The Three Comma Code

This is a post that I created back in 2016 when I was just starting this journey. It’s fascinating how much has changed - and yet the fundamental strategy is just the same.

My biggest dream in life is to walk around not knowing the time of day. In other words, I want to be so secure financially that I can spend every waking moment pursuing joy and helping people without thinking about the time or financial trade-offs. I am a firm believer in maximizing my life in terms of experiences and I want to spend the rest of my days building great relationships and pursuing great experiences with great people.

I have developed a framework that helps me to pursue this dream, so I thought I would share and solicit feedback:

Revenue Generation

  • Core – This is your ‘9 to 5’ paycheck; the steady source of income that comes at least twice a month

  • Hustle – This is something you can do to get cash immediately or on an hourly basis; examples include cutting hair, writing resumes, driving Uber or Lyft

  • Windfall – This is a hobby that you enjoy doing with or for others that has an occasional big payoff; examples include wedding planning, public speaking, poker

  • Business – This is something that you build over time based on an area of passion and expertise that has a long-term payoff and that you can either sell or hand off to someone else to run in the future

Revenue Distribution (post tax)

Live – 60% – all life expenses should be taken care of with this pot
Love – 20% – love yourself by setting aside 20% for wealth generation
Laugh – 20% – have some fun and splurge on yourself, your friends, and your passions, you earned it 🙂

Wealth Generation

  • Have $1,000 in cash immediately available at any time

  • Have a liquid fund of 6 months of living expenses

  • Invest up to $100,000 in the stock market and leave it alone; take Warren Buffett’s advice and invest in an index fund like the S&P 500

  • Invest up to $1,000,000 in real estate; focus on areas with growth potential that you are familiar with and partner with a great realtor and property manager

  • Invest up to $10,000,000 in other businesses in order to diversify your risk; again focus on what you are familiar with and work with great business and financial advisers

Build a Team that Wins

  • View yourself as an enterprise – you are the CEO of your life

  • Build a great team – this team should consist of:

    • Board of directors: 5 or 7 of the people you trust in life; must be a diverse group with different perspectives; this board will help you make the tough trade-offs

    • An expert in the following areas:

      • Lawyer (Business and Personal)

      • Taxes

      • Real Estate

      • Sales

      • Marketing

      • Personal Finance

      • Communication

      • Operations

      • Psychologist

      • Personal Trainer

      • Dietitian or Nutritionist

      • Technology (IT)

      • Computer Science/Engineering (coding and building)

      • Webmaster

Then focus on hiring and partnering with people who have at least one skill that they are better at than you are – then share your context and empower them to deliver.

I believe that if anyone can execute against this plan, they have a real shot at 3 commas.

So you might ask, what can I do now to get started?

Invest your time the same way that you will invest your revenue

Live – 60% – this is your core revenue and learning time
Love – 20% – this is your time taking care of you (health, meditation, sleep, etc.)
Laugh – 20% – pursue fun experiences by yourself, with your friends, and connected to your passions, you earned it 🙂

Everyone can choose how to invest their time, even if the resources aren’t available in terms of finances.

I plan to continue to share my journey and I would love to hear about yours.

Edward Bailey