Up until this point, we’ve talked about activating your net worth, taking control over your hard-earned money, and getting into the private market as a way of protecting it. In this episode, we’re going to explore another one of the key Solomon Investor principles. It’s a crucial element that makes a real investment a real investment.
Up until this point, we’ve talked about activating your net worth, taking control over your hard-earned money, and getting into the private market as a way of protecting it.
In this episode, we’re going to explore another one of the key Solomon Investor principles. It’s a crucial element that makes a real investment a real investment.
Today, we’re going to go over the second component of the 3-dimensional investment - generating cash flow.
Activating your net worth and protecting it is a great start, but it was all for nothing if you stop there. Until it starts to generate cash flow - your net worth is worthless.
It’s time to explore how Solomon Investors reap the rewards of their investments and what makes their positioning in the private sector so powerful.
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- Your net worth is absolutely worthless unless you implement this one key principle. The Solomon Investor Podcast begins now. My name is Blake Templeton, CEO of Boron Capital. This is a Solomon Investor Podcast. My cohost, Zachary Mauro, VP of Investor Relations, we're here to demystify the actual process you got to go through to move from the public sector, to the private sector. And today, we're talking about cashflow. What makes a real investment, a real investment?
- Right and so, as you mentioned, your net worth is absolutely worthless unless you can convert it to cash flow. So let's touch on this in deeper, in a deeper way. Let people know really what we mean, what cashflow is, what it's not, and why do they need it in their investments?
- We've talked about your net worth, that you had to activate it. So if you don't activate it, you don't take control of it, then you truly are just leaving it out in the middle of, you know, the crazy cycle. So we've talked about activating, and if you've missed that, you got to go back to past episodes 'cause it's so important. Every single key principle is building on the next key principle. So you've got to activate it and take control. Then we talked about, you have to protect it, put it in collateralization. That begins actually the second dimension, actually, collateralizing it. And that's what we're talking about today, but it's a different part of it. And it's actually the cashflow. So you've got to activate it, protect it and have cashflow. If your net worth is not transitioning every month, cashflow into your pocket while sustaining its nest egg, then it's worthless. Like if your net worth, isn't actually creating new income every single month, sustainably, your net worth is useless. It holds no benefit. To say that another way, 'cause in the public market, the stock market, it's useless until you actually activate it, protect it and begin cashflow.
- Yeah, so the traditional way that everybody's accustomed to is to spend their whole life saving up their net, their nest egg, their net worth. You've been working for, you know, 20, 30, 40, 50 years to get where you're at now. And the traditional model would be save up until you have this nest egg. And then hope that once I retire, this nest egg, I start paying myself out of my nest egg. And I hope that, as I take distributions, that it'll last me long enough.
- Right.
- Right? And the craziest thing to me is that like, most financial advisors would tell you that we calculate so that you, you want to retire off of 80% of your current income, right. So if I'm making a hundred thousand dollars a year now, as I'm working, when I retire, hopefully I can live off of 80. Basically what they're telling you is you're going to be broker in the future than you are right now.
- Right.
- Yep, for sure.
- And hope that your net worth will last you and just leave it in the system and let it slowly pay you back. But what we're saying is the exact opposite of that, right. So, what's the difference?
- It's a massive difference. I mean, it's between, it's the difference between black and white. It's the public sector rules, the paradigm isn't the same as the private sector. Like cash flow in your pocket, it's tangible money, you can actually spend today. It's certainty. There's so many pieces of, there's so many areas of cashflow, the rules around cashflow that are so important. Like for instance, let's step out of your investments. Let's step out of the stock market. And let's just look at big business. The value is built on the cashflow. So if you were to bill, if you were to purchase a massive franchise, it would be built on the value of the cashflow. You'd be buying it on multiple of the cashflow. So you and I, as a Solomon Investor, we would think the same way 'cause we're building sustainable wealth, we're building wealth, which would mean our net, our nest egg, our net worth, has to actually be translated into a business. So in the three-dimensional investments of Boron Capital, we'd put it into a business and then that actually spits out cashflow. That creates value on your net worth because it actually is tangibly producing cashflow. The opposite would be leaving it in the market, hoping and praying that your price on the stocks that you're in are going to go up. But at the end of the day, that's actually irrelevant until you actually take it out, activate it, protect it and create cashflow.
- Yeah, there's multiple ways to make money in the private sector that aren't available in the actual public market.
- Very true, yeah.
