Alternate Roads to Wealth | HTH022 | 568

Alternate Roads to Wealth | HTH022 | 568

Today, we are talking about alternate roads to wealth. Number one road to wealth is real estate, and that’s why we created this show. Reals estate allows you to cut the wealth curve down but what about entrepreneurship, intellectual property and licensing, niched down online businesses? What are the other great ways to get rich? Tune in to find out!

What You Will Learn About Alternate Roads to Wealth | HTH022:

  • What else can you leverage besides real estate?
  • The best models of automated businesses
  • Niched down Internet businesses – where do you spend your money?
  • The high-risk investments and the scandals that follow them
  • Getting rich with intellectual property
  • The biggest barriers to starting a business
  • The best and the safest investment bets

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  • Grab my book, Epic Freedom ($1) 
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  • Join our Badass Investor Program and be a Case Study 
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  • Also, check these out:

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Transcript:

Speaker 1: This is Theriault Media.

Don’t wait for appreciation to buy real estate. Buy for cash flow and wait. In other words …

Hold that house.

Your hosts, Matt Andrews, and Matt Theriault.

Matt Theriault: Hey there, flipping houses can make you rich. Holding them will make you wealthy, however. This is The Hold That House Show. I am Matt Theriault, and over there is Matt Andrews.

Matt Andrews: Apes.

Matt Theriault: Apes. Before we begin, we’ve got a free gift for you. Go to holdthathouse.com and download the four-hour work month. I think we’re up to 10,000 downloads already. It’s incredible. The Ten Commandments to Managing Property Managers, the Key Ingredient to Financial Independence Through Real Estate that They’re Not Telling You About. I love that book title.

Matt Andrews: Awesome, awesome.

Matt Theriault: The secrets they’re not telling you about.

Matt Andrews: That’s correct.

Matt Theriault: Right? They’re hiding it from you.

Matt Andrews: I want to say thanks to you guys too, for everybody for listening. I mean, that is awesome to have that many downloads. We get messages from you. Let us know what you guys want us to cover, write us.

Matt Theriault: Absolutely.

Matt Andrews: Send us an email. Visit the site and let us know what you guys want to hear about because this podcast is for you. It’s for us. It’s for those of us that know that we’re holding properties, building wealth, and let’s do it together. Tell us what you want to know.

Matt Theriault: I love it. Go to holdthathouse.com and get your four-hour work month for free.

Matt Andrews: That’s right. If you want to know how to shave your head really well, you’ve got two bald Matts.

Matt Theriault: That’s right.

Matt Andrews: I did a fresh shave this morning. I’m really sleek. We can help with that, but probably don’t want to help in any other grooming tips or anything. Besides that, we’re good to go.

Matt Theriault: Coming to you again from Tampa Bay, Florida, another week here. Hopefully, Mr. Soundman is doing a good job making us sound good because we are working with a mobile set-up. I think as long as everything’s clear, everything’s good.

Matt Andrews: Cool, cool.

Matt Theriault: Right?

Matt Andrews: All right.

Matt Theriault: Today we’re talking about alternate roads to wealth. As you were just mentioning, we do this podcast for them. Being a professional podcaster is not one of those alternate roads.

Matt Andrews: No.

Matt Theriault: No.

Matt Andrews: We can both attest to that, right?

Matt Theriault: We can attest to that. Number one road to wealth and this is why we’ve created this show, is real estate. It has produced more millionaires and billionaires than any other industry, any other venture hands down. I would have to say, it is probably the final frontier where the average person has a legitimate shot at creating wealth.

Matt Andrews: Absolutely. Absolutely, and like in the last episode, we talked about leverage, just the fact and how you can use leverage in your real estate business alone. Just that one factor trumps almost every other thing that we’re going to talk about today on this podcast.

Matt Theriault: It does. You know what we didn’t talk about when we were talking about leverage is by the ability to leverage all that, it just collapses the time-frames. I mean, you can still accomplish everything inside of real estate and have a lot of great benefits from real estate without leverage, but, boy, you can cut your time down in a fraction of the time.

Matt Andrews: It’s all about cutting down the curve. We talked about leveraging people, too, in that last episode. Leveraging people allows you to cut the curve, cut the learning curve down. This real estate allows you to cut the wealth curve down basically.

Matt Theriault: I like that. I like it.

