With the current state of the economy, where can someone get their best Rate of Return or Return on Investment (ROI)? It is in the most unlikely spot imaginable!
First lets take a second to understand ROI from a business perspective. ROI is a measure of cash (or potential cash) generated by an investment, or the cash lost due to an investment. It measures the cash flow or income stream from the investment to the investor. Cash flow to the investor can be in the form of profit, interest, dividends, or capital gain/loss. Capital gain/loss occurs when the market value or resale value of the investment increases or decreases.
ROI is used to compare returns on investments where the money gained or lost. For instance, a $1,000 investment that earns $50 in interest generates more cash than a $100 investment that earns $20 in interest, but the $100 investment earns a higher return on investment.
- $50/$1,000 = 5% ROI
- $20/$100 = 20% ROI
ROI is the holy grail of business. Understanding, evaluating opportunities and driving toward higher ROI's highly correlates to wealth creation. The focus on ROI just seems to encourage doing the right things day in and day out for the ultimate arbiter of success - the bottom line. Ultimately, to claim this focus, you must have a great handle on ROI.
Many people have been lead to believe the best ROI is in real estate. Real estate ALWAYS go's up and Never goes down. One of my businesses is real estate investing and we limited our investments a few years ago when the numbers didn't make sense any more. They still don't in many cases. For an investor to make money they typically have to put money down on the property and the rate of return is based on money taken out of your pocket compared to how much it brings in each month. In today's current situation, banks are asking for any where from 20% - 30% down to be qualified for the loan. We have developed a spreadsheet that allows us to evaluate a property very quickly. Based on our spreadsheet and using the above number of 20% down lets look at a Real Estate Investment:
House Purchase Price: $220,00
Down Payment of 20%: $44,000
Closing Costs: $5,280
Total out of Pocket: $49,280
ROI Based on Rent:
Rent at $750 @ month is a -17% ROI
Rent at $1500 @ month is a break even or 0% ROI
Rent at $1,800 @ month is a +6.5 ROI ($266.00 a month)
So looking at the above example, we would have to put almost $50,000 down on the property to make $266 a month and have a lot of money at risk. This is using a better scenario then I think is realistic.
Now lets look at the Ultimate ROI opportunity!
Have you looked at Personal Franchising? Personal Franchising is one of the fast growing trends. There are many superior products that will never make it to market because the large corporations own the shelves. These products are better then many of the products purchased in stores. Personal Franchises allow you to distribute these products and you get the commission. You can either focus on selling the product or sell franchises. For your best business it is better to have both product sales as well as other franchisers. Many of these franchises can be started for less then $500. Lets look at the ROI of a Personal Franchise:
Purchase Franchise: $500
Monthly Operating Expenses: $100
ROI Based on Monthly Revenue:
Income at $200 @ month is 240%
Income at $500 @ month is over 900%
With the above example, you have a huge ROI with very little money at risk. The key to having a huge ROI is finding the right Personal Franchise for you!
Cash Flow Potential's team of experts will help you every step of the way to help you find your personal solution. They have strategies that will help you to your fastest path to cash and ROI using Personal Franchises.
