099: Profiting in Leisure with Beth Clifford

Before I had a clue on how to invest, I thought I could just figure it out on my own. How hard could it be? After all, it's not brain surgery right? And to a certain extent that is true. The math is quite easy. And yes, there is a simple equation. Wealth=leverage(Mass x Velocity). But the problem is, you have to believe the numbers that you plug into that equation in order for you to invest with confidence. And…to be clear, apart from concepts like Wealth Formula Banking, there really is no guaranteed return on investment in just about any opportunity. You can do all the math and due diligence you want, but at the end of the day, you have to take some leap of faith when you write that check. The first time I bought an apartment building, I did all the math right but there were many things I did wrong that caused me to lose about $300K—that was an expensive education. And boy…did I learn. In fact, I'm happy to say that I never lost money on another apartment investment since then. A big reason for that is my discovery along the way that investing is a team sport. You've heard that before I'm sure. But it's really important. In fact, I call this tribal investing. You see, with the concept of tribe, there is this idea that we can all benefit from the collective strengths of our community. Yes…learning is best done through mistakes. But…they don't need to be your mistakes. Borrow the battle scars of others in your tribe! Tribe also suggests an orderly community—one in which there are checks and balances. It is way that people create order out of an otherwise chaotic world. The same can be said for your financial tribe. Your want to have people that have your back and you want people with whom you invest to take your money personally. You want them to feel personally responsible for your money and also worry about their reputation in the community if they don't perform—that's where checks and balances come in to play. Listen, the best investors in the world lose money. There is no such thing as a deal that can't go south and even the most skilled and experienced deal sponsors will on, occasion, lose money for their investors. But if someone is in your tribe, the hope is that they believe what they are telling you to be truth and do not take the responsibility as your fiduciary lightly. That's why it is important to constantly expand your tribe. You need to be able to trust people before you can trust their deals. Some of you occasionally send me opportunities and want my opinion and more often than not I send a one liner back to you that says, "I don't know them". That's not to be curt or unhelpful. I just don't look at anything unless I have some kind of connection with the sponsor group. On the other hand, knowing an operating group well and believing in them can sometimes convince me to get past some of my own dogmas. As you may know, our accredited investor club bought into an offshore resort development last year. I don't normally invest in resort property and I normally don't invest in developments. But the strength of this team and associated brands along with their character made me look deeper into an opportunity I would have otherwise never considered. That property is Mahogany Bay Village and Beach Club and the lead developer, Beth Clifford, is my guest on Wealth Formula Podcast this week. If you have ever considered investing in developments or resort property, make sure you listen to this show as Beth will explain, from the investor's perspective, how one should approach these kinds of projects. Shownotes: [00:07] Introduction [11:51] Beth Clifford's background [14:38] Golden Handcuff [18:39] Beth's take on investing in development [26:17] Mahogany Bay Village Belize [37:34] The projection of Mahogany Bay [42:49] Learn more about Beth Clifford and her work Mahoganybayvillage.com [45:42] Outro