Make a Profit AFTER Paying Yourself

Paula Pant

The biggest mistake I’ve made as an entrepreneur? Confusing my role as an investor with my role as the general manager.

As an investor, my role is to infuse money into a project or a company. Then I kick back and wait for the returns.

As the general manager, my role is to oversee the daily grind. I send emails, make phone calls, conduct research, source supplies, and do a hundred other tasks that amount to the nuts-and-bolts of the daily drudgery.

In many entrepreneurial ventures, it’s common to wear many hats — to be both the investor and the employee. In doing so, it’s easy to confuse “profit” with “paycheck.”

You Don’t Work For the Stocks You Own

If I bought stock in Coca-Cola, I wouldn’t be expected to renovate the Coke bottling factory, drive to the delivery warehouse when an order gets shipped, or design the next Coke commercial. As an investor, that’s not my job. My job is to raise the capital, accept the risk, and collect the return.

If I designed the next Coke commercial or drove to the warehouse to oversee shipping, I’d demand to be paid for my work, regardless of whether or not I also invest in the company.

Running your own business is no different. Recently, I’ve come to realize that as a real estate investor, I’ve been confusing my role as an investor with my job as the project manager.

Too many real estate investors – including me – think we can make a “bigger return” by doing the work ourselves. Newsflash: that’s not “making a return.” That’s taking on a second job (often a poorly-paying one).

Pay Yourself

As a business owner, my role is to say, “I need to hire someone at $X/hr, and their tasks will be …”

If I’m strapped for cash, I’ll hire myself. If I can find an equally-qualified candidate who will do the job for less, I’ll hire that person. If I’ve got money to invest, I’ll hire a more-qualified candidate.

But I shouldn’t perform a series of tasks myself, value that labor at $0, and then proclaim, “Hey look, I just made a 10 percent return!”

I’ve been making that mistake within my real estate investing projects. My recent decision to start delegating work, rather than doing everything myself, brought that reality to light. When you HAVE to put a monetary value on labor costs, the true profit margins come into sharp focus.

Profit vs. Paycheck

About a year ago, I wrote a blog

Article source: http://www.businessinsider.com/make-a-profit-after-paying-yourself-2012-4

SignatureMD Announces ‘Affordable, Portable, Personalized Care’ (APP Care …

LOS ANGELES, April 30, 2012 /PRNewswire via COMTEX/ –
SignatureMD, a leading provider of retainer-based, personalized health care in the U.S., announced today “Affordable, Portable, Personalized Care,” or APP Care, a program designed to address the needs of the middle class while helping to ensure the future of primary care, private practice physicians.

“The standard concierge medicine program is designed to be exclusive rather than inclusive. Typically, when a doctor converts to a retainer-based practice model, patients are given one choice: pay up or drop out. APP Care ensures that all patients can continue to see their primary care doctor, even if they opt not to join the program,” says Matt Jacobson, CEO, SignatureMD.

Those who do join enjoy a suite of services not available under traditional health care including 24/7 email and phone access to their doctor, no-wait doctor appointments, executive-style annual physicals and extended doctor visits.

The average concierge retainer for a doctor affiliated with SignatureMD is $1,650 per patient with substantial discounts for families. Concierge patients keep their insurance policies, which still cover prescriptions, radiological studies, hospitalizations and catastrophic illness. In fact, an average family of four can actually save money with APP Care by adjusting their existing insurance coverage to a plan with a higher deductible and using the savings to pay for the retainer.

“For so many people, the concept of concierge medicine seems elite – designed only for the rich. In reality, the vast majority of our concierge patients are middle class. In an age where the average doctor’s appointment is now only 8 minutes, people want a more personalized approach to health care that focuses on long-term prevention of chronic conditions rather than merely the treatment of symptoms,” explains Jacobson.

For physicians SignatureMD’s APP Care offers a recurring income stream that is not dependent on the vagaries of government and private insurer reimbursements. SignatureMD physicians deliver superior patient care and wellness planning by limiting the size of their practices to no more than 600 patients whereas traditional primary care practices are often saddled with 3,000 or more patients .

“Today’s healthcare system leaves physicians as frustrated as patients. It completely changes the dynamics of health care when doctors have the time to focus on each individual patient’s short-term and long-term goals. Our concierge plan gives both doctors and patients choices,” says Jacobson.

