7 Lessons From the 7th Year of Running a Book Summary Business Cover

7 Lessons From the 7th Year of Running a Book Summary Business

My business has lasted as long as the average American marriage — seven years. The level of commitment surely feels on par.

When I launched Four Minute Books, I had no idea what it would grow into. All I thought about was how to get better at writing and maybe make a few bucks along the way.

Seven years later, in what has been, undoubtedly, my hardest year in business yet, it turns out that this little book summary site is, so far, the only consistently growing revenue generator. Here’s a chart contrasting its revenue vs. Medium and Write Like a Pro, my writing course.

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If You're a Time Billionaire, Don't Worry About Not Being a Real One Cover

If You’re a Time Billionaire, Don’t Worry About Not Being a Real One

Would you rather have a billion dollars or a billion seconds?

If something takes you a million seconds to do, that’s about 12 days. If you need a billion seconds, however, that’s 31 years — not counting sleep.

Equating seconds to dollars, a billion dollars is worth 31 years of your time. Would you make that trade?

In his daily newsletter to 93,000 investors, Anthony “Pomp” Pompliano shared similar musings this week. A reader asked him: “If you could switch places with Warren Buffett, would you do it? You’d be one of earth’s richest people — but you’d be 90 years old.” In the money, yet out of time.

If you’re in your 20s, you’re a time multi-billionaire. You likely have more than two billion seconds left. If you’re 50, you could still be a time billionaire. How much would Warren Buffett give to get back those seconds?

“The time billionaires are the wealthiest among us, yet they fail to recognize the wealth that they enjoy,” Pomp writes.

The time billionaire can have a time horizon that is counted in decades. The time billionaire can afford to be patient. The time billionaire can slowly compound money over time. There is no rush. There is no compressed timeline that clouds the judgement of a time billionaire. They can recover from almost any mistake. The time billionaire is unshakeable in a sense.

If you’re a time billionaire, don’t fret about your lack of dollars. Embrace your advantage in time. Unlike the pieces of paper we all covet, each of us only gets to spend their seconds once.

What I Learned Losing $300,000 Cover

What I Learned Losing $300,000

In January 2018, my crypto portfolio showed a value of $350,000. At the time, I had invested about $20,000, making the multiple a cool 18x.

A smart man might have cashed out some of that money; a genius would’ve cashed out all of it. I was neither smart nor a genius, and so I watched that $350,000 shrink into $30,000 at its lowest point over the last 2.5 years — all while continuing to invest. My portfolio has recovered a good bit since then, but it’s still far from its all-time high.

The only way to learn how to act in a financial bubble is to live through one. You can read all the psychology and trading books in the world — how you’ll handle the real experience is written into none of them.

Me, I had to go up and down to learn. I don’t regret anything. I had a lot of fun, and I learned a great deal in an extremely compressed period of time. Some of my initial theses crumbled to bits, but I believe others are still valid.

I wanted to take enough time to reflect on this story. It’s been three years since I first began studying cryptocurrency, and today is a good day to tell it.

Here are 9 lessons I learned about money and investing.

Disclaimer: I’m not a financial advisor. This post recounts my personal experience as an individual. If anything, it’s probably a tutorial on what not to do rather than what to do.

1. Don’t count your chickens before they hatch

I guess technically, I didn’t “lose” $300,000 — because you can’t lose something you don’t have. The money never hit my bank account.

To this day, I haven’t cashed out a single cent. I’ve sold assets to buy others, but whether at a profit or at a loss, I always used that money to buy more assets. That’s a fine strategy to have, I think. They always say, “Treat the money you invest as if it’s gone forever.”

On some days, however, I pretended to have that money. I felt and behaved like someone with $300,000 in the bank. That’s not good, because that’s what leads to feelings of remorse when you later do realize that, actually, you don’t have the money. Never count your chickens before they hatch.

2. Think about profit before you think about taxes

In Germany, any gains from cryptocurrency you held for more than a year are tax-free. That’s a tempting promise, and so my plan from day one was to hold everything for at least a year.

(Un)fortunately, the profits came and went much quicker than that. Paying taxes on $100,000 in profits is a lot better than having no profits to pay taxes on.

But the flip side of the German tax rule — any gains you make from selling within a year become part of your overall taxable income (and thus drag up your tax bill for everything else) — clouded my thinking.

You have to take profits when there are profits to take, period.

3. A good time to take profits is when they feel too good to be true

Looking at old screenshots, I realized my portfolio hit $100,000 on December 23rd, 2017. On January 7th, 2018, it hit $300,000. When your portfolio triples in two weeks, it’s probably a good time to take profits.

For months, I spent 2–3 hours every day studying blockchain technology and the crypto markets. There were enough signs. I listened to smart Youtubers every day. I distinctly remember one of them pointing at a vertical chart, saying: “Anyone who doesn’t tell you to take profits on a chart like this is probably trying to scam you.” But since it didn’t align with my plan, I didn’t understand the urgency of taking profits. And so I never took them.

