There is an old saying that goes, “One can make a lot of money, if one wants to make a lot of money.” You must do three things to do what you want to do: 1.) Don’t follow your passion. That’s right, I said DON’T. Passion-based businesses bring us bike shops, boutiques, bakeries and gimmicky web stores. Sure, they can and do make their owners a living. But they don’t make them millionaires. 2.)

Don’t go into a business that is easy and affordable to start. My mother owned an ice cream store that cost her $50,000 to start, buying equipment, supplies etc. Even though she owned the building, and managed to make about $50,000 take home pay a year for 14 years, she ultimately sold the business for, you guessed it, $50,000, which was all it was worth. All she got in addition was overweight and diabetes from eating ice cream. Why did she not “get rich?” Because ANYBODY with $50,000 can open an ice cream store! That’s why there’s thousand of them. Your capital investment should be much higher than what most people can afford, and it should be in an industry that very few people understand, i.e. something in which you can become the expert or go-to supplier. And now for number 3…3.)

To create a million dollar business, your first and foremost “passion” should be MAKING MONEY. Yes, it’s that simple. Making money, i.e. concentrating on “the numbers,” as in margins, lowering costs, and maximizing profit, THOSE should be your passions in ANY business. Because without those being the primary focus, no matter what business you are in, you will just wind up owning your job, and not a profitable business.

When a billionaire goes to buy a $100+ million dollar yacht, do they have to sell shares of stock, or do they have that cash in a bank account on hand?


Would it surprise you if I told that they would take out a loan?

When you’re wealthy, you learn to think about money differently. The first rule is to always preserve capital (money), especially money that can be invested to earn more money. The second rule is always use leverage (other people’s money) when you can. The third rule is to look for the tax advantages in every transaction.

So if you have a billion dollars that is invested and earning a good rate of return, the last thing you want to do is convert it to cash to buy a yacht that will depreciate in value.

So let’s assume that Billion is earning a modest 7% return, or a cool $$70 million per year. As a major customer of a bank, you’ll be eligible for preferential interest rate – which is usually pretty close to the Fed fund rate (currently 2.5%). So instead of liquidating your investments and paying cash, you finance the yacht at less than 3% interest and your investments keep generating $40 million a year to pay off that loan, which would be around $3 million per month, or $36 million a year.

The next strategy would be to list your yacht as a second home as it generally meets the tax requirements of having a bathroom, a kitchen, and sleeping quarters. That makes the $360 million in interest payments on that loan tax deductible, which would recover about $100 million of your money. You would also designate part of the yacht as an office to potentially qualify for additional tax deductions. Entertain business clients on the yacht several times a year, and you qualify for more tax breaks.

When you get bored with the yacht and are ready to sell, you have one of your companies buy it out for the loan value as a “short term investment”, rent it out for a year while it’s on the resale market, and then the firm “absorbs” any financial loss as a bad investment and writes the loss off against their earnings.

Meanwhile you still have your initial stake of one billion happily earning interest.

Hope this was helpful.



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