Self Directed Investor Talk: Alternative Asset Investing through Self-Directed IRA's & Solo 401k's

Porn, IRS audits, and a SELL EVERYTHING warning from a massive international bank. Today’s show is a doozy, my friends. I’m Bryan Ellis. This is Episode 185.

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Hello, SDI Nation. Welcome to the podcast of record for savvy, self-directed investors like you! Get ready for another dose of predictably profitable thinking!

Hey just a special note: Tomorrow is Episode #1 of a NEW SDI podcast called SDI Money Law. Hosted by attorney Tim Berry, this show is powerful and unique. You see, affluence and wealth are certainly blessings… but they’re not blessings without cost. The affluent person or family faces challenges that the less affluent are not even aware of, and many of those challenges are of either a financial or legal nature. That’s what SDI Money Law is all about… it’s the ONLY podcast that focuses exclusively on the intersection of the law and your money and has a very simple goal: To teach you to use every advantage the law allows for making better profits, protecting those profits from wealth vampires, and passing that wealth to future generations. In short, it’s all about using the law to be a better steward of your financial blessings.

The host, attorney Tim Berry, is an incredibly sharp attorney with clients ranging from normal affluent people all the way up to people who have 3 commas in their net worth number. Yeah, think that one over hehehehehe. He has extraordinary expertise in 3 areas: Tax law, high-end asset protection and self-directed retirement accounts. And, as it turns out, all 3 of those areas are quite heavily related. In tomorrow’s show, you’re going to learn how to save $25,000 on LAST YEAR’S tax bill… so be sure to tune in. To get a notice about the show, text the word SDIMONEYLAW with no spaces or periods to 33444. Again, text the word SDIMONEYLAW with no spaces or periods to 33444.

Ok, people… Porn. IRS audits. And an incredibly dire prediction from a major bank. Where to begin.

Let’s go with PORN! Actually, that one is all about the IRS, too.

The IRS recently did an audit of disciplinary practices for its employees. That very notion brings up some big questions for me, as I wonder what exactly constitutes unacceptable behavior to the IRS on behalf of its employees, as I’m hearing more and more reports of the IRS returning to the bad old days of very heavy handed tactics during audits.

Anyway, in this disciplinary practices audit, it was revealed that an attorney at the IRS viewed sexually explicit material on his computer for 2-3 hours per day for a period of four months.

Let’s see… one month has about 20 work days. Four months is 80 work days. 80 work days times 3 hours per day… let’s see… that’s 240 hours.

240 hours viewing porn at the IRS by one of their attorneys. That’s a whopping SIX WHOLE WEEKS in aggregate of this guy getting his jollies at the expense of you and me as taxpayers.

What was that expense? Well, based on standard pay tables, it’s safe to say his salary was AT MINIMUM $100,000 per year. Thus, using the most conservative analysis possible, this guy was paid over $11,500 to act like a dirtbag during work hours.

But don’t worry… the IRS really came down hard on him. They suspended him for 3 days. The report didn’t say if the suspension was with or without pay. What do you figure that guy did during those 3 days? Hehehehe

But hey… at the end of the day, this gives us all a new strategy to consider during audits: Make sure that the revenue agent you’re facing is bombarded with voluminous amounts of porn during your audit. Maybe the 3 hours a day they’ll lose to smut-surfing will accrue to your benefit!

On to a much more serious topic: RBS, the Royal Bank of Scotland – a HUGE bank with over a trillion dollars in assets, revenues north of $15 Billion per year and over 100,000 employees – issued a particularly dire warning.

Their suggestion? “SELL EVERYTHING”

RBS is predicting a cataclysmic year and is recommending that their clients SELL EVERYTHING except for high-quality bonds. They’ve suggested that their fear for their clients is the return OF their capital, rather than a return ON their capital.

And RBS, like a few others, have said that they think this year is setting up very similarly to 2008.

Sounds pretty awful, doesn’t it?

Well here’s the thing: I don’t buy it, but I hope they’re right. Yes, I think this year could be pretty turbulent in the conventional financial markets. The Chinese stock market is in horrible disarray, and is being made far worse by the Chinese government’s insistence on manipulating that market. The U.S. Stock market has already fallen by more than 1,000 points this year, with just 13 days into the new year. And oil prices are absolutely freefalling, though the immediate impact of that for you and me is distinctly positive.

Here’s why I don’t buy it: There are certainly some negative forces at work in the world economy, and here in the United States. No doubt about it. And I DO expect the U.S. stock market to have a really rough time this year.

But I just don’t’ see a single CATACLYSM-level driver for destroying the markets like existed back then. Back then, everything came to a head at once for the mortgage crisis and the broader economy. Hey, here’s the harsh truth: It really wasn’t that bad, even back then. According to the St. Louis Fed, mortgage defaults never exceeded about 11%. That means that even at the worst of the worst times, 89% of mortgages in America were being paid as agreed. Think about that in your own portfolio: if 89% of your investments performed exactly as expected but 11% of them hit a rough patch… you’d probably be just fine… probably even happy. But I digress, as government math isn’t real math, and real people are invariably smarter than our friends in Washington.

I do see turbulence ahead for the stock market, because I really do believe that the Fed will be shown to be a paper tiger, as the only real tool they have – interest rate adjustments – will do nothing to spur the economy.

But what about those of you investing in real assets, like real estate or precious metals or even other paper-based assets that you really control, like private loans or even real businesses?

Well, the wisdom of ownership of real assets always comes to the fore in times of economic weakness, and I suspect this time will be no different.

But recall the standard used by wise self-directed investors for making investments: Every asset must be SIMPLE and SAFE and STRONG. This is a time for prudence. Part of the safety standard should be this: Is there a margin for error? In other words, if the U.S. stock market really melts down, does that inherently mean your portfolio will suffer? If oil trades down to $20 a barrel… or even back up to $150 a barrel… what would that mean for you?

These questions matter, my friends.

Here’s my advice: Boring investments that throw off cash will win the day. Boring cash producers. Boring cash producers. Boring cash producers. That’s what you should be looking to in 2016.

BUT… never fear, my friends… BORING doesn’t mean unprofitable. In fact, we’re getting ready to do a major capital push into one of the most boring markets I know of. We’re going to buy a lot of rental property in this market and rent it out. Why? We can collect nearly 20% of the property price every single year… and those rents won’t be effected even slightly in the event of economic cataclysm.

But this market is boring. I’ll bet nobody has ever visited this place to vacation. And you probably would never brag to your friends about the locale… but the NUMBERS are very, very sexy. You’d definitely brag about the numbers.

Want to know more? Join me on RIGHT HERE on SDI Radio for our next episode on Friday… and I’ll tell you all about it. To be notified about that episode when it’s available, text the word SDIRADIO with no spaces or periods to 33444 right now.

And in the mean time… invest wisely today, and live well forever!

Hosted on Acast. See acast.com/privacy for more information.

Today’s episode is particularly raw and direct.  It’s about my TERROR in giving advice to you about investing, and about being responsible for the capital of others.  I’m Bryan Ellis.  This is episode 184.

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Hello, SDI Nation!  Welcome to the podcast of record for savvy self-directed investors like you!  Get ready for another dose of Predictably Profitable thinking!

Monday is, without a doubt, my very favorite day of the week.  I love the weekend, and the time with family and friends, and some rest.  Enjoying the waning days of my first daughter’s teenage years… watching my 15-year-old blossom… seeing both of those girls absolutely dote on their younger brothers, who are 1 and 2… and seeing those little boys transition from tiny infants capable of nothing into actual little people… it’s such a sweet, wonderful thing... and that time spent with and focused on them actually helps my mind to recharge and be ready for another great week of work… and that’s certainly the case today.

