Access 1 Million People in 10 Minutes

The Google Adwords Methodology

1. You need a website in place, doesn't have to be fancy but professional, with a way to capture e-mails. (I recommend using a third party solution such as Mail Chimp or AWeber.)
2. Set up a google adwords acct, go to Google, hover over advertising programs at bottom ... AdWords
3. Write down one sentence which describes your "money in-hand, ready to buy, laser targeted customer" - your might not be so much a "ready to buy" buy you get the idea.
4. Go to Google's keyword tool - just search on google keyword tool - pull out of your one sentence the key phrases and search - now you will find relevant keywords, pay attention to the traffic and only use the ones that pertain to what you are trying to do.
5. Once you have this use the Google traffic estimator and type in the keywords - notice the traffic, eliminate the low ones.
6. Set up a Google Ad - the headline should have your keyword in it, the second line a benefit, the third line a feature or offer. (Note, go slow at first, do not set your budget above where you need it)
7. Set up a competing ad to try and beat the first one ... split test ... eliminate the loser.

I highly recommend picking up the book Google Adwords by Perry Marshall and Bryan Todd ... at Barnes.

Remember, you are trying to capture e-mails as well so you can continue to market to your market and not pay for the click again.

The Craps and Piss of Marketing Research

In small business, if you do not perform some sort of marketing research before going into business, you might as well be stepping up to a craps table in Vegas and putting all of your chips in. Business is risky period so why get a million from the bank without first checking if it will work or not.

The market research you should do primarily boils down to polling or surveying your target market and asking: how much will you spend and how often will you frequent my business. These answers should result in a revenue projection but also, can lead to valuable input in order to refine your business. Questions for improvement center around - "what do you like about this product or offering, what do you not like" as well as "in this type of business, what have you found that you don't like" referring to your competition.

Also, you can leverage technology such as Google Adwords to perform some market research. If you are a brick and mortar that is focused on local customers, you can set an AdWords ad to target local folks only. The methodology is to have a website in place that can capture e-mails so you can open the communication lines and again ask - "how much, how often, what do you think about some of my ideas (name, product offering, etc.)" all valuable information you need before going into business. You can also use a Facebook Page in a similar manner - open the lines of communication and ask.

Remember also, marketing research does not stop once you get the doors open (or website up and running.) You want to keep a finger on the pulse of your customers. The net-net is that you can piss off customers at anytime and need a way to catch when you have done so and then apply a remedy.

For more information on small business and financial freedom, go to myhappyassets.com.

Cash Flow Through Covered Call Options

Explosive Passive Income

Below you will find the details of actual covered call transactions our company has invested in. Although we cannot guarantee individual results, there is great opportunity to deliver substantial passive income through covered calls. I highly encourage you to invest in your education on covered calls before leaping in. My Happy Assets provides essential information.

Some explanation: the far left-hand column is the date the transaction was entered in. The Actions represent Bought the stock, Sold the Call and then Called away. The 4th column represents the stock price paid and the premium received.

Remember, one option contract represents 100 shares so in the first example of FSLR, multiply column 4 by 100 to get the Total Amt. column. As you can see, the premium received for this call was $1,533 for 2 months for a monthly cash on cash return of 6.4% or an annualized return of 77%.

The bottom line is that this transaction led to $767 in monthly cash flow.

This last transaction for ICF, Ishares Realty is a closed transaction that we were called out on. (the buyer of the called the stock before the strike expiration date.) You can see that the inital transaction generated a 2% monthly return, 28% annualized and $221 a month in cash flow. The buyer called us out in March and the stock was sold for the strike price of $52 for a 2 month return of 14% annualized to 82%.

Now again, results cannot be guaranteed but these are real transactions. Again, we highly encourage you to invest time in learning about covered calls and all of the risks associated with this type of investment ... My Happy Assets is a great starting point ... click here to order.

REITS - Real Estate Investment Trusts

An equity REIT owns physical property – skyscrapers, malls, hospitals, hotels, shopping centers, nursing homes and the like.

It also manages them – leases space, screens tenants, collects the rent, renovates, paints, patches carpets and fixes the water heater and air conditioning – does whatever it takes to keep the properties operational.

Manages a portfolio of real estate, selling existing properties and buying new ones as it deems advantageous.

Pros: Diversification in Real Estate

Since a REIT is a collection of properties that are often located in diverse geographic regions, by buying several REITs you can cover the entire states thus, you can own a stake in a nationally diversified portfolio of commercial real estate properties with as little as $100.

Since they trade on stock exchanges, shares can be bought and sold within ten seconds any time the market is open, whereas an individual rental property might take months to unload.

Commission to sell = $10 versus a single million dollar rental at $60k.

REITs are leveraged at 50% and you can equalize with rental leverage at 80% by buying REITs on margin or in a leveraged closed-end mutual fund.

