The Billion-Dollar Reason Your Financial Advisor Wants You In Stocks—Not Real Estate – Christian Dy

 

Are you tired of watching your portfolio rise and fall with the whims of the stock market? It’s time to rethink your investment strategy by exploring the wealth-building potential of real estate private equity. Ava Benesocky sits down with financial advisor and educator Christian Dy, founder of Latitude West and author of Break Your Wealth Ceiling, to discuss why traditional stocks and bonds might be limiting your growth. Christian reveals how the ultra-wealthy use alternative assets to build resilience, offering insights into diversifying your portfolio across geographies and asset classes. From understanding the “12-hour clock” of investing to uncovering why now is the perfect time to look beyond the public markets, this conversation provides a clear framework for building a balanced, inflation-hedged portfolio.

Get in touch with Christian Dy:

• Website: https://latitude-west.ca
• Facebook: https://www.facebook.com/ChristianDyLatitudeWestFinancial
• Instagram: https://www.instagram.com/christiandylatitudewest
• Break Your Wealth Ceiling book: https://www.amazon.ca/Break-Your-Wealth-Ceiling-extraordinary

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Watch the episode here

 

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Important Links

• Christian Dy
• CPI Capital
• Break Your Wealth Ceiling
• Rich Dad Poor Dad
• The Holy Grail of Investing
• CDY@Latitude-West.CA
• BOOKING LINK

 

About Christian Dy

Christian is a proud qualifier of the Million Dollar Round Table (MDRT), which has memberships around the world enabling him to collaborate with the top advisors in his industry world-wide.

Christian is an award winning educator, team leader, and financial advisor.

When Christian took over his father’s business, he not only gained 40 years of experience but also brought his desire for helping his clients invest in real estate. He realized that traditional financial advisors were only focusing on wealth in the stock market, which went against his philosophy of growing wealth.

His practice is now focused on working with clients who want to build their financial wealth in the real estate market. This is achieved with an integration of stock assets, combined with active and passive real estate investments. His team can not only do traditional financial planning for clients, but will also analyze and present new cash flowing real estate deals across Canada/US.

When he is not advising clients or giving financial workshops, he can be found analyzing real estate investments, creating financial education videos for his YouTube channel, and volunteering locally and abroad with his philanthropic projects.

 

The Billion-Dollar Reason Your Financial Advisor Wants You In Stocks—Not Real Estate – Christian Dy

Real Estate Private Equity: Beyond Traditional Portfolio Strategies

Everyone, my name is Ava Benesocky. I’m the CEO of CPI Capital. We’re a real estate private equity firm that partners with Canadian investors to acquire US real estate. Now we’ve launched a vehicle that allows Canadian investors from all across Canada to utilize their registered funds, such as RSP, TFSA, RESP, etc., to self-direct them into our real estate offerings and allows them to really diversify their financial portfolio. We’ve had great success since our launch, and about, I’d say, half the equity that we raise for our offerings actually comes from registered funds now. I’m interviewing Christian Dy. He’s a financial advisor, and unlike most other financial advisors, he actually recommends alternatives such as real estate to his clients.

Most financial advisors are focused on the classic stock and bonds portfolio, also known as a fixed income or equities portfolio. Just taking a phrase from what Christian has taught me in the times that we spent together, I’ve really learned a lot from him. Financial advisors offering this classic 60/40 stocks and bonds will keep you from being poor, but investing in real estate and alternatives in conjunction with stocks and bonds will make you wealthy. Now let’s get into the conversation and see how this is possible and what Christian’s thesis is on this matter. Let’s get into things. Christian, thank you so much for being with me.

Thank you for having me. You and I have co-hosted different events as well, which is how we met. I’m glad to be here because I’ve always been a big studier. My first career was in education. I’ve always liked to look at the facts. In my financial practice, which is helping to advise clients to grow their wealth specifically in real estate, even though I’m not a realtor, I realized that it was the way that the average Canadian can essentially get to the next level of investing.

In many ways, you actually do not even need a financial advisor if your only strategy is to dollar-cost average in the stock market. The advisor will add a little bit of extra layer of value, but probably not as much as you think. When we think about it, what are these other alternative classes? Should I be investing in real estate or private equity? That’s where a really strong advisor could come in to actually give you the information that you need in order to make a decision.

