My First Million
The best business ideas come from noticing what's working and doing it better, faster, or for a different audience.
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.
How It Works
Business generates cash → invest that cash → spend only the returns from investments. This creates a permanent asset base that continues generating income indefinitely.
Components
Business generates $X in cash flow
Invest 100% of $X into income-generating assets
Live only off the investment returns from $X
Never touch the principal $X investment
Repeat process to build permanent asset base
When to Use
When you have consistent business cash flow and want to build permanent wealth while funding lifestyle expenses.
When Not to Use
When you need immediate cash flow for business reinvestment or don't have sufficient initial capital to generate meaningful investment returns.
Anti-Patterns to Avoid
Example
“Business earns $1M profit → invest in assets yielding 6% → spend only the $60K annual return on lifestyle, preserving the $1M principal forever.”