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“Why you should focus on your taxes” With Ryan Scott

If left unattended, taxes can be the biggest drag on the growth of your investment portfolio. What this means is that if you let taxes happen TO you, they will take a big bite out of your hard-earned returns. If on the other hand you plan effectively for where and how you invest, and crucially how […]

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If left unattended, taxes can be the biggest drag on the growth of your investment portfolio. What this means is that if you let taxes happen TO you, they will take a big bite out of your hard-earned returns. If on the other hand you plan effectively for where and how you invest, and crucially how you reinvest your gains, you’ll be able to keep more of your money to work for you. For anyone just starting to learn more about financial literacy, investing, and building wealth, it isn’t intuitive that the tax code provides the most benefits for behaviors OUTSIDE of the way many Americans make money. For most American’s, the primary source of income and focus of our financial mind share is earning a ‘normal’ paycheck. This paycheck, also known as a W-2, does not provide much flexibility to the earner to take this or that action to reduce their tax burden. On the contrary, the tax code provides significant tax reduction, deferral and/or elimination strategies if Americans engage in other forms of investing/earning. This is because the code is designed to encourage behaviors that benefit one stakeholder or another. Knowing the major concepts, especially those related to tax-advantaged investment accounts, owning a small business, and buying/managing/selling investment real estate, can enable the everyday investor to proactively manage their tax liability like the pros. Have a proactive tax advisor on your team.

I had the pleasure of interviewing Ryan Scott.

Ryan is a serial entrepreneur and real estate investor who grew up in the Bay Area. In his early career as a consultant for Accenture and IBM, he developed strong affinities for the overlapping importance of shrewd investing and disruptive technology that he parlayed into his successful rental management group, Surfcomber et al, in San Diego, CA. Ryan is always on the lookout for new opportunities and found his passion in the power of the Opportunity Zone program. In 2018, he formed Aspire Fund and, since then, raised over a million dollars and completed his first project in 2019.

Thank you for doing this with us Ryan! Before we dig in, our readers would like to learn a bit more about you. Can you tell us the “backstory” about what brought you to the finance industry?

Igrew up in the bay area, and have lived in San Francisco, San Diego, and now settled in Gilbert, AZ with my wife, step-son, and as of last month, twin girls! My father was a small cap CEO and I idolized him. Rather than pursuing a career as a doctor, lawyer, or astronaut, I grew up wanting to be someone who carried a briefcase and got dressed up for work (even if at the time I didn’t know what he did every day). I studied Psych & Econ as an undergrad at Davidson College in North Carolina before getting my Finance MBA from Duke. I was engrossed on the subject that I used for my thesis: Investing in Short-term Rental Assets using Creative Financing.

I started my career out of undergrad with Accenture, eventually climbing the ranks as a Digital Transformation consultant. I’ve been in the industry ever since, currently in the role of an Associate Partner selling and delivering digital transformations engagements built on SAP software. This is my day job and among other things, it provides the W2 income so important for obtaining real estate financing. A few years out of school, I got hooked on passive income and leverage after reading Rich Dad Poor Dad, never looked back. I missed the 08/09 crash due to lack of cash, pure luck. My biggest hurdle getting into property in 2010 was lack of cash for down payments; I had the salary and good credit. This was a catalyst to learn about using creative financing techniques to buy SFR properties with little to no money down. As an example, I financed a few fixer uppers with credit cards and hard money and then used cash out refinances to wipe out the expensive debt.

