The Empowered Investor Methodology is a revolutionary way of helping people obtain financial security and transform their lives through alternative real estate investments. This methodology consists of a five-step process: Ethos, Educate, Evaluate, Execute, and Empower.
This article is the last of a five-part series on this original methodology.
Step 5 — Empower
“The question isn’t who’s going to let me; it’s who’s going to stop me.”
― Ayn Rand
Now, for our final recap of The Empowered Investor Methodology.
- Step 1 discusses the importance of changing one’s ethos and how this puts investors on the right track to succeed.
- Step 2 covers how investors may broaden their financial education by looking at syndicated commercial real estate investments and understanding how this investment class is more favorable than both stocks and bonds on a risk-adjusted basis.
- Step 3 digs into how investors should evaluate the merit of a syndicated commercial real estate investment by weighing some of the important variables.
- Step 4 focuses on how investors execute on building multiple income streams by using a customized and diversified portfolio of investments in commercial real estate.
That brings us to Step 5, Empower. A culmination of the previous four steps, an investor knows they have earned empowered status when they take stock of their investments and see that they have been rewarded with three significant payoffs:
1. Enhanced Investment Performance
Almost all investors’ top priority is maximizing investment returns while minimizing investment risks and portfolio volatility. The empowered investor realizes how commercial real estate is an asset class that has historically generated higher returns with reduced volatility as compared to stocks. The empowered investor understands these benefits and adjusts their investment thesis to invest in private commercial real estate, which is a more favorable investment on a risk-adjusted basis than both stocks and bonds. Additionally, they are owners of assets that generate consistent income with tax benefits; they own assets that generate income rather than liquidating their paper (traditional) assets to generate income.
The empowered investor does not build long-term wealth using a traditional retirement plan that mainly consists of paper investments. Under the traditional retirement route, people earn money, save money, invest, and grow their investment portfolio until it reaches their financial independence number (typically 25 times a retiree’s annual income needs). Upon reaching this number, people can choose to retire and live off their nest egg by selling paper assets to generate income — but with a big caveat. If they liquidate too quickly, they risk outliving their savings.
The empowered investor understands the emotional roller-coaster ride and stress associated with periodic stock market crashes, which can plummet to paper losses of 50% or more. Because of these events, people may be forced to delay retirement, as it could take years for the value of their portfolio to recover to pre-crash levels. Therefore, the empowered investor knows to shift to an alternative retirement plan that consists of a financially robust portfolio of income-producing real estate assets by building and scaling their own customized portfolio of syndicated commercial real estate investments.
The empowered investor’s portfolio is constructed to minimize concentration risk by selecting diversified assets in several ways. First, they can diversify across different sectors of commercial real estate such as multifamily, senior housing, industrial, self-storage, and mobile home parks. Second, they can diversify across multiple investment strategies such as core, core-plus, value-add, and opportunistic. Third, they can diversify across different geographic markets. These various ways of diversifying a portfolio should align with the investor’s risk appetite and investment goals.
2. The Time and Means to do What They Love
The empowered investor is leaving or has already left the rat race where work obligations consumed the majority of their time. Many people continue to trade their time for a paycheck as their main or only source of income, but this is not the case for empowered investors. Time is a non-renewable resource, and there are only so many hours in a day. When wealth is contingent on time, and people are limited to how much they can actually work, it is extremely difficult to get ahead or prioritize doing things they enjoy. Therefore, the empowered investor breaks the cycle by modifying their investment strategy to generate passive income from cash-flowing commercial real estate. Beyond the financial security that comes with multiple income streams, they have the freedom of free time.
While the empowered investor understands how this can be profound on a personal level, they can also choose to leverage their free time to create change on a much greater scale. Building a portfolio with passive income streams allows someone the time to undertake their personal mission, whether that is to bring clean water and basic sanitation to millions of people worldwide or to support their favorite charitable organization. From here, we can see a ripple effect of good: the empowered investor’s success inspires others to adjust their investment thesis, and they then embark on their own journeys to positively impact the world — something only made possible by their decision to invest in commercial real estate.
3. Improvements of Lives and Communities
The empowered investor does not gamble in the “Wall Street Casino,” a landscape of volatile paper investments that are also soulless and uninspiring. The empowered investor takes the much safer bet of pursuing investments in tangible commercial real estate assets as an investor in Main Street, a term that collectively denotes small businesses and small-town values — the polar opposite of Wall Street. Through Main Street investments, empowered investors have direct ownership of income-producing assets that enhance lives, solve real world problems, and provide tangible societal benefits.
With a customized portfolio of Main Street investments, the empowered investor is no longer disconnected from where their money goes, and they do not feel helpless as to how their capital is used by corporate leaders and fund managers. They understand the power of their wallets to effect meaningful change and want their capital directed to investments that both deliver returns and improve the world around them.
The empowered investor has modified their investment strategy and objectives to invest in commercial real estate assets such as multifamily, senior living, and mobile home parks, and they understand the remarkable effect that has on lives and communities. The empowered investor understands that these assets provide safe, clean, and functioning housing, and therefore, the demand is evergreen. When others adopt this investment strategy and objectives, then the results become self-evident and even more people will become empowered through commercial real estate investing to improve Main Streets around the world. Ultimately, the empowered investor is an inspiration for others to take increasing control of their financial future and to become empowered investors themselves.
Whether you are taking alternative investing for a test drive or are already on your way but keep getting turned around, this is a proven roadmap that will help break down barriers and guide you along the journey. With that said, it is up to you to get in the driver’s seat and take the wheel. Self-empowerment, financial freedom, and meaningful returns are just up ahead.
For more information on passive investing in commercial real estate, please check out our free eBook — More Doors, More Profits — by clicking here.
Mo Bina
Managing Principal
High-Rise Capital
Website: https://www.high-risecapital.com/
LinkedIn: https://www.linkedin.com/in/mohrc/
