5 investments with the highest ROI for Entrepreneurs

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You're listening to Freedom Fast lane, presented by capitalism.com this is the show about building businesses and investing the profits so that you can live life on your terms. And now, your host, the future owner of the Cleveland Indians, Ryan Daniel Moran. Hey, fastlaners, Ryan Daniel Moran here. Welcome to Freedom Fastlane.

That came out weirder than I expected it to. Let's talk about investing. Today we're going to talk about the areas of highest ROI for you, both as an entrepreneur and as an investor, because they are different. I believe the fastest way to have financial freedom is to make your money in business and then to invest your profits for passive income. But when you're an entrepreneur, when you are developing the business, there that is a form of investment because you're investing your time, you're investing money into people, you're investing it into things that don't necessarily have a direct ROI because you're not buying a note. But there's multipliers, as I have put them here on the podcast, by the way, great episode called Only Invest in Multipliers. Go look it up. There's also, from the investment side, there is the, like, I'm going to put in money because I want money back. And we're going to talk about both. But first, I am going to give you the five areas total. Out of all the different things where you could put your focus, your time and your money, what would give you the highest roi? Now, I believe.

I believe that everything has an ROI to it. My buddy Clement Won likes to say that all money has an interest rate. All money has an opportunity cost. It could be sitting in the bank getting nothing. Well, that has opportunity costs. That has, that also has opportunity cost, an interest rate associated to it. Whereas it could be in the market or it could be in real estate. That would be a different opportunity cost. So all money has opportunity cost and an interest rate. And I would also say that everything you do has an interest rate. Everything you think about has opportunity cost. For example, what you eat has an roi because if you eat a green smoothie versus eat a pile of fried potatoes, you are going to feel different, which means you are going to show up differently, which means you're going to write copy differently, which means you're going to sell differently. At the same time, how much you sleep has an roi. You know, what is the ROI of giving up that extra hour of sharpness because you are putting together a presentation to pitch an investor. There's a trade off there and you have to decide which ROI is greater that extra hour of sleep or that extra hour working on the presentation, that that's gonna wow the investor which one has an roi. You make that decision. So I think the way you spend your time, what you put in your body, how you exercise, all has an ROI to it. So I could sit here and tell you, and I would say that the highest ROI that you can spend is actually in your body. That's what I should put as number one. Because how you think how you carry yourself, how much energy you have is the biggest form of ROI that you have. Plus your ROI and everything you do is really crappy when you're dead. So if you are healthy way into your 90s, that is the best ROI you can possibly make. Because you have nothing if you don't have your health. But I'm going to skip that. And by the way, another awesome podcast. You just listen to the. Try the five where I go through the five areas of, of investment and they are how you spend your time, the relationships you have, how you make your income, how your body feels, and what is your expansion, meaning what you think about, what is the inputs in your brain. And that's things like books and what you listen to, the podcast you listen to. Hey, podcast listeners. So go listen to that one where I talk about those five areas of investment. But for the context of this conversation, I am talking about actual financial roi. So that's why we're going to skip body and all the other stuff. All right, so the five areas where you can have the highest financial roi. Number five. Actually, there's no order. So forget I just said number five first. Your skill set, if you look at any entrepreneur, if you look at any really successful person, they got successful because they mastered a skill set. For me, that has been copywriting. For me, it has been specifically email copywriting has been the thing that has made me the most money in my career, that even drove the success of my Amazon and E Commerce brands. They were successful at the beginning because of email copy. Now, my greatest skill set is probably brand building, being able to build audiences and launch products to those audiences. Now, some people would say Donald Trump, the best skill set that he has is negotiating. For some people, that would be speaking from stage. For some people, that is really mastering social media. But whatever your skill set is, it is really hard to be an entrepreneur or a successful person if you do not have a particular set of skills, bow hunting skills, some sort of skills. So what can you leverage that the marketplace is willing to pay for? That is your skill set that is what you will get that that is what you will ultimately build a business around. When people buy info courses, they really must be developing a skill set from that info course in order to build a business. That is why you can give some people a $2,000, a $3,000 course and they become millionaires because they master a skillset. It is also why probably the fastest way to build a cash flow business is to run a service business, meaning you take a and you have clients. That is probably the fastest way to build a cash flow business because you're literally leveraging your skill and direct for payment. So I know a lot of people have a certain skill set. They leave their corporate job and they take on clients. Now they're an entrepreneur and they're making more money than they would than they were at their corporate job. So what is the skill set? Even Gary Vaynerchuk would say that he built his businesses on his singular skill of social media and branding and that is why he runs VaynerMedia. First clients were $5,000 a month, another 25 to $50,000 a month because his skill set got better. So that is the first highest area of roi, your skill set that you build your businesses around, whether that is negotiating, networking, social media, copywriting, whatever it is, what is the thing that you focus on as your skill set? The second highest ROI investment you can make is in your network. I was having lunch with Cameron Herold a few months ago and he said that his network net worth so he invests a lot of time and money into building up his network. My network is the reason why I'm about to have a huge splash into retail, into one of my businesses. My network is the reason why I can put on freedom fast lane live. My network is the reason why I was able to raise outside capital to buy a multimillion dollar business this past month. Your network is the people who invest in you, your mentors, the people that you connect with. In a mastermind is the reason why people grow so quickly when they get plugged into a mastermind. Assuming that the people in the mastermind bring complementary skills, knowledge and people to the table that allow you to very quickly build a business and make an impact. If you're not plugged into a mastermind group, I would highly recommend I'm biased, but I would highly recommend you get plugged into either our tribe or our back room. If you have a net worth of over a million dollars. If you're building a business, go into the tribe. If you're already successful, go into the back room. It's where we make deals happen, we partner people up, we do intentional networking for them, but get plugged into some sort of network where you are around people with complementary skills. I'd also put a stamp of approval on the podcast called building your success network. It'll show you how to identify and start building relationships with the 10 people who will make the biggest impact in your life. So your network is the second place of highest ROI investment. It is worth paying people to mentor you. By the way, I was once asked, how do you find a mentor? I was like, it's always a good idea to start a relationship with money being exchanged. Great way to start a relationship. Number three. The number three, in no particular order, highest ROI investment is businesses that you can impact. So I have made the mistake of buying into businesses, investing into businesses that I could not impact. For example, my restaurant. My restaurant was an investment for me and it was a calculated risk. But there's nothing that I can do to increase the value of that business. There's very little that I can contribute to Fresh Planet in Avon, Ohio that will increase its sales unless I want to be an operating partner in that business, which I don't. So only buy businesses that are in direct line with your skill set, that complement your skill set. So if you're a social media expert, buy a business that will benefit from your expertise in social media. This is one of the reasons why I run and teach and invest in our students. I run the tribe, I teach the model and I invest in our students because I know I can directly impact those businesses. I already have the retail relationships. I already have years of experience building million dollar businesses. I already know all the top people in the space, so I can directly impact that business. So rather than buy restaurants, which I'm not going to do anymore, I buy businesses that I can have a direct impact on because of my skill set. That is one of the best investments that you can personally make.