I’m going to admit a certain terror to you, my friends.  I hope you’ll bear with a show of a bit more personal nature today.

But first – if you’re in the Atlanta area, please be sure to stop by the Georgia Real Estate Investor’s Association meeting tonight.  I’ll be the featured speaker there, and I’ll be talking about how to raise capital for real estate transactions.  Now you, my friends, are more likely to be an investor of capital than someone who raises it.  But I GUARANTEE you’ll find it fascinating, because you’ll see in graphic detail the reverence with which I view the notion of controlling or influencing the capital of my clients.  And besides, I’d LOVE to meet you and even have a drink with my listeners after the presentation, so when you come tonight, please do be sure to introduce yourself to me… I’d really love to meet you.  Anyway, to be sure you get the notice with information about the time and location for tonight’s meeting of the Georgia Real Estate Investor Association, just text the word SDIRADIO with no spaces or periods to 33444 and I’ll send the reminder to you.

Folks, as you know, I give out financial analysis and suggestions regularly on this show.  And you may also know, I run a private equity fund that focuses on purchase and resale of houses in certain strategic markets.  It’s been doing very, very well.  In fact, on tomorrow’s episode of Self Directed Investor Success Stories, I’m going to profile the latest deal that we closed this past week.  I’m totally confident you’ll be impressed.

And you know, that success wasn’t by accident.  I’ve really done my homework.  I’ve really checked out the markets in which we focus; I’ve researched the PEOPLE who are working for and with me; I routinely monitor the economic situations and other macro issues that could affect what we’re doing.  I pay attention… CLOSE attention… every single day.

So what you hear on this show is confidence.  And I am confident.  I’ve made a series of well-researched decisions.  I’m staying on top of everything.  I treat every single penny I manage as if it’s my own because here’s how I see it:  My client are risking money, and I’m risking my reputation.  My client’s capital… and the safety of it… is job #1.  Protecting that money is the first thing I care about.  And by extension, protecting my reputation is critically important to me, too… more than I can ever express.

So the confidence with which I speak to you is well-founded.  It’s not an accident.  The evidence of the accuracy of my words is all around us.  There’s simply no arguing that it’s wiser to buy real estate below market value than at or above it.  There’s no arguing that engineering your investments in such a way that they’re predictable and profitable is very wise.  It’s beyond debate that investments secured by collateral are safer than those not secured by collateral.  These things are true.  These things are wise.  These things can’t be credibly challenged.

And yet, in implementing those abstract ideas in the very real world, risk comes into the equation.  Sure, it makes all the sense in the world to buy real estate far below it’s real value in a rising market.  But what happens if a contractor slows down or even goes rogue?  What happens if the supply of assets dries up… or my strategy for acquiring them expires?  What happens if a crash in the Chinese stock market actually does have reverberations on the opposite side of the world, and suddenly the real estate market weakens in the places on which I’m focused.

Here’s the truth:  I have a strategy in mind for each one of those risks.  I’m a big believer that, to the greatest extent possible, one should make decisions for difficult and undesirable situations before those situations ever materialize, in order that clearer thinking prevails.

By my plans are, until enacted, only theory.  But that’s true every single day.  Every single day I have a theory that I can make decisions to direct my team the next day on which assets to buy, which assets to renovate, and which to sell.  Every day, I operate on a theory that has as its basis the assumption that I and my team, that we know something… or can do something… that gives us an advantage that can lead to profit.  That’s the difference between academia and business… academia gets to theorize.  In business, we get to see where theories work and where they don’t… in the real world.

So the confidence you hear from me on this show is well founded.  I’m careful.  I’m certainly not paralyzed by my carefulness… not even close.  In our fund, for example, I’m absolutely very, very happy with every single asset we’ve purchased so far.  My theories are playing out well… and with my watchful eye on the whole process – a watchful eye which I suspect sometimes may be a bit heavy on my team – I expect we’ll continue to have success.

But my friends… it’s terrifying.  Not stressful, but terrifying.  Those are different things.  Stress is essentially just an  extended negative reaction to a lack of preparedness.  You encounter something you weren’t expecting, for which you’re unprepared, and you experience stress.  Terror is fear of the unknown.  Yes, I’m terrified of the unknown.  I’m terrified I could get it wrong for clients in my private equity fund.  I’m terrified I could tell you something that’s not quite right on this show.  It’s a heavy load to be a trusted source of financial advice… a very heavy load.  The ramifications of doing it wrong?  Well, that’s terrifying.

But that terror is motivating to me.  It keeps my mind sharp.  It keeps my senses turned up.  That terror makes it impossible for me to be complacent with the capital that my clients have entrusted to me.  And I wouldn’t have it any other way.

There are two sayings that really resonate with me.

First:  Everybody is a genius in a bull market.

Second:  Pigs get fat, hogs get slaughtered.

God, please grant me the wisdom to profitably manage my client’s capital.  Let me be wise in good markets and bad.  And may my guide posts be wisdom and prudence, not greed or pride.

My friends, invest wisely today, and live well forever.

Hosted on Acast. See acast.com/privacy for more information.

Are you an entrepreneur, independent sales rep, or anyone whose income isn’t the function of a consistent salary?  If so, you’ve got the makings of a great investor… and there are some things about you that could doom you to failure.  Today you get the knowledge you need to succeed BIG TIME as an investor.  I’m Bryan Ellis.  This is Episode #183.

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Hello SDI Nation!  Welcome to the podcast of record for savvy self-directed investors like you!  Get ready for another dose of PREDICTABLY PROFITABLE thinking!

We’re at the end of the first week of the new year.  How’d you do?  Is your year off to a great start?

I’m feeling pretty good.  My private equity firm bought two more houses this week – both EXCELLENT deals – and I signed the closing papers on a resale we did just yesterday.  Made about 28% on that one in 22 days, so it was a slam dunk!  In fact, I’ll likely give a case study of that deal this coming Tuesday on the next edition of Self Directed Investor Success Stories, the sister show to this one.  But the private equity firm is off to a roaring start, and that’s really gratifying.

Hey a quick note – this coming Monday night, I’m the featured speaker for the Georgia Real Estate Investor Association.  This is pretty rare.  I don’t do a lot of public speaking these days, so if you’d like to meet me, stop by, because I’d love to meet you too!  I’ll be talking about how individual investors and affluent investors can work together to fund and finish deals in a way that’s very safe and profitable for both.  If you have a goal of doing more deals this year… either as a real estate entrepreneur or as a passive investor and you’re in the Atlanta area, come on by.  This is a topic I know well, both from having done it very, very effectively and also very, very badly in the past.  This meeting officially starts at 6:30, I’m on at 7:30, but I’d not risk waiting until 7:30 to arrive.  There’s a $25 fee to come to the meeting but later today I’m going to send an email to the private SDI email list with a code to get in for free.  To be sure you’re on that list, text the word SDIRADIO to 33444 with no spaces or periods.  And when you come, please be sure to stop by and introduce yourself to me as an SDI Radio listener… I’d love to meet you.  Again, text SDIRADIO to 33444 to be sure you get that code.

So my friends… are you an entrepreneur, independent sales person or anyone who doesn’t have the luxury of a salary to depend upon?  Hey, note – this isn’t a slam against those of you who are salaried employees.  Not at all.  This is a recognition of the different type of personality, the different type of person – not better or worse, just different – that it takes to live the entrepreneur’s life.

