It takes a certain kind of person to do well on the stock market. But if you’re running your own company, odds are you have a lot of the skills required to be successful. Even if you only have 30 minutes a week.
Business owners like you tend to have a “take-charge attitude.” You’re your own boss, after all. Why not do the same for your stocks?
Sure, you could listen to other investors’ advice and invest in a mutual fund (which hugely underperform), or you can say “I will be in control of this myself for the future.”
That’s exactly the kind of attitude that makes entrepreneurial investors so successful. What’s more, a lot of the processes that set investors up for success are very similar to running a business. Treat your portfolio like elements of your business and you’ll ultimately succeed in the long term.
Here are three ways they’re similar, and you can start making passive income in just half an hour each week.
1. Systematize Everything
Unsuccessful part-time investors tend to make a similar mistake: they treat the market like a hobby. I’ve seen it over and over again. Trading isn’t your main source of income, so it’s not a big deal to take your buddy’s advice, or go with your gut when it comes to buying and selling.
But that route, just like it would in running a business, runs your money into the ground.
Don’t treat it like a hobby--treat it just like your business. Your approach to trading should be to get as professional as possible, and this means creating and sticking to systems. What systems did you have to put into place when you started running your own company? Odds are, the same rules apply to your side hustle in the stock market.
Always Follow the Process
Starbucks didn’t become a $15 billion company without putting some serious systems into place. One of their most powerful systems helps them make a very important decision--when to open a new store.
In addition to their manuals on how to make the perfect Frappucino, stock the fridge, and close the store each day. They figured out what works, and they replicate it again and again.
You need to do the same thing with your trading decisions. Build a system for everything. Have specific entry and exit rules for buying and selling. For example, what’s your system for a 3 year bull market? For an unexpected economic downturn?
When you set systems for yourself for how to behave, you won’t make unprofessional mistakes. And the more you systemize your decisions, the easier it is to execute on them.
2. Automate and Outsource Your Weak Spots
Building a business takes a lot of work. And every business owner has found there are certain elements you’re going to need help with, whether that’s hiring a CPA, building your new website, or staffing the store on weekends.
Business owners have to identify their own weaknesses and get help to fill those needs. The same is true when you’re earning passive income in the stock market.
Understand Your Trading Personality
Much like your business, in trading, you’re the brains of your operation. This means you need to understand what your personal weaknesses are and account for those. You also need to build a business that fits into your lifestyle.
If you want to keep running your company and only spend 30 minutes a week trading, you need to set up some automated systems that account for your personality.
For example, if you can only focus on your investments for less than an hour a week, you need to build software that can do the bulk of the analytics work for you, to free up your time to work on other things.
3. Make a Business Plan
When you started your own business, you probably didn’t expect to turn a profit within the first month. You had to pay off your vendors, put down a deposit on a retail space, and pay all the other upfront costs involved in starting a company.
The same is true of your stocks. You’re making a serious investment in your financial freedom.
By taking that initial leap and investing equity, or building software to help systematize your trading rules, you’re paying a lot of now for future gains. But if you see it as a business investment, then it’s always worthwhile.
In order to make sure you’re getting a good ROI on that initial investment, you need to plan like you would for a business.
Have a Contingency Plan
Great businesses have contingency plans. They hope for the best, but prepare for the worst. In your own business, you’ve probably accounted for contingencies like what to do when there’s a fire, or a vendor goes out of business. The same is true for trading.
Let’s say your broker suddenly doubles the commission you need to pay, and that can have a huge impact on your trading. You need to account for and be prepared for that. You need to be prepared for market disasters, or when there’s an earthquake and that affects the market.
By incorporating these into your automated trading system, you’ll be able to withstand shocks to the system and win in the long run. Even small bumps along the way won’t matter that much--just like one bad day of sales doesn’t ruin your business--because your business plan shows you’ll be fine in the long run.
Make Passive Income in 30 Minutes a Week
Business owners tend to have one question for me: do I really have time to focus on the stock market?
For business owners, I recommend using a weekly rotation system, which I explain in my book, that shows how to only execute on your work once a week.
In thirty minutes per week, you can download data, scan for new trade setups, and enter numbers in your broker platform. If that’s done on a weekly basis, everyone can do it—even busy CEOs.
The results are amazing: it has showed close to 20% backtested returns over the last 21 years, which is almost 3x the returns of the S&P 500.
You can beat the index with your entrepreneurial attitude. You’ve already got the skills. Time to put them to use.