an app on my phone the other day, a financial services app, where you can buy and sell stocks and the cryptocurrency and things like that. And I had this thought, this is what you’re doing investing for, or maybe your retirement or investing for income and, or maybe you’re just playing around with it. And what’s the difference between an investor and a trader? There was a day trading. So you might’ve heard this expression day trading and that’s people that might buy and sell a stock within a day for the up and downs that are happening, or they’re turning it over quicker versus investing where you’re investing for the long-term.

If you’re familiar with Warren Buffett, Berkshire Hathaway is his company. He’s one of the richest people in the world. He is an investor. They don’t buy companies to turn them over and sell them. Not that they’ve never sold, but that’s not his goal. He invests in a company because they want to be invested in that for the long-term. When they buy a company outright, they keep the management. Whereas a lot of companies when they take over another company, they’re going to get rid of the management and put in their own. Now, the management is part of the asset, it’s part of the benefit to that company, to Warren Buffett and his team over there at Berkshire Hathaway, which by the way is not a big team because they’re a company that owns whole or parts of other companies. So they don’t have you think with a company that’s worth how many billions and billions of dollars that they’d have a lot of employees, but they actually don’t. The companies do, each of the companies do, but they don’t. So investing is investing for the long-term. Day trading is short-term, it’s being more transactional. It’s looking not at the value of the asset, it’s looking at the dollar value and how I can make money on that.

So how does that apply to your business? Well, some of you look at your businesses like day trading, where it’s a way to make money and that’s all it is. Okay, that’s fine, just understand that. Investing though is thinking, where, if I’m going to put money into my business, what is the long-term implication of that? I’m thinking bigger picture, I’m thinking longer term, instead of thinking tomorrow, I’m thinking years down the line. Again, it could be 1, 3, 5 years down line could be even longer than that. You could have your five-year-old with you and you’re thinking, okay, this is going to be your business someday. That’ll be up to them more than you, but we’ll get there. Investing versus day trading. It’s so easy to get into the wedding and event industry that it’s easy to start out, you’re pretty much like a day trader. Most people that get into the industry fall into it.

I had a conversation with someone on the podcast the other day, and I said, how did the business start? And his father had actually started the business years to second generation and his father came back from the war, he was in the army, he came back and he bought some DJ equipment, speakers and amps and stuff really cheap when he was overseas and brought it back with him and friends and family started having him do parties and maybe bars and stuff like that. And then it expanded and built and built. And so many people in the wedding and event industry started that way? You were in college and you were on the radio station staff and the DJ on the side, or you are a photographer as my son’s girlfriend, I’ve said this story before, she’s got like 21 or 22 first cousins and it was, oh, you’re coming to the wedding, hey, could you bring your camera with you? You’re a photography student and you take really good pictures, could you bring your camera to the wedding? And then somebody sees the pictures and says, oh wow, that was great, how much would you charge me to shoot a wedding? Like, ooh, I can make money for this? Wow, what an idea or how many wedding planners started out when they plan their own wedding or they planned their friend, or family’s wedding? You got into the business.

The low barrier to entry makes it easy to be a day trader in this industry because it’s easy to get into it and it’s just as easy to get out. If you say today, I’m a fill in the blank and then tomorrow I’m not, there you go. Have you invested in a way that you’re going to want to stick it out longer, or have your exit strategy? Obviously, if you are a venue, you have a bigger investment because you have the investment in the venue. Whether you have a contract that you’re renting the venue from someone, or whether you buy it, there is a bigger commitment.

If you’re a dress shop, you have inventory, you have the building itself, so there’s a bigger investment there. So investing, but you don’t think about that as a dress shop, are you day trading your inventory? Are you investing in it? Are you seeking out certain lines, private labels, custom designs, other services. When you decide to add a service to your business, is that a day trading thing or it’s just about the money again? Or is it strategic to give you a strategic advantage, a competitive advantage, whether it’s going to build upon that towards something else towards something else. On the podcasts that are getting recorded the other day, we’re talking about expanding services. Well, they expanded to another service as a out of necessity because in 2008 during the recession, their main business which had been chugging along, wasn’t bringing in enough business so now adding all their lines, other services, let them bring in clientele that they might not have had before or sell more to their existing clientele. That was investing, that was not day trading.

So day trading is making it about, I’m doing this to make money. This is a short-term thing, I’m not thinking longer term, investing is thinking longer term. It’s the same, whether you’re planning for retirement or just saying, this is my play money. I have invested very little, but a little bit into cryptocurrency. To me, it’s like gambling. That’s what it is. And day trading stocks is like gambling. It’s not investing, most people, there was a big frenzy recently with Game Stop and that was not about investing, those people were not thinking about the underlying asset. What’s the value of this asset down the line? What do we think their strengths are, that’s investing. This was about this price is going to go up, we can make it money upon this. It was strictly about the dollar change from where it is to where it was going and not about the underlying asset.

When you buy a house that you’re living in, if you’re going to live in that house, you’re probably investing more so than day trading. If you’re going to buy the houses to flip, that’s like day trading. We’re going to put money into it, we’re going to do it, we’re going to flip it, I don’t care. I’m not going to live there, it’s not about my color needs, is not about that. What am I going to do to be able to flip that and make more. You’re flipping your time and your energy into day trading in your business, if it’s just about moving transactions here, that’s all I’m doing. But if you’re investing, you’re thinking about what are the goals? What are the goals down the line? What should I be investing in today to get towards that thing? So it was just the thought I had, about when I’m looking at my financial app on my phone, day trading versus investing. I do a little bit of both, but I would say 95 or 97% of my personal investments are invested for the long-term. I don’t worry about the ups and downs in the stock market because they’re going to be there, I worry about over time, is it going to go up? Yes, that’s what I’m concerned with. I hope this gives you something to think about.

I’m Alan Berg. Thanks for listening. If you have any questions about this or if you’d like to suggest other topics for “The Wedding Business Solutions Podcast” please let me know. My email is [email protected]. Look forward to seeing you on the next episode. Thanks.

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