My Personal Quest To Find A Million Men With One Dollar
Posted: Wednesday, January 13, 2010
by Rhiannon Wilkinson
If you think about a million dollars at one time, it is overwhelming. But if you take it little by little, piece by piece, it isn't such a huge thing.
When I was a kid, my grandma told me this corny little joke. She use to tell it to me all of the time when I was growing up, and it is a joke that changed my life. But I didn't really get it until I was 18 years old. So, I am going to tell the joke to you...
The maid was amazed by the wealthy woman's good fortune, and came up with a plan of her own.
About a year later, it was the maid who came walking through the door with a mink coat on, and she handed the wealthy woman her letter of resignation. The wealthy woman asked her, "How did you get a beautiful coat like that?" To which the former maid replied, "I found me a million men with a dollar."
This joke came back to me when I was eighteen years old, when I was telemarketing. And it hit me like a bolt of lightning, or what the bible would call a burning bush. If I could find a million people and sell them something for one dollar - I would be a millionaire.
Or if I found 200,000 people and sold them something that made me a $5 dollar profit - I would be a millionaire.
Or if I found 50,000 people and sold them something that made me a $20 dollar profit - I would be a millionaire... and so on.
After I realized this, I immediately quit my job even though I was making very good money at the time and opened my first business. I saw a presentation from a friend of mine who was selling this vaccum cleaner called the "Rainbow" and I thought it was the most amazing machine ever. It cost about $1,000 dollars to the customer - but my commission was $200 dollars every time I sold one.
So, I created a formula about how many Rainbows I would have to sell in order to be a millionaire. So, 200 divided by 1,000,000 is 5,000, which means I would have to sell 5,000 Rainbows to become a millionaire.
That is a lot of vaccum cleaners, but here is what else I learned... if I opened my own office, trained a force of salespeople, I would also make $200 dollars every time one of my salespeople sold one, because I would own the office.
So, if 5 salespeople sold 5 vaccum cleaners a month, that would be 25 vaccum cleaners per month, and $200 dollars times 25 vaccum cleaner sales is $5,000 dollars per month. If I grew the force to 10 sales people... 20 sales people... 50 sales people... 100 sales people and so on... you can see where I am going with this.
But lugging around that vaccum door to door was A LOT of hard work. Not only that, but if the customer didn't buy it, you would have to clean it up, put it in the box again, and take it back home. It was truly a pain in the neck, even though the machine was awesome.
I got up to 2 recruits under me after about a month, and it was the first time in my life I made $1,000 in a week just off my sales alone. But I quit, because I got sick of it and it was a whole hell of a lot of work lugging that thing around all the time. Plus, vaccum cleaners are a luxury item, not a necessity.
My first business venture was not successful, but only because I didn't stick with it. However, it was the first time I put my "million men with a dollar" theory to practice, even though it was meant as a joke.
I've sold magazines, home security systems, health insurance, atm machines, and cars. I was either a telemarketer, or doing door to door sales. When I was a telemarketer, I worked for somebody else. But when I was on the field, I was self employed. But each venture I tried, I always applied the formula...
How many of these do I have to sell and how many people do I have to recruit to sell for me in order to make a million dollars?
Common sense tells you that if you sell a low ticket item like a magazine, you have to sell a very high volume of them to get rich. And the higher the items ticket, the quicker you can get to a million dollars.
So, let me ask you this...
What is the most high ticket purchase you can think of that a person can buy?
There is nothing in this world more valuable than real estate. There are some pieces of commercial real estate in New York City and Dubai, India that are literally worth billions of dollars. It is the highest ticket item you could EVER sell, with the exception of jet airplanes and some farm equipment.
But real estate is beautiful, because everybody needs it.
At first, I started out as a Realtor making 3% commission off of total sales price. So, if I sold a $100,000 dollar house I would make $2,100 dollars after the brokers cut. If you open up a real estate brokerage firm and recruit Realtors, you make 30% of their entire commission, or $900 dollars. I helped my broker grow his firm from 15 Realtors all the way up to 120 Realtors in less than a year. He made MILLIONS off of me, due to his increase of sales.
For a long while, I thought seriously about opening up my own brokerage firm. But there is an even BIGGER game of money than that - and that is real estate investing.
That is when you are not the Realtor, you are the owner of the property. And you sell it for a tremendous amount more than what you paid for it.
I have two houses I am working on now here in Oklahoma City. One I bought for $40,000 dollars, put $20,000 into it and after the lender fees - my total mortgage amount is only $80,000 dollars. The house is worth $125,000 as it sits right now, and I am putting it on the market by January 1st.
That is a $45,000 profit to buy real estate at a substancial discount, and sell it for top market value.
So, how many deals like that would you have to do to reach a million dollars? If you did one deal like that per month, you would be a millionaire in 22 months, or in less than 2 years.
If you did 2 of those a month, well you can imagine where I am going with this. It is a lot more than some commission you make off of selling somebody's house as a Realtor, that is for sure.
I love real estate for several reasons, and I will NEVER stop investing in it. Here are just a few of the reasons why:
1. You can buy houses with bad credit, no money, and no job.
2. It is a very high ticket item, which means you make a forture once you sell one
3. The tax benefits of owning real estate are like no other
4. Everybody needs a place to live, so it is not a luxury item - it is a necessity.
5. You get 3 benefits of real estate investing, which are: Cash Flow, Equity, and Appreciation (If you buy it right and know what to do)
So, why would a lender lend to you, even if you are broke, without a job and horrific credit? Let me tell you why...
The lender isn't really a lender, even though they are providing the money for the partnership. The lender is really a real estate investor themselves. Or in other words, the money they loan to you is secured by the real estate itself.
For instance, on my house venture here in Oklahoma City... I borrow $40,000 to buy the house, and $20,000 to fix it up - so my total loan amount is $60,000 dollars. When the house is fixed up, it is worth $125,000 dollars.
If I sell the house, I pay back the $60,000 dollars I initially borrowed plus $20,000 in interest payments - which is $80,000 dollars. But I STILL make $45,000 dollars with absolutely no money out of my pocket.
But if I don't sell it, the lender gets the house back. But it is a great investment to them, because the house is worth $125,000 that they only had to lend $60,000 dollars on. So, it is a win-win-win situation.
If I win, they win. If I fail, they win. There is no risk to the lender. If the house catches on fire, the insurance pays them off. It is a safe, secure and sound investment. That is why if you find a good deal, lenders will lend you money allllllllllll daaaaaaaaaaaay looooooooong. So, knock yerself out, tiger.
There are lenders all around you who are looking to form partnerships with you on lucrative real estate investment deals.
The trick is to find yourself a good deal, and they abound in this marketplace. So, you must educate yourself how to buy the property, regardless if you are in a depreciating market, flat market, or an appreciating market.
If you have any questions pertaining to real estate, please call or text Rose Wilkinson at 405-881-5958. I also pay a $250 referral fee if you have a friend, family member or co-worker who needs to sell their house FAST.
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Top-level comments on this article: (1 total)Do such lenders exist? This is a fascinating piece, but I'm skeptical.Greg,You can find hard money lenders by going to your local real estate investors association in the city / state you live in. But the best sources are the friends and family you have around you that you can form partnerships with (if you find the right deal)Thanks for stopping by! ;-)Sincerely,Rose Wilkinson
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