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Conventional wisdom says that when you create a high barrier of entry for your business, it will be harder for new competitors to enter. As a result, your profitability will be high, right? Ehm, you are wrong on this one. Several excellent examples show that despite the validity of high barrier, it does not guarantee profitability. In fact, some lower barrier business can thrive in this business.

The truth is, many people equate high barrier business with high capital requirement. Capital creates barrier but that creates setback too. When you spend so much capitals on your business, it is harder for your business to turn a profit. Look no further than Amazon.com (AMZN). In the early part of the decade, Amazon was busy erecting barriers for its business, expanding its selection from books to lawnmowers. That strategy seemed to work well for Amazon but it takes them a whole lot of time to be profitable. Congrats to early Amazon.com shareholders. You would do well as the company has turned profitable for the last few years. However, cumulatively, Amazon still lost a combined $ 2.02 Billion since its existence.

That alone should deter you from investing in companies depending on capital to erect barriers. For one, the future is uncertain. The longer it takes to be profitable, the higher risk it won’t achieve that. Heck, I can even give you more examples of high barrier low profit proposition. How about the airline industry? Sure, nowadays, the barrier to entry is a lot lower. But, you still need to spend all those capitals to hire fleet, pilots and so forth. So far, the only established airlines that consistently make a profit is Soutwest Airlines (LUV).

You might say that low capital business cannot compete with high capital business. That thought again is wrong. How about restaurant operators such as Mc. Donalds? Opening a restaurant does not take that much capitals. How about creating an information based website such as CNET.com or MySpace? While these business has lower capital barrier, if you can make your product & service unique, you will be on your way.

While high capital is a barrier for new competitors to emerge, it does not guarantee profitability. Meanwhile, low capital business may have thousands of competitors springing up each day. But, with your business unique proposition, your business can thrive and profitability will be on the horizon. Therefore, creating barriers with high capital expenditure is not a prerequisite for business success.

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Donald Trump and Robert Kiyosaki have written a new book, “Why We Want You to be Rich: “If you believe that working hard, saving money, investing for the long-term in mutual funds and diversifying is good advice then this book may not be for you.” They were on CNBC a couple of weeks ago, a day after the book was released and it was already #1 on the Business Best Seller’s list. Their names alone cause people to act. I have read several of Kiyosaki’s books and one or two of the Donalds, but I haven’t read this one yet. I stumbled on a review of the book which didn’t say much about the book - other than it is their best one yet. However, in the review the writer discusses an email that he received from a money manager that floored me.

Jack said it even better: “In 18 years in the business of managing money I’ve NEVER [his emphasis] met anyone who accumulated significant investment assets (seven figures, or more today) from following a financial or retirement or savings plan.” “Several studies over the last 10 years have found little consistency in planning advice when researchers posing as prospective clients visit various advisers. Consumer’s Union has a summary of the research on its Web site. These plans are simply another sales angle for Wall Street and its salespeople.”

Jack spotlights a major weakness in the Trump-Kiyosaki book: In spite of all their wealth, they’re na

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For a few, life has improved amongst the terrorist threats and subsequent roller coaster of an economy. Some have bought second or even third homes, while others have elected for collection quality, top of the line automobiles. Others still have traveled the world, experiencing realism at a level the vast majority will never know. Why yes, luxury today is known well in certain circles and is in fact lavished with immoderations.

The question begging to be asked is, “What now?” How many yachts can one water-ski behind? Do you really want to go to the moon? When it is all said and done and you cannot find satisfaction with all the material things at your disposal:

Give of Yourself
People of affluence unaccustomed to a life dedicated to the service of those less fortunate will always have a void to fill. It is the scarcity mentality that says, “I must get all the money I can before I die.” It is the abundance mentality that counters, “I must pass on my knowledge and experience to give others an opportunity to obtain things far greater than my own accomplishments.”

Behave Consistent with How You Want Others to Remember You
Those who want to be remembered as having made a difference need to lead lives full of actions powerful enough to not only be cherished in their life, but also after they have passed on. Traditionally, these are service oriented acts. Become a mentor to today’s youth. Help as many others achieve their goals as you can.

Write Your Memoirs
When you have it all, tell it all. The story of your life should be recorded. This way, you only have to say it once and you will maximize the affect your experiences can have on all the people that read your book. Book writing is always a great project for those needing a new experience in their lives, especially for those willing to undertake its arduous course.

Challenge Yourself
More like, refine yourself. Take up Jiu-Jitsu. Learn yoga. Do something you have never done before. Study a new language. Study two. Fly a helicopter. Feed thousands of starving people.

Make a List of Long-Term Goals and Complete One Each Year
Aim for the horizon on this one. If you have ever thought of owning a sailing team, here is where that desire is to be recorded. It is far more difficult to achieve your innermost desires without writing them down. The human brain understands that you are serious when you take the time to write your goals down and review them on a daily basis. Let it all hang out.

Studies have shown that 90% of this great nation’s wealth is controlled by 10% of its population. Many find that statistic shocking, while others have come to accept its validity. Some of this 10% are wholly fulfilled by their life’s experiences, but there are those who yearn for a bit more. The upper crust possess within it a class of its own, a faction unsatisfied by the trappings their money affords them. Rather, they go through with their day-to-day affairs and wonder if they could get even more out of life. The answer is a resounding yes.

Vicky Therese Davis, William R. Patterson, and D. Marques Patton are co-authors of the acclaimed business and personal finance National Bestseller, The Baron Son: Vade Mecum 7. Vicky Davis is Founder and Chief Executive Officer of Indulgence Jewelry Corp. William Patterson is Chairman and Chief Executive Officer of the Warcoffer Capital Group, LLC. D. Marques Patton is President and Chief Operating Officer of The Warcoffer Capital group, LLC. To receive their breakthrough book and over $3,631 in FREE bonus gifts, visit: http://www.baronseries.com

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