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WHY YOU NEED TO DESTROY YOUR BUSINESS SO THAT IT GROWS

By Craig Ballantyne | Jun 18, 2018

Everyone knows investment icon Warren Buffett. Fewer people, however, are familiar with the
equally impressive Charlie Munger, Buffet’s business partner of almost 60 years.
A spry 94, Munger has spent much of his life working with Buffett on building up the $500
billion Berkshire-Hathaway conglomerate. Much of their success is owed to what he dubs
“mental models”—the business philosophies that guided the two to unequalled heights in the
investment world.
One of these philosophies is “inverse thinking.” Instead of asking how new projects, ideas, or
investments can grow a company, Munger advocates asking the opposite: How can you
destroy parts of your business and rebuild with fresh ideas, approaches, and methods?
This “creative destruction” can be seen both within companies and in industries as a whole.
Consider the following examples:
Once upon a time, a horse and buggy was the predominant form of public transportation.
That was squashed with the advent of taxis. And, in similar fashion, taxis were made
practically obsolete when Uber launched.
Another example: 8-track tapes were bumped by audio cassettes, which were ultimately
pushed out by CDs and, eventually, MP3s.
You get the idea.
This is capitalism’s evolution—and it often occurs when independent companies outperform or
out-create others currently dominating the market.
Back to Munger. His advice to entrepreneurs who find success with their “big ideas” is to
leverage inverse thinking and creative destruction internally to keep outside brands from
shutting them down.
In other words, beat your competitors to the punch.
Author of the famous business advice book, “Good to Great,” Jim Collins, piggybacks off
Munger’s philosophy by suggesting business owners ask three “creative destruction” questions
that can keep them at the top of their game:

Question #1: What are the brutal facts?

Sometimes the most important question for a business owner to ask is not about how to hone
their existing product but whether or not their product is even in demand.
For example, are you in the physical publishing space where newspapers are dying out and
print books are an endangered species? If so, how can you adapt so that digital publishers
don’t push you out of your industry? Do you need to destroy your existing product(s) and build
new ones?

Question #2: What could kill you, and how can you protect your flanks?
It’s easy to ignore the big commercial threats, in part because there’s so much to focus on
inside your business. But if you don’t regularly ask yourself what threats you’re facing, how
can you effectively respond?
So start with questions like these:
Is a monolith like Amazon going to enter your industry?
Is it possible that an indispensable team member could go rogue and open up a competing
store down the street?
Is the government likely to pass regulation that could shut you down overnight (as it did to
broadcast fax back in 2005, making it illegal to send “junk fax” and essentially putting many
companies out of business when they lost their main source of marketing)?
For that matter, are you entirely dependent on one marketing method, one employee, and one
big customer? What would happen if you lost them?
Once you’ve identified your Achilles heel, Collins urges you to put a plan in place to protect
yourself.
Question #3: What should you stop doing to increase your discipline and
focus?
As businesses become successful and cash flow increases, many owners and executive teams
begin to chase passion projects—or just plain bad ideas.
Yep, it’s no secret that the business landscape is littered with failures—from the “New Coke”
(which I loved as a 9-year old kid), to Microsoft’s Zune (Gates’s answer to the iPod), Target’s
failed expansion into Canada, Coors “spring water,” and R.J. Reynold’s smokeless cigarette.
Each one of these seemed like a good idea to corporate bigwigs flush with cash, but in
hindsight were obvious missteps. They were diversions from the core products that brought
the companies early success.
Learn from their mistakes. Ask yourself what current projects, services, or products serve your
mission and which don’t.
Are they profitable, or likely to be in the next 6 months? Do they offer value to your
customers? Are they really in your wheelhouse, or just vanity/passion projects?
If you’re coming up with a series of “no’s” then take a step back and refocus on your original
mission.
#
To sum up the illustrious Munger:
If anyone is going to destroy your business, it needs to be you. You need to initiate the cycle
of controlled destruction and inverse thinking that keeps you at the top of your game—and
beyond the reach of your competitors.
So ask the bad questions. Destroy creatively. Then, grow with renewed passion and
perspective into the next chapter of ever-more-successful business.

