Fastlane to Start-Up Success

Many people fail when starting companies. Many people fail because they do not know the drill. They have no clue whatsoever how to build a company and walk away with multi-millions in the end.

Let me shed the clouds for you. When starting a company, your main aim should be to create something better. Something bigger, something lighter, something faster etc.
Even something cheaper (even though I encourage people to focus on the value instead of the price difference. People want stuff that works, cheap stuff rarely work for long).

The keyword here is: "Something different".

Creating something different is not the hardest part. That's the simple part. Everyone can dream up something weird. It just requires a great imagination. Some people have this skill, some people don't. But most of us do have it.

The hard part comes when we are to prove the commercial side of things. When you have come up with the newest (and obviously best choice) product, then you want to sell it. You want to make a mint on it. But how? What is the path?

The path is this (my way):

1) You buy a DM (Direct Marketing) list. Say 10,000 unique names. You need to buy a specialized name list only. Because you want a targeted crowd. A crowd that is clearly in to your kind of products because they usually buy this kind of product from time to time. If you can offer them a better deal, then you have business. Then you have income.

2) Step number 1) is what I call "proving the commercial concept". You have proven to the world that people are willing to purchase your product for the price you have set.

3) Step number 1) leads to step number 3) which is licensing. As soon as you have proven your product in the market, then you have a smashing hit to license abroad. In foreign countries. On this stage your ultimate aim is to sell a license to existing companies in your field. You want these companies to pay you a minimum guarantee amount (order a certain amount of products) every quarter so as to guarantee an on-going cashflow stream. If these companies purchases more than the minimum guarantee, fine (great even). If not, you still have a guaranteed order amount to expect. You get companies on guaranteed amounts by giving them exclusive rights to their particular market. You secure that particular market for them. That is a great value for the distributor.

4)On step number 4) you are in a position to contact an investment bank like Merrill Lynch, JP Morgan etc and tell them you have this company you want to sell. Then have the investment bankers sell your company to the highest bidder (investment bankers usually contact existing companies who are looking for companies to purchase. The more bidders the higher the price you might get).

Say you have $5 Million in pure profits each year (due to the many licensees you will gather), if you have an investment banker on board selling your company, you will be able to get at least 10 times profits (that is $50 Million pre-tax). Why is that? The investment bankers are prone (due to them making more money on it) to contact strategical buyers. That is, buyers interested in synergies before short-term profits. Strategic buyers pay more for companies due to the possibilities they see, that other investors (who are looking for ROI pure and simple) can't see.

One example of this is the Ebay VS Skype deal, where Ebay paid somewhat 30 Billion SEK for Skype. Making the owners of Skype pretty loaded on money. Skype had 50 Million SEK in turn-over (not pure profit) at the time of sale. According to the newspapers. That is the magic of great investment bankers, a buyer with eyes for synergies and a big, fat buyer account.

So the formula in short, is:

1) Test the product/service in a small DM campaign. If it sells, go to step 2). If not, test a new product/service.
2) License the deal to foreign countries on exclusive distribution terms.
3) Find an investment bank to sell your company to a strategic buyer.
4) Exit.

Start over with something new and live of the money you have gathered. Live on 1/1000th of the after-tax sum and you will have money for 1000 months (or 83 years). Money for the rest of your life even if the next company went belly up.

As Mark Cuban said: "You only need to be right once". And he meant in business.

Business tip of the day

Tip of the day is:

Set high prices on your products and services and give unique selling points to what the customer will be getting after they have paid. You will sell only to a few customers, but you will also raise the profit level you will be getting. And at the same time, you will gain a lot of free time to actually enjoy the money you make.

How is that for a tip? Enjoy.

Geo arbitrage

Geo arbitrage has become a little bit of a new hype word. What Geo arbitrage means is: currency difference in living standard between different countries. More or less.

This means that, if you live in Sweden like me, for every 1 SEK you can recieve 10 times more in purchasing power in Kenya. That means you don't even have to amass one million SEK (or approximately 60,000-70,000 USD) in order to be regarded as a millionaire in Kenya. In Kenya you are considered a millionaire with only 100,000 SEK (or approximately 6000-7000 USD). At least if you use the SEK/Kenya shilling comparison. You have to look at the difference between your currency and the Kenyan shilling in order to see what you can gain yourself.