Here’s the thing:  There’s a lot about the entrepreneurial nature that means you already have some of the best and most important traits for success as an investor.

For example:  Entrepreneurs have an innate sense of the distinction between “price” and “value”.  They’re not the same thing, but are easy to confuse.  As an entrepreneur, you live or die by this distinction, because your price must always be equal to or below the value of your offer to your customer, otherwise there will be no sale.  You know that, you get it, it’s obvious to you.  And that thinking transfers well to investing.  For example:  Yesterday, Apple traded from a high of $100 per share down to a little above $96 per share.  That was it’s PRICE.  But what’s it’s VALUE?  You may not think that $4 swing is much… but that accounts for a $22 BILLION drop in value for that company.  Not trivial.

Similarly, in real estate… there’s a difference between price and value.  Great example:  Yesterday, my private equity firm bought a house for $178,000.  Why’d we do that?  We know that after spending a max of $20,000 to fix it, we can sell it for $270,000… I expect we’ll profit by about $50,000 on that deal in a very, very short time frame.  So, value here is $270K… price was only $178K.  A clear opportunity.

Entrepreneurs also tend to have an innate sense of the nature of risk – and an ability to be comfortable with calculated risk.  This is key in successful investing.  Related to that is the ability to make decisions, another key entrepreneurial requirement.  Not a small thing, either.  Not everybody can make a decision and stick with it.  Entrepreneurs must… and that plays well as an investor.

One other highly compatible trait among entrepreneurs with great investors… Great entrepreneurs have, by necessity, a broader understanding of their businesses and industries than is true for most non-business owners.  And let me tell you… there’s HUGE value in being able to see the big picture as an investor because investments are not successful in a vacuum.  Everything effects everything else.  I’ve currently go my eye on how market turmoil in the Chinese stock market is going to affect the success of the technology industry in America… because that connects to the health of certain real estate markets in which I have great interest.  Everything is connected, and entrepreneurs have an innate ability to perceive and understand those connections.

But my entrepreneurial friends, there are some things about you – about us, since I’m one of you – that can hold you back that may be less of a challenge for others in a more structured profession.  Really, it all comes down to time and delegation.  Time, because for entrepreneurs, their business isn’t just their means of income, it’s their life meaning.  And because of that, it takes a lot of time… time that doesn’t leave an opportunity for them to do the study and research it can take to be a great investor, time that they don’t have to learn the language of investing, which is a totally separate world unto itself.  For entrepreneurs, the work week doesn’t end at 40 or 50 hours… and there’s just not a lot of time to become proficient as an investor.

And thus the second challenge:  Delegation.  The lack of time will make you more inclined to delegate your investments to conventional financial professionals, because they are in very large supply.  That, of course, relegates you to a portfolio of mutual funds, the occasional individual stock and more insurance than you ever dreamed possible.  Hey, look… maybe there’s a place for stock investing.  I know some people have done well with it.  But that kind of investing is wholly antithetical to entrepreneurs because it DEMANDS that you give up control.  Your only influence as a stock investor is to decide when to buy or sell.  That’s it.  So as a result of the BUSY-ness, entrepreneurs frequently do what they should be good at and delegate their investments… but rather than using the non-conventional thinking that brought them success as an entrepreneur to begin with, they take their entrepreneurial profits and pour them into the most plain-jane, uncontrollable and conventional investments that exist today:  Mutual funds.  Blah.

Hey, entrepreneurs… your capital is the fruit of your labor.  Respect it.  Give that capital the chance to flourish in investment assets that may be different than what your financial advisor might consider… but different because they’re BETTER.  Does your financial advisor have a way for you to generate a 10% return that’s incredibly safe and is so simple that you immediately understand it?  No, they don’t.  But it can be done, and I’d be happy to tell you about it.

So for you entrepreneurs… and for any of you who simply have idle or underperforming investment capital, but you lack either the time or the experience to work some magic with that capital yourself, let’s talk.  Go over to SDIRadio.com/consultation to set up an appointment with me, and let’s talk through some options for you.  As an entrepreneur myself, I can give you the perspective of an entrepreneurial investor, because that is my life.  And if I do say so myself, I’m pretty darn good at it!

One final time my friends… be sure to join me at the Georgia REIA meeting this coming Monday night.  In the mean time…

Invest wisely today, and live well forever!

Hosted on Acast. See acast.com/privacy for more information.

Another day, another stock market route in China… leading to another day that’s looking incredibly bloody for the U.S. Stock market, with Dow Futures currently suggesting a DOWNWARD opening of well over 300 points.  Plus there’s the continuing weakness in Apple stock, the long-time market leader.  Now the good news… there’s a better way, and I’ll tell you all about it RIGHT NOW.  I’m Bryan Ellis.  This is episode 182.

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Hello SDI Nation!  Welcome to the podcast of record for savvy, self-directed investors like you!  Get ready for another dose of Predictably Profitable thinking!

This is a tune you’ve heard before… earlier this week, even.  China’s stock market suffers leading to a route across Europe and bringing on a bloody start to the day on Wall Street.  The same thing happened on the first trading day of this year…just 3 days ago, on Monday of this week.  That day, the Dow closed over 440 points lower than it closed on the last trading day of last year.  It was ugly.

And then there’s Apple… long the darling of Wall Street, but it reached a peak last year and has declined by a whopping nearly 25% since then.  Apple has lost about $180 BILLION in value… that’s about the same as the TOTAL value of Bank of America, the TOTAL value of Coca Cola, the TOTAL value of CITIGROUP, Disney or Intel.

And that’s just how much value Apple has LOST in the past year… and it’s your market leader.

Back on August 13, I sounded the alarm about the stock market on this very show.  I told you things looked bleak for China.  I told you that a very bad technical indicator had formed in the U.S. stock market, called the “death cross” by technical analysts.  And I told you that the China problem was a huge problem for Apple, and that Apple could continue to be the stock market leader… to the downside.

My friends, I’ve not been wrong.  I’ve been deadly accurate, in fact.

Here’s something else that’s deadly accurate… it’s a different way to think about investing your money.

Allow me to propose a hypothetical scenario to you… this is totally hypothetical, but definitely instructive.

Let’s imagine that it was 6 months ago – July 7, 2015.  Apple stock was trading at $125 per share, and the sky was bright with hope and optimism.

So a buddy of yours – who knows that you have some money – comes to you and says… “Hey, I’d like to buy $100,000 worth of Apple stock… the sky’s the limit!  Would you lend me the money? I’ll put up my shares of Apple as collateral for the loan.”

So, let’s forget about the legalities and complexity, and let’s just imagine that it was a simple matter for you to lend your buddy the money and take his stock as collateral.

Let’s further imagine that call me up and say… Bryan… I’ve got this guy who wants to borrow some money from me and place a really great piece of collateral as security.  What should I do?

Here’s what I’d tell you to do:

I’d tell you that, assuming the transaction itself is legally kosher, that you SHOULD lend the money to your buddy, under terms these conditions:

Condition #1:  You’re not lending $100,000 to your buddy, but $65,000.  Your buddy has to put up the other $35,000.

Condition #2:  You get paid an interest rate of 10% per year, with interest payments every month.

Condition #3:  The loan has to be repaid or extended – at your option – every six months… unless Apple drops to $95 per share (about 25% below it’s current value), at which time the stock has to be sold and you are repaid.

So you got it?  You’re only loaning 65% of the money, you’re getting 10% interest, it’s a 6 month deal, and you can sell the stock if it drops too far.

Let’s look and see what would have happened with that, shall we?

