Escaping the Golden Handcuffs
Why You Need Multiple Wealth Engines
The reason I don’t try to build “trading systems” is because their design largely assumes that the market maintains the same characteristics and features over time. For this to be a reality, it would imply static decision making and reactions from market participants.
This is far from what we see in reality.
The market has a mind of its own - a mind that keeps changing. It has an incredible way of reacting very differently to two seemingly identical pieces of news. The magic of the market is owed in part to the constant rollover in who the participants are (old traders retire, funds shut down, new shops emerge, etc…) which drives different decision makers into position to influence price action.
When I built Throne Capital I had two systems for this reason. One was scanning for equities that fit our parameters and the other was evaluating changes in the 13F and other filings that indicate who was entering/leaving the market for the different stocks we were evaluating or owned at the time.
Now I take a more simple approach.
Instead of trying to automate the buying and selling of securities I built out multiple wealth engines:
a portfolio of income producing assets
a “side business” of writing options
a SaaS product for B2B companies
an e-commerce offering for business owners & leaders
The Golden Handcuffs
For years, I lived the Wall Street dream. The tailored suits, the corner office overlooking Water Street in Manhattan, the big bonuses and bigger nights – it was exhilarating, incredibly lucrative and honestly: exhausting.
Beneath the surface of success, I felt trapped. Golden handcuffs, they called it. My life revolved around making money for someone else, my time dictated by the whims of the market and the demands of clients. I was the single point of failure in my own financial life, entirely dependent on that one paycheck, that one "wealth engine" – my job.
That realization hit me hard.
What if something happened?
What if the market crashed, my role was eliminated, or I simply burned out?
My entire financial world would crumble. That's when I decided to take control and build a more robust, antifragile financial system. I left the world of investment banking, dove headfirst into software development (skill I picked up building the Throne systems) and started my own family office.
The key? Multiple wealth engines.
Think of it like this: relying on a single source of income is like powering your house with a single generator. If that generator fails, everything goes dark. But with multiple generators, you have backup, redundancy, and peace of mind.
The same principle applies to your finances. Diversifying your income streams across different asset classes and business models creates a safety net, reduces risk, and accelerates your path to financial freedom. Instead of being a slave to a single paycheck, you become the architect of your own financial destiny.
Below you’ll find the blueprint I've used to construct my own financial fortress, focusing on three powerful wealth engines:
Dividend Portfolio: A classic strategy for generating passive income and building long-term wealth.
Options Trading: A more active approach that can amplify returns (and risks) if managed carefully.
E-commerce: Leveraging the power of the internet to build scalable businesses and tap into global markets.
I built these specific engines because I have a background on Wall St and have an incredible network of entrepreneurs, engineers, financiers and more to help with the e-commerce component + drive vital information into the decision making of our single family office.
Your specific blueprint should leverage your resources and expertise!
Engine #1: Building a Dividend-Paying Powerhouse
Dividend investing is the cornerstone of my wealth-building strategy.
It's the financial equivalent of owning a piece of land that consistently produces crops.
You invest in companies with a proven track record of profitability and shareholder returns, and they reward you with a portion of their profits in the form of dividends.
But building a dividend portfolio isn't just about chasing high yields. It's about selecting companies with strong fundamentals, sustainable competitive advantages, and a history of increasing their dividends over time.
I’ve written a 5-part series on this engine here.
Here's how I approach it.
Rule One: ALWAYS Focus on Quality
Strong Financials: Look for companies with healthy balance sheets, consistent earnings growth, and manageable debt levels. Dive deep into their financial statements, analyze their cash flow, and understand their profitability metrics. Don't just rely on surface-level numbers; dig deeper.
Competitive Moats: Identify companies with durable competitive advantages that protect them from competition. This could be a strong brand, proprietary technology, or a dominant market position. Think of companies like Coca-Cola, Microsoft, or Google – they have moats that are hard to cross.
Dividend Growth History: Seek out companies with a long history of consistently increasing their dividends. This demonstrates their commitment to returning value to shareholders and their ability to navigate economic cycles.
Rule Two: Diversify Across Sectors
Don't put all your eggs in one basket. Spread your investments across different sectors to reduce risk and capture opportunities in various parts of the market. Consider sectors like consumer staples, healthcare, utilities, and technology.
