So much of the challenge that both entrepreneurs and investors face in earning return on time and capital is driven by the low growth rate of the economy as a whole.
U.S. GNP growth, after averaging 3.6% annually for the period 1982-1999, has since 2000 slowed to a mere 1.8%.
Not coincidentally, in that same period stock market returns have declined dramatically.
From averaging over a 17% annual return rate in the ’80s and ’90s, most of the major indices have painfully dwelled in negative return territory since.
And to pile on the misery, with budget deficits exploding from 58% of GNP in 2002 to over 100% today, all of the “free” money poured into the system over the past decade has not had any kind of meaningful stimulative effect.
But it is going to be okay.
Why? Well, because as business people and as investors we do not work in the “macro”, but rather in the far more confined – and controllable – dimensions of our particular “micro.”
And here, we can escape from the “tyranny of the average.”
How? Well by simply exhibiting that most blessed of American freedoms – individual action.
Here are actions that smart entrepreneurs and investors can take today to “break out” and attain well above average results and returns:
Think and Act Globally. The developing world continues to maintain rates of growth and virgin and nascent market opportunities probably never again to be seen again nearer to home.
How about China, even with its recent slow-down, still averaging well over 8% growth?
Or India, at 6%?
Not your cup of tea? Well how about Mexico, Brazil and South Korea all growing faster than 4%?
And don’t tell me that you can’t compete there – via technology these markets are more accessible to small and medium-sized US businesses and investors than ever.
Think Sector. The overall economy may be flat, but there are sectors within it that are booming.
Like software, growing close to 6% annually.
Or how about the entertainment industry, growing at 5.5%?
Even seemingly mature industries, like transportation & food services, are growing at close to 5%.
Think Inefficiency. Remember that to make a small fortune – and a big difference – we do not need to solve the challenges and difficulties of the overall economy.
No, we just need to find those little market and competitive inefficiencies, those niche needs and wants, those investment strategies born and won far from Wall Street.
Now, when tens of thousands us follow our particular rainbows toward our particular pots of gold the byproduct of all of this thoughtful, opportunistic, and individual action…
…is that yes collectively we all do win.