You can call this guide the definitive investing because nothing is held back. I say it here as it is.
So let's start by asking the question, "who are these rich folks, anyway?" Hmmmm, Let me put it this ways
You are a rich man if you each 5 million Naira and above per month.
You are a medium income earner if you earn one million Naira per month, every month.
You are a low income earner if you earn below 50,000 Naira per month.
You are a stinking rich man if you earn above 20 million Naira per month, every month.
The above is the simple definition of a rich man viewing from the practical sense of life.
Now that you understand that, now that we are on the same page, let's address the main question:
What do the rich invest in that makes them rich?
What are the secrets of the rich?
I will share them with you below.
The Secrets of The Rich
Rich people invest in stuff that gives them the most value for their money.
This means that they take out time to define in pen and paper the minimum return they want from any business idea they will invest in, and then they assess every business proposal/ideas based on whether it meets their expectation or not.
Since we are discussing the secrets of the rich, I wont mention names because that is absolutely unnecessary in this regards Instead, I will discuss the what national and multinational organizations do because it is the earnings from these organizations that fuel the bank accounts of the rich.
So, what do multinational organizations and rich folks do?
As I have mentioned above . . . they invest only in product lines or investment options that yield high return on their investment.
This simply means . . . they invest in high yield investing options but not the risky ones.
So, what is the baseline return on investment level expected by rich folks?
Simple answer. 40 percent.
Based on fact and experience Multinational companies specify a minimum of 40 percent profit margin on their products.
When material prices change or government policy reduces the percentage margin below their expectation, they set up a project team to brainstorm how to restore the lost margins.
Guess what happens.
If certain products fail to meet the target margin for retaining the product in the market, and virtually every strategy have been deployed to up the margins without success, that product risk being taken off the products portfolio no matter how much consumers love it…..
“It is that unalloyed passion investing in high profit margin products and ideas that makes rich folks rich. And it is that same passion that makes them even richer.”
How does this affect you, the average guy?
Simple. If you want to be rich, think like rich people. Invest only in high margin products and ideas.
This is the biggest secret of the rich.
The Impact of High Margin Investing - How High Yield Investing Makes You Rich
“Business is about volume and value.”
That is, the quantity of products you sell per day and the profit margin per product. If you multiply the two, you will get your total profit per day.
Investing Case Study 1
For example, suppose you are a product distributor of an alcoholic drink called Snap Beer and you make 100 Naira per carton sold.
If you sell 100 cartons of Snap Beer per day, your profit for that day will be . . .
Profit per day = 100 x 100 = 10,000 Naira
. . . and
Profit per month = 10,000 X 30 = 300,000 Naira
Suppose due to increased marketing you're able to increase sales to 200 cartons per day.
Your profit per day will become . . .
Profit = 200 X 100 = 20,000 Naira per day
. . . and
Profit per month = 20,000 X 30 = 600,000 Naira
Investing Case Study 2
Suppose you have a friend who prefers to become a dealer for Honda cars instead of becoming a distributor for the manufacturer of Snap beer.
Your friend confides in you that the reason he chose to become a Honda dealer is because the profit margin per car is 50,000 Naira. So, he expects to earn more with less effort.
You laugh at him because you believe it takes more effort and capital investment to become a dealer with a car company than to become a distributor with a beer company.
Your friend did not waver.
Your friend went ahead and struck a strategic deal with a Honda dealer since he did not have the funds to become a dealer with Honda.
Suppose your friend sells an average of one car per day for 20 working days. That means he sells 20 cars per month.
Suppose too that your friend earns 50,000 Naira from each car sale.
His profit per month will be = 50,000 X 20 = 1,000,000 Naira
Bottom line.
You sell 200 hundred products per month and earn 600,000 Naira. On the other hand, you friend sells 20 products and earns one million Naira.
Your friend sells less and earns more! Wow! That is the power of a high margin product.
Want to become a millionaire fast?
Manufacture or sell a high margin product.
This is the number one secret of the rich. And they won't tell you about it.
Happily, this investing guide has exposed this secret.
Lucky you!
Volume And Value - Two Sides of A Coin
Is this investing guide saying that you must only invest in high margin products and ideas?
YES and NO.
Wait. Why yes and no?
It's because there are always two sides to a story. Here is the first side of the story . . . invest in high margin products.
When you do, medium sales volume results in high overall profit for you. And you become a millionaire and even a billionaire faster.
The other side of the story is . . . invest in small margin products with high off-take or high sales volume.
For example, suppose you have small capital and therefore do not have the financial muscle to become a big time distributor for one of the telecoms companies.
However, you have found certain hot spots where you can sell recharge cards faster than fast in Lagos Nigeria.
Now suppose you rent a space in one of those spots and you're able to sell 200 telecom recharge cards per day. Suppose too that your profit per card is 40 Naira.
Your profit per day = 40 X 200 = 8,000
Suppose you sell only 24 days per month (That is, you're off on Sundays).
Your profit per month = 8000 X 24 days = 192,000 Naira
Having conquered that location, you decide to invest in more fast track locations like this one. Fortunately, you were able to secure nine more locations like the first one.
The 10 locations will earn you a total of 1,920,000 Naira per month.
That is superb!
Your dream of becoming a millionaire is now reality!
Get the point? Business is about volume and value.
What is therefore the bottom line advice of this investing guide?
Simple.
Invest in high margin products and ideas as a priority.
However, if you find low margin products with potential for high sales volume when done right, grab the opportunity.
Channeling Your Investment Returns
There are people who have had successful businesses in the past but who now are reduced to poor folks.
Why?
Well, circumstances changed . . . sometimes caused by change in government policy . . . and their business hit the rock.
The result?
Their finances hit rock bottom and they became poor.
Don't let this happen to you.
So when your business takes off and you start making huge profits, channel that profit into other investment options like real estate investing, stock market investing, and online investing.
When you diversify your income stream as described above and even more, your secure your ability to continue to generate income to sustain yourself and your family.
For example, think of the business person described above who have become a millionaire by selling recharge cards in ten business side streets in Lagos.
If someday the Lagos state governments initiates a law banning trading in street corners, he could lose his entire 2 million Naira per month business overnight because all his "corner shops" will be closed down overnight.
Get the point?
This investing guide is saying loud and clear . . .
DO NOT put all your eggs in one basket no matter how solid the basket looks.
Diversify, diversify, and diversify!
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