Do you know what's fun and free? Dreaming BIG! A while ago, I thought: Can Financial Samurai be the next billion dollar financial technology company? After all, all my writing is from firsthand experience. Further, you are seeing a lot of personal finance sites grow with a bunch of inexperienced freelances.
As kids, we use to daydream all the time. I fantasized about being a professional tennis player who'd compete in tournaments around the world via a private jet until I realized I couldn't even make it to All-State, just All-District. It was only until the age of 32 did I start dreaming again.
The Next Billion Dollar Company
When Ariana Huffington sold The Huffington Post to AOL for $315 million in 2013, The Smoking Gun, and several other sites reported that Ariana only received $21 million, or ~6.6% from the sale. $21 million isn't chump change, but that's a far cry from the original sale price.
Meanwhile, Michael Arrington, founder of TechCrunch sold his site to AOL in 2010 for only $40 million (includes incentives). 2010 was a bad time to sell anything – stocks, real estate, businesses, you name it. But because he owned an estimated ~80% of the site, Mike walked away with around $32 million, or 50% more than Ariana even though TechCrunch sold for 85% less than HuffPo!
It's amazing how two vastly different sales prices can result in two surprisingly different windfalls due to company ownership structures. It often takes an army of employees and capital to build something massive. I'm not looking for fame, but I'm starting to wonder whether it's time to once again rekindle the dreams of great fortune.
Whether you know it or not, you the FS community, is instrumental in the continued content production here. I struggled for years not wanting to do anything but travel and play because years ago I finally found “enough.” But thanks to your continued support and encouragement, I've kept on going. People keep asking whether I will ever run out of material to write. The answer is always “never,” because there's an endless amount of things to talk about. If you can speak forever, you can write forever.
Lifestyle Business Or The Next Billion Dollar Company
Back in October, 2010 I was already beginning to burn out from my finance job after 11 consecutive years (plus another two years at a previous firm in the same position in NYC).
I penned the post, The Comfortable Lifestyle Business Or The Big Payout?, as a way to gut-check my feelings about taking work down a notch with the community. I asked the following question to a bunch of poker buddies and to all of you:
Would you rather make $15-000-$30,000 a month and work only 2-4 hours a day? Or, would you rather make minimum wage working 12-18 hours a day for two years with a 25% chance of selling your business for $100 million dollars and netting yourself a cool $25 million? If you don’t, all you are left with are your experiences.
The large majority of you chose option #1, the lifestyle business making $180,000 – $360,000 a year working up to 28 hours a week. And you know what? That was exactly the answer I wanted to hear as I left a $250,000 – $1,000,000 a year job in finance 2012 to pursue such a lifestyle. In retrospect, leaving so much money on the table at 34 was crazy. But, without taking some risk, I knew my life wouldn't change one bit.
The great irony is that for the first year, I was probably working just as hard, but I was enjoying every minute of it because there was a 100% correlation with effort. My old job had dissolved into a somewhat communistic structure where high performers or high performing departments subsidized low performers or low performing departments. It's a team sport in the rocky world of finance, but I wanted to see what I could do on my own.
What About Now?
It's been almost 11 years since I first asked the lifestyle business question, and By The Power Of Greyskull, the dream turned true. Who would have thought discussing an idea while waiting for a good poker hand could turn into something life changing? Who would have thought, simply one day registering a name online would ever lead to anything?
Ever since middle school, I've thought in four or five year blocks because that's the typical duration of high school and college. The last five years have been terrifyingly wonderful.
Given the lifestyle business goal was met by the end of 2013, one and a half years after I left Corporate America, I decided to utilize my free time consulting for financial tech startups that I believed could revolutionize the industry for the better. I thought how cool it would be to bring Silicon Valley insights to the FS community living here in San Francisco. Fintech was a chance to pivot into something new.
Why Not Build A Billion Dollar Company Too?
During the year and a half of consulting for financial tech startups I learned a ton about Silicon Valley tech culture, compensation structure, fundraising, growth metrics, venture capital, product creation, pitfalls of working at a startup, and various ways people exit for big and small money.
Since November 2, 2013, I've spent over 1,600 hours consulting for Personal Capital. During this period, the company raised a series D funding round led by USAA, BBVA, and Corsair. And I've spent over 300 hours with Motif Investing, who during this time raised a Series E round led by Renren of China, a company I ironically helped take public years ago.
Over the next 10 years, there's a good chance the founders of these companies will personally walk away with eight-figure paychecks. The value propositions Personal Capital and Motif Investing have created are just too compelling for big finance companies and consumers to ignore. I use and enjoy their products, which is why I wanted to be part of their team.
Starting in 2015, the feeling of why not me too began rising in my underbelly again. I haven't felt this way since I began to seriously think about leaving my corporate job at the end of 2011. But life has a funny way of pulling you OUT of satisfaction.
FOMO For More
When I read an article by FastCompany this past January about the 10 most innovative companies in personal finance, it got me all excited!
FastCompany is a leading entrepreneur's magazine. If you click the article you'll see that Motif Investing is ranked the #1 most innovative personal finance company, and it's hard for me to disagree. I couldn't fully comprehend the full value proposition until I built my own motif. Their user interface is slick and the ability to build a diversified portfolio for only $9.95 blows away the competition. How neat it is to be able to consult with a company that has such recognition.
Then I started reading about every other company on the list, until I stumbled across LearnVest at #10, a company founded in 2009 like Financial Samurai, but a company I never thought was that innovative because they are basically a larger version of Financial Samurai, but with a lot less personality, experience, and firsthand knowledge.
My only innovation is coming up with new financial metrics like FS-DAIR for paying down debt or investing, FS-FR Score for measuring fiscal responsibility, the 1/10th rule for car buying in order to save you from yourself, and the Average Net Worth For The Above Average Person to provide people some financial targets.
