investment
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What is Wealth?
The answer to this questions might seem a little abstract. Usually, when we think about wealth, things like money, properties and other sort of assets come to our minds. However, the definition of wealth is much broader than that. Some books refer to it as the time that you would be able to live in…
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Margin of Safety
One of the difficulties when starting a business is predicting the volume of sales and costs in the future. You don’t need to be a genius to guess that it’s impossible to know exactly what is going to happen, either if your product will be a complete success or that a competitor will launch another…
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Revenues and Costs, Some Aspects
I’ve been living abroad for a while, as many people are doing these days. A common topic of discussion among expats is the salary you can earn in a certain country. It is funny to see people who move to countries like the United Kingdom, the Netherlands or Germany to find not only opportunities but…
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What is ROI?
You have a pool of available funds that don’t require an immediate use in the company. Then you decide to invest it and you look at different options in the market: stocks, deposits, bonds, a new machine, a computer, a building… It doesn’t matter, the most important is that it meets the definition of an…
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Assets
Imagine for a minute that your business is reaching its maximum production capacity. Profits are higher than ever and you can’t satisfy the demand of your product. Another example. You want to travel all around the world. Therefore you decide to learn a new language. Or maybe you develop a new computer software that can…
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Understanding bad expenses and bad debt
Thanks to the earnings of our company, we may have the desire to buy something that makes us feel good. Maybe a new car or a house, because our family is growing, or that fancy mobile phone that takes high quality pictures and go on holidays to the most remote location on Earth. Sometimes, when…
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Compound interest
When we’re watching or reading the news, we often hear about inflation hitting -once again- the consumer price index and increasing the cost of living. Also, when we ask for a loan, we need to pay a certain interest for it. If we own some stocks or government bonds, we might receive also a percentage…
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