A $1m/year PBT Business is Worth 10x a $1m Salary.
I got lucky and landed a job on wall street a couple of years ago. Wow, I must be on a fast track to private jets and ruling the financial world I thought. Think again. It was mostly PowerPoint and Excel until 2 am. After some time in Investment Banking slavery, I joined The Buyside. Great, more money, fascinating projects and better working hours. While true, I don't own my productivity. Someone is making money off me.
Even though I make the equivalent of $250K-$300K now, and probably in 5-10 years closer to $500K-$1MM, it's all "time for money". I don't own these cash flows. It's HIGH-RISK money really, with a limited safety net and completely location dependent. I see this with my colleagues. They get used to the money. A trophy wife who gets pregnant. Kids in private school. Apartment/house in "the neighborhood". Expensive holidays. You may not believe this, but I have colleagues earning $500K a year who are NOT saving ANY money and NOT living the HIGH LIFE.
With every investment that I make, I spend countless hours trying to figure out:
I got lucky and landed a job on wall street a couple of years ago. Wow, I must be on a fast track to private jets and ruling the financial world I thought. Think again. It was mostly PowerPoint and Excel until 2 am. After some time in Investment Banking slavery, I joined The Buyside. Great, more money, fascinating projects and better working hours. While true, I don't own my productivity. Someone is making money off me.
Even though I make the equivalent of $250K-$300K now, and probably in 5-10 years closer to $500K-$1MM, it's all "time for money". I don't own these cash flows. It's HIGH-RISK money really, with a limited safety net and completely location dependent. I see this with my colleagues. They get used to the money. A trophy wife who gets pregnant. Kids in private school. Apartment/house in "the neighborhood". Expensive holidays. You may not believe this, but I have colleagues earning $500K a year who are NOT saving ANY money and NOT living the HIGH LIFE.
With every investment that I make, I spend countless hours trying to figure out:
- Is the NEED this business is addressing growing/changing?
- Does the business have BARRIERS to ENTRY?
- Are there CONTROL RISKS (regulation, clients, supply chain)?
- What is the total ADDRESSABLE MARKET?
- What can be done BETTER?
- Is distribution (marketing & sales) BEST IN CLASS?
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