Ever wonder how "Amazon businesses" go from $500 to $5 Million? In my opinion, it has a lot to do with the power of compound interest.
You set aside greed and immediate gratification, and build up wealth.
Here's an example of what that looks like. You can follow the process below for an easy way to building wealth:
In one year, you can realistically do 4 transactions. It takes 30 days for a factory to create a product. 30 days for it to be shipped to you. 30 days for you to sell it off. You can repeat this process 4 times in a year.
That means, that you can compound the 20% returns.
Let's say you start with $10,000. Then after the first trade, you'll have $12,000, then $14,400, then $17,280, and will end the year with $20,736.
If you do this process for five years, your $10,000 investment will turn into $383,376. Manage to do it for ten years, and you'll have $14,697,715.
Want "Amazon success story" returns?
Do the same thing as above but with a 50% return. Start with $10,000 and within two years you'll have $256,289. Ten years, and you'll be the richest man in the world ...
Ok. So obviously not sustainable. But what happens when you stop growing?
You pay out dividends.
Let's say you started at $10,000 and get to a glass ceiling after two years. At that point, you'll have multiplied your $10,000 to $43,000. On that amount, you make a 20% return, so $8,600 per transaction, or $34,400 per year into your pocket. The $43,000 stays in the business as working capital, and the system that you've created becomes a cash machine.
Yeah, your business won't grow into millions, but you'll have turned that $10k into $34.4k in annual income; and if you repeat the process enough times, you'll find a product that will eventually put you in the fastlane.
You set aside greed and immediate gratification, and build up wealth.
Here's an example of what that looks like. You can follow the process below for an easy way to building wealth:
- Find a raw materials product that businesses need in an industry that has an inefficient supply chain (2-4x factory cost is typical in a lot of industries)
- Offer them the product for: Your Costs + 20% Markup
- Reinvest 100% of the profits.
- Acquire customers continuously or expand the product line to maximize returns.
- The clothing industry needs premium denim to make top quality jeans. Let's say they can buy this denim for $10 per pair of jeans overseas, or $20 per pair domestically. They mostly buy overseas but occasionally domestically when they run out.
- You approach them and offer them the same pair for $12 domestically. They give you a small order to build up trust. They want to save $2 per transaction, but that money can be better put elsewhere so they give you the deal.
- You take the 20% profit from the order plus the original amount and reinvest it into the next order. You continue this process until you're supplying 100% of the business's denim needs.
- You search for other businesses needing denim. Since your offer price is so good, you'll have a high conversion rate. And if you run out of businesses that need denim, then you start offering your same customers cotton, wool, etc.
In one year, you can realistically do 4 transactions. It takes 30 days for a factory to create a product. 30 days for it to be shipped to you. 30 days for you to sell it off. You can repeat this process 4 times in a year.
That means, that you can compound the 20% returns.
Let's say you start with $10,000. Then after the first trade, you'll have $12,000, then $14,400, then $17,280, and will end the year with $20,736.
If you do this process for five years, your $10,000 investment will turn into $383,376. Manage to do it for ten years, and you'll have $14,697,715.
Want "Amazon success story" returns?
Do the same thing as above but with a 50% return. Start with $10,000 and within two years you'll have $256,289. Ten years, and you'll be the richest man in the world ...
Ok. So obviously not sustainable. But what happens when you stop growing?
You pay out dividends.
Let's say you started at $10,000 and get to a glass ceiling after two years. At that point, you'll have multiplied your $10,000 to $43,000. On that amount, you make a 20% return, so $8,600 per transaction, or $34,400 per year into your pocket. The $43,000 stays in the business as working capital, and the system that you've created becomes a cash machine.
Yeah, your business won't grow into millions, but you'll have turned that $10k into $34.4k in annual income; and if you repeat the process enough times, you'll find a product that will eventually put you in the fastlane.
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