Last Updated on April 28, 2020
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We’re excited to be able to interview Sam Fong, an expert in the field of finance, working with accredited investors and working with billionaire clients.
My investing journey began at an early age – during high school, I arbitraged between the “street value” and the eBay value of cards from the Magic: the Gathering game. After graduating from high school, my friend and I co-authored a book to raise charity funds for disaster relief.
As part of the founding class at UC Merced, I created the first business organization on campus and was one of the leaders in the successful campaign to invite First Lady Michelle Obama to speak at our commencement ceremony.
After college, I worked for a start-up in Beijing and then formed a consulting company in China. Next, I started a company in the Philippines that created custom wedding dresses and suits. I also began teaching personal finance and investing seminars at universities and investment groups in China, the Philippines, and the U.S.
Currently, I provide qualified accredited investors with access to private equity investments in commercial real estate. Across multiple billionaire clients, we manage approximately $1 billion of investor equity. Additionally, I buy and renovate properties across the San Francisco Bay Area.
Traveling and scuba diving are two of my passions, and I’ve been fortunate enough to visit 40+ countries and dive all over the world.
Getting Into Investing
During my final year of high school, I developed a passion for investing, and it became my life’s focus to become a successful investor. Every day, I prioritized studying equities and investment strategies for about 3 hours. It was a new and fascinating world for me.
When I turned 18, I put all my savings and earnings from various business ventures into stocks. After achieving over 40% in 3 months on my very first stock, I never looked back. (However, I did learn a hard lesson on proper due diligence on my second stock.)
Three years later, I used a portion of that capital to invest in a multifamily property in Texas. I also executed single-family residence “flips” – buying properties at below-market value, performing value-add renovations, and selling the properties at fair market value. Later on, I began investing in private equity partnerships in commercial real estate.
Basic Personal Finance Tips
Master what I call the “4 Engines of Personal Finance,” and you’ll be well on your way to mastering your financial life.
- Plan your future
- Spend less than you earn
- Increase your earnings
- Invest your savings
Treat life as an investment. Everything in life comes with an opportunity cost – time/resources that could be spent somewhere else. Good investors always work to determine the best use of their resources. With your own limited resources of time and capital, how can you best spend what you have?
When you buy a jacket for $100 and wear it 100 times, its cost per use is $1. Compare that to a jacket you buy for $20 but only wear 4 times. Which jacket is more worth it?
When you make a purchase, think of it as an investment and consider the opportunity cost. Is a $15 burger really 3x better than a $5 burger? Is it really necessary, or where could that money be better spent?
When you spend time in a toxic relationship or hang out with friends who are constantly dragging you down, the opportunity cost is the time and energy you could have been spending on a better relationship or with people who uplift you.
How much is your time worth? Recognize that spending time on anything is a conscious investment of that time. Whether you choose to allocate time to browsing social media, building wealth, or taking a vacation, there’s an opportunity cost.
Don’t live life on autopilot. Make conscious decisions about how you spend your time and money.
How can a beginner investor get started?
First, focus on educating yourself. Learn from successful investors. Determine your risk preferences and whether you want to invest yourself or have another professional invest for you.
If you want to invest on your own, make sure you know what you’re doing. Investing is one of the best ways to earn money, but it’s also quite easy to lose money.
If you’re investing with others, make certain that your interests are aligned and that you can trust them. Many financial professionals will promise you the world when they want to sell you something, so your job is to evaluate whether they can actually perform.
Next, amass capital through disciplined savings and earning extra income. When you have a sum of money that you don’t need for living or emergency expenses, you can use this capital to start making investments. My advice is to start small and stay disciplined. The power of time and compound interest will make your money work for you.
Analyzing Great Investment Opportunities
The investor’s mindset is more important than any single technical skill in investing. Without discipline and emotional control, consistent success is rarely possible.
The two most common pitfalls of every investor are fear and greed. I subscribe to the Warren Buffett philosophy, “Be fearful when others are greedy and greedy when others are fearful.” It sounds simple, but it’s not as easy in practice.
During the cryptocurrency craze, I saw friends who had never invested in their life giving advice to others about investing in cryptocurrencies. When asked, they could rarely explain what the risks were, why that cryptocurrency would outperform other assets, or even why that cryptocurrency couldn’t be replaced with something else. That’s called gambling.
On the other hand, during the financial crisis of 2008, I saw valuations for stocks plummet to absurd levels. As a long-term value investor in stocks, this was incredibly attractive since short-term performance did not concern me. I invested heavily because I knew that companies with great financials and fundamentals, such as Starbucks (only $9/share at the time), would outperform the market. Starbucks is now valued at around $90.
What makes real estate investing special
There are many ways to do a deal in real estate, and I like working with other people. It’s fun making money together. The power of leverage is also great – you can magnify the power of your investment and make investments that would otherwise not be possible without financing.
Investing is not gambling; it’s about taking calculated risks. Investing always carries a degree of risk, and the good investor must manage that risk carefully. Before making any investment, you should understand the potential risks and rewards.
For my multimillionaire clients and my own investment portfolio, I go through the same process. I manage risk through in-depth analysis and use a due diligence checklist to carefully examine risks and mitigants for each investment. I calculate valuations on properties and consider various scenarios, such as the potential downside. I build in those risk factors into my underwriting model, so I have a reasonable expectation of how much I stand to earn (or lose) in each scenario.
There are always more investment opportunities, so I usually pass on everything that is not incredibly compelling, or not suitable for my needs.
How can somebody get started in real estate?
Real estate investing can be quite daunting and often requires a lot of capital, so I recommend first educating yourself and building relationships in the industry, then working with a successful partner or team you can trust. As you build knowledge and experience, you will have more opportunities available to you.
Sam’s Book Recommendations
3 books that changed my life:
- Dale Carnegie – How to Win Friends and Influence People
- Napoleon Hill – Think and Grow Rich
- Robert Kiyosaki – Rich Dad, Poor Dad
My billionaire clients employ an entire financial team to manage their personal finances and investments. These teams use specific rules and principles that anyone can apply in their own lives, but no one shares these strategies with other people.
Since financial education is the #1 thing holding people back from greater financial success, I’m developing a comprehensive course to teach strategies for people take control of their personal finances and build lasting wealth.
If you’d like to get access to this course, contact me at email@example.com.
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