My Barbell Wealth Strategy

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THINK

“See it big, and keep it simple.“
Wilferd Peterson

Today, I’m going to show you my ‘Barbell Wealth Strategy’.

In a world full of countless business ideas and confusing investment options, I’m going to cut through the noise and show you a simple 2 pronged approach to generating and storing wealth.

By simplifying the strategy you eliminate costly distractions, allowing you to accelerate your wealth exponentially.

The problem is that there are so many ‘good’ income and investment options out there, people are either, 1) Paralysed by choice and do nothing, or they, 2) Take on too many and excel in none.

Finding the right balance between active and passive investing is the key to accelerating Financial Freedom

This is the exact approach I take with my coaching clients who seek financial freedom. My ‘Barbell Wealth Strategy’ is designed for people who want:

Maximum earning potential
In minimum time
With less stress and energy
Financial Freedom in <5 years

Here’s the 2 Step approach. Let’s dive in.

1. Side Hustle

The first end of the barbell is focused on wealth generation. The goal here is to simply:

Make as much money as possible

The fastest path to wealth is through business.

Most people have jobs and ditching the 9-5 to start a business is a risky and stressful strategy. I wouldn’t recommend it! That’s why I love side hustles.

You keep the security from your job, but increase your income by adding a new revenue stream that fits around your free time.

Picking the right side hustle is a minefield, there are thousands to choose from. I’ve created a 6-step process to find the perfect one for you HERE.

Perfect Side Hustle = Fun + Impactful + Lucrative

There isn’t one side hustle I recommend doing over another.

There are examples of people making obscene amounts of money with YouTube, Dropshipping, Etsy or Publishing.

And there are even more examples of people getting nowhere with them.

It’s not the vehicle. It’s you.

The perfect side hustle is a blend of something:

You enjoy – You’ll keep doing it
You’re good at – You’ll stand out
That solves a problem – You’ll get paid

Don’t limit yourself to one element. Find something that offers all three and stack the odds in your favour.

It doesn’t have to be perfect. You could argue that perfect doesn’t exist and I wouldn’t fight you on it. But it needs to touch on something you like doing, you’re good at and helps others.

If you negate one or two of the elements of the perfect side hustle, you’re either going to:

Quit before you make it – Don’t enjoy it
Drown in competition – Not good at it
Won’t make enough money – Doesn’t help people

Prioritise the Side Hustle

In order to get the highest income on minimum effort, you need to prioritise the side hustle over any other investment.

What does that mean?

Use your disposable income to:

Invest in books, courses, coaching and networking to increase your knowledge and skill in that area.
Pay for tools, apps, equipment, systems, marketing or people to improve the business.

Before investing in any other asset, use your spare cash to improve yourself and your business.

If you’ve paid for education and the basic set-up costs, and you have leftover cash, that’s what we’ll use for investing on the other side of the Barbell.

But I don’t need or want a side hustle

If you love your job, have a lucrative career or have no desire to create a side hustle, I would encourage you to double down on that.

This side of the barbell is about maximising income. How you achieve that is up to you.

How could you become the best in your industry at your job?
What skills or experience do you need to progress to the next level?
What other businesses could I utilise my skills/experience in that would pay more?

Your employer will likely pay for your continued education and the tools to do a better job, but if that’s not the case, take the initiative and use your disposable income to become better.

It’ll help you become:

Less likely to face redundancy
More likely to get promoted
More likely to get a raise
More likely to get hired by another company

Remember, The premise behind this end of the barbell is to maximise income. Side hustles are one of the best ways to do that, even if you do enjoy your job, but they’re not essential.

Once you’ve invested your disposable income into maximising your earning potential and you still have leftover cash, move on to step #2.

2. Index Investing

The second end of the barbell is focused on wealth storage. The goal here is to:

Grow your money with minimal effort

The easiest, most passive, inflation-proof form of investing is the stock market. Specifically, low-cost global Index Funds.

We use excess disposable income and side hustle profits (that aren’t needed to support the side hustle) to invest.

My Barbell Wealth Strategy is designed to maximise earnings at one end, and passive income at the other.

The opposing opposites represent the biggest potential for ACTIVE and PASSIVE income.

You don’t spend any energy in the middle. That’s wasted time that could be spent making your side hustle better, which will fund the passive investment.

The same is true for starting 2 or 3 side hustles at the same time. Pick a lane! Double down your efforts on one to increase the likelihood of it succeeding.

Why Not Property?

Property sits somewhere in between wealth generation and wealth storage. It does both but not as well.

1. Less Passive

Setting up and maintaining your property business will suck up valuable time that could be spent making your side hustle more lucrative.
You can set and forget investing in stocks, the same is not the case for property.
If it’s done right, property is more of a business than an investment. Businesses require time, effort and energy. Even when you’re not working on the property business, you’ll be thinking about that recent leak in the roof, if that mortgage will go through, if that troublesome tenant will move out etc.

2. Less Lucrative

It’s more of a business than an investment, but Property can’t compete with the profit potential of an online business.
- Basic Buy-to-Lets and Commercial units will generate around 10% net profit returns. HMO’s, Serviced Accommodation, Rent-to-Rent and Developments can generate around 20% net profit returns.
- My publishing business has provided over 55% net profit returns (averaged over the last 8 years) and it’s carrying a lot of fat that could be trimmed to boost that.
- Many internet businesses have profit margins of >70%-90%.

Any time spent on your property business will be time spent away from your side hustle, which could yield far greater returns.

Granted, Index Funds will likely produce lower returns than property – but what you lose in returns, you’ll get back in mental space, time and energy, which you can redirect into your side hustle, which will produce higher returns than property.

I cannot overstate the importance of this.

What to invest in?

