learn to make money with money
In The Falcon Method Book Summary You will see that One thing most of us have in common. That is, even one day, if we do not go to our work. Or we didn’t work that day. So we will not have any income on that day. So whatever happens, we have to work. We cannot rest even if we want to. Because our financial situation does not allow us to do this. In this trap, we are trapped all our life. The Falcon Method Book Summary will help you to come out from this situation.
But with the passage of time the new generation is becoming more financially aware and literate than before. At the same time, it is also becoming aware of this. Working hard throughout life, living a mediocre life till old age, is not the way to live life. That is why most of the focus of this generation is in earlier retirement, passive income and financial freedom. (keyword : The Falcon Method Book Summary)
Only then people are showing interest in investing in stocks and shares. But the problem that comes to most of the people. That is, which stocks to take. Because only to buy quality stock at the cheapest rate. Investing has a real challenge. For which author David Solyomi in his book The Falcon Method, teaches us one such investment method. Which is based on the principle of value investing, common sense and basic discipline. Whose ultimate goal is to create a portfolio of such stocks. So that you can make your passive income along with returns. Actually falcon is the name of a bird. One who specializes in hunting. Like the same bird, this method also works. Because the author had seen a lot of financial struggle in his early age. Only after that, it was decided. That he doesn’t want to be caught in this Rat Race when he grows up. (keyword : The Falcon Method Book Summary)
Author David Sollyomi, at the age of 33, retired financially free. Author was born in 1982 in Hungary. When he was 10 years old. So his parents got divorced. He lived with his mother. who was a kindergarten teacher.
Author, in his youth, faced different financial realities. So they decided that they should be done as soon as possible. To be financially free. He was inspired by his decision. With his ability and passion to learn, he became financially free at the age of 33. He became a full time investor. This book of his tells us. That’s where the stock market is. Where we can start very small. Through this we can become financially free. Due to which after a while not us, but our money works for us. (keyword : The Falcon Method Book Summary)
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Types of Investment.
In 2011, the world’s greatest investor, Warren Buffett, wrote a letter to his shareholders. In which he told about three types of investment. In which the first investment is.
Currency Based Investment
In this type of investment, bonds, bank deposits, etc. come. This is that investment. Which investors consider the safest investment. Whereas the reality is this. It is not the best investment option at all. Its disadvantage is this. The interest earned on this is less than the inflation rate. Thus, by investing in it, we reduce our investment value instead of increasing it. (keyword : The Falcon Method Book Summary)
Unproductive Assets
In this, gold rice, oil etc. come in this type of investment. Investors invest in it, thinking about it. One day their price will go up. In this way their investment value will increase. But this investment, often remains in people’s house or locker. As long as this investment remains with the investor. It doesn’t give any benefit. Only then do they benefit. When investors sell them. (keyword : The Falcon Method Book Summary)
Productive Assets
This type of investment is considered the best investment. Stock market is the best example of this investment. Warren Buffett recommends investing in this category. This is such a category. Which can give you good returns by leaving inflation behind. (keyword : The Falcon Method Book Summary)
Its biggest feature is this. You can start with very small capital. When you buy a share of a company. So you buy a small stake in that company. When you remain a partner of that company for a long time. So from there you get a very good return on your capital. When the company makes profit. So being a shareholder of the company, you also get a stake in it. We should always remember this. To be successful in the stock market, it is important to stay with good stocks for a long time. (keyword : The Falcon Method Book Summary)
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What is Falcon Method.
The Falcon Method tells us. After doing complete research of companies, once the best company is selected. So keep it with you for a long time. This is the key to success in the stock market. There are more than 5000 companies listed in the Indian stock market. (keyword : The Falcon Method Book Summary)
So the question comes. Which company to invest in? We get the answer from the falcon method. Calls the Falcon method. Before buying shares of a company, this is important to know. How does the company work? When we look at a company financially. So we need to think of it like a black-box. Being an investor, it is not possible for you. You get to know what’s going on inside the company. But you definitely have one thing on your hands. What’s going on outside the company. For this you need to understand input pipes and output pipes. Which are connected to Black-Box. (keyword : The Falcon Method Book Summary)
On one side of the black-box is the input pipes ie income. On the other hand there are output pipes i.e. expenses. The first pipe in the input pipes is to get the revenue. This is that income. Which the company gets from its customers through its products and services.
Its second pipe is Borrowed Money. It’s that money. Which the company has taken as a loan from the bank to expand or run its business. The third pipe is Equity Sale. When the company lowers its new share holdings to raise funds. Then sells that new shares in the market. So it comes in equity sale. It is very important to pay attention to this. Because many companies, from the money collected in this way, give dividend to the shareholders. Which is not fair at all. (keyword : The Falcon Method Book Summary)
Now let’s talk about the output pipes. Here we get the first pipe of Ongoing Expenses. These are the daily expenses of the company. That includes salaries, office supplies, marketing, and advertising.
The second pipe is Capital Expenditure. These are the expenses. Which is used to buy those things. Whose useful life is more than 1 year. Like computers, machinery and building etc. The third pipe is Acquisitions. These are those expenses. When the company acquires other companies for its growth. (keyword : The Falcon Method Book Summary)
The fourth pipe is of Payment of Debts. Which is shown in the input pipe of the forward money company. Which the company has to pay along with interest. So from this pipe, we get this. How much does the company pay to pay off its debt? The fifth pipe is of Taxes. This is that expense. Which the company has to pay to the government in the form of tax. The sixth pipe is of profits. From this pipe, we get it. How the company uses its profits. Inside this pipe, we find 3 types of sub pipes. From which money goes out. The first of which is Dividends. When the company gives some part of its profit to its shareholders. So it is called dividend. In this, the second pipe is of share buyback. When the company buys its own shares from the open market with some part of surplus cash. So it is called share buyback. The third is Retained Earning. When the company keeps its profit, to increase its business, with itself. Which leads to the growth of the company. This should also be taken into account here. How and where does the company use this money? That company gives good return to its shareholders by generating good returns. Whose income is coming in more than the pipe. Less money is going out the same output pipe. The company which manages its profit very well. A company that does not have debt. Whose assets are much more than their liabilities. (keyword : The Falcon Method Book Summary)
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The Goal of Falcon Method.
After doing your research again, buy the best stocks. Then after 1 year, sell them. Thus every year, you have to repeat this process. For an investor, it is not comfortable at all. In such a situation, you also buy the shares of those companies. Whose name you have not even heard.
It also has a disadvantage. Sometimes it takes more than 1 year to see the results of the company’s plans. When you sell his shares within a year. So you miss out on being a partner in the growth of that company. Contrary to what the Falcon Method tells us. By choosing us quality wise good shares. It has to be held for a long time. So that from that stock, money continues to come in the form of dividend in our pocket.
So, this is the short summary of “The Falcon Method Book by david solyomi”. hope you liked it. If you find this informative then also check out some more book summaries like The 5 second rule , The magic of big thinking , Finish book by john acuff, Hooked book summary and my blog section.
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