When it comes to investing, most of us are sold on the eternal quest to “beat the market.” We’ve been conditioned to think that the route to monumental wealth lies outside our primary domain of expertise. We scour, strategize, and sometimes even gamble, in hopes of finding that magic bullet investment.
But what if I told you that the surest path to riches might be right under your nose?
For most entrepreneurs, the ultimate wealth creator isn’t an exotic stock pick or a hot startup; it’s their primary business. It’s that venture you’ve bled for, nurtured, and know inside out.
Let’s rewind a bit. Between 2014-2017, I extracted $2 million from my energy investment firm (where I was an expert) and gallantly dove into the startup investing world. While the allure of discovering the next unicorn was irresistible, and yes, I made some commendable picks (outperforming many of my startup investor peers, I might add), that choice had an underlying cost. That $2 million? Had I simply kept reinvesting in my primary business, it would have compounded to a staggering $10 million at the time of our exit.
Take my money, indeed.
Now, the mathematics of this isn’t just about the raw numbers. It’s about the time, energy, and focus diverted from a proven money-maker to tread unknown waters. If I’d truly craved the thrill of venture capital, a smarter move would’ve been investing in an established VC fund—gaining exposure without diluting my focus or squandering valuable hours on due diligence and learning structural intricacies.
Consider this: every dollar reinvested into your primary business isn’t just another dollar—it’s a dollar placed in a domain you dominate. Whether it’s hiring a top-tier talent that amplifies growth, ramping up your marketing budget for expanded reach, or innovating on your offerings, these calculated reinvestments can offer returns that Wall Street can only dream of.
The best way to amplify your wealth is by doing more of what already works, and doing it better. Double down on your strengths. Continuously reinvest in your mainstay, and when you do pull money out, ensure it’s strategic—either to hedge risk or generate a substantial Return on Lifestyle (ROL) – ideally, accomplishing both.
I’m not saying you shouldn’t pull money out of your business, in fact, quite the opposite. I love the concepts outlined in Profit First. I believe most business owners actually do a poor job of paying themselves.
What I am saying is that when you pay yourself, those dollars should have one job – to protect you from potential headwinds in the future. I recommend having at least 12 months of living expenses (at your current level of lifestyle) and 6 months of business operating expenses in some sort of liquid assets. If you can’t access it in 24 hours, then it doesn’t count.
Most entrepreneurs that I know are woefully illiquid. Their primary business makes up most of their net worth and anything that they take out burns a hole in their pocket and they deploy it into real estate or, even worse, other businesses that they don’t control.
In the arena of wealth creation, distraction is your arch-nemesis. Those fleeting shiny objects? More often than not, they scatter your energies, diluting what could be laser-focused growth.
The secret?
Ruthlessly eliminate distractions.
Dive deeper into your proven well of wealth, refine your strategies, and watch your empire grow.
The path to unbreakable wealth isn’t about broadening horizons but about digging deeper where you’ve already struck gold.
Betting on the Home Team,
Mb
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