James: I want to put my money to work. I do have some surplus money from my business. I have a great business. It has a good profit margin, then I end up with a pot of money. What do I do with that money? That is the phase I think a lot of people wish they are at or would like to get to.
But I’m pretty certain there’s plenty of listeners here who have a pot of money, or have equity in a home, or have built up access to some kind of liquidity, but may not know what to do with it. There’s definitely discussion about that inside SuperFastBusiness. It’s like, what do you do with your money? Do you buy Cryptos? Do you do DeFi? Do you put it all into rental properties? Do you put it into mutual funds? Do you invest directly in a share account?
These are the things we typically hear about, but one thing that I like that you’ve sort of mentioned to me is, there’s a whole other world out there that people aren’t even seeing in terms of what you can do with the money. Maybe you can talk about that.
Salena: Absolutely. And I think you’ve hit upon a really important point. Like, I think business owners, part of the reason they go into business is they want to have some degree of control about what they earn, how they earn, and how they work. Unfortunately, a lot of the people that I’ve worked with over the last 12 years, they end up with a high-paying job.
And so the importance around wealth building isn’t lost on business owners. They totally get it. Where I think a lot of them flounder is they’re confused. And this is definitely a problem in Australia, but I’d say it’s a problem universally, is, they think that trying to build high net worth is the goal. And so there’s a huge difference between aspiring to be a high net worth individual versus aspiring to build a capital base that you can then, very carefully and strategically, convert into annuities or income streams.
And so I think, in terms of the vehicle, like my number one rule for investing is, do not invest in something you don’t understand. So if you don’t understand it, just don’t touch it. And the number of people I’ve worked with, who have jumped into some kind of get rich scheme or get rich quick scheme, or they’ve invested in something that they didn’t quite understand but their friend told them it was a really good thing, or they midlife just decide to pivot into something like hospitality, when they’ve had no experience in that, you know, those sorts of things.
They all come back to this same principle, which is, you’ve got to have a game plan. The execution of the game plan, and what in particular investments will align with that, becomes clearer when you know where you’re trying to get to. So if you know that you want to get to this point with this level of passive income in this period of time, then it’s really easy to say, Well, these investments are congruent with that game plan. And these ones are not.
And I think part of the challenge that most business owners face is, as I said earlier, there’s an avalanche of information out there. And how do you tell, if this is not your area of expertise, how do you tell what’s real and what’s not? What’s hype and what’s political? How do you know what to do with your money? And so I think that’s the biggest challenge is, where do I put my money? Because I don’t know what’s real and what’s not.
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