Why I Invest Like a Business Owner, Not a Stock Picker

The riskiest asset I own is not Bitcoin. It is my business.

Once I actually understood that, my entire approach to investing changed. Not the tactics. The purpose. The portfolio stopped being the place where I tried to be clever and became the place where I stopped being clever on purpose, because the clever part of my financial life was already happening every day inside businesses I control.

I am an operator, not a financial advisor. I am not a CPA and I am not a lawyer. Nothing here is a recommendation for you. This is documentation of how one guy who runs a handful of internet businesses from Bali handles the money that comes out of them, including the parts I got badly wrong. If you want advice tailored to your situation, go pay somebody licensed to give it.

With that out of the way, here is the actual framing.

The Riskiest Asset I Own Is the One That Pays Me

If you asked a normal salaried investor to describe their risk, they would point at their portfolio. Stocks are the risky part. The paycheck is the stable part. That is a reasonable way to see the world when your income arrives on the fifteenth and the thirtieth from an employer with a thousand other employees.

Mine does not work like that. My income is concentrated in a handful of businesses, all in the same broad industry, all dependent on the same few things: search traffic, ad platforms, supplier relationships, payment processors. If Google changes something, three of my sites feel it in the same week. That is not diversification. That is one bet wearing several costumes.

It is also a bet with a real failure rate. I have started more than twenty online businesses since 2013. Most of them are dead. One of them I sold for a mid five figure exit, and that felt enormous at the time. The Bureau of Labor Statistics tracks business survival rates and the numbers are not flattering to any of us. My personal hit rate is worse than the averages, and I do this full time.

So when I look at my whole balance sheet, the business is the high-risk, high-variance, illiquid, concentrated, undiversified position. It is also the position with the highest expected return, which is exactly why I keep running it. But it means the rest of the money has a completely different job than it would if I were an employee.

Money I Earned Versus Money I Am Trying to Earn With

This is the distinction that fixed my thinking, and I wish somebody had handed it to me in 2014.

There are two piles. The first pile is money I am actively trying to earn with. That is inventory of attention: ad spend, content, a new store build, a writer, a developer, a supplier deposit. That money is at work, exposed, and I expect a chunk of it to disappear. That is the cost of finding out.

The second pile is money I already earned. Profit that survived the business, survived taxes, and made it to my personal account. Its job is not to be exciting. Its job is to still be there in fifteen years when one of my businesses has stopped working and I do not want that to be an emergency.

When I mix those two piles, I make bad decisions in both directions. I get conservative with money that should be taking a swing in the business, and I get aggressive with money that was supposed to be the floor under my life. Keeping them separate is most of the discipline.

Lumpy Income Breaks the Monthly Contribution Habit

Every piece of standard investing content assumes a salary. Set an amount, automate it, contribute the same number on the same day forever, and do not think about it. The logic is sound and I have no argument with the math. The problem is the input.

My income does not arrive in equal slices. A good month in high-ticket dropshipping and a slow month can differ by a factor I would rather not print. Agency work lands in chunks when projects close. Affiliate commissions get paid on other companies’ schedules, which is a thing I wrote about in detail in how affiliate income actually works from click to payout. Ad spend goes up before revenue does. A supplier changes terms and suddenly I am floating more cash than I planned to.

If I set a fixed monthly transfer sized for a good month, a bad month forces me to either cancel the transfer or fund it out of the business, which is the exact mixing I just said I do not do. If I size it for a bad month, I sit on cash for years and never actually invest the good months.

How I Handle It Now

I stopped trying to invest monthly and started paying myself like an employee, then investing on a percentage.

The business pays me a fixed owner draw on the same date every month, sized so it is comfortably survivable in a bad month. That is my salary. It is boring and it does not move. Everything above that draw stays in the business until the month is closed and I know the actual number.

