When your passive income is greater than your active income

[BeTheChange]

Essentially, when youre portfolio income makes more than your actual job.

For people who have reached this point or seek to reach this point what do you plan to do?

Do you plan to retire at this point, since your wealth is now making enough to cover both your living expenses and some. So you can essentially sit on a island and your money grows regardless.

Or do you plan to just keep going and going maximising your income every year.

Based on my current expectations and goals I plan to be in a position where my investment income covers my living expenses by the time I'm 33.


I expect to be a millionaire by 35, which is also the point at which my expected (based on what my boss makes) after tax salary will be less than my investment income (net income). This is the point at which I may choose to focus on actively managing my investments full time and growing my wealth.


I'd like to focus on investing, owning and growing businesses including:

• A real estate portfolio
• Gym(s)
• Restaurant(s)
• Bar(s)

In addition to owning and managing the above I'd also like to operate as a VC investor for small businesses and manage my own funds, in a sort of family office type of way.


That's my dream. What's yours?

 

[Billtx49]

Stay out of the restaurant business unless you are an expert in it. Their business comes and goes with the economy and is highly competitive.
If you are considering the gym business, also consider hair salons in a white collar section of town. People may stop dining out as much in bad times, but professionals Always need to look their best. It's more of a steady income stream.
The only way to effectively do any type retail though is to be the property owner if you're thinking long term.

 

[zekko]

For people who have reached this point or seek to reach this point what do you plan to do?

Do you plan to retire at this point

That's what I did, but I'm not as young as you are.
If I were your age, I'd probably keep piling up the wealth. You've got the energy, and the younger you are, the bigger the safety net you need. Another possibility is once you reach your goal, taking a very extended vacation, and then going back to work at some point in the future (easier said than done probably lol).

 

[AAAgent]

Stay out of the restaurant business unless you are an expert in it. Their business comes and goes with the economy and is highly competitive.
If you are considering the gym business, also consider hair salons in a white collar section of town. People may stop dining out as much in bad times, but professionals Always need to look their best. It's more of a steady income stream.
The only way to effectively do any type retail though is to be the property owner if you're thinking long term.

I have 3 restaurant clients. It's a MAJOR pain. Food is good but management is bad = bad business. One of my clients makes great indian food. Even one of my others clients says this guys food was good. But the owner just didn't know how to manage a business. Didn't have consistent staff, take inventory, keep consistent offers, and didn't remember or care about his return customers. Business went down.

IF the food is mediocre but staff is good results in a non memorable experience and they probably won't be coming back often.

Bars are a pain in the a$$. My family owned a large nightclub in a major metro city. Gotta pay off police, pay off politicians, hire security, tickets all the time out the wazoo from city (we get fined when promoters promote their party using our location). We had a shooting and fatality back in the day outside our club. That shut us down for 4 months. It's a cash business and requires us to be there ALL the time. My brother stole lots of money from there.

Passive income is best and i'm also trying to find ways to do this. Maybe 1 or 2 apartments in a metro city close by each other and AirBnB them when I have a bit more money to invest. I can vet them using the platform and rent it out and pay a friend for any emergencies.

Employees are a pain. My side business has 2 employees and as I don't pay enough it's hard to get HIGH caliber work out of them. I always do better work than they do, but unless I learn to delegate and accept what I paid for, I would be doing their jobs and never moving forward with my life.

I'd like to get a larger house, get solar panels on the house and just setup 5-10 cryptocurrency miners (invest 15k-20k). Have the solar cover energy costs, and the monthly crypto payouts to more than cover mortgage expenses as well.

 

[PrettyBoyAJ]

That's what I did, but I'm not as young as you are.
If I were your age, I'd probably keep piling up the wealth. You've got the energy, and the younger you are, the bigger the safety net you need. Another possibility is once you reach your goal, taking a very extended vacation, and then going back to work at some point in the future (easier said than done probably lol).

What was your path to the passive income stream?

 

[BeTheChange]

I have 3 restaurant clients. It's a MAJOR pain. Food is good but management is bad = bad business. One of my clients makes great indian food. Even one of my others clients says this guys food was good. But the owner just didn't know how to manage a business. Didn't have consistent staff, take inventory, keep consistent offers, and didn't remember or care about his return customers. Business went down.

IF the food is mediocre but staff is good results in a non memorable experience and they probably won't be coming back often.

Bars are a pain in the a$$. My family owned a large nightclub in a major metro city. Gotta pay off police, pay off politicians, hire security, tickets all the time out the wazoo from city (we get fined when promoters promote their party using our location). We had a shooting and fatality back in the day outside our club. That shut us down for 4 months. It's a cash business and requires us to be there ALL the time. My brother stole lots of money from there.

Passive income is best and i'm also trying to find ways to do this. Maybe 1 or 2 apartments in a metro city close by each other and AirBnB them when I have a bit more money to invest. I can vet them using the platform and rent it out and pay a friend for any emergencies.

