EP238: 100X Your Wealth With No Money

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Imagine the power to turn nothing into something extraordinary!  🥰🥰

It’s not exactly magic ✨, although it might seem like it at times. 

The hidden world we’re talking about is where the titans of finance clash and converge – where trillions of dollars are at play, ideas are given life, and both capital and influence are wielded with near-mythical precision and strategy.  

Ah, the realm of private equity. It’s where the alchemists of the business world thrive – taking uncut gems like startups, patents, and innovative plans, and polishing and transforming them into the shimmering diamonds of industry advancements. 

It’s a beauty to behold, isn’t it?

The powerful combination of insight and capital sends ripple effects through the economy – impacting everything from the housing landscape to businesses, to the pivotal financial dealings of our everyday lives. 

Entrepreneurs, business owners, and real estate investors…this one’s for you. ⬇️

Let’s unravel the mysteries of private equity, and cast a light on the unseen forces that pave the way for growth, wealth, and innovation in every industry. 

Of course, to understand the magic of private equity, we need to first get acquainted with its nuts and bolts, so to speak.

What is private equity, really? 

Well, you might say that private equity funds are similar to mutual funds, in a way, which allow investors to invest via brokerage accounts to pool money with other investors for the purchase of things like stocks and bonds, managed by a fund manager. 

Mutual funds are public in nature, and offer investors liquidity to buy and sell investments at their discretion. 

While the process of pooling money for investment is similar in private equity funds, the main difference is in the inability to buy and sell investments when you want, because private equity funds are less liquid. 

Usually, investors need to commit to a certain length of time, which results in higher risks and returns for investments. 

A typical private equity fund is structured like this: investors contribute capital that meets a certain minimum, and become Limited Partners in the fund. They sign on for the full-term commitment, with no option of early withdrawal. 

While the length and minimums can vary, a common example would be at least investing $5 million and committing to about 10 years. 

Now, the likely investors for private equity funds tend to be accredited investors and qualified clients including insurance companies, university endowments, public employee and union pension funds, and some high net-worth individuals. 

Investments in private equity funds are made in non-publicly traded companies, and tend to follow a highly structured, methodological approach over strongly fixed terms. Flexibility and liquidity? Those typically aren’t associated with private equity funds at all… they are more the strong, steady, long-lasting types. 

So, now that you understand what happens within private equity funds, let’s talk about the fascinating effects of how private equity firms have perfected the art of acquisitions and growth, impacting not only individual investor wealth, but also facilitating one of the largest wealth transfers in history! 

It’s been coming for a while now – the transfer of wealth from Boomers to their children and grandchildren – and the trillions of dollars being moved are hitting record-breaking numbers.

Did you know, though, that the catalyst for such a historic financial event can be traced to the very forces we’ve been discussing? 

The way private equity firms have mastered the skills needed to acquire and transform the right businesses has vastly impacted the amount of wealth available to pass down. 

We’re also looking at a massive wealth growth opportunity ahead of us, while younger generations begin to harness the strategic advantages of long-term, high-return private equity funds. 

The possibilities for business-reshaping across all industries are truly endless!

Does private equity sound like something you want to reap the benefits from, yourself?

We know you might’ve caught that whole, “$5 million minimum investment” stat and immediately thought it’s not the right path for you, but wait just a minute there. 

You see, we’ve got exciting news to share about how we’re currently breaking the mold of private equity investing, and up until now, we didn’t even know it was happening! 

It’s true. We used to think that private equity funds were more for wall street suits than main street, casual fold like us. But man, were we wrong! We actually have been unknowingly creating our very own private equity firm, all this time. 

You might be curious how we didn’t realize it until now, right? Well, everything we discussed earlier about private equity funds applies to our investment company, and how we help investors grow lasting wealth, but it looks a little different the way we do it. 

Our version of private equity investing is actually much more accessible than you might’ve even thought possible. 

Check it out.

Our investment minimums until now have been about $75,000, we don’t pool money from things like life insurance funds, but directly from individual investors, and we aim to hold our investments for about 3-5 years, as opposed to 10. Oh, and in those 3-5 years, our annual cash flow averages 5-6% annually.

Pretty cool, right? 

What we’re really trying to drive home here, is that the growth and power of private equity funds is fully accessible to you, not just big firms or high-net worth individuals. There is a lot of wealth to be made out there. Why shouldn’t you get in on that action too?

There’s about $3-4 trillion dollars in PE firms currently, and you might assume that it’s all being invested in the next big thing, like the newest AI technology or microchip, but it’s not. 

The PE business model just involves raising the money to buy a firm or business outright, and in our case, the funds go towards multifamily apartment buildings. 

Why apartments?

Well, for us, the main reason is that they offer much less risk than other investment assets. 

For some PE purchases, the goal is to transform a low-performing asset into a profit-making machine. But we decided to skip the fixer-upper step, you know? 

Apartment buildings are already high-profit assets that will stand the test of time and meet our high financial standards. Thus, we choose to invest in profitable businesses, and make them even more profitable. 

Success for private equity or business acquisitions lies in the strategic selection of businesses that address essential needs and offer recurring revenue. I learned that from Adam Coffey, and I think it’s pretty helpful as a foundation for smart investment choices. 

If you want to start building a lasting legacy of wealth, private equity can be the right vehicle for the job. But let’s cover some tips for really forming PE options into a sustainable investment portfolio. 

First, like we already mentioned, if you want your PE investment to succeed, there needs to be a need.

It’s that simple!

Investing in businesses that are based in intrinsic human needs will far outlive those based in wants, desires, or whims. 

Whatever is trendy at the moment won’t still be relevant in a few months, let alone a few years. So, focusing on needs like housing gives your investment that long-term growth potential you’re looking for. 

Next, let’s discuss the recurring revenue part of the equation. In addition to meeting a lasting need, you want your PE investment to have more than just a one-time payoff possibility. 

Those tend to be much riskier, and take a lot more effort to keep things moving forward. With apartments, though, you’re looking at 12 monthly payments of guaranteed cash flow, which you can also find in other subscription-based business models. 

Keeping cash flowing will keep your wealth growing. Between meeting a basic human need for housing and the continuous revenue of incoming rent, we find multifamily apartments to be the perfect private equity investment model. 

Here’s what we’d love for you to take from all this: the realization that money is truly everywhere, and doesn’t need to be controlled by just the wealthy top 1%. 

If you take this info to heart, we hope you realize that you have the power to multiply your own, personal wealth with the private equity model we’ve laid out. 

Why settle for slow growth and trickle down wealth, when you can literally 10x, 20x, and even 100x your wealth in a short period of time? 

The power is yours for the taking, and you can start your exciting journey of investment discovery today!

Begin by diving deeper into the wonderful world of private equity funds, seek out mentors for guidance, and engage with others on a similar path for inspiration and support. 

We may be on individual wealth journeys, but we do not need to do any of this alone. We want to empower investors to take their wealth and future into their own hands and explore a new world of opportunities. 

Seeing others doing the same is a big help in keeping you moving towards your own financial goals. 

Here are some ways to keep learning, get connected and find the next right step in your investment journey. 

If you want to dive into some more tips for successful investing and wealth generation, check out this episode!

In more than half of America’s 50 biggest cities, there’s been a notable drop in permits issued for multifamily construction, falling by at least 35% from their highest points.

➡️ Developers are facing big challenges, like expensive borrowing, less financing options, lower rents for new leases, and consistently high construction costs. 📖