business owner, what is your income from business and how did you get into successfully business, what's your networth?

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HenrysPlan2
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business owner, what is your income from business and how did you get into successfully business, what's your networth?

Post by HenrysPlan2 » Mon Oct 02, 2017 5:40 pm

business owner, what is your income from business and how did you get into successfully business, what's your net worth? How much you are investing in low cost index funds?

As I have been reading this board for a year or so, and starting investing about $600k to index fund this year in taxable accounts. I read most of the high net worth members of this board are business owners who sold the business.
I am 40 years old, and working as W2 workers, yearly salary about $200k, I have been thinking to start my own business for a few years but not brave enough to leave the W2 job. The business I was thinking is to start a use car dealer.

investing1012
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Re: business owner, what is your income from business and how did you get into successfully business, what's your networ

Post by investing1012 » Mon Oct 02, 2017 6:13 pm

Well that’s because the majority of small business owners fail and they don’t post their bankruptcies on this forum ;)

HenrysPlan2
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Re: business owner, what is your income from business and how did you get into successfully business, what's your networ

Post by HenrysPlan2 » Mon Oct 02, 2017 6:39 pm

Looks like a lot of W2 people here with a few Million net worth, but prior business owners over $10m.

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AllieTB1323
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Re: business owner, what is your income from business and how did you get into successfully business, what's your networ

Post by AllieTB1323 » Mon Oct 02, 2017 6:54 pm

investing1012 wrote:
Mon Oct 02, 2017 6:13 pm
Well that’s because the majority of small business owners fail and they don’t post their bankruptcies on this forum ;)
From our package delivery person we heard some of their drivers have a betting pool on how long new small businesses will last.

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Sandtrap
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Re: business owner, what is your income from business and how did you get into successfully business, what's your networ

Post by Sandtrap » Mon Oct 02, 2017 6:58 pm

Left work as a bank accountant. Boring/low pay. Bought a run down studio apartment over 40 years ago while just starting my commercial construction company. Rented the apartment out for cheap. Things just kept going from there. Work, buy more. Rinse. Repeat.
Never felt successful nor had enough "networth" to bother counting.

Net worth is . . . "comfortable".

Probably would have made and kept more if I had discovered the mind of the "Boglehead" decades earlier.
Or learned financial strategy like so many here are good at. . . . . Oh well. :(

Actionably:
IMHO doing well in a small business is not something to dip one's toes into or something done half heartedly. An old mentor once told me that if it was so easy everyone would do it and prosper. Like everything else, success is proportional to commitment and perseverance and a willingness to do anything and everything that is needed 24/7, year after year, decade after decade.

Can you do that?

j
Last edited by Sandtrap on Mon Oct 02, 2017 7:06 pm, edited 3 times in total.
Not a financial expert - just a retired businessman hacking out of a sand trap -- again.

Bacchus01
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Re: business owner, what is your income from business and how did you get into successfully business, what's your networ

Post by Bacchus01 » Mon Oct 02, 2017 6:59 pm

Are you trolling?

Used car business? Really?

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zaboomafoozarg
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Re: business owner, what is your income from business and how did you get into successfully business, what's your networ

Post by zaboomafoozarg » Wed Oct 04, 2017 12:35 am

Bacchus01 wrote:
Mon Oct 02, 2017 6:59 pm
Are you trolling?

Used car business? Really?
My uncle actually does that, he's a used car dealer part-time in a partnership with another guy. Seems to enjoy it since he likes cars, but it does eat up most of his weekends.

From what I've gathered he thinks it's worth the time and effort, but it hasn't been enough to allow for early retirement or anything like that.

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Re: business owner, what is your income from business and how did you get into successfully business, what's your networ

Post by IMADreamer » Wed Oct 04, 2017 9:46 pm

Sandtrap wrote:
Mon Oct 02, 2017 6:58 pm
Left work as a bank accountant. Boring/low pay. Bought a run down studio apartment over 40 years ago while just starting my commercial construction company. Rented the apartment out for cheap. Things just kept going from there. Work, buy more. Rinse. Repeat.
Never felt successful nor had enough "networth" to bother counting.

Net worth is . . . "comfortable".

Probably would have made and kept more if I had discovered the mind of the "Boglehead" decades earlier.
Or learned financial strategy like so many here are good at. . . . . Oh well. :(

Actionably:
IMHO doing well in a small business is not something to dip one's toes into or something done half heartedly. An old mentor once told me that if it was so easy everyone would do it and prosper. Like everything else, success is proportional to commitment and perseverance and a willingness to do anything and everything that is needed 24/7, year after year, decade after decade.

Can you do that?

j
I hope it pays off in the long run. I've been grinding away for quite a few years now and I'm hitting my first really tough patch with employees. In that in my small town it's getting really hard to find people to work, I pay well too. So I'm starting to wonder if after a long stretch of growth and now my first rough patch if I'm tough enough to do this another 20 years. It's nice building a business but truthfully I think I've built more of a job for myself than a valuable business.

Anyway, sorry for the little rant.