So why do I bring this up? What is the great thing I want to display here? Simple:

If you make 1000 SEK in Sweden and then spend in Kenya as a resident you will have the purchasing power of 10,000 SEK. That means, you don't have to work hard at all anymore. You can cut hours from your mobile job (if you have any such job that is) and just relax more than you do now (or do something more meaningful if you do hate your current job). But, of course this hinders you to one specific country of course: Kenya.That is the bad part.

As they say: There is good things, but even good things has it's particular dark side. Yin and Yang you might say. For every bad part there needs to be an equally good side to balance the situation.

Savings VS Investing

People these days, at least those I associate with, seem to hate saving money. It is all about "investing". The problem is, all these people "invest", "invest" and "invest", but have no savings.

Let us begin with discussing why someone should save money? The only reason I can come up with is: to recieve passive interest income that secures your private economy. That's all.

Second, why should someone invest or even speculate? The only reason I can see is in order to get capital gains and use that capital gain to put in a savings account. That's all. You make more money and then put that money into a savings account that is secure and reliable.

The thing is: You make deals in order to then live of the interest of that same money. The easiest and best place (I am biased as you may understand) to place that money is in a savings account that beats inflation every year and then pay you cashflow that you then can use to pay your living expenses with.

How to give something of value in order to raise networth and cash

When starting a new business venture entrepreneurs need to focus in delivering value. Many people talk about "give value and you will recieve money". But they usually think on a low scale. What I want to introduce you to today is how to create massive value and recieve a billion dollar status and also recieve cash in your pocket that you can then put into your savings account (and then live of the interest for the rest of your life).

Before we can get a billion dollar valuation and a lot of cash to put in the bank, we need to define what kind of value our venture can offer an investor. If you have positive net cashflow then you have a great advantage. You can then offer this cashflow to the investor in return for a P/E valuation of 10X earnings. In return for that value you ask the investor to buy only a small piece of your company. The smaller the part, the higher the valuation. Say you can offer $400,000 a year in income from the company and you ask for a P/E valuation of 10, you could then recieve $4 million in cash (tax on it and put it in the bank and live of the interest).

As mentioned in previous posts on this blog you probably know the valuation system at this point. But let us tell you again. If you sell 1% of the company for $4 million, then the entire company is worth $4 million /1% = $400 million. If you own 99%, then you would be worth $396 million. But this is on paper of course. Unrealised capital gain as they call it. You need to sell it in order to spend it or save it in the bank. But this number still bear a value to your personal balance sheet. The fact is, you have created a company, a value, that an investor has seen being worth $400 million. Be proud.

It's like Microsofts investment in Facebook. They paid somewhat like $240 million for 1,6% of Facebook. Not because of the money or the dividents etc, but becuase they where promised exclusive control over the banner advertising space on Facebook. That "value" made Mark Zuckerberg, the 24 year old a multi billionaire on paper. The "valuation" is just a bi-product of the value you give. And as you can see with the Microsoft-Facebook connection, money is not always the best value. If you have a website that has a lot of well defined visitors, you could probably find an investor willing to purchase a little piece of your corporation in exchange for exclusive banner advertising control on your website. That could equal a cash payment for you as the owner of the shares sold and a new and higher valuation of your company. hence raising your personal networth a lot.

You really need to look at it this way in order to become super rich. And have more money in your savings account, earning you income interest for the rest of your life. Never needing to think about making a living anymore.

Artwork and Wealth

Wealth is a subject I like to debate. Art is one very interesting one as well. I am not interested in how the artist has painted a painting, I am more interested in the wealth related part of that painting. The "collector value" so to speak.

For example: Create 4 equally looking paintings (or have a good artist do 4 equally looking paintings). Then sell one of those paintings as expensive as possible.

Example:

4 equally looking paintings is created by an artist (paid by you). You get all 4 paintings. One of the paintings is sold by you at an auction. You recieve $100,000 for this one painting. The other 3 paintings is kept by you. These 3 paintings are valued at $100,000, each, after the auction sale of one of the paintings. That means you hold paintings worth a total of $300,000 ($100,000 X 3 equally looking paintings).

Wealth created out of necesity.

Time Management

Time management is the ultimate way of doing more with less time. It is also the ultimate way of making things happen instead of postponing things. Because when you have a clear deadline everyday where you are forced to do a certain thing in a certain time frame (or wait to the next day) you will do it more effectively. You will find ways of doing it. Otherwise you will lose.

