By Joe Palumbo
So you stayed up a little later than you should have this past Saturday night watching TV and somehow found yourself zeroed in on an infomercial. It’s those special paid-for commercials covering various items on how to make a fortune buying and selling real estate to making a ton of money in mail-order.
There is a franchise credit card machine business that claims all you have to do is go to your mailbox and collect the money. So you’re sitting in that nice comfortable chair at home and you begin to feel like a financial chump.
You think to yourself, “I should be making that kind of money” instead of enduring all the stress of your daily 9-to-5 job where you’re not appreciated. So you may aspire to invest in real estate, buy a franchise, start your own business or even become a landlord.
What must be remembered is that everyone is different and we do not live in a one-size-fits-all society. Though you may be adapted to a given business, success is not guaranteed.
Business ventures sometimes fail, and success does not mean you will be rubbing elbows with Michael Dell. The lowest-risk route for the entrepreneur is the way of the franchise. But I have seen some well-known household names such as Burger King go belly up.
Real estate sounds like easy money, but is it? If you’re buying for the purpose of a profitable resale renovation, are you prepared to outlay for property taxes, insurance, maintenance and loan payments (after all, they’re telling you you’re buying with no money) for the duration of the renovation and sale period?
Oh, yes, there is also the expense of the real estate commission. Now don’t get me wrong. There is a great potential in pursuing the direction of an entrepreneur. What must be understood, however, is that one must have a strong mental framework enabling him or her to be comfortable in taking risks — sometimes enormous — with the great possibility of business failure and mounting debt.
Sam Walton, the famed creator of Walmart, many times owed much more money than he had before his company finally found legs. But history has displayed that it can be done.
So how’s business in the get-rich-quick profession? If you’re selling the programs or the books or collecting seminar fees as a financial guru they can be quite profitable, as Tony Robins has proven from his comfortable home in Hawaii.
Joe Palumbo is the fund manager of The Palco Group Inc., an investment company, and can be reached at palcogroup@aol.com or 718-461-8317.
