Real Estate Investing & More

Do you like hearing about real estate investing or is it just Motley Fool analyst Matt Argersinger’s mellifluous voice? Either way, by popular demand Matt is back to answer some questions about real estate investment trusts (REITs), crowdfunding, and Foolish meet-and-greets. Plus: poetry, sound effects, and a reminder of why we invest.

To catch full episodes of all The Motley Fool’s free podcasts, check out our podcast center. To get started investing, check out our quick-start guide to investing in stocks. A full transcript follows the video.

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This video was recorded on Nov. 24, 2021.

David Gardner: This month’s mailbag episode will speak in particular to what was this month’s most popular episode, which was “Real Estate Investing” with Matt Argersinger. Don’t get me wrong, if you’re not into real estate, we have items speaking to which industries to avoid, an inspirational story from a fellow Foolish investor, a retelling of one of my favorite stories, the five monkeys story, and other Foolishness to boot, but many of you had more questions for Matt Argersinger and so he joins me midway through to speak to you through you. Wait, those rhyme. Which reminds me, we’ll have a poem or two. Roses are red, violets are blue, this month’s mailbag is here for you only on this week’s Rule Breaker Investing.

Welcome back to Rule Breaker Investing. If you are in the United States of America or if you care about us, happy Thanksgiving to all my fellow Americans. We will be sharing some thanks a little bit this week. It’s not front and center. It’s not themed, but you know what? It will be in December because last year I had fun opening up December with my Gratitude 2020 episode. I thought there are some new and unique things to give thanks for in 2021 and so in mid-December we’ll do Gratitude 2021. That will be full of thanks and thanksgiving but in the meantime, I hope your week, fellow Americans, is replete with thanks and thanksgiving. Gratitude is good for all of us, it’s as good for the giver as it is for the recipient, always worth keeping in mind. I do want to express gratitude for the month that was. We had three podcasts in November of 2021 proceeding this mailbag. The first was “Real Estate Investing” with Matt Argersinger, a topic we don’t touch on very often, which is why in part I think it touched off a bunch of notes and we’ll take some of the most relevant ones and Matt will be joining me in a little while to speak right back to you and your questions, fellow Fools, about real estate investing. We had two other podcasts this month. The first was “Stock Stories Volume 6.” We talked about Chipotle, Rollins, Stitch Fix, Zillow, and Nvidia.

Yes, “Stock Stories” in the middle of this past month, and then last week it was a “Reviewapalooza,” in particular, sending off one of my five-stock samplers to […]. It was 5 Stocks That Got Trouble. Five stocks at average, by the way, gains of 253% as a group since picked on this podcast just three years ago, so far exceeding in expectations I would ever have. It was a delight to go through all three of those five-stock samplers. Well, I am conscious it sometimes sounds like bragging as we go back and review the numbers years later, I try to make it as much about learning because why the stocks have done what they’ve done is really the important takeaway you and I should have. Most of these five-stock samplers have beaten the market. Many have crushed the market. We also have some clunkers occasionally. Yeah, I’m looking at you 5 Stocks for the Age of Miracles, [laughs] which I am already dreading reviewing in April of next year. Yes, sometimes you do need to lose to win. Well as is our wont, we’re going to start this mailbag off with some hot takes from Twitter. I’ve got three of them for you this particular month. One comes from […].

Mark, you wrote, “Learned lots on the Rule Breaker podcast this week. Thanks, David and Matt. One quick note, Canada also has a very healthy self-storage industry.” Mark adds, “It does exist outside of the U.S.” Matt and I were talking about how Americans have a lot of stuff and I’m particularly aware of that as I look around my own house near the end of this year and start seeing things piling up in the corners. I haven’t had to entertain as often in 2021 or indeed in 2020 as I did years before that, and sometimes I’ve allowed piles to form in my house. I’m alarmed by that, but I think It’s not just me. It might even be an American epidemic, a second epidemic, epidemic of stuff. We talked in that episode about how the self-storage so-called industry is a pretty big one here in the U.S. and we wondered aloud, does it exist in many other places in the world? Mark assures us that it’s very healthy in Canada as well. In fact, Mark closes by saying he’s held StorageVault Canada, which I presume to be an investment, probably a REIT, for several years with great results. Thank you […]. There was a lot of talk of spiffy-pops throughout this month and that’s because we had a bunch of them. If you don’t know what the word spiffy-pop is, if you’re new to this podcast or to The Motley Fool, feel free to Google it, you’ll read and understand. I’m not going to go back over it.

I’m just happy to talk about gratitude. We had some amazing moves on the stock market, especially stocks held by many Fools over many years. Truly it’s a pleasure to see how many of you had your first spiffy-pop or your umpteenth spiffy-pop, and I particularly enjoyed this note from Oliver Vahrenholt, @OVahrenholt on Twitter. Oliver writes, “I remember jogging in Parque Villa Lobos in Sao Paulo listening to the Rule Breaker podcast @DavidGFool explaining the term spiffy-pop. Only later, I got to really understand the power of this seemingly simple concept.” Oliver writes, “It’s the math of patience.” Today he wrote, “I had my first thanks to The Trade Desk.” Well, I particularly underlined that tweet this month because I really enjoy hearing how people listen to the podcasts, and I love being able to picture a little movie in your 140 characters or less, and I can see you jogging in the park I’ve never been to, I’ve never been to Brazil, Oliver, but thank you very much for sharing that. It’s nice to know that this phrase spiffy-pop is not just confined to The Motley Fool or to the United States of America, it is going global. I sure hope the math of patience, as Oliver Vahrenholt says, is going viral or at least becoming a little bit more contagious than before The Motley Fool showed up. Spiffy-pops galore in the month of November and finally from Twitter, well, I’m not going to read any given tweet, but I received many ratings for Rick Engdahl’s performance as my producer for the sound effects that he brought to our “Stock Stories Volume 6.”

I, personally, thought that Rick had outdone himself, but I put it out to you, reminding you before you gave your 0-10 rating where zero was horrendously bad and 10 is Rick is a sound wizard, I asked you for your honest rating of Rick’s performance, but I did remind you in the same tweet that Rick is very, very sensitive. Well, I’m happy to say that’s with my tongue in cheek. I’m happy to say Rick got solid 10s from everybody. He got one 11. Outstanding performance. Rick, you outdid yourself for “Stock Stories Volume 6” this year. Thank you, sir. Well, we have nine Rule Breaker Mailbag items for this month. Let’s get started. Rule Breaker mailbag item No. 1. This one comes from PT Lathrop. “Hey, Fools. I’m sorry to be the most pestery fan” PT writes. “But it’s your fault stop being modern-day superheroes.” Too kind. “I want to write a bunch of context, but I’ll channel my inner Nathan Alderman and get onto the point.” I’m going to pause it right there. Nathan Alderman is an incredibly talented, longtime Motley Fool employee who helps many of our contract writers be more brief. PT Lathrop is referencing Nathan. A lot of you would not know Nathan’s name, but now you do, and I’m glad you do, because what a wonderful Fool who for years has helped our writers write better for you. He’s touched many, many lives through his work, and thanks for calling them out there PT. You go on, “Do you have any industries you just avoid no matter what?

