Dan's 2024 Investing Strategy

Dan Austin: [0:00] Hey there. Welcome back to another episode of the collecting keys Friday focus. Today, have me as your host, Dan Austin, also known on all social media platforms as investor man Dan. If you ever have a question for me you want answered on the show, or if you just wanna give me feedback, hit me up. I'm most active on Instagram, but I'm on all platforms. So if you you hit me up anywhere, I will I personally will get back to you. I don't have a bot or some VA doing it. It's me. You're talking to me in the DMs. And while you're giving me feedback, if you don't mind going on iTunes or wherever you listen to this podcast at, give us a review. We still do this, I still tell this to people, if you give us a five star review, or just a review in general, it could be one star, I don't really care. Give us a review and a rating and screenshot it, send it to me, and I will send you anything out of our store. We have got Collecting Keys podcast shirts, they're very comfy, and we also got the BDE, a fan favorite, the Big Dan Energy shirt. If you're a new listener, go back, know, maybe to last year, think is when BDE came out, and you'll get the inside joke there. But without further ado, let's dive in today's topic, which is Dan's, my investing strategy for 2024, which really is just my strategy going forward, and my philosophy around investing.

Dan Austin: [1:14] I actually get asked this quite a bit by other people, hey, would you do this deal, or how do you look at this, what is your strategy, do you invest in this asset class, what do you do with your retirement account? I get tons of questions about this, so I figured I would just share a stream of conscious about how I think about things, and I'll go through the different investment classes, and really just give my philosophy and my thoughts. Is it right, wrong, or indifferent? Maybe, what it's up to you to make these decisions, I'm not a financial advisor, I'm not trying to give you financial advice, I'm just trying to answer a question broadly that I get asked all the time. So let's start at the top, with one of my favorites, I think it's hot in the media right now, again I guess, and that is cryptocurrency. Do I invest in cryptocurrency? What do I think about it? No. I absolutely don't invest in cryptocurrency. I have. I don't really think of it as investing, it's more speculating. It is a store of value, I do believe that, just because there is enough people behind it that you can put some money there, but it's not the same thing as like gold, or a commodity, or even investing in a stock that's tied to a business. It just launched as an e as an ETF, I think there's something with it with that, and I don't see it doing anything other than the crypto prices are going down, Bitcoin is anyways, I think that's the ETF. Again, don't follow that closely, but I do know enough to know that I'm not investing it. It's because I don't really believe in the mission.

Dan Austin: [2:34] The crypto heads that are really into this stuff, they really believe in the mission, and they think about the idea of like cryptocurrency being, you know, crypto becoming a currency. I just don't see that happening. There's too many big important people in the world that unless they want it to happen, it's just not gonna happen. The US government's not going to let it happen, and in fact, I do find it somewhat ironic that all of the crypto heads are celebrating the fact that the government now has regulated cryptocurrency trading through an ETF, because that seemed to be the opposite of what they wanted, it was more of an anti establishment type thing, and a way to, you know, buy and sell goods, and trade currencies, and invest that was outside of government control. So kind of ironic in my opinion. Okay, moving on next. Let's talk about stock investing, and what I think about that, and what I think people should do with it. I don't really have a lot of opinions around this, I do have equities, and that is mostly just from retirement accounts that I've had, Roth IRAs, you know, tax advantage accounts that there are there I have a sum of money in, I don't self direct them right now, I just have left that money there. I don't personally actively look for new investments in stocks themselves, and here's why, like I don't spend enough time, I'm not an expert and I don't really wanna be an expert at investing in the stock market per se, or looking to buy you know, this business, you know, stock versus that business stock, or bonds versus equities, it's just not my thing. Some people love it.

Dan Austin: [4:07] What I believe with stocks though is, it takes too long to build immediate wealth and to build massive income, right? You're getting a portion of the profits from a business, and you're also buying into the demand of that stock, which is going to create value. But it's never gonna be you know, overnight success, you know, unless you're doing some some stonk trading, some with Wall Street bets, and once in a while there's this big win and some people made a lot of money. I don't usually make my investing decision based on the exceptions, I look at averages and historics, and what is the real chance of me actually having that type of win, and I always put that at zero because I don't gamble, I don't play the lottery, that's just my investing style. So when it comes to stocks, I personally haven't self directed anything, but I do know a lot of people that have so that they can invest in other alternative assets like real estate to get diversified outside of the stock market. I do think that's a great plan for people that want to do that. For me, it's just a way for me to diversify away from a lot of my real estate investing, just by having some reserves on the side that that are just focused on on the stocks and equities. And I know, on average, I'm probably gonna make somewhere in that 9% over a long period of time, and I'm okay with that for those funds that are sitting there. So now the one that you probably wanna hear the most from me about, because I'm a real estate guy, is my real estate investing strategy. And when it comes to real estate, I've evolved, and I think as you have more experience in real estate, you evolve your strategy.

Dan Austin: [5:32] Where I used to take on bigger risks, now that I've established a strong base, a strong foothold with good strong equity positions and properties, I will no longer take the risks that a new person may need to take if they want to grow at a faster rate. What I mean by that is I have my buy box is a lot more limited where it was before, as long as it met my criteria, and I could fully bury it, I would buy it. That meant a 100 year old houses on rock foundations, to you know, multi families in the ghetto. Now I'm I'm looking to buy, and I will continue to buy into 2024, but I'm looking for really solid assets, ideally a class assets, but I'll go, you know, b class. I want things that cash flow well, and I want to be able to burn money. I don't want to leave large sums of cash in any property. You know, there are certain situations where in the past, maybe a 12% cash on cash return in the immediate for some long term upside, I would do that. Going into 2024, I just really don't want to do that where I'm leaving large sums of money into properties. And so it has to be a great buy in a nice area, in a nice solid unit, what I would consider like a legacy property for me to buy in 2024. That has nothing to do with my market predictions.

