You’ve probably been reading a lot from me on the subject of diworsification lately, so it might surprise you to learn that I used to tell my turnkey real estate investors to take their money elsewhere. That’s right: I used to push investors who had a lot of properties with my company to start investing in other markets because I felt like they needed to make sure that Good Success and Olson Property Services were the best fit for them.
It was not that I did not want their business. I loved these customers! I was proud of our long relationship! It was just that I had been hearing so much about diversification and how hot other markets were for investors that I felt like I was doing them a disservice if I did not encourage them to spread their capital around. And now, honestly, I feel pretty bad about that – and most of my investors say I should.
What I thought was a selfless act was really more like a reckless act. When I told my clients that I thought they should invest in other markets, I was trying to avoid being self-serving. I have hundreds of clients invested with my companies. I thought pushing them into other markets might be a good way to help those clients get more exposure to other markets. Too bad that exposure wasn’t quite what I thought it would be.
At the end of the day, most of the investors who looked into other markets and even invested in them came back and told me that they’d prefer I stick to real estate from now on and leave financial planning to them. They pointed out that most of my portfolio is in my specialized area of expertise and that my experience in single-family turnkey rentals, property management, private lending, and real estate investing is extensive. Why, they asked, did I try to make them go work with people they did not know in markets they did not have relationships in?
Well, I was stunned. It was incredible to hear people saying, “I wish I had just left all my capital with you in Indiana,” but I definitely felt dismay since most of those folks gave my advice about a year before coming back to me and telling me to take their investment capital and let them worry about whether or not they needed to diversify. At the end of they day, they wanted to work with known, trusted entities (Good Success and OPS) in a solid market with incredible opportunities and potential for growth. Honestly, I should never have argued with that.
So, when you are investing and you think about diversifying just for the sake of diversification, remember you could be toying with diworsification instead. And if I was ever a part of that, then please, forgive me. If you want to follow Warren Buffett’s advice and put all your eggs in this basket I will curate your investments like they are my own – just as I’ve been doing for decades.
If you want unbiased, mastermind advice on diversification, small-business building and management, and real estate investing from national experts working in an intimate, boardroom setting, the Good Success Mastermind could be the answer you are looking for. Learn more and request an invitation here.