(...Continued
From Money Tree Part 1)
(...Continued
From Money Tree Part 2)
The Money Tree Formula
The first step to picking
the right income streams is to pass them through the filter
of the Money Tree Formula -- the 9 essential characteristics
of the ideal income stream
Having a money trees assumes
that you have an exhaustible, effortlessly generating, stream
of cash flow which doesn’t require your presence. In
order to do this, you must be in a position to create, control
and own that stream of income. Another way of saying the same
thing, is you must become an entrepreneur...a business person.
You may still retain your employee position, but on the side,
as a way of protecting your long term financial future, you
need to create additional streams of income. ASAP
I remember watching TV recently
as a couple was being interviewed about being laid off from
a long term job position. The wife looked into the screen
and said, with tears in her eyes, "For 17 years we worked
hard for our security, and now we’re out in the cold.
It’s not fair." I wanted to reach through the television
set and tell her, that for 17 years she had the illusion of
security. She wasn’t secure, she just thought she was.
Working for someone else, unless you own a piece of the profits,
is not security. It’s just the illusion of security.
The Money Tree formula
If you’re going to become
a home based entrepreneur, you’d better learn which
businesses have the potential for creating lifetime streams
of income and which ones are just a dead end way to make a
few extra bucks before they peter out and die. I’d like
to teach you a formula for the perfect business in the next
century. I call it the Money Tree formula and it will be very
easy for you to remember because it spells the word MONEY
TREE...
M in the Money Tree formula
stands for Multiple Streams of Income
Multiple Streams of Income
The first goal in starting
your own home based business is to add another stream of income
to your life as a safety net for when other of your streams
of income dry up. But the home based business you select should
be a source of more than just one stream of income. It should
eventually be a source of multiple streams of income all by
itself.
For example, suppose you’re
considering buying an existing restaurant. What possibility
will you have to grow? Can you add more shops? Is your idea
franchisable? Can one of your food entree’s be sold
nationwide as a frozen item? Can you license your special
cooking secrets to other restaurants. Is there a cookbook
in there somewhere? What about bottling and selling your special
sauces? Get the drift? Don’t even consider a business
that doesn’t have expansion potential for additional
streams of income. That’s why the first M in the formula
reminds you of Multiple Streams of Income.
The O in the Money Tree formula
stands for outstanding.
Outstanding product or service
If your product, service or
information isn’t distinguishably excellent it will
eventually become a casualty of competition. The goal of creating
a money tree is to do the work once and to have the money
flow for the rest of your life. What good does it do to create
a business and eventually have it succumb to competition.
In order for your source of income to survive through the
next ten recessions...as there will be many more recessions
in your lifetime...you must select a product, service or source
of information that has the possibility to be permanently
and perpetually profitable. When times get tough, people gravitate
either to price or to quality. Don’t get stuck in the
middle. That’s a sure formula for disaster. And don’t
compete with the rest of the world on price. Make sure the
quality of your produce is outstanding...the best in the world
at a fair price. And you have a good chance of succeeding
long term.
The N in the Money tree formula
stands for Nothing Down.
Nothing Down
Why nothing down? Well, it
doesn’t have to be completely zero down...but as little
of your own money as possible. If you’re like most people,
you probably don’t have a couple of hundred grand lying
around to invest in your business. But what if you do have
a nice chunk of cash. Should you run out and find a business
to match your money and launch in? I think that one of the
greatest curses is to have a lot of money to put into a new
business.
Suppose you want to buy a
hot franchise. It might cost you $100,000 and that’s
just for the franchise rights. Then, you need to purchase
inventory, leasehold improvements, special equipment. And
what do you get? For most franchises, you get the right to
be tied to a business 12 hours a day, to manage a lot of undereducated,
under motivated employees, and make a steady paycheck for
yourself. In a sense, you are just buying yourself a job.
Why spend tens of thousands of dollars of your own money just
to buy yourself a job...with a lot of risk?
I’m going to show you
businesses that you can launch with little risk, little or
no money down and the possibility of creating what I call
"walk away" cash flow --money that flows to you
whether or not you show up.