And this working time frame each day is there for a reason. The reason is to tell you that when this time frame is over, the working day is over. And if you haven't reached the effectiveness and productivity in that time frame you will have lost one day of your life to bad time management. If you are working for someone else you have in most cases 8 hours of work. Then you go home and you don't work more hours that day. No for your employer anyhow.

When you are an entrepreneur you don't have those clear distinctions between work and play time. You have to set those time frames yourself. Otherwise you will certainly burn out. Sooner or later.

I work 3 hours and 20 minutes each day (Saturdays and Sundays included).

My schedule looks like this:

-2 hours 30 minutes - checking mail and writing mail.
-10 minutes - reading online businss news.
-1 hour - reading a book of my choosing.
-10 minutes - talking on the telephone (business only). This requires dicipline. I gotta tell you. I usually give delegations by telephone only. Updates is done by my COO or anyone else by email only.
-30 minutes - Reading/writing forum threads to keep up with other peoples ideas. Inspiration purpose.

In order to succeed with this kind of time management you need to use your creativity and your focus on getting things done in much, much less time. And you need to have a clear disticntion between work and play time. It is like when you start a company. You don't use your personal bank account as your companies account. You open up a separate account for the business. The same goes with your time.

Start-ups and banks

Many start-up companies are stuck when it comes to bank financing. Why is this? Simple, they have no cashflow history. They have no earnings history.

So the simplest way to get a loan from a bank if you have a start-up company is by getting long-term contracts signed and clear.

This works like this:

You have produced a new beer product. You walk around to local pubs and they find your idea very interesting and sign themselfs up for 2-3 year lease or purchase agreements. Why agreements? Simple, with agreements you now have a history (all though a future history of revenue). The bank will like this. With these agreements you have a proven revenue stream 2-3 year into the future. You also have your customers creditworthiness working to your advantage (a start-up company is per automatic not creditworthy).

The next step you need to understand in order to get a bank to give you money to deliver your product/service is how much you will earn on the agreements. Banks will lend only a certain percentage (75% in Sweden) on the annual earnings divided by the cap rate you are given.

So if you make $100,000 annually in earnings (after fixed expenses and before taxes) the bank would give you $75,000 in Sweden divided by a cap rate. In this case we say the bank will give you a fixed 10% cap rate on $75,000. This would give you $750,000 that you could use to finance your company and get things moving (assuming an interest loan).

Sounds overly simplified and unrealistic, but test it before you dismiss it, will you. I think you owe it yourself. The worst thing that could happen to you is getting a "no" from every bank in the world. How horrible can that be? There is always hard money lenders (private lenders) if the traditional banks should say no (which would be very strange by the way).

Management Buy-In

When you hire managers you should ask them to invest in the company. This is called "management buy-in". This gives you, the founder, a sense of security. The security is in the risk the management is taking together with you.

You should not sell a lot of your company equity though. 5% should be more than enough.

When you are in the start-up phase you should usually ask for a lead investor who will take the CEO position in the company. This lead investor/CEO will invest US$100,000 - US$200,000 in the company (or pay you this sum of money). This CEO will then lead the company and have a $100,000 - $200,000 at risk if the company should fail. This ensures that every manager do what needs to be done to ensure the success of the business. This is a very good thing for you, the founder. Nothing boost the founder ego more than the success of this act. Because you don't need to entice the managers as much, the money risk speaks for itself.

Also, the other good thing about management buy-in's is that the company value rises. As mentioned before: If you sell 5% for a given sum, then the value of the company rises 20 times the invested amount. This can be a big gain in your net-worth.

If you are really smart, you lead the company yourself until the company is bankable. You then borrow a little money at a very low cap rate and then you sell 5% of your company at the value you now get from using "earnings / Cap rate". If your company makes money the managers will be easier to entice.

Raise company value with loans

Sounds like a clear contradiction for sure, but the reality is that your company is worth what you can get for it.

So if you can sell a company for 10 times earnings, then you in fact have sold your company with a 10% interest to the investor. The same thing goes with borrowing money for your business.

If you can get a loan at 10% annual interest then your company is essentially worth:
Earnings X 10 (multiple) = A company value.

Example:

You have earnings of $100,000 and this earnings is after having included cost of capital from the bank. Company value based on the cashflow method alone will be:

$100,000 X 10 = $1 million.

Raising Capital - The easy way (An example)

I promised to give you a simplified example of how to raise capital the right way.