Employees are a pain. My side business has 2 employees and as I don't pay enough it's hard to get HIGH caliber work out of them. I always do better work than they do, but unless I learn to delegate and accept what I paid for, I would be doing their jobs and never moving forward with my life.

I'd like to get a larger house, get solar panels on the house and just setup 5-10 cryptocurrency miners (invest 15k-20k). Have the solar cover energy costs, and the monthly crypto payouts to more than cover mortgage expenses as well.

You can make those claims with any business really. I like to get my hands dirty in something that's MINE. Besides you can pay managers to do most of the gritty work while you keep things high level, which is what I'm doing with my real estate business.

I let the managers deal with the builders and surveyors focus on the refurb and the property manager deal with the tenants while I oversees the whole process. Furthermore it frees up my time and mind to focus on the bigger picture and find creative ways to finance my next project in addition to sourcing the next deal. For example I spent some time just brainstorming and came up with some great ideas. Fast forward a week and I already have the capital in place or atleast the means to acquire the capital for my next two RE purchases (both of which will occur in the next year).

 

[zekko]

What was your path to the passive income stream?

Active income stream lol. No magic pill here.

I was fortunate enough to earn a good wage, and I knew from a fairly young age that I wanted to retire early. So I worked hard, and threw a lot of money into saving and diverse investments. Took advantage of programs through work, matching funds, health care plans, that sort of thing. Educated myself on finances as much as I could. Constantly reworked my plans. I lived a decent lifestyle, but I kept a cap on it, didn't get crazy. Pay yourself first. Time + money = more money.

Unfortunately I had to make a certain amount of disposable income to make this work for me, so like I said there was no magic pill for me. Just knowing my goal from an early age, educating myself, and working toward it.

 

[BeExcellent]

My gross passive income roughly equals and in some years surpasses my active income. Both active & passive incomes are solid six figure amounts annually and have been for a few years. My active income has been six figures for 20 years. That allowed me to build the passive side. That's just income before you consider assets and equity.

So I have met my goal of replacing my active income. Now I am servicing debt on my real estate portfolio so I don't yet live only off the passive income but I am in a transitional phase preparing to live primarily off the passive income.

If it were just me I could already easily have an enviable lifestyle, retire, pursue creative endeavors & travel. But I have 3 kids and higher education costs are in the offing. So I continue to work in my professional field to accelerate the process financially and continue to build the passive income engine. I'd prefer to help my children with education costs so they aren't saddled with debt coming out of university. My father paid for my undergrad degrees (both of which I earned in 4 years) and I'd like to give my children that leg up in life too.

Once I have confidence my passive income stream is unencumbered enough to support me for the rest of my days and fund university for my children then I am going to do a number of things I was born with talent for. These are various creative endeavors in the arts. I have always been recognized for those creative talents growing up but was taught to avoid an artist's life (a potentially starving artist's life to my parents' way of thinking.) So those dreams were deferred but they never died.

I also intend to travel and be able to enjoy my friends, where ever they are, and be able to host friends and family to relax & experience life together. I have plenty of nice things. I don't need more stuff. I envision using my resources to enjoy experiences and create art & experiences for those I love & by extension for the world at large. I have friends in the arts & entertainment world who are already pursuing similar paths. I've had invitation from a gallery already to sell my work...but I want to be able to get fully into that creative space before I take the plunge there.

And I'll always be involved in real estate. I've always found it to be a creative outlet too. I love to create beautiful spaces, no matter how modest, and people gravitate to what I put into the world, so far.

It's very exciting. It's as though I'm gathering myself for the leap into what I was made to be doing...and I won't be poor when I do it, which will allow me greater creative freedom.

 

[AAAgent]

You can make those claims with any business really. I like to get my hands dirty in something that's MINE. Besides you can pay managers to do most of the gritty work while you keep things high level, which is what I'm doing with my real estate business.

I let the managers deal with the builders and surveyors focus on the refurb and the property manager deal with the tenants while I oversees the whole process. Furthermore it frees up my time and mind to focus on the bigger picture and find creative ways to finance my next project in addition to sourcing the next deal. For example I spent some time just brainstorming and came up with some great ideas. Fast forward a week and I already have the capital in place or atleast the means to acquire the capital for my next two RE purchases (both of which will occur in the next year).

Restaurant managers are around 40k per year +. That's a huge chunk of change right off the bat. My one friend had a wealthy investor fund his restaurant in exchange that he manage it full time. He had skin in the game and his silent partner collects 50% of profits every month. If you have not dabbled in the restaurant business and are not a chef, I would not make it your first venture. My friend has failed at 2 restaurants prior. The first was poor business and the second was partnership problems. This one is finally successful as he was able to find a very wealthy SILENT partner. He does what he wants and the partner doesn't bother him much as long as he gets his payout. He pays himself the 40k per year and then pays himself the 50% profit. He's making probably close to 6 figures with salary + profit and works about 40-50 hours a week. He's managed to streamline the process somewhat but he still needs to be there all the time. When he's off on vacation he says it's a major headache. Most of his business is takeout 3-5k average a day and he can't seem to increase foot traffic to even 1k a day in sales.

