Ep 271: The Path To Financial Freedom Through Online Businesses & Making Money Online [Revealed]

Jaryd Krause:

How the hell does somebody get out of this damn job and semi-replace their income, semi-retire, and then fully retire? Hi, I'm Joe Krause. I'm the host of the Buying Online Businesses podcast.

I was presented with a question via email by somebody about retirement and a path to wealth. And so I just decided to sit down and have a chat with you guys and just get out what's in my head around the steps that you need to take to get to earning a little bit of money online and then fully replacing your income, quitting your job and then building wealth and the things that you may come across along the journey and the mindset principles that you need to be able to get you there as well.

Now there's so much value in this podcast episode. It's not the only way that I can help you, though, if you're going to buy an online business. make sure you go away and get my due diligence framework. It takes the guesswork out of buying an online business. It's at Buyi, for that's free resources.

It's what I've used, and what my clients use, to help people save millions of dollars and make millions of dollars. So go away and get it. Let's dive into the pod. Okay, road to semi-retire to fully retire through passive income. Now, this is completely unscripted. This is from a question that I got from Jamie McGrory.

So thanks for sending this question in, Jamie. With the suggestion of, you know, me creating some long form discussion or content around just one singular question. And it's basically, I'm just going to hash out a bit of a roadmap from sort of start to finish and depending on where you're at in your life, financially, time-wise, and life situation-wise, what would you be kind of starting in this journey to, you know, earning a bit of passive income, semi-retirement, fully retirement and then building wealth?

So. First and foremost, we need to accept where we're at in our lives financially. then create a roadmap towards that. So first, accepting is very, very important. Accepting where we're at, maybe we don't have what we want; maybe we're not making the money we want, maybe we're not saving the money we want; maybe we don't have the job that we like or the life that we like.

I'm going to put my hand up here, and that was completely me. I thought I was earning good money, and it's a bit different these days with how much I earn and what I earn from my investments and all that sort of stuff. When I first started, I thought I was earning good money.

And you can; I'm just a testament, and there's so many other people out there as well who are testaments to how you can reshape and go bigger and bigger and bigger. But there really is no glass ceiling. And that's something I'm going to mention throughout this chat as well. But first, let's accept, Let's just accept where we're at.

And also, at the same time, don't accept where we're at. So accepting where we're at is good, you know, everything's, you know, there's positives and negatives to everything, right? And there's duality in everything. So accepting where we're at, the positives to that are that, okay, we accept where we're at and we're not going to beat ourselves up about it too much, right, and play the role of a victim.

A lot of people play the victim role throughout their lives, poor me, and this is hard and they connect with other people through complaining. You probably know a lot of people like that. I did, until I consciously decided to choose my friends and my circle, choose who I wanted to be around and choose my environment.

Something that is going to be helpful for you on your path to wealth. So that's the positive of accepting it. But the positive, the negative of, or the positive of not accepting it, I should say, is that you're not accepting your position in life, that it's going to be like this forever, and then you're going to do something about it.

So... Really, the secret that everybody's searching for is how I get there; it's very simple. It's hard. It's extremely hard. But it's so simple that it's just commitment. You just really need to be so damn committed. You need to basically put yourself in a position or have the mindset that there's absolutely no other option. There's no other option.

Like you living the life that you are living and earning the income that you're living or the situation that you have with your finances, you've accepted where you're at, but it's not acceptable for the long term. And it's just not; you just can't. There's no other option. You can't stay where you're at.

And before I started, well, as I first started buying online businesses, you used to have phone sales and calls with people. And I would literally present the option to them of, like, we talk about, all right, where are you at? You know, what do you not like about where you're at? And then, where do you want to go?

And where a lot of people get caught is, they go, Oh, I'm attached to my situation. and are scared to get outside their comfort zone. You, and I'm going to reiterate this multiple times through this pod, really need to commit. And I'm talking about committing to it forever. Right? A lot of people want a band-aid; a lot of people just want out of the situation.

