Rick Sapio’s 15 Investing Considerations
Rick Sapio is a Co-Founder of The 100 Year Real Estate Investor. He is passionate about helping individuals create long-term, generational wealth. Rick believes that the Dual Assetr Strategy is the holy grail for real estate investors. He puts his money where his mouth is as an owner of eleven 100 Year REI structured whole life policies.
Rick leverages his policies to invest in real estate, private companies, and other alternative investments. He also uses his key-man policies to protect his businesses and his estate from unexpected future events.
Rick believes people should take a more conservative approach to investing. His first-hand experience with thousands of people is that it’s not how much you make in your investments that matters. It’s more about how much you DON’T lose.
Rick created his “List of Investing Considerations” to embody his three main values of Simplicity, Probability, and Leverage.
1. Understand that entrepreneurs and business owners are typically the worst investors, so have a cooling-off period of several days or weeks BEFORE you write a check for a new investment.
2. Always be conservative with your investment strategy, and consider all downside risks before writing a check.
3. Remember, that a dollar in your business is worth more than a dollar out of your business.
4. Think about your business as a golden goose, and be sure to make business decisions that enhance the longevity of your business.
5. In order to stabilize your business, put yourself on a salary and bonus structure.
6. Only invest in things that you can control, i.e. companies and products you understand, services that align with your current business, etc. Use your expertise, and your business’s expertise to invest in companies, products, and ideas that are related to your business. DO NOT look outside of your business for investments that you don’t understand.
7. Set aside one full year of cash on the side, to allow you to survive any storm.
8. Investment mistakes are often costly. Be sure that you’ve done far more due diligence than you think necessary, before writing a check.
9. Education is very important. Invest in educational programs, since good programs usually return a multiple of the price paid. Once you buy a program, you must actually do the program, and then organize your life to implement what you have learned.
10. Only make investments that are fully aligned with your values, your business’s values, and your long-term objectives. You will pay more attention to investments that you care about.
11. Look for ways to lock in profit. If you’ve recently received a big check, or you have a big check coming in down the road, be sure to lock that money away, and don’t use it to make a big purchase.
12. Design a simple program for your business and personal life to lock away a certain percentage of revenues. Many people we know lock away 15% of their personal take-home pay, and 15%of their business revenues into safe investments.
13. Set up as many of your accounts as possible to pay automatically, using ACH or other means. This refers to everything from mortgages, and monthly recurring payments, all the way to putting money into brokerage accounts and insurance policies. David Bach wrote a book called “Automatic Millionaire” which goes very deep on this point.
14. Know the “Principle of Due-Diligence Dissonance.” This principle states that people “over investigate” and do far more due diligence on investments that they are not familiar with; however, they often do zero due diligence (and invest large sums) into ventures referred to them by family members and friends.
15. Understand that your need for financing, i.e. borrowing money and paying it back, is a much larger need in your life, than your need for investment return. Or, said another way, your need for financing will almost always outstrip your need for investment return. Think about how much money you earned (or lost) last year on investment returns. Now compare that sum to the cumulative total of ALL your principal, interest, and lease payments. The objective here is to get you to realize that you need to be as debt-free as possible and have your money work for you. Please refer to the book, Bank On Yourself: The Life-Changing Secret to Protecting Your Financial Future, by Pamela Yellen, which goes very deep into this concept.
This list of considerations is meant to motivate you to take a very close look at your investments, your investment behaviors, and your long-term focus on investing.
Take action to increase the probability of creating generational wealth for yourself and your family. You can start by changing some behaviors that might not serve you in the long run, regarding how you invest.
For more on Rick Sapio click below:
Podcast: The Barbell Investment Strategy
Podcast: Objectives-Based Decision Making with Finances
TEDx Talk in Italy: Purpose 2.0 – Using a Catalyzing Statement to Transform Your Future
NOTE: Please understand that Rick Sapio is NOT an attorney, accountant, or financial advisor. The purpose of this writing is to get you thinking about ways to increase your wealth over time. BEFORE you make any investment decisions or any decisions related to anything you’ve learned in this piece, please consult with the proper advisor.
The 100 Year Team has over 100 years of combined experience and specializes in working specifically with Real Estate Investors. The special design of a 100 Year REI structured policy can help you grow and diversify your portfolio and protect your legacy by creating generational wealth.