I’m trying to decide the best way to proceed with my various businesses, so I decided to write a blog post about the choices. Ultimately, I’m trying to decide how to allocate my time. I think time is the most valuable resources and I use portfolio theory to help me allocate it. If I focus my time exclusively on one activity, I might accomplish something, but there are diminishing returns. Spending 24 hours per day playing golf might improve my game, but I’ll get pretty tired by the second day and need to sleep. Its possible to spend too much time on any particular activity while spending some of my time on various activities which may yield a better overall result. A bit of sleep, a bit of exercise/physical activity, some leisure, some time spent eating meals. I feel like spending some time on “non-productive” things will help me become more productive in accomplishing business goals.
So what are my goals? Sustain my current economic lifestyle which requires a few thousand dollars per month of income. I’ve accomplished this from my portfolio and real estate investments. What else can I accomplish with my life? I should spend some time doing charitable activities and other activities that help other people. I make regular current charitable donations and I’ve made a charitable trust the beneficiary of my estate. I regularly engage in charitable activities, much more than my peer group, so I feel I’m accomplishing this altruistic goal. My health? I am excising almost everyday and pushing myself to new health and physical goals. I am trying to reach a balance between enjoying food/alcohol with my health, this is something I’m working on, but based on my body weight and physical capacity, I’m better than average.
So now I have about 10 hours per day after sleep, health, and charitable goals are met to engage in other business activities. There are so many business opportunities I’m finding it hard to choose to focus on specific ones. Currently, I’m engaging in three main business activities which I’ll call family office, property management, and Bitcoin DFS.
My family office business is one that I mostly run alone. I provide bookkeeping, tax, and investment advisory services to a small number of high net worth families. Its pretty easy for me to offer these services profitably because I already have the systems in place and knowledge that I’ve gained from doing these things for myself. It also helps that I’m a former investment advisor, a licensed CFP, and I hold a number of financial designations. This business has the same economics as an accountant or a lawyer. It doesn’t require much capital, but the only way to earn fees is to do the work, so this business is not very scale-able. The most you can make as a financial advisor is a few hundred thousand dollars per year. If I were to sell investment products on a mainstream platform and build a team of associates, I could make up to a million dollars of income each year, but in order to do that, I would have to dedicate my entire life to the task. Reaching a very high income would mean sacrificing my health (both mental and physical) and leaves little time for alternative pursuits. I’ve decided to only spend part of my time providing family office services.
My property management business is one that I run with a small team of friends on contract where we provide leasing services to landlords. We rent out residential real estate to tenants. Some of our tenants are long term tenants in unfurnished suites and other tenants are monthly tenants in furnished suites. The nice thing about this business is that is only takes a small amount of capital investment. Other than some furnishings, its mostly a business that requires some business process and time to do the work. The business process isn’t that hard to create and mostly involves standard practices to market vacancies, process leases, and respond to tenants. This business is moderately scale-able, but to make it grow I have to invest a lot of time finding new clients (landlords) who will allow me to manage their property. The short term furnished rentals are the best area for growth. This is an emerging market for leasing managers that involves a higher capacity for guest service and greater management capability.
My Bitcoin DFS business is the one with the biggest capacity for scale, but also the one with the greatest risk. Its the biggest long-shot. Along with a friend, we are developing an account management and marketing system that will allow us to run daily fantasy sports games. What makes our concept unique is that our platform will be denominated in bitcoins. Currently, there are no competing bitcoin daily fantasy sports sites. We also plan on investing the float of bitcoin deposits in other bitcoin investments. We are not sure how aggressive we’ll be with our investing strategy, but at first we will hold more than 100 percent player deposits in reserve. This business has many challenges including technical, legal, and managerial. But so far we’ve been having fun developing the concept.
I’ve decided to spend my day to day on providing family office services and property management to current clients, and to spend my spare time developing the bitcoin fantasy sports business. It would be nice to have something easy to accomplish that provided some spare income that I could dump into some fliers, but I think the family office service is as close as I’ll get to a safe stream of small business income.