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In this episode, we have Spencer Hilligoss, the dynamic CEO of Madison Investing. 
Spencer’s journey is nothing short of remarkable, transitioning from a successful career in the corporate world, where he led operations and sales teams at five high-growth Fintech companies, to becoming a full-time investor and entrepreneur.
Spencer founded Madison Investing with a clear mission: to help busy professionals secure their most valuable asset—time—by offering them access to carefully curated, cash-flowing real estate deals.
During our conversation, Spencer shared his insights into breaking free from the “golden handcuffs” of corporate life just months before the pandemic hit in 2019. He discussed the mindset shifts required to make such a bold move and how his focus on serving his investment group has led to Madison Investing’s tremendous growth.
Spencer’s commitment to helping others achieve financial freedom is evident in every aspect of his business, and his story serves as a powerful example of what is possible when you combine passion with purpose.
In This Episode
- Spencer’s journey and expertise in the world of investing
- His strategic investment thesis, philosophy and business approach
- Insights on current market trends and associated risks
- Identifying and capitalizing on emerging market opportunities
Spencer, welcome to the show.
Dave, great to see you. Really honored to be here. Thanks for having me on.
Yeah, always great to connect Spencer and I know people are going to enjoy your journey, right? I find that a lot of it we took in common, right? Coming from the tech sector and being in technology, kind of working that grind in that industry for quite a while. And I know we have much of our audiences actually in that sector as well. So why don’t we begin there and, you know, talk about your journey and, you know, how it kind of started for you, how you got led down the path of heading towards financial freedom.
Yeah. You know, and I probably will start right out the gates with sharing a quick story, Dave, because we haven’t caught up in a while. we just got back, meaning my family, my wife, Jennifer, our two young boys, we came back from a five week trip living abroad in the, in the Balkans to the summer. And I bring that up just right out the gates because that is something that would have blown my mind as a person grinding away, like you and I both did in tech companies. Right? I mean, I was in tech companies for 13 years in Silicon Valley.
80 hours a week in office for some of these early stage tech companies trying to you know, “build the rocket ship”, try to get that big meta Google IPO style exit that everyone dreams about. Never would I have believed that I’m able to go out and have this kind of autonomy that both investing and entrepreneurship can provide, you know, and it’s hard fought. It’s the second summer in a row, done something like this.
Last year was Portugal, this year was Montenegro and Croatia and traveling with young kids is hard. I’m not gonna kind act like it’s a cakewalk, when you’re living and running a business and reviewing investments on the other side of the planet, it reminds me why we do what we do. And I just wanted to share that because where the journey started versus where we are now is very different. So I was in five tech companies, had left to go full time managing our investing club at Madison investing in 2019. That was five months before COVID, and that was not part of the plan.
I know you and I have talked about this a bit before, Dave, that, you know, there’s many chapters to the entrepreneurship journey, but certainly did not expect to pull the RIC cord on leaving a 13 year leadership career in tech companies. Five months before a global pandemic, first of our lifetime. Even further back though, my dad was a real estate broker. I grew up in a real estate household. That’s what scared me into tech.
You know, I used to be a kid that played in punk rock and metal bands growing up and I was not business oriented whatsoever. So, you know, started out cleaning out fridges at properties for my dad. He was making me do open houses as a young teenager and that was not cool to tell my friends growing up. So I thought, well, let’s go join these tech companies, fell in love with leadership, management and you know, ended up running a team of over 200 people by the time I was 26. And that was of course like way in over my skis.
That was how you learn painfully at times, but you also learn, the merits of the hard work and the pain along the way that that teaches you. So long story short, you know, flash forward 13 years into that career. we had started investing ourselves, you know, bought some rentals, local, bought some rentals, long distance, built a portfolio. And then, you know, it became quite a bit less passive than we wanted. You had a dump in our former 401k money into stuff.
So we started investing as LPs, you know, and that’s really what gave us the bug to start doing what we do now, which is investing in bigger deals, know, bigger properties, stuff that you and I know, I know both you and I appreciate Dave, but that’s kind of the whirlwind overview of, know, the beginning and the end and everywhere in between.
Yeah. Yeah. Now I love that and the fact that you really had that spark Spencer and you know, that deep down really passion. I know you’re such a great family guy, and how much you’ve really dedicated to that and then creating your own life, right? To be able to support that, right? Because we talk about financial freedom, but it’s also this other like, you know, expansive freedoms, freedom of time.
