Build Wealth & Beat Inflation: Cashflow Ninja’s Alternative Investing Playbook with M.C. Laubscher – EP 225

Justin Donald: What's up, M.C.? Good to have you back on the show.

M.C. Laubscher: Great to be here. I've been looking forward to our conversation.

Justin Donald: Well, you know what? It was so fun recording another episode on your show. And I feel like just the banter back and forth is so good. It's so fun for me. We're so aligned on so many levels. And it's funny when we first were talking about, "Hey, we should rerecord on each other's shows," I was kind of like, "Well, I've never really done that before, but maybe that would be a good idea." We're so aligned. And then the more I thought about it, the more I was like, "Well, heck yeah, we totally should." Our last episode was incredible. Had tons of downloads. And so, yeah, so I'm excited.

And by the way, because of your email, I actually have done a repeat episode with a few people now thinking, "Hey, we're probably on to something. Let's cherry-pick some of the best episodes and some of my favorite people to talk to." So, welcome back.

M.C. Laubscher: Yeah. Thank you so much. I've always enjoyed our conversations on the show and offline. And things are changing and they're changing pretty quickly. So, it's great to connect and catch up and talk about all the things relevant that we find very important for investors today.

Justin Donald: I love it. Well, you're a researcher like me. You dig in deep. You go the extra mile on your diligence, on your data aggregation, learning what people are investing in, asset classes, so on and so forth. I mean, I talked a lot on your show about how most of these family offices specifically, and especially the single-family offices, meaning the billionaire family offices, they're sitting somewhere between 45% and 59% in alternative investments. So, for their entire portfolio, their entire net worth 45% to 59%, according to JPMorgan Private Bank and according to KKR, according to UBS, their private clients, according to Goldman Sachs and tons of other reports, tons of other family office groups that provide this data, alternative investments are not really alternative. They're actually the primary main investment for wealthy people. And I'd love to get your thoughts on that.

M.C. Laubscher: Yeah. So, alternative just means alternative to Wall Street. I always say these assets have been around for hundreds of years, some even thousands, if you look into the commodity space. So, I think it's just very slick and sharp marketing to convince people that the only option that you do have is Wall Street. And for the most part, most people are born into the Wall Street investing world, right? And they enter there and they stay there and that's it because that's what their parents did and that's what their grandparents did. So, not knowing that there's a completely different other world out there, and it's only when there's pain and experience that people actually look for alternatives.

And a great example, of course, is the great financial crisis in 2008-2009. Everybody remembers the Lehman Brothers moment, people walking out with boxes and all of their belongings from the building. Lehman Brothers closed, and this was in October of 2008. Earlier that year, you had Bear Stearns being swallowed up by JP Morgan Chase. And that was really the moment that everybody remembers. And then a significant amount of pain followed, right, because everybody had their wealth in their primary residence, maybe a second, and Wall Street.

And then they started looking for alternative assets and they came across this world where they said, "Wait a second. So, you mean I can take responsibility, ownership of look at asset classes that I find interesting and I enjoy learning about, look for operators and sponsors in those spaces and vet them as well as the projects that they're investing in, do my own diligence, make my own decisions, and then invest directly with them as a partner and then enjoy cash flow, great tax benefits? I have the ability to enjoy the upside potential of the appreciation of the assets, and I get to leverage their skill sets, capabilities, knowledge, and networks, and other people's capital and I could have fun with investor communities? Come on, get out of here."

And then I found that world, which is just completely different. So, I just look at it as, yeah, it's just a marketing kind of like. If you see the wealthiest families position so heavily in all of these assets, which we called alternatives and I've even seen the marketing spend alts, this is real assets and it's just a different avenue than just Wall Street.

Justin Donald: Yeah, 100%. And it's interesting because at one point I think most people thought the only way you could get access to this was in hedge funds. And so, another Wall Street product where it's generally like a 2-in-20 type of structure. And with the democratization of alternative investments, that's becoming less and less relevant. You're seeing overall family office allocation to that specific asset class, to that specific niche dwindling down while alternatives is massively growing. And so, it's a fascinating concept. And I love studying all this data. But one of the other things that’d be fun to talk about is just the markets right now. We're in an interesting place. We talked about it on your show.

