Business

Sacrificing The Stock Market For The Good Of Your Loving Home

As stocks plummet and recession fears grow, there’s one silver lining worth highlighting: the increasing value of your home, if you own one. A home is a fundamental necessity for survival, stocks are not. So, the government sacrificing your stock portfolio to strengthen or preserve your housing situation can be seen as a net benefit.

Many of us are scratching our heads wondering why President Trump and his administration would intentionally tank the stock market and push the economy into a recession with new tariffs. After all, about 62% of Americans own stocks in some form, according to Gallup. Meanwhile, the poorest citizens get squeezed the most since they spend the highest percentage of their income to survive.

But 66% of Americans own homes, per the U.S. Census Bureau. Since more people own homes than stocks—and a home provides essential shelter—it stands to reason that real estate is far more important than stocks. If that’s the case, it’s also logical to allocate more of your net worth toward real estate than equities.

Don’t Fight the Government or the Fed, Who Prefer Real Estate

Since 2009, I’ve been in the real estate vs. stocks debate. I invest in both, but I’ve long preferred real estate—ever since I was a 32-year-old launching Financial Samurai. Now, at nearly 48 with a family to support, I still do.

Let’s not forget: I worked in equities at Goldman Sachs and Credit Suisse from 1999 to 2012. I’ve lived through enough bubbles and crashes to know stock market volatility isn’t for me. With stocks, you can be up big one day and down even more the next. A year’s worth of gains have been wiped out in just one month in 2025. Real estate, on the other hand, is far more stable.

The government clearly favors real estate. Why fight that? The Trump administration wants a lower 10-year Treasury yield to reduce interest payments on national and consumer debt. A lower yield also leads to lower mortgage rates, which enables more Americans to refinance or buy homes. Of course, if they go too far and cause a spike in unemployment, the whole strategy could backfire.

My goal for this post is to help those who dislike real estate see it in a better light. Real estate is my favorite asset class for the typical person to build long-term wealth. The combination of rising rents, rising property prices, and declining mortgage balances is a power wealth creator.

However, I feel like I’ve been losing the argument over the years to my peers who promote being 100% invested in stocks and renting. So I’d like to use this latest market meltdown as a way to bring more balance to the debate.

Treasury Secretary Scott Bessent’s View On Helping The Middle Class

To better understand Trump and Bessent’s ideology on disrupting the stock market to help the middle class, here’s a short interview clip. Treasury Secretary Bessent points out that the top 10% own 88% of all stocks, while the bottom 50% primarily hold debt.

As a result, they’re trying a different approach to provide meaningful relief to the middle class. Unfortunately, at this pace, the middle class will be negatively impacted with rising mass layoffs.

Treasury Secretary Scott Bessent Tells Tucker Carlson,

“I Don’t Think The Bottom 50% Of Americans Are Losers. I Think The System Hasn’t Worked For Them. I Think That They Are Winners. It’s Just A Bad System.” pic.twitter.com/Wtpv7Zkf8k

— 𝕁𝔼𝔽𝔽𝔼ℝ𝕊𝕆ℕ𝕊 𝕍𝕀𝕆𝕃𝕀ℕ (@Rust_And_Decay) April 4, 2025

Real Estate Has Better Tax Benefits Than Stocks

Besides its utility, income, and relative stability, real estate’s tax advantages are a huge part of its appeal.

Investors can deduct depreciation—an amazing non-cash expense—to reduce taxable income. Even better, married homeowners can earn up to $500,000 in tax-free capital gains when selling their primary residence, as long as they’ve lived in it for two of the past five years. With the median home price around $400,000, that’s a potential 125% tax-free gain for many Americans!

Compare that to public stocks, which offer no such tax-free gain. The only exception is if you’re an angel investor I Qualified Small Business Stock (QSB), where you can exclude 100% of capital gains up to $10 million or 10x your basis. But the risk? Over 90% of private startups fail, so you’re likely never going to benefit from QSB in the first place.

Here are additional tax benefits real estate offers over stocks:

1. Depreciation (A Paper Loss That Shelters Real Income)

You can depreciate a property’s value over 27.5 years (residential) or 39 years (commercial), reducing taxable rental income. What’s great is that depreciation is a non-cash expense, so you’re not spending any money to get the deduction.

