You’re an entrepreneur. And no matter how great your business is, it’s a higher-risk investment.
Maybe you outperform the stock market year over year. Maybe you’ve seen constant growth through wartime and peacetime. But if you want to build your platform, you still have to balance your portfolio.
Think of your primary business as a cornerstone in your wealth platform. It generates revenue (and it probably makes you feel great, too).
In the Tinker Phase, your goal is to grow your platform. That means adding more blocks.
Other Tinkers have added:
- A second or third location.
- Stocks or index funds.
- A different business.
- Overfunded life insurance.
- Crypto and more.
To launch a long-term legacy, you need to start with a platform of wealth.
Here’s my platform, as an example. This won’t work for everyone:
- Two-Brain Business.
- Index funds.
- Commercial buildings.
- Other companies.
While most of your time and energy is probably spent growing your bricks-and-mortar business, it’s a good idea to have some more conservative “hedge” investments. As my CFO told me, “Your business is your higher-risk investment. Balance your portfolio!”
Here are some ways to do it:
1. Kick off a “hedge” revenue stream, like online coaching. Make your primary skill set more antifragile to risk.
2. Set up one cash-flow asset. I gave a bunch of examples in “Founder, Farmer, Tinker, Thief.” My cash-flow asset: my buildings. They pay me rent for as long as I own them.
3. Set up one compounding asset. I choose index funds (but I also have a mix of retirement plans and educational savings plans for my kids).
4. Set up a strategy to defer taxes as much as possible. Invest through your business when you can instead of investing money that’s already been cut by taxes. Talk to your accountant or CFO. If you can invest 20 percent more because you buy with pre-tax income, that will have a massive compounding effect.
I’m not an investment advisor. Don’t take this as written-in-stone advice. But your business exists to make a profit (even if that’s only your secondary goal behind changing lives).
What do you do with that profit? Use some of it to grow a hedge.
We have great conversations about platform-building in Two-Brain’s Tinker program. Check it out here.