Sometimes back in 2019, I received an email from Caleb ODowd that contains an unusual but very important advice that is mostly for internet marketers or direct response marketers.
Read the Email below.
You will understand why I consider this pure and high value advice.
………..EMAIL STARTS HERE………..
Once upon a time, I had the opportunity to have dinner and drinks with Mark Ford.
If you don’t know who Mark is, he’s one of the co-founders of Agora, which is a $1.5 Billion dollar direct response marketing company out of Baltimore.
I was telling Mark that my brother John and I were planning to sell one of the businesses we owned.
Mark asked how much profit was the business earning, so I told him.
Mark then told me he thought my plan was silly.
He explained that there are two types of businesses…
… a Cash Flow business…
… and… a Cash Out business!
Mark explained that the business I had, while very profitable, was a Cash Flow business.
He told me Cash Flow businesses are not really worth a lot of money from a buyout perspective.
Agora, he said, was a Cash Flow business… and even though it generates $1.5 Billion per year, it wouldn’t be worth a big multiple if they ever tried to sell it.
So instead, Mark said the best thing to do with Cash Flow businesses is to take all the money they earn and invest it into a Cash Out business.
So in Agora’s case, Mark told me they take all the profit they earn and sink it into real estate – which is a very sellable asset if they ever want to cash out.
This advice, while simple, is pure gold.
In fact, it changed my entire perspective on the purpose of direct marketing businesses.
I now believe the following…
Direct marketing businesses serve two functions from a monetary standpoint…
FUNCTION #1 – To give you the freedom and income to live the lifestyle of your dreams.
FUNCTION #2 – To provide you with the capital you need to invest in Cash Out businesses.
While this might seem obvious to those who are already up to speed in this regard, it’s my belief (based on experience) that 90%+ of marketers are pursuing Function #1 only.
If you’re a Function #1 marketer, then you’re missing out on a much bigger game that you could easily be playing – a game that could create for you and your family a much greater degree of wealth and financial security.
Food for thought.
Thanks so much for this.
Thank You Boss
Well said Sir, the real estate game has proven to amass compounding wealth over an extended period of time. And in the vein provides you with a safety net for the future.
Thanks for this piece, it’s so insightful
This advice is so valuable and a big aha moment for me, Thanks Mr. Toyin for sharing.
Thanks Sir, I truly appreciate this important information.
food for thought
wow This was super helpful
This is enlightening