Right? Freedom of location, right? Freedom of purpose, you know, to be waking up every day, excited about the work you’re doing. Right? And, you know, that is the opportunity that we have in these times. But you had the courage to actually step away from what you were doing, you know, to really, you know, accelerate your purpose, accelerate those freedoms. So, you know, kudos to you because it does take a lot of courage. And I know a lot of folks listening,
Yes.
You know, are always kind of thinking about that. And that’s really one of our goals here, right? Is to share some of these success stories, just like you’ve had Spencer. So people can, you know, they can feel like there’s other like-minded people out there. I’m having these same feelings. I want to have the same outcome, and you can do it, right? You know, we’re here to kind of encourage and show examples and things like that. So as part of that, did you have really an investment thesis, right?
As you moved from full -time getting a paycheck as a W-2 earner into kind of building up your passive income. I know you like to talk about it as cashflow laddering and things like that. So talk to us a little bit about that wealth strategy.
Yeah, you know, in hindsight, like everything else in life, Dave, whether it’s business, relationships, kids, parenting or whatever, stuff always seems much clearer, right? It’s like hindsight is 2020 as the platitude goes. In reality, getting started in anything is clear as mud. And when I was working full time in the fifth tech company, this is where it all started for me. It happened to be a real estate lender. It was the biggest fix and flip lender in the country. Actually, they still are now.
I used to be called Lending Home, another called Kiavi. I was brought into that company to turn around and scale their loan origination team. As a guy who truly at that stage didn’t really know what that meant, I had turned around teams, I had scaled big company organizations and customer experience teams, but I hadn’t done that. So I go in there, over the course of a couple of years, I learned the ins and outs of everything related to that, that type of underwriting for that type of deal.
The way that origination is managed, the way that you go out and evaluate a scope of work, you know, on all these types of smaller projects that were sometimes run by big companies, sometimes run by first time HGTV watching flippers who just said, “Hey, I got the bug and I want to do this to my home”. And you’re like, “well, I wish you the best of luck”. So I can’t swing a hammer. Like I, I need YouTube to fix basic stuff. Like, I’m an operations guy. I know how to do business partnerships and I say all that because like, I saw the dollar amounts, like the number of zeros behind.
Some of these transactions, right? Some of these flips that people were doing in the real world and they didn’t always have deep experience on some of these things. And I’m like, well, there’s clearly something there. I was making, and my wife, Jennifer, we’re making great W2 income, know, maxing out 401k has been doing that for years, but we still felt like we were just barely paycheck despite owning a home in the Bay area, California. Live in Alameda, California now, something had to give and you know, I hadn’t seen one of my sons in over two weeks because I was going in so early and coming home so late.
So all of that stuff culminated for me right at that moment, which led to read 24 books in an 18 month period, know, devouring stuff on finance, devouring stuff on investing and listening to podcasts that are quality education, just like yours, you know, and, that just kind of gets you started and ultimately we went out and bought a duplex in the Bay area. you know, it was.
$430,000 and $100,000 down for 200 bucks a month in cashflow and that’s not what you call a cashflow win. In hindsight, we kind of call that phase one, phase one of three. Phase one, buy local. We took all summer to buy that damn thing and we still have it now. Yes, it’s appreciated a lot. It’s also a learning thing. So that was our thesis. Phase one, buy local. We’re too scared to buy site unseen.
Phase two, we’re like, let’s go buy something still small, get up to a portfolio of five single family rentals in the Midwest, $60,000 average purchase price. Just like mind blowingly cheap, right? Compared to what we see in the coastal markets, 250 bucks on average cashflow across that modest little portfolio doors and we’re like, “wow, like that’s, that’s much more profitable”. Then we learned rentals are semi-passive at best and there’s still a place for them in a portfolio.
Absolutely right. Like any other type of investment, it’s a tool, know, we’re getting notices from the county. There’s a couch on one of the porches. We’re getting tenant turnover every year in most of those units, killing our cashflow ultimately. And these are C-class properties and we learned the difference between why you still have to go out in person and vet these neighborhoods, despite all the due diligence, despite hiring someone online to go and take a look at videos, video of the block.
Right. Like really, really analyze the heck out of all the financials involved and that was the evolution of this thesis for me is those two phases. And then realizing something’s got to give because we are very busy parents, working parents still at this time. So phase three was like, “wait, what’s this whole buying a piece of a bigger property structure?” And, know, that led into syndications and I went deep on that, you know, read more networked like crazy, went to meetups and that led me to realize, I can just go and put in, we certainly think our first one was 25K in a multifamily deal out in Alabama.
