7 lessons that took me from small entrepreneur to investor

For over 14 years, I have been a serial entrepreneur working my way to successful business exits. Over the course of this journey, I have focused on helping small businesses grow and expand, and helping founders prepare for significant exits.

In this article, we share seven important lessons that will guide you on your journey from entrepreneur to investor. These lessons are about breaking through the income ceiling and realizing that investing is a path to wealth, not just for the already wealthy.

The following sections explore each of these seven transformational lessons in detail.

1. become self-employed
2. Stop exchanging time for money
3. Focus on profit, not just revenue
4. Stop pouring all your profits into your business
5. Avoid expensive lifestyles when profits are growing
6. diversify your income
7. Leverage existing assets

Each lesson is based on my personal experience and packed with insights and strategies to grow both financially and professionally.

Lesson 1: Become self-employed

Choosing to run your own business instead of just getting a regular job is a big step for many people. But if you want to make more money and have more freedom, you need to get one first. Tim Ferriss writes in his bestseller, The 4-Hour Workweek:It’s not just about making money. It’s about having the freedom to do things your own way and on your own time.”

In 2019, I realized that the amount of money you can earn as an employee is limited.So I Dive into entrepreneurship And never looked back.

Lesson 2: Don’t trade your time for money.

Many people start businesses by becoming freelancers and selling their time to make money. You are the boss, so you are responsible for how much you work and earn. The disadvantage is that you can’t earn money if you don’t work. This is a trap that most freelancers never escape from. But you should.

So I became a business owner, Your income is independent of hours you are working

Lesson 3: Profit is vanity, profit is sanity.

In pursuit of larger revenue goals, business owners begin to offer a greater variety of services and products. It can lead to increased revenue, but it can also lead to decreased profits. Complexity eats away at breakfast profits.

Real success lies in increasing profitability. This means simplifying your offerings, focusing on high-margin products and services, streamlining your operations, and cutting unnecessary expenses related to complexity.

Lesson 4: Stop putting all your profits into your business.

I’ve met countless entrepreneurs who have spent decades investing all of their profits into their business. They never understood that “your business is always hungry.” Businesses always have projects to spend money on, whether it’s a new product, hiring more employees, a strategic rebrand, or better software. It never stops unless you stop it.

In Profit First, Mike Michalowitz advises:Let’s take profits first. Run your business with what’s left.This is a simple but powerful mindset shift. This profit-first approach not only ensures personal financial health but also forces you to use your remaining resources more efficiently.

Lesson 5: Don’t let increased profits buy you an expensive lifestyle.

A private plane, a yacht vacation in the Mediterranean, a mansion in the countryside, and a dream car. Upgrading your lifestyle should be the fun part of increasing your income, but it’s not the only part. I’ve met hundreds of small business owners who have made a lot of money and used it all to succeed.

Robert Kiyosaki perfectly sums up this idea in Rich Dad, Poor Dad.Wealthy people buy assets. Poor people have no choice but to spend.“If profits increase, resist temptation Personal expenses will increase as well.

Lesson 6: Take profits and invest them in other assets

Don’t rely solely on your business for income. Therefore, instead of spending your profits, invest some of it in acquiring various assets outside your business. Warren Buffett, one of the most successful investors in history, wisely said:Never rely on one income. Invest and create multiple sources.”

The goal is 5-7 various sources of income. This includes not only your day job, but also investments in stocks and real estate, royalties from bestsellers you’ve written, and equity investments in small and medium-sized companies in which you’re an angel investor. Create a financial ecosystem that supports your long-term wealth and freedom by building multiple streams of income, not just one from your business.

Lesson 7: Leverage assets you already have

The most recent lesson I’ve learned on my journey from entrepreneur to investor is to not always seek out new investments, but instead to look at the assets I already have and ask myself: ? ”

In Secrets of a Self-Made Millionaire, the author emphasizes this strategy:The true path to financial freedom is Maximize the value of what you already ownrather than stretching to gain more.” This really touches my heart. It’s not just an accumulation. It’s about optimization.

Jamie’s story of a freelancer turned investor

I remember meeting fellow entrepreneur Jamie many years ago. When she started freelancing as a graphic designer, I remember advising her to move into owning a design agency and selling scalable services. She instantly maxed out Glass’ earnings and spent the next two years reinvesting everything into her own business.

But after attending my mastermind session, she changed her focus and started extracting some of the profits. increase her personal wealth. She started investing in her stocks and real estate. Today, her diverse portfolio not only provides her with significant passive income, but also buffers her wealth against market fluctuations.

She is currently preparing to sell her profitable business. This will give you a lot of cash. Invest in assets consciously she has a passion for it.

your investment challenges

Now it’s your turn.

1. Identify ways to improve business profitability
2. Research external investment opportunities
3. Understand investments and align them with your goals
4. Take a step towards this investment

Take these four steps and see how your life changes over the next 12 months.

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