The fourth highest area of ROI is people, and that is team members. Those are the people who report to you, the people who are oper and implementing your business. The right hire is a 10x return, sometimes more. The wrong person drags your entire organization down. The people that you invest in. According to all of the individuals that I have interviewed that run $100 million businesses and up. You can listen to the chat with Gary Vaynerchuk or with Cameron Herald. They both back up that people are the reason why businesses go from 1 million or 10 million all the way to 100 million. It's about people. It's not about the algorithm or the formula. It is about the people in your organization. The role of a CEO or a founder is to set the vision for the company, make sure you never run out of money, and to ensure that you're acquiring the best possible people to implement that vision. I have realized recently that I am never going to own the Cleveland Indians if the business is dependent upon me. So I am simply getting out of the way, being the leader of content, allowing good people to build the vision that I have set on all of the different businesses that I'm involved in. And finally, number five, the number five highest ROI investment you can make is in building your audience. That is the check writers, the customers and the fans of your business or of your brand. I am always amazed when people simply go after more customers rather than building up their total exposure, their total reach in fans, leads and customers. Especially when it comes to physical products, brands and Amazon based businesses. When people are simply trying to promote their products so that they get more front end customers and not building up a total collection of leads and eyeballs, they are playing the short game rather than the long game. Everything that you do from now forward will be easier if you have a collection of eyeballs that you can tap into when you want to launch a product.

On the first episode ever of Freedom Fast Lane tv, somebody asked me, how would you build a business if you only had $500 a month or less? And I said I would put every dime of that into building up a following. Build up the audience. If that is driving traffic to a squeeze page, if that is boosting videos, if that is advertising your YouTube page, the reason for that is because even if all you ever do is promote other people's products as an affair affiliate, which is how I made my first hundred grand and how I paid for college and graduated college, which $100,000 in the bank.

Was because of the audience that was being built because all I did was promote affiliate products in that time. So if all you ever did was promote affiliate products or you took on clients, whatever it is, all of that is easier and faster and almost automatic. If you have enough eyeballs to be able to do that, if you have the audience to do it, what's the difference between somebody who is around 10 years from now and somebody who is a fly by night person? How many people they impact, how many active audience members they have on their disposal? So those top five areas are your skill set, your network, businesses that you can impact people as in Your team members and and your audience. If you are neglecting any of these areas, they are the highest ROI you can get from any dollars that you put into something. Are you leaving any of these on the table? Are you neglecting any of these? If so, analyze what you can do to get plugged into these areas so that you can get the benefit of these high roi. If you don't. If you don't have a business, it's because you don't have a skill set that you've developed. So put some money into developing a skill set. If you are kind of flatlining in your business, it's probably because you're missing a person in the form of someone in your network, a mentor, a partner, a team member.

