Transparency is one thing that I rarely see from investment gurus. They’ll tell you a strategy. They’ll explain to you how you should diversify. They’ll even recommend funds, stocks, asset classes, you name it. But it’s pretty rare that they’ll give you an exact screenshot of everything they own and in what percentages. I’m not sure why. If you really want to help people and want to reduce the work they have to put in, give them your formula. Hell, you can even charge for it. It’s better than charging for a “formula” where people are still doing all the research and guess work. Don’t get me wrong, there are some people out there who are pretty transparent with stuff, but I’d say for the most part, you’re not browsing the internet and finding all the stock and real estate holdings of the top 500 CEOs. P.S. rightfully so. That’s their information and they can do whatever they want with it. However, as a fun exercise I’ve decided to share with you every single thing in my portfolio. All of my assets and a percentage breakdown of each. You can take this information and do what you wish with it. These numbers are based on my total assets including my home (because it’s paid off and has no debt) and my business. If you exclude my home and business these percentages change dramatically but you’ll still get a complete sense of how I invest. Also, each one of these asset classes has monthly funds going into it automatically. I’m a huge believer in that. Pay yourself first. Here we go:
My Business (Close to 65%)
I’m a man who tries to walk the walk. Just yesterday I wrote about how the rich don’t get rich investing. They get rich with their businesses. Well, the same goes for me. I may not be rich but I would consider myself someone who’s comfortable and doing pretty well. Mortgage is paid off. I make a good living. And I can do the things I want with the time I need. That to me is rich in and of itself but let’s not stray too far off topic. Of all my assets, my business is far and away the most valuable and it’s not even close. If I were to liquidate my websites today, based on current valuations it would be a substantial windfall for me. Of course that value can change any minute and my business can suffer greatly in the blink of an eye. But like I said, based on current valuations my business is nearly 3/4 of my current assets.
Physical Real Estate (Approximately 15%)
There are a million different kinds of real estate out there and a million different ways you can invest in it. But for the purposes of my own assets I would split up my real estate holdings into two kinds: physical and paper. By “physical” real estate I mean actual property. These are deals that I’m an investor in where the underlying asset is some type of building or land. It could be a multi-family apartment building, an office building, anything. And with regards to land, it could be a vacant lot or it could be income producing farmland. With regards to the types of physical real estate I have, there are 4. Here they are:
- My House – normally I wouldn’t count my house as part of my portfolio, but because it’s paid off and I owe nothing on it except taxes every 6 months, it 100% counts. It may not be liquid but it’s still a valuable asset.
- 1 Private Syndication Deal – I currently have money in a private real estate deal. I’m one of the investors on a limited partnership agreement for a multi-family building located in North Carolina. Again, this isn’t a liquid asset but it’s a 3-5 year investment that pays quarterly distributions.
- Fundrise – Fundrise is a crowdfunding platform which invests in commercial and multi-family properties. Instead of going in on one property I get a tiny piece of a bunch of them. It operates almost exactly like a REIT. It’s about as passive as it gets. It’s not entirely liquid but you’re eligible for withdrawals every single quarter if you make a request.
- Acre Trader – Acre Trader is like Fundrise only it’s for farm land. Here, however, it’s not a fund. I must choose my investments individually. So far I’ve invested in two different farms in the United States. These are income producing farms with slow and steady appreciation. These investments also pay out dividend distributions.
Brokerage and IRA Accounts (Approximately 15%)
So this is what most people have most of their money stashed away in. And it’s not much different for me. If it weren’t for my business, stocks and funds would take up nearly 50% of my assets. I believe the stock market is a wise place to put your money long-term. It’s seen nearly 10% returns throughout its lifetime. Sure, past performance isn’t indicative of the future but I’ve been in the market since 2003 and I have no complaints. So where is my money actually put? I’ll tell you exactly what stocks and funds I own. I have five accounts in my brokerage, all worth approximately the same.
- Brokerage Account 1 – this one is comprised of 9 stocks all with equal weight. Here they are: AAPL, AMZN, AWK, GOOG, GWW, MKL, MSFT, SQ, and WM. That’s it! I’m a huge fan of owning parts of successful businesses and I think all of these qualify.
- Brokerage Account 2 – this one is also comprised of 9 stocks all with equal weight. Here they are: BAM, BLK, DIS, JNJ, MCD, PEP, PG, V, and WPC. As you can see I’m not an incredibly risky investor. Mostly blue chips, some dividend stocks in there. Nothing fancy.