But if you're going to build wealth and you want to semi-retire, you need to be able to, you know, fully retire. You need to be able to say, I'll do this; I'll work at this forever, as hard as I can. Obviously, within reason, without killing yourself. I've actually been to the point where I worked so hard that I got super sick, but.

You need to commit to it and you need to work super damn hard to do this and be in it forever. I've got one sort of thing that I do, like say a say a word that is a cuss word. But if you're going, first you gotta find your lane, and I'm going to say this cuss word soon, but first you gotta find your lane, right?

You've got to find the vehicle that's going to get you there. Most of you guys are listening, he's like, I wanna buy a business. I want to buy an online business so I can have that lifestyle. Now, there's a billion other routes that you can take. You can invest in so many other things. But what you need to do is stick to one and commit to it for an absolute minimum of five years.

Like I said to you before, you should be committing to this for life. because the compounding that comes from it is just insanely exceptional. And that's where real growth happens. For example, Warren Buffett committed to acquiring businesses, right? And he started buying them in small, small portions until he could start buying the whole company.

And that's what he does. And he's been doing it for decades. And he earned, I think, 90% of his wealth in the in the last couple of years, right? From compounding. For example, say he's got like $90 billion. I think he made like 80 billion in the last sort of eight years or so, which is just insane to think about. When he's got 90 billion, he made 80 in the last, you know, within the last decade and he's been doing this for four or more decades.

So the compounding really is in your favor and even when you think about it, it's like the difference between three years and 10 years. There's a good saying that is, often, we overestimate what we could achieve in three years and underestimate what we can achieve in 10 years. So for me, I wanted to replace my income as soon as possible, right?

And I gave myself; I said I would; you know, I committed to myself and I committed to the path forever and I'm going to continue on this path forever of acquiring businesses. It's not just a vehicle that I'm going to run. It's a lifestyle that I'm going to choose. And I would urge you guys to adopt the same sort of lifestyle for building wealth, acquiring assets, and acquiring businesses.

Because there's no, you can't make it into a lifestyle. I have. And when I started this back in 2013, well, I tried to make my first dollar online in 2013. So the time of recording was 11 years ago. My goal was to just make a couple thousand dollars a month to be able to pay for my expenses to travel around the world and surf.

So if you take me back 10 years ago, that was basically where my goal was, right? 10 years is, I mean, I've been investing for 20 years—21 years, actually. But 10 years have passed and I have far exceeded what I even conceptually thought was possible. And I was speaking to my mentor just two days ago about what I had achieved. Not just, I'm not saying I've done it all myself; I've had help and all that sort of stuff, but what has come into fruition in my life within a 10 year period because of the commitment that I have to it.

So I want you guys to adopt that. And when I say stay in your lane, what I'm saying is choose this vehicle, make it a lifestyle, and the cuss word that I wanted to mention is just stay, and this is going to help you remember it, stay in your fucking lane. Just stay in the lane, commit to it, get the compound and grow from it.

Now, I've done a bunch of episodes on mindset around how to achieve things. My threes to achievement, my three Cs to achievement. Commitment comes before courage, which comes before confidence. So if you want to become a confident investor, be confident. knowing that you have replaced your income, are semi-retired, fully retired, and that you're a wealth generator.

To become confident at that, you need to be courageous enough and then you need to have that commitment. To get that commitment, you need to have a vision. You need to have that vision and make everything else in your life yours; there is no other option. You need to work on that constantly. And then, as you achieve that vision, you need to allow that vision to reiterate and set new goals as well.

Now, coming back to the start, depending on where you're at, set some small goals, right? Don't set ridiculous goals. Because what happens is that when you guys look at, say, something somebody's achieved, they're making $5,000 a month after buying a business and it only took them five months to buy. They may be a single person with no children and no work; they don't need to work, maybe and they've achieved this awesome result.

That person may not be comparable to where you're at in your life situation. So don't set expectations on yourself based on what other people have achieved and what input they can put in. We don't count time as a factor when trying to achieve something, or I don't anyway, because it's a very ridiculous way to claim success within a certain period of time. It's more about the inputs and the outputs. So remember that.

