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Wealth Roadmap in 2 phases.
Phase 1:
a. Start a straight-forward, less risky, cash flow business (consulting, services, agency)
b. Reinvest profits into cash flowing assets (real estate, dividend stocks, bonds)
Once passive income covers living expenses, go to Phase 2.
Phase 1:
a. Start a straight-forward, less risky, cash flow business (consulting, services, agency)
b. Reinvest profits into cash flowing assets (real estate, dividend stocks, bonds)
Once passive income covers living expenses, go to Phase 2.
Phase 2:
c. Switch your business model to something riskier that can scale (SaaS, tech, eComm, apps)
d. Switch to reinvesting profits into more moonshot/growth assets (startups, tech stocks)
c. Switch your business model to something riskier that can scale (SaaS, tech, eComm, apps)
d. Switch to reinvesting profits into more moonshot/growth assets (startups, tech stocks)
The problem is, many founders go straight to Phase 2.
The variance of outcomes for Phase 2 is high. You might be stuck there for years (or forever), without building any real wealth.
The variance of outcomes for Phase 2 is high. You might be stuck there for years (or forever), without building any real wealth.
Also, Phase 2 requires long-term thinking & high pain tolerance. Very hard when your bills aren’t being paid.
Your long decision-making becomes adversely effected when you need cash to pay living expenses in the short term.
Your long decision-making becomes adversely effected when you need cash to pay living expenses in the short term.
You can get to Phase 2 faster by living well below your means.
Track your expenses, understand exactly what level of passive income you need to sustain.
Track your expenses, understand exactly what level of passive income you need to sustain.
You can substitute Phase 1a with a high paying job, but that means more taxes, less control, less upside, less freedom.
You can’t tell your boss you want to 3x your income in 12 months and outsource your work to someone else.
But you can do that with a consulting business.
You can’t tell your boss you want to 3x your income in 12 months and outsource your work to someone else.
But you can do that with a consulting business.
You can also skip Phase 1 entirely if you’re born into wealth...
(cheat code for life I guess)
(cheat code for life I guess)
I spent ~5 years in Phase 1, running a PPC agency. It was a grind, but great cash flow. Reinvested into real estate, bonds, private debt and div stocks.
This allowed me to switch to Phase 2, (running eComm biz, investing in startups) which is where I’m focused today.
This allowed me to switch to Phase 2, (running eComm biz, investing in startups) which is where I’m focused today.
You can also convert your business from Phase 1a into a cash flowing asset. You’ll need to hire a GM/CEO, delegate everything and alleviate all your time from the business.
I wasn’t able to do this, but @awilkinson successfully did this with his agency.
I wasn’t able to do this, but @awilkinson successfully did this with his agency.
Few DMs asking me for examples of Phase 1a businesses.
It's any business where you're selling your (or your employees') time for money. eg:
Professional - law firm, bookkeeping, dental practice
Online - digital agency, web dev/design agency
Blue-collar - HVAC, landscaping
It's any business where you're selling your (or your employees') time for money. eg:
Professional - law firm, bookkeeping, dental practice
Online - digital agency, web dev/design agency
Blue-collar - HVAC, landscaping
Why service business make great Phase 1 businesses: https://twitter.com/jayvasdigital/status/1291721228051451906
