By: Stefan Aarnio
Freedomway.ca
facebook.com/stefanaarnio
https://twitter.com/stefanaarnio
http://ca.linkedin.com/in/stefanaarnio

Get Stefan Aarnio's book "Money People Deal: The Fastest Way to Real Estate Wealth" at MoneyPeopleDeal.com!

Remember: Please share this article if you found it enjoyable!

I was having a conversation with a friend of mine and I asked her for her opinion on the local Asper school of business.

Her answer surprised me "needed for some, not for others."

Formal education usually has mixed reviews in the business world. Some people love it and swear by it, others think that it is an outdated dinosaur of the industrial age.

Although I did attend the University of Manitoba, and did take classes at the Asper school of business, I am a business school drop-out. My ambitions for taking classes at the school were quickly quenched when I learned that they were grooming me to become an employee and not an entrepreneur. No matter how much education is received from an institution like Asper, the teachers are employees and they train people to think like employees.

Many of the world's greatest entrepreneurs were drop outs: Steve Jobs of Apple, Bill Gates of Microsoft, Mark Zuckerburg of Facebook, Henry Ford and others. These men build their businesses on passion, experience, and practical hands-on-study in their fields. 

"Formal education will make you a living, Self education will make you a fortune." - Jim Rohn

With enough hands on study and experience, these great entrepreneurs build the most valuable asset of all - sound business acumen. The greatest difference between most WANTrepreneurs who have day jobs and real entrepreneurs who derive their livelihood directly from their businesses is:

1) Entrepreneurs live off of their business acumen
2) WANTreprenerus trade time for money

Where entrepreneurs can turn their ideas and passions into assets that create strong enough income to reach their dreams, many WANTrepreneurs are stuck trading time for money building someone else's dream.

In Robert Kiyosaki's game CashFlow, there are two circuits:

1) The Rat Race, a wheel that the players circulate around in collecting pay checks. In the Rat Race, these players have jobs and trade time for money. It doesn't matter if the player has a low paying job like a Janitor or a high paying job like a Doctor. All of the players in the Rat Race trade time for money, have a limited earning potential, are susceptible to the pitfalls of relying on a fixed income i.e.: players may become downsized and lose 100% of their income for a short period.

2) The second circuit in Cash Flow is called the Fast Track and on the Fast Track players move much faster. The Fast Track is reserved for players who have strong enough business acumen to create enough passive income to exceed his expenses. In other words, these players have become smart enough to not need their jobs  and live off of their ability to invest and create income. Players on the fast track make disproportionately more money, have larger deals, cannot be downsized, and are unaffected by many other disadvantages of the rat race.

One circuit relies on trading time for money, the other relies on business acumen.

Many new investors and WANTrepreneurs want to make the transition from the Rat Race onto the Fast Track, but the sad thing is, many of these WANTrepreneurs refuse to invest in their financial education - the most important asset of all.

Your education and business acumen is the greatest asset, far more valuable than Gold, silver, cash, stocks, real estate, companies. All of these "real" assets mean nothing if there is not a strong base of skill and education backing these symbols of wealth.

But if formal business school teaches most people to be employees, then where can one get an entrepreneur's education.

There are many places to get an entrepreneur's education:

1) Books written by real entrepreneurs
2) Seminars for teaching business put on by real entrepreneurs
3) One on one coaching from real entrepreneurs
4) Mentorship or apprenticing under a real entrepreneur

The key word with all of the above is REAL entrepreneurs. When choosing to learn about entrepreneurship or business from someone, it is counterproductive to learn from a good employee. Employees are trained to think differently from entrepreneurs and they collect pay checks instead of build companies.

ACTION STEP:

In your life, ask yourself; "are you living off of your business acumen?" Or are you trading time for money?

What do you need to get to where you want to go?

Who do you need to help you get there?

Thanks for reading,
By: Stefan Aarnio
Freedomway.ca
facebook.com/stefanaarnio
https://twitter.com/stefanaarnio
http://ca.linkedin.com/in/stefanaarnio

Get Stefan Aarnio's book "Money People Deal: The Fastest Way to Real Estate Wealth" at MoneyPeopleDeal.com!

Remember: Please share this article if you found it enjoyable!

By: Stefan Aarnio
Freedomway.ca
facebook.com/stefanaarnio
https://twitter.com/stefanaarnio
http://ca.linkedin.com/in/stefanaarnio

Remember: Please share this article if you found it enjoyable!

Robert Kiyosaki defines intelligence as “the ability to make distinctions”. For example, an interior designer will be able to make distinctions between 15 shades of blue giving them specific names like “azure”, “indigo”, “sky blue”, “royal blue”, “navy blue” etc.

