Transcript 0:00 Then why is it what the billionaires do? The billionaires put 20 to 30% of their wealth in public markets and 50 to 50 to 60- Mm-hmm... in private markets. Is it riskier? 0:10 I- yes, probably, but it's also more opportunity, and that's all about your sponsor. It's getting- Mm-hmm... better sponsors. 0:16 It's pretty hard when you're in the middle of things, when you're going through really tough stuff and your reputation is getting smashed. I was on the front page of the paper when my company was going up. 0:26 It was a big deal. Mm-hmm. And then I was also on the front page of the paper when it was going down. Today's guest wrote the book I wish I had when I first got into alternative investments. 0:34 It's the perspective that can only come from someone who's lost everything twice. $250 million gone in the dot com crash, but then he rebuilt. Then 2008 took it all again. 0:47 Most people don't survive one of these, but Bob, well, he came back from both, and he built a family of funds that's now approaching a billion dollars under management in the process. 0:57 In this conversation, we go beyond the strategy. We talk about what carried him through the wreckage and what God was doing in it. 1:04 We also go into why he believes Christians may be the most uniquely positioned people on earth to build real lasting wealth through private markets. 1:13 Wait till you hear his story and why he approaches alts and life the way he does. Welcome to my conversation with Bob Fraser. 1:21 Because I, I know that you're a man of faith and that that is a big part of, uh, that discovery- Mm... process in there. What do you see now that you didn't see then in the way God was carrying you through that time? 1:32 It's pretty hard when you're in the middle of things, when you're going through really tough stuff and your reputation is getting smashed. 1:39 You know, I was, I was on the front page of the paper when my company was going up. It was a big deal. Mm-hmm. And then I was also on the front page of the paper when it was going down. I'm the laughing stock. Yeah. 1:48 And I'm sure there's people listening that that's you. You know, you've- Yeah... you know, you just... you, you're embarrassed, you're humiliated, nothing's worked. 1:55 And, and as men and dudes, you know, we, you know, we wanna be successful- Right... and it's not, and so you're a failure. So that was really tough. I- I'm not a depressive- Mm... person at all. 2:05 It never really happened, but I was struggling with depression. And, you know, the same people that were begging for 30 seconds of my time wouldn't even return my phone calls. Yeah. And there was nothing happening. 2:16 I'm trying to get, get something going, and there was nothing happening. You know, aft- after the dot com crash, the world was dead. I mean, it was [laughs] just dead, to me at least. And it was, it was really time... 2:27 You know, the one thing that really worked for me always was my faith and my family. And, you know, my family was just, has always been solid. 2:33 And my wife just is a fan of mine and, and has always been, and my kids love me, and that worked, right? So it was, it was a place to find solace, and, and my faith just believing that there was a better day, right? 2:48 According to the promises in the scripture, that there was always a better day, that I just needed to, needed to go, you know, put one foot in front of the other, and there would be a better day. And there was. 2:59 How did Lauren and the kids walk through that journey with you, too? I- I'm just personally curious. I think more concerned about me. She's never been concerned about money, of course. And the kids were like kids. 3:09 You know, as long as there was mud to play in and a tree to climb, they were happy. They didn't know we just lost everything and [laughs] 'cause their world was the same, you know? 3:17 "Are we going to the dollar store today?" "Oh, yeah." So kids are great. Yeah. Right? They're not even clued in most of the time. 3:24 But, uh, yeah, Laur- Lauren was amazing and just always encouraging me and always telling me that, who I was and not letting me forget it. How did you climb out of that, and, and what was that like for you? 3:38 I lost everything, and, and at that point, I actually wrote a book called, uh, Marketplace Christianity. Mm-hmm. 3:44 And it was really about a move of God that happened in the business, the dot com business, that surprised me. And it was, it was kind of one of the very first books about faith in the workplace. 3:54 It was one of the very first, way back. And so it got a lot of attention, and I started traveling and speaking. 