LearnVest started off helping women with their personal finances, and has since expanded to be a large lead generator for financial advisors with media heavy content. For $299, one of LearnVest’s 50-plus planners will speak with a client on the phone, draw up a financial plan, and then walk the client through it. For $19 per month, users get continued support via email, plus access to premium educational tips. A referral + subscription business based on content is pretty standard, and something I could easily do.
Proving I Can Create A Business Too
Financial Samurai has similar content, but my content is written by me, someone who painstakingly writes 1,000 – 4,000 word articles based on my experiences investing in stocks, bonds, real estate, private equity, getting out of the rat race, saving for retirement, and so forth.
LearnVest hires a team of freelancers, who may or may not have the experience, to write its financial content.
Since early 2010 when I started the Yakezie blogging network, I've come to deeply understand the world of freelance writing because I'm friends with freelance writers, hire freelance writers for my consulting clients, and researched how the industry works from an SEO and business perspective. Personal finance is just too important a topic for people to accept pontification rather than first-hand experience.
The greatest peculiarity I've found online is how there can be so many people out there giving financial advice when they have no experience. (See: Is Fake It ‘Til You Make It The Reason Why We Are All Screwed?) The online media world is filled with people who produce content under a recognizable brand, yet lack expertise. Yet, it doesn't matter so much because readers automatically associate authority based on the platform i.e. if an article is published under Forbes, then it must be good.
What an opportunity to change the way financial content is published! I know hoards of highly qualified professionals with 15+ years experience who are just dying to do something new with their lives.
My “A-Ha” Moment
LearnVest raised around $75 million in funding over six rounds since 2009. On the other hand, Financial Samurai has raised a total of maybe a dozen draft beers and a couple cheeseburgers, with zero equity exchanged when I sat around a bar with friends discussing my idea before leaving Corporate America.
FastCompany reports LearnVest draws 1.5 million visits per month with their large staff of writers, executives, and operational personnel. Financial Samurai draws roughly half of LearnVest's traffic with my team of ten fingers, best friend, and father who frequently reviews my posts for edits (thanks guys!).
In terms of revenue, multiple sources have said the company generates “way less than $10 million a year.” Based on their latest regulatory filing, they've got 45 employees and 3,700 paying clients. They charge $19/month and a $299 “setup” fee. The recurring revenue is therefore $19X12 X 3700 = $843,600 a year. Add on the $299 X 3700 and that's $1,106,300 in one-time revenue.
With 45 employees, and even more contractors and financial providers to pay, offices to rent in NYC, lawyers, accountants, advisors, and so forth, it's obvious that LearnVest is deeply loss-making. Let's say my basic calculation on their revenue is wrong, and they actually make $10 million in revenue a year. I still can't imagine them being very profitable.
When LearnVest raised $16.5 million in Series C funding in mid-2013, it was valued at roughly $100 million ($40 million total funding to date). With its $28 million Series D funding in April, 2014, I'm assuming the company was valued at around $200 million. (A double in one year is commonplace in the bubble land of private equity) What surprised me is that during the time I spent developing this post, LearnVest was sold to Northwestern Mutual for a reported $250 million (probably includes lots of target hurdles) on March 25, 2015!
Why would LearnVest sell for $250 million after raising almost $75 million in total funding, and $28 million just a year ago? Let's not worry about capital returns, cash burn, the inability to raise money at higher valuations, and LearnVest's employees getting blind-sided.
They were bought by a cash-rich giant who already invested in previous rounds and is relatively price insensitive. Everybody is ensured of a job at least (not the main goal of a startup employee making below market rate to just work for survival). Furthermore, let's say the Founder and CEO owns 10% of the company, that's a cool $25 million for her. Not too shabby, but probably not very exciting for many others except for the first three employees.
My ah-ha moment is this:
If LearnVest only grew to 1.5 – 2 million in monthly visitors and has less than 10,000 paying subscribers after raising ~$75 million dollars and being barely profitable, if at all, imagine what Financial Samurai could do raising just $1 – $2 million dollars? I was able to generate a third to one half the amount of visitors as LearnVest with zero budget, and zero publicity. Meanwhile, Financial Samurai is very profitable and growing!
Maybe all I have to do is become a more public figure and get on Bloomberg or CNBC to talk about escaping the rat race, entrepreneurial life in Silicon valley, negotiating a severance package, retirement planning, or the myriad of personal finance topics to surpass LearnVest's traffic. Speaking to big media costs nothing, except for my time. In the past, I've turned down multiple interviews as I enjoy privacy.
What To Do With $75 Million?
Hire the best writers: With $75 million, I could hire some of the most experienced personal finance authority figures to write the best personal finance content on the web. My writers would all write from experience, instead of pontification. I'd have Samurai Marisa, Samurai Mark, Samurai Steven, and Samurai Sally all write and manage different tracks of personal finance columns to build a thriving community. The writers would all have 10+ years of experience working in wealth management, investing, insurance, estate planning, taxes, and real estate.
Create a free Financial Samurai app: Then I'd hire a developer or three to build a free Financial Samurai app that helps people grow their finances based on the ratios me and my colleagues believe should be followed. For example, users can answer a series of questions and the app will the spit out a FS ratio for each, compare you to the average, and then compare you to the ideal figure based on your financial goals. Once the inputs are in place for savings, investments, spending, retirement, housing and so forth, the app will pull your data and track your progress towards financial freedom! We can even gamify the app to make your finances as fun as possible.
Build a subscription based business: In addition to building a wonderful free app to propel you towards financial independence, I'll have a couple engineers build a financial subscription business where people who want more direct help can sign up on a monthly, or yearly basis. The beautiful interface will focus on connecting those who value professional advice to a team of the most qualified financial advisers, estate planners, tax attorneys, and career coaches. We would only highlight the most qualified people and leverage video meetings over your phone or laptop.