Sectors of the market go out of favor. If you are concentrated in Finance/Banking and a bad banking system stress test result is released… you could see your dividend yields cut and principal loss from stock price slides.
This doesn’t mean the ENTIRE market can’t fall — it will and it does.
…it’s just more likely that isolated pockets of the market will see weakness vs the entire system.
Rule Three: Reinvest Your Dividends
The real magic of dividend investing lies in the power of compounding. Reinvesting your dividends allows you to buy more shares, which generate more dividends, and so on. Over time, this creates a snowball effect that can significantly accelerate your wealth growth.
Rule Four: Be Patient and Disciplined
Building a successful dividend portfolio takes time and patience. Don't get swayed by short-term market fluctuations. Focus on the long-term and stick to your investment strategy.
Engine #2: Harnessing the Power of Options
Options trading can be a powerful tool for generating income and amplifying returns, but it's not for the faint of heart.
If buying a Dividend Aristocrat is a 2/10 on the risk scale… getting into Options writing/selling is closer to 8/10.
Proceed with caution I am NOT advocating for this strategy unless you do serious homework + brokerages won’t give you the ability to write options without agreements attesting to Accredited Investor status (and documentation).
It requires a solid understanding of market dynamics, risk management, and options pricing models. However, when used strategically, options can provide an additional layer of income to your wealth-building system.
Here are some key principles I follow.
Rule One: Start with Education
Before you even think about placing an options trade, invest time in learning the fundamentals. Understand the different types of options (calls and puts), how they work, and the factors that influence their prices. There are numerous online resources, courses, and books available to help you get started.
Rule Two: Focus on Selling, Not Buying
While buying options can offer the potential for explosive gains, it also comes with significant risk. Selling options, on the other hand, allows you to collect premiums and profit from time decay. Strategies like covered calls and selling puts can generate consistent income while limiting your downside risk.
Rule Three: Manage Risk Religiously
Options trading involves leverage, which can magnify both profits and losses. Always define your risk tolerance and use appropriate position sizing. Never risk more than you can afford to lose.
Rule Four: Don't Get Greedy
It's easy to get caught up in the excitement of options trading, especially when you see big gains. But remember, greed is the enemy of good trading. Stick to your strategy, manage your risk, and don't let emotions cloud your judgment.
Engine #3: Tapping into the E-commerce Goldmine
E-commerce has revolutionized the way we buy and sell goods, creating unprecedented opportunities for entrepreneurs to build scalable businesses and reach customers around the world. Whether you're selling physical products, digital goods, or services, e-commerce offers a powerful platform for generating income.
I’ve geeked out at length before about how you can do work ONCE and then float your work in the cloud somewhere, place a few landing pages down and start building funnels across social media + email + IRL and drive energy toward a conversion point.
Here are some key considerations when venturing into the world of e-com.
Step One: Find Your Niche
Don't try to be everything to everyone. Focus on a specific niche market with passionate customers and unmet needs. Conduct thorough market research, identify your target audience, and understand their pain points.
Step Two: Find Your Model
There are various e-commerce models to choose from, each with its own advantages and disadvantages. Dropshipping allows you to start with minimal investment, while Amazon FBA provides access to a massive customer base and fulfillment infrastructure.
Choose a model that aligns with your skills, resources, and goals.
I was already producing content about business strategy and operations, so launching a paywalled Substack with premium content including Python scripts and other resources was a natural extention.
Step Three: Build a Strong Brand
In the crowded world of e-commerce, branding is essential. Create a unique brand identity that resonates with your target audience. Invest in high-quality product photography, compelling copywriting, and a user-friendly website.
Step Four: Master Marketing and Sales
Driving traffic to your e-commerce store is crucial for success.
Utilize a variety of marketing channels, such as social media marketing, search engine optimization (SEO), and paid advertising. Optimize your website for conversions and provide excellent customer service to build loyalty.
By mastering these three wealth engines – dividend investing, options trading, and e-commerce – you can create a diversified and resilient financial foundation. In the next section, we'll explore how to strategically allocate the income generated from these engines to further accelerate your wealth-building journey.
The Trifecta of Wealth: Bitcoin, Reinvestment, and Savings
Congratulations! You've built your wealth engines and they're humming along, generating a steady stream of income.
Now, the critical question becomes: what do you do with that hard-earned cash? This is where many people stumble. They fall prey to lifestyle inflation, chase fleeting pleasures, or make impulsive investment decisions.
