The Startup Journey: Alternative Investing With Sliced Investing Founders

Founders of Sliced Investing. Top: Akhil Lodha. Bottom: Mike Furlong

Top: Akhil Lodha. Bottom: Mike Furlong

One goal after leaving my corporate job of 11 years in 2012 was to learn more about the startup industry in Silicon Valley. I was coming from the old school finance industry where there was relatively little innovation compared to many financial technology companies today. Life was getting a little boring and I kept watching company after company we took public grow into great successes.

One of those companies was Google. I remember being excited seeing Sergei Brin, one of Google’s founders give a lunch presentation in downtown San Francisco during their IPO roadshow back in August, 2004. It was standing room only, so I wasn’t able to eat one of the manufactured plates of rubber chicken. We were one of the lead book runners, and I was inspired at how quickly Sergei, Larry and team were able to build something so huge, so quickly.

We are living in the golden age of tech/internet innovation. Five years ago, at age 32, I told myself that if I didn’t create something internet-related on my own or join a startup while having so much access living in San Francisco, I would kick myself in the face when I’m old.

Today, Google is one of my largest sources of traffic and revenue for Financial Samurai. Maybe it’s good karma for helping them go public, even though the IPO seemed shaky at the time with the last minute price decision of $85/share. Yes, we all should have piled in back then! It’s crazy how life comes full circle.

After some research, I’ve decided to consult for a couple months part-time for Sliced Investing here in San Francisco! I discovered Sliced Investing on AngelList while vacationing up in Tahoe over Christmas break. With my tag-line “Slicing Through Money’s Mysteries,” I wondered if destiny was calling once again as I shot the founders a note to say I’m interested in helping them out. They kindly responded, and here I am.

I wrote off hedge fund investing until 2015 because I didn’t have the $500,000+ minimums to invest. It was just as well since the markets have been on fire since 2009 and hedge funds have underperformed. But in a way, I have been creating my own equity hedged portfolio with my accumulation of structured products since 2012. Give me 5-10% returns every year with low volatility, and I’ll happily invest all I can.

Sliced Investing smartly crowd-sources investor capital in order to make investing in hedge funds and alternatives more accessible to more people due to their minimum investment of $20,000. With the bull market entering its sixth year, I’m beginning to wonder how much more this baby can run. I’ll take under a 10% return for the S&P 500 for 2015 if anybody wants to take the other side of the bet!

In this interview, I want to understand the mindset of an entrepreneur. We’ll talk about risk-taking, the why, and how things came to be with Mike Furlong and Akhil Lodha, founders of Sliced Investing. I’ve got to imagine many people would love to be their own bosses and create a company one day as well. 

How To Make Lots Of Money In Real Estate: Focus On Expansion

Remodeling and Expanding

Building The FS Hot Tub!

In 2014, I bought a fixer for about $714 / square a square foot in the Golden Gate Heights neighborhood of San Francisco. Nobody really knows where the neighborhood is, and that’s just the way I like it because everybody eventually will! Golden Gate Heights is just several blocks west of UCSF and has homes facing the Pacific Ocean.

Real estate is my favorite asset class to build wealth because it is tangible, inflates with inflation, has preferential tax benefits, and provides an income stream if rented out. When I buy real estate, I’m the CEO of the property. When I buy a stock, I’ve got to trust the CEO and his or her management team to execute. Sometimes the CEO is great, sometimes the CEO sucks wind, yet still gets a multi-million dollar exit package that makes me sick.

Nobody cares more about your money than you. Hence, the goal for wealth builders is to own investments where you can better control the outcome. And if you can’t own investments that you control, let someone you trust manage your money if you don’t have confidence in managing your money yourself. I trust myself to work harder and scrutinize expenses and revenue more than anybody. My bottleneck is time.

In this post, I’d like to point out a very important rule before buying any single family home. If you follow this rule, I’m confident with the right execution, you will be able to make far more money than if you didn’t.

