The Law of Infinite Returns
One of the key secrets to building wealth is your return on investment, or ROI. The greater percentage of return you get, the faster you get your money back. In the world of business, you want to get your initial investment back as quick as possible. If you invest in a CD, you’ll get about a 5% return on your investment. If you invest in a mutual fund, you *might* get a 10% or more ROI, as long as the market you’ve invested in doesn’t fall apart (see my previous post). Either way, you’re not going to get rich anytime soon using this method. Now let me give you an example of what I’ve done in the past: I used $6000 towards a down payment and closing costs for a duplex I bought, and after all my expenses the duplex is projected to make me over $2000 in profit in a year, which would be an over 33% ROI. That’s much better, but still, it’s going to take me 3 years to get my initial investment back. Now, if you can put together a deal, say in real estate, with no money out of your pocket, what’s your ROI? Well, if I had invested $0 of my own money in the above deal and profited $2000 in a year, then my ROI would be infinite wouldn’t it? With no money out of your pocket, your profit potential becomes unlimited. Now you can’t count on being able to always do this, but putting together such a deal CAN be done, I know because I’ve done it myself and many real estate moguls like Donald Trump have done this to build their incredible amounts of wealth in a relatively short period of time. Just remember, the greater your ROI is, the sooner you can be financially free.