Author Topic: Want to Retire Faster? Don't Invest. Start a Business Instead.  (Read 8586 times)

CargoBiker

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Want to Retire Faster? Don't Invest. Start a Business Instead.
« on: February 27, 2017, 11:55:44 AM »
Long time blog reader, new poster here.

I see a lot of threads in this forum about the ins and outs of investing. 

People debating how to squeeze out one percentage more from this or that investment.


That's all well and good, and it's important from a wealth maintenance standpoint... but it's really not all that helpful for wealth creation.


After reading the first posts on this blog years ago, I decided to aggressively pay down debt. I hustled on the side for an extra thousand here or there. I sold our 2nd vehicle. These were all good things.


But then I stopped.


I realized that by paying down student loan debt, I was only earning 4-6% max guaranteed returns (in the form of not having to pay that interest). If I decided to invest, it wouldn't be much better.

But, if I started a business, my returns would have no ceiling. The sky was the limit.

So I stopped paying down my loan debt, and I put every extra dollar to a business selling widgets online. 2 years ago, I started with a $100 investment for an initial order of product, and then proceeded to roughly double my investment every 30-60 days.

I now have the business for sale for a mid 6 figure price.


The fastest way to generate wealth is by owning a business, and I think that there should be more discussion about this.


Any other current/former business owners out there?
« Last Edit: February 27, 2017, 12:15:24 PM by CargoBiker »

J Boogie

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Re: Want to Retire Faster? Don't Invest. Start a Business Instead.
« Reply #1 on: February 27, 2017, 12:05:14 PM »
I agree this forum should include an entrepreneurship/small business category (this has been requested but I'm guessing the demand isn't too big).

I disagree with your general premise though.  Starting a business can be very risky, time consuming, and requires a lot of creative energy.  It isn't for everyone.  Putting your earnings in an index fund is simple and easy.  It truly IS for everyone. 

I think the most value that you can add as a business owner posting on here is telling your story.  Share your highs and lows, what worked for you and what didn't.  A snapshot of your financials.  Stuff like that.  There are many people here who have started businesses and it'd be great to have them share more. 


Vilgan

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Re: Want to Retire Faster? Don't Invest. Start a Business Instead.
« Reply #2 on: February 27, 2017, 12:13:07 PM »
Starting a business worked great for me and I'm also way happier and love the extra flexibility. However, I've also seen a lot of people try to do exactly what I did and fail at it. Heck, I failed the first time I tried to start a business.

I think the best people to go down that route are those who are already independent and not eager to work for "the man". It takes a good amount of internal drive and motivation and the ability to be comfortable with a much less secure approach than doing X for Y salary.

prognastat

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Re: Want to Retire Faster? Don't Invest. Start a Business Instead.
« Reply #3 on: February 27, 2017, 12:20:06 PM »
The fastest way to generate wealth is by owning a business, and I think that there should be more discussion about this.

Running a failing business(which isn't that uncommon) is also one of the fastest ways to lose wealth.

Not saying it is not a viable way to wealth. however though I haven't seen the number I would venture a guess that if you were to compare the amount of people that succeed using the passive investment advocated around here to the percentage of new businesses that succeed that your odds at the former to achieve FI are better using the former, though smaller odds of becoming excessively wealthy are higher with the latter.

Since MMM is a large advocate for frugality rather than excess the people drawn to that message are likely to choose the better odds of achieving FI through a safer, but potentially less lucrative way through "relatively" safe investing and achieving frugality rather than through taking the higher risk for a higher potential return involved with starting a business.

I also believe that a large portion of people are not well equipped to handle being self employed and self guided and that these kinds of people would be all the more likely to fail at starting a company. You can tell anyone to invest in a small number of diversified funds and they won't need to put that much effort in. However the drive and work put towards starting a company are much higher and riskier.
« Last Edit: February 27, 2017, 12:22:09 PM by prognastat »

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prognastat

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Re: Want to Retire Faster? Don't Invest. Start a Business Instead.
« Reply #5 on: February 27, 2017, 12:24:46 PM »
Here are some statistics to consider:
https://www.sba.gov/sites/default/files/SurvivalRatesAndFirmAge_ADA_0.pdf

Thanks for looking up the numbers. I would say if there was a 50% chance that your investment would completely be lost within 5 years(as in putting all your money, time and effort in a business instead of the market) this would be a rather bad option.

CargoBiker

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Re: Want to Retire Faster? Don't Invest. Start a Business Instead.
« Reply #6 on: February 27, 2017, 12:31:16 PM »
I agree this forum should include an entrepreneurship/small business category (this has been requested but I'm guessing the demand isn't too big).

You know, I looked through all of the subforums looking for just such a category 3 times, before making this post. I can't believe this sub-forum doesn't exist.

Quote
I disagree with your general premise though.  Starting a business can be very risky, time consuming, and requires a lot of creative energy.  It isn't for everyone. 

This isn't everyone though. The readers of this blog, in general, are way more resourceful and knowledgeable than the general population. If you're smart enough to engineer your own early retirement in 5-10 years, you're smart enough to start a business.

It's only as time consuming as you let it be. I started this business with a newborn in my lap, in the evening after I got home from my day job, talking to Chinese suppliers from 11pm-2am.

Let's not turn this into an "excuses for not starting a business" thread.


Quote
I think the most value that you can add as a business owner posting on here is telling your story.  Share your highs and lows, what worked for you and what didn't.  A snapshot of your financials.  Stuff like that.  There are many people here who have started businesses and it'd be great to have them share more.

My story:

I side hustled flipping cell phones and electronics on craigslist 4 or 5 years ago to pay down debt.  Made an extra $700 a month or so. I tried to scale up by buying inventory in bulk and got burned, and scammed out of $6,000. I quit that hustle.

I decided to buy low-priced websites on Flippa after that. 

1) I bought a niche clothing site for $300, that made me a few grand, before I sold it as it was a flash trend.

2) I bought a sub-contracted snow plow business in Ohio for $1200, that made me a few grand, before I learned that the previous owner had burned all his sub-contractors, and was under multiple lawsuits. I sold that business.

3) I bought a web-design company for $5,000, with outsourced contractors in India, only to find that all of the traffic data was fake, there were no customers, and that my $5,000 was gone forever.  Scammed again.

Next, I started an appliance repair company two summers ago. Fixing/flipping washers/dryers on Craigslist. When I decided to scale, and bring on a full-time employee, quality control went to crap, and I really wasn't making much profit, and I was beat down by the end of the day. I decided to return to teaching.

My daughter was born, and I knew I had to start a business that worked, because my day job was going to keep me from spending time with her. So, on my three month maternity leave, I started the business that I mentioned in the OP with a $100 bill, re-invested 100% of the profits for a year and a half, and am now selling $70,000+ a month of XXXX products.

