I, like many in my generation, am struggling along my personal quest for independence. I followed the classic formula my generation has been taught to follow: I went through high school, got good grades, went onto college, took on a lot of debt, graduated, got a J.O.B. selling my time to a businessman for a weekly fee and I am applying that fee (aka income) to pay down college debt and invest in my future. I am part of the “99 percent” as coined by the media. What makes the “99 percent” so different than the “1 percent” is the “99 percent” rarely generate income beyond selling their time for a fee. The “1 percent” are so different because they tend to not sell their time to another person – they generate capital for themselves by selling products, services and ideas to a consumer base that are willing to pay a premium for it. I want to be part of the “1 percent,” and I plan on being there some day. But how?
I believe the easiest way to become part of the “1 percent” is to build a business. The concept of a business is very simple. All a person has to do is sell a product, service or idea for a higher cost than it takes them to generate that product, service or idea to someone that is willing to buy it. What’s left over are earnings that that business can than reinvest into itself, be taken out by the owner for a salary or a mixture of both. It’s nothing more than a simple math problem. The question is, as the Owner of a business, how much money to you want to take out of it for yourself? That, again, is just a simple math problem. What if your goal is to build a business you can then turn around and sell for a million dollars? It may sound daunting at first, but when you think of it as a simple math problem, it actually becomes fairly simple.
You build a business with a product to sell for $__.__ That product has a 25% margin.
You know you can sell your business for about 10 times earnings. In order to turn your business into a $1 Million business, you need to generate $100,000.00 in earnings. At 25% margins, that’s $400,000.00 in sales. Spread out over 365 days, that’s $1,095.89 in sales per day.
If your product costs $10, that’s 110 items sold daily.
If your product costs $100, that’s 11 items sold daily.
Can you sell 11 of something a day? If so, now all you need is a buyer.
Building a business worth $1 Million may sound daunting, but when you actually break it down using simple math, a path becomes clear. The most common reason why people do not hit their goals is, simply, they give up. Develop a clear vision, develop a plan on how to achieve that vision and becoming wealthy becomes nothing more than a simple math problem.
All information found herein, including any ideas, opinions, views, predictions, commentaries, forecasts, suggestions or stock picks, expressed or implied, are for informational, entertainment or educational purposes only and should not be construed as personal investment advice. I am not a licensed investment adviser.