I do,” says PT. “I think it’s a very Foolish approach. Of course, we want diversification, but unless I see a major paradigm shift or unless I become a trader and not an investor, I avoid at all costs,” he writes, “retail, airlines, things that are too tied to commodities such as oil or mining.” That’s a very interesting list. Retail, airlines, and things too tied to commodities. “Nobody should think exactly like me.” PT continues. “We keep it Motley. But are there any industries? You can go as broad or specific as is true for you that you, David, avoid entirely. I think this is an important element to our performance. Choosing the places to just ignore can really help outperform the average. Thanks as always, PT Lathrop.” Well, that’s a fun one to open up with. I’ll say, that in general, I’m a for person, not an against person. As I’ve said many at time, mirroring my friend, Roy Spence; I’m a for person, so I don’t too much sit in judgment of various aspects of other people, or our culture, or parts of our economy. I’m not a hard guy to please. In general, if you’re doing something legal, which is pretty important to me, if I think it’s wholesome and good, I’m thinking about how I’d like to invest in you. I don’t make long list of the things that I think are bad. With that said, you’re right, PT, nobody should think exactly like me, or you, or any of us. We keep it, as you said, Motley.

That’s a phrase we use, of course, all the time around the Motley Fool, keeping it Motley. Motley being the garment that court jesters wore, centuries ago, that patchwork quilt, that ragtag, funny Harlequin looking garments, worn by many of a Fool. That is the technical meaning of the word Motley. But we’ve always used that to think in terms of diversity at The Motley Fool. We have a wonderful new Chief Diversity Officer, Rachel Williams, who just joined us from Google X, where she was in a similar capacity. Rachel is pretty amazing and she understands the importance of the word Motley. For us, in particular, we encourage all of our writers, to think for themselves as they write articles about stocks. Just because I might like a certain stock, or it might be my biggest holding, it doesn’t mean that anybody else at our company, whether it’s an employee of ours, or a contractor of ours, nobody has to agree with me. We think we are a much stronger company as a result. We hope you want to do business with us because we do have independent viewpoints. While it’s certainly true that my brother Tom and I agree on most things, it’s always interesting where we would disagree, or where you and I might disagree, PT Lathrop.

Let me just give a shortlist of things I typically do avoid and I’ll explain why in each case. I typically do avoid tobacco companies. I just don’t like the smell of cigarette smoke. I wish it weren’t anywhere near me, whenever I’m in a public place. From a familiar standpoint, we’ve lost a few family members over the course of years because of, I think, their addiction to tobacco. It was social and glamorous to smoke back in my mother’s day. But it sure didn’t do good things for her health long term. I don’t say that with any particular animus or bitterness. In fact, my mother loved smoking. For her, I would fill her portfolio if I could have with tobacco stocks, it makes sense for her. That’s why I think for all of us, we should be making our portfolio reflect our best vision of our future. What are the things that you love? What are the things that you believe in? I don’t happen to love or believe in tobacco. You’ve never seen me pick one of those companies for Stock Advisor or for Rule Breakers. On the other hand, I should mention, I do pick alcohol companies.

You’ll see Boston Beer, Sam Adams, Bud, you’ll see others. I like a glass of wine. While I’ve never smoked marijuana and have no plans to do so, I’m totally open to cannabis. I’ve always thought that cannabis should be legal. I’m glad that it’s increasingly legal these days. While it’s not part of my culture or interest, that’s OK with me. Here’s one thing I guess that’s not OK with me in closing. You’ve never seen me pick a casino stock or a so-called gaming stock. Businesses that specifically make money in my mind, based on the ignorance of others, I have not much interest in. I hope you, as a fellow Fool would understand that we’re trying to make the world smarter, happier, and richer, and games that are zero-sum where the house is always going to extract its pretty penny, leaving the regular players of those games poorer and poorer the more they play the game. Well, you can imagine, I’m not going to be a fan of those businesses. I’m not going to recommend those companies. It’s not to tar and feather casinos. I’ve spent a good time myself in casinos. I have nothing personal against gambling. In fact, I always thought it should have been legal and increasingly sports gambling is legalized. I’m looking forward to doing an episode in the new year about sports betting because I feel like it’s an important thing to speak to.

A lot of people are doing it these days and I have no problem with that. But do I want to recommend the companies that make money very directly on other people’s ignorance of math and sometimes their addictions losing money? Definitely not. You’ve never seen me recommend those companies. I’d be the first to say, if you love yourself a good day at the casino, that that might well be the right stock for you. Thanks for giving a quick opportunity for us to share the importance of thinking for yourself and making your money match your own actions and your beliefs in this world. Thank you, PT Lathrop. Onto Rule Breaker Mailbag, item No. 2. This one’s from Troy Mackie. Troy, a pleasure to make your e-acquaintance or your POD acquaintance. Anyway, because you reference a story that’s one of my favorite stories that I’m going to retell. I’m going to retell it in advance of reading your mailbag item because you’re riffing on that. I think it’s important to put that story out there first for all of our listeners who may never yet have heard the five monkeys story. Here’s the five monkey story, as I’ve told it many times before, including on this podcast. But it’s one of those things I do about once every year or two.

Many will not recognize the importance of the five monkey story. Let me tell it right now. This is a psychological experiment that may never actually have been conducted. In that sense, it would just be a fable or maybe it did happen. But I think we’ll all appreciate the moral of the story. Here it is. Start with a cage containing five monkeys. In the cage, hang a banana on a string and put a set of stairs under it. Well before long, a monkey will go to the stairs and start to climb toward the banana. As soon as he touches the stairs, this is what those conducting an experiment do. They spray all of the monkeys with cold water. As soon as that monkey touches the stairs, all five monkeys get sprayed with cold water. Monkeys, by the way, don’t like being sprayed with cold water. Well, after a while another monkey is going to make an attempt, with the same result, all the monkeys are sprayed with cold water. Pretty soon when another monkey tries to climb the stairs, the other monkeys will try to prevent that monkey from climbing the stairs. For our experiment, we’re now going to turn off the cold water altogether. No more cold water. That part has gone.

We’re going to do one other thing now at this point in the monkey story, the experiment. We’re going to remove one monkey from the cage, and we’re going to replace it with a new one. The new monkey sees the banana and wants to climb the stairs. But to his horror, all of the other monkeys attack him. After another attempt and attack, he knows that if he tries to climb the stairs, he will be assaulted. Next, we’re going to remove another of the original five monkeys and replace it with a new one. The newcomer goes to the stairs and is attacked. The previous newcomer takes part in the punishment with enthusiasm. Again, we’re going to replace a third original monkey with a new one. The new one makes it to the stairs, he’s attacked as well. Two of the four monkeys that beat him have no idea why they were not permitted to climb the stairs or why they are participating in the beating of the newest monkey. After replacing the fourth, and fifth original monkeys, all the monkeys which have been sprayed with cold water have been replaced. Nevertheless, no monkey ever again approaches the stairs. Why not? Here’s the moral of the story. Here is the punch line. “Because that’s the way it’s always been done around here.” You can imagine, I’ve always loved that story. I’ve told it many times in front of our Motley Fool employees or business talks I give the world outside. I’ve even seen somebody else’s Ted Talk once given about it. This story predates that Ted Talk.