- So just for terminology, in the stock market, really the only way you can gain money is what's called appreciation, right. Appreciation is the idea that something will be worth more in the future than it's worth right now. And that's the only way my stock portfolio can grow. What we do know is that that appreciation doesn't actually come from production, it comes from other investors, i.e., why it is a Ponzi scheme, but in private business, appreciation is a very real thing that you would want to capture and capitalize on. But there's other ways to make money. There's multiple other ways from cash flow, which is production, which is profits, which is revenue. In the private world, you can not only have that appreciation factor because you have a tangible asset, collateral, protecting you, and a tangible asset that can grow in value, but it has production, as well. It produces returns. And now, you're getting paid on the cashflow, as well. And a major difference for an investor is that they can now take their net worth, they can take that portfolio.
- Right.
- And put it into something that can continue to appreciate, put it into something that then pays them. So the idea is, let's say I got a million dollars in a portfolio. My stock portfolio is a million dollars. Now, if I can cashflow that at say, 8%, right, then that money is going to make me money. Right?
- Yeah.
- So the money, like I don't want to live off my money.
- So break it down for me some more. So like, that's, let's make it more tangible. So I've got a million bucks in the market.
- Hmm hmm.
- I'm Bob, I'm 64 years old.
- Welcome back, Bob.
- Thank you, thank you very much. And I've done the 50, 50, 50. I've worked 50 hours a week for 50 weeks, for 50 years. And I've worked up my nest egg. I mean, I'm just a hard worker. I put my head down, I do my thing. I've got integrity. I do, I'm full of, you know, providing for my family and I look up and I'm like, well, shoot, I've got some money to work with. I got something. At this point, I don't even know what I could do 'cause I've never, ever been in cashflow. I'm just thinking like at some point, I'm going to need that and I don't know what to do with it, but you're telling me, I can actually take that million bucks out of the market. Yes, I'm going to pay taxes on it. I get it. I understand there's that, but-
- You were always going to pay taxes.
- I was always going to pay taxes, so. So I've got this, I've got my nest egg. Help me understand, what does this mean like monthly? So you're telling me, what I hear you saying is like, I could actually have an income that comes off of this and you're telling me that it doesn't eat this away.
- Correct, so the traditional model would say, I grew up my $1 million, right. Bob has a million dollars. I have a million dollars. And now, once I retire, he's 64, maybe he retires at 68. And he starts taking a monthly distribution to live off of. Now, this is my income. So that million dollars is dropping every single year because I'm living off of it. But I would say scratch that, that sounds like a terrible idea. What if I could take that million dollars, put it to work in something where my money made me money? If I could take that million dollars, preserve it and have that produce cashflow. So like on the example of the 8%, if I could cash flow at 8%, well, 8% of a million dollars means my million dollars is just sitting in here collateralized, right. Because we never go into anything. We never go into anything without collateral. We're collateralized, fully collateralized. My million dollars is fully collateralized by a tangible asset. And then there's a business operating on that asset that produces return. Let's say it's 8%. So at 8%, that's $80,000 a year. And that 8% can be paid back to you in the form of cashflow, it's income in your pocket, right. That's 20,000 a quarter, which is roughly $6,333 a month, right. So on that million dollars, you're making $6,333 a month if your cashflowing at 8%, And you're not. you're not using your actual nest egg to live off of. You're living off of the production. And this becomes legacy. This becomes paid for, it becomes a protection. It becomes an asset. An asset is something that makes money for you.
- I love that because now, it's what we talked about. Our net worth now has value.
- Right, it has value. It's worthless otherwise.
- You're collecting $6,300 plus every single month. Now, that means that net worth has value. That nest egg has value that 50, 50, 50, where I worked my whole entire life for. Now, it actually has value. The powerful truth that you've got to get is is if it's in the market, not only are you not making the 6,000 plus a month, not only are you not making that, but it has no value.
- Right
- Your net worth has no value. It's such a powerful principle. And you know, as we sit down with investors every single week and they come into the office or we do a Zoom, you know, for some of you who are our investors, you guys know, you may be in another country. You would just do a Zoom and we can video conference with you. And the reality is is that this is such a foreign concept. I mean, I've been out, I go work for my money.
- Hmm hmm.