In hindsight, I would always take some profits when times are so good you know they won’t last. Planned or not, it’ll still give you peace of mind.

4. Have an exit plan before you enter

My investing philosophy is compounding every dollar I can spare indefinitely. I’m not in a rush, and I know the biggest jumps on an exponential curve happen at the very end of said curve.

That said, you should always have a contingency plan. In my case, “What do I do if my portfolio grows a lot before I hit the tax-free holding period?” I never asked myself that question, and that’s why I didn’t have an exit plan to follow.

The best time to come up with an exit plan is before you even invest. “If this grows 100% in a year, I’ll sell 50%.” Making these plans won’t guarantee you execute them, but if you don’t have them, you definitely won’t do anything.

5. Numbers rarely reflect reality

Most people are frustrated with the markets because they want them to reflect reality — but that’s not what markets do.

The stock market is a discounted version of the expected future economy. The crypto market reflects the expected value of future blockchain networks. When people have bleak expectations, prices are bleak too. And when people are euphoric, so are the prices — regardless of our current reality.

On any given day, some crypto networks are grossly undervalued, whereas others are worth more than they should be. The same applies to companies in the stock market.

Numbers rarely reflect reality — but that doesn’t matter as long as you adapt to what the numbers are. Don’t let cognitive dissonance get it in the way of managing your money as best as you can.

6. When you have “a number,” nothing else matters

In finance movies like Wall Street, there is often the question of, “What’s your number?” Allegedly, everyone in the business has an exact sum of money for which they would retire and quit competing in the markets.

Unlike trading, wealth is not a zero-sum game. The things you create can add value to everyone’s benefit and at nobody’s expense. That said, a number can still be your guiding star in a positive sense. My number is $10 million.

Naval Ravikant is a thinker, philosopher, and investor. His net worth could be anything from $4 million to $4 billion, but I’ll never forget him saying, “Every time you see one of these billionaire founders giving away to a hospital or whatever, you know they overshot. They didn’t need that much money.”

$10 million will pay for the lifestyle I want to have until I die. It’s a lofty goal, but it’s also comforting. I don’t need a $600 million yacht. I need freedom.

The good thing about determining your number is you know exactly where you’re headed. Nothing else matters. It’s much easier to take profits — or stomach losing money if you don’t — when you know your long-term goal.

7. When you believe in something, commit to it

One of the conclusions I drew after hundreds of hours of research is that, yes, blockchain has lots of potential, but, like the internet in 1993, the mountain of unlocking it still lies ahead of us.

It’ll take years to build the infrastructure upon which good blockchain apps can attract a large share of the population, and there are many ways the effort could fail. If it works, however, the rising tide will lift all boats.

Amazon’s stock went down 95% after the dot-com bubble burst — from $100 to $5. 20 years later, the drop looks like a blip on the radar, and one share costs $3,000.

At the end of the day, what matters in investing is taking out more money than you put in. Right now, I’m down 20%. I used to be up 1,650%. Will both look like a rounding error in two decades? I don’t know, but I believe in the industry, and that’s why I’m still in the game.

8. Make risky investments when you’re young

When I tell people that I invest most of my money into cryptocurrency, they often tell me I’m insane. I think investing in risky assets when you’re young is actually quite reasonable.

When you’re young, you don’t need a lot of money. You still have the energy to recover from financial setbacks. And every extra day of being invested early will add exponentially to your compounding returns decades later.

I want to buy my riskiest assets first, not last. If I lose $100,000 now, I can recover. If I’m late to the party, most of the returns will have already happened. The more my crypto portfolio grows, the more I’ll invest into stocks. Then, I can look at index funds, real estate, and so on.

The older you get, the less risk you should take on in exchange for safer returns. Start bold, grow more timid. You don’t want to bet the house when you’re 60. You want to bet it while you can still build another house.

9. Save early and aggressively

As my friends are starting their first jobs out of college, some go from earning $0 to earning $4,000. I often tell them: How you spend your first paycheck will determine how you spend every paycheck.

It only takes one month of spending it all to get used to spending it all. Five years later, you’ll still have $0 invested, and you’ll have lost the last five years of your exponential growth curve — the years with the biggest returns.

Even if you don’t earn a lot, chances are, you can take away 10% and it won’t hurt at all. Maybe even 30%. Or 50%. However much you can put aside without feeling pinched, do it and do it now.

Whether you first save for a while or invest all of it right away, the only way to learn to manage and grow your money is to commit some of it to that end.

No One Is Coming to Save You Cover

No One Is Coming to Save You

Your parents aren’t coming to save you. They’ve done that often enough. Or maybe never at all. Either way, they’re not coming now. You’re all grown. Maybe not grown up, but grown. They’ve got their own stuff to take care of.

Your best friend isn’t coming to save you. He’ll always love you, but he’s knee deep in the same shit you’re in. Work. Love. Health. Staying sane. You know, the usual. You should check in with him some time. But don’t expect him to save you.