And it went very well, it was fully passive. Once you do the due diligence on the legal docs upfront, which you absolutely still consider work. but that led us to say, okay, not going to invest in our backyard. a mentor said to me in terms of thesis creation, he was like, “Spencer, what kind of state do you live in?”
“You know, do you live in a money state or a deal state?” And I was like, “well, I very much appreciate that framing because that is like, you know, clear cut, simple and brilliant”. It still is to me now and it breaks the heart of the local California real estate market. Of course, that’s not to be derogatory to the people that I live near and respect here in this industry, but for cashflow investing, I still see it that way, investing elsewhere. So that’s why we’re looking in the sun bill. We were looking out East and we’re looking at different places in the Midwest.
And we’re looking for something that’s a hard asset, a real asset that’s bigger, more predictable and that led us to multifamily that led us to self-storage. And those two asset classes have been the primary focus for us. The lion’s share of the portfolio that we had invested in and then eventually when we built our investing club around that Madison investing, where we put our own money in along with our investors, you know, and so we branched out from there further, but that really has been the thesis and how it came to be, to until today.
Yeah. What do you think are some of the considerations that investors should be thinking about in this day and age, right? I mean, there’s been so many things going on. We’ve got a huge controversial election coming up you know, we’ve had, you know, unprecedented rise in interest rates on the real estate side. You know, there’s just so many different things going on in the economy right now.
Yes.
Are there some learning lessons that you can share with investors about, you know, whether it be due diligence, you know, investment thesis or things that they should really consider at this point in the cycle?
Gosh, how much time do we have? I know that, you, you and I can go long winded offline talking about the conversation like this most likely, but for the sake of big picture, big key learnings as an LP, like putting in my own LP hat for a moment as a passive investor, you know, flashback to 2018, compare that to now. It’s like, has happened, you know, and you and I were chatting a bit about this before. Well, let’s see, we’ve had a first time ever global pandemic hit.
We have had the lifestyle adjustments to that. There was a small recession that happened in 2020, technically, right? It was like a blip compared to what has happened historically, but that counts. So we had COVID, we also had historically massive interest rate hikes and the interest rates hikes fastest and most aggressive since the 1980s, right? And those have profound implications on the market.
And, you know, have to say as well, there’s some, you know, what feels like ever present geopolitical uncertainty, you know, and, that’s probably for a second podcast, but I think right now those three things, I recount the last few years as a from to what has informed new insights of how we do due diligence and what has been the same is we use a five -part vetting framework whenever we look at a new sponsor, because at Madison Investing, like that’s what we do, right? We look at great deals.
All week, every week from great teams, try to figure out who they are. Are they up for the task and then find the great deals that they’re working on. So we look at the team. We look at their approach. We look at their comms, like their, communications and we have to look at their values and we look at the legal structures, right? And I think that all of those, there’s a nerdy spreadsheet behind those, but that still remains the same. Those buckets have not changed.
Right? Like the, that the highest level buckets don’t need to change. What has changed though, is the following, like probably the most profound examples of what has changed for me on due diligence. If I’m looking at a new, talking to a prospective operator, we want to invest with them, let’s say. Number one, the track record, right? Like when you and I look at a track record or an investor says, let’s show me that beautiful PDF document that, that like investment summary and it says, we have these exits. Great. You can’t stop there when it comes to track record.
Approach is really where it’s at, what I think of when I think of approach is like market timing of when exits happen matters greatly. People can catch an upswing, but really capable operators can define and put on paper and walk you through in exhaustive detail. What is their approach to their business plan? Like anything else, you know, I’m a big guitar nerd. So here’s a comparison point. Like if I learn how to play a really hard guitar song or solo.
I can walk you through the exact steps that I took to be able to perform that thing and it did not happen quickly. I’m not a savant. You know, I have to learn the old school hard way. I have to practice a lot. Same thing applies back on the business plan front. If a sponsor or a team knows how to do something well, and I want to de-risk this approach as much as possible to de-risk execution risk, which is the biggest risk on a passive investment, I have to make sure as best I can that they can do that again.
And that their big exits with their sexy looking IRRs were not just a flash in the pan because they caught the right moment, they bought the right asset, and they happened to peak the market right at the point where they could exit that thing. So that’d be number one. I think number two would be, said simply, extraordinarily transparent and ideally third party audited financials. That would be the gold standard. And I’m only chuckling because it sounds really simple.
