5 Secrets to Doubling Your Money Every 3 Years

by Early To Rise (07/24/2007)

Issue #2102

  • WEALTHY: Get the biggest bang for your buck with this investment (Michael Masterson)
  • HEALTHY: A fat that kills cancer (Jon Herring)
  • WISE: Michael Gerber on opportunities

ALSO IN THIS ISSUE:

  • MySpace for the business world (Ilise Benun)
  • 3 ways to make new employees feel welcome
  • It’s Fun to Know… about video games
  • Add "elegiac" to your vocabulary

== Highly Recommended ==

"I lost my fear, opened my mind and listened and I cannot believe the result."

Hello Bob,

I finished The Billionaire Way about 10 days ago. Now I promise you I did not cheat on this so hear me out.

I started the first two or three days I think and there was a transaction I was involved in that I was not comfortable with but had an emotional attachment to. I sat down one night and crunched the numbers and made some tough decisions, all emotion aside.

Then about two weeks into the program there was the day when we had to exclude our emotions and cut off dead baggage. Wow, I felt like yeah, OK I’m getting this because I just did that.

OK so now I’m tearing along the program, accepting things that I am already doing and working on the things I am not comfortable with. Vigilantly everyday, watching the DVD after the kids were in bed and working my work book.

Two days after I finished the program I saw an opportunity which I could assess very well given my clarity of vision, my assessments of my talents and the work I had accomplished.

It is my joy to tell you that I am founding executive of a new international network marketing company, the likes of which have never been seen and I have already built my team Australia wide within 10 days, using the billionaire way techniques.

I lost my fear, opened my mind and listened and I cannot believe the result. Thank you so much…

Regards,
Kathy

Learn more about The Billionaire Way program today…

"The entrepreneur in us sees opportunities everywhere we look, but many people see only problems everywhere they look. The entrepreneur in us is more concerned with discriminating between opportunities than he or she is with failing to see the opportunities."

Michael Gerber

5 Secrets to Doubling Your Money Every 3 Years

By Michael Masterson

To double your money every three years, you need an average yearly profit of about 26 percent. Does 26 percent seem like an easy target? Or a hard one?

When I look at my own investing track record, here’s what I see.

  • Stocks: I buy mostly no-load index funds and some blue chips. On average, over the years, I’ve done about as well as the market has done over the last 100 years - i.e., about 10 percent I do believe I could do better with stocks. I know plenty of people - including some of the investment specialists at Agora Publishing - who do. If I followed their advice consistently and carefully, I believe I could get 15 percent to 18 percent a year on my stocks. That’s not enough to double my money every three years, but it could still make me rich over time.
  • Low-Cap Stocks: I tried them for a while, and lost lots of money. So I stopped.
  • Bonds: I buy AAA munis and I don’t trade them, so I get market rates. Over the past 25 years, I’ve probably averaged about 4.5 percent - which, at my tax bracket, amounts to about 7 percent before taxes. Seven percent doubles every nine years. That won’t increase my wealth significantly, but it will protect it from stock market losses and (usually) from inflation. I have about 50 percent of my liquid investments - 15 percent of my net worth - in bonds.
  • Options: Never tried them.
  • Currency Trading: Never did it.
  • Rental Real Estate: I’ve been doing this for about 20 years. I’ve gotten better with experience. Counting my early mistakes, I’ve averaged about 18 percent I am very happy with my rental real estate investments, and I think that by applying what I’ve learned I can do a little better in the future. I wouldn’t expect to earn 26 percent a year in real estate, though.
  • Buy-Build-and-Flip Real Estate: I got into and out of this game with good timing. I made millions during the 1990s - making 50 percent or 100 percent on individual transactions almost seemed "normal." As prices became insane, I pulled out. (All of this was documented in ETR.) And except for the foolish mistake of letting a partner buy three houses that I knew with certainty were overpriced in 2002, I never lost money on a deal. Overall, I averaged about 30 percent to 35 percent per year, annualized over 10 years, but I don’t believe I will have this opportunity again for a long time. I do like the idea of investing in other areas (which Justin Ford recommends), and I’m doing some of that. But I’m not expecting 26 percent on these investments.
  • Passive Real Estate Investing: I’ve been investing in a friend’s real estate deals for about 15 years. The returns have been up and down - and I’ve had a chance to learn a lot about the development business during that time - but overall my ROI with him has been about 14 percent
  • Overseas Development: I bought a lot of overseas real estate in the past 15 years. My returns have been generally very good on that - 50 percent or better. But I am not doing much of it now. It has become a much more selective market.
  • Small Businesses: The one area of investing that has given me the greatest returns - well in excess of 26 percent - has been my investments in small businesses. Although individual businesses that I’m involved in vary greatly (a few lose money, a few linger at breakeven, a few make modest profits, and a handful hit the jackpot), I’ve probably averaged more than a 50 percent per-year return for the first 10 to 15 years on all of my start-up ventures. Counting the older businesses too (which have much slower equity growth) and the occasional failures, I would say that my overall ROI on small business investments has been more than 35 percent