I guess including property and business my net worth is pretty good. My income is pretty meh though as I keep trying to grow my business. I hope in the next year or so I can take more income and have a little more joy in my life because there hasn't been much of that lately.

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Sandtrap
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Re: business owner, what is your income from business and how did you get into successfully business, what's your networ

Post by Sandtrap » Wed Oct 04, 2017 10:03 pm

IMADreamer wrote:
Wed Oct 04, 2017 9:46 pm
Sandtrap wrote:
Mon Oct 02, 2017 6:58 pm
Left work as a bank accountant. Boring/low pay. Bought a run down studio apartment over 40 years ago while just starting my commercial construction company. Rented the apartment out for cheap. Things just kept going from there. Work, buy more. Rinse. Repeat.
Never felt successful nor had enough "networth" to bother counting.

Net worth is . . . "comfortable".

Probably would have made and kept more if I had discovered the mind of the "Boglehead" decades earlier.
Or learned financial strategy like so many here are good at. . . . . Oh well. :(

Actionably:
IMHO doing well in a small business is not something to dip one's toes into or something done half heartedly. An old mentor once told me that if it was so easy everyone would do it and prosper. Like everything else, success is proportional to commitment and perseverance and a willingness to do anything and everything that is needed 24/7, year after year, decade after decade.

Can you do that?

j
I hope it pays off in the long run. I've been grinding away for quite a few years now and I'm hitting my first really tough patch with employees. In that in my small town it's getting really hard to find people to work, I pay well too. So I'm starting to wonder if after a long stretch of growth and now my first rough patch if I'm tough enough to do this another 20 years. It's nice building a business but truthfully I think I've built more of a job for myself than a valuable business.

Anyway, sorry for the little rant.


I guess including property and business my net worth is pretty good. My income is pretty meh though as I keep trying to grow my business. I hope in the next year or so I can take more income and have a little more joy in my life because there hasn't been much of that lately.
IMHO small businesses, from inception to growth to substantial (hopefully eventually) is organic. It has a rhythm to it and plateaus as it grows.
IE: At lst one is 100% involved, perhaps with part time help, family, etc, etc, working out of home or just a small rented building. Everything is under control, expenses tight, profits maximized. But at some point one must hire full time employees (over 20hrs/week). Now there's payroll, added expenses, perhaps more vehicles if a service business, so profit margins shrink even as revenues rise.
Then there's a need to delegate with growth which equals more expenses. So changes have to be made, some drastic, to maximize profits again.
Whether service, products, or professional services, or R/E development, the rhythm is the same and along the way the business model has to keep changing to keep up. Sometimes re-simplifying, laying off, tightening up. Getting back to lean/mean and basics. Other times letting it fly. It is instinctual and only you can be the best judge of things. It is common to feel like running so fast that one is ready to fall on one's face all year long.
I personally know many a prosperous business owner who has not had the luxuries that wage earners have. Paid vacation, sick leave, "days off", retirement plan, unemployment benefits, etc. Nor have some taken a "vacation" in many years. For many, their passion for the company or family business is what drives them and rather than "waiting to retire" they dread the day when it might not be fun anymore. Most do not have "retirement" in their vocabulary because that's not their goal. (think Sam Walton - Walmart, Ray Croc - McDonalds, etc). Not everyone can be a businessman. Takes grit.
I hope this is encouraging and, per forum guidelines, actionable for you in some way.
As is often said here, "stay the course".
Good luck.
j
Not a financial expert - just a retired businessman hacking out of a sand trap -- again.

30sep16
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Re: business owner, what is your income from business and how did you get into successfully business, what's your networ

Post by 30sep16 » Mon Oct 09, 2017 12:31 am

Nice to see this. There are 3 main roads to wealth. Business ownership, real estate, and passive investing. Too many people reading these boards think the 3rd way is all that exists.

Anyone who is truly wealthy owns business(es) and/or real estate (or inherited money), not from growing W2 wages in passive investment accounts.

I got into business by coming up with a brand new business model. It's much easier to sell when you walk in and say that nobody offers the same thing. My staff learned not to say good luck when I leave for sales meetings, because I always win them. There are still no competitors, 15 years into this. I also pursue a stealth strategy (nothing of substance on the website and no publicity), which you can do with a business-to-business model.

And that's the other thing I recommend: A business-to-business model. If you can help other businesses make more money, they will pay you handsomely. And one relationship results in large repeat business. I make 6 figures off a typical relationship, sometimes 7. Why try to make pennies off consumers? (Although if you want to be a billionaire you probably have to deal with consumers.)

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Re: business owner, what is your income from business and how did you get into successfully business, what's your networ

Post by Flashes1 » Mon Oct 09, 2017 6:39 am

And there's a 3rd Option: become an outside investor in a private business. You keep your day job, but have upside potential of the business's success. High risk, high reward. I'm in final stages of doing this with a craft beer/restaurant start-up. Very exciting stuff.

