What's New: The founder's guide to investing

(from the latest issue of the Indie Hackers newsletter)

Financial freedom is a top priority for most founders:

• These tips will help you determine what financial freedom means to you, and how to structure your finances to achieve it.
• When starting a community, try Rosie Sherry's surround system approach: Surround yourself with your people, and explore the landscape with intention. Here's how!
• Founder Randall Kanna's online course hit $53,000 in one month. Below, she talks engaging with your audience in a way that truly adds value, and establishing yourself as an expert in your field.

Want to share something with over 90,000 indie hackers? Submit a section for us to include in a future newsletter. —Channing

💰 The Founder's Guide to Investing

by Wisani Shilumani

As founders, we all value freedom. Freedom means different things to different founders, but being financially free is important for all of us. Here's how to invest wisely to reach that goal!

Building for freedom

Be aware that product revenue is rarely evergreen. It has a peak and a tail. Naturally, the revenue also isn’t completely passive. This means that any plan for financial freedom has to extend beyond this income.

I’ve worked as an asset manager for the last three years, and I’ve given the topic of personal finance quite a lot of thought. A few months ago, I built Simfolio to share the tools that are helping me accurately plan for my financial future. Read on for more about my strategies.

Know your number

How much money is enough? Everyone has a different number.

Some people have an idea of the approximate balance that they would need to be financially free. Others follow rules of thumb, like The 4% Rule, to determine how much they need according to their annual expenses.

The 4% Rule suggests that you can withdraw 4% of your savings every year without running out of money for at least 30 years.

Some critics rightly suggest that this rule is based on an outdated model with an assumed inflation rate and an assumed portfolio of stocks and bonds. Simfolio can help you calculate your retirement number based on your expenses, your unique portfolio, and a variable inflation rate.

Invest early and frequently

A common mistake that I hear from beginner investors is that they invest a small lump sum, forget about it, and hope that it will become a mountain of wealth in the future. It often doesn’t work that way.

Just like we need to consistently invest time into making good products, we need to do the same with money to see a good return.

If you’ve been fortunate enough to see significant recurring revenue from your product, this is a good opportunity to invest money monthly. A sure way to see benefits from investing is to actually spend time in the market and invest consistently.

Increase your investments when you can

This is not the most obvious thing, but if you keep investing $1K every month for five years, due to inflation, the real value that you are investing is decreasing. If inflation is 5%, in year two, you are contributing 5% less than you did the previous year in real terms.

To combat this, increase your investments when you can. I do this annually. You can factor this increase into your future net worth calculations!

Structure your finances for financial freedom

For the general investor, I find that these recommendations provide a winning strategy. These are listed in order of priority, with the highest being first:

1. Pay off your debt: Given that debt often has a guaranteed interest rate that’s higher than what most investments can offer, it's recommended to pay it off first before prioritizing any of the other steps.

2. Create an emergency fund: This is money that you should save for when life goes wrong. When it rains, it tends to pour. This should ideally be 3-6 months of your expenses in a low-risk account. The last thing you want to do when a distressing event occurs is to take on debt or withdraw from an investment (especially during a bear market).

3. Take advantage of tax-advantaged investment vehicles: Different countries have different regulations for tax-advantaged accounts. These can come in the form of IRAs, 401(k)s, retirement annuities, pension funds, or special tax-free accounts.

4. Discretionary investments: Once you’ve done the above three, you can take advantage of discretionary investment opportunities. I tend to invest in ETFs that track markets that active fund managers and retail investors alike struggle to beat.

5. High risk, fun investments: I'm not a big fan of telling people to completely stay away from high risk opportunities. I personally use <5% of my wealth to invest in speculative, high risk investments. I would suggest getting the basics above in place before moving into this space. I would consider some stocks as being in this high risk zone.

Of course, all of the above are strengthened by good financial behavior. As founders, we're already on the right track to find ways to increase our income. This is well complemented by living below our means and investing as much we can.

If you know your number, you should have a good idea of how much you need to invest every month. Then, you'll be on a good track towards financial freedom!

