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The Really Rich Journal

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The Weekly Tone

The soothing hum of two GE jet engines propel me towards the heavens as I type this Journal. A short, two-hour and forty-five minute flight, back to the place where the whole circus began: Chicago. The Windy City, the town where my roof of my loft caved-in from the weight of snowfall (a story for another time), the town where there’s a freaking salad on top of your hot dog, the town that forced me to look a lot closer at myself, far from the nonstop glistening luxury of New York or Miami.

I’m doing the ‘ol reverse commute - popping the cork in the frosty North, when I could have easily leaned against a palm tree in linen pants, but I have homage to pay. A debt, if you will.

Here, the bricks are still caked with factory dust. It’s the City that Works. There’s less ego on the streets. And I’m thankful for it. I owe a lot to this town.

This year started with a massive rush - my social media presence had just spilled over into the real world. I could either carpe diem or screw it up. I’ve chosen to grow, which by all means, is the more difficult solution.

It’s quite easy to screw things up by:

• Not changing or evolving with the market

• Clinging to existing accomplishments

• Thinking you know more than you do

This experiment we call "life" rolls on for both me and you.

So, you might be sitting there with a two-day Champagne hangover hoping that I can leave you with a sense of hope or inspiration for the New Year as you reach for another Alka Seltzer. Well, you’re in luck. Because I, of course, am writing this from the sober past (Friday, December 30th, noon ET) with a clear mind and unsoiled tuxedo.

Here’s the second installment of my 2023 Cheat Sheet, but this cuts a bit deeper for all the aficionados out there:

• The world is more forgiving and moves slower than you think; you didn’t miss the boat

• There’s always a solution to the problem, but it takes outrageous creativity and humbleness to solve

• 99% of people want to help you succeed

• This will be the “Year of AI”

• If you can’t earn more, cut spending

• Decide what counts as “luxury” for you

• Spend freely on things that save you time, as long as you’re using that time to make more money

• Don’t let anyone put you in a bad mood that spills over into another area of your life

• Nothing is that important; this will free you to perform at your best and have fun doing it

• Hoping and wishing doesn’t work, taking action and ensuring everything around you is in alignment with you achieving it does

• Ask yourself, “How can I add more value?” not “How can I make more money?” and watch the world bloom

I hope that 2023 is a year for you to become more you. No matter what your starting point is.

No matter who cheated you, cheated on you, stole from the register, keyed your Porsche, told you you’d never amount to anything, overcharged you at the farmer’s market for shitty honey, called you an asshole in the parking lot, transferred your crypto to their hardware wallet, or turned off the WiFi during your presentation, I swear there’s a layer of pure, blue air above all of the pain and bullshit where anything is possible.

A layer where your perspective is wide and godlike and wraps around the earth. A layer where you see the chess moves before they’re made, you learn to love your enemy because he makes you smarter, and all the right words tumble out of your mouth without rehearsing. That layer of superintelligence and possibility, where the music is loud and the pizza is fresh, my friend, is where we'll be flying in 2023.

So, a toast to our mutual bravery and willingness to do great things whether anyone notices or not.

Happy New Year.

I'm not taking meetings this week for year-end.

Fortune magazine features Fundrise and CEO Ben Miller in expansive profile

Fortune’s in-depth article covers Fundrise’s “recession-proof” potential; the factors that make our portfolio truly innovative; and why Fundrise is in a position to offer investors a unique opportunity, even when other parts of the financial world are in upheaval.

Take a look at the 7 most important takeaways from Fortune’s profile of Fundrise and CEO Ben Miller.

* In partnership with Fundrise

Assets: Control What you Can, Buy Insurance on the Rest

by Wil D., Investment Analyst

Summary: Why, when, and how to protect your bet.

Stock picking and concentrated investments can be highly profitable, but they come with higher risk than other, more diversified strategies. Using options strategically, you can protect your investment from adverse price action. You buy downside protection for the same reason you buy health insurance, if your investment gets sick (declines in price over a short or long period of time) - you have a safety net.

The three points you need to know:

• Long-term puts guarantee a certain price for the life of the contract, locking in a max loss for an investment.

• Buying a long-term put option can offer great value of protection, the marginal cost of another month of protection decreases as the length of the contract increases.

• Long-term put options transfer risk to the seller of the option. If an investor doesn’t have downside protection on a concentrated investment, then they are bearing all the risk.

The derivatives market, and options as a part of that, are more complicated than investments in the stock market. Puts and calls, in their simplest form, payout when the price of a given investment falls or rises to a certain threshold respectively. Here, an investor can have a highly concentrated position (a few stocks), but decrease the risk by protecting against the downside with puts.

Hypothetical Example: You’re an investor with 1 million in the bank, you love Google stock (GOOGL), and you want to buy 100k. 10% of your portfolio isn’t an amount to joke around with, so you look into protection on the investment.

Assumptions:

You end up buying a 10 month put contract with a $100 strike price for $0.75 a share ($750 total), covering your entire investment. That contract guarantees you can sell your entire position at $100 per share, locking in max loss at $750 even if the stock goes to $0 within your 10 month time frame.

Here are two different, but equally possible outcomes:

1. 8 months from purchase, you exit. Google stock is up 15%, $115/share. You gained a cool $14.25/share or $14,250 from your investment (115-100 = 15 - .75 = $14.25 * 1000 = $14,250). The Rich Guy might see this and think, “why waste money on the protection, all it did was take from your gains”. -- not the Really Rich Guy.

2. 8 months from purchase, you exit. Google stock is down 40%, $60/share. Thanks to your put contract, you only lost $0.75/share or $750 because you could execute a sale at $100 for your entire investment, and only lost the premium for the put contract. Opposed to the $40K loss you would have eaten, the insurance is well worth it.

So, control what you can, buy insurance on what you can’t, and sleep better in the end.

*This isn't investment advice.

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