Start-up businesses have given me so much - a steady growth of income, a base of wealth that has doubled every three years, the opportunity to get involved in so many other, interesting investments, and a rich and stimulating business life.

Because of the nature of what I did - getting involved in dozens of start-up businesses, including two direct-marketing companies that were essentially holding companies for start-ups, I’ve had the chance to participate in hundreds of launched businesses over the past 25 years. I’ve seen, and made, every mistake that you can possibly imagine. And I’ve seen some very successful launches too.

Although I sometimes grouse about working too hard, I have to admit that I love starting new businesses. It’s so much fun. And it’s something I know how to do. When I start a business these days, I am confident it will work. I didn’t always have that confidence. And I didn’t always deserve it. But gradually, over 25 years, I accumulated a little guidebook in my mind that gives me good advice on what will work and what will not.

For the past year, I’ve been trying to transcribe that mental book onto paper. The result is going to be my next book: Ready… Fire… Aim, being published next January by John Wiley & Sons.

So if you were to ask me, as an ETR reader recently did, "What is the absolute fastest way to become rich?" I’d have to answer: by starting a small business.

That’s my answer. It doesn’t mean it is your answer. You may not want to invest the time, creativity, and energy that it takes to be a successful entrepreneur. You may be retired already and determined not to give up your daily golf game. If investing in your own small business is not for you, then I recommend you look into stock investing and real estate. I don’t think you should expect to safely double your money every three years that way, but you can certainly do as well as or better than I have.

But if you do think you’d like to be an entrepreneur, you will be rewarded for it. Not only can you double (or even triple) your money every three years, you can also enjoy the many other benefits of being your own boss:

  • the freedom to choose your own schedule
  • the power to create your own products
  • the excitement of being fully challenged
  • the knowledge that you are providing an income for your employees

My friend Anna W. asked me to help her start a business based on her love of music. She’d been looking over her current retirement plan, and figured out that if she keeps her present job and continues to increase her responsibility and her income, she will be able to have a comfortable retirement in 14 years (at age 67).

That’s not bad. Most people in her age bracket won’t do that well.

But if she puts her energy and resources into creating a successful business of her own, she can look forward to a much better return on her "investment."

Anna is going to start her new business on the side, working evenings and weekends. She’s going to find a partner to back her, develop her product, and take it to market. When we went over the numbers, it became clear to Anna that this secondary business - if it is successful (and I’m pretty sure it will be) - will allow her to achieve her retirement goals in five years instead of 14, while she is still relatively young.

At that point, she can do whatever she wants to do with the rest of her life.

That’s what a business can do for you.

Think about your own financial situation. Are you okay as you are - or would it be helpful to triple your money every three years?

If you need that kind of way-above-average ROI in your life, you simply have to consider starting your own business. Don’t quit your day job. Just get something going on the side. You don’t have to invest a ton of money or work endless hours. You can do well starting small.

Here are five proven (and absolutely true, in my experience) secrets of highly successful entrepreneurs that will help turn you into a business-building genius.

Secret No. 1: Don’t spend too much time planning.

When you are entering a market, you don’t know (and couldn’t possibly understand) the hidden problems and challenges you will face. You won’t understand those problems until you make a few mistakes. And you won’t solve them (and go on to making a success of your new business) unless you are capable of changing directions quickly.

Most successful new businesses (probably 90 percent of them) end up following practices that are different than anticipated. That’s why it doesn’t pay to spend too much time and money planning. Do a reasonable amount of noodling. Figure out the big strokes and give yourself a bail-out option. Then go for it. He who can adapt wins.

Secret No. 2: Don’t spend too much money.

The vast majority of business start-ups that succeed do so on a limited budget. Almost none of them have the benefit of venture-capital funding.

