Making Money vs Growing Money
Earning and compounding are separate skills — most high earners only have one
Armoo identifies two distinct financial skills that people routinely conflate: making money and growing money. Making money is an active, input-driven skill — your effort, judgement, and network translate into income. Growing money is a patience-driven, systemic skill — you deploy capital into vehicles you don't control and accept lower, slower, less exciting returns.
Entrepreneurs are systematically biased toward making money because they are wired for control and speed. An 8% index fund return feels insulting when you know that re-investing £500k into your own business would return 100% or more. But that calculation ignores the risk asymmetry and the compounding that occurs over decades outside the business cycle.
Armoo rates himself a 7.5 out of 10 on money — strong at making it, weaker at growing it. He frames the post-exit period as learning a new game from scratch: the same discipline and humility that made him a good founder applied to wealth management, but aimed at unfamiliar instruments. The takeaway is practical: treat growing money as a learnable skill requiring deliberate study, not an afterthought to the 'real' work of earning.
- Making money and growing money are separate skills — excellence in one does not confer competence in the other.
- Entrepreneurs systematically undervalue passive compounding because their reference point is their own active return rate.
- The bias toward control causes founders to see index funds as low-return rather than as uncorrelated, low-maintenance compounding.
- The earlier you treat growing money as a learnable discipline, the more compounding cycles you capture.
- Running no pension while reinvesting everything in your business is a legitimate strategy — but only if the exit actually happens.
- Audit your score on each skill separatelyRate yourself 1-10 on making money and 1-10 on growing money independently. Most entrepreneurs score 7+ on making and 4-5 on growing. Writing both numbers down makes the gap concrete rather than vague.Pro tipArmoo gave himself 7.5 overall — but decomposing it revealed the asymmetry. The combined score masked the gap.
- Stop applying your active return rate to passive vehiclesWhen evaluating an index fund or bond, resist comparing its return to what you'd earn running a business with the same capital. Those are different risk profiles, time commitments, and liquidity positions — the comparison is structurally unfair.Pro tipThe question is not 'is 8% better or worse than my business return?' The question is 'what is the right allocation across risk tiers given my overall position?'WarningThis comparison is the single most common reason high earners hold too much cash and too little diversified capital.
- Build a barbell allocation across risk tiersStructure your capital into three bands: low-risk (cash, money markets), medium-risk (indexes, property), and high-risk (angel investments, business stakes). The barbell ensures compounding at the low end while preserving the entrepreneurial upside at the high end.Pro tipArmoo's high-risk tier is structured as minority stakes where he provides capital and judgement and a partner runs the business — capturing entrepreneurial return without the operational load.WarningDon't let the high-risk tier dominate just because it feels most natural — the point of the barbell is protection, not maximum concentration.
- Approach growing money with beginner curiosityTreat the growing-money skill exactly as you treated the making-money skill when you started: with humility, curiosity, and a willingness to spend time learning before deploying capital at scale.Pro tipArmoo says he feels 'like a kid again' studying investing post-exit — the same openness that made him a good founder applies here.
- Set up basic compounding infrastructure regardless of income levelPension, ISA, monthly index fund contribution — these are not just for large capital holders. Jim Rohn's insight Armoo cites: each small structural step builds the identity of 'someone good with money,' which creates a feedback loop toward better decisions.Pro tipEven £100 per month into an index fund is less about the return and more about building the identity and habit before the larger capital arrives.
In Fanbytes' third year, Armoo and co-founders created a base salary plus net profit percentage per quarter. Some months they earned a million in revenue, which scaled their take-home significantly. This made them comfortable with larger numbers before the exit.
After the exit, Armoo worked with financial advisors to build a three-tier barbell: cash and money markets at 3% (low risk), indexes and commercial property (medium risk), and 100-150k angel stakes in early businesses where he holds 40% and the founder operates (high risk).
After selling Entrepreneur Express for £110,000, Armoo deployed £40,000 into spread betting — reasoning that his business instincts would transfer. He lost most of it.
Armoo sold Fanbytes for eight figures and immediately confronted a problem his making-money skills couldn't solve. His instinct — invest the proceeds into a new business and return 100% rather than put money in an index fund for 8% — was the same bias that caused many of his equally successful friends to sit on cash or over-concentrate in their own companies. His wealth managers introduced a barbell structure, and he began studying investing with the same curiosity he brought to building businesses at 16. He describes the learning phase as 'feeling like a kid again.'