Your Business Makes You Rich, Not Your Investments - Part 2 - Caleb Jones

I receive a lot of questions regarding investing topics, i.e. stocks, ETFs, bitcoin, commodities, silver, gold, REITs, and real estate. And that’s okay because these things are important.  

The problem is that I often get pelted with questions about these investing topics from men who either don’t own their business, or who have just started a business and aren’t really making money from it yet, or from men who barely have any money to invest; often well less than $50,000. 

I talked about this problem here but this issue is so damn prevalent that I need to expand upon this.

I see a lot of men spending a lot of time reading books about investing, thinking about investing, reading websites about investing, and talking to other men about investing, when these men have hardly any money to invest and/or make well less than the Alpha Male 2.0 minimum income of $75,000 per year. 

Investing is very important. It’s a critical topic to all Alpha Male 2.0s. It’s even more critical a topic now than it ever has been, since we men of today don’t have the benefit of our grandfathers of yesteryear who never had to worry about retirement because of rock-solid corporate pensions and similar vehicles we don’t have access to today in the Collapsing West. Today, our corporatist society throws a bankrupt social security system or a rigged 401k in our faces and expects that to work when you need it in your old age (which they won’t in most cases).

So yes, investing and financial literacy is extremely important to all of us and I will continue to speak about these topics from time to time. 

BUT… and this is a big, fat BUT… the topic of investing has a proper time and place. It becomes important only at a certain point in your Alpha Male 2.0 evolution. If you focus on investing in the incorrect order, you’re just hurting yourself.  

The fact is that most of you reading these words are not there yet. You’re not at a place where you should be spending any time worrying about this topic to any great degree. 

Here’s why: 

Your business (or businesses) will make you money, not your investments. 

It’s your Alpha 2.0 businesses that will make you hit your financial and lifestyle goals. It’s your business that will provide all the cash you need to be happy. Your business creates all the income you want (provided you put in the work and do the right things) that funds your lifestyle and investments, not the other way around. 

Your investments will never do any of this. Unless you are a very, very rare statistical exception to the rule, your investments will never make you a decent amount of money you can actually go spend in your life. That isn’t even their role. The role of your investments is to preserve your wealth, not create wealth. Your investments are there to maintain the wealth you create from your businesses and hopefully grow at a nice rate of return that is well above inflation.  

Your investments are not there to make you some kind of killing or windfall so you can make a bazillion dollars. That’s what your businesses are for. This means that unless you already have a decently high net worth and a decently high income, you need to focus your time, effort, money, and learning into your business, not investing. Instead of reading a book about how to invest like Warren Buffet, you should be reading a book about how to make a badass business resembling Conrad Hilton’s 

Business should be your focus, not investing. You’ll make far more money over your working lifetime if you focus on business first instead of investing. Only when you’re making (and have!) a decent amount of money should you start shifting some of your focus to investing. 

I started from nothing and made a six-figure income in 1990s dollars while in my twenties, not by learning about investing, but by focusing on business. Yes, I invested in real estate during the 1990s as well and I made money doing that too, but the amount of money I made in my real estate paled in comparison to what I made in my businesses. My day-to-day energies were spent improving my businesses, not my investments. 

I only started really focusing on investing in the last five years or so, once my income and net worth were at levels high enough to start worrying about this kind of thing. But I was well into my forties before I made that shift. 

And even then, it’s still not a very strong shift. For every hour I spend learning or working in my investment life, I spend perhaps 40-60 hours working, learning, or improving my businesses. 

As a matter of fact, I made the decision a a while back to re-invest a decent percentage of my net worth back into my companies rather than investments (I will make some very big announcements about this early next year). Why? Because I can make orders of magnitude more money in my businesses than I ever could in my investments (and much faster too), and you’re looking at a guy who as literally never lost money in his annual investment portfolio in his life and made an over 100% return on his investment portfolio back in 2017. Doesn’t matter; that’s just a fart in the wind compared to the income I’ve made and income growth I’ve experienced in my businesses over the last few years. There is literally no comparison.

If you’re an older guy with a strong six or seven figure net worth and you make a good amount of money from your profitable, location-independent Alpha 2.0 businesses, then yes, it’s time to really start spending serious effort learning investing and managing your investments. But if you’re not in that category yet, forget bitcoin or the stock market or Warren Buffet or Ray Dalio and get to work on your Alpha 2.0 business 

That’s where you need to put your time.

11 Comments on “Your Business Makes You Rich, Not Your Investments – Part 2

  1. How about things like day trading or house flipping, those are borderline between investment and business. Do you see those as legit Alpha 2.0 options for guys starting out?

  2. How about things like day trading

    Yes.

    or house flipping

    Generally no. House flipping isn’t usually location independent.

    those are borderline between investment and business

    No, those are both businesses. Day trading is Alpha Male 2.0 compatible. House flipping usually isn’t.