Does business have risk?  yes.  Will your first business fail?  probably.  But, if you get it right the 4th or 5th time, it still seems far preferable to me than sticking with a job and putting an extra $xxxx a month into an index fund.
« Last Edit: February 27, 2017, 12:33:10 PM by CargoBiker »

CargoBiker

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Re: Want to Retire Faster? Don't Invest. Start a Business Instead.
« Reply #7 on: February 27, 2017, 12:38:56 PM »
Starting a business worked great for me and I'm also way happier and love the extra flexibility. However, I've also seen a lot of people try to do exactly what I did and fail at it. Heck, I failed the first time I tried to start a business.

Every entrepreneur has failures. Or as I see them "lessons learned".  But, if you start one on the side, with extra money that you were going to invest in something else, what's the risk, other than potentially losing out on 4-7% annual interest on that money you put up?

Quote
I think the best people to go down that route are those who are already independent and not eager to work for "the man". It takes a good amount of internal drive and motivation and the ability to be comfortable with a much less secure approach than doing X for Y salary.

I'll agree with this.  I'd argue that most of the members of this forum are pretty independent, however.  Wanting to escape "the man" is a helpful motivator, for sure.

Day jobs aren't always as secure as people like to make them out to be.  I watched my industry get gutted with full-timers being moved to part-time or let go altogether. All of my friends in the petroleum industry are always looking over their shoulder, wondering if this will be the month they get let go.  I like the security of being in control of my destiny.

Again, if you start it on the side, while keeping your day job, the risk is zero.
« Last Edit: February 27, 2017, 12:40:39 PM by CargoBiker »

stoaX

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Re: Want to Retire Faster? Don't Invest. Start a Business Instead.
« Reply #8 on: February 27, 2017, 12:44:53 PM »
I agree that this would be a good choice for a new sub-forum / category.   And I'm one of the people who have little to no inclination to start a business! 

radicaledward

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Re: Want to Retire Faster? Don't Invest. Start a Business Instead.
« Reply #9 on: February 27, 2017, 12:45:42 PM »
This isn't everyone though. The readers of this blog, in general, are way more resourceful and knowledgeable than the general population. If you're smart enough to engineer your own early retirement in 5-10 years, you're smart enough to start a business.

It's only as time consuming as you let it be. I started this business with a newborn in my lap, in the evening after I got home from my day job, talking to Chinese suppliers from 11pm-2am.

Let's not turn this into an "excuses for not starting a business" thread.
Let's also not turn this into a "This worked great for me, therefore it will work for everyone else as well!" A lot of businesses fail for a lot of different reasons and a good number of those reasons may be completely beyond your control. Starting a business is great for someone that is willing to accept the risk-reward ratio, but it's not for everyone. Also, to be perfectly blunt, if I can work for "The Man" for five to ten years and then retire, why shouldn't I go for the sure bet?

Also, another vote for a new sub-category on the forums!

Digital Dogma

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Re: Want to Retire Faster? Don't Invest. Start a Business Instead.
« Reply #10 on: February 27, 2017, 12:46:53 PM »
It would seem as though this goes against the golden rule of investment - diversification.

If you're putting every cent into your personal business, which is also your (presumably) sole source of income, what do you have to show for it if your speculation fails to deliver?

You're out of a job and all your investments are for nothing.

I can certainly see the rewards of starting a business as a side hustle, but relying on it as my sole source of investment income and a paycheck/salary is just tooooo much risk for me to take.

undercover

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Re: Want to Retire Faster? Don't Invest. Start a Business Instead.
« Reply #11 on: February 27, 2017, 12:48:47 PM »
There's plenty of businesses these days that require more time than money in terms of startup capital. And for the big ideas that do require plenty of capital, you should be using other people's money. No one should be using tons of their own money unless they already have plenty of it to fund a business.

It's not really a matter of "don't invest" as much as "you should take on more risk and work harder", which is what starting a business requires. Regardless of how much risk you take (in terms of capital or time expenditure), you will be putting in tons of work. So, that's why not everyone is suited for, nor will everyone ever start, a business.
« Last Edit: February 27, 2017, 12:50:49 PM by undercover »
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Slee_stack

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Re: Want to Retire Faster? Don't Invest. Start a Business Instead.
« Reply #12 on: February 27, 2017, 12:51:46 PM »
Just because this forum contains folks with a better than average financial skill set, does not mean that the same folks have better than average small business building skills.

You also seem a bit myopic in your views.  Why is it one only needs a few hundred to 'start a business'?  Should everyone start resale operations?  Does everyone want to work in resale?

Otherwise, if someone is going to enjoy their business, or leverage skills they might already have, they may also need to invest more money to get that off the ground.

It isn't just a little risk of losing 4-7% interest in a year.  Its not even close.  Its the potential to lose 104-107% of that future value seed money value PLUS potentially a whole lot of lost labor.


Obviously, many people do fantastic with their own business.  If one is pretty risk tolerant, has an abundance of energy, and a very shrewd business mind/skillset, have at it!

Suggesting that to the average person is probably a disservice though.

GU

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Re: Want to Retire Faster? Don't Invest. Start a Business Instead.
« Reply #13 on: February 27, 2017, 12:53:52 PM »
Long time blog reader, new poster here.

I see a lot of threads in this forum about the ins and outs of investing. 

People debating how to squeeze out one percentage more from this or that investment.


That's all well and good, and it's important from a wealth maintenance standpoint... but it's really not all that helpful for wealth creation.


After reading the first posts on this blog years ago, I decided to aggressively pay down debt. I hustled on the side for an extra thousand here or there. I sold our 2nd vehicle. These were all good things.


But then I stopped.


I realized that by paying down student loan debt, I was only earning 4-6% max guaranteed returns (in the form of not having to pay that interest). If I decided to invest, it wouldn't be much better.

But, if I started a business, my returns would have no ceiling. The sky was the limit.

So I stopped paying down my loan debt, and I put every extra dollar to a business selling widgets online. 2 years ago, I started with a $100 investment for an initial order of product, and then proceeded to roughly double my investment every 30-60 days.

I now have the business for sale for a mid 6 figure price.


The fastest way to generate wealth is by owning a business, and I think that there should be more discussion about this.


Any other current/former business owners out there?

How many hours a week do you spend on your business?  Has that been continuous, or was there more hours upfront, but less now that things are up and running?

CargoBiker

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Re: Want to Retire Faster? Don't Invest. Start a Business Instead.
« Reply #14 on: February 27, 2017, 12:54:04 PM »
Quote
Running a failing business(which isn't that uncommon) is also one of the fastest ways to lose wealth.

Sure, if you're highly leveraged for some reason.  If you don't take any debt, the most you can lose, is what you put in to start it.