Develop corporate partnerships: After the free app and subscription business is built out, then I'll build partnerships with the largest financial institutions in America to create value-added extensions to their exiting customer base. The enterprise model can be a fee based on customer, or a revolving subscription fee.
What makes you think you can do it? My “unfair advantage” as VC Chris Sacca likes to ask is that I've got 16 years of experience in the finance world, an already established perpetual stream of incoming traffic on Financial Samurai due to high search rankings in coveted keywords, and relationships with meaningful players with deep pockets. Furthermore, I have no business debt, strong cash flow, six years of experience building a profitable online business, and over a couple thousand hours working in startups from Series Seed to Series D.
What's The Problem? Build A Billion Dollar Business Already!
My problem is that I don't crave the limelight. I'm also content. I'll gladly meet up with readers and clients when I'm free, but I'm not a promotional machine. I'm of the old school where I want the writing to speak for itself in a meritocratic manner. But as we know in many of my career building articles, doing good work can only take you so far. You must self promote!
Those who rise to the top are masters of self-promotion. Building a big business is about having a “big ego,” as my venture debt friend told me. I've definitely got an ego, but it's not yet big enough to take incessant amount of selfies to post online, share vacation pics on Facebook, write memes with my picture on it, and drive around in a fancy car. You see none of that on Financial Samurai. Meanwhile, I drive around in a Honda Fit, which does nothing to boost confidence, just driving range. Self-promotion just feels a little off.
My other issue is that I love the speed in which decisions are made at Financial Samurai.
Here's how it may go: 1) Wake up at 5am and remember an idea from a dream, 2) Write from 5:30am – 7:30am while the idea is still fresh, 3) Take a break by doing five sit-ups to keep my one-pack toned, 4) Eat breakfast and get on a call, go to a consulting client at 9am, or work on some business development opportunities, 5) Come back from work and respond to e-mails and comments, 6) Ping a freelancer to work on a project, 7) Spend time with friends and family, 7) Go travel for four weeks somewhere, and 8) repeat.
There's never a need to have a meeting about a meeting to hear yourself speak. Sitting in too many meetings crushes my soul because that time could be spent doing something productive. A 30 – 60 minute meeting once a week is fine. Or a 15 minute meeting once a day works too. But I've noticed there are endless in the startup world.
Finally, there is complete autonomy with running my online media business. “Sam, you like the idea?” “Why yes, I do. Let's do it!” Voila! So easy! Once you take money from investors, you've now got to report to other people, even if they don't make the final decision. There will be increased pressure to hit targets and perform, and knowing me, I will stress significantly to try and always over-deliver.
“Sam, I've got a thousand bosses. There's something to be said about being your own.” – CEO of a $3.5 billion public tech company.
One Billion Dollar Company Pipe Dream
Selling Financial Samurai for one billion dollars is probably never going to happen. But selling Financial Samurai for $100 million in five years is a real possibility. During my due diligence, I talked to the following people:
* A VC who invested in Lending Club and Mint.com
* A CEO/entrepreneur who is worth hundreds of millions of dollars
* An Angel who has invested in both AirBnB and Uber
* A CFO of a Series E company
* A CEO of a Y Combinator seed stage startup
* A Venture Debt partner
* A failed entrepreneur after 10 years of trying
* My parents and my best friend
Here's how I could turn Financial Samurai into a $100 million dollar company.
1) Put together a pitch book with details of my organic growth, revenue projections, business plan, and use of proceeds. Highlight the various new products and business lines planned with cost figures and timelin. Compare Financial Samurai with the likes of LearnVest and other similar companies to show that there is demand for innovation in the multi-trillion dollar financial wealth management industry.
2) Hire a respected technical first employee or co-founder given funding is easier with a team.
3) Establish an existing valuation of $10 million – $20 million. If pre-product, pre-revenue companies (i.e. loss making, just idea stage) can be valued for $10 – $20 million, why can't Financial Samurai, which is highly profitable, has six years of existence, can pay a nice dividend if it wants to, has way less risk than all these new startups, and can grow revenue by triple digits every year with promotion, be worth a similar range?
4) Sell 10% of the company for $1 million – $2 million to a consortium of passive investors who understand the space and can provide connections and expertise.
5) Spend $ 1- $2 million on hiring content producers and engineers to develop the products I've outlined above. The $1 – $2 million can theoretically last forever because I don't need the money to grow. But, I will spend the money for growth in a prudent way. If Financial Samurai can grow to 1 million pageviews a month with no big media appearances, no forum, and no marketing spend, I have no doubt I can grow even bigger and quicker with an actual budget. I have literally not put any money back into my company as a lifestyle business, except for ongoing maintenance.
6) In five years, I'm confident I'll be able to grow to three to five million visitors a month, gain more than 10,000 paying subscribers, and boost revenue 20X due to a fantastic app, a new subscription business model, more advertising revenue, and new partnerships. Let's say revenue grows to $10 – $20 million, with 60% operating profit margins in five years. Why can't I sell the company for $100 million based on a 5 – 10X revenue multiple when comparable startups are being valued at 15 – 25X revenue? OK, it's not a billion dollar company, but still. Remember, LearnVest was generating $10 million or less in revenue a year, was loss-making, and got sold for $250 million!
So there you have it. That's how I can grow Financial Samurai to a $100 million business if I actually get down to trying. The private equity market is absurdly hot right now as too many dollars are chasing too few deals. Vox Media just purchased Re/Code after just 1.5 years of existence. Buzzfeed is looking to go public with over a $1 billion valuation. Tech publishing site GigaOm shut down after raising an estimated $40 million because they took on debt and were burning $400,000 a month (!). It just goes to show how much money is out there. And who knows, maybe I'll pivot the business model at some point after a couple years so it can scale to a billion dollar company.
