Ways To Make $1 Million Ep 464



In this podcast, the host, founder of acquisition.com, debunks the myth that one needs money to make money, outlining various strategies for financial success without initial capital. He emphasizes the importance of providing value over trading time for money, a mindset he attributes to the wealthy. The host discusses tactics such as offering conversion rate optimization to e-commerce businesses, using real estate leverage, refinancing, contract selling, and commission-based sales of high-value items. He also covers the potential of combining businesses, understanding arbitrage opportunities, and promoting products as an affiliate. The overarching theme is shifting one's mindset to recognize that skills and value creation are the true drivers of wealth, rather than merely possessing capital.

Summary Notes

Misconceptions About Wealth

  • Many people believe that you need money to make money, which is a misconception.
  • Listening to poor people for advice on how to become rich is ineffective.
  • Wealthy people view business as a game and approach it strategically.

"If you believe the shit that you're reading, if you're listening to poor people and advice on how to be rich, you will stay poor."

This quote highlights the idea that following misguided advice, especially from those who have not achieved wealth, can prevent financial success.

Strategies to Make Money

  • Selling a high-value product or service to an established business can yield significant returns.
  • Acquiring skills that can increase a business's revenue can be monetized.
  • Borrowing money to invest in assets that generate income, like real estate, can pay off the loan without personal funds.

"The wealthiest people in the world see business as a game."

Wealthy individuals often treat business ventures as strategic games, where the objective is to maximize value and returns.

Real Estate Investment

  • Real estate allows for leveraging borrowed money to purchase assets that others pay for over time.
  • Negotiating lower purchase prices can lead to bank financing without needing a down payment.
  • Seller financing can also be used to facilitate real estate transactions with little to no money down.

"You borrow money to buy an asset, you put tenants into the asset, they pay off the money that you never had."

This quote explains the fundamental concept of real estate investment, where tenants effectively pay for the property through rent, allowing the investor to use borrowed money to build wealth.

Refinancing and Flipping Contracts

  • Refinancing an asset for more than its purchase price can yield profit.
  • Contracts for assets can be sold at a higher price than they were secured for, making money on the margin.

"You refinance something for more than you bought it."

Refinancing an asset at a higher value than the purchase price can provide immediate financial gain without having to sell the actual asset.

Trading Time for Money

  • Wealth creation is not about trading time for money but providing value.
  • Thinking in terms of value rather than time can lead to more significant financial opportunities.

"That's how poor people think. And that's why most people stay poor because they're trying to think about what they have to do over a year to make $100,000, because they're not thinking in terms of value, they're thinking about themselves."

This quote emphasizes the flawed approach of equating time with money, which can limit earning potential and perpetuate poverty.

High-Value Sales and Commissions

  • Selling expensive items, like real estate, can result in substantial commissions.
  • Even without owning the asset, skills in sales can lead to significant earnings.

"You absolutely can make a million dollars with no money down if you have skills."

The ability to sell high-value items can lead to earning large commissions, demonstrating that skills can be more important than capital when it comes to making money.

Early Investments and Demand

  • Early investment in products or assets with high demand can result in substantial profits.
  • Understanding market demand and scarcity can lead to successful investments, such as pre-IPO shares or NFTs.

"This is how the entire NFT thing worked, is that you have tremendous demand for a scarce resource."

The quote explains the principle of supply and demand in investment opportunities, where early investment in scarce resources can lead to high returns due to increased demand.

Selling Units and Increasing Value

  • To make a million dollars, one can focus on the number of units sold and the value of each unit.
  • Business owners need to either sell more units or increase the value of their offerings to grow income.

"You either got to sell more units in the same period of time or you got to make the units worth more."

This quote outlines the two primary ways to increase revenue: selling more units or enhancing the value of the products or services offered.

Acquiring Businesses

  • It is possible to acquire businesses without money down by consolidating and leveraging existing businesses.
  • Creative deal-making can lead to ownership of businesses without initial capital investment.

"You can get people to give you their businesses for no money down."

The quote suggests that with the right strategy and negotiation, it is possible to acquire businesses without upfront capital, expanding one's portfolio through strategic acquisitions.

Business Acquisition and Consolidation

  • Small businesses with similar top-line revenues can be combined to create a larger, more valuable asset.
  • Acquiring businesses without initial capital can be achieved through creative financing like seller financing.
  • The combined value of the businesses can significantly exceed the sum of their individual values.

"He combined them all to be a $4 million top line, million and a half bottom line business for no money out of pocket."

This quote explains the process of consolidating small businesses to create a single entity with a higher total revenue and profit margin without any upfront investment.

Seller Financing and Asset Ownership

  • Seller financing allows for the acquisition of businesses by agreeing to pay the seller their expected income over time.
  • Ownership of the asset provides the ability to sell it for a profit in the future.
  • Understanding the terms of seller financing and its implications is crucial for successful deals.

"But he owns the asset now. And so if he turned around and went to say, hey, I'm going to go sell this, he could probably sell the thing for $5 million put together."