4:01 So I did that for 12 years, taking speaker fees and traveling the world and doing conf- conference speaking and, and those kind of things, and not making any money at it. 4:10 You know, you don't, you don't make money when you... you know, unless you're the 1%, which I wasn't, you know? Yeah. Uh, you don't, you don't make money doing that. And then after that really decided... 4:20 I just knew, I just knew I needed to, I needed to get back in the game. And I find I'm one of those guys that if, if I do too much business, I miss ministry activity. Oh. And if I do too much ministry, I miss business. 4:31 Yes. [laughs] So being in the ministry for 12 years, I'm like, "Oh, I just wanna do business"- Yeah... "and I wanna make some money. I wanna be the guy that writes the big checks. 4:39 I wanna be the guy with big shoulders that carries a lot of other people." And that's just me. It's just who I am. So met my partner, who had also l- got, just lost everything in the great financial crisis. Oh, my. 4:50 A fantastic brother. And he figured out mortgage notes. And he had lost everything. 4:56 He was a real estate developer, and he had lost everything in the great financial crisis because he had hard money loans on a whole bunch of land. 5:03 The land drops 80% in value during the great financial crisis in California, and he gets taken back. He loses everything, but he figures out it's the debt guys that win. 5:15 And so he figured out how to buy defaulted notes and fix them. What, what year was that? And that was 20- 2012. Right. All right. 5:25 And, you know, re- which was really the bottom of the housing market, the single family housing market- Mm-hmm... at the time. He figured out how to buy them and how to fix them, and it's, it's no small thing. 5:34 He, he's a very, very smart guy, and I was the guy that scaled it. So I was the guy that knew how to raise capital, knew how to structure businesses and scale businesses. 5:42 He was the, the, the technical expert that was the genius that figured out how to do this. So, so it was magic for us two to get together. 5:49 And we started a beta test fund, and, and I had enough credibility that I could raise a little bit of money with, with friends because of the ministry stuff. Sure. And- Oh, interesting... you know. 5:59 Yeah, so- I, I thought you were gonna say because of your previous business experience, but it was because- And-... of the ministry stuff that you had developed that relationship... 6:04 because of the b- b- the p- people trusted me. Yes. Because so, so this first fund, we bought all this, these notes. We, we couldn't model it Matt, we didn't know how much money we're gonna make. 6:13 We didn't know how much legal costs are it's gonna be. We didn't know what our timelines were. We didn't know what our return characteristics were gonna be. Yeah. We didn't know anything. 6:20 It was literally a trust me fund. It was like- Oh my gosh... you know. A- and I know. 6:25 [laughs] But I got a lot of guys that trust me 'cause they know I got a lot of hustle and if there's somebody who can figure it out, it'll be me. Yes. 6:31 And as, you know, so it worked and we made them a lot of money, and then we were able to, getting the data from that beta test fund, we then could model everything, and then we scaled it up and kinda blew it up and became one of the largest distressed debt, uh, f- uh, firms, uh, around. 6:48 Mm-hmm. And but we never viewed ourselves as the d- as the distressed debt guys. That was just the first place to stick the fork in. Yeah. Right? 6:55 And, and so, you know, given, given my history of four decades of getting creamed, you know, I'm like, "No, no, no. 7:00 We're, we are gonna find whatever the next things are, and we're gonna start to diversify and create a family of funds that- Mm... that's gonna work regardless what's happening in the world," right? 7:12 So was, was that distressed debt fund the beginning of Aspen? Yes. Oh, okay. Okay, so that's where it all started. And, uh, you guys are still partners, or did that continue, uh- Yes. Yeah, yeah... yes. 7:23 We're still best friends and partners and- Fantastic... part- partners- Yeah... in faith and, and, uh, he's, he's an amazing man with amazing family and, uh, yeah, it's, uh, still going on. 7:34 Can you explain the distressed debt funds just a little bit more? I, I just wanna understand in a little bit more granularity as far as what you were getting into because it sounds risky, right? 7:41 It sounds like you're getting in on something that's going to default or has a higher likelihood of defaulting. No. So what's the benefit of that? It's not gonna default. No, it's already defaulted. [laughs] So we're... 7:50 So imagine buying a mortgage, um, $100,000 mortgage for $6,000. So yeah, i- it's- it's risky, but there's also a lot of upside. Mm-hmm. So we, we did super well with it. We made 3 to 400% margins. 