All I know is that after speaking to some highly respected people, researching what other companies are doing with massive funding, and analyzing what I've done on my own, I think I've got a much higher chance of a $100 million exit than the average new startup. Half the battle is survival, and given Financial Samurai doesn't need funding to grow, it can survive into perpetuity.
So let me ask you dear readers, as I asked you back in 2010 with some new figures:
Would you rather 1) continue building a lifestyle business that provides all the freedom in the world with $500,000+ a year in revenue and 50% – 70% operating profit margins? 2) Go for glory and try and build the next billion dollar company over the next 5 years with a 25% chance of walking away with $60 – $100 million dollars? 3) Follow a hybrid route by finally plowing back earnings into growing the company instead of using the money to fund a lifestyle while joining another promising startup? 4) Sell everything now for $5 – $8 million based on current offers and start another site.
Seven Second Resume To Build A Billion Dollar Company
* Was a consistent top 3 producer in the brutally competitive finance industry for 10 years in a row.
* Built Financial Samurai from the ground up over the past six years into a recognizable brand and a highly profitable business with no marketing spend and zero PR.
* Spent 1.5 years and 3,000 hours consulting at leading financial tech firms.
* Understand the importance of scale and profitability.
* Will not fail due to a lack of effort. Calculated risk-taker.
* Can be intensely competitive as a current athlete if needed e.g. beat the founder of one roboadvisor company 6-0, 6-1 without remorse or regard for future consulting business opportunities. But can also be a good politician who can build collaboration.
* Connected to people who can “flip the switch” and expedite the business.
* Weaknesses: already content, lack patience for inefficiency, already helping folks with their financial problems by publishing posts and answer questions, more of the happy-go-lucky type.
Start Your Own Website, Be Your Own Boss. You can try to start your own massive billion dollar company, or you can do what I'm doing and run a lifestyle business online. But nothing will happen if you don't start your own site to begin with. At least own your brand online and earn extra income on the side.
Why should LinkedIn, FB, and Twitter pop up when someone Google's your name? With your own website you can connect with potentially millions of people online, sell a product, sell some else's product, make passive income and find a lot of new consulting and FT work opportunities. Here's my step-by-step guide on how to start your own website today.
Financial Samurai started as a personal journal to make sense of the financial crisis in 2009. By early 2012, it started making a livable income stream so I decided to negotiate a severance package.
Years later, FS now makes more than I did as an Executive Director at a major bulge bracket firm with 90% less work and 100% more fun. Follow my step-by-step guide to starting your own website today in under 30 minutes. Once you own your platform online, you can now potentially reach 3 billion+ people! You never know where the journey will take you!
Updated for 2021 and beyond. I'm loving the lifestyle business lifestyle. No investors. No shareholders. 100% freedom to do whatever I want is priceless. A billion dollar company is ice, but I really enjoy the autonomy of my lifestyle business.
Why Blogging Is The Best Business In The World
80 thoughts on “Can Financial Samurai Be The Next Billion Dollar Company?”
This is the only article I’ve read on your site (and I’ve been here 30 minutes) but I know I’m going to become a fan. Personally, I’d say go big. You need to be the best you can be without any regrets in life. The fact that you are asking the question is proof enough. You’ve got it all mapped out and all that is left is execution. I’m just a young 26 yr old guy from Ghana who wants to build a lifestyle business like yours, escape the poverty here and live the dream. So obviously, I don’t have that much life experience as you but that’s just my 2 cents.
I’d also recommend you reach out to Ramit Sethi because he talked about something similar on his blog recently. He’d be in a much better position to advise you. Wish you all the best.
100 million. Sounds tough. Not too many blogs have sold for 100 million. Tech crunch sold for like 30 mil 10 years ago. I think you would need to totally revamp the site and have a proprietary totally custom site built from the ground up. It can’t be like a word press template. Huff Po, Tech Crunch, and motley fool all had that proprietary aspect around the sites they built. You’ll also need lots of writers. You could also choose to take it a different direction beyond just blogging. All of which requires capital.
Another, thing to consider would be keeping the blog the way it is today and instead Quitting your consulting gigs. You could then use the freed up time from quitting consulting to start something totally different seperate but maybe related to FS.
Anyway, good luck. It should be a nice journey and all of the above is at least worth deep consideration.
If $100 million was easy, I think everybody would do it :)
I wouldn’t sell a blog. I’d create products with the blog helping serve as a supporting content marketing arm.
Two main things for raising money: Building a team who builds a product, and getting that product distributed and known.
Seems like you want to take a step in some direction. That means you’ll have to. :)
But whatever happens, please, please, PLEASE don’t sell it to some group who’ll hire cheap just-out-of-college kids and bored housewives to write about student debt, how to save money on shoes, and how to make money on Etsy. For the love of all that is good and holy, don’t ever let anyone ever do that to your empire!
I vote turn FS into a $100m business. If you find it no longer brings you happiness after you’ve cashed in, you can always start all over again doing something new that you love! Go big!
It will probably take 5-10 years to build the business to $100 million. What if you are already happy?
In my opinion, if you’re happy then leave everything as is and enjoy your already wonderful life! But if you have think you want to do this and the process will be exciting and rewarding, plus you are concerned that if you don’t do it you’ll live with regrets, then isn’t it worth the effort?! I suppose you’re in the position where you can do no wrong, so just pick whatever will bring the greatest amount of happiness and the least amount of regrets.
I would vote for continuing to build the business behind the scenes and maintain your privacy. I dont think you can overvalue the worth of your privacy. Im sure many celebrities would pay millions to get their privacy back.
Thanks Jeremy. It may be a chicken or the egg thing though. Many celebrities wouldn’t have gotten to their millions without being all out there!