Matt Andrews: That sounded pretty good. Cut down the wealth curve.

Matt Theriault: Trademark.

Matt Andrews: Yeah. Boom, done, boom.

Matt Theriault: We talked about leveraging people. I don’t know if that was the first time anyone heard that before if that sounds a little bit manipulative or dominating.

Matt Andrews: Leveraging contacts.

Matt Theriault: I just want everyone to know that I rent my personal residence, my primary residence, so I am being leveraged as well, and I’m well aware of it, and I’m perfectly okay with it.

Matt Andrews: There you go. We all leverage and we are leveraging ourselves.

Matt Theriault: Exactly. I know that I pay my rent every month and it’s making someone else wealthy.

Matt Andrews: It wasn’t indentured servitude you were referring to when you talked about leverage.

Matt Theriault: No. Exactly. Exactly.

Matt Andrews: It’s not? Okay. Got you. Got you. Okay.

Matt Theriault: That was about … quite a while ago.

Matt Andrews: Did we get nasty emails on that?

Matt Theriault: I thought about it when we said it. I was like, ooh, no, whatever. This world has too much political correctness in it already anyway.

Matt Andrews: That’s right. I take that back. I take that apology back.

Matt Theriault: I take it back.

Matt Andrews: There you go.

Matt Theriault: Leverage the people. Second would be definitely business ownership.

Matt Andrews: Yeah.

Matt Theriault: Right? Entrepreneurs. We talked about that a little bit last week.

Matt Andrews: Absolutely, and that’s what real estate is in so many forms is a small business, right, that you’re operating. Almost every rental property is kind of a microcosm of a business. The concepts are the same, but sure, there’s a lot you can do out there in buying functional cash-flow businesses. I mean, I think about a lot of my friends that own dry cleaning businesses and just little consolidated businesses like that that have a pretty fixed return. That’s about as close to rental properties as you can get because the numbers are pretty standard, but you can’t leverage it like you can, again, real estate. Business ownership provides all kinds of opportunities. What are some other ones? I mean, let’s just list off some … some types of …

Matt Theriault: I’ve always wanted a laundromat. I thought that’d be very cool.

Matt Andrews: A laundromat, that’s one. Car wash.

Matt Theriault: I’ve always wanted the car wash too. I’ve got to get one of each for sure. Those are your automated business. Certainly, the Internet boasts a whole world of opportunity about creating an automated business. I mean, gosh, you look at something like an Amazon, what a machine they’ve built that just spits out transactions 24/7.

Matt Andrews: Down to small Internet businesses that are real niche businesses. I know, I mean, my wife follows some female-centric blogs and mommy blogs and stuff. There are some women out there that are running some amazingly successful businesses out of their kitchen blogging. Now, for every one of them, there’s a million that aren’t, but that’s a valid model now.

Matt Theriault: Absolutely.

Matt Andrews: I see it because we spend some money on some of that stuff.

Matt Theriault: Yes. Yes. We’ve been trying to get that to a point where it makes more than the real estate but we haven’t quite figured that out yet.

Matt Andrews: Right, exactly. We haven’t gotten there yet.

Speaker 1: Thanks for sitting tight while we pay our light bill. We’ll be back right after this.

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Matt Theriault: Contrary to popular belief, there’s a lot more money in real estate than there is teaching it.

Matt Andrews: Yeah. A lot of my friends own storage units, too. That’s about as close to rental real estate you can get, right, because that involves actually many times owning some of that land, but certainly owning the assets there and then renting out parcels of that. That’s a cool little business too.

Matt Theriault: I have a couple of friends that are in the storage units or they tried to get into them. It looks very easy. They all look very easy and said, “Oh, you just buy it and you rent it out and you collect the rent.” There’s some major companies out there trying to create their racing to the monopoly of let’s push out the little guy.

Matt Andrews: It’s a highly competitive business. I looked at some of that early on in my real estate career just when I was looking at some commercial properties. I could never get anything near where I would need to for me to justify going into it. It’s very, very competitive, but you get them at the right price, they can be like rental properties for sure.

Matt Theriault: You can buy the business, or you can start the business, or you can invest into a business. Typically, that comes in the form of the stock market. It would be your stocks or multiple businesses at once with a mutual fund type thing. I wouldn’t say … Well, I guess lightning does strike in the stock market. If you really know what you’re doing, I guess that goes for all of them if you really know what you’re doing. You have a shot.