The E in the Money tree formula
stands for "Employee-resistant."
Employee-resistant
That’s right...you don’t
want employees. Employees are dangerous! They begin to feel
they are entitled to their jobs. ("You can’t fire
me. I own this job." ) The rapid increase in employee/employer
litigation should be enough to convince you that you want
to find a home based business that can be done by yourself,
with a very low employee to income ratio.
I used to be the president
of a seminar company with over two hundred employees. I made
the decision to downsize when one of the employees sued me
for age discrimination. He was in his late sixties when he
came to work for us and when we layed him off during an economic
downturn, he slapped us with a $500,000 lawsuit. We settled
out of court for $2,000 but that was the last straw. I decided
to never again put myself in a position where one disgruntled
employee and his smart attorney could take it all away.
Today, I have zero employees.
I make as much today as I used to make with 200 times less
hassle. I like it that way. All of my streams of income can
be monitored from a telephone anywhere in the world on only
a few hours a day.
A friend of mine, Dan Kennedy
puts it this way, "When it comes to employees, hire slow
and fire fast." Most business people do just the opposite.
They hire fast and fire slow. I say, try to find money tree
businesses that don’t require any employees and then
you don’t have to worry about either hiring or firing.
The Y in the Money tree formula
stands for the world "Yield"
Yield
The streams you choose should
be high yielding, high profit cash cows. Five years ago a
friend of mine, Collette, started such a home based business.
In less than a year she was making about $10,000 per month.
What’s more, this business was a money tree business.
It generates cash flow even if she stops working! But why
stop when she is having so much fun? Today, after five years,
she has grown her business till she now earns over $500,000
a year net, net, net.
What’s the yield on
that kind of income? It’s the equivalent of having TEN
MILLION DOLLARS in the bank earning only 5% interest! That’s
my idea of yield. In this book I’ll be sharing exactly
how Collette did this...as well as other business that meet
the same kinds of money tree characteristics.
The T in the Money Tree formula
stands for the words Trend and Timing.
Trend and Timing
Starting a business against
the trend is like swimming up stream against the current.
. Running a business is hard enough without trying to swim
upstream. But when you choose a business that is with the
trend it’s like floating downstream with the current.
How do you select a business that’s on trend?
The first time I started a
business was just after college. I started buying real estate...and
as luck would have it...it was the exact right time. The baby
boomers wanted real estate and the demand drove prices upward.
Anyone who owned property made a killing. You could almost
do no wrong.
Then, I started teaching people
how to buy real estate with little or no money down. My little
classified ads brought hoards of calls. It was a feeding frenzy.
I was on trend. My seminar businesses took in more than a
hundred million dollars in the next decade.
The secret is to get in front
of a trend and ride the wave. The biggest wave of our century
is the Baby Boom – 76 million people. This generation
is four times the size of the previous generation. As this
mass of humanity rolls forward through time it creates a huge
demand wave. Picking businesses which are at the leading edge
of this age wave has created thousands of fortunes. You need
to make sure that your new business is leading this trend
and not following it. It can make a huge difference in your
lifestyle.
The R in the Money Tree formula
stands for Residual
Residual Income
We’ve already talked
about the importance of this part of the Money Tree formula.
But to emphasize this concept
even further, let’s compare it to an escalator. Have
you ever walked up a down escalator...the wrong way? When
you walk up the down escalator, you have to walk fast just
to stay in the same place. And to get to the top, you have
to walk at double speed. People on the Up escalator don’t
have to work hard at all. They just stand there holding the
hand rail and the escalator takes them to the top.
These two escalators represent
the two kinds of income that you can earn...linear income
and residual income. Our economy is a down escalator. You
work hard for your money but with inflation you have earn
3-5% more next year just to stay in the same place. But this
puts you in higher tax brackets. The more you make the more
they take. It seems you work harder and harder without making
any progress. Your bank account balance earns 2% and your
credit card balance costs you 20%. You’re going in the
hole 24 hours a day. You wonder why you can never catch up.
And if you stop...the escalator just takes you right back
down to the bottom.