8:05 That was very, very co- complex, but we, we figured it out. And, and we... So we'd buy bad debt and we'd basically fix it. 8:12 Just understanding the distressed debt side, did, did you actually work with the individuals who held the mortgage, or was it the bank? Absolutely. 8:18 And then so it was kind of both figuring out how to make that- We worked, we worked with the individuals that held the mortgages, and so we did everything we could to keep them in their homes and to be good guys and make money doing it, so. 8:30 Well, and that's what, that's what I'm getting at here too, is you've gone through this whole ministerial phase where you're trying to help boost people up or the kingdom up or whatever it is, and then all of a sudden you've got these folks who are in terrible situations and at risk of losing something, and you're in there, and I don't know if you'd consider it helping them, but it certainly sounds that way from the outside, that you're helping them stay in their homes or at least maintain that mortgage. 8:48 E- exactly. That was our goal. And, you know, there's some firms that we know that were, they would buy these notes- Mm-hmm... in order to take the properties. Yeah, it can be very predatory. And very predatory. 8:59 And we... And it's perfectly legal, uh, but we never did that. We wanted to keep... 9:03 If, if someone could stay in their home, uh, if there was any way for that to happen, we would make that happen and, and help them stay in their home. 9:12 So we only end up completing foreclosure, I think, less than 2% of the time. No kidding. Um, you know. That's incredible. That, uh, sorry, I mean, that just registered with me. 9:20 2% of the time is incredible for distressed debt. It is. So you must have been really working hard and had a good system in place that folks could, could fall into and follow. 9:30 We had, uh, seven asset managers who were bankers and, and attorneys who worked full time for us, and that's all they did, and they got very, very good at it and, yeah, we really tried to help people. 9:39 So how did that parlay... What, what was the next thing in Aspen Funds? If that was the start, the core, where did it go from there? Because we're talking about- So-... 9:46 in 2012, 2011 right now, so the economy's kind of gradually building back up toward that, that high cycle, uh- Yeah... where it went into high gear over the next 10 years. So how did that look? 9:57 Well, one of the, one of the outcomes of a non-performing loan is a re-performing loan. So where the borrower does a loan modification, they get back on track, and they start paying it, right? 10:07 So maybe they had a divorce or, you know, they lost a job and they, they fell off the wagon, but then they, they get their job or they, they recover and now they can start paying their debt. 10:17 So we, we modify the loan, bring it current, and then we start, we start collecting mortgage payments on these notes. Well, one of the outcomes of that is a re-performing note. 10:28 And then what we did is we, we, we created an income fund, a credit fund that would basically collect these mortgage payments and pay our investors. 10:37 So and the, the genesis of this, you know, so many good things is your customers, you know? 10:42 So one of our guys came and, and a, just a guy he knew from, from church actually, and, and he said, "Hey, Bob, um, you know, you're, I know you're really smart. 10:51 I got, like, a million dollar settlement, and I, I wanna turn it into income. What do, what do I do?" And it turns out this guy literally, I'm not exaggerating, has had 13 special needs kids that he adopted. 11:04 And, and so I'm like, "You know, I feel for you, buddy," but I'm like, "Good luck." Because I knew the public markets. I'm an expert in, in public markets, and I was a pr- professional trader for five years. Yes. 11:14 And I said, "Good luck." There's nothing, there's no way to get the kind of income... He wanted to earn double digit income. I was like- Uh-huh... 11:20 "Nah, not gonna happen, not without massive amounts of volatility," right? And, and not something you wanna do. Mm-hmm. And then I, so I go home and I think, "You know what? 11:30 I could make a heck of an income fund by buying these re-performing notes at a discount." So I'll buy $100,000 note that's being, being paid at an 8% rate, and I'll pay, you know, 70 grand for it. 11:44 And so there's this discount which is the cushion which makes it safe, and then we just collect payments and we, we, we send that to investors. Well, he became our first investor, and we pay, we're paying 10% returns. 