This story is decades old. I first came across it a long time ago. I don’t even know if it’s true, but it’s spiritually and experientially true, isn’t it? It reminds us of the killing power of the killing phrase, “because that’s the way it’s always been done around here.” Especially those who love corporate cultures, we love ours at the Motley Fool. I hope you love yours at your organization. We look at others to invest for or against based on the cultures that we see at the stocks were researching, culture matters a lot. You can imagine how bad it is, if people are going through the motions unproductively and they don’t even know why they’re doing what they’re doing. That is the five monkey story. Now I can share with you Rule Breaker Mailbag item No. 2, which as I mentioned, comes from Troy Mackie. Troy just has another version of this. I thought it was fun though, so I wanted to share it. Everybody knows the five monkey story now, but not everybody knows the five pubs story. “Hi, David. I’ve come across a similar story to the five monkeys in a business literature book. The story goes like this. A brewery supply chain plan was as follows. Monday, pubs 25 kilometers away. Tuesday, pubs 20 kilometers away. Wednesday, 15, Thursday, 10, Friday, pubs five kilometers away, so on and so forth. Friday basically is when they supply all the local pubs.

A new starter, a new employee at the brewery asks the supply chain manager, “Why do we do it this way?” The supply chain manager says, “I don’t know. We always have.” The new employee then goes on to ask every person in the business until someone says, “Oh, Kev, he’s retired now, but he is going to be in today. Why don’t you ask him?” The new employee asks Kev and Kev says to him, “Well, we did it that way because the horses got tired during the week, so we needed to make their routes shorter by the end of the week.” Needless to say, the brewery had upgraded to vehicles from horses many years before but had never questioned if there were being most efficient.” Troy Mackie concludes in his note to us, “Although this probably has no reality to it, it is something I always pull out.”

Troy writes, “Whenever someone says, that’s how we’ve always done it.” The points are the same. It basically just gave Troy and me a platform to share with you all this concept of going through the motions and not asking why. I think the world often needs, doesn’t it? You or me to ask, why? Why are we doing this this way? Does it make sense anymore? Maybe we should try something different. In a lot of cases, it comes down to understanding the origin of how we got to that place, whether it’s cold water or horses in the first place. Really helpful to look backward, to understand how to act better going forward. Thank you, Troy Mackie. Well, onto Rule Breaker Mailbag item No. 3. But actually, onto Rule Breaker Mailbag items No. 3, 4, 5, and 6. For them, as already mentioned, I want to welcome back my friend Matt Argersinger. Matt, welcome back to Rule Breaker Investing.

Matt Argersinger: Thanks, David, I’m glad to be back.

David Gardner: Well, you and I had a wonderful conversation about real estate investing, a topic that I’ve certainly undercovered in the seven-year history of this podcast. Because I think that was really the first time that we’ve done a focused episode on your specialty in your subject. You and I have shared many hours before in this podcast, but not in your new calling. Now not everybody was listening three weeks ago, Matt, could you briefly reassert who you are and what you do at The Motley Fool.

Matt Argersinger: Sure. Well, thanks, David. Let’s see. I’ve been at the Fool almost 14 years, and most of that time, I’ve been an investor on our various services. I, of course, worked with you on Stock Advisor, Rule Breakers, Supernova blast-off. I think I named them all. But over the past few years, I did do a slight pivot, The Motley Fool launched Millionacres, which is our real estate arm, and I’ve been able to work on there, launch two real estate focused investing services. That was a great pleasure for me just because I’ve made real estate investing part of my personal investing strategy for over a decade now, and it’s exciting to explore that asset class a little more with these two services we’ve launched. That’s my story.

David Gardner: Thank you for that, Matt. Before we get into this first item, I just want to draw a parallel. I think I drew it three weeks ago, but it was such a delight for us to open up this whole new important category of investing that’s always existed for thousands of years, but not at The Motley Fool. We started as very stock-centric in many ways. We remain very focused on stocks and certainly part of your real estate investing advice, Matt, which are the reads, which are the good tickers we should be following? You and I played a game to that effect a few weeks ago to understand this industry, but it was a delight to have somebody who is passionate, so Foolish and knowledgeable about this really big category. I think I was drawing a parallel to venture capital investing another thing The Motley Fool hadn’t traditionally done, but for our Chief Financial Officer at the time, Ollen Douglass, to go over and lead our venture cap fund. Well, it’s been exciting in the last few years at the Fool to watch us hit these big categories we hadn’t spoken to before and have talented and wise, Foolish people like you guys to lead us there, so thank you for that Matt Argersinger with that said, let’s get into it here because Trevor [inaudible 00:23:10] wrote the following.

This is Rule Breaker Mailbag item No. 3. “Hi David. I really enjoyed your podcast on real estate investing with Matt Argersinger. My father was a successful realtor and developer for over 30 years and always impressed upon us the importance of real estate as an investment. Now over the years, I’ve owned a few rental properties,” Trevor writes, “But as i got older, I decided to sell them and just buy REITs.” Now really quickly, not everybody knows that acronym it stands for real estate investment trusts. They’re basically like stocks a way to benefit, especially with good dividends from real estate properties that are being managed or owned, and you, as a public market investor, a mom-and-pop investor like me, you can be part owners of it through REITs, so those are real estate investment trust. Trevor goes on, “I bought several before the pandemic, both residential and industrial. They declined over the last year, but now they have all gained nicely, especially the industrial REITs. Could you ask Matt?” Let me do that. Matt, “To discuss the pros and cons of crowdfunding real estate as an investment compared to REITs. Thank you,” writes Trevor […]. Matt, could you discuss the pros and cons of crowdfunding real estate, which some people will remember from a few weeks ago, but some people are wondering what the heck is that as compared to real estate investment trusts?

Matt Argersinger: Well, thank you, Trevor. Let’s start with REITs because I think Trevor knows REITs well, and I think probably more of your listeners are familiar with them. Real estate investment trust, you introduced them, David. They’ve been around for about 50 years, a little longer than that. I like to think of them as mutual funds of real estate. It’s a way to get exposure in a very liquid way to large portfolios of real estate. REITs you can buy and sell them just like stocks, in your brokerage account, they’re tickers, you can buy and sell them, so they are very liquid, which is really nice. What you do when you buy the average REIT, is you immediately get exposure to a large portfolio, dozens, if not hundreds of properties of really institutional quality, real estate. This is really your top-of-the-line real estate, whether it’s residential, industrial as Trevor said or office properties or hotel properties or self-storage properties. There’s all kinds of categories. It’s a wonderful way to have very liquid diversified investments in real estate.