6 months ago today, July 7 2015, Apple was at $125.  You lend your friend $65,000 who then adds $35,000 of his own money and buys $100,000 of Apple Stock.  So far, so good.  Almost immediately, the stock drops to $120, then bounces back up to $132… it’s all good.

So you go on your merry way, not thinking about it… and one month later on August 7, you get an interest payment from your friend, just as he committed.  But interestingly, Apple has DROPPED… and is now at $115… $10 below where your friend bought it.

Another month passes, September 7 rolls around, and you get another payment from your friend… you’re still collecting 10% interest.  But Apple has dropped to $110.  So far, there’s been a 12% decline in the value of that stock.

Another month passes, and on October 7, you’ve just received another payment at your 10% interest rate.  Apple is still at $110, still at a 12% decline overall.

Another month passes, and on November 7, you get another payment from your friend.  You’re still making 10% interest.  Fortunately for your friend, Apple has bounced back up to $120.  Still a loss versus his purchase price, but better than before.

Another month comes and goes, December 7… and you get another payment from your friend.  Apple is at $118.  Still a loss for your buddy, but you’ve gotten another payment at a 10% interest rate.

Are you sensing a pattern here, my friends?  Your friend was basically WRONG about Apple… in fact your friend has LOST money on that trade… but you, as a WELL-SECURED private lender… you’ve been PROFITABLE and WELL SECURED the entire way.

So, one month to go.  January 7 rolls around.  That, my friends, is today.  As of the time I’m writing this, the market hasn’t yet opened.  But yesterday, Apple closed at… WHOA!  $100 per share.  That means your friend’s trade on Apple is DOWN by 20%... only $5 away from the drop-dead price of $95.

But you?  Today you get another payment, and your loan to your friend is over.  Today you have the option to call your loan due or extend it.  And I’m guessing based on how badly Apple is performing, you’re going to call it due.

What’s happened here, my friends?  You’ve been a PRIVATE LENDER.  You’ve profited from a loan against a good asset… and you’ve made money even as that asset declined in value.

Yet, every other person who poured money into Apple stock six months ago is looking at a loss of 20%.  But you?  You’re sitting pretty.  You’ve made a solid 10% interest rate the entire time… and you didn’t have to lose any sleep over it at all.

My friends, that is EXACTLY how private lending really works, but in the REAL ESTATE market.  It’s exactly the same thing… you, as a private lender, get to make REALLY ATTRACTIVE interest rates… you get regular payments… and your money is EXTREMELY WELL SECURED.

In this example, Apple stock lost $180 billion in value, but you STILL made your 10% interest.

What if Apple stock had stayed flat?  You’d still have made your 10%.

What if Apple stock had rocketed to the moon?  Well, your friend would be very happy… and you’d still have made your 10%.

Are you sensing a pattern here?  This is exactly how it works in good real estate-backed private loans.  This is the essence of being PREDICTABLY PROFITABLE… this is wisdom in investing, pure and simple.

Want to know more about how to make your money work for you in this way… simple, safe and strong… and be PREDICTABLY PROFITABLE?

Then go RIGHT NOW to SDIRadio.com/predictable.  I’m hosting a webinar about this very topic, to help you understand it further, and to see how to make your money work for you in a PREDICTABLY PROFITABLE manner.  So again, go right now to SDIRadio.com/predictable.

My friends, invest wisely today, and live well forever!

Hosted on Acast. See acast.com/privacy for more information.

What’s that cold, increasingly harsh feeling in the air?  If you said “winter”, you’re partly right.  The whole truth is, it’s “economic winter”… a period in which wise investments in real assets will be more important than has been the case for many, many decades.  Get ready for some hard truth… and strategies to weather the storms of the economic winter.  I’m Bryan Ellis.  This is episode #181.

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Hello, SDI Nation.  Welcome to the podcast of record for savvy self-directed investors like you!  Get ready for another dose of Predictably Profitable thinking.

May I share a personal note with you before we begin?  Well of course I can, it’s my show.  Hehehehe.  Today is the 18th birthday of my first child, Kayla.  Boy… this, and her transition to college in the fall… man, it’s been tough on me.  She’s handling it all like a champ, but I find myself tearing up at the strangest times.  Not a fan of this transition.  Though I’ve got to say, she’s made a liar of everyone who told me to dread the teenage years.  She’s been an absolute delight and has never, ever been in any trouble and has always done really well in school.  Now I’m just blabbering.  Kayla, I know you’ll hear this… heck, you’ll probably be the person who edits and posts this show for all the world to hear.  I want you to know how amazing I think you are.  Really.  You’re an amazing young lady and what is thrilling for me is that I can clearly see a number of ways that you’re truly amazing, and you’ve not yet discovered those things about yourself… you think that everybody has the same wonderful qualities that you have, and it’s just not like that, as you’ll soon learn.  You’re special.  It’s going to be a great life for you, kid.  Always pursue wisdom as your highest priority, always operate with gratitude as your prevailing attitude, and view every blessing as an opportunity to be a wise, generous steward.  Do those things, and everything will always work out just as God intended.  I love you, Kayla, and happy birthday!

Well, that’s a season that’s changing in my life… and it’s a big one.

But there’s a season that’s changing for all of us, in America at least.  This season has been in effect in a number of other developed economies for quite a while already, and that is the ECONOMIC WINTER.  It’s a period of the economic cycle that is marked by what I’d describe as a reckoning… a time to pay the piper.

There’s been a lot of foolish excess in the United States, brought on by our leaders at the top and by our own willingness to spend our money in ways that can’t be described as wise.  Many of the policies, in retrospect, look like they were actually designed to weaken this country.  It’s as if Americans vote and politicians govern on the basis of an adolescent idealism rather than giving heed to any consideration of wisdom.

The examples are many.  There’s a serious immigration crisis in this country that has been growing for decades and has accelerated drastically in the last 7 years.  Yes, I’m talking about illegal immigration.  And if that raises your hackles… if the prospect of my using the word “illegal” rather than “undocumented” insults you or brings you to think negatively of me, then your thinking is consistent with the idealism that I mentioned which is antithetical to actual wisdom.

Folks, just because something FEELS good doesn’t mean it is good.  It’s shocking that adults – many in their 60’s, 70’s, 80’s and beyond – simply haven’t learned that lesson yet.

People, SUPPLY and DEMAND are the central consideration in economics.  Nothing else.  Supply and Demand.  Adolescent notions of fairness do not play into the equation, because fairness isn’t a real thing.  Fairness is an arbitrary standard that’s determined not by the wisest among us, but by those who scream the loudest.  Fairness is ALWAYS a distraction, and intellectual smokescreen to shape policy and law to the whims of those clinging to adolescent reasoning.

And then there’s the entire mortgage crisis.  It’s easy to blame that on the ratings agencies and the big financial institutions, and they certainly have culpability.  But every bit of that was enabled by government policies that REQUIRED… actually FORCED lenders to make loans to people who had ZERO ability to repay, and to accept collateral worth far less than the loans.  Every bit of that was precipitated and encouraged by government policy.

All of that leaves us where we are today… Economic Winter.  There’s a confluence of factors at this time… a strengthening dollar which discourages foreign investment in America, a clearly weak and weakening domestic economy, a huge and wealthy generation – the baby boomers – shifting their spending FROM consumables and into healthcare en masse, and a government bent on expanding its reach into and control of healthcare and the financial system.

What does it all mean?

