​

How to build wealth as a solopreneur (don't make my mistake)

Monday, April 28, 2025 / Rich Webster / Watch on YouTube / Listen to podcast​

😩 I should be rich by now.

That's a joke.

But it's also not.

When I shut down my agency in 2023, I did some math.

I made over $4m in the past decade from that business.

But I had nothing to show for it.

• I had a lot of fun.
• I balled out.
• And I spent most of what I made.

Lifestyle creep is real.

There’s always another level up.

For example, I had:

• A new Audi every 3 years. (leased)
• A private chef (not as expensive as it sounds).
• International travel every year. (2-3 trips/year)

Don’t get me wrong, I wasn’t BROKE.

We had zero debt and a couple hundred grand in retirement/cash.

But that means I kept just 4% of what I earned. 😭

Looking back, my biggest regret from the last decade was not focusing on building wealth sooner.

But as you'll see shortly, this isn’t some sob story about a rich guy who could have been richer - there's a lesson here.

So why didn’t I just save more?

📖 Invisible money scripts.

We all have stories we tell ourselves about money.

Here’s my story:

From 16-21, I was addicted to drugs.

If the world was fair, I’d be dead or in jail right now.

By the time I entered recovery at 21, I saw the world differently.

Subconsciously I believed long-term planning wasn’t necessary when life wasn’t guaranteed.

That was the story I told myself, and it became my operating system.

In I Will Teach You To Be Rich, Ramit Sethi talks about the idea of invisible “money scripts.”

These are the unconscious beliefs that silently govern our actions around money.

How many of these “money scripts” resonate with you?

• “I’m not good with money.”
• “Budgeting means depriving myself.”
• “Investing is only for the rich.”
• “Money is the root of all evil.”
• “I’ll never be rich.”
• “It’s better to enjoy life now than worry about the future.”

We all make decisions based on the stories we have about money.

If you don’t understand WHY you behave the way you do, awareness is the first step.

To get started, Ramit suggests:

1. Self-reflection: Examine your financial beliefs and their origins.
2. Reframing: Replace negative scripts with empowering narratives, such as transforming “I’m bad with money” into “I’m learning to manage my finances effectively.”
3. Setting personal money rules: Establish guidelines that align with your values and financial goals.

Those unconscious money scripts are the reason I missed out on an opportunity to set myself up for early retirement.

So I’m doing this differently this time.

✨ Cashflow is great.

I LOVE profit-first solopreneur businesses.

I’ve been running them for over a decade.

You can earn tons of cash, while enjoying a great lifestyle.

First, I built a design agency that grew to $500k/year in profit and at it’s peak took me 10-15 hours a week to run.

Then I built an education and consulting business that makes over $500k/year.

My clients make anywhere from $5,000-50,000 in profit EVERY MONTH running their businesses this way, and most work far less than the average 9-5er.

Sounds great, right?

But there is a HUGE problem with this type of business…

🏧 Solopreneur businesses are not assets.

Here’s the truth:

Solopreneur businesses are not assets.

Even if you’re working 10 hours a week, you’re still WORKING 10 hours a week.

Once you remove yourself from the business, the money stops.

It may not stop the second you stop working due to momentum, but it eventually will.

When I start working with a new client, I often ask this question:

“Do you want to build a business you can sell or a business that generates cash flow?”

9/10 clients say “Ideally, both.” 🤦‍♂️

Optimizing for profit and asset value are two different strategies.

Building an asset looks like this:

• Focusing on revenue, growth, and scale.
• Reinvesting every dollar BACK into the business to grow it.

Optimizing for profit looks like this:

• Focusing on profit, cash flow, and hours worked.
• You pull every dollar OUT of the business.

If you’re optimizing for profit, you’re not building an asset.

These businesses are profitable because the leverage is YOU.

You trade asset value for cash flow and profit.

Which is great, but you’re still missing something...

👨‍🏫 You have to turn cash into assets.

Building wealth is about creating freedom and optionality.

Someday you may want to stop working, retire, or do something different.

You’d like to have something to show for your hard work, besides memories and good vibes.

With inflation, lifestyle creep, and high living costs, it’s easy to feel that cashflow is never enough.

But if you ever want to:

• Stop worrying about money.
• Stop working whenever.
• Finally feel safe and secure.

Here’s the secret:

You need to turn your CASH FLOW into ASSETS.