In the private market, as you know, Dave, like so much is bespoke. So much is understandably opaque. All right. Like if a sponsor is buying competing for a great deal, they can’t go out and scream to the high heavens, Hey, I found this great property. We’re going to buy it at a discount and it’s under contract. So let’s go tell everyone about it. That type of private market dynamic cannot apply when it comes to vetting a team. And if they have a great deal.
The ability to see are they in a position at the company level, the company itself, like do they have sound financial footing in their balance sheet to persist through whatever may come. And number two is like, is that deals financials truly transparent? Like, are we able to see, you know, all this stuff, the T12, the historical, you know, the rent roll and all that good stuff. So thanks for indulging the diatribe. But I think that those two big buckets, you know, of approach plus like an exhaustive level of due diligence on financial transparency are things that have been deepened in the way that we look at stuff now.
Yeah, good insights there. I would definitely concur with that, you know, just to add, I think, to the audience, you know, we’re always learning and there’s been some hard lessons. But when you make those hard lessons, you have those challenging times, that is truly the raw material for your success and for your growth. Right. And one thing, you know.
I think it’s fascinating that we spend a lot of time really studying the ultra high net worth, how our family offices, some of the wealthiest in the world actually allocating capital, how are they thinking about the geopolitical events and things like that and they’re really looking to, you know, invest on a 25 year basis, right? But they’re going to go through multiple election swings, right, where it’s going to go back and forth, you know, against different parties.
You know, operators, do they actually have a continuity and plan business continuity plan? Do they have a legacy, a succession plan, right? Things like that. So they’re really in it for the longterm. And then, so when you break down some of those fundamentals, you know, where can you constantly de-risk, right? And, hedge. And also I think one thing that’s really important for people to keep in the back of their mind is that there is risk everywhere.
Okay, so I go back to this story that my wife was gifted a sizable amount of equities from her dad generously into some blue chip stocks, one of them being Kodak and she sat on it because it was very sentimental. One day, Kodak’s bankrupt. No recourse, no nothing.
Hmm.
And it was touted by all financial advisors, Wall Street, you name it, as one of the safest, most blue chip stocks. And there was no recourse, no nothing, and it went to zero. Right? I can also think of in the past 12 months, we had a numerous amount of banks completely go under and a bank is supposed to be the safest place that you can actually keep your money. So the lesson here for the investors, I think, is just that there is always risk.
Yes.
Right with your capital. So, you know, never keeping all of your eggs in one basket, right? Having focus, I think, and core sectors like you have some great focus there, versus kind of that stock market diversification, which is really diversification, because you’re spread across so many things. So when the market popped, you know, it was down three, you know, three plus percent the other Monday.
Yes.
It doesn’t matter what you own, you’re down, right? So I think having, you focus, not putting all of your eggs in one basket, and really thinking about those fundamentals for the long term are really some, you know, key considerations people should be thinking about.
Yeah.
Having focus, not putting all your eggs in one basket and really thinking about those fundamentals for the long term are the key considerations people should be thinking about.
Well, thank you for sharing this story and just the learnings. I think the Kodak story is potent, think prevailing opinions from pundits in the world’s most brilliant minds, far and more intelligent than me on the IQ scale, that’s for sure. They analyze everything out there when it comes to take a snapshot, right? Back at 2021. Virtually every forecast out there said, well, clearly 0 % interest rates. Let’s talk about the rates.
Zero percent interest rates cannot persist. What goes down must come up. What goes up must come down. And that sounds so basic to wrap my head around, right? I did not see a single forecast and I’m still waiting for someone to send me one that showed the severity and the intensity and speed of the rate hikes that we just experienced and so it gives me pause. I mean, there’s a learning there clearly.
But I think it also gives me pause when I hear people speak in absolutes about, man, know, everyone, know, I should have known better on this one deal because I’ve invested in some incredible deals that have gone full cycle and we’re still in some excellent deals right now. There’s fewer deals available right now because the rates are a little bit, you know, punitive on making them, on freeing up the market to go have more transactions.
However, I just wanted to call that out. It’s like, anytime you’re de-risking an investment, anytime you’re de-risking decision to the best of our ability. It’s a snapshot. It’s a snapshot in time. Still waiting for my crystal ball to arrive in the mail. It’s like I still don’t own one right? None of us do.
