Apr 13 2007

The Secrets of Successful Investing

Published by Mike at 4:03 pm under Entrepreneurship, Investing, Personal

Generate a Better-than-average Return on Your Investments

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 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:

  • You can invest in the business that employs you by securing a profit-sharing compensation package.
  • You can invest in another business you run in your spare time or have a friend run.
  • You can learn for yourself the ins and outs of making money by investing in real estate.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:

  • Marketing and finding new business cost effectively increases in value for any business or consulting practice.
  • Become an expert in your chosen field of expertise success in being able to build a consulting business.
  • Invest in businesses you know and understand  success in being able to pick stocks that will appreciate in value.
  • Find a mentor who will provide you with great advice success in being able to build stand alone businesses.
  • Understand the dynamics of the market that drive demand successful investments in real estate.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 action
    Once you know what makes your investments tick, you can then go to work at adding still more value. You can:

  • Find new products for your business to sell.
  • Learn how to enhance the value in the products you already sell so you can charge customers more.
  • Develop new and innovative way to create additional customers.
  • Exploit “back-end” sales strategies that enable you to sell more to your existing customers.
  • Learn how to form and work effective partnerships with the right people and the right organizations.
  • Learn the ins and outs of what you need to be doing through hands-on experimentation.

    Using the 3 Business Strategies

    All of these different ways of optimizing and increasing your rate of return on your investments are really combinations of three general business strategies:

    1. Secure profit-sharing packages

    Put yourself into position to benefit from the good work you’re already doing by negotiating some type of profit-sharing arrangement. Typically, these are structured in such a way that you get a share of the additionl profits you generate for the business by introducing some new idea. If your employer is smart, this will be a no-brainer because you’ll become highly motivated to achieve something that benefits the business even more. There are many different ways to set these types of deals up.

    2. Start a side business and grow it

    Everyone should have a side business that allows you to generate money through the talents and skills you already possess. Not only does this add a second stream of income for you, but it also allows you to find the true market worth of your skills. If your part-time business grows large enough, at some point in the future you can decide whether to go into your own business full time or stay where you are. This gives you a good range of options. Set a goal to generate $25,000 a year through your side business by selling your services to noncompeting firms on a part-time basis to get started.

    3. Invest in real estate

    Real estate is th ideal investment vehicle. If you buy right, real estae will increase in value while you’re working away on other projeccts. To work real estate effectively, you don’t need to be actively doing physical work on your proerties. Instead, you make the most money in real estate by buying right. An active real estate investment program will mean you’re getting out in the marketplace and understanding value, getting on good terms with real estate agents who can steer good deals your way, and generally keeping tabs on what’s available. It also means watching for foreclosures and other great purchasing opportunities.
    Learn more about Michael Masterson’s philosophies from his book Seven Years to Seven Figures.

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