The Million Dollar Question:
How can I do what I do for more people with less work and for a better price?
How to come up with business ideas:
How can I become rich by working for free?
How can I build, buy and create assets?
Wealth Ratio:
Monthly Passive Income + Monthly Portfolio Income / Total Monthly Expenses
Once you reach 1+, you are out of the rat race.
Debt / Equity Ratio:
You want to see this number shrink.
Metcalfe’s Law:
Economic Power is the square root of the number of the network:
Ex: Number of franchises:
2 franchises doubles the power and earnings of the company.
Employee Interviews:
Don’t ask about benefits, if people do - stay clear.
Good candidates - ask how they can help the business grow.
How to pay out your business:
Who gets paid first and most:
1. Asset (business or investment)
2. Employees
3. Specialists
4. Investors
5. Business Owner
Work to build the asset, not to make money.
Things you NEED to do to become rich:
1. Hire a bookkeeper:
Financial statements are necessary to receive large loans / bonds.
Owner should review financials at least once per month.
2. Create a winning team:
Don’t keep money problems or plans a secret, discuss them openly with your team.
Borrow money at low interest rates and invest it at a higher return (real estate).
3. Constantly expand your context and content.
4. Keep Growing Up:
Take care of yourself, don’t assume other will.
Don’t assume the market will stay bull.
5. Be willing to fail more:
Destroy fear by thinking of the things you want.
Stock Market Advice:
Have an Entrance and an Exit Strategy when investing in the stock market.
Only a loser stays forever losing everything, instead of knowing when to take a loss and walking away from a bad investment.
Investor - buys to hold
Trader - buys to sell
“An investor buys a cow for milk and for calves; a trader buys a cow to slaughter.”
Fundamental Investor: Follows a company, management team, business potential and finances.
Technical Investor: Follows market trends and charts.
Notes:
Keep your money moving - don’t buy and hold in stocks.
Be your own market - follow market trends.
Buy low and sell high.
Use saddles - hedge your investments to protect from losses.
Place a 10-15% stop loss on your stocks.
Don’t leave your stocks naked to a bear market or recession / depression.
Large Cap: Take 25% of your original investment out of stocks when they are up 25% from the original investment.
Cramer says to do this when stock doubles.
Small Cap: Take 50% out to recoup original investment when up 50%.
OPTIONS:
Allow you to make more money with less at risk.
The rich do NOT want to own anything - they only want to CONTROL.
Call Options:
If you expect the market to rise.
Put Options:
If you expect the market to fall or want to stop risk of losing.
Lock your price in at the right to sell at the current market rate for a small fee. If the market goes down use the option to sell, then re-buy your stock at the lower rate - you keep the difference.
Straddles / Collars:
Using both a call and a put option on a stock to protect an investment both ways.
Can straddle a short of a $50 stock buy using a call option for $51 and sell the call option and short at different times. - Make money no matter what this way.
SOPHISTICATED INVESTORS: Prefer to trade options rather than stocks.
Faster money and less risk (one option is for 100 shares)
Shorts are NOT options.
Shorts: Trading / Selling stock you do NOT own.
When to short a stock?
If you feel a stock is overvalued and about to drop - short.
Borrow someone’s stock, sell it, then re-buy it at the lower point - pocket the difference.
“Covering the short position”
Re-buying the stock.
Naked Put Options:
A naked put option at $40, current price is $45.
You get $5 per share covered, but have to buy all the shares at $45 it the naked put drops to $40.
If the put option does not drop to $40, you get to keep the $5 per option (remember options are contracts for 100 shares) as it expires within a certain time frame.
85% of naked put options expire without being exercised.
Make sure you have the money to cover, just in case.
Make sure you like the stock, in case you have to cover.
“Naked” - you do not own the stocks you are optioning.
“Covered” - you do own the stocks you are optioning.
Real Estate:
Your profit is made when you buy, not when you sell.
Use a home equity loan or reverse mortgage to your advantage.
Use this when a house appreciates, to extract money for more investments.
RATIOS: See 100 properties, make an offer on 10 properties, have 3 sellers say yes and buy one.
Browse even when you don’t have money - keep learning. Know the market.
Don’t invest in a place with an HOA - not enough control of your investment.
Use Price to Rent ratios to find good markets.
Rule of 72:
72 / Interest Rate = Annual Growth %
How long it takes an investment to double.
Marine List of Priorities:
Mission
Team
Individual
Believe you will be rich and tell yourself everyday.
11 TIPS TO BECOME RICH:
1. Decide:
to be rich and expand your context of reality.
2. Friends and Family:
Surround yourself with only supportive and positive people - no critics.
3. Team:
Build a successful team of assets.
People can be assets or liabilities too.
4. Set a Retirement Date:
Discuss with loved ones and advisors - have a plan.
Do this meeting quarterly.
5. Plan:
Create a plan - on paper.
Update and review the plan as you progress.
6. Plan your early Retirement Party:
Motivation.
7. Look at One Deal per Day:
Read articles about money.
Look at stock / options shopping.
Look at properties.
Got to investment seminars.
Boost financial IQ.
8. Follow Market Trends:
Invest with the trend, not for the “long haul.”
Better use of funds, strategies base on trends.
Money is just an idea.
9. Words / Vocab is Free:
To be rich, must understand the vocab associated with investing.
10. Talk about Money:
11. Make a Million Out of Nothing or Virtually Nothing:
An entrepreneur can make money out of nothing.
Loans
Math to make money
More work
Less expensive