Your boss is not coming to save you. Your boss is trying to cover her ass right now. She’s afraid she might get fired. She’s fighting hard to keep everyone on the team. She’s worried about you, but she has no time to save you.

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5 Good Things That Will Follow From This Pandemic Cover

5 Good Things That Will Follow From This Pandemic

The best way to stay calm amidst the coronavirus madness is to focus on the present moment. Accept reality as is, realize you’re okay, and then handle the challenge at hand with direction and resolve.

The second best way is to time travel to the future. What will happen after all this is over? Can you imagine a more peaceful tomorrow? What good will come from this? There will come some good from this. It’s hard to see it now, but making the effort will give you something to aspire to in these dark times.

Of course no one can predict the future, but when I think about what positive, long-term consequences we could see from this pandemic, I spot a lot of potential. Here are 5 predictions to provide some comfort while we’re all stuck at home.

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Reach High and Hope You Don’t Fall Cover

Reach High and Hope You Don’t Fall

Yesterday, I went bouldering for the first time. Finally, the source of many scrawny-kid jokes in high school turned into an advantage. I’m 5’7″. I weigh 136 lbs. I’m neither tall nor strong — but my power-to-weight ratio is excellent.

I can easily do 50 push-ups or pull myself up some ledge. As it turns out, this kind of balance is exactly what you need when you’re trying to go from one set of tiny knobs to the next on a six-foot slanted wall.

After some basic, first-level trials and picking up the rules, I managed to climb some second- and even third-level problems. That’s nothing compared to expert climbers gliding up the impossibly-flat-surface elements of a level 12 wall, but, for a beginner, it’s not half bad. Still, my arms got tired after about 90 minutes, and it was almost time to go. Almost.

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Diversification vs. Focus: The Hardest Tradeoff for Entrepreneurs Cover

Diversification vs. Focus: The Hardest Tradeoff for Entrepreneurs

The toughest, ongoing challenge I have as an entrepreneur is the debate in my head about what I should focus on.

Should I start another project? How much time, attention, and energy should I commit to X over Y over Z? Is it time to shut down one of my ventures, bundle my resources, and bet big on one thing? Or need I diversify more?

Besides being hard to answer for any given time frame, asking these questions is a project all on its own, a project that also takes time and energy, both of which could be spent on making actual progress at any one thing.

I don’t claim to have definitive answers, but I’ve learned a lot from my own decisions and mistakes in diversifying and focusing over the past five years. I made a long-term bet on a website that now generates a full-time income. I shut down my writing course after it made $20,000. Most of all, I think about what the word ‘balance’ means for an entrepreneur every day.

Below is a collection of my most formed ideas on the subject. I hope they’ll help you figure out when to quit and when to stick — no matter how many times you’ll have to do it.

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Success for 20-Somethings Cover

Success for 20-Somethings

I won’t leave my 20s with a fiancé, a checked off bucket list, or a shredded body. I didn’t party a lot, date a lot, or travel as much as I would have liked.

I will, however, finish my 20s with two things most people want but don’t get: A job I can do for the rest of my life and financial independence.

Not in an I-can-buy-my-own-island sense but in an I-can-feed-a-family-of-four sense. All without a boss and including multi-year, what-if-shit-hits-the-fan savings, earned from doing what I love.

Two of the biggest existential fears we have in our 20s are feeling lost in our careers and anxious about our financial future. I have eliminated both of them. Who can say that before they’re 30? Not many.

To me, those two things are success. You may define it differently, and that’s okay. But if you want those two things, if you’re okay with figuring out the rest later, here’s everything I’ve learned about how to get them.

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Your Only Job Is to Let Yourself Be Good Enough Cover

Your Only Job Is to Let Yourself Be Good Enough

You know that Coldplay song, Viva La Vida? The one with the strings and choir that tells the story of a fallen king:

I used to rule the world
Seas would rise when I gave the word
Now in the morning, I sleep alone
Sweep the streets I used to own

I’ve always wondered why it’s such an upbeat song. Why it’s called “long live life” when it’s about someone who’s lost everything they had in theirs. Well, Chris Martin, lead singer of the band, once explained the title.

When he was in Mexico, he went to a museum, and, in there, he saw the last painting Frida Kahlo ever made. It’s called Viva La Vida.

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How to Get Rich the Humble Way Cover

How to Get Rich the Humble Way

One in 185 people is a millionaire. Credit Suisse counted 42.2 million of them in the 2018 Global Wealth Report. Divide that by the 7.7 billion people currently inhabiting this planet, and you get to that number — about 0.5%.

And just like you “get” to that number, we think “getting rich” is an activity. That it’s about movement, action, struggle. It’s implied. Think about how we use the word “get.” We get coffee. A job. To the top of a mountain.

It’s true, of course, that getting rich requires years of hard work. You’ll have to learn a lot, build skills, make the right decisions at the right time, and have a whole bunch of luck in the process. But if that’s all we focus on, we miss the most important aspect of how wealth is built: through compound growth.

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