0 - Billionaire Without Creating Anything

[M&A]

I have an interest in mergers & acquisitions, investing, real estate. More buying, improving and growing vs starting. I

have been looking into the stories of how these guys go from ZERO-10 figures. A quick look at Forbes and you will see a huge number of fortunes derived from "Investments" and "Diversified"


Taveta Investments was started with a 20000£ loan by Phillip Greene, he started selling jeans and eventually ended up buying retail chains like Topman and Selfridges under Taveta Investments giving him a 10 figure net worth.

Icahn Enterprises was started by Icahn when he was a trader and he took controlling positions in companies and made money off each deal. Giving him a 11 figure net worth.

Berkshire Hathaway a textile company was bought by Warren Buffett when he was 32 and he later expanded into the insurance industry and eventually ended up as the richest man in the world at one stage in time.

Cheung Kong Industries was started by Li Ka Shing after he left school an started working in a plastics trading company he expanded into real estate and is now Asia's richest man.

Millhouse LLC was started by Roman Abramovich after he set up a company making dolls. Within a few years his wealth spread from oil conglomerates to pig farms and he also started investing in other businesses. His wealth peaked at about $20B and now sits at $9B.

Virgin Group was started by Richard Branson at 20 years old with a mail order business and expanding into finance, travel and entertainment. Richard's net worth is also in the 10 figures.

Grey Enterprises Holdings (Fictional from 50 Shades) was created from a 100k loan used to buy Christian Grey's first business. Eventually giving the fictional 20 something billionaire status.

These are just famous examples I am sure that there are other examples of less known individuals who made 7,8,9 figure sums through similar M&A deals.

Can buying assets and growing them be easier than creating and developing an idea from scratch ? To rise to the top would require great delegation and a talent for raising money. It won't make you 20m in 2 years like some tech idea or innovative product but its a viable option to the creatively challenged.

In Dan Pena's book "Your First 100 Million" he says its easier to buy revenue than create it.

Would love to here thoughts on this, I know many here do this kind of business except with real estate instead of businesses.

I am seriously considering going down this life path at 21 after slaving the past 2 years amassing a 5 figures in cash.

 

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[M&A]

As far as fulfilling CENTS

NEED - Businesses/Properties that already generate revenue already fulfil a need, the concept has already been tested an proven by the previous owner.

ENTRY - The barrier would be finding good deals, capital to finance deals and hiring the right people.

CONTROL - Once you own a business you can do what you want with it.

SCALE - You can buy as many businesses/properties as you want.

TIME - After delegation and a chain of command is properly set up you can sit back and only take phone calls from important people. Money is being made whether you are playing golf or inspecting the premises.

 

[jazb]

if you learn how to raise money, and learn how to pick the right deals then yes.

lot of players in real estate doing this though! a few people even on this forum. so you will have to get creative to find the best deals.

another way is to learn old boring industries which provide the same metrics as real estate. meaning it will last forever (decades), virtually no change etc.

learn some industries, learn the companies and wait for the right deals to come along. and when they come you will end up very rich if you put enough money in (other peoples money). this route takes YEARS to do. to learn and to wait.

I personally think its better to start a biz then do this on the side. can take a while to get the right deals/ raise the money, and even longer to live off the cash flow.

 

[Kevin D. Smith]

Well it's obviously effective. I think the struggle would be in finding the right business that you can apply skills you've already learned. It's one thing to find a great deal on a business but then it's another to turn it around into a profitable business.

 

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[jlwilliams]

It's an area I know little about, but what you are talking about sounds like the jackpot that people are pursuing when they take a private company and "go public."

This could be the start of an interesting discussion.

 

[Ninjakid]

Look deeper into their biographies. All the guys on that list have created a business at some point. Christian Grey doesn't count because he's a fictional character from a shitty book and shitty movie.

Your five-figures is not nearly enough to start buying assets that would take you to billionaire status.

The guys you list didn't go from zero-billionaire as you say. They may have started with zero, but they worked their asses off building things and acquiring more money to get where they are now. It was no picnic, or gimmick.

You're chasing the dollar. Focus on creating value.

