this hack made billionaires... USE IT IN YOUR BUSINESS!

Hey everyone, it's Mike Andes. And today I'm talking about the strategies and tactics used by billionaires, the likes of Warren Buffett and Charlie Munger, to become billionaires and build massive businesses that were successful and how those things can be applied in your small business, whether you're just getting started or you're trying to scale up your company.

Now, I truly believe that when people look at these great entrepreneurs and business people of our day, they typically will think, well, because they are wealthy, they think this way. But I believe that what their philosophies are about business, their thought processes about employees, their thought process about cash flow and understanding businesses, that is what creates the juggernaut, that is what creates the wealth, that is what creates the entrepreneur that we now look up to. And so I'm going to go over a few things today that I looked at recently in Berkshire Hathaway's annual shareholders meeting where Charlie Munger and Warren Buffett talked to all their shareholders. And when I listened to it, these are some of the things that popped out to me. And I think they can all be applied in your small business. So whether you're just getting started or you're trying to scale up, these things do apply. The first thing that's very evident when it comes to Warren Buffett and Charlie Munger is they're always thinking very long term and they do not try to time the market. One thing that was really interesting that they said recently is that they never look at the short term conditions of the market as a thesis or a filter by which they decide whether or not to invest in a business. They simply are looking at the fundamentals and whether or not the price makes sense. So if they're trying to buy a company, it doesn't matter that short term there is pain in the market or that there's economic issues, or that there are political issues. They're simply looking at just the numbers of the business and the long term thesis and fundamentals of what's going to happen in that industry. They are not concerned about the short term. And I think so often we as small business owners can get wrapped up in the short term because the customer's mad at you, an employee walks off the job, you lose a big contract, someone disappoints you, a partner begins to shirk their response. Responsibilities inside the business, these are all things that are very taxing in the short term. And a lot of times we get so focused on that that we fail to realize the long term vision of the business. And furthermore, we buy into the constant short term possibilities and opportunities that come our way. This is what I call the shiny object syndrome. Literally going from one thing to the next and I'm gonna start this type of business and this type of business and we never lock in for 5, 10, 15, 20 years when the businesses that Berkshire Hathaway buys, traditionally, they stick with them for generations and they don't sell, they literally just keep buying them if they're at a good price or they just stick for the long term. And so I truly believe that most small business owners are constantly changing so many different industries and businesses and different opportunities, they never actually lock in on one and spend 10, 15, 20 years that is required to actually master that industry and become really good at it. So ultimately, the thing that I took away is patience beats timing. So timing the market is a fool's game when it comes to stock market. And timing the market and getting things just right and having short term wins when it comes to small business, in my opinion, is also a fool's game. Anything that's going to promise great returns in the short term is probably going to be gone just as fast as it came. And that's why I don't buy into crypto coins, meme coins, or meme stocks that are going up really fast. And people are so into their next nft, as fast as they go up, they will come down just as fast. And this leads me to the second observation that I have come to when it comes to billionaires. When you look at the list of billionaires, most of the people on that list, if you look at them, the vast majority of them are in relatively boring industries. They're not developing the next app, they're not developing the next electric car, they're not developing the next web that we all know about. That's breaking news. It's not. It's a lot of very boring industries. Things like gas and food and transportation. These are industries that have been around for decades. They're nothing new. It's not breaking science, it's nothing cutting edge. And when people look at me, they're like, why are you doing lawn care? It's not like revolution. It's not. You're right. It's a boring industry with an absolute demand and an absolute profitability and a massive sleeping market. That's what I'm interested in because that's where I feel like opportunity lays. And if you look at most billionaires and even millionaires, they don't get involved in massive get rich quick NFT type cryptocurrency. Games. They get really involved and really, really grounded in boring industries. Boring industries. The reason they're boring is they've been around for a long time. The reason they've been around for a long time is because there's necessitated demand, which means a track record over time that people need this product or service. Guess what? Tomorrow if every single NFT dropped off the face of the earth, no one would care. We'd all just keep living our life. So why not be invested in my