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MN Real Estate Investors Compound Effect: Multiply Time Multiply Money

Minnesota Real Estate Investors

Compound Effect Multiply Time Multiply Money

What’s great about the compound effect is it doesn’t just multiply money, it multiplies time.  For example those who have $50,000 in today’s world don’t always know how to double that money, they often are happy just with 3 and 4% returns.

I say if you figure out how to multiply time with time efficiency and online marketing, funnels and great business models then you are creating income streams that are double your time and as a result of that money, at some point you will have extra money and you will have to decide to park it in something like real estate and live off the return or the interest, or you can reinvest it back into a high cash on cash return business like online and offline funnels and systems.

Sometimes your systems in your business work so well your money is best diversified and invested back into the business because you know how to turn it into more money.

When we take the formula of 76x: 3x leads, 3x conversions, 3x profit margins, 3x frequency, I see the first two, leads and conversions best leveraged online these days to get the right kind of converting leads.  for the last two, profit margins and frequency, I see those as leverage of the money, hopefully on a scalable type of platform.

The profit margin sometimes you can only do so much, or if you get upsells that could also go into the frequency category.

When I say frequency I mean frequency of recurring income, cross-sells, upsells, and even referrals.  It’s extracting even more money from the same relationship by giving lots more value and utilizing a large lifetime value of a customer (CLV or LTV).

Often I look at profit margins within a 100% pie, and the other 3 as they can go much higher.  But having said that if you are making 10% profit, and change it to 30% profit by buying cheaper, or increasing the price point that could be a 3x or 300% increase, but what’s more, it’s usually all extra income above and beyond bills.

Minnesota Real Estate Investors

Compound Effect 76x Mindset

Before getting the results of 76x, you must first have the mindset, and stretch your mind to be prepared and to think even bigger than you do right now.

This is because you need to create the platform, framework, and foundation for what your business WILL grow into.  But that doesn’t just mean investing tons of money.

You still want to scale it lean and be agile and learn from it.  For example going to buy an expensive office with 10 employees on payroll before you know someone even wants to pay for your product are not good action steps, and that’s a lot of risk.  Scale and improve what you can with the formula as much as you can without investing lots of money and take out a lot of the risk.

Sometimes posting 2 times as much with free social media marketing or 2x better headlines can give you a lot more leads.

Conversions may increase by simply following up 5x vs only 1x.  It may feel more expensive to invest 5 times more of your time, but in the long run it’s more expensive to keep starting from scratch if your 1 follow up isn’t converting or closing people.  This is why online funnels and online/offline CRM are important.

Minnesota Real Estate Investors

Compound Effect Cash Flow & Cash on Cash Return

Another important part on the 76x formula is to take in account cash flow.  In many business models I’ve studied the long sales funnel and wait on funds and cash flow situation can slow down the business a lot.

The cash on cash return takes a very long time.  If you have to wait many months for invoices and slows a company from growing faster with a faster cash on cash return.

If you own a $70,000 rental home with $700/mo cash flow that differs from $210,000 home with $700/mo cash flow as to when it can be paid off and that debt service and mortgage payments are gone and you can keep scaling faster.

The great thing about the online follow up funnel is that you are cultivating leads, and you are growing them and they interest is compounding more daily, so like compound interest in investments, you aren’t ever removing your capital, it’s growing daily.

It takes the same time to show 10,000 people your message vs. 1 person.

This is the power of time leverage.  But I’ve seen businesses that can scale up the 3x leads, but they never have time to follow up, or don’t know selling, or closing, or whatever it takes to CONVERT them to a sale or income, thus they have a big bottleneck.

Also a business can get 3x the leads, get 3x better at converting with follow up, and even have a good profit margin, actually a lot of companies can get to this point, but without referrals, recurring income, or upsells, they are scrambling to get 10 to 50x more leads then they need to, and their time becomes more inefficient vs. someone who has that back end figured out.

This is why retention with a product or service is very important.  The compound effect is very powerful, let it work for you.

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