My “White Box” Strategy Creates Millionaires

Stress shouldn’t play a role in your investment strategy. Nor should volatility or uncertainty…

I don’t wake up each morning checking to see if the Fed has announced any nasty new surprises. Nor do I worry about inflation or the health of America’s banks.

I can avoid all that because I only invest in what I understand and what I have control over.

The stock market to me is a “black box.” You can see the inputs and the outputs, but only a few insiders know about the internal workings. Same goes for banks or any other big company…

If you looked at Silicon Valley Bank a couple of months ago, you would have thought it was in robust shape. Then… kaboom.

Investing should never be a crapshoot. That’s why I invest in best-in-class real estate in growing destinations that attract people from around the world, whether times are good or bad.

Real estate is a “white box”—engineering jargon for a system where all the inner components are available for close inspection. No wizardry. No trickery. Just clear, common sense.

It’s an easy asset to understand. It’s land, amenities, bricks, mortar, wires, plumbing. It has hard value. People need a roof over their head. And there are specific locations where people always want to live. They want amazing views, great amenities, and to be close to the things they love to do…

In other words, when you invest in the right real estate, you get control and agency, and when you buy well, it generally goes up in value.

In 2017, a team of expert economists from the Federal Reserve Bank of San Francisco studied the returns of four major investments from 1870 to 2015—treasury bills, bonds, equities, and real estate. That’s 150 years of data crunching. And real estate came out on top.

Although returns on housing and equities over the long term are similar, the volatility of housing returns is substantially lower.

In other words, real estate gives you the benefits of stock market appreciation, while protecting you from market swings. Having a strong stable of foreign real estate in your portfolio also reduces your exposure to your home market.

I’m close to 100% invested in real estate. Yet I still consider myself diversified across countries, markets, and real estate asset classes. I own property in Mexico (Caribbean and Pacific), the U.K., Brazil, Portugal, and Ireland. This means I’m tapping into very different markets. Middle-class renters in Brazil, Spanish and Dutch vacationers in Portugal, Americans in Cabo.

Real estate is the most versatile asset you can own offering different ways to maintain and grow wealth. You can rent short term or long term. Use it as leverage to secure a loan or refinance and free up money. Hold and watch it appreciate in value… or buy cheap and flip it for a profit. Or live in it or use it as your winter getaway.

This flexibility is one of the reasons real estate has created more millionaires than any other asset class. In fact, over the last two centuries, about 90% of the world’s millionaires have been made by investing in real estate.

Today, there’s never been a more opportune time to join their ranks. From all corners of my global beat, the reports come in daily: “limited supplies of desirable real estate”… “soaring demand”… “rising prices”…

With the right deal in the right destination overseas, this scarcity can play into your hands. It can give you the opportunity to own something truly rare, valuable, desirable… and real. And by owning profitable best-in-class real estate, you can set yourself up for a pretty stress-free life.