Welcome to our second SPI community member feature! On our SPI Facebook Group, we have over 40,000 amazing entrepreneurs across all stages of business, and I wanted to start highlighting some of the amazing work the community members are doing with their businesses here on the blog.
Brendan Hufford, our Facebook Community manager, wrote this post to highlight Sam Priestley, who is a lifestyle entrepreneur who lives in London.
You can also check out Brendan and his work at Photo MBA.
London entrepreneur Sam Priestley remembers the exact moment when he decided not to get a job. He was sitting at his laptop during his second year of graduate school at the University of Warwick, staring at an application he was filling out for a job at a bank. The question he was staring at wasn’t a difficult one to answer, per say, but it did have him stumped: “Why would you like to work at this bank rather than any other bank?” the question asked.
He just couldn’t face answering it. He had fifteen additional applications lined up to fill out, and each one had similar questions. It would take hours and hours of research on each bank in order to fill out the applications—all with the grand prize of a job that would require early mornings, long commutes, a boss, and dedicating most of his working hours to an industry he didn’t even understand or care about.
Most of us have been there: Trying to fake passion for an interview in an industry we don’t care about, for a job that we really don’t want. Sam just couldn’t do it. After the independence he felt in college, he decided to find another way.
“It’s one of the reasons I describe myself as the ‘lazy entrepreneur.’” He says. “I started building businesses for the sole reason that it would allow me to be lazy and avoid having to get a job. I wanted financial independence so I could be the master of my own time.”
As you might expect, things didn’t turn out that way. Over the next few years, Sam would work harder than he ever would have if he’d become a “normal” employee.
Building a Foundation
One day, Sam’s housemate came across a “cash back” website where he could open an account on a gambling website and deposit £50 and receive £100 back in cash.
What Sam learned is that the “cash back” website was essentially giving him part of their affiliate commission for signing up. But, in addition to the cash back, he would also get a free bet.
Sam learned about “matched betting,” where he could find two sites offering wildly different odds on the same sporting event, for example. No matter who won the event, he would come out with profit. This is also known as “arbing” (short for arbitrage) as it leverages an arbitrage between to two sites. The concept of arbitrage is often used in the selling of securities, currency, or commodities in different markets or in derivative forms in order to take advantage of differing prices for the same asset. Sam even wrote his dissertation in graduate school on finding arbitrage opportunities in betting odds.
The Staircase to Financial Freedom
The money he earned “arbing” right out of college was enough for him to live on while he was creating other companies. Over the next few years, using his initial profits, Sam started a number of other businesses and income streams.
Some of these businesses failed. But even through these failures, Priestley kept going.
Remember, the definition of “passive income” isn’t something that requires no work: It’s doing the most difficult work now to reap the benefits later. For Sam, that benefit is financial freedom and he notes four distinct phases he’s gone through on his path.
The first type of financial freedom he had was from matched betting. He was earning enough from a side gig that he didn’t need to get a job. He wasn’t comfortable or rich or as well off as he would have been if he’d gone the corporate route, but his needs were covered and that allowed him to take risks trying new businesses, including:
- A car import / export business
- A property development business in Malta
- A face-painting business
- A tech startup
- A social network
- A table tennis brand
- A coffee shop
- A blog
Again, some of them have failed, but that doesn’t matter, because a few of them have done really well, including arbing, his table tennis equipment company, his blog, and a tech startup. He also invests some of his earnings, which has given him even more financial freedom.
Next, Sam hit a level of financial freedom where he still needed income, but after outsourcing all of the logistics of his table tennis company, he only needed to work a few hours a week to maintain it. Similar to Pat’s definition for passive income, Sam put in a lot of work initially to reap the benefits later.
However, he realized quickly that once he started topping the bestseller lists on Amazon, there wasn’t much more he could do. It would take a lot more work for a relatively small improvement. He’d rather spend his time elsewhere. Sam spends just a few hours a week on the table tennis business, and puts the rest of his time focusing on newer more exciting projects. Currently, he’s working on building his craft gin brand.