I just wanted to say that I will be a fan either way you go. It is amazing that you are able to do all of this by yourself. The quality and depth you put into each article is nuts. One flaw in the plan though is you. You are FS and if you are gone will the quality remain. Kevin on shark tank would say what happens if you get hit by a bus.
The quality will be bursting at the seams! So if I die, all will be good. There are so many people who want to get out of finance and do something new. They know their stuff, can write, can market, can create. They just don’t know how to get there.
It’s a dream for many professionals to leave Corporate America and work on a startup or something new. It’s just the golden handcuffs and the inability to understand how to escape that keeps them trapped.
Mark Zuckerberg was offered a job at AOL, sell FB to yahoo for $1 bil, he turned both down. And now his net worth is >$ 24B :)
Why sell when you can be the chairman and hire someone to be CEO like Alibaba’s boss does it :)
You can turn FS to motley fools. in 2005-2006 they were nothing. Look where they are now?
One broke paparazzi name Lopez only focus on writting craps about Britney Spears back then, and making millions why not FS with great contents and further build out.
I’d keep coming back to see the changes you’ll make.
I wonder about Motley Fool. They’ve been around forever, yet still no major windfall. They’ve had a lot of ups, and then some downs when I think Yahoo cut out its syndication partnership. I’ll be curious to know if anybody else has insights on the company, as that is one loooong road they’ve taken!
I was pretty startled to hear those million dollar numbers you’re throwing around. It makes sense when you spell it out like you have with those other benchmarks, but still a little mind-blowing that a blog which isn’t hugely focused on selling products to readers could be worth so much already (no disrespect to the excellent content you write here of course!).
I voted pretty firmly to keep the lifestyle business, or perhaps add some new products or ideas here and there at your leisure. But that’s because right now my dream is to make only a fraction of what you’re doing, and is hard to imagine wanting more. But it’s also hard to imagine what it’s like in your shoes now, with FS as your current ‘baseline’. Your quote about life ‘pulling you out of satisfaction’ rings true to me. I think we all picture some future milestone where life will be perfect, and we’ll never want again, but it never lasts long until you start itching to do something else exciting and new.
I’m sure you’ve spent plenty of time reflecting on this, but I think there must be so many other avenues for you to challenge yourself and achieve your potential. But if this is the path that means most to you, then go for it!
Kinda funny, isn’t it? You never know what will happen if you one day register a site, build a brand, and produce something of value or of interest to enough people. The thing is, so many people just don’t bother TRYING. It’s either they don’t believe in themselves, or their idea, or know how. But, once you see someone do it, it becomes infinitely easier b/c you no longer have this self-defeating mental block to hold you down.
One of the best compliments I can get from a reader is when they ask whether I make any money off this site. A lot of times, readers will reach out and want to donate money to see if they can support me. I’m touched, and it makes me happy.
Now I wonder what if I actually started building a business with products and services to sell and scale online. Surely revenue would tick up, no? Just got to build something that people want. It seems obvious to me there are millions of people out there who need some excellent financial advice that suits them, at a reasonable price. The market is big enough for many players.
Large banks need to be disrupted b/c lending is so onerous nowadays, as I experienced w/ my own recent mortgage finance rejection. Financial advisory can still be more readily accessible to the public. Financial education is still lacking in schools. The opportunities seem endless! Too bad, one only has so much attention and energy.
Don’t get sucked back in FinSam. You left because you didn’t want to be in the racket anymore! Never go back! You can’t take it with you when you are gone! FREEDOM IS YOUR SALVATION!
Noted, Peter! What is the point of money, if you don’t have your FREEDOM?
I knew this would be a fascinating article! Thanks for sharing your thoughts about what to do next. I cannot help having Peter Thiel’s voice in my head right now, know why? Because he focused on monopoly capitalism, and the importance for being a company doing something truly unique — rather than competing over scraps and lessening the price of the product over time. That’s a powerful point he makes in his book “Zero to One.” And while you do have a unique voice, community, and intelligence, I wonder if that can be sold to someone else. I’d be buying you if I made an investment — not the product.
Haven’t read the book, but perhaps I should!
Small world, my close colleagues used to cover Peter Thiel’s Clarium Capital before it kinda blew up. I lived in the same neighborhood as he did.
Sam – This article is why I keep coming back to FS – great insight, candid, quantified, etc. Short story that may help with your decision: I have a buddy (Aaron) who plans his TH/FRI/SAT nights to the moment; a party here, a drink there, etc., etc. Every time I go out with Aaron we spend more than 50% of the evening driving/cabbing to the next place. One night I was out with Aaron at some bar I got to talking to this guy (Mike?) about where Aaron and I were going next. The bar we were at was packed, cuties everywhere, etc. – Mike put his hands up and asked, “Chris, why are you leaving this good time to go searching for another good time?” Solid question! The point is you’ve got it great with base hits (FS site, rentals, consulting gigs, etc) so what would you gain by swinging for the fence…. other than a boatload of headaches?? Look forward to reading your stuff and hearing wutev you decide to do.
Now that’s a great analogy!
Are you saying that it’s not going to be fun dealing with investors, lawyers, regulators, along with multiple employees with their own dreams, issues, and desires?! Sounds like a walk in the park! :)
You’ve only got one life to live. You should ask yourself: if I don’t take the dive in, will I regret this when I’m a grandparent?
You have the expertise, you have a nice nest egg to fall back on, you have experience in the market, you have a clear plan with fall back options, you have a solid network to get top shelf advice.
It doesn’t get much more risk-friendly than that in entrepreneurship!
Judging by your comments though, it already sounds like you’re 90% of the way there.
Good luck from the 808!
Mahalo! What are you doing in Hawaii? I’ve often thought about just running the lifestyle business from there. But, there’s just so much action going on in San Francisco now, it’s hard to permanently remove myself from this place for longer than two or three months at a time.