I love sharing some of my insights and some of my thoughts, and I'd love to get some of yours. Like, what's going on? Where are we going? Do you think it's going to be a soft landing, hard landing, regardless of what it is? Are there things that you see as being safe and good investments still?

M.C. Laubscher: Yeah, that's a great question. So, as people found their way into the alternative asset space post the great financial crisis looking for alternatives, they entered this world and then they thought, "Okay. I've experienced a lot of pain in Wall Street. This is smooth sailing." And it was. It was smooth sailing. If you got in in 2011 and ran it all the way up with a slight hiccup in March of 2020 until $4 trillion came back into the economy and ran it back up basically to the end of, I would say Q3-Q4 of 2022, you had one heck of a run. It was very difficult to lose money during that period. And, of course, when things are all going straight up, we all look like geniuses. And as you have shared before, strategies that are not quite good or even really bad ones, they were successful too.

Everybody looked like geniuses during that time but, unfortunately, market cycles do happen, and the interest rate spiked at that point. It was one of the things that really started to, in my view, pull those back a little bit. It was the first hiccup. And all of a sudden, that first spike of interest rates led to a lot of deals falling apart in the past 12 to 18 months, right? So, people have experienced already pain because this is something that came out of left field. Again, you should be underwriting deals on more fixed-rate debt and obviously plan for worst-case scenarios. So, never underwrite a deal thinking that interest rates will never go up ever again. And, of course, that was a lot of what I heard people say, right? Of course, it was the opposite.

So, in my view, we had our first shoe that dropped. It was that one. The market is just kind of going sideways right now. There's a lot of uncertainty, too. I would say a lot of uncertainty because why? Why is there uncertainty? Well, every single country, I forgot the exact amount of countries. This is fascinating stuff. The amount of elections that were held this year already, it's crazy but it's all over the world and you feel like you're going from one election cycle to another. And in the US with, of course, from a marketing standpoint, you have to getting your messaging out is both great messaging on both sides that would, you know. So, a lot of people would just shake their heads listening to the messaging. So, that provides a lot of uncertainty.

And then what we've already seen in other countries play out provides uncertainty. For example, in Great Britain, they've moved a little bit left. And then in other areas of Europe and France, they've moved right. And why is this important? It dictates our environment as investors, so it dictates, especially tax policy. So, that's very, very important that the tax is a big thing. So, when there's uncertainty of that playing out, you got to prepare as an investor and take control over that. But the market itself is a little bit uncertain. Then again, we don't know the outcome of what the election's going to be. We're not fortune tellers and most people aren't so they don't know. There's the uncertainty of that.

It feels like before every presidential election, there's that kind of uncertainty, that feeling of we don't know quite what's going to happen so you have that as well. And then down the road, there's massive tax changes coming. Governments are very much in big financial trouble. So, what are they looking at? Well, they're all broke. That's the first thing.

Justin Donald: And we're not even talking about it, which is a shame.

M.C. Laubscher: Right. And in the presidential election cycle, what's been very disappointing is that this is not even a topic of conversation of either side.

Justin Donald: It's a shame.

M.C. Laubscher: Yeah. The financial state of the country is not even a topic of conversation. And of course, in the pause, the solutions have been either inflate more, print more money, or raise taxes and/or do both. And we could see both of those. So, those are some of the things from an economic and market standpoint that I'm just looking at and saying, "Okay. How is this going to play out and what can we do as investors to make sure that this is an unknown variable that we've kind of tamed because we have a strategy in place regardless of what happens?" But overall, from a market cycle soft landing, hard landing, I think it's just cyclical.

I feel like it could go either way so I'm preparing for anything and everything, whether the economy just keeps chugging along like this or we have another leg down in all markets, or something else could happen that provides a boost, right? And you have an economy that's running again and doing well. So, you got to prepare for any scenario and that's all I'm looking at. But overall, I feel like in our world over the past 12 to 18 months, we've seen things unravel. I feel like there could be more things unraveling, which there's going to be opportunities in any type of market. So, I'm looking at it as preparing for anything and everything and positioning myself, my family, my business, and my investment portfolios for opportunities.