The yields on REITs can be somewhat comparable to those from owning an apartment house.

They have a transparency and accountability previously unknown in real estate.

By law, a REIT must distribute 90% of its annual taxable income as dividends to its shareholders.

Depreciation used for tax purposes is returned through dividends – usually about 25 – 30% of the dividend yield from equity REITs constitutes such a return of capital and is ultimately taxed at the lower long-term capital gains rate. This makes for a better after-tax yield on REITs.

Just to play devil‟s advocate, below is a list of advantages in traditional, real property real estate that we would potentially miss out on if we only invested in REITS.

• Leverage
• Tax Advantages Through Depreciation
• Control to Improve Value of Property
• Not correlated to the Stock Market

I wish to make a big, important point here: Although a REIT can give you national or global real estate diversification, and let you avoid tenant and property headaches with an investment that can be leveraged with a tax advantage, you are still correlated to the stock market. It is not a strong correlation to small stocks, but a correlation nonetheless. Thus, with a stock market crash during a period when real estate holds, you would still lose value in a REIT versus if you were in real estate. In my opinion, this defeats the purpose of true asset diversification – investing across asset classes such as paper, real estate and business. So again, although I wish to present a plan that allows you generate passive income through other sources besides real estate, rental property is still a part of the plan.

So, during a market crash, the question becomes, is it still delivering yield? Perhaps you are not as concerned with underlying value if the checks are still arriving in the mail. Still, even if the checks are showing up, you would not have true asset diversification.

Cash Flow Through Dividends

How to Pick a Winner

The first step in DIFCCO, after opening an account with a mutual fund/stock provider, (go to Fidelity.com) is to identify a dividend stock hat is going to put checks in the mail on a recurring basis. Below is a simple screen for id'ing a high yielder (but not too high) and a link to a free stock screener. 1) Use a Dividend Yield Screen of 8 - 20% (anything above 20% is typically bad news.) 2) The Market Cap should be >= $1 billion - no small caps. 3) ROE >= 10% 4) The Fundamental Grade should be >= C 5) Institutional ownership >= 30% 6) Recommendation > = Hold from analysts 7) EPS Growth next year > = 1 The reasoning behind these metrics: first we want a stock that is going to result in decent pay thus a yield of 8 -20%. To find out how much income will find its way into your pocket each month, simply multiply the amount of your investment principal by the yield of the stock and divide by 12. For example, if you find a 12% yielding stock and you wish to invest $10,000, .12 x $10,000 equals $1,200. This result divided by 12, results in a monthly income of $100. ($10,000 * .12) / 12 = $100 F stands for Fundamental Analysis and Fuqua In the beginning there was Benjamin Graham and he begat Warren Buffett and he sort of begat Peter Lynch and he begat the Motley Fool's Dave and Tom Gardener. And God looked around and said that it was good and then he said "a PEG ratio of less than one is a good indicator that a stock is on sale." A great book that breaks down how one of the masters (remember that whole begetting stuff) mastered Wall Street, is Peter Lynch's One up on Wall Street." This book details what Peter Lynch looks for in a stock when he is performing a detailed fundamental analysis on the stock. Peter Lynch's success in the 80s and 90s came from his fundamental investment strategies he used while at the helm of Fidelity Magellan fund in. One of Lynch's biggest stipulations as detailed in his book is to invest in a company or product that you are familiar, something you know. He goes into detail about visiting retail stores if the business is myhappyassets.com retail and talking to company top execs if possible. Lynch professes that being familiar with the brand is an important part of the equation - it would be like going to a franchise restaurant that is getting ready to take off and noticing that business is booming, something is going on here. He also goes into detail regarding what to look for in the company's financials and key ratios. For our purposes, here is the breakdown of his more salient and screen-able points:

The Dividend Screen Sifting for Winners

Measure Formula What to Look For Dividend Yield Dividend per share divided by stock price Yield at least equal to that of the S&P 500 and not out of line with that of the S&P industry yield. Price to Earnings Ratio Stock Price Divided by per-share earnings P/E that is not excessive compared with company's historical P/E and with S&P industry P/E Cash Flow Per Share Net income plus depreciation and amortization divided by number of shares outstanding Should be at least three times dividend payment Quick Ratio Current assets minus inventory divided by current liabilities Should be at least 1.0 Payout Ratio Per-share dividends divided by per-share earnings Should be higher than 50% but not exceed 100% Dividend Coverage Ratio Cash flow per share divided by dividends per share Minimum should be 120% Short-Term Debt Coverage Ratio Operating income divided by short-term debt Should be at least 2.0

Create Financial Freedom, Residual Income and Cash Flow Without the Tena...

