Hi everybody this is Phil Town this is Phil Town this is Danielle Town and we're

here for the podcast Invested Invested

also known as the Invested Podcast.

Invested, colon, the Rule 1 podcast.

Indeed.

And we are going to talk today about valuation, how you figure out, how to figure out what a business is worth and we started

last time into the idea that you can buy a little house to rent out and it's a business and you value it based on how much cash flow you're getting out

How much a big check you're gonna have at the end of the year for yourself.

And then you're going to basically assume that that check is going to represent 10% of the price

you paid for the thing.

Well, wait, you assume that it's, isn't that just how you... That's how you're going to buy it.

That's how you decide how much you would buy it for. Right. Of course you're going to try to get it cheaper than that. In which case you return, if you pay less,

remember that $5,000 thing we were talking about?

Yeah, so the $5,000 thing is,

we've been talking about the lemonade stand for a while. We're on the

valuation train. Right. We are on it. The lemonade stand is being compared to

owning real estate and renting it out. Right.

And we have switched now the lemonade stand.

Got bigger.

You got a lot bigger.

With multiple lemonade stands.

It used to be giving us $5 of profit and five dollars of owner cash flow

...