What i've learned is that most rich people don't plan for passive income. They specialize in a business, make a killing in that business, THAN they diversify if they are smart. It's hard to be successful when your plan is diversification from the start. Jacks of all trades aren't really in high demand for good pay.

That's what my dad did. Built his fortune on his seafood wholesale distribution business. Bought tons of real estate with his money, rented it out on the side while he managed his seafood business. When he sold his seafood business, he bought an empty warehouse and turned it into a ballroom dance studio. When that failed, he got a beer license, then liquour license, and turned it into a private venue for hire/nightclub/concert hall and made millions. Had the best lighting, smoke, and sound system. He then bought a fedex hub that fedex leased from him while he ran the club full time.

What i've learned is, most people successful people aren't planning to live off passive income. THat's one of the main reasons why they're successful.

 

[PrettyBoyAJ]

My gross passive income roughly equals and in some years surpasses my active income. Both active & passive incomes are solid six figure amounts annually and have been for a few years. My active income has been six figures for 20 years. That allowed me to build the passive side. That's just income before you consider assets and equity.

So I have met my goal of replacing my active income. Now I am servicing debt on my real estate portfolio so I don't yet live only off the passive income but I am in a transitional phase preparing to live primarily off the passive income.

If it were just me I could already easily have an enviable lifestyle, retire, pursue creative endeavors & travel. But I have 3 kids and higher education costs are in the offing. So I continue to work in my professional field to accelerate the process financially and continue to build the passive income engine. I'd prefer to help my children with education costs so they aren't saddled with debt coming out of university. My father paid for my undergrad degrees (both of which I earned in 4 years) and I'd like to give my children that leg up in life too.

Once I have confidence my passive income stream is unencumbered enough to support me for the rest of my days and fund university for my children then I am going to do a number of things I was born with talent for. These are various creative endeavors in the arts. I have always been recognized for those creative talents growing up but was taught to avoid an artist's life (a potentially starving artist's life to my parents' way of thinking.) So those dreams were deferred but they never died.

I also intend to travel and be able to enjoy my friends, where ever they are, and be able to host friends and family to relax & experience life together. I have plenty of nice things. I don't need more stuff. I envision using my resources to enjoy experiences and create art & experiences for those I love & by extension for the world at large. I have friends in the arts & entertainment world who are already pursuing similar paths. I've had invitation from a gallery already to sell my work...but I want to be able to get fully into that creative space before I take the plunge there.

And I'll always be involved in real estate. I've always found it to be a creative outlet too. I love to create beautiful spaces, no matter how modest, and people gravitate to what I put into the world, so far.

It's very exciting. It's as though I'm gathering myself for the leap into what I was made to be doing...and I won't be poor when I do it, which will allow me greater creative freedom.

I'm interested in learning from you what you were able to do to build that 6 figure passive stream. I do know you are in the real estate game. If you can send me a message or make a thread I think it would be very beneficial. I've been making 6 figures in my twenties for a couple years straight and I need to start looking towards the future and start saving/investing.

Bethechange this is a great thread. I'm very envious of the people here that have worked hard and set themselves up for success.

 

[BeTheChange]

Restaurant managers are around 40k per year +. That's a huge chunk of change right off the bat. My one friend had a wealthy investor fund his restaurant in exchange that he manage it full time. He had skin in the game and his silent partner collects 50% of profits every month. If you have not dabbled in the restaurant business and are not a chef, I would not make it your first venture. My friend has failed at 2 restaurants prior. The first was poor business and the second was partnership problems. This one is finally successful as he was able to find a very wealthy SILENT partner. He does what he wants and the partner doesn't bother him much as long as he gets his payout. He pays himself the 40k per year and then pays himself the 50% profit. He's making probably close to 6 figures with salary + profit and works about 40-50 hours a week. He's managed to streamline the process somewhat but he still needs to be there all the time. When he's off on vacation he says it's a major headache. Most of his business is takeout 3-5k average a day and he can't seem to increase foot traffic to even 1k a day in sales.

What i've learned is that most rich people don't plan for passive income. They specialize in a business, make a killing in that business, THAN they diversify if they are smart. It's hard to be successful when your plan is diversification from the start. Jacks of all trades aren't really in high demand for good pay.

That's what my dad did. Built his fortune on his seafood wholesale distribution business. Bought tons of real estate with his money, rented it out on the side while he managed his seafood business. When he sold his seafood business, he bought an empty warehouse and turned it into a ballroom dance studio. When that failed, he got a beer license, then liquour license, and turned it into a private venue for hire/nightclub/concert hall and made millions. Had the best lighting, smoke, and sound system. He then bought a fedex hub that fedex leased from him while he ran the club full time.