11:56 That fund is still operating. It's been going now, uh, 15 years. Oh, I didn't realize that. And- Wow... and yeah, and it's, it's our, it's our income fund. We've got, um, nearly 1,000 mortgages in it. 12:06 It's a very large fund. It's audited. Mm-hmm. And it just pays, pays monthly income. So to me, that's part of my service. That's part of- Mm-hmm... 12:15 me being a servant and being a steward, is I wanna help other people steward money. And what do you do when you need income and you don't wanna take volatility, you need something that's fairly safe? What do you do? 12:28 Mm-hmm. And so while we've never lost anybody's money in that fund, uh, we've never missed a payment, we've never missed... It, it... Here's the other thing, it's fully liquid. Mm-hmm. 12:36 At any quarter you can request your money back. So, so we have 1,000 mortgages in there. They're always paying off, right? So we have the- Yeah... massive amount of internal cashflow. That's interesting. And so we, we... 12:46 Yeah, we can't promise liquidity, right? You can't guarantee it. But we've never met- Yeah... we've never failed, uh, to meet a request ever in 14, 15 years. How interesting. That's great. And so, so to me that's... 12:58 I, I'm, I'm passionate about that, right? A lot of, lot of my friends are going into raising... You know, they're successful, they're gonna raise institutional capital. I don't wanna do that. Uh-huh. 13:07 I'm gonna stick with retail capital. We raise 100% of our funds from retail, and that's who I, that's who I serve. That's, that's my service. Why? That's what I'm trying to do. Why retail? 13:15 It's e- it's easier to go institutional, right? You can get bigger chunks of money, you're proven, you're established, you got a track record. Why not go institutional when you can go retail? 13:22 Or why, why are you choosing retail? Because, because I wanna help people. Interesting. And I wanna help investors. I wanna help investors. I wanna create better products 13:30 that help investors do a better job, and I'm passionate about it. So yeah, maybe I could find an institution and I could f- I could fire my guy with, with 13 special needs kids, you know? But why would I do that? 13:41 He's the reason I'm doing this. He's, he's the reason I created the income fund. And, and him and 1,000 like him. If I can help people, I wanna do that. And people are desperate. 13:51 You know, if you think about it, if you're, you know, you're trying to earn a little bit of income as you're getting close to retirement or something, what do you do? 13:58 Private credit is, is, its superpower is income with a margin of safety and liquidity. Hmm. And there's nothing like it. There's nothing that can compete with private credit in the public markets. Nothing comes close. 14:11 You know, the best thing is bonds, but now, yeah, now you're getting, you know, low single digit yields. And what if you need more than that? And, and really, you can get fairly safe with, with credit products. 14:23 You know, it's not a, it's not a US government bond for sure. But you know, we soared through COVID, the interest rate hike cycle, and no, not, not even any speed bumps. What's interesting is what you're alluding to. 14:35 You, you, you've been burned by the public markets a couple times, right? Exactly. Is that, that, that, that's done you wrong. 14:40 But at the same time, you're, you're talking about something that's highly counterintuitive to most people. Most people see alternatives as risky or volatile or, or something that's unpredictable. Uh, a lot of unknowns. 14:51 And frankly, there are a lot of unknowns. 14:53 But you're saying that it's a much safer track for a lot of people to protect from some of that volatility, and you're, you're speaking specifically about private credit right now. 15:01 And I think a lot of, a lot of the institutional guys would agree with that too. But what do you say to people, especially people who say that this is a poor 15:08 use of your money or poor stewardship of your money by putting in something that's risky like this? Then why is it what the billionaires do? 15:16 So the billionaires put 20 to 30% of their wealth in public markets and 50 to 50 to 60- Mm-hmm... in private markets. So it's just smarter, it's better. 15:26 And yeah, you, you can make a stinkier investment, and you can also make a better investment. One of my favorite charts from the book is a chart from JP Morgan that showed in real estate. 15:37 So there's public real estate, they're called real estate investment trusts, right? And they basically buy real estate and it's a stock and it trades, and it's, it's real estate, but it's a stock, so it's super volatile. 15:48 It's got a yield. 