SOURCE SignatureMD

Article source: http://www.marketwatch.com/story/signaturemd-announces-affordable-portable-personalized-care-app-care-program-to-address-flaws-in-us-health-care-system-2012-04-30

Century Software expects boost to earnings

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PETALING JAYA: Century Software Holdings Bhd (Censof) is expecting an earnings boost after it bagged two government information technology (IT) contracts.

The contracts from the Social Security Organisation (Perkeso) and the Inland Revenue Board (IRB), although totalling RM39.1mil and not large by nature, are expected to be sufficient to lift the earnings of the ACE Market company.

Censof group managing director Datuk Samsul Husin (pic) is confident of doubling the company’s earnings for its year ended Dec 31, 2012. He said recurring income now contributed 20% of Censof’s topline, and this had been increasing every year whenever the company wins new contracts.

Censof group managing director Datuk Samsul Husin

For the year ended Dec 31, 2011, Ceosof’s net profit was down 27.22% to RM9.31mil on the back of a 36.61% increase in revenue to RM43.34mil. The lower profits were due to lower maintenance work from its Financial Management Software System (FMSS) division. Currently, the FMSS division contributes almost 90% to its profits.

Censof has RM8.85mil in cash and almost no debt on its balance sheet.

The new contracts will bring Censof’s order book to RM74.1mil, which will keep the company busy until June 2013.

“Our Perkeso contract will begin on Friday and will last for some 16 months. This contract requires customisation and has many of its own pecularities. Perkeso liked our proof of concept for the development model, and we were also a lot cheaper than some of the multinationals,” said Samsul.

An OSK analyst has an earnings forecast for Censof’s year ended Dec 31, 2012 of RM20.3mil, based on its existing contracts and full-year contributions from its newly acquired Indonesian Investment Management Solution arm, PT Praisindo Teknologi, which has gross margins of approximately 70%.

For the quarter to Dec 31, 2011, Censof completed the acquisition of a 60% stake in PT Praisindo on Nov 14, 2011, for a US$1.25mil (RM3.75mil).

PT Praisindo is now providing services to 22 banks, including PT Mandiri and BNP Paribas.

“We are confident of maintaining those high margins, as the overall cost for the solution provided is already quite low. While PT Praisindo’s contribution to bottomline is approximately 10%, we see this increasing as many of the existing clients are upgrading their solutions and the maintainance work is increasing,” said Samsul.

According to the OSK analyst, the company has identified another RM36.5mil worth of new projects it can tap.

Shamsul added that apart from the RM36.5mil contracts it was bidding for, it also recently bid for another contract for the provision of Goods and Services Tax software services. There are four competitors in this bidding process.

Last June, Censof was awarded the RM22.5mil Outcome-Based Budgeting project by the Finance Ministry. To date, the planning module of the system had gone live to all ministries.

At the same time, Censof announced that it has received two Letters of Award from the IRB for two contracts. Both contracts, with a total combined

Article source: http://biz.thestar.com.my/news/story.asp?file=/2012/4/30/business/11182151&sec=business

Must pay for chairs or sit on the floor

Savvy businessman … Patrick Russell, 8, who has earned and paid for his chair plus a spare that he now rents out to other children Evelyn Tong, 6, and Adeline Tong, 5 / Pic: Justin Lloyd
Source: The Daily Telegraph

LEARNING the value of money can be a tough lesson, literally. In an effort to help her young students grasp the meaning of worth, teacher Jamie Lee is offering her charges the choice – pay to rent a chair or save cash and sit on the floor.

Using a mini play-money economy and mock shops, Ms Lee hopes to encourage financial literacy among primary students through her Kids At Switch program.

“Habits are formed at a young age and many psychologists and researchers have proven that the best age to teach is about five to eight,” she said.

“I think kids today are very different from the generation before. They are assimilated into technology at such a young age. They know money can get them things but they don’t know the value behind it or which item is the most expensive.”

Ms Lee said parents were signing their children up to her private course because they want their kids to turn from “lolly buyers” to savers and careful spenders.

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“My goal is to help kids learn to have their passive income higher than their expenses. They can buy things in the shops but they have to pay me for their expenses so every week they have to pay rent for their chairs.

“If they don’t pay, they have to sit on the floor.

“Two boys bought chairs and one is determined to buy another chair so he can rent it to his friends at a higher price.

“He is only in Year 3 but learning about property and money without realising it.”

The federal government last year committed $10 million to financial literacy in schools, using experts from the Australian Securities and Investment Commission to help improve teachers’ skills.

