5 Ways to Achieve Financial Freedom
This is not your typical business advice.
Everyone tells you to write a business plan, start an LLC, design a logo, throw it on some merch, talk about it on Instagram, and put your head down and grind because money doesn't grow on trees.
They're wrong, money does in fact grow on trees. There are five types of money trees, and today I'm going to show you how to plant seeds and start growing one of your own. In fact, to prove to you how much I believe in this strategy, I'm starting a brand new business in the same way.
I documented my very first real estate deals on this channel. I'm going to be documenting that business and all of the failures and all the successes starting with this post.
Today's post takes us from zero to five hundred dollars, and if you follow along with this series it might just take you from day one of your business to Financial Freedom.
If you're really about it, let's go! I recently read a book called “The Millionaire Fastlane,” and it got me thinking. I'm so fired up. So in addition to my real estate business, my education business that teaches people how to invest in real estate, and my YouTube channel, which is the business that documents those other businesses, I'm starting one more business.
I'm super excited about it, like I've had to stop myself from talking about it all day every day, but I think it could be big and I actually just had a call a little while ago with somebody who might be my actual first paying customer. but before I reveal the idea, let me back up a bit.
As I was reading this book, so many of the concepts in the millionaire fast lane really stuck out to me as outside of the box and just different from the typical way of teaching and thinking about business.
Not only are we going to talk about those five money trees, but we're also going to go over five questions that kind of got crafted in my mind as I was reading the book that I'm using as I build my business. You also can use them as you try to go from zero to creating a business that has the potential to Skyrocket you to Financial Freedom.
Question #1
Up first, we have to find an idea that will be successful for you. There are videos out there that list dozens and dozens of potential business ideas, and 99 of them could be successful. What I'm trying to say, is that every idea isn't a good fit for every person, and so you can't just think “Would that work? Yeah, maybe.”
Somebody out there in the world could figure it out, but does it work for your unique set of experiences, your skills, and your goals?
And if you have the wrong idea, you'll fail.
Question #2
After that, we've got to figure out if your idea is actually a money tree.
When I was a freshman in college it was move out day and as we were packing and carrying stuff to our parents’ cars, one of the guys who lived down the hall from me asked me, “Hey Lili, where's the laundry room?” on the last day of freshman year.
I don't know what that man's clothes and sheets smelled like, and I don't want to know. But over the summer, me and my best friend kind of took this funny exchange and formed a business idea.
We realized that college kids hate doing laundry, and so there's probably a huge demand for an on-campus laundry service. But there was a huge flaw in our plan, and if we had known what you're about to learn about, how to plant and grow a money tree, we probably would have made a killing.
But spoiler alert, we didn't.
Question #3
Third, there's a simple thing you have to do to figure out just how big your money tree can get. And we're doing this before you spend any real time or money building out the business.
We want to build this business fast, but we want to make sure that we're going down the right road. Because once we get going, it's going to be hard to turn around.
Question #4
After that, we'll lay out not just exactly what to do, but how to do it.
Again, it's not just about $500 or even $5,000. It's about building a business that might pay for your grandchildren's college tuition.
And fifth, and probably the Idea most important, is a question that most people never even think to ask, and we'll get to this one later, but let's start with the idea.
I recently went to Cancun on a staff retreat for a basketball program I'm a part of, and while I had such an amazing background, I decided to film some content.
So many people came up to me to ask me what I was doing, and once they found out I had a YouTube channel, they wanted to talk about it.
Some of them were the people that I was actually on the trip with, but some of them were just complete strangers who happened to also be at the resort.
Some people had channels that they were trying to grow.
Some people just thought it was a cool idea and something they might get into someday, and this was the moment when the idea for my new business started to get planted in my brain.
When you're thinking of your business idea, the word you have to hang on to is leverage.
I think of leverage as using something you already have or can easily get to create an advantage.
You might be a college student who's only taking a couple classes, and so you have a ton of extra time over other people who are trying to do the same thing as you.
Or maybe you grew up on a farm and you can leverage certain skills that the general population doesn't have.
No matter who you are, you have some type of competitive advantage that will set you apart: public speaking, makeup and hair skills, athletic ability, maybe you're funny, maybe you can teach, maybe you worked a particular job, maybe you have great parenting skills.
I was talking to someone the other day who lives in a huge apartment complex where people give away their old furniture for free all of the time. She can then pick it up, repurpose it, and then sell it for a profit.
Her advantage over other people doing it, the thing that she can leverage, is the fact that she got the initial piece of furniture for free. If you're having trouble coming up with an idea, think of things that you're already passionate about: video games, cooking, babysitting, whatever it is that lights a fire within you.
You can also think about which things do people in your life already come to you for. Are you the person in your family that everyone calls when they need a quick fixer-upper job done around the house because you're handy with tools and can figure complex problems out?