Another thing is... Set that goal of maybe for your first business, buying something that is making maybe enough money to pay for your grocery bill. Maybe it's a couple hundred dollars a week or a couple hundred dollars a month and then work your way up to starting to replace all of your expenses. Right?

Also, at the same time, and I'm not the biggest advocate for it, I'm more of an advocate that you should not cut out too many expenses in your life and downgrade your life, but instead work out a way to earn more money to afford a better lifestyle.

At the same time, though, it can be hard to get into that position where you are making more money. And sometimes what can help you get there faster is eliminating some entertainment expenses. And what I mean by entertainment expenses is unnecessary entertainment expenses. Maybe you don't need to be paying for Netflix or a bunch of other streaming software.

Maybe you can downgrade how much you're spending on your phone bill or your internet bill. I would not be compromising on that. Shelter, I think you should be in a great space, of course. The better the space, the more inspiring it is. However, sometimes, you know, if you're in something that's a bit unnecessary because you're, in quotes, keeping up with the Joneses or trying to show the world that you've made it, that can be detrimental to your success.

It can be detrimental to your growth. It can really squash you or strangle your growth. So there is something to understand there. So slowly start to work your way up to achieving those things. I would say you should give yourself five years, like I said before, to get to the point where you're earning a bit of money online.

And then once you've worked out that step, the rest can compound, right? You can start to go bigger, you can start to work on it harder, and you can start to make a few moves because you've got some resources. And we'll talk about the next, like... resource allocation shortly. Now, once you start earning money, it's exciting.

And you can start to see, you get closer to the end of the tunnel, right? The light starts to get a bit brighter and you're starting to see that you're close to the end of the tunnel and you can leave your job. Now, I get it. I get messages and emails from people all the time, Joe. This is why I can't be in my job any longer. I just can't do it. I've just got to do this within a short timeframe and I've got to make it work.

My... The answer to that is to slow down a little bit, because when we rush, we typically make mistakes. And I think you guys should be, and if I were starting out again, I would be urging myself to stay in my job a little bit longer—not longer than I did, but longer than what most people expect. They should be staying in their roles and earning an income.

Because there's a level of stress associated with being a business owner that you need to deal with. And sometimes when we quit our job too early and maybe we're not making as much as we should be making to cover bills, but we have this ambition, we have this flair and we have this commitment and we're just really hungry for it and we tell ourselves we can make it work, what happens is that we leave out a sort of stable sort of income.

And then we have to make it work and we put our backs against the wall Sometimes, when we're too stressed, we don't make the best decisions, like I said before. So don't quit your job too early. In fact, I would be suggesting that you don't quit your job until you're making more than your current wage or more, like more than your current wage and the income from that business or vehicle that you've got is a stable, predictable income.

Now I know that with online income, it can be unpredictable at times, but you want to have one that's pretty stable and has a has a pretty decent income. And you also want to make sure you are saving enough money as well. So, not just number one, I've replaced my income.

Number two should be, yes, you should have an income, and that income should be pretty stable. The average wage should be stable and more than what you were previously earning in your job or your roles. So you can afford to reinvest, right? You can not just grow the business that you have, but you can also afford to take money on the side and reinvest.

As well as when it comes to really starting to build wealth and... Like I haven't built generational wealth. I mean, I haven't been doing this long enough and I haven't made the same aggressive moves as some other people to get to the point where I'm building generational wealth yet. And I am on the path to getting there.

However, when you want to build that level of wealth, you can't just buy a business or own a business that's making enough money to pay for your lifestyle. You need to be able to typically save money to reinvest in other things, but what grows that even faster is have havinggh money or a decent wage to show lenders that you can get finance to acquire other assets and to acquire larger assets.

And I'm not saying there has to be online businesses; it can be other assets as well. So that's a very, very important thing to think about. Before you go, yes, cool, I've got enough, and I can get by, and I'm going to leave my job. There's obviously nuances to this. Everybody's personal situation is very different as well.

