People are always wondering how can I make more money in business, how can I make more money in real estate? I received a question comes from a gentleman, he’s 27 years old, he has $200,000 to invest, and he wants to know how can he maximize his ROI. Now that’s a really tough question because it’s like a blank canvas. It’s like having a blank canvas and some paints and saying, “How do I paint the best picture?” In truth, there’s so many different ways that you can paint the canvas, but I’ll try to break this down a little bit for this gentleman so that he can get a better idea of the things he can do.
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Now there’s two places to invest your money in the world. There’s the active side, and then there’s the passive side, active and passive. Now passive investing, you’re going to earn a rate of return from anywhere from zero probably safely to about 15%. That’s about the max ROI you can do in a passive investment. Passive means no time, no effort, no energy, no brains, you don’t need to know how to do anything, no management. Realistically with this space, it’s very tough for you to get a return over … I would say getting over 8% without getting into some sort of business relationship is kind of tough. That’s one side. If this gentleman’s okay with making anywhere from zero to 15%, we can do passive investing all day long.
Now if you get into active investing, you’re probably looking at 15 to 150% ROI. On the active side, if you want to be an active investor and actually spend time, money, effort, energy, management, then you can earn 15 to 150% ROI. Really what’s happening on this side if you want to be an active investor, you’re kind of becoming an entrepreneur. That’s where the highest rewards and the highest risks are. Now for myself, I don’t do very much passive investing. I’m 29 years old and I’m very close to this gentleman’s world, and I prefer at my young age to be doing more active investing on this side rather than passive. Because I know that if I’m 27 years old, if I’m doing this kind of investing, I’ll be 50 or 60 one day, or even 70, and I won’t have much money. If I get into business and start ten businesses, here’s another thing to consider.
Nine out of ten businesses fail. one in ten businesses succeed. I really think that the smartest thing to do if you really, truly want the highest return on your money, is to become an entrepreneur, get into active investing, which is starting businesses, starting companies, buying companies, fixing companies, selling companies. The brings me to my next point. If you want to be making this kind of return, you need to be very smart. I’m going to write here very smart, and very educated. You’ll need coaches. You’ll need mentors. You’ll be reading tons of books. You’ll be flying around going to seminars, meeting people, networking. Because this is not an easy game. If you want to just park your money over here, I work with investors all the time and I aim to give them a double digit return, anywhere from eight, nine, ten, 11, 12% in that range. That’s what I pay my passive investors. On the active side, I’m seeking to make on my business ventures an infinite return. It truly is infinite because a lot of the deals I don’t have my money in.
Now I’m Stefan Aarnio, guys. Respect the grind. and leave a comment below if you found this post to be valuable. I’m going to continue to bring you guys some really great, juicy content.