That's a sign of something that you've got that other people don't. Or maybe when your friends need to buy a new piece of tech, you're the person they call for a recommendation. The fact that people continuously kept coming to me about their YouTube strategy was where I was realizing I might have some leverage.
And if you're still struggling to decide, hold an idea in your head and think “Am I willing to wake up two hours early every weekday for the next six months to work on this idea?”
And if it's not an enthusiastic “Yes!”, if that's not exciting to you to get out of bed and turn your idea into something that actually exists in the world, you don't like it enough.
I've started so many businesses, and the vast majority of them failed. But the most exciting part is always taking the idea and bringing it into the world. And so, if that isn't exciting enough to you yet, I'm not saying it's a bad idea.
I'm just saying maybe it's not the thing that when the going gets tough, you're going to be willing to stick with.
This next part about money trees was my absolute favorite part of the book. I listened to a lot of books on Audible, and I kept rewinding this part so that it would literally get imprinted in my brain.
You've probably heard the phrase that money doesn't grow on trees, but the author of The Millionaire Fastlane, MJ DeMarco, completely disagrees.
He argues that there are five particular types of businesses that are “money trees,” meaning they make money in a way that is both passive and scalable.
Rental systems
The first type of money tree is a rental system and this is where you own something and you rent it out to people who want or need it.
Obviously, the most common and maybe the most lucrative type of rental system is real estate, and that's the one that I've been documenting. One thing I love about the rental money tree is that once you get it set up and you get systems and processes established, it gets a passivity grade.
This is basically the way of looking at a particular money tree and thinking about “How passive is the continuous making of money?”
Rental systems get a passivity grade of an A.
The problem is that the startup velocity grade, which is basically the idea of “How difficult is it to get that thing started in terms of knowledge, effort, and upfront investment?”
For rental systems, I would give that a C.
Now that's not to say it can't be done. You can see how I did it and see how other people do it as well.
If you already have something of value that you can rent out, maybe your car or an extra bedroom in your house, then a rental system can be great.
But if you don't, getting this money tree going probably requires you to do some work to have the thing to rent out in the first place.
Computer or software systems
The second type of money tree is a computer or a software system. If you can code or create software, I'm jealous of you because this is one of the most passive money trees out there.
Computers and software can run 24 hours a day, seven days a week, without you doing anything but maybe some regular maintenance.
The problem is the ability to create those things is a skill that takes a lot of time, and because it's such a lucrative business, it's highly competitive.
So the startup velocity grade for this one is going to be a D.
But if you have the skills to pull it off, and you have an idea that you're passionate about, this could be a great money tree for you to plant. But it's definitely not mine, so this is not where my new business is going. You're gonna have to wait for that one.
Content systems
A content system is our third type of money tree.
These are systems that create and or share different types of content and information, whether it's educational, or entertaining, or some mix of the two.
My YouTube channel is the main part of my content money tree, and even when I took a recent break from making new videos, my old videos were still producing passive income for me. And that's why the passivity of a content system gets a B plus.
You do need to be consistent in some way to keep it going, but you do have a backlog of almost like little rental properties that are continuously making you passive income.
And this might be controversial, but I'm actually going to give the startup velocity of making a content system an A plus.
That's not to say that you're going to post your first video and go viral and become a multi-millionaire, but each and every one of you watching this likely has something you can use to either start recording videos, writing articles, or making a podcast, and get your first piece of content out probably for free.
But I've already got my content money tree going, so this is not where my new business is going to be built.
Distribution systems
Fourth up, we have a distribution system, and this is a money tree that basically moves products to consumers. Think Amazon.
Once your distribution system is set up, it can be pretty passive and so we give it a grade of B, but to be honest I hate physical products and so I'm gonna give it a startup velocity of D.
It's just really hard to make money and deal with the logistics of moving items around the world, especially in this year of our lord 2022 when supply chains and everything else is messed up.
So as you can probably guess, not what my new business is going to be based on.
Human resource systems
That brings us to our fifth money tree, a human resource system.
I know it doesn't sound super exciting like you've all been waiting for, but don't leave yet. I promise it's good.
A human resource system depends on your ability to create systems and processes that mean the success of your business is not dependent on one single person, but is dependent on an entire group that keeps things moving.
And the cool thing about a human resource money tree is they're pretty much behind any other system that you can think of.
We talked about Amazon being a distribution system, but it's really built on top of a human resource system, from the people who built out the website itself, to the sellers and those who package the goods, those who deliver them, and the customer service and logistics support behind the scenes. That's why the distribution system runs.
And that's the type of tree that I'm looking to plant. My YouTube business is a content system but it's built on top of a human resource system, and I'm one of those human resources.
But I also have a team that helps me come up with ideas, and titles, and thumbnails, and strategy, and editing, and repurposing, and community management.
