2nd September 2010

4 Mega-Companies That Started in Garages

Some of the world’s biggest companies came from the most humble of beginnings. Here are four major corporations who’ve each starred in their own rags-to-riches story.

Google Inc. (Nasdaq: GOOG)
“On September 7, 1998, Google Inc. opened its door in Menlo Park, California. The door came with a remote control, as it was attached to the garage of a friend who sublet space to the new corporation’s staff of three.” — Google’s Corporate History

Just days before that garage door opened, Google
co-founders Larry Page and Sergey Brin moved out of the dorms, officially incorporated the Google name, and finished raising $1 million from a handful of investors. A friend of Brin’s, Susan Wojcicki (now Google’s VP of product management), needed help paying the mortgage on her 1,900-square-foot home in Menlo Park, and agreed to lease the garage for $1,700 per month to the 25-year-old Stanford grads.

For the five months Google operated out of Wojcicki’s garage, Page and Brin alternated between tinkering with their search engine’s now legendary algorithm, soaking in the hot tub, and raiding the refrigerator for midnight snacks — a habit that may have inspired Google’s free-food policy for all its employees.

By the end of 1998, Google (still in Beta mode) had indexed nearly 60 million pages and was being praised for providing better search results than its competitors. They moved out of Wojcicki’s garage in March 1999, and after quickly outgrowing three other locations, settled down at the 26-acre complex fondly referred to as the “Googleplex.” On the company’s 8th birthday, Google purchased the garage (and the attached home) and plan on preserving it as part of its legacy.

Dell (Nasdaq: DELL)
The University of Texas at Austin campus is known for stimulating the minds of its undergraduates — the grassy fields, the sprawling trees and the traditional architecture of the revered halls are all filled with inspiration. But Michael Dell didn’t have his revelation in the class room. He found it in his dorm room.

It was in room 2713 that he ran his informal business, building and selling custom-ordered personal computers under the name PCs Limited. By selling directly to the customer, Dell cut out the middleman and kept prices lower than his competition. That bright idea set the young entrepreneur apart, and by 1985, the 19-year-old dropped out of school and moved his business to an office center in North Austin that he purchased with his profits.

Dell is now one of the largest tech companies in the world, and is ranked #38 on the Fortune 500 list.

Nike, Inc. (NYSE: NKE)
Before it became the world’s leading supplier of athletic gear, Nike wasn’t Nike — it was “Blue Ribbon Sports.” And for the first two years, you couldn’t find it at any retailer. Blue Ribbon Sports operated exclusively out of the trunk of Phil Knight’s green Plymouth Valiant. That’s right, Nike started in the trunk of a car.

Blue Ribbon Sports was founded in January 1964 by two University of Oregon men — track athlete Knight and his coach, Bill Bowerman. The company originally operated as a distributor for Japanese shoe maker Onitsuka Tiger. While Knight sold shoes at track meets, Bowerman, always on the search for the competitive edge, was ripping them apart to see how he could make them lighter and better. He recruited his runners to test his designs.

In 1966, the two opened the company’s first retail store in Santa Monica, California, and business grew quickly. Blue Ribbon Sports split from Onitsuka Tiger and launched its own line of footwear, bearing a newly designed “swoosh.” In 1978, BRS, Inc. officially renamed itself Nike, Inc.

Dyson
Just as Nike was getting its official start, Dyson was coming into being across the pond. In a dirty living room.

In 1978, James Dyson was growing more and more frustrated with his Hoover vacuum cleaner.  As he tried to clean his living room, dust clogged the fine mesh pores of the bag and blocked airflow, causing the machine to quickly lose suction power. Even emptying the bag had no effect. Tired and frustrated, he set to work on developing a more efficient vacuum cleaner.

While visiting a local sawmill, Dyson noticed that large industrial cyclones were removing sawdust from the air. Inspired, he dismantled his Hoover machine and fitted it with a cardboard recreation of the sawmill cyclones. During his initial tests, Dyson found his cardboard prototype picked up more dust than his bag model!