 

[Dwight Schrute]

brb, raising monies on kickstarter to buy google

 

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[Adam Secada]

Taveta Investments was started with a 20000£ loan by Phillip Greene, he started selling jeans and eventually ended up buying retail chains like Topman and Selfridges under Taveta Investments giving him a 10 figure net worth.

Icahn Enterprises was started by Icahn when he was a trader and he took controlling positions in companies and made money off each deal. Giving him a 11 figure net worth.

Berkshire Hathaway a textile company was bought by Warren Buffett when he was 32 and he later expanded into the insurance industry and eventually ended up as the richest man in the world at one stage in time.

Cheung Kong Industries was started by Li Ka Shing after he left school an started working in a plastics trading company he expanded into real estate and is now Asia's richest man.

Millhouse LLC was started by Roman Abramovich after he set up a company making dolls. Within a few years his wealth spread from oil conglomerates to pig farms and he also started investing in other businesses. His wealth peaked at about $20B and now sits at $9B.

Virgin Group was started by Richard Branson at 20 years old with a mail order business and expanding into finance, travel and entertainment. Richard's net worth is also in the 10 figures.

Grey Enterprises Holdings (Fictional from 50 Shades) was created from a 100k loan used to buy Christian Grey's first business. Eventually giving the fictional 20 something billionaire status.

First. Come on. Christian Grey? COME ON.

Second. I want to point out something that not a lot of people like to admit -- the plural of anecdote is not "data". Cherrypicking examples of how a strategy worked for some people isn't proof that the strategy is foolproof. Case in point. (http://edition.cnn.com/2009/BUSINESS/05/21/merger.marriage/)

"If the definition of a successful merger is driving up shareholder value, then their failure rate is far north of 50 percent," says Lawrence Chia, a managing director of Deloitte & Touche in Beijing, China."

Thirdly, all of the veterans of this forum are going to circle this thread like vultures if someone doesn't point this out now -- you aren't going to get from 0 to billionaire without creating anything. You need to create value. Value on a massive scale, if you are talking those kinds of numbers. If you're going to make ten billion widgets that you sell for a dollar a piece or you decide to make your multi-billionaire bosses happy and they give you a paydirt, some value needs to be created for someone.

By all means, swing for the stands when you step up to the plate, but don't think you can become a billionaire without creating anything. Something needs to be created at that scale.

Or hell, maybe it doesn't. Prove me wrong. Become a billionaire M&A dude.

 

[Nick314]

... you aren't going to get from 0 to billionaire without creating anything. You need to create value.

Perhaps a perfect example of this is Napoleon Hill's recounting of the great US Steel consolidation that Charles Schwab accomplished. He created value for all parties involved by suggesting changes to the industry that would reduce inefficencies and provide a net gain in profits for the parties involved. His idea could be considered as creating value from nothing (tangible that is), but it was still an idea and he had to work to achieve it--in the form of pitching it to the right people and selling them on it and getting them to sign. It didn't occur overnight. He studied the industry, knew it backwards and forwards, and then saw the opportunity, and even then had to figure out the right way to convince all parties to participate.

 

[Chitown]

Look deeper into their biographies. All the guys on that list have created a business at some point. Christian Grey doesn't count because he's a fictional character from a shitty book and shitty movie.

Your five-figures is not nearly enough to start buying assets that would take you to billionaire status.

The guys you list didn't go from zero-billionaire as you say. They may have started with zero, but they worked their asses off building things and acquiring more money to get where they are now. It was no picnic, or gimmick.

You're chasing the dollar. Focus on creating value.

@Ninjakid,

You're spot on. With rare exception most billionaires and multi-millionaires initially started some other business - Limos.com, anyone? - that became their cash flow generator, thereby allowing these folks to invest/nurture other ventures which led to even greater wealth.

As an example, look to no other than recently deceased multibillionaire, Kirk Kerkorian. http://www.latimes.com/local/obituaries/la-me-adv-kirk-kerkorian-20150616-story.html#page=1

Born to a once prosperous family, Mr. Kerkorian left the eighth grade to work and help the family survive. He became a pretty good boxer but realizing his prospects were dim he moved on. As fate would have it, a friend who was taking flying lessons took Kerkorian up for a trip over the San Gabriel mountains, north of Los Angeles.

Kerkorian was hooked. Broke, he bartered his labors for flying lessons in Palm Springs. Within six months he was a full fledged pilot. This is where it gets interesting.