Example: $30,000 in rental income – $15,000 depreciation = only $15,000 taxable.

Stocks offer no such benefit.

2. 1031 Exchange (Tax-Deferred Growth)

Sell an investment property and defer capital gains taxes by reinvesting in a like-kind property. This allows you to compound real estate wealth tax-free until you eventually sell without doing a 1031 or die.

There’s no 1031 equivalent for stocks.

3. Mortgage Interest Deduction

You can deduct mortgage interest on investment properties, further reducing taxable income. Pair it with depreciation, and your real income can look surprisingly low.

Stocks don’t offer anything similar—unless you’re borrowing on margin, which I don’t advise.

4. Deductible Expenses

You can deduct maintenance, insurance, travel, property management, HOA fees, legal costs, and more.

You might even be able to buy a 6,000 pounds vehicle and deduct the full cost of the vehicle from your business taxes using Section 179 or bonus depreciation. If you bought the heavy beast before reciprocal tariffs were launched, your truck or SUV may also be worth 25% more, another bonus!

Stock investors? Only limited deductions, especially after the 2017 tax law changes.

5. Self-Employment Tax Advantage / Real Estate Professional Status

Rental income isn’t typically subject to self-employment tax. The current tax rate for Social Security is 6.2% for the employer and 6.2% for the employee, or 12.4% total. The current rate for Medicare is 1.45%.

Stock dividends also avoid self-employment tax—but active trading can trigger it if considered a business.

Further, if you qualify for Real Estate professional Status (REPS), you can use rental losses to offset ordinary income, saving potentially tens of thousands in taxes. There’s no similar perk for stock investors.There’s no similar perk for stock investors.

How Big Of An Additional Price Increase For Real Estate By Sacrificing Stocks

To calculate how much of a price boost real estate gets by sacrificing stocks, we can calculate the derivative effect a drop in interest rates have on home affordability. We must also assume the economy doesn’t go into a severe recession.

We know that during times of uncertainty and chaos, investors tend to sell stocks and buy Treasury bonds, which causes yields to come down. This is exactly what is happening during Trump’s tariff wars with the 10-year Treasury bond yield plummeting to as low as 3.89% from 4.8% at the beginning of the year.

Let’s break it down with some math based on a 30-year fixed-rate mortgage, assuming a 20% down payment ($100,000), and borrowing $400,000 on a $500,000 home.

Every 0.25% mortgage rate drops results in a $64 – $67 decline in mortgage payment, or about $780/year. A $65/month decline in mortgage payment also means you can afford $10,000 more house, which equals 2% on a $500,000 house.

Therefore, every 1% drop in mortgage rates results in a 8% boost in home prices on average. Given mortgage rates have fallen about 0.7% since the start of the trade wars, we can calculate that sacrificing stocks has resulted in a ~5.6% boost to your home and real estate portfolio. This is on TOP of whatever the estimated price action would be if there was no tanking of the economy by Trump.

Net Worth Calculation Example: How Real Estate Helps During Tough Times

Let’s say your net worth is diversified as follows:

30% Stocks: Down 20% → contributes -6% to your overall net worth
50% Real Estate: Normally up 3%, but with a 5% relative boost due to the “stock sacrifice,” let’s say it’s up 8% total → contributes +4% to net worth
20% Bonds and Cash: Up 2% → contributes +0.4% to net worth

Net Worth Impact:

-6% (stocks) + 4% (real estate) + 0.4% (bonds/cash) = -1.6% overall

Instead of being down 20% if you were 100% in stocks, your diversified net worth is down just 1.6%, thanks largely to real estate cushioning the blow. Hooray for diversification!

But here’s the kicker: if your real estate exposure is based on total property value (not just equity), the positive impact is even greater if you have a mortgage. For example, if you own a $1 million property with $250,000 in equity and it rises 8%, that’s an $80,000 gain on just $250,000 invested, a 32% return on equity.

Most Americans have the majority of their ~$192,000 median net worth in their homes. Hence, the government wants to protect it.

Eventually, you might grow wealthy enough to have a paid-off home. In such a scenario, the comfort and and security it provides during downturns is invaluable.

Enjoy Your Stable, Loving Home And Real Estate Portfolio

With capital fleeing volatile stocks and flowing into bonds and real estate, now is the time to appreciate your home. Real estate acts like a bond-plus investment—generating income and often appreciating in value in uncertain times.

