Finding the Right Investments for a Truly Diverse Portfolio

By Loral Langemeier


The Live Out Loud community has some amazing wealth builders. They understand Wealth Cycle Investing and they work hard at creating diverse portfolios that generate high returns. They aren’t shy about bringing deals to the table and they have zero tolerance for anyone who is not honest and open about their deals.



While Live Out Loud is an educational company focused on teaching people about money, wealth, and the Wealth Cycle, like any educational institution, networks of peers naturally form.

In my community, which extends far beyond the Live Out Loud community, people are anxious to help each other achieve success in their financial investments.


Thus, finding the right investments is an essential component of this community. We emphasize individual responsibility in due diligence on any deal but will immediately oust anyone with a negative attitude, who lies about a deal, or doesn’t follow through on his or her promises.


I suspect that you’d like to get your hands on deals that produce an annual cash flow of 30 percent on capital or earn an easy 12 percent on money that’s just sitting there. Here are a few tips on how you can find the right investments for your portfolio:


1. Build your community. One reason wealthy people find good investments is that they are in community with each other. Imagine that the people you spend your time with are all deeply in debt and complain about the economy. Will they be a source of good investment information? Not likely.



That’s why you should become involved with successful people that are regularly investing in deals that earn higher-than-average returns on capital and/or appreciating at higher-than-average rates.


2. Participate in your community. Certainly, you can participate in your community as a passive investor. If you’ve got money in stocks, equity in your home or even a large sum in your IRA, you can re-direct this money into various investments. However, see if you can find other ways to participate in your community.



Tag along with one of your community’s real estate experts to learn how to find the best properties. Then, use your newfound knowledge and bring some deals back to your community. Learn and grow so that you can give back to a community that has given to you.


3. Educate yourself. Learn about the different kinds of investment opportunities. In my community, we’ve brought in an expert on oil and gas to teach us about the science and practice of drilling for oil.

As a result, many of us have invested in actual oil wells. Consequently, we’re experiencing very good returns and enjoying the tax advantages of investing in oil and gas.


4. Do your due diligence. When you’re presented with an opportunity (and you will be if you’ve done a good job building your community), it is your responsibility to investigate the investment opportunity according to your personal money rules. If it doesn’t fit, let go — even if senior members of your community bought into the deal.


5. Look for direct asset allocation. True diversity in a portfolio means that your investments are spread across several asset classes. This means that you’re participating directly in the purchase of land, the development of a high-end condo complex, the purchase of an oil well, or the purchase of a business.

You’re not just buying stock in these businesses — you’re buying the business (or a share of it).


6. Find both cash-flow investments and appreciation investments. To fully implement Wealth Cycle Investing, you’ll need cash to purchase your assets. Cash-flow producing assets will give you the money to purchase assets that will appreciate over time.

I can’t emphasize enough the value of a successful community of like-minded investors. You don’t want to hook up with loners who’d rather hide their deals. Seek established wealth-building communities of which you can become a part.

Remember that it’s just as important to have good people on your side, as it is to have good investments.