I guess I should’ve said “Good luck from your brother from the 808.” I was Radford HS c/o ’09.
I’m actually in the Bay Area (Palo Alto) for all the same reasons you are. I started a design/innovation consultancy (simplicitylabs.co) and all the work is in the Bay / Mainland.
I wish I could be back home in Hawaii, but the opportunity cost is just too high! I visit as often as I can though; my whole filipino fam is back there.
In that kind of decision, there’s always one answer your gut tells you to pick. I think you’ve already made your choice…
Gut says enjoy life. Statistics are not kind to startup successes. Furthermore, you could have a largely valued startup now and end up going bust, or become a zombie company that just gets buy with never a large windfall.
That said, I haven’t made up my choice yet. I’m looking for a sign over the next couple of months.
All viable options! Question is what YOU want to do. I’d keep building and potentially consider taking a passive investment to monetize some of the business now and/or use for growth. That’s probably not the super ambitious path though.
Made me think of this too-> https://startupclass.samaltman.com/courses/lec01/
Have you thought of tax implications of the different exit paths? That could be a post for others with businesses
Thanks for the link! I’ll watch the video tonight. Do you know if Sam Altman has started and sold his own startup?
I know what I want to do every day. It’s different from what I should probably due. I’m constantly conflicted by this “don’t waste your opportunity” type feeling.
Ever get that feeling?
Before YC, Altman founded + sold Loopt. I think it was more of an acquihire though, it doesn’t seem like he got “f you” rich.
(Although now with his network in the Valley, he probably gets in the best angel deals and is doing just fine.)
I think everybody get’s that feeling. I liked how Steve Jobs said it where if you’re not getting up and doing exactly what you want to be doing for too many days in a row, that you should really think about making a change. I don’t think he necessarily meant this will make you the most financial wealth, but it’s weird how things have a way of working out when you’re doing what you love.
What I found thought provoking too re: that link is how large the reward could be by being the 100th guy at Facebook or wherever with just 10bps of equity.
This was a great and very thought out post as usual.
Given your traffic and loyal readership, you really don’t need to take outside investment to level up Financial Samurai.
I think you could easily add 7 figures plus to your sites revenue by adding a premium course. Investing a little money in a site re-design and start aggressively growing your email list and leveraging it way more than you currently do. You have two eBooks you could potentially use as lead magnets.
You have information that others need and value.
But it all depends on how much extra time you want to put into growing the business.
A great example of what’s possible is what John Lee Dumas has done over at EOFIRE.com.
He started his site and podcast back in 2012 and is now making $300K to $400K a month with his girlfriend and a small team of VA’s.
I would love to see what you could do by leveling up (without investment from outsiders), but I would also love to see your voice be the primary one on the site.
I also believe what others have mentioned in the comments above, it is your perspective and lessons as a practitioner that make you unique and interesting. I would hate to see a bunch of staff writers on the site. That would totally change and dilute your brand.
Not sure if you follow Gary Vaynerchuck or not, but he has a philosophy of “Give, Give, Give, Ask.” And you have mastered the Giving piece without asking much in return for all the value bombs you have dropped on this site. Now it’s time for a little asking and you can still give 99% of what you create for FREE.
Man I wish I were in your shoes right now. You have an exciting journey ahead of you my friend.
$300K – $400K a month is massive! That method while being your own boss sounds to be the ideal scenario. Thanks for helping highlight what’s possible. Knowing other people can do it is a great motivator.
I’ve got to get over my ambivalent attitude towards making more money if I want to start a bigger business. It is really weird. I love that money buys freedom, but I don’t love money. In fact, I think money is the cause of a lot of stress and problems.
Maybe the real answer is to find a new passion; my life story goes in a different direction, but I’ve spent eight years teaching, and I’m at a point where I’m starting to wonder what else I can realistically take from it that brings me joy. I’ve won some accolades, crafted a successful product in the classroom, and don’t have the ability to leverage my skills within the work day to bring me more wealth. So I’m exploring other career paths now.
You’re content with this site in its current form, and it still brings you joy, but it doesn’t sound like becoming a major player and pusher of content is something that you necessarily want (or at least not with this business model). Why not figure out your end game first? I think following another company’s example/story isn’t the risk you’re looking for. Do something you’d never expect yourself to do, and then live it; you won’t have any regrets that way.
Yes, go for it! You’re still young and restless so do it while you can. Once you settle down with a family, it will be a lot more difficult to go for broke. You can always go back to the current model, right? I don’t think you have anything to loose.
The article was great and very fun to read. Based on reading your blog pretty regularly, the idea of creating the next billion dollar fintech company doesn’t seem to fit your personality and your lifestyle. I’ll make a tennis analogy(side note I don’t play tennis). You can go after hitting the line on your next shot with as much force as you can followed by sprinting towards the net to smash any return or you can exchange ground strokes from the back of the court at your leisure.
I don’t think either one of them will be bad, but certainly completely different lifestyles in each.
I like the analogy! I’m a baseline grinder in singles, but I do serve and volley as much as possible in doubles.
You’re right about going for glory not fitting my personality. But, I see such a huge opportunity to provide quality financial advice, perhaps the best financial advice from highly qualified people through a content marketing solution.
Let’s see what the future holds.
Sam, if it helps make the decision any easier, just know that there is no right answer here. You’re a poker player so let me put in poker terms. 2 players left in the tournament – you and Phil Helmuth. Phil has 2x your stack and blinds are still a non-factor. Phil offers you a 10% chop of the winnings to end the tourney immediately. What do u do?
If I had to guess, I think you would decline Phil’s offer, given it seems you value experience more than money. I think you would take on the challenge to test yourself! You would gain valuable experience playing against a legend and would have no regrets, even if you failed.