I realized early the potential of Airbnb for real estate investing and went all-in in the San Diego market in 2012. For my first big portfolio builder, I bought a $1M beach triplex for $35K using attractive owner-occupied financing and have been acquiring properties ever since. I amassed a portfolio of $4M of my own properties and spun up Surfcomber Vacation Rentals to manage my units and those of many other local owners. I was showcased in multiple publications including some larger media outlets like Entrepreneur, Bloomberg, and the San Diego Tribune. I rode an amazing wave until new entrants saturated the market and I decided to take an exit in order to get creative in a new market with new concepts. That’s when I moved to Gilbert, AZ and became intrigued by the power of Opportunity Zones. I saw nothing but potential and began to research. Eventually I became an expert on Opportunity Zones and created Aspire Fund in 2018. Aspire Fund focuses on bringing affordable, attractive housing to OZ regions. I again went all-in with the capital that I had taken out of my previous investments while soliciting other partners to help bolster the fund. I quickly raised the first million and broke ground on Kachina Pines up in Flagstaff, Arizona in early 2019.

Can you share with our readers the most interesting or amusing story that occurred to you in your career so far? Can you share the lesson or take away you took out of that story?

When I was starting out in my mid-20’s, I was a member of Kathy Fettke’s Real Wealth Network. The group was set up to educate newish real estate investors, especially those who wanted to invest out of state and only part time. Kathy would sometimes use the network to help money find people who needed it in a hurry. One such deal was sent out asking for roughly $160K in a week or two for a quick three month bridge loan for a developer in Ohio that needed the funds to get him through to an exchange transaction on a large apartment building. Honestly, I don’t recall the exact reason and may not have fully understood it, but I knew he was desperate and owned the building outright. I couldn’t come up with more than $30K that quick, so I borrowed $50K from a family member at 5% and brought in my childhood best friend for another $80K. Later, he would tell me he took the money without asking his wife and he was a dead man if we didn’t have it back in time.

I told Kathy we’d be willing to do for the right terms and so we were off to the races. I remember sitting with my friend writing up our term sheet, basically making it up as we went along. We wanted a note in first position, formally recorded, and 18% interest plus a few points up front. That return was going to be a fortune for us. Right before sending it, I suggested to my friend we add something in case he didn’t pay us back after the term, because we needed the money back on time. So, we created a term Penalty Interest adder for every week after the term ended, coming close to a 40% rate. Turns out, he couldn’t pay right away. He called and asked us to be flexible… wanting more time at the base rate, so on and so forth. My friend just wanted to give him another month, but I was having a blast finally being a grown up with a briefcase! I refused to sign any release that didn’t include the full egregiously high payout and threatened that we preferred to take the property in Foreclosure. My friend was worried about his marriage and didn’t want to own an apartment building in a city we hadn’t visited.

We got a lawyer and stood firm, and as you would expect, the developer did actually have the money and paid us off a month and a half later. We still laugh about the moxy it took and the blissful ignorance of youth, but mostly we focused on the 50% IRR (glossing over the unnecessary risk of course).

Ultimately, my key take-away from that experience is: when you’re younger, you can, and I argue should take more relative risk because the upside, in a worst-case you can make up for a loss over a longer horizon and generally don’t have the lives of others depending on you. Plus, the learning that comes from new experiences can be invaluable.

Are you working on any exciting new projects now? How do you think that will help people?

Absolutely. As part of my Opportunity Zone fund, Aspire Fund, we’re doing several innovative projects in Northern Arizona. We like Northern Arizona because there is a tremendous amount of opportunity zone land and less competition from those funds focusing on urban high rises and the like. One of the projects is Kachina Pines Tiny Homes. We are about to bring live the first luxury tiny home vacation rental project in Flagstaff. We partnered with Uncharted Tiny Homes to build four custom tiny homes in a cozy corner of our Kachina Pines pocket neighborhood. The fully furnished homes are amazing and will offer guests the opportunity to stay in one of four different themed rentals. The second project we’re working on is called Grand Canyon Modular Multi-Family Housing. We are in talks with several tech startups to partner to deliver sustainable, cost-effective affordable housing north of Williams, the gateway to the Grand Canyon. The projects will leverage modular development, meaning it is built in a factory vs. onsite. This newer approach has traditionally only been used for single-family homes and brings benefits of speed, efficiency, and sustainability. This project is a real win-win for our investors, the community, and the overall spirit of the Opportunity Zone program! We’re bringing development to an area with a significant affordable housing shortage on land that was previously seen as unprofitable by other developers. We believe the creativity brought to this kind of project is repeatable around the country given the fact that COVID is pushing many American’s to downsize and to live outside the urban areas.

