Each Wealth System Is Different
The basic idea of Wealth Systems is simple:
build multiple wealth engines
these are vehicles for income, capital appreciation… often both
how we integrate these together forms a wealth system
that wealth system powers our life and leaves the legacy we want
The reality is: we each have different goals and constraints so our wealth systems will necessarily be different.
Some folks do not have the attentional bandwidth to manage a portfolio of stocks, run an e-commerce company, make venture capital investments and own a growing hybrid SaaS / digital operations agency.
Keeping things simple at first is a smart start.
Scale complexity as resources allow until you see diminishing returns and then consider a period of refinement and optimization. You can move in waves like this and continuously improve your wealth system.
The basics of a wealth system, including the key components like budgeting, asset/liability managing, mechanical savings and more are covered here:
Let’s assume you understand the basics of savings, budgeting and general financial management… what’s next?
The Maximum Thrust Wealth System
If you want to maximize thrust you need multiple wealth engines.
A single engine aircraft, no matter how powerful that single engine, creates a safety risk for the passengers. Multiple aircraft engines provide redundancy, increasing safety. If one engine fails, others can keep the plane aloft.
Multiple wealth engines provide financial redundancy. If one income stream falters, others can sustain you.
Multiple engines allow for greater overall thrust and power.
I advocate for at least 3 income sources, with 1 being largely passive.
Get to 5 wealth engines eventually with 3 of them in that “not a daily attention requirement” category.
Running 3 jobs at the same time in parallel is unethical in most situations, but beyond that: it isn’t efficient. You can’t divide your attention between several nodes without performance breaking down. Without dropping balls. Potentially very expensive ones that create liabilities.
Get one and then a couple engines running well before activating several.
These are the five our family office runs:
Dividend Income
Options
Lending
Venture Capital
Digital Commerce
Why these?
Dividend Income
Passive income from owning shares in profitable companies.
You are basically an equity “landowner” with a crop that pops up on average every 90 days that you can harvest.
Near zero time requirement. Gain access to the free beta from all the money printing, and all the share buybacks, and all the manipulations and machinations that drive the S&P 500 faithfully higher, year after year.
Options
A more active strategy that can generate income from trading options contracts. When you sell options and the Theta / time decay becomes your income source and the time advances passively. I do a bunch of research on the weekend and set my positions so I have free time during active hours in the week.
Managing positions can take time but systems speed this up considerably.
I've written in-depth series on how to build an options strategy, go look those up.
Lending
Earning interest from lending money, which can be passive or active depending on the type of lending.
Great way to structure income. Once you have 5 different loans in active repayment phase, you start to see income with great tax treatment. Repayment of a loan is not income, only the interest is.
Lenders have more security (typically) than investors so I love making loans that are secured by property, cash flows, receivables and other valuable things.
I lend to people I trust, who I meet through people with even MORE to lose if the deal breaks.
Near zero time requirement. Returns that aren’t correlated to the movement of the markets.
Venture Capital
Investing in early-stage companies with high growth potential, which is typically a long-term, higher-risk strategy.
Rather than make 1 or 2 big VC allocations each year I prefer to make 6 to 8 new investments per year to ensure I cast a wide enough net to capture a few 50x to 100x multiples.
There are 2 investments for 2025 still pending, but the six companies above are the VC investments we’ve made so far this year.
Pretty small time requirement aside from initial diligence.
Digital Commerce
Building and running online businesses, which can range from passive (e.g., automated e-commerce stores) to very active in terms of time commitment. I run 3 substacks:
You are reading the 3rd one.
Substacks are great ways to build thought leadership and connect with other authorities. I decided to create separate substacks for my favorite topics: wealth, technology, business.
This way I can earn audiences that are hyper-focused on those vertices and I can be a unique bridge between those 3 worlds, cross-pollinating ideas and energies constantly.
E-com is also great because digital storefronts never close.
In January of this year Naval Ravikant quoted me on X and all 3 of my substacks saw a massive surge in membership across the free and paid tiers… this is only possible with digital commerce.
If my business was physical and analog I would need extra materials and labor to serve a sudden influx of customers.
Online is different. Online the rails are built. The distribution problem has already been solved. Logistics are a massive tailwind in the digital world meanwhile in the physical world logistics are a source of financial entropy.
E-com has the greatest margins, the fastest growth rates and the most upside from advances in AI, robotics and other technologies. This is why the digital commerce engine is the one I focus the most of my time on.
The future is digital.
To fly high in life build a diversified portfolio of income sources (wealth engines) for financial safety and growth. Aim for a mix of active and passive income streams to balance effort and return.
Prioritize sustainable, long-term strategies over short-term, unsustainable efforts.
This translates to greater wealth accumulation and a healthier life.
p.s. paid subscribers have access to the research vault which contains links to write-ups about how I designed and built each wealth engine.
👋 Thank you for reading Wealth Systems.
I want to learn what topics interest you so connect with me on X.
(Or you can find me on LNKD if that’s your deal.)
I started Wealth Systems in 2023 to share the systems, technology, and mindsets that I encountered on Wall Street. I am a Wall St banker became ₿itcoin nerd, ML engineer & family office investor.
💡The BIG IDEA is share practical knowledge so we can each build and optimize our own wealth engines and combine them into a wealth system.
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