In this example we want to purchase a company with existing revenue and positive earnings.

This company has a CEO doing the day-to-day operations (he comes with the purchase). So you don't have to be a manager.

This business has $1 million in revenue. And earnings (after paying total expenses incl salaries, but not taxes) are $200.000. These numbers are annual numbers.

Each month this business makes approx. $200.000/12 months = $16.667.

If you have no cash, whatsoever, but you want this company and it's monthly earnings. What can you do to get it? Investors is the obvious answer. Sure you can get bank loans, but at least 20-30% will be reuquired as a down-payment. The down-payment will come from you or investors. But if you can get investors to cover the whole asking price then the numbers above will be accurate.

In this case the seller wants $2 million for the business (he is generous). In order to entice investors you will be forced to perform better than a bank or a bond. That means you will need to offer more than 8% in most cases. So in this case we will give investors 10%. So the business need to make more than 10% each year in annual earnings to make you any money. Let's see if this business qualifies:

Asking price: $2 million
Earnings per year: $200.000
ROI: $200.000/$2 million = 10%.

It would qualify to entice investors (because it gives a good return in regards to obvious placements), but you will make zilch. Nothing. The only way to make more money would be to either accept the current asking price and improve earnings (or improve revenues with the same earnings percentage) or have the seller lessen his/her asking price to under $2 million.

If you could get the seller in this case to take an offer price of $1,5 million, then you would make:

$200.000 / $1,5 million = 0,13 = 13% return. You will give 10% of this cashflow to investors each year. The rest of the 3% is yours to keep. This means an actual cashflow stream of $200.000 X 3% = $6000 a year (or $500 a month. In free passive cashflow). And remember, you don't have to do any work (yes, you need to visit company meetings of course, but that is not really work. It is just your way to look after your interests) you have a manager doing that, remember.

This how you could entice investors to work with you more freely. Of course, not all investors will accept 10% a year in ROI. Some investors want 30% or more even. Everyone is different. But I can tell you that pension funds etc ask for 5-8% a year. Maybe such investors would be the best bet for you with an investment like this. Have a business broker ask around.

Enticing investors

The absolute simplest way to have investors invest in your particular business project is by bribing them. You read it right.

What many people seem to miss when they meet investors is: How do investors profit? How do they secure their money?

The best medicine in enticing investors to give you the money you need right now is to give them a monthly cashflow from the deal. Nothing speaks better than you giving them monthly cashflow. Everyone can say: "You will get this and this annual return on your money, but you will not get it in cash for years hence. The money will be returned to you in 5 years or so money years from now". Well let me tell you, if you came to me, asked me for an investment in your company and you told me I where to get my money back with a return in 5 years. Then I would tell you "NO, I will not in a million years invest in your company on those terms". Why? Simply, because I don't know if you're company will exist in 5 years. What I do know more certainly is that you will exist in 1 months time (that is more certain). And if I can have only a fraction of my money back in the form of a monthly cashflow from your company, then that would be better odds than having nothing in 5 years.

Wouldn't you agree? Wouldn't you see this as something you would feel would be a better proposition? If you where the actual investor, what would you choose: Little money back every month or all the money back in years with interest (perhaps you get it back), but nothing until then?

Read my next post, which explain what I mean. I will give you a made up example (please don't comment on my lack of detail. I want it as simple as possible for everyone to get this).

Fortune VS Cash Flow

People seems to draw a line between "Fortune" and "Cash Flow". But the real fact is that "Fortune" and "Cash Flow" are only two sides of the same coin. They may exist on the same coin, but the realities of the two aspects are far from equal.

Fortune is often defined as "paper-wealth". In todays world Bill Gates has most of his wealth in Microsoft shares (without them he wouldn't be the third richest man today, that also goes for the now richest man in the world Warren Buffet). And as you know shares are just a paper with a denominated value. It has a value because people accept it has some kind of value. It is not real cash in the bank that you can spend.

Jean Paul Getty ones said (in his Biography) that many people asked him for money. But, he said, what many of those people doesn't seem to understand is that rich people doesn't have all their millions in cash in the bank that they can spend vividly whenever they want to. Most of the rich people have shares in private companies, publicly listed shares, real estate ownership etc. In order for them to spend it, they need to sell their shares and real estate and what have you.