What i've learned is, most people successful people aren't planning to live off passive income. THat's one of the main reasons why they're successful.

Going to have to be straight here. I think a lot of successful people are planning for passive income. For every Mark Zuckerberg, who generates huge wealth from loving what they do 24/7, there are those whose make it their career goals to gain financial freedom and they also do very well.

I am living proof that it's possible to diversify into several niches.

• Qualified as a chartered accountant (never wanted to be an accountant)
• Set up a tutoring business and made over $100,000 in revenue over 2 years (never wanted to be a tutor)
• Set to make nearly $30,000 in gross revenue by December year end from property portfolio (didn't plan to be a landlord)
• Made an additional $35,000 in unrealised gains based on the work performed on my portfolio from January to June by building a strong experienced team around me (never planned to be in real estate investment)
• The domino effect means I'm already planning my next purchase for December and my fourth / fifth for summer 2018.

I'm only 28 and just getting started.

There is more than one way to skin a cat.

@PrettyBoyAJ You need to do your research and put that money to work now, due to the nature of compounding and the domino effect the longer you wait the harder it will be to get to that magic number.

 

[BeExcellent]

I'm interested in learning from you what you were able to do to build that 6 figure passive stream. I do know you are in the real estate game. If you can send me a message or make a thread I think it would be very beneficial. I've been making 6 figures in my twenties for a couple years straight and I need to start looking towards the future and start saving/investing.

Bethechange this is a great thread. I'm very envious of the people here that have worked hard and set themselves up for success.

The good news for you @PrettyBoyAJ and anyone else who is young & ambitious is that anyone can do this with enough determination & focus.

I turned my first home into a rental when my family outgrew it and so we were buying a second larger home. The market had a recent downturn and I was unwilling to take a loss on the first home when I could afford a bigger house & just rent the first one. I was 32 weeks pregnant with my second kid, supporting my family on solely my income, and if everything failed it was my ass. I was almost 35 years old and had been earning six figures in my field for 5 years by then. I have a bachelor degree level education.

So if a 35 year old chick with a family wholly dependent on her income can do it without a fancy advanced degree, surely you can. In fact you ought to kick my ass. Frankly I'll be disappointed if you don't.

I buy inexpensive rent houses & small multis, sometimes with issues other buyers are afraid of, fix & rent. I use property managers and I manage them remotely. That's all I do.

Read my thread Success Starts Between Your Ears in this forum for the mental fortitude side of things. Very important.

Now it should be obvious that the devil is in the details.

As far as the pragmatic side I needed something I could do on the side while working full time and traveling all over. Real estate fit the bill.

Since you are making good money, set plenty aside. Avoid debt, especially consumer debt & debt on things that lose value (cars). If you are not debt free with the exception of mortgage debt, get out of debt and stay out. Run on cash.

Live below your means & stockpile discretionary income in a liquid account so once you are ready you can deploy it.

While you stockpile capital do your homework.

What is your dream? Mine was originally financial independence before my kids were grown, so I could be a mom. It's Tuesday afternoon. I'm home with my kids about to take a nap. When I wake up I'll check client email & take the kids to eat and see a movie. Two houses rented up this week. Both times I got a text and a deposit. Life is good.

What drives you?

The answer matters because it tells you how to go & in what direction. It isn't enough to be envious of someone else's accomplishments...you have to be driven yourself by your own driving reasons. What are yours?

PM me or we can converse here.

 

[AAAgent]

I think you're wrong when you say successful people are thinking about passive income. Successful people are never thinking about easy money. Successful people are successful because they understand everything in life is earned. Money doesn't grow on trees and nothing in life is free. Most successful businessmen can't sit still and will be working until they die. They are workaholics. There are lucky people and smart people who have come into decent money and work to maintain that, but business men are a different breeds. They are not your "I've made good money now let me sip latte's for the rest of my life.". Don't confuse people who lucked their way into money and those who worked hard for it. Different types. My dads personal goal he told me was to make $1 million dollars. My aunt would tell me stories about how my dad was saying he was going to make $1 million dollars since he came to America as an immigrant when he was 16. She thought he was crazy and told him to get more realistic goals. He was working as a bellboy in the Marriot when he was telling her he was going to make $1 million dollars and 3 years later he made $1million.

My point of view is from wealthy people which is what I'm assuming you want to be. I'm not saying you can't diversify in several niches and do well. I'm saying most successful and wealthy people don't do 5 different things at the same time starting out. You can't have financial freedom until your businesses are under complete control and run themselves and they don't get that way by you working part time on them, for the most part.