A cigar connoisseur will know the difference between a fine Cuban cigar and a fake.

An investor should know the difference between money and wealth. Unfortunately, most investors do not know the difference.

Everyday we wake up and chase the pursuit of happiness. For most people, money is part of the equation. Everyone would like to be rich and rich means an abundance of money. However, there is a huge distinction between money and wealth.

A person can be wealthy and not have any money. Logically, the opposite is true as well; you can have lots of money and zero wealth.

Sports stars that make millions of dollars per year and lottery winners are examples of people who can make lots of money but have zero wealth.

On the other hand, a retiree with a solid income from their investment portfolio may have wealth but very little money to throw around.


What is wealth? What is money?

Wealth is measured and defined in time. The question we must ask is “if I stopped working today, how long could I survive?” If the answer is “forever”, then you have wealth. Many people who live paycheque to paycheque could only survive for a few months if they stopped working. These people have very little time to survive and very little wealth.

I recently heard a statistic that over 50% of American households are 1 paycheque away from bankruptcy. This may or may not be true, but it paints a grim picture of the lowest level of wealth. One paycheque is only 2 weeks worth of wealth and a very low level of survival.

Money on the other hand is much easier to define. Money is measured in dollars and all we have to do to measure dollars is count. The key with money is to learn to exchange dollars for wealth.

Traditionally speaking the rich are very good at trading dollars for wealth (assets that produce passive income), the middle class are good at trading dollars for liabilities (houses, cars, cottages) and the poor are good at trading dollars for expenses (flat screen televisions, booze, rent).

This year in my Real Estate portfolio I focused mostly on wealth rather than money. I built wealth this year through multiple income streams of both business and real estate. To myself, I consider it important to build income streams early in my life. I wanted to create wealth and the ability to survive “forever” without a paycheque so that I could become creative in my free time.

At the time of writing I have multiple income streams and can survive “forever” which means that my passive income is greater than my expenses. However, wealth alone is not enough to win the game of money. We need both cash and wealth to get the most out of life because dreams aren’t cheap.

In the words of the American billionaire Bill Bartmann “Cashflow buys you time, profits buy you praise”. Both cashflow and profits are required to win the game, the question is which one do you focus on today.

For most people with a paycheque, they should focus on learning to create wealth and multiple streams of passive income through real estate, dividend bearing stocks, internet businesses, traditional businesses, or joint ventures.

For people with wealth, they may be interested in creating more cash and liquidity through business, real estate and joint ventures.


The game of money is a game of balance and this year for myself, I will be starting the year off with a “cash” strategy; I have achieved a level wealth, which has freed up my time and will be pursuing my strategy to take my brand to the next level.

What are you doing this year to take your game to the next level? Will you be pursuing cash, wealth or both? Please discuss your strategy in the comments below.

Thanks for reading,
Stefan Aarnio

Freedomway.ca
facebook.com/stefanaarnio
https://twitter.com/stefanaarnio
http://ca.linkedin.com/in/stefanaarnio

P.S: Please share this article if you found it enjoyable!

By Stefan Aarnio
Freedomway.ca

Photo left: Build your tribe with the 3 most important types of capital.

In the world of business, capital is needed to fund ventures, purchase equipment, land, product, time, talent, people, relationships and leads. Most entrepreneurs and Real Estate investors chase and compete for cold hard capital all day long and never learn about the "other" types of capital that are often more important and powerful than cold hard cash.

When I began in business, all I could think about was cash, profits and revenues. I couldn't see the bigger social, educational or relational picture that was taking place around me. Consequently, when I began in the world of business, I was isolated, ignorant, alone and broke. In the animal kingdom I would have been eaten by a large carnivorous predator.

Unfortunately for me, my fascination with traditional capital had blinded me from the true wealth and value that circulates every day and pays zero in taxes to the government. I didn't realize that business is a TEAM sport and that you cannot run it alone with just cold hard money - or lack thereof.

JT Foxx, one of my teachers and mentors, showed me the 4 types of Capital, and the 3 that most people don't think about.

The 4 types of capital:

1)   Capital (real money) for business: This is the type of capital that everyone thinks about. It's cold hard cash and most people chase it and compete for it. In my opinion, this type of capital is the most worthless of the 4 types and very easy to obtain if you understand the other 3 types of capital.

2)   Educational capital, money for your education: This is an extremely important type of capital. Many people finish high school or university and then never invest in their education again. This year alone, I have invested 3x my college education in educational capital and will have it all earned back by the end of the year. This type of capital is absolutely required for you to grow your business. The people who avoid this type of capital move slowly through life, cannot expand their business geometrically and cannot collapse timeframes. THIS TYPE IS ESSENTIAL.

