Relentless investing in private prisons and areas destroyed by natural disasters

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A while ago I proposed the question to our investment club about investing in private prisons.  I received a resounding NO, along with a lot of people questioning my ethics. That was troubling to me.  This wasn’t the first time that my people have turned away money in the name of being the bigger person.  

When I was in college I joined a frat and I had found a way to make awesome greek shirts at a good price.  So good that I could get other chapters super hot, well designed, high quality shirts for a fraction they were paying Greek Escape and other online companies. I had to give up the idea because certain people had a rule against making money off the frat.  Apparently only the Asian business owners can do that.

As a culture we are too nice.  We are so nice that we are broke and often times last in the wealth race in america.  Two ways we struggle when it comes to investing is that we think making money off our own is bad and we don’t invest in things that could lead us to making money off our own.

This is troubling to me because there is no people that we know better than our own people.  We know the trends of our people. We know what we like to eat, drink, wear, listen to etc etc.  For some reason though we leave these opportunities to other cultures to exploit because in the African American community making money off people close to you is bad and making money in anyway that doesn’t look like getting a check from a white man is seen as shady.  This is seen by the constant discounts and free stuff that you are expected to give to your friends an family when you start a business.

“If your family members starts a business don’t tell them that you are praying for them, ask them what you can buy”

We have to learn to be relentless in our investing.  This means that we have to be hungry and we have to be willing to step on toes and even be seen as “unsavory”.  An example of this are the investors looking to scoop up property in Houston now that the storm has passed.  To some, capitalizing on a tragedy and the resulting low priced real estate could be seen as scum bag-ish but look at it another way.  You are bringing a community back to life by investing in the community and bringing it back to its former self.  As a result, you can get assistance in your investment from the multiple community development organizations, tax credits and fund raising donations.  All because you stepped up and solved a problem.  The very things that we think we shouldn’t be doing are the very things that we should be doing and the things we can get government support in doing.

Another example of this is the desire to not invest in private prisons.  If the prison is going to make money would’t it be better that we were making the money? If we want to have a say in the policies of the prison wouldn’t it be better if we had an ownership stake in them? Investing is in part about making money but it is also about having control and a seat at the table.  Ask Carl Icahn or Warren Buffet.  You have to realize that these prisons are going to go on with or without you.  We are not in position as a culture to turn down money making opportunities.  

If you look at the charts of private prison companies such as GEO and Corecivic, these companies are pushing 30-50% returns since the election of Donald Trump. Much of the gains aren’t even related to the African American community.  Much of it has to do with illegal immigration.  Controversial or not, those are gains and the money is green.  We have a duty to ourselves to make as much money as we can so that we can then take that money and invest it into opportunities for our people.  We can’t do that keeping our hands in our pockets in the name of being nice.

We have to be relentless in our investing.  We have to be aggressive and hungry and we can’t play nice.  Nobody else is playing nice.  I was just on a conference call about investing in Houston after the storm and a lady shared a story about investors who are out trying to scoop up properties for dirt cheap by telling owners that the flood damage made their properties worthless.  Now I am not saying you have to be shady but you have to be in the game.  You have to be the investor that is willing to give that person a fair price and beat back the shady folks who could care less about your community.

For some reason we think that capitalizing on someone else’s misfortune makes you bad.  Maybe it is, but an opportunity is an opportunity.  Most opportunities don’t come with bows on them.  As a real estate investor much of what you are doing is coming to the rescue after a divorce, death, lost job etc etc.  It looks ugly but that is where the money is made.  Everyone want’s to do the clean stuff and that is why there is less money in clean (see blue collar millionaires).

By stepping into these areas as an owner and not a victim or bystander we allow our community to have the protection that it needs. We give ourselves a seat at the table at these private prisons.  We show that we are willing to put dollars behind our people not just words and picket signs.  We will ultimately dictate policies that turn those communities around.  We will dictate the policies that turn those prisons into actual correctional facilities that teach trades and don’t milk people’s lives with extended sentences, and we can still turn a profit.  OR we shut the entire thing down and use the real estate for something else like affordable housing.  Those are our options when we are owners.

We can beat back people who have no desire to do good for us.  We do that by putting our money up and being relentless in opportunities.  All that grimy stuff like tobacco and alcohol or marijuana and private prisons should all be considered because investing on the back end (stock market investing) is about the profits and the numbers we make on our gains.  Taking an L in the name of being nice is going to keep us taking Ls in all other areas.  

In the end, it is all about shifting your mindset from consumer to owner.  From bystander to stakeholder.

Be great, invest well,

Todd Millionaire

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