But these are the suggestions that I would be making on a path to getting yourself to a point where you are fully retired and you're building wealth. Now, most people forget what the actual goal is when it's to build wealth and retire. Most people will say they want this, but I believe what they really want is freedom.

I think that's what the real goal is. Freedom of stress, time freedom, and location independence, right? That's what I believe the real goal is that people are searching for, and a lot of people lose sight of that. And... Remember, if you get caught up in the point where you like just building wealth and just working super hard, you may be stressed and you may be attaching yourself to a location, a certain work schedule, or a certain figure of income that you need to make to be happy In reality, you can typically believe that what happiness equals is fulfillment, and content and peace, right?

Being at peace with, being at peace in your life. And so that's what I believe most people are searching for. And sometimes, you know, people get caught up too much in the money thing and the work thing and try to build wealth when sometimes, you know, you might be stuffing yourself over there.

So. Then, when you get to the point, the next stage is, when you get to the point that you're earning a good, stable, solid income and you're saving money, then you can go and get debt and you can acquire other assets like larger online businesses or, you know, on this path as well, you might buy one business and you might grow it.

And then you might sell it. Or you might buy one business, grow it, and then you've got enough money that you've built up from your savings from that as well, and then you might buy another one and build out a bit of a portfolio. Now, I would advise against buying too many businesses too soon. I've done this; you guys know a bit about my story where I bought three businesses in three years, my first three businesses, and it wasn't the smartest move.

Later in life, I learned that's... because I wanted to build wealth, I learned a good quote that I got from a friend who got it from his mentor, which is that for wealth creation, you need concentration. For wealth preservation, you want diversification. Now, most people are taught that we should just diversify

Now, that's what I thought, and I bought too many businesses too soon, too close together. and one ended up crushing it and doing really well and I left the others by the wayside because I wasn't focused on them. Right, so I believe that for wealth creation, you really need that concentration. So I wouldn't be advising, like once you bought one business that's making enough to say, for your income and your expenses and to live, then go away and buy another one that can be like a slush fund one.

I believe it's probably better to sell one and then acquire a larger one and just fully focus on it. Unless you have a really good growth plan with a team and systems that allow that existing business to grow year over year without any input or concentration from you,. So a couple of caveats there. And there you go.

That's basically the path to semi- semi replacing your income, slowly building it up so you can get half of your income more and then fully replace it. Don't leave your job too early and then you can leave once. I believe you should leave once you are saving money, earning more than your current wage and then being able to reinvest those savings on the side and build that wealth to the point where the money is working for you.

Versus you working for the money. Because I think we should get to the point where. We have resources, typically our time, our money and our energy. And I believe we should be investing them in the best possible way we can. Typically, our time, I believe, should be invested in joy because, you know, this is getting a bit woo-woo, but that's what we're here for is to enjoy life.

And that's our, I believe our sole purpose is to have fulfillment and enjoy life. Not everybody can get to that stage yet, and sometimes we need to work through certain stages. I did as well, You know, I had a very dark time, well, before 10 years ago and I had to get through certain stages to be able to get to the point where I could spend my time on joy and things that are fun and then spend my money that is making me money without me having to touch it.

I believe that is the goal and then... The reason that I think that's a very admirable goal is not because, like, hey, look at me, I've made it. That's dumb, in my opinion. The reason I think it's quite admirable is because... you are getting yourself out of the way. When you have enough money to acquire an asset that does not need you and it grows without you, then you've eliminated yourself.

Because typically we get in our own way so much, and then when we have those resources to buy maybe property or online business, and it grows without us, because it's got a team and managers and all those sorts of things in place, then it's fully passive, and then it becomes like, here that's producing this level of income or this level of ROI versus this other one, and then you should start to think about all right, I've got this cash here, I've got these assets, and then you should start to weigh up opportunity costs and things like that.

So I hope that's a bit of a step on the path to semi replacing your income. Jamie and everybody else that thought this was valuable and want to listen, if anybody does have questions that they do want to propose to me, please email them through. I'm happy to answer them through a podcast like I did here. I know this was only one question. But I'm going to come back and reiterate again.

