Recently someone asked me: “What do you mean when you say ‘Alternative Investments’?”
It’s a great question.
Often we get accustomed to our vernacular and forget that others don’t always know what we’re referring to.
Alternative investments are the alternative to what most people think of as “traditional investments.”
By “traditional investments,” I’m lumping together the different types of Wall Street products, like stocks, mutual funds, bonds, and life insurance contracts.
Alternative investments include directly investing in businesses – not buying stock in them.
Your own business or practice could be an alternative investment.
Even though most small business and professional practice owners are doers, and their business typically becomes more of a job, it is possible to run it like a business.
I had a professional dentistry practice for many years, and learned over the years how to turn it into a business that wasn’t dependent on me.
I’ve run it both ways: as the owner-operator, doing all of the treatment, and as a business owner with associates and hygienists doing the work for me.
The other alternative investment that I really like is Real Estate.
It’s actually a whole lot easier than running a business!
However, these alternative investments are not as simple as clicking a mouse or calling a financial advisor and saying “Here, take my money and manage it for me.”
Wall Street is volatile – you could have an up year and then lose 40 – 50% the next year.
Even Bernie Madoff, the fraudster who ran a Ponzi scheme that took so many people’s money, said that, “There’s no room for the retail investor on Wall Street.”
People love to quote Warren Buffett, saying “You should buy the market and invest in index funds.”
Well, Warren Buffett doesn’t buy index funds.
He invests in actual businesses, the way I described alternative investments.
Why does he tell the average person to invest in index funds?
Because for the average person, who isn’t going to take the time to understand how to invest their money, doing something is still better than doing nothing at all.
Alternative investments are, bar none, the best investments.
You’ve just got to do some work, create access points, and learn how to invest through other people – which is what we do in Freedom Founders.
You have to learn how to do the due diligence – the vetting of the person you’re going to invest through.
I don’t believe in doing the heavy lifting myself.
I’m not going to fix and flip houses or manage contractors and tenants.
Whether you start with single-family homes, buying equities, lending money, investing in syndications, or some other avenue, you can find Real Estate operators who know what they’re doing and have access to the wholesale market like nobody else.
Alternative investments are an inefficient market, so it’s where you want to be to get your money working for you.
Otherwise, you can play the lazy man’s game, put your money on Wall Street, cross your fingers, and hope.
But hope is not a good wealth-building strategy.
Why do you think more of our dental colleagues are retiring later and later in life?
The ADA recently stated that the average retirement age went from 62 up to 68.9 in just six years.
This year, we’ve gotten up to 70.5 years for average retirement – which means some are retiring much later than seventy.
Do you really want to keep doing the emotionally tough, back-breaking work that you’ve done for decades… in your seventies?
Many bodies won’t even take it; it’s not what we were built to do.
You’ve got to learn how to leverage yourself, your skillset, license, and degrees, and transition those into alternative investments – whether it’s your business or Real Estate.
It’s not hard if you follow people who have already been down that path.
Don’t be lazy and just put it on Wall Street.
I hope this has given you a better explanation of what alternative investments are, and why you should consider adding them to your own financial blueprint.
To your freedom!
– David
P.S. This is just the tip of the iceberg – if you want to learn more, join me for our two day workshop this September: https://www.freedomfounders.com/sep-workshop
P.P.S. Whenever you’re ready, here are some other ways I can help fast track you to your Freedom goal (you’re closer than you think) :
1. Get Your Free Retirement Scorecard:
Benchmark your retirement and wealth-building against hundreds of other practice professionals and get personalized feedback on your biggest opportunities and leverage points. Go to www.FreedomFounders.com/Scorecard to take the 3 minute assessment and get your scorecard.
2. Attend A Workshop:
If you’re committed to Freedom, but still building a practice, paying down school debt, or growing investment capital, our hands-on Freedom Blueprint Workshops are your entrance ramp onto the fast track! Visit www.freedomfounders.com/workshop to claim your seat!
3. Apply To Visit The Mastermind:
If you’d like to join dozens of dentists, docs, and practice professionals on the fast track to Freedom (5-7 years max), visit www.freedomfounders.com/step-1 to apply for a seat.
4. Want to Work Directly with Me?
If you’d like to work directly with me and a small group of my closest investment colleagues, with direct access to the dealmakers and asset classes that I invest in, just send a message to my Executive Assistant (Lindsey@FreedomFounders.com), and put “Fast Access” in the subject line. Or, call (972) 203-6960 Ext 144 and leave a brief voicemail for Lindsey. Let her know you’re interested in the Fast Access program – we’ll set up a time with you to talk, find out about your goals, and see if there is a fit.
