Clayton L. Mathile is an entrepreneur who built a billion-dollar fortune in pet food. He sold the Iams Co. to Procter & Gamble in 1999 for $2.3 billion. Like many of his ilk, he turned his energies to teaching others the craft of entrepreneurship. For the $130 million he’s already spent on that goal, Mathile could have simply stuck his name on a new building at Harvard Business School or Wharton and called it a day. Instead, he started a new kind of school for the betterment of the small business owner.
Mathile’s project is called Aileron, which started in 1996 offering management classes at community colleges. Some 1,500 businesses have taken its seminars. In April 2008 Mathile cut the ribbon on its permanent home, an airy 70,000-square-foot building of glass, wood and stone on a bucolic campus outside Dayton, Ohio.
The “clients,” as the small business owners are called, are a different breed from what’s usually found wandering the halls of Ivy League business schools. These are owners of roofing, landscaping and metal-stamping firms too wrapped up in the grind to focus on internal controls and long-term strategy. Read More
Corporations Are People Too (Bad, flawed, nasty people)
My friend Chris Helman was there, and it must have been a sight –Microsoft Chief Executive Steve Ballmer told a bunch of oil executives what a bad business decision Google is about to make regarding China. Then Ballmer compared Microsoft’s decision to kowtow to the Chinese dictatorship’s deplorable censorship laws with its compliance with U.S. laws banning child pornography. I guess protecting kids from kiddie porn and keeping people from sharing information about their oppressive government passes as a moral equivalence in corporate America these days.
While serving as willing partners to China’s oppressors overseas, corporate America has been fighting for its own free speech rights at home. Last week the Supreme Court decided that corporations have free speech rights, just like any individual citizen, so even the weak campaign finance laws that America uses to try to keep massive corporate interests from bulldozing their agendas through every election are now officially worthless. Goldman Sachs, JPMorgan Chase and Citigroup can now use all the money they’ve made and will make with the assistance of the Treasury and Federal Reserve to try to defeat any politician who might want to regulate them so that they never go crying to the taxpayer for help again.
Sure, the government can still regulate commercial speech, but political speech is fair game. So if you’re a political junkie who donates small sums to your favorite candidates over the Internet, forget it. Your interests will be swamped by the massive amounts of money that big business and its public relations consultants will pour into television programs, Web sites and old media attack ads. Read More
Real Estate’s 2010 Problem
Popular investing theory says to sell your lousy stock picks and let your winners ride. At least you get to capture the tax benefits of the losers if you follow that advice. But it takes nerve to hang onto an investment once it’s soared in value. Case in point: shares of real estate investment trusts have more than doubled in price in less than a year.
Investors have reason to be jittery since property values continue to fall, vacancies are rising and rents are falling. That will likely hurt REIT shares in the next twelve months, say Barclays analysts Ross Smotrich and Jeffrey Langbaum. Yet the long-term trends in real estate favor these publicly-traded commercial landlords.
Since REITs depend on debt to juice real estate’s (historically) slow but steady returns they suffered mightily from the real estate crash. Since they can’t hold onto their profits (they must pay them out to shareholdes every year) REITs depend heavily on the public stock and bond markets for funds. When the markets froze during the financial crisis, REIT shares collapsed. When they un-froze again REIT shares snapped back smartly. From its low the sector is up 124% and gained 29% in all of 2009. Now that investors think REITs are no longer threatened by insolvency, earnings are getting attention again, and that’s where the problem is. Read More
It is awfully nice of lenders to be offering free loans. At least, that’s what it sounds like they’re doing. Think of all of the radio and television ads you have heard where the lender claims to be offering loans with no out-of-pocket costs. Have you ever wondered how they can do this? If they are not charging you, the money has to come from somewhere. It helps to clear things up when you understand how a loan officer makes their money.
Pay Now or Pay Later Loan officers get paid in a way that they call “on the front” and/or “on the back.” If a loan officer makes money on the front, that means they are charging for things that you can see. This money is either out-of-pocket or is incorporated into the loan when you sign the papers. These are things like processing fees and other miscellaneous charges that are charged for processing your loan. If a loan officer makes money on the back, that means money is being received from the bank as a sort of commission for filing the loan. This is the money you do not see.
When lenders claim to be giving you a “no out-of-pocket” or “no-fee” loan, they are still making money, but they are charging it on “the back.” Although the bank is paying the loan officer this money now, it is really coming from you the borrower in the form of a higher interest rate. Lenders that are not charging fees on the front can be charging a higher rate to make up for lost fees. In fact, the bank could be making a lot more money this way as they are getting a higher rate of interest for possibly 30 years or more.
Comparing Loans How do you compare loans to be sure which deal is the best for you? Read More…
(Bloomberg) — Individuals with more than $800,000 to invest plan to increase their property holdings because they foresee better long-term returns than from stocks and bonds, according to a Barclays Plc global survey.
