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How Would/Do You Turn Excess Cash Into Wealth?

Discussion in 'BlackHat Lounge' started by hellohellosharp, Sep 21, 2012.

  1. hellohellosharp

    hellohellosharp Power Member

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    I am posting this in the lounge as this thread is just meant for a casual conversation...

    Did you know that if you were able to invest and get 10% monthly off your input, than $3,000 would turn into $1 Million in just about 5 years?

    Now, 10% monthly is a 120% AR, which some people say is unrealistic and impossible. But this is BHW :D We don't let the mental limits of others have any effect on us.

    This has been on my mind quite a bit lately. I have gotten to a position where I am satisfied with my IM earnings...but now what?

    I have got the extra cash I need...but what do I do now? How to I take the next step up?

    I am still cheap as heck even with this extra money. I drive around a piece of crap car and I wear run-down clothes. I refuse to spend money on materialistic things.

    Of course, the best thing to do with your money is invest in yourself. But I am somewhat stuck here as well...my operations are going well and I can't really scale it up with just cold cash.

    I mean think about it. You could spend years and years in IM until eventually you make $1k every day. But if another man figured out how to get 10% monthly through investing, than in 5 years he would have $1 million, and at that point he would be making $100,000+ per month while you are making $30k s month. I think it is very critical to know how to use your money to make money.

    So what idea's do you guys have for investing :D I am sure I am not the only one who thinks about this!

    Is it stocks? Bonds? 401k's? Real Estate? Should you simply put all your excess cash towards starting a new business?

    I am interested to see what BHW comes up with :)
     
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  2. Zapdos

    Zapdos Power Member

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    Stocks? Takes too long and short term winners are rare.
    Bonds? Takes too long
    401k.. same
    Real estate is expensive


    Creating a business is the best option if you have the drive to do so. All the people who are filthy rich have one thing in common: they run companies. People who made the companies are rich. Find something that works, make it perfect, release and keep making it the best it can be.
    I'm not talking about a business of micro niche sites, blog networks, ppc, email... I'm talking envato, kampyle, kayako, scout, new relic.


    It's takes awhile, takes alot of money, takes many sleepless weeks and you'll want to quit. If you don't, you will reap the rewards of profit.
     
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  3. d1129

    d1129 Registered Member

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    If you could get a 10% return on investing in stocks you'd make a hell of a lot more money than 1 million in 5 years. Look at Bridgewater Associates - a big ass hedge fund, the guy that runs it made 3 billion in 2011 just by giving investors a 20% net return.

    It's possible, if you make some great trades or get into forex but it's also risky and to get that return on a consistent basis would require a decent amount of luck.

    I think short-term title loans might do well if I had to venture into the outside world. It has to be pretty decent, you give them 3k at 10% interest, they don't pay you take their car and sell it. Would probablt end up being a hassle though.

    Is it not possible to scale up what you are already doing with your IM money or are you just looking for other options?
     
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  4. hellohellosharp

    hellohellosharp Power Member

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    I agree about the stocks and stuff. Also, it seems like starting a company IS a good idea, but don't just limit your suggestions to IM related companies. I am just talking about investing in general :)
     
  5. hellohellosharp

    hellohellosharp Power Member

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    Kinda both. My stuff can be scaled up, but not really with money as much as it simply needs work and dedication (which I am still putting into it). But meanwhile, I have this extra cash that I want to put to work for me.

    Never heard of a short-term title loan. Can you expound on that?:)
     
  6. d1129

    d1129 Registered Member

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    Sorry, I didn't check to see where you are from. I'm in the US, California to be exact, and there are a ton of places that give short term loans and in exchange they hold the title for you car as collateral. I know every place is different as far as interest rates and legalities surrounding loan companies, but payday loan companies in general have to be amking a killing. There's an article on CNN about it, I would post the link but I don't know how so I'll just quote the interesting part - "On average, these borrowers take out eight loans per year, averaging $375 each, the survey based on focus groups and telephone interviews found. Over the course of two weeks -- when payday loans typically come due -- fees averaged $15 per $100 borrowed, amounting to a 391% annual percentage rate."
     
