Ownership, Scale & Wealth
By Josh Bobrowsky
Nothing here should be thought of as financial advice. Anything you read below are just my general thoughts, I am not a financial advisor.
Why ownership matters
Don’t trade time for money any longer than you have to. Focus on ownership and earning based on value not time.
Bad: Earn a salary, buy depreciating assets, increase fixed expenses as income grows
Ok: Earn a salary, buy appreciating assets, keep fixed expenses constant as income grows
Good: Earn scalable income with ownership that has exponential growth potential, buy appreciating assets, form multiple streams of income and ownership
The foundation of wealth comes from scalable income and ownership not wages.
Forms of ownership:
Traditional: stocks, bonds & real estate
Small business: this can be as a founder or investor in a non-public company
IP rights or licensing
Collectables: art, trading cards, watches & fine wine, etc
Cryptocurrency
Media/Social Media
Software
Many more not listed
You should put a massive focus on investing in assets you know and understand very well. You can’t expect to have a below average understanding of an asset class but yield and above average return.
Appreciating assets vs depreciating assets
Assume 20 years ago you spent $2,000 on either a TV or stock in the S&P 500
TV Purchase:
Initial cost: $2,000
Current value: $0
ROI: -100%
S&P Stock Purchase: S&P has gone up an average of 9.7% per year over last 20 years
Initial cost: $2,000
Current value: $11,300
ROI: 465%
It is far better to own an appreciating asset but you still didn’t generate material wealth with a $2,000 investment.
For that you need to find lines of revenue that scale.
What scales
Scale your earnings, knowledge and ownership. Ways to Scale:
Social Media: Your personal or business brand on social will scale exponentially if crafted correctly. Using your social brand can generate massive income for yourself or a business you own
Examples: Joe Rogan, Mr. Beast
Sales: Sales is one of the few jobs where you can earn 7-8 figures if you are selling the right product. Your relationships here will often be the key to scaling your sales
Software: Building software has extreme scalability. You can do this with ownership of software you build within a company (need contracts) or by building software where you are the sole owner
Startups: A successful startup or small business can scale from nothing to billions or be profitable
Outside Capital: You are not limited only by your savings, use of outside capital can dramatically increase returns especially in fields like real estate and startups
Learning: Developing an expertise in a field allows you to scale your knowledge in a way that can result in outsized returns. Especially true for investors
Example: Charlie Munger (Warren Buffet’s business partner)
Conclusion
Wealth begins when your ownership of assets provides enough income where you can live a good lifestyle without needing to trade time for money.
Once you get to a place where you are not dependent on a job you begin to craft your focus around the things you find most interesting and are most passionate about.
Your greatest work will be done doing what you love.
Cheers
Josh Bobrowsky