Today’s episode is particularly raw and direct.  It’s about my TERROR in giving advice to you about investing, and about being responsible for the capital of others.  I’m Bryan Ellis.  This is episode 184.

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Hello, SDI Nation!  Welcome to the podcast of record for savvy self-directed investors like you!  Get ready for another dose of Predictably Profitable thinking!

Monday is, without a doubt, my very favorite day of the week.  I love the weekend, and the time with family and friends, and some rest.  Enjoying the waning days of my first daughter’s teenage years… watching my 15-year-old blossom… seeing both of those girls absolutely dote on their younger brothers, who are 1 and 2… and seeing those little boys transition from tiny infants capable of nothing into actual little people… it’s such a sweet, wonderful thing... and that time spent with and focused on them actually helps my mind to recharge and be ready for another great week of work… and that’s certainly the case today.

I’m going to admit a certain terror to you, my friends.  I hope you’ll bear with a show of a bit more personal nature today.

But first – if you’re in the Atlanta area, please be sure to stop by the Georgia Real Estate Investor’s Association meeting tonight.  I’ll be the featured speaker there, and I’ll be talking about how to raise capital for real estate transactions.  Now you, my friends, are more likely to be an investor of capital than someone who raises it.  But I GUARANTEE you’ll find it fascinating, because you’ll see in graphic detail the reverence with which I view the notion of controlling or influencing the capital of my clients.  And besides, I’d LOVE to meet you and even have a drink with my listeners after the presentation, so when you come tonight, please do be sure to introduce yourself to me… I’d really love to meet you.  Anyway, to be sure you get the notice with information about the time and location for tonight’s meeting of the Georgia Real Estate Investor Association, just text the word SDIRADIO with no spaces or periods to 33444 and I’ll send the reminder to you.

Folks, as you know, I give out financial analysis and suggestions regularly on this show.  And you may also know, I run a private equity fund that focuses on purchase and resale of houses in certain strategic markets.  It’s been doing very, very well.  In fact, on tomorrow’s episode of Self Directed Investor Success Stories, I’m going to profile the latest deal that we closed this past week.  I’m totally confident you’ll be impressed.

And you know, that success wasn’t by accident.  I’ve really done my homework.  I’ve really checked out the markets in which we focus; I’ve researched the PEOPLE who are working for and with me; I routinely monitor the economic situations and other macro issues that could affect what we’re doing.  I pay attention… CLOSE attention… every single day.

So what you hear on this show is confidence.  And I am confident.  I’ve made a series of well-researched decisions.  I’m staying on top of everything.  I treat every single penny I manage as if it’s my own because here’s how I see it:  My client are risking money, and I’m risking my reputation.  My client’s capital… and the safety of it… is job #1.  Protecting that money is the first thing I care about.  And by extension, protecting my reputation is critically important to me, too… more than I can ever express.

So the confidence with which I speak to you is well-founded.  It’s not an accident.  The evidence of the accuracy of my words is all around us.  There’s simply no arguing that it’s wiser to buy real estate below market value than at or above it.  There’s no arguing that engineering your investments in such a way that they’re predictable and profitable is very wise.  It’s beyond debate that investments secured by collateral are safer than those not secured by collateral.  These things are true.  These things are wise.  These things can’t be credibly challenged.

And yet, in implementing those abstract ideas in the very real world, risk comes into the equation.  Sure, it makes all the sense in the world to buy real estate far below it’s real value in a rising market.  But what happens if a contractor slows down or even goes rogue?  What happens if the supply of assets dries up… or my strategy for acquiring them expires?  What happens if a crash in the Chinese stock market actually does have reverberations on the opposite side of the world, and suddenly the real estate market weakens in the places on which I’m focused.

Here’s the truth:  I have a strategy in mind for each one of those risks.  I’m a big believer that, to the greatest extent possible, one should make decisions for difficult and undesirable situations before those situations ever materialize, in order that clearer thinking prevails.

By my plans are, until enacted, only theory.  But that’s true every single day.  Every single day I have a theory that I can make decisions to direct my team the next day on which assets to buy, which assets to renovate, and which to sell.  Every day, I operate on a theory that has as its basis the assumption that I and my team, that we know something… or can do something… that gives us an advantage that can lead to profit.  That’s the difference between academia and business… academia gets to theorize.  In business, we get to see where theories work and where they don’t… in the real world.

So the confidence you hear from me on this show is well founded.  I’m careful.  I’m certainly not paralyzed by my carefulness… not even close.  In our fund, for example, I’m absolutely very, very happy with every single asset we’ve purchased so far.  My theories are playing out well… and with my watchful eye on the whole process – a watchful eye which I suspect sometimes may be a bit heavy on my team – I expect we’ll continue to have success.

But my friends… it’s terrifying.  Not stressful, but terrifying.  Those are different things.  Stress is essentially just an  extended negative reaction to a lack of preparedness.  You encounter something you weren’t expecting, for which you’re unprepared, and you experience stress.  Terror is fear of the unknown.  Yes, I’m terrified of the unknown.  I’m terrified I could get it wrong for clients in my private equity fund.  I’m terrified I could tell you something that’s not quite right on this show.  It’s a heavy load to be a trusted source of financial advice… a very heavy load.  The ramifications of doing it wrong?  Well, that’s terrifying.

But that terror is motivating to me.  It keeps my mind sharp.  It keeps my senses turned up.  That terror makes it impossible for me to be complacent with the capital that my clients have entrusted to me.  And I wouldn’t have it any other way.

There are two sayings that really resonate with me.

First:  Everybody is a genius in a bull market.

Second:  Pigs get fat, hogs get slaughtered.

God, please grant me the wisdom to profitably manage my client’s capital.  Let me be wise in good markets and bad.  And may my guide posts be wisdom and prudence, not greed or pride.

My friends, invest wisely today, and live well forever.

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