Investing in People: The Next Big Thing in Wealth Creation
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Chapter 1: The Concept of Human-Centric Investment
Imagine a world where your investments focus on real assets, specifically people, rather than just pouring cash into a startup that might be more of a gamble than a sure thing in today's speculative market.
The most appealing qualities to look for are confidence, charisma, and emotional intelligence. While physical appearance can enhance someone's likability and potential success, it isn't the sole factor—especially when their proven track record, dedication, and work ethic shine through.
I've been contemplating the notion of self-investment and supporting promising colleagues for a while. As someone who is driven, I believe this approach could be less risky compared to traditional venture capital.
Investing in startups often requires navigating through industry-specific niches that are influenced by fleeting trends. For instance, while social media is thriving today, its relevance a decade from now is uncertain. The intense competition and capital requirements can make startup investments daunting. Although many individuals with discretionary income still take the plunge, the reality remains that the majority of startups—about 90%—fail.
Unlike a startup, an individual only requires a vision to transition from concept to reality, without the need for a detailed business plan, pitch deck, or operational license—elements that can easily falter if challenges arise. Typically, businesses outside of the software-as-a-service (SaaS) realm struggle to achieve profit margins over 30%, often needing years to break even.
The WeWork Example
When examining companies like WeWork, it's evident they share similar profitability trajectories with professional athletes. After raising billions, WeWork found itself needing to go public to generate more funds, banking on the speculative enthusiasm of investors rather than solid business fundamentals. Unfortunately, if you invested in WeWork and sold your shares before the pandemic, you might have dodged a bullet.
However, if you had invested in Adam Neumann, the founder, since 2004, you would have seen substantial returns. Post-ousting, Neumann managed to secure a staggering $1.1 billion—a remarkable feat for someone once perceived as a reckless CEO.
Currently, he's embarking on a new venture called Flow, which recently attracted significant investment from Andreessen Horowitz. It’s a test of whether he can replicate his earlier success.
The parallels drawn between investing in startups and professional athletes like tennis players are striking. The tennis industry, worth about $2 billion, presents its own challenges. Players ranked outside the top tier often struggle with the high costs of travel, coaching, and other expenses.
European players often receive more financial support compared to their American counterparts, leading to a greater presence in the sport. I’m particularly proud of Iga Swiatek, hailing from Poland, for her recent U.S. Open victory. Investing in athletes like her could yield significant returns, although it carries its own risks.
Section 1.1: The Unpredictability of Sports Investments
Betting on rising tennis stars such as Carlos Alcaraz can be tricky, given the sport's inherent unpredictability. Unlike traditional sports leagues with set seasons, tennis operates year-round, making rankings volatile.
Interestingly, top players can still attract lucrative endorsements, even when not actively competing. For example, Naomi Osaka is one of the highest-paid female athletes despite limited playtime. Such instances highlight the potential for higher returns when investing in individuals who think outside the box.
Video Description: In this insightful video, a $2 billion investment expert shares invaluable startup ideas and strategies that could revolutionize your investment approach.
Section 1.2: The Importance of Self-Investment
As I reflect on the concept of investing in oneself, I realize it may represent one of the greatest untapped opportunities available. The most rewarding investments often come from self-growth and development.
Consider the rise of reality stars like Kim Kardashian and Paris Hilton. Initially dismissed, these individuals took risks that led to unprecedented success. Their journeys remind us that appearances can be deceiving; true potential often lies beneath the surface.
Kim Kardashian's brand, Skims, is now valued at $2.3 billion, illustrating the incredible ROI that can come from investing in those with vision and determination.
With this in mind, it’s crucial to diversify investments, especially when considering individuals. A balanced approach, where no single investment exceeds 30% of your net worth, is essential for long-term stability.
Chapter 2: Innovative Investment Strategies
As you contemplate investing in a promising individual, whether it be a favorite artist or entrepreneur, congratulations on thinking creatively. Unlike traditional startups, individuals can offer lower-cost opportunities for return.
The premise of income-sharing agreements or equity stakes in a person's future earnings is not entirely novel. It's essentially investing in someone's potential rather than merely seeking returns from conventional avenues.
Video Description: Explore the top 14 profitable business ideas for 2024, providing insights into emerging trends and opportunities for savvy investors.
The Work Done Today
Interestingly, a venture named Humanism has emerged, founded by siblings Daniil, David, Anna, and Maria Liberman. This initiative encourages individuals to invest in each other, allowing for a more personal approach to wealth generation.
By measuring success in broader terms than mere financial returns, the Libermans have created a unique business model that emphasizes collaboration and personal connection.
Though investing in individuals may seem daunting, it can lead to rewarding outcomes. After all, the most extraordinary ideas often originate from unconventional beginnings.
Investing in people is not just about financial gain; it’s about believing in potential and fostering growth. So, if you see promise in someone’s future, take the leap—just remember to invest wisely!
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