Season Finale of Rich Friends, Poor Friends: Season 3
A quick reminder before the party begins:
If you want to learn the fastest way to buy and own profitable online businesses, give Engineered Truth Premium a try:
In the previous episode of Rich Friends, Poor Friends,
We learned that you need to find the step along career enlightenment that makes you the happiest.
But what if you don’t want to work at a job for the rest of your life?
The idea that you have to go to a job Monday through Friday for the next 30 years of your life can feel suffocating.
And it’s something I stand firmly against.
It’s the reason why Engineered Truth took a huge pivot from being pro-engineering to anti-engineering.
Engineering is important, and there will always be engineers who are paid well for what they do.
But just like most jobs, engineers usually to go into the office 5-days a week, 8+ hours a day.
It’s not the way I want to live my life.
I just came back from a trip to Singapore, something that would be difficult to do if I was still an engineer.Follow me on Instagram, I promise I don’t post annoying memes
I just took Monday and Friday off so I could take a long weekend trip to Singapore.
It’s something my friends and I do regularly,And would be nearly impossible to do if I was still an engineer.
If you’ve ever wanted to have your freedom, you know you only have three options:
- Become self-employed.
- Start your own business.
- Buy cash flow assets.
If you have a professional job (step 2), the fastest way for you to have your freedom is to buy cash flow assets.
Becoming self-employed or starting your own business are both valid ways to have your freedom.
But they’re not the most efficient or reliable ways to do it.
We already went over the problems with becoming self-employed in the previous email, so let’s go over the issues with starting your own business.
When you’re starting your own business, you’ll be getting paid $0 per hour for a prolonged and indefinite amount of time.
You’re essentially learning a new profession.
And if you’re starting a business that requires capital such as an Amazon FBA business,
You will be investing a few thousand dollars for something that likely will be a loss.
But at your professional job, you could be getting paid $50 per hour.
Which is a lot higher than $0 per hour.
By buying cash flow assets, you go from a professional job (step 2) straight to investor (step 6).
You are skipping steps 3, 4, and 5.
Though now we run into a new problem:
Traditional cash flow assets bring low cash flow.
A rule of thumb for a real estate investment is that its rent should be 1% of its cost.
So for you to make $10,000 per month in revenue, you need to buy a $1,000,000 house.
Once all the costs are taken, you’re looking at pocketing about $7,000 per month.
And for cash flow stocks (dividend stocks), on a decent year, you’ll get an 8% return.
So for you to make $10,000 per month in revenue, you need $1,500,000 invested.
(which you’ll also pocket about $7,000 per month after taxes depending on your tax bracket).
Alright Matt, this is making me depressed. What’s the point?
If you instead took your money and invested it in profitable online businesses, you could make $10,000/mo much faster than in real estate or stocks.
If you wanted to make $10,000/mo in profit, you only need to invest about $300,000 in online business.
(Also subject to taxes, and varies a lot depending on where you live and how much you make from other sources).
But Matt, it’s incredibly risky for someone to buy an online business that they know nothing about.
With real estate, you wouldn’t manage your property.
You would pay a property manager to do everything for you.
When you invest in online business, you’ll hire an operator to help you choose a business to buy.
You’ll also pay them a monthly retainer to manage and grow the online business for you.
An operator is like a property manager.
Except instead of managing physical real estate, they manage digital real estate.
They usually manage a portfolio of 20 – 30 websites and have been in the industry for years.
Operators have systems and procedures in place that make it efficient for them to manage multiple businesses.
Which drives the cost down.
It doesn’t make sense for you to learn how to manage or grow your online business because it’s not the most efficient way for you to make money.
It’s more efficient for you to focus on your profession, and to use your salary to purchase online businesses which will be managed by pros.
This is the fastest and most reliable way to get enough cash flow to quit your job.
But Matt, the internet business world moves fast, while real estate is more stable.
For the same price as a $1M dollar house, you can buy 10 x $100,000 online businesses.
Your profit at the time of purchasing would be around $30,000 per month instead of just $7,000 that you would get from real estate.
Since your investment is divided across ten businesses, your income is reasonably safe.
Some businesses will go up, some will go down, while most will maintain.
My main focus right now is buying cash flow businesses as fast as possible so that my income snowballs.
This is the phase I am in my life, and I hope by explaining it,
You will get to this path much faster than I did.
In the beginning, buying your first online business will feel sketchy.
After all, you could do a lot of fun things with $50,000.
But once you’re making about $20,000 – $30,000 per month in profit.
You’ve reached what we call Critical Mass.
Because now you’re able to buy a new business every couple of months with just your cash flow.
Your income will be increasing so fast that it’ll be hard to spend it all.
And it’ll be getting more stable because it’s coming from additional sources.
All of this is taught in detail inside Engineered Truth Premium.
Whether you decide to join ET Premium or not, I hope you enjoyed Rich Friends, Poor Friends: Season 3.
Even if you decide to never buy an online business, at least now you know the option is out there for you.