Christians, what are the reasons I was really excited to have you on is that you have a perspective that I think is somewhat unique in the financial advisory world. You do not just look at real estate and alternative investments as being in competition with a traditional portfolio. You look at them as potentially playing a different role with an overall wealth strategy. Let’s dive right into things. Let’s get started. Christian, as a financial advisor, an author, and an educator, what does your experience and research say about how the ultra-wealthy invest versus the average person?

 

 

How The Ultra-Wealthy Invest: Lessons From Tiger 21 And Pension Funds

I’ve authored a couple of books and e-books, and I really like studying what other people do, and who better to study than essentially the ultra-high-net-worth and also very large institutions. What is the difference between an average investor and an ultra-high-net-worth? One, they have teams behind them. They could actually afford these family office teams. They have people whose entire job is to help them make money, and they’re their only client. It’s like having just one client and saying, “Your only job is to analyze, to look at different asset classes and help me to do two things.

Grow my wealth, but also, of course, protect it from taxation.” The Tiger 21 is a group that not a lot of people are familiar with. People tuning in, feel free to Google them. The Tiger 21 is probably the wealthiest investors on the planet, and they are part of a club, and in this group where they have chapters across North America, there’s a certain amount of money you have to have just to be part of the group. I think it’s roughly around $10 million. The average investor has about, I think, $110 million, $120 million. They have quite a bit of money. What they’re probably not going to do is take that amount of money and put it in a stock-bond portfolio. They’re beyond that level.

In many ways, you actually do not even need a financial advisor if your only strategy is to dollar-cost average in the stock market. Share on X

When I studied Tiger 21, I realized that actually less than 40% of their assets are actually in the public stock market. Whereas the typical investor has 60%, 70%, 80%, some even 100% in the S&P 500. You’d have to wonder, “Why are the smartest people on the planet not doing that? Do they not want to make money?” When we look at it, less than 40% are there. Then they have almost 30% in real estate. They have probably 25 to anywhere between 20% and 30% in private equity. Now they’ve chopped up these three different asset classes, and the fourth asset class we’ll call it other. Precious metals, insurance-based products, GICs, bonds.

Their core is actually those three asset classes. At Latitude West, that’s actually our core as well. We’re heavily real estate focused. The next wealthiest investors out there are actually pension funds. Pension funds are responsible for an enormous amount of money. We’re talking in the billions. They cannot take a chance on a fluctuation of a down market. At the same respect, they have to have very high returns. One pension fund, one pension plan fund in particular, is the Canada Pension Plan, which everyone here in Canada contributes to, CPP.

People do not know that it’s one of the best pension plans in the world. They consistently beat out the S&P 500. At the same time, they have much less volatility. If you take a look at their portfolio, it’s about 20% to 30% in private equity. Last year, it was their largest performer, private equity, in terms of rate of return. I thought, with my practice, as well as what I’m advising for clients, why do not I just mimic what the ultra high net worth are doing and figure out the best ways for my practice in order to do it, which is why the majority of our clients, we do fee for service, majority of our clients actually do not have as much stock exposure as many other average investor does.

The difference between an average investor and an ultra-high-net-worth is high-net-worth investors have teams behind them. Share on X

I’m listening to you talk about Tiger 21 and the Canada Pension Plan and just seeing what these ultra-wealthy or institutional groups do. What you’re really describing is diversification across different types of assets, different return drivers, and potentially different economic environments, and not simply diversification within the stock market. That’s where investors sometimes get confused if they hear the word diversification. Even with their financial advisor, they hear the word diversification and think, “I own stocks, I own bonds, I own ETFs, I’m completely diversified.”

What you’re saying is diversification goes much more beyond that, and you can intentionally build wealth. That’s really great to outline because historically, these alternative investments were not like private equity. They’re really only accessible to institutions and very wealthy families. The question really becomes as an investor, as access improves, should everyday investors be at least educating themselves on what else is out there? Let’s get to the next question that I have for you, Christian is why should Canadian real estate investors broaden their portfolio, which might include US real estate?

Diversifying Across Geographies: The Case For US Real Estate And Private Equity

I know there is a little bit of sentiment because of what’s going on politically with the US. At the end of the day, that too shall pass. It’s actually silly if somebody said, “I want to grow my wealth, but I refuse to do anything that has to do with the S&P 500 or with the US or anything of that sort.” It’s more or less just saying, do not grow my money as well as it possibly could be. Every single thing we touch, of course, has to deal with that market. I myself have invested in US real estate. I’ve owned a property there for many years.

