Borrowing yourself rich

Are you out of your mind? Answer: No.

It’s quite smart to borrow you’re ass of. Especially in times like these when inflation rates are skyrocketing and it is actually cheaper to pay tommorrow than it is today. Saving these days are utterly stupid. I mean, say you make 2-3% on savings and you lose buying power at 4, 5, 6 or even 7%. As you can see, you will lose money. If you make 3% and lose 4%, then you lose money. Simple economics.

So borrowing money is sane because:

If you borrow money at x% and lend it out / invest it at x+1% then you are making cash. And you don’t have to think about inflation anymore. You will make money faster than anyone can imagine. If you do it with intelligence. The best part is: infinite return. You use your bankers money to make money. So inflation has no grip on the situation. Not on your situation at least.

So how do this relate to startups? Simple: You may start a business solely with the intent of investing in businesses with the banks money. A business can’t be simpler than that. I mean, the only thing you do in such a business is borrow low and lend out more expensively. With fixed terms of course. You need to hedge the down side.

So a simple example of this:

You make contact with a business owner who wants a partner who can invest $1 million for a 40% stake in his corporation. You tell him you would invest if he gives you your terms, he agrees to listen. You say “I want $25,000 in monthly dividents for at least 20 years. Guaranteed dividents. The business owner thinks for a moment and then after some uhm and ah’s agrees to the setup. You make a deal where you get 30% annually guaranteed for 20 years.  At the bank you borrow $1 million at 10% with straight amortization, monthly for 10 years. For this you pay  $16,667 monthly and recieve everything above this sum, $8333 / month.

Can it be this easy? Yes it can. But some will argue it isn’t, but they will never be rich either or at least not very rich. I wish them good luck nonthless and no hard feelings.

Licensing – Smart move

Many people miss licensing as a great way of increasing profit margins, increasing cashflow, increasing money in the bank. And all this with little expense outlay.

And above else: Why invest cash in expansion when others could and would gladly pay you to have the chance of expanding for you?  That is business intelligence ladies and gentlemen. Never pay for stuff that others could pay for you and never pay when others could pay you for doing the same thing.

Many companies could save millions of dollars each year by just licensing all of their foreign offices and recieving licensing checks each quarter.  Many don’t do it. Why? Don’t ask me, ask those suckers instead. Yes, having pride is good, but not when you are loosing money on it.

My company, a debt lobbying company, is actually looking for licensing partners in the US and for the European area right now. Anyone interested, write a response to this post.

Price tag for all of those interested: $1 Million each year. Divided into quarterly payments ($250.000 each quarter). If you don’t have the cash or business structure setup, don’t write. Only serious and well healed businessmen/businesswomen are invited.

What is included? Training and support fully included. Marketing budget and PR efforts are split amongst licensees and the licensor company to strengthen the brand presence worldwide. No license needed to operate.

Startup deficites and how to create a surplus

Many people are good at creating cashflow. But many are horrible at keeping the money. Many are also good at spending more than they have in cash. That is a horrible thing to do.

So what is the solution? What R Kiyosaki says: Create a surplus. A very easy thing to do. Emotionally hard, technicly a simple thing.

What you do is:

1) Make money.

2) Take 30% of the top (before any other expenses).

3) Invest the 30% in cashflowing investments.

Voíla. You are increasing revenue without much harder work.

The mother of an old ex-friend of mine, she had a little store selling second-hand products. She always struggled every month. Falling behind bills etc. She made money, but she never reinvested any of it in cashflowing investments. It was no mystery why she failed making ends meet.

You don’t need any business to make this work. Works really good on private economies as well.

This post was about startups in particular. So when you start out, you will invest some cash in prodcing something to sell and then you will invest money primarily in marketing. When the marketing brings paid orders to your door you just take 30% of the top and buy cashflowing investments. Investments that pay from day one. Forget capital gains stuff. Capital gains are secondary, always.

The more cashflowing investments you buy every month the more profit margin you will have and the more tolerance to fluctuations in the market you will have. See it as a smart hedge against unforseen catastrophes.

Wealth Dynamics – Your role in the game of business

I am big fan of Wealth Dynamics. The system created by Roger Hamilton. What be basicly say is, you have 8 wealth creators and all of them make their wealth in different ways.

For example I am a Creator and I make money primarily by starting companies and letting others run them. For me it is better to come up with new business ideas than trading stocks, running companies or acquiring them.

Others like the Star profile makes money by promoting others. The Supporter makes money by running either their own company or others. The Dealmaker makes money by doing deals. Say connect point A with point B. Then we have the Trader making money on the spread. He needs a lot of cash usually (OPM) and he uses that money to make a tiny percentage profit on many trades.

We then have the Accumulator who basicly acquire assets for the long term and live on the cashflow and appreciation. Then we have the Lord who can borrow money at say 5% and lend it out at 10% and those controlling the cashflow part of a deal. At last we have the Mechanic who makes money by licensing business ideas.

All of the profiles are mentioned in chronological order. Which one you are? Do the test at www.wealthdynamics.org. Well worth the money, time and energy.