Enhance Your Odds of Biz Success Using Strategies That Amateurs Do Not
A professional poker player isn’t successful because they have better cards. They don’t win tournaments because they start with a bigger stack of chips either. Hell, they typically don’t even win a higher percentage of hands! They are consistently successful because they know the game’s odds better than the other players at the table. Professionals know the odds inside-out and they bet accordingly. This expertise of the odds turns them into a “shark”, playing against the amateurish “fish” who play on impulses, bad habits, or chemicals.
There are also many well known odds-enhancing strategies that people use to increase successes in their personal life. Everybody knows that if you want to get a hot date, it’s best to dress nicely, hit the gym, maintain excellent hygiene, and develop at least a semi charismatic personality. Everybody also knows that loosing weight is a function of feeding your fat-ass less nachos and actually walking around Walmart rather than taking the electric scooter rascal thingy.
What is far less obvious for most people are the odds behind financial and business success. Here’s the cool news: If you start to employee some of these odds-enhancing strategies in your financial and biz life you will quickly see things change for the better. Even more fun is the fact that most people don’t understand these ideas, so using them can send you to the top 10% in a hurry.
People & Relationships:
- It’s extremely difficult to make money where there is no money moving around. I’m writing this from Manila Philippines, a poverty stricken city within a third world country. There is nothing happening for 90% of the population. Move to a location with a vibrant economy and grow up with it. Better to have the wind at your back.
- Don’t do anything alone. You’ll get slaughtered. Get team members ASAP. This means attorneys, accountants, bankers, co-conspirators and mentors. Get a business partner ASAP. Hell, get 10 partners.
- Speaking of partners, find people who are very different from you. Plug gaps in your skill set and knowledge base with partners. I have no skill set or knowledge base so this is why I need so many partners. In an early stage business it is important for each of the key players to bring big value form their respective backgrounds. Very often you will see a visionary/strategy/sales kind of person joining forces with a technical/details/organization type person as they need each other. This is a great example of where 1+1 ≠ 2. If you find the right partner then 1+1=10.
Finance:
- If you’re not using investor capital to grow your business, you either don’t believe in your business or you enjoy slow growth. Raise $10MM from investors so you can borrow $40MM from banks. Take 20% of all investor gains as your own personal profit. Repeat a few times then add a zero to the deal size. If there’s a secret formula to wealth out there, this is it.
- In startup mode don’t be afraid to be creative. Use those 0% for 12 months credit card offers that come along. I was in $200k of personal credit card debt early in my RE career. It sounds crazier than it actually was because I had used the debt to create around $1mm in equity in my RE deals. Remembering this fact was the only way I stayed sane.
- Refinance your P.O.S. car to strip another few grand of equity out to invest in marketing or rehab dollars. I always admired my passive investors who would do this or get a HELOC on their house to pile more money into our projects.
- Don’t pay off your house. Mortgages are cheap money with tax advantages. Instead invest excess money into your business. It’s better to pay 5% interest on your mortgage and invest your extra cash in deals that will yield 100% returns. Better yet, don’t own a house at all and just rent. It’s never as sexy to say “I rent this house”, but neither is waking up at 5am to commute to your cubical.
Communication:
- Learn at least the basics of spreadsheets. If you can’t speak spreadsheet you’ll have more difficulty communicating with biz people than if you don’t speak English. Many folks won’t even deal with you if you cannot communicate your ideas this way. (but on the flip-side, don’t make spreadsheets overly complicated as it will just seems like you’re hiding something …)
- Get one great deal under your belt. Once you do, build a high quality PowerPoint or video highlighting it. Break down the numbers, and use it as a marketing piece for yourself. It might only be one deal but it will create 719.2% more credibility for yourself. (sorry, I rounded to the nearest 10th) People will start to send you checks or wire you investment funds without your permission. Not exaggerating. At one investor meetup I had a guy trick me into following him to his car to show off his new Benz Coupe, turns out he took me to his trunk and tried to hand me an envelope with a $500k check in it. I’m surprised the DEA wasn’t there for the bust.
- Brand yourself. Market yourself. Become a mini-expert and create content around your “expertise”. That could be a seminar, podcast, blog, meetup, YouTube channel, etc. People will chase you down to add value to your life and projects. BTW, I think it takes like 2 years of heavy research to be a mini-expert in any given field. You can tell I’m being super scientific with all of this.
Strategy:
- Invest in local private deals. It’s nuts that people send most of their money to Wall Street where they have no control and an expected return of merely 7%. Instead invest in your neighbor’s used car lot or online LED lighting store. Use competent attorneys to review all contracts, get the advice of people who understand the business. Maintain voting rights in the business. Make 70% per year instead of 7%.
- If you want to be a Billionaire the most direct route is to have an IPO by taking a company public. Best bet is to move to Silicone Valley and start a business or get involved in a startup there. It’s not very practical to do it thru real estate, M&A, starting a coffee shop or by getting a degree in IT. I gave this moving idea some serious thought last year but decided my life wouldn’t be much better off going from millionaire to billionaire and would be worse off for several different reasons. (I already left CA once!)
- Forget net worth, millions, billions, big paychecks, and crushing/dominating things. Instead simplify your life and expenses and make $5k a month doing something you love from your laptop. If there’s a secret formula for freedom out there, this is it. My upcoming blog post on this subject is halfway done and coming soon. 🙂
What odds-enhancing strategies have you used to increase your biz & financial successes? I’d like to pick up dozens of them from comments on this post.