https://www.earlytorise.com/get-rich-with-royalties/

GET RICH WITH ROYALTIES

By Paul Lawrence | Dec 13, 2007

“Sitting quietly, doing nothing, spring comes, and the grass grows by itself”.
– Zen proverb
Imagine this. You walk outside and open your mailbox. Sitting inside is a check for thousands
of dollars. Best of all, you didn’t lift a finger to earn that money.
Sounds fantastic, right? Well, I’ve been enjoying this experience for the last few years.
And in the past few weeks, I made two new deals that will make it happen more often.
Why am I getting these checks? Because they’re royalties.
You may think the only way to get royalty checks is to sell a book to a major publishing
house… or sell a screenplay for a movie or television show… or sell a piece of music that you’ve
written. And you’d be half right. Authors, screenwriters, and musicians usually receive
substantial royalties for their work.
SUGGESTED: How to Make 7 Figures

But you don’t need to be an artist to get royalty checks in the mail. In almost any industry,
you can find many opportunities to set up deals that will spin out royalties… with no extra work
on your part. And those deals aren’t anywhere near so hard to crack as becoming a widely
published author.
Let me give you an example. A couple of my deals churn out royalties on a quarterly basis.
One of these deals is with a large information publishing company. I authored an instructional
manual for them. I created the program three years ago, but the company still sells it to their
growing base of customers.
It took some hard work to create the program, but I got paid a nice chunk of money up front.
And since then, I do very little. Yet I continue to receive royalty checks for thousands of dollars
every three months.
Another deal I have is with a direct-mail company. I developed a nutritional product that the
company markets to their list of customers. And they keep sending me money.
Other than doing a little basic consulting on the sales promotions, I don’t do any work on this
product. I expect the deal to bring in somewhere close to $50,000 for 2008.
That’s not a fortune… but let’s not forget that it frees up my time to work on other projects.
I have plenty of time to earn more money… and all I need to do on this deal is cash checks.
In my experience, the information publishing industry has the most opportunities for these
types of deals. You can partner with a large info-publishing company and easily earn royalties.
But many other industries offer similar possibilities.
If you create a new board game, you could go to toy manufacturers. Some might offer you
royalties for the sales they make on your game. You could even earn royalties on a product
you import – maybe an exercise machine. All you need to make royalties is a product that a
larger company can market. The product should not only be unique, but should have a high
probability of making big profits.

To secure your own royalty deal, follow these five steps:

1. Either create or obtain the rights to a product that has a large demand with a
clearly identifiable group of consumers.
For instance, middle-aged women might have a special interest in anti-aging skin creams.
2. Identify companies where your product would complement what they already sell.
You can find these businesses in industry directories. You can also do some basic Internet
searches using keywords linked to the type of product you want to sell.
Let’s say you have an idea for a new investment program. So you would want to find
companies that publish investment information. A directory you could look at in the library is
the Directory of Major Mailers and What They Mail. You could also look at trade organizations,
such as the Direct Marketing Association. Or you could do an Internet search with a keyword
phrase like “investment courses.” You’ll find plenty of publishers that you can track down and
contact this way.
3. Develop relationships with the decision makers for these companies.
I use several methods to determine who the decision maker is. For one thing, I scour trade
publications to see if there are any articles about the company I want to work with.
If it’s a large company, a specific person is usually in charge of making deals.
Sometimes their name and position will show up in the article. If that doesn’t get me the
information I want, I simply call up and ask the person who answers the phone.
Identify who you need to talk to, and you can set up a meeting and pitch your project.
4. Once the company starts marketing your product, keep an eye on it.
Make updates to your product or marketing materials as necessary.
For instance, I recently helped update the sales promotion for my nutritional product.
Sometimes, your partner may ask you to support their marketing efforts in some way.
In the deal I have with the information publisher, he forwards me questions from existing or
potential customers. I respond to those questions by e-mail.
Neither of these things takes much of my time.
5. Monitor the results and cash the checks.
The way a deal is structured will dictate how you monitor results. In my deal with the
information publisher, the royalties are based on actual profits. The company sends me
quarterly profit-and-loss statements to show how well my product is selling.
In my deal with the direct-mail company that’s selling my nutritional product, I’m paid a
royalty based on the number of sales promotions the company mails.
Every time they do a mailing, I get a statement and a check.
Make deals with larger companies that will market your products, and you can just sit back
and collect royalties. It will be some of the most enjoyable money you’ll ever make.
An added bonus: Because simple-concept deals like this take up almost none of your time once
they’re in place, there’s no limit to how many you can set up.

http://www.earlytorise.com/becoming-a-decamillionaire/

6 STEPS TO BECOMING A DECAMILLIONAIRE, FROM A MAN WHO

STARTED OUT BROKE
By Mark Morgan Ford | Apr 25, 2017

I had my first dream of being rich when I was 6 or 7 years old.