The private equity funds that my clients are involved with, the public equity funds my clients are involved with, there’s just too much overlap. Why the US in general for real estate, and of course, you probably talked about this more in some of your other workshops and webinars, it’s a bigger playing ground. You can cherry-pick states that are very tax-friendly to investors. You could cherry-pick states that are very friendly to landlords as opposed to tenants. You could also cherry-pick states that have been heavily corrected in their real estate markets, but also have high foundational growth potential. Is not that exactly what an investor is supposed to be doing?

If we just limited that to our own geography, or if we just limited that to, let’s say, the TSX, we’re leaving a lot of money on the table. True diversification is actually in looking at different geographies and different asset classes. As I said, I am a bit of an academic. If people want to just look up private equity on their own and say, “Is this something worth investing in?” You’re correct. Ten years ago, you probably would have needed a million to $5 million to be involved in any of these private equity firms right now. It’s just because it is a little bit of a different asset class.

 

It has a little bit of a bigger hurdle. It’s just recently that institutions as well as individual investors have more access to private equity. If anyone wanted to look up the Cambridge Associates study in 2023, they did a 25-year period study, where they compared the stock market in the form of the Russell 3000 compared to the private equity market just as a whole. What they found was that in this 25-year study, the average rate of return on the Russell was about 8.16. Anyone investing in the stock market would probably agree with that 25 years, 8%.

The private equity in that same timeframe was 13.3%. That’s a 5% difference. We’re talking, at least, almost a third more. The difference is staggering when you think about it. Right away, when I talk to my clients about private equity, it’s not there to beat the stock market, even though historically it has. It’s actually just there to non-correlate against the stock market. It’s just a different asset class. We all know the S&P 500 has been rip-roaring high for the last, for sure, the last five years in double-digit returns. We know if we stretch that out longer, it’s not going to always be that way.

In the studies that I’ve shown, from 2010 to 2026 today, that’s 16 years, the S&P 500 has returned 13%, which is fantastic. That’s an incredible run. That’s a sixteen-year timeframe. If I go from 2000 to 2026, that’s 26 years. 2000 to 2026, that exact same stock market, the SP 500, has only returned 7.9%. If you strip out inflation, that’s only 5.2%. One of the things that we have to realize is the facts, and those are the facts. It’s not hard to research that data. At the same time, a lot of people do not fully understand private equity, and they do not understand why diversification into other geographies makes a lot more sense if you truly want to have a balanced portfolio.

 

 

Very good points. Especially relevant for Canadians because we’re talking about diversification, obviously not just over asset classes, but geographically as well. You could be a Canadian investor who owns Canadian stocks, Canadian bonds, Canadian real estate, and has the majority of your financial life tied to the Canadian economy. You could technically have a diversified portfolio. You’re still heavily concentrated in one country.

That’s really the point Christian’s trying to make here. We’re not saying that Canadians should abandon Canada. We’re just saying that a world of investment opportunities outside of Canada and the United States is obviously one of the largest and most developed real estate markets in the world. That’s great that we speak about diversification. When I’m talking with investors, Christian, I always talk about diversification as well.

By investing in the US, you now have another layer of diversification when it comes to different currencies that you own, because you’re also introducing a US currency to your portfolio as well. Now we’re talking about asset class diversification, geographic diversification, and currency diversification, which opens up a new world for investors, and they get excited about that. Very good points. Moving on to my next question, Christian, what do you say to someone who has only invested in a balanced stock and bond portfolio?

The 12-Hour Investment Clock: Why A 60/40 Portfolio Won’t Make You Rich

Basically is about 90% of all investors out there, because you’re institutional investors. I’m really talking about a non-professional. I’m talking about the average person who just has a job, their spouse has a job, and they might be middle, middle-upper, or upper income. They will typically go to a financial advisor or a bank that’s got an advisor, or sometimes they try to do it themselves. Oftentimes, a lot of literature is some form of a balanced portfolio in the form of 60% stocks, 40% bonds, or 70/30 or 80/20 depending on their age and depending on their risk profile.