3)   Social Capital – investing in causes etc. We've all heard of social capital, but so many people don't build their business around it. People do not buy products and services, they buy what you believe in. Social capital is created when you do GOOD things for your community. Make sure you give back once in a while. Select a charity to either raise for or volunteer for that aligns with your business and beliefs. This type of capital is extremely important because prosperity attracts prosperity. If you are going to succeed, you need to be an attractor of prosperity and not hoard to create poverty. People who fail to invest in social capital become isolated, alone and vulnerable. DO NOT FORGET ABOUT SOCIAL CAPITAL.

4)   Relational capital – between people. Relational capital, like social capital connects us on a greater level. People are tribal creatures and in the tribal days, isolated tribe members were cannibalized by other tribes or predators in the jungle. Today the world is no different. Relational capital is formed when you take care of the people around you and build solid, long lasting, reciprocal relationships. This type of capital is the glue that teams and tribes are built out of. Without this type of capital, you cannot bind yourself to other people or create strategic partnerships or alliances to take on bigger missions. Build your team, invest in RELATIONAL capital or die alone at the hands of a bigger, stronger tribe.

The very interesting thing about the 4 types of capital is; the more you focus on the unconventional types of capital, the more opportunities, people, deals and cash you attract. Recently in my own business, I have focused on the 3 neglected types of capital and my business has exponentially exploded. I work on the projects I want to while bigger and better opportunities fall into my lap every day. I focus on my network, bringing value to other people and creating synergies with colleagues. This is where successful people find true wealth and satisfaction in life. Stop chasing the money... The harder you chase - the faster it runs.

Thanks for reading,
Stefan Aarnio
Freedomway.ca

P.S. Please share this article if you find it helpful.

By Stefan Aarnio

Freedomway.ca

I had the pleasure of spending some time with Real Estate veteran John Brauc last week in Chicago.

John has been featured on my blog before and has built his business around property management and acquisition of multi family units in Chicago. Today he has acquired 500 doors and counting and he has no sign of slowing down. One thing that I found to be very impressive with John's 23 years of experience is his extensive and detailed knowledge of the key players of a real estate power team.

Most investor's power teams are 8-9 members max and John's is very large (13-25) and keeps specific people for specific tasks. Below is an outline of the members of John's power team that he has built over his 23 year career.

Please notice that he does not keep one person for each category, he'll have multiple power team members who are highly specialized and I identify with John's strategy because you can diversify your team risk and also have a highly specialized team.

Please take a few moments to review John's power team members and ask yourself - who am I missing?

John Brauc's Power team players:

1) Multiple Real Estate Brokers

a. Multi family brokers are different than residential

2) Lawyers – fire them if they don’t call you back the same day. John uses about 5 different types of lawyers:

a.     Different lawyers for different tax laws

b.     Do not mix commercial and residential lawyers

c.      Eviction lawyers

d.     Lawyer versed in foreclosures.

e.     Syndication Lawyers.

3)   Deal Analyzers - People who analyze deals for you.

a.     Single family analyzer - These are different than multi family.

b.     Multi family analyzer different person who understands the business.

c.      Have other investors or associates take a ‘second look’ at your deals and always double check

4)   Accountants

5)   Book keepers

6)   Insurance agents

7)   Bankers, different bankers for different deals

8)   Mortgage brokers

9)   Funding partners

10) Mezzanine Lenders, banks only give 70%, you have 20% They will bridge the last 10%

11) Hard Money Lenders

12) Property Management Team

a. Property manager

b. Assistant property manager

c. Leasing Agent

d. Receptionist

13) Maintenance Team

a. Maintenance supervisor

b. Maintenance personnel

c. Landscaping

d. HVAC

e. Plumbing and electrical

As I grow my business, I begin to see the effects of the 80/20 rule. 20% of your actions produce 80% of your results. Having the proper power team in place helps any investor leverage their time to maximize their efforts.

Another principal of having a great power team is to "Do what you do best, delegate everything else." Find your strength, be the "quarterback" of the team and let everyone else do the other jobs.

Real Estate is a relationship business and you must create reciprocal relationships with everyone on the team to have long term success in the business - especially with high unit counts like multi family.

The team is like a chain, each and every Team member is important and you are only as good as the weakest link. Treat the team well and they will bring you success. Invest in your people.

Set up the proper communication systems within the team and supply the right tools for them to make things work. Too often I see investors with weak teams that fall apart because of poor communication. Even in my own power team, I often have to step in when communication fails.

