By Younas Chaudhary
I would like to share a few lessons that I have learned over the years that will help you avoid serious financial harm and make good financial decisions.
Look before you buy: I have been burned multiple times buying properties without taking a deeper look at the assets with field inspections and site visits. Declining values and a host of other problems have come to haunt me because someone had convinced me that a particular property was a worthwhile investment and that I did not need to see it. This has happened in transactions involving land, minerals, buildings, and other tangible assets. It is important to travel to the site, feel the land by putting boots on the ground, search property records, and perform proper due diligence homework before you commit to buying and closing any deal. A trusted advisor can send you videos, but nothing beats standing on the site, seeing it firsthand, and experiencing the prospective asset before you buy it. I have had big-time losses.
I purchased a property in Louisiana that was in a swamp-wet land area. I was told that it was all on the dry land. That purchase cost me a large amount of money in cleanups and other unnecessary costs. Buying that piece of swampland was an expensive venture that I did not inspect before buying.
Be detail-oriented: You must watch, control, and manage all your costs consistently in any business transaction. Do not speculate, instead, look at the hard math and take logical decisions with a meticulous approach. Make sure you understand day-to-day operational costs, liabilities, insurance cost, property taxes, future projections, so on and so forth. Each time I have focused on those, I have been impacted negatively because I was not detail-oriented.
Partnerships can burn you unless you are careful: Stay away from partnerships unless you are comfortable making collective decisions. I started my business with my brother in 1979 as an equal partner but this lasted just one year.
Partnerships can burn you unless you are careful: Stay away from partnerships unless you are comfortable making collective decisions.
In early 1980’s I was introduced to some prominent doctors around Wichita, Kansas, and I partnered with them to purchase oil and gas wells. My investors were happy and were making good money. The business was flying high until oil price dropped to $8 a barrel in the mid 1980’s. My investors suddenly became unhappy, hired a local high-powered attorney, and filed a lawsuit against me. This was nerve-wracking for me. I pleaded with my investors to stop the proceedings, but they did not listen. I wanted to come to a resolution. My back was against the wall, and I had to find a solution. I made a settlement deal with all of my investors to take over all their bank loans in exchange for their interests in the wells. I made this deal to buy peace with them when oil prices were extremely low at around $8 a barrel. Fortunately, oil prices recovered in next few months and that bad deal turned out to be a good deal for me. I fully repaid all the bank loans. That partnership lasted only around two years.
Since then, I have been operating solo over the last three decades. Several wealthy individuals have expressed interest in partnering with me in my oil and gas wells, but I have politely turned down every offer. The oil and gas business is a cyclical one, it is highly risky, and I did not want their hard-earned money to be invested in a volatile business.
Have a vision: Whenever I have focused on the bigger picture, I have succeeded and whenever I have taken a myopic, short-term view, I have failed. Individuals with vision can withstand the difficulties of a business and will maintain stability, profits, and control over a long period. I have tried to rely on foresight while purchasing and operating properties. Remember, just having a vision will not get you anywhere, instead, you should act on realizing it every day. Today is your day.
People matter: People are the bedrock of your business. Your coworkers bring their skills, experience, and talents every day. Respecting them and providing them a culture of belonging is critically important. It is important to be fair in your dealings with coworkers and learn to understand their internal feelings. During my earlier years, I used to be a stickler and get upset with day-to-day issues at my coworkers. However, over the years I have become more mellow, and I am more understanding. The ability to be calm and collected and have a pleasant positive behavior is important when dealing with anyone especially with your coworkers. Blessings.
People matter: People are the bedrock of your business. Your coworkers bring their skills, experience, and talents every day. Respecting them and providing them a culture of belonging is critically important.