That's my human resource system, and I use it not just for my own YouTube business, but I can leverage it to help other people grow their YouTube businesses.
And I don't know about y'all, but I think it's pretty cool.
So, even if you're not 100% clear on how that all works yet, stick with me because we have a couple more questions that are going to help to piece this all together.
When I first realized that people were coming to me for a YouTube strategy and how passionate I am about helping them, and how it might actually fit into the human resource money tree, I knew that my first step wasn't to go out and write a 20-page business plan, or start an LLC, or open up a business bank account.
First step
The very first step is we have to figure out “Is this idea something someone will pay for?”
You must talk to someone who's in your target audience and figure out if what you're offering is something they're willing to pay for.
Here's the conversation I had with my guy Jamil from another YouTube video that we were recording, where I told him about this idea that was forming in my head.
Here's what he had to say:
Lili: “Does that sound like something that, just at face value, would be beneficial?”
Jamil: “100%. You tell me where to send the check. Go do it. I'm sad that it's not starting tomorrow.”
Yeah. Now that was great to hear, and it gave me a boost of energy to go ahead and take another step.
Second step
And that second step is not just asking someone whether or not they’d pay for this thing, but actually getting someone to agree to do it and give you the money.
Like I said, this idea has been formulating in my head and I talked to another one of my friends who's looking to start a YouTube channel.
And I gave him a pitch and a contract for a three-month, $500 per month deal to help leverage all of my systems and services for building a YouTube channel, and here's what happened:
Lili: “Basically, what we went over earlier would be like the first steps of what we need to do. So it's that $500 up front, and then $500 a month for the 12 video package. And basically, once you sign the contract and pay that first invoice, then we'll get started on the first set of videos and the first tasks and we'll be on our way.”
Friend: “Let's go, I'm in. I'm ready to go.”
Lili: “Yeah? you want to do it? All right.”
Third step
So now that I have a paying client, and once you get your first paying client, the question you must keep on your mind is “How do I build this business using smart work and not just hard work?”
And so much of this is going to come down to two things: leverage and documentation. This is not something I was very good at when I built my real estate business or my YouTube business, so I'm trying to learn from that and I hope you can learn from my mistakes.
So remember, when I say leverage, it means to utilize the things you already have or can easily get to gain an advantage.
So with this new client, it's not like I'm going to be editing his YouTube videos.
I already have an editor, and she's not working full-time editing just my videos, so she has extra capacity.
And we already have a system for producing video ideas, getting them edited, and getting them formatted and correctly posted to YouTube. So I'm leveraging that system as well as leveraging her excess capacity, so that whenever I get a client, she also gets a client.
Rather than me just getting a new job as a video editor, I find the clients, and I work on their YouTube strategy, which is the thing that I'm passionate about.
And she works on the editing, which is the thing that she's passionate about. I'm leveraging my existing systems and my existing people to provide the service to my new clients.
And the second, and I think it's going to be the biggest hurdle for myself, is the documentation.
I don't want to do the YouTube strategy forever. I'm super passionate about it right now, but again I want to build a business that will potentially pay for my grandchildren's college tuition.
And so that means that as I go through and figure out my own secret sauce for building YouTube channels, I'll be documenting that process so that anyone I hire in the future can replicate those results.
A true human resource system is not dependent on just one person, it's dependent on strategies and systems that anyone can step into and find success.
Remember that college laundry service I told you that me and my best friend were thinking about starting?
Well, we had one fatal flaw, and that's we were going to wash the laundry ourselves. I know, I know, so stupid. And one load of stinky laundry completely killed that business.
We were planning on working hard and not working smart. We were not leveraging different opportunities for someone else to wash the laundry.
Instead, we were just putting our heads down and grinding rather than planting and watering a money tree, and that's why this fifth question is the most important.
Question #5
Do you MSH, make stuff happen?
I talked about getting up two hours earlier to work on your business, and again that doesn't mean to start an LLC, or write out a business plan.
Can you find the number one money making activity in your business to get you to your first five hundred dollars? For me, it was finding that first client who would hire me and pay me to work on their YouTube strategy and services.
If you're starting a lawn mowing business, maybe you get a client that pays you fifty dollars per lawn mowed, and you hire a high school kid who will mow them for forty dollars and keep the difference.
Well, now you know you've got to get x amount of lawns in order to reach that $500 threshold. That's your number one activity. Find out what that activity is, ask yourself and answer honestly, “How willing are you to go out and get it?”
If you like the idea of starting a YouTube channel and turning it into a content creation money tree, you can join this waitlist for my free training on how I built this YouTube business and how you can replicate it for yourself.
And once you do that, check out this full conversation with Jamil, which is the first episode on my brand new podcast channel.
Obviously, that conversation opened up my mind in so many ways, and I would love it if you would help us become one of the fastest growing channels to get to 1,000 subs by heading over there now.
As always, thanks for reading.
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