A 2009 study of the finance skills of

Article source: http://www.news.com.au/money/cost-of-living/knowledge-is-power-and-money-as-children-learn-a-valuable-lesson-in-life/story-fnagkbpv-1226342290626

Arabtec weighs on Dubai’s DFM

Arabtec Holding weighed down Dubai’s stock market yesterday as investors sold shares amid valuations that analysts said were unjustifiably high.

Arabtec, the builder behind the Burj Khalifa, the world’s tallest building, fell 4.7 per cent to Dh3.43. The Dubai Financial Market General Index fell 0.7 per cent to 1,639.44.

Arabtec, which has risen more than 100 per cent this year, is trading at 30 times earnings, compared with regional peers that are trading at six to nine times earnings.

“Arabtec is not a cheap stock and has reached a very dangerous price,” said Fadi Al Said, a senior fund manager at ING Investment Management in Dubai.

Emaar Properties rose 0.3 per cent to Dh3.26. It reported a first-quarter profit of Dh606 million, a 44 per cent rise from last year. Analysts polled by Bloomberg expected the company to report a profit of Dh566m.

“Emaar’s diversification strategy, in terms of revenues, makes it among the most resilient real estate plays in the market,” said Marwan Shurrab, the chief trader at Gulfmena Investments in Dubai. “Despite the fact that markets are taking time to turn around, Emaar continues to outperform because of its recurring income.”

The Abu Dhabi Securities Exchange General Index rose 0.1 per cent to 2,512.17.

Kuwait’s measure was little changed at 6,336.50, Bahrain’s gained 0.2 per cent to close at 1,148.50, Oman’s MSM 30 Index advanced 0.5 per cent to 5,870.75, and Qatar’s QE Index added 0.3 per cent to finish at 8,687.83. The Saudi Tadawul All-Share Index fell 0.6 per cent to 7,555.77.

halsayegh@thenational.ae

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Article source: http://www.thenational.ae/business/markets/arabtec-weighs-on-dubais-dfm

Sorouh profit rises 22% as project revenues grow

Abu Dhabi: Developer Sorouh Real Estate said yesterday the evaluation process to look at the legal and business aspects of a potential merger with the emirate’s largest real estate developer Aldar Properties is under way.

“The ultimate outcome of this process will take into account the best interests of shareholders. A further update will be made as and when appropriate,” Sorouh said while announcing its first quarter results.

On March 11, Sorouh and Aldar announced that they were in early discussions to evaluate the possibility of a merger. Sorouh said its first quarter net profit jumped 22 per cent year-on-year to Dh92.8 million while revenue grew a whopping 114 per cent to Dh967.2 million year-on-year. Its stock closed 1.77 per cent higher at Dh1.12 on the Abu Dhabi Securities Exchange yesterday.

Short-term obligations

Article continues below

Reacting to Sorouh’s performance in the first quarter, Marwan Shurrab, vice president at Dubai-based Gulfmena Investments, told Gulf News: “The first quarter numbers showed strong performance for 2012, indicating the ability to generate liquidity to meet obligations in the short term.”

Shurrab added: “The growth we are seeing in gthe first quarter supports the market performance in the year-to-date, giving indication that future growth will further support the financial performance of the company.”

Higher net profit represents a “continued strengthening of sustainable recurring income from Sorouh’s investment portfolio and revenues from its national housing projects,” Abu Dhabi’s second biggest developer said.

The company also said its revenue from national housing projects increased significantly, generating Dh62 million in gross profit.

“Revenues from investment properties grew 14 per cent year-on-year to almost Dh50 million. The company is on track to reach its target of Dh500 million of recurring income by 2014,” Sorouh said.

Managing director Abu Baqer Seddiq Al Khouri said: “We continue to diversify our revenue streams which will support the quality of our earnings over the medium to long term. The current flight to quality with Abu Dhabi real estate leaves us well positioned to deliver an exciting project pipeline of some 7,000 units between now and the end of 2013.”

Article source: http://gulfnews.com/business/property/uae/sorouh-profit-rises-22-as-project-revenues-grow-1.1015462

Knowledge is power and money as children learn a valuable lesson in life

Using a mini play-money economy and mock shops, Ms Lee hopes to encourage financial literacy among primary students through her Kids At Switch program.

“Habits are formed at a young age and many psychologists and researchers have proven that the best age to teach is about five to eight,” she said.

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Ms Lee said parents were signing their children up to her private course because they want their kids to turn from “lolly buyers” to savers and careful spenders.

