Freedom Through Passive Income
Freedom Through Passive Income
Ep 341 - 6 Investor Success Principles
Yesterday, we were talking about the 7 investor mistakes. We wanted to follow that up with the good thing. So learn from the mistakes and then learn from what goes well, what high net worth investors are doing, and is performing for them.
Consistency + Boring = Wealth: Ep 96 - Consistency + Boring = Wealth
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Today, we want to follow that up with concepts used by successful investors that we can implement to reach our financial goals.
1. High net worth investors invest in what they know. They are comfortable with where they place their money. They rely on their advisors and teams to guide them based upon a set design or goal. They do not allow outsiders to push or influence them into making an investment for which they are not prepared
2. Long term successful investors invest in the boring. They prefer assets with a history of predictability and performance. These assets may not generate a buzz like the newest investment vehicles, but they have proven their worth over time
3. Invest long term and seek illiquidity to shield your investments from broader market volatility
4. Invest resilient assets in the face of inflation and recession
5. Successful investors are interested in compounding wealth, instead of hitting the jackpot. They seek consistency and reliability over time rather than look for the home runs
6. They seek significant tax benefits to preserve the income they have earned
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Hey everybody! Flip and Dani here, founders of the Freedom Real Estate Group Family of Companies, and welcome to another episode of our podcast, which is called Freedom Through Passive Income. That's right, and welcome to another episode. And this episode is called "6 Investor Success Principles". You know, when you asked me the title of the podcast, I almost said that, because you kept practicing six investor success principles. So you said, and the name of the podcast is, I wanted to go, the six investor success principles. No, that's the episode. So he was saying, can you get any more S's in there? Yeah, I had to work on that one.
So this is, yesterday, we're talking about the seven investor mistakes. And so we wanted to follow that up with, you know, the good thing. So learn from the mistakes and then learn from what goes well, what high net worth investors are doing, and is performing for them. Whenever you surround yourself with people, you want to do both, what did you do wrong? What did you do right? And you take both of them and you learn and you grow, so that you don't have to make the same mistakes or take the time to learn what is successful.
So I'm going to start because I'm odds and you're even. I'm even. All right. Okay. So number one, high net worth investors, successful principles for high net worth investors. Number one, they invest in what they know. And if they don't know something, they rely on someone who does know. So I am going to not say one of the things that I wanted to say when I read that, because there's an episode that we did that I think applies to something else on here. Let me just look, just to be sure, no, it doesn't. Okay, so we did multiple podcasts episode one in particular about being very comfortable with what you're doing. So we said, you don't need to know it all. You need to trust the team who knows it all, right? We want to be that team for you when it comes to real estate investing, because we know real estate. And we want you to be able to learn from us. And we want to give you the knowledge and answer your questions when it comes to that.
But you have to number one, trust that team. So we need to earn your trust. If you don't trust us, don't invest with us. That's rule number one, find a team you trust. Rule number two is be comfortable, don't let anybody push you into an investment that you're not ready for. And if for some reason you don't like real estate, weird, but there's some of you that don't, well, then don't invest in real estate, you know, find other opportunities that you like, and you feel good about. We like real estate, because when it comes down to all of the things that we're presented with, and we're presented with so many opportunities all the time, this is what feels the most solid, the most predictable, the most reliable, and that's what we want for ourselves. And if we want that for ourselves, that's what we want to do for investors, we don't want to offer investors something that we would not personally invest in. So you don't have to know it all, you have to know a team that knows it, and you have to trust them. And you have to be comfortable with the vehicle that they are providing. And for us that happens to be real estate.
Yeah, I just thought about investing in crypto. Eek! And ever since we invested in crypto, all I want to do is just get my money back. I don't want to make money in crypto, I just want to get back to even. Hahaha! I'm not gonna let you, just because I think there's a future in crypto that we said we're gonna leave that money alone. Yup, I'm not touching it. It was either gonna burn or someday it's gonna go woosh! Yeah, it's a burden. I'm waiting for like 10 years from now and it might actually go up.
