There has been a lot of talk lately, especially this last year over, you know, should I be investing in Bitcoin? Should I invest in doge coin? Right. You know, Elon Musk loves this sort of like cultural currency and, you know, is this something that, you know, I can invest in and maybe, you know, double or triple my money you know, in a short matter of time.
The thing is if your concern is what is the best place for my money today, it might not be in an external asset.
Let me explain.
So in terms of buying businesses, you can buy businesses with leverage with a small amount of cash infusion, even with seller notes. Ultimately, when you look at the institutional fund firms and search funds that are basically acquiring these companies, you will see that 70% of them are at least doubling their money over a five-year period. Nine percent of them are getting a 10X over their investment.
When you look at doge coin, or you look at a Bitcoin investment, or even at Tesla or apple… what you are talking about is an external force of which you have no control over.
I’m not saying that they are bad investments. I’m not saying that they’re good investments.
What I want to talk about is control.
Here’s the thing, in a world where the majority of everything that happens in this world is external to you, in which you have no control over. The little portion inside of this world that makes up everything that is within your control – where you should be spending your time and how you should be focusing, the things that you work on…
It’s all about focusing on the things you have control on and doing activities that lead to the outcomes that you want.
That’s how you start to impact, inform, and shape the world around you and get the things that you want to do.
Let’s dive into this for a second.
Taking a $100,000 and investing it in doge coin, you have no control over what is going to happen with that. I’m picking doge coin because it’s the most external. Bitcoin has a very logical kind of break down into its intrinsic value. You can choose to buy into that or not. It doesn’t matter. At least there’s a story.
Doge coin doesn’t have one. It’s sort of like a cultural currency. It is as external as anything could possibly be in my opinion.
When you buy a company, you are focusing all of your investment on an active investment. It is not a passive investment like real estate. It’s something that you can really put your back into. You can really put your life into.
And what we’re finding when you look at it at the internal rates of return on these companies, they’re on average getting, you know, 32 to 33% internal rates of return.
Where else do you get that?
You beat that if you are invested in Bitcoin in 2020. But what other asset is going to do that this year?
That is completely external.
Buying a company provides an active investment that you have control over. You are focused on the things within your control.
This gives you an advantage that no one else has – controlled, unlimited upside potential.
You might think to yourself that, you know, the most successful entrepreneurs don’t buy their companies. However, let’s use Elon Musk for an example. You may think “this guy doesn’t go off and buy companies”. Actually he does. He actually started x.com, not paypal.com. Ultimately PayPal succeeded X didn’t. X ended up with all the cash so he bought PayPal when they ran out of cash because they were growing too fast.
He became one of the PayPal mafia because he acquired PayPal at an early stage.
Looking at Tesla, he was not a co-founder. He was actually sued over calling himself a co-founder by one of the co-founders.
Elon Musk acquired Tesla.
And then he put his back into it, bringing the vision of the thing that he wants into today.
Understanding that acquisition entrepreneurship is the path that leads from trying to make gambles around things that you do not control to something that is within your almost total control.
There’s unlimited potential based on what you can do.
If you’re interested in acquisition entrepreneurship, we run a program called Acquisition Lab. We run it in small cohorts of vetted individuals. If you are looking to acquire a business in the next six to 18 months we provide the first do-it-with-you buy-side advisory service to get you up to speed on the things you need to be focused on get you in the right mindset, help you understand the different opportunity profiles, the three forces of search, and really a vetted community of buyers and service providers to those buyers.