Quote
Not saying it is not a viable way to wealth. however though I haven't seen the number I would venture a guess that if you were to compare the amount of people that succeed using the passive investment advocated around here to the percentage of new businesses that succeed that your odds at the former to achieve FI are better using the former, though smaller odds of becoming excessively wealthy are higher with the latter.

Since MMM is a large advocate for frugality rather than excess the people drawn to that message are likely to choose the better odds of achieving FI through a safer, but potentially less lucrative way through "relatively" safe investing and achieving frugality rather than through taking the higher risk for a higher potential return involved with starting a business.

Good points. For some with an MMM mindset/lifestyle like me, starting a business was just a shortcut. I don't need the excessive stuff, which would come from running a business for another 7-10 years. I just need enough to get to FI and time with my family. The potential for an upside is much higher, if you're willing to stick it out.


Quote
I also believe that a large portion of people are not well equipped to handle being self employed and self guided and that these kinds of people would be all the more likely to fail at starting a company. You can tell anyone to invest in a small number of diversified funds and they won't need to put that much effort in. However the drive and work put towards starting a company are much higher and riskier.

I would argue that most people who read this blog are well equipped enough. If you're self-guided enough to pursue an alternative FI lifestyle, and convert to a mustachian lifestyle from your previous wasteful lifestyle, then you're self-guided enough to start a business.

Followers of this blog shouldn't shy away from hard work. Every other MMM post is about working hard.


CargoBiker

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Re: Want to Retire Faster? Don't Invest. Start a Business Instead.
« Reply #15 on: February 27, 2017, 12:57:46 PM »
Here are some statistics to consider:
https://www.sba.gov/sites/default/files/SurvivalRatesAndFirmAge_ADA_0.pdf

Haha, I was waiting for this post.

Look, most people who start a business, start a business like they run their lives. Full of extravagance and wastefulness, and without any real thought put into it. Yes, they fail.

I had 3-4 failed businesses before I had a successful one.  Every successful business owner I know has a similar story.

If you're a die-hard mustachian, and run your business like a die-hard mustachian, I think your chances of success are much higher.

It's at least worth thinking about, if it could potentially get you to FI 5-10 years faster.

CargoBiker

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Re: Want to Retire Faster? Don't Invest. Start a Business Instead.
« Reply #16 on: February 27, 2017, 01:04:20 PM »
It would seem as though this goes against the golden rule of investment - diversification.

When my business is sold, and I have enough capital, I will be investing in real estate, funds, stocks, everything else to preserve that wealth.  We're talking a fairly short time period of having a mono-investment vehicle for wealth creation, not preservation.

Quote
what do you have to show for it if your speculation fails to deliver?

The freedom of not having to report at 8am for a day job, for one.

Quote
You're out of a job and all your investments are for nothing.

In the age of the internet, and easy access to $4/hr Filipino employees, and contract labor, you don't need to quit your job to start a business.

Failures are not for "for nothing", they are lessons learned, that you'll improve upon, the next time around.

Quote
I can certainly see the rewards of starting a business as a side hustle, but relying on it as my sole source of investment income and a paycheck/salary is just tooooo much risk for me to take.

I only invested $100 total from my paycheck ever. Everything from that point forward was funded 100% by profit from the business.  I kept paying off debt and paying bills with my paycheck income, as normal.
« Last Edit: February 27, 2017, 01:07:02 PM by CargoBiker »

CargoBiker

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Re: Want to Retire Faster? Don't Invest. Start a Business Instead.
« Reply #17 on: February 27, 2017, 01:12:04 PM »
There's plenty of businesses these days that require more time than money in terms of startup capital. And for the big ideas that do require plenty of capital, you should be using other people's money. No one should be using tons of their own money unless they already have plenty of it to fund a business.

It's not really a matter of "don't invest" as much as "you should take on more risk and work harder", which is what starting a business requires. Regardless of how much risk you take (in terms of capital or time expenditure), you will be putting in tons of work. So, that's why not everyone is suited for, nor will everyone ever start, a business.

Of course there's exceptions to everything and every business is different.  I'm just offering rebuttals to the excuses put up by people responding to this thread.  If I was out to create a company with nation-wide retail distribution from month one, yeah, I'd get outside investment, and give up equity in the company to do so.

There are ways of using other people's money, without going into debt.  Taking out a bank loan, to start your dream restaurant is a terrible idea, and is a great way to destroy your wealth as @prognastat mentioned earlier in the thread.


"don't invest" was just a click bait title to get people to read the thread   :)   Of course you can do both at the same time. Just depends on how all-in you want to go.

golden1

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Re: Want to Retire Faster? Don't Invest. Start a Business Instead.
« Reply #18 on: February 27, 2017, 01:17:19 PM »
Quote
Followers of this blog shouldn't shy away from hard work. Every other MMM post is about working hard.

Not really.  Most are about optimizing whatever you choose to do and spending less so you don't HAVE to work hard.

But some people enjoy working hard.

I am skeptical that you aren't providing any details to this wonder business of yours.  Is it a MLM?  If it is, you are just making money on the backs of others, which isn't something I would be comfortable with.

My husband is an entrepreneur.  I work the stable job so that he can take the risks that are likely to make his business more profitable in the end.   There is room for both in an FI world. 

CargoBiker

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Re: Want to Retire Faster? Don't Invest. Start a Business Instead.
« Reply #19 on: February 27, 2017, 01:19:18 PM »
How many hours a week do you spend on your business?  Has that been continuous, or was there more hours upfront, but less now that things are up and running?

There were more hours upfront. Figuring out the product details/branding/marketing/advertising, learning how to use amazon, create an ecommerce website, etc. There was a learning curve.  After a year, things were pretty much on auto-pilot, and last summer I took the family to live in Sweden for 2 months, and the business stayed steady at 4-6 hours of work a week, and I was making sales while we were on the beach or biking around.

It can still run and maintain at 4-6 hours of work a week.  Any work I do beyond that, is generating growth.  Like, learning new methods of advertising, developing more products to sell, or creating new marketing. I don't really work more than 20-25 hours a week tops, though.


In the age of the internet, nearly everything process in a business can be automated or outsourced.  I haven't touched my product, or packed an order, in close to a year.
« Last Edit: February 27, 2017, 01:21:16 PM by CargoBiker »

marty998

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Re: Want to Retire Faster? Don't Invest. Start a Business Instead.
« Reply #20 on: February 27, 2017, 01:23:52 PM »
I'm a little disheartened by all the negative replies on this thread.

We are supposed to be an optimistic and supportive bunch. The story the OP has told is not the norm, but that doesn't mean it is out of reach for everyone.

Success requires risks to be taken. Good on you for being persistent and resilient in the face of failure CargoBiker, more power to you.