Here’s what I fear… what I sense.  I’m am amateur at this financial prognostication stuff.  So take this for what you will… I sense a certain malaise… a depression… not of a financial nature, but a crisis of confidence.  Consider these words and whether they apply to today:

“The threat is nearly invisible in ordinary ways. It is a crisis of confidence. It is a crisis that strikes at the very heart and soul and spirit of our national will. We can see this crisis in the growing doubt about the meaning of our own lives and in the loss of a unity of purpose for our nation.  The erosion of our confidence in the future is threatening to destroy the social and the political fabric of America.”

Do those words resonate?  If yes, you should be concerned… those words come from Jimmy Carter’s famous “malaise” speech… that’s a time to which we don’t want to return, but which the policies instituted in this country appear to recreating before us now.  That’s the price of basing fiscal policy on idealism rather than wisdom.  That’s the price of giving credence to demands for a $15 minimum wage to people who simply are not worth $15 per hour.  That’s the price of giving respect to foolishness movements like Occupy Wall Street from a few years ago, and the price of actually believing that there’s a widespread epidemic of law enforcement officers targeting minorities for murder.  It’s all sensational and makes for great headlines… but the truth behind the headlines is different, yet the profoundly negative impact on the national psyche is nevertheless powerful and increasingly palpable.

It’s time to let go of idealism and embrace wisdom.  Adult wisdom.  Wisdom that demands responsibility, not just rights.

What are we to do?  You and I as self directed investors are really at the center of this storm, whether you realize it or not.  Our assets are at risk each day, as they should be, generating returns for us.  And for a long time, there have been returns to be had by deploying capital into questionable, but socially acceptable, assets.  But my friends, a time for prudence has come… a time for wisdom… a time for a certain conservatism.

The malaise that I sense we’re approaching won’t necessarily be characterized by a huge sudden fall in stocks or real estate.  Those kinds of flash crashes could be a part of it, but I sense a longer-term doldrums… a stagnation motivated by fear and mistrust.  It won’t last forever, but it could last for a substantial season.

From a purely practical perspective, the thing to do during times of stagnation is to focus your capital into REAL assets, not just paper.  You may think I’m referring to stocks when I say “paper”, and I am, but I’m also talking about cash.  The value of the dollar is high right now.  It’s a good time to convert it into real assets… and not just any assets.  Assets that can, themselves, produce cash.  And not just cash-flowing assets, but cash-flowing assets for which your basis is substantially below current value, in order to insulate you from economic shocks that happen along the way.

My prediction:  15 years from now, the people who today focus on making VALUE-oriented purchases of real, meaning non-paper assets, well, those people will be doing very well in 15 years.  And yes, I do mean real estate… and also potentially some precious metals.

This isn’t a blanket endorsement of real estate as an asset class, by the way.  I think that a KEY component of real estate as a hedge against the stagnation and economic pain that I fear is to come is to ALWAYS and ONLY acquire real estate on a value basis… less than what it’s “officially” worth today.  A good rule is this:  if you acquire real estate at a cost that allows you to rent it out for less than the market rent and still be profitable, then you’ve got a good, strong basis.  I suspect that people buying real estate, even for the purpose of cash flow, but who pay full retail price for it… those are the people who think they’re being wise now but will be bitten in the not too distant future.

My friends, please consider today’s discussion of the Economic Winter which we may now be entering… consider this a call to wisdom and conservatism.  Consider this a call to forsake the idealism that feels good, but is not based in reality and is antithetical to wisdom.  Consider this a call to consider the LONG TERM, and FUTURE GENERATIONS, as important considerations rather than a sideshow.

My friends… invest wisely today, and live well forever!

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Overnight, the Shanghai Composite Index in China fell by nearly 7% in a single trading session, triggering circuit breakers and a domino effect that spread all over Europe. And now, 1 hour before the open of US financial markets, the Dow Jones Industrial Average is set for a triple-digit decline at the open. Who knows what will actually happen. Are you ready for carnage in stocks? Here’s how to protect yourself RIGHT AWAY… and banish these concerns permanently. I’m Bryan Ellis. This is Episode #180.

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

It’s not a new thing, people… market upheaval in China spreads to Europe, dooming U.S. markets to a substantially lower open and substantially higher prospect of a bloody day on Wall Street.

Now we don’t know what is actually going to happen. Could be one of those yoyo days on Wall Street where the averages bounce all over the place and end up higher. Or, it could do something very, very different… much worse… something that many people think this market is overdue for…

…and that’s a scary prospect.

This brings to mind a text I got from a client 3 weeks ago, on December 18. That day, the Dow had fallen by over 4% in a single day. Around 4:30, I got a text from one of my favorite clients, Paul, who said “Yet another day I am glad I have a self directed 401k that is not reliant on the stock market. Thank you for all your hard work.”

I really, really appreciated that text… thank you, Paul!... and it lends some context to this day.

Why?

Because right now, Dow Jones futures are set to open down by about 300 points. Again, things change rapidly and that could be resolved by the time the open rolls around in about an hour, but… probably not.

Why is that relevant? Well, the Dow has, so far, failed to recover the losses it made on December 18 when Paul sent that very kind text to me. And with an open of 300 points to the down side, the Dow is going to fall even farther than it fell on that awful day 3 weeks ago.

And still, Paul is sitting pretty. Why? He gets a very solid rate of return every single month. In fact, Paul doesn’t know this yet – unless he’s listening… and I’ll bet he is… Hi Paul! – but Paul’s ROI numbers are going to go up even more soon… and there’s simply no stress involved in making the strong returns he’s making.

How?

It’s like this: Paul is getting paid EVERY SINGLE MONTH… reliably… and safely. He’s doing that by lending his investment capital at very attractive rates of return… and he’s made his money safe by getting great collateral.

In fact, he’s OVER-collateralized. That means that every dollar he has invested is protected by $1.50 in collateral. Paul’s collateral is real estate in very strong markets and because of his collateral position, those markets would have to be slashed by 1/3 of it’s value before Paul’s collateral was at risk.

So let’s be clear, it absolutely IS possible for real estate to fall by that much. It happened in several markets during the real estate collapse of 07 and 08. But you know what? Even in that case… in the worst of the worst scenario… which, by the way, was Las Vegas, Nevada… even in that case it took a whopping 2 YEARS from the market’s high point before it fell by one third… and that was in one of the very the worst real estate market routes in history.

And you know what? Had Paul been involved in that situation… he could have seen what was coming and gotten out. Heck, he could have dilly-dallied for 6 months, even a year, and THEN sold his collateral, and could have still gotten exactly the ROI he was planning on from the beginning. That is powerful, my friends.

How about your stock portfolio? What’s your collateral? You guessed it: It’s NOTHING. Nothing at all, not a single penny of anything.

But Paul? Paul is solid. The kind of investments Paul makes yields from 7 or 8 to a high of 10-13%... and is still incredibly well collateralized. And it’s TOTALLY stress free. It’s simple. It’s safe. It’s strong. That’s all there is to it.

Oh, by the way… the U.S. Stock Market has opened since I started working on this episode. As of right now, the Dow is down about 400 points. What does that mean for your portfolio?

Paul probably doesn’t even know this has happened. It’s not that he’s not informed. It’s just that that volatility you’re feeling… it’s not relevant to Paul. He doesn’t care, because he doesn’t have to.

What about you, my friends? Would you like to make really, really solid returns – and do so in a way where you are PROTECTED from market volatility using a PREDICTABLY PROFITABLE strategy?

If so, I’d love to tell you more about it. In fact, this Thursday, I’m offering a free webinar training that is 100% LIVE… I’ll be on there personally to provide some great info to you, and to answer your questions... and to show you how – just by adjusting your strategy a bit – you can go from simply hoping for the best to being PREDICTABLY PROFITABLE.