I say HELL NO because second place is always guaranteed at least 30% of the total pot! :)
Eg first place at The main event WSOP 2014 was $10 million. Second place was $4,950,000!
I’m a Process Management Consultant/Developer… If you happen to decide you want to build a “Financial Samurai” app, I would love to join your project. (<—- yes, fanboy).
If you go through with the plan for the app, I wish you luck. I’m not sure if I would use it or not, personally. Some of the ratios/scores you have invented and blogged about were interesting but I didn’t find most of them helpful to bother tracking them as it relates to my own finances.
On the other hand, I’m sure you would come up with more scores and ratios than what you have now, perhaps allowing users to come up with their own?
In my own finances I aim to keep my car and personal residence as small as a % of my net worth as possible, with the value of my car specifically below 1%/NW at all times, invest 80% or more of my take-home pay, measure my annual change of NW in $ and % growth, and compare my investment principal to my cap gains and reinvested dividends to visualize my compound growth. I have a spreadsheet built for this and I visualize it in a dashboard using my employer’s software.
Luck is hopefully all I’ll need! Because thinking about all the extra thousands of hours needed to spend creating the business can be overwhelming!
Fine, fine, I’ll write for this site for $75 million. You don’t have to beg.
But in all seriousness, GO BIG.
Sam; I follow your site daily, and never comment (maybe once). Your voice is what keeps me coming back to this site. Your writing style and story telling is a unique gift. I find that the other blogs that I frequent all have that in common. I used to read Get Rich Slowly religiously, but when JD Roth stopped posting I stopped finding the site interesting. My point is, if you decide to hire content writers and add other modules to your website, I think your voice will diminish and gradually the site will no longer reflect your POV. You would loose me as a reader. That is not to say that you couldn’t achieve your goal, but the product would likely be a different animal and have to attract a new following.
Thanks for following! You make a good point, but don’t worry, I don’t plan to stop. I’ll always have my own column. The blog will just be a smaller portion of the business as the product side takes over. You can still click a link to all this content. You’ll just see a traditional business added on to the site.
Wow what a great post! You sure have had a lot you’ve been thinking about. I can understand why these type of thoughts can run around your head living in the Bay Area with endless startups and fintech companies all over the place.
I believe you can do whatever you set your mind out to do. You’re a go getter who has the type of hustle most people only dream about. I think you also value autonomy a ton and are very efficient because you have full control of everything you do now.
I’ve been listening to the Startup Podcast and it has opened my eyes to a lot of things. While the show is incredibly fascinating to listen to and hear about, I am so glad I am not going through the challenges and insane amount of hours and stress they are. It reminds me of how unhappy I was at my old job with stress but times two, three, or even more.
Life is short and so yes its easy to think about doing so many things in order to not have any regrets. But at the same time we have to remember that there is a lot of value in not doing things too. I think you wrote a post once that referenced something like the most common regret people had on their death bed was actually working too much, not working too little. There’s a lot of food for thought in that.
Growing a company to the point it needs lots of employees would certainly be exciting. It may also come with disappointment bc noone is likely to be as passionate as you. I experienced this a lot at my last job of 10 years. I cared way more than my staff and it planted seeds of resentment and frustration in me that eventually boiled over. There was one turning point I had with an employee who was not doing his job right and was making my job incredibly difficult and I snapped inside. Dealing with other peole can be super hard.
But yes there are many incredible upsides that are possible as well. You would learn a ton and would push yourself to new limits. You could do a lot of exciting things and make a lot more money.
I would say keep on going with what you have as it is already incredible. The grass usually is not greener on the other side. If you really want to kick it up a notch, a mild hybrid approach could be good. Or instead of dealing with the headaches of investors you could put more of your own money into trying to expand. You’d get to experiment with having control.
No matter what, you’ve done incredible so far!! We all love Financial Samurai!!
Thanks for all your support over the years! Really, I couldn’t have grown as much without you helping me with the editing, the book, and the sharing.
I really like the Startup Podcast. It’s interesting how unscalable their business is though with advertising revenue paid one time for the season, and no more recurring revenue. I like the written content business much better b/c it is faster, easier, and more recurring.
I don’t envy people who have to manage multiple people, with multiple sets of desires, egos, and problems. Stress!
Always happy to help!
I also enjoy the Startup podcast since the one featured was founded by women. They provide a lot of insights that I hadn’t heard before since a lot of founders getting featured are men.
My guess would be that once you take on investors, it would no longer be a purely “fun” venture. Of course, even now, you work very hard and try to grow through quality content, but that also allows complete autonomy and the ability to take extended leave as you wish.
Unless you fear a drop off in visitors to the sites, I can’t see why you shouldn’t try to grow it yourself for another 1-2 years. Alternatively, set a target to make a decision when you reach, say, 1.5mm MAUs. At that level, you know you could quite easily ramp up if you no longer have the passion to fly solo, or maybe you really want to build an empire… in which case the 1.5mm MAUs will surely assist in capturing great financing for even less equity.
Another option given the strong cash flow, if you feel inclined to reinvest, would be to take on some debt so that at least for the next few years you can grow the sites using OPM!!! Then, a few years out, you can pay it off, take on investors (small equity), or a lot of investors for more equity. Or, more debt if you want to stay solo!
It’s all about optionality!
The fear of FUN turning into WORK is definitely one of my biggest fears if I take on synergistic investors who understand this space. Part of the reason why I’ve been able to continue is because I’m having fun around 90% of the time!
When I was working in Corporate America, I was having fun for about 70-75% of the time, hence the 13 consecutive years in one spot. But the financial crisis and massive gov’t regulation dropped that fun percentage to only 40%-50%. That’s not worth it, so I left.
