Issue# 2707
- WEALTHY: 17 qualities that make up the ideal business (Michael Masterson)
- HEALTHY: If you’ve gained a little fat since high school… (Craig Ballantyne)
- WISE: Wayne Dyer on perfection
ALSO IN THIS ISSUE:
- How to make money with gift cards (Marc Charles)
- You don’t have to go it alone (Christine Comaford)
- It’s Good to Know… about the growing importance of online classifieds
- Add “fraught” to your vocabulary
* Hightly Recommended *
The Secret “Three-Step Strategy” to Internet Riches
You’ll want to read and reread the “three-step strategy” to Internet Riches very, very carefully… for it holds the secret to Internet riches beyond your wildest dreams.
I’m dead serious.
A warning before you check it out – it sounds almost too simple. But don’t let its simplicity fool you.
This strategy is so incredibly powerful… and will save you so much time, money, and energy… that you will be absolutely astonished at how much progress you’ll make when you follow it.
What’s more, it’ll place you right on the fast track to making money from your own new website almost immediately.
Get this “three-step strategy” to Internet Riches right here.
- Wayne Dyer
The Perfect Business for Today
My ever-present, effervescent managing editor Suzanne came up with another good suggestion last week. “You know Richard Russell,” she said. (Richard Russell writes the Dow Theory Letters.) “I just came across an essay of his about the ideal business. It was very popular with his readers. His criteria mesh well with your advice, but I bet you’d have something to add – especially when it comes to starting a business in a down economy.”
I read Russell’s essay and found that, as Suzanne suggested, he and I share many of the same beliefs. Which is another way of saying I liked it.
Russell said that he once asked a friend, a prominent New York corporate lawyer, to name the single best business he’d ever come across. Without hesitation, he cited a client with a business that made a chemical used in making synthetic rubber. The chemical was absolutely essential to the process. He had, in effect, a small monopoly that made him a millionaire many times over.
That hardly sounds like the perfect business to me, but I understand the value of having a de facto monopoly.
To me, the perfect business would have to meet a number of criteria. First and foremost, it would have to be a real business. By that, I mean one that had the capacity to provide me with equity – not just pay me a salary.
I’ve made this point several times in ETR. Most small companies are not really businesses at all. They give the entrepreneur a modest income – $60,000 or $100 000 – but without the prospect of earning much more or cashing out for big dollars when he wants to retire.
Owning a single retail store, for example, is usually not a business. It’s more often a self-employment enterprise, with the owner working 60 or more hours a week and struggling to keep his employees, vendors, and customers satisfied. The same is true of owning a restaurant, bar, travel agency, art gallery, or bookstore.
I know this is true because I have been in all those businesses. (I still own an art gallery and a travel agency.) They all seemed attractive before I actually got involved in them. Then I quickly found out that they were commercial balls and chains, tied around my financial neck.
No, the perfect business certainly would not be retail. If you are contemplating retail, you should get a copy of Automatic Wealth for Grads… and Anyone Else Just Starting Out and read Chapter 3. It will save you a lot of money and emotional distress.
Richard Russell’s father warned him against retail. He said, “The hours are too long, and you’re dealing with every darn variable under the sun.”
Russell’s dad also advised him to stay out of real estate. (He was a real estate executive during the Great Depression.) “When hard times arrive,” he told his son, “real estate comes to a dead stop and then it collapses. Furthermore, real estate is illiquid. When the collapse comes, you can’t unload.”
I don’t like real estate development as a business. (I know at least a dozen developers who have gone from being multimillionaires to near broke in the past two years. Many more will follow this year before the market hits bottom and begins to turn around again.) But I do like it as an investment, for reasons I explained in detail in Chapter 5 of Automatic Wealth: The Six Steps to Financial Independence. I don’t have time to go into all of them here, but these are the main ones:
- It’s easy to learn.
- It’s easy to leverage.
- You can limit your exposure.
- It’s easy to spot an overvalued market unless you are a fool, so there is little chance of going broke.
That’s not true of real estate as a business. When you are developing properties, your personal wealth is at risk. The better you do, the more insistent the banks are that you put your own neck on the block.
FYI, I have just bought a property in my neighborhood to add to my real estate portfolio. It is a duplex that is currently generating $1,350 a month in rent. It was on the market 18 months ago for almost $300,000, and I bought it for $110,000. I expect to be able to fix it up and increase the rents – but it will yield a nice positive cash flow even if rents go down. And I know how to sell rentals – something I didn’t know when I started investing in rental real estate.