Real Estate is a team sport and you cannot do everything yourself. Acquiring a great team is essential to success, start building this team now, sub out the weak members and make sure your bases are covered.

Thanks for reading,

Stefan Aarnio

Freedomway.ca

P.S. Please Share if you found this article helpful.

by Stefan Aarnio
Photo Left: JT Foxx and Stefan Aarnio

I have spent the week in Chicago at an event hosted by JT Foxx and George Ross and my perception has changed yet again on business and investing.

I have met investors from all levels in last few days. Some investors have literally done 1000's of deals in a short time span, others have done 500's of deals, 100's of deals 10's of deals and many have done no deals at all. What amazes me, is the different mentalities between the levels of investors.

I find that the lower the level of the investor, the more greedy they are, the lower the skill set, and they have a tendency to try to 'hoard' equity and kill deals. In contrast, I have noticed that the investors who have done 500-1000 transactions in 5 years or less are extremely generous, have wonderful abundance mentalities and can literally PRINT MONEY whenever they want. They make money by creating opportunities where others see nothing. They can freely add profit centres to distribution channels and multiply cash flows where others saw nothing. These investors are successful because they are able to ADD VALUE which is a key component of business. The unsuccessful, new investors try to TAKE VALUE away and are only focused on one number... That number is ROI or Return on Investment.

Mini-Mega Partnering is the seminar I have spent 3 days this week in, and close to 50 hours of time. It is full of some of the world's top real estate investors and coaches and the ironic thing is THERE IS VERY LITTLE TALK OF RETURN ON INVESTMENT. Very few are discussing ROI or numbers or percentages at all... Instead, 75% of our time has been spent focusing on the OTHER returns that people make in investing and more importantly in BUSINESS. After all, business and investing are extremely similar, and business is really just a high velocity version of investing.

But please don't misunderstand me. Return on Investment is a very important return to anyone investing money and please use it when evaluating a deal. However, there are 4 additional returns that I think everyone should consider when considering a business opportunity.

1. Return on Effort
2. Return on Time
3. Return on Learning
4. Return on Relationships

In my real estate career, I have done 12 transactions this year, all with none of my own money. I leverage these four returns and create value for my partners and investors by letting them consider Return on Effort, Return on Time, Return on Learning and Return on Relationships... In addition to these 4 Returns, I also give them a very healthy Return on Investment.

JT Foxx has gained access to hundreds of millions of dollars to do his real estate deals and he has done over 700 deals in 7 years. His perspective is:

"The back office (The team running the deal) is more important than the acquisition (The deal itself)." -JT Foxx

The brains behind the deal (often called the management) creates ALL OF THE VALUE in any real estate or business deal because any moron can serve coffee, but it takes a genius to create a Starbucks.

I like to remind people when I'm raising money for my deals that money has very little value when parked in a bank account. Money is a transportation medium and can be compared to a car. If you have a beautiful Porsche and leave it parked in the garage all winter, by the time summer rolls around you will have a rusting hunk of metal. The car will be devalued, in bad shape and will need repairs. Money works the same way - it needs to move. If money is parked in a bank account for the winter, by summer it has devalued. Money itself has no value and if parked long enough, it's value will go to Zero.

I have dozens of deals come across my desk every week and I always have to decide on the 5 major returns behind every opportunity.

1) What is the Return on Effort? I want to operate the deal with minimum effort. I like to cherry pick and if the deal requires too much effort, I will sell the opportunity to another investor. I am becoming a high velocity investor, big risky rehabs are less attractive to me than they used to be and need to be turned in less than 30 days. I like a high return on my effort and so do my investors.

2) What is my return on Time? Again, I am becoming high velocity. My goal is to achieve 100 deals in a year and I cannot take on a project that takes all of my time. Remember, keep the best opportunities for yourself and if something is too time intensive for your appetite, pass it on to another investor.

3) What is my Return on Learning? I need to make sure that the deals I'm doing are going to take me out of my comfort zone enough to keep my skills sharp. The world is always changing and you need new skills every day. Make sure you are learning something all the time in your deals, don't get too boring. Take some calculated risks and learn.

4) What is my Return on Relationships? I try to employ two strategies when choosing deal partners. A horizontal approach and a vertical approach. The horizontal approach is to do as many deals with as many people as possible to gain a social track record and develop a reputation. This is a great way to get your name out there and network. On the flip side, I like to remain loyal to my best investors and create deep relationships where the success and trust can climb to higher and higher levels. I like to consider who I am doing business with and the relational capital that is exchanged when doing business. Relational capital is EXTREMELY important in the business world, and many new investors completely forget about this very important currency.