For five years, Dyson faced rejection from every major vacuum manufacturer. He and his wife were seriously in debt, and they even began growing their own vegetables and sewing their own clothes to support the ongoing project. A determined Dyson persevered, and he went on to manufacture, market and sell his design. Today, Dyson is one of the most widely-recognized appliance manufacturers, constantly wowing consumers with innovative and stylish solutions to everyday problems.


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    31st August 2010

    Little White Lies from Your Broker

    In recent years, there has been a tectonic shift as Wall Street brokers leave their big firms to set up shop on their own. Generally speaking, such a move is bad news for the biggest clients as they are able to participate in hot IPOs and other transactions, and they may lose that access when a broker jumps ship. But for the rest of us, this transition is good news, as the newly independent broker can simply focus on your needs and not the big brokerage’s needs. Big firms won’t always act in their client’s interests. As we recently saw with Goldman Sachs (NYSE: GS), when there is a conflict of interest, the house always wins.

    To make sure your broker is watching your back, keep an eye out for these pitches.

    1. “My analyst loves this stock.”

    If your broker is pushing a stock idea on you, it’s at least a few days old, and perhaps a lot longer than that. The best ideas are first shared discreetly among the firm’s most favored clients, and even more egregiously, with the firm’s proprietary trading desk. Ever wonder how these internal trading operations seem to make money, even when their clients lost money? Now you know. And sometimes, a firm decides that its traders hold too much of a certain stock. And guess who has been told to help get rid of those shares? The broker. The solution: work with folks who have zero conflicts of interest.

    2. “We got this stock at a great price for you.”

    Read the rest of this entry »


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    27th August 2010

    The First Million is the Hardest

    It’s true that it’s easier for the rich to get richer. That first million is by far the toughest to make. But once you’re there, it gets much easier to make the next million.

    When you already have money working for you, each percent of return adds more to your worth. Earning 10% on $10,000 gives you $1,000. Making 10% on $1,000,000 gives you $100,000. 

     Let’s look at what it takes to accumulate your first million. Assume you regularly invest a monthly amount at a given return. Using the power of compounding, the table below shows you how many years it will take you to reach your first million. We’ll assume you’re starting from zero.

    You might wonder why I chose $1,375 as the last monthly contribution. That number happens to be the maximum amount an individual can contribute to their 401k in 2010, divided by 12 months.

    As we’ve already mentioned, after you reach your first million it takes less time to make your second. When you start from $1 million, you can take advantage of the effect of compounding on that first $1 million. 

    If you consistently put away as much as you can afford, it is possible to have $2 million in 26 years if you contribute the maximum to your 401(k) and achieve a 10% return. Even better, some companies will match some of your contribution, helping you reach your million-dollar goal even faster.

    The taxman even wants to help.  He’ll give you a break when you save in tax deferred accounts like 401(k)s and IRAs. If you are in the 25% marginal tax bracket and you contribute $200, your out of pocket cost is only $150. Now you have a little more money to contribute to help you become a millionaire even sooner.

    The most difficult part is getting started. Once you begin, it becomes easier. So, what are you waiting for? Sign up today to have that monthly allotment taken out of your paycheck. Then increase it ever so slightly every six months until you reach the maximum contribution level. Before you know it, you will be well along your way to your first million.


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    25th August 2010

    The 6 People Who Owe Their Fame to the Recession

    While most of us were busy clinging to jobs, hoarding cash and delaying retirement plans, a few lucky people capitalized on the opportunities created by the Great Recession of 2008.

    Nouriel Roubini

    You have to admit, Nouriel Roubini was screaming “danger” from the mountaintops well before the financial system fell apart. The NYU professor of economics had been dismissed as somewhat of a fringe element when in September 2006 he told the IMF, “The United States was likely to face a once-in-a-lifetime housing bust, an oil shock, sharply declining consumer confidence and, ultimately, a deep recession.”

    Labeled “Dr. Doom” by the New York Times and CNBC, Roubini has found widespread acclaim in light of his foretelling of the recession. Nowadays, when Roubini speaks, the markets listen. Dr. Doom was ranked #4 on Foreign Policy magazine’s list of the “top 100 global thinkers.” Additionally, he has spoken before Congress and the influential Council on Foreign Relations.