But you're not going to make those mistakes. You're building a system, a fortress of financial security. And that requires a disciplined approach to allocating your income.
My strategy revolves around three key buckets:
Bitcoin: The digital gold, a hedge against inflation and a store of value for the future.
Reinvestment: Fueling the growth of your existing wealth engines and compounding your returns.
Savings: Building a financial cushion for emergencies and unexpected expenses.
Let's break down each of these.
Bitcoin: Securing Your Digital Future
For years, I viewed Bitcoin with skepticism. Another tech fad, I thought, a speculative bubble destined to burst. But as I explored the distributed computer know as blockchain deeper, I began to understand its true potential.
Bitcoin is more than just a cryptocurrency; it's a revolutionary technology that challenges the very foundations of our financial system.
Here's why I believe Bitcoin deserves a place in your wealth system:
Decentralization: Bitcoin operates independently of central banks and governments, making it resistant to censorship and manipulation. In a world of increasing political and economic uncertainty, this is a crucial advantage.
Scarcity: Only 21 million Bitcoins will ever exist. This finite supply, combined with growing demand, creates a powerful case for long-term price appreciation.
Hedge Against Inflation: As governments continue to print money at unprecedented rates, inflation is eroding the purchasing power of fiat currencies. Bitcoin, with its fixed supply, offers a potential hedge against this inflationary pressure.
Store of Value: Like gold, Bitcoin can serve as a store of value in times of crisis. Its portability and divisibility make it an ideal asset for preserving wealth across borders and generations.
I’ve made the case Bitcoin is a better wealth battery than gold.
How to Invest in Bitcoin:
Buy and Hold: The simplest approach is to buy Bitcoin and hold it for the long term, riding out the market volatility.
Dollar-Cost Averaging: Invest a fixed amount of money at regular intervals, regardless of the price. This strategy helps to average out your cost basis and reduce risk.
Security is Paramount
Remember, Bitcoin is a digital asset. Securely store your Bitcoin in a reputable hardware wallet or a trusted exchange.
One of the safest ways to store Bitcoin with multiple keys is using a multi-signature (multisig) wallet.
What is a multisig wallet?
A multisig wallet requires multiple private keys to authorize a transaction.
You can set it up to require "M of N" signatures, meaning M keys out of a total of N keys are needed to sign a transaction. For example, a 2-of-3 multisig wallet would require two out of three private keys to move any Bitcoin.
Why is this secure?
Redundancy
If you lose one key, you still have access to your funds with the other keys.
Protection against theft
A single compromised key won't give a thief access to your Bitcoin. They would need to obtain multiple keys.
Reduced risk of human error
If you make a mistake with one key, the other keys act as a safeguard.
How to set up a multisig wallet:
Choose a multisig wallet provider: Several reputable providers offer multisig wallets, including Electrum, Armory, and BitGo. Research and choose one that meets your needs.
Generate multiple keys: Generate the required number of private keys. Ideally, store each key on a separate device (e.g., hardware wallet, offline computer).
Set up the multisig wallet: Follow the instructions provided by your chosen wallet provider to configure the wallet with your keys and the desired M-of-N signature scheme.
Never share your private keys with anyone, and be vigilant against phishing scams and other security threats.
Reinvestment: Compounding Your Way to Wealth
The most powerful force in finance is not market timing or stock picking; it's the power of compounding. Reinvesting your income allows you to earn returns on your returns, creating a snowball effect that accelerates your wealth growth exponentially.
Think of it like this: if you invest $10,000 and earn a 10% return, you'll have $11,000 at the end of the year. But if you reinvest that $1,000 profit and earn another 10% the following year, you'll have $12,100. The extra $100 is the result of compounding.
Here's how to apply the principle of reinvestment to your wealth engines:
Dividend Portfolio: Reinvest your dividends to purchase more shares of dividend-paying stocks. Many brokerage firms offer automatic dividend reinvestment plans (DRIPs) that make this process seamless.
Options Trading: Use a portion of your options premiums to increase your trading capital or to diversify into other asset classes.
E-commerce: Reinvest your profits back into your business to expand your product line, improve your marketing efforts or purchase more traffic via PPC / Paid Media.
The key is to find the right balance between reinvestment and taking profits. Don't starve your wealth engines of capital, but also don't be afraid to enjoy the fruits of your labor.