Matt Andrews: At certain times in history, we’ve seen even when people didn’t know what they were doing, they still did well and then that usually ends, kind of like in real estate. You can always sustain stupidity and bad decisions for so long and then the market will correct you.

Matt Theriault: It will correct you. It won’t correct itself. It will correct you.

Matt Andrews: You will be corrected.

Matt Theriault: Yes. There’s a solid extra part of that, that so much that goes on behind the scenes and there’s so much that you just can’t control.

Matt Andrews: True.

Matt Theriault: It’s really a strategy of hope, in my opinion, hoping you backed the right horse. I just saw … I did not read the article, I just saw the headline but something about Mark Cuban had said the biggest insider trading scandal is about to be exposed or something like that. It just seems like every time somebody gets caught, it’s bigger, twice as big as the one that they just previously caught. That just makes me a little bit nervous about that whole thing. If you’re inside that gain, and you understand how it works, boy, you can make more money than anybody, but if you don’t, I think you’re just part of the vehicle that’s making that … That’s my thought.

Matt Andrews: No, absolutely. Like you said, lightning can strike. I’ve got kind of a funny story. I think I was 12-years-old, and my grandmother who was a pretty savvy woman with her money, didn’t have much money, but she liked to think of herself as a stock person. She would make small little buys at Dean Witter. She’d go to Sears, and there was a Dean Witter office back then in Sears. This is how long ago we’re talking. No e-trade, nothing like that.

She told me, she’d given me some money when I was born, and it had basically grown to $1,000. She put in a couple hundred dollars or three or $400, whatever it was. It had grown to $1,000. She said, “I recommend you take this and put this in this new company I just heard about. It’s called Blockbuster Video.” I think I was 12. I might have been even younger. I’d have to think back exactly, but I was young; too young to know about stock tips and stuff. I invested that $1,000 in it at 15, 15% is what it was. Their shares were at 15 then. It went up to 45%. It tripled in four months.

Matt Theriault: Forty-five percent or $45 a share?

Matt Andrews: I’m sorry, it went to $45 per share.

Matt Theriault: Got it. Got it.

Matt Andrews: Yeah, so tripled. It tripled in four months or whatever it was. That’s when Blockbuster first came out when there was one on every corner. I thought wow, this is cool. This is how the stock market works.

Matt Theriault: This is easy.

Matt Andrews: You put $1,000 in and you get three back in three or four months. Cool. I’m 38 now, and I have yet to have ever made any other money in the stock market. There’s the lesson right there, right? When I didn’t know what I was doing, I made a little bit of money one time, but since then … If you’re waiting for that, it’s not happening. The day traders a few years back that all quit their jobs. I remember my lawn guy, the guy that mowed my lawn quit because he became a day trader for about three months, and then he started mowing my lawn again. Those kinds of things, a lot of it just ends up being pipe dreams. Educated people can do really well there, but man, that’s a tough business really making wealth, creating wealth. Now just hedging against inflation, if that’s all you’re trying to do, maybe you can do that, but really building wealth there in stocks, that’s a tough game. Really tough.

Matt Theriault: You made me think about the … every time I go to Vegas. I have my biggest winning between the check-in counter and the elevator. They get you. Then I can’t wait to drop off my luggage and get back downstairs and it’s downhill from there.

Matt Andrews: You get the first one, yeah. That’s so true, yeah. I don’t know if Vegas is on this list of wealth [crosstalk 00:10:58] options.

Matt Theriault: No, it’s not.

Matt Andrews: Some people seem to think it is.

Matt Theriault: Yeah, right.

Matt Andrews: Some people actually, you’d think they did.

Matt Theriault: Licensing is another one. Intellectual property. It could be software. It could be you wrote a book or wrote a screenplay. You wrote a hit song. What else can intellectual property-wise? A patent.

Matt Andrews: Yup, a patent.

Matt Theriault: An idea.

Matt Andrews: You have an idea. I mean, you guys have watched Shark Tank and some of those shows like that. There’s one I saw the other day called Everyday Edisons or something, just people trying to invent something. Tough business. One out of a million probably really do a giant business and sell on QVC or whatever it is. If you invent something and solve a problem, that’s a great business. That’s not my thing. I don’t have ideas that … I wouldn’t have come up with the Flowbee or whatever else, or the … what’s been the biggest thing lately, the Slap Chop?

