There is a rule of thumb that many of the people who have created great fortunes have successfully applied over the years. It may be difficult for me to comply.
Perhaps the most famous person to whom this rule is attributed is Warren Buffet. You said a very simple thing to increase net worth. “Never lose money”.
Never lose money. Logic. It’s more. It’s common sense but we all know it’s not so easy to follow these supposedly simple rules.
In my case, I’ll be honest. It’s going to be difficult for me to conform for a simple reason: I like to take risks.
I don’t go crazy either, but I get bored easily and only betting on the safe bet isn’t my thing. My bets are reasonable. I can lose money but never to the point of risking bankruptcy.
I am considering the issue of importing a luxury car from Japan. This is a significant risk that can make me lose 20k in the worst case. It’s a lot of money and I have to think about it. I am tempted by this experience and it is very likely that I will. This is one example among many others. The rest of the things you already know if you read this blog frequently.
This is the return on investment that my three children have realized thanks to their investment in 10 months
One of the things I want to teach my kids is that if they invest their money now that they’re young, they can multiply their money. This is how I invested your money.
This is the second time I have invested my children’s money. The first time between the three they put a capital of 70 euros. The two big ones put 30 euros each and the smallest 10 euros but honestly it is he who understands the least what is happening.
The first time, we were able to double the investment with an ROI close to 100%. They all decided to continue the bet and reinvest everything, even putting a little more of their invested money. They gave me a total of 220 euros to invest.
Products that I bought with the 220 euros
The advantage of a low investment is that you can focus the money on the items that will have the best return on investment. This is why it is more difficult to reproduce this return on investment with higher figures. With my brothers I achieved an ROI of 26%, although these figures already deduce what I get for management. For my children, I work for free. That’s why my brothers ROI with a total investment of 50k is 52% ROI on products sold, which isn’t bad either.
As well as the first time I put almost 70% in the product which always generates the best ROI for me. This also explains the average that was generated because these are products that are bought for 1-3 euros and then resold for 15-35 euros. I decided to invest the rest in Lego. I bought used here at a flea market a complete Lego set which is already at the end of its life for 37 euros. It wasn’t cheap but I sold it for 245 euros on Amazon as a second-hand product, which isn’t bad at all. I have the game…
Results after 10 months
They had been asking me for a long time, so my team finally started analyzing the data. The investment tool will allow us to have it in three clicks in the future. We are very close, but not quite yet. Finally. Figures.
547 euros profit which gives us an ROI of 149%. I think we are not at all wrong with this data. It is clear that this is easy to achieve. Converting a 1 euro into 10 is much easier than replicating it with an initial investment of 1 million euros and converting it into 10.
The eldest wants to continue and reinvest everything. He realized that the thing is profitable. The medium has been saving for a Hoverboard for a while and wants to spend it. I’m still trying to convince him that he should continue to save a bit more and reinvest at least some of that money. Let’s see if I understand. The youngest still doesn’t know exactly what money is and will follow the trend of what his brothers are doing. We’ll see what they decide.
He didn’t test me. Pay impulses I say. In the end you can’t help it if you’re looking to grow faster. You need financing as leverage in your business. There is no other.
Everyone has to pay taxes. The stupidest thing you can do is try to defraud the state to save yourself miles or even millions of money. Your freedom is priceless. Going to jail for money is not worth it. In addition, we do not want to live in a society where breaking the rules of coexistence is something normal and well seen.
Then there is the part of having a strategy when it comes to paying taxes. If you try the theme there are options to pay more or less in a 100% legal way. There are even more options if you operate between several countries, as is the case with me. One thing is essential for this. You have to know more than your tax advisor. Yes, he heard me correctly. A media consultant listens to the “normal things” to call it something. You have to put your batteries to check taxes and structures that allow you to save legally. It’s what I always do. I call up advisers and tell them “I have an idea…”. Then you are an advisor who tells you where the risks are and if your plan can work or not.
Last year things have been going well financially. The downside of all is that this entails a significant payment of taxes. 2 or 3 years ago I always wanted to minimize this part. Now I allow accumulating a minimum amount of benefits that entail a relevant tax payment. Why? For a very simple reason: to demonstrate solvency to the bank.
Banks are an essential instrument to continue investing and use your existing capital as leverage. Right now I am closing a financing in Germany of 305k for the purchase of a local. It is not yet 100% confirmed, but it looks good, although you can close the purchase without having to put a single euro on the table. They even lend me 7k to do a little reform.
When they do the studies they always look at your income from last year. A person who does not pay taxes consequently has no income (or very little). Many entrepreneurs act in this way to maximize the cash flow available to invest. I always tell my advisor that my goal is to maximize cash flow. I don’t need to have the money on a personal level. As long as I have it in the company, I can use it to grow assets.
What little has been taken into account in the past is the impact of paying taxes. Let’s say we pay 30k taxes. This amount can serve as leverage to get 300k financing. That is why it makes no sense to minimize the part of paying taxes. You have to find a good balance. The issue of accumulating debt is a dangerous game. You have to know very well what you are doing because things can go wrong. When I get into debt, I take into account different scenarios and I do so if I really think that a possible catastrophe of any kind is not going to ruin me. You will never be able to anticipate everything that can happen but you have to at least give it some thought.
So things have changed. I like paying taxes, if it opens doors for me with banks.