Billy Keels  00:00

Today's conversation is sponsored by first generation Capital Partners. If you're an accredited investor, and you want to know about how we're helping other accredited investors keep more of their income, go to firstgencp.com forward slash going long.

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00:12

You're listening to the going long podcast with Billy keels, the number one podcast for long distance real asset investing.

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Billy Keels  00:22

Welcome to the Golang podcast, we're back once again to continue to help to educate you so you feel much more comfortable as well as confident investing beyond your backyard. And guess who I am. Yep, I'm your host, Billy keels, and I am so super excited to welcome you back to another solo episode. This is the moment this is a time it's gonna be brief. And you will be able to get out and have a wonderful day and have a little bit more information to help you make informed decisions. So also with that, thank you so much for continuing to keep the podcast in the top 1.5% of podcasts globally. And not thanks largely been continuing to download, continue to share with your friends. And also leaving your honest written reviews as well as ratings. Thank you so much for that. And thank you for continuing to share us across social media, because it also helps to attract other new podcast family members. So thank you so much for that. And then also, if you ever wanted to check out any of the previous episodes, and we're well over 260 years old, 70 or 80, or something like that, at this point in time, just go to firstgencp.com forward slash podcast. Once again, that's first gen cp.com Ford slash podcast. And you can find every single episode video, audio transcripts, all that kind of stuff there. So But listen, this solo episodes love to keep these short. And I like to keep them informative. And today I want to do something that's a little bit different. Because a lot of times you can be stuck trying to figure out what is the absolute perfect metric that you should use for making your investment decisions. And I just won't let me I want to share a conversation that I recently had. I had one with one of our investor family members. And it was really interesting. Because one of the things that came up and this is one of the reasons that I enjoyed doing, what I'm doing is because I have a chance to talk and have these kind of conversations, right? Just having a conversation. And we got onto the topic of and the question wasn't related to the internal rate of return. When for those of you IRR is one of the metrics, I mean, you can use IRR cash on cash, or to COC IRR, NPV Net Present Value lots of different ways to look at how you can make your investment decisions, lots of different metrics. I mean, you can get frozen looking at so many metrics that are out there. So But the really interesting part of the conversation was we were just talking about life. And we were talking about different investment decisions. And we got to the part of the our IRR is well in the in the response from from an investor family member was really to the effect of, you know, when I'm looking at the making an investment decision is the best metric for me to look at the IRR and make the decision based on my IRR. It's not like I'm a lawyer or a CPA, I cannot give anyone tax advice, which I never do. My response was very much. It depends, right? Because it depends. And let me just give you an example. Right? So let's say we have two different investment opportunities. The two investment opportunities one is a is a real estate deal where you are investing and you are investing as a passive investor. And you well, you're investing in a real estate deal, let's just say typical real estate deal. It's real estate syndication, where you are investing in generating passive income. The other is a deal where you're investing in you're investing in the energy sector. And this gives you specific types of opportunities where you're generating income as well. And you're also getting tax benefits. Well, and I'm just making these numbers up, right, these are not the real numbers at all, but I'm just making these numbers up. So let's say that the, the real estate investment gives you an IRR of 24%. Wow, that sounds pretty good, especially for if you're used to getting 1% or something like that, because your money's in the bank. The energy opportunity is an IRR, that's 21%. So I guess if we follow that logic, then the IRR the one that we should go with all the time is the one that's 24%. Well, like I said before, it depends. And the reason I say it depends is it, it goes back to one of the things that we've talked about many, many times it is and what I believe is the most important metric that you should always follow. Before you make an informed decision. There's there's like literally one metric that you should always keep in mind to decide whether or not you want to continue to move forward. But before I tell you what that metric is, I'm going back to the IRR, the 21% the 24% some of the questions that I would typically ask is okay, well, what is the timeframe? And I know I are supposed to take that some of that into account because it's the time value of money, et cetera, et cetera. But over what period of time, is it a shorter timeframe? Is it a longer timeframe? Does that add risk does that take away risk? When do you actually start receiving capital? Right Because if most of the things are back loaded, then maybe that affects you one way, if they're front loaded, that could affect you another way. And then a really, really important question. I think a lot of times you may not ask yourself is, okay, so if I'm able to keep money today, what am I going to do with it? Because if it's just sitting in the bank that really doesn't serve you very well at all. So the reason that I'm saying this is, you really need to ask different questions. Definitely the IRR and the NPV in these metrics have their place in the making a decision. But if we look at the opportunity that I was talking about before, like real estate, some things that especially for high wage earners, that are really, really important is that's generating IRS definition of passive income. Typically, one of the other reasons that you're investing is because you want to be able to keep more money, because we believe that real estate will help you to lower your taxes, or at least that's what most people say, I would say it's a very tax efficient vehicle. But if you're a high wage earner, like I was for 26 years, that type of income, real estate doesn't help you keep more of your money today. Whereas in the other opportunity in the energy sector, you can keep more of your money today, you can use that money to do other things. And then you're also generating more income in the future. So there's no right or wrong answer. And it's not necessarily one metric. But let me tell you what I believe that the most important metric that you should start with before you even go down that track is number one, does this investment opportunity align with my true north? Is it helping me get closer to the goal that I set out for myself, let me be very specific. Let me give you an example. If I know that I want to be able to keep more of my income this year, because I have two or three different specific investment opportunities that if I can keep more money today, I can invest in these other opportunities. Well, then, as I look at the opportunities, I look at the I know what my true north is, I look at the different location, I look at the team, and then I'm looking at the opportunity, if that if the opportunity is gonna allow me to keep more of my money today in whatever fashion that is. Then whether the IRR is 21, or 24%. Well, that should also help to inform my decision, it should help to inform your decision. And so I just wanted to use that example. Because sometimes it's not as simple as just looking at the IRR. Sometimes it's about even before that is this aligning with your true north is this aligning with the goal that you truly set out for and if it is, then continue down the path, in my opinion, if it doesn't, then don't waste more of your time or energy, no pun intended. So So with that, hopefully that has been also really, really helpful just kind of a insight into one of the conversations that I was having with an investor family member, like I said, and so hopefully you find that useful. If you ever want to chat about it, feel free to send me an email, I know that there are a lot of view that are high wage earners. And you really want to understand more about how you can keep more of your money today. If you want to find out more about that and you haven't already just go to first gen cp.com forward slash going long, you can find out more about that and would have been able to have a conversation with you. And most importantly help you to get to your TrueNorth and start doing the in living the life that you really want to live. So take today's conversation share with a couple people have the conversation reach out to us, me and my team love to have a conversation with you. And in the meanwhile I'm going to be here preparing for the very next solo episode and so until then go out and make it a great day. And thank you very much. Trust that you enjoy today's conversation and once again today's conversation was sponsored by first generation Capital Partners. If you're an accredited investor want to find out more about how we're helping accredited investors to gain their personal freedom even faster. Go to first ncp.com forward slash going long.

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