Money
How I actually think about money, stated plainly enough to disagree with. None of this is advice. It is a description of what I do and why.
I treat an operating business with recurring revenue as the highest quality asset a founder can hold, because it compounds, it responds to my own labour, and it does not require anyone else to revalue it. Everything else is a smaller allocation sized so that being wrong is survivable.
Most people meet money through a market. I met it through a profit and loss statement, which permanently changed what I think an asset is. A market position is priced by strangers. An operating business is priced by how well it is run, and I can affect that directly on a Tuesday.
That is the whole thesis. If I can add a point of retention, a channel, or a price increase that the market will bear, I have created value that no macro cycle handed me. Nobody gets to vote on it. That is a form of leverage that public markets structurally cannot offer a person with my skill set.
The second belief is that recurring beats large. A one time payment of fifty thousand dollars is worse than a contract for four thousand a month, and it is not close, because the second one has a duration and the first one has an ending. Duration is what turns income into an asset.
The third is risk of ruin governs everything. The only unforgivable outcome is the one that removes you from the game. I would rather compound at a boring rate for twenty years than at an exciting rate with a real chance of a zero. Every position gets sized by asking what happens if this is wrong, not by asking what happens if it is right.
The fourth is that concentration builds and diversification keeps. Almost nobody gets wealthy by diversifying. Almost everybody who stays wealthy does. Those are two different games with two different rulebooks and the mistake is playing the second one while you are still in the first, or worse, playing the first one after you have already won.
The fifth is the least popular one. Most alternative investments are entertainment priced as strategy. If you cannot explain where the cash flow comes from in one sentence, you are not investing, you are holding a lottery ticket with a nicer deck.
The framework
The primary allocation is the operating business, because it is the only asset where my own work moves the return.
A smaller payment with a term is worth more than a larger payment without one. Duration converts income into equity.
Every position is sized by the downside case. Risk of ruin is the only permanent loss.
Concentration is how you build it. Diversification is how you keep it. Know which game you are currently playing.
If you cannot say where the money comes from without a diagram, it is speculation wearing a suit.
Twenty unremarkable years beat four spectacular ones followed by a zero, and the second story is far more common.
Questions
Cash flow before appreciation. He treats an operating business with recurring revenue as the highest quality asset available to a founder, because it compounds, it can be improved by his own work, and it does not depend on someone else revaluing it. Market positions are a secondary allocation sized so that being wrong is survivable.
No. He believes in position sizing and risk of ruin. The question that matters is not whether a call is right but whether being wrong ends the game. Any strategy that requires you to be right on schedule is a strategy that eventually meets a schedule it cannot keep.
Because it is the only asset class where his own labour changes the return. A public position is priced by other people. An operating company can be made materially more valuable by improving the offer, the retention, and the distribution, which are all things he can personally influence.
Confusing revenue with an asset. Revenue that stops when you stop is income, not an asset. The moment it becomes contractual, recurring, and transferable to someone else, it becomes something you own. Most founders spend a decade building income and calling it equity.
Nothing on this page is financial advice, an offer, or a recommendation. It is a personal description of how one operator thinks about capital. Talk to a licensed professional before you do anything with your own money.