Paul Alex, a former police officer, started a side business operating ATMs.
The Start of Investing in ATMs
Paul Alex, as a police officer, decided that it would be better for him to invest in cash flow assets.
Initially, he purchased six ATMs and expanded to 30 machines with the profits he generated.
He stated that the minimum acceptable return for an ATM should be $200 per month per machine.
The Decision to Invest in ATMs
Paul Alex joined the police force as an intern with a plan to build a future in law enforcement in the San Francisco Bay Area.
Paul Alex started his career strong, eventually becoming a detective in the drug enforcement unit before being assigned to the special victims unit. By 2020, he managed to secure a salary of $133,000, with benefit packages elevating it to an annual income of over $272,000, according to California state records viewed by Insider.
While his career afforded him financial stability, his weekly working hours could range from 60 to 100 hours.
Alex decided that investing in cash flow assets would be a way to eliminate the fluctuations of his salary. He could then use his paycheck for discretionary purchases like vacations, cars, and additional investments.
Investing in ATMs
In 2017, Paul Alex discovered the idea of investing in ATMs through a colleague who was exploring the field. He began joining social media groups on the topic, watching YouTube videos from those who had done it, and reading any materials he could find.
The business model of operating ATMs was outside his comfort zone because he knew nothing about it. However, what attracted him was its low starting cost; an ATM could cost less than $3,000. It also carried lower risks because in case the desired return was not achieved, he could relocate the machine, which he refers to as a floating asset. Lastly, it was a quick way to start a side business because once the machine was placed at a location, it could begin generating profits almost immediately.
Paul Alex decided to pursue this business as a side hustle in 2018. By March 2021, he left the police force and made it his full-time job, providing ATMs for those who also want to venture into this business.
Exploring Locations
In 2018, Paul Alex took two weeks off work and used that time to explore the city to find ideal sites.
He searched for high-density areas that needed an ATM on-site. This included tourist areas and parts of the city that were crowded with nightclubs, restaurants, and parking lots to target areas where tips were often given to staff. He also looked for small businesses that offered cash in payment points, which is a hassle for businesses as they always have to ensure they have enough cash in the register.
Paul Alex presented the businesses as if he were providing a service. He was responsible for supplying and maintaining the machine at no cost to them. He recalled that he contacted over a hundred businesses and visited more than 20 locations in person.
He said, “When I started doing that and went out getting rejections and acceptances, it was very hard for me to come back to work and not think about my business. And I think that’s what drew me in, just the fact that I was growing something for myself and wanted to keep developing it.”
Funding
Business
Although Paul Alex had enough cash to buy the machines, he realized he would need the bills to supply the ATMs with cash. Therefore, he signed up for two personal credit cards and used them to purchase the machines, stating that they were cards that offered an interest-free grace period for the first 12 months. He noted that this would give him enough time to create cash flow without incurring monthly interest.
When he bought his first set of six machines, Paul Alex thought he got a good deal, which was $2100 per machine. He quickly realized it was a bad deal because he had to pay a 30% commission on the fees charged by the ATMs. Although the sales agent he worked with told him it was standard practice, he later realized it wasn’t the only way.
The next set of machines would be purchased from his mentor. They were new and refurbished and cost between $1800 and $2200 depending on the model.
Additional costs for the ATMs include a wireless internet modem for $150, monthly internet fees of $6.99, and installation costs by a technician of $300.
Business Financing
Paul Alex would gradually use his ATM profits to purchase more machines. By 2020, he had amassed 30 working ATMs in the San Francisco Bay Area. They were generating profits ranging from $250 to $1500 monthly.
All together, these small assets netted between $9000 and $12000 monthly, and he said that his side business did not replace his salary but he was able to fully cover his bills with the profits. This was enough to make him want to leave his job in 2021 to build a business in this sector.
Doubts and Challenges
Even while building his side business, Paul Alex had doubts swirling in his mind. Conversations around him made him question his ability to continue with it. Some of his colleagues considered it a bad idea to invest in an unknown business and told him he should work extra hours instead. In the end, he feels relieved that he continued working.
He said, “Invest in yourself. Self-education is everything,” reflecting on his journey. “It all started from a friend giving me an idea, then I did the necessary research, read books, watched videos, and read, read, read until I reached the point where I felt comfortable enough to execute it on my own.”
This story was published in June 2023.
Source: https://www.aol.com/ex-police-officer-made-12-151026152.html
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