Open 1 clinic, 2 clinics, or 3+ clinics? What would YOU do? These are non-trivial questions: make the wrong move and you can defeat any chance that you had to reach your Number.  So, how NOT to leave this critical decision to chance? Well, Scott ‘benefited’ from his turn ‘under the spotlight‘ so, we already have some insight as to where he is heading with all of this.

Now, you can read Scott’s latest thinking … what do you think? And, can you help Scott ‘only’ get 12% compounded on his money?

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Ok, now that i’ve laid it all on the table about my plans and strategy to get to my number of 4 million in 9 years, I’ll just summarize a few things.

First, I’ve realized that opening clinic after clinic after clinic in multiple succession is not necessarily an optimum plan to get me to my number faster. Running the numbers on opening 3 clinics as fast as reasonably possible does not produce a higher number within 9 years than opening 2. The reason being, is that takes capital, to the tune of around 100 grand to get an office up and running and cashflowing positive, not to mention it takes valuable time and a big drop in salary while it’s developing.

If i’m moving things along at warp speed, I can cashflow positive an office in 6-8 months, but looking at the numbers, this sudden drop of 100k to open an office, coupled with the fact that I have to hire a new associate PRIOR to starting up the next office, spend at least 6 months minimum training them to run an office by themselves before I can turn them loose on their own at my old office and they can be reasonably capable, pay them a fair salary during this training period (while they aren’t producing a dime of income and actually dropping the clinic performance, due to patient lack of trust in a new doc a well as my focus being so much on the new doc and less on running the practice), continuing to pay them and increasing salary while i’m at the “new” office building(this drops my salary from the previous office dramatically and remember, i’m not making anything on the new one until it cashflows positive) etc…etc…

NOW, if my goal was to work for 12,15, or even 20 yrs, you would see that NUMBER double and even triple on the backend. Once you own 3 clinics and they all have well trained docs, all cashflowing very well and everyone is happy, it’s easy to have cashflow to the tune of 50k per month to invest. This builds quite a Number very fast, but this process takes a few years before the plane even gets off the runway. It’s a helluva 15-20 years plan for major wealth, just not a good 7-10 year plan.

Now double checking, triple checking and quadruple checking my math says that if I can achieve a 12% gain on my cashflow, while keeping my lifestyle the same, I can accumulate 3.2 million in roughly 9 years by continuing out my contract over these next 29 or so months, then getting an associate asap and moving on with the next clinic startup and just sticking with 2 clinics. At that time, I can sell both clinics for roughly 300k each and when adding those funds to my other assets (home equity at that time, rental property equity, etc…) that will put me right around 4 million in 9 years.

Now, I have to make sure I can produce 12% per compounding with this cashflow…..the next question is, how do I get this rate of growth on my money? Stock market coming out of a recession? Continuing to add rental properties and hopefully great foreclosure buys to my portfolio? Steadily purchasing tax lien certificates in states with a high return rate? Buying the commercial properties that these 2 offices reside in? A combination of all the above?

Also, just for kicks, I ran the numbers on just owning the one clinic the entire 9 years and not even opening a second office, keeping our lifestyle the same and investing all the cashflow. Interestingly, it produces very close to 3 million in those 9 years if I can get that same 12% return. Now think about that one for a minute. 2 clinics “only” produces 200-300k more over that 9 years (plus the 300k value of the second clinic itself if it were to be sold, so I guess i’m looking at more like a 500-600k difference in the end at 9 years) so you can see from the above example, the multiple clinic ownership REALLY needs time to take off and produce meaningful results. Definitely not a get rich, really quick plan, but more of a “get REALLY rich in 20 yrs” plan.

Any suggestions?

Best ways to almost guarantee at least a 12% return on your money?

The Right Vehicle

The vehicle selected for my journey to 9 million in seven years is to start and manage a business, this selection is appropriate for the compounded annual growth rate necessary to achieve 9 million in seven years. The business I plan to start is essantialy a money managing business also know as a hedge fund (In the past several decades the title “hedge fund”  has become more of a blanket title then an acurate description of how money is managed in most “hedge funds”, because usually very little “hedging” is actually happening).

The fund I plan to manage will initially use purely long/short equites for investing purposes, using an aggressive yet risk adverse strategy to atract institutional investor’s as well as high net worth individuals. Most of the revenue from the fund is generated from from  fee’s taken from the investors capital appreciation, this is generally 20%-25% and usually 1%-2% of the principal for administrative costs.  The fee structure of hedge funds is the main attraction for me to this business model because when comparing to mutual fund’s, the fees guarantee that profits to the firm will only be paid when capital appreciation takes place, thus aligning the managers and investors incentives perfectly.