Then, on a schedule, I take a percentage of the surplus that survived the close and move it out permanently. Percentage, not a fixed dollar amount. A big month sends more, a thin month sends little or nothing, and I never have to make an emotional decision about whether to skip a contribution. The rule does the deciding.

Two things make this work. The business needs its own bank account, genuinely separate, which for me means a US business account plus Wise for moving money between currencies and countries without getting quietly shaved on the exchange rate. And the books need to be closed before I know what the surplus even is, which is why bookkeeping is not optional for this system. More on that below.

The Cash Buffer, and Why Mine Is Bigger Than the Standard Number

The common guidance is three to six months of expenses. That number was built for somebody with a salary, an employer, and a reasonably predictable path back into work if the job goes away.

An operator has two different problems stacked on top of each other. Personal expenses still need covering, and the business itself needs working capital to survive a bad stretch without me being forced to sell something or take terrible terms. Those are separate buffers and I keep them as separate piles.

On the personal side I hold considerably more than six months, and I have never regretted it. On the business side I hold enough to cover a full cycle of ad spend, supplier obligations, contractors and platform fees without any revenue arriving, plus the tax I owe but have not yet paid, which is the one people forget. That last part is not savings. It is somebody else’s money sitting in my account temporarily.

Yes, holding that much cash costs me something in real terms. I know. I have decided that the price of being able to say no to a bad deal, ride out a slow quarter, and never sell an investment at the wrong moment is worth more to me than squeezing the last bit out of my idle balance. That is a personal call, not a formula.

Boring by Design, Because the Business Is Already the Exciting Part

What I actually hold is unglamorous: broad index funds and ETFs, in a plain brokerage account, bought on a schedule, largely ignored. I hold Bitcoin as a separate long-horizon position for reasons I laid out in why I hold Bitcoin and what I expect from it. That is most of the story.

I did not start there. For a few years I was convinced that because I was good at reading a business, I would be good at picking stocks. Those are related skills in the way that being a good cook is related to running a restaurant, which is to say barely, and mostly in ways that mislead you.

What actually happened was that stock picking ate the thing I could not afford to spend: attention. Reading filings and following tickers is genuinely interesting, and it competed directly with the work that pays me. An hour spent on a company I own a tiny slice of and cannot influence is an hour not spent on a store where I control the product page, the ad, the supplier and the price. That comparison stopped being close once I ran the honest version of it.

There is a lot of free, non-commercial material on how funds and fees actually work at Investor.gov, which the SEC runs, and I read a lot of it before I simplified. FINRA’s investor section is another one I still go back to, particularly for how to check whether somebody selling you something is actually registered.

For the brokerage side I use Schwab, which handles the international address situation better than most. That matters more than people expect when you live abroad; plenty of brokers get uncomfortable the moment your residence stops being American. I keep a second, smaller account at Robinhood for the sleeve I actively trade, deliberately walled off from the long-term account.

The Small Sleeve I Keep Separate

I do swing trade. It is a small, fixed, deliberately capped portion of my liquid net worth, it lives in its own account, and it never touches the boring pile. If it went to zero it would annoy me and change nothing structural about my life. That is the whole design.

I keep it because it scratches an itch that would otherwise get scratched with the money that is not supposed to be gambled with, and because it keeps me paying attention to markets in a way that reading about them does not. I explain the honest reasoning, including why it is probably a bad idea for most people who already run a business, in why I swing trade at all when I already run businesses.

The charting side of that runs on TradingView, which is where I keep my watchlists and alerts. I also skim Benzinga for market news in the morning, mostly so I am not surprised by something obvious. Neither of those tools touches the index side of things, because there is nothing to do over there.

Reinvest in the Business or Buy the Index: the Test I Use

This is the real question a business owner faces that a salaried investor never does. Every dollar of profit has two competing homes, and the business will usually feel like the better one because it is the thing you understand.

That feeling is not a reason. So I built a test. Five questions, and the money only goes into the business if I can honestly answer the first two.