He also started focusing on his hobbies and life instead. Sam took on projects he knew would make no money alongside trying to start new businesses. A great example of this is his coffee shop, The Wren, near St. Paul’s in central London which started as a nonprofit. He’s no longer involved in the coffee shop, but the business is going well.
Another thing Sam spent his time on, while living in London, is volunteering as a policeman. He did about twenty hours a month (for free) policing some of the rougher parts of East London, responding to issues ranging from gangs to domestic violence. He did it for a few reasons, but a big one was to get him out of his comfort zone and learn how to defuse conflict. Now, he spends quite a lot of time learning Brazilian Jiu-Jitsu.
Sam’s third level of financial freedom was when he didn’t need any income anymore. In 2014, he realised he had made enough to live at his current level for many years (mainly from arbing and investments from that money). He quit a business (his tech startup) that was earning a fortune, but that he was losing love for and that wasn’t adding any value to the world. His partners thought he had gone crazy. One of them lost his temper and said to Sam, “What’s wrong with you, do you hate money now?”
No, Sam didn’t hate money, he just refused to allow it to rule over him.
When he started out as an entrepreneur, he had no responsibilities and could easily survive for a couple of “gap years” after he graduated from the university. But now, after a decade of being his own boss, he reckons that he’s quite unemployable, because he doesn’t have any traditional job experience. This is why multiple income streams and a high rate of savings (Sam saves a great deal of money each month) is extremely important to him.
Sam’s primary motivation has always been to avoid getting a job. The best way to ensure that was to save aggressively and keep his expenses low (he’d rather have an extra couple of years of freedom than a super-expensive car). Sam notes that he was “lucky because I started earning money when I was living as a student and hanging out with other students. I never had to learn to cut down my quality of living. I just continued living the same way as I did in college. My expenses slowly crept up, but much slower than my income and that money invested early on quickly started earning money by itself (another passive income stream).”
His goal is still the same now. The best thing money can buy is control of his time so he can focus on projects he’s passionate about.
The current level of financial freedom is the freedom to put money into the stuff he loves. His day-to-day expenses are small enough (and businesses successful enough) that he has more money than he needs. So instead, he gets to spend it on other things: causes he is passionate about supporting, investing in new business ideas, and even sponsoring budding entrepreneurs.
Sam does a great deal to support his local church. The Wren, mentioned above, was founded to support Christian lunchtime gatherings where participants talk about charity. Sam also cares a lot about helping victims of domestic abuse, homelessness, and degenerative brain diseases. He’s also focused on the concept of effective altruism where he gives his money to places that it will have the largest impact, giving to things like malaria nets and cataract surgeries in developing countries that have the highest return on investment.
A Rickety Staircase
As entrepreneurs, we often feel that we should make the jump from the first step to the last. What we forget is that this process most often looks like small incremental stair steps from one season of life to the next.
While Sam’s journey maps to slow growth over time and manageable stair steps to where he is today, it certainly wasn’t an even, or even “safe,” staircase. Climbing it felt more like a rickety New York City fire escape than the Gatsby-esque grand staircase you may be picturing.
When Sam first started his table tennis company, he started by licensing and distributing another brand (very similar to Phil Knight of Nike starting his business by importing Onitsuka brand shoes from Japan).
Also, extremely similar to Knight, Sam built it from scratch into the most popular in its niche only to have others start selling and profiting from his work. Even though he tried to protect himself with an exclusive distribution deal, his competitors were buying it abroad and selling it locally. This drove prices down and crushed his margin.
Eventually, he started again (under his own brand name and with a new supplier) and had full control, but Sam estimates that he lost roughly $200,000 and, even more valuable, a lot of time.
Another mistake Sam made was taking money from friends and family. He had a business that raised around $150,000 in the form of loans (money that was surprisingly easy to get). Friends and family queued up to give him their money because he had a track record, his idea was good, and it was for a noble cause.
Except things didn’t go quite the way he planned and the business wasn’t able to repay the loans. And it turned out that those investors couldn’t afford to lose their money.