There’s a lot of software out there where you kind of get this bank advisor with very little experience. They type in, and the software says you need 75% stocks and 25% bonds, and this is the portfolio that the bank has in the form of mutual funds. It’s a very narrow focus. That’s like, imagine driving down a highway and you’re just staying in one lane. It’s just literally one lane. That’s the lane you’re in. You’re in the balanced stock portfolio mutual funds lane. The person advising you can only see what’s inside that lane. The ultra-high-net-worth and professional investors just do not do that.

They’re not going to stay in that one lane. It’s insane. You’ve got the real estate lane. Real estate, you have leverage. You have the 5-to-1 rule. For every 1% that the real estate goes up, then you get a 5% return because of the leverage. There’s the private equity lane. There’s the natural resources lane. If you invested in gold and silver, you would have done very well over the last ten years. I think the mutual funds will try to package that and say, “We have exposure to that,” but it’s still inside the mutual fund. What I find is that that balanced portfolio actually does not really balance.

The reason why I say that is this. When we have market crashes, usually, or large pullbacks, then when you go to the advisor, they say, “What are we doing over here?” It’s like, “All of my portfolio has been pulled back.” Now we have to wait for it to come back and do not stop investing. Dollar-cost average. Just what I’ve said in my book, Break Your Wealth Ceiling, that strategy will prevent you from being poor. It will not cause you to be rich. The advisor’s not doing a bad job. Most of my colleagues are these fantastic advisors who basically advise on balanced stock portfolios. I’m the unicorn.

I’m the anomaly where I do the fee-for-service, and I heavily promote real estate assets, real estate growth, and private equity. What happens is that I’m going to throw a number out there between now and 2030 that will probably have a significant pullback in the S&P 500. The reason is that tech makes up a huge portion of that, probably about a third, and tech is overvalued by about 40%. Right away, I do not like those numbers. I definitely do not like those numbers. They talk about the twelve-hour clock of investing.

Real estate’s got a twelve-hour clock, and the stock market’s got a 12-hour clock. 12:00 is the peak. That’s the absolute peak of the market. 6:00 is the absolute bottom. All this data shows that from the stock market perspective, we’re at around 11:00, maybe 12, like we’re at its peak. They said in real estate right now in our cycle, our peak was 2022. Right now in the cycle, we’re probably at about 4:00 or 5:00. Where do you want to buy and where do you want to sell inside?

If you think of this twelve-hour clock and if people said, “I want to sell high and buy low,” people often do the opposite. They usually buy high, and they sell low. Again, a true balanced portfolio really should have more than just mutual funds and sort of a stock-bond portfolio. The professionals are all doing private equity. The professionals are all doing real estate. Why are you not looking into it? I’m not saying to do it. I’m saying just look into it to see if it makes sense.

I really like that answer because I do not think the takeaway here is that stocks and bonds are bad. It’s that they do not necessarily have to be the entire conversation. That’s a very important distinction because I do not want someone listening to this thinking that we’re saying, “Sell your stocks and bonds, put everything into real estate.” As Christian mentioned, the diversification. It’s really about asking whether your portfolio is appropriately diversified for you, your goals, your horizon, and obviously the tolerance of risk that you have. Very good points on that.

That gives us a really good framework, Christian. We’ve talked about what wealthy investors tend to do. We’ve talked about diversification, why alternatives may have a role in a portfolio. Now I want to turn the conversation around and talk about something I think a lot of our listeners have probably experienced themselves. That is the relationship between financial advice and alternative investments like real estate. Christian, let me ask you, why might a traditional financial advisor not recommend clients invest in real estate?

The Truth About Financial Advisor Incentives And Real Estate Recommendations

I do not think this session is long enough just because it’s a pretty loaded question over there. I’ll try to answer to the best of my ability. I am a financial adviser. I’ve been a real estate investor since I was in my twenties. It was my uncle who mentored me. He was an engineer. All of his wealth, he had so much wealth. He was an engineer. He didn’t make that much money. He made it in real estate. He also made it in alternative investments. It wasn’t all in the stock market. He said, “Actually, the stock market had done okay for him.”