• Do I have a specific use with a number attached? Not “grow the store.” A written line item: this much on this channel for this many weeks to answer this specific question. Vague plans are how money disappears.
• Has this already worked at a smaller size? If a channel has never produced a profitable sale at a small budget, more money does not fix it. It just finds out faster and more expensively.
• Can I fund it without touching either buffer? If the answer is no, it is not a growth decision, it is a solvency decision wearing a costume.
• Would I still do it if the payback took twelve months? This one kills a lot of ideas. Most of my genuinely good reinvestments were slow: content, supplier relationships, systems and SOPs. Most of my bad ones promised to be fast.
• Am I doing this because it is the best use of the dollar, or because I am bored? I have started businesses out of boredom. They were not my best ones. This is the same impulse in a different outfit.

If questions one and two both come back yes, the business wins, and it usually wins by a lot. A dollar in a channel I already know converts beats a dollar in a fund almost every time, because I am not a passive owner of my own store. I can change the offer, the price, the page and the traffic source.

If either of the first two is a no, the money goes to the boring account and I do not agonize about it. Default to boring. The default matters more than the occasional judgment call, because the default runs hundreds of times and the judgment call runs twice a year.

There is a third option people forget: pay down a real obligation or just hold the cash. Not every dollar needs a job this month. Some months the right move is to do nothing, and doing nothing is a legitimate position rather than a failure to decide.

What Running a Business Taught Me About Behaviour in a Drawdown

Here is the strange gift of running businesses that fail. I have watched revenue drop by more than half in a month. I have had a supplier drop me. I have had a store go from working to not working because of a change I did not cause and could not appeal.

That does something to your nervous system. The first time a business fell apart, I panicked and made it worse. I slashed ad spend to zero, which killed the data I needed. I chased a new niche before I had diagnosed the old one. I have written about that pattern in why most dropshipping stores fail in year one, and the honest summary is that the failure was rarely the market. It was me reacting.

By the fourth or fifth time, the same event produced a much smaller reaction. Not because I had become brave, but because I had a process: stop, measure, find the one variable that changed, and do not make an irreversible decision inside the first week.

Market drawdowns now feel like a slow version of the same thing, with one important difference. In a business I can actually do something, and doing something is usually correct. In the market I can do almost nothing useful, and doing something is usually the mistake. Learning to tell those two situations apart is probably the single most valuable thing running businesses has given my investing.

The practical version: when the number goes down, I do not open the app more. I open it less. My rule is that I am allowed to look at the long-term account when I am making a contribution, and at tax time. That is it.

Earning in Dollars, Living in Rupiah

I have lived in Bali since 2018. Almost all my revenue is in US dollars. Almost all my daily spending is in Indonesian rupiah. That creates an exposure most domestic investors never think about, and I am still not sure I handle it perfectly.

My approach is deliberately simple. Long-term assets stay dollar denominated, because my long horizon is measured in decades and my dollar income is the thing that produced them. I keep a few months of local living costs in local currency so a bad exchange week never forces a transfer at a bad moment. Beyond that, I do not try to time the rate, because that is just currency speculation with extra steps and I already have a sleeve for speculating.

The part that surprised me is how much of expat life is quoted in dollars anyway. Villa rent here is often priced in dollars and paid a year at a time, which is a large annual cash event that has nothing to do with markets and everything to do with the buffer. I broke down what that actually costs in the real cost of living in Bali as a digital nomad.

Practically, moving money is a workflow, not a one-off. I get paid through a mix of processors and use Payoneer for some client and platform payouts, then consolidate. For business balances across currencies, Airwallex has been useful for holding multiple currencies rather than converting everything the moment it lands. The goal is fewer conversions, not better guesses about the rate.

One more thing that has nothing to do with returns: being a US citizen abroad does not turn off your US filing obligations. The IRS international taxpayers section is where I start every year before handing everything to a professional, and I strongly suggest treating that as a job for someone qualified rather than a thing you wing.