But this is an investment, not a business. So let’s get back to the question: What is the perfect business for today? In my opinion, this is what it would look like:
1. I’ve mentioned my first criterion already. It would be a real business that could become more valuable over time and eventually be sold for millions of dollars. Single-store retail enterprises, as I’ve said, seldom qualify. Most have a net zero balance sheet when they are mature. You can sell them for a portion of the inventory and physical assets. That’s about it. No big payday.
2. It would have unlimited upside potential. It could go from 10 million to 100 million as easily (actually, more easily) than it could go from zero to a million. (For a complete explanation of what I mean by this, read Ready, Fire, Aim.)
3. To have that kind of upside potential today, it would have to have the entire world as its marketplace – not just a local community or even an entire country.
4. Richard Russell pointed out in his essay – and, of course, I agree with him – that the perfect business would sell a product that benefits from “inelastic” demand. Inelastic means that the price you charge for the product is determined by you, not the market. If you are selling canned goods or beer, for example, you can’t charge whatever you want. But you can do that if you are selling luxuries, rarities, or unique pieces. That’s one of the reasons I like the art business. (Still, as those of us in that business know very well, even art can be affected by the market. Prices have dropped by about 30 percent in the past year.)
5. In addition to benefitting from inelastic demand, it would be a product that could not be easily substituted for or copied. Ideally, as Russell said, it would be “an original, or at least… something that can be copyrighted or patented.” (There are many ways to make seemingly ordinary products unique and, therefore, “original.” In an upcoming issue of the Liberty Street League newsletter, Charlie Byrne and I tell you just how to do that.)
6. The perfect business would not employ blue-collar workers. Forgive me for saying this, but, in my experience, the hassles are just not worth it. Working with professionals is infinitely easier. Take my word for it – or learn on your own.
7. The perfect business would be financially leveragable. By that I mean it could be grown – at some point – without requiring an enormous amount of your attention. This is the difference, for example, between owning one hamburger joint and owning a string of burger joints. Opening a second restaurant is always a high-risk, low-return prospect. But adding another location to an already-successful chain is much easier.
8. The perfect business would not take up all your time. In the beginning, you’d surely have to put in 12-hour days. (I’ve never encountered a business where that’s not true.) But after you learned the industry secrets and taught them to your top employees, they would be able to take over day-to-day operations.
9. Similarly, the perfect business would not depend on you to keep it going. After a few years, it would run on its own.
10. The perfect business would have a very high net-revenue-to-employee ratio. This is an idea I developed many years ago. (I’m sure MBAs have a name for it – but I don’t know what it is.) Whenever I contemplate starting a business, I insist that it can reach $10 million in sales, after refunds and cost of goods, with no more than 20 employees. That’s a $500,000-to-one employee ratio.
11. The perfect business would have little or no inventory. If you have been in an inventory business, you know how important that is.
12. The perfect business would be cash-based and, therefore, have no receivables – meaning your income would never be held up by payment terms or bad debt. Receivables are fine when an economy is booming, but disastrous when the market sags.
13. The perfect business would have no debt. Customer payments would be sufficient to pay all bills and finance growth. (Imagine how lovely that would be!)
14. Another Russell criterion that I endorse: The perfect business would not need “an expensive location… large amounts of electricity, advertising, legal advice, high-priced employees, etc.”
15. Yet another Russell criterion: The perfect business would be relatively “free of heavy government and industry regulations. The cost of dealing with such regulations is always burdensome but will break you during a serious and long recession.”
16. And yet another Russell criterion that I agree with: The perfect business would be portable or easily moved. In other words, you could take your business (and yourself) anywhere you wanted – Nevada, Florida, Texas, Washington, South Dakota (none of which have state income taxes). Or, hey, maybe even Monte Carlo or Switzerland or the South of France.
17. I was trying my best to keep Russell’s criteria out of this article. In fairness to him and you, I wanted all the advice to be uniquely from me. But that’s not happening. My final requirement for a perfect business is from Russell too: It must be able keep your mind thinking and your heart pumping. You don’t want to become bored with it after a few years. You want it to be intellectually and emotionally satisfying, which is another way of saying “fun.” Most businesses simply can’t offer that.
