I think all of us have a secret drive for freedom, and since many of us grew up playing business games like Monopoly, that means that we see business as a way to pile up large amounts of cash. Entrepreneurship is a big ol’ game, and if you have fun with it, it can be the greatest game in the world.
Inside Freeland Ventures, we have the same idea about investing that Ryan Moran does. We make loans for fix and flips and then we take the profits from the lending business and invest it passively into income properties. Ryan invests in internet businesses primarily built off of the e-commerce platform, and then he invests those profits for a passive income stream.
As the founder of Capitalism.com, Ryan is responsible for creating over 100 millionaires, and he’s a serial entrepreneur, investor, and speaker. He’s set up a system for building, scaling, and then selling e-commerce businesses, and he breaks down his 3 steps for us on how you can become an internet millionaire. Over and over, he’s seen the same kind of people succeed, so he knows the mindset it takes to create a million dollar e-commerce shop.
BUILDING AN E-COMMERCE SITE FROM SCRATCH
When you start an e-commerce business, no matter what products you choose to sell, the first three to four months are just you grinding away trying to get every sale. Every time you make a sale, you’re begging for reviews to boost your shop’s reputation. It doesn’t matter if you’re selling yarn, dog toys, or shoes. Every e-commerce site starts out having to hustle for sales and reviews.
The goal in this first step is to get to 25 sales a day as quickly as possible. You’re trying to build a customer base and keep the momentum going so that you can add in 3 or 4 more products which will really start to grow the business. Once you add in the extra products, by about the ninth month, things are really moving along and you can take more risks and start paying yourself a salary.
In the last three months of the year, paid advertising and creating unique partnerships can help take an e-commerce business over the finish line and into what Ryan calls the “gold” period. There’s enough profitability in the business to test out products that might hit a home run, and you have the chance to make more in these three months than the previous nine months.
DON’T START SEVEN BUSINESSES THIS YEAR
When Ryan goes around talking to the entrepreneurs who’ve used his business model successfully, they all have a lot of the same characteristics. They’re not trying to make as much money as possible as fast as they can. They’ve got a long-term plan that focuses their attention on reinvesting their profits for long-term gains.
Short-term entrepreneurs fail because they take their money off the table too quickly. They’re always looking for the next fast sale rather than focusing on building assets. Long-term entrepreneurs that succeed realize that every step forward can grow exponentially.
For example, you make one sale in an e-commerce store, and the customer loves your product. They leave a positive review, and then they tell all of their friends about you. That one sale can yield 25 more sales, that then grows by an order or magnitude that has you quickly on your way to millionaire status. But if you’re focused on a couple of sales before you hop over to something else, then you’ll miss that long-term growth that really rakes in the profit.
So don’t start seven businesses this year. Start one, focus on it, and reinvest your profits so that you can watch your profits grow by an order of magnitude that’s beyond the vision of short-term entrepreneurs
WHAT LONG-TERM INVESTING IN REAL ESTATE LOOKS LIKE
E-commerce is the widget that Ryan uses to grow his wealth, but like me, he also invests in real estate. And the tactics for reaching millionaire status in real estate are very similar. Focus on a great customer experience, put your profits back into your business, and build your reputation as a great real estate investor. Then and only then will you find yourself with cash-flowing properties that help you build your life the way you’ve always wanted to.
There are people who are buying apartment buildings with negative cap rates because they’re counting on appreciation to let them eventually refinance their way to profitability. But when you do that, Ryan warns, you’re not leaving any meat on the bones to be good to your tenants or your investors. You don’t want to get on the hamster wheel of trying to maintain profits when there isn’t any wiggle room.
Just like those first 9 months in e-commerce, those first couple of years in real estate is about focusing on creating really amazing customer experiences for your tenants and your investors.
You don’t matter at this point. You’re trying to be a steward for the attention and money of your tenants and investors to make sure they’re getting out of your business what they need. If you do that long enough, you’ll get everything you want and more.
Successful real estate investing isn’t about transactional real estate that brings you a big payday today and then nothing tomorrow. Real wealth is built by long-term investing in properties that are cash-flowing. Treat your tenants and investors with integrity and you’ll soon have the resources you need to build the life you’ve always wanted.
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