The Only Real Path to Wealth: Ownership and Reinvestment
It's more simple than think
Lately, I’ve been writing a lot about agency work. The Launchpad is taking off, and I’ve been excited to promote it and talk about the benefits of building a boring, profitable agency.
That said, I haven’t lost sight of the main purpose behind my work, which is to build my portfolio.
Today, I want to talk about finance and investing as a reminder that investing and ownership are the only true paths to building real wealth.
LFG. 🔥
Every Company Eventually Becomes a Finance Company
If a company becomes successful, it will eventually face a critical question:
“What do we do with our money?”
Most people spend their money. They live paycheck to paycheck because as their income increases, their spending increases. This is more common than you might think. High earners often carry the most debt, largely because of the higher costs associated with owning a larger home, more cars, or a more expensive lifestyle.
Smart businesses, on the other hand, put their money to work. Over a long enough timeline, every profitable company must transition into a finance company. This usually involves:
Investing in expansion and infrastructure
Investing in other companies
Investing in equities and public markets
Creating an endowment
The reality is that unless you adopt this kind of financial thinking, you’ll probably hit an income ceiling.
This Is True for Individuals as Well
If wealth creation is a goal, one of the first things you need to do is change your mindset around income.
Even the language you use matters. Think of your paycheck as revenue, not just income. This mindset shift helps you treat yourself like a business.
I’m not trying to sound like one of those entrepreneur bros who makes people feel like they’re losers if they have a day job. In reality, working for a company can be one of the most reliable paths to wealth. The X factor is treating your paycheck as capital and putting it to work.
The simplest way to do this is by consistently investing in the stock market. Dollar-cost averaging is a straightforward, stress-free way to let your money grow over time.
If your job offers a 401K matching program, you should max it out. This alone can virtually guarantee you become a millionaire over the course of your career.
With That Said, the Best Thing You Can Do Is Start a Company and Reinvest the Profits
This is why I’m a huge advocate of starting service-based businesses. You could start a:
Cleaning business
Google ads agency
Lawn care business
Any local service business
The difference between a paycheck and a business is leverage. If you build a business and are patient, you can put yourself in a position to hire a team, allowing you to make more without working more.
Of course, this is one of the main challenges of entrepreneurship, but it’s a skill set anyone can learn. If you increase your profits, you increase the amount you can invest, creating a powerful feedback loop.
Let’s consider a simple scenario:
Two people each make $100,000 a year. The business owner reinvests profits and earns a 15% annual return, while the employee relies on a 5% annual raise. Over a 30-year period, the business owner’s wealth skyrockets while the employee’s remains relatively flat.
Understand, this isn’t some make believe scenario that I am using to over emphasize a point. This is legitimately what happens. People don’t appreciate the power of compounding.
It’s the compounding nature of finance that allows such a huge gap in wealth between people that put their capital to work and people that keep their money saved.
I Am Once Again Asking You To Start Building Your Google Business Agency
I’ve yet to come across a method that is more straight forward and easy to execute on than doing online marketing and SEO for local service businesses.
I realize I am selling my book, but I know this works from my own experience. It was my ability to generate monthly recurring cash through an agency, and then reinvest that cash into private businesses, stocks, crypto, and real estate that put me in a position of financial security.
This is what I want for you. If you’re willing to bet on yourself, I can get you started.
Love you guys. Talk to you Monday.
Tim
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