None of us are able to achieve success without some help along the way. Is there a particular person who you are grateful towards who helped get you to where you are? Can you share a story about that?

When you’re starting out, you’re often heavy on ideas and time but short on cash. The skill then becomes demonstrating to those around you that you’ve become wise in your area of focus and worthy of investment, be it debt or equity. Especially for young adults, finding someone who will reward your dedication and initiative by taking a chance on you is more possible than you think because it’s rewarding for the investor/partner/lender as well.

By the time I put together my first large deal for a triplex in San Diego for $1M, I was deeply aware of the market dynamics locally, had a proven track record making money with Airbnb, and planned to personally invest my own ‘sweat equity’ in making the deal a success. When I approached someone in our family about a loan, he pushed me to create the terms that I thought would work well for both of us. I’m so thankful he insisted I do that rather than him because it was real-life experience creating a deal structure and applying what I had learned in books and seminars. We negotiated a bit, again a very helpful experience for me, and agreed. That loan for the down payment, which was relatively small in general, but huge for me at the time, allowed me to accelerate my investing experience and confidence. I’m truly grateful!

I share this story as much for those needing encouragement to seek out the first investment, as for those with funds they can afford to invest. Let those around you know you would consider staking them, but at the same time develop a well thought out plan. This turns dreams into reality and could be worth so much more than the returns.

Let’s shift a bit to what is happening today in the broader world. Many people have become anxious from the dramatic jolts of the news cycle. The fears related to the coronavirus pandemic have understandably heightened a sense of uncertainty and loneliness. From your experience, what are a few ideas that we can use to effectively offer support to our families and loved ones who are feeling anxious? Can you explain?

I’ve had similar feelings recently and my heart goes out to those who are really in dire straits. What I would recommend is to look at this as an opportunity to re-examine your approach to generating income and financial flexibility. As many folks realized during the financial crisis in 2008/2009, what we think of as a stable and low-risk income is often in itself tenuous when push comes to shove. To help us survive and press ahead, we have a short memory, but now many are being reminded again that a seemingly secure job working for someone else is just as perilous as creating a stream of income for yourself. Knowing this can lead to the motivation to reposition yourself differently going forward. How this manifests is different for everyone, but I’m happy to share a few examples:

  • After the crisis, there was a feeling of unease about job security as there is now. I chose to go back for an MBA part-time in order to make me more attractive in my existing role and also open up more opportunities should that job take a turn for the worse. I didn’t need the MBA per se, but I was trying to protect myself against the downside and be prepared.
  • Given the knowledge that even a traditional salary job isn’t fully secure, creating your own business has a different comparative risk profile. Consider starting with a side hustle to get your feet wet while you still have your day job, with the hopes of growing it until you can go full time or rely on it during the interim if you happen to lose your job.
  • Surround yourself with those around you who don’t consider their salary as their key to financial independence. There is a significant group of people who recognize that they need to build cash flowing investments outside of their salary to truly build wealth. Learn how these people think and slowly take action. Building a portfolio of investments reduces your reliance on an employer and provides cushion mentally during these hard times. Basically, consider that the job is not the goal, building a portfolio is the goal and the job is a means to that end. For better or worse, our economy is structured to reward those who invest, not those who simply work.

Ok. Thanks for all that. Let’s now jump to the main core of our interview. As you know the stock market and the economy in general have become extremely volatile and uncertain. Many people “dollar cost average” and put aside a monthly sum into a long term savings plan for retirement, college, or a home purchase. If a loved one or a client came to you and said, “I have been saving and investing $500 every month in an S&P 500 index fund. Over the next few months until the dust settles, should I be doing something else with my money?”, what would you say to them?