The great majority of new businesses are hampered (and enhanced) by flying on empty. People involved in businesses that have limited funds must think harder, work harder, and (most important) sell harder. Their primary initial effort is to bring in the cash. And that’s how it should be. There is only one thing that will surely stop any business in its tracks - and that’s a lack of money. Ironically, limited capital usually means a quicker and stronger cash flow.

Secret No. 3: Get operational fast.

The most common reason for new product/project failures is wasting time getting ready. Between making overlong and expensive business plans, endlessly tinkering with the product, fooling around with focus groups, and second-guessing yourself, it’s easy to let a good product/project lose its steam.

Bootstrappers don’t mind starting with a copycat idea targeted to a small market. Imitation saves the cost of market research - and the start-up entering a small market is unlikely to face competition from large, established companies.

Secret No. 4: Go for the quick cash first.

Contrary to what some business books tell you, successful entrepreneurs admit that they take the fastest route to cash when launching a new venture. They do so because they don’t have a choice. (See Secret No. 2.) After the cash starts coming in, they have the time and funds to improve the product, enhance customer service, and refine operations.

Keep in mind that the best-laid plans are often arrogant. You don’t know for sure how to best serve the market. When launching a new business or product, figure out how you can get to breakeven fastest. This kind of noodling will force you to pay closer attention to the market.

Secret No. 5: Forget about the crack team; you are it.

Successful entrepreneurs don’t hire experts to run their businesses. They figure it out for themselves. When it comes to making your new product/project work, rely on nobody but yourself to make sure it gets done right. It may be stressful and time-consuming to do a lot of extra work, but it will pay in the long run. You will understand the project in an intimate, extremely valuable way.

[Ed. Note: Michael Masterson and his team of extraordinary entrepreneurs will be revealing all their strategies for getting a brand-new business of the ground... and making an existing business grow like crazy. Reserve your spot at this fall's Info Marketing Bootcamp today to get the benefit of their expertise.]

== Highly Recommended ==

Make Money on Both Ends of a Real Estate Deal…With No Monthly Mortgage Payments In Between!

Most real estate investors know that the real work of making a profit is to buy well. Unfortunately, the average investor doesn’t get to see any of those profits until the property is sold… months or even years later.

But smart investors know a better way to set up profitable real estate deals… a sure-fire method that:

  • Pays you twice: Once when you buy and again when you sell
  • Eliminates monthly mortgage payments, credit checks, and bank delays
  • Allows you to rehab or upgrade a property without using a penny of your own cash
  • Gives you the clout and confidence to make super-profitable deals that banks and hard-money lenders won’t touch
  • And will have sellers begging for you to buy their properties at bargain-basement prices… even if other buyers are offering more money!

Click here to learn more.

Online Networking: Using the Internet to Follow Up With New Contacts

By Ilise Benun

LinkedIn, an online business community of more than eight million people, is like MySpace for business. It’s a perfect way for you to network with colleagues and follow up with people you’ve just met.

LinkedIn is based on the idea that weak ties tend to be more important than strong ties, described by sociologist Mark Granovetter in Malcolm Gladwell’s best-seller, The Tipping Point,"Your friends, after all, occupy the same world that you do. They might work with you, or live near you, and go to the same churches, schools, or parties. How much, then, would they know that you wouldn’t know? Your acquaintances, on the other hand, by definition occupy a very different world than you. They are much more likely to know something that you don’t."

You can use the LinkedIn community website to make connections with people who know the people you know, who can then become prospects for you with potentially lucrative projects.

Freelance copywriter and AWAI student Mary McCauley-Stiff suggests using LinkedIn as a follow-up tool. "After a networking event, instead of using regular e-mail to reach out to the people with whom you’ve exchanged business cards, use the LinkedIn invitation feature to do double-duty: Follow up and invite them into your network. This is better, because if your new connection accepts your invitation, you both have a more tangible reminder of your connection. Plus, you also have access to their network of contacts."

You can also use the LinkedIn community to get warm introductions to your dream prospects. Search LinkedIn by title (such as "creative director" or "marketing director") for prospects in your target industry. For each search result, LinkedIn will tell you how many degrees away you are from that person. Then you can use your contact to get an introduction to the target person.

The difference between this process and a straight referral is that when you’re using a "trusted network" to reach your targeted person, he or she is more likely to accept your invitation. Also, LinkedIn employs an extensive gate-keeping system, which has made it attractive to senior professionals. Users can only contact those in their immediate network. The identities of people outside your network aren’t protected, but their contact information is. If you want to reach someone who is separated from you by three degrees, you must ask each person to pass your request on to the next until you reach your target.