When he tried to do some do-it-yourself investing in the stock market, he says, “That’s where he really lost money.” He says in real estate he never lost money. I said, “Your real estate has never gone down?” He says, “No, it’s gone down plenty of times, but I’ve never lost money.” I said, “Can you explain that a little bit more to me?” In my early twenties, I started to invest in real estate. That’s why I also invest in the US and outside of my own province. If you think about it, again, going back to the lane analogy, I’ll use a bank advisor, and there are a lot of great bank advisors out there.

If I’m a bank advisor, and I’ve had a relationship with you for ten years, and you come to me and you say, “There’s this great group called CPI Capital, and I have friends who invest with them, and I saw their presentation. They get really good rates of return, and they invest in real estate. I’m thinking of taking ten percent of my portfolio, and I’m thinking of investing it with CPI. What do you think about that?” The financial advisor is in a lose-lose position because one of two things is going to happen.

They’re going to say, “Take ten percent of your portfolio and invest it with them,” and the deal goes bad. The deal goes bad, they didn’t make the money, and they say, “Man, I made this huge mistake. You’re my financial advisor, you probably should have protected me a little bit more.” Right away, he looks bad, or the deal goes great. Double-digit returns, great cash flow, dividends, everything looks fantastic. Again, he’ll probably go back to the advisor and say, “That thing went so well. My balanced stock portfolio got me 8%. This portfolio got me 13%. I’m going to strip out another 30% and do more of that.”

Again, it’s a loss for the advisor. Why on earth would they be incentivized, especially if they work for an institution that wants to keep as many assets under management? Why on earth would they say, “Yes, this is a good idea?” Why on earth would they say, “Let me investigate this to give you a more educated opinion?” Most of them will say, “No, those rates of return are too high, it’s a scam,” or “No, it’s not going to work,” or “Here’s a list of all the things that could go wrong, which is why you should not do it.” That list is valid. Did they investigate it?

Did they look into it? Did they look at the track record? Did they do a little bit of deeper research? With our financial practice, we do invest in real estate, where clients will come to us and say, “I’m thinking of buying this multi-unit building. Is this a good idea?” We’re not going to say no. We’re going to say, “This is why we’re a fee-for-service. Let’s investigate that. Here’s a private equity fund that I’m really interested in. Do you think I should invest in it? Let’s figure this out.” What we do is we have this rule. We inquire, we research, and we verify. Once we have that information, we advise our clients, because we are financial advisors.

We’re not stock and mutual fund advisors, which I think the majority of people who say that they’re financial advisors are actually just stock and mutual fund advisors, maybe insurance advisors as well. I feel that, to answer your question, why do they not recommend real estate? What’s in it for them? Nothing. The greatest version of that is maybe a REIT inside their mutual fund portfolio. Aside from that, there’s not really a lot of benefit in them encouraging you to strip out assets under management to put with your firm. That’s the good and the ugly. Yes, a very good answer.

That’s a really important distinction because I think the answer is not necessarily that financial advisors do not care about their clients. There are just structural reasons why certain investments are more commonly recommended to others. To your point, if your entire business model, your licensing structure, your compensation structure, and investment platform are built around public securities, naturally that’s going to be the type of influence of solutions that they present to their clients.

One thing that investors should think about, and they do not always think about, is incentives. That’s one of the most important things I think an investor can understand. That’s just to your point. You do not necessarily have to assume that someone is giving you bad advice simply because they are recommending something else that they get paid for. They do not understand real estate. People should understand how they’re compensated and whether there are other options that they’re able to recommend outside of what they’re showing on paper in front of you as well.

There’s that saying that I’m sure many people have probably heard of, and that’s if your only tool is a hammer, everything becomes a nail. If I said, “I want to grow my wealth,” and I go to somebody, a traditional advisor who I used to have when I was back in my teaching days, “RSPs, that’s the best way to save up for retirement.”

 

“You mean buying a rental property is not a good retirement vehicle?” “No, RSPs.” If I took that advice 25 years ago, I would be half the man. Literally, my wealth would be chopped by two-thirds. All of my wealth is in real estate. I practice what I do. If I stuck with a balanced portfolio of a teacher’s income back 25 years ago, right now I would not be living in the house that I’m in. I would not be taking the vacations that I take. I would not be driving the car that I drive with my kids. I would not be living the lifestyle that I do if I stuck with a balanced mutual fund portfolio for the last 25 years.