That’s what it’s
like to earn linear income. When I think of this kind of income
I think of how they catch monkeys in Africa. A native takes
a coconut and cuts off one end to make a small hole just the
size to allow a monkeys fist to enter. To the other end of
the coconut they attach a long cord. They place a few peanuts
inside the coconut, place the coconut in the middle of a clearing
and hide behind a tree to wait for the monkeys to come. The
monkeys come and smell the peanuts inside the coconut shell.
One monkey reaches inside the shell to grab the peanuts, but
with the peanuts inside, his fist is too large to escape the
hole in the coconut. And then the native yanks on the cord
and hauls that silly monkey to captivity because the monkey
will not let go of those peanuts to save his skin.
Are you working for peanuts?
If you’re walking up
the down escalator, you are caught in a Monkey Trap. What
you want is Up Escalator Income. Which escalator are you on?
Here’s a list of the
many types of residual income that you want to be exploring:
* Savers earn interest
* Song writers earn royalties on their songs.
* Authors, like myself earn royalties from their books and
tapes.
* Insurance agents get residual business
* Securities agents get residual sales.
* Network marketers get residual commissions
* Actors get a piece of the action
* Entrepreneurs get business profits.
* Franchisors get franchising fees
* Investors get dividends, interest and appreciation.
* Visual artists get royalties from their creations
* Software creators get royalties.
* Game designers get royalties.
* Inventors get royalties.
* Partners can get profits.
* Mailing list owners get rental fees
* Real estate owners can get cash flow profits
* Retired persons can get pensions
* Celebrity endorsers get gross percentage profits
* Marketing consultants get % of profit or gross revenue
When you go to bed tonight,
ask yourself this question, "What percentage of my day
did I spend creating residual income?" If the answer
is zero, you’re in trouble. You’d better wake
up tomorrow and get busy. More on residual income later. I
hope now you see why it’s such a vital part of our money
tree formula
The E in the Money Tree formula
means Essential to Everybody Everyday.
Essential
Whatever you sell, try to
pick something that’s essential or is perceived as essential
by a large and very motivated segment of society. Let me give
you the real reason that real estate has always been a great
wealth creation vehicle and a prime source of residual income
for hundreds of thousands. It fits the Money Tree formula.
Check it out for yourself and you’ll see why..
Whatever product you choose
to market just make sure it’s essential. The more people
need it and the more often they need it, the more successful
your business can become.
The final E in the Money Tree
formula stands for Enthusiasm.
Enthusiasm
You’ve got to love what
you do. If you hate what you sell, you’ll never be any
good at it. The prime admonition from Gary Halbert one of
the all time great marketing gurus is this; SELL WHAT YOU
LOVE. Truth is, you’ll never be truly great unless you
do.
Well, there you have the 9
major characteristics of the Money Tree formula. These 9 characteristics
are essential to the kind of hands off, hassle free businesses
that create lifelong streams of cash flow.
In this book, we’ll
be exploring in depth the 9 practical business which fit this
formula perfectly.
As a final note.
In the book, Multiple Streams
of Income, I start with the basics, and help the reader build
a strong foundation for wealth. Then, I expand into the nitty
gritty strategies and techniques for developing 9 separate
streams of income. Finally, I finish with strategies and techniques
for protecting these burgeoning streams of income.
Like Nothing Down and Creating
Wealth, I believe that Multiple Streams of Income will become
a long term, perennial bestseller. I’m anxious to bring
it to the large and growing audience which is desperate for
these solutions.
Authors Details: Robert G. Allen -
Prosperity, 7 Secrets.
His colossal bestseller Nothing Down established Robert
Allen as one of the most influential investment advisors
of all time. Also the author of 'The One Minute Millionaire' |
More Articles On Money
(Money
Tree Pt 1)
(Money
Tree Pt 2)
(Money
Tree Pt 3)
(4 Ways
To Make Money)
(3 Astonishing
Facts About Fast, Easy Money)
(4 Steps
To Control Your Money)
(The
Trick To Money Pt 1)
(The
Trick To Money Pt 2) |
