Theory | wealthymatters

The 8 Rules Of Dividend Investing

November 11, 2019 Leave a comment

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Dividend investing involves accumulating stocks that issue dividends to generate a steady stream of passive income.

Rule #1: The Quality Rule

Invest in high quality businesses that have a proven long-term record of stability, growth, and profitability. There is no reason to own a mediocre business when you can own a high quality business.Rank stocks by dividend history and corporate history ,the longer the better. Stocks must have paid steady or increasing dividends through the worst periods of financial stress and turmoil to be eligible for inclusion in your portfolio.

Rule #2: The Bargain Rule

Invest in businesses that pay you the most dividends per rupee you invest. All things being equal, the higher the dividend yield, the better. Additionally, only invest in stocks trading below their historical average valuation multiple to avoid investing in overpriced securities. So rank stocks by dividend yield. Only stocks trading below their say 10 year historical average valuation multiple are eligible for inclusion in your portfolio.

Voya Corporate Leaders Trust – The Virtue Of Sloth

November 11, 2019 Leave a comment

Ever wondered what might happen if you just bought some leading stocks,once only ,early in your life,and simply held onto them for a life-time ? Generally practiced sloth? Arousing yourself perhaps only if a company went bankrupt or stopped dividends ?

Then here is a story for you : Read more of this post

Filed under Paper Assets, Theory, Tool Kit Tagged with Investing, mutual fund, portfolio, postaday, scripts, shares, stocks, Voya Corporate Leaders Trust

What Makes The Current Times So Great For Family Businesses ?

August 7, 2019 Leave a comment

wealthymatters A commonly cited statistic is that only 30% of family businesses make it through the second generation, 10-15% through the third, and 3-5% through the fourth.

Now for some perspective : How many businesses of any kind are still around after the equivalent of three or four generations? A study of 25,000 publicly traded companies from 1950 to 2009 found that, on average, they lasted around 15 years, or not even through one generation! In this context, family businesses look pretty enduring,don’t they?

In the hyper competition of the Fourth Industrial Age, family businesses have innate strengths over others forms of ownership, especially public companies. In the Second and Third Industrial Age, businesses had access to vast opportunities, which meant that winning strategies revolved primarily around size. Public companies had a clear advantage while raising massive capital. But firms today are no longer looking at endless opportunities. Instead, they have to struggle for their very survival in an intensely competitive world of slower growth and more frequent economic crises. Read more of this post

Filed under Entrepreneurship, Theory Tagged with advantages of family business, agile business, captive capital, corporate governance, employment, family business, Fourth Industrial Age, higher calling, investment, postaday, principal-agent problem, rapid response, reputation, sustainable footprint, talent

Ownership, Inheritance, Succession And Control In Family Businesses

July 30, 2019 Leave a comment

Starting-up and getting a business to stabilize and start paying off, is one sort of challenge.At the time,an entrepreneur might even be glad to have family and relatives pitch in and give them a helping hand.

Its only a little later that a whole lot of other challenges crop up.People who bear risk ,put their own life and priorities on hold or put in substantial efforts into a business expect that their contributions will be rewarded,not just perhaps in the form of a one-time or limited pay-out but in terms of a share of future profits and control over the business,so that they can guarantee and determine the quantum and timing of payouts.Perhaps even these challenges could be managed by having open discussions with all concerned ,ensuring full buy-in and clearly recording what is owed to who and why. Read more of this post

Filed under Entrepreneurship, Theory, Tool Kit Tagged with compensation, core business, daughters in family business, family business, family business ownership and control models, founder, free loaders, inheritance and succession in family business, nested model, owner-manager, partnership model, postaday, private company, profit distribution, public model, successor

The Pros And Cons Of Requiring Children To First Work Outside The Family Business

July 12, 2019 Leave a comment

wealthymatters Generally,the term ‘family business‘ evokes plenty of envy,fueled by images of no-account inheritors living it up,even as other meritorious souls in society don’t get a chance to take the easy road to the good life…….of concentration of wealth in the hands of the few,to the detriment of all others.

Under the circumstances,business schools,family-business consultants and the media today,feel the need to recommend that people work for at least 5 and sometimes 10+years outside the family business.In fact the education system feels the need to socialize children to seek success in fields far removed from their parents own occupation.Besides business families themselves feel it good PR today to talk of how their children won their spurs outside the family business and so are not mere inheritors.

Here are the pros of first requiring family members to work elsewhere before entering the family business : Read more of this post