Sam felt terrible about it and ended up paying back all the investors from his own pocket, something he couldn’t really afford to do. But that was a big lesson for him: losing his own money on a calculated gamble is one thing, but risking the money of others is entirely different.
Sam advises that if you are going to take investment money, take it from professionals who can afford to lose it and know the risk. You do not want to responsible for your great aunt’s pension.
How He Stayed Motivated
When you work for yourself, especially when you’re just getting started, you’re both the supervisor and the employee. The biggest challenge Sam has had in working for himself is mustering up the motivation to do the “worker bee” work. Remember, Sam is a self-admitted lazy person and discipline isn’t something he’s good at. His solution here is to simply outsource everything he doesn’t like and focus on what he’s best at.
Spending eighteen hours per day on your business is nothing when you’re only doing the parts that give you energy.
Here’s an example from Sam:
“For instance today I spent the afternoon at a bar designing cocktails for the launch party of our new gin brand,” says Sam. “In the morning I went through the last month, counted my earnings, and finished a write-up of how all my businesses did during the month. Then in the evening I played table tennis to test some new products we’re developing. I was up early, and I am now writing this at midnight. That is a full day, but it was also a really fun day.”
Obviously, there are some things you need to do (like tax returns), but Sam notes that you’d be surprised how much you can ignore and it not really matter. For example:
- He barely reads his emails.
- He has disabled his phone from ringing.
- He doesn’t do any cold outreach or hard selling.
- He doesn’t sell any online courses and he doesn’t have any funnels.
- He doesn’t do webinars or live videos.
- He keep his calendar mostly empty and avoid meetings.
Yes, his businesses would be more successful if he did all those things. But, he wagers that he would also quickly lose interest in them. Sam’s advice is to find what parts of the business you love and focus on those. He goes on to explain that if something is really difficult for you, “sign up” in a way that you can’t get out of it.
For example, check out Sam’s viral video (below) where he played table tennis every day for a year. Like Sam, you can elect to take on a paradigm (worldview) shift and simply view the difficult tasks as self improvement.
The Value of a Community
Sam credits much of his success to Smart Passive Income, and Pat. “Smart Passive Income was probably the first blog I ever read,” says Sam. “Before Pat, I was just working everything out myself, and missing a lot. I didn’t know the first thing about SEO or online marketing. I was very tech savvy, but pretty clueless when it came to websites and getting viewership. In fact, I had a few businesses that failed solely because of that lack of knowledge. My first ecommerce site just sat there all ready to go, waiting for traffic, until we eventually shut it down.”
Inspired by Pat’s income reports, Sam started his blog in late 2014 (which also brings in revenue for him) and he followed every single guide that Pat published, word for word.
As Sam started to grow his table tennis company, he listened to Episode 144 of the SPI Podcast: Building a Million Dollar Business in 12 Months with Ryan Moran, where Moran talks about using Amazon’s Fulfilled by Amazon (FBA) service. That podcast episode was huge for Sam, because he was using Amazon’s FBA service as well to sell his table tennis bats.
Amazon’s FBA is a service that allows you to store your products in the Amazon fulfillment centers, and Amazon will ship your products for you once you sell them. Sam learned a lot from that SPI Podcast episode and implemented quite a few of Moran’s suggestions. Today, Amazon’s FBA program is pretty well known and there are a lot of great resources out there. But, back then, Sam was stumbling in the dark on his own until he heard Episode 144 of the SPI Podcast.
Most recently, Sam listened to an SPI Podcast episode where Pat mentioned the income he generates from having a resources page on his website. Sam makes money from his blog, but after hearing Pat’s commentary, Sam is going to be creating a similar page on his website with resources related to his businesses.
More than any blog post, podcast episode, or YouTube video, Sam values the SPI Facebook community and encourages anybody not in the community to join.“It’s pretty much the only [group] I’ve come across that really adds value to my life.”
Sam’s plans for the rest of 2018 include continuing to work on his own brand of gin, investing in websites and online businesses (in addition to his entrepreneur grants), helping his wife set up a food-related business, and starting a podcast about money and investing. There’s nothing “lazy” about that!