And believe me selling of shares in a privately held company isn't something you do in a day. And you won't be able to purchase milk with one of your shares either. Highly doubt it.

Poor people seem to believe the rich people who is worth $1 Billion are free to spend that $1 Billion because they have it all in cash in the bank. They would be surprised how many millionaires who have become broke because they had very much net-worth (a fortune more or less), but they went broke because their "Cash Flow" was terrible (i e they didn't have a billion dollars in the bank to spend).

And that takes us to the other side of the coin "Cash Flow". In order to survive you need good "Cash Flow" coming in every month. That takes more skill than building a fortune. It takes a lot more finesse and intelligence.

This is how you produce a Fortune in simple terms (how simple it is depends very much on how simple you are):

You form a company around a new idea that produces $100,000 a year in earnings. You sell 5% of this "Cash Flow" for 10 times earnings and get a $1 million valuation. You own 95% of that value after having sold of 5% (on paper you are now worth $950,000). In cash you get $50,000 (Cash Flow) which you pay taxes on. The rest is for you to spend as you please.

That is how you produce a "Fortune". The value you give in order to get wealthier is the earnings you can produce with your new idea.

The next step is how to produce "Cash Flow":

As mentioned above you can produce one sort of "Cash Flow" by selling part of your equity. But in order to get to that level you need to produce revenue and make high earnings first. This is trickier than producing a "Fortune" for in fact producing a higher valuation on your company is something you can do even on your own account. You may have another company that might invest a little bit of cash in the new venture for 5% of the company and voíla, you have a new "Fortune" on paper. You can very much build your way up on paper. But the "Cash Flow" will ultimately drag you down again if you are bad at managing that aspect of the business. "Cash Flow" is the blood and air of the business. Without it, the business dies. No matter how rich you are on paper.

One way of creating "Cash Flow" is by trying to sell something new. See if it sells at the price you want to sell it. If it does, then expand and sell more. And more. And more. Ultimately you will, step by step, create a business that is bankable and sellable to investors. And you may have a management team running the business for you. The key is to focus on the earnings base. Making a revenue isn't enough, you need to have high win margins as well in order to to get as high a valution as possible when selling part of your business.

In conlusion: "Fortune" is what you are worth on paper. And that is easy to manipulate to your advantage. "Cash Flow" is what really separates good companies from bad ones. No earnings usually means shallow contents. The business will probably soon die out.

New project!

I am involved in a project. A start-up project really. In the lending business.

The thing about this lending business is that it has a very unique niche. A niche no one wants to touch. Not that it is a bad niche, it just doesn't seem to make logical sense for big lending institutions to be in this niche.

I would say the bigger institutions avoid this lending niche because they can't handle the risk taking. They haven't solved the problem to handling the game in this niche. But I have and I will take a shot at it.

The best part of it? I have over 1000 reserved bookings from customers wanting to borrow money. No suprise is it? Who doesn't want to borrow money these days? Everyone does. But tell me this: How much can you make from 1000 potential borrowers if you charge them a handling fee (for just considering looking at their application) of $65 every time they send in an application to you? Is that something that gets you going? I hope so.

And don't tell me this is illegal. It isn't, every bank these days charge a handling fee just in order to consider you as a borrower. Though, the handling fee doesn't guarantee you are getting a loan. Your financial score card does. And your credit score.

The lending business is a great business to be in these days. Money is always sought after, especially today. Money are equally sought after just as sex is or food and water. If you always want customer demand then be in these three areas of commerce because they will never stop being important unless we become robots and don't need food, drink, sex or money to survive any more. Long fetched thought.

Company Value

Do you know how wealthy billionaire creates all their paper wealth? It's a rather simple feat really. It is just semantics.

Say you want to sell a new kind of car to young customers around the world. Before creating your company you have been diligent enough to get a lot of reserved bookings on paper (commtiments on paper).

Whenever you have formed a company, setup bank account etc you wonder how you are going to create the car you have promised to create. You don't have the cash and you have promised your customer that they will only pay when you deliver. It would be a real gamble to ask them to deposit money and then use these deposits to create the cars. If you don't deliver you can be in big trouble. You will need to pay the money back you know.

So what the smart serial entrepreneurs in this world do is that they will form the company, deposit some kind of share capital and then they will approach a business broker and ask the business broker to sell a couple of percent of their company on a contingency basis. They will then use these funds to finance a smart and reliable project manager and the project costs. And then he will let the project manager do the magic.

