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Video Transcript: I wanted to talk briefly just about this idea of creating wealth and building cash. I talked about this idea of step one, you need to make sure that you get cash flow right before you do anything. I was in a very fortunate position when we built out the Metastock Programming Study Guide. I was still at home living with Mum, so I had my rent and my food and everything else covered. So I went straight into building info product which is a residual automated style cash flow because I had that covered.
When I say cash flow, really what I mean is have those basics covered. You need to focus your attention there til it is sorted. So whether or not you need to get a job. Gary Vaynerchuck in a great book called Crush It, he talks about this idea of, if you need to go work in a supermarket shelf stacking for $10 an hour where you work from 9 to 5 and everything outside of that is free time where you can work on your entrepreneurial endeavours, then do that. Do whatever it takes to get that sorted.
The next step, once you get that cash flow sorted, I’m all about building your own business. So if you can build your own business that gets that cash flow sorted, that’s where I’d focus. Then the next step I would look to automate your core processes. So when I think about what we were doing, we automated the SEO component. For me, I thought, yes the traffic thing, what can I do to make sure it is as automated as possible?
The reason you do it automated is so that, just like McDonald’s, you can plug a fifteen year old in. McDonald’s hire fifteen year olds to run multi-million dollar businesses because they’ve got these systems. It’s just about following a process. You want to do the same so that you can step out of your business, this is Michael Gerber material, work on your business not in your business. That’s really what I’m talking about for automating that core cash flow.
From there, the next step is then I like to do automated cash flow that is a bit more residual. The core thing is almost about delivering services, so whether or not you’re a fitness person, the way that you might automate the fitness thing you might create some processes and then you can get other fitness trainers in to do the fitness training for you. That’s how you do that.
Then the next step might be, well, maybe I’m going to create a set of DVDs of one of the people running these little fitness sessions, Rock Hard Abs in Thirty Days or Less or something like that and come out with a DVD or something like that, a suite of products that can then supplement what it is that you’re doing. It’s almost like you’re starting to shift into an info product business.
Granted you need to take everything I say with a grain of salt. I don’t know if you’ve heard the saying if you’re holding a hammer, everything looks like a nail. For me, info products is where I started and that’s just worked incredibly well for me. You might do a slight mix on this, but if this resonates with you, then it might be worth trying something.
Once you start to get that automated cash flow, then you want to invest that into assets. Now start off firstly focusing, building your assets for business assets. What I’m talking about there is, let’s say, we’ll just keep on using Willows as the example, maybe you start to buy websites related to, all around the fitness area. So maybe you start selling fitness equipment and you might buy some other business, the fitness equipment that plugs in. We already know you’ve got the market, so now that you’ve got the market you need to start to think ok, what can I sell them?
Step one is find that market, then you want to find out what it is that you can sell them. So now that you’ve built up that core business and automated it, now you want to try and start to think, ok, well what else do they want to buy? Then you start to add businesses in. This is where I was saying, a lot of people just start digging holes in all different directions and then they start starting businesses in other areas. Really what you should do is focus.
Then after that, you start to acquire assets in other classes. Part of creating wealth, you need to invest in real estate, you need to invest in trading and you should also look at business as well. So business is usually where I like to start because you generate cash flow and then I like to funnel that money into real estate and trading. I don’t use those asset classes for cash flow, I use them for capital growth to make sure that your cash grows. I’m not looking to drawing money from it to make sure that I cover my day to day expenses.
I think the reason business is the best place to start is because you get the best leverage. You get you. You can put more of you into it and that’s where you’ll get the most money back. It’s a little bit harder in something like, well you can, for real estate, some people do it for cash flow. They might renovate a house or something like that. So they do the house up and then sell it. But the problem with that is, I still fell like it’s a big capital event. It’s not consistent income and it’s about building that consistent income.
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