Keeping Records When Your Income Is Self-Employed and Messy

Nothing above works without clean books. If I do not know what the business actually earned, I cannot pay myself a real draw, I cannot calculate a surplus, and I cannot tell whether a reinvestment worked. I have run a year on shoebox accounting. It was awful and it cost me more in stress and accountant hours than software ever would have.

Here is what the system looks like now, and it is not complicated.

• Separate accounts, permanently. Business income never lands in a personal account. Personal spending never comes out of a business card. This one rule prevents most of the mess.
• Bookkeeping software connected to the accounts. I run QuickBooks for the main entity because my accountant already speaks it, and it is easier to hand over at year end.
• A monthly close. Categorize, reconcile, look at the profit and loss, and only then decide what moves out. It takes an afternoon.
• Tax set aside the same day revenue lands, not at the deadline. That money goes to its own account and I pretend it does not exist.
• An annual paper trail of what I contributed where, so tax time is retrieval rather than archaeology.

For the smaller projects where full accounting software is overkill, Wave handles basic invoicing and books for very little. If your books are years behind and the thought makes you ill, Bench does catch-up bookkeeping with actual humans, and paying somebody to fix a backlog is not a defeat. Ecommerce sellers with multi-channel sales data usually need something purpose built, and Finaloop is built for that kind of store.

The IRS self-employed section is the reference I actually use for what records are expected and how estimated payments work. Again: I am not a CPA, and I hired one the year my income stopped being simple. Best money I spend annually.

What I Got Wrong

Three mistakes, and I made all of them for longer than I should have.

I Thought I Could Out-Trade the Market

For a stretch in my earlier years abroad, I traded far too actively. Living fifteen hours ahead of Los Angeles meant the US market opened in the middle of my evening, which felt like an advantage and was actually a trap. I stayed up. I traded tired. I confused being busy with being skilled.

The real cost was not the account. It was that my business results got worse during the exact same period, and I did not connect the two for a long time. The attention had to come from somewhere and it came from the thing that actually paid me.

I Treated Business Cash and Personal Cash as One Pool

Early on, if the business had money in it, I felt rich. If my personal account had money in it, I felt like I could fund an ad test. Both directions were wrong.

The version that hurt most: I once funded a personal purchase out of what turned out to be tax money, then had to pull from what should have been an investment contribution to cover the bill. Nothing catastrophic happened. But I spent a quarter feeling behind for no reason other than sloppy accounting, and that is a fully avoidable kind of stress.

I Checked the Balance Far Too Often

At one point I was opening the brokerage app several times a day, which is a habit with no upside. It never once caused me to make a good decision. It did cause me to sell something out of boredom on a flat afternoon, and to feel unnecessarily bad on days when my actual business was doing fine.

Deleting the app from my phone did more for my long-term results than any allocation decision I have ever made. The trading sleeve lives on the desktop, in a separate account, at a specific time of day. Everything else is checked when I fund it.

Where I Would Point You Next

If you take one thing from this, take the framing rather than the specifics. Your business is your concentrated, high-variance, high-risk position. That fact should make everything else in your financial life more boring, not less, and it should change how much cash you are willing to sit on.

The mechanics of that framing, including how I actually structure the piles, what I hold and why, and the numbers behind the reinvestment test, live on Investing Paradise, which is where I write about stocks, ETFs, Bitcoin and trading in depth. This site holds the personal decisions. That site holds the reference material, and there is a lot more of it there than I could fit here.

If you are earlier than this and still deciding what the business itself should even be, start with choosing an online business model you can actually run, because there is no point designing a portfolio around income you have not built yet. Every tool I mentioned here is listed with the rest of what I actually use on my resources page. And if you want to go through your specific situation with someone who has made these mistakes already, that is what my 1-on-1 consulting is for, though I will say again that I am not licensed to give you financial advice and I will not pretend otherwise.

Boring portfolio. Interesting business. That is the whole thing.