This webinar training is FREE to you as a listener to Self Directed Investor Radio. To reserve your spot, just go over to SDIRadio.com/predictable. Again, that’s SDIRadio.com/predictable.

My friends, tomorrow is the inaugural episode of Self Directed Investor Success Stories… and you’re going to hear about a deal that closed for a client of mine in just the last couple of weeks… the results were… well let’s just say, this one deal – which was this client’s first experience with us – beat the VERY BEST annual return that the S&P 500 has ever had all throughout history… Yep. It was that good.

So be sure to join us on this show tomorrow for this incredible success story and in the mean time, go over to SDIRadio.com/predictable to register for an EXTRAORDINARY training opportunity to learn to become PREDICTABLY PROFITABLE!

My friends, invest wisely today, and live well forever!

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What were the HOTTEST EPISODES of Self Directed Investor Radio for all of 2015? I hope you didn’t miss them, because they are SIZZLIN’ HOT! Hehehehe. I’m Bryan Ellis. I’ll tell you what they were and how to find them in the archives – and reveal MY favorite show of the year – RIGHT NOW in this special New Year’s Eve episode #179!

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

It was a milestone day, February 2, 2015. That was the day that Self Directed Investor Radio was launched EXCLUSIVELY as a podcast, and not as a radio show in any market.

And yet… here today, less than a year later, far more people hear this show every single day than hear most radio shows across America. The growth has been AMAZING and I’m so grateful to YOU!

Most of you found this program through iTunes which is great… but unfortunately, Apple is constantly toying around with that system, frequently adjusting the number of back-episodes to which they provide access. That’s too bad, because many of our older episodes were very, very well received. And with that, I’d like to take just a few minutes to share with you the top 5 episodes of 2015 – judged purely by the number of downloads:

The FIFTH most popular episode of 2015, titled “Is your IRA liable to file tax returns”, Episode 48 revealed a truth that shocks many people: Your IRA isn’t completely tax exempt, and can very easily have tax return filing requirements. In fact, there are relatively FEW categories of transactions that can be done in an IRA that do not create a tax filing requirement, and in episode #48, a shocked America discovered the truth. You can check it out for yourself at SDIRadio.com/48.

The FOURTH most popular episode of 2015: Titled, “Two Very Bad Signs About The U.S. Economy”, Episode #114 on August 13 warned about two hugely problematic indicators for the U.S. economy concerning CHINA and concerning activity in the U.S. stock market. And not coincidentally, the Dow Jones Industrial Average had dropped by nearly 2,000 points in the 2 weeks following that warning. You can hear it for yourself by visiting SDIRadio.com/114.

The THIRD most popular episode of 2015: Titled “SKIP LANDLORDING! How To Really Make Cash Flow From Real Estate”, Episode #39 was a treatise of my feelings about investing money as a private lender, and I still feel that’s the best overall strategy, even better than owning rental properties for MOST investors. Both strategies are great, but to find out why I think private lending is a better place to START and to base your portfolio, particularly for newer real estate investors, check out episode #39 by visiting SDIRadio.com/39.

The SECOND most popular episode of 2015: Titled “How To Buy Real Estate FAR BELOW It’s Actual Value” Episode #56 revealed a strategy that absolutely, positively works to get real estate at great prices. It’s particularly apt for those of you who only want to acquire an extra 1-4 properties per year, as it allows you to be very selective. This strategy is an ACTIVE strategy, meaning you have to work at it every month, although the time requirement is not big. But for those of you who are ACTIVE real estate investors looking for great deals, be sure to check out Episode 56 at SDIRadio.com/56.

And DRUMROLL PLEASE…. Ok, no drumroll, we haven’t gotten that fancy yet.

The most popular episode of 2015, Titled “CAUTION! Why rental property should NEVER be the foundation of your portfolio”, Episode #47 took a lot of people by surprise. Can rental property be a great investment? ABSOLUTELY! Should it be where you start? For most people, the answer is a resounding NO… and in episode 47 – a very controversial episode – you’ll find out why. You can listen in at SDIRadio.com/47.

So there you have it… the top 5 most downloaded shows of 2015 for Self Directed Investor Radio.

But there’s something about that stat you should know: The unique nature of podcasts… and the ability to download past episodes… means that older episodes will always have more listens that newer episodes.

So to wrap up today’s show, I’d like to tell you about my favorite episode of the year. In fact… it wasn’t a real episode. It was something of a “filler” because I chose to take the day off and spend it with my family. It was my treatise on the very best investment available… that will beat the socks off of anything in which you’ve ever invested before. Check that one out… it’s at SDIRadio.com/best.

My friends, this year has been amazing, and I’m so grateful to all of my loyal listeners, and grateful to have the opportunity to turn you casual listeners into the more loyal type! The new year will be full of wonderful opportunity… and I’ll share those opportunities with you, like I did in Episode 162 at SDIRadio.com/162, where I told you about an overlooked market that my team is taking advantage of for the benefit of our clients… and I’ll tell you, that market is being very good to us!

The new year will be full of risk, too… and I’ll do my best to tell you about that stuff before it happens, just like I did in the previously mentioned Episode 114 where I give you a nearly 2-week warning before the Dow Jones got crushed.

The new year will be full of changes… changes in the law – such as the really, really big one I alerted you to in June in Episode #90 about a huge Supreme Court decision that bodes very, very badly for the rights of real estate investors in America… and I, of course, suggested some ways to minimize that impact. You can hear that at SDIRadio.com/90.

But most of all, the new year will be full of LIFE… beautiful, wonderful life for which we have the distinct honor and opportunity to be grateful every single day. There’s an extremely high probability that anyone hearing this podcast lives in one of the WEALTHY countries… such as here in the United States, where our “poverty line” would allow people in most other countries of the world to live in unimaginable splendor. We should all be so grateful for these opportunities, the risks that create them, and the time we’re given so that every single day can be a work of beauty… and it’s all up to each of us every single day.

Hey folks, that’s all for 2015! Next year will be great, and I’d like to take this opportunity to thank GOD, who is faithful all the time, even and especially when I’m not. And I’d like to thank my wife Carole whose raw intelligence, incredibly productivity and impressively accurate instincts have made a huge difference in our business this year, and whose grace and beauty blow my mind every single day. I mean every single day. I love you, Carole.

My friends, have fun tonight, but stay safe. We’ve got a lot of great things to do together in 2016!

And of course… invest wisely today, and live well forever!

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2016 is coming up, and soon 2015 will disappear into the rear view. What did you learn this year that will make you a better self-directed investor? And just as importantly, what did you realize that you’re already doing well? Let’s do a bit of self-analysis today, shall we? And in the process, I’ll tell you about some WONDERFUL big changes coming soon to SDI Radio. I’m Bryan Ellis. This is episode 178.

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

What a year! It’s been a year of great learning, great growth and great excitement here for the SDI team, and I’ll tell you a bit more about that briefly. But more importantly…

What about YOU?

What did you do well as a self-directed investor this year?

What could you have done better?

Over and over again, one of the biggest regrets I hear from investors is that they didn’t take action sooner to diversify away from the stock market. This would have been a good year to do it, as the Dow and S&P are both flat, having gyrated wildly, and mostly to the downside.

Will this be the year that you redeploy some of that capital you have in stocks to other assets… maybe like real estate, or secured debt, or even intellectual property?

Another excellent change to consider is to get MORE outside input… to network more with other investors who have a similar preference for control of their investments. Investing is frequently a lonely road, but it is one of the places where the experienced-based input of others can make the biggest difference.