Justin Donald: Yeah, I love that. I think that's great. And I love telling people, "Hey, here's what I think's going to happen." But at any point in time, the government can print more money, and that changes the game. You know, it creates something different short term and exacerbates the long-term problem. But we still may have a lot more time on the long-term problem. So, it's fascinating. You know, one of the things that we were talking about offline that I'd love to bring online for this conversation is just how some investors are going to get wiped out while other investors are going to make an absolute fortune. And I'd love to hear your thoughts on that. Are you seeing that? Why do you see it that way?

Because this, I think, could be interesting for people. It's the whole story, like where you have two brothers that maybe grew up with an unfortunate situation. Maybe one parent passes away, another parent goes to jail. And then you have one brother who ends up in jail and the other brother that ends up a very successful entrepreneur. And you ask him, "Well, why did you end up the way that you ended up?" And the answer for each is the same. Well, look at my parents. How else was I supposed to end up? And I feel like investing is very similar to that, where you're going to have some investors that are going to find opportunities where others are going to be scared to death.

You're going to have some investors that make really good wise decisions and other ones that make really poor decisions, but with all the same data, all of the same information. So, I'd love to hear your thoughts on that.

M.C. Laubscher: Yeah. So, that's a great point. And I truly believe that there are going to be some investors that will get wiped out and others will make a fortune in the coming months. Why would that be? I've had many conversations in our communities with investors and also business owners, and I've seen differences between investors that have sustained some shocks in our space and deals that have gone south. And I've seen other investors that are in really bad shape after those deals have gone south. So, it's a pretty good case study of like, okay, what did the one group do that they were able to sustain it and they're good, they're plugging along and still looking for opportunities, and other folks are basically wiped out?

One of the big things that I'll share that I've seen and I've seen this in all the different worlds, the Wall Street world and our world, the alternative asset investing world, is the most understanding of definitions. And this might sound so basic, but this is one of the most important lessons I've learned like in the past 24, 25 years. And I think it will help a lot of people. The first, there's four different things that they're not the same, although in some cases people think that they're the same, and it's savings, investing, speculating, and gambling. And people would say, "Well, what do you mean some people think it's the same?" Allow me to explain.

So, in a savings vehicle, you take on less risk. I'm going to say that there's no such thing as no risk. In business school, I was taught that U.S. Treasury bonds, risk-free. I'm going to say there's no such thing as risk-free. You're taking on less risk and you're getting a conservative return and therefore you have it. So, the goal, the reason why you do that is capital preservation. You want to build up capital so you always have capital on hand whenever you need it, either to capitalize on our opportunity. As you get a capital call from a deal that you're currently in, you have access to cash. And you and I are very much aligned. We always share 6 to 12 months minimum, and now definitely around 12 or even a little bit more. But you always wanted access to that savings.

And then investing is you're putting your capital at risk in an investment, an investment vehicle, and you could lose some or all of it. The reason that you're doing it is you're taking on more risk in the hopes of a higher return. The goal there is to grow your capital. And most people think that they're saving when they're investing. And just that's like definition, I already saw a lot of pain from investors. They go, "Well, I was saving, you know, I was building out my portfolio and this is my retirement savings." And I said, "But that's not saving at all. You are investing through retirement but you thought that that was your retirement savings and now most of it is wiped out."

Where other investors, they knew the difference between savings and investing and we're very much aligned with the infinite banking concept and using life insurance as a vehicle to position and warehouse cash. And so, they had it in there. It was guaranteed. It was guaranteed to grow, receiving dividends from a mutual life insurance carrier, all tax-free with disability waivers, and so forth, and death benefit. It's private. It has asset protection and guaranteed access the investor has to that. That's very, very different than a deal that you can lose some or all of it. And the other too, speculation. Speculation is also great. And again, I know professional speculators. Good friend of mine, Doug Casey, is a professional speculator.

Justin Donald: I love Doug. Love his books too.