So here's number two, they invest in the boring. Talk about boring. They prefer assets with a history of predictability and performance. These assets may not generate a buzz like the newest investment kids on the block, but they have proven their worth over time. That's perfect. When you just talk about crypto, crypto is the new kid on the block. Right? It has been for a while. A lot of people with a lot of disposable income have tested it up just like us, you know, we just said here, here's the money we're comfortable with, we're gonna go ahead and put it in there. We're gonna leave it alone. And like Flip has described many times we've lost our butt on it. But we're still gonna leave it alone and it might come back, it might not whatever, we chose something that was kind of high risk knowing that we were just putting that money to sit and waste. We didn't need it. So boring is another episode we like, I think it's in the title. If I googled the title on our podcast, I think I'd find it but we talk about that boring long term. Those are the best investments. So go back to that episode, find that episode and listen to it. Because there's a lot of tips that we don't have time to share in this one that will explain to you why boring and long term is really really advantageous to you as an investor and your success going forward. And that's why successful high net worth investors have it on their list of success principles.
Number three, they invest long term and seek illiquidity to shield their investments from broader market volatility. And the illiquid piece of this is what I was getting to in coupled with the boring part. So that I think it might be the same it might not be, so AJ, when you're editing this, if you can find the episode we did about boring, find the episode we did where we are talking about liquidity and liquidity not always be a good thing. If you need help with those, let me know, but put the links so that people who are listening or watching or can view the description, they can find those links and go back to them. Because we don't have time in this episode to talk about this. But there's a reason why successful high net worth investors are saying boring investments and illiquid investments. Because having access to your money is not a good thing all the time. You want to have access to the things that you need as an emergency savings. But you don't want to have access to things that are supposed to be building long term wealth. And we go into great detail in the episode when we're talking about illiquid investments.
All right, your turn. We are on, there we go. Number four. Yeah, I should have, sorry. They invest resilient assets in the face of inflation and recession. That's right. So we're in that environment right now. So right, you want to look and see what has been proven in the past in similar environments. And so we know multifamily has proven in history of even more volatile environments that we are in right now. And that's why we're so strong in the multifamily market. And in working with those types of investments, that will be our primary asset class going forward. There's some other pillars to our future and vision of Freedom Capital Investments and what we want to invest in for the reasons of the market that we're in. But multifamily is first and foremost. So I think that that's what hits home about that point. Yeah.
And then number five, I believe, is they're interested in compounding wealth, instead of hitting the jackpot, they see consistency and reliability over the one off homeruns. And that is 100% goes back to the boring, the illiquid. And the fact that we're putting in some compounding return options for our investors is because we too believe in this, we want something that is strong and consistent, dependable, reliable, that is what we want for us so that we can sleep at night feel safe about where our money is how it's growing, what the future looks like, based on its growth, and the preservation of capital and getting that back to us. We're not out there, we don't put a lot of our money into crypto, right? That's the shot at glory that we put very little in, we're not looking for like a jackpot. But we might have fun playing with it. But it's very little compared to the amount of wealth that we put into the more stable asset classes. And that is another success principle. Yeah, I think the funds have worn off on those.
And number six is they seek significant tax benefits. Saving a penny is just as valuable as adding another penny to the cover. That's right. A dollar earned, dollars saved. It's all the same, right? So if you save $15,000 in taxes, that's $15,000 in your pocket, right? So it doesn't matter tax benefits, people don't really understand the tangibility of oh, I saw I get that tax deduction, well, I don't really understand, it's money in your pocket. That's what we were trying to get you to understand for those of you who are still kind of lost on the tax thing. And we're going to, we're creating a course in 2023, we're really going to dive into that. And again, we try to do everything that we do is simple, simple, simple, we don't want to be the CPA and the financial planner or whatever that's going to throw so much information at you that you're just more confused than when you started in the absolute simplest way, we're going to try and provide examples that really show you the benefits of what an investment does, via the tax savings. So that next time you see hey, you get up to 50% depreciation on this, you're gonna go wow, that's awesome. That's money in my pocket, and you're gonna get it because of the way we're going to try and help and teach you but tax benefits are absolutely one of the biggest success principles that people probably don't understand. And we're going to do the best job that we can and trying to educate more people about that. Awesome. I love this. Yeah.
Well, we hope you enjoyed this episode, make sure you head on over to our website, www.FreedomCapitalInvestments.com to join the investor club. We've got a lot of stuff going on at the end of this year. And we already have stuff going on at the beginning of next year. But you need to reach out to us, make sure you're talking to Ben and or CJ to find out all that information before it's too late.
But we'd like to end all of our episodes with Invest Smart, Live Happy. Bye everybody!
Nothing on this show should be considered specific, personal or professional advice. Please consult an appropriate tax, legal, real estate, financial or business professional for individualized advice. Opinions and information on this show are not guaranteed, all investment strategies have the potential for profit or loss.
Transcribed by https://otter.ai