15:49 And in the JP Morgan data, it shows the, the difference between the best public real estate managers and the worst is the lower court trials getting six and a half percent returns, giving six and a half percent returns. 16:03 The better guys are getting 8% returns. So there's not that much difference, one and a half percentage points. On the private side, the best guys are, are getting close to 16% returns. 16:13 They're doubling the returns of the other guy. And the worst guys are losing money. They're not making any return, they're making a negative return. [laughs] So- Yeah... i- is it riskier? I, yes, probably. 16:26 Uh, but, but it's also more opportunity, and that's all about your sponsor. It's getting- Mm-hmm... better sponsors. And it doesn't have to be riskier. It's like, well, you could say, "Hey, is, are stocks risky?" 16:37 Well, some are riskier than others. And the same with alts. It's like, you know- That's right... you can find alts that are very, very, very, very safe, and you can find alts that are horrendously risky. 16:46 You know, I've, I've seen stuff that's... Yeah, I wouldn't touch it with a 10-foot pole, you know? [laughs] So, so it's like everything, right? There's the good, the bad, and the ugly. 16:55 The way, and you describe in your book too, the, the billionaires have about 50%, the, the family offices, they have about 50% of their assets in alternative investments. 17:04 Uh, and they tend to be funding a whole lot of these deals throughout the world, uh, really kind of building the world that, that we live on. 17:09 And one of the things that I'm really passionate about is I, I really wanna see the, the foundations of the world that's being built built on the right values. 17:18 And, uh, I know that that's something that you, uh, place a lot of emphasis on too, is these values. And you don't get that in public markets. 17:24 You don't get that kind of opportunity to, to inject values from the foundational level, but, that you do in alts. 17:30 And I'm curious if you think of things that way too, uh, in terms of the, the, the funds that you're creating or, or the vehicles that you wanna create for people to get into. Yes. 17:39 And, and like I said, these are my friends and family who are investors. Mm-hmm. And by the way, I'm one of the largest investors in my own funds. And so I take stewardship extremely seriously. 17:50 I am an animal on, on execution, and making sure that we do a good job in underwriting, and making sure- Hmm... we do a good job. Because I do not wanna lose money. 18:02 And you know, and everybody kinda says that, but I th- I think some people take it more seriously than others, you know? 18:07 And it's very interesting because this last year, uh, in 2025, Aspen raised double the amount of funds that we raised the year before. We, it is our best year ever. 18:17 Meanwhile, we're going to these real estate c- investment conferences, and it's like a ghost town. Wow. Nobody's raising capital. It's like only us. We're the only guys that were successful. 18:26 And, and I look back and, and I think, well, because we didn't stumble- We have not stumbled. We have not, we, we never invested in these things that other people did. 18:38 We didn't go to the Sunbelt markets and buy four-cap properties. We didn't get, you know, the variable rate, you know, bridge loans- Yeah... and leverage it up 80 and 90%. We didn't do any of those things. We did, we... 18:50 Because we, we c- I can't take that much risk, right? Mm-hmm. As, as a, having gone through four cycles, I know that bad stuff happens. And- You've been through the downs, yeah... 18:58 and I'm like, I'm like, I'm the guy that's waiting for the bad stuff to happen. I can't do those things, and we didn't do those things, so our deals are doing well. 19:04 And then a Iran thing happens and oil spikes, well, we're in oil. All my investors are in oil, you know, so we're doing just fine [laughs]. You know? So, so it's kind of like- Yeah... 19:14 I think what happened is, is it's just emerged. We've emerged, and it's because of the values and because of the, of the, of the really the character to execute, right? Mm-hmm. And to, to treat our... 19:25 You know, for me, g- my investors are not a means to an end. They are the end. They are my purpose. You follow me? Yeah. And versus for most people that are in my game, they are the means to the end. Mm-hmm. 19:40 The purpose is for them to make money. Yeah, that's very true. And, and you, you point that strongly in the book, too, Invest Like a Billionaire. It's very, very clear where your emphasis is. 19:48 You want to educate and make sure that people feel confident in what they're getting into. Uh, but one of the things you talk about right at the beginning I just thought was, was great, talking about investment advisors. 