During World War 2, he took a job - at $1,000 per trip - flying DeHavilland Mosquitoes across the Atlantic from Canada to Scotland. Oh yeah...3 out of 4 planes never survived the flight!

At the end of of his 18 month run he managed to save $30,000 which he used to start a charter airline between Los Angeles and Vegas. By 1962 he'd made enough cash to purchase the 82 acre parcel that became home to Caesar's Palace. By 1969 his net worth was $250,000,000. At that point he washed, rinsed and repeated, until his wealth reportedly hit $18,000,000,000.

He bought and sold MGM three times, for crying out loud!

But as was stated earlier in the thread, Kerkorian and his fellow billionaires and multimillionaires waited - sometimes, years - for the right opportunities while simultaneously educating themselves on industries they had ideas about.

The common denominator in all his ventures? He saw an opportunity to add value and executed better than the next guy.

It can be done but not overnight. Ask me how I know!

 

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[Digamma]

Grey Enterprises Holdings (Fictional from 50 Shades) was created from a 100k loan used to buy Christian Grey's first business. Eventually giving the fictional 20 something billionaire status.

AHAHAHAHAH!

No, but seriously, what is the discussion here? You don't have to "invent" anything. People have always made money with commerce. Walmart, anybody? It's not like they're inventors. People also always made money through arbitrage. Wall Street, anybody?
You still have to have ideas and do things better. Otherwise you will do the same as average competitors, and will be crushed the same way.

 

[obrian]

AHAHAHAHAH!

No, but seriously, what is the discussion here? You don't have to "invent" anything. People have always made money with commerce. Walmart, anybody? It's not like they're inventors. People also always made money through arbitrage. Wall Street, anybody?
You still have to have ideas and do things better. Otherwise you will do the same as average competitors, and will be crushed the same way.

 

[M&A]

First. Come on. Christian Grey? COME ON.

Second. I want to point out something that not a lot of people like to admit -- the plural of anecdote is not "data". Cherrypicking examples of how a strategy worked for some people isn't proof that the strategy is foolproof. Case in point. (http://edition.cnn.com/2009/BUSINESS/05/21/merger.marriage/)

"If the definition of a successful merger is driving up shareholder value, then their failure rate is far north of 50 percent," says Lawrence Chia, a managing director of Deloitte & Touche in Beijing, China."

Thirdly, all of the veterans of this forum are going to circle this thread like vultures if someone doesn't point this out now -- you aren't going to get from 0 to billionaire without creating anything. You need to create value. Value on a massive scale, if you are talking those kinds of numbers. If you're going to make ten billion widgets that you sell for a dollar a piece or you decide to make your multi-billionaire bosses happy and they give you a paydirt, some value needs to be created for someone.

By all means, swing for the stands when you step up to the plate, but don't think you can become a billionaire without creating anything. Something needs to be created at that scale.

Or hell, maybe it doesn't. Prove me wrong. Become a billionaire M&A dude.

Haha Its just that the "Industries"/"Holdings" Is a really glorified and prevalent source of wealth in hollywood. In another popular TV show, a guys father burned down an apartment building he owned claimed 900k insurance and went on to build the half New York skyline and was a billionaire.

 

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[Dwight Schrute]

a guys father burned down an apartment building he owned claimed 900k insurance and went on to build the half New York skyline and was a billionaire.

Solid business plan. Brb, burning down my recently bought google-headquarters.

 

[ace81385]

I believe if you are able to acquire the right businesses,grow them ,add value you can achieve great things. I'm in the process of looking at businesses to acquire as we speak in a few industries where I think I can not reinvent the wheel but make the companies more profitable and either sell them or scale them. I am fortunate that I've saved a decent amount of money over the last 5 years working and will use that money to seed my future business endeavors.

 

[Kung Fu Steve]

Solid business plan. Brb, burning down my recently bought google-headquarters.

You?

I like you.

 

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[Ubermensch]

another way is to learn old boring industries which provide the same metrics as real estate.

I can think of a few. Energy is one of them. Utilities is another. Energy efficiency is a third.

View attachment 10012

 

[Chitown]

Haha Its just that the "Industries"/"Holdings" Is a really glorified and prevalent source of wealth in hollywood. In another popular TV show, a guys father burned down an apartment building he owned claimed 900k insurance and went on to build the half New York skyline and was a billionaire.