If you could do all those business projects you mentioned at the same time making a lot of money, you would not have this thread. You would be successful already in your terms. I gave you a story of how my dad built his wealth and Zekko pretty much said the same thing. They worked hard at one thing and then diversified once things became manageable in their expertise. I'm sure if you focused on your tutoring business more than you currently do now, you'd probably make good money. My friends father is a well known math tutor that tutors over 500 students per year including private sessions and groups and makes $400k/year. I was tutored by his competitor who made $100k a year but was very selective in her students. There's a tradeoff to everything. You put 20% of your time into 5 different places, you get 20% worth of payoff without luck. If one of those things hits at 5x or 10x then you have 100% or 200% plus the other 4 things you were dabbling in and then you're at 180% or 280%. Imagine if you identified out of those 5 things which one would be the best focus of your time and put 80-100% of your time into it. What would that return look like?

It sounds like what you're doing is fine and more than covers your expenses but since you're spreading yourself thin in 5 different directions, no one thing will get enough time from you to put you where you need to be in a short amount of time. Might be good for a long term play but you're trying to make money in a relatively short time frame. You pay with your life and health for success. Some pay more than others. I would not be making the money I make off crypto if I split my time up the way you did. I would not have the knowledge, would not have the experience, and would have significantly less opportunities if I was being pulled in 5 different directions. The trade off is I work 40 hour week at my full time job (there is alot of freedom for me to do research there), allocate about 5-10 hours a week on my side business (I've trained employees who run it for me) and spend about another 40+ hours a week on crypto. I sleep on average about 5-6 hours every night for the past 2 months. My gym is almost non-existent, i'm working out once a week at most and if I don't make it to the gym, I run once a week. If you know me at all, I've had a workout journal on this forum for 7 years. Gym is life for me and I don't have time for it now.

There is definitely more than one way to skin a cat but most people don't become successful by playing it safe. They put the majority of their eggs in one basket and they hit the jackpot either through hardwork, luck or a bit of both. They don't split their eggs up in 5 baskets and hope all the baskets hit.

 

[BeTheChange]

I think you're wrong when you say successful people are thinking about passive income. Successful people are never thinking about easy money. Successful people are successful because they understand everything in life is earned. Money doesn't grow on trees and nothing in life is free. Most successful businessmen can't sit still and will be working until they die. They are workaholics. There are lucky people and smart people who have come into decent money and work to maintain that, but business men are a different breeds. They are not your "I've made good money now let me sip latte's for the rest of my life.". Don't confuse people who lucked their way into money and those who worked hard for it. Different types. My dads personal goal he told me was to make $1 million dollars. My aunt would tell me stories about how my dad was saying he was going to make $1 million dollars since he came to America as an immigrant when he was 16. She thought he was crazy and told him to get more realistic goals. He was working as a bellboy in the Marriot when he was telling her he was going to make $1 million dollars and 3 years later he made $1million.

My point of view is from wealthy people which is what I'm assuming you want to be. I'm not saying you can't diversify in several niches and do well. I'm saying most successful and wealthy people don't do 5 different things at the same time starting out. You can't have financial freedom until your businesses are under complete control and run themselves and they don't get that way by you working part time on them, for the most part.

If you could do all those business projects you mentioned at the same time making a lot of money, you would not have this thread. You would be successful already in your terms. I gave you a story of how my dad built his wealth and Zekko pretty much said the same thing. They worked hard at one thing and then diversified once things became manageable in their expertise. I'm sure if you focused on your tutoring business more than you currently do now, you'd probably make good money. My friends father is a well known math tutor that tutors over 500 students per year including private sessions and groups and makes $400k/year. I was tutored by his competitor who made $100k a year but was very selective in her students. There's a tradeoff to everything. You put 20% of your time into 5 different places, you get 20% worth of payoff without luck. If one of those things hits at 5x or 10x then you have 100% or 200% plus the other 4 things you were dabbling in and then you're at 180% or 280%. Imagine if you identified out of those 5 things which one would be the best focus of your time and put 80-100% of your time into it. What would that return look like?

It sounds like what you're doing is fine and more than covers your expenses but since you're spreading yourself thin in 5 different directions, no one thing will get enough time from you to put you where you need to be in a short amount of time. Might be good for a long term play but you're trying to make money in a relatively short time frame. You pay with your life and health for success. Some pay more than others. I would not be making the money I make off crypto if I split my time up the way you did. I would not have the knowledge, would not have the experience, and would have significantly less opportunities if I was being pulled in 5 different directions. The trade off is I work 40 hour week at my full time job (there is alot of freedom for me to do research there), allocate about 5-10 hours a week on my side business (I've trained employees who run it for me) and spend about another 40+ hours a week on crypto. I sleep on average about 5-6 hours every night for the past 2 months. My gym is almost non-existent, i'm working out once a week at most and if I don't make it to the gym, I run once a week. If you know me at all, I've had a workout journal on this forum for 7 years. Gym is life for me and I don't have time for it now.