A Variety of Assets is Better than Death by Tenants

For ETFs and REITs I would recommend Stein and Demuth's Yes You Can Be a Successful Income Investor and Siegel's Stocks for the Long Run. Of course I would also have to promote my own book listed below which has a number of sections that covers dividend payers including ETFs, REITs and Royalty Trusts -www.myhappyassets.com

Good luck and yes, passive income can come from varying sources including stocks. Each asset class has its own pros and cons. In real estate you have leverage, control, depreciation, amortization but honestly, unless you have property management you also get tenant headaches and property management can greatly reduce cash flow.

With stocks, the management is built in, you get cash flow but it is at a higher tax rate (floor of 15%) and you do lose control over the investment. (if you own Coke stock for example, how are you going to increase sales? Go buy a boat-load of Coke from your local Super-Mart?) Still, stock is passive from the start and if you match what Warren Buffett does, you buy good businesses with consumer monopolies.

The net-net is that financial freedom can come about via a plethora of asset classes. I am a proponent having a portfolio comprised of varying, diversified asset classes - real estate, stocks, covered call stocks, business and web income which is covered in the book below as well ...

myhappyassets.com

Turning Your Business Into a Template

Along with your mission statement, vision and goals, an org chart will help solidify the core structure to your business, forming interchangeable parts and accountability standards.

The prescribed steps:

1. Write out all the tasks that must be completed in your business.
2. Write out new tasks that should be completed.
3. Assign a key attribute to each one (example: administrative).
4. Based on the attribute, group into roles.
5. Assign roles to individuals – task them with documenting the steps to complete the job.
6. Review the steps for each job, look for efficiencies and change as needed.
7. Compile Roles, Tasks and steps in Separate Role Manuals.
8. Establish position contracts with each person in your business, (Guidelines, Resources, Desired Results, Accountability, Consequences)
9. Review Desired Results and Accountability in weekly/bi-weekly team meetings.

Examples:

Tasks	Key Attribute
Filing	Admin
Answer Phone	Admin
Run Errands	Admin
Maintain Social Media Tools	Marketing
Make Cold Calls	Marketing

Roles	Assignments
Admin	John
Marketing	John

Task Details	Efficient Steps
Answer Phone	1. Provide coverage during business hours – forward to phone 2 on breaks
	2. Answer with greeting “xyz … have you heard about our special?”
	3. If Info Request, redirect to website. If person needs consulting, schedule in using shared calendar.

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Position Contract Example

John

Guidelines - Follow company rules and guidelines. .. The guidelines also include consistency - we want a professional, consistent delivery to our services. Remember part of system building is delivering consistently time and time again.

Resources - include the boss when available along with other staff members as well as technology and research resources.

Desired Results – (these would be specific to the role)

Role – Admin

1.) Part of our customer surveying will include a question regarding phone response and service. We are shooting for an average 8/10 positive rating on this response.

2.) We must maintain organized files – we will audit once every quarter for organization.

3.) We will also gauge the “streamlined” element of our services … thus we will also ask the customer if they had a streamlined, hassle-free experience. Again, we are looking for a metric of 8/10 positive response rate.

Role – Marketing

1.) We are seeking to maximize our social media marketing tools – shooting for 100 leads a month with a 5% conversion rate to sells.

2.) We want to make a consistent branding effort – thus we are seeking a consistent, quality posting on each of our social media tools at least once a week.

Accountability - you grade yourself. At our meetings tell me how you are doing to these desired results, show me the work, etc. Benchmark your results - answer the questions/have the clients answer: Was our financial/accounting work quality/professional, Do you feel our services are consistent and quality and then look at the metrics and records – do they match with expectations – are we beating goals, are the books in good shape.

Consequences – Positive consequences – raises, promotions, time off, team events. Negative consequences – demotions, pay decrease, etc.

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So part 1 is the building of the org chart with tasks stepped out efficiently, grouped into roles and then assigned out, part 2 is to implement the accountability and desired results through a position contract and weekly meetings, part 3 is ensuring the role is interchangeable and that you can hire out for it.

You want to create “role manuals” and include the Roles, asscociated Tasks and how to complete them efficiently. You can include the position contract but really, the only dynamic part is the roles section and this will change as individuals change so I say, keep it on a role level.

You should also include your mission statement. So when someone comes into your organization, you show them the mission statement, and then you provide them the roles manuals for each role they will be handling and ultimately, you provide them with a position contract which encapsulates all of the roles.

myhappyassets.com

If You Climb the Corporate Ladder You are at the Mercy of the Tax Man

Org Chart 101

The Old Org Chart

Most small businesses don't bother with developing an organization chart. If you truly wish to build a business that can one day provide passive income, one in which you are an interchangeable cog who can one day leave without the building blowing up, then you must take the time to develop an Org Chart.

Start by identifying all of the tasks that must be completed in the business and then detail out the steps to complete the task efficiently ... not just how to do it. Next, group these tasks into roles and then assign out the roles to individuals. Implement the accountability through weekly or bi-weekly team meetings ...

For more information on building a successful business system and generating passive income go to myhappyassets.com.