- I've got this thing that I'm supposed to do something with it sooner or later. And I know I don't want to run out of money. So I just want to leave it there 'cause if I get it, maybe I'm going to run out of money or something. But the reality is, no, if you don't get it out of there, it might take a huge loss like what we've seen in those last few months. You know, it may actually deplete, but the realization is, is you've got to activate. You've got to take it out. You've got to now go invest like the wealthy. You've got to go be like a real investor. That's a Solomon Investor. I mean a Solomon Investor, we go back to the key principles of Solomon, these central principles to sustain the test of time, the ancient principles in the Bible where he literally had a three-dimensional investment. He took net worth. He took it out. He then put it into the land. He then put business on top of it. And then the big picture is, is he was the third-dimension again. He's God-directed. And that second dimension is what we're focusing on. Now, it's the cashflow. He became the wealthiest man in all the land. Today, he's still noted as the wealthiest man in all the land. And he followed these key principles. Cashflow is king, especially in a volatile market.
- Right.
- Especially in unprecedented times. And especially when you know that you can't control the things in which your net worth is currently in.
- Right? And your future depends on your income. Right?
- Right.
- You have to have income.
- Yeah.
- And it's not about living off savings. It's about producing an income, producing a cashflow, right. And then we then live off of that and that produces longterm sustainable wealth, right. And one might ask the question, well, what happens if you know, my values are going up and down in the private markets, right. Well, what if my tangible value went down? Well, what we have to realize is there's multiple ways to make money and you mitigate risk, number one, by controlling the variables, right. The only way to mitigate risk is to control the variables.
- Right.
- And you can only control the variables when you are in an ownership, a control position.
- So, so, yeah.
- When you come into multiple dimensions, right. I have collateral, it's going to protect me in the longterm, but my cashflow. So if the appreciation value is ebbing and flowing, that doesn't mean your cashflow is ebbing and flowing, right. So you have protection here, taking care of you. You've got cashflow here, putting money in your pocket, it's the difference between what brokers would call realized versus unrealized gain. So unrealized gain is just gain that you've never touched, never felt. It's like when you're back at the casino and your chip pile's getting real big. But until you actually take that and go turn it into cash, it's unrealized. You don't have it, you don't own it. As long as it's chips, as long as it's digits on a screen somewhere, you don't have it.
- You mentioned a good principal. You start talking about a advisor or you know, maybe a broker. And I think that's such a good thing to just soak on for a minute. You and I want to take our discretion. We want to get our wisdom from the wealthiest people. And you know, unfortunately, from the financial advisor mindset, we love you financial advisors, but from the financial advisor mindset, one, you can't control it.
- Right.
- Two, you can't influence it. Three, you're telling people to put their money in a place in which you might not even have your own money. Four, you're working out of a cubicle. You don't have any actual input on the thing. And then five, whatever it's doing, you've been given a set amount of rules to actually tell the people, stay until the long haul. It's going to come back, be patient. You know, this is a long game, you know, and the realization is, is that a financial advisor is going to get paid, whether you're making money or not.
- Right, well, the tough thing about it is, like you said, they're forced to stay in a specific system.
- Right.
- They have to follow that system based off the guidelines that come from the top down of the company.
- Right.
- Right. And if those, they're all in the public market.
- Right.
- Right.
- They don't have the ability to move and shift and be nimble and be able to work inside the markets in the best way possible, because they're forced inside those systems. And it's not only about breaking out of those systems, but you know, the biggest thing that I tell people is you need to understand, wherever you invest your money, right. Because as a Solomon Investor, you should be investing on these strict principles, but you've got to put your money somewhere. So wherever you invest it, you need to know exactly how the people you're investing with make their money.
- That's a great point.
- Right? So the way a broker works is, you give them their money, your money, they put it into something else. They get paid fees or agreements or things like that. But they don't make money with you. They make money off of you. I mean, it's just the simple truth. The way we structure is we make money with our investors, not off our investors.
- Right.
- So in a private scenario, you're partnering with people where you make your money the same way they do. You're coming together on a deal. Number one, you can pick the best deal possible. And then number two, you actually make money together. There's no misaligned interests. You're incentivized to do your best together rather than incentivized just to keep it going.
- Yeah, yeah, it's a massive shift. The alignment is what you got to have. And that's, again, the Solomon Investor, the Solomon Investor receives discretion and a wisdom. You're actually putting your money into something that's controllable, that has influence. I mean, look, we don't have a crystal ball, but you've got to at least take very clear, you know, discretion on how you're actually putting your money into something. It's got to be able to be influenced.
- Right.
- And not have a market that influences it. It's got to have protection where you don't, no matter what craziness is going on and we're in unprecedented times, but in unprecedented times, you can still have control. In unprecedented times, you can still have protection. In unprecedented times, you can steal have cashflow. And that's what's so important about a Solomon Investor.
- Right. And again, this is Solomon's wisdom. This is Solomon's way. It's what he did. He had tangible assets, right. We covered it.
- Right.