Judging from the fee structure, anyone can see that the more money under management, the greater the profit potential is, although it is arguably harder to make 50% per year with 1 billion dollars then 1 million dollars, so the competition to earn the greatest return for investors becomes more difficult as more and more money pores into the fund.

The path to the initial starting capital for the fund will come almost entirely from the what I saved up and continue to earn and make from investments. As certain milestone amounts have been reached it will become feasable to start the fund. There is no dought in my mind that managing a hedge fund has the potential to increase my net worth past my number of 9 million.

mmm

You Have Got to Be Kidding!

Speaking of ‘shooting’: every time I read a post from this guy, I’m glad that he decided to shoot for – and hit! – a spot in the Final 7 …

I only have one question (for now): how does a dirty ol’ pickup truck haul ITSELF off to the dump?!

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I’m going to shoot a lot of blanks here, but you asked, so here goes:

My Vehicles?

(1). 1981 Ford Ranger F-100 Pick Up purchased in 1983 .. What did I pay for it?  YOU HAVE GOT TO BE KIDDING.  I’ve had it for 25 years, I don’t have a clue what I paid for it.  I have replaced the engine, transmission and everything else except the body.  I have approximately 85,000 on this engine.  My son learned to drive in this truck and for him it was a “chic magnet”.  My Daughter was afraid of it. “Respectfully” this truck has rust older than some of the 7m7y community:)  As close as I can figure,  if I could get $1,000 for it I’d be arrested for theft.  Did I pay cash? YOU HAVE GOT TO BE KIDDING.  The good news is, it’s totally paid for:)

(2). My wife has a 2001 Pontiac Grand Prix which we purchased in 2004 for approximately $12,000…. Cash?… YOU HAVE GOT TO BE KIDDING.  The pay off of the loan is $3,179.95 (I have refinanced it once) and the estimated value is about $4,000.

Why Do I need a “TRUCK” because I have a house and yard… My personal opinion is that everyone who purchases a home should have a pickup to haul “stuff” off to the dump.

Why do I need the “CAR” …. YOU HAVE GOT TO BE KIDDING…My wife works nights and buses don’t run at night and a taxi would be more expensive than buying gas for the car. Topeka’s population is only 126,000 and from one side of town to the other is less than 10 miles.

Why don’t I take public transportation or ride a bike?  YOU HAVE GOT TO BE KIDDING. You Younger guys can if you want, I’ll be glad to be your designated driver.

What/when/how is my next planned vehicle purchase and how do I plan to pay for it? YOU HAVE GOT TO BE KIDDING.  I don’t plan on purchasing another car unless I just have to or until I reach the goal of my 7m7y journey and then I’ll pay cash. THAT WOULD BE WAY COOL.

While I understand the purpose of the exercise my journey over the last 61 years has taken me from Missouri, to Oklahoma, to New Mexico, back to Oklahoma and finally Kansas.

You guys can have all your little fu fu cars that go real fast but I’m keeping my truck:)

[AJC: Does 'fu' here mean what I think it means (??!!) or is it meant to be pronounced, in this context, "foo foo"? ]

AJC @ 7million7years live THURSDAY @ 8pm CST (9pm EST / 6pm PST)

Josh # 2 Asks:

Hey, my name is Josh and I am 24 years old and I am a huge personal finance junkie. I really enjoy reading your site so far. I was particularly intrigued about your post about renting vs buying real estate. To make a long story short, my dad owns commercial/rental property (3 housing units, bottom floor is for business) that is mortgage free. It is in a great up and coming neighborhood in Brooklyn. If he were to sell it today it would fetch in the 2 million dollar range. He makes pretax annual income of about $100,000+ in residual income from the business and the 3 housing units. I have been for the past couple of years been trying to convince him to take a loan from the equity from his property and reinvest in other commercial properties or other properties, but he refuses claiming that it is too risky. I don’t how else I can try and sell him on this. Maybe you can help? I am just trying to help my dad become more cash rich, instead of cash poor, asset rich?

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Join AJC as he answers this question – and, more – as he shows how he went from ($30k) in debt to over $7 million in the bank in just 7 years … no scams, no schemes … just good-old-fashioned free advice … LIVE THURSDAY @ 8pm CST (6pm PST / 9pm EST)!

This is your chance to ask AJC @ 7million7years.com your personal finance, real estate investing, or business startup questions. Or, if you feel the need, go ahead an criticize him … AJC just loves a good, clean fight

Click on the link below to see AJC live and to chat with him and ask him questions (no webcam required!)

If you would like to ask AJC a question …

… during the show, AJC loves to chat, so why don’t you create a login to the chat room now (if you haven’t already created your login) it’s free, and takes just a few seconds!

