I often tell my students to focus on one single asset class for building their wealth. Many students focus on paper assets, such as option trading, or real estate. Some, like Brian, want to focus on business. Business is perhaps the most difficult asset class and yet, it is clearly the one with the most potential and the fastest way to build wealth (and my personal favorite). Brian asks the following questions about building his businesses.

Q: I want to build multiple businesses and either grow them myself or earn a royalty from inventions. I assume that building scalelable businesses from stratch is the best way to achieve my cash flow goal of $14,000,000 per year or $280,000,000 in net worth. However, what should I do with my businesses to achieve that amount of cashflow? Would it be most feasible to licence out my businesses, sell them privately, or would I need to do an IPO? Do you think I have time to focus on another asset class, or should I just remain focused on one given growth asset to achieve my cashflow goal and just take the excessive cash and invest in high leveraged real estate as well as build controlling interests in established small to midsized growth companies? How do companies compensate their controlling shareholders if they aren't paying out dividends?

A: I agree that building scaleable businesses are the best way to achieve your aggressive cash flow goals. Business has the most leverage of any of the asset classes and the best tax benefits for velocity. In order to achieve high cash flow, you must first, achieve maximum tax reduction (since taxes are the biggest drain on business cash flow) and then you must achieve maximum velocity of the cash flow.

I suggest you begin with a business and tax strategy. You need a plan to build your business and keep your cash flow moving while continually lowering your taxes. This plan will include the answers to whether you license out your business ideas, franchise them, or do an IPO. It will also address the quesiton of how to compensate your shareholders and what to do with the excess cash flow.

For more information on developing a tax and business strategy, visit our website at http://www.ProVisionWealth.com or contact Gennifer at my office at 866.467.5809 and she can set up an appointment for you with one of our business and wealth strategists.

Warmest regards,

Tom