How Can We Help Level The Financial Playing Field?

Level Financial Playing FieldThere’s no greater feeling than helping people solve financial problems. I’ve always been someone to find solutions, rather than complain or pontificate why such and such is the way things are. Perhaps it’s the MBA side of me that always encourages problem-solving. Or maybe it’s the do-or-die ex-banker side of me who always had to close a deal or else I would never get paid or promoted. Taking action is always better than sitting on your ass, and just hoping things will get better.

But I’m torn by money because I’ve seen the entire spectrum of wealth; from the slums and favelas of India and Brazil to the mega-mansions in Pacific Heights and The Hamptons. Life is not fair. Some of us are born with a great foundation for achieving wealth. A few of us are born already wealthy thanks to the trust funds set up by thoughtful parents. However, the vast majority of us are born middle class or poor.

I’ve always thought one of the greatest ways to give back if you don’t have much money is to share what you know with others; to be a mentor. I’ve been fortunate to have two supportive parents who enabled me to study hard, think for myself, and take some risks. I often question “why me?” for achieving financial independence earlier than normal when I worked no harder, and am certainly no smarter than many other people.

To deal with my question, I simply write, and write, and write so that perhaps I may be able to help others seeking answers to a financial problem. The internet is truly the best medium for gaining knowledge today.

On October 20, 2012 I wrote a post entitled, “Financial Samurai Career & Personal Finance Coaching.” The post’s purpose was to help those who wanted 1-on-1 personal finance help from me beyond the free content that I write. I never published the post because I was embarrassed to charge any money to help people. It felt off to charge for advice given I’ve never charged anybody a penny since 2009. I’ve even welcomed people who don’t pay a cent to openly berate me about my ideas and opinions.

After a month of sitting on the post, I decided to finally put it up in my menu tab bar on the homepage without any public announcement. People did take notice to the tune of around five clients a month, but I didn’t have time, so I raised the price to $600 an hour in order to work with just two to three clients a month and it worked… for a while. However, I took the page on the menu tab off altogether because demand started growing again unbelievably. 

Who Should Pay For The Wedding? A Logical Guide To Lavish Spending

Winter Valentine's by Colleen Kong-Savage

A Wintery Valentine’s by Kongaline.com

Do you know what’s crazy? Spending $25,000 – $30,000 on the average cost of a wedding in America if you make a median household income of $52,000. What’s worse is going into debt to get married, especially since there’s a 50% chance it won’t last!

In many Asian countries, the parents of the bride foot the entire wedding bill because of the now backwards idea that the husband is “relieving” the parents of the financial costs of caring for their daughter. I can hear many Westerns scoffing at this way of thinking, but before the 1970s it was rare to have dual income households in America. One of my neighbors is a 30-something year old woman who still lives with her 55+ year old Chinese mother. Living with your parents until marriage is quite commonplace for many Asian and Hispanic cultures.

The one thing many Asian weddings have that Western weddings don’t have is the ability to make money during your wedding. I went to my friend’s wedding in Taipei and he actually made about $100,000 from his 50 table, 400 person wedding. The Chinese have a culture of giving monetary gifts in the form of red envelopes during weddings and Lunar New Year. If you are a business associate invited to the wedding, you better give at least $500-$1,000 or else you might not have much business left for the year!

In many Western countries, the parents of the groom pay for all wedding expenses. The thought process is that the groom’s parents are honored to have such a wonderful woman be their son’s life partner to love and care for him through sickness, health, wealth, and poverty. I like this thought process a lot, but as a son of middle class parents who went to a cheap public school, I would feel bad for my parents to pay. But as noted with the many commenters in this post, in America, there’s also a strong tradition of the parents of the bride to pay.

Finally, there’s a growing trend for many lovebirds to pay for the large majority of their wedding cost themselves. Out of the past five weddings I’ve attended, all five were predominantly paid for by the bride and groom. I’ve asked other 25-40 year olds and they’ve said the same thing. Perhaps parents might pay for the venue, or the flowers, but certainly not everything.

