The Future Depends on Today's Investments
I’ve never been much of a numbers person; I’m more the creative type. In school I did OK in my math classes, but as they became more complicated, I really had to work at it. The only class I ever failed was my college accounting course, but that had more to do with lack of attendance than inability to grasp the subject matter.
I never took any other finance classes, but shortly after landing my first “real” job after college, and beginning to earn “real” money, I gained a new interest—investments. I still didn’t have a lot of extra money after normal living expenses, so I started slowly. Beyond my 401k allocation, I began putting small amounts into mutual funds. I also tested the waters in real estate by purchasing rental property. Several years later I made what to me was a significant investment in Procter & Gamble stock at the end of a downward trend. The quick growth and subsequent stock split sparked a love for the stock market that I carry to this day.
Stock investments are sort of like a thrill ride—they can be very scary, but also can leave a person with great satisfaction. I think what excites me most about them is the impact they can have on my future. But stocks aren’t the only investment that can have a huge effect, and with good planning, any investment has potential of reaping rewards that outweigh its risk.
Investments can take many forms, many of which do not involve banks, brokerage houses or real estate. Essentially, an investment is the commitment of something, whether money, time, effort, and so on, in order to achieve something else. Although that “something else” is generally understood to be a financial reward, it may more accurately be described as an effort to move forward from one’s status quo.
A college education is a great example of such an investment, as it requires a great deal of time and money to attain and the purpose is typically to deliver a brighter future with better opportunity to earn more money or at least the opportunity to work in a desired occupation or field.
The goal for most companies is to earn more money. But the investments made to achieve this goal can be quite varied. Companies must invest in their facilities to create a safe and productive work environment. If employees are not comfortable doing their jobs and do not have the tools needed to do it effectively, then they’re not likely to be successful, happy or motivated.
Metalworking companies face tough decisions every day as they try to equip their shops with the best equipment for which they can justify the cost. They need to weigh the value of the machine tools based on how effective they can be in producing the necessary parts and how quickly they can help to recoup the required financial investment. These decisions can be very difficult, as risk is always involved.
In one of our feature articles this month (see "Large Threading with Single Spindle"), we visit a shop that relies heavily on its employees in choosing the equipment that is brought in. The company owner believes his seasoned personnel are well equipped to make educated decisions on which machines are best suited for the job and also feels that the employees gain a sense of ownership and responsibility by being involved in the decision. The company also invests in employee training, realizing that time away from making parts can be very beneficial when it leads to more effective production down the road.
Another important form of investing for good business is in relationships, whether with customers, suppliers or peers. Building and maintaining solid relationships takes time, which is always at a premium, but the benefits are usually well worth the effort. The payoff is obvious with customers, but what is often overlooked is added service benefits from suppliers and potential learning opportunities through peer networking that takes place at industry functions and trade association events such as those held by the PMPA.
The truth is, not all investments work out. Even with detailed research and the best intentions, bad purchases can be made, businesses can falter and relationships sometimes sour. I’ve made my share of poor choices through the years as well, but by capitalizing on the good and minimizing the losses caused by faulty judgment, I’m far better off for having tried.