“Your investor’s edge is not something you get from Wall Street experts. It’s something you already have. You can outperform the experts if you use your edge by investing in companies or industries you already understand.” — Peter Lynch
If you don’t know these guys, I highly recommend you follow them!
At the end of the panel, someone asked what advice they had for people looking to take advantage of inflation and investing.
They both said pretty much the same thing:
You need to find your edge.
Specifically, you need to find an edge in an area where you can actually win.
Wall Street is set up to beat you.
It has unfair advantages,
But there are certain areas where smaller investors or someone with special skills can take advantage and stick it to Wall Street.
In the movie Rounders, Matt Damon says if you don’t know who the sucker is at the poker table after 30 minutes, you are the sucker!
I don’t want you to be the sucker.
I want you to learn what your edge is and how you can take advantage.
Let’s jump into it!
1. How I Discovered My Edge
I wanna share with you how I discovered my edge.
Or, really, it’s how I discovered what wasn’t my edge.
I used to be a medical device sales rep.
I would work with doctors and surgeons, helping them with their equipment.
I remember coming out of surgery, sitting in my car, getting my laptop out, and realizing that I had lost $70,000 in one day.
That was about a third of my net worth.
I felt absolutely awful.
In that moment, I learned that a complex options trading strategy was not my edge.
Over time, I found some mentors.
With their help, I realized that real estate investing was something I was really good at.
I was really good at finding and analyzing deals.
I’ve had conversations with 1,300 investors over the years.
I’m really good at explaining financial ideas and investments to investors.
I’ve been able to 20x my net worth in the last four years.
We’ve raised $30 million to buy apartment buildings and other alternative assets like ATM machines.
Understanding and explaining macroeconomics are my edge.
When it comes to real estate, I have a way I can win.
Now let’s help you discover your edge!
2. How to Discover You Edge
Is it better to work on your strengths or your weaknesses?
In the U.S., 60% of people would say they need to work on their weaknesses.
In China, 80% would say they need to work on their weaknesses.
There’s a test called StrengthsFinder.
The book discusses how people don’t become world class because they’re average at everything.
They become world class because they’re phenomenal at one thing.
The area of most improvement you have is an area of strength or passion – or an area where you can have an edge.
Look at LeBron James or Michael Jordan or Michael Phelps.
They are world class in their one area.
So, what does this look like for the Average Joe?
How does this help with investing?
If you have a business background, can you use that in your investing life?
You could be somebody who buys businesses!
If you’re a doctor, you could help other doctors to invest.
I know some doctors who are doing just that.
Are you an engineer or a CPA?
Maybe you could find real estate deals and analyze them.
If you have a unique skill set, that’s hard to copy.
Not everybody has the skills you have.
A lot of times in investing, we don’t think we have other skills.
But we do!
Being a salesperson was one of my most valuable assets while working with investors.
I found a way to sell things in a way that builds a relationship with people.
That’s very transferable when it comes to working with investors.
If you don’t think you have an edge, I have a suggestion…
3. An Edge Anyone Can Use
Don’t fight macro trends.
When the Fed says they’re gonna print a bunch of money, don’t bet the other way.
The idea of being a contrary investor is good.
If things go a certain way (like if inflation is high) don’t fight it.
Find out how you can take advantage of it.
Right now, I’m getting into as much debt as I can.
That’s weird to hear, I know!
Don’t worry, I’m not talking about credit card debt or buying boats.
I want to buy as much real estate as I can.
I can then use that money to invest at a higher rate.
If I can get loan rates of 3% to 8% while inflation is 15% to 18% according to shadow stats, then I can invest for the long term and do very well in inflation hedge assets.
I’ve got a high amount of my net worth in multifamily real estate.
Whatever you invest in, you have to make sure the deal makes sense.
As Warren Buffet says: Don’t invest in anything you don’t understand.
If you don’t understand how the deal works, then don’t invest.
Take your time to understand the business plan.
Understand the risks and how you could lose money.
Make sure you’re comfortable with how that could work.
There are safe and solid investments that pay you to hold them, including multifamily, self-storage, and mobile home parks.
These are edges you can use in a time of high inflation.
It’s not really rocket science to figure out what you need to do if inflation is high.
In summary, try to find your edge.
It could be in a business or even multifamily investing.
Improve your edge by learning from smart people.
Don’t be the sucker at the Wall Street table.
If you play at that table, make sure you have an edge and a reason to be there.
Now I want to hear from you!
Do you have an investing edge?
Let us know in the comments below.
Before you leave, make sure to check out our special report about inflation investing. It shares the best choices to invest during an inflationary environment.
If you are interested in investing with us, we are happy to answer any questions that you may have. Join our investment club today and we will be in touch.
Disclaimer: I am not your investment advisor. This is for educational purposes only. I am not giving specific advice on what you can do. I am simply giving my opinions.