In my dream, a sleek, white limousine pulls up to the playground. My classmates stop and
look. A chauffeur comes around the car and opens the back door. Little me, in a white tuxedo
and holding a gold-tipped cane, steps out. The gasps of astonishment and admiration are
audible.
The reality for my family and me was otherwise. Ten of us were crammed into a dilapidated
house across the street from the municipal gravel pits. I wore hand-me-down clothes donated
by local charities. We drank powdered milk because we couldn’t afford real milk.
I had many such dreams as I grew into an adult. But it wasn’t until I was 32 that I did a series
of things that made me rich. By my 50th birthday, against all odds, I had accumulated more
wealth than I was ever going to be able to spend.
So I took (another) stab at retirement. In 2000, I dropped or delegated away most of my
business activities and focused on writing about what I’d learned…
I wrote about marketing and management and starting entrepreneurial businesses and earning
wealth. Under the pen name Michael Masterson, I wrote eight books on those topics and more
than 2,000 essays for my blog ‘Early to Rise’.
In 2010, I passed Early to Rise on to the reliable supervision of Craig Ballantyne.
I thought I was done writing about wealth. But in the last seven years, I’ve written loads more.
More importantly, I’ve learned more.
I’ve still got plenty to learn. But I’m pretty sure of one thing: With the right mindset and game
plan, any ordinary, unconnected, wage-earning American can become wealthy.
Most people—like 98%—who fantasize about becoming rich never will.
But for those who do the right things in the right order over a reasonable amount of time, the
chances are very good. I’d say 90%+.
Doing the right things in the right order over a reasonable amount of time—what does that
mean?
Here are six things that worked for me and that I’ve found—through all these years of writing
and talking and mentoring on the subject—have worked for many others.
That includes dozens of my protégés. In fact, I’d bet they are the same strategies that are
working for the 1,700 people who become millionaires every day.
 Get Your Priorities Straight and Be Straight With Them
I set to work on building wealth at an early age. I worked for my neighbors starting at 8 or 9
years old, published and sold my first “book” at 11 (Excuses for the Amateur), and worked two
jobs (a paper route and car wash on the weekends) when I was 12.
I learned some important lessons about making money back then, but the big breakthrough
came much later, when I was 32.
I was the editorial director for a newsletter publishing company in Boca Raton, Florida, then.
At the time, I also took a Dale Carnegie course to acquire public speaking skills. I learned a bit
about that, but I also learned an important lesson about achieving goals.
The lesson was that if you really—really—want to accomplish something, you have to make it
your top priority.
And that means putting all your other goals (mine included becoming a teacher and a writer,
mastering martial arts, and traveling the world) in second place.
After much mental haggling, I chose—as my one and only top priority—the goal of
becoming rich. That changed me.
It changed the way I worked. It changed the way I spoke. It changed virtually every choice I
made at work and many of the choices I made at home.
By having “getting rich” as my one-and-only top priority, my financial DNA changed almost
overnight. I became an instinctive wealth builder.
You can do this too.
It requires sacrifices. And you must accept the fact that you will be living an out-of-balance
life. But if you want a 90%+ chance of getting rich, make it your number one goal and put
everything else in second place.
(Side note: When I teach wealth building these days, I don’t insist on this drastic strategy.
I teach a balanced approach that includes goals related to health, personal development, and
social relationships. But if you want that 90%+ guarantee, commit to an unbalanced life.)
 Have the Right Numerical Targets
If getting rich and retiring is your goal, you need to know where you are, and you need to
know where you’re going. That means you need to make a plan.
When it comes to financial planning, there are three numbers you need to know:
 Your lifestyle burn rate (LBR)
 Your start-over-again fund (SOF)
 Your take-a-hike target (TaH)
Pursuing wealth without a specific knowledge of these three numbers is like driving around a
city searching for a restaurant without any idea of its address.
Most people—high earners as well as working-class people—go through their lives striving for
financial peace of mind without any idea of what these numbers are or should be. As a result,
wealth is always around the next corner.
I’ve explained in detail how to find these three numbers in other essays. But here’s the gist:
Your LBR is how much you need to spend each year to enjoy the lifestyle you want.
It’s easy to find this number. Simply calculate how much you are currently spending each
year, and then increase that by the yearly cost of all the extra things you’d like to have that
you don’t have now.
Your SOF number is what you need to have socked away in case everything else fails.
It’s basically your monthly LBR expenses multiplied by the number of months you would need
to get back on your feet, plus whatever money you might need to start a new business (if you
are an entrepreneur or professional). This is the safety net you must construct to have true
financial security.