That’s my list. It’s pretty demanding, I’m sure you’ll agree. Is there a perfect business? By golly, there is. In fact, there are several. Next week, I’ll tell you exactly what they are.
[Ed. Note: Looking for a business that is portable, has no physical inventory, has unlimited upside potential, a worldwide marketplace, and more? Look no further than the Internet. Find out - step by step - how to start your own "ideal business" right here. But hurry - time is running out to get personal guidance for getting your "perfect business" up and running. Sign up now.]
How This “Dirty” Word in Real Estate Can Make You a Fortune
Why would you EVER want to invest in real estate these days?
The market is in shambles:
RealtyTrac reports that 860,000+ properties were repossessed by lenders last year.
5.4 million Americans behind on their mortgage payments, says the Wall Street Journal.
Foreclosure.com says that home foreclosures jumped to nearly one million homes in 2008 – a 64% rise from 2007.
Yes, the situation is bleak.
But the truth is, there IS money – BIG money – to be made in real estate.
Especially when it comes to that “dirty” word: foreclosures.
Charles Petty has made $3.2 million in the past few years. But he hasn’t done so using any real estate investing method you’ve heard of…
No, he found a little-known “loophole” in the foreclosure process…
And now he makes tens of thousands of dollars a month, from his laptop, sitting by his swimming pool.
He’s not a realtor or a property buyer. He doesn’t sell. He doesn’t even visit a single property.
Yet in the past 3 months alone, he’s made over $80,000.
Find out what this foreclosure “loophole” is – and how you can use it to make your own fortune – right here.
The Big Business of Stored-Value Cards
By Marc Charles
You know what a stored-value card (SVC) is, right? You’ve seen racks of them near the checkout counters at Walmart, Sam’s Club, Home Depot, Rite Aid, and thousands of other retailers. You probably call them gift cards. And you’re probably familiar with phone cards, too.
Well, guess what? You can resell prepaid cards like those online as an affiliate. There are hundreds of markets to choose from, including prepaid cellular, restaurants, auto repair, computers, and game rentals for the Xbox and Nintendo Wii systems.
One opportunity I particularly like is with TracFone, the biggest prepaid cellular company in North America. They have a very lucrative affiliate/partnership program that enables entrepreneurs to make a 15 to 20 percent commission on all TracFone sales. This includes the TracFone itself, airtime, and accessories. (The largest TracFone reseller averaged more than $30,000 per month in sales in just one year.)
Entrepreneurs are offering TracFone airtime cards on websites and/or promoting them to their opt-in subscribers. I’ve even seen TracFone affiliates selling products, accessories, and airtime through keyword ads on Google and Yahoo.
As I said, there are hundreds of SVC markets just waiting for someone like you to take the bull by the horns. But the TracFone program is a great place to start.
[Ed. Note: Marc Charles is a member of the board of experts at the Liberty Street League, a group of like-minded entrepreneurs and investors dedicated to making money "off Wall Street" with under-the-radar opportunities like this one. Find out if you are eligible to join the Liberty Street League right here.
Interested in becoming an Early to Rise affiliate? You'll get access to bestselling products and proven advertising materials that have brought in millions. And the program pays commissions as high as 90 percent! Find out more about the ETR Affiliate Program here.]
Do You Have a Killer Support System?
Susan was tired of being a professional speaker. She’d often spend 200 days a year on the road, away from her family. And she knew it was time to build a business that wouldn’t be completely dependent on her.
But how? She needed a killer support system to help her figure out what she could do and then help her do it.
A killer support system has three components: a mentor, a coach, and a community.
Your mentor helps you strategize, distill your business to its essence, and focus only on the activities that are crucial to move the business forward. Your coach holds you accountable for sticking to your goals and commitments, while helping you get rid of any internal roadblocks/blind spots to success. Your community – a fun group of like-minded entrepreneurs – celebrates your achievements, picks you up when you’re down, and shares tips and techniques.
After putting together her killer support system, Susan has expanded her business to include products sales, webinars, and phone-based consulting. This allows her to serve her customer base… without constantly traveling. Meanwhile, she is watching her revenues soar and her enthusiasm skyrocket.
Every successful entrepreneur has a mentor, coach, and community – a killer support system. Do you?