Josh’s First Post

Hi, my name is Josh and I’m looking forward to sharing my journey to an early retirement with you. In order to finish this journey, I would need to have $20,000,000 in equity, with the ability to cash out and move onto the final lesson of “Money Making 301″ (check out 7million7years.com for more info the Money Making Lessons).

I hope this journey is as exciting for you as it will be and has been for me. Please feel free to leave a comment with your own personal advice, criticism, encouragement…etc.

The Golden Key …

That’s it … I am handing over the “keys to the Chocolate Factory” to the 7 Millionaires … In Training!

From now on you will start to see posts from all 8 of us … chronically our … well, their journey (with my – and YOUR – guidance) towards their own (hopefully!) 7 Million in 7 Years!

Thanks for sticking around … your patience is about to be rewarded!

Meet the 7 Millionaires … In Training!

On April 28th, 2008 – just a few short months ago – I announced a crazy concept: I wanted to ‘prove’ that the millionaire-making methods that I talk about on my blog How to make $7 million in 7 years are real and work …

… in fact, I believe that they can work for just about anybody because they are timeless principles, not some half-baked out-of-the-box scam or scheme. This site is my way of proving it.

Over the course of the next few months, I had to weed out 100+ serious applicants; things really hotted up when we got down to the Final 30 and then the Final 15 when I decided to help each finalist to find their Number.

Now, it’s all history: we’ve waxed on and we’ved waxed off … we’ve shared life goals, out hopes, dreams, and even our ages (oops, sorry!) …a nd, it’s finally come down to this …

Here are our 7 Millionaires … In Training! – in absolutely NO particular order

Lee

Diane

Mark

Josh

Ryan

Debbie

Scott

Everybody made it to this list on their own merits – based upon a complicated scoring mechanism that I created using some of the metrics that we discussed over the past few days and some others that I won’t disclose as the scoring is NOT important.

Equally, this is not a measure of who I felt would be more likely to become rich … the list may have read a little differently as a couple of ‘guaranteed millionaires’ did not make the Final 7 (but, I hope they choose to stick around!).

Anybody who did not make this list is still just as much a part of this ‘experiment’ as those who didn’t, although they won’t have the obligations that we eight have: which is to air our dirty laundry right here … all in the name of helping YOU to get rich as well!

So, please join me in congratulating our 7MITs and wishing them well on what will be a long, arduous, but ultimately extremely rewarding journey – not just for them, but for anybody else who decides to follow in their footsteps, using their journey as a guide.

If you haven’t done so already, now would be a great time to subscribe to this blog by e-mail because it is about to dramatically change shape as I prepare to hand over the keys to the ‘Chocolate Factory’ to 7 future multi-millionaires (and, to as many of you as want to follow along / contribute / comment / criticize / ask-answer questions / etc.) …

… stand by for the New, Improved 7 Millionaires … In Training ‘grand Experiment’

My First eBook …

I’m about to find out if you can make money online!

FREE eBOOK (well. free to readers …. come on over and see my new blog to see what all the fuss is about)!

________________________________________________________

We’ll be right back …

…it looks like nobody is pulling out so the ‘judges’ are going over all the entries one more time … stand by to have the Final 7 Millionaires … In Training! announced LIVE on Thursday @ 8pm CST (9pm EST / 6pm CST)!

Tune your browsers to http://ajcfeed.com and see what all the fuss has been around for yourself …

Until then, things will be a little quiet around here.

Building the 7m7y Community …

On Tuesday, I told you about the importance of building a Community – for our mutual benefit – around this site:

- The more contributors, the better the quality of the interactions and the more information we all get … and, the more we learn from each other!

- The more interaction on the site – and the more visitors – the more/better subject-matter-experts we will be able to attract: imagine if we can get Michael Gerber to guide us through an even deeper understanding of our Life’s Purpose?

So, as well as directing traffic to this site, do you think that it might be important to contribute to this site with questions/comments?

If that were the sole criteria (unfortunately, it is but one criteria) Diane would virtually OWN this site … Igave myself the very exciting (not) task of scrolling through page-after-page of comments to see who left them … from inception (only this site, not 7million7years.com); here’s who did what:

Finalist                   Comments

Lee                              16
Deanna                        14
Andrew                          1
Luis                               6
Diane                          32
Mark                             8
Josh                            11
Ryan                             3
Jason                          13
Shannan                     11
Debbie                         7
Scott                          12

As for directing traffic, the quality of comment counts as much as the quantity – if not more so …

… I’m happy to say that quality = quantity here!

Relatively few comments were of the “please direct your attention to my site” type. And, a lot were encouraging ‘the competition’ … which is exactly what we need to achieve if we are to build a real Community.

Thanks!

Let’s make a pact, that no matter what happens … in / out … this WILL continue?!

mmm