Apparently, this type of activity was prevalent during the 70's up in the Bronx.

 

[JAJT]

Lots of people do this (or similar) to great success at all levels.

Look at Flippa - it basically exists to link first-level creators and next-level builders.

Really, most people it seems fall into one of three general tiers: people who are good at creating businesses, people who are good at growing businesses and people who are good at managing businesses.

I read a story not two weeks ago about someone who started a small physical products business, grew it to $3-400 per month and sold it for like $5 grand to someone else. This new owner changed the web site, added extra products, got better photography and better packaging and better fulfillment and changed prices and was up to 50-100k per month revenue within 6 months. Likely this person will sell it to some other interest who will either grow it bigger or just simply manage it well enough to be a nice, tidy little asset in their portfolio.

So yeah, you can make a killing with acquisitions but only if you know how to add value to what you are buying. You don't make money on acquisitions, you make money on increasing the value of acquisitions (or you get lucky on timing a market event that changes the value of your asset while you sit there doing nothing, but this is obviously much harder and more akin to gambling...).

 

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[jlwilliams]

@Adam Secada , "The plural of anecdote is not data" .... That's good. I'm going to use that.

 

[YelmisPravida]

Lots of people do this (or similar) to great success at all levels.

Look at Flippa - it basically exists to link first-level creators and next-level builders.

Really, most people it seems fall into one of three general tiers: people who are good at creating businesses, people who are good at growing businesses and people who are good at managing businesses.

I read a story not two weeks ago about someone who started a small physical products business, grew it to $3-400 per month and sold it for like $5 grand to someone else. This new owner changed the web site, added extra products, got better photography and better packaging and better fulfillment and changed prices and was up to 50-100k per month revenue within 6 months. Likely this person will sell it to some other interest who will either grow it bigger or just simply manage it well enough to be a nice, tidy little asset in their portfolio.

So yeah, you can make a killing with acquisitions but only if you know how to add value to what you are buying. You don't make money on acquisitions, you make money on increasing the value of acquisitions (or you get lucky on timing a market event that changes the value of your asset while you sit there doing nothing, but this is obviously much harder and more akin to gambling...).

Very interesting observation.

I've now (11 yrs after reading Fastlane Millionaire) created a B2B marketing automation agency that has $65k monthly revenue and profitable.

However, I'm struggling to take it to the next level.

My plan was always to get it to a "passive" place (make myself redundant), but training people, managing "crisis", selling all takes time and I've yet to find any of the employees who could take over or afford to hire someone more senior to do this stuff. After making it passive, my plan was to leverage the assets, clients, and know-how to spin off a new venture from this one.

However, after reading this, it makes me wonder: Am I a creator, and not a grower, and that's why I'm struggling with the next step? ... Maybe selling it and building something new from scratch would be a better option

 

[Flint]

Very interesting observation.

I've now (11 yrs after reading Fastlane Millionaire) created a B2B marketing automation agency that has $65k monthly revenue and profitable.

However, I'm struggling to take it to the next level.

My plan was always to get it to a "passive" place (make myself redundant), but training people, managing "crisis", selling all takes time and I've yet to find any of the employees who could take over or afford to hire someone more senior to do this stuff. After making it passive, my plan was to leverage the assets, clients, and know-how to spin off a new venture from this one.

However, after reading this, it makes me wonder: Am I a creator, and not a grower, and that's why I'm struggling with the next step? ... Maybe selling it and building something new from scratch would be a better option

You may find interesting what Jason Cohen has to say about it (jump to 44:55):

View: https://youtu.be/MWXBWLTcmn4

 

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[Kevin88660]

I have an interest in mergers & acquisitions, investing, real estate. More buying, improving and growing vs starting. I

have been looking into the stories of how these guys go from ZERO-10 figures. A quick look at Forbes and you will see a huge number of fortunes derived from "Investments" and "Diversified"


Taveta Investments was started with a 20000£ loan by Phillip Greene, he started selling jeans and eventually ended up buying retail chains like Topman and Selfridges under Taveta Investments giving him a 10 figure net worth.

