- All right, it's time to settle the debate:
what's going to make you the most money?
Should you reinvest into the stock market
or reinvest into your business?
And this is getting real, y'all
because this is a collaboration.
I've got Joseph Hogue from Bowtie Nation,
and he has taken the stance that you make more money
by reinvesting into the stock market,
and I'm taking the stance that you should
reinvest into your business,
and I'm gonna share my reasons why.
We're gonna find out all of that and more right now.
(upbeat music)
what's going on y'all, welcome back to the channel
Wealth Hacker Labs, the channel dedicated to
teaching you new ways to grow wealth
that is not taught to you in schools or by your parents.
I am your gracious host Jeff Rose,
and I was excited to be a part of this.
When Joe reached out to me and asked
what stance I would love to take,
and he wanted to take the stance on
reinvesting back in the stock market,
and I'm like, all right dude, you do that,
and I'm gonna do reinvesting back into the business.
Now, being a financial planner,
having been involved in investing for
a number of years, I could take both stances
and I could argue both points.
But I will say, especially coming from
the wealth hacker mindset, I have made so much more
by reinvesting back into my business.
Like, there is no comparison.
I'll share some real life examples
at the end of this video, so stay tuned.
Also find out my strategy and the way I go about
deciding how I reinvest has to do with ice.
That's correct; the ice method.
So you're gonna find out what that is, too.
All right so in Joseph's video,
he shares his three reasons why
reinvesting back in the stock market
makes so much more sense.
And if you need to watch that video first
to kinda see where he's coming from,
to see his points, his arguments,
be sure to check out the link in the description.
It's a great video, great channel, be sure to subscribe.
He's got a ton of content on investing,
entrepreneurship, and just a lot of good stuff.
So the first point that Joseph mentions,
his reasoning for reinvesting back in the stock market is,
in a business, you are not guaranteed a future profit.
- Reinvesting in your business is no
guarantee of more profits.
In fact, most entrepreneurs feel obligated to reinvest.
- So his argument is that, yes, you could reinvest
back into your business, but you're not guaranteed
that there are future profits to be had to be made.
And yeah, I totally agree with that 100%.
But what I would also argue,
especially reinvesting back into the stock market
is you are not guaranteed future growth.
Just because the investment that you place,
whether it be a stock, a mutual fund, or an ETF,
just because it's done amazing the last
one year, two years, five years, 10 years
doesn't mean that it's going to be an awesome investment
for the next three, five, 10 years.
Do you think your companies like Kmart
or Blockbuster video or Motorola
that had a tremendous run, but now, like
they're not even part of the conversation.
So yeah, you're not guaranteed profits
reinvesting back into a business,
but you're also not guaranteed return
reinvesting back in the stock market.
As part of his first point, Joseph mentions that
he feels that business owners feel pressured
to reinvest back into the business,
and that could lead to wasteful spending.
- In fact, most entrepreneurs feel obligated
to reinvest; they feel pressured by all the
business gurus to follow the rules.
It's like a golden rule, and you'll see
all kinds of rules here when you listen to these gurus.
- And it sure can.
I know from my perspective, I have reinvested
back into my business on things that didn't quite work out.
I have wasted money on newspaper ads,
I've wasted money on brochures,
I've wasted money on taking potential clients
out to dinner or lunch.
I mean, there are so many things I have
reinvested back in the business that yield negative return.
But in the same breath, I have reinvested
in ways that have yield amazing results,
and I think of other seminars that worked out amazing.
Doing webinars, different marketing strategies
that I've implemented that just, I mean,
not only did I get all my money back,
but I mean, it was 3x, 5x, sometimes 10x.
And the thing about reinvesting back into the business,
you don't always know what's going to work out,
but you have to be willing to try and experiment new things.
All right, the second point that Joseph mentions
is that reinvesting back into a business
for the sake of growing just to grow,
especially if you're sacrificing happiness and joy
for doing so.
And I have been surrounded by this type of individual,
this type of business owner that all they do
is want to grow, and what ends up happening
is that they are working even more into the business
instead of working eight, 10 hours a day,
they're working 12, 14 hour days.
They're working evening, they're working weekends,
and I can totally relate to that,
and I totally get that.
Like, you don't reinvest just for the sake of growing
and I'll share some of my ideas or strategies
on how you can reinvest into you business and grow,
but not sacrificing happiness because of it.
Joseph's third point for not reinvesting
back into your business is to diversify your assets.