One of the main reasons why more wedding costs are born on the bride and groom is because they want their wedding to be a certain way. We’re much more picky and elaborate nowadays it seems. And if your parents are paying for everything, they may put a lot of pressure on you to do things their way instead of yours. This may affect the guest list, the location, the vendors, and more.

Should I Buy Bonds? Wealthy People Don’t

Stocks and James Bond 007 by Marc Tavenier

Stocks and James Bond

Wealthier people in America do not follow the conventional asset allocation model of buying bonds, i.e. age equals your bond percentage allocation or a 60/40 equities/fixed income split. How do I know this? Personal Capital has over 800,000 users of their free financial dashboard to help manage your money and I’m a consultant who is privy to some of their data to share with all of you. Data geeks, rejoice!

Out of 800,000+ Personal Capital financial dashboard users, roughly 165,000 of them have linked investable assets of between $100,000 to $2 million. We call this the mass affluent class, or upper middle class if you’re so inclined. The mass affluent are generally regular folks with mainly W2 income. They save and invest in order to provide for their family, pay for expensive tuition bills, take a couple nice vacations a year, and hopefully achieve a comfortable retirement when all is said and done.

Let’s do a quick review of my proposed stocks and bonds asset allocation model before moving on to the big data. 

The Source Of All Stress In Life: Giving A Giant Crap

Giving A Crap: The Source Of All Stress by grigoria vryttia

Stop taking giant craps in order to be happy

The reason why I got my first speeding ticket going 35 mph in a 25 mph zone was not due to racial profiling, car profiling, or any other type of profiling one likes to conjure up when one gets caught. I got snagged because I was in a hurry to be on time for my doubles match at 6:30pm. I absolutely hate making others wait for me. It’s disrespectful.

If I didn’t care about being 10 minutes late, I wouldn’t have gone 10 miles over the speed limit. I would have taken my sweet sugar time. Maybe I would have pulled over to take some pictures of people’s flower gardens as every other car whizzed by me going at least 35 mph. I’m not bitter, no sir, no ma’am. I mean, of course I was speeding even though it’s impossible to move faster than a pregnant turtle during rush hour traffic in San Francisco.

I’ve accepted the fact that because I gave a crap about people’s time, I broke the law.

From Welfare to Well-Off: My Journey To Financial Independence

The journey to financial independenceThe following is a guest post by Samurai Dominic. He shares his story about escaping the life of trouble and poverty towards one day reaching financial independence. Reading different perspectives is what makes the Financial Samurai community so awesome. – Sam

They say the best time to plant a tree is 20 years ago. You know when the second best time is? TODAY!

As you are about to discover, it doesn’t matter where you start in life, what matters is how you play the hand you were dealt. You can stand around and complain how the world is unfair, and yes it is very unfair…get over it. Complaining and dwelling on your dire circumstances will do nothing to improve your life, so don’t waste your time. The thing to remember is that successful people do what unsuccessful people are unwilling to do.

We live in unprecedented times with more opportunity than any other time in history. You just have to decide if you are willing to put in the work to achieve your vision of success.

You could say I am one of those rags to riches stories in the making. I entered this world like most, in a hospital room naked and screaming. However, I entered the world with absolutely no advantage. Some might say I was dealt a crap hand. I grew up in a low income area, where my family and most other families were on welfare or some kind of government support. Growing up I slept on the hard-floor of my grandmother’s 2-bedroom apartment with my 3 brothers, while my grandmother and mom shared a bed, and my uncle had the other room.

Shit, we were so poor that my grandmother would use the oven to heat the apartment (not cooking for, but cracking the oven door while it was on with nothing in it). That could not have been safe. And to this day I don’t really know if it was actually cheaper to heat the apartment using the oven vs. the actual heating unit. Either way my grandmother was determined it was the best and cheapest way to heat the house.