Disclaimer: I don’t give regulated financial, investment, tax or legal advice. I don’t give product recommendations and I don’t try to sell you anything.

I’m not here to tell you what to invest in. There are many reputable low-cost global Index Funds to choose from. I’m not affiliated with the funds below, nor do I care if you select another.

Here’s the truth…

The difference between the returns of the funds I mention below will pale into insignificance compared to finding a way to invest an extra £500, £1,000 or £2,000 a month.

I’m going to repeat that point to highlight its importance.

Contribution is more important than fund selection in long-term returns.

Instead of tinkering around with funds attempting to find the best possible returns…

Spend your valuable time and energy making your side hustle more lucrative (> income), and find ways to spend less money effortlessly (< expenses) so you can invest more money.

Improving your annual returns from 8% to 12% is great… but do know what’s better?

Improving a side hustle from £500/month → £5,000/month or even £50,000/month.

Keep it Simple

One of the hardest things to do is to keep things simple. We humans love to complicate life.

When you’re staring blankly at the 1,000’s of funds on offer at an online broker, it’s overwhelming. Here’s a checklist to help you cut through the noise when selecting your investment:

Minimise Tax – Utilise tax-advantaged accounts wherever possible. EG. ISAs and SIPPs in the UK and Roth IRAs and 401k’s in the US.
Low Cost – Maximise your returns by giving less away to greedy fund managers. Saving 0.5% might seem insignificant, but it’s £5,000/year on a £1,000,000 portfolio. Look for funds with ongoing charges <0.25%.
Diversify – Spread your risk out by investing in multiple markets, sectors and countries. This can be done simply with one fund (see examples below). Minimise the potential downside when inevitable events occur like the next ‘Covid’, War, Recession or Financial Crash.

Funds I’ve Invested in

Here are 2 very reasonable index funds I’ve previously invested in.

This isn’t a recommendation to invest in them. I’m simply sharing what funds I’ve previously invested in to give you an indication of how I’ve met the criteria above.

Vanguard FTSE Global All Cap Index Fund – 0.23% ongoing charge
- This fund has over 7,000 companies, comprised of large, mid-sized and small company shares in developed and emerging markets around the world.
- With the largest distribution of companies, you could consider this the least risky option.
FTSE All-World UCITS ETF (VWRL) – 0.22% ongoing charge
- This fund has over 3,500 companies, in early 50 countries including both developed and emerging markets. It covers more than 95% of the global investable market capitalisation.
- If you live outside the US, this might be one of the most popular index funds you encounter from personal finance content creators.

IMPORTANT: Do your own research

Once you’ve selected an investment – one of these or an alternative – it’s time to shift your focus back to your side hustle, business or career and make as much money as possible to fill it with.

Financial Freedom

You’ve probably heard me talk about the 4% Safe Withdrawal Rate (SWR). In theory, once you can live on 4% of your investment returns, you can retire. Check out my explanation HERE for more.

I appreciate it’s overly simplified. If you plan to retire in your 20s, you’ll probably want to lower it to 3% or even 2%, which means growing a bigger pot. Sigh!

But fear not…

Most people don’t want to retire and do nothing. Sure, it’s fun for a while but you’ll soon get bored. Most would happily accept working 2-4 hours a week.

This is where the side hustle comes in.

Whilst your investment pot is slowly growing, focus on building your business to a point where it brings in 4x your living expenses (LE), to account for tax, business expenses and drawings:

Living Expenses = £2,000/month
- Side Hustle = £8,000/month
- Investment Pot = £600,000
Living Expenses = £5,000/month
- Side Hustle = £20,000/month
- Investment Pot = £1,500,000

It’s far easier and quicker to build a side hustle you can live off than it is an equivalent investment pot.

I got to over 5x LE’s within 12 months with my publishing business.

Now, I have two meetings a week with my team. They last around an hour each. I might do an hour or two max outside of that, and more often than not, nothing.

A legit 4-hour work week.

Is it passive? No.

Is it easy? Yes.

Building a stocks and shares portfolio takes time. It can seem insurmountable.

Building a side hustle that brings in 4x your LE’s is achievable for anyone in less than a year (not easy).

I like the options the 4x metric presents. When you get to that point:

You can legitimately cover your living expenses by doing something you enjoy (at least more than your job).
You can afford to outsource elements you don’t want, like or need to do. Freeing up time.
You can work minimal hours a day/week and prioritise other areas of your life.
Getting from 0-4x is harder than scaling to 5x-10x. It took me 7 months to 1x and 5 months to 5x.
You can consider selling the business to receive a sum of money close to your retirement pot amount.
You can start a passion project or another side hustle.

True freedom is choice.

Summary

The ‘Barbell Wealth Strategy’ is a simple premise with life-changing potential.

The key to success is eliminating distractions and pouring your efforts into a wealth-building business.

Ignore the noise.

Invest surplus cash into passive index funds.

Enjoy your freedom.

But more importantly…

Enjoy the journey.

Reflect and share this with someone.

ASK

“How can I invest more time, money and energy into wealth generation?”

“How much time do I spend on ‘Passive’ investments?”

“How can I do less to achieve more?”

Write down what comes to mind.

TRY

Review how much time, money and energy you spend across multiple wealth generation vehicles.

1. Consider how you could channel all of that into one.

Review how much time, money and energy you spend on your ‘passive’ investments.

2. Consider how you could make it more passive.

Free up more time to dedicate to your wealth generator, so you can invest more money into your wealth storage.

3. Calculate what your 4x LE and 4% SWR currently are.

LE = 4 x your monthly living expenses

SWR = 25 x your annual living expenses

Now get to work. 😁

COMMENT and tell me how you plan to implement the ‘Barbell Wealth Strategy’.

Remember: Little by little, a little becomes a lot.