Dan Austin: [6:46] That is just how I am buying, and how I am building my strategy. If you're just starting out, you may be buying some of these other assets that have a lot more work. I don't really even think about it as risk, as they just take a lot more work. I want my income from my investments to be a lot more passive, and what I found with my residential portfolio, as it's grown, it's even though I have property managers, it's still not a 100% passive, and there are still challenges that come with you know, residential real estate and becoming a landlord. All of it is worth it, just depends on where you're at in the season, and I am in a season where I want to put my money elsewhere. Which brings me to my last point on what I'm investing in, where I'm actually spending most of my time with my investing, and that is business. I really truly believe the mantra that Mike and I are always pitching, which is massive income over passive income. We all got into real estate, because we thought it was passive, and it is to an extent, and it's a great investment, but I'm at a point to where I see the benefits from real estate, not as the as the rental income, but I see it more as a tax benefit, and I see it more as an appreciation play, which is why I wanna be in nicer properties, in nicer areas, where there's always going to be demand. When it comes to investing in a business, I can take that same amount of money, that I would invest in real estate over that same period of time, and I can go and 10 x it, five x it, 20 x it, whatever it is, and one way to look at it is, if you're in a business where you're using marketing to grow your customer base, you might have what you would call like a multiple of marketing, right?

Dan Austin: [8:20] So if you basically spend $1, how many dollars do you make? And so for me, if I can spend $1 and make 10, that to me is a lot more, that's 10 x ing my dollar. Now there's operational costs in there, but even so, if I can take you know, $10,000 and turn it into a $100,000 through business, versus taking $10,000 and turning it into $200 a door, with the risk of maintenance issues, and not having a reserve account for a specific property, that to me seems like a negative, as opposed to making that good money on that 10 x kind of concept. And the same goes for business in the sense of like, I know what I'm good at, so why should I not spend more time doing that? I am good at running a real estate marketing business. We run an off market acquisitions business, we know how to generate leads, and we know how to close sellers for a discount. So because of that, I can spend more time in that business and get much more return, and then with that massive income, I can invest in more passive real estate, where I'm looking for these nicer assets, where I'm looking for commercial properties. We're under contract on one of our first commercial properties right now. We're still in the due diligence phase, so that may not work out. But if it does, it'll be a much more passive asset for me as opposed to a residential property.

Dan Austin: [9:42] Other things that I look at are syndications in real estate, which are pretty passive, because there's nothing you can do as a limited partner to be active in that business. And so I do invest in those syndications in real estate, which is for me, as in real estate, is one of the most passive ways to do it. Granted, my return will be much lower, closer to maybe 18% on that specific syndication, however, I'm doing nothing with it. So the point being is, I'm taking a skill set that I'm not only good at, but I'm passionate about, I really enjoy business, I enjoy business strategy, and I'm focusing all of my effort on that, to produce large sums of income that can then be invested. Because in reality, the amount of passive income you need, and I talk to a lot of real estate investors out there, especially like even big players, the amount of passive income you need for real estate to really survive and like not do anything else is kind of, you know, it's not a lot a lot, but say it's 5 to $10 a month for the average person, that takes a lot of properties, that takes a lot of work to manage and get there. So for me, I thought, why don't I pivot and change my mindset, and not just be focused on purchasing the real estate asset, but actually building an asset out of my business, that then kicks off excess amounts of cash flow, that I can then invest in real estate, and other passive forms, more passive forms of investing. And I really wanna make the key point of like doing something that you're good at, because there's often times, when we're talking about investing, or where people want to spend their time or money, really, they'll come, they'll actually, let me step back, they will say, I have 5,000, I have 10,000, what should I do with my money? How can I maximize it? And in reality, especially in real estate, there's not a lot you can do with that type of money, but what you really need to do, is you need to go get skills. You don't have to even pay for those skills.

Dan Austin: [11:30] A lot times people say, oh invest in yourself, take that five or ten thousand dollars and buy a course. Well that's your only money, I'll Dave Ramsey it right here. Don't spend that money, that's your reserve account for emergencies, keep that there. Instead, go and find free and cheap ways to learn skills. A lot of times that's just by doing, getting out and getting around people that are doing what you wanna do and learning, because the skills in your business, the skills in your investing are what are going to make you money, and spend time doing that. If you're a pilot, if you're a doctor, if you're a lawyer listening to this, you're really good at those things, you should probably do those, because those pay a lot per hour, those pay a lot for the time and effort you put into them, as opposed to a $200 a month cash flow on a rental property, that you're gonna get called from with a plumbing leak, and you maybe don't have the time to build the systems because you're going and flying for $450,000 a year, and that's more of your focus because you've got 200 passengers and airplane, as opposed to building out the systems for your rental property portfolio. So just something to keep in mind, skills are more valuable than anything. Go spend your time creating skills and building your skills, and then invest in areas where your skills are going to make you the most amount of money and return on your time. I'll stop there, that was a little bit of a rant. Hopefully that answers the questions for many of you that have asked me how I invest, how I look at things.

Dan Austin: [12:50] It really is that, if I don't know it, I don't invest in it. If I do know it well, I'm going to invest most of my time there, and right now that is scaling business and creating massive income, so that I can invest in the passive income sources. Thank you for listening, have a great weekend.