Yeah, yeah, yeah. It’s true, right? I mean, you can literally, you can go, you you pick your channel, you know, whatever you want to watch and there’ll be a pundit talking about, you know, one technical analysis of whatever it is, a sector, a stock, interest rates, whatever. And then you can find someone who’s equally as qualified just talking about the complete opposite thing, right?
Yes.
And that’s where it becomes, I think, very difficult. But when you, again, when you look at family offices and some of how a lot of these people invest, it’s really for fundamentals, right? And to your point of the team, who are you investing in? Because if you’re investing in the team, they actually have resilience as entrepreneurs to be able to shift.
Okay, you things are happening during a pandemic, which never happened before. Now we need to repurpose the business, we need to, you know, pivot or do something differently or lower our costs or, or find new, you know, ways to generate revenue. Right. And that’s really the opportunity, right within private investing. know, to your point, if you’re investing in the right team, right, they have the ability to execute well.
Yes, Gosh, there’s a real nugget there. You know, that’s a brilliant, brilliant comment and I’ll give you two examples from recent times that I, hits home for me, Dave. De-risking the who, know, truly vetting a team. Like when we say vetting a team, there’s been deals that I personally invested in where you’ve got a robust team, you know, maybe two, three, maybe more.
General partners actively involved, maybe they’re specialized. One person is kind of the CEO have, one person is more of a finance focus. One person knows their construction. If it’s a heavy rehab focus, they buy apartment buildings to renovate. Maybe they do storage facilities. The point being if, when I invest in those teams and I see them navigate COVID, I see them navigate high interest rate environments and oversupply markets right now.
They have to change and adapt, some of them will say, we’ve been using third party property management. We’re going to go vertically integrate. I’ve seen some partners and some folks we’ve invested with, they go back because they realize vertical integration was a mistake for them. Those are very large changes for a team to navigate in the middle of an active investment during their whole period. And not even talking about the other disruption coming from.
You know, inflation coming from geopolitical challenges and so just to validate your comment, completely agree with that. I think that one of the things, we didn’t chat about earlier, but it’s implied, but I want to make it really clear for folks. Cause this has been helpful for me. Like this is, you know, it’s like you’re saying there’s humbling moments out there along with the winds, right? You know, those humbling moments, here’s a key learning on the team is really drilling down to, are you looking at a scenario where one operator, one person, one human has absolute control, regardless of the structure, no matter what you see in the docs, no matter what you see in the PDF, that is to be avoided.
And it sounds simple. It’s actually quite a bit harder to spot than people realize and so I think that, you know, we can do a criminal background check, civil background check. We can go down the professional background check, which we do. We do all of these things. We do the due diligence, but you’re also taking a snapshot of it one human.
You’re taking a snapshot of a human being and ideally on a team in a larger organization, when we talk about big picture, long-term investing wisely with that profound insight you’re saying about family offices looking at a 25 year time scale, it makes total sense why they look for strong teams because the teams are resilient. They don’t end up having an overly focused single source of power in a deal that can sway whichever way that happens to go and maybe it’s not favorable, you know? So let’s wanted to hit home on that because it’s a great comment.
Yeah, for sure. So where do you think the opportunities lie, Spencer?
You know, right now we are fired up in two different areas. This is where we’re focused, the first is in private credit. you know, the banks have pulled back interest rates are high, but also banks are lending less and particularly on the assets that I know you and I appreciate Dave. You know, large commercial real estate, particularly within apartment buildings and also on self storage, but other places as well. So there’s a need, you know, there’s a need. So what fills that need is private credit, private debt.
You know, and the ability to go out and, you know, invest alongside to become the bank as an investor is very interesting, because we’re able to go take a less risky position in the capital stack, you know, right behind the senior lender or even, you know, as the senior lender, depending on the structure. So those types of investments are very interesting to me also just wouldn’t, you know, great deals exist, but it may not necessarily be participating as a common equity investor. It may be coming in as preferred equity, right?
Or met mezzanine, so that that’s the first one. The second one being there are deals, they’re just harder to find, and, they’re less common. So I’d say that certain deals truly bought at a discount right now. we’re looking for longer hold periods, you know, kind of akin to a similar ethos and investment thesis you’re heading on from the family office side, looking for deals that are purchased at a great upfront yield on cost, you know, and I think that that going in, accepting that it’s got cashflow in place already, hard to find, but when you find them, we’re gonna pounce on them. So we’re just kind of sifting through the market, looking through as many opportunities as we can, to find those diamonds in the rough.
