70/30 Profit Split Rule

A strategy for building wealth through consistent reinvestment of profits while maintaining a comfortable lifestyle.

Core Investment Strategy

• Take 70% of profits and continuously reinvest
• Use remaining 30% for personal lifestyle
• Percentage split adjusts downward over time as wealth grows
• Focus on steady, boring growth vs high-risk ventures

Key Success Principles

• Play the long game (like Warren Buffett who made 97% of wealth after age 55)
• Stay under the radar
  • Accept being underestimated
  • Be comfortable being dismissed as boring
• Focus on consistent returns
  • Aim for 10-15% annual returns on capital
  • Prioritize steady compound growth over risky moonshots

Mindset Required

• Patience to watch others make quick money while playing long-term
• Comfort with being perceived as "boring" or unimpressive
• Discipline to maintain reinvestment strategy over decades
• Willingness to compound slowly (took 17 years to build significant wealth)

Results

• Leads to substantial wealth over long periods
• Creates diversified, stable income streams
• Builds businesses with strong moats
• Generates significant cash flow over time

Risk Management

• Focus on capital-efficient businesses
• Build multiple income streams
• Create diversified portfolio of assets
• Maintain conservative growth approach
• Avoid unnecessary overhead and expenses