If you own rental properties in supply-constrained areas, treat them well. They’re likely to keep delivering semi-passive income and growing in value.

Yes, of course, maintaining properties requires more time and effort compared to stocks, which are 100% passive. However, there’s a certain satisfaction in actively caring for and improving a tangible asset, rather than being entirely at the mercy of external market forces with stocks.

When I compare my absolute dollar gains from the S&P 500 to those from real estate, it’s not even close. Thanks to tax breaks, leverage, and long holding periods, real estate has made me far more money. For the average American household, I suspect the results are similar.

Remember, stocks are considered funny money because they provide no direct utility. You must occasionally sell them to capitalize on their value, otherwise, there’s no point in investing.

An entire year of stock market gains can be wiped out in a month. If you never take profits, then there is no point in investing in stocks.

Find Your Asset Allocation Sweet Spot For Stocks And Stick To It

Continue investing in stocks for long-term growth. Dollar-cost average in and buy the dip for you and your children. But when the stock market tanks, that’s when you need to deeply reassess your true risk tolerance. Too many people overestimate their risk tolerance if they’ve never lost a lot of money before.

For me, the sweet spot is having stocks represent 25%–35% of my net worth. Figure out your own comfort zone—and stick with it.

Remember, you can’t sleep in your stocks, but you can in your home. During tough times, cherish your home and real estate portfolio. Not only are they providing you with stability, but you’re likely also earning from them.

Readers, do you think the latest stock market correction and this post will help real estate skeptics overcome their bias and view real estate more favorably? Why do you think more people don’t recognize the long-term wealth-building potential of real estate? If you own both stocks and real estate, how have your absolute dollar returns compared?

Invest in Real Estate More Strategically Without the Hassle

If you’re not interested in taking on a mortgage and managing physical real estate, you can invest 100% passively through Fundrise. Fundrise is my preferred private real estate platform, focusing on residential and industrial commercial real estate, primarily in the Sunbelt, where valuations are lower and yields are higher.

I’ve personally invested over $300,000 with Fundrise to diversify away from my pricey San Francisco real estate holdings and generate more passive income. With technology driving a long-term migration to lower-cost areas of the country, I’m eager to capitalize on this trend.

Invest in Real Estate More Strategically Without the Hassle with Fundrise. Sacrificing stocks for the good of housing and real estate

During times of extremely volatility, I appreciate the stability of investing in private real estate and venture with Fundrise. Fundrise is also a long-time exclusive sponsor of Financial Samurai, as our views are aligned.

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Business

How An ARM Can Save And Make You More Money On A Home

About once a month, I get an email or comment from a reader criticizing adjustable-rate mortgages (ARMs) as a poor financial choice. Since I’ve been a proponent of ARMs since starting Financial Samurai in 2009, I understand the pushback.

However, I still prefer an ARM over a 30-year fixed-rate mortgage because I don’t want to pay more in interest than necessary. Yes, there will be periods of higher interest rates, like the one we’re experiencing now. And yes, your ARM may occasionally reset during a high inflation period. However, over the long run, I believe the broader interest rate trend is to remain low, driven by technology, efficiency, and globalization.

Here’s an example of ARM pushback:

Hey Sam,

I know you’ve been a supporter of ARMs for years. I get the logic as you’ve laid it out, but for my investment properties and my primary home, I refinanced in 2020 and 2021. All my rates are fixed between 2.6% and 3.5%. I’d argue that longer-term fixed 15- and 30-year mortgages worked better.

I know several people who had ARMs and either sold their investment properties or are still dealing with negative monthly cash flow. You may still believe in ARMs for yourself, but maybe it’s time to revisit the topic in light of today’s environment. Perhaps I’m missing their merits.

When mortgage rates surged in 2022 after years of aggressive fiscal stimulus, criticism of ARMs intensified. Suddenly, locking in a 30-year fixed mortgage at 2.5% – 2.75% at the bottom of the market looked like a stroke of genius — and it was.

But here’s the thing: Both an ARM and a 30-year fixed mortgage can be smart moves if used strategically. The right choice depends on your financial situation, risk tolerance, and homeownership goals.

Let me share a case study illustrating how an ARM saved me money and even helped me make more money.