There is definitely more than one way to skin a cat but most people don't become successful by playing it safe. They put the majority of their eggs in one basket and they hit the jackpot either through hardwork, luck or a bit of both. They don't split their eggs up in 5 baskets and hope all the baskets hit.

Read my post again. You're thinking in binary terms. Each to their own. There are numerous examples of investors/businessman who have found success through selective diversification or through the domino effect of numerous ventures. What do you think the guys at KKR or Blackstone are doing? They buy and run a variety of different businesses. That's my dream. And I will grind until I have the funds and experience to do this on a more micro level. Guru is a good example of someone who engages in these activities.

Set to make over well over a $100,000 in net income, gains and salary over the next year after taxes and expenses so I'm doing ok. Over achieving on the plan I set to being a millionaire by 35. If I see an opportunity to better that goal I'll take it.

I'm already getting interest from people who want me to manage their money or form a JV because of my results. That's where the real game starts. Selective diversification has served me very well.

 

[AAAgent]

Read my post again. You're thinking in binary terms. Each to their own. There are numerous examples of investors/businessman who have found success through selective diversification or through the domino effect of numerous ventures. What do you think the guys at KKR or Blackstone are doing? They buy and run a variety of different businesses. That's my dream. And I will grind until I have the funds and experience to do this on a more micro level. Guru is a good example of someone who engages in these activities.

Set to make over well over a $100,000 in net income, gains and salary over the next year after taxes and expenses so I'm doing ok. Over achieving on the plan I set to being a millionaire by 35. If I see an opportunity to better that goal I'll take it.

I'm already getting interest from people who want me to manage their money or form a JV because of my results. That's where the real game starts. Selective diversification has served me very well.

I actually worked in the Investment banking, PE/VC, corporate acquisitions space so I know this space very well. Those are elitist categories that are handed to them, not earned. This will change soon. I sold specifically Mergers & Acquisitions databases to these bankers/lawyers and PE guys. They don't know business, they know money and power. They know numbers and how to lay people off. They know how to bring in specialized people into their portfolio companies and kick out founders. These guys basically come in and trim the fat and flip in 5 years. My company was owned my Pearson PLC and we were sold off to BC Partners. They came in and gutted 1/5 the staff after coming in and saying there would be no layoffs. It's pretty standard procedure.

Are you a KKR or blackstone? They have billions in funding from millionaires and billionaires. They have teams of hundreds of people that SPECIALIZE....yes, SPECIALIZE in certain transactions and verticals. There is a TMT group (tech, media, and telecom), there is an Energy group, Healthcare group, Mining group, Real Estate group, so on and so forth. You are either recruited into banking and PE and built your career in a specific group from investment banking, then move your way into private equity. After enough deals and time you get promoted to VP, then director, then managing director. Usually top analysts/associates get poached by PE/VC's if they're lucky. Salaries generally double or the bonuses triple/quadruple as you make promotion. I have friends in this space, and I've been to various parties entertaining these bankers/lawyers. We threw the parties specifically for them afterall.

Once again, these bankers and PE's SPECIALIZE in verticals. The ones that don't work their way up from banking, are high level ceo's, coo's, and senior management in those respective fields and they are recruited by PEs and banks. At the top of these banks, it's ALL about who you know in that particular industry because these guys are making acquisitions, divestures, JV's, IPO's, etc. They need to know who's looking to buy, sell, or raise capital so they can match make them with their respective clients and collect the fees.

The investment banks and PE shops themselves house many companies, correct. But those banks and PE shops have.......MULTIPLE SPECIALIZED Teams that manage those portfolio companies.

http://www.apax.com/investments/
That's Apaxm one of my past clients. The they have teams for tech, healthcare, services and consumer.

http://www.warburgpincus.com/sectors/
Warburg, another one of mine I sold and managed. Healthcare, Energy, financial services, and TMT.


Find me an example of someone that made their riches through diversification and isn't known for striking it big with one thing. I don't see it and i've grown up with rich and worked with the powerful. Not trying to put you down or anything bro, what you're doing seems to work for a decent lifestyle. But that's not how riches are made. You can have a good life and accumulate wealth over a short period of time.

 

[BeTheChange]

I actually worked in the Investment banking, PE/VC, corporate acquisitions space so I know this space very well. Those are elitist categories that are handed to them, not earned. This will change soon. I sold specifically Mergers & Acquisitions databases to these bankers/lawyers and PE guys. They don't know business, they know money and power. They know numbers and how to lay people off. They know how to bring in specialized people into their portfolio companies and kick out founders. These guys basically come in and trim the fat and flip in 5 years. My company was owned my Pearson PLC and we were sold off to BC Partners. They came in and gutted 1/5 the staff after coming in and saying there would be no layoffs. It's pretty standard procedure.

