As I sit here and write this post the investment club portfolio is up 18%. We have a holding that is up 50%, three up over 30%, two up double digits and one position that is down, but is still up over 20% from its low. A lot of those are five figure positions with four figure gains.
A few weeks ago I was approached by an old college colleague who was never very supportive and never saw the vision even way back when. I received an unsolicited FB message talking about how the investment club is only up 7% and how the overall market is up about 17% and how if he had invested with me he would be pissed. I took this to heart and it kind of upset me. Mostly because I don’t charge investment club members a dime and most investment club members wouldn’t have access to this type of hands on investment advice at the levels we provide them. I was appalled that anyone could complain about something that is free.
Nevertheless, the crazy thing is that while I believe we were justified in the lower return because the goal was to preserve principal while growing our base, as outlined in the intro letter, I also felt we could be doing better.
This message, although it resulted in a smooth block, did actually motivate me to do better for this club.
Its not about the returns though
I started this club because I was tired of seeing the black community get pushed around and reduced to beggars and protesters. I knew that our resources would grant us access, protection and security. I did not start this club to get rich quick or to earn money for us to live the good life tomorrow. I started this club as a showing of tangible unity and power.
I want a racist owner to have a team come for sale and we buy it. I want a brand to make an insensitive comment and we buy them, buy their competitor or short their stock. I don’t want diversity, I want ownership. You get that with capital. We have built that capital by working cooperatively just like every other group in America who has built up capital.
So, even with the returns what they are, the key is that we have built up a significant healthy portfolio that will pass the six figure mark soon, we have two cash flowing rental properties (in discussion for seller financing on two more aka four total homes) and we are in position to tap into other opportunities that come with having this level of debt free assets that aren’t available to small time quick flip chasers.
The borrower has become the lender. And a lot of time the lender makes more than the owner. We can now do both. It would be an entire blog post to talk about what we can do now as we grow into what could become a full on financial institution complete with lending, banking, mortgage, and other capabilities. This is why its important to start. There are opportunities that only avail themselves to people moving and shaking not thinkers.
This is what we have now with the chunky assets not even considering the return on those assets.
The group wins
If you are investing by yourself you are already a loser. In the big scheme of things individuals don’t get far. Warren Buffet doesn’t even invest solo. This is because individuals get slaughtered.
If you are solo you are likely going to spin your wheels trying to save enough, trying to know enough or trying to go big enough. The group ends all of that. The group is the hack, despite the returns.
Power of the partnership in practice
As I was riding into work this morning I was talking to my mom, a CPA, about one of her clients that has a partnership of about 20 members. Each member pitched in $2,000 and they bought an orange grove that yields them $8,000 per member per year. That is a 300% return. Not only are they winning on the cash flow side, the property is also worth millions and they can sell that and cash out their family at a later date.
It is no secret folks. The only secret is a lack of exposure to things like this that go on all over. CPAs, private bankers and lawyers see these things on a daily basis. They get exposed to these things. This is me exposing you to how wealth works. Real wealth not mutual fund and financial adviser wealth that takes you 20 years to cash in on.
Goal number one
Goal number one is and always has been to not to lose money. In the beginning I lost this a little because I gambled on some things that we thought could actually make us big money fast. We bought Snapchat, we bought Under Armour and we tried to turn a quick profit. I tried to show people that investors make money. In this regard I was conflicted because I got away from the purpose of the club.
After those quick missteps we refocused and began buying solid companies like Visa, Netflix, Amazon and several index funds. As a result we were able to see gains without losing money. Might not be crypto returns but crypto returns wont be here forever guys.
Our returns create a silent capital partner
In the beginning you use a lot of your own money but as things progress you just start reinvesting the gains.
Now that we have picked up chunky returns on the stock side and are stacking the cash flow on the real estate side, its not time to distribute the gains and buy expensive purses. Now, we plow that money right back into the deal. This is what they mean when they say investors make their money work for them. Not just the principal gets put to work but also the gains. If we were to continue to contribute the $5,000 per month that we see, plus reinvesting the gains, in ten years we will have multiple millions of dollars working for us. You don’t create generational wealth in one year.
Sometimes you have to start investing so you can get the cash to help you invest bigger and improve your life. This is why the mentality that you have to pay off your debt or loans to invest is just dumb. You pay off your debt by investing, you invest by investing. That’s just the game. We now have our members and a silent member in the gains and cash-flow. That is the ultimate level up because now our money is truly working for us. Its hard to see money available and not spend it but what do you think wealth is? If you have millions you can basically buy whatever you want whenever you want. Self restraint is the only thing that keeps you from going broke. We must practice restraint on the gains and principal. Act like that money doesn’t exist.
Also, based on the track record we have seen I would say that Todd Capital is a good bet for any windfalls you might be stepping into. Lets get some assets, lets accumulate more power and lets change our family tree by investing and stacking not spending and showing.
So, as always, thanks for riding with the club. If you aren’t a member of the club, become a member of the club. It’s completely free and everything is above board and transparent. I believe that just being exposed to this level of black owned wealth will open your eyes to what is possible for you and your family.
Email firstname.lastname@example.org to join.
Be great, invest well,