If you are looking for that upside growth because you already have a business and you know that you want to make an impact that gives you a higher than what is normal ROI financially. That is, by getting involved in businesses that you can have an influence on. If you are not growing as fast as you want, it's because you're missing the right team members. And if you're not sure how to monetize what you've got going on, it's because you don't have the audience that would make everything else easier. So put your dollars into one of these five areas and preferably all of them. I have a few honorable mentions that didn't quite crack the top five, but I want to give them to you now. And the first one is going to Good debt. I have recently, like in the last year, really gotten an understanding of how valuable debt is. At the beginning of my career, I thought debt was a bad thing. I wanted to avoid it at all costs. Now I realize that debt is one of the most beneficial things that you can have. For example, if you can borrow money at 5, 8, even 10%, but you could put it into one of the top five highest ROI investments, I will make that trade all day long. For example, if you could borrow $100,000 to put into a process for developing leads and eyeballs to build your audience. And you use that audience to promote affiliate products or to launch a book or to.

Put on a workshop regularly, that alone is a fantastic use of capital because the audience is an asset that will be around for years and all it cost you was the interest rate on the debt from what you borrowed. So good debt, in my opinion, is one of the best investments that you can make. And.

I would have been shocked by that a few years ago. But I have seen the power of Utilizing debt. It's one of the reasons why I don't understand more people don't use Amazon lending or seek outside capital when it comes to funding their inventory. They could grow so much faster. I mean, I think about the first inventory order I ever made in my business was $600. That product now sells $6,000 a day. So $2 million a year on that one product.

Maybe I'm a little high. It might be four or $5,000 a day. So $1.5 million a year. I spent $600 on the first one. Well, shoot.

What if we bought. If you could borrow at 5 or 8% interest like Amazon lending is, or like an SBA loan is, how many new products could you launch with that? How many million dollar products could you make with that type of a loan? And it costs you 5% interest. So good debt is one of the best places where you can get roi. Next is real estate. Real estate mostly for the depreciation, which is a long term way to reduce your taxes. It also is a great source of good debt, which is one of the reasons why I included it. And what I mean by that is you can borrow against it and also it can be highly leveraged. I believe is the most highly leverageable assets that you can purchase. Which is why real estate becomes so attractive. You can leverage it at 20%, put 20% down, control the entire asset for that, write off the debt on that and write off the depreciation. Overall it is just a fantastic way to hide cash and also grow your wealth over the long term. Next, I put dividend paying stock From a cash flow perspective. Dividend paying stock is my favorite source. If you have a long enough timeline, dividend paying stock is one of the places where you can just get eye poppingly high interest rates or ROI on your money. Especially if you're following a drip strategy, a dividend reinvestment plan. So if you have never heard me talk about that before, go listen to the episode with Matthew Paulson where we talk about why dividend paying stock is one of the most overlooked places for long term returns. And finally, anything that reduces your tax burden. My favorite is captive insurance. But there are lots of ways once you're kind of over that million dollars worth of income that open up ways for you to put cash away. And what I tell some of our students in our Investing for Entrepreneurs class is that the best time to pay taxes is always later. So anything that you can defer any asset that allows you to pay taxes later, I consider that a win because it allows you to have that capital that you can invest into other places to get ROI. So whether it's captive insurance or a 401k or an IRA or anything that allows you to keep some money now and defer those taxes for later so you can invest them into other places, I consider that a win. So the honorable mentions go to sources of good debt, real estate, dividend paying stock, and anything that reduces your tax burden like captive insurance or in some cases it's life insurance or it's an IRA or a 401k or all places where you can park some cash and defer it from Uncle Sam getting his greedy little hands on them. Hey, my favorite thing to talk about is investing. I really became an entrepreneur because I wanted to invest. It's one of the reasons why I invest so heavily in our students and in other businesses. If you like this conversation, head over to freedomfastlane.com investing. You can get on the waiting list for the next time we hold one of our Investing for Entrepreneurs class. So what we do is we work with entrepreneurs to be able to take the assets they have and grow their business. In fact, if you don't, if you don't see at least $100,000 worth of value within that first half of the first day.

You can exit the workshop and get your money back. Because I what my goal is is for everyone to come in and learn the business strategies that are these high leverageable ROI places. To put your emphasis in business, be able to have $100,000 worth of value within the first half of the first day. So everything that we talk about from there on is gravy. Because I believe you should make your money from business. So we cover those high leverageable and areas of your business right up front. Then we know how we're going to make additional money that we can invest into. All the other areas that we talk about, they go into dividend paying stock and real estate and a bunch of different other areas where you can see a really high ROI from the money that you make from the business. So that is@freedomfasting.com investing to get on the waiting list for our next Investing for Entrepreneurs class, which we will roll back again sometime here in 2017. If you found value in this episode, please share it with an entrepreneur who's not investing wisely. Because I think one of the biggest mistakes entrepreneurs make is that they don't invest so that they are they are constantly worried about what's going to happen next. They're worried about it all going away. That is a product of not investing wisely and not having predictable passive cash flow. And they could have that if they just had a good predictable investment investing strategy. So if you found value out of this, please share this with an entrepreneur who is worrying too much and is not investing into high ROI assets. Thanks for listening to Freedom Fast Lane. We'll see you on the next episode.