The biggest mistake I see people make in business or investing is that they get rigid in their thinking and only focus on one type of deal or one number - usually ROI. Next time someone brings you a deal, consider the 4 other returns and look for the 'hidden gold' that is buried deep in some opportunities. 

Remember the other types of capital that circulate in the world and learn to harness not just money but time, effort, relationships and learning.

Thanks for reading,
-Stefan Aarnio
freedomway.ca

Making Money the Smart Way
By: Robin J. Elliott

We've heard all the cliches that are trotted out by so-called “experts” - You have to risk a lot to make a lot. You have to sacrifice your time with your family / your family. You have to be focused on one specific product or service and one specific demographic / psychographic customer model. You have to own your category on the Internet. You have to create a successful image (so lease an expensive car, pay a small fortune to graphic artists, printers, et al, lease an expensive, “impressive” office, buy a franchise, buy a business... I could go on all day.

My response to all this claptrap is, “Not necessarily.” I'm an unusual kind of entrepreneur in that I hate risk. So I run my business with no cost, no risk, no employees, no inventory, no leases, no limitations, and no cost of sales. So everything I earn is 100% profit. That's 90 – 95% of my income. The other bit is coaching and speaking engagements, both of which cost a little time, but both are designed in order to create more passive income. And I live pretty well. I don't buy stuff I don't need with money I don't have to impress people who don't care. Nobody cares how old I am, how smart I am, what my academic “qualifications” are, what experience I have, where I live, what car I drive...

Sounds too good to be true, right? I'm not talking about some Ponzi scheme, Forex, Network Marketing, real estate investing – none of that stuff. This is simple, logical, risk free, minimum time. I use Leverage, and I do that through the medium of Joint Ventures. I've been doing it for 25 years. You can do it anywhere, from anywhere, regardless of who you are, where you are, or how old you are. It takes some learning and some work in the beginning, and of course the more you learn, the more you can earn, and the faster you learn it, the faster you can create enough residual or passive income to live very comfortably indeed, with enough time to enjoy your life and the people in it.

Joint Ventures are based on the simple idea that if you bring a business more sales, they will pay you a commission – that is a part of their profits. So you can literally introduce new customers to any business that agrees to pay you a commission, and you can develop multiple income sources in different industries and in different places and countries. There is literally no limit to this concept, because it takes little time and you don't need to understand the business – just the benefit of using its products or services.

Business owners, how does this sound? I took a profit centre in my business that had taken nine months to get to $4,000 per month and boosted it to $20,000 per month in FOUR DAYS – with one, risk-free JV. If a JV Broker did that for you, would you pay him or her a percentage of that $16,000 increase every month? You would if you're smart. It's money you wouldn't have had.

How you find those customers, how you link the customers to the businesses and get paid, how you develop as a Joint Venture Broker is what I teach. And I also teach business owners to use this same principle to increase their sales and profits and only pay for results – that is commissions for sales – thereby removing risk and limitations. Less that one percent of small business owners understand and use Joint Ventures, whereas the practice is very common in large businesses. It's nothing new; it's just new to the owners of small businesses. Once you understand and use Joint Ventures, you control your income and your financial destiny. Imagine having twenty different income streams from twenty different business! That, in my opinion, is called “security.” Having a job is about as insecure as you can be.

I recently made a phone call to introduce a friend of mine who helps people get taxes back from the CRA to someone. That five minute phone call earned me a commission of $4,000. And it saved his client a LOT more. Pure profit. Win / win / win. Some people work hard to earn $4,000. Or they have to sell a lot of stuff to net $4,000. There are MANY ways to make these JV's happen. You don't have to leave your home if you don't want to. Our primary focus is real, brick and mortar businesses with real people and real money, not online JV's.

If this sounds too good to be true, check out a few testimonials on my website www.leverageadvantage.com – I have hundreds more – and objectively consider how logical this is. What I'm saying is that whether your a business owner who wants to increase your sales and profits, or you've lost your job or can't get a job, retired, a school child, just got out of prison, someone who simply wants to supplement their income, a senior, a new immigrant – it doesn't matter. Joint Ventures are a very safe and viable option. No more excuses. And it depends on how much you learn and how fast, and how much you put into making it work. And the best part? Even if one of your Joint Ventures underperforms or doesn't work at all, nobody loses any money!

Next step? Grab a free membership at www.DollarMakers.com, take a one dollar trial at www.jointventuresforlife.com or contact me direct to see if personal coaching is the way to go.