Business Intelligence

(22003) Michael Masterson says:

A high income is a good start, but in and of itself this will usually not be enough to provide you with a seven-figure net worth within seven years. To achieve that goal, you’ll also need to make investments that generate a better-than-average return for you. This will never be a matter of picking some investment and then sitting back and letting it make you wealthy. Again, you will need to make some astute investments and then work hard on making those investments appreciate in value by applying the skills and know-how you bring to the equation.

The Secrets of Successful Investing

The 3 major investment types

There are usually only three investments you can make that will allow this intensive hands-on involvement on your part to generate extraordinary returns:

Essential investment knowledge

In order to achieve above-average gains on your investments, some inside knowledge about how each investment appreciates is usually required. These will be the closely guarded “secrets” of success the industry insiders guard jealously.Even from the outside, however, you can make an educated guess about what you will need to know to make your investments appreciate in value. For example:

The whole point is that to accelerate your rate of return on your investments, you have to work your investments. It isn’t simply a matter of looking far and wide until your have found the “right” investment and then sitting back and waiting for your ship to come in. You can generate above-average returns in any type of investment you choose as long as you know what’s required and you are prepared to work at it.Taking actionOnce you know what makes your investments tick, you can then go to work at adding still more value. You can:

Brad Solomon was a 27-year-old accountant in 1998. He met someone who convinced him the time was right to start an investor-relations business. This was natural extension of the kind of work he did as a corporate accountant, except it would also require that he learn how to write good public relations material that would appeal to potenial investors.To get started, Brad contacted someone who was already active in the financial publishing industry. Since he had more business than he could handle, he agreed to contract some of the more mundane aspects of his work to Brad. That worked out fine because it gave Brad the confidence to quit his job as an accountant and plunge into building his own company. The arrangement worked fine for a year or so until his client accidentally e-mailed Brad an invoice he was sending to his client. When Brad realized the other company was taking his bills and then doubling or tripling them for their clients, he realized there was much more money to be made if he dealt directly with the end clients himself.To build his profile, Brad started attending trade shows and industry conventions where he handed out his business cards. He also offered to do a few jobs on a love-it-or-you-owe-me-nothing basis. Gradually, he started getting clients and since he delivered more than they expected, he started generating some good word-of-mouth referrals. Within a year, he was regularly billing $10,000 to $20,000 per month. He then hired his first employee in 2002 and taught him how to find new clients.

To add another revenue stream, Brad then decided to start publishing an investment newsletter. He also started another business with his cousin to provide specialized healthcare workers. Brad agreed to put up the start-up capital and have his cousin run the company. By a stroke of luck, this industry was just about to enjoy some explosive growth and the new company literally took off.

By the end of 2004, Brad was making $400,000 a year from his investor-relations business and newsletter. He also made another $250,000 as a silent partner in the healthcare workers business. Brad started investing that money in small-cap stocks and real estate, where again he was fortunate to be coming into both markets when they were on the upswing.

By the time a large temp agency made an offer to acquire the healthcare workers business in 2005 for a very healthy price, Brad realized the value of all of his investments were rising rapidly. In fact, he ended up making around $2 million within three years just from his investment portfolio and the sale of his sideline company.

Example #5–Using sales skills to start a business

Approaches used:

In 1975, 18-year-old Bruce Buffer got a job selling office supplies at a 50-person company. Within two weeks he was the company’s number one salesman and within three months he was promoted to sale manager. He was earning $50,000 a year, but he could see the coompany was earning a lot more from his efforts, so he quit to start his own business. That was fine, except his previoius company hit him with a million-dollar lawsuit because he took their best salespeople with him, so Bruce returned to work for his previous employer for twice his salary plus a bonus.By 1993, Bruce Buffer got the entrepreneurial bug again. He already had a couple of part-time ventures going but he also wanted to help commercialize the success of his half-brother, Michael Buffer, who was a ring announcer for boxing matches who had the trademarked signature phrase: “Let’s Get Ready to Rumble.” Bruce and Michael decided to form a partnership to generate income from that phrase.Within three years, Michael Buffer was not only acting as ring announcer for boxing matches but also doing the same for the NBA, the NFL, WCW Wrestling, the NHL, the Indy 500, NASCAR and the MLB World Series. Bruce even came up with the idea of using personalized audio recordings of Michael for other events so they could generate more revenue without being imited by Michael’s in-person availability.

By 1999, Bruce and Michael working together had generated more than $400 million in sales. Michael even managed to negotiate one deal that saw him become the voice of the Ultimate Fighting Championship (a martial arts tournament) because Bruce was contracted to a competitor, the WCW Wrestling League.

Example #6–Writing a success story

Approaches used:

 In February 1999, Justin Ford declared bankruptcy. He had tried starting his own import-export business and then building a publishing business, but all his efforts had come to naught. As he had a wife and three kids to support, he looked around for something he could do to make end meet. The only job on offer was to become a copywriter to develop marketing materials for another publishing company. Justin didn’t have any experience in the field, but with no other options he interviewed for the job. The publisher liked him and offered him a job with two salary options: Justin could take a starting salary of $60,000 a year or he could work for the company on a freelance basis earning the standard rate for freelancers plus a royalty on the sales he generated. Justin opted for the freelance position.Within a year, Justin’s income had doubled to around $200,000. About half came from copywriting fees while the other half came from the performance-based commissions he was generating as a marketing consultant. It was at about this stage that he came up with the idea to develop a program called The Seeds of Wealth, which would teach children how to save and invest money. Justin developed all the sales materials for his program and then approached a successful businessman to offer a 25-percent stake in The Seeds of Wealth for $25,000. The businessman loved the concept, was impressed by the marketing materials and made the investment.With his new idea launched and solid success as a copywriter, Michael had managed to save $30,000 by the end of his second year as a copywriter. He used that money to buy a piece of real estate that turned out to be a very good investment. He would be able to resell his property for an additional $85,000 within a couple of years.

By 2005, Justin had four income streams in place:

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