How to become a successful investor: rules tested by crises

Formal economic education provides a foundation, but rarely helps build confidence in personal financial decisions. Academic courses cover macroeconomics, capital theories, and market behavior models, but often miss the applied level.

As a result, even those who studied at economic faculties continue to believe in common myths about investments. Meanwhile, these myths hinder the development of a personal strategy, the proper assessment of investment risks, and capital management.

The Illusion of Knowledge: How False Confidence Is Formed?

One of the dangerous paradoxes is the feeling that knowledge about interest rates and GDP automatically provides an understanding of personal investments. However, investments for beginners require skills, not just theory: calculating returns, evaluating bonds, comparing stocks, analyzing portfolios. The formal approach replaces practice, and as a result, graduates do not know how to start investing in real instruments.

Myths about investments are often reinforced by the education system: students study models that work in ideal conditions but do not address real-life situations. As a result, simple things like choosing a broker, assessing risk, and asset purchase strategy remain overlooked.

Myth #1. Financial Education Guarantees Success

The notion that a diploma provides an advantage in investments is not supported by practice. Investment myths include the belief that education fills all gaps. However, real income depends not on theories but on decisions. The ability to analyze, develop a strategy, manage emotions, and allocate capital is more important than academic knowledge.

#2. Invest Only When You Have Excess Funds

In academic circles, the thesis often heard is: save first, then invest. In reality, the earlier you start the investment journey, the better the results. Even small amounts invested regularly yield long-term effects through compound interest. Investments for beginners are not about millions but about starting with a minimal deposit and discipline.

#3. All Risks Must Be Eliminated in Advance

The idea of complete predictability is a typical investment myth. Investment risks cannot be completely eliminated, but they can be calculated, accepted, and factored into the portfolio. In reality, actions taken with calculated risk lead to growth, while trying to avoid any fluctuations leads to stagnation. This is where academic principles contradict practice.

#4. Investments Require a Lot of Time and Daily Market Analysis

This myth is even supported in the educational environment, creating an image of a person constantly watching charts. In practice, one can choose a conservative or automated strategy, minimize involvement, and achieve stable profits. Investments do require a lot of time—an assertion refuted by real investor cases working through index funds and automatic contributions.

#5. The Most Reliable Asset Is Real Estate

Many still believe that investing in property is the only way to preserve money. However, real estate is a less liquid asset that requires significant costs upon entry and exit. Unlike securities, selling property quickly and without losses is not guaranteed. Investment myths related to “bricks and mortar” are outdated in the digital economy.

#6. It’s Better Just to Save

Amid uncertainty, the advice to “just save” is often heard. However, without growth, capital loses its value under inflation pressure. Even the most reliable savings depreciate if they are not working. A properly selected portfolio of stocks and bonds allows for capital preservation and growth with moderate risk.

#7. Putting Money in a Deposit Is Better

Many students and graduates unfamiliar with practice rely on banking instruments. However, the actual profits from deposits are often below the inflation level. In the long term, such investments lead to stagnation. Even investments for beginners through funds offer higher efficiency!

#8. All Investments Are Complicated

A myth formed in the educational environment: investments are stressful and only risky people engage in them. However, there are tools with predictable income, regulated by the government, suitable even for the most cautious individuals. Minimizing risks in investments is achieved through tools, not by avoiding participation.

#9. A Successful Investor Is a Market Guru

Reality shows the opposite: the most stable investors are not those who predict trends but those who regularly invest and hold portfolios long-term. The image of a “trading genius” is a myth promoted by the media. In real practice, a simple strategy yields better results than complex speculations.

#10. Investing During a Crisis Is Not Advisable

A crisis is not a stop sign but an opportunity. It is during downturns that assets can be purchased at reduced prices. Investment myths that instill fear during turbulent periods hinder seeing the growth potential. The history of the stock market shows that recovery periods always follow declines.

Why Doesn’t the School of Economics Teach Investing?

The reason is simple: the university’s goal is to provide a foundation, not to develop practical skills. Practice, thinking, and strategy are developed independently. Investment myths persist precisely because they are rarely questioned in the educational environment.

They do not teach how to analyze the stock market, how to allocate income, how to set up a personal investment plan. Real instruments like bonds, trading, dividends, coupon mechanics are not explained.

What Is Truly Important to Know at the Start to Avoid Investment Myths?

The School of Economics does not provide the following fundamental principles necessary for every investor:

• Investing can and should be done with minimal amounts;
• Strategy is more important than the amount;
• Risks are not enemies but factors to be managed;
• A broker is not just an intermediary but a key to the platform;
• Coupons and dividends are the basis of stable passive income;
• Liquidity and distribution are more important than “loud” assets;
• Stocks are not enemies but the main driver of portfolio growth;
• You don’t have to be an expert to start;
• Analysis is more important than intuition;
• Discipline is more valuable than prediction.

Understanding these principles forms a solid strategy and dispels false financial beliefs.

Conclusion

Investment myths persist not only in the minds of unprepared individuals but also within the education system. The lack of practical tools, the substitution of reality with models, the ignorance of decision-making psychology—all hinder the development of a personal strategy.

However, understanding the essence, knowledge of mechanisms, discipline, and a sober assessment of risks allow for the creation of a sound investment model. This is not taught at the university—and this is what becomes the foundation of financial independence!