This quote highlights the benefit of owning an asset through seller financing, allowing the new owner to potentially sell it for a profit.

Leveraging Value to Make Money

  • Wealth creation is not limited by time but by the value provided.
  • Understanding the needs of multiple parties in a transaction can lead to profitable opportunities.
  • Providing value can be more important than the amount of time invested.

"They're thinking, how do I provide the most value to somebody so they'll give me a percentage of the value I provide."

This quote emphasizes the mindset shift from trading time for money to creating value for others as a means to generate income.

Real Estate Investment and Tax Benefits

  • Commercial real estate can offer significant tax advantages through depreciation and leverage.
  • Understanding the tax system and investment strategies can lead to profitable opportunities with little money down.
  • Catering to the needs of building owners and investors can create win-win situations.

"He could take the depreciation on the whole building and hand it to the guys who gave him the money. And so they got free buildings."

This quote explains how leveraging tax benefits in real estate can provide substantial value to investors, leading to profitable deals for the facilitator.

Affiliate Marketing and Arbitrage

  • Affiliate marketing allows individuals to earn money by promoting products they believe in without creating their own.
  • Arbitrage involves exploiting price differences in different markets for profit.
  • Both strategies can be executed with minimal or no initial capital.

"You can affiliate other people's products and make money in that way without any money out of pocket."

This quote illustrates how affiliate marketing can be a viable way to earn income without needing to invest in product development.

Options and Contracts

  • Securing options to buy assets at a fixed price can lead to profitable reselling opportunities.
  • Understanding the value of an asset and securing the right to purchase it can lead to substantial profits without owning the asset.
  • Skills in identifying undervalued assets are more critical than having capital to make money.

"And then you sell the paper for $20 and it costs you a penny."

This quote demonstrates how securing an option and then selling the rights to purchase an asset can result in significant earnings with minimal investment.

Real Estate Investment Strategy

  • Manny Koshman's first million in real estate was made through a no-money-down deal.
  • By purchasing a property under market value and refinancing, one can extract the difference as profit.
  • This method relies on leveraging the bank's loan to create a spread between the purchase price and loan amount.

"and you can get it for seven, you can get the bank to pay you eight for the house because they'll do 80% loan to value, right? And so if you bought it for seven and the loan will be for eight, it's like refinancing out the money. So you make the spread from the bank with no money down."

The quote explains a real estate investment strategy where you purchase a property for less than its value and refinance it at its actual value to profit from the difference without investing your own money.

Misconceptions About Wealth

  • The speaker warns against taking financial advice from those who are not wealthy.
  • Believing that money is required to make money is seen as a misconception that keeps people poor.
  • The speaker emphasizes the importance of learning from successful individuals.

"The reason I'm telling you this is because if you believe the shit that you're reading, if you're listening to poor people and advice on how to be rich, you will stay poor."

This quote suggests that misguided advice, especially from those who are not financially successful, can hinder one's ability to achieve wealth.

Podcast Support Request

  • The speaker requests support for the podcast through ratings, reviews, and sharing.
  • Emphasizes the non-commercial nature of the podcast and its aim to help entrepreneurs.

"The only ask that I can ever have of you guys is that you help me spread the word so we can help more entrepreneurs make more money."

The speaker is asking for support to increase the podcast's reach and impact, highlighting the value it provides to entrepreneurs.

Commission-Based Earnings

  • Selling high-value items without owning them can yield significant commissions.
  • Success in this method depends on sales skills and the value of the item sold.

"Another way to make a million dollars is to sell something that's expensive, that you never owned, and be the salesperson, like a $20 million house and get a million dollar commission."

This quote describes a method of earning large commissions by facilitating the sale of expensive items without having to own them.

Earning from Business Transactions

  • Bankers can earn substantial fees from facilitating business sales without owning the business.
  • Applying skills to a transaction can be lucrative.

"The bankers got $2 million for facilitating the transaction. They never owned anything."

The quote illustrates how bankers can profit from business transactions through their facilitation services without needing to invest their own capital.

Options Trading

  • Options trading involves securing the right to purchase an asset at a future date for a set price.
  • Profits come from the difference between the option price and the asset's market price at the time of exercise.

"They get 100 options that they can choose to exercise right. And so let's say that the stock price that they're getting the option for is $40, and at the time, it's $50 in the future when they secure the option in the past."

This quote explains the basics of options trading, where traders profit from the increase in value of the asset between the time the option is secured and when it is exercised.

Digital Assets and Scarcity

  • Creating scarcity for digital assets and building an audience can drive up prices.
  • NFTs and cryptocurrencies are examples where this method can be applied.

"So you have a scarce resource, let's say you have five of a thing, and then you get a million people to want the thing, and then you sell only those five."

The quote describes a strategy of creating demand for a limited digital asset, which can significantly increase its value due to scarcity and high demand.

Reverse Engineering a Million Dollars

  • Understanding the math behind making a million dollars is crucial.
  • Different approaches can be taken based on the value of the goods or services sold and the number of customers.