19:58 We all... So many people rely on their advisors to tell them exactly what they should and shouldn't be in. Right. Right. 20:04 And there's kind of a standard 60/40 model, 60, uh, equity, 60 or 40% bonds, you know, which has been longstanding, but that's, that's kind of shifting right now. 20:13 Now they're saying maybe 2% alts or, or 2% even crypto or something like that, too. But that's clearly not what the big, big players are doing in the world. 20:21 And you make a really good point, though, that investment advisors aren't trained. They, they don't have that kind of experience- They're not... 20:26 nor, and I, I don't know if you alluded to this, it's just my personal take, is there's really very little incentive for them to go through the, uh, the effort to pursue alts on behalf of their clients. 20:37 And I'm not saying they don't. They're great people who want to do best for their clients. But the system is not set up for that particular investment vehicle for them. And I'm curious- Yeah, you nailed it... 20:46 to get your take on that. Yeah. Yeah, you've nailed it. That's exactly right. And these investment advisors, the system is not set up for alts. They are set up to be asset gathering firms. 20:57 They wanna get assets under management, and they take a little percentage, okay? And that's the way they make their money. And they don't, literally do not know anything about alts. 21:08 So now there are, of course, some that do. They're extremely rare. If your advisor knows about alts, then, you know, you've got a unicorn, because they just don't. 21:17 They, you don't have to know about alts to, to, to, in, in a Series 7 or the s- or the Series 65. Mm-hmm. That's not part of, of what you're training is. 21:26 And furthermore, as asset gathering firms, well then, if somebody's writing, taking f- funds from the public markets and investing in an apartment complex, they're taking money from you as the advisor. 21:37 They don't wanna do it. Plus, an advisor who recommends alts, oh my gosh. Well, what happens if that thing loses money? 21:43 Okay, so if, if Apple, you know, takes a dump or whatever and it loses 50% of its value as, y- you know, these things happen, you can't blame your advisor, right? It's Apple, you know? That's right. 21:55 But if, if the advisor picked this apartment complex and, or, or for you, so they, they don't want anything to do with that. They don't even... 22:02 And generally they'll, they'll try to scare the pants off you to keep you from doing it, you know- Well, and to be fair-... from, from investing... 22:09 they, they do have that fiduciary duty, and that is something that's a significant responsibility on their behalf. 22:14 But it's still, it, it, it takes a lot of the retail players who would like to be doing these kind of alternative investments and, and doesn't steer them to at least, 22:23 at least investigate them to see if it might be the right thing or a fun thing even for them to get into. But, uh, but I don't, I don't think fiduciary duty means you can't invest in alts. I mean- Mm... 22:32 a fiduciary duty means you're responsible to make, to, to make the best choices. Right. I believe alts are the best choices. And that's why the billionaires are in them, you know? 22:40 So I think being a fiduciary, you should be getting alts as a good fiduciary. So they're, they're superior. If you wanna capture inflation in a, in a safe, non-volatile way, you need to be in real estate. 22:52 If you need income, you need to be in private credit. If, if you want something uncorrelated, you need to be in natural resources, uh, and energy. You, you have to be in these things. 23:02 And, and the public markets do not s- are not good substitutes for good, a good private alts. And you do lay out a very, very good approach for why it actually is beneficial for a lot of folks. 23:14 You think about tax benefits alone. There are a lot of vehicles there that I- Right... you, you hear about tax the rich and all these kinds of different things people are saying. 23:22 But there's a reason why the tax code is built the way it is. It's to benefit things getting built and getting, uh, owned and put into place. And a lot of- Right... 23:30 that's incentivized for these purposes, and alts are what tend to carry that. So I, I, I, you know, I, I think there's a lot of merit to that, that, uh, that ought to be considered. 23:38 But with that, I do, I, I wanna jump into Aspen now and look at what you guys are up to next, because you, you've alluded to a couple things. You talk about the oil and gas and those funds that you're getting into there. 23:47 But is there anything else that, that's really exciting you moving forward? 