Debt is interesting, but why not just use the existing cash flow? As a frugal person, my cash flow usage has also been relatively frugal. I’ve got to overcome this if I want to grow faster. Consulting at startups made me realize how much money companies spend on marketing!
You could absolutely use free cash flow to reinvest. I assumed you were wanting for more capital to grow the business than the ~250k FCF which you have now. After all, today your business (my guess, anyway) is running on relatively few assets and mostly outsourced services/providers (web hosting, ads, etc).
Maybe ramping up, depending on which services/products you want to deliver first, could take more capital. Otherwise, if you can fund your growth with cash flow, then by all means!
Personally, I’d go the small equity raise avenue (<20%), and see if I could negotiate a decent option to buy it back. This way, you pay some of the cost if you want to get back all the control in a few years, but also get the advantage of someone else with material skin in the game.
Having the right partner makes all the difference… with good potential to gain more than you could lose. Depending on the option price to buy it all back, it's another way to consider things. At least this way you can reduce your fear of giving up control, and quantify the cost to get it back.
First world problems for sure! Looking forward to see your new strategy. Good luck
Hmmm…ok, so take this with a grain of salt, but here is how I think of it. You are like the LeBron James of this niche in blogging, sure you could hire a team of writers and they could spti out additional content (most of it good stuff)…but the reason people keep coming back is for your unique insights. If LeBron leaves the Cavs next year are they going to be the same? Hell, look at the Heat to get the answer to that one. If somebody is willing to give you $5-$8M for a virtual one employee business I would not hesitate. The market is super frothy IMO and it reminds me a lot of 2007/08…everything is way up in value, company valuations are at a peak…take the money and run my man! Pay your capital gains taxes while they are low, sign on for a consulting/writing gig/non-compete for 3 years @$300k/yr = cake & eating it too. There will absolutely be a day when the irrational exuberance dries up, every bubble bursts. If you’ve already got enough and this is your baby, I totally get hanging on. I also get going for it because hey you’ve got nothing to lose since you starting this thing from nothing…that is something appealing to me as well.
I’m guess I’m most interested in the direction you are taking and how FS posts have evolved because you are a few years younger than me but also a few years farther into the retirement thing. I’m just now starting my “retirement”, and of course there are opportunities to jump back in and make $ but really how much is enough? You could take the proceeds from your sale, plop it down and pay cash for your oceanfront home in Hawaii and call things good…consult, travel, and enjoy an amazing life.
How much is enough is exactly the question. I’ve asked a person who is worth probably $300 million this exact same question, and he said, “never enough.”
But the money is not the main driving force. The main driving force is not looking back with regret for not having tried my hardest to realize what I could do with my average mind and body. Given I’ve got enough money to be happy, what’s left is seeing what I can do before I completely run out of energy.
Like I said in the post, “Life has a funny way of pulling you out of satisfaction.” Maybe I need to leave Silicon Valley now when things are good b/c there is just too much FOMO. Live the good and peaceful life back in Hawaii!
GO WARRIORS! If they win, this town is going to go nuts, especially after the three SF Giants World Series Wins.
LOL, oops I probably should have said you are the Steph Curry! It is amazing the Cavs are even in this series at all actually. I totally get going for it for personal pride & satisfaction reasons. It blows my mind the kind of valuations and money that is being spent on apps and small start ups, the only slight concern I would have is that you achieve your target but miss the big payday because of market timing. Quality properties and companies will always have value though, good luck!
You have a life most can only dream about. To use your own words, the income needed for maximum happiness is $250k a year. You’re well over that doing something you love, and people love reading it. If you sell out to the big guys one day I may not be as interested anymore. I’d love to see some figures as to what happened to the readership of getrichslowly after it was sold. My gut says the regular readers said goodbye. Anyone know?
Everybody has a dream, and can dream, no matter who they are or how much money they have. I think we can all remember the days where we’d daydream about the future. It was a wonderful time. Too bad it takes a lot of effort, action, and luck to fulfill dreams!
GRS’s readership looks to have died down after the sale. But is that not the buyer’s problem?
What I’m thinking about is creating a bigger business where the blog is a small percentage of the company’s real estate that continues on like normal. I’ll just add on products. I’ll never stop writing.
The inherent value of this company (moderately unbiased and distinctly valuable intelligence) would likely diminish if you scaled up… which would be disappointing. The world needs Financial Samurai. But you gotta do what you gotta do I suppose… I’m sure over the next 10-15 hrs blogging (as a concept) will morph more than we can ever imagine. So unless you adapt there is probably an expiration date anyway.
Tech/internet/the world is always changing. I agree. Hence, this post!
if you would to sell off your company, would you have to sign a non – compete clause stating that you wouldn’t be creating another financial related website? if so, then I would say it would not be worth it.
Maybe. Everything is negotiable. Perhaps I can spend the non-compete period to work on an invention/product I’ve been thinking about for a while, or any number of things really.
Sam, I see no reason given your numbers that you can’t have your cake and eat it. You can continue to write for FS, stay on in any takeover, and receive a large payout, + a dividend as member/consultant/shareholder of FS.
8m or 100m, with your experience and momentum you’ll have enough money to live the way you want regardless. You’re happy driving a Honda Fit, right?!
Love my 2015 Honda Fit! Two cameras, two USB charges, Pandora built in, Bluetooth, and Magic Seats. What more could a car owner want?!
Lol, you’re right. And as we all know on here, it’s not what you own, it’s how you own it. But that’s for another thread!
I autocrossed in the Macan S recently. It was brilliant.
Maybe you would like to look to exit to the Big 3 of the Far East (Baidu, Alibaba or Tencent)- it looks like they are snapping up mobile enabled companies with impunity.
Mobile is definitely hot right now, and Chinese Internet companies have massive balance sheets. When China’s capital account creaks open even more, anybody with any desirable asset could be in for a nice windfall.
Build real assets!