What would you do if you had to turn $100 into a successful business? You can put that money into stocks, pay for a virtual assistant on Fiverr, or invest it in other areas. Real estate investor Grant Cardone faced this task during his appearance on "Undercover Billionaire," and he did something you won't believe.
Cardone threw away the $100. While this might sound like the worst possible choice, Cardone explains how this approach helped him start a successful business.
"Go to zero," Cardone stated when describing his logic.
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That advice doesn't mean you should donate your entire portfolio to charity just to start a successful business. However, Cardone reveals valuable lessons that can give you a better perspective on what it takes to succeed in business.
You Have To Meet New People
Cardone mentioned that he didn't need money to turn $100 into $10 million. He focused on meeting new people who could introduce him to new opportunities and become long-term customers.
You can grow a business with funding. It's normal for startups to use financing when they are new. However, viewing money as the solution to any business problem can waste a lot of time and put you into a deeper hole.
You have plenty of options to meet new people. You can attend events in your area, communicate with people online, and ask your family and friends if they know anyone. Meeting more people will expand your life, and growing your network can also scale your business.
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Reinvest What You Earn
Cardone also mentions that you should reinvest any of the money that you receive from customers. You can use the extra cash to hire more workers, boost your exposure with online ads, and optimize your brand's customer journey.
Cardone is against putting money into a savings account or saving up for retirement. This advice isn't for everyone, but it demonstrates how some of the most successful business owners operate.
As your company grows, you will spot new opportunities to reinvest your money for higher profits. In the beginning, you can probably manage every task on your own. However, as your business grows, it will make more sense to delegate repetitive tasks. Paying someone $20 per hour to perform some tasks will give you more time to complete tasks that average $100 per hour. You can get creative with how you pour money back into your business, but you’ll only know the best investments as you grow your business and come across new challenges.
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Quit Managing Money
Part of the reason Cardone didn't use the $100 was that he didn't want to manage money. Carefully looking at your stock portfolio will not change its value unless you trade securities. Stock price movements are entirely out of your control.
You can streamline your investments by putting your money into an ETF. That way, someone else is looking over the fund, and you don't have to spend much time on your portfolio. Cardone said that financial firms like Goldman Sachs (NYSE:GS) aren't managing money. Instead, these companies raise money, invest it, and earn their money that way.
It's still good to have a budget and keep track of your expenses. However, if you dig too deep into those numbers, you won't do things that can grow your business or help you climb the corporate ladder faster. It's similar to how some people penny pinch without considering how they can increase their income. Cardone believes people should spend less time managing money and more time meeting new people who can lead them to new opportunities.
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