You mentioned dividends, David, so REITs by law are forced to pay out 90% of their taxable income to shareholders as dividends, which is nice because not only as a shareholder do you get dividends and therefore regular cash flow on a monthly or quarterly basis, you get to decide what to do with the cash flow that you get from the investment. In other words, you get the dividend and you can reinvest the dividend into the REIT or you could take that cash and invest it elsewhere. In a way, it gives you the decision behind the investment which I like. REITs also have a really great long-term track record. Like I said, they’ve been around for decades, and most of the really top-line REITs have done very well over time. If you’ve had a basket of REITs in your stock portfolio, I’m sure that’s been a really great place to be over the last 10, 20, 30 years. A wonderful track record and a great way to get highly liquid exposure to real estate.

David Gardner: Great job breaking that down Matt. Before you go on, I want to mention there was a gentleman called, Ralph Block, who wrote a book called Investing in REITs and Ralph was an early contributor to The Motley Fool. Now he did write some articles for us, but he just started right there on our forums. I think it was back in our AOL days, he was right there on the discussion boards, generously answering any question sent his way. He was basically a worldwide expert on real estate investment trust. My brother Tom and I were so honored to have Ralph in our community. He’s no longer living today, but a quick in memoriam celebrating Ralph Block and answers he gave to many Fools about REITs. Matt, you’re basically continuing in Ralph’s tradition as you break it down so understandably for all of us listening and that’s a great, I said, stock earlier about REITs, and I guess in a way it’s an investment trust, it’s not really a stock, but it’s a collection of properties that was really well said. Those are real estate investment trusts. Now, Trevor is talking about crowdfunding. This is exciting. This is not as big or institutional. This is more emergent, but I know you spend a lot of your time here Matt, could you explain briefly what’s happening in crowdfunding with real estate and then I think Trevor wants a compare contrast.

Matt Argersinger: Yeah, you got it Trevor, and by the way, David, thanks so much for bringing up Ralph Block. Investing in REITs is like a seminal book. I’ve read it like three times.

David Gardner: Really?

Matt Argersinger: In fact, every new analysts who joins us on Real Estate Winners or Mogul, the two services I work on, I have them read the book. Anthony Schiavone is our newest analysts over on Real Estate Winners, and we read the book together and we shared notes and had a good conversation.

David Gardner: That’s so great.

Matt Argersinger: It’s just a wonderful primer on REITs. I highly recommended Ralph Block Investing in REITs if you want to learn more about REITs. Let’s talk crowdfunded real estate. This is a relatively new way to invest in real estate. I’d say it’s roughly the last 10 years that it’s come about, and you can think of it almost as private equity, because it is private equity. It’s essentially, you have developers or what they call sponsors, who are raising equity in the private markets from investors to develop properties, to buy assets and renovate them or just simply buy assets and get the cash flow just like any person might do with real estate. But what it allows these entities to do is, to pool a bunch of capital from individual investors to make these big investments.

David Gardner: From individual investors, and that’s the key here, Matt because normally we would never have had access. You and I didn’t have enough capital to really be relevant in a bigger deal like this.

Matt Argersinger: No, that’s exactly right, David. I’d say 15 years ago, if you wanted to invest in a large office building or hotel development or anything like that, you had to come to the table with maybe half a million dollars, you had to know someone, you had to have relationships. The game has really changed in the favor of the individual investor with these pooled real estate capital investments. You can invest with as little as 25,000, in some cases as little as 10,000 or a $1,000, and really good access to high-quality real estate. What’s really compelling, I guess, about crowdfunding real estate, is that you can really pinpoint the asset that you’re investing in and its location. With a REIT, the beauty of a REIT is that you get instant diversification, but you’re investing in dozens of properties, generally across the country or throughout a region.

With crowdfunding real estate, I can choose to invest in a hotel in Chicago, a self-storage facility outside of Washington DC, an office building in New York City. I can choose where exactly I want to invest or what I want to get exposure to, so that’s exciting and that generally will come with more upside potential. Now, there’s more risk to that because you are only bidding on one asset and one developer or manager here, but it also comes with more upside, and so that can be really compelling to certain investors, especially who want to really pinpoint what they’re investing in asset-wise within their portfolio. Then the other big advantage is there are some tax advantages. I know we’re going to talk a little bit later, I think in this section about the tax advantages, but there are some specific tax advantages that crowdfunding real estate investors can take advantage of that are also really beneficial.

David Gardner: Wonderful. Thank you for that overview, Matt. We have a few more, so let’s get into those. But let me just say in conclusion, part of what I’m hearing you say, “This is me mapping my own view of the world.” Let me know if I have this horribly wrong, but it’s almost crowdfunded individual properties are like stocks. You’re just picking that thing, that company, that building, that development, whereas real estate investment trusts are much more like funds composed of many different stocks. In the same way that an individual stock, if it does really well or not, would probably outperform funds that hold that stock, you are taking on more risk, but you also have more precision in terms of what you’re investing in when you pick a crowdfunded property over a real estate investment trust. I think I see it both ways, it’s certainly going to be safer to have that real estate investment trust, but it could be more exciting and ultimately more lucrative if you have a good eye for it. I think you do more than I Matt. [laughs] It’s like picking individual stocks, fair?

Matt Argersinger: Totally fair, and I would say, there are a few more downsides I think to that. I think that’s the exciting part about it. The downside is, unlike a REIT, your capital’s tied up for probably several years at least.

David Gardner: Yeah.

Matt Argersinger: At least three, maybe longer, and so you’ve got to think of it almost as a venture capital investment or private equity investment where you’re giving your capital over, and until the property is sold or refinanced or recapitalized, you’re not going to really see any profits from your investment, could be several years. It depends on the business model, but that’s generally something you have to understand with these private investments. I will say this too, because the market is so new, and I see this all the time, is that you’ve got a lot of developers and sponsors who are tapping this new crowdfunded world, they’re reaching out and connecting with individual investors. It comes with a lot of paperwork, a lot of fine-print, and what will often happen is individual investors are excited about this, they jump in, and are taken advantage of in a lot of ways. Where REITs have been around for a long time, there’s disclosures that they have to make, there’s managers, again, they’re forced to pay out 90 percent of their taxable income so there’s not much they can do to really screw over their investors, whereas a lot of these private developers can really take advantage sometimes have individual investors who aren’t as knowledgeable about private real estate as they might otherwise be.

David Gardner: I’m glad you said that Matt. Now I know you do provide through the Mogul service Millionacres. By the way, for anybody who is interested in more, if you’ve got a, you’re going to see a lot more about what Matt’s talking about, especially those who might be interested in pursuing some of the advice that we give here. But through your Mogul service you do provide viewpoints, and you do recommend individual crowdfunded properties, but those are going to obviously be the ones that you feel are advantageous for us as mom-and-pop investors and nobody is going to be taking advantage of the ones that we’re recommending through Mogul.

Matt Argersinger: That’s exactly right. We score every deal we recommend, and we’re always looking for sponsors or managers with great track records, and who’ve been working with individual investors in the past and delivered good returns. Usually a deal is not going to get passed us, we’re not to recommend it, if it certainly doesn’t lease check those boxes.

