My First Million
The best business ideas come from noticing what's working and doing it better, faster, or for a different audience.
“You don't spend the first derivative money, you only spend the second derivative”
What It Means
Never spend business profits directly - invest them first, then spend only the investment returns
Why It Matters
Creates permanent wealth base that continues generating income while funding lifestyle
When It's True
When you have consistent business cash flow and want to build permanent wealth while maintaining lifestyle
When It's Risky
When business cash flow is inconsistent or when investment returns are too low to fund desired lifestyle
How to Apply
Automatically invest all business profits into income-generating assets
Set up separate accounts so investment returns are clearly identified as 'spendable'
Choose investments with reliable income streams (dividends, rent, etc.)
Example Scenario
“Business owner earns $500K profit, invests it all in dividend-paying stocks yielding 4%, spends only the $20K annual dividends while preserving the $500K principal forever.”
Related Knowledge
Second Derivative Spending Rule
A cash management principle where you never spend business income directly, but only spend the investment returns generated from that business income.
Wealth Preservation Framework
A conservative investment approach focused on maintaining purchasing power and reducing stress rather than maximizing returns, typically used after achieving a significant financial milestone.
Investment Thesis Litigation Framework
A systematic approach to evaluating competing investment or business theories by collecting multiple expert perspectives and weighing evidence like a legal case.
Systematically evaluate and optimize personal investment allocation through peer feedback
Clear understanding of current allocation, identification of blind spots, actionable feedback from trusted peers, and refined investment strategy aligned with goals.
Convert entrepreneurial success into sustainable long-term wealth
Financial independence where investment returns can fund lifestyle indefinitely without touching principal, plus continued income from new ventures.
Personal Capability as Safety Net
Viewing your own skills, knowledge, and earning ability as the primary financial safety net rather than relying solely on savings or investments.