businesses that are going to be in boring industries that I know? Tomorrow the grass will grow and it will need cut. Why would I not want to invest in businesses like fuel, like Warren Buffett just invest a whole bunch in Chevron? Well, guess what? We're going to need fuel for a long time. Even with the advent of electricity and sustainable energy, we're going to need fossil fuels and oil for a very long time. Boring industries bring boring profit margins and they're usually higher, brought on by cutting edge technology that requires tons of R and D, research and development, a massive amount of infrastructure to invest in something that might not even work or there might not be a demand that is sufficient to actually capitalize the business. The third thing that I admire about billionaires and things that have served them so well is they get very cash heavy during times of euphoria. So when everything is going good, they actually hoard cash and they don't overextend themselves, they don't go into deep amounts of leverage. And when you listen to Warren Buffett and Charlie Munger at Berkshire Hathaway, last year they had records amounts of cash, over $140 billion of cash sitting there. And over the past few months they've deployed like 30, 40% that like $50 billion. They have deployed towards buying up assets. Why? Because we've seen a massive decline in the market. There's now things being sold for 60, 70% off compared to what they were just last year. And that is what a billionaire and someone who takes advantage in business does is when everyone is all about a certain industry, when everyone's all about a certain piece of equipment, when everyone's all about a certain marketing, they just sit back, they take their time, they don't rush into things. And this is something I'm learning and I need to work on, is that I don't need a rush. There is no rush. Anything that requires a rush to beat crowd and be the first mover. I don't want to be the first mover when it comes to money because most first Movers get wiped out. And if there's a good thing happening, I can come on with a better strategy. And usually when you look at market leaders, they don't really win the category. It's usually the person that comes around second, third or fourth to actually have a plan, a strategy and copy the features of the market leader. They're the ones who actually capitalize and make all the profit. So in times of euphoria, when you ever feel pressure to make any financial decision based upon what everyone else is doing, probably a good idea to not do that and be actually very conservative in that moment and keep cash on hand, because as fast as it goes up, it will come down just as fast. And when it comes down, if you have cash on hand, that's when you'll be able to buy things for pennies on the dollar. And that leads me to my fourth and final tip that I always see billionaires consistently do, is that they buy the dip. Now that's something that's used frequently in the stock market. And that is when you see a dip in the market in the stocks you buy and you are programmed to see when, hey, we're in a correction territory, 10% down, or when we're in a bull case scenario and we are looking at 20% in the stock market, we're going to buy. That is what is typically looked at in the stock market. What I want to think about more when it comes to small business is when you dip emotionally, when you don't feel the energy for the business anymore, when not everyone is on Wall street bets hyping everything up. That is the moment to buy in stock market, but also in your business, the moment when you feel the lowest, the moment when you feel like giving up. The moment that you feel most discouraged is actually the moment you need to go all in on your business. And doing it at that moment is what's going to lead to outsized returns. The only way beat the S&P 500 and the index in the stock market is when there's dips. You go all in when there's dips, when things dive, when things sell off and there is an opportunity in the market, you have the cash on hand to buy the dip. And when it comes to this, your small business, the entrepreneurs that will stay in the game the longest are the ones that when they get low, when things are not going well, when there are misunderstandings, when employees don't look at things the same way as them, when a customer's mad at them, when they lose a big contract. They still, in that moment, emotionally put all the chips on the table of I'm still committed this. I'm going all in. And that is the time to buy the dip, the emotional dip and the roller coaster that is very equivalent to what happens in the stock market. Up and down and up and down. And people have said in the past that the stock market is simply a chart of emotions. Well, the same thing goes in small business, and that is running a small business is simply a chart of emotions. Days that are good, days that are bad, days that are exhausting, weeks that are horrible, weeks that are great, weeks that are getting great contracts. The next month is an absolute failure. This is the game of business. And the game of business is a chart of emotions. And when the emotions are low, that is when your conviction must rise and buy the dip on your emotions. Thanks for watching. I'm Mike Andes. If you thought that was great, watch this video here where I talk about the one thing that is sabotaging your profit margins. And what, in my mind separates businesses that are ultra profitable compared to their competition versus the ones that go out of business. Check this video out right here.