12 Laws of Investing
How I've built a framework to ensure that where I flow my attention and currency isn't based on simply emotion or trends, but intellect and principles as well.
I really believe that having a framework for investing is important, early on in my investment journey, I realized that if you don’t have an understand of “how” you will invest, you’ll start saying “yes” and “no” based on what others say about something.
Instead of following your own thesis.
We’ll get into investment thesis a different day, what today is all about is my own personal “laws” or “principles” that guide my investments.
This helps me ensure that all of my investments are in full alignment.
Because my belief is that everything is energy, it ensures that the energy that I flow to the various investments is fully aligned.
Aligned energy multiplies and increases.
Misaligned energy dissolves.
Thus, it’s my belief that we must align our energy in our life, business and investments and stay true to that, no matter how “wonderful” something sounds.
Without further context, here’s the 12 laws…
#1: Not Emotionally Attached
If I’m emotionally attached to the outcome, I wait until I become neutral. If the deal makes sense, after neutrality, then I go ahead, if not, I wait longer or don’t.
Further, my gut is the main driver of all choices on investment will use it instead of logic and intellect.
#2. Growth without Involvement
If the company has to use me to grow and that’s the only way it can grow, I shouldn’t be part of it.
#3. 10X effect
I should be able to easily see that the business can grow by 10x within 5 years with my involvement, if this isn’t true, it’s not the right business. Growth can be determined by multiple indicators, not just revenue.
#4. Relationship with Founder
The relationship with the founder is the most important aspect, I must know this person and believe they are the right person to run this business. I don’t invest in businesses, I invest in people.
#5. Flow, Ease & Relaxed
If the deal isn’t easy, relaxed and in flow and almost a “of course, we’ll do this”, I’m out.
#6. It can be sold easily
If it can’t be sold, or my position can’t be sold easily within 3 years of entering, I’m out.
Enjoying this post and my content on investing? If you have a friend that could use this, I’d love for you to share it with them. - Scott
#7. It has its own energetic system and brand
It must have, or can be transitioned to having a brand separate from the founder's brand.
#8. Everyone wins, multiple ways
There must be multiple wins across the board for myself and everyone involved. In no case, can I ever use my power or influence or the lack of someone else’s position (aka. Not a lot of money) to gain a higher level power in the deal.
If the energy isn’t balanced, I’m out. If the deal isn’t a win for everyone, I’m out.
I invest in businesses I believe will be still here within the next 10 years. I may utilize trends, however, I invest in my belief for the future.
#10. Lack of Leverage
I invest in businesses that aren’t over-leveraged and that have strong financials or have the ability to have strong financials within 2 years.
Further, I only invest with Entrepreneurs who already have a level of abundance so they aren’t solely reliant upon the success of our business together.
If there is fear of missing out, refer to #1
#12. Gazelles, not Unicorns
Small bets pay off, I don’t over-invest in one specific investment, simply because I think it’s the best. I look to have a group of gazelles, not attempting to build unicorns with massively high levels of risk. I don’t invest for short-term returns, I invest for long-term vision oriented returns.
As I’ve continued to invest, I’ve continued to add more to my “potential laws” list…
However, before you start being an investor, I really believe it’s important to know what you believe.
Are you okay trying to “hit the timing” of the market?
Are you okay attempting to find the next “dogecoin” bull run?
Are you wanting to invest only in things that will build the world you want?
Find your investment “principles” and the choice of when to say “yes” and “no” will save you 90% of the energy required of being an investor.
That’s all for today, friend :)