Your opinion might be different from mine, but your experience is not different than mine. My experience has been that I’ve grown all of my wealth through real estate, which is why I’ve written books about it, which is why I encourage my clients to diversify into real estate, to diversify into private equity. My only tool is not a hammer, and neither should yours be.

Amazing points, Christian. I absolutely love it. Let’s get to our next question. The bestselling book, Rich Dad Poor Dad, teaches people the wealthy builds through real estate. Why are advisors not helping clients do that?

The Purple Bible: Breaking The Wealth Ceiling With Cash-Flowing Assets

This is the classic. This is the epitome of the first financial book that decided to talk really about real estate, cash-flowing assets, leverage, about getting out of the rat race. Robert Kiyosaki has done a lot for the community in helping people to understand, I guess, what he’s called the game that’s being played over here. Full disclaimer. He is not a big mutual funds guy. It doesn’t mean mutual funds are bad. He is not a big mutual funds guy. He is also not a fan of traditional financial advisors. He actually calls them crooks. I definitely do not call them crooks.

I understand his point of view because he had those experiences. He had those experiences where he actually built wealth from nothing in real estate, and when his wealth hit a certain amount, he and his wife Kim would talk to various financial advisors who are these higher-level professionals who can help him with taxation, help him continue to preserve and grow his money. They told him similar things. “Sell your real estate, put it in mutual funds.” He’s like, he basically walked up and got out the door. He started to realize that there is a bias out there.

He also realized that he created his wealth in real estate assets, joint ventures, and private equity in brick-and-mortar real estate. I tended to agree because my history looked like that as well. Why are advisors really doing that? The quick answer is I’m not sure because I’m not them. I know what I’ve seen, and I know the comments that my other clients have brought me. They usually come to me. They say, “I’ve hit a point where my advisor, whom I really like and I really trust, just cannot help me any further.” I get it. They do not want to give up the relationship. At the same time, they cannot take them to the next level.

That book, Rich Dad Poor Dad, really describes how the game is played among the wealthy and how the average person can get to that level. Again, I talk about the first book I wrote, Break Your Wealth Ceiling. I will talk about one chapter, Three Wise Men. The Three Wise Men were three men that I worked with, and they were all high school teachers. All of them had a few things in common. Number one, they all retired early. Number two, they all retired with a lot more money than they needed and definitely more money than their peers who were also teachers. The third attribute that they all had is that they all invested in real estate, off of a teacher’s income.

It’s the only real way that the average person can get to the next level, from what I found. Andrew Carnegie, whose name a lot of people may have heard, is not really known in history. He was actually the richest man on the planet at one time. If you adjust for inflation, he was basically up there with Elon Musk as a comparison. He built his money in the steel industry. He built great amounts of wealth. He spent the second half of his life giving all of that wealth away for charitable reasons.

When they interviewed him, they said, “A young person who’s ambitious and wants to grow wealth, what is the best way to grow wealth?” He didn’t say build a steel empire because he knew the majority of people couldn’t do that. He basically had one message, and it wasn’t a diversified portfolio. It wasn’t even investing in stocks. He said, “Buy real estate. That is the fastest shortcut to wealth for the average person.” The thing is that’s basically my message as well. On the other side, I’m not saying sell the farm and buy, put everything else in real estate.

Buy real estate. That is the fastest shortcut to wealth for the average person. Share on X

My clients do have assets in the public stock market. They do have assets in private equity. We have to make room for real estate. We have to make room for all of those other things. CPI Capital is helping people to do that. If they do not want the brick and mortar, if they do not want to jump into markets like in the US, they do not want to deal with tenants and things of that sort, the concepts are still the same. You’ve got leverage, you’ve got diversification. You’ve got an asset class that is not directly correlated to the stock market.

It’s an asset class that could help you to smooth out your wealth, at the same time to grow it without giving up gains. Right now, what is the tool for a balanced portfolio to smooth out the volatility? Bonds or GICs. They’re not yielding very much. If it’s inside a corporation, they’re taxed the heaviest. Oftentimes they do not even keep up with inflation. Why don’t I just find another asset class that is not correlated to the stock market where I do not have to give up gains? At the same time, it has the potential to grow and, many times, grows further than the stock market.