Matt Theriault: You know the two that [crosstalk 00:11:52] I would have totally whiffed on if it was proposed to me right now from day one, Starbucks. I would have never gotten that one.

Matt Andrews: Yeah. That’s true.

Matt Theriault: I did not see that coming. We just did Disney World yesterday, and they had a giant mega-Starbucks on each side of the Disney walk. I was like, “There was just one a hundred yards ago that way, and both of them had lines wrapped around.” I was just like … I’d have totally missed that. Then the guy that did the sign twirling for real estate, I would have totally missed that one.

Matt Andrews: No. Absolutely.

Matt Theriault: That guy got in, patented that idea and cashed in or cashed out millions. Millions and millions. I was like, huh? [crosstalk 00:12:29]

Matt Andrews: … would ever thought about it. An innovation in the sandwich board essentially was what he made. Spin it. He just had the idea. It’s amazing.

Matt Theriault: It’s amazing. That’s another option. Then we’ve got, hey, you can become a celebrity, a professional athlete.

Matt Andrews: There you go.

Matt Theriault: You can win the lottery.

Matt Andrews: That’s it. There you go.

Matt Theriault: We could put Las Vegas in here. We do have a place for Vegas.

Matt Andrews: Vegas. Vegas would fit in that category for sure. Absolutely.

Matt Theriault: It happens. It happens.

Matt Andrews: Yeah.

Matt Theriault: But you’ve got to be in it to win it, and you’ve got to be six-foot-six at least, right?

Matt Andrews: Yup, exactly.

Matt Theriault: And 19-years-old. But then it all just comes back down to a lot of those are viable ways. A lot of people have made their wealth that way. It’s definitely possible, but when it comes down to it, if you want to play the odds, what is your best chance? Where do you have all the tools and resources? You don’t have to have any sort of degree. You don’t have to be any sort of rocket scientist. Really just know your basic mathematics: your addition, subtraction and your multiplication, division. If you’ve got those four things, algebra is not even required, right?

Matt Andrews: Yup, absolutely.

Matt Theriault: And you understand the concept of supply and demand, real estate is really where it’s at. That’s why 74% of our wealthiest 1% … say that again, 74% … and I did not make these statistics up on the spot.

Matt Andrews: These are real ones.

Matt Theriault: These are the Department of Health and Human Services. Seventy-four percent of the wealthiest 1% made their money or preserved their money in real estate.

Matt Andrews: Awesome. Awesome. The good thing is, guys, real estate, if you want to invest in these other things, that’s great. Real estate will give you the ability to do that. Build the wealth with real estate and then sustain the wealth and use that wealth to diversify into these other things that we’ve talked about.

Matt Theriault: Absolutely.

Matt Andrews: Matt and I both own other businesses that aren’t even real estate related, right?

Matt Theriault: Mm-hmm (affirmative).

Matt Andrews: Would we own those businesses if it wasn’t for real estate though?

Matt Theriault: No. I wouldn’t have had the money to put into it.

Matt Andrews: Wouldn’t have had the money to put into it. Wouldn’t have had the luxury of the time to research it. It wouldn’t have been an option, right? Real estate’s a vehicle. I know Matt and I look at it that way. I know you guys do too. Those of you who are buying and holding properties and building wealth, it’s a vehicle. It’s not a vehicle necessarily to a number. It’s a vehicle to what it is that you want. I know we’re going to talk about that in some of the other podcasts too, what you really want and what’s the reward, what’s the way. That’s really what real estate is, is a vehicle to those things, and it’s the best one we know.

Matt Theriault: Getting wealth, there’s no wealth in protein powder either.

Matt Andrews: No. You figured that out?

Matt Theriault: That’s my other business.

Matt Andrews: Yeah, yeah.

Matt Theriault: Yeah. At least not yet.

Matt Andrews: There’s no wealth in buying and selling rare LP’s either, just so you know. What you do is you end up collecting a lot of LP’s. That’s what happens there. I did that a few years back.

Matt Theriault: I love it. I love it. All righty, well, that’s it for today. Flipping houses can make you rich. Holding them will make you wealthy. We’ll be back next week. Until then, remember, don’t wait to buy real estate. Buy real estate and wait.

Speaker 1: Hold that house.

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