Knowledge Marketplace
My First Million

My First Million

The best business ideas come from noticing what's working and doing it better, faster, or for a different audience.

Back to Frameworks

Wealth Management A/B Test Framework

Reusability

Split significant capital between professional wealth management and self-directed investing to empirically compare performance over 5+ years

How It Works

Reduces emotional bias and marketing influence by creating controlled comparison with actual money at stake rather than theoretical analysis

Components

1

Split capital into equal or proportional amounts

2

Give one portion to reputable wealth manager

3

Self-direct other portion using simple indexing

4

Track performance net of all fees over 5+ years

5

Compare risk-adjusted returns and tax efficiency

6

Make allocation decisions based on empirical results

When to Use

When you have substantial capital ($10M+) from liquidity event and lack investment experience but want to validate advisor value

When Not to Use

With smaller amounts where fees would disproportionately impact results, or when you already have strong investment convictions

Anti-Patterns to Avoid

Using too short a time period (less than 3 years)Ignoring fees in performance calculationsNot accounting for tax implicationsGetting emotional about short-term underperformance

Example

After selling company for $100M, allocate $20M to Goldman Sachs and $20M to Vanguard index funds. After 5 years, Goldman returned 6% annually vs 13% for S&P, confirming indexing superiority.