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Re: Want to Retire Faster? Don't Invest. Start a Business Instead.
« Reply #21 on: February 27, 2017, 01:24:54 PM »
its awesome you had the drive and wanted to do all of that.   i already make an insanely high income.  if i wanted to start a business selling crap on amazon i'm sure i could figure it out.  but its much easier to just invest it in all of america's publically traded companies.  i may pick the right widget and make a killing i may not.  you got lucky and congrats.  i make crazy money buying and selling things on CL when i find the right deals and its probably what i'll do when i FIRE but until then i'll just take my day job and bank the huge cash and retire around 5-7 years from now vs trying to build something.
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CargoBiker

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Re: Want to Retire Faster? Don't Invest. Start a Business Instead.
« Reply #22 on: February 27, 2017, 01:29:41 PM »
Not really.  Most are about optimizing whatever you choose to do and spending less so you don't HAVE to work hard.

In MMM's life, spending less equates to inputing sweat equity in place of dollars. Hard work. Building a pre-fab building in the backyard from the foundation up. Crawling under his house with a head lamp. Doing all his own repairs/maintenance/upgrades.

And yes, for many things, he optimizes and just does without.  But he works hard to get/build the things he wants, because he enjoys the work and all the benefits and skills that come from doing something yourself, and saves money as a bonus.


Quote
I am skeptical that you aren't providing any details to this wonder business of yours.  Is it a MLM?  If it is, you are just making money on the backs of others, which isn't something I would be comfortable with.

Have you ever bought anything using Amazon Prime?  If so, that was a product that Amazon employees packed and shipped instead of the business/brand owner. 85% of my sales are via Amazon prime. 15% are sold wholesale to retail stores. 100% are packed and sent to Amazon or wholesale customers by a 3rd party warehouse company in Arizona.

Anyone who thinks starting an MLM is "owning a business" is delusional. The only people who make money are the people who own the MLM.

Quote
My husband is an entrepreneur.  I work the stable job so that he can take the risks that are likely to make his business more profitable in the end.   There is room for both in an FI world.

I agree, my wife works a day job too. She likes teaching.
« Last Edit: February 27, 2017, 01:34:00 PM by CargoBiker »

GU

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Re: Want to Retire Faster? Don't Invest. Start a Business Instead.
« Reply #23 on: February 27, 2017, 01:37:02 PM »
How many hours a week do you spend on your business?  Has that been continuous, or was there more hours upfront, but less now that things are up and running?

There were more hours upfront. Figuring out the product details/branding/marketing/advertising, learning how to use amazon, create an ecommerce website, etc. There was a learning curve.  After a year, things were pretty much on auto-pilot, and last summer I took the family to live in Sweden for 2 months, and the business stayed steady at 4-6 hours of work a week, and I was making sales while we were on the beach or biking around.

It can still run and maintain at 4-6 hours of work a week.  Any work I do beyond that, is generating growth.  Like, learning new methods of advertising, developing more products to sell, or creating new marketing. I don't really work more than 20-25 hours a week tops, though.


In the age of the internet, nearly everything process in a business can be automated or outsourced.  I haven't touched my product, or packed an order, in close to a year.

Thank you for the response.  Are there any resources (books, blogs, etc.) that you recommend for starting an online business such as yours?  Not asking you to out your product or specific processes, just wondering if there is "general knowledge" that would be useful.

Mezzie

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Re: Want to Retire Faster? Don't Invest. Start a Business Instead.
« Reply #24 on: February 27, 2017, 01:44:07 PM »
My husband wants to start a business that requires significant investment to get started and has fairly high risk. I'm all for it, though, and have accepted that we will likely lose the investment amount (we'll live) so I can be pleasantly surprised if it succeeds. Meanwhile, I'll keep my steady job. My one requirement is that he have a solid business plan in place before we invest anything.

In our case, it would be absolutely safer for us to continue plugging along and investing, but I have my dream job, so that's easy for me to say. My husband deserves a chance at his.
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CargoBiker

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Re: Want to Retire Faster? Don't Invest. Start a Business Instead.
« Reply #25 on: February 27, 2017, 01:45:42 PM »
I'm a little disheartened by all the negative replies on this thread.

We are supposed to be an optimistic and supportive bunch. The story the OP has told is not the norm, but that doesn't mean it is out of reach for everyone.

Success requires risks to be taken. Good on you for being persistent and resilient in the face of failure CargoBiker, more power to you.

I too am surprised by all of the complainypantsing and negativity here, myself.


Starting a business is not out of reach for anyone here.  I am no one special, and I had no skills 5 years ago, other than knowing how to teach middle school kids how to play band instruments. I went $30,000 in debt, and spent 5 years in college to learn a skill that made me $50,000 a year, with no chance of ever earning more.   With a few years of hard work, using free information from the internet, and one $300 course about selling on Amazon, I am earning way more than that.


You get to FI by having enough wealth to have passive interest cover your expenses.

You can get there by reducing your expenses and investing a % of your paycheck every month until you have enough.

You can get there faster by reducing your expenses and multiplying your monthly paycheck by starting a business.


CargoBiker

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Re: Want to Retire Faster? Don't Invest. Start a Business Instead.
« Reply #26 on: February 27, 2017, 01:51:00 PM »
its awesome you had the drive and wanted to do all of that.   i already make an insanely high income.

That's awesome.  If I could go back in time, I would've either started a business right out of high school, or learned a skill that made me an insanely high income, like you.  If your income is high, you can get to FI pretty quick just investing, and reducing your cost of living. My teaching income wasn't high, however, thus, the business.

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but until then i'll just take my day job and bank the huge cash and retire around 5-7 years from now vs trying to build something.

That's definitely the smartest way to go in your case, I agree.  It'd take about 5 years to get a businesses to a point of financial independence, assuming you were really working hard to grow it.

boarder42

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Re: Want to Retire Faster? Don't Invest. Start a Business Instead.
« Reply #27 on: February 27, 2017, 01:51:25 PM »
I'm a little disheartened by all the negative replies on this thread.

We are supposed to be an optimistic and supportive bunch. The story the OP has told is not the norm, but that doesn't mean it is out of reach for everyone.

Success requires risks to be taken. Good on you for being persistent and resilient in the face of failure CargoBiker, more power to you.

I too am surprised by all of the complainypantsing and negativity here, myself.


Starting a business is not out of reach for anyone here.  I am no one special, and I had no skills 5 years ago, other than knowing how to teach middle school kids how to play band instruments. I went $30,000 in debt, and spent 5 years in college to learn a skill that made me $50,000 a year, with no chance of ever earning more.   With a few years of hard work, using free information from the internet, and one $300 course about selling on Amazon, I am earning way more than that.