"All right, I'm going to get real with you guys right now. This is how I analyze every business that I look at. I look at sales velocity against LTV."

The speaker emphasizes the importance of analyzing sales velocity and lifetime value (LTV) to understand and predict business revenue potential.

Sales Velocity and Lifetime Value (LTV)

  • Sales velocity is the rate at which products or services are sold.
  • Lifetime value represents the total revenue a customer will bring over the course of their relationship with a company.
  • The combination of these two metrics can predict business growth and revenue potential.

"Sales velocity is the number of units sold per month, all right? And then you multiply that by the lifetime value of the customer."

This quote explains how to calculate the potential revenue of a business by considering both how many units are sold in a given period and the total value derived from each customer.

Leveraging Business Acquisitions

  • Acquiring businesses with no money down through seller financing is possible.
  • Knowledge in mergers and acquisitions can enable entrepreneurs to consolidate businesses for growth.

"So there's a company that we're looking at in our portfolio that's trying to come on, and the guy went through a course on M and a. He got four small guru businesses to give him their businesses."

The quote provides an example of how one can acquire multiple businesses without initial capital by leveraging seller financing and knowledge of mergers and acquisitions.

Seller Financing and Business Acquisition

  • Seller financing can enable the acquisition of a business without upfront capital.
  • Combining multiple businesses can significantly increase their value.
  • The acquired businesses' collective revenue and profit can be much higher than individually.
  • Seller financing is a skill-based strategy rather than capital-intensive.

So let's say I'll give you $200,000 for your business. Your business makes $200,000 a year, and I'll give it to you over the next year. Right? So you just give me the business, I'll keep running it. You get your $200,000, and after the end of that year, I get it back where you can spread the debt over two years, whatever right.

This quote explains the concept of seller financing, where the buyer pays for the business over time out of its earnings, allowing the acquisition without needing large amounts of capital upfront.

Value Creation Through Business Roll-Ups

  • Combining smaller businesses into a larger entity can create value.
  • Larger businesses can attract higher valuations and better multiples.
  • Private equity firms often engage in roll-ups, buying many smaller businesses to create a more valuable larger business.
  • Small operators can facilitate acquisitions for larger entities by making the purchase more efficient.

So when you combine small things into a bigger thing, things become more valuable. If you've heard the term a roll-up in private equity, that's when they take lots of little things, they combine them together, and they make it into a big thing.

This quote describes the process of roll-ups and how they create value by combining smaller entities into a larger, more valuable one.

Arbitrage Opportunities in Business

  • Arbitrage involves capitalizing on the price difference between markets or products.
  • It can occur at various scales, from small transactions to large business deals.
  • Arbitrage can be applied to physical products, financial instruments, or entire businesses.
  • The concept is also applicable to lending money at different rates and promoting products for a commission.

Another way to make money is that you lend money between two parties. So if you get access to money between one person and he's like, I'll give it to you money at this rate. And these people are like, I'll pay you money at this rate. You hand the money to this person, you make the difference.

This quote explains financial arbitrage, where one profits from the interest rate difference between two parties.

Scaling and Entrepreneurial Growth

  • Scaling a business or operation can lead to significant financial gains.
  • Entrepreneurs should aim for high-value transactions rather than limiting themselves to small-scale deals.
  • Learning skills that allow for scaling and high-value transactions can be more efficient than focusing on smaller goals.
  • The amount of effort required to achieve significant success is often underestimated.

And so I want people thinking in orders of magnitude, dude, in terms of not just how do I make $100,000 a year, but how do I make a million dollars on a single transaction?

This quote encourages thinking big and aiming for transactions that can generate significant revenue in a single deal rather than smaller, incremental earnings.

Real Estate as a Vehicle for Wealth

  • Real estate can offer opportunities for large profits through strategic buying and selling.
  • Flipping properties, especially in the commercial sector, can result in substantial gains.
  • The scale of the deal in real estate directly correlates with the potential profit.
  • High effort in marketing and outreach is essential to find profitable deals.

So a buddy of mine got into real estate, was flipping houses. Didn't think there was a lot of money in it. Was like, thought, this sucks. There's so much work and there's all those fixings and all this stuff, and he didn't like it. So he ended up buying a 14 unit apartment building with someone else's money, and he didn't have any. Bought the apartment building and then sold it four months later for $500,000 more.

This quote illustrates a real-world example of how a shift from small-scale house flipping to larger commercial real estate deals can dramatically increase profits.

The Effort Required for Success

  • Success in any venture requires a significant amount of effort and persistence.
  • Many people underestimate the work needed to achieve high levels of success.
  • Large-scale success often demands high-volume, aggressive marketing strategies.

But people dramatically underestimate the amount of effort it takes to be really successful. And they're like, I sent 100 letters out. It's like, 100 is not even a test size. It's literally just an irrelevant number. The statistical efficiency of that number is so small, it's irrelevant. It doesn't even matter.

This quote emphasizes the underestimation of effort by many aspiring entrepreneurs and the necessity for substantial action to achieve notable success.

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