David Gardner: It’s a great big world out there, you got to watch out for some of the sharks, but man there’s some beautiful things if you get to know the ocean. Matt, Rule Breaker Mailbag item number 4. This one comes from Anand Khatri and he says, “Hi David, it was a great discussion on real estate investing with Matt Argersinger. Traditionally,” Anand says, “real estate was only accessible to people with high net-worth.” But recent change, we just spoke to this, it’s now accessible to individual investors which you mentioned really well on the podcast. The one reason Anand says that he turned to real estate investing, is because of the tax advantage, and you still have some decent, and in some cases market beating returns in addition to those tax advantages. Matt, I know you referenced this earlier that’s why I wanted to go to this one next, Anand says, “When we invest in the CRE, that will be commercial real estate, we received a K-1 form at the end of the year, which is equivalent he says to the 1099 tax form. You can write off the loss when the property is under development, tax filing will be a little bit different than the normal but it will be worth it if you want to take advantage of this.” Anand concludes, “I think it’s one of the hidden advantages in investing in real estate, Matt would know far better than I. I think it will be helpful for listeners if you’d cover a little bit more about this on the podcast. Happy investing and Fool on Anand Khatri.” Matt.

Matt Argersinger: Anand is exactly right David, so the one of the advantage of these crowdfunded real estate deals is that, you’re investing in what is a pass-through entity. In other words, the gains and losses that this entity producers, it flows right to the investor via the K-1 or at least published in the K1 as Anand pointed out. The advantage there of course, is yes, you can write off losses from these investments. If you think about, let’s say you’re investing in a hotel development, well the first few years that that hotel is being developed, it’s incurring nothing but losses. It’s got no cash flow, it doesn’t have any hotel guests yet. So while it’s producing those losses, those losses show up on your taxes, and you can use those losses to write off gains or profits from other passive entities. That is key by the way, it’s not as if I can take those losses and just write them off my normal income or maybe my stocking.

David Gardner: Okay.

Matt Argersinger: You can’t do that, it has come off other passive losses. But that is a nice thing. If you think about it, you can stagger several commercial real estate or crowdfunded real estate deals. Some are in the earlier stages, some are in their later stages producing distributions and profits, you can use the losses from the one set of your investments to offset gains. The cash flow you’re getting and the other ones that are more mature, and you’re not really paying taxes on your real estate investments. It’s certainly advantageous. The nice thing is the property doesn’t even have to be in development. A lot of properties if you’re buying investment property, one of the losses that you can take is depreciation, which is a non-cash loss, you’re depreciating the real estate asset over a number of years. Oftentimes, that depreciation at least in the first year or two of a properties ownership outweighs the cash flows. You’re also getting losses even if the property isn’t in development. It’s a great point but Anand, this is one of the hidden benefits of investing in these private deals.

David Gardner: Thank you for that. Thank you Anand for sharing your own experience and reminding us to underlying that, and Matt, thank you for explaining that further. Of course, we’re not tax professionals, neither Matt nor I don’t need to issue a Motley Fool disclaimer here. But for each of us we have our own tax situation so we just want to point out the advantage that is there and let each person decide based on what country they live in or what their own tax situation is, what makes sense for them. Let’s go to Rule Breaker mailbag item number 5. A quicker one here Matt, but this is from Clifford [inaudible 00:38:18] Hi David. Here’s a question for Matt following his guest spot talking about real estate. Like you, Clifford writes, “Most of my investments are in stocks,” and that is definitely true of me, so yes Clifford, you and I are that way together.

“My only real estate exposure is my home,” he writes, and I bet he’s speaking for many others, listening to us right now Matt. “I don’t have a $125,000 in cash lying around,” says Clifford. I think the reason he uses that number Matt is because on the podcasts we did together, we talked about five investments at a minimum to start maybe 25,000 each. He’s doing the math saying, “So you’re saying that I should have $125,000 lying around.” Those are his words, “in order to get started here.” He just goes on to ask you Matt, “Would you suggest that most people sell off some of their stocks to diversify into real estate, or should he amass that much in cash in the next year or two instead of buying stocks? How much of one’s investment portfolio should be in real estate, assuming the requirements to become an accredited investor are met? All the best from Clifford […].”

Matt Argersinger: Thanks, Clifford. Your first question, would I suggest selling off stocks to diversify into real estate? I would never suggest selling because I just think when you sell anything, you have to be right twice. You have to be right on selling the asset. That’s no longer going to be really beneficial investment and you have to be right in what you roll those proceeds into. I would much rather suggest, and this is what I do with my own portfolios, just make your next investment in your best idea. In other words, if your next best idea, Clifford, is a real estate opportunity, and you have some cash and you’re looking where to put that cash, that’s probably where you should put it. How much of your investment portfolio should be in real estate? Such a tough question, and of course, I can’t speak to your personal situation or risk tolerance. I’ll just speak for mine.

That is for someone who studied and invested in real estate for well over a decade now, I’m comfortable personally with having about 50 percent of my assets in real estate. Now that includes not only REITs in my brokerage account, but also income properties that my wife and I own and manage, and also private crowdfunded real estate deals that we’ve spoken about. I know 50 percent is not going to be typical. I bet if you talk to your average financial advisor, they are probably somewhere in a 10 or 15 percent [laughs] range when it comes to real estate. Fortunately, I think that add to these changing a little bit. I think people are coming around a little bit to real estate, especially because it’s so much more accessible today. I think they’re looking back and saying, rather than maybe the bonds or gold or commodities or I don’t know crypto that I have in my portfolio, maybe I should make a little more room for real estate going forward, especially if I’m someone who’s more interested in maybe income down the road for retirement or things like that. Just some thoughts there, Clifford, to help you along your way.

David Gardner: Really appreciate you sharing that, Matt, I probably could’ve asked you that on the podcast itself because it does seem relevant. Here I am talking to my good, bright friend Matt with whom I’ve worked for many years and I’m about 100 percent in stocks and zero percent in real estate. It’s not to say that I’m doing it right or Matt’s doing it right. It really comes in a lot of cases down to how you want to spend your time and where your expertise is and what are you trying to grow in or grow into. I’m definitely at rather advanced age of 55, not expecting, I’m going to all of a sudden become a real estate magnate that said, there are people listening to us right now Matt that, probably five or 10 years older than I am that could get started today and really be happy they learned the trade over the next 25 years.

In the end, what we’re all going to do are different things, whatever makes sense for us. But I’m really glad to present your case, Matt, where you’re about 50-50 and mine I’m 100-0. There are a lot of people somewhere in between and I’m just glad that they’re getting to hear from us. My zero isn’t because I don’t think these are good ideas, it’s just because I like where I am, what I’ve done. I don’t want to sell stuff to do other stuff as you mentioned, and I’m pretty passive as an investor just trying to find rule breakers and hold them for long periods of time. Let’s keep moving. But that really wasn’t a real estate question, it was more about asset allocation and what makes sense for each of us. But Matt, I didn’t know you were 50-50 and I think that makes a lot of sense. I think that’s great.

