Understanding Wealth Building
Before we begin, let’s review some principles…
Capital = Asset + Title.
Capital is what can be leveraged to create Wealth. Wealth, is a multiplication method, not a division method (percentage). Meaning we want to find a way to Compound Businesses not Compound Interest. The Rule of 72’s in Banking proves this point.
Rate of Return
Going back to the Rule of 72’s, it is an approximation of the time it will take for your money (value) to double. Basically, if you take 72 and divide it by your Return on Investment (ROI) it gives you the number of years to double. Let say a Bank pays 6% on a CD; then 72/6 = 12 Years.
A Franchises is an Asset.
When you buy a franchise unit from a Franchisor and place it in a company (i.e., LLC or S-Corp) the franchise becomes an Asset on your Balance Sheet. Your Title is Your Franchise Agreement. The Franchise Agreement is proof that you own the Franchise. The agreement controls how you can buy and sell this asset.
What Is the Rule of 72?
The Rule of 72 is a simple formula used to figure out how long it might take for your money to double when you invest it. It works like this: you take the number 72 and divide it by the interest rate you expect to receive on your investment. The answer gives you an estimate of how many years it will take for your money to double. Or, you can flip it around. If you know how many years you want it to take for your money to double, you can use the Rule of 72 to find out what interest rate you'd need on your investment. It's a simple way to get a rough idea of how your money might grow over time.
Rate of Return
Going back to the Rule of 72’s, it is an approximation of the time it will take for your money (value) to double. Basically, if you take 72 and divide it by your Return on Investment (ROI) it gives you the number of years to double. Let say a Bank pays 6% on a CD; then 72/6 = 12 Years.
What's ROI and How Does It Work?
ROI is a way to see how well a business is doing. Imagine you have a pie, and you want to know how big a piece you have compared to how much money you put in or, invested. ROI helps you figure that out. To figure the ROI, you look at how much profit the business made and divide it by how much money you invested. This gives you a number that shows how much you're getting back for every dollar you put in.
According to bplans.com, “Return on investment (ROI) is a financial concept that measures the profitability of an investment. There are several methods to determine ROI, but the most common is to divide net profit by total assets.
For instance, if your net profit is $50,000, and your total assets are $200,000, your ROI would be 25 percent.
Usually, businesses make more money than they spend, but not always, especially at the beginning. Still, generally, they do better than if you just put your money in a CD at the bank. It's like comparing how much your money can grow in different places. A common definition of ROI is a profitability measure that evaluates the performance of a business by dividing net profit by net worth.” Needless to say, not all businesses earn a net profit, especially in the first year, but generally, they outperform a CD.
Again using the example from bplans.com. 72/25 = 2.88 years to double. This is the Magic of Compounding Businesses.
According to bplans.com, “Return on investment (ROI) is a financial concept that measures the profitability of an investment. There are several methods to determine ROI, but the most common is to divide net profit by total assets.
For instance, if your net profit is $50,000, and your total assets are $200,000, your ROI would be 25 percent.
Usually, businesses make more money than they spend, but not always, especially at the beginning. Still, generally, they do better than if you just put your money in a CD at the bank. It's like comparing how much your money can grow in different places. A common definition of ROI is a profitability measure that evaluates the performance of a business by dividing net profit by net worth.” Needless to say, not all businesses earn a net profit, especially in the first year, but generally, they outperform a CD.
Again using the example from bplans.com. 72/25 = 2.88 years to double. This is the Magic of Compounding Businesses.
Leverage
We can show you how to leverage franchise units that have higher ROI enabling creating Wealth much sooner.
Understanding Wealth Building
Before we begin, let’s review some principles…
Capital = Asset + Title.
Capital is what can be leveraged to create Wealth. Wealth, is a multiplication method, not a division method (percentage). Meaning we want to find a way to Compound Businesses not Compound Interest. The Rule of 72’s in Banking proves this point.
Rate of Return
Going back to the Rule of 72’s, it is an approximation of the time it will take for your money (value) to double. Basically, if you take 72 and divide it by your Return on Investment (ROI) it gives you the number of years to double. Let say a Bank pays 6% on a CD; then 72/6 = 12 Years.
A Franchises is an Asset.
When you buy a franchise unit from a Franchisor and place it in a company (i.e., LLC or S-Corp) the franchise becomes an Asset on your Balance Sheet. Your Title is Your Franchise Agreement. The Franchise Agreement is proof that you own the Franchise. The agreement controls how you can buy and sell this asset.
What Is the Rule of 72?
The Rule of 72 is a simple formula used to figure out how long it might take for your money to double when you invest it. It works like this: you take the number 72 and divide it by the interest rate you expect to receive on your investment. The answer gives you an estimate of how many years it will take for your money to double. Or, you can flip it around. If you know how many years you want it to take for your money to double, you can use the Rule of 72 to find out what interest rate you'd need on your investment. It's a simple way to get a rough idea of how your money might grow over time.
Rate of Return
Going back to the Rule of 72’s, it is an approximation of the time it will take for your money (value) to double. Basically, if you take 72 and divide it by your Return on Investment (ROI) it gives you the number of years to double. Let say a Bank pays 6% on a CD; then 72/6 = 12 Years.
What's ROI and How Does It Work?
ROI is a way to see how well a business is doing. Imagine you have a pie, and you want to know how big a piece you have compared to how much money you put in or, invested. ROI helps you figure that out. To figure the ROI, you look at how much profit the business made and divide it by how much money you invested. This gives you a number that shows how much you're getting back for every dollar you put in.
According to bplans.com, “Return on investment (ROI) is a financial concept that measures the profitability of an investment. There are several methods to determine ROI, but the most common is to divide net profit by total assets.
For instance, if your net profit is $50,000, and your total assets are $200,000, your ROI would be 25 percent.
Usually, businesses make more money than they spend, but not always, especially at the beginning. Still, generally, they do better than if you just put your money in a CD at the bank. It's like comparing how much your money can grow in different places. A common definition of ROI is a profitability measure that evaluates the performance of a business by dividing net profit by net worth.” Needless to say, not all businesses earn a net profit, especially in the first year, but generally, they outperform a CD.
Again using the example from bplans.com. 72/25 = 2.88 years to double. This is the Magic of Compounding Businesses.
According to bplans.com, “Return on investment (ROI) is a financial concept that measures the profitability of an investment. There are several methods to determine ROI, but the most common is to divide net profit by total assets.
For instance, if your net profit is $50,000, and your total assets are $200,000, your ROI would be 25 percent.
Usually, businesses make more money than they spend, but not always, especially at the beginning. Still, generally, they do better than if you just put your money in a CD at the bank. It's like comparing how much your money can grow in different places. A common definition of ROI is a profitability measure that evaluates the performance of a business by dividing net profit by net worth.” Needless to say, not all businesses earn a net profit, especially in the first year, but generally, they outperform a CD.
Again using the example from bplans.com. 72/25 = 2.88 years to double. This is the Magic of Compounding Businesses.
Leverage
We can show you how to leverage franchise units that have higher ROI enabling creating Wealth much sooner.