Good morning & happy Monday!
What I see is telling me this world’s gone crazy, but what is real says God’s still on His throne. What I need is to remember one thing, that the Lord of gentle breeze is the Lord of the rough and tumble and He is the King of the jungle.
Steven Curtis Chapman, music artist, from his song “King of the Jungle”
Anyone else feel like the world’s gone crazy? That song was released in 1994, I don’t know about you, but I think the world has gotten even crazier since then! We don’t have to look far to feel like everything around us is going up in smoke. From war, to gas prices, to government policy, to inflation, it seems like virtually nothing is stable.
And what about the stock market? That most certainly feels like it’s gone crazy too!
What the heck is going on … and what are we supposed to do about it???
I propose that we all take a big deep breath and take a step back and realize what we are truly doing when we invest.
What is equity (stock market) investing? We are purchasing an ownership stake in a business.
Do business values change? Of course they do!
I am the 100% owner of Intentional Wealth. If I were to sell this business (not even considering it, just for the record) what would someone be willing to pay for it? Well, that depends on a bunch of factors. What are the firm’s revenues & expenses? How many clients do I have? How much money do I manage? Is the business growing or shrinking? Are the clients loyal? What is the outlook for the industry? What are other businesses of similar makeup selling for? How profitable is the business? These, and many more, would all be things a potential buyer would consider if they were interested in purchasing Intentional Wealth.
Would the value of Intentional Wealth change over time? I would have to image it would.
I have been exceptionally blessed to have a growing business. I recently reviewed an old investment report to see how my business has grown over the last handful of years. My firm’s investment revenue has grown a little over 300% over the last 4 years (I am absolutely blown away by my amazing clients and the growth we have been able to achieve together … THANK YOU!!!). Despite a significant increase in expenses associated with starting Intentional Wealth I have been able to increase the profitability of the firm over the last number of years. I would have to imagine that my business is worth more today than it was 4 years ago. Lord willing, it will be worth more 4 years from now than it is today.
Here’s the thing: I’m not selling Intentional Wealth. Not anywhere close to even considering it. I love what I do, I love the clients I serve, and I can’t image selling the business any time soon. Intentional Wealth is not for sale, no one else is able to purchase an ownership stake in this business. However, we all have an opportunity to purchase ownership stakes in incredible, profitable businesses every trading day. If you hear the term “publicly traded company” that means you and I can be a partial owner of that company through stock ownership.
As equity (stock) investors we are business owners too, except we get to collect the profits (dividends) without putting in the work or taking on the expenses. In addition, we have the potential of making money off the sale of the business when we decide to sell our ownership stake. Of course, that also means that the value of my business could be worth less than what I paid for it … a risk anyone who is purchasing a business would need to understand & accept.
Does owning a business involve risk? No doubt. If someone were to buy my business, would they expect to turn around and sell the business for a significant profit in a short period of time? Probably not. Would they think the value of the business would increase consistently and steadily every single day? I hope not, that’s not how virtually any business I know of operates. Does owning a business take patience in order to realize its true long-term potential? You bet ya’. On a long-term basis, is owning a business a very efficient way of generating meaningful wealth? It’s the best way I know how.
I was a licensed Financial Specialist @ First Union National Bank in 2001 as a 21-year-old senior in college. Seems like yesterday and forever ago all at the same time. At such a young age I would be able to observe all sorts of people in that environment and after a while I noticed a trend … it seemed that the business owners as a general rule were the wealthier of my clients.
My friends, we all have the chance, through equity ownership, to be business owners as well. I believe it is an amazing thing and an incredible opportunity. Risk free? By no means. Rewarding? History teaches us it has been richly rewarding.
I understand it’s a crazy world and emotions can run high, but please don’t lose sight on what we are doing here … as equity investors we are owning companies as a means of funding our financial goals. I know it can be challenging at times, but stick to the plan and stay the course.
Please feel free to reach out if there is anything my team or I can do to support you.