Savings: Building Your Financial Fortress
In the pursuit of wealth, it's easy to overlook the importance of savings. But a solid financial foundation requires a safety net, a cushion to protect you from unexpected expenses and life's inevitable curveballs.
Here's why savings are crucial:
Emergency Fund: Life throws surprises our way – job loss, medical emergencies, car repairs. An emergency fund provides a financial buffer to weather these storms without derailing your long-term goals.
Peace of Mind: Knowing you have a financial safety net reduces stress and allows you to take calculated risks in your investments and business ventures.
Opportunity Fund: Savings can also serve as an opportunity fund, allowing you to seize unexpected opportunities that may arise.
Three steps to building a Savings Habit:
Automate Your Savings: Set up automatic transfers from your checking account to your savings account each month.
Reduce Unnecessary Expenses: Identify areas where you can cut back on spending without sacrificing your quality of life.
Increase Your Income: Explore ways to increase your income through side hustles, freelance work, or negotiating a raise.
By strategically allocating your income across these three buckets – Bitcoin, reinvestment, and savings – you'll create a robust and resilient financial system. You'll be well-positioned to navigate market volatility, capitalize on opportunities, and achieve true financial freedom.
Putting It All Together
We've explored the individual instruments of your wealth orchestra – the dividend portfolio, options trading, and e-commerce. Now, it's time to bring them together in a harmonious symphony, conducted by a disciplined and strategic allocation of your income.
This is where the real magic happens. This is where you transform from a passive observer of your finances to an active architect of your wealth destiny.
Step 1: Assess Your Current Financial Landscape
Before you begin allocating your income, it's essential to take stock of your current financial situation. This includes:
Income: Calculate your total monthly income from all sources, including your wealth engines and any other income streams.
Expenses: Track your monthly expenses, categorizing them into essential and discretionary spending.
Debt: Identify any outstanding debts, such as credit card balances, student loans, or mortgages.
Assets: List your assets, including your investment portfolio, real estate holdings, and any other valuable possessions.
This assessment will provide a clear picture of your financial health and help you identify areas for improvement.
Step 2: Define Your Financial Goals
What does financial freedom mean to you? Is it early retirement, the ability to travel the world, or simply the peace of mind that comes with financial security? Clearly define your short-term and long-term financial goals.
This will provide a roadmap for your wealth-building journey and help you stay motivated.
Step 3: Allocate Your Income
Now, the crucial step: allocating your income across the three buckets – Bitcoin, reinvestment, and savings. There's no one-size-fits-all answer here. The ideal allocation will depend on your individual circumstances, risk tolerance, and financial goals.
However, here's a general framework to consider:
Bitcoin: Allocate a percentage of your wealth engine income to Bitcoin, 20% to start. This provides exposure to the potential upside of this emerging asset class while managing risk. Consider increasing your allocation as your wealth grows and your understanding of Bitcoin deepens.
Reinvestment: Prioritize reinvestment, particularly in the early stages of your wealth-building journey. Aim to reinvest a significant portion of your income, perhaps 30-50%, back into your wealth engines. This will fuel their growth and accelerate your progress towards financial freedom.
Savings: Ensure you have a comfortable emergency fund in place, ideally 3-6 months of living expenses. Once this is established, you can adjust your savings allocation based on your goals and risk tolerance.
Example Allocation:
Let's say your monthly income from your wealth engines is $10,000. Here's a possible allocation:
Bitcoin: $2,000 (20%)
Reinvestment: $4,000 (40%)
Savings: $1,500 (15%)
Discretionary Spending: $2,500 (25%)
This allocation allows you to invest in Bitcoin, fuel the growth of your wealth engines, build your savings, and still enjoy the fruits of your labor.
Step 4: Monitor and Adjust
Your wealth-building journey is not a static process. It requires ongoing monitoring and adjustments along the way. Regularly review your income, expenses, and asset allocation.
As your circumstances change, so should your strategy.
Here are some key factors to consider:
Market Conditions: Pay attention to market trends and adjust your investment strategy accordingly. For example, in a bull market, you may increase your allocation to riskier assets like stocks or options. In a bear market, you may shift towards more conservative investments like bonds or cash.
Personal Circumstances: Life throws curveballs. Job changes, family needs, and unexpected expenses can all impact your financial plan. Be prepared to adjust your strategy as needed.