- I know a lot of entrepreneurs, friends of mine
that would be completely wiped out if their business failed.
They've run a solid business with good profits for years,
but they've just plowed everything back into it.
They've got no other assets to depend on or to rely on.
Another hallmark of today's internet age is
it's just that constant competition and change.
Some of these changes, you can't foresee or stop.
And good business models go extinct every single day.
This means you've gotta diversify your financial assets.
So God forbid, if that change comes,
then you're at least partially protected from it.
- You know, when you think about diversification,
especially in investing in the stock market,
that means you don't put all your money in one stock.
You don't put all your money into one mutual fund.
You diversify, you don't put all your eggs in one basket.
You put your assets in different places,
and with your business, if you keep reinvesting
back into your business, there is that potential
that all of your money, all of your net worth,
all of your capitals tied up into this ill liquid asset
that you can't sell.
Now, the part of that I wanna push back on
is just because you're reinvesting back
into your business doesn't mean that you can't
diversify where your money is.
So, as an example, like, I have my online business
where inside of that, one of the main pieces
is my financial blog: Good Financial Cents.
So yes, I could reinvest back into that business
and all my assets are tied up and I can't sell,
and all that fun stuff.
But the reality is that with my online business,
just because I'm generating revenue from that site,
and primarily from affiliate conversions
and display ads and CPC ads,
so that's a main bulk of the revenue.
But I could reinvest back into that business,
but now develop my own courses,
or develop a membership site.
Basically, you can reinvest back into your business
and diversify the revenue streams.
And if you think of, like, let's say a chiropractor,
you know, where most of their revenue
is generated from meeting clients and cracking their backs,
and all that stuff.
But they could also add a nutrition line
maybe they could offer to their clients.
Maybe there is some sort of a health and wellness
training that they can market and sell.
Maybe there's a healthy living group
where they're sharing recipes and workout tips.
Either way, there's different revenue streams
that you can have within the business
that is still diversifying where your income is coming from.
So just because you're reinvesting back into the business
doesn't mean that you're reinvesting back into the same
things that are producing that income, that revenue.
One of the trickiest reasons why it's hard to decide
do you reinvest back into the business
or do you reinvest back in the stock market
is because it's hard to calculate what is the ROI,
what is the return on investment
when you're reinvesting back into the business.
You know, when you put your money in the stock market,
if you're doing the S&P 500 Vanguard fund,
you know that the S&P 500 is averaged
anywhere from eight to 11 percent
so you get a sense of what you should expect and make
over the next 10, 20, 30 years.
Going back to Joe's original point
where there is no guarantee of future profits,
it's hard to know when you reinvest back into the business,
what are you going to make?
Like, what is the return on your investment
for whatever that is?
And obviously there are so many different ways
that you can reinvest back into your business,
and this is where, for me, this is where the ice method,
this is where this came to be
and just really helped me to kinda break down
and understand where I should be reinvesting my money.
So what is the ice method?
All right, so let's break this down.
The ice method.
I stands for impact.
So what is something that you can do right now?
What is something that you can reinvest right now
that there is no barrier to entry,
something that you could execute almost immediately
and you know that you're going to have some results from it.
So yeah, you could dabble in Facebook ads.
Yeah, you could try a newspaper ad
and yes there's ease of execution,
but you don't know if that's really going to work.
So take a look at what is currently generating revenue
right now, like where are you making money?
Where is that money coming from?
Now, for me, like with my financial planning practice,
whenever I was trying to grow it,
one of the things that I knew had success
is because other financial planners were doing
the exact same thing and that was doing seminars.
So the way that I reinvested back into my business
was I would rent out a local restaurant,
I would then send out invitations,
I would send out mailers trying to get people
to come in and listen to me talk.
Can you imagine that?
Trying to listen to me talk
while they're trying to eat dinner?
But I would spend anywhere from a couple hundred
to a couple thousand in the mailers,
in the invitations, and just the restaurant and the meals.
But seeing that other advisors had had success
where I knew that I could implement that,
it would have an impact, that's where I was able
to reinvest back in the business and saw immediate results.
A good friend of mine who's a business owner,
he owned his own photography studio,
and he wanted to reinvest back into his business,
and for him, what he felt would have the
greatest impact was having upgraded equipment,
so new camera, new lens, better lighting,
but he also wanted to reinvest back into his studio.
So he wanted new backdrops, and just some new furniture
that made his studio more inviting.