Here’s how to do it:

6️⃣ 6 steps to build wealth as a solopreneur:

If you don’t have a PLAN for creating wealth, I guarantee it won’t happen.

Here’s a simple path to enjoy the journey AND set up future-you for success:

💳 1. Get out of debt.

Before anything else, get out of debt.

If you have “bad debt,” it needs to go.

That means credit cards and high-interest loans are paid down to zero.

If you have “good debt” like a mortgage, that is fine.

🛫 2. Get some runway.

You should have 6-12 months of cash runway.

Runway creates a feeling of safety.

Without runway, you’ll focus on fear-based short-term cashflow needs and miss out on leveraged long-term decisions.

Here’s a simple formula to calculate your runway:

(Cash + Receivables + Pipeline) / (Monthly Burn Rate) = X Months

Some notes:

• Cash = Checking + Savings
• Receivables = Projects billed, but not paid + Projects done, but not billed
• Pipeline = Projects 80%+ certain to close
• Burn Rate = Business + Personal Expenses (Monthly)

Your goal: Keep it as high as possible.

🤑 3. Make more money.

Surprise: You need money to build wealth.

So why do I focus on increasing profit before expenses?

You can only cut your expenses to zero.

Increasing profit has infinite upside.

To increase profit, focus on scaling your business in one of two leveraged paths:

• Expert Business: Scale by price and sell expensive things (services, consulting, etc.).
• Marketing Business: Scale by marketing and selling volume (courses, software, etc.).

P.S. To learn more these two strategies, watch this.

⚖️ 4. Spend less than you make.

This one sucks.

Making more money is pointless if you spend it all.

Audit your household and business expenses to create some “headroom.”

Commit a % of your monthly income to invest in assets.

The goal is to free up as much cash as possible so you can…

🏦 5. Turn your profit into assets.

The only real source of “passive income” is owning assets.

Here’s a good starting list:

1. Retirement accounts. Talk to your accountant. Max that shit out.
2. Stocks. People don’t realize that investing in stocks means you OWN a piece of a business. You don’t have to do anything, and in exchange, you share in the company’s success. I invest in a broad Vanguard index fund.
3. Real estate. The market has changed, but opportunities remain. Real estate is TANGIBLE, real assets, not just numbers on a spreadsheet.
4. The rest. Crypto and startup investing are high risk, high reward. I don’t participate. IMO being an entrepreneur is risky enough and your investments should exist to offset that risk. That’s just me though.

⏰ 6. Let time work.

• The first step is to own assets.
• The second step is to wait.

If I started this journey at 23 instead of 33, I’d have a lot more money.

Wealth isn’t built overnight.

🏖️ What I’m doing this time.

In The Psychology of Money, Morgan Housel says:

If you want different outcomes, you need different behaviors.

I’m making up for lost time and taking my own advice:

• Earn more.
• Spend less.
• Invest more.

I now control $1M in real estate and aim to double my business this year.

Those profits will rebuild my runway and invest in more assets.

Then I sit back and let compound interest work its magic.

But life keeps showing up.

I was significantly waylaid when we purchased our most recent house.

Literally 3 weeks after we closed, we were hit by Hurricane Helene.

• We were out of power and internet for a month and water for almost 3 months.
• We had to flee the city and live somewhere else for a month.
• We also sustained external damage that cost us another down payment to repair.

These things you can’t avoid, everyone gets a turn.

The goal is to stay the course even when things get hard.

Wealth creation isn’t complicated, but it requires discipline and patience.

The key is to start today.

The best time to plant a tree was 10 years ago.

The second best time to plant it is today.

Every day you wait is a day you can’t get back.

That's it! If you want to work closer with me as you navigate your wealth building path, here are some ways we can work together:

And finally, the fun stuff since we're talking about money and investing…

FINANCIAL DISCLAIMER

The information provided in this article is for educational and informational purposes only. It should not be considered financial, investment, legal, or tax advice. The information is general in nature and may not apply to your specific circumstances.

I am not a licensed financial advisor, accountant, or attorney. Any decisions about your finances, investments, taxes, or legal matters should be made in consultation with qualified professionals who can assess your unique situation.

Past performance is not indicative of future results. All investments carry risk, including the potential loss of principal. My personal experiences and results are not guarantees or promises of any particular outcome.

Before making any financial or investment decisions, you should conduct your own research and consult with qualified financial, legal, and tax professionals regarding your specific circumstances.