M.C. Laubscher: There's an art and a science to speculating. You take advantage of distorted market conditions. You allocate capital in the hopes of a massive profit, a moonshot or you see like bubbling like trends. You speculate accordingly, position capital for a moonshot. So, there's very different goals there, right? You could be two for ten with speculations and your losses would be wiped out with your profits and you would have significant windfall just from a profitability standpoint. Where your goal with investing is you want to have eight out of nine, ten of deals, you want to have successful deals, successfully implement and execute its strategy, and a great exit. So, I would even say like a lot of people speculate rather than invest. And then gambling is when you place bets of things going a certain way.

And now I know most people listening will say, "Well, there's professional gamblers, too." Yes, there are. I was in a mastermind with a card counter. There's science to this, too. But my argument would be the entire math is everything runs on math. The entire math model on gambling is stacked against you. It's the house always wins. So, when you do hit the jackpot in a casino, you have 20 people running towards your table offering you a free night steak dinners, comps, bottle service, and a party with your friends, whatever you want, because they know if we can keep that person here and get them to keep playing over time, the odds are in our favor. We're going to win back most of the money that you just got. So, that definition is big.

And that is, I think, like, why would some investors get wiped out? Well, that's the first thing is they don't understand definitions. The second thing I'll share is the threats. Most people are good at identifying opportunities, but the threats that are out there and, I mean, this could wipe out a lot of folks. So, the first one is market volatility. We talked about that, not having savings, a savings bucket, and an investment bucket. The second thing I would say is taxes. The biggest I call it a gray rhino. I've been in South Africa and just spending time in South Africa. It's a gray rhino. It's not a black swan. You could see it coming. You could hear it coming. You could feel it coming and you know it's coming.

Justin Donald: That's right. And every year it repeats.

M.C. Laubscher: Now, especially with conversations about corporate taxes going up, capital gains taxes more than doubling, and then even unrealized capital gains taxes. So, as an investor, yes, these are not policies that are in place right now. These are conversations happening. But this can tell you the direction where everything is headed towards. So, you have to prepare for, from a tax standpoint, this is a compound interest equation that you don't want to be on the wrong side of. And then, of course, inflation. There's a lot of folks that are being eaten alive by inflation. If you invest accordingly in hard assets that keeps up with inflation, good, solid operating businesses, great pieces of real estate, and so forth, you're going to combat debt.

So, that's how I'm looking at it. This is why the majority of investors will get wiped out and others will make a fortune. And the big thing, just to put a bow around this, as you would say, is strategy, lack of strategy. So, when you cooperate all these different things and you have a diversified portfolio, just as the wealthiest families and family offices and so forth, you need a strategy to bring it all together. So, that includes getting your income as tax efficient as possible, warehousing capital as tax efficient as possible, deploying capital as tax efficient as possible, and having great defensive structures, which is your tax and your legal structures.

Justin Donald: Well, I couldn't agree with you more. I mean, you're so articulate. I appreciate you sharing all this. You know, it's interesting. There are so many directions I want to go with this. One thing I'm going to point out, we talked about this a little bit on your show, with inflation. And a lot of people are looking at CPI, the Consumer Price Index, as their barometer for what inflation is. And right now, based on the last report, it's at 2.6%. But that's not what real inflation is. Remember, it doesn't include energy, it doesn't include food, the two of the most consumed products that we have, but they're also two of the highest inflated products that exist.

And so, those aren't in the bundle. And conveniently, anything else that doesn't fit the bill gets removed from the bundle. And even if you're talking about that, there's still a ton of things that haven't outperformed the last 14 years, commodities, U.S. cash, emerging markets, U.S. Total Bond Market, TIPS. I don't even think long-term duration treasuries have for the most part. So, you just have to recognize that first and foremost, that's probably not the barometer. I mean, these are our, you know, we'll call them economists, analysts, economists that are handpicked by the government to maybe toe the line.

But I think a better indicator of inflation is actually measuring it against monetary inflation, like the actual monetary inflation rate based on the expansion of N to monetary supply. So, if you look at that money supply, we talked about how as monetary supply expands, so do asset prices. So, if you're sitting in cash, you're losing money. If you're sitting in assets, you're making money, which I think is important. But if you track that across the last 100 years, it basically equals what the performance of the S&P 500 is, so about 13%. And so, if you think about inflation right now being 13% and you're sitting with most of your money in the markets, you're not really making money, even though it feels like you are. You're actually just not losing money.