- IRA Account 1 – 100% VWENX – This is the Wellington Admiral Fund. It’s a Vanguard fund with a very low management fee consisting of around 65% stocks and 35% bonds. Pays a nice dividend. Simple.
- IRA Account 2 – 100% VWENX
- Business Brokerage Account – 100% VGSLX – This is Vanguard’s Admiral REIT Index Fund. I love my real estate. This is the only non-physical real estate I own. Pays a hefty dividend and management fees are super cheap.
Business and Personal Checking Account (Under 5%)
This one doesn’t need too much explanation. I only keep as much money in here as I need since there’s no interest. But it’s where all the money I make from my business goes. It grows throughout the year (hopefully) but I make sure there’s enough in there so I can pay my estimated taxes, property taxes, expenses, etc etc.
Goldman Sachs Marcus Account (Under 5%)
This is my “emergency” fund. I have about a year’s worth of expenses in here. I always make sure a little bit goes in here each month so it keeps building. The interest rate is garbage but I don’t put money in here for returns. I put money in here just in case the shit hits the fan.
Whole Life Insurance (Under 5%)
I would only recommend this if you can get in early and have a very long timeline. Most people get term life and I have zero issues with that since the monthly premiums are considerably cheaper. However, if you can start a policy in your 20s (which is what I did), within 12 years your premiums can pay for themselves. I started 2 policies (each one was $500K) in 2009 and now the cash value of them is in the 6 figures. The premiums are only $400 a month because I started them at such a young age and am healthy. Remember, the longer you wait on these, the higher the premiums will be. Only do whole life if you have a 20 year or more timeline.
My “Risky” Investments (Under 5%)
This is where I take the biggest risk. Any kind of investment in a start up company, crypto, collectibles, or something “alternative” goes in here. But for me, these aren’t even that risky. It’s not like I’m investing in penny stocks and have bet the farm on Bitcoin. I’m not saying that’s wrong if that’s your thing, but it’s just not for me. I prefer even my biggest risks to be less risky. At the moment I don’t own any crypto. I did own Bitcoin and Ethereum but sold them off because I couldn’t stand the volatility. I may eventually buy some Ethereum again, but I’m in no rush. I simply don’t understand crypto so I don’t really bother. The most important thing with these investments is that I’m willing to lose on all of them. Honestly I don’t care if any pan out.
- Peer to Peer Lending – There are a zillion peer to peer lending sites out there. The biggest one is probably Lending Tree. However I have an account with Prosper. I’ve been putting little bits of money away for years in there. So far my return’s been around 5% so it’s not bad. Each loan I’m a part of averages 3 years. At the moment I have little $25-$50 shares in hundreds of loans that Prosper selects for me based on criteria I gave them (basically I only loan to people with A and B credit).
- Art – I have zero interest in fine art for my home. Never did. I’m not an art guy. But that doesn’t mean I’m not aware that it’s crushed the S&P for decades now. Problem is that it’s not liquid. That’s why I signed up for Masterworks. They do all the work for you by offering you part ownership in multi-million dollar paintings. So far I’ve invested in 3.
- Wine – Very similar to Masterworks I joined a crowdfunding site called Vinovest. You put the money in, they do the rest. They select the wines in your portfolio. You own real wine. It’s stored in a massive refrigerator. You can even take bottles out to drink if you want. They appreciate in value over time and you can eventually sell them. I don’t even like wine! But I’m still aware of how it appreciates.
- Collectibles – I don’t own anything except for trading cards in this category. I doubt I’ll buy comics or Pokemon cards, but that’s where these types of things lie. Same deal with antiques. I invested in a few baseball cards that I’m betting will pay out eventually, but who knows?
As I said I might get back into Cryptocurrency but I’m in no rush to do it.
How should you invest?
So there you have it. That’s my entire portfolio of assets. The way I see it, you should be investing according to what makes you sleep at night. I’m dead serious. The more stress, the less you should be doing something. Remember how I said I got out of Crypto? I couldn’t stand the volatility so I walked. If there’s one thing I know pretty well, it’s myself. Price fluctuations of a giant magnitude piss me off if I have too much invested in them. With regard to your own assets, listen to yourself. That’s the best advice I can give, seriously. Do you. Don’t listen to anyone else. Hold yourself responsible and accountable. That said, if you want to copy my allocation to a tee, be my guest. It’s worked for me so far.