You get to FI by having enough wealth to have passive interest cover your expenses.

You can get there by reducing your expenses and investing a % of your paycheck every month until you have enough.

You can get there faster by reducing your expenses and multiplying your monthly paycheck by starting a business.

yeah you can get there faster by building a real estate empire like ARS did.  there are tons of ways to get there.  i built a mid 6 figure networth in around the same amount of time you left teaching school.  how did i do it.  by getting an engineering degree and being an engineer and investing.  you went a teaching path as did ARS ... which give you a few months of down time each year to explore in depth one of these business starting like enterprises and congrats to you on it.  there are many different ways to skin the cat.  but starting a business as you show above has many failures you found success on your 5th try congrats... what about the guy who's on his 100th try in 15 years.  their is however little to no risk on the investing side when compared to starting any business.
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Re: Want to Retire Faster? Don't Invest. Start a Business Instead.
« Reply #28 on: February 27, 2017, 01:58:45 PM »
Thank you for the response.  Are there any resources (books, blogs, etc.) that you recommend for starting an online business such as yours?  Not asking you to out your product or specific processes, just wondering if there is "general knowledge" that would be useful.

The business book that influenced me the most is one with a stupid title:  The Millionaire Fastlane.  Any business you start with the general principles he lays out, is going to do well, online or offline.  It just happens that online buisnesses can lend themselves to scale a lot easier than say, a plumbing company.  4 Hour Work Week is a little cheesy, but has some similar principles regarding maximizing your time input, and his initial business was similar in structure to mine.

Beyond that, it's important that you find a need that is unfulfilled. Is there a problem that people have in their daily lives, that a product would help solve?  Or maybe the products that are supposed to solve that problem suck, and you can improve them. Is there a service that would make life easier for people? 

Listen to the conversations of the people around you.  Anytime someone says "I can't do xxx"  or "I hate xxxx" or "I can't believe xxx" or "I wish xxx" is an opportunity.

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Re: Want to Retire Faster? Don't Invest. Start a Business Instead.
« Reply #29 on: February 27, 2017, 02:04:31 PM »
I'm a little disheartened by all the negative replies on this thread.

We are supposed to be an optimistic and supportive bunch. The story the OP has told is not the norm, but that doesn't mean it is out of reach for everyone.

Success requires risks to be taken. Good on you for being persistent and resilient in the face of failure CargoBiker, more power to you.

I too am surprised by all of the complainypantsing and negativity here, myself.


Starting a business is not out of reach for anyone here.  I am no one special, and I had no skills 5 years ago, other than knowing how to teach middle school kids how to play band instruments. I went $30,000 in debt, and spent 5 years in college to learn a skill that made me $50,000 a year, with no chance of ever earning more.   With a few years of hard work, using free information from the internet, and one $300 course about selling on Amazon, I am earning way more than that.


You get to FI by having enough wealth to have passive interest cover your expenses.

You can get there by reducing your expenses and investing a % of your paycheck every month until you have enough.

You can get there faster by reducing your expenses and multiplying your monthly paycheck by starting a business.

I would say there is a difference between complainypantsing/negativity and realism.

The realism is that you are more likely to succeed by investing than starting a business. MMM himself worked a regular job and didn't start a business until he was FI at which point doing so was very low risk to himself.

I will readily agree that a successful business could very well speed up this process, however I don't think it is unfair to say that this comes with a substantial amount of risk too if you aren't FI already. A level of risk not involved if you work a regular job, work hard there at growing your income and saving as high a percentage to invest in will diversified low fee index funds.

You say that today you don't need to risk much capital and it would be mostly time ignoring the fact that time is money. If someone spends hundreds of hours setting up and managing a business there is an opportunity cost in losing those hours instead of working them at a regular job or if you are still working a regular job possibly putting them in as OT or a second job.

It's not that people are unwilling to work hard or be optimistic, but there is a difference between being optimistic and simply ignoring the numbers that don't agree with your point of view.

100% of the time reducing your expenses will speed up FI.
100% of the time working extra hours either through OT or a second job will speed up FI
100% of the time investing money in diversified index funds will lead to more money in the long run(except for catastrophic failure of the economy which would also impact most businesses)

however:
The majority of businesses fail losing either money or the opportunity cost of the hours involved with setting up and managing the business.

So when you say instead of investing in something that is guaranteed to bring you a moderate return and instead invest in this risky proposition that is very likely to lose all money/time invested, but at the chance of a higher return many people are going to criticize it here just like people criticize stock picking. Some people manage to gain unimaginable wealth doing it, most lose money though as opposed to investing it in a low fee index fund.

That is also only going in to how many businesses fail. I am sure the number of businesses that don't fail, but fail to return above the average of the market would grow that percentage even more.
« Last Edit: February 27, 2017, 02:10:12 PM by prognastat »

CargoBiker

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Re: Want to Retire Faster? Don't Invest. Start a Business Instead.
« Reply #30 on: February 27, 2017, 02:04:54 PM »
My husband wants to start a business that requires significant investment to get started and has fairly high risk. I'm all for it, though, and have accepted that we will likely lose the investment amount (we'll live) so I can be pleasantly surprised if it succeeds. Meanwhile, I'll keep my steady job. My one requirement is that he have a solid business plan in place before we invest anything.

In our case, it would be absolutely safer for us to continue plugging along and investing, but I have my dream job, so that's easy for me to say. My husband deserves a chance at his.

From a husband perspective, having the blessing of the wife is a huge wind in the sails.  I did not have my wife's blessing at first, because of my previous failures, and I operated the current business in secret until it was making money, at which point I told her about it.

For any investment, you don't put in more than you can afford to lose. The attitude you have is a healthy one. Of course, you do whatever you can to mitigate the initial risk, and operate on your gut/best judgement.  100% of the time, my gut always knows a good choice from a bad one. When I've gone against it, I've failed.

What is risky about this business, specifically (without telling me what the business is)?

boarder42

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Re: Want to Retire Faster? Don't Invest. Start a Business Instead.
« Reply #31 on: February 27, 2017, 02:05:20 PM »
so now we get to the root of this you're essentially saying invent or innovate which is even more difficult than just buying a bunch of chinese widgets on alibaba and selling them on amazon.

of course inventing or inovating will be out the market if it succeeeds. 
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CargoBiker

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Re: Want to Retire Faster? Don't Invest. Start a Business Instead.
« Reply #32 on: February 27, 2017, 02:08:50 PM »
what about the guy who's on his 100th try in 15 years.

That guy needs to take a hard look in the mirror and figure out why he hasn't learned anything from his failures.

Quote
their is however little to no risk on the investing side when compared to starting any business.