And I think that that's a great distinction for people to think through and how they want to be allocated. And I know you were talking about Truflation being even higher than that. Right? Share your findings.

M.C. Laubscher: Yeah. So, I always say, "Wait a second, we calculate inflation and we don't put energy in there that matches everything on this planet? And food, which we would die without. Come on." So, of course, they're doing it and keeping it as low as possible because back to our previous point, the governments are broke and they have all these programs that need to be funded and they have an inflation escalator in there. So, inflation's only 3% so your benefit that we need to pay out is only going up 3% this year. So, they have a very, very big incentive to keep inflation as low as possible. And, obviously, public perception and the psychology of the public, if they hear this over and over and over and over, some of them will tend to believe that.

What's fascinating, as you mention, is some of the AI tools that have been used with calculating inflation. Now, of course, you have different ways. I mean, your way that you just described, it was fantastic. You also have John Williams with Shadow Stats. And then Truflation.org calculated inflation from 2020 to 2024 compound inflation and they hit a number of around 25% to 26%, which I was even shocked at.

Justin Donald: That's huge.

M.C. Laubscher: So, I looked at that and I said to my wife, I said, "You know what, what are some services or products that cannot be replaced?" And of course, food. And she's like, "That makes perfect sense if you look at the food that we're buying." And then I said in my world of insurance, I looked at property and casualty or just auto insurance, for instance. And if you're listening to this, you've probably got an auto insurance bill in the past 12 to 18 months and you looked at this and go, "Well, wait a second, this is up like 20%, 25%, like, what is going on here?" And then probably like me, you made phone calls to several other carriers, and guess what? They were all about the same. So, that's one thing that math is baked into their algorithms.

So, this is something that everybody needs to have in the zip code that you're in so you can't really replace that with a different auto insurance product. So, if it's something that cannot be replaced, any product or service, you're seeing about 25, 26. So, yeah, what does that mean for investors? I mean, that means that this is challenging times. You have to get very creative. You have to have a strategy. And obviously, in your portfolio, there's got to be an element of many different assets that will help you achieve and stay ahead of us.

Justin Donald: That's right. Yeah. You know, it's interesting. We talk a lot. You know, when I speak and we just had our big Lifestyle Investor live event and one of the things I'd love to teach people is this whole idea of concentration versus diversification. Most people make their wealth via concentration. So, most of their allocation, most of their net worth inside of one specific thing, they have an exit into some cash. And now when you look at how do people actually compound and grow wealth and have, I guess, piles of it for future generations, not just the cash, but also the education around it, that's through diversification, right? That's where the exponential growth can come from because you're protecting it in all situations, right?

So, it's allocating where it's 20% to 25% in public equities. And it's in some cases even less than that. I've seen as little as 5% from the ultra-wealthy. And then it's very similar 20 to 30 in private equity and 15-ish, 15% to 20%, 10% to 20% in real estate, and then 5% to 15% in private credit, 5% to 15% in cash, 5% to 15% in fixed income, right? So, like this is kind of the breakdown. And we're going to talk about cash here in just a moment but I think most people don't recognize that there are two markets. There's efficient markets and there's inefficient markets. The stock market is so efficient, it is hard to make money.

It is like you're not beating the algorithms, you're not beating the AI, you're not beating the quants, you're not beating transactions, micro-transactions that can process a thousand times before you click a button once to buy or sell. You're just not winning. You can bank long-term on the US economy or whatever country's economy that you may be investing in, whatever stock exchange you're investing in. But the inefficient markets is where the majority of the opportunity lies. That's why alternative investments outperform the stock market or public equities by 50% at virtually any season across the board. Look at the last 100 years and it's going to be a 50% greater performance with the ability to have a lot more tax liability offset. So, the net-net is significant.

And so, the inefficiency is what creates this extra return profile. So, I love talking about that. I love teaching that. We just did this roadmap to passive income for all these different people, these different avatars, whether you're W-2, trying to become a lifestyle investor, whether you're a business owner trying to become a lifestyle investor, or maybe you had an exit but you need to figure out how to replace that income that you used to be able to get from the business and expense through the business, right? And so, a lot of different scenarios. And we love using member examples. We use four actual member examples and it was really powerful.