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Re: business owner, what is your income from business and how did you get into successfully business, what's your networ

Post by MossySF » Mon Oct 09, 2017 7:35 am

30sep16 wrote:
Mon Oct 09, 2017 12:31 am
Nice to see this. There are 3 main roads to wealth. Business ownership, real estate, and passive investing. Too many people reading these boards think the 3rd way is all that exists.
Nobody here believes you can use passive investments to become "wealthy". Even the millions thrown around as projections, it's just a comfortable retirement if you adjust for future inflation.

The problem with wealthy is that it's a sliding scale. It's rare to hit 100M/1B in some type of tech IPO where you can bail to a life of fun & sun on yachts around the world. Everybody else who makes it "big" (company sold for a few million) still gotta watch their pennies to avoid having to return to work.

If you get to that range (1-10M) but still have to continue working insane so you can flaunt a flashy lifestyle, that feels a bit pointless to me. I did the 100+ hours a week thing in the early days of my business -- I'm done with that.

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Re: business owner, what is your income from business and how did you get into successfully business, what's your networ

Post by Hayden » Mon Oct 09, 2017 8:12 am

I've been in business almost 20 years. I agree that it takes alot of perseverence. There's no such thing as going on vacation and letting other people handle things. When the phone rings, you answer it.

In my case, my business model has changed many times over the years. In part that was due to my preferences; I enjoy trying new things. It also is due to changes that have occurred in my industry.

I sell to the government and other businesses. Never to consumers. My success has been based on flying beneath the radar. No flashy cars etc. I've found a profitable niche; why in the world would I let other people know how profitable it is!

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Re: business owner, what is your income from business and how did you get into successfully business, what's your networ

Post by hoops777 » Mon Oct 09, 2017 8:32 am

I do not like the odds of starting a used car business with the reason being to become very wealthy.There is also a lot more competition from do it yourself sites like auto trader that did not exist years ago.
People do not only start businesses just to sell it someday.Many really small businesses provide a nice income but are not really sellable,or if sellable,maybe for a small amount of money only.
K.I.S.S........so easy to say so difficult to do.

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Re: business owner, what is your income from business and how did you get into successfully business, what's your networ

Post by dbr » Mon Oct 09, 2017 8:42 am

30sep16 wrote:
Mon Oct 09, 2017 12:31 am
Nice to see this. There are 3 main roads to wealth. Business ownership, real estate, and passive investing. Too many people reading these boards think the 3rd way is all that exists.
I don't know that people reading these boards do think that. The forum is what it is because this is a forum about passive investing as inspired by Jack Bogle and Vanguard.

In fact there are occasional discussions of business and real estate, but that is not the main thrust. There are certainly posters here that do own and operate businesses and real estate.

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Re: business owner, what is your income from business and how did you get into successfully business, what's your networ

Post by friar1610 » Mon Oct 09, 2017 12:01 pm

Nothing to contribute from personal experience as I never owned a business nor felt I had the psychological makeup to do so. But as I read this thread I recalled how many of the people cited in "The Millionaire Next Door" were owners of small, non-glamorous businesses (trash removal, septic tank cleaning, flooring, HVAC, etc.)
Friar1610

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Re: business owner, what is your income from business and how did you get into successfully business, what's your networ

Post by WL2034 » Mon Oct 09, 2017 12:09 pm

Bacchus01 wrote:
Mon Oct 02, 2017 6:59 pm
Are you trolling?

Used car business? Really?
I'll preface this by saying I don't know if this was a successful business or not, and the person I knew was not wealthy.

I knew someone who's family was in the used car business and told me that the trick to the business was in-house financing. Essentially, they would sell a used car and finance it with some huge interest rate, get the up-front fees and transaction costs, and then typically people would miss payments within 6-9 months and they would repossess the car and repeat the cycle all over again. Basically, they just sell the same car over and over, while making all the profit off of fees and interest. It sounds a bit predatory and quite a hassle, but I suppose some are good at it. Hopefully OP is at least very knowledgeable regarding cars.

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Re: business owner, what is your income from business and how did you get into successfully business, what's your networ

Post by Dottie57 » Mon Oct 09, 2017 12:35 pm

30sep16 wrote:
Mon Oct 09, 2017 12:31 am
Nice to see this. There are 3 main roads to wealth. Business ownership, real estate, and passive investing. Too many people reading these boards think the 3rd way is all that exists.

Anyone who is truly wealthy owns business(es) and/or real estate (or inherited money), not from growing W2 wages in passive investment accounts.

I got into business by coming up with a brand new business model. It's much easier to sell when you walk in and say that nobody offers the same thing. My staff learned not to say good luck when I leave for sales meetings, because I always win them. There are still no competitors, 15 years into this. I also pursue a stealth strategy (nothing of substance on the website and no publicity), which you can do with a business-to-business model.

And that's the other thing I recommend: A business-to-business model. If you can help other businesses make more money, they will pay you handsomely. And one relationship results in large repeat business. I make 6 figures off a typical relationship, sometimes 7. Why try to make pennies off consumers? (Although if you want to be a billionaire you probably have to deal with consumers.)
I am passive investor. Not made to be a business owner. Not wealthy. But have accumulated enough. My dad was small business owner (small animal vet) and it takes a lot out of you to run the business. It is 24/7. Constant worry about paying employees when times are slower.

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