Icahn Enterprises was started by Icahn when he was a trader and he took controlling positions in companies and made money off each deal. Giving him a 11 figure net worth.

Berkshire Hathaway a textile company was bought by Warren Buffett when he was 32 and he later expanded into the insurance industry and eventually ended up as the richest man in the world at one stage in time.

Cheung Kong Industries was started by Li Ka Shing after he left school an started working in a plastics trading company he expanded into real estate and is now Asia's richest man.

Millhouse LLC was started by Roman Abramovich after he set up a company making dolls. Within a few years his wealth spread from oil conglomerates to pig farms and he also started investing in other businesses. His wealth peaked at about $20B and now sits at $9B.

Virgin Group was started by Richard Branson at 20 years old with a mail order business and expanding into finance, travel and entertainment. Richard's net worth is also in the 10 figures.

Grey Enterprises Holdings (Fictional from 50 Shades) was created from a 100k loan used to buy Christian Grey's first business. Eventually giving the fictional 20 something billionaire status.

These are just famous examples I am sure that there are other examples of less known individuals who made 7,8,9 figure sums through similar M&A deals.

Can buying assets and growing them be easier than creating and developing an idea from scratch ? To rise to the top would require great delegation and a talent for raising money. It won't make you 20m in 2 years like some tech idea or innovative product but its a viable option to the creatively challenged.

In Dan Pena's book "Your First 100 Million" he says its easier to buy revenue than create it.

Would love to here thoughts on this, I know many here do this kind of business except with real estate instead of businesses.

I am seriously considering going down this life path at 21 after slaving the past 2 years amassing a 5 figures in cash.

Their first pot of gold is definitely not investing. Its mostly actively running a business. When they become big they diversified and become holding companies.

 

[YelmisPravida]

You may find interesting what Jason Cohen has to say about it (jump to 44:55):

View: https://youtu.be/MWXBWLTcmn4

Very interesting to listen to, thanks.

I'm currently at 13 employees and definitely feeling the shift.

I'm currently in the middle of trying to get people to take more leadership, and actually am making progress. Actively pushing back and asking them to solve the problem, not getting involved etc.

Certain things, though, are simply not possible right now to delegate, for example certain types of client emergencies, and most sales.

But very interesting video and gives me a much better vision of what's ahead.

 

[Flint]

I'm currently in the middle of trying to get people to take more leadership, and actually am making progress. Actively pushing back and asking them to solve the problem, not getting involved etc.

Certain things, though, are simply not possible right now to delegate, for example certain types of client emergencies, and most sales.

An owner of a prestigious hotel brand (can't remember which one) decided his place needs to provide the best experience to his guests. He understood one of the pain points was customer service and making sure his staff resolved any issues quickly, efficiently and to customer satisfaction. You call at 2 am you want a lobster? Done.

The bottleneck was staff didn't know what to do with requests not described in any process. All such issues boiled down to asking managers for permission, filling in paperwork, waiting for others to decide what to do etc. He solved that by empowering the staff to address any customer request on the spot. He gave them a daily allowance of something like $1k that they could use without prior approval. You may worry this would be abused... but has grown to a global chain. The power of letting go.

Maybe someone can remind me where this story comes from and what the name of the chain is.

Look here for a similar example (jump to 2:50:40):

View: https://youtu.be/6BXGnE3OHp8

 

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[Antifragile]

This thread started in 2015. @M&A hows your empire building experience so far? Did you get to at least 8 figures if Net Worth?

 

[Ing]

Very interesting observation.

I've now (11 yrs after reading Fastlane Millionaire) created a B2B marketing automation agency that has $65k monthly revenue and profitable.

However, I'm struggling to take it to the next level.

My plan was always to get it to a "passive" place (make myself redundant), but training people, managing "crisis", selling all takes time and I've yet to find any of the employees who could take over or afford to hire someone more senior to do this stuff. After making it passive, my plan was to leverage the assets, clients, and know-how to spin off a new venture from this one.

However, after reading this, it makes me wonder: Am I a creator, and not a grower, and that's why I'm struggling with the next step? ... Maybe selling it and building something new from scratch would be a better option

A former friend ( no more contact) built a business, sold and built the next, quite similar, sold that and built the 3. same one.
For the first he needed so e years, the second 6 months, the third 4 months.