So, I share all that because I think it's important to think holistically and think about, what does a diversified portfolio look like? Why did the wealthy people invest in inefficient markets primarily? And those that invest in public equities, a super-efficient market, they actually borrow against it to buy more alternative investments because that is not a taxable event. That's debt. They're not selling their stock. They're borrowing against their stock and they use that as a liquidity option for them to build more resources on the alternative investment side of things. So, I'd love to get your thoughts on that. You've probably taken a deep dive on this like I have.

M.C. Laubscher: Absolutely. And to your point of just placing stock and shares as collateral, that's how Elon got some liquidity for his Twitter deal.

Justin Donald: That's right.

M.C. Laubscher: And then everybody wanted to jump in on finance the rest. The banks were fighting over who gets to partner with him. But to your point on inefficient markets, inefficient markets on uneven playing fields provide massive asymmetric opportunities. Because if you're listening to our conversation and even regard just what we shared on inflation, you're going, "Oh, how am I going to do this?" Well, if you're a business owner, yeah, you could definitely beat inflation, having an operating business inside of your business. But maybe you're not a business owner. Maybe you sold your business or maybe you're an investor.

So, one way of getting some of those returns is positioning a portfolio where you have certain plays in very inefficient markets where there's unlevel playing fields that provides these imbalances, which you can capitalize on and have huge asymmetric opportunities. I just spent a month in South Africa, and this is one of my conversations with one of my best friends there. He's an Uber entrepreneur and investor, and I always ask him about Africa, and he operates in different countries in Africa. And he said, "It's so inefficient here. It's a thing of beauty because the returns that they can generate here and the capital that they can generate in those markets."

And of course, it's a blue ocean because there's a lot of people that would never get involved in Africa, still in the West because they think, "Oh, it's just not..." You know, they'd rather go to Latin America than Africa, right? So, nobody's getting in there. There's massive distortions, a lot of just inefficiencies, and just this provides like huge, huge opportunities. So, that's what I would say. And sometimes you get him here with shocks, right? So, that's the thing about having cash. I'll give you an example of a shock. You know, when oil went negative in March of 2020 right there, that was just screaming opportunity where the entire world running on oil, I mean, you knew that’s going to be a snapback unlike we've seen.

So, people were piling in and just positioning themselves because that was a massive asymmetric opportunity. And bet at that time the same thing with other trends that I know you were an early investor on, AI. I mean, this was something that was just not going to be stopped at all. So, robotics, still not a lot of people know about it. They'll know about it when these dogs are in the police force that you see online. And you start to see different types of drones, then it's going to be very obvious to everybody. But these are still early startup phases, a little bit inefficient. And by the time they're efficient, they're mainstream, right? And they're Wall Street so then the money is already made.

Justin Donald: That's right. Yeah. So many good points there. And I love to even start talking about Africa because I've invested in a number of companies there. And really the fintech opportunities there are some of the best in the world and you're getting just outsized return potential for the risk profile. So, yeah, that asymmetric risk-reward, especially with some of these companies that are well-established, well-funded, but maybe they're just looking for a little bit more of some cash for protection, right, to have cash on the balance sheet. Now, let's talk about cash on the balance sheet. Let's talk about a cash position because we've seen a ton of banks here recently start to hoard gold, getting back into gold.

This is worldwide, not just in the US, but specifically also in the US. I'm seeing a lot of family offices increasing their position from 21 to 22 to 23 in cash. And I am curious what your thoughts. We've got Warren Buffett doing it. We've got a ton of people doing it. Is this something that you're doing or you're moving more into cash? And do you generally sit in a pretty strong cash position like the ultra-wealthy do?

M.C. Laubscher: Yeah, great question. So, one of the things that you mentioned is the move towards gold by a lot of central banks and private investors and family offices. You know, it's fascinating. When I was down in South Africa, too, you get different media information too. You get the BRICS view basically of the world because they're part of BRICS. And then you compare it to kind of like what the media in the U.S. and even like the pundits on both sides. You get the BRICS pundits and you come over here, you get the Western pundits. And one thing commonality that I saw across both is everybody is saying the war is on the horizon. It looks like it. It's been there for a while.