Absolutely. And if you currently have the income, or have a way to get that income quickly, from a day job, more power to ya. It's a good plan.

geekinprogress

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Re: Want to Retire Faster? Don't Invest. Start a Business Instead.
« Reply #33 on: February 27, 2017, 02:10:55 PM »
I didn't interpret the responses in this thread as negative so much as cautionary; yes, it is possible to make a boatload of money in your own business, assuming you find the right niche and can be successful.  Yes, probably many of the people on this forum could be successful at it.  But, no, it is not necessarily a panacea, or the right move for everyone; some people would be miserable starting their own business, or could make enough money to FIRE in their current job within the time they'd need to get a business in a certain niche up and running and would in fact extend their FIRE timelines, and there is always a chance for failure because of external factors (demand changes, legislation in your niche, etc.) 

I think it's definitely worth considering, and there is tremendous opportunity, and I like the idea of fostering further discussion around how to start a business with a high likelihood of success, and how to use it as a method of asset diversification. 

I've considered starting a consulting business but right now it would be extremely difficult for me to start one on the side (various health issues really cut down on how much time I can invest outside of my normal job into working), and I am not at the point financially where I feel comfortable just quitting my job to pursue something like that. 

CargoBiker

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Re: Want to Retire Faster? Don't Invest. Start a Business Instead.
« Reply #34 on: February 27, 2017, 02:39:16 PM »

The realism is that you are more likely to succeed by investing than starting a business.

True. I didn't say a business was as or more likely to succeed as investing. I did say that it potentially could get there faster.

Quote
MMM himself worked a regular job

A six figure engineer job. I think his wife had six-fig salary too?   I wouldn't call that situation regular, or necessarily recommend someone in that situation to start a business, as I've said to @boarder42 in this thread.

Quote
I will readily agree that a successful business could very well speed up this process, however I don't think it is unfair to say that this comes with a substantial amount of risk too if you aren't FI already. A level of risk not involved if you work a regular job, work hard there at growing your income and saving as high a percentage to invest in will diversified low fee index funds.

I'll agree with this, and acknowledge that you are being realistic and not complainypants in this post.

Quote
If someone spends hundreds of hours setting up and managing a business there is an opportunity cost in losing those hours instead of working them at a regular job or if you are still working a regular job possibly putting them in as OT or a second job.

There's also opportunity cost of spending the next 8-15 years at a job, when you could've started a successful business instead and got there in a third of the time. X number of hours upfront to purchase a few more years of freedom for my life.

Quote
100% of the time reducing your expenses will speed up FI.
You can reduce your expenses and start a business, and I have.  A business generates profits, that can be used to grow the business. You don't have to continually invest in it.

Quote
100% of the time working extra hours either through OT or a second job will speed up FI
100% of the time investing money will lead to more money in the long run.

True.

Quote
So when you say instead of investing in something that is guaranteed to bring you a moderate return and instead invest in this risky proposition that is very likely to lose all money/time invested, but at the chance of a higher return many people are going to criticize it here just like people criticize stock picking.

Some people manage to gain unimaginable wealth doing it, most lose money though as opposed to investing it in a low fee index fund.

That is also only going in to how many businesses fail. I am sure the number of businesses that don't fail, but fail to return above the average of the market would grow that percentage even more.

You have to set up rules for yourself to mitigate the risk. If you're lazy or haphazard with your plan, you'll get those same results.

I will only start a business that fulfills a need. If it's not something people need or want, don't do it.
I will only start a business if it can scale. Either in volume of sales, or in magnitude of price.
I will only start a business that has a barrier to entry. If any joe off the street could do this business, I don't want to do it.
I will only start a business that I have near-complete control over. I break this rule by having such a large percentage of my sales from Amazon, but my next business won't.
I will only start a business that can operate and grow independent of my time. 

Most people who start businesses break all of these rules.

They start a product or service that no one really needs or wants, that is easy to get started doing, that takes 100% of their time to run.


Most of your post was based in reality, but where you went into assumption mode was when you assume that it takes lots of money or hundreds of hours to start a business. It doesn't necessarily need to take either.   You can spend a month and small bit of cash to try and get something off the ground, and if it doesn't work, you move on.  If it failed, all you wasted was a month of your life and a bit o' cash, which ain't going to make a huge difference in the grand scheme of your FI plans.

I think the point I'm trying to get at, is that the risk can be much lower than people in this thread seem to suggest. And I think the risk is low enough to at least be worth considering as a valid path to FI.
« Last Edit: February 27, 2017, 02:44:11 PM by CargoBiker »

CargoBiker

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Re: Want to Retire Faster? Don't Invest. Start a Business Instead.
« Reply #35 on: February 27, 2017, 02:51:02 PM »
so now we get to the root of this you're essentially saying invent or innovate which is even more difficult than just buying a bunch of chinese widgets on alibaba and selling them on amazon.

of course inventing or inovating will be out the market if it succeeeds.

Yeah, Amazon is just a sales/marketing channel for me. 40% of all online sales take place on Amazon, so you can't really ignore it, if you want to sell products online. I didn't mean to imply that I'm selling cheap off-the-shelf chinese stuff.

I think inventing is very difficult, and personally have had zero experience doing this.  Inventing is pioneering into the unknown at a wild upfront cost of time and money, into an unknown market.

Innovating, or improving, is taking something that already exists, that people have already shown that they want, looking at how it could be better, and making it better.  This is way easier than inventing.

Or an approach that has also worked for me, is finding products that exist in other countries, that aren't yet being sold here in the U.S., and being the first to do so.


The iPhone was an invention. Completely radical.   Every smartphone, from every company since then, has been an innovation. A slow improvement to an existing product that people want.
« Last Edit: February 27, 2017, 02:58:44 PM by CargoBiker »

CargoBiker

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Re: Want to Retire Faster? Don't Invest. Start a Business Instead.
« Reply #36 on: February 27, 2017, 02:56:54 PM »
I didn't interpret the responses in this thread as negative so much as cautionary; yes, it is possible to make a boatload of money in your own business, assuming you find the right niche and can be successful.  Yes, probably many of the people on this forum could be successful at it.  But, no, it is not necessarily a panacea, or the right move for everyone; some people would be miserable starting their own business, or could make enough money to FIRE in their current job within the time they'd need to get a business in a certain niche up and running and would in fact extend their FIRE timelines, and there is always a chance for failure because of external factors (demand changes, legislation in your niche, etc.) 

Good points all around. You're right, it's not for everyone.

Quote
I think it's definitely worth considering, and there is tremendous opportunity, and I like the idea of fostering further discussion around how to start a business with a high likelihood of success, and how to use it as a method of asset diversification. 

This is what I hope this thread can be. I think we're all aware of the risks of going on your own. Clearly, the business path is more zig zag, and less straight, than a job to index fund plan. Let's talk about how to mitigate those risks, and make it happen!

