My First Million
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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.
How It Works
Works by diversifying across low-risk assets (index funds, treasuries, real estate) while living off separate income streams to avoid touching the principal nest egg.
Components
Set aside 2-3 years of living expenses in liquid savings
Invest windfall in diversified, low-risk assets (index funds, bonds)
Live off separate income streams, never touch the principal
Use 3% withdrawal rule as theoretical guideline
Avoid active trading or market timing
When to Use
When you've achieved financial independence through a business sale or other windfall and your primary goal shifts from wealth creation to wealth preservation.
When Not to Use
When you're still in wealth-building phase, young with high risk tolerance, or when your current wealth isn't sufficient for your long-term goals.
Anti-Patterns to Avoid
Example
“After selling a company for $10M, investor puts funds in 79% index funds, 15% treasuries, 6% REITs, while continuing to work and live off current income, treating the $10M as untouchable security.”