The TaH number is the amount of money you need to have self-sustaining wealth without
working. The simplest way to estimate this number is to take your LBR, subtract any side-
business income you have (and expect to continue to have after you quit your main job),
subtract any income from Social Security or a pension, and then multiply that total by 15.
That amount, kicking off 6.75% returns in income, will give you enough money for you to be
able to say to your boss, “I don’t need this stupid job; take a hike!”
If you don’t know these numbers, you can’t expect to make smart choices about your finances.
 Grow Your Active Income and Net Investable Wealth
I retired for the first time when I was 39. I had a net worth in the eight-figure range, half of
which was liquid. You’d think that would be more than enough. But my LBR at that time was
very high.
The millions I had socked away would not give me the income I needed to continue enjoying
my big-shot-spending life.
I had a choice: I could drastically cut down my spending (and thus my lifestyle) or I could go
back to work. I thought about it for a while. And then I went back to work.
I’m being cute here, but there’s a serious point:
Neither your earning power nor your investable income can increase by saving money.
And those two things—much more than how much you can save—will determine your future
wealth.
Plus, let’s face it: Ratcheting down on your lifestyle isn’t fun.
Going back to work was a great decision for me. I found a great person to partner up with, an
exciting wealth-building challenge, and a chance to double and then triple my wealth in the
ensuing years.
So say no to the Scrooge in you. Focus on these two things:
1. Increasing your active income
2. And saving most of that to increase your net investable wealth.
And if you want to know the best way to earn more income, it’s to…
 Develop a Financially Valuable Skill
A financially valuable skill is one that allows you to make a lot of money—a lot more money
than the average Joe. It also allows you to quit your job and take a better one or start your
own business. In terms of your financial education, developing one of these skills is objective
number one.
When you boil it all down, there are only a handful of financially valuable skills: marketing,
selling, creating saleable products, and managing profits.
There are plenty of financially valued skills (like doctoring or lawyering or plumbing), but only
those I listed above are valuable regardless of the business or circumstance.
Yes, societies and companies value people who know how to design a car engine, analyze a
spreadsheet, or fix a broken arm. But if you want to be 90%+ sure of becoming wealthy, you
have to develop a skill that you can use anywhere, anytime, under any situation.
And that means a financially valuable skill.
 Live Rich
I said above that I don’t believe in scrimping. I hate and disagree with the idea that, to
become wealthy (or even have enough money to retire on), I must spend 30 or 40 years
denying myself the richness of life.
You can live rich—i.e., enjoy all the benefits and pleasures of being wealthy—long before you
become, say, a millionaire.
I’ve spent a lot of time thinking and writing about this subject.
In fact, I published a book on it called Living Rich.
My thesis, in a nutshell, is that there are two ways you can experience wealth—in what you
can buy and how you spend your time.
The myth is that you get what you pay for… or that if you want the best, you have to pay the
most. That’s completely untrue.
Here’s one example:
We can agree that good, restful sleep is essential for a happy life. Ideally, you’re going to
spend around one-third of your life sleeping. So rather than “pay up” for an expensive car or
necklace, buy a great mattress.
By getting a great mattress (which can be bought for less than $2,000), you’ll sleep as well as
any billionaire… and be just as happy.
Your family can be just as happy in a house that costs $350,000 as they’d be in one that costs
$10 million or $20 million. Likewise, a $25,000 car will get you where you want to go just as
well as a car that costs 10 times that amount.
There are dozens of ways to live like a millionaire on a modest budget.
If you learn those ways, you’ll have a tremendous advantage over everyone else at your
income level.
 Don’t Count on Passive Investing to Make You Wealthy
I’ve said this time and again: You cannot become wealthy by investing in passive instruments
like stocks and bonds.
The investment advisory industry—and by that, I include brokerages, private bankers, and
insurance agents as well as investment newspapers, magazines, newsletters, and internet
publications—is a multibillion-dollar business based on this little white lie.
They want you to believe that you need them to grow your wealth. But the only sure thing
about investing with them is that they will become wealthier (from all the fees and
commissions they charge you!).
Passive investments are not bad. But believing that they are the best and safest way to build
wealth is downright foolish.
The truth is, building real wealth involves much more than just investing in stocks and bonds.
In fact, most of the rich guys I know spend little or no time investing in passive
financial instruments.
They got rich—every one of them—by following the six strategies I’ve just described.
Many found an internet business that essentially earns them money off-the-clock. Learn about
internet marketing and how to found an online business by watching the courses offered by
ETR University.