That’s specifically why we here at Self Directed Investor Society are making a couple of really big changes this year, and I really think you’ll like them.

First: In January, we’re launching SDI Society Local – a face to face networking and educational event to be held each month in select cities across the country. We’re currently planning to have SDI Society Local events in Atlanta, which begins in January. Then later in Q1, we’ll do the same in

two other cities out west, most likely one in Southern California and one in Northern California. Your thoughts about best cities for these events are welcomed by email at [email protected]... I’d love to hear from you!

We’ve got other cities in our sites as well, including Las Vegas, where my Private Equity fund is headquartered, New York City, Washington DC, Austin and/or Dallas, Texas and Miami, Florida. But to begin with will be Atlanta and two locations out west.

And if you’re not near one of the targeted cities, don’t fret! Because we’re going to offer SDI Society National as well, an internet-based meetup and discussion group. Sure, the local groups will be the best way to forge relationships of great value… but the National group is going to be GRAND CENTRAL STATION for the national self directed investor community… so look for more information about that very soon.

We’re also updating the format of this show. I’ve had universally positive feedback about the very compact nature of this show, and we’re absolutely sticking with that. But this show will shift to 3 days a week rather than 5… published on Monday, Wednesday and Friday. Don’t be downcast my friends! You’ll still get your daily dose of SDI, because we’re launching two NEW shows next week: Self Directed Investor Success Stories and Self Directed Investor Expert Series.

SDI Success Stories is a weekly show each Tuesday that highlights specific transactions done by and/or for the benefit of self-directed investors who GOT IT RIGHT and made a great profit. Each show will be entertaining and inspiring… and will show you a clear example of what is REALLY WORKING RIGHT NOW!

For example: Next week’s show will feature a transaction of one of our client’s where the total net profit was well over 40% in under 5 months… and it required virtually no involvement from that client at all, other than their capital investment. I’ll give you the numbers on the deal, I’ll tell you what went right and wrong, and I’ll tell you how you can do the same thing for yourself…. And you’ll get a similarly informative and highly inspiring episode of SDI Success Stories each Tuesday!

Then on Thursdays you’ll enjoy SDI Expert Series, a weekly show where I interview a real expert in the world of investing, finance and wealth protection. We have some EXTRAORDINARY guests lined up for you… people of great reputation that are chosen, at least in part, because I want to learn from them myself! This is going to be a great, great show each Thursday, and I KNOW you’re going to love it!

All of this… this show, the new shows SDI Success Stories and SDI Expert Series, and the new SDI Society Local events… all of this is designed with one thing in mind: Relationships. I really want to get to know you folks. It’s been such a blessing to experience the overwhelming success of this show, but what’s been even more enjoyable to me have been the times I’ve gotten to actually MEET my listeners and forge relationships with them. So the purpose for the SDI Podcast series is to deliver content to you and bring value to you on a regular basis. And the purpose of SDO Society Local and National is to actually build real personal relationships with you, and to allow you to forge relationships of great value with OTHER self directed investors as well. There’s great power in associating with great people.

Tomorrow – the last day of the year – I’ll be featuring a countdown of the top editions of SDI Radio in 2015… it’s been a great year, we’ve had some great shows, and tomorrow, you find out which are the most popular and the best of the best.

Hey… please be sure you’re on our exclusive announcement list by texting the word SDIRADIO with no spaces or periods to 33444.

And my friends: Invest wisely today, and live well forever!

Hosted on Acast. See acast.com/privacy for more information.

What does MALCOLM GLADWELL, the brilliant writer and thinker have to say about the financial markets? Nothing… but this ASTOUNDING observation from him has everything – and I mean EVERYTHING – to do with success in what could be a turbulent market. I’m Bryan Ellis. This is Episode 177.

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

It’s said if we don’t learn the lessons of history, we’re doomed to repeat them. Here’s a quick lesson NOT about investing… and completely about it all at the same time:

“In the fall of 1973, the Syrian army began to gather a large number of tanks, artillery batteries, and infantry along its border with Israel. Simultaneously, to the south, the Egyptian army canceled all leaves, called up thousands of reservists, and launched a massive military exercise, building roads and preparing anti-aircraft and artillery positions along the Suez Canal. On October 4, an Israeli aerial reconnaissance mission showed that the Egyptians had moved artillery into offensive positions. That evening, Aman, the Israeli military intelligence agency, learned that portions of the Soviet fleet near Port Said and Alexandria had set sail, and that the Soviet government had begun airlifting the families of Soviet advisers out of Cairo and Damascus. Then, at four o’clock in the morning on October 6, Israel’s director of military intelligence received an urgent telephone call from one of the country’s most trusted intelligence sources. Egypt and Syria, the source said, would attack later that day. Top Israeli officials immediately called a meeting. Was war imminent? The head of Aman, Major General Eli Zeira, looked over the evidence and said he didn’t think so. He was wrong. That afternoon, Syria attacked from the east, overwhelming the thin Israeli defenses in the Golan Heights, and Egypt attacked from the south, bombing Israeli positions and sending either thousand infantry streaming across the Suez. Despite all the warnings of the previous weeks, Israeli officials were caught by surprise. Why couldn’t they connect the dots?”

Those words come from the venerable Malcolm Gladwell – one of the most brilliant minds of our age – in his book called “What the Dog Saw”.

So Major General Eli Zeira had absolutely every reason in the world to think that Israel WOULD be attacked by Syria and Egypt. Literally every single piece of evidence suggested that the attack was imminent and that Syria and Egypt were very serious. And let’s face it: Israeli intelligence has the reputation of being, shall we say, rather effective. But in this case – despite overwhelming evidence to the contrary – Israel chose NOT to set up defensive positions in response to enemy movements, and the tiny Middle Eastern country suffered mightily for it.

Why? Why did Major General Zeira make such a clearly WRONG decision in the face of overwhelming evidence to go the other way?

Consider this: Do you know anyone who was hurt by the mortgage meltdown of ’07 and ’08? Maybe even you, yourself, took some serious shrapnel from that one.

But have you noticed that… even though the financial carnage from that event was very, very widespread, affecting investors and the general public alike… almost nobody seemed to see it coming at the time… yet now, if you ask nearly anybody, they’ll tell you, almost derisively, that anyone with a brain could have predicted it?

Yet… almost nobody did predict what happened. The few who did became billionaires.

What we all recognized at the time was that something was wrong… something fundamental was not right… something that could be damaging to us all was happening. And yet… almost nobody had the good sense to get out of the real estate market or even better yet, figure out a way to bet AGAINST it.

Does that make you and me foolish? I don’t think so.

In fact, you may be tempted to think that Israel’s Major General Zeira was just careless or even foolish. But there’s far more to the story. At the time, it was a rather common occurrence for Egyptians to mobilize for war… it was common for tanks and war supplies to be sent to the canal and for fortifications to be built. The president of Egypt made multiple public statements in years preceding this attack that war was imminent… and yet, it never happened.

Egypt mobilized a whopping NINETEEN TIMES between January and October of ’73… and in not a single one of those cases did war commence.

Furthermore, the trusted intelligence source who warned Israel the day of the attack… well, that person had recently given two completely wrong promptings.

Given the extreme cost and difficulty of mobilizing for war, Israel – which is a tiny country with a citizen army – couldn’t afford to mobilize at every threat. The threat in early October of ’73 seemed to Major General Zeira a serious threat, to be sure… but a threat to be defended against on another day.

