If you are not familiar with the concept of growing assets, I strongly recommend you to read Passive Investing vs Growing Assets first.

The problem with growing assets by outsourcing is that you need money. If your income is too low you probably won’t be able to afford outsourcing your projects or it won’t be economically efficient for you.

Photo by NoahA at Flickr

For this reason you could be interested to learn about opportunities for growing your assets and income without big startup capital. There are some good ways to do it, so let’s talk about them.

Joint Ventures

How often have you had a good business idea but did not execute it because you can do only part of the work yourself? Some people can write great books but when it comes to promotion they have to go through the route of traditional publishing (that’s why many good books never see light). Others can write great software but don’t know how to sell it, that’s why they choose to work for someone else and write mediocre programs. Maybe you are good in selling and have connections in specific niches, but all the products you can find are overpriced or crap.

One solution to such problems is to have capital and pay someone else to do the job you can’t do yourself. The other solution is to form a join venture with someone who can do the other part of the work, but can’t or don’t want to do yours.

You can see examples of many joint ventures online. Probably many of the blogs you read participate in joint ventures. They promote products and service in exchange for % of the sales or shares in the project. That’s the simplest form of online joint venture.

If you want to learn more about how to do successful joint ventures, subscribe to this blog. There will be further guides on the topic soon.

Angel Funds

In the software industry getting angel funding is a popular way to grow a company with nothing but ideas and some very initial implementation. While finding angel investors for an IT startup is an industry standard and much easier, there is no reason for you to avoid it even if you are not in the IT field. In such case you will need to be more creative when searching for angels who would be interested to invest in your venture.

The assets that you grow with angel’s money will not be entirely yours of course - usually angels sign against 10% to 50% ownership of the startup company or product.

Don’t think that this ioption is available for large projects only. If you are in the IT, check Paul Graham’s Y Combinator for example. Each year they fund small web startup, so if you have an idea, you can be the next.

Another great place to look for angel funding of your business projects in any field is Go Big Network.

Starting Business With Friends

Starting a business with friends is not a free way to grow assets, but it can be “almost” free depending on the number of friends enrolled in it and on everyone’s contribution. Often some of the founders participate with money, others with buildings or machines and some only with hard work, ideas and connections. Making a business with friends is just like a join venture, but in it you know the people you work with.

The big downside is that business and friendship sometimes mess badly and at the end you could lose both the business and the friends. There is no free lunch, you know.

Do It All Yourself

What most people try for growing a business or creating other long term asset is to do everything themselves. If you want to grow a fast food business, that makes no sense - you can’t cook, sell and take care for the supply entirely yourself. But if you are trying to create an asset that brings automated passive income, that may justify the hard work. Of course it’s better and faster if you can afford outsourcing part of the work, but if you can’t afford it you can still grow the asset for free. This is the way many intellectual products like books, innovations, software and web based projects are created.

Next time when you feel depressed about your financial situation, think what you can do to improve it. Isn’t it better to try to grow some assets than complaining and wondering how to cut your food expenses?

If you enjoyed this post, make sure you subscribe to The Shark Investor!

This entry was posted on Sunday, August 24th, 2008 at 8:32 pm and is filed under Investment Strategies. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.