[GregWeld]

This is a great discussion -- because for "newbs" it raises the specter of LOSSES... Losses occur for many reasons and can occur in ANYTHING at ANYTIME.

The only money I've ever lost - would be in the sure deals I couldn't possibly loose on. They were going to make fortunes. Easy money.

When you think that way. You're going to get your ass handed to you!

So let's use this discussion to revisit INVESTING 102.

When people tell you to never invest money you're going to need... there's a very good reason for that! You may never see that money again! It might also bring with it DEBT the gift that keeps on giving... that you may be on the hook for.

It's also why "rules" such as the 5% rule should be adhered to. That way - you'll still have 95% left when an investment goes south. Even a complete idiot should be able to pick some winners in a portfolio which will cover the couple of complete losers... We ALL have losers. Get used to it. This isn't a perfect science... and things beyond your control change.

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Why do I invest with a "company" (actually it was ONE guy - that is now Two guys) that picks/prospects/manages/controlling partner when it comes to commercial real estate?? Because I don't know what I'm doing! I want to be "diversified" --- therefore this is another way to diversify. It's NOT in the stock market - therefore it's diversifying my total investment portfolio. I have stocks - commercial real estate - mortgages - and properties I own outright (non commercial and non income producing but that are still assets).

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I will share this info - even though it's not really a rule or whatever..... it's just how MAYBE you all may want to come about in your "thinking".

I didn't suddenly put a couple million dollars into a real estate deal with ONE guy! Hell no! My tax accountant and I had discussed diversifying and "other" income YEARS AGO -- like 20+ -- and he had another client that did these apartments LLC's. He had been the accountant for the guy for quite awhile - and had invested his own money into a couple of these "deals". When a new acquisition came up -- I bought into it -- I think it was maybe 100 grand. A couple years later I bought into another one -- that was 250 grand - I upped the amount because the first one had proven successful. I also now had a better understanding of how these things worked... and had built trust with "the group". My next investment wasn't with this same group ---- hell no ---- I don't want all my eggs in one basket -- and there are MANY companies that do these kinds of deals -- and having been in the first two -- I became aware of others doing this - so I invested with another company. What if the first group became a bunch of crooks? What if they died? What if they weren't as lucky going forward as they had been in the past..... So I diversified with a different group.

You read all the time about people "loosing it all". Generally it was because ALL of their investments were in ONE thing - or with ONE outfit - or with ONE "investment advisor". Don't be the Rob Lowe of investing!

Investing isn't all about hitting a home run. It isn't all about being "lucky". It IS about patience... it is about CONTROLLING RISK... it is about controlling being GREEDY... it is about taking SOME risk while also trying to avoid losses. The losses WILL be there... but you need to control those losses so they don't take you down. Read this again. YOU WILL LOOSE MONEY at some point in something and it will never be the thing you thought you'd lose in. It always comes out of left field. The key is to have that loss not be a big deal. Hurtful - sure - but losses - when you survive them - make you a better investor. Why? Because they teach you not to be so f'n greedy - they teach you to not invest in stuff you know nothing about - they teach you to do better research.... They teach you to say NO to your neighbor/buddy/cousin who has a "can't loose" investment...