(Part 2) Top products from r/fatFIRE

Like creating a successful business, it's not so much about following a "do these 5 things" article. It's more about solving hard problems that take time, discipline, and thoughtfulness.

I recently read an outstanding book that I can't recommend enough. It focuses on this very topic. It's called "Finish Big". Here's a link to it on amazon.

In short, the author's general philosophy is to create a healthier, better running business for yourself, because that will ultimately increase the value of the business in the eyes of a purchaser. Namely:

• Reduce the businesses dependency upon you
  
• Obvious basics: have a high margin and show good growth
  
• Make the business more durable to market changes
  
• Learn to appreciate how long the sale process actually takes
  
• Learn to appreciate how you really need help during a sale process as everyone involved in it has different motivations than you do and you probably have the least experience of all of them.
  
  Read this book. You will thank yourself and it'll receive a permanent place on the bookshelf!

First, I want to say, welcome to the wonderful world of real estate. You have a LOT to learn and it takes time. Don't let that discourage you.


Second, anyone financially sophisticated would never put their money in residential for a number of obvious reasons. My guess would be you have only ever bought a house, so that is where you are comfortable. I won't even get into how incredibly inefficient and what a poor investment residential is, particularly trying to buy 400-500 homes. There is a whole list of books you would need to read, just to have a discussion on the topic. To be fair, I will recommend one book you should read immediately ( https://www.amazon.com/gp/product/0471684058/ref=ppx_yo_dt_b_search_asin_image?ie=UTF8&psc=1). I picked this one specifically for you because he actually compares residential to commercial in it.


Third, you would never approach a real estate broker (very strange recommendation by LordAshon). Brokers don't own property's, they get a commission for closing them. Many commercials brokers have no idea what they are doing. The good ones are exceptions and not the rule. 50% of all commercial deals are done without brokers. You don't bring brokers into the deal unless you are ready to make an offer (and they have the listing) or are sending your specific requirements for purchasing. Truthfully though, if you were going to move forward with some sort of portfolio (like hundreds of homes)...you would need an attorney, not a broker.


Fourth, You should find someone who actually has experience in analyzing, making offers, doing due diligence and closing multi-million dollar deals. There is a reason why capital groups have teams of people involved.


What you should be doing, is looking into are capital groups, rather than funds to invest with. Don't lose your friends and associate's money. I can already tell you are going to make a LOT of mistakes that will cost millions. Please don't do that! They won't be friends for long if you lose their capital.

1. What are the actual goals for the group and its members? Tax deduction? Income? Portfolio diversification? Inflation protection/hedge?
   
   Each of these questions has a different answer and strategy related to it. You should group these people together so that interest is aligned in that particular investment.
   
   
2. Where are the funds from each member coming from? Some may use tax-sheltered accounts and others may not.
   
   You need to adjust the strategy to reflect this. For example, if someone is using a self-directed Roth IRA, they can not be invested in any property with a mortgage/lien because the investment is still subject to UBIT tax and negates the whole point of the ROTH.
   
   
   
3. How do you plan to structure the company? LLC's, Trusts? A combination? Some more advanced structures I won't mention (which is where you probably should be)?
   
   
   With the right capital group, you should be able to double your money nearly every 5 years or so (but you have to buy right, to hit these numbers). With $10 million, you should be able to leverage roughly $35-$40 million in assets. In 5 years, that $10 million should grow to $20-30 million. Partnering with a capital group would be the best way to learn the business or just let them do all the hard work for you (do you really want a full-time job?). Finding the right fit could take a year. I can make a couple of recommendations if I knew what your financial goals were.
   
   
   A couple of things to consider, if you don't use leverage and you get sued, you can lose 100% of your equity in that LLC. Leverage is actually quite an important strategy. You need to understand your tax implications to the partners and this should be known before you ever make any offers.
   
   
   As far as markets go (I won't tell you how you future proof your investments using demographics, this is something that should be earned): What I will tell you is all the movement is heading south. 10,700 people retire per day...this will continue until 2023. Millennials are relocating south because that is where the job growth is. Parts of Arizona, Atlanta metro, other areas outside of Dallas/Fort Worth in Texas, almost all of the Florida coastline.

Try to keep in mind that popular media rarely presents a proportionately balanced view of the world. Due to fundamental incentives, media tends to be biased toward particular kinds of attention-grabbing sensationalism and pessimism.

Wanting to accurately perceive the state of the overall world beyond our personal experiences is admirable, so good for you. Investing the time to increase understanding helps us react rationally and responsibly.

A useful starting place is this brief TED talk by the amazing statistician Hans Rosling. Good books include Pinker's "Enlightenment Now: The Case for Reason, Science, Humanism, and Progress" and Ridley's "The Rational Optimist: How Prosperity Evolves".

VC here. Finally created an account to answer your question. Before doing anything, read these two books:

1. Angel by Jason Calacanis https://www.amazon.com/Angel-Invest-Technology-Startups-Timeless-Investor/dp/0062560700
   
   
2. Venture Deals by Brad Feld https://www.amazon.com/Venture-Deals-Smarter-Lawyer-Capitalist-ebook/dp/B01M3UIVW3/ref=mp_s_a_1_2?keywords=venture+deals+brad+feld&qid=1563846931&s=gateway&sprefix=venture+dea&sr=8-2
   
   The first book provides a high level overview of angel investing while the second goes into some of the nitty gritty details.
   
   From there, if you’re still interested, I’d recommend looking up your regional angel investor network. Pretty easily found on google. Most cities have them (Baltimore Angels, New Dominion Angels, etc...)Ask to come sit in on one or two of their pitch events. Get coffee with the other angels in the room and hear about their experiences.
   
