042 | The Green Swan | Why Start a Business, When You Can Buy One?

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In Episode 42 we have a wide ranging discussion with JW from The Green Swan about his FI path, going into business with family, buying an existing business and much more.

1500 days
In Today’s Podcast we cover:

  • A discussion with JW from The Green Swan about financial independence and busing buying and ownership
  • How JW got involved in the FIRE community
  • A discussion of life insurance and how much someone in the FI community really needs to think about
  • They were already on a path to financial independence even before finding the FI community online
  • How JW approached college with the mindset of graduating early
  • JW’s dad passed many of the tips and tricks of the FI community to him in his teens
  • JW’s relationship with his older brother made a big difference in his FI journey and they long talked about buying a business
  • The concepts discussed in the book Rich Dad, Poor Dad and how it could help you get multiple streams of income
  • JW and his brothers were saving for many years in anticipation of buying a business
  • How they researched the options of buying a business
  • How they could step in and grow the business they intended to purchase
  • What did they do to fix the culture in the business and reassure their employees about the future of the business
  • How did they know they could add value to this or any other company?
  • How they structured their legal entity to optimize most efficiently
  • They are investigating purchasing a similar business to expand their business
  • What does the path look like for each of the four brothers and how have they navigated the sibling dynamic?
  • They entered the business with ‘eyes wide open’ to the potential to damage their family relationships
  • They built an operating agreement with all potential future possibilities so they could navigate future issues. It was important that they did this from the outset
  • The unexpected joys and crazy things that happen when you own a small business with many employees and JW’s examples
  • How are they funding a future potential acquisition?
  • How do these businesses impact JW’s financial independence number?
  • He is calculating his FI number without even considering the income or equity in the businesses
  • Hot Seat Questions
  • Favorite life hack is listening to podcasts and audio books at 2x speed
  • He wishes he would have done ‘house hacking’ like his father did when he was younger

Links from the show:

Books Mentioned in the Show:

3 thoughts on “042 | The Green Swan | Why Start a Business, When You Can Buy One?

  1. Great show as always Jonathan and Brad!

    I found it a little hard to relate to in terms of acquiring a business for a $1MM. I mean, once I have $1MM that I could invest in an existing business, I’ve already hit FI and I could just keep it in the index fund. I suppose that perhaps the learnings from the Green Swan could be scaled down to buying smaller business with people that have a lower Net Worth and/or don’t have partners they trust to buy a business together.

    A couple more things (not to rail into this too much because believe me, I look forward to this show every Monday and Friday!!!): How is acquiring an existing business that much different than just buying a single Stock? I mean, it has the added stress of it no longer being passive, right? Like, the success of the investment is riding on the shoulders of the new owners. Just seems very risky and also stressful; and all for what, a ROI % in the teens? I guess I’d rather just hope for 8% return in VTSAX and sleep better and have more free time. Plus I don’t have a $1MM 🙂 The other piece that is difficult is that these guys are rockstarts and are CPAs and MBAs, so all though they are still probably riding by seat of their pants on this one, they are more well-prepared than 99% of the population perhaps. It seems like a lot of pieces to the puzzle need to be in place for this to pay off.

    But like I said in my first sentence, it was a good show and the guest was a great guy and very knowledgeable. The best thing about this show is all of the unique perspectives and paths to reach FI. Looking forward to your Friday Roundup!

    ~Lucas

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