23:51 Yeah, kind of the newest thing we're doing right now, um, and this is just kinda rolling off the, uh, you know, hot off the presses, is a brand-new multi-asset, uh, multifamily fund. 24:03 So, so we think it's time for multifamily, and anyone that's followed me for a while knows that we've not... We've been on the sidelines and say it's not time for multifamily. Well, there's, the market is... 24:13 I've called, I called a bottom in February. Who knows if I'm not right, but I've been right a lot of times. Um, I called a bottom in retail, in, in commercial, and in multifamily, um, real estate. 24:26 So we're backing up the truck to buy. And what we're doing is a very, very different kind of fund. It's an evergreen fund. So the idea is you can put money in when you ha- Again, it's investor focused. 24:38 It's not deal focused or Bob Fraser focused. It's investor focused. Everything we do is thinking about, "Well, what does the investor want? What do they really need? How do we f- how do we make it great for them?" 24:49 And that's the way we think. So y- you- what if you can put money when you have money, right? You can put money in. 24:55 And you take money out when you want to take money out, not when the, when the sponsor says, "Okay, we're gonna wrap this deal up now," and then you get this giant tax bill, you know, that, that shows up, right? 25:07 Rather than being able to tax plan. So we're creating a, a multifamily fund with liquidity on an annual basis. So you can, you can request liquidity, and we have a liquidity sleeve in there. 25:17 We've got the whole thing modeled out, designed out. It's, it's abs- it's a work of art. It's my magnum opus, and I'm super pumped about it. Here's the other thing, is that when I... 25:26 In w- in writing the book, I noticed that very, that as a, as a passive investor, it's very difficult to take advantage of a lot of the things that the billionaires are doing. 25:37 And things like, unless you own a property outright, 1031 exchanges don't work. As a passive investor, you can't do 1031 exchanges. So I thought, "Well, you know what? Why don't we build a fund that has zero tax?" 25:49 It, it's not... It has no tax liability. It's gonna just grow, and we do internal 1031s, okay? You- we- and you can, you can pull your money out when you want. We, we also let people borrow against this. 26:03 So we, we give people emergency liquidity loans if, if they need, you know. Now, they're expensive because we- we're not a bank. 26:10 And, uh, but so you can actually borrow against your shares if you need, you know, y- you have, you know, you need, uh, you know, short-term access to money. 26:18 But, and, and here's, here's the other thing, is, is in the key to getting wealthy is compounding, and very few people do it. 26:26 So just in real estate, if you just did, you know, let's say five four-year, uh, single asset syndications over 20 years. So you- five of them. You invest for four years. You- they, they liquidate that. 26:39 You, you wait six months 'cause it takes you time to find the new deal. You deploy your capital. You do it again, and you do it again. You pay taxes each time you take one of these pit stops, right? 26:49 At the end, if you're, if you... If each deal was a 12 IRR, you get a 5.6 multiple at the end of 20 years. So $100,000 becomes 560,000. Not bad, right? It's terrific, yeah. 27:01 If you, if, if, if you have the same return, 12% return, same return in, in the fund, but you don't take tax breaks to pay taxes, and you don't take deployment breaks- Mm... you just compound, it's 7.9 X. By work. Yeah. 27:17 Massively different. So, so open-ended funds, evergreen funds are massively more efficient at delivering compounding. And f- and f- and funny enough, less work. [laughs] You know, what if you got one K-1? 27:31 A lot of ride, right? Yeah. What if you got one K-1? Yeah. [laughs] And what if that K-1 was on time? Yeah. You know? 27:34 And, and, and what if you just got a statement, it showed here's the value of your sh- of your shares, you know? Yeah. Just... And, and what if it wasn't volatile, you know? 27:43 And what if you could get your money back when you want? So we've designed a kind of a really, you know, honestly, it's a perfect fund. And, uh- I look forward to learn more about that. That's interesting... 