If you haven’t already joined LinkedIn.com, do it now. It’s free - so you can start building your network.

[Ed. Note: Networking expert Ilise Benun is the author of Stop Pushing Me Around. Get more networking strategies with Ilise's free e-newsletter, Quick Tips from Marketing Mentor.]

Omega-3 Fatty Acids Cause Cancer Cells to Self-Destruct

By Jon Herring

One of the most common health threats for aging men is prostate cancer. And if a man has a family history of this disease, his risk is even higher. But there are plenty of things he can do to reduce the risk. And one of the most important is to consume omega-3 fatty acids.

In a recent study, researchers from Baptist Medical Center at Wake Forest compared the incidence and progression of prostate cancer in mice that were bred without a gene called Pten. This gene suppresses prostate tumor growth. Without it, tumors proliferate.

The researchers discovered that when the prostate-cancer-prone mice were fed an omega-3-rich diet (in a ratio of one-to-one with omega-6 fatty acids), they had reduced tumor growth, slower progression of the disease, and increased survival. They also discovered that diets high in omega-6 fatty acids had the opposite effect. In fact, the survival rate was 60 percent in mice on the high omega-3 diet, and 0 percent in those on the high omega-6 diet. The study also showed that a diet rich in omega-3 fatty acids caused cancer cells to self-destruct at a much faster rate.

The best sources of omega-3 fatty acids are fatty fish (such as wild salmon and sardines), fish oil, eggs, and grass-fed beef and dairy products. You’ll find omega-6 fatty acids in greatest abundance in products made with vegetable and seed oils, in fried foods, and in conventionally raised meats. Avoid these foods as much as possible.

Quick Management Tip: 3 Ways to Make New Employees Feel Welcome

Make new employees feel welcome by doing three things:

  1. Appoint top-performing employees to be their buddies - to have lunch with them every day for the first week and introduce them to other employees.
  2. Have a welcome package waiting on their desk that includes information about the company, their department, and their job.
  3. Make sure they spend at least a half-hour with each of their bosses as soon as possible.

It’s Fun to Know: About Video Games

A recent study has found that surgeons who regularly play video games committed 32 percent fewer errors and were 39 percent faster on surgical simulations than their non-gaming colleagues. In another study, researchers determined that video games promote efficient eye movement and boost scanning abilities - two skills that can make you a better reader and driver.

Before you get excited and decide to take up video gaming as a self-improvement activity, keep in mind what Dr. Sears said in ETR #1989 - that although playing these games can make the brain work faster in some ways and able to process more visual information, it can also have very negative effects on brain functioning.

There are much better ways to develop faster reading skills and dexterity - and they don’t involve staring at a screen for hours on end. Try playing real sports instead of the simulated version, or read a book that will help your career.
(Source: Popular Science)

== Highly Recommended ==

The World Is Shrinking… and the Opportunities to Make Money With This “Global” Economy Are Nothing Short of Staggering! If You Know How…

Imagine how well your business would be doing if you could slash your costs by more than 49% while boosting your profits by more than 57%.

You can do it… if you know how.

Today, as a matter of fact, all the Fortune 500 companies are doing just that, and they’re posting record-breaking profits by taking advantage of the “Global Economy.”

Unfortunately until now, only big companies could even think of doing this. But not anymore. Now it’s your turn.

Click here to find out how you can put the “Global Economy” to work for you.

The global borders are shrinking… The world’s becoming a smaller place… Will you just stand there watching opportunity go by or will you seize the moment and put the “Global Economy” to work for you? Click here to read more…

Word to the Wise: Elegiac

Something that’s elegiac (el-uh-JIE-uk) - from the Greek - expresses sorrow or lamentation.

Example (as used by Lorraine Adams in a New York Times review of Shadow of the Silk Road by Colin Thubron): "With its elegiac tone, Shadow of the Silk Road is moving in a way that’s rare in travel literature, sidestepping nostalgia even as it notes its pull."

[Ed. Note: Become a more persuasive writer and speaker ... build your self-confidence and intellect ... increase your attractiveness to others ... just by spending 10 VERY enjoyable minutes a day with ETR's new Words to the Wise CD Library.]

Michael Masterson
Copyright ETR, LLC, 2007

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