At first, I would congratulate them as many folks find even this to be difficult. Then, I would share that what to do depends on what the money is intended for, and even more so, when you’ll need it.

If the money is truly for retirement 10+ years down the road, putting it into a low-cost index S&P index fund is a great option given you don’t need to worry about short term dips or spikes. However, I would then drill down in two ways:

Are you diversified enough? With a little research and no extra cost, you could split those funds into a few index funds that have different exposure, such as a REIT index fund and an International index fund. I would NOT spend precious time trying to find a specific fund that might outperform, as this is hard even for experts. Your time is probably better spent increasing your earning power by learning additional ways to create cash flow or advancing in your career. Rely on the recommendations of the experts but stick to low-cost index funds!

Are you maximizing tax benefits? If you’re investing in a standard investment account, this is likely going to be the least tax-advantaged investment model because you’re investing with after-tax dollars and you pay tax on the gains. A multitude of other investment options should be considered first, such as a 529 plan for college or an IRA or 401K for retirement. This is an area where you owe it to yourself and your family to know at least the minimum and make sure you’re optimizing your cash flows. There are tons of good books and webinars or ask your advisor or someone you look up to financially.

If the money is for a home purchase in the next year, or ideally an investment property purchase, this may be better kept in cash or a high yield checking account or short-term CD. It’s certainly possible the market could tank, so the risk/reward in your time horizon probably doesn’t justify rolling the dice. Interest rates are amazing right now so find a property that pays for the mortgage and let time and leverage do the work for you.

Eventually the economy will recover and rebound. Certain sectors, like travel and hospitality might be hurting for a while. But other sectors, like technology and healthcare, might do very well. If someone wanted to prepare today to take advantage of the future recovery, what would you suggest they do?

I’d tell them to do whatever they can to increase their earning potential or cash flow (could be passive or active). This could be in the form of an advanced degree to position you for advancement in your current field or open up the possibility of a new field. It could also be in the form of learning a new method of building supplemental cash flow, such as renting out an in-law suite in your home or fixing up a home and renting it out. People are going to be downsizing and will need housing.

Are there sectors that provide exciting and lucrative investment opportunities today, specifically because of the volatility and uncertainty?

I really like the opportunity created by the combination of the pull from shifting to a more minimalist culture and the desire to downsize to live within one’s means, and the push from COVID leading people to want to live outside a crowded urban setting and the fact that so many people can work from home. These factors converge on less traditional forms of housing such as tiny homes, container homes, and modular housing beyond the city limits, which offer amazing cost of living in a newer, trendier way. Even manufactured housing has come incredibly far. In our first Kachina Pines development site, phase one included five manufactured homes. We partnered with SABE Homes in Flagstaff and I was blown away by how attractive and well-built the properties were. Most friends, families, and the eventual buyers didn’t realize they were manufactured. Manufactured housing has transformed from the mobile home/trailer stigma and creates a very viable investment opportunity.

When you combine these more efficient and cost-effective ways to develop housing with the availability of land outside of urban areas, you can see very attractive returns in a lease or sale situation. This is the main reason why Aspire Fund has focused on the Opportunity Zone census tracts in the greater Flagstaff area.

Are there alternative investments that you think more people should look more deeply at?

I’m a huge believer that the Opportunity Zone (OZ) program is the biggest tax break of our generation. To over-simplify, the program is designed to incentivize investors to deploy their capital to underserved areas of the country, designated by specific census tracts. The clever way the program does this is by allowing investors to defer taxes on any capital gain until 2026 and by waiving capital gains they make on the investment, as long as it is held for 10 years, and meets set rules intended to increase the impact in the designated zones. My website and many others have additional details on the program and what situations/investors are eligible. In short, every investor plans to have capital gains, so they should be aware of the opportunity.