Now, did he know that that would
increase his profits, grow his revenue?
He didn't, but he was able to visit plenty of
other studios and see other photographers,
seeing their work that he realized
that if he wanted to compete with the other photographers
out there, he had to step up his game,
and he had to reinvest back into his business.
So he did just that.
He bought his equipment, he upgraded his studio,
and then sure enough, his studio took off.
Just through word of mouth, he started getting bookings
from all over the place, and his schedule was full.
So yes, reinvesting back into his business
where he was confident that it would have
the greatest results paid off.
So I stands for impact.
C stands for confidence.
E stands for ease of execution.
And I've already mentioned this before,
but what is something that you can implement today?
What's something that you could implement tomorrow
that you don't have to have a
three month launch strategy before you actually
implement whatever it is this is
that you're reinvesting back into your business.
So is there something that you could do tomorrow
that's going to generate profits?
A personal example that I can share is
when I reinvested back into my blog, Good Financial Cents.
So I already had a very good looking web design,
but at the time, my book was coming out,
Soldier Finance, you know,
that book right back there,
and I just felt like the site needed an update,
it needed a refresh, it just needed like
a fresh coat of paint.
So pay a designer, a developer, about $8000
to relaunch this new website.
The website wasn't broke.
Like, it was working, but I just felt like
it was what I needed and all I had to do was
task that out to a designer and developer,
so I was confident, I knew the impact was gonna be there,
and it was ease of execution
because I didn't have to do anything.
I just had to hire the person and send them the check
and they took care of it.
Like, it was pretty much overnight.
I noticed an uptick in traffic,
which then was an uptick in revenue.
And then all of a sudden I started getting
more media mentions and media requests.
And it was by far one of the best reinvestments
back into my business that I executed on.
Another thing that I executed on
with my business reinvesting was through business coaching.
I'm gonna have another video where I share
a little bit more in depth how this worked out.
But basically over a three-year period
by reinvesting back into the business,
into myself, into business coaching,
I reinvested approximately $24,000, $27,000
over a three year period.
And that reinvestment, after three years,
was yielding me an increase of revenue
of $500,000 more per year.
You heard that, right?
I reinvested $27,000 and then at the time
I was making a half a million dollars more per year ongoing,
and that has only gone up since then.
So those are just a few of the examples
I've been able to reinvest back into my business,
but the thing I really wanted to address,
especially point number two where he says,
you don't just want to reinvest to grow
for the sake of growing and sacrifice happiness.
- Reinvesting in your business, a lot of times
means more work and less happiness.
It's kind of a cruel joke, but we entrepreneurs,
we're driven by that ambition and those goals,
but it so often just makes our lives harder.
- One of the best things and greatest things
that you can reinvest into are efficiencies.
So how do you do more?
How do you make more, how do you get more results
by working less?
And one of the ways I've been able to do that
is to identify where do I need to be spending my time?
Like, where does Jeff Rose need to be spending his time
generating the most revenue for the business?
And what are other areas of the business
that I don't need to be spending my time on?
So when I'm able to identify what those areas are,
then the way that I reinvest is by outsourcing
or hiring or delegating.
Finding people that excel in those different areas
that, frankly, I just don't like to do,
but even worse, I'm just not good doing them.
So why would I waste my time editing or web design
or other stuff that's just not my thing.
So one of the greatest things that you can reinvest back
into is to identify how to be more efficient.
That's why I'm not working 40 hours a week.
That's why I work when I want, and I travel when I want,
and that's because I've got a team
that is great at what they do,
and I spend my time, when I have to,
doing what I enjoy most.
One example is recording YouTube videos in my home office.
I love this.
I love being able to help out others achieve
accelerated wealth, I love people just taking charge
of their life, and financial ownership,
and all that fun stuff.
So this is where I thrive, and this is why I can do this,
and my business continues to grow,
and I have a lot of fun with it.
So that's my arguments why I think
reinvesting back into the business
is going to make you much more return,
even be more satisfied than just going to the stock market.
But anyway, Joe, he had some good points.
And he's got some other good content.
So be sure to check out his channel.
And if you like this video, you know what to do.
Give us a thumbs up, leave some comments,
subscribe, share it, all that fun stuff.
We wanna make sure that we are encouraging others
to be a part of Wealth Hacker Nation.
All right, y'all, this is Jeff Rose
reminding you that it's your money,
it's your life, and only you can make it awesome.
Til next time.
Peace.