Entrepreneurship Versus Investing
Essential concepts for living a life of freedom | Issue 3 / November 2024
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If you are like me, you have made a decision in your life to pursue the path of entrepreneurship and to build wealth for yourself. To extricate yourself from a life situation that you are not happy with and to create a sustainable happy future.
We live in a world where if you don’t take things into your own hands and create a vision for your life, society will be more than happy to do that for you.
More worker serfs creates a population that is easier to control, reduces competition and makes it easier to implement and increase taxation.
Perhaps this is why I didn’t get taught personal finance in high school.
If you have managed to build some wealth for yourself, allocating your surplus capital efficiently in order to protect and grow it will become a process that you may want to consider.
Ideally and perhaps obviously you should produce more than you consume and save the difference (tell that to governments who like to produce nothing and also consume more than they receive in taxes).
I recently sold a property. I sold it for a price that was considerably higher than when I bought it 3 years previously.
The profit from this trade has been very beneficial and has opened up many new opportunities for me, but it has also created somewhat of a problem. A good problem to have.
How do I allocate this capital in order to protect it and grow it?
I have heard stories of successful entrepreneurs making good money early on with their business, and then celebrating by going on a big spending spree.
They buy nice cars and even take out loans to buy an expensive property thinking that their business income will continue at this rate forever.
If the demand for their goods and services stops, they have a problem.
If they invested a percentage of their capital or paid a money manager to grow and protect it, they could have been in a much better position financially.
That is if they had chosen their assets and money managers wisely.
This is why I believe developing a foundational economic understanding of the world is so important.
If you happen to acquire some wealth through employment, inheritance, real estate or speculation, having a macro view of the world and markets, and a macro thesis as to what is going to happen in the near to long term future can give you the confidence you need to allocate your capital effectively for gains and protection.
My story is that I knew very little about economics up until the age of 33, this is when I finally decided things had to change.
I relentlessly self-educated in the world of economics, finance and investing. I consumed hundreds of hours of podcast material and read many articles on those topics for years. I can say that I am very glad that I put in the hours doing that.
My hope is that for future generations they will be able to create a foundational economic understanding of the world much earlier in life than I did.
Thanks largely to the internet and the recent growth of decentralised education, this has already started to happen. The knowledge and wisdom required has never been more freely available and accessible.
Once you have developed a foundational understanding of economics, you can then develop a macro thesis relating to the world and markets. A current assessment and a future outlook.
All your major life decisions will be filtered through your views.
This acts as a potentially effective de-risking strategy when it comes to investing your hard earned capital.
You can better assess the probabilities of your investment working out in your favour.
One example would be assessing the probability of where interest rates on government bonds will be at a particular moment in time.
Learn the basic principles of Austrian economic theory and Keynesian economic theory, then decide which leads to better outcomes, knowing that Keynesian economic theory dominates the big Western countries today.
You can even come up with your own economic theories and test them.
If you haven’t started already I can recommend the book ‘Economics in one lesson’, by Henry Hazlitt as a good starting point to begin your journey.
Paid investment Newsletters
I recently purchased two investment newsletters.
They were ‘Crisis Investing’ and ‘Capitalist exploits insider’.
They are great newsletter services. I have very much enjoyed reading the issues and have found them to be hugely beneficial.
Below are the qualities I look for in the authors of investment newsletters:
I respect the author
We share the same macro thesis on the current state of markets and economics
We share similar values relating to morality and ethics
They are much more knowledgeable than me
They are much wealthier than me
They are better connected than me to people who have information that could lead to better investments
If everything seems in alignment, I apply my own version of due diligence then I am happy to try investing in some of the assets that they recommend.
Capitalist Exploits Insider
The Capitalist Exploits Insider newsletter is a great service where the writing topics cover unfiltered macroeconomic and geopolitical analysis, it also includes discussion on five stocks that have come onto the author Chris Macintosh’s radar recently.
Capitalist exploits implements an asymmetric investment strategy which focusses on stocks with a low downside risk but also a high upside potential.
Crisis Investing
As a big fan of Doug Casey and his wisdom I was always going to buy the Crisis Investing newsletter eventually.
Doug Casey, Matt Smith and Lau Vegys write a great newsletter based on stock picks either identified or endorsed by Doug.
The focus is on current and emerging stock opportunities in the precious metals and natural resource sectors.
In the VIP level of the subscription, you also have the opportunity to access private placements and warrants, allowing you to buy into a stock at lower than market prices, then also obtaining a warrant that allows you to purchase the stock at a fixed price in the future.
The subscription also comes with access to ‘The Phyle’ community and is hosted on Substack. Which means you can handily read the newsletters on your smartphone with the Substack app.
The writing provides great insight and also covers Plan ‘B’ and Plan ‘A’ concepts. Ways to de-risk your life and protect your purchasing power moving forward into this rapidly approaching global economic shit-storm.
I highly recommend these newsletters and see them as great value for money.
Entrepreneurship Vs Investing
I am early on in my journey when it comes to entrepreneurship and I have made more money through investing than selling products or services. Which has led me to analyse the amount of time I dedicate to either entrepreneurship or investing.
In terms of obtaining initial capital to invest, it is possible to do that either through being an employee or an entrepreneur. The huge problem lies in the fact that as an employee you have a ceiling on how much you can earn.
Therefore becoming an entrepreneur is the preferred option if you are looking to increase your income by the means of starting a business and scaling a product or service.
I won’t be giving up on entrepreneurship, but the thought has crossed my mind that maybe I am more suited to being an investor rather than being an entrepreneur.
I recently listened to an interview with the successful mining entrepreneur and philanthopist, Frank Giustra.
He believes that not everyone has the ability to be a successful entrepreneur.
Time will tell for me I guess.
For now, giving up is not an option.
Please do your own due diligence when it comes to investing, this is not financial advice. There is always risk with investing.
Thankyou for reading.
Shernon
P.S
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Thank-you for your support.
*Not to be construed as financial advice. This newsletter is for informational and entertainment purposes only. Please perform your own research when making financial decisions.
Cover photograph by Shernon Hague | Kyoto, Japan 2016 | 35mm film
I would choose both.. Entrepreneurship to have multiple business income streams.. And investing to invest money..
A Finance community is the reason that's why I am building my communify on Substack..