A lot of people want to replace their income. I don't think that's good enough. A lot of people want a lot of things and have a level of expectation that they should achieve them because other people have achieved them, but they don't really know what work went into achieving them. You know, so I believe you can want things, but you don't deserve them.

Just because you want something does not mean you deserve it. and I was speaking to a friend about this the other day. When you want to own a certain size business, say you want to own a $3 million business that produces a million dollar passive income per year or semi-passive income per year, the goal is to understand that you may want that business, but what you need to do, and this is wants versus needs, is to become the person through the journey and through the process that deserves to own a $3 million business.

So you need to change yourself, you need to change your character, and you need to go through the journey of maybe losing a bit of money, gaining a bit of money, having hardships, having things fall out from under you, and then keep on the path. towards that to become the person who can be accountable and responsible enough to own and handle a three million dollar business that owns, say, a million dollars of passive income or semi passive income per year.

I'm now on this journey, and I've had people buy businesses and say this isn't for me, right? Because on this journey you will come up against some adversity, and I'm talking real adversity that will be; that is life changing. You know, if you get through it, it's life changing. If you don't get through it, it's life changing because you'll stay in the same position.

Obviously, if you guys haven't heard me talk about the book The Obstacle is the Way by Ryan Holiday, I suggest you read it. It's highly recommended reading for everybody who does my courses. Take the hard path, take the path towards wealth, take the path towards semi-passive income, semi-retirement and full retirement, and then build wealth. And just wanting something isn't good enough, you need to become that person who deserves to own that type of asset and to have that type of life.

And... I'm going to butcher it, but I've heard Tim Ferriss talk about it, and he and other people talk about it as well around achieving things and it's a lot of these, like I've mentioned. I've just spoken about this for like half an hour here, and it's very simple in theory. But you need to make the right decisions, especially when you come up against adversity and pressure.

And so what Tim and his mentor talk about is easy choices, hard life, hard choices, easy life. I'll give you an example. So if you make easy choices in your life, typically it's going to make your life harder. Vice versa, if you make harder choices, harder decisions, and you don't just back away from those hard decisions, those hard decisions are typically going to make your life easier.

The quick example that I give people is alcohol. When I was younger, I quit alcohol and partying, and a lot of my friends wanted to peer pressure me into drinking because of their own stuff, I would say. And... I said no and they kept peer pressuring me and I came across the decision through peer pressure as like do I make the easy choice and just go yeah, okay, I'll drink.

But that would make my life harder because if I drank then I wouldn't be able to wake up the next day feeling fresh, go for a surf, maybe do some work on the side and it's gonna wreck my body as well, right? So making that easy choice makes my life harder when you come up against adversity.

Now the other way around is if I made the hard choice when that adversity came towards me, solid and strong and said no. And that made my life so much easier because I could wake up the next day, I could go surfing, I'd be happier, fun, I'd be healthier and I can do the work with a proper mindset towards achieving the goals that I want to achieve. So, it's the same when it comes to business.

Now, I'm not saying that every single time you come up against adversity that you need to just rush at it like a bull out of the gate. Sometimes we need to be patient but we need to make moves and sometimes it's better to fold as well. However, if you just fold every time, you're not going to get anywhere.

You're just out of the game. So at times you need to choose to make those hard decisions to move forwards and tackle that adversity and overcome it. So there you go. A lot of this is really mindset. about what's going on between your head. And to get there, you need to have people that have achieved great success in the areas of their life that can be a sounding board for you.

I don't recommend speaking to people that wanna keep you safe and want you, you know, just want to keep you safe and just. They might have your best interest at heart based on their knowledge and understanding the world. Some of the decisions you make would be bad decisions for their model of the world versus a mentor that's been through some level of adversity.

They might say, you should do it this way instead, and it might help you, it would likely help you get towards your goal faster by having the right people in your ballpark. That's basically it. I hope that helps guys. Sending love and I'll speak to you soon.