How Millionaires Think — Bedros Keuilian

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In this episode of the Bedros Keuilian show, the host discusses the difference between making money and creating wealth.

I’ve worked multiple jobs as a personal trainer, a cook at Disneyland, a bouncer at a gay bar, and running my own business, TotalMuscle.com. Despite my strong work ethic, I found myself burning out in my 20s. Trading time for dollars is not sustainable, and its important to have multiple income streams for wealth creation.

We have a traditional system of trading time for money that keeps people financially ignorant and trapped in a cycle of taxation and work. Even high-paying jobs like engineering or architecture do not provide true financial freedom. Create wealth through passive income and multiple income streams because it allows money to grow without trading time for it.

Nine years ago, I was coaching a business owner. The client had a profitable business and a few employees, but was heavily involved in the daily operations and they also wanted to improve their business. She was making around $4,000-$5,000 a month but desired more. After hiring me as a business coach, her business significantly improved within the first six months, making an additional $30,000-$40,000 a month.

For businesses with recurring payments, there is business strategy called the ‘paid in full tsunami’. This strategy involves offering customers a discount and an extra month free if they pay for a year in advance. Implement this strategy around Black Friday in November and leverage the global trend of sales during this period.

A woman ran a successful three-day campaign and made $175,000. However, instead of using the money to grow her business, she spent nearly $100,000 on a new car and a Rolex watch. She lacked financial literacy, and without it even the wealthiest people can go broke. Even professional athletes like Evander Holyfield and Mike Tyson who made millions ended up in financial trouble due to poor financial management.

Do not buy luxury items like boats or planes because it’s more cost-effective to rent them. This is because owning these items comes with additional costs and responsibilities, such as maintenance and storage. Instead, use good credit to make strategic purchases that can help grow your business. For example, buying a car on credit allows you to keep more cash on hand to invest in your business. Use your resources wisely to outperform competitors.

Competition is not good for entrepreneurs, and they should strive to outperform and eliminate their competitors. Leverage credit and do not rush to pay off debts, including mortgages. Instead of paying off a house, one should take out money on it to invest in income-generating assets like a duplex.

Real estate investment is one strategy for wealth creation. Buy a $500,000 duplex with a 20% down payment, which would be around $80,000-$90,000. After spending an additional $40,000 on renovations, the investor can rent out the two units of the duplex. If the mortgage is $1,800 a month and the rental income is $3,500 a month, the investor becomes cash flow positive. The tenants essentially pay off the mortgage over a 30-year period, leading to wealth creation for the investor.

Use rental properties to generate cash flow, with tenants paying off the mortgage and the property appreciating in value. This strategy can turn a 30-year mortgage into an 18 or 19-year one, saving on future interest payments. Leverage other people in business, have leadership teams in various companies who lead the work and generate more revenue. This provides a paid internship-like experience for employees, giving them the opportunity to learn and potentially start their own businesses.

Nurture employees into becoming entrepreneurs. I had six former employees who have started their own businesses, including Rich Mujica of One Call Closers. There are mutual benefits of this relationship, where employees learn entrepreneurial skills while contributing to the company’s success. Tony Stephan, a registered dietitian transitioned from being an employee to starting his own business.

Two of my clients, Tony and Rachel, who both started online nutrition coaching businesses had also found success. Tony was initially making around $80,000-$90,000 a month as a one-man operation, with his wife assisting with back-end tasks. I advised Tony to hire other coaches to expand his business. Similarly, Rachel was making $9,000 a month as a one-woman operation. Today, she makes about $200,000 a month and has a team of eight people. Both Tony and Rachel have diversified their income streams, with Tony also coaching other registered dietitians on how to launch their businesses. Tony was looking for ways to reduce his tax burden. I advised Tony to invest in real estate, cryptocurrency, precious metals, and index funds. Tony now owns over $5 million in apartments in Detroit and they are now partnering with other coaching clients to buy more properties. Have multiple revenue streams. My other businesses helped me keep my fitness franchise afloat during the pandemic.