Gold is a very good play in times of war. And even just the probability or the possibility of it to take a position because that's kind of something, especially that a war of that scale that everybody's talking about, which we haven't seen in our lifetime. So, that's one of the things. And of course, gold has been a store of value for centuries. And of course, being in South Africa, I mean, we have Johannesburg is literally called the Gold Reef City, right? So, we have all the gold. So, there's a lot of that talk in the news there. It's very commodity-focused, of course, gold, diamonds, and platinum, some of the biggest platinum mines.

There's a highway where you drive in the northwest of South Africa called Platinum Highway, where you drive down you see the platinum mines on both sides. So, the majority of platinum's mine in South Africa, in Zimbabwe, and of course, in Russia. But back to the cash thing. Yeah, cash is something that I've been de-risking by moving more and more into cash and building a strong cash position to be in the position to capitalize on opportunities. I think Warren Buffett even said not doing something is doing something. So, I guess cash is not doing something and playing out.

But in the meantime, while I'm building a cash position, I look at markets that I'm interested in. I look at places that I'm interested in. I'm networking, I'm talking to people, I'm keeping my eye on certain assets and see what movements are. And I've already started to see in some of the markets that I've been exploring and looking a slight pullback, which is something that I'm looking at very favorably, saying, "Okay. This is great," because as we see more and more of a correction in those markets then, yeah, there's going to be opportunities. So, yeah, cash has its play. You know, it's funny, over the past 20 years and a lot of what has been talked about in our worlds, we've heard sometimes.

Even Robert Kiyosaki with Rich Dad Poor Dad say, "Cash is trash," and so forth. But I can tell you, when you need access to capital and cash, you're going to wish you had some. And I just want to share also something that you had mentioned in our conversations that a credit line is very important to establish now. So, build a very strong cash position in places with guaranteed access. A lesson I learned in 2008-2009. I had credit lines that were taken away, and I wish I had more in life insurance contracts that had guaranteed access that I can access at that point. So, that being said, have diversified credit lines, different types of credit lines.

There are providers where you can even use if let's just say you want to buy more gold and you store more gold and you want it warehoused offshore. There are services and companies that allow you to set up a line of credit with your gold. So, there's a credit line that you can establish there. You mentioned a stock portfolio. We've mentioned life insurance, right, is a great guaranteed access. So, HELOCs and so forth. Have those lines of credit. If you don't use it, you don't use it, but you want to have many of them because if some of them get taken away, then you have options. I always have the philosophy I want more options in all areas of life than less.

Justin Donald: Yeah, I love that explanation. And I'm such a big fan of getting the lines of credit before you need them because when you need them, you're not going to be able to get them. So, I think that a lot of people try to maximize or optimize every single dollar that they have. And what that does is it creates an unhealthy risk profile for the whole portfolio. And I think it's important to be okay with 5% to 15% in cash. This is what the wealthiest families do. You're rewarded more today than ever before, earning 4% to 5% on that cash. But it's also like I like to look at it as a hedge.

It's like I want to be in cash because if I was in an investment, maybe I'm earning X, but if I'm waiting for the right one and I have dry powder to pull the trigger, then maybe I can earn a 2X or 3X on that investment. So, long term, it's a better return profile but then also some things I want to hold as like insurance or as, you know. It's not even that I'm trying to get the return on the cash. It's more a hedge against it being in something else that isn't performing as well or that is but there could be a lot of risk. You could lose everything. So, it's like even gold, like a lot of people are like, "Ooh, gold's way up. We should be in gold." I don't ever look at gold as something that I want to own to get the return. I want to own gold as a hedge against a devaluing dollar, right?

So, like, if you look at the wealthiest families, 1% of their net worth is in gold, silver, and other precious metals. And I'm pretty confident it's not because they're trying to get a good return. It's that they want to be balanced and diversified in a way that they have liquidity if they need it. They have performance that is strong but more than anything, it's a hedge against other asset classes that could devalue the dollar or devalue their total capital in that deal.