  3. Problem here is time. The earlier you start to invest the more money will you make with your investments. If you start late you have to make way more money to make the time up that you lost. And time trumps money.

    You will have 1 million in the bank by 67 if your parents do make a one time  ETF stock investment of 15k when you are 5 years old and you keep reinvesting it all the years. When you start with 45 you have to do a 250k one time investment to achive the same goal. At age 55 it’s 500k.

    So your afford has to double every 10 years.

  4. Problem here is time. The earlier you start to invest the more money will you make with your investments. If you start late you have to make way more money to make the time up that you lost. And time trumps money.

    I was enthralled by these words five years earlier, while my brain did not form full analytical apparate yet. They do sound good, but the last bit misses one important word: Money and time trump money.

    You will have 1 million in the bank by 67 if your parents do make a one time  ETF stock investment of 15k when you are 5 years old and you keep reinvesting it all the years. When you start with 45 you have to do a 250k one time investment to achive the same goal. At age 55 it’s 500k.

    So your afford has to double every 10 years.

    Here, several assumptions are made, that sound great, but fail to deliver:

    Parents make an investment for you. HA! Dunno how you have it in America, but in other parts of the world – good luck with that. (So, let’s roll on to 20…college, no, 25!)
    “45…55, double in 10 years”. HEH. Investment returns are best viewed on S&P 500. Average 10%, should be doubling in ten years, right? Assuming current as 3200. 1600 was in 2012 (7 years, wow!)… 2006 (well, not so good now)… 1998 (fuck, took 21 years to double!). Okay, next, 800 was in 1993 (5 years, woah!)… and, almost, in 1968 (30 years, welp) => You can’t invest in high return but very volatile stocks, so you’ll have to go for the averaged portfolio. Let’s assume a 6% return => +80% in 10 years. Now, add in inflation! 2% => -18% on full portfolio in same 10 years. The final count is… ~+50% per 10 years.
    “Afford has to double”. Now, at last, BD’s argument comes into play. You are 25, working on a shit entry-level job. Can you double your income in 10 years? Easy. Triple? Hm… More? So, if you use 15K sensibly at 25 to enhance your life for 10 years, at 35 you’ll have zero problems investing not 30K but much, much more. There is a saturation point, but BD is generally right +++ BD actually talks not about the job, but about business, where you can have 10x return of time and money invested or more. In 5 years or less.

    TL;DR: Money & Time beat the living shit out of Money alone. To get to big money ASAP and multiply it before investing is what BD post is about and what makes sense to do in our volatile world.

  5. You will have 1 million in the bank by 67 if your parents do make a one time ETF stock investment of 15k when you are 5 years old and you keep reinvesting it all the years. When you start with 45 you have to do a 250k one time investment to achieve the same goal. At age 55 it’s 500k.

    You’re just quoting standard Societal Programming from investment websites and traditional financial planners focusing purely on the math and not factoring in any real-world human behavior. Others have done so on my blogs in the past. Real-world human beings do not behave in these ways over a period of 50 years straight (with very, very rare exception). Alexander already gave you some of these specifics.

    I’m also not saying younger women should save zero money. Of course they should.

  6. I agree with BD and this is a wake up call, as usual.

    Investing and saving is important, yes. It’s the ultimate passive income.

    That said, a guy making $120k a year has a much better go of it than a guy making $40k a year. If you keep lifestyle inflation in check, you can “save” and invest a lot more, a lot earlier.

    In some ways, making money is a lot like picking up women.

    80-90% of the population thinks you just sit there and take what scraps you can get. You are what you are, this is the way things work, everything is a struggle. I wish I were born into a rich family or were taller/ handsomer.

    Then there’s the 10-20% who realize a lot of it is just the hustle and tenacity and realizing there really are no rules or limits on upward mobility. And that you constantly need to be challenging your own limiting beliefs and assumptions and “do something crazy.”

  7. I was reading the Millonaire Mind yesterday and also saw this article. The coincidence made me think about what is “investing in your business”… I realized I grave too much importance to financial investments I couldnt afford and toó little to muy own business and career.

    So:

    -Advertisemnt (this is the easiest one)

    -Hiring an agent

    -Zero DIY stuff. From cleaning to repairing etc

    -work with the best equipment. And also having one or two spare kits of equipment just to instantly replace the one at use.

    -A 15% off in the price of anything related to your business is worth a year of a great financial investment

    – Education and skill improvement

    -Insurance. Best insurance possible

  8. Yeah i post in the financial independence reddit sub and everybody talks shit about investing in businesses.  They’re just drunk on their stock market ‘wins’ that earned them an extra few hundred bucks a year these past few years.

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