What are your top investment strategies? Share in the comments below!

Discuss this story.

📰 In the News

from the Volv newsletter by Priyanka Vazirani

👓 Snapchat has acquired brain-reading tech "NextMind" to make its AR glasses.

🌳 Cannabis stocks are surging this week.

📱 Apple will sell iPhones as a subscription service within a year.

🛒 Instacart has slashed its valuation by 40%.

👀 Meta is highlighting crypto and Web3 in its new trademark apps.

Check out Volv for more 9-second news digests.

🔊 To Start a Community, Create a Surround System

from the Rosieland newsletter by Rosie Sherry

I was speaking to someone recently who is super passionate about getting their community off the ground, but hasn't quite found a way to get consistent traction.

When considering what I would do in that situation, what came to mind was to recommend that they surround themselves intentionally and entirely with their people. Here's how to create a surround system that kicks off a community!

The starting point

Starting anything is hard, and that includes communities. We seem to accept that businesses fail all the time, yet when it comes to community, we don't seem to talk about failure enough.

As community builders, we have to find and create traction, flow, value, connection, and consistency. As part of this, we need to create systems, an online presence, design, content, and products. It's like starting a business, and it's a big ask.

Yet, when we go to build community, the first question that people still ask is: What is the best tool to build community?

It's almost as if we think that tools will magically build community for us. Let's agree to look past the tools when we are starting out in community. Instead, we should focus on deciding what to surround ourselves with.

The strategy

You can't just barge your way into building a community. Why would anyone join anything without any prior knowledge or trust in you?

Instead of barging in, try surrounding yourself with your people. This makes things truly authentic and organic. It means embracing people, respecting ideas, and contributing to the ecosystem.

You can surround yourself with your people by doing things like:

• Following and connecting with them on social media.
• Following their blogs and actually reading what they write.
• Seeking opportunities to have conversations.
• Hanging out where they hang out.

I previously mapped out practical steps for this process: "Study Your People" has been my process for staying in the community loop. Here are the steps:

• Start by lurking.
• Choose your tools.
• Collect resources that you need.
• Whenever possible, subscribe to content by RSS.
• Take action!

Creating processes or systems to surround yourself with the right kind of people brings community growth. It is not immediately obvious, but the more time you take to understand and connect with the landscape, the better you will be able to spot opportunities to serve your people.

Creating a surround system culture

Surrounding yourself with your people brings abundance of insight, understanding, trust, and opportunities. It is active community research.

Learning to spot and identify what matters, and what fosters community impact, is key. It's not just about what your potential people say or do; you also need to combine that with the direction you believe your community needs to take, and the knowledge you have acquired from your research.

Always be seeking opportunities for your people and your community. When you look, you will find. The challenge will then become which opportunities to pursue.

Intentionally exploring your surroundings

So, what do you do once you have a surround system set up? Community exploring should come from two angles:

1. Passive exploring: This is your internal research. Keep a close eye on conversations, bookmark interesting things, take notes, curate, ask questions, and start discussions.

A few things to keep in mind:

• People: Who are the regulars, and what do they talk about? Who are the new voices or talent popping up? Who is missing?
• Language: What patterns can you see in how people communicate? Look for signs of excitement, celebration, frustration, and anger.
• Struggles: What are their complaints? Which struggles are new?
• Conversations: Do they have a tool or medium of choice? What kinds of topics are they talking about? What are they not talking about?
• Community activities: How are people contributing?
• Community journey: What does their ideal transformation path look like?

2. Active building: Don't get stuck in the passive stage. Passive exploring and active building go hand-in-hand. Do a bit of exploring, then experiment with building a Minimum Viable Community (MVC) mindset.

A surround system brings sustainability

Creating a surround system is not an overnight thing. The basics can be set up pretty quickly, but the learning, adaptation, and building relationships takes time.

You can't serve your community if you don't truly understand them. A surround system creates that understanding.

Do you have a surround system in your community? Let's chat below!

Discuss this story, or subscribe to the Rosieland newsletter for more.