   If you’re still interested, I’d join the group (all have some nominal fee) but you’ll get practice reps at analyzing companies, access to dealflow, and a good platform to start building a network. Other key takeaways:
   
   
3. Only allocate what you’re willing to lose (10% of NW is a rough estimate for alts depending on how big you are)
   
   
4. You need to be able to make 25+ bets. Often companies have minimum check sizes, so joining a group allows you to pool.
   
   
5. Invest in what you know.
   
   
6. Invest where you can help. (I.e. former F500 CISO angel investing in cyber security startups)

Do you or your spouse have the option of being paid as a contractor? If so, that suddenly allows you to expense many things such as a work vehicle, home office, meals, etc. You can find other threads on here discussing this.

As others have said, you might also interview other potential accountants. I didn’t realize how much variation there could be until I finally found a good one, and now it’s like night and day. I’d recommend reading What Your CPA Isn’t Telling You by Mark Kohler. It definitely opened my eyes to things I didn’t know were possible and gave me lots of good questions to ask when interviewing accountants.

Read this: How to Retire Happy, Wild, and Free: Retirement Wisdom That You Won't Get from Your Financial Advisor by Zelinski, Ernie J.

The Millionaire Mind is a book based on such a study you describe:

The Millionaire Mind targets a population of millionaires who have accumulated substantial wealth and live in ways that openly demonstrate their affluence. Exploring the ideas, beliefs, and behaviors that enabled these millionaires to build and maintain their fortunes, Dr. Stanley provides a fascinating look at who America's financial elite are and how they got there.

The Millionaire Mind https://www.amazon.com/dp/0740718584/ref=cm_sw_r_wa_apa_i_BY2LDbJYPQRD8

I’d recommend to OP, u/AnthonyNapoli, that they check out a book about this topic called: Uneasy Street: The Anxieties of Affluence.

The author interviewed people from households with a wide range of incomes ($100k to several million per year) and wide range of net worths (some around $10 million). What she found was that all refer to themselves as “middle class”.

It’s uncomfortable or maybe rude to think of oneself as poor or rich, so instead everyone says they are “middle class”. Middle class is considered the best class to be a part of.

Anyway that’s why it’s better to talk about percentiles, like income percentiles or net worth percentiles. That’s quantified and more concrete.

No. Read David Swensen's book for non-institutional investors. He is the Yale endowment manager and has great data on the perils of active investing. Essentially, he is a Bogle Head, espousing index funds and asset allocation as the way to go.

If you haven’t seen my other comment that got drowned, this book is AMAZING:


The Opposite of Spoiled: Raising Kids Who Are Grounded, Generous, and Smart About Money https://www.amazon.com/dp/0062247026/ref=cm_sw_r_cp_api_i_DCE2DbPTSHSAD

As far as reputation goes, Quiet Light is at or near the top. I sold through them and it all worked out very well (apart from the buyer taking his sweet time to arrange financing).

The FBA Broker is wonderful to work with. FE International and Empire Flippers are also both legends in the space but I’ve not worked directly with them.

Website Closers does not have the best reputation.

But if you’re new to the game, do yourself a favor and get calibrated by reading this: Buy Then Build: How Acquisition Entrepreneurs Outsmart the Startup Game https://www.amazon.com/dp/1544501137/ref=cm_sw_r_cp_api_i_z1fODbQN3Q40H

This one was pretty interesting. https://www.amazon.com/Dungeons-Dragons-Art-Arcana-History/dp/0399580948

I would read this book.

Really great advice.

https://www.amazon.com/Permanent-Portfolio-Long-Term-Investment-Strategy/dp/1118288254/ref=mp_s_a_1_1?keywords=permanent+portfolio&qid=1567914372&s=gateway&sprefix=permanent+portfolio&sr=8-1

I liked this one:

https://www.amazon.com/All-About-Asset-Allocation-Second/dp/0071700781

I have good news for you, they did update it the past year.

I read it and thought it was meh compared to the first one. I thought the first one spoke about how small business owners were mainly the millionaires, this one talks more about how there are more 401K millionaires out there.

https://www.amazon.com/Next-Millionaire-Door-Enduring-Strategies/dp/1493035355

one way to accustom yourself to coding/algorithms and software engineering when you are not a software engineer is as an example by reading this kind of books

https://www.amazon.com/Algorithms-Live-Computer-Science-Decisions/dp/1250118360

About the IA thing, read this article: https://blog.safegraph.com/a-non-technical-introduction-to-machine-learning-b49fce202ae8

and if you want a more in deep reading about the AI, here's Google's articles about Machine Learning and AI

https://ai.google/education

Trust me

Take a look at this book https://www.amazon.com/Messy-Marketplace-Selling-Business-Imperfect/dp/0998030007

I work in tech in the Bay Area so yes, my context is dramatically different. A friend of mine who was Zuckerberg's roommate at Harvard recently wrote this a book about the dramatic difference between the kind of wealth you're talking about and the kind of wealth he has amassed. His premise is that we live in a world where a piece of blind luck (meeting Zuckerberg) plus a couple years of hard work turned him into a billionaire, and no one should think that is "fair" or "justified".

And he's not at all the exception. I got incredibly lucky too and would generally say I've worked less hard than the vast majority of people who work two shitty jobs to support their families.

The issue isn't whether or not anyone is ever "self made". The issue is that the amount which society rewards certain things and not others isn't necessarily tied to fairness or hard work. If we lived in a world where everyone's basic needs were taken care of, then this debate would be pretty different, but so long as people are hungry and sick and money could solve those things, allowing billionaires to hoard resources is amoral.

Imagine money didn't exist, and the rich were hoarding grain - more grain than they or their families could ever eat in a hundred lifetimes - while millions of people died of hunger right outside their walled-off homes. We would call them monsters, right?