I’ll also explain why ARMs could be ideal for lower-risk homebuyers who are personal finance enthusiasts. While 30-year fixed mortgages may be better suited for higher-risk buyers, which often describes the typical American homeowner.

Table of Contents

Case Study On How Using An ARM Saved And Made Me Money On A Home

In April 2020, one month after COVID lockdowns, I stumbled across an amazing home with panoramic ocean views. This was somewhat of a problem since I had just purchased a home in April 2019.

My original plan was to gut remodel my 2019 fixer and expand it to about 2,840 square feet. Unfortunately, after one year of remodeling, I realized it wouldn’t get done by the end of 2020 due to COVID delays. So I decided to look for another home.

The new home I found in 2020 was fully remodeled and had over 2,800 square feet. As the father and primary income earner, my #1 responsibility was to provide for my family. Our daughter had just been born in December 2019, and I didn’t want her to have to live through construction.

In the end, I decided to get a 7/1 ARM at a 2.15% interest rate. I could have gotten a 30-year fixed-rate mortgage at a 2.5% interest rate, but I wanted to save money. In addition, getting an ARM enabled me to borrow more money to purchase the home since the payment was lower.

More importantly, deep down, I knew this new home was not my forever home. It was the same size as what my 2019 home would ultimately end up as. It just had slightly nicer views and finishes.

I foresaw my family and me living in the home for up to 10 years before moving to Honolulu.

Sold The Home Five Years Later For A Profit

My forecast for owning the home for up to 10 years didn’t play out. Instead, greed took over because I found an even nicer home in 2022. Luckily, I couldn’t afford it at the time. However, once the home came back on the market at a lower price in 2023, I could. My stocks had rebounded and I had saved more money.

After purchasing another home in 2023 and renting out my 2020 home, I finally sold it in 2025, saving myself ~$31,000 in mortgage interest expense by going with an ARM. I also made a greater percentage return because I was able to borrow more with an ARM. The return boost was an additional 10 percent.

Ideally, I would have liked to own the 2020 home for seven years, up until the last month the 2.125% mortgage interest rate would reset higher. But even if it reset higher, it would only increase by 2% to 4.125% for the eighth year. There’s a cap on how much an ARM can adjust.

Hence, the lesson from my ARM case study is to know thyself. Based on my obsession with real estate, my then desire to climb the property ladder, and my net worth growth forecasts, I anticipated wanting a new home around the time the 7/1 ARM introductory rate was set to expire. And sure enough, it did.

The Formula That Helped Me Decide On An ARM

As a personal finance enthusiast, you’re constantly running financial models to forecast the future. In my situation, I calculated what the 2020 home purchase price was relative to my net worth. Then modeled out what it would likely decline to over a three-, five-, and 10-year period.

Finally, I referred to my recommended primary residence as a percentage of net worth chart to decide how much home I could responsibly buy. Then I calculated at what point the 2020 home would start to feel like not enough (less than 10% of net worth).

I am a fan of optimizing my living arrangements, especially with family. Both my wife and I don’t have to go anywhere to work, so we highly value owning a nice home. But if we had to go to the office for 12 hours a day, perhaps not.

Recommended Income and net worth required to buy a primary residence - Why getting an ARM makes sense

To help clarify my formula for deciding on an ARM, let’s create an example.

My recommendation for financial freedom seekers is to spend no more than 30% of your net worth on a home. Or, if you’ve already purchased a home, grow your net worth until your home is worth less than 30% of your net worth.

Formula Example For Using An ARM

Net worth: $3.5 million

Target home price: $1 million

The target home equals 28.5% of your net worth, which is within the ideal recommended percentage.

You forecast your net worth to grow by 10% a year for the next 10 years. As a result, your net worth grows to $4.66 million in three years, $5.36 million in five years, and $9.078 million in 10 years. As a side note, here’s how you might feel after reaching various millionaire milestones.

For simplicity’s sake, let’s say your house is worth $1.2 million after three years (from $1 million purchase) and stays there. Your house is now worth only 26%, 22%, and 13.2% of your net worth after three, five, and ten years, respectively.

Given you don’t want to live so frugally after 10 years, you happily take a 10/1 ARM at a 0.375% lower mortgage interest rate than a 30-year fixed to save. You know that there’s no point in making money if you don’t spend it. In 10 years, you will most likely want to buy a nicer house.