Are you a KKR or blackstone? They have billions in funding from millionaires and billionaires. They have teams of hundreds of people that SPECIALIZE....yes, SPECIALIZE in certain transactions and verticals. There is a TMT group (tech, media, and telecom), there is an Energy group, Healthcare group, Mining group, Real Estate group, so on and so forth. You are either recruited into banking and PE and built your career in a specific group from investment banking, then move your way into private equity. After enough deals and time you get promoted to VP, then director, then managing director. Usually top analysts/associates get poached by PE/VC's if they're lucky. Salaries generally double or the bonuses triple/quadruple as you make promotion. I have friends in this space, and I've been to various parties entertaining these bankers/lawyers. We threw the parties specifically for them afterall.

Once again, these bankers and PE's SPECIALIZE in verticals. The ones that don't work their way up from banking, are high level ceo's, coo's, and senior management in those respective fields and they are recruited by PEs and banks. At the top of these banks, it's ALL about who you know in that particular industry because these guys are making acquisitions, divestures, JV's, IPO's, etc. They need to know who's looking to buy, sell, or raise capital so they can match make them with their respective clients and collect the fees.

The investment banks and PE shops themselves house many companies, correct. But those banks and PE shops have.......MULTIPLE SPECIALIZED Teams that manage those portfolio companies.

http://www.apax.com/investments/
That's Apaxm one of my past clients. The they have teams for tech, healthcare, services and consumer.

http://www.warburgpincus.com/sectors/
Warburg, another one of mine I sold and managed. Healthcare, Energy, financial services, and TMT.


Find me an example of someone that made their riches through diversification and isn't known for striking it big with one thing. I don't see it and i've grown up with rich and worked with the powerful. Not trying to put you down or anything bro, what you're doing seems to work for a decent lifestyle. But that's not how riches are made. You can have a good life and accumulate wealth over a short period of time.

Warren Buffet. He invests in a variety of different companies. Rather than professing to be an expert in a single sector.

I worked directly in financial services (M&A) and with PE funds. Not selling them software (or whatever it is you were doing). I was actually the Analyst on the advisory side. I helped sell manufacturing companies, recruitment consultants, tech firms and the list goes on. So I don't think you know entirely what you're talking about. You're basically trying to lecture someone on the inside when you're on the outside. It's unseemly.

Generalists do very well in PE. Only the largest funds have specific departments focused on one industry.

Never said I was KKR. But it's not impossible to do what they do on a microscale focusing on SMEs. And as I said I'm already building a network and have people ready to provide funds. I suggest you educate yourself on this topic further.

 

[AAAgent]

Warren Buffet. He invests in a variety of different companies. Rather than professing to be an expert in a single sector.

I worked directly in financial services (M&A) and with PE funds. Not selling them software (or whatever it is you were doing). I was actually the Analyst on the advisory side. I helped sell manufacturing companies, recruitment consultants, tech firms and the list goes on. So I don't think you know entirely what you're talking about. You're basically trying to lecture someone on the inside when you're on the outside. It's unseemly.

Generalists do very well in PE. Only the largest funds have specific departments focused on one industry.

Never said I was KKR. But it's not impossible to do what they do on a microscale focusing on SMEs. And as I said I'm already building a network and have people ready to provide funds. I suggest you educate yourself on this topic further.

You do understand you're also talking about people who specialize in investing that have made their riches. Your talking about owning restaurants, bars, tutoring, real estate, and gyms. With $1 million you probably can't comfortably own even 2 of these businesses let alone not work and have passive income come in.

Sounds like you were big 4 consulting (E&Y, KPMG, Deloitte, & PWC). That's different from banking/PE and definitely not the inside. When you're sitting in a back office crunching numbers and aren't client facing, you don't really get to see what it's like. My job was to meet with MD's, directors, VP's, educate entire teams, etc. I teach them how to source deals using our platform, how to find out which corporation is using, which bank, law firm, consulting firm, and who the bankers and lawyers were on that deal so they can network with them. If big 4 advisory was the same as banking/PE, you would probably still be in it, but as you know, the salaries aren't the same. Good salaries yes, but unless you're partner level, the hours most people believe, aren't worth it. Two of my room mates quit Deloitte and went corporate.

I've also never said generalist don't do well. I said you don't get rich quickly by spreading yourself in multiple directions.

As an analyst at a consulting firm, you were most definitely not selling, so I don't think that is the correct term. That's the MD, Director, and maybe VP level of banks and most like partner level or one step down at the big 4. Majority of the time, analysts and associates have never even meet the clients and that's the investment bank side which is the most client facing compared to consultants. They're doing the grunt work with e-mails, DCF's, etc.

Also, you're only looking at Buffet as he is now. After he acquired his wealth. Buffet acquired his wealth through consecutive small ventures until he went into the securities business and got himself on the boards of companies. He invested in a pinball machine that turned into his first real business. They started with one machine, and then two, and than multiple and they finally sold that business for many multiples. He moved from one thing, to another, to another until he built wealth. Then he diversified.