“If they don’t pay, they have to sit on the floor.

“Two boys bought chairs and one is determined to buy another chair so he can rent it to his friends at a higher price.

“He is only in Year 3 but learning about property and money without realising it.”

The federal government last year committed $10 million to financial literacy in schools, using experts from the Australian Securities and Investment Commission to help improve teachers’ skills.

A 2009 study of the finance skills of 10 to 12-year-old children discovered 82 per cent found it difficult to equate simple maths calculations to concepts involving money.

Working out cash change, account balances and mobile phone charges were hard tasks for the upper primary students, the research found.

Amit Malhotra has signed his son Bivyesh, 8, up for a second term at Kids At Switch.

“Only yesterday he was choosing between the Sony and Nintendo (computer games systems) and he was thinking in terms of Sony is the dearer one, $120 more and has less games but the other one is older technology but he will have games that are better and less expensive,” Mr Malhotra said.

“Bivyesh is thinking there is a financial angle to everything now and

Article source: http://www.dailytelegraph.com.au/news/sydney-nsw/knowledge-is-power-and-money-as-children-learn-a-valuable-lesson-in-life/story-e6freuzi-1226342154671

RICK KAHLER: Tax rates vary depending on ‘ordinary,’ ‘passive’ income

The recent discussion of the “Buffett Rule” proposal to increase taxes on the wealthy has focused attention on U.S. tax rates. It’s giving Americans a chance to better understand our tax policy and the economics of the free market system.

Mitt Romney, the probable Republican presidential candidate, has come under attack from both Democrats and other Republican primary candidates for his high income and net worth and his low overall tax rate.

The arguments are that Romney made his money by the wrong type of capitalism and that he pays too little in federal taxes.

The tax returns Romney has made public show most of his money comes from investment returns on his holdings rather than from wages or a salary. His overall tax rate in 2010 was 13.9 percent and his estimated rate for 2011 is 15.4 percent. This caused a predictable outcry that his tax rate is lower than the income tax bracket of many middle class Americans.

President Obama’s 2011 tax return shows a tax rate of just over 20 percent. Former Republican candidate Newt Gingrich paid 31 percent of his 2010 income in federal taxes.

To the uninformed, these varying tax rates initially look unfair. What many people don’t understand is the big difference between “ordinary income” (from wages, a salary, short-term capital gains and interest) and “passive income” (from stock dividends and long-term capital gains). The federal government taxes ordinary income at up to 35 percent and passive income at 15 percent.

Why the different rates?

First, let’s look at dividend income and long-term capital gains taxes on investments held over 12 months. Dividends come from corporations that must first pay income taxes on any profits. Long-term capital gains come from shares of a company purchased and held for more than 12 months.

Since the effective corporate rate is 39.2 percent — the top federal rate and the average state tax rate — the corporation has already paid taxes on all income, including what is paid out to investors as dividends.

Before the Bush tax cuts in 2001, dividends were then additionally taxed at almost 40 percent. This meant every dollar of dividend income was taxed twice, once at the corporate level and again at the individual level.

The result was that 60 cents of every dollar of profit made by a company were paid to the federal government. The Bush tax cuts continued the practice of double taxation, but lowered the amount paid at the individual level to 15 percent.

The same double taxation applied to long-term capital gains, except that the tax rate was a flat 28 percent before the Bush tax cuts reduced it to 15 percent.

This double tax makes it seem that the wealthy pay less tax than they really do.

An individual may pay 15 percent on passive income of, say, $5 million. Yet corporations have already paid taxes of around 39.2 percent on that same income, for a total tax rate of 54.2 percent.

Of the $5 million in profit, over $2.5 million goes to Uncle Sam. That would seem to be

Article source: http://rapidcityjournal.com/business/rick-kahler-tax-rates-vary-depending-on-ordinary-passive-income/article_bd4b4982-9099-11e1-8b0d-001a4bcf887a.html

Bumi Serpong Damai Profits on Property Sales in Banten Site

Bumi Serpong Damai Profits on Property Sales in Banten Site
Jakarta Globe | April 29, 2012

Sinar Mas Reports 132% Profit Growth, 2011 3:02pm Mar 2, 2012

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Indonesian Palm Oil Giant Vows to Save Forests 8:57pm Feb 9, 2011

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Listed property developer Bumi Serpong Damai booked a 64 percent increase in net income in the first quarter compared to a year earlier on the back of strong property sales, the company said on Sunday.