The real value of the program can come from thoughtful planning to harvest the paper gains sitting in stock or real estate or business investments. The underlying intent of the OZ program is to ‘get this money off the sidelines’ by eliminating the downside of selling–the fact that you have to pay the tax. Here’s an example from my pool of investors: If you have significant gains in a stock portfolio, especially concentrated in a few stocks, that’s outsized concentration risk. Consider selling some of these positions while the market is at the current record highs and investing the gains in an OZ fund to better diversify and take advantage of the unreal opportunity to AVOID capital gains on future gains for your investment.

If a person in their thirties and forties came to you today and said that they have $10,000 that they want to put away today for a long term investment what would you advise them to do with it?

Again, so much depends on their situation, but dollar for dollar I don’t think you can beat the various benefits from a leveraged rental property. By leveraged, I mean that you’re not buying with all cash, you’re getting a loan and making other people’s money work for you. So, I would first use some of the money to get educated and/or find a mentor or partner. But please don’t think you have to know everything and wait forever! You have to start somewhere. (Keep in mind that today’s market is pretty pricey, so you need to be diligent about making sure the rents will cover the mortgage and you can ride out price bumps.).

Here are some highlights of the benefits:

Via mortgage financing, you can easily use leverage to increase your returns through debt (this is theoretically possible with stocks via margin loans but not available to everyone and quite risky). In many cases, you can also end up with a ‘Tax Loss, Cash Gain’ situation in which your property cash flows, but based on other expenses like depreciation, you actually show a loss for your taxes and reduce your overall tax burden. When you sell the property, you can defer the taxes via a 1031 exchange (not possible with stocks unless you consider an Opportunity Zone program). Plus, since this is now a small business, you have a multitude of ways to optimize your personal and business spending to reduce your overall tax burden. For example, you might have a portion of your internet and cell phone used for managing the property and now this is paid with pre-tax dollars. Perhaps at dinner, you and your wife discuss the property, so it is a business dinner. Perhaps you meet with your business partner every year in Miami to review the year ahead (and get some sun).

There are two things to keep in mind. Firstly, you might need to pool money with another partner, or as I’ve done, offer to do all the work if someone else offers to put in the money and you both share in the returns. This approach, termed Sweat Equity, would allow you to increase your return by investing both your time and money. Secondly, leverage works both ways. You can amplify your losses just like you amplify your returns so be wary of any deal where the cash flow doesn’t cover the mortgage and you’re just in it for the appreciation. Appreciation nearly always comes eventually, but can you wait 20 years?

Ok, thank you! Here is a more general finance question. You are a “finance insider”. If you had to advise your adult child about 5 non intuitive essentials for smart investing what would you say? Can you please give a story or an example for each?

1 . Financial independence, or what I think of as feeling safe financially, is about building a portfolio of investments, period.It isn’t about having a bit bigger salary than your neighbor. This is in contrast to previous generations in the US or some other economic systems in the world that have pensions. This is a key realization! If you aren’t moving toward saving and investing, you’re not getting closer to the goal. It may be that it comes later and for now you’re working up the ladder but be honest with yourself. Having a salary is good, but is a means to an end, not the actual end game. This is to say that your salary is important purely because it helps you live now and provides you the cash flow you need to create investments.

This recognition can help guide decisions about how you allocate your time and money. In my family for example, we have three brothers and I’m the oldest. In my career, I chose to work for solid, established firms in a reliable industry. This provided consistent cash flow that enabled me to get the loans required to build a real estate portfolio. However, I was never building wealth simply from my salary, as lucky as I was to have a great job. In contrast, my middle brother chose to go into the startup world and forgo the higher salaries in favor of significant equity in the hopes they would hit it big. Even after years of not, when this came through, the returns are astronomical compared to any elevated salary I had. Be conscious about your decisions and the tradeoffs. Simply having a ‘good job’ isn’t what is rewarded.

It has to be said here that immediately upon working for yourself, you’re now building equity not just receiving a paycheck. You’re like my brother forgoing larger paychecks for the big payoff. Our system is designed to reward this risk-taking.