  7. silentthunder

    silentthunder Jr. VIP Jr. VIP Premium Member

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    Most millionaires get there at least partially with real estate or become even wealthier with it and they do it by leveraging. It would be interesting to know how leveraged millionaire and billionaire real estate investors are. Only the hard working middle class think they have to have 70% of the purchase price to buy a home or to invest. Just a thought.
     
  8. Allnightlong

    Allnightlong Junior Member

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    Well, then you'll have to find someone decent that you trust, set up a contract, train him to do what you do. In most cases, you don't have to reveal everything. You could still do the crucial stuff yourself if you don't want to trust anyone with it.
    Then pay him half of what it makes you (or, if you are earning a lot, pay him a fitting salary). If you keep working like you used to, you will make twice the money and only spend a quarter of it. Rinse and repeat. ;)

    Of course that is a very simplified version and only you know if you could scale your thing like that. But that's is how you build a business. :)
     
  9. Zapdos

    Zapdos Power Member

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    The companies I listed are internet related, but they're not internet marketing :p
    Envato is a marketplace, and the rest provide a service. None of them are using affiliate sales, SEO or proxies to drive their income.
     
  10. hatterftw1

    hatterftw1 Power Member

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    id like to know about this question too, cuz once I start making a steady income from IM i plan to spend extra money on investing, but what idk yet. I always thought about general stock stuff, but I kind of always figured I might look for up and coming businesses to invest in that need that intro money bad and in-return give you a nice ownership portion like Shark Tank or something haha. I mean if you invest in say a Internet company early for just pennies you just a year down the line could have tons of money, cuz internet companies grow so fast.
     
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  11. jazzc

    jazzc Moderator Staff Member Moderator Jr. VIP

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    You are talking about compound interest.

    Well, the obvious difficulty is getting something that will give you that whooping 10% interest per month (= (1+0.1)^12 = 314% per year). Good luck with that :D
     
  12. MatthewWoodward

    MatthewWoodward Jr. VIP Jr. VIP Premium Member

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    In the UK we have a government run scheme called 'Premium Bonds'

    It is essentially a monthly draw with cash prizes, each 'bond' costs £1 and is an entry into the monthly draw - you can have a maximum of 30,000 bonds.

    The cash for the prizes is raised from the interest of the cash that everyone has in the scheme and there are millions of pounds of prizes each month.

    The best bit, you can withdraw any money you have put it at any time which makes it a free lottery basically
     
  13. jazzc

    jazzc Moderator Staff Member Moderator Jr. VIP

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    Free? :D If you have 30000 bonds, you lose 1200 pounds a year (assuming 4% interest if you had in a bank)
     
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  14. kelvincuts

    kelvincuts Junior Member

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    OP, for me I'd go for the bond market. I don't know how bonds are doing in your country but in mine, I get incomes of about 5% each month after investing a min of $1200 (without selling it) money that you could easily remove from your overall monthly earnings from IM. Think of what you could do if you did this cumulatively (This means adding more cash on top of what you made to earn more every time), you could achieve that goal faster than you think.

    Corporate and Government Bonds are safe unlike stocks, I wouldn't advise you to go for stocks because that is gambling....bonds are debt instruments and debts pay big money these days, if you can lend money to someone and get a high value collateral, you'll be way ahead...but you don't have a bank or a financial institution and that's why I talk about bonds. Low risk and lucrative.

    I have been reading an awesome book that was written in 18th century about how ancient babylonians were able to have massive wealth and the principles that they used could still be applied to our daily lives. Its about ENSLAVING MONEY to make it labor for you and in the end, you only spend its OFFSPRINGS rather than spending what you're directly earning and your pockets will never be empty!

    Here is the link, and I hope this awesome book helps you and other members here too...you can thank me later:

    http://www.ccsales.com/the_richest_man_in_babylon.pdf

    Good luck reading it, its full of fun!
     
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  15. hellohellosharp

    hellohellosharp Power Member

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    I'm in the USA. What country are you in?

    5% monthly would be a great start:) But most bonds I have heard of are more lik 8-9% per year.

    I realizing its not common, but I think it is very possible.