The franchise format creates a special business model in which one business partner (franchisor) grants another (franchisee) the right to use a trademark, technologies, instructions, service standards, and business system. The concept is based on licensing and repeatability, where an entrepreneur implements a proven model with minimal risks. Therefore, what is a franchise is a ready-made business entry strategy with predictable results.

The franchisor provides knowledge, brand, training, access to IT systems, marketing support, and quality control. The franchisee pays a one-time initial fee and royalties monthly. Both parties work towards mutual growth, maintaining clear business distance and responsibilities.

### Rules for launching a franchise: what it is and how it works

The format requires clear structuring. The franchisee does not receive a ready-made business but implements a model according to approved standards. The system includes a legal agreement, a business case, guidelines, corporate support, and employee training. The brand ensures recognition, while the partner adheres to the regulations. The franchisor scales the network, and the entrepreneur reduces market entry risks.

#### Legal Foundations

The agreement documents key elements: territory, duration, types of products or services, personnel requirements, reporting forms, sanctions for violations. Regular audits, mystery shopping, CRM reports are mandatory control elements. The legal side protects everyone: the partner retains rights, the franchisor controls quality. Participants adhere to the contract supported by the Civil Code (Chapter 54, RF).

#### Franchise Economics

The model outlines three key payment streams: initial fee, monthly royalties, marketing fees. The commission ranges from 100,000 to 5,000,000 ₽ depending on the brand. Royalties range from 3–10% of turnover. Additional fees include contributions to general advertising, app support, IT maintenance. The payback period depends on the category, averaging from 6 to 24 months. Therefore, the answer to what a franchise is an investment with built-in return mathematics.

### Types of franchises by model

Understanding formats helps choose the optimal model for business goals. Varieties of franchises determine the level of commitments, investments, and autonomy:

1. **Product-based**: The manufacturer grants the right to distribute products under the brand. Example: “Apple Premium Reseller.” The franchisee does not change the product but organizes sales in the required format. Popular in technology, FMCG, fashion segments.

2. **Production**: The franchisee receives recipes, instructions, equipment. Produces products independently. Example: Coca-Cola — local plants produce drinks under license. Suitable for food, chemical, pharmaceutical markets.

3. **Service-based**: Not a product but a service is transferred: haircut, massage, training, rental. Example: “Like Center” studios, “Skyeng” schools. Service is controlled, not the product. Dominant in educational and beauty networks.

4. **Mobile**: Business operates without a fixed location. Example: mobile car washes, food trucks, “wheels delivery.” Minimal investments, high flexibility, rapid scalability.

5. **Investment**: The format involves a third-party manager. The franchisee is an investor who invests capital and receives reports. More commonly used in hotels and restaurants.

6. **Master franchise**: The franchisee receives the right to develop the network in a specific territory. Controls sub-franchisees. Requires significant capital and experience. Used by international brands: KFC, McDonald’s.

7. **Digital**: The product is entirely digital: online courses, services, applications. Example: a license to launch an LMS platform with content and CRM. Low costs, global coverage, quick setup.

Each format reveals a specific aspect of the approach. The specific choice depends on capital, competencies, goals, and launch time. It can be said that a franchise is not a universal solution but a flexible tool with dozens of modifications.

### How to choose the right format

Optimizing the starting path requires analysis. When choosing, consider:

– Entry level (capital);
– Readiness for operational management;
– Industry competencies;
– Goals (income, scaling, passive income).

A novice entrepreneur often chooses a service or product franchise with a simple entry. An experienced one may opt for a master model or production. Analyzing niche ratings, financial modules, competitor cases helps make an objective choice. A well-founded decision shortens the path to the first profit by 30–50%.

### Mistakes when launching a franchise

Mistakes when launching a franchise often occur not for technical reasons but due to ignoring the strategic base outlined in the documentation package. The main failure is underestimating the importance of internal standards. The franchisor provides a detailed set of regulations: instructions, brand book, scripts, checklists, service protocols. Deviating from these points undermines trust, reduces efficiency, and leads to sanctions. The brand starts to perceive the point as vulnerable, blocks access to training, denies marketing support. Violating rules is not a trivial matter but a critical blow to the reputation of both parties. Cases confirm that a franchise is primarily about precise compliance with regulations, not a loose interpretation of recommendations.

The second typical mistake is overestimating the brand. A strong logo does not replace real management. Even a successful national network does not guarantee an incoming flow without efforts on-site. Opening in an unprepared region, lack of local marketing, insufficient staff control nullify the franchise’s reputation power. The partner starts to rely on the magic of the name, ignoring operational tasks. Such an approach renders the essence of franchising useless.

The third failure occurs during calculations. Without financial modeling, the partner enters the project without understanding the breakeven point. Seasonality, logistics, depreciation, labor costs, taxes, hidden expenses are ignored. As a result, even with normal sales flow, the project goes into the red. The error occurs at the start due to a lack of deep planning. Therefore, even before signing the contract, it is necessary to create a P&L model, consider three scenarios (optimistic, basic, pessimistic), assess profitability through ROI and payback period. It is crucial to understand that a franchise is not just a contract with a brand but a business with financial responsibilities and figures at the entrance.

### Conclusions

Franchising proves its effectiveness as a way to scale a brand and enter business. The model combines standardization, delegation, and support. The franchisee receives a ready-made business algorithm. The franchisor scales the brand without investing in points. As a result, both parties build a sustainable partnership. It can be said that a franchise is a growth mechanism where each element works in conjunction.