- But then he had business. He had commerce and trade. He was making exchange freely and he was able to influence how much of that's happening, he's directly tied to it and in exchange. So the idea of business, business produces profits. When you invest into a business, you're counting on the business, the people of the business go make money. But then as an investor, you're counting on your, you're putting your money to go money. So you're leveraging multiple ways to make money. So inside of a Solomon investment, you would always have protection, right, the tangible asset. And then you would always, always have it paired with a business, a functioning operating business to produce cash flow where you can have profit share. You can have real production.
- Well, what's the reason, if I'm Bob and I'm 64, again, I've done that 50, 50, 50, 50 year, 50 hours a week, 50 weeks, 50 years. And I put my money in the market. How has this never been brought up? Like, how has this never been thought about that, why is the natural condition to actually leave it outside of cashflow? Why would I do that? There's only one reason. Well, what is that reason?
- There's only one, why don't you share.
- The reason is, is because we just haven't been taught.
- Yeah.
- Like we just haven't been taught. It hasn't been brought to our foreknowledge, that there's another way. Like we can actually invest like the wealthy. We can actually have like exponential growth. We can have compounding wealth. We can have protection. You know, we think about the market and you look at the 20 entities that control 80% of the stock market. Look, if you understand anything about when a majority gets together, the house always wins. That's what you can do as a Solomon Investor on the private sector, outside of the market. Like, you can actually have majority. Like, this is what Boron Capital does. We actually run all of our investments like this. And that's why in 14 years, 300 plus transactions, not one single investor's lost money. Look, we're not perfect. We don't have a crystal ball, but we just follow the principles of the ancient key principles from the Bible from King Solomon. And that is activating your net worth, taking control, taking it out of a public market, putting it into a private market that is actually tangible. It actually has influence. You can actually have a, put a business inside it and have commerce. But the protection is, is that the actual business and the land can be sold separate. That's why even apartments in the three-dimensional investment. They're only sold together. So unfortunately, even apartments can be in a downmarket and have bad occupancy. You've got to be where you are hedged to that and where that's not even an effect.
- Right. And what Blake's saying here is the difference of dimensions, right. So the apartment, the single family home, because look, not all real estate is created equal. We're not saying you can just go into the real estate market.
- So true.
- We're saying you actually have to have a real estate asset to protect your investment. We're saying you actually have to have a business operating on the side of it, where you own and control and operate that business, as well. Or you're partnering with the people that are. And the reason why I say, an apartments, well, okay, well, we're running a business. Well, unfortunately, the business side of that is directly tied to the real estate market.
- Right.
- So they both sit in the same market. So when we are hedging our bets, when we are mitigating risk, you're wanting to look for a business that sits on a different cycle than the actual real estate. So if real estate cycle, like all of the cycles are going to ebb and flow.
- Right?
- But let's look for a business that sits on a different cycle. Right.
- Right.
- So now we own tangible asset. We own a business and they have different cycles, which again, creates diversification in a single asset with real true principles that can stand the test of time.
- That's right. Again, you've activated, you've taken control of your net worth. You've then protected it, put it in collateralization, inside the real estate. It's cash flowing. And now, you've got to be, whether it's Boron Capital or someone else, you've got to be a Solomon Investor. And we believe that Solomon Investors are the only ones that prosper in hard times. We believe that Solomon Investors are the only ones that actually sustain wealth sustainably. We believe Solomon Investors are the only ones that actually have discretion, walk in wisdom. And whether you go invest your money in your, by yourself and walk out with Solomon's principles, or you want to do it with a company like ours that's turnkey, that has all the pieces in place, that's been doing this for 14 years and hadn't had a single investor lose money. Look, it's time to take control of your net worth. It's time to actually create a cashflow, it's time to actually realize that you're created for a bigger purpose than just putting your money with someone and just setting and forgetting it. It's time to rest while you invest and actually have impact and legacy in your future. It's time for you to become a Solomon Investor.
- Yeah, I got to follow up on that one thing. When you leave this podcast, like they got to take this away, like becoming the Solomon Investor. This one takeaway will change everything.
- Yeah.
- Right? When you have cash flow, you have income that pays you for the rest of your life. It pays you for the rest of your life. So now, you've worked your whole life. Now we don't have to worry about it lasting. We activate it and we control it and then it creates cashflow that's going to pay you. That's why you have to have it. It's not about trying to make it last. It's not trying to squeeze every dollar. It's about living and realizing your gains today to increase your financial abilities today, and also protect you in the future, create impact and legacy, like every Solomon Investor ever would.
- It's time for you to be a Solomon Investor.