    Take a smart BHW member, give him $1,000, and tell him he has to use it and comeback with $1,100 in a month. Could he do it? I bet he could :)
     
  16. xpesos

    xpesos Regular Member

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    believe me or not, i am in IM to build investment for my offline business, as i am chemical engineer..
    i Will find something new something in demand something people can be crazy about, i know people have actually multiplied their capital going that way.. i will go for something innovative and i am strong believer in affiliate and refer system..
    In the start you should have "Less gain more service" strategy people start referring you cuz you are cheap and give out of the way service, just build offline customers with long term relationship, they can make you Millionaire :cool:
     
  17. Bestbuyfoam

    Bestbuyfoam Jr. VIP Jr. VIP Premium Member

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    Definitely interested to see how this plays out... Subscribed for updates...
     
  18. illfounded21

    illfounded21 Senior Member

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    1) I don't think I could happily start up an money lending/loaning company, as you are literally preying on those who are at their weakest and most vulnerable. I believe I have the ability to make money in other ways, ways which don't involve the extortion of someone else's misfortune.

    2) Government bonds aren't as safe as people make them out to be. Long term lending at a low rate of return over many years is often eroded by inflation and increasing interest rates on the more mature bonds, so any meaningful return disappears. Also in these times, my gut says not to invest in any govt, as there are doubts over how safe they really are.
     
  19. illfounded21

    illfounded21 Senior Member

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    But in truth I don't have any brilliant investment proposals to share around myself, I just keep my extra money under my mattress ;)
     
  20. cybersage

    cybersage Regular Member

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    Jazzc is right, those numbers are not easy to achieve.

    Payday lending can hit these numbers (at least in my state) and still avoid usury caps however. I believe my state allows these companies to lend at a rate of $15.50/$100 (so 15.5%) but the term period can be between 2 weeks and 35 days. I believe with this you get near 800% return over a year; but this does not factor people who default on the loans and the costs of collection. I've looked into doing this business in my state but my other business partners won't allow it (these businesses can be harmful to a person's reputation). In my state payday lending requires that the business owner have at least 30k in a bank account to make these micro loans. I must say that this type of business is not hard to get into, but is pretty regulated and it usually requires someone that can navigate those regs to stay above water (and not get on the wrong side of the law). Where I live, I see payday loan shops all over the place, and now gold buying shops are popping up, as are smoke shops.

    I also saw a news report on one of the big online gold buyers and they usually end up paying between 25-40% of melt value, which means the margins are huge; and if you have a good relationship with your refiner, your TAT could be relatively quick. With both these businesses it takes money to make money (that is why people always say the first million is the hardest to make).

    A business is certainly one way to spend that extra money to make more money, but it can also end up costing you that money and your time. If you plan to go into any type of business, having a solid business plan is important because it can allow you to work out some kinks/bugs that you'd mess up otherwise which ends up costing $$$. This includes figuring out your costs of doing business (fixed & variable), figuring out how the particular business is regulated (and thus how you have to operate it), and having a marketing plan (IM will help, but you have to use other forms of marketing too). However, once you get those small businesses running on autopilot (or as close as possible) then all that hard work does pay off. Also, once you've built one offline business, then you have a recipe to duplicate where you can setup multiple locations of the same business; I'm involved in a business with 5 locations and I can honestly tell you that the first was much harder to get going than the fifth.

    This is the point that leads to a bad reputation and thus why it is something I won't get into personally. I can see both arguments with regard to payday lending because the payday lending industry is regulated, so that the lenders cannot lend more than 25% of a person's paycheck (again, this applies only to my state, as I havent bothered to look elsewhere). Thus if you make $800 every paycheck, the most the lender can give you is a $200 loan where you will pay back $231 after two to five weeks. Are there better sources of credit available? absolutely, but many of these places serve a need which doesn't exists everywhere (this doesn't even hit the fact that many people that utilize payday lending don't have bank accounts and use these places to cash their checks).

    Microlending is a hot business and along the same lines of credit as payday lending (at least in my mind), and the returns are very good. I've seen large companies getting into microlending in less progressed countries giving microloans with 100% interest/year and I believe they are doing a good thing. I've seen instances where business owners in other countries were lent $1000 for their business and that was enough for them to get started and change their life. The crazy thing is that when you look at the rate of default on these types of loans, it is extremely small (typically less than 10% for microlending).
     
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