Twice as many people plan to raise their investment in commercial and residential property as intend to reduce it, the Barclays Wealth unit said in an e-mailed statement today. The richer the individual, the greater the proportion of wealth is placed in real estate, the survey found.
“I was surprised how big a share of their wealth property represents,” Mike Dicks, the London-based head of research at Barclays Wealth, said in an interview. “It’s not what I would tell grandma. None of our data suggests that would be a good allocation.”
The global recession pushed down commercial and residential real estate prices in every region except Asia. The value of U.S. shops, offices and warehouses fell 21 percent in the first three quarters of this year, following a 12 percent decline in 2008. Belief that properties are now undervalued was the second most common reason cited for increasing investment.
Real estate investment among wealthy individuals is set to rise to 30 percent of the average portfolio for the next few years from 28 percent now, according to the survey. That excludes properties used as a principal residence. Most rich people, other than the extremely wealthy, should have no more than 10 percent of their assets in property, said Dicks.
‘Emotional Attachment’
“An emotional attachment to bricks and mortar,” can mean that rich investors are often unwilling to sell real estate at short notice and may be less rigorous in measuring its performance as an asset, according to the report.
Well it seems that 50 Cent has a little extra money to burn in the mist of a recession. MediaTakeOut reported that 50 Cent is under contract to purchases this $18 million Beverly Hills estate being that he’s trying to get his Denzel on now days. The rap game has slowed up for Fif time to take it to Hollywood.
Forbes pose twenty two questions for real estate tycoon Donald Trump, check it out:
Net Worth: $2 billion Age: 63 Source of Wealth: Real estate
What’s the biggest business blunder you’ve ever made, and what did you learn from it?
Buying a yacht. It was an investment I couldn’t wait to get rid of.
What’s the one thing every first-time entrepreneur should know?
They should be prepared to go it alone–being an entrepreneur is not a group effort. It requires everything you’ve got.
What’s the last book or article you read that you’d recommend to other entrepreneurs?
Edward de Bono’s Six Thinking Hats thoroughly covers the process of thinking, and it’s a way to avoid blind spots if you are thinking alone. He coined the expression “lateral thinking,” and this book provides a comprehensive approach to using your brain in an efficient and effective way.
What one job should every person have to do at least once in their life?
Work in an emergency room, or observe one.
How do you know when to keep fighting or to cut bait?
That’s an instinct that can be developed, but it’s definitely an instinct that we all have. Paying attention to the signals is what is important–and heeding them.
Will/should the U.S. have universal health care?
That very much depends on how it is handled at the core level–which is extremely complex at this point. It’s not clear enough yet.
According to an article in today’s WSJ, the feds are slated to pump another $35B into state and local housing.
WASHINGTON — The Obama administration is close to committing as much as $35 billion to help beleaguered state and local housing agencies continue to provide mortgages to low- and moderate-income families, according to administration officials.
The move would further cement the government’s role in propping up the housing market even as some lawmakers push to curb spending at a time of rising debt.
The effort, which could be announced as early as this week, is aimed at relieving pressure on government-operated housing finance agencies, which have been struggling to find funding amid the downturn. These agencies, or HFAs, are a small part of the housing market but are critical to many first-time and low-income home buyers, who can get lower-rate mortgages through an HFA than they could through a private-sector lender. Rates are typically 0.5 to one percentage point lower than commercial lenders.
What’s the pull out strategy will be the topic of conversation this week when the Federal Reserves top honchoes meet up. The Fed dumped $1.45 trillion into the housing market with hopes of stabilizing it, but one thing they forgot about was to figure out how they were going to re-coupe all this money they forked over into the housing market. Its going to be interesting to see what they come up with so stay tuned. Below is a write up by forbes discussing the mess the Fed is in, Check it Out:
When the Federal Reserve’s governors and presidents gather in Washington on Tuesday and Wednesday, they will wrestle with the challenge of how to get out of the housing market.
With the economic crisis believed to be mostly over, the Fed has to figure out how to undo its extraordinary interventions. And none of those interventions have been more extraordinary than the Fed’s $1.45 trillion foray into housing.
To review: As the housing market went from sliding to plunging amid the worst of the Panic of 2008, the Federal Reserve announced a plan to buy $500 billion in mortgage-backed securities and $100 billion in debt issued by Fannie Mae and Freddie Mac (otherwise known as “agency debt”). These actions help hold mortgage interest rates down by providing cash to the markets. Lower interest rates make homes more affordable, thus helping to stop the fall in home prices.
In March, the Fed announced it would enlarge these programs–$1.25 trillion in mortgage-backed securities and $200 billion in agency debt. The Fed’s cumulative purchases have reached $840 billion of mortgage-backed securities, and it now has $124 billion of agency debt on its balance sheet.
Alexis Diaz has always been a natural born Actress. From the start of a young age she had participated in plays and competed in talent shows. Always driven she had attended Temple university in Philadelphia, where she received her Bachelors of Arts Degree in theater.MORE
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