Billionaires are able to start with nothing but an idea and a couple of interested customers commited to buy on paper.

As the title says, this article was formed to explain "Company Value". Let me quickly explain how the "paper wealth creation" works:

Say you created this company with the vision of selling a new, cool car to commited, young customers. Say you sold 10% of your business for $10 Million. If you sell 10% of your business for $10 Million then the entire company would instantly have a company value of $100 Million. Your paper wealth would be 90% of that $100 Million value. See paper wealth is not rocket science. With a sharp business broker you can become very rich both on paper and in pure cash sitting in your bank account. Ready to be spent on fun things. The main problem may not be too little money, but too much money. I mean it is hard stuff spending $10 Million. Even if you tried really hard and wasn't aloud to give it to charity.

This reminds me of a movie with a black actor who one day got the news that he had a rich relative that had died and he was the beneficiary. But the problem was that before he could recieve his multi million dollar heritage he was forced to spend a couple of millions in only 30 days without giving it to charity. He had to spend it all. Every red cent. If he didn't succeed he wasn't aloud to inherit the bigger cash heritage. It may sound like a simple feat, but believe me having to much money can be a hugh problem. Especially if your making more money than you are spending.

So my friends, find a demand and meet (commitments on paper) it and start a company and sell it dearly with the help of a professional on a contingency basis. If you don't, then don't be angry at others. It's your fault that you are poor and broke.

Give and recieve value

Everything in business is about giving and recieving value.

I am stunned to hear people say that people "owe" them money or "owe" them fame. What on earth are they talking about? The right thing to focus on is to first think of ways to contribute (giving value) and then collect. Didn't the Bible say "give and you will recieve"? Yes, it did. But even though the Bible says this people are stubborn enough to think that others are to give them value first. Give them money first, give them love first etc. It ain't gonna happen. Get real.

It is not a phenomona that people are money poor or that people hate them. The reason people hate them or that they have very little cash on hand is because they aren't worth their salt. Of course there are people that give and give and never collect a dime. They give of their time or from their expertise but collect netiher money nor fame. And there are people who give generously of their love and kindness and never recieve any love back (a lot of these people get killed by crazy people).

There is two major problems in what I've just described to you. Either people count on getting the world without giving anything in return (no equal value exchange)or they give genereously only to be counted out, without getting anything back. The true equation of a great value exchange is when someone gives and also recieves. And someone who recieves and also gives back.

A great deal is like that. Both sides win. A true value exchange has taken place. Evolutions happen that way. Great evolutions. So think about how you can help your neighbor solve his/her problem and ask for something in return. Then you will have mastered the very basic of what dealmaking is about. It is not about being macho at all. It is about helping another human being and being open to getting rewarded for it.

You get paid in equal proportion to what you give and this is not any New Age crap. This is the real deal people. Give and you shall recieve. Stop being a moron.

Starting a Company

Starting a company is rather easy. As a dealmaker I want an entrepreneur who has customers, otherwise I can do only so much to help him/her finding investor capital. Why? Because without customers there is no value for an investor you see.

So my advice to entrepreneurs starting companies from scratch is:

1) Before producing the actual service or product you want to sell I would, as entrepreneur, go out and ask customers if they would like to reserve a place as a future customer for the service you would like to offer (say you want to sell MP4 players for $5 a piece).
2) If there is an interest, then potential customers would like to reserve themselfs on a paper (on a lead form).
3) Then, when you have a lot of customers who has commited/reserved themselfs on paper, willing to buy from you when you are ready to give them the proposed service/product, you go out and start your company.
4) You then sell of some percentages of your company to investors with the help of a professional business broker. Preferably a business broker working on a contingency basis. You should never pay a business broker until they have delivered a value for you (if you make money, they make money).
5) With proceeds from the stock sale you finance a certified project manager who will develop your dreams to something really tangible. You also finance the project cost.

In short:

1) Find customers and have them reserve a spot as your customer.
2) Start a corporation/company with shares.
3) Sell part of that vehicle so you can finance the project 100%.
4) Hope everything works out and your certified project manager is good at what he does.

Starting a company is not rocket science even if many strange people say it is. You start a company around a real demand or want. No demand? Don't start the company. Make it simple or don't do it at all. Think big or don't do it at all.

As they say: Think big, start small. Start with one place and expand. But have expansion in the initial plan.