Matt Argersinger: I’ll add that the 50 percent that’s not real estate is pretty much all David Gardner stocks. Just throwing that out there as well.

David Gardner: I appreciate that. Anybody who’s started this overtime knows that some of David Gardner’s stocks were Matt Argersinger’s picks, and some of them have been spectacular. We’re a big team here at the Fool, but thank you for that, Matt. Will you stay on for one final Rule Breaker Mailbag item?

Matt Argersinger: You bet.

David Gardner: Excellent, Matt. Let’s do one more Rule Breaker Mailbag item number 6. This one starts with #IBeatDavid now reminds me, that Matt, when we had fun together three weeks ago. For anybody who may not have heard that podcast and finds themselves interested by anything you’ve said in the last 15 minutes or so. Matt, I would say listen to the Rule Breaker Investing podcast entitled Real Estate. I think it was actually Rule Breaking Real Estate with Matt Argersinger, although on my iTunes feed it comes off as Breaking Real Estate with Matt Argersinger. But regardless of what it’s entitled, it was an excellent hour or so spent together. You played a game where you flash me 10 different ticker symbols and asked me, “Did I know the company behind it, all of them winning real estate investments of various calibers over the last umpteen years?” That was fun. I didn’t do so great. I think I got three out of 10. We encouraged people to say if they did better, to go with #IBeatDavid, and that’s exactly how David Callanan’s note here, Rule Breaker Mailbag item number 6, starts with #IBeatDavid, my fellow Dave goes on, “David, it’s not really fair that I beat you on the 10 real estate tickers given by Matt as I’ve been a happy Mogul member for the last two years. But the podcast motivated me to write a brief thank you to you and The Motley Fool staff.”

I mentioned earlier at the top of the show Matt, it is the week of thanks and thanksgiving. This one seems to fit well into this week’s podcast. David says, “I go back all the way to Duke Street as a Motley Fool member.” That’s what we first called our highest-end service around 10 years ago or so. David has been obviously in and around the Fool for a good long time. David Callanan writes, “I go back all the way to Duke Street as a Motley Fool member. I have loved all things Foolish, so I also joined Matt on Mogul and invested in Motley Fool Ventures. I mentioned Ollen Douglass earlier and 1623 Capital.” That’s our sister hedge fund company with Jeff Fischer. David goes on, “If there is an investment service created by The Motley Fool, I have joined in the fun. I just wanted to thank you and your brother Tom for having guided my investment portfolio all these years. I hope to thank you in person at a live event in the future.” Side note, those will come again. They will be coming back. I’m very confident that next two years will not be like the last two years.

Anyway, back to David’s note. “My two main podcasts are Motley Fool Money and Rule Breaker Investing. Thanks for creating my drive time enjoyment. I also share one other interest with you,” David Callanan writes, “My favorite baseball players growing up were; Tony Oliva, Rod Carew, and Harmon Killebrew.” He writes, “I’m a little olde than you. I had the pleasure of going to a Texas Rangers game with Motley Fool employee Jim Mueller when he came to Dallas a few years back. So If you ever make it down to the Dallas-Fort Worth area, I’d be honored to see a game with you. Signed David Callanan.” That one doesn’t have a lot to do Matt with real estate, but what it does have something to do with is the experience of being a Fool and I just love the human element. He is obviously a Minnesota Twins fan and I know a lot of our listeners don’t even care about the Minnesota Twins, so we won’t talk further about Tony Oliva, Rod Carew, and Harmon Killebrew. I know you’re a baseball fan, you know those names, Matt. But what I loved is there he is with us in the earliest days of our services. He’s buying every new one. He’s diversifying into real estate, venture cap, and hedge funds. He’s going to baseball games with our employees. It just reminds me of the great joy that we have of building this community of Fools over the years, very actively larger than ever before worldwide and the fun that we’ve had. Does that spark anything for you, Matt?

Matt Argersinger: It sparks a lot of things. By the way, thank you, David Callanan, for being a member of Mogul for two years, but also Motley Fool Ventures and 1623 Capital and I’m sure other services that’s really extraordinary. I think what David sparked to me is he mentions, wanting to say thank you in person to you at a live event in the future. We just haven’t been able to do live events for probably going on two years now. That’s a real shame. Hopefully, we can get back to that in 2022 and beyond. But it made me think back to a live event that we did, I believe it was Fall 2019 and this was our Motley Fool One event in Washington DC. I wonder if David was there and after the event or after the main event was completed, we were able to take all our Mogul members over to Nobu, which is of course the famed Japanese restaurant.

David Gardner: Yes.

Matt Argersinger: There happens to be really nice one a few blocks from where we’re holding the Motley Fool One event. What was interesting about that is that particular Nobu right in Washington, DC was actually a recommendation in Mogul a few months prior. We actually recommended or invested in the space, the building that houses that Nobu. Not only were Mogul members joining us at this event, we were the sponsor. Many of them had actually invested in the restaurant itself and we were there having an event and it just made me think about how joyous that was, what a great evening that was. It was one of those rare events where my wife was able to come out because it just happened to be in the evening and her parents were visiting so they could watch our son who was less than one year old at that point. Tom Gardner, your brother came to the event as well. I love that event and I feel we’ve just missed that so badly over the last couple of years. That ability to connect in such a neat place with members coming from all over the country and all over the world. Just hearing how excited they were about investing, Mogul, real estate, and all that. I had so many great memories from that particular night. It just feels like ages ago now, unfortunately.

David Gardner: Yeah. It does, but it is coming back and it will be back before we know it. I do trust that. I’ll also just remind the fun of investing together. In a lot of ways anybody who listens to this or any Motley Fool podcasts is investing with us because you are investing dear listener, your time, to hear us, to learn from Matt Argersinger, to have a Motley parade of different topics and celebrities from one week to the next. We are investing so much time together in our podcasts, but indeed we invest our dollars together when you follow us into this or that investment as many have over the years. There’s great joy in doing it together. It’s the opposite of a zero-sum game like poker, where someone is going to win and everybody else is going to lose. I like games too. But my favorite games are cooperative games and the cooperative game of investing together with our members, with everybody hearing you right now, Matt, and you helping some of them, guide them into something new, something we hope is profitable. I tried to do that too, and we have our losers as well, but what enjoy it is to share that time together. Matt, thank you for sharing some time with us this week. Happy Thanksgiving to all Argersingers. Are you hanging out somewhere in Virginia or are you headed North to see other family members this Thanksgiving?

Matt Argersinger: No. We’re staying at home in the rural hills of Middleburg, Virginia.

David Gardner: Beautiful. Sounds delightful. I do know one thing. Our kids are a little older than yours at this point, but it’s fun once you do have a child or a family when people start to come visit you, whether it’s for whatever holiday you start to become a little bit more of a magnet for the rest of your family members, and at least for us selfishly. It always meant we didn’t have to drive long distances. Others in our family might do that to us. Keep having kids, Matt. You and Jean will end up with everybody in your extended family coming to [laughs] visit all the time.

