Paul is concerned that the private equity investment he's about to undertake might be a scam. How can he conduct thorough due diligence and protect himself when he lacks access to trustworthy information?
Rob is reconsidering the role of bond allocations in his substantial investment portfolio. Is he onto something, or is there a valid reason to include them?
Dan is nearing retirement in a few years but is eager to do so sooner. Could acquiring a business be the solution for him to exit his W2 job earlier?
In today’s episode, former financial planner Joe Saul-Sehy and I address these three inquiries.
Enjoy!
P.S. Have a question? Feel free to leave it here.
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Paul inquires (2:38): How can you confirm the legitimacy of a private fund, aside from placing your trust in a podcast host?
I’m aiming to diversify my investments and have been interested in a mobile home park fund called Sunrise Capital, managed by Kevin Bupp. I’ve followed their podcast for some time, and the fund seems to have a strong track record.
However, when I was about to transfer funds, the bank was unable to verify the account number they provided. This raised a red flag for me. I contacted investor relations, who claimed they had never encountered that issue before.
Then, during a conversation with a financial help line, someone posed the question, “How do you know they’re legit?” and I realized I didn’t have a solid answer. I understand they are public-facing and have successfully raised three prior funds, but what other ways can I independently validate that this is a genuine investment?
Rob asks (30:10): If my portfolio already has a significant portion invested in income-generating real estate, do I still need bonds?
I possess an $11 million net worth, with $17.3 million in real estate and $9.8 million in equities. My liquid assets consist entirely of Vanguard Total Stock Market (VTI) and cash reserves for my properties, without any bonds.
Considering that over half of my wealth is in diversified, income-producing real estate, do bonds still have a place in my portfolio? If they do, how much should I allocate to them, and why — particularly for someone whose career and finances are already closely linked to real estate and index funds?
Dan asks (42:28): Instead of retiring, what if I purchased a small business to replace my job?
I am 56, and my wife is 55. We have saved $1.7 million for retirement — $600,000 in a Roth IRA and the remainder pre-tax — along with an additional $450,000 in after-tax savings. Our side hustles (started in 2022 and 2024) currently cover 20 percent of our expenses.
Our existing plan is for me to work for another three to four years, then rely on after-tax savings and side hustle income for five to seven years while our retirement funds grow. We’ve effectively reached Coast FI and could probably retire now if we maintain a frugal lifestyle and include Social Security.
Recently, however, I considered the possibility of buying a small business. I signed a non-disclosure agreement, reviewed financial documents, and consulted with a bank regarding an SBA loan. Although that specific deal may not progress, it generated a larger idea: could owning a business serve as a pathway to full retirement?
I've enjoyed my side job, but it lacks the potential for scalability into a full-time endeavor. I’m thinking about utilizing after-tax savings — or the Rule of 55 — to finance a down payment. Here’s my dilemma: Unlike in the FIRE community, the realm of small business purchases seems disjointed and challenging to navigate.
What resources are best for learning how to buy a business? How can I find a trustworthy advisor? And what criteria can I use to evaluate whether this route aligns with our long-term financial independence strategy?
Resources Mentioned:
Interview with Dr. Eric Cole
Interview with Katie Gatti Tassin
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Paul is concerned that the private equity investment he is about to undertake may be fraudulent. What steps can he take to conduct his due diligence and ensure his safety when there is a lack of trustworthy information?