Jim Rogers, George Soros partner made his riches off one bet. The bet that broke the bank of england and turned him into a multi millionaire overnight. They specialized in investing.

Anyway, i'm not here to convince you. Just leaving my two cents and you can take it or leave it. I'm on my way to 7 figures this year and have tried to diversify in many things and realized that it wasn't the way for me.

 

[BeTheChange]

You do understand you're also talking about people who specialize in investing that have made their riches. Your talking about owning restaurants, bars, tutoring, real estate, and gyms. With $1 million you probably can't comfortably own even 2 of these businesses let alone not work and have passive income come in.

Sounds like you were big 4 consulting (E&Y, KPMG, Deloitte, & PWC). That's different from banking/PE and definitely not the inside. When you're sitting in a back office crunching numbers and aren't client facing, you don't really get to see what it's like. My job was to meet with MD's, directors, VP's, educate entire teams, etc. I teach them how to source deals using our platform, how to find out which corporation is using, which bank, law firm, consulting firm, and who the bankers and lawyers were on that deal so they can network with them. If big 4 advisory was the same as banking/PE, you would probably still be in it, but as you know, the salaries aren't the same. Good salaries yes, but unless you're partner level, the hours most people believe, aren't worth it. Two of my room mates quit Deloitte and went corporate.

I've also never said generalist don't do well. I said you don't get rich quickly by spreading yourself in multiple directions.

As an analyst at a consulting firm, you were most definitely not selling, so I don't think that is the correct term. That's the MD, Director, and maybe VP level of banks and most like partner level or one step down at the big 4. Majority of the time, analysts and associates have never even meet the clients and that's the investment bank side which is the most client facing compared to consultants. They're doing the grunt work with e-mails, DCF's, etc.

Also, you're only looking at Buffet as he is now. After he acquired his wealth. Buffet acquired his wealth through consecutive small ventures until he went into the securities business and got himself on the boards of companies. He invested in a pinball machine that turned into his first real business. They started with one machine, and then two, and than multiple and they finally sold that business for many multiples. He moved from one thing, to another, to another until he built wealth. Then he diversified.

Jim Rogers, George Soros partner made his riches off one bet. The bet that broke the bank of england and turned him into a multi millionaire overnight. They specialized in investing.

Anyway, i'm not here to convince you. Just leaving my two cents and you can take it or leave it. I'm on my way to 7 figures this year and have tried to diversify in many things and realized that it wasn't the way for me.

Nope. Started Big 4 jumped sell side. And big 4 M&A is front office - they do exactly the same thing as banks except smaller deals. I sat in a room and helped advise CEOs/FDs over 9 figure Enterprise Value companies. Once again showing you're understanding of this business is limited...

Anyway if you have a 7 figure net worth as you claim well done. Just make sure you realise some of those bitcoin gains!

Furthermore $1m at the average investors debt to equity ratio would imply control over $5m worth of assets. I can work with that in my 30s. Let's just agree to disagree.

 

[AAAgent]

Nope. Started Big 4 jumped sell side. And big 4 M&A is front office - they do exactly the same thing as banks except smaller deals. I sat in a room and helped advise CEOs/FDs over 9 figure Enterprise Value companies. Let's just agree to disagree.

As I stated above, most analysts are not client facing. I don't consider your associate or VP telling you to send the client an e-mail, as client facing. If you did see the client, you're definitely not leading any conversations and were most likely doing what you stated. Sitting and helping. Saying you advised CEO's as a 23-26 year old is a very big stretch. Over glorify all you want, I don't care, but saying my understanding is limited of this space when you are trying to pass off sitting in a room and doing grunt work as advising is more than stretching.

This is probably more realistic. I've seen analyst fall asleep/doze off from lack of sleep.

http://www.mergersandinquisitions.com/investment-banking-analyst-life-worst-day/
http://www.mergersandinquisitions.c...an-investment-banker-yes-even-in-a-recession/

 

[BeTheChange]

As I stated above, most analysts are not client facing. I don't consider your associate or VP telling you to send the client an e-mail, as client facing. If you did see the client, you're definitely not leading any conversations and were most likely doing what you stated. Sitting and helping. Saying you advised CEO's as a 23-26 year old is a very big stretch. Over glorify all you want, I don't care, but saying my understanding is limited of this space when you are trying to pass off sitting in a room and doing grunt work as advising is more than stretching.

This is probably more realistic. I've seen analyst fall asleep/doze off from lack of sleep.

http://www.mergersandinquisitions.com/investment-banking-analyst-life-worst-day/
http://www.mergersandinquisitions.c...an-investment-banker-yes-even-in-a-recession/

Bulge bracket. Smaller firms like the one i joined after my Big 4 stint allow for greater levels of responsibility, so yes I was specifically sitting down with CEOs and business owners and advising them on transactions.

You're just trying to get personal now as you've lost the argument. Like I said bro, I don't really care if you think you're right. If it works for you well done.