I’m absolutely loving this conversation with you, Christian, because, just like Rich Dad Poor Dad, people call it the purple Bible. I would say I’ve talked to over a thousand accredited investors, and I cannot tell you how many people told me that they read that book and it’s changed their lives. Doing an interview like this with yourself, just opening up the mindset and the perspective that investors have, it’s life-changing. I’m excited to share this. Moving on, what should audiences look for in unbiased financial advice and what questions should they ask?

Finding Unbiased Advice: The Power Of The Fee-For-Service Model

That’s great. Again, I’m going to circle back to the traditional financial advisor because I’m assuming that a lot of your audiences right now, accredited and non-accredited, probably have been using a financial advisor. If that relationship is going great, then you probably, in many ways, should not interrupt the parts of it that are going great. If the parts of it that are going great are that they’re managing my RSPs and they’re doing a really good job, then sure, do not interrupt it. If you’re saying, “Maybe I should be diversifying, maybe I should be doing other things with it,” by all means, it’s just like a good doctor.

 

If you want a better doctor, go look around. You might say, “I want to keep this advisor. I do need some extra help over here because I seem to be hitting a roadblock whenever I bring the word real estate or alternative assets or private equity.” There seems to be this hard line where they do not help me. In some cases, they do not even encourage it. When you’re looking to diversify your advice, you want to pre-qualify what your goals are. If your goal is “I want to grow in real estate,” and I have an advisor who is not growing in real estate, then double-check to see if that’s still a good fit.

Maybe it was a good fit at the first stage of life, the same with me. My wife and I used this financial advisor when we were both young teachers in our twenties. We didn’t really know what we were doing. We met a great guy. We referred him to many people, and many of our other friends are still using him. We hit a point where I felt we had outgrown him. I started investing in real estate on my own. I started looking at private equity on my own, and there was no help coming from that area. We basically outgrew him, which is okay. Sometimes a relationship does outgrow.

If you’re going to look for another advisor or an additional advisor, make sure you guys are aligned. Ask the hard questions. “I’m thinking of investing in real estate.” “Sure, I could help you. How can you help me? How exactly can you help me to grow my wealth and real estate? I’m thinking of investing in private equity.” “I could help you.” “Exactly how can you help me? If I come across private equity, can I show it to you? Can you analyze it, and can you help advise on it? Is the only private equity you could help me with the ones that you and your firm are providing?” This is me being biased. The absolute best piece of advice is fee-for-service.

At the end of the day, a fee-for-service advisor will have no real hidden agenda. You get what you pay for over here. If the person that you’re working with is only compensated with assets under management or insurance products, guess what? The only thing they’re going to offer you is mutual funds and insurance products. That’s it. Are they going to help you to expand into multi-unit buildings in the US? No. Are they going to help you to expand into multi-unit buildings through private equity in the US? Probably not. That’s how wealth is really obtained. Second, dangerous advice is the friendly financial advisor that you’ve been with too long.

They might be keeping you underneath what I like to call your wealth ceiling. They might more or less be keeping you in the middle. Most of us are trying to move to the next level wherever a level happens to be. The second most dangerous piece of advice that is probably out there is loving family and friends. You’ve got these loving family and friends who say, “I’m thinking about doing this real estate deal, or I’m thinking about doing this private equity. My parents have always given me good advice, or my brother’s always giving me good advice, and he’s a smart guy.” You go to them.

They actually do not know what they’re talking about. You ask somebody a question, they’re going to give you an answer. If it comes from a loving voice, the most dangerous thing is that it’s the wrong advice. If that’s the problem, it’s the wrong advice. We have so many regrets when it comes to investments. One of the biggest regrets is that we got the wrong advice. We followed it. Of course, in hindsight, we looked at it, and we said, “I totally should have done that.” This is just my experience. Not a lot of people that I know invested in real estate 15, 20 years ago and then said, “What a big mistake. I totally should have invested in that real estate.”

No, I’ve heard the opposite. I usually push clients to invest in more real estate. Let’s be careful of the real estate we invest in. Let’s make sure it’s in the right area, the right product, or the right private equity. Those are the things we should be researching. It’s an asset class with much lower volatility than the stock market, with historically higher gains if you consider the leverage that comes with it. Ask the right questions. Here’s an even more poignant question. I’m waiting for this question when people ask me, “Christian, you’re somebody who helps to grow wealth in real estate. Tell me how.”