Risk Tolerance: Your risk tolerance may evolve over time. As you gain experience and build wealth, you may become more comfortable taking on risk. Conversely, as you approach retirement, you may become more risk-averse.
Step 5: Stay Informed and Educated
The world of finance is constantly evolving. New technologies, investment strategies, and market trends emerge all the time.
Stay informed and continue to educate yourself. Read books, attend seminars, and follow industry experts. The more you know, the better equipped you'll be to make sound financial decisions.
By following these steps, you'll create a dynamic and adaptable wealth system that can weather any storm and propel you towards your financial goals.
Beyond the Finish Line: Living a Life of Abundance
You've built the engines, diversified your income, and orchestrated your wealth symphony.
You've reached the destination – financial freedom.
But what now? What does life look like beyond the finish line?
For many, financial freedom is synonymous with early retirement, endless vacations, and lavish spending. But true abundance goes far beyond material possessions. It's about living a life of purpose, fulfillment, and impact. It's about having the freedom to pursue your passions, contribute to society, and leave a lasting legacy.
Here's how to make the most of your newfound financial freedom:
Step One: Redefine Your Relationship with Money
Money is a tool, a means to an end. It's not an end in itself. With financial freedom, you have the opportunity to redefine your relationship with money. Instead of chasing it relentlessly, you can use it to enhance your life and the lives of others.
Shift from Scarcity to Abundance: Let go of the scarcity mindset that may have driven you in the past. Embrace an abundance mindset, believing that there is enough for everyone and that you can create the life you desire.
Focus on Experiences, Not Possessions: Material possessions provide fleeting pleasure. Invest in experiences that create lasting memories – travel, adventures, and quality time with loved ones.
Give Back to Others: Use your wealth to make a positive impact on the world. Support causes you believe in, donate to charities, or volunteer your time.
Step Two: Design Your Ideal Lifestyle
Financial freedom gives you the power to design your ideal lifestyle. What does that look like for you? Perhaps it's:
More Time with Loved Ones: Spend quality time with your family and friends, creating cherished memories that will last a lifetime.
Pursuing Your Passions: Dedicate yourself to hobbies, interests, and creative pursuits that bring you joy and fulfillment.
Traveling the World: Explore new cultures, experience different perspectives, and broaden your horizons.
Giving Back to Your Community: Volunteer your time, mentor others, or start a non-profit organization to make a difference in the world.
The possibilities are endless. Take the time to reflect on what truly matters to you and create a life that aligns with your values and aspirations.
Step Three: Continue to Learn and Grow
Financial freedom doesn't mean you stop learning and growing. In fact, it's an opportunity to expand your knowledge, explore new interests, and challenge yourself in new ways.
Invest in Personal Development: Attend workshops, read books, and seek out mentors to help you grow as a person.
Explore New Skills and Hobbies: Learn a new language, take up a musical instrument, or master a new craft.
Stay Curious and Engaged: Never stop learning, exploring, and seeking new experiences.
Step Four: Leave a Lasting Legacy
Financial freedom is not just about accumulating wealth; it's about leaving a lasting legacy. How do you want to be remembered? What impact do you want to have on the world?
Share Your Knowledge and Experience: Mentor others, write a book, or give talks to share your wisdom and insights.
Invest in Future Generations: Support the education and development of young people.
Contribute to Causes You Believe In: Leave a philanthropic legacy that reflects your values and makes a positive difference in the world.
The Journey Continues Without Golden Handcuffs
Reaching financial freedom is a significant milestone, but it's not the end of the journey. It's the beginning of a new chapter, filled with opportunities for growth, fulfillment, and impact.
Embrace this new chapter with open arms.
Live a life of purpose, passion, and abundance. Lift other people up. Help them build their first and second wealth engine. Teach them about saving and compounding.
Make a difference in the world. And leave a lasting legacy that inspires others to follow their dreams.
Remember, the true measure of wealth is not just in your bank account, but in the richness of your life and the positive impact you have on the world. That’s one of the main reasons I started writing Wealth Systems — we all deserve wealth and well-being.
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Wealth is the sum of all the value humanity has created while technology is the engine we've used to build wealth over time. The rate of wealth building is accelerating faster and faster thanks to AI, robotics and rapidly rising tide of technology.
👋 Thank you for reading Wealth Systems. I started this in November 2023 to share the systems, technology, and mindsets that I encountered on Wall Street.
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