What is ARROGANT MONEY?  ARROGANT MONEY sometimes disguises itself as conservative, careful decision making.  But at the end of the day, it’s simple foolishness, disguised as experience.  I’m Bryan Ellis.  I’ll help you to know if yours is ARROGANT MONEY right now in Episode #164.

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Hello, SDI Nation!  Welcome to the podcast of record for savvy self-directed investors like you.

Arrogant money… it’s a funny thing.

Ever heard of it?  It’s kind of like “Old Money” because it really refers to the owner of the money more than the money itself.

Arrogant Money describes the person who has had some success in one kind of investment, and thus presumes himself to be expert in all others as well.

I’d like to tell you about a recent example of Arrogant Money… and I hope you hear the caution in the story.

There’s a guy named Will.  Real guy, but that’s not his real name.

Will is in his 80’s and is clearly a very smart guy.  For years he focused his investments on note investing.  In other words, he’d lend out his money to home owners at a very high interest rate, and would secure his capital by getting a lien against the property.

So far, so good.  Will did really well for himself.  He did some real estate deals along the way too… some rehab deals and some other stuff.  But at the core was always his note investing strategy.

And you know… that worked very well for him.  It’s a fundamentally wise thing to lend money against valuable assets.  He was collecting 15% on his money… and just about anybody would be happy with that.

So, several months ago, Will called me up.  He heard what we were doing in Phoenix, in which we were working with clients who provided capital, which my team then used to purchase, renovate and resell those properties… and profits were split.  And by the way… those deals are doing very well, and the results have been very strong.

But Will called me up back then and we talked.  It was clear that he had plenty of capital to invest.  But what was also very clear was a “my way or the highway” type of attitude.

So… who knows?  Maybe I caught the guy on a bad day.  So I certainly didn’t close the door on working with him, but he seemed more interested at the time in selling off his portfolio of notes than doing anything else.  I was interested… but not terribly so… because I knew – whether he did or not – that many of his notes were simply not compliant with new regulations, so they had the potential to really blow up.

So, I hear from Will again this week.  He’s heard what we’re doing in Stockton – very similar to what we did in Phoenix several months ago, where we’ve got lots of happy clients – and he’s interested.

So, I explain the deal to him.  Not particularly dissimilar to what we did in Phoenix.  Basic idea is – we use client capital to buy, renovate and resell the property, then we split the profit.  There are no guarantees on the profit, but history has shown results that are, shall we say, substantially superior even to what Will has been accustomed.

That’s when Will drops the bomb on me.  His money won’t be invested into anything where he doesn’t have a guaranteed rate of return, and what he wants is 25%.  Barring that, he wants to structure the transaction totally differently to totally suit his purposes, and to the detriment of the other clients involved.

You know, Will has every right to be cautious with his capital, and I applaud him for his concern.

But in his case, caution has transformed into arrogance.

Will believes his capital is “more worthy” than others.

And you know, that’s ok.  But here’s the thing, folks… this is the lesson I want you to get out of today’s episode:

There’s an ebb and flow to global capital markets.  Sometimes markets are short on capital and long on opportunity… sometimes, markets are short on great opportunity and awash in capital.

Today’s environment is definitely the latter.  There’s a LOT of cash out there just waiting to be deployed, such that any worthy investment is not having difficulty attracting capital from reasonable investors.

People like Will do really well when there’s a capital shortage.  But when there’s not… and there certainly isn’t right now… people like Will see their investment portfolios dwindle through underuse.  Inflation is the killer of arrogant money.  Arrogant money sits, and sits and sits… ready to be deployed, but never finding an opportunity that’s exactly the right one.

Not because the right opportunity doesn’t exist… but because it isn’t the PERFECT opportunity.

My friends… there’s no such thing as PERFECT opportunities.  There are only opportunities.  Wise opportunities and unwise opportunities.  And at the end of the day, arrogant money uses the only arrow in it’s quiver:  Rejection.  Rejection of unwise opportunities, sure.  But also rejection of wise opportunities.

That, my friends, is a very sad thing.

So, don’t be like Will, mmmmkay?  Hehehehe

Why is this on my mind?  Well, it’s far more than just the fact that this conversation with Will happened yesterday.  It’s because we’re coming up on Thanksgiving tomorrow.  And for me, that’s the most meaningful holiday of the year because gratitude is such a central key to success.  I mean genuine real gratitude… the kind of gratitude that acknowledges that none of us are here alone, that none of us succeed independently, that all of us are blessed far beyond what we deserve.  Gratitude, in other words… is the very opposite of arrogance.

And as the Good Book says… pride comes before the fall.  May that never be your fate.

Folks, I’d like to express my deepest gratitude to you for listening to this show.  This year – 2015 – has been an amazing one for me.  Very, very hard at times, to be honest, but so deeply rewarding.  While I’m really proud of how well this show is doing, and how well our clients in Self Directed Investor Society are doing… the thing I’m most proud of for this year so far is my relationship with my wife.  We’ve worked very consciously to grow and become better and stronger for each other, and I’ve got to tell you… the effect it’s had on every other part of my life – including business – has been profound.  Carole, thank you, thank you, thank you.  I can never, ever thank you enough.  You’re a spectacular woman and I love you with all that is in me.

Happy Thanksgiving, everyone.  You people are special to me, and I really do mean that.  So I hope you’ll…

Invest wisely today… and live well forever!

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