Quote
I've considered starting a consulting business but right now it would be extremely difficult for me to start one on the side (various health issues really cut down on how much time I can invest outside of my normal job into working), and I am not at the point financially where I feel comfortable just quitting my job to pursue something like that.

Yeah, that's the trouble with consult businesses. They are 100% time dependent on you. If you aren't inputting your time, you aren't making money. People try to scale up by having others do the consulting underneath them, but this can be pretty difficult to do while keeping the quality of consultations high. After all, if they were good at consulting, why wouldn't they be doing it on their own.

I think consulting is only worth doing if you have a very high price tag for your service.

undercover

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Re: Want to Retire Faster? Don't Invest. Start a Business Instead.
« Reply #37 on: February 27, 2017, 03:21:24 PM »
Bottom line: we need an entrepreneurial section on this forum rather than the once-a-month threads that pop up that end up going down the same rabbit holes.
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swick

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Re: Want to Retire Faster? Don't Invest. Start a Business Instead.
« Reply #38 on: February 27, 2017, 03:24:02 PM »
Bottom line: we need an entrepreneurial section on this forum rather than the once-a-month threads that pop up that end up going down the same rabbit holes.

MOD Note: Yes, we do. Let me work on it.

galliver

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Re: Want to Retire Faster? Don't Invest. Start a Business Instead.
« Reply #39 on: February 27, 2017, 03:29:47 PM »
CargoBiker, do you get satisfaction from the business you run? I am not asking condescendingly or rhetorically; I know a lot of people get satisfaction from sales, from the process of connecting people with products that they seek. I just wonder if it's true for you, and how it compares to teaching band (time with baby aside).

I feel like a lot of these discussions, about what job to train for/take, or what business to start, focus exclusively on the bottom line. But if you're spending time doing something, you want it to either be actively enjoyable, or to bring you satisfaction of a job well done, else it becomes tedious or downright repulsive no matter the paycheck (a pacifist at a defense contractor, no matter how good their technical acumen, would be miserable due to moral conflict). You have some kind of sale or resale operation; I would feel zero satisfaction from that. If I was to start a business, it would probably be a tutoring gig, but that has the same issue as consulting that you pointed out: 100% dependent on personal capital. Null startup costs are a plus, though. However, I bet Aerospace Engineering pays better with more stability, and any downtime I have from that, I'll want to spend pursuing soul-satisfying, health-generating, non-lucrative hobbies (like hiking, cooking, crafting, etc).

On a related note, let's note that some professions don't translate well to startup/small business contexts vs standard employment models (W2 or contract), such as engineering, nursing, physics, pharmacology/biochem, etc. In fact, off the top of my head, I would pull out three categories that lend themselves to starting businesses: software, sales (resale), and service. (Don't gouge me if that's an incomplete list! It's just a guess!) If you don't see a path to higher income and/or satisfaction than your "standard" job through one of those avenues, it likely it doesn't make sense to invest the time and possibly money in the business, away from the main job or other life-satisfaction activities.

Slow2FIRE

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Re: Want to Retire Faster? Don't Invest. Start a Business Instead.
« Reply #40 on: February 27, 2017, 03:45:48 PM »
I've thought about the same thing:  starting a business to accelerate wealth accumulation.  I'm terrible at sales & marketing though...

Plus, what gives me the flexibility to start a side business also makes it difficult to want to start a business:  I have a six figure income, set my own hours, set my own work days, work from home anywhere in the US and get a guaranteed 8.5 weeks off per year plus a small pension.

CargoBiker

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Re: Want to Retire Faster? Don't Invest. Start a Business Instead.
« Reply #41 on: February 27, 2017, 03:56:32 PM »
Bottom line: we need an entrepreneurial section on this forum rather than the once-a-month threads that pop up that end up going down the same rabbit holes.

MOD Note: Yes, we do. Let me work on it.

Alright!

CargoBiker

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Re: Want to Retire Faster? Don't Invest. Start a Business Instead.
« Reply #42 on: February 27, 2017, 04:16:01 PM »
CargoBiker, do you get satisfaction from the business you run? I am not asking condescendingly or rhetorically; I know a lot of people get satisfaction from sales, from the process of connecting people with products that they seek. I just wonder if it's true for you, and how it compares to teaching band (time with baby aside).

Not particularly. That's the main reason for selling it, and getting into something else. I sell a product that people want, but that I don't particular care for.

What does give me satisfaction, is all the perks of having the business, like getting to spend lots more time with my family, and being location independent.  I didn't really like teaching all that much, and the 5th year I had the worst kids of all 5 years, and it was a real beat down. I was ready to jump into anything else, be it business, or another job instead.

Quote
I feel like a lot of these discussions, about what job to train for/take, or what business to start, focus exclusively on the bottom line. But if you're spending time doing something, you want it to either be actively enjoyable, or to bring you satisfaction of a job well done, else it becomes tedious or downright repulsive no matter the paycheck (a pacifist at a defense contractor, no matter how good their technical acumen, would be miserable due to moral conflict). You have some kind of sale or resale operation; I would feel zero satisfaction from that.

Yeah, absolutely. I enjoy the process of creating, be it a business, or a treehouse in my backyard. I think this is an important part of the discussion. I don't think passion is necessarily required for a business, as the perks alone can make it worth it, even if you have to spend a small amount of time each week doing something I don't like (like customer service emails).

Quote
If I was to start a business, it would probably be a tutoring gig, but that has the same issue as consulting that you pointed out: 100% dependent on personal capital. Null startup costs are a plus, though. However, I bet Aerospace Engineering pays better with more stability, and any downtime I have from that, I'll want to spend pursuing soul-satisfying, health-generating, non-lucrative hobbies (like hiking, cooking, crafting, etc).

I used to do private lessons/tutoring for different musical instruments. I wouldn't call it a business, it was really just more of a job that I created for myself.  Tutoring as a business, is the music school down by wal-mart, that brings in teachers, and charges them to use the facility, and then rents instruments and sells supplies to the students.

I did take this, and other manual labor skills that I have, into account when I decided to leave my teaching job.  I knew that if for some reason my business went nuclear over night, I would still be ok, because I can just start making money immediately by putting my skills to use, in exchange for time.

Quote
I would pull out three categories that lend themselves to starting businesses: software, sales (resale), and service. (Don't gouge me if that's an incomplete list! It's just a guess!) If you don't see a path to higher income and/or satisfaction than your "standard" job through one of those avenues, it likely it doesn't make sense to invest the time and possibly money in the business, away from the main job or other life-satisfaction activities.

That's a really good list actually.  Doing any of those things, will give you skills that are very helpful/essential for starting your own business, especially sales. It's hard to run a business if you don't understand how to sell.