27:51 I, I'm, I'm so pumped about it. Yeah. And, you know- [laughs]... and I'm, it's m- I, I, I wanted fr- something that I could put a lot of money into and not have to think about it, that I could put it- Yeah... 28:00 for my kids and not have to think about it, and so I don't have to redeploy. I don't have to deal with g- late K-1s and multiple K-1s. You know, my, my tax return, I don't know what it is, it's nearly 1,000 pages now. 28:11 And who wants that? So. But no, one of the things that you, you... the drums you like to bang a lot is making sure the person who is issuing whatever deal it is, that they are highly invested themselves. And- Yes... 28:22 uh, you're, you're a living model of that too, and I, I, I have a lot of respect for that because you clearly believe in what you're getting into, and I definitely appreciate that. 28:30 So with that in mind, I'm looking at you. You got eight granddaughters, right? You- 10. You have 10 granddaughters. [laughs] All right. You have 10 granddaughters. And now three grandsons. Oh my gosh. I know. 28:41 [laughs] Time, times have grown here. So you have- [laughs]... 28:44 you have 10 granddaughters, three grandsons, and they're all looking up to you right now, and they're seeing what you, where you are today and hearing stories about where you've been, the ups and especially the downs. 28:55 What are the lessons that you hope that they'll take with them, n- not necessarily just financially, but the lessons that you've learned that you hope they take with them for life to ensure that they have the highest quality and the best use of the time on the earth, their time on earth? 29:09 That's such a great question, Matt, and, uh, you know, something very few people think enough about, you know. What, what legacy are you leaving? And it's not just a financial legacy. It's really a much more important. 29:21 What are the life lessons and the values that you're leaving? And, um, one of the things I've done is I've created a little family office for my family and my extended family. 29:33 And we have an annual gathering, and it's a conference. I invite outside speakers. I've invited some very, very good speakers to come, and they speak, and it's just my family. 29:44 I get a big pile of condos, you know, or Airbnbs together. We went to Orlando and did Disney at one point and got all these condos. 29:51 And we have meeting days and then park days and meeting days and park days, so we had a whole week there. But c- we bring in conference speakers, and we talk about our values. 30:00 We talk about our stories, and we're really passing these things on. And it's a giant inspirational conference. And, uh, where we, where we do it every year, and we pay for everything. 30:10 You know, bring an army of babysitters. [laughs] And so it's all expenses paid, and just to do our best to pass on the stories and the values and, and our heart. 30:21 And we're gonna do things like being able to fund missions trips for all the kids. I mean, you know, I think the best way to guard against, you know, having too much money and wealth is to see other people in need. 30:33 And if you go and... My, my youngest son, I took him when he was 13 to Zimbabwe, and we were in the middle of an orphan- orphanage with, I don't know, 1,000 young boys there. 30:42 And he emptied, I think he spent $1,300, his entire life savings at the time, went to Walmart, filled five suitcases full of toys, and took them there and gave it all away. 30:52 Every, every dime he had, he gave away, and never thought it... For him, it wasn't even a sacrifice. It was, it wasn't like, "Look what I did, Dad." He, he didn't care. He was just so happy. 31:00 And he, he is, to this day, is one of the most generous men alive. And I wanna do that. I wanna, I wanna sponsor those things, right? And so I have a whole donor-advised fund, and I'm giving my kids access to it. 31:12 So I'm teaching them how to make donations and, and with their kids. So their families are doing water projects, and they're, they're deciding everything, you know. 31:22 And they dec- you know, I give them the, "Here, here, here's the access to the funds. You d- you d- you tell me what you wanna do." And they do it with their families. What a gift. 31:30 Yeah, it, it's very, very clear that you like to stay close to your family and that you want to preserve whatever you've learned and carrying it forward and those, that legacy, those values in particular with them. 31:40 But also, it looks like you're leaving them with, with a great experience, if nothing else. 31:45 Even if the funds move on to somebody else or something else and they choose to move on, they've l- learned some tremendous things by being a part of this with you from the journey. 31:52 Just from what I under- under- understand and know about you, uh, is that you've welcomed everybody into this story with you, and I really appreciate you welcoming me in just for this time that we've been able to share here today. 32:01 So thank you so much, Bob. Really appreciate it. Such a pleasure. A great interview, great questions, and I wish all, I wish you and all your, uh, listeners all the best. 32:10 [outro music]
