How to Create Cashflow by Accumulating Undervalued Assets

I’m not a big baseball fan but ended up reading “Moneyball” by Michael Lewis over the summer. It’s an awesome book, and I highly recommend it.

Moneyball is about how the Oakland A’s consistently engineered a playoff baseball team with one of the lowest payrolls in professional baseball.

The reason why I recommend reading Moneyball is because we can use many of the same strategies used by the Oakland A’s in our businesses and with our investments.

Plus, it’s a fantastic book. Lewis is an amazing author.

Before we dig into some of the strategies from Moneyball, I wanted to touch on something extremely important:

One of the best ways you can increase your cashflow
is by taking ideas from one area and moving them into a new area.

Way back in the early 2000s, I took the “membership” idea and used it with my real estate brokerage. This idea opened the doors for a new income stream and a massive amount of new home sales.

I just took an idea from the information marketing world and used it in my brick & mortar real estate business.

I didn’t get this idea from reading books on how to sell real estate!

Let’s start with something from Moneyball:

“A decade before, the highest payroll team, the New York Mets, had spent about 44 million on baseball players and the lowest payroll team, the Cleveland Indians, a bit more than 8 million. The raw disparities meant that only the rich teams could afford the best players. A poor team could afford only the maimed and the inept, and was almost certain to fail.

Or so argued the people who ran baseball.

And I was included to concede the point. The people with the most money often win. But when you looked at what actually happened over the past few years, you had to wonder. The bottom of each division was littered with teams – the Rangers, the Orioles, the Dodgers, the Mets – that had spent huge sums and failed spectacularly.

On the other end of the spectrum was Oakland. For the past several years, working with either the lowest or next to lowest payroll in the game, the Oakland A’s had won more regular-season games than any other team, except the Atlanta Braves. They’d been to the playoffs three years in a row and in the previous two taken the richest team in baseball, the Yankees, to within a few outs of elimination. How on earth had the done that?”

They engineered this success by thinking differently than all other baseball teams, which is obviously an illustration of everything we do in the Cashflownaire Membership.

This process started when the Oakland A’s began thinking through how teams actually won baseball games. To figure this out, they studied every possible metric, looking for those that were critical for success.

This process forced them to think accurately. They couldn’t just do what they always did. They couldn’t continue taking old school opinions on how to win as if they were accurate. They ended up focusing on a few key statistics that most teams ignored. They built their team around these key statistics and began to win.

This exact same situation presents itself with regard to how average people invest. Average people blindly follow everyone else without putting much thought into what they’re doing. They don’t think accurately and end up trading away decades of their lives working needlessly.

Average people focus on the market value of their investments. Their goal is to build a large net worth so that they can finally retire in their 60s. 🙁

Well, what metrics are actually important when it comes to financial success?

Um… how about positive cashflow? 🙂

Please note that I didn’t use the word “income.” Income usually flows from your labor while cashflow flows from your assets.

Prior to the Oakland A’s, all Major League Baseball teams focused on meaningless metrics, which is why the highest paid teams rarely achieved consistent success. And because these teams focused on meaningless metrics they consistently overpaid for their assets. They overpaid players who didn’t significantly improve their chances of success.

Guess what?

The basic financial plan everyone follows forces them to do the exact same thing… consistently overpay for assets.

Back when I was a CPA slugging it away in the corporate world, I had set up automatic contributions to my 401k (retirement account). These contributions where then invested into individual stocks by the various fund managers. The stocks selected by the various fund managers tended to be “safe” investments and didn’t offer very much cashflow.

On a high-level, this meant that I was investing into overpriced investments, and because these funds didnt pay out a lot of income, I was stuck working 60 to 70 hours a week.

Because I blindly did what everyone else was doing, I created a long-term trap for myself. I couldn’t escape this trap because I needed my paycheck.

Robert Kiyosaki taught us something critically important: If an asset doesn’t pay you for owning it, it’s NOT an asset.

Every dollar I was investing into non-income producing assets was an overpayment.

Seriously think about this for a minute… Most baseball teams overpaid for their assets and didn’t succeed. Average people overpay for their assets and end up struggling financially.

Everything changes when we stop following meaningless metrics (net worth), which you have zero control over. When you focus on cashflow (important metric), you instantly stop overpaying for assets.

One important new metric the Oakland A’s started paying attention to back then was their cost per win. By minimizing their cost per win, the team became more profitable. They didn’t need massive salaries to make it to playoffs.

We can do the same thing by analyzing our cost per income-producing asset. By minimizing your cost per income-producing asset, you can create more cashflow with less money.

We all know that what we focus on expands, right?

Wouldn’t it make a lot of sense to focus on positive cashflow?

You can use positive cashflow to pay this month’s bills. You can use positive cashflow to go on an amazing vacation. And you can even use positive cashflow to buy new cashflowing assets!

2021 is just a few weeks away.

Why not make creating more cashflow your focus for the new year? I can promise you one thing… positive cashflow makes life a lot better without having to wait until you can finally retire in your 60s or 70s!

If you’d like to have instant access to my strategies for accelerated cashflow, test-drive my Cashflownaire Membership with this FREE 7-DAY Trial Membership available here.

P.S. Billy Beane was the general manager of the Oakland A’s during their domination of Major League Baseball. Beane aggressively pursued players other teams ignored.

In fact, many of the Oakland A’s players were overweight and didn’t even appear to be professional athletes. These players had excelled in specific metrics that Beane realized were crucial to success in baseball. Metrics all other teams ignored.

Everyone in baseball laughed at Beane for the players he acquired for the team. They thought he was nuts wasting first-round draft picks on unattractive players. He stuck with his plan by holding his focus on the “right” metrics and led the Oakland A’s to the playoffs year after year.

The majority of my monthly cashflow flows from assets that most people ignore. In fact, when most people hear about this unusual investment, they laugh at me. I’ve stuck with this particular investment and it continues to pump out massive amounts of cashflow.

You’ll receive my System for investing in these unusual investments when you take the 7-day test drive of my Cashflownaire Membership!