2 . All assets, things you buy, own, or put a down payment on, are not created equal. Some assets can be great investments because they reliably appreciate over time. This is generally obvious for things like stocks and bonds, but it also relates to your own home and rental property. In contrast, other assets are simply bad investments or not investments at all (they are expenses), most notably your car. As a result, money you’re putting into a down payment for a car is similar to money you’re spending on a nice dinner. It better be enjoyable because it’s gone. On the flip side, money you put into a down payment for a home is like putting money away in a stock investment account (assuming the home is reasonably priced). With this simple mindset, you should be able to drastically transform how you evaluate your largest purchases. It simply isn’t prudent to spend a lot of money on a fancy car early in life. On the flip side, spending a bit more to get a home rather than a rental, or even a nicer home instead of a nicer car, will pay dividends for the long-term investor.

3 . If left unattended, taxes can be the biggest drag on the growth of your investment portfolio. What this means is that if you let taxes happen TO you, they will take a big bite out of your hard-earned returns. If on the other hand you plan effectively for where and how you invest, and crucially how you reinvest your gains, you’ll be able to keep more of your money to work for you.

For anyone just starting to learn more about financial literacy, investing, and building wealth, it isn’t intuitive that the tax code provides the most benefits for behaviors OUTSIDE of the way many Americans make money. For most American’s, the primary source of income and focus of our financial mind share is earning a ‘normal’ paycheck. This paycheck, also known as a W-2, does not provide much flexibility to the earner to take this or that action to reduce their tax burden. On the contrary, the tax code provides significant tax reduction, deferral and/or elimination strategies if Americans engage in other forms of investing/earning. This is because the code is designed to encourage behaviors that benefit one stakeholder or another. Knowing the major concepts, especially those related to tax-advantaged investment accounts, owning a small business, and buying/managing/selling investment real estate, can enable the everyday investor to proactively manage their tax liability like the pros. Have a proactive tax advisor on your team.

Let’s use a striking example to illustrate the point. As mentioned, what you do with the gain when you sell an investment can affect the amount of taxes you pay. For example, consider the investor who bought Apple stock for $100K and it has risen to $400K in the last ten years. If they sell the stock and go to buy new stock, they might pay 33% in taxes or $100K to the IRS. Then they can invest the remaining $300K in other stock. Suppose instead they knew about the Opportunity Zone program and wanted to diversify into real estate while optimizing taxes. In this case, they can defer taxes until 2026, so they would invest the full $300K gain in an OZ fund and the $100K in any other investment opportunity, enabling them to receive returns on $400K of invested capital versus $300K. Over and above this good incentive is the incredible incentive that capital gains earned while in the fund will not be subject to taxes after a 10-year hold.

4 . Debt gets a bad rap, but not all debt is created equal. Turning debt into a tool in your toolbox can be the catalyst needed to accelerate your financial freedom. Two main points here. First, debt can be tied to a good investment, to an expense, or to a bad investment. Second, debt tied to a good investment creates one of the most powerful forces in finance–leverage (the most powerful being compounding). Leverage, or using debt to buy an asset, means you can buy more assets than you could with just your cash so you get to take advantage of the financial returns on a larger asset by using other people’s money. The key to this is to make sure what you’re buying is an investment, not an expense. Here are a few examples:

  • A car is NOT going to appreciate or produce cash flow, so this is just an expense. As a result, taking out a loan to get a car that is really more than you can afford is a BAD idea. If you’re unsure, it is probably too much of a car.
  • A rental property is an investment and leverage, means you get to enjoy amplified returns. If you put 20% down on a $100K home and it goes up in value by 10%, you’ve made $10K on your $20K for a 50% return, even though the home only went up 10%. The reverse is also true, so this means only buy when the cash flow covers the mortgage, so you don’t have to sell when the market is down.
  • Higher education that won’t increase your earning potential is likely NOT a good investment and the debt to finance it makes it worse. If it will improve your salary somewhat, try to calculate if it is enough improvement to justify the significant debt payment. You’re borrowing from your own future, the money isn’t free.
  • Buying your own home can be a great investment, especially because this can be the easiest and cheapest debt to get. But here is a tip so you don’t turn the home purchase into disaster: consider buying a home that you could rent out and cover the mortgage, just in case. This does two things: first, it means that if you have to exit that property for any reason, you can hold on to it if the market is in a dip. Over the long term, prices have always appreciated, and home ownership has been central to building wealth. Second, if it makes sense as a rental, then prices are probably reasonable, and appreciation is certainly possible. I remember in 2010 I bought my first SFH in the bay area and it was going for $310K and would rent for about $2500, making it a decent rental. Even when we sold it for $420K a year or two later, the $2700 rental rate still made it reasonably priced. However, when it last sold during the crash in 2008, it was sold for $900K! A simple rental calculation can show if something absurd is going on. If you live in an area where no home would work well as a rental, then the home is a riskier investment, even if it is accurately priced, so be wary.

5 . If I could add an extra credit 6th nugget, it is that just because you qualify for a loan doesn’t mean it is a good idea. You would like to think lenders carefully assess whether it is a good idea for you, but they DON’T. There are tons of reasons they may give you a loan you shouldn’t take.

Can you please give us your favorite “Life Lesson Quote”? Can you share how that was relevant to you in your life?

“If you think you can, or think you can’t, you’re right.” It’s been attributed to many people over the years, but most often is credited to Henry Ford.

For me, I try to use this quote when I have an idea that is much larger in scale than I’ve encountered before, and I’m overwhelmed. Often in meditation, I observe that I’m actually trying to convince myself I can’t do it. I try to look back at other instances where I said the same thing about a new idea but did it anyway and was successful (or even unsuccessful but gained valuable experience). For example:

  • When I was 26, jumping from small single-family rentals managed by others in Memphis, to personally managing $1M+ high-end vacation rentals in San Diego.
  • When I was 31, earning the trust of the CIO of a major shipping company and moving to Denmark to plan their global enterprise-wide software implementation.
  • When I was 36, jumping from investing on my own or with one partner to creating Aspire Fund and bringing in outside investors, returning over 20% IRR since inception.

I like to combine this retrospective point of view with the law of attraction concepts and transform the way I talk about the idea. If I can change the way I talk in my head and with others to “I’m going to do a $50M development in 2021”, from “I’d like to” or “I’m hoping to”, my sense of conviction and motivation flips and it’s off to the races.

You are a person of enormous influence. If you could inspire a movement that would bring the most amount of good to the greatest number of people, what would that be? You never know what your idea can trigger. 🙂

As mentioned before, a key to my success in my mid-20’s was obtaining the capital needed to start doing meaningful size deals earlier. A $50K loan from a family member, and the open-door mentorship he provided along the way, was the perfect combination to enable me on my path. I share this because of the outsized impact it could have if we were able to enable the success of a couple young, hungry entrepreneurs in locations across the world. From a trickle-down perspective, this would improve communities without the hurdles of large-scale investment. This approach blends the hands-off approach of an Angel Investor, Peer to Peer Lender or Charity with mentorship approaches that provide support and coaching but the need for capital unresolved.

Specifically, I’m talking about a movement, supported by the technology platform to facilitate it, where successful people could choose to be the crucial source of capital and guidance that the family member was for me. In a way, angel investing, but with a personal component and far less money so we could bring in more angels. The capital could be in the form of debt or equity or any other reasonable structure. Shark Tank has a similar approach in that they customize the investment terms for the deal and their investment comes with various support from the sharks. If we could leverage the power of crowds the way Kickstarter does, but limit investors to just a few who want to be more involved…who knows? For anyone that has helped anyone else succeed, the ‘good’ to come of such a movement would certainly not only be for the recipients. There is a tremendous benefit for those donating their time and money.

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