The Most Powerful Investing Secret that Nobody Wants to Hear
If you follow some of the most successful influencers on social media today such as Gary Vaynerchuk, Grant Cardone, Dean Graziosi, and others, you will hear a very common question asked thousands of times by so many people. The question goes something like this. Grant! I have $25,000 saved. What should I invest in?
Hi, my name is John Abbas and I’m the host of Mentor Nation Podcast. Today, I’m writing an article about The Most Powerful Investing Secret that Nobody Wants to Hear. These tips will help you to gain more and more profits.
Every time I hear this question, I usually see two answers being given.
They say “Invest in yourself”
They recommend investing in what “they” are selling.
Not that this answer is wrong, but is it really what people want to hear? Is the answer complete? Is the question even able to be answered generically or is the answer on a case-by-case basis depending on the situation of the person who is asking?
This is why I want to share something with you that a very wise mentor of mine shared with me.
You see. In my 20s, I was all over the place. I was making decent money in Network Marketing, and my mind was racing. I had a little money saved and decided that I was ready to be an investor. Every time I heard about some cool opportunity to get in on something early, I was hooked. I started following lots of people who built wealth in different industries. Some made millions in the stock market. Some made their fortune in Real Estate. Some by selling coaching and marketing. If you follow anyone enough, you will feel like what they do is what you should be investing in. If you follow several people, this can lead to confusion and uncertainty. This is where I found myself. I had several courses that I only watched part of. I was paying for software that I didn’t know how to use. I was paying for masterminds with other clueless people hoping to get some sort of direction. I was dabbling a little into the stock market. I owned a little cryptocurrency. I was trying to figure out how to do drop-shipping and make millions on Amazon.
Then I met a mentor in Nashville that corrected my thinking and helped me get clear on what I should be focusing on… Here is the advice he gave me almost 10 years ago that has made me a lot of money but more importantly helped me understand the mind-set around investing wisely.
Before you ever become an “investor” with your money he said “Invest your time to build a skillset because nothing can take that away from you. Learn how to build a business around that skill set. Not only will you learn a valuable skill, but you will learn other equally valuable skills as you build the business such as leadership, communication, problem-solving, sales and marketing, and management.”
Choose what you are passionate about, what you enjoy doing, or something that is highly valued in the marketplace to others, and build out a strong skill set by learning, finding mentors, practicing, and getting results. This is how you create a stable and steady income. If you do this well, and you don’t live above your means by buying dumb shit, then you should make quite a bit more than you need to live allowing you to save money. Focus on building that before you invest in anything else. Don’t think because you have $20,000 saved that you are ready to be an investor. Until you have mastered something that makes you valuable, and that people are willing to pay you good money for, just stay the course with blinders on. Regardless of what happens in the economy, there will always be a demand for people with a valuable skill that most people don’t have.
Here is why this is important. As I type this, the world is getting ravaged by the coronavirus. Nobody saw this coming. Businesses are closing, people are losing everything, the stock market dropped over 30% and things are just getting started. In Nashville where I live, thousands of Airbnb’s that were making owners a fortune due to tourism, are now vacant and many of them will head into foreclosure soon.
“Investments” are getting crushed but the people who have skills are still making tons of money.
Once you have built a business that generates excess cash flow that is stable, then it might make sense to start investing. So what should you invest in? Unfortunately, I can’t give you a perfect answer because everyone’s situation is different, however, I will give you some direction and some questions you should ask yourself.
- Do you want to be a hands-on Investor or a hands-off investor?
- Do you want to focus on short-term investing or long-term?
- Do you want to invest in things with high risk, high reward, or low-risk low reward?
- Do you want to diversify, or just invest in one thing that you believe in?
Do you see how the answers to these questions can lead to drastically different advice?
What I do might not be what you should do but let me share what I do at the moment that works for me.
My main business is day-care. That is where I spend much of my time and energy because I know that business, it’s very profitable, and I can expand. The demand for quality childcare is high and it’s not easy, so I spend a majority of my time planning the next 5 years on how I can go from currently doing over a million per year to be at $10 million per year at the end of the 5th year. I know that to do this, I will need to open up more locations and focus on owning the real estate as well so that the money I pay monthly in rent is toward a mortgage on a property I own vs. giving it to a landlord.
I know that I have excess money and for me, I like to be hands-off. I want to invest in both short-term payoff and long-term payoff, and I don’t mind taking big risks if the rewards are there.
I put my money into buckets.
- Bucket 1: Savings. 6 months of living expenses in liquid money or cash because you just never know.
- Bucket 2: Money I focus on just investing back into my main business
- Bucket 3: Retirement. I have Life Insurance, Disability Insurance, and IRA’s
- Bucket 4: Stocks. Since I want to be hands-off, I focus on ETF’s, and solid companies that pay a great dividend. ETFs are Exchange Traded Funds that just follow the S&P 500.
You are just buying a pool of the top 500 companies traded so it’s more stable. Since for the last 100 years, the S&P has gone up, if I think long term, I should be good. I like dividend stocks because, in addition to owning shares of the company, they pay a dividend quarterly which is steady cash flow aka residual income.
- Bucket 5: Real Estate: This is also hands-off for my situation. Since my fiancé is a realtor, and Real Estate holds value well long term, I chose this and can do this hands-off. She sources deals, she runs the numbers, we buy the property or properties, have a contractor fix them up, and then have a property manager rent them out and handle 100% of the day-to-day while we collect a check every month.
Remember: I am not telling you what to invest in or that your plan should be my plan because it shouldn’t. The purpose of this blog is to help you understand that before you become an “investor” with your money, Invest your time into building skill and build a business around that FIRST until you can create a lot of excess cash flow.
Second, before you invest your money, ask yourself the right questions so that you understand what type of investing suits you so that you aren’t just throwing your money away at everything that sounds good or some get rich quick BS. Many great investments are both hands-off and hands on, low risk and high risk but you need to know what your risk tolerance is and also if you’re thinking is short term or long term.
Lastly. Some of you reading this might just want to be an “investor” for your career. In that case, being an investor will be your business and you will still need to build a “skill” so everything above still applies. Choose the industry you love, learn all that you can, find a mentor, take massive action, make mistakes, learn from them and keep going and chances are you will become a great investor!
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