M.C. Laubscher: Yeah. It's the approach of having good solid defensive structures in place first before we played hard offense. You know, I grew up boxing as a kid too. And the first thing that they teach you is not to get your teeth knocked out and how to protect your face. The second thing that they teach you is to go clobber the other person and knock their teeth out and punch them, right? So, it's not the first thing to attack, it's to defend. So, what you mentioned with cash, if you have a sleep-well-at-night account of capital cash that's liquid growing tax-free that's protected through asset protection, that's a sleep-well-at-night account.

That means in the worst-case scenario, you have access to that guaranteed access and you're protected from one of the biggest wealth destroyers, taxes. In the same way, once you have that setup, you spoke about gold and I look at it as wealth insurance. It's one of those things that, and the mindset of the ultra-wealthy families too, they don't look at gold to make them "rich or wealthier." That is there in case of a catastrophic event. And for most part of it, it's heirlooms, right? So, like for me, I'm South African. And so, Krugerrands, it's not something that I wish or to hold that's going to get me rich or wealthier. It's something that's there that's wealth insurance and we'll just pass it down from one generation to another.

It's just a family heirloom. So, when you have those and then, of course, your tax structures, your legal structures, and your other insurance structures, if you have that in place, you've got a pretty good defensive foundation to now build out your alternative asset portfolio. And if there for any reason in an economic environment or in a market environment, if there's shocks and something happens, you have all of those defensive structures in place to protect you and not to get wiped out.

Justin Donald: Yeah. And as your net worth grows, the likelihood of being sued increases at a great clip. So, just to be protected against that, I mean, anyone that becomes a millionaire and once you have 2 million, 3 million, 4 million, I mean, you've got to get your house in order because you now have a target on your back. And a good defensive structure is going to discourage people from actually suing you. They're going to say, "Oh, I can't do anything here." A lot of times there are attorneys that their job is they're trying to figure out who's weak, who could they prey upon because they don't have their defensive structures in place. And if you do, they're like, "This person's safe. Let's not even waste the time or money."

So, I love that. You've got a new book out. Tell us about your new book. And I know we're kind of coming to an end on our time here. So, after that, tell us where we can find it and learn more about you but I want to make sure we get time for your book about getting wealthy for sure. Love the title.

M.C. Laubscher: Absolutely. Thank you for asking. So, I got a new book out that's on Amazon, a number one bestseller in two categories in the financial section. It's Get Wealthy for Sure: The #1 Financial Strategy for Business Owners to Multiply Wealth Predictably. And in the book, I talk about the strategy that we discussed of positioning capital and making sure it's positioned properly with guaranteed access so that you could use that to go and grow your alternative asset investment portfolio and operating business if you have it. If listeners and viewers want a free paperback copy of Get Wealthy for Sure, they can request it only by shipping and handling at GetWealthyforSure.com.

That's GetWealthyforSure.com. And just as a bonus, I'll throw this in for your listeners and viewers too. I just wanted to appreciate them for listening to our conversation. I've researched over 90 different alternative asset investing niches, and I wrote four books on all these different types of investments that I researched. They can download it all at the home page at CashFlowNinja.com. The 21 Best Cash Flow Niches, of course, is one of them, The 21 Most Unique Cash Flow Niches, The 21 Best Cash Growth Niches, and The 21 Next-level Cash Flow Niches. So, all at CashFlowNinja.com. They could just download all four books. If they want a free paperback copy of Get Wealthy for Sure, just go to GetWealthyforSure.com.

Justin Donald: M.C., this has been awesome. Thank you for the value that you add, for just the intelligent conversation, the thoughtful strategies and structures and just you do such a great job articulating the brilliance that you have in all the years that you've been researching this stuff. So, it's always a pleasure to connect, my friend.

M.C. Laubscher: Thank you so much for having me on and appreciate all that you do. And thank you to your listeners and your viewers for listening.

Justin Donald: Love it. Well, I love ending every podcast episode with a question for our audience. The question's the same every time, but here is the question. What is one step you can take today to move towards financial freedom, to move towards a life that you truly desire on your terms, not a life by default, which most people have, but actually a life by design? Think about one thing you can take from M.C. today and run with it and move in that direction. Thanks so much! And we'll catch you next week.