If you don’t buy a nicer house in 10 years, then there’s less of a need to work so hard today. But you’re a highly motivated professional who wants to climb the corporate ladder, make more money, and live the best life possible.

Therefore, getting a 30-year fixed-rate mortgage at a higher interest rate — fixed for 20 years longer than your likely holding period — is not ideal.

Getting a 30-Year Fixed Rate Is Fine, Don’t Worry

Just because I’d rather get an ARM doesn’t mean having a 30-year fixed-rate mortgage is bad. It’s not!

Feel great about your 30-year fixed-rate mortgage, especially if you refinanced or took one out near the bottom of the interest rate cycle. What a gift to be able to borrow money so cheaply. Then to be able to earn a higher risk-free rate in money markets or Treasuries is another blessing.

We all like to think the financial choices we make, especially large ones, are the best ones. All I ask is that you don’t make blanket statements that an ARM is bad. There are financial situations and life circumstances where getting an ARM to buy a home at a lower interest rate is a great solution.

Saving money and matching the fixed-rate duration to your homeownership period is a more optimal choice. However, paying a higher mortgage interest rate for greater peace of mind is also worth a lot to many people.

The interest rate spread was just too high to be worth it to me at the time in 2020. If I could have gotten a 30-year fixed-rate mortgage for only 0.125% – 0.25% more, I may have taken it.

30-Year Fixed For More Risky Homebuyers

If you’re cranking up the risk by spending much more than 30% of your net worth on a primary residence, then getting a 30-year fixed rate will provide more peace of mind.

The typical American has between 70%-80% of their net worth in their primary residence, which is way too much in my opinion. This high percentage of net worth is why so many homeowners got crushed during the 2008 Global Financial Crisis period.

Therefore, the typical American getting a 30-year fixed-rate mortgage is a way to protect themselves given their concentration risk. It also protects the rest of us who aren’t willing to take such risk. We don’t want our home values to get hammered due to foreclosures.

An ARM Is Suitable For Less Risky Homebuyers

If you’re not betting the farm and buying a primary residence equal to 30% of your net worth or less, taking more “risk” by getting an ARM may be more appropriate. You’ve crunched the numbers and feel good about the various financial scenarios in the future. Even if your ARM resets to the maximum interest rate, you’d still be fine because you have so much more net worth left over to cover it.

I hope you enjoyed this case study on how using an ARM can save you money, help you build wealth, and align with your homebuying goals. I’m sure some will disagree, and that’s fine. The most important thing is to run the numbers and choose the mortgage that best suits your unique situation.

Readers, why do you think so many people are against ARMs? Is it simply a fear of the unknown or a lack of firsthand experience? Wouldn’t it make more sense to lock in a lower rate during a fixed period that better aligns with your actual real estate holding timeline?

If you’re looking to invest in real estate passively, check out Fundrise—my preferred private real estate platform. Fundrise focuses on high-quality residential and industrial properties in the Sunbelt, where valuations are lower and yields are higher.

Some commercial real estate valuations have dropped to levels near the 2008 financial crisis lows, despite today’s stronger economy and healthier household balance sheets. Seeing this as an opportunity, I’m dollar-cost averaging into the sector with my home-sale proceeds while prices remain attractive. The minimum investment is only $10.

Fundrise investment dashboard Financial Samurai

Fundrise is a long-time sponsor of Financial Samurai and I’ve invested $300,000+ with them so far. About half of my invest in Fundrise is in their venture capital product. I want to build a decent amount of exposure to private AI companies.

Join over 60,000 readers and sign up for my free weekly newsletter. Everything I write is based on firsthand experience. Founded in 2009, Financial Samurai is a leading independently-owned personal finance sites today. I am the author of the new USA TODAY bestseller, Millionaire Milestones: Simple Steps To Seven Figures.

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Business

This Fun Family Ritual Revealed a Surprising Truth About AI

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Opinions expressed by Entrepreneur contributors are their own.

The first time I hosted a Prompt Party, I didn’t call it that. I was just trying to keep my five-year-old busy on a rainy Friday evening.

He wanted to make a video where our dog, Calvin, cooked up scrambled eggs with green onions. So we opened Sora, typed in a prompt and watched a pixelated masterpiece come to life. It was weird. And wonderful. And most of all, it was ours.