Matt Argersinger: Thank you, David. Thanks for having me back on and happy Thanksgiving.

David Gardner: Happy Thanksgiving. All right. Onto Rule Breaker Mailbag, item number 7, the first of two poems original works presented on this week’s podcast. Rule Breaker Investing is not a stranger to your poetic creations. In fact, we’ve shared many of these over the years to the point that sometimes I’ve wondered aloud, should it be a new series, the reading of poetry inspired by this podcast, because we have a fair amount of it building up. We’re about to add two more original works this week. Let me thank in advance. Poet number 1, Lisa Wharton. Lisa, as I’ve gotten to know you some over the years, I believe I know your story. I believe that you are of Chinese origin. You are living here today in the United States of America, but I don’t think English is your first language, but I’m delighted to present your work in English. It’s very well done. It’s a sonnet, you say. It’s in Robert Frost style. In fact, your note says, “Dear Rule Breakers at the end of the last year, Mr. David Gardner read my acrostic poem called Motley Fool.”

Now, a lot of us probably know what an acrostic poem is, but I want to make sure all of us know what an acrostic poem is. It’s when you read the first letter of each line of the poem down vertically and it spells something, it says something. You read the first letter of each line and if it says something, it’s an acrostic, and in Lisa’s case, she spelled out Motley Fool with her poem. Well, she goes on with this mailbag item to say, “I told David on Twitter that I would write a sonnet for The Motley Fool since it’s changed my life for the better. But it takes time to write a sonnet.” Lisa writes. “Finally I’m now ready to send a modern sonnet that it’s not so strict with meters and syllable count. Sincerely, Lisa Wharton.” Rule Breaker Mailbag, Item number 7, a Rule Breaker, sonnet. Motley Fool helps me navigate the storm. Investing could be unpredictable. It’s like us navigating in a storm in small boats, big waves, unthinkable. For small investors waves are dangerous. It will swallow you without too much regret with shaky hands. We lost, so outrageous. A small investor will never win. They say, giant whales can move the stock market at their will. The winners take all, in the end, one day. The Motley Fool provides help to survive.

They offer sage advice through emails, their show, the Fool TV, has just arrived. They prove investors, no matter how small, if they are patient, they can win it all. What I think in particular Lisa, your emphasis is on the small investor, and that’s what I am, and that’s what most of us are, unless you’re an institutional investor, probably by definition, investing other people’s money in large measure. You’re probably just investing your own money for your own portfolio. That’s what Tom Gardner was when we started. That’s what David Gardner was. That’s what most of our members who come to us. Yes, we do have institutional types and pros and traders out there. But The Motley Fool was really created for Main Street. For all the rest of us. Not so much Wall Street to show you. Yes, you can win too. In fact, ironically, I think we’ve consistently proven not just in our own actions, but in your actions hearing back your stories that you’re doing better often than the Wall Street traders or traditional mutual funds with their big ad budgets.

You and I, we don’t have any ad budget, but quietly, patiently over time in those dangerous waves you mentioned, and there are some giant whales out there and you’d think it’d be all about them Lisa, but you are reminding us that no, it’s that patience that we have that we can exhibit looking for excellence that’s what can help us win it all. Thank you, Lisa Wharton. Onto Rule Breaker Mailbag, item number 8, this is from Adam Nelson, hero among men, Adam the person who revolutionize the Market Cap Game Show. That’s why I consistently lionize him no matter what he does or says on this show or in the world at large. I want to mention, Adam that of course, one of the pleasures of December will be the next iteration of the Market Cap Game Show. Thank you for your helpful suggestion to improve the game shows. But this time you are of a more literary bent and Rule Breaker Mailbag, item number 8 is also an original work of literature. “Hi David. I was inspired by your latest podcast to write this short poem, which embodies,” Adam writes, “my 2022 resolution to not sell a single share of any stock I own, and thus embody my desired investment strategy of and I quote here, ‘bordering on slot'” Adam writes. “In the spirit of your Foolish namesake.

Here it is. Anybody who studied Shakespeare will recognize who he means by our Foolish namesake. Anybody who loves Shakespeare or maybe, in particular, knows Hamlet, probably can sense where this might be issuing from. I really think Adam’s work here speaks for itself. Let’s begin. To trim or not to trim? That is the question. Whether it is nobler in the mind to suffer the dips and pullbacks that lead to outrageous fortune or to rebalance into a sea of troubled stocks and by adding to them to die. To die. To lose sleep no more and by asleep to say we’re in the heartache of choosing a thousand obvious stocks that are flushes air too. It’s a compounding devoutly to be wished. To hold perchance to dream. There’s the rub for in that holding what dreams may come when we have not sold off this immortal business. We must give pause to respect the management that gives so long a hold. For who can bear the downgrades and price target cuts of analysts in time. Time that exists in quarters only. The analysts are wrong. The proud holders must not be spoken to with contumely. The insolence of Wall Street and the spurns. Only the patient merit the worthy gains.

The undiscovered stock from who’s wealth no holder returns, puzzles the market and makes us rather bear those ills of the bear market than to fly to other stocks we know not off, and enterprises of great growth and business momentum. With this regard, their currents do not turn a rye and we shall not feel the need to take action. Winners win. Do not trim. Thanks, Adam Nelson. Eight down one to go and yes, I often try to save something like the best for last each week, but there was a lot of good to talk through. From the five monkeys retailing, to all of Matthew Argersinger’s answers, to original works of literature, and a listener story to close. But before we do that, let me just mention what’s happening next week on Rule Breaker Investing, it happens about once a year. Well, once a year for sure, it’s Games, Games, Games. It is my Games, Games, Games, annual holiday podcasts where I’ll be sharing with you five of my favorite lighter, more family oriented games, and five of my favorite heavier, more strategy-oriented board games and card games.

I generally try to look at the recent ones, those of 2021, maybe 2020 vintage to give you some of the latest and greatest and of course I’m doing it right on the very first day of December, next week because that’s still gives you a few weeks to maybe put them underneath somebody else’s tree. Supply chain problems notwithstanding, so Games, Games, Games coming next week. Now onto Rule Breaker Mailbag item number 9. This comes from my friend Jum, and Jum for several years now has written in and described herself as my biggest fan and so let me just say after hearing your story, which I get to share back with our listener base this week Jum, I might be your biggest fan, so thank you for sharing this. It’s a wonderful note to close on. Hello David and Rick, Jum Writes, “I hope that you and your family are doing well. It is Thanksgiving week and always a time I reflect on what and who I’m thankful for, you and The Motley Fool team are on the top of my list. First and foremost, thank you for everything that you do. You have no idea how grateful I’m to have crossed paths with The Motley Fool. I also would like to tell you a little bit about my background. I realized apart from telling you that I am your, ‘biggest fan,’ I’ve never elaborated.

