Ever had a BIG SETBACK in your investing objectives?  Yesterday, I had one, and I’d like to tell you about it so we can all learn together.  This one is expensive, folks… and will be good for you to know.  I’m Bryan Ellis.  This is Episode 158.

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

Folks, I’m guilty of something that I’d like to confess.  It’s not really a sin or a moral failing, but something that I need to correct nonetheless.

This show… which I LOVE doing… I mean I truly LOVE it… every episode is like a dream fulfilled for me, well… I’ve not been as fully authentic with you as I want.  That’s not to say I’ve been deceptive… that’s far from the truth.  In fact, I pride myself on offering you brutal honesty.  And that must come through, given then really nice review that Dave the Cop left for this show on iTunes where he said “Bryan’s program and information is refreshing!  His honesty and integrity come through.”

Dave, I really… REALLY appreciate that very much.

But where the authenticity issue comes into play is this:  I’ve been providing information to you – good information, relevant information, actionable information – and been doing it in a highly scripted manner.  Every morning, I write this show – word for word – and then I record it.  I try my best to make every single word perfect, every pause meaningful and every topic timely and relevant.

And I think, based on the way you folks have responded, that I’ve done pretty well… and I thank you for your kind feedback.

And here’s the thing:

I’m a true self-directed investor.  Like, at my core, that’s what I am.  I LOVE this stuff.  I love it!  The reason I do this show is because this is what I think about all day long every single day.  I think about investment opportunities, I think about legal constructs, I think about ways to help people grow their portfolios.  This is really who I am.  This is me at my core, and I LOVE this stuff.

But you know… my existence as a self-directed investor is NOT well scripted.  It’s pretty chaotic sometimes.  Sometimes – like yesterday – big fires appear out of nowhere that must be faced and put down.  And frankly, up to this point in the show, I’d never consider sharing that kind of stuff with you.  Even though I’ve never really admitted it to myself until now, the truth is that I hoped you folks would see me as some sort of exalted aspirational figure with all of the answers… as the wise man at the top of the mountain, so to speak.

And I still aspire to that.  But from now on, I’m going to be more transparent with you about what’s happening here with Self Directed Investor Society on a day-to-day basis.  Not because you care about my business, but because, at the core, remember this:  You and I are the same.  The exact same.  The reason I do this show is to advance my own self-directed investment objectives by way of providing value to my listeners.  That’s 100% of my motivation, and nothing else.  So, you and I are the same… and hopefully my experiences can benefit you.

So the big lesson from yesterday:  Securities law.  Let me set the stage for you:

Like I said, the entire reason I do this show is to advance my own self-directed investment objectives by way of providing great opportunities to my clients.  We’ve got a deal going on right now whereby we’re taking on new clients for a turnkey flipping program in Stockton California.  Frankly, the response has been overwhelming.  We’re having an event out in Stockton in early December, and within 3 days of opening that offer, it was full.  If you want to learn more about it for the next round, you can check it out at SDIRadio.com/stockton.  But bottom line… the response has been amazing.

Now, understand that I’m not making a pitch to you right now for the offer at SDIRadio.com/stockton.  I’m just giving you some context.  So the way that deal works is that our clients put up some capital, which my team then uses to purchase a property, renovate it and resell it.  We then share the profits.  Everybody wins… it’s a good thing, with a massive amount of successful history to prove it.

So here’s the deal… a lawyer out there in the great state of California told me that he sees this deal differently than other lawyers I’ve spoken to, and that he believes that we could have some trouble with securities laws.  Now folks, if there’s one area I don’t want to get tangled up in, it’s securities laws.  When you mess up there, it’s go-to-jail type of stuff.  Now, securities laws don’t matter until somebody loses money, and I have no plans for anybody to ever lose money.  But until I have a crystal ball, I’ve got to plan for the worst, right?

Well, bottom line… this lawyer says that we need to form a particular type of investment fund – called a 506b – that allows us to raise money from accredited investors, and that exempts us from those securities concerns.  Ok… fair enough, I think… let’s do it.  It’s inconvenient because it’s going to introduce a minor change into the structure of the deal that I’ve already mentioned to my investors, but it’s a very small change for them, so I don’t think they’ll care.

But then comes the big news – it’s going to cost a LOT of money to do this.  I’m not going to say how much, but solid 5 figures.  As in, I’ve got to wire him the money tomorrow… and that’s only because today is a bank holiday.

By the way… Veterans:  Thank you for your service.  Thank you from the bottom of my heart.  Thank you on behalf of my family.  Just know that many of us – most of us – in America are truly, truly, truly grateful to and for you.  May God bless and keep you.

So, just like that, a huge expenditure that I wasn’t expecting… a painful expenditure… one I didn’t really want to make.

But here’s the upside… and something I want to help you to understand… now, I can run that part of the business with confidence that I’m compliant, and we can do many, many millions of dollars in real estate business in the next few months… and everybody wins!  My clients will enjoy exactly the same profits, my business partners will enjoy exactly the same profits, and I will enjoy exactly the same profits, too… minus this big chunk.  But that’s ok.  That’s the way it’s got to be if you’re a self-directed investor who serves the interests of other investors, as I do.

Here’s one more bit of vulnerability:  The fact that I didn’t know this already – about the need to structure our business in that particular manner – well, it’s disturbing. In this case, we took care of it before there was a problem.  But it makes me wonder… what other things don’t I know?  What other lessons of experience have I yet to learn?

Thankfully, we’ve endured no real calamities in our business in the past, and God willing, it will stay that way.  We try very hard… and focus very hard on getting great legal advice… to avoid problems in the future by being smart today.

That’s all for today, my friends…  Tune in tomorrow and I’ll tell you more about the particulars of raising money like we’re doing.  You’ll benefit from that regardless of whether you want to raise money, or if you’re considering partnering with someone like me who is doing so.

Invest wisely today, and live well forever!

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