There’s been a cautionary tale running around the news this week. It makes me think of something the Oracle of Omaha once said. “You cannot build a good career with bad people.” This statement has been interpreted as “You can’t make a good deal with bad people.”
Morris left Faux News to form a turnkey investment company that buys, renovates, and manages rental properties for investors. There are a number of companies that do this job well, but you are always taking a big risk when you invest in a property you may never see.
Here’s the audio.
A couple of points:
- Real Wealth Network, which produced the podcast, may compete with Morris in some markets. I can’t tell because Morris Invest does not list the markets in which he is active. Real Wealth does.
- Being sued does not necessarily mean you have done anything wrong.
- But leaving the country in the midst of a law suite does not inspire confidence.
So, how do you know if you can trust the people you’re investing with. Ultimately, that’s something you can never be sure of, but there are a few things you can do.
- Due Diligence
- Due diligence is a legal term that simply means being careful. Before you invest, find out everything you can about the people you’re thinking about investing with. Just be careful.
- Their Experience
- Never risk your money with inexperienced people. Have they been in business long enough to establish a track record? Look for previous projects they have done. Were those projects completed on budget and done well?
- The Investor Experience
- What have other people experienced when investing with them? Talk to other people who have invested with them—anyone you can find, not just the ones they point you to. Have they paid off on time? Have they communicated well with their investors?
- This is the hardest part. Are they good people? I’m not asking if you like them. Con artists are very likable, and “superficial charm” is a trait of most psychopaths.
- Their character trumps their experience. Are they good people? Do they contribute to society? Is helping others at the core of their mission? Do others trust them?
But the bottom line is that investing is risky. If you invest carefully, you can expect to make money more often than you lose it. If you don’t learn everything you can about your investments, you’re not investing; you’re gambling.
Whether you’re investing or gambling, some advice my older brother, a “professional gambler,” once gave me still holds true. He said, “Don’t put any money on the table you wouldn’t set fire to and walk away from.” For investing, that boils down to “Don’t invest your rent and grocery money.”Hermann says please like and share!