That was the spark.

Since then, we regularly gather for what’s become a tradition: Prompt Parties. They’re our family ritual where imagination leads, AI follows, and joy is the goal, not the output.

Table of Contents

Why we started Prompt Parties and why they stuck

Like many parents working in tech, I’ve had to confront some big questions:

How do I introduce AI to my kids without overwhelming them?
How do I make it feel like a tool, not a threat?

The answer, I’ve learned, is play.

Our Prompt Parties are casual. Pancakes optional. We brainstorm ideas, type in prompts and generate AI videos or images together using tools like Sora. Then we laugh, critique, remix and sometimes fall down rabbit holes of absurdity.

One week, the prompt was:

“Create the most photorealistic close-up of a blister pack of 8 pills, but instead of pills, there are tiny, adorable octopuses in different colors and textures. Each octopus is fully visible in side view, squished gently into its compartment like a soft gummy, but looking cheerful and content.”

The result? “Happy Octopus Pills.” A serotonin hit disguised as AI art. Feel free to try these on your own; I’d love to see what the output is.

That same day, my son Kai asked if Calvin (our side-eyeing dog) could wear a top hat and judge people like a Victorian aristocrat. We obliged:

“Dog side-eyeing like it knows your secrets. Make the side eye more intense. Have him wearing a top hat and human clothes.”

We’ve made LEGO towers with real-life bears in clown makeup. We’ve explored haunted castles and invented cereal mascots. There are no rules. Just prompts and possibility.

The science behind silliness

Shawn Achor, the positive psychology researcher behind The Happiness Advantage, argues that happiness isn’t a luxury; it’s a precursor to performance. Joy improves creativity, resilience and cognitive ability.

And guess what?

AI makes joy accessible in entirely new ways. It rewards curiosity, makes ideas tangible and bridges the gap between imagination and execution.

For kids, it’s magic. For adults, it’s a masterclass in thinking differently.

When we turn AI into play, we reduce the fear factor. We shift the narrative from “this tech will replace you” to “this tech can collaborate with you.” And that’s a lesson worth learning early.

Building AI literacy without the creep factor

Let’s be real: Some parts of AI feel a little dystopian. Deepfakes. Chatbots impersonating humans. Kids don’t need all of that.

What they do need is agency.

Here’s how we keep Prompt Parties joyful and grounded:

Use bounded, kid-safe tools. We use Sora, not Midjourney. And we steer clear of tools that generate ultra-realistic humans or open-ended chat. We don’t ever use images of them or real people.
Stay involved. Every prompt goes through me. We sit side by side. If a result feels off, we talk about it. Not with fear, but with curiosity.
Celebrate their ideas. Whether the prompt results in a perfectly rendered image or a total flop, we cheer the attempt. It’s not about what the AI makes. It’s about what they imagined.
Turn screen time into story time. Most creations begin as drawings, stories or re-enacted scenes with stuffed animals. This feeds into active play and imagination later. AI is the spark, not the endpoint.

What Prompt Parties have taught me

I started this as a way to teach my kids about AI. But I’ve learned just as much in the process.

Originality beats polish. The octopus pill pack wasn’t technically perfect. But it made us laugh, think and feel. That’s the metric that matters.
Emotions drive retention. A child who gets to play with AI will remember how it works far more than one who just reads about it.
We’re not raising consumers. We’re raising creators. The real win isn’t AI literacy, it’s creative confidence. When kids learn they can steer technology, not just consume it, you change the trajectory of how they’ll interact with the world.

A surprising takeaway: Creativity is a form of courage

Here’s what I didn’t expect when we started Prompt Parties:

The courage it takes for a child to say an idea out loud before they know how it will turn out. To imagine something no one’s ever seen. To press “generate” without knowing what they’ll get back.

That’s not just play. That’s bravery.

And it reminded me: Creativity isn’t about talent. It’s about permission. Permission to be original. To be ridiculous. To be seen.

These parties aren’t just building AI fluency. They’re building resilience, voice and self-trust.

Because the world they’re growing up in won’t just reward knowledge. It will reward perspective. The ability to think differently, speak clearly and imagine what doesn’t yet exist.

And that starts with a question: What if?

Each Friday, we ask a simple question: What do you want to create today?

