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The Hard Lesson I Learned From Losing It All Could Save Your Portfolio

If you’ve been following along with me in these essays, you know real estate is my area of expertise and remains my favorite asset class.

But it wasn’t always smooth sailing. Like any asset class, you can make amateurish mistakes. And I can say that firsthand…

Today, I want to tell you about my past life as a commercial real estate developer. And boy, is it a cautionary story worth telling.

I’ve always had real estate in my blood (and not just because I loved to play Monopoly as a kid). My grandfather was a hotel owner, and my hardworking, single-parent mom was a real estate agent.

So, it seemed only natural to become a leasing agent myself out of college.

I knew the power of real estate. I loved the power of real estate. And I was good at wielding it.

A little too good, as it turned out.

Here at Intelligent Income Daily, my team and I don’t want you to be “a little too good” at investing in anything. We want you to be great at selecting stocks that ultimately make your retirement successful and financially stress-free – whether you’re already retired or want to be someday.

We do that by recommending dividend-paying stocks like the kind that rescued me from my financial crash of 2008.

It was a hard lesson learned, but it’s one I ultimately benefited from. And you can, too.

From Broke to Boom to Bust

After college, I didn’t stay a leasing agent for long.

Opportunity knocked, and I answered it to follow where I saw the real money being made – by becoming a commercial real estate developer.

That was back in the days of intense national expansion from companies like Blockbuster, Athlete’s Foot, Advance Auto Parts (AAP), and Dollar General (DG).

I built for them and others, constructing both standalone properties and strip malls.

Of course, two of those companies went belly up eventually… As did my business, though not until the financial crash of 2008.

Before that life-altering year, though, I thought I’d be retiring at 50. I was the owner of two Papa John’s franchises, two Athlete’s Foot franchises – and the properties they worked from.

As I told you last Wednesday, “At the peak of my landlord career, I had over 100 [rent checks] coming in 12 times a year.”

If that sounds like I had a lavish life, you’re somewhat right. I was working hard to make my money, mind you.

But I was enjoying spending it, too. Going on expensive vacations… sending my five kids to upscale private schools… and buying my wife spur-of-the-moment jewelry that was far from cheap.

In short, I wasn’t managing my money well. On top of that, my investments weren’t diversified. And I gave no thought whatsoever to the idea that real estate could ever face a downturn.

So, when 2008 came around with its subprime mortgage mess and the financial crash that followed…

I lost almost everything: My properties, my franchises, my millions, and my career.

Just like that, I was at the bottom of the business barrel – this time with a family of seven to provide for and bills to pay.

And Back to Boom – Thanks to REITs

Here’s the thing though: Despite the housing market crash and all its repercussions… real estate didn’t actually fail me.

I was the one who’d built my financial house on shaky ground, and by doing so, I learned a hard lesson.

What I should have done was focus on a different set of real estate experts – one that was able to ride out the storm.

By that, I mean real estate investment trusts, or REITs. These corporate landlords own select portfolios of office buildings, apartments, casinos, farms, shopping centers, hotels, warehouses…

The list goes on.

REITs operate on a much larger scale than I was, owning dozens, hundreds, or even thousands of properties. They’re run by management teams who help balance out each other’s egos and ambitions.

And – also unlike my pre-2008 self – they’re legally structured in ways that force them to be more conservative in their spending. This helps them pay out dividends higher than other income-producing investments.

Now, REITs aren’t perfect investments. Please don’t buy them up without doing your due diligence.

But thanks to the qualities above, they can be exceptionally reliable stocks – even for those who hit rock bottom like I did.

I’d already known about REITs back in my developer days. They just weren’t exciting enough to bother with – until I realized that “exciting” is overrated.

In 2010, I was in the proper headspace to want sleep-well-at-night (SWAN) investments: Dividend-paying stocks that grow steadily over time. That’s how I started a new career focused on REITs…

Sharing my newfound wisdom with others to keep them from making my mistakes.

And by 2020, I was operating several thriving portfolios, each one driven by a strategy that protected investor capital – even grew it – during the shutdowns.

That’s why I’m still in love with real estate today. I just treat it and my other investments with the respect they deserve now.

That’s made all the difference.

And I’ll continue bringing REITs to your attention, so you can benefit from the income and safety they offer and help build your retirement nest egg.

Happy SWAN investing,

Brad Thomas
Editor, Intelligent Income Daily