What Makes a Successful Entrepreneur? – Balancing Risk and Reward
Today I want to talk about what makes a successful entrepreneur. In short, a successful entrepreneur knows how to balance risk and rewards.
I’ll explain what risks entrepreneurs specifically face, how to mitigate them, and finally I’ll share with you an entrepreneurial venture I discovered over 20 years ago that yields big rewards with very little risk.
What Makes a Successful Entrepreneur? – Risk is Necessary
It would be unrealistic to think you can avoid all risk and play it safe. There’s no change without calculated risk. You can’t do what everyone else is doing otherwise, you will get what everyone else is getting. This is going to be slightly uncomfortable. Change always is.
Often to avoid risk, entrepreneurs avoid action. Most people recognize the statement paralysis of analysis. If you’re not sure, this is the outcome of not making a decision. Many are afraid and they claim they need more time. Sometimes, more time means years.
What Makes a Successful Entrepreneur? – Measuring Risk Against Reward
On the other hand, you won’t be successful as a dare devil or a gambler either. Calculated risk means measuring the risk against the reward. Ask yourself, ‘Is the reward too small? Is the reward large enough?
Here’s a rule of thumb. Ask yourself, ‘What is the worst that could happen? What is the best thing that could happen? Can you tolerate the worst thing? If you succeed, what’s the end result? Will it be worth it???
Decisions always have consequences. Managing risk simply means asking yourself what’s the reward. If there is no reward, are you betting, are you guessing or are you praying? Most ideas fail. Burn that on your brain. Most ideas fail.
What Makes a Successful Entrepreneur? – How to Mitigate Risk
To be a successful entrepreneur, you must avoid the ‘winner-takes-all’ businesses. Only a small number of businesses will enjoy the majority of the rewards. Some examples are Apple, Amazon, Google, Facebook; everyone else comes home very tired at night and broke.
This does not mean you can’t make it big. You must differentiate/develop a unique problem-solving product. I’d like to share what business I have been incredibly successful in.
What Makes a Successful Entrepreneur? – Ted Shares His Lucrative Business Idea
For 30 years I’ve been an entrepreneur working from home and I discovered a little-known and highly lucrative subset of the traditional real estate business.
My discovery wasn’t something new to the business world. It was a subset of the traditional real estate business – tax liens and tax deeds. I was shocked and the more I investigated, the more excited I became.
What Makes a Successful Entrepreneur? – How Tax Liens and Tax Deeds Work
It’s not difficult to understand. It works like this: Local governments which we call county governments and municipalities have employees like school teachers and fire fighters and a sheriff and police department. These employees must be paid.
To pay for these employees, the state legislature, which is the government body that runs the state, mandates that the local county supervisors or county commissioners to have a treasurer to collect property taxes and in the case of tax deeds, if they cannot collect property taxes, the treasurer is authorized by the legislature to seize the delinquent property.
The treasurer confiscates the property and then evicts the tenant or owner and pushes them off the property and finally, the treasurer sells the property at a public auction which they announce on the county website and in the newspaper.
The treasurer sets the sale price to sell the property quickly. The tax assessor has assessed the property; however, the treasurer will discount the sales price 60%, 70%, 80% below the tax value. They do that to facilitate a quick sale.
If you’d like to get started today, you can begin now at no cost by taking advantage of Ted’s FREE Master Class. It’s only about 1 hour of streaming video and will open your eyes to the incredible opportunities available in tax delinquent real estate investment.
What Happens to the Mortgage?
The auction property will be sold to the highest bidder without a mortgage or a deed of trust loan. The county treasurer is authorized by the state legislature to cancel out the mortgage and the deed of trust loan. The auction purchaser receives a treasury deed to the property with no mortgage or deed of trust loan.
Here’s an Example:
For example, a buildable residential lot in a nice subdivision may have a value of $50,000 according to the assessor. However, at the public auction, starting bid could only be 5 cents on the dollar. If you were the high bidder at 20 cents on the dollar, you would own a $50,000 lot for $10,000.
- Tax assessed value $50,000
- Quick sale price $25,000
- Your investment $10,000
- Your profit:$15,000
Wow, $15,000 profit potential. Nice deal, low risk, high reward. For over 200 years the government locally has been selling tax-defaulted real estate. You would never worry about having a boss.
What Makes a Successful Entrepreneur? – Conclusion
A successful entrepreneur will avoid the mindset of ‘get-rich-quick’, and will learn to measure their risk against the potential reward. I have shared with you one of the business ventures that I not only practice, but I teach.
How can you get started with tax deed investing? As my gift to you, please attend my FREE Master Class. It’s only about 1 hour of streaming video and will open your eyes to the incredible opportunities available in tax delinquent real estate investment.