BSD’s net income rose to Rp 265 billion ($29 million) from Rp 162 billion, it said in a statement. The higher earnings were supported by a 29 percent rise in operating income to Rp 800 billion from Rp 621 billion.

The company has seen strong demand for houses, commercial buildings and offices in satellite cities that it operates directly or through a subsidiary, said Hermawan Wijaya, a BSD director and corporate secretary.

BSD, which is part of diversified conglomerate Sinar Mas Group, operates BSD City, a fast-growing satellite city in the Serpong area of Banten. BSD City is 25 kilometers west of Jakarta.

“The strong demand also pushed up the price of land in the area that we manage, both for newly offered units and secondhand units,” Hermawan said in the statement.

BSD also said that it reduced its financial burden by 55 percent after paying off Rp 600 billion worth of bonds it issued in October 2011. This will allow the company more flexibility to secure financing from external parties for its business expansion and that of its subsidiaries, it said.

In 2011, BSD trimmed its debt to banks by 32 percent to Rp 97 billion. In August 2010, the company took over three affiliate subsidiaries under Sinar Mas Group, which wanted it in order to diversify its portfolio with recurring income from offices, trade centers, hotels and mall operation.

The hospital at the Serpong site is one of only five in Indonesia with international accreditation.

The company’s shares rose 2.1 percent on Friday to Rp 1,450.

Article source: http://www.thejakartaglobe.com/business/bumi-serpong-damai-profits-on-property-sales-in-banten-site/514833

Abu Dhabi’s Sorouh reports 22% profit increase in first quarter

UAE. Sorouh Real Estate, the Abu Dhabi-based real estate developer (ADX: SOROUH), today announces its first quarter results for the period ended 31 March 2012.

Q1 2012 Financial Highlights:

Q1 2012 Operating Highlights:

 Strong start to 2012 – Q1 revenues more than doubled year-on-year to almost AED 1 billion.

 Net Profit up 22% year-on-year, representing a continued strengthening of sustainable recurring income from Sorouh’s investment portfolio and revenues from its National Housing projects.

 Revenues from National Housing projects significantly increased, generating AED62 million in gross profit in Q1.

 Revenues from investment properties grew 14% year-on-year to almost AED50 million in Q1. The Company is on track to reach its target of AED500 million of recurring income by 2014.

 Almost all sold units for Sun Sky Towers have now been handed over. Handed over units generated a gross profit of AED33 million in Q1. The average development margin for the project was 17 %, in line with previous guidance.

 Robust financial position, with cash collections of approximately AED450 million in Q1. AED1,503 million of cash on balance sheet with low gearing of 42%.

Abubaker Seddiq Al Khouri, Managing Director, Sorouh, commented: “I am pleased to be able to report a strong start to 2012. These results reflect the strength and maturity of our business. We continue to diversify our revenue streams which will support the quality of our earnings over the medium to long term. The current flight to quality with Abu Dhabi real estate leaves us well positioned to deliver an exciting project pipeline of some 7,000 units between now and the end of 2013.”

Q1 2012 Development Portfolio Update

Master-Planned Communities:

Shams Abu Dhabi

 The hand-over of sold units at Sun Sky Towers is almost complete and leasing of residential and commercial units is progressing well. Over 900 families now live at the development.

 Commercial tenants at Sun Sky Towers include the Austrian Embassy, Agthia Group, Al Ramz Financial Services, Advanced Integrated Systems and Arabian Construction Company. Waitrose will be opening from June 2012, and other retail outlets have begun to fit out.

 The Gate Towers are advancing rapidly and are now 75% complete. At present, two of the four sections of the penthouse bridge structure have been raised and locked in place (the highest ever construction lift for a real estate development). This will house the unique penthouses at the Gate Towers.

 Sorouh has completed the infrastructure on Shams Abu Dhabi, with 12 sub-developer plots under construction. Three sub-developer projects are expected to be completed in 2012.

alghadeer

 The development is progressing well, with infrastructure at an advanced stage. The development is on track for phased completion and delivery at the end of 2012 through Q1 2013.

Saraya

 All infrastructure works at the Saraya master-planned development, near the Abu Dhabi Corniche, are complete and four plots are currently under construction by sub-developers. This is a positive development for the location and is a catalyst for other sub-developers. It has also created an interest in the secondary market for the sale of land plots.Article source: http://www.bi-me.com/main.php?id=57598&t=1&c=33&cg=4&mset=

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