Building Indestructible Wealth with Jack Gibson
Jack Gibson recently sponsored a newsletter that I read. I signed up for his free guide and spent a Sunday afternoon printing it out, highlighting it, and then quickly set up a free call with him. The call did not disappoint. Today I’ll summarize my key takeaways from Jack’s work, including insights from our call where he coached me on my own business (you’ll love how he talks about entrepreneurship).
Here are the takeaways:
Spend the majority of your time doubling down on your business
Jack’s guide is all about investments that will provide passive income:
Rental real estate
Convertible bonds
Privatized banking
Bitcoin mining automation
Syndication
But he prefaces all of those options by first saying this:
“If your business is making $250,000 a year. It’s a lot easier to focus on growing that to $500,000 a year than it is to try and make $250,000 with outside investments.” —Jack Gibson
So his first piece of advice is to “double down on your current business, or if you have a job, increase your skills and become world-class at what you do.”
Your attention to the profitability of your business is the single most important component of building wealth
It’s not enough to grow revenue from $250k to $500k. We have to do that profitably. Not every business model lends itself to easy profitability, but it’s a key source of wealth generation.
There are three key areas for any good investment
They create passive income that you can spend right now
They have the ability to grow in value
They have tax advantages
Building a business is similar to the above, except it’s not passive, at least not right away. But it’s an asset that grows in value, has tax advantages, and at a certain point, can provide passive income.
Don’t let your investment strategy distract you from growing your business
It’s common advice that when your income hits a certain point in your business, you should start buying rental real estate to grow your passive income. He agrees this is a good strategy; however, he reminds us of the first point, which is that truly the best levers for building significant wealth are in our businesses. So no matter what else we’re pursuing (like real estate), we need to stay focused on the business no matter what.
Entrepreneurship is really hard in the first two years but worth it over time
I confided in Jack on our call:
“I’m building a business, putting in work, paying my own health insurance every month ($500), and re-investing almost everything I make back into the business. Meanwhile, many of my peers are making multiple six figures. I’m hoping you can share some wisdom with me because, at times, it feels like a huge question mark whether any of this will be worth it.”
Keep in mind, Jack is older than me (I’m 30 as of writing this) and he’s launched multiple businesses. His first business now makes him $1M in passive income per year. Here was his response:
“From a wealthy person’s perspective, you’re doing everything right. The first few years are hard, but it’s worth it. Here’s what happened for me and what will likely happen for you…”
From there, he outlined a model of how entrepreneurship can play out over time:
No guarantees of course and the years are just estimates
The wealth slingshot effect of entrepreneurship
If you picture a slingshot, you initially have to pull backward before the stone can speed off into the air. That’s how business often feels and that’s how Jack described it to me on the call.
I’m in the pulling-your-slingshot-back phase. From a wealth perspective, it can feel like I’m falling behind (the opportunity cost of the income I could be making at a full-time job). However, the investment I’m making now will likely be the exact thing that propels my wealth.
Entrepreneurship is a mental game
Jack didn’t talk about this a ton on our call, but it’s something I wanted to point out:
Entrepreneurship typically requires an initial sacrifice that not everyone is willing (or able) to make. Having a mortgage, children, or other responsibilities makes it challenging to skip out on reliable income from a traditional job.
More importantly, if you do take the risk, no one knows in the first few years of their business if any of it is worth it. Including me.
That takes a lot of mental energy to manage every day.
The most important thing I took away from our call is the upside of what I can have over the long term. If you’ve been reading my content for a while, you might recall that a core tenet of my work is building for the long-term and delayed gratification.
Life is risky, not just entrepreneurship
Entrepreneurship is risky, but there’s also the risk of not trying something you’re interested in, the risk of not receiving the upside of everything you could build. Plus, being an employee isn’t a perfect state forever. There’s the risk of having a bad manager or inevitable layoffs. I think of this quote often although I’m not sure who said it: “As an employee, you’re a line in a spreadsheet until the math doesn’t work anymore.”
If you enjoyed this article, please share it with at least one person. And if you’re new here, subscribe to my newsletter here.