[Ed. Note: Business Accelerator Christine Comaford is CEO of Mighty Ventures, a startup and CEO mentoring company. She has helped more than 150 entrepreneurs become millionaires with her proven strategies and killer connections. Get her free business-boosting tools at www.MightyVentures.com and join her Facebook group at www.BusinessRenegades.com.
Having a killer support system is just one way to ensure that you own your business - and it doesn't own you. Get even more tips about starting and growing a business the right way with Michael Masterson's New York Times and Wall Street Journal bestseller: Ready, Fire, Aim: Zero to $100 Million in No Time Flat.]
3 Rules for Burning Fat Over 40
One of the side effects of aging is that you lose the ability to burn fat at the drop of a hat. So if you’re over 40 and want to lose belly fat, here’s what you have to do:
Rule #1: Eat a low-calorie diet, focusing on whole, natural foods.
Everyone needs to be eating more fruits and vegetables, no matter how old they are. So try to add one extra serving every day – starting tomorrow – until you are up to 10 total servings per day. The fiber will help fill you up. And by reducing processed foods in your diet at the same time, you will have more energy and you will lose weight. It’s that easy.
Rule #2: Use resistance training to sculpt your muscles.
As you get older, strength becomes more and more important to your health and well-being. If you don’t use it, you’ll lose it. So make sure your exercise program includes total-body strength training at least twice per week, preferably three times.
Rule #3: Do interval training instead of long, slow cardio.
Researchers from Australia found that women who did only 20 minutes of interval training three times per week were able to lose more belly fat than women who did 40 minutes of long, slow cardio. So switch your program to short-burst exercise and you’ll get more results in less time!
[Ed. Note: If you're not sure of the best fat-burning exercises to try, fitness expert Craig Ballantyne can help. In his Turbulence Training program, he'll reveal how you can burn fat and build muscle with three 45-minute workouts a week. Get the details here.
For more easy-to-implement ideas about how to live longer and feel better, sign up for ETR's free natural health newsletter.]
It’s Good to Know: The Growing Importance of Online Classifieds
If you’re looking for a job, a car, or a great deal on a used sofa, the first place you might look is online, specifically on sites like CraigsList, Sell.com, and CareerBuilder. And you’re not alone. According to a survey by the Pew Research Center, 49 percent of Internet users say they have used online classified ads, compared to just 22 percent in 2005. About 9 percent of users visit these sites on any given day, compared to 4 percent in 2005.
(Source: eMarketer)
* Highly Recommended *
How You Could Make a ZERO-DOWNSIDE $3,120 a Month
What if I told you that your escape to early retirement lies inside a plain white envelope?
Open the envelope, and you’ll discover one simple sentence that could help you make a fast and easy few grand a month.
Listen, American workers are having to put their retirement dreams on hold. HR and compensation consultancy Towers Perrin found that a whopping 59% of workers polled are planning to postpone their retirement.
With the economy on shaky ground, that could be you.
So why not say “YES!” to an extra $3,120 a month?
I know it sounds unbelievable. But you owe it to yourself and your financial future to find out more right here.
Word to the Wise: Fraught
“Fraught” (FRAWT) – from the Middle English – means marked by or causing distress; emotional.
Example (as used by Anthony Doerr in a New York Times review of The New Valley by Josh Weil): “This is a gorgeous, lonesome and fraught place, where mountain people emerge like ghosts from the snow, headlights are rare on the roads, and the distances between people are great.”
[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 Words to the Wise CD Library.]
Similar Articles:
- The Big Business of Stored-Value Cards – You know what a stored-value card (SVC) is, right? You’ve seen racks of them near the checkout count…
- The Perfect Business for Today – My ever-present, effervescent managing editor Suzanne came up with another good suggestion last week…
- Do You Have a Killer Support System? – Susan was tired of being a professional speaker. She’d often spend 200 days a year on the road, away…
- Add Some Leverage to Your Portfolio the Easy Way – You can find ETFs that cover just about any market ("spiders" cover the S&P) or sector…
- The First Step to Becoming a Millionaire Real Estate Investor – Thanks to real estate investing, I no longer have to work full-time. If I want to go hiking in the m…
- Small Caps’ Unexpected Giddy-up – Sooner or later, the market is going to hit bottom. And when it does, you’ll want to be invested in …
- DON’T LET PERFECT RUIN GOOD – “The longer I live the more I see that I am never wrong about anything, and that all the pains I hav…
A very good and enjoyable newsletter!