I tell them how. I help to find deals. I help to structure their deals. I help to analyze what they should keep, what they should sell. The bigger question is, do you invest in real estate? I said, “Of course I do. I’ve been doing this for decades over here, and some examples of things that I’ve done. Do you invest out of province? Do you invest in the US?” If the answer is yes, then you’re actually aligned with someone.

If somebody promises you, “I can help you grow your wealth in real estate. I can help you grow your wealth in private equity. I can help you to do all of these other things to grow your wealth beyond just a traditional portfolio.” If you find out that they own no real estate, if they own no private equity themselves, how on earth are they going to research you in helping you with private equity if they do not know that you’re better off getting someone who says, “No, I’m very familiar with private equity. I know how to analyze these firms. If CPI is good, I will let you know. If they’re bad, I will also let you know.”

That’s the guy you want to work with. You do not want to work with a person who overpromises. They have no experience in it themselves. You definitely do not want to work with a person where you’re not aligned. If you’re saying, “I want to grow my wealth outside of the stock market in real estate and private equity, I am working with an advisor who does not do that with his clients now and does not do that himself,” you’re already misaligned.

Final Insights, Recommended Books, And Contact Information

I love that. Sometimes investors outsource too much of the thinking to the person managing their money, and you have really opened up a new doorway. Some of those questions that you were saying are great questions. I honestly think every investor should write those down before meeting with their financial advisor next time. It’s not that you’re trying to challenge your advisor. You’re just really trying to open up a whole new world of how you want to build wealth, after you have a conversation with your spouse or you look at yourself in the mirror and say, “There are other strategies out there that I could be missing out on that are accessible to me.” Those are some incredible points, Christian.

I always just enjoy our conversations so much. The biggest takeaway for me from this conversation is that the conversation should not really be stocks versus real estate. It should be about understanding the different roles that different classes can play in building and preserving wealth. Another one of the takeaways, Christian, is that investors need to become more educated consumers of financial advice. That’s really one of the big takeaways. You do not have to distrust your advisor. You should understand the advice you’re receiving, the incentives behind it, and whether you’re actually getting the full picture of the opportunities that are available to you.

 

 

Can you see my screen?

I can.

I just wanted to let you know, when you said that they should get more educated, if you have not read Rich Dad Poor Dad, you should. Another less well-known book, which is the one that I wrote a few years ago, was Break Your Wealth Ceiling. When we’re talking about real estate, which is what we’re doing right now, it shares a lot of the math behind how ordinary people can create extraordinary wealth with real estate. It also talks a lot about a lot of the data. A nice chunk of data is private equity.

Private equity, where Tony Robbins, another book people should consider reading, is The Holy Grail of Investing, where he specifically does his own research, comparing private equity to public equity. He did a 40-year study showing a 14% return versus a 9.2% return and what that means in the form of wealth. If people understood how the rich get rich, and Tony Robbins interviews all of these hedge fund managers. He interviews all of the wealthiest investors that he knew, and they all invest in private equity.

He says, “The average person does not know that because they do not have access to it or they do not understand it or the advisors they’re using are not showing it.” Three books. We’ve got Rich Dad Poor Dad. We’ve got Tony Robbins, The Holy Grail of Investing, and we’ve got my book, Break Your Wealth Ceiling. This is available on Amazon or on Audible. If you contact me and my team, we just converted this to an e-book, which we’ll download for free for you. I know we’re slowly wrapping up here.

If anyone wants to chat a little bit more about me and with me and my team, or would like a copy of the e-book, there’s a QR code. Just request it from us, and we’re happy to send it to you. If you wanted to look at our practice, we’re a little bit of a unicorn, which is probably why you’re interviewing me now. We’re a financial practice that is fee-for-service.

We focus on real estate investors and real estate growth strategies. We like alternative investments such as private equity, even though we still continue to do wealth management with public equities as well. We highly promote that people build their wealth with real estate. I’m at www.Latitude-West.ca if you’d like to learn a little bit more. If you want to just reach out to me directly, I love talking to people, CDY@Latitude-West.CA.

Amazing, thank you so much, Christian. I really appreciate you. You can stop the share now. I was going to say I just wanted to thank you so much for joining me. You’ve given our audiences a lot to think about, and I have so much respect for you. Thank you so much for being on our show.

This has been great. Thank you so much for having me.

Thank you.