Well, I was born and raised in Thailand. I didn’t grow up being dirt poor, but money issues did cause stress in our lives. My mom was an English teacher and my dad was a pilot in the air force. They both didn’t make a lot of money. I’m grateful, however, for their money habits that they instilled in me. My mom hates debt of any kind. She drilled in my head to never spend more than you have. My dad always gave me a piggy bank for my birthday and that taught me the importance of saving. I think the best lesson they gave me at an early age was budgeting. I remember mom dropping what equated to a quarter in my kindergarten uniforms pocket each day and if I returned with it, we’d put it in a piggy bank. I had a weekly allowance to spend at leisure on things rather than just school projects. This rule was very strict by default because every time I asked them for extra money, they simply didn’t have more to give. I hated seeing pain and frustration in their eyes so I learned to stay in my budget. Looking back, I think seeing my parents struggle with money has helped drive me to become financially independent. I moved to the US when I was 24 after getting married. Having to reinvent myself in a new land, I went back to school and became a registered nurse. I graduated in 2007 and entered the US workforce in 2008. I have to thank my ex husband who taught me the concept of saving for retirement.”

Quick insertion here, thanking during the week of Thanksgiving ones ex.” I think that’s above and beyond. Jum continues, “Each year, I saved up to the maximum yearly contribution limit in my 403B plan and as I told my story in a previous correspondents in 2015, my interest in investing became real. That’s when I came across the infamous Motley Fool, 20-minute sales advertisement [laughs] ha-ha,” she writes, and I should just pointed out parenthetically, many of you may know this, but one of our more successful ads, it was always surprising to me and I’m certainly not entirely proud of it, but it would be an ongoing 20-minute long audio PowerPoint that was talking you through an important new trend or technology, something we were excited by and it was a bit of a teaser in that there was going to be a stock that you discovered at the end and indeed you did discover the stock when you dropped your email to us after listening to us blather on for 20 minutes.

I mean blather on in the best sense of the term, because that was good work and those are good stocks as you’re about to hear, but I understand why it wasn’t the most popular form of advertising for some people who spend a lot of time, so that’s why Jum says the infamous 20-minute sales advertisement. To continue on with our note, “The one stock it gave me was Nvidia, and the rest is history. By following Stock Advisor and Rule Breakers over time, my stagnant portfolio more than quadrupled in the last six years. This is beyond what I could have dreamed of. My GKC score is two plus I’m 45 and my sleep number is 90.” I have to pause there and briefly explain that, she is telling us that she has more than 90 stocks, a ratio of the number of stocks you have to your age, which we call the Gardner-Kretzmann Continuum with great fondness, slightly silly, slightly seriously, so very well-diversified if you have a GKC score of two plus, that means you have twice as many stocks as your age and her sleep number of 90, that means she’s very willing to let a winner run to a huge potential part of her portfolio. Not everybody would feel that way.

We’ve covered that this week, we’re all different. Picking back up on her note, “I know that history is still in the making. Anything can and most likely will happen in the stock market and that could cut my portfolio in half, but like you, I’m an optimist as long as I stick to: 1 save; 2, don’t spend more than you earn; 3, have an emergency fund; 4, only invest the money you don’t need in 3-5 years into the stock market; 5, buy and hold great company stocks and 6, continue to listen to David. LOL.” She writes, “I should be OK. You’ve been the calming voice in my ears more times than you know, especially in March of 2020. That was my first so-called market crash and I didn’t panic or sell a single share. I asked myself, what would the Fools say or do? I bought more shares of my winners at a much cheaper price. Boy, that rewarded my portfolio tremendously. It’s not always rosy and I’ve done some serious damage sometimes to my portfolios, pick several losers, but I’m willing to lose to win,” Jum writes. “One of the most terrible mistakes I did was shorting Netflix.

It did not end well. I learned a great lesson from it and vowed, never to short any company ever again.” I love the turn here in this note and how she closes. Jum goes on, “After my first success, I see the power of investing and I’ve been helping others start investing for their future. All of my nieces and nephews have learned to save and invest. I have helped many of my coworkers open a brokerage account and start their own investing journey. One girl has begun picking her own stocks and recently told me that her $5,000 had grown into $35,000 in three-years and she started a portfolio for her 18-month-old godson. It is an amazing feeling to be able to share the knowledge and bring as many onboard so they can build their own wealth. This is why I invest.” Jum writes, “Investment, capitalism, and money for many sadly still equate to greed, but through my lens, the stock market is the best part of capitalism and it is up to us to utilize it. It allows individuals like me, to be part-owners of great companies without the hustle of owning my own business, I can keep doing what I love being a nurse and prosper along with companies I invest in.

Technology makes it so much easier and more transparent than ever. I think it’s foolish, with a small f, to not be taking part in it. The more people invest and become financially independent, the more we can help people who are less fortunate. Being financially independent to me, it’s like I’m putting on my own oxygen mask first before the child next to me, I can proudly say now that I’m financially independent at the age of 45. I could retire if I wanted to, but I love being a nurse. I get to make a real difference and be the light in someone’s darkest hours. Being a nurse also has taught me how certain the uncertainty is. Seeing people at some of their worst moments and knowing lives can change in an instant keeps me humble. Having financial stability certainly helps prepare for anything to come. So I thank you, Motley Fools, for being the oxygen masks for individual investors like myself. Also for all the work that you and Rick put into each and every episode of The Motley Fool Rule Breaker Investing podcast, relistening to all this year’s episodes made me realize how much work you put in producing such high-quality content. Rick, I also enjoy Motley Fool Answers and your cameo Rick in both podcasts.

Shout out to Alison and Bro, I’m so thankful for your wisdom, humility and positivity, and everything that you and your team brought and continue to bring to your members and listeners. Wish you the best health this holiday season. Stay safe and happy Thanksgiving, Forever a Fool. Jum.” Our biggest fan. Well Jum, I think you made your own fans this week. In sharing your story, you’re reminding us why we invest and that’s to enable us without fear, motivated by love, to do the things in this world that add value to others that we love to do and to do it from a powerful place, that’s a place of financial strength, abundance, opportunity. I love that you were there for people in their darkest time and I love my pal Rick, and the whole Motley Fool company, including the merry band of podcasters, enable you to be a nurse to all those around you, as well as a pretty doggone good investment teacher as well. Jum, happy Thanksgiving to you, ma’am, and to everybody else, Fool on.

Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. David Gardner owns shares of Alphabet (A shares), Alphabet (C shares), Chipotle Mexican Grill, Netflix, Zillow Group (A shares), and Zillow Group (C shares). Matthew Argersinger owns shares of Alphabet (C shares), Boston Beer, Chipotle Mexican Grill, Netflix, Stitch Fix, The Trade Desk, Twitter, and Zillow Group (A shares). The Motley Fool owns shares of and recommends Alphabet (A shares), Alphabet (C shares), Chipotle Mexican Grill, Netflix, Nvidia, Rollins, Stitch Fix, The Trade Desk, Twitter, Zillow Group (A shares), and Zillow Group (C shares). The Motley Fool recommends Anheuser-Busch InBev NV and Boston Beer. The Motley Fool has a disclosure policy.

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