How does this relate to investing? It’s a rather apt comparison, my friends. As manager of a private equity firm that buys real estate in some markets that have a volatile history – can anybody say NORTHERN CALIFORNIA – I think about this type of thing every single day. I think about the reports that venture capital is not flowing as freely into silicon valley, and I know that could be a problem since the entirety of northern California is just it’s own little universe that rises and falls largely on the strength of Silicon Valley and the Bay Area. I know that my target markets have a history of extreme volatility… on the upside and the downside. I know that the economy at large is NOT as strong as the press is leading us to believe.

I also know that there are some substantial and profoundly negative factors that are not in play right now like they were in 2007 and 2008, and that’s a very good thing. I also know that most – not all, but most of the time – real estate markets follow a pattern when they’re beginning to reverse in a huge way, and that pattern isn’t in clear evidence presently, and isn’t in evidence at all in some very large markets.

What do you believe? For me… and for my clients… I’ve responded by tightening our buying criteria. We’re going a bit more towards the “no deal is better than a marginal deal” approach. And in truth… this will likely cause me to miss some… but not most… opportunities. On this very day, actually, I’m tasked with making an allocation to my buyers for an auction that happens tomorrow, December 30… and there are a LOT of great opportunities. Still, we’re going to be conservative in our allocations because, at the end of the day, I don’t want to have missed the signs of impending meltdown.

Right now, those signs aren’t in evidence. But there are winds blowing in that direction. Times like these usually presage a shift in markets, but whether that shift is an outright reversal or merely a temporary plateau… the reality is this: There is STILL opportunity… and a lot of it… to be had right now… and I believe for the near future as well.

That’s why we’re hoping to buy several houses this week alone… and really get next year started off right for my private equity clients. We got one late last week where we’re expecting a net ROI in the neighborhood of 23-25% within 120 days… and both history and current market conditions support that projection, so it’s very exciting.

My friends, tomorrow I tell you about what happens to SDIRadio in the New Year… and I think you’re going to love it… because you’ve been ASKING FOR IT. So until then, please be sure you’re subscribed to our PRIVATE and EXCLUSIVE notification list by texting the word SDIRADIO with no spaces or periods to 33444. And, now more than ever:

Invest wisely today, and live well forever!

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What are the NON-FINANCIAL standards that overrule, overpower and even overshadow every other consideration in your investment decision making? We all have them… and to know them gives you great power. I’ll tell you one of mine RIGHT NOW. I’m Bryan Ellis. This is Episode #176.

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

There I was, laying in a lump. I was at a mommy-and-me gymnastics class with my then 18-month-old daughter because… let’s face it… daddy is more fun in a gym than mommy. Hehehehehe. But I was having no fun at all this day.

You see, I’d taken on several affluent clients to manage their money. My oldest daughter is about to go off to college, so this incident was well over a decade ago. Anyway, I was laying there on the mat, not being any fun at all because… I was STRESSED OUT. I was worried and it had caught up to me. I was worried about one thing: losing my client’s money. There wasn’t an ounce of peace in my body.

Now here’s the thing… I’d just had one of the best days of my trading life. At the time, I was trading stocks and options. And you know what? I was good at it. This was during the time when tech stocks were absolutely going crazy – back when Microsoft and Dell and Juniper Networks and Cisco and Oracle were the headline makers – and you know, I’d played the market like a Stradivarius. In fact, in one single day where the market made a massive, massive downward swing and then returned to basically even in the very same day, the report on my trading that day looked like I had the day’s newspaper in advance. I covered shorts at the very bottom of the market… I sold out longs at the top… I was firing on all cylinders. I recall a client watching my trading as it was happening and he called me – actually complaining – because one of the option spread trades that I’d put on for him had reached maximum profitability and there was no way it could improve further… even though we’d made nearly 400% on that trade in a matter of weeks… yet somehow, he was upset.

So there I lay on the matt in my daughter’s gym… and I was a mess. I was successful… I had plenty of prospects for additional money management clients, and I had a track record under way that would have impressed anyone. But I was stressed out to the max. Life was still happening outside of my work, but I wasn’t participating in it.

So I gave it all up. I told my clients I’d manage their existing trades to completion and would release all of their capital back to them. The stress was killing me, and it simply wasn’t worth it to me any longer.

I didn’t make that decision lightly. It was then, and remains now, a dream of mine – a dream which, gratefully, I’m achieving – to use my skills to bring strong investment results to my clients and their families. And on the surface, I had everything I needed: The skill to create that result, suitable markets in which to deploy capital, and clients with plenty of money.

But there was one other thing I needed that I didn’t know at the time that I needed: The right kind of clients. I didn’t know what “the right kind” of client was… to me, at the time, it was anybody who had at least $250,000 in cash that I could trade.

By the way, this isn’t a criticism of the clients from back then. It’s a criticism of me, of my lack of awareness at the time about things of greater consequence than money and financial success.

So for me, one of those NON-FINANCIAL ISSUES that overrules every other consideration is PEACE. I just won’t purposefully put myself – or my clients – into a situation that won’t let me sleep well at night, or that causes me to lose the use of my waking hours, and thereby causes me NOT to be present with my beautiful wife Carole or an of my four kids. I just won’t do it anymore… and I want clients who value the same thing.

I’d like to tell you another story about that in just a moment that’s far more recent – within the past week, actually – but first, let’s talk about how this relates to YOU.

What are your NON-FINANCIAL standards that overrule every other consideration? You might be tempted to think that only financial considerations should determine financial decisions, but that’s not a particularly wholistic understanding of human decision making.

Here are some other big considerations:

CLARITY of thought is a huge issue… and it’s reasonable to demand that you are of clear mind when making financial decisions. But how and when does CLARITY happen for you? Does MENTAL clarity require that you take care of yourself PHYSICALLY? What about your spiritual life? Can you be totally mentally clear when you’re spiritually off-kilter?

What about time of day? I do my best thinking, without a doubt, early in the morning when it’s still dark outside and no phones are ringing. Maybe clarity for you comes best at a certain time of day.

Or maybe there’s a question of PRIORITIES. What are your PRIORITIES for building your portfolio? Clarity about your PRIORITIES is an excellent way to establish a GUIDE RAIL by which you are able to quickly reject or accept investment opportunities as being worthy of further consideration.

All of this is on my mind because recently, a client in our passive flipping program experienced a net profit of over 20% in about 5 months – an awesome result by any standard, and in excess of what we had guided him to expect – and yet, his first instinct was to complain because it wasn’t MORE profitable because it didn’t happen even faster. This particular guy is a nice guy at heart, but frankly, this profile – the person who finds something about which to complain no matter how clearly success has been achieved – well, that type of person doesn’t contribute to peace in my life… and for me, my CLIENTS are my investments as much as any particular asset… and I only want those who are compatible with my priority of PEACE.

My friends, what are YOUR “BIG ISSUES” that are not financial, but deeply impact your financial decision making? If you don’t know the answer, the time is now to look inside yourself and find out… to make your investing an extension of yourself, your personality and your greater life purpose.

Because at the end of the day, what we’re all after is more abundant LIFE… not just a more abundant portfolio!

Hey, ever heard of Malcolm Gladwell? He’s an extraordinary writer and thinker. And tomorrow, you’re going to hear the wisdom of Gladwell applied to investing strategy, SDI Style! So don’t miss that… be sure to text the word SDIRADIO with no spaces or periods to 33444 in order to subscribe and hear the next special episode!

And may I ask a simple favor of you? If you enjoy this show, would you tell your friends about it? Just think of one person right now who you think would enjoy this show, and drop them an email today and direct them to SDIRadio.com… I’d really, really be grateful for your vote of confidence.

And as always, my friends: Invest wisely today, and live well forever!

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