In a way, teaching is a form of selling.  You have to communicate your message, and do a song and dance, to get these kids to hear what you're saying and digest it.  So I'd say, spending 5 years teaching helped me in this area.

CargoBiker

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Re: Want to Retire Faster? Don't Invest. Start a Business Instead.
« Reply #43 on: February 27, 2017, 04:20:36 PM »
I've thought about the same thing:  starting a business to accelerate wealth accumulation.  I'm terrible at sales & marketing though...

Sales & Marketing are super important.   Having a good product is the most important thing. It's your vehicle. Having good marketing is the gas that makes it go.  You gotta have both to do well.

One of my favorite sales books is Ca$hvertising.  Lots of good info on copywriting in there, which is the main sales skill you need if selling online.

I'm not great at graphic design or branding, so I have a cousin who does most of that for me.


Quote
Plus, what gives me the flexibility to start a side business also makes it difficult to want to start a business:  I have a six figure income, set my own hours, set my own work days, work from home anywhere in the US and get a guaranteed 8.5 weeks off per year plus a small pension.

In your case, when you don't have a need or even a desire necessarily, a business would probably best develop from some sort of hobby that you have.  Say, you're really into flying drones, and then you start a business doing aeirial real estate photography for a friend who is a realtor, and then it goes from there. So something that would be fun for you to do, and just happens to make money at the same time.

Or just starting something for the fun of it in your free time, to see if you can.  It is kind of addicting launching new products and seeing them be successful.
« Last Edit: February 27, 2017, 04:24:02 PM by CargoBiker »

Slow2FIRE

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Re: Want to Retire Faster? Don't Invest. Start a Business Instead.
« Reply #44 on: February 27, 2017, 04:59:51 PM »
I've thought about the same thing:  starting a business to accelerate wealth accumulation.  I'm terrible at sales & marketing though...

Sales & Marketing are super important.   Having a good product is the most important thing. It's your vehicle. Having good marketing is the gas that makes it go.  You gotta have both to do well.

One of my favorite sales books is Ca$hvertising.  Lots of good info on copywriting in there, which is the main sales skill you need if selling online.

I'm not great at graphic design or branding, so I have a cousin who does most of that for me.


Quote
Plus, what gives me the flexibility to start a side business also makes it difficult to want to start a business:  I have a six figure income, set my own hours, set my own work days, work from home anywhere in the US and get a guaranteed 8.5 weeks off per year plus a small pension.

In your case, when you don't have a need or even a desire necessarily, a business would probably best develop from some sort of hobby that you have.  Say, you're really into flying drones, and then you start a business doing aeirial real estate photography for a friend who is a realtor, and then it goes from there. So something that would be fun for you to do, and just happens to make money at the same time.

Or just starting something for the fun of it in your free time, to see if you can.  It is kind of addicting launching new products and seeing them be successful.

Very helpful response, thank you.

independence

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Re: Want to Retire Faster? Don't Invest. Start a Business Instead.
« Reply #45 on: February 27, 2017, 05:01:36 PM »
I'd like to see a business sub-forum too!

I'm in the process of starting a business right now. Although I think it could be a great choice for me and obviously was a great choice for you, I definitely don't think it's for everyone. Maybe not even most people. I think you've got to have some kind of secondary motivation for starting a business beyond 'if it works it could be a better investment' whether that's a genuine desire to be an entrepreneur, a business idea you're excited about, a hustling mentality, a need for flexibility or an inability to do a traditional job. The early stages of a business are hard work and draining. If you don't have more invested in it, I think you'd struggle to get beyond that stage.

I'm also very risk averse so I'm sympathetic to those who would rather take a predictable path even if it were longer.

pianomom

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Re: Want to Retire Faster? Don't Invest. Start a Business Instead.
« Reply #46 on: February 27, 2017, 06:00:55 PM »
I, too, would be interested in a business subforum. My husband is a business owner and we have been blessed to so far be successful with it. It has increased our income and has the potential to continue to increase our income. We don't invest everything back into the business, but instead we pay ourselves a salary (I'm employed as well) and distributions and we invest as much as we can. I've heard stories of people who put everything in their businesses and 30 years later they don't have retirement savings and their business tanks and they lose their entire savings. So although we will continue to grow our business, we also will invest in the stock market and maybe someday in real estate. Another advantage of being self employed is that if our business continues to do well we could potentially sell it and shorten our time to early retirement.

It has also helped me as a stay-at-home mom who was out of the workforce for a few years. I've gained business experience by working in the business yet my hours are flexible so that I can be home when my kids get home from school and while my youngest isn't in school yet. This gives me extra security knowing that I have business skills, and I'm lucky that my husband and I can work well together in the business.

Running a business may not be for everyone, but it has helped us in our quest for financial independence. And even though it's a service business and at the beginning we could only make money on how much my husband worked, we have since hired employees and can do more work and earn more money even outside of our own potential. We are also looking at selling products in the near future and that could take our business to another level.

Part of our success in running the business is using a recurring revenue model that's not based on hours, staying out of business debt and bootstrapping the business, becoming experts in a niche, and working hard.

I will say that we lost out of some years of investing at the beginning, but our income has made up for that and we will be able to have a higher savings rate going forward.

Dave1442397

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Re: Want to Retire Faster? Don't Invest. Start a Business Instead.
« Reply #47 on: February 27, 2017, 06:37:28 PM »
I think this quote from Donald Rumsfeld is perfect for this topic, especially the last sentence.

"There are known knowns. These are things we know that we know. There are known unknowns. That is to say, there are things that we know we don't know. But there are also unknown unknowns. There are things we don't know we don't know."

I see so many people putting things down in a way that just shows their complete lack of knowledge on the subject. I have a feeling that a sub forum would degenerate quickly.

Krum312

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Re: Want to Retire Faster? Don't Invest. Start a Business Instead.
« Reply #48 on: February 27, 2017, 09:33:58 PM »
Thank you

I thought I heard wise words when someone told me "The best way to get ahead is to do what everyone else is not doing."

The theme of this forum seems to be that when everyone else is enjoying consumerism, we are saving and investing.

The initial investment of $100 is very low. The education costs to run this business could include the books read as well as the money lost on previous businesses.

Starting a business is a great option for anyone who is not a high earner.

There is very little risk in doing what everyone else is doing, such as going to college and getting a high paying job.

There's plenty of free education out there to minimize the risk of starting a business.
The greater the risk. The greater the reward.

Smokystache

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Re: Want to Retire Faster? Don't Invest. Start a Business Instead.
« Reply #49 on: February 27, 2017, 09:54:51 PM »
A few thoughts:
Definitely want a small business subforum.

The $200 Startup is a very interesting read.

People who do well in self-started businesses tend to overestimate their skill and underestimate outside factors. Survival bias is significant.