Having a lifestyle business is the best. As someone with a lifestyle business since I left my day job in 2012, I'm completely biased. However, I've been able to make money doing what I love with no boss and no growth targets. At the same time, I've been able to life my life the way I want.
Why Having A Lifestyle Business Is Best
Imagine if you were a billionaire, free to buy private jets, mega yachts, and your own archipelago of islands. You'd also have love interests everywhere you went because there are an endless amount of people who want a piece of your money and power.
Sounds pretty good right? Not if it's at the cost of your personal freedom.
Elon Musk of Tesla shared this public tweet on a very private matter.
Thanks to Elon's tweet, shorts like David Einhorn who is down -18.6% for the year have little-to-no hope of getting back to even by new year. Back when I was working in finance, sending out such information over social media would get you thrashed by the SEC. Now they're treated like punching bags by the wealthiest people in the world. Oh, how times have changed!
Being A Public Company CEO Sucks
It's clear Elon doesn't enjoy being a public company CEO. He chastised analysts on their 1Q Tesla earnings call for their boring and stupid questions. He goes on nonstop public rants and gets into social media battles with his haters. His FU game is strong!
Elon has discovered what we private lifestyle business owners have known for a while: having the freedom to do whatever we want is PRICELESS. Being under the constant scrutiny of others is the worst, even if you can get incredibly rich.
The Lifestyle Business Decision Framework
Before you become an entrepreneur, you must decide the magnitude of your business. For example, this was my decision back in 2012:
1) Do I want to run a lifestyle business where I could earn $100,000 – $500,000 a year, have no employees, less stress, and only work 25 hours a week anywhere in the world with a 80% chance of succeeding?
2) Do I want to run a potentially big business where I could earn mega millions, but have to manage employees, work 60+ hours a week, raise capital, and feel the tremendous stress of succeeding due to everybody else’s expectations, with a 80% chance of failure?
Live Life To The Fullest
At the age of 32, I was already getting disillusioned by the financial services industry, so I chose Option #1: the lifestyle business. The mega millions from Option #2 sounded nice, but the realistic chance of getting there was much lower than Option #1.
What I've discovered years in 201 is that a lifestyle business is even better than I had imagined. Not only can you make more than $500,000 a year, you can also sell your lifestyle business for multiple millions of dollars. Further, once you start traveling, or volunteering, or have a family, a lifestyle business gets even that much better.
There is no more incremental happiness once you make more than ~$200,000 a year as an individual or ~$350,000 a year as a family. Life is good without public scrutiny. Check yourself if you have delusions of grandeur.
It's the little things that matter the most.
Note: Let's hope President Biden preserves the stepped-up basis for families and entrepreneurs. If he removes the stepped-up basis, then having a lifestyle business is not as good for succession planning.
Income By Race: Why Is Asian Income So High? A look at some factual and personal explanations why one of the smallest minorities in America is earning the most. I bring this post up because there's been a lot of talk recently about Harvard getting sued due to race based admissions. No matter your race, get into the mindset of controlling what you can control. Don't get bogged down with perceived injustices. It will get you nowhere.
Exploring The Top 0.1% Income Earners. Three surprises came out of this post when I was doing the research: 1) how there are more ways to make a lot of money than I originally thought, 2) how much easier it is to make a lot of money today versus in the past, and 3) how I forgot to include physicians, probably because it just takes too long and costs too much to become one. This is a fun post to read before an upcoming post this week about a top 0.1% family struggling to make a decision.
How Much Can You Really Make Blogging For A Living. A lot more than you think! Creators are making tons of money each year because they can. They take chances and put themselves out there.
About the Author: Sam began investing his own money ever since he opened an online brokerage account in 1995. Sam loved investing so much that he decided to make a career out of investing. He spent the next 13 years after college working at two of the leading financial service firms in the world. During this time, Sam received his MBA from UC Berkeley with a focus on finance and real estate. He also became Series 7 and Series 63 registered. In 2012, Sam was able to retire at the age of 34. His investments generate about $300,000 a year today.
FinancialSamurai.com was started in 2009 and is one of the most trusted personal finance sites today. It receives over 1.5 million organic pageviews a month. Financial Samurai has been featured in top publications such as the LA Times and Bloomberg.