🌐 Best Around the Web: Posts Submitted to Indie Hackers This Week

🥊 Battling feelings of being overwhelmed. Posted by Ida Radovanovic.

💡 Five strategies for coming up with business ideas. Posted by Kevin Conti.

🤩 A household name endorsed my product in an interview! Posted by Mick.

🛠 What tools did you use to build your landing page? Posted by Matthias Gabriel.

💻 Why you should use end-to-end encryption. Posted by Brad Dominy.

⏰ Share your best productivity tip. Posted by Darko.

Want a shout-out in next week's Best of Indie Hackers? Submit an article or link post on Indie Hackers whenever you come across something you think other indie hackers will enjoy.

👩‍🏫 Randall Kanna's Online Course Hit $53K in One Month

by Randall Kanna

Hi, all! I'm Randall Kanna, and in February, I made $53K in one month by growing my audience and selling an online course. In fact, I had too many course signups. I ended up closing the course to new applicants sooner than expected.

Two years ago, I spent months creating a mini-course. Months. I meticulously wrote a course script. I created graphics. I had my mother edit it. I bought an entire green screen and lighting kit, and filmed for days. And guess what? It got two downloads. I literally could not get anyone to want the product. Did I mention that it was also free? I couldn’t even give the course away!

Here's the difference between that product and my new course generating $53K: I spent time to actually build an engaged audience and ask what they wanted me to create. I created quality content on the subject. I grew rapidly on social media, created tons of free resources and guides, and helped people 1:1. More details below!

Share quality content on social media

When I grew rapidly on social media, it was because I started sharing carefully curated resources and information that I had collected over the past decade in my career as a developer.

I didn’t share jokes. I didn’t share photos of my dog (anymore). I didn’t write clickbait-y tweets. I didn’t schedule my tweets. None of that leads to a truly engaged audience.

I even helped people 1:1 in Twitter DMs. I spent weeks hunched over hundreds of resumes, carefully editing and providing feedback.

This translated to a real audience and sales because I had given out real value that truly helped people. Marketing is what you say about yourself. Branding is what others say about you. I didn’t intend to create a brand for myself. I set out to help people.

Establish yourself as an expert in your field

When you produce high-quality content, people will see you as a credible source of information. Produce garbage content, and you’ve lost that potential customer forever.

My biggest pet peeve is seeing someone constantly put out content in an effort to saturate the market. It never works, and it actively pushes away customers.

Think of all the times you got sick of seeing someone spam on Twitter or email you relentlessly with useless content. You probably unsubscribed or muted them immediately, right? We have a low tolerance for useless information.

You have a limited amount of time to catch someone’s attention, and once you’ve lost it, it’s probably gone forever. You become noise.

One high quality blog post is worth 10 crappy blog posts. When I started out blogging, I spent weeks on one post. I had several people edit it, and I obsessively analyzed every word.

It's important to make sure that your content is high-quality and relevant to your target audience. This increase the chances that your content will be seen by more people, and help you achieve your business goals.

Engage with your audience

Engaging with your audience is key. Not only do you want to respond to comments and questions, but you also want to engage with them on a more personal level.

Remember how I mentioned spending weeks editing resumes and responding to DMs? I also jumped on calls and mentored people. This helps you create a dialogue with your audience, which can help you learn more about them and what they want from your content.

When I created my first product, I went off in a silo and built something that people didn’t want. When you take the time to engage with your audience, they will be more likely to return to your blog, and they may even become loyal followers. Later, they'll become customers.

Jumping on a call with someone is scary. But you know what’s scarier? Spending months building a product that nobody wants.

If you're looking to write blog posts quickly and easily, sign up for early access to my new product!

Discuss this story.

🐦 The Tweetmaster's Pick

by Tweetmaster Flex

I post the tweets indie hackers share the most. Here's today's pick:

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Also, you can submit a section for us to include in a future newsletter.

Special thanks to Jay Avery for editing this issue, to Gabriella Federico for the illustrations, and to Wisani Shilumani, Priyanka Vazirani, Rosie Sherry, and Randall Kanna for contributing posts. —Channing