Wealth Profiles

I am very into Roger Hamiltons Wealth Profile System. If you haven't yet seen it, please do at www.wealthdynamics.org. Please do the "Wealth Profile Test". You do yourself a great service. And no, I am not profiting from the referal.

In Roger Hamiltons Wealth Profile system you have 8 profiles to wealth. As you know people work in different ways. Some are naturally extrovert and likes being around people. Others are very introvert and likes being for themselfs. Then we have people who are a bit "crazy" or intuitive. People who likes to experiment. Then we have the other side of the coin, the ones being very sensory and cautious.

All of these 4 general ways of being as humans gives people different ways to approach wealth creation.

So the 8 Wealth Profiles I am talking about is:

1) Creators - Good at starting companies and/or creating new products. They are the innovators of our society.
2) Stars - Builds brands easilly. They are the ones you see in movies, TV-shows etc. They make money on promoting others or themselfs even. Great salespeople.
3) Supporters - They are the CEO people of our society. Often they run other peoples companies and make good money doing it.
4) Dealmakers - They make commision on connecting people.
5) Traders - They make money buying low, selling high or even by buying high and selling back low (and making money, not losing it). Great at timing things.
6) Accumulators - They buy something at a bargain and wait until they can sell higher. Often they hold forever.
7) Lords - Make money with other peoples money. They are the people who create Funds and then invest that money in interest bearing investments or in stocks that pays a divident. They make money from management fees and success fees.
8) Mechanics - They make money by giving other people a marketplace to sell their stuff. See Jeff Bezos Amazon.com where millions of people sell millions of stuff every year and pay Amazon.com a listing fee.

As you see you can make money in many different ways. Your wealth profile determines where you should focus your time. Your profile is determined by asking questions. These questions in turn determine your true passion. And your true talents and natural tendencies.

As I see it, we are all dealmakers in some way. But only one profile makes money ONLY through dealmaking. And that is the Dealmaker profile.

The best deal you can make this year

The best deal you can make this year is hidden in two words: "Carry interest".

Carry interest is a simple concept really. What you do is lend out money to countries at a daily interest rate called "carry interest". You don't need to be a trader doing this. You don't even need to be particularly smart to set this up. But it sure is a great deal and the easiest deal you will ever make in your life.

You open up a forex account, fill it with cash and buy a currency giving the highest possible interest rate (carry interest). Then just let the taxameter start rolling. Check it from time to time (say once a month) and see the cash accumulate faster than you would ever be able to make money at your current job. Even if you where to take a second or third job, you would still be able to make more money per hour at carry interest.

If you have $10000 in your account and you accumulate say 0.1% a day then that would mean $10000 X 0.1% = $10/day X 20 working days a month = $200 in accumulated profits each month.

I have a little cash invested on carry interest at the moment myself and I accumulate $1.1 for every pips I hold. At the moment I hold 253 pips making me a daily accumulated profit of $278.3. It all adds up.

The risks? The leverage you will recieve when dealing with a discount broker. The second risk is interest changes (goverments tend to change interest in order to control the influx/outflux of capital into a country. Higher carry interest obviously attract more external investors to invest in a country. The same goes with lower carry interest that drive investors away from a country).

Why not test it yourself? You do yourself a big disservice by not checking it out. I'm not refering to any one discounting broker. That is up to you to find out. See it as your homework.

Cash or Stock?

Cash or Stock is the real money question. And it needs to be thought about carefully. I would rather take stock than pure cash. Why? Simple, you need to invest the money and during the time you are looking for an investment to invest in you will have two big enemies: Taxes and inflation. Take the stock and you will gain a lot.

But, be carefull with taking stock as payment. If the company has bad financials or the company is utterly corrupt with it's financial reports then you will be in a world of shit.

Before accepting stock, do your financial due diligence of the company with the help of your CPA: If everthing shows green lights, then take the stock by all means. Especially if you can gain more by taking the stock than taking the cash. And most of the time you do make more from a stock payment than from a cash payment. Not just because you don't need to pay taxes right now or that you don't need to worry to much about inflation (because hopefully the company will make enough money to cover the loss in purchasing power), but because you will be able to sell your share of the stock payment for at least 5-10 times earnings.

And don't tell me that this is not possible. The right view on it would be that you are a lousy dealmaker. But hopefully you will join my subscribers list and learn the tricks of the trade to get at least 5-10 times earnings in the stock you have accepted.