    Nassim Nicholas Taleb

    Before Nassim Nicholas Taleb wrote the book Fooled by Randomness in 2001, he was a financier, having worked at world-renowned financial institutions including UBS, Banque Indosuez and the Chicago Mercantile Exchange. Fooled By Randomness brought him distinction as a writer with a keen understanding of financial markets, but his follow-up, The Black Swan, published with perfect timing in 2007, truly launched him to rock-star status.

    Like Roubini, Taleb spotted the Ponzi scheme that was our financial system years ahead of the crowd, and he wasn’t shy about taking the banks to task. He recognized that with widespread sharing of risk comes the greater chance of a devastating domino effect. When his prophecies came to fruition, his books gained increased notoriety for having foretold the crash.

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    23rd August 2010

    Don’t Believe Everything You Read in Get-Rich-Fast Books

    Robert Kiyosaki, says he went from bankrupt homeless person at 38 to retired multimillionaire at 47. His story has inspired me to start writing a paperback telling fatties they should eat more chocolate and watch more TV if they want to look like supermodels.

    The success of the Rich Dad, Poor Dad franchise shows that a book titled Making Money Is Extremely Hard Work just won’t sell. This may be why most of the books I recommended have to be ordered while you’re bound to find Kiyosaki’s paperbacks in your CNA.

    Kiyosaki – now 63 and still scribbling away suspiciously much for a supposedly retired tycoon – tells stories about how his hard-working university graduate dad ended up poor while the high school drop-out dad of the kid next door became rich.

    It is enjoyable fiction, unfortunately pretending to be fact. Much of Kiyosaki’s advice is extremely dangerous, especially for the lazy, uneducated market at which it is pitched.

    Wall Street Journal personal finance writer Jonathan Clements kicked off his review Rich Men, Poor Advice: Their Book Is Hot, But Their Financial Tips Aren’t: “My entire career has been a pathetic waste of time. Or so Igather from Robert Kiyosaki and Donald Trump.

    “You know all those articles I have written about saving diligently and buying mutual funds? This ‘may be good advice for the poor and middle class, it is not good advice for people who want to become rich,’ according to Why We Want You to Be Rich, the new book from Messrs Kiyosaki and Trump.

    Clements concludes: “Don’t rush to dump your funds quite yet.”

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    21st August 2010

    Playing Games Online For Cash

    There are a great many computer games available online. If you have been playing online games for a while it might be time that you put your skills up to the task and see if you can win some cash for playing these online games . You really don’t have to be a professional gambler to win some cash from these sites. Just play online and see if you have what it takes to win some money with your skills. Some of the games are not games of chance but instead games of skill and these are the ones that you should be looking for. These types of games will mean that you have to put some practice into the games and get really proficient at playing. You will not be participating in a get rich quick scheme, just a way to put some of your online gaming skills to the challenge.

    All you will have to do if you want to play some of these games for cash is find a site that offers this type of gaming. Deposit your money into your online account and get playing the games. There are free games on the sites in most cases so you can get some practice in before you begin playing the cash games.

    Most of the games that you will play will match you up against other players who are playing at the same skill level as you. This will make the games more of a challenge and give you the opportunity to make some cash. Make sure that you play on a site that matches the players up against those that are in their same skill class.

    One thing that you should keep in mind when you are playing these games for cash is that you should never spend money that you don’t have. If you are finding it hard to pay your bills, online gaming is not a good idea. There is still the possibility that you will lose your money no matter how good you are. You will always face the possibility that you will be playing against someone who is better than you are. Don’t bet your rent.

    On the other side of the coin, if you have some extra cash and are interested in wagering a little bit of money on the skills that you have acquired there is nothing wrong with a little gaming now and then. It is perfectly legal as long as you are over eighteen years old. Make sure that you get in some practice before you put up your money in the games.

    You can find these online gaming sites all over the Internet. Some of the sites will play traditional casino games and others will allow you to wager on word games and puzzle games. The choice is yours. If you find a game that you are particularly good at, then this might be the game for you to make some cash. Put your money where your mouth is and get playing for some cash online.


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