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There’s a common mistake founders make; thinking that their wealth is built all at once. This is the dream. The exit. The selling the company for millions, tens, hundreds of millions of dollars. Entrepreneurs dream of a single moment where everything changes for them financially.
The truth is this is only what happens for a very small subset of entrepreneurs. More likely, it’s a series of events. Because I built / bootstrapped an independent brand, I took a different mindset than most. The idea I always share with founders is, “Always be exiting.”
If you are relying on just one moment, in the future, to change everything, you might be waiting for a long time. The mentality of “always be exiting” is the mentality building your wealth over time in many wins, not just one. While most people think wealth building is about absolute dollar amounts paid out in large sums, the truth is compounding and being in the practice of wealth building is much more sustainable and much more likely to create success for you.
And the good news is you don’t have to be a founder to practice this. Everyone can have a wealth building strategy. Because wealth is built through leverage and compounding, anyone can take dollars they make today, and funnel them into strategies that give them leverage or compound their dollars.
You don’t even have to be an entrepreneur. All you need to do is ask yourself how you might take dollars that come in through your day to day work, and ask how you might funnel those into higher leverage, higher growth opportunities?
But most people don’t have a wealth building strategy. Most people have no personal business model. And because of that they have no clear idea for how to build wealth. Say for example you work at a design studio, or you work for a big real estate firm. By day, you can work to be paid for your salary. At night, you start or create a second opportunity for yourself, which is funded by your day job. This could be a new business, real estate, investments, or even investing in learning a new skillset. The trick is to make money one way, and build wealth another way.
Here was one of my past wealth building strategies: I told myself that every year, I will invest more in my personal development than the year before.
This was a way of compounding my learning, and investing in my learning. I just had to funnel more dollars into bigger and better programs that would teach me skills. The leverage was being built through my knowledge.
Here’s another wealth building strategy: I got really interested in the democratization of Finance and went through a process of testing and learning about alternative investments and alternative investment platforms. I got in the habit of trying out new finance apps; Acorns, Rally Road, Uniswap, etc.
This gave me a view of the landscape of investing and how it’s been changing. I put int time and money to play with these platforms.
The point is less about what you do, there are so many ways to build wealth, and more about having a plan, and having a strategy. Everyone has their own version of how they build wealth.
There’s a good program on this topic called Wealth Dynamics. Warren Buffet made his money slow, compounding over decades. Stan Druckenmiller puts a trade on for one week and makes $1B. Both made money, one through trading, one through investing. Oprah made money by promoting other people’s products. And then there’s the inventor who creates a product for themselves. Each of these styles can work, it’s just about what’s natural to you and what you’re uniquely interested in.
So that’s what’s important. It’s not about absolute dollars. It’s about direction, and having some type of strategy that you are creating. If you wait until you’re in a new circumstance to start, or you think it will happen someday in the future, but it’s vague when and how that will actually happen, you’re sort of vaguely hoping for something that you’re not really in the practice of creating for yourself. Sometimes entrepreneurs hit it big and then don’t know how to keep it. Or, they hit it big, but at the end of it, not that much wealth was actually generated for them, factoring in their loss of income, taxes, and payments to investors.
You can get in the practice today so that you avoid that problem and get into a weekly practice. You can be in the flow of seeing or creating opportunities. That’s more important than the big exit. Direction and process are more important than hitting it big.
What’s your wealth strategy? How do you practice it every week?
xx David
P.S. I’ll tell you one more quick one: I round up all of my purchases to the closest dollar, and invest the spare change. I do that by using Acorns app (my link). Every purchase I might, has a fraction of a dollar invested now. That’s just one simple strategy and I never have to think about it again.
I help Founder’s go from day-to-day operator to wealth-building owner through scaling your company beyond you.. If you’ve built a $1M | 8.37 BTC+/year business and want to get in touch about pathways forward, reach out.
Biggest takeaway: opportunities to build all kinds of wealth are everywhere–it's about shifting your lens to see them. Action will likely flow naturally from there!