That question has generated more laughter, connection and creative spark than anything else I’ve tried as a parent.

So, if you’re wondering how to bring AI into your home without the creepy vibes, start there.

Give your kids the prompt (and the permission) to play.

Because teaching them how to be curious, thoughtful, joyful humans in an AI world might just be the most powerful lesson of all.

The first time I hosted a Prompt Party, I didn’t call it that. I was just trying to keep my five-year-old busy on a rainy Friday evening.

That was the spark.

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What 8 Years in Corporate Life Did — and Didn’t — Prepare Me For as a Founder

1747345804 from corporate to founder lessons 0525 g2185768058

Opinions expressed by Entrepreneur contributors are their own.

As a consultant, chaos was a problem I had to solve. As a founder, it’s the air I breathe.

I entered the startup world armed with what I thought was the ultimate toolkit: a consulting background. Years of strategy decks, stakeholder management and cross-functional collaboration taught me how to turn chaos into structure and solve problems fast. I thought I had seen it all.

But I quickly realized that the transition from consultant to founder wasn’t so much a pivot — it was a free fall. See, consultants and founders couldn’t be more different. Consultants are trained to be perfect, founders need to be scrappy. Consultants are trained to eliminate chaos, founders need to thrive in it. Consultants have a safety net, founders don’t.

Let’s dive right in.

This is what consulting did prepare me for:

Finding structure in chaos: I am stating the obvious here, but it is essential for founders to be able to execute on their vision; and to do that effectively, founders need structure. Something as simple as creating an organized folder structure — which coincidentally was my first task as an associate — can go so far as securing your term sheet with investors when they ask for the data room during the due diligence process. Being due diligence-ready isn’t just about having your documents in order; it’s about demonstrating transparency and building confidence with potential investors.
Thinking on the spot: As a founder, it feels like you’re in the middle of the ocean and you need to swim your way back to shore. Consulting prepared me for that. I remember being chucked into remote environments to explain technical workflows to non-technical people — in my third language nonetheless. Thinking fast and adapting your message to whoever’s in front of you isn’t just useful — it’s how you create openings. It’s how you pitch before your product is ready. It’s how you get a meeting before there’s anything to show.
Burning the midnight oil: Let’s be real, consultants — at least, the good ones — are machines and can be extremely productive. Founders are part of a world where being busy includes attending a lot of conferences, exhibitions and the post-event functions that come with them. Consultants can rarely afford such luxuries. Crunchtime is real and forces them to converge their efforts on work. Knowing when to lock in and say no is crucial as a founder.

This is what consulting did not prepare me for:

Building and failing fast: Most founders and visionaries fall into the fallacy of building an end-to-end super solution that promises to be the holy grail of their customers — myself included. Enter the pivots. Your startup does not succeed when it builds out your vision — that is often just a very expensive dream. It succeeds when you find out what your customers are willing to pay for as quickly as possible. As Eric Ries puts it in The Lean Startup, the key is learning what customers actually want – not what you think they should want.
Storytelling as an art: In my first days as a founder, I walked into a potential client’s office long before I had a product or even a live website. I took the consulting route and brought a strategy deck with me. I got destroyed that meeting. Off the bat, it sounds like a mistake — but it was the best decision I could have made. I took note of the feedback and acted on them immediately. Get out there, pitch your idea and ask for feedback! Feedback helps you figure out what sticks, what doesn’t and how to sharpen your message until it cuts through.
Learning how to network: I did more networking in my first year as a founder than I did during my eight years as a consultant. Let that sink in. I thought I was networking as a consultant, but I was really just moving within the same orbit. As a founder, the galaxy is yours to explore. From day one, you find yourself networking with fellow founders from all walks of life, angel investors, venture capitals, tech builders, community leads — you name it. And the best part is, they don’t care about your CV. They care about your energy, passion and convinction. A study by Queen Mary University of London found that the quality of a startup’s network significantly impacts its chances of success, often more so than initial funding or team size.

In the end, the transition from consultant to founder was less about applying what I knew and more about unlearning what I thought I knew. And if you’re willing to unlearn, embrace different perspectives, take constructive criticism, to be honest with yourself and to move fast without all the answers — you will find yourself growing in ways no corporate job could ever offer.

As a consultant, chaos was a problem I had to solve. As a founder, it’s the air I breathe.

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