Yeah. Well, with the latest guidance from the Fed at, you know, potentially, you know, lowering in next September’s meeting, maybe again, later this year, do you think that there’s a tipping point, right, where there’s going to be a point where we just, you know, strike in the market, right, because there’s going to be some great multifamily assets on sale that we can get in for buyers who have capital?
I do believe that to be true. When is of course the thing I’m not going to chisel into a rock right here, but I’d say that the most recent forecast for the Fed interest rate says that it’s going to be at least a quarter point reduction likely in September. I’ve really given up on trying to make my own firm forecasts on what that means, but it’s likely we will have at least the first one this year. Is that going to suddenly open up transaction volume and have a bunch of acquisitions, you know, showing up on the market potentially. It’s going to take a bit. You know, I think it’s going to take at least six months personally.
So I think in the back half of 2025, we’re going to see a material increase in the number of transactions and of course there’s a thousand different opinions people out there might have about that are far more read up on this than I am. They’re deep in the industry, but that’s what I would expect. I think if we look further into like more like 2026, then it’s going to get really interesting.
I think we’re going to see a lot of movement, particularly also because the primary source of a great deal right now is because of floating rate debt on a property, right? That is if a loan that has been on a three-year term coming up for an interest rate cap renewal or a property that simply can’t service its mortgage payments anymore, its debt payments, then the clock is still ticking and it’s not ticking favorably for some of these assets that are out there. They’ve been able to extend.
Some of them being able to renew, know, you know, buying interest rate caps. but some cannot and as a result of that, you know, it’s ramping up the number of properties that are going to be experiencing some form of challenge. And that might lead to a sale event, which leads to on the buying side, a really great deal. And so I think we’re keeping our eyes out for that as we go throughout the next 18 to 24 months.
Yeah. How about on the self storage side?
Yeah, self storage, man. I think it became, I would say, my favorite asset class over the last few years within commercial real estate because it’s just the best kind of boring. What I don’t think any of us necessarily expected when the interest rates spike happened is that the relationship between storage, storage occupancy, storage rent rates and the values in relationship to single family home market movement.
That’s got to be one of the most fascinating dynamics that, you know, in the short term is painful for self storage because the valuations were going so killer, like growing and growing and growing through 2021, akin to many other asset classes. But right now, it’s surprisingly resilient, you know, despite the fact that people are not moving because people aren’t buying homes and selling homes.
Storage is used mostly with all the four D’s, right? That’s like death, divorce, et cetera. Those big moments in life that drive people to store their stuff while they move or relocate, like to another state altogether. So I think that the institutional demand for storage is still robust, meaning bigger institutional investors want to buy portfolios of improved, efficient, strong NOI.
Self storage facilities, they want to buy them not, know, self storage facilities are relatively inexpensive compared to a $40 billion apartment building. So you’ll see them typically packaged up in this playbook used by so many great sponsors right now. They buy mom and pop, they improve the facility. They want to put them into one fund together. And if they do it correctly, they put together a really attractive looking portfolios for a potential institutional buyer.
I think that playbook still holds water. but there needs to be a rebound on the market before it can really be capitalized, right? Like before it can materialize rather. So I think that that’s where it’s at right now. think storage, like we’re still, I’m still receiving distributions from multiple storage investments that I’ve made multiple funds, pleased with those. I think that it has shown a bit more resilience than multifamily. And that’s, that’s just the difference in the structure between the two, but it’s a rosy forecast in my opinion for storage. And there’s not that many, it’s a consolidation moment still for a lot of the storage players in the top 25 list.
Yeah, one thing I love about the alt space, and it’s always comical to me why it’s even called alternative investments, because to me, these are tangible hard assets versus public equities, They kind of move and go up and down based on the wind, it seems like. But one thing that’s really helpful, I think, for investors is like, when you’re traveling this summer,
Right.
Right? I mean, get out and about and just get a feel for what’s going on. I I live in Florida now and just seeing the amount of those new self-storage buildings going in and also even as a resident, there’s no basement. We moved down here, you know, from Virginia. There’s no basements here and people come, they typically have bigger homes. You have all this stuff and there’s nowhere to put it.
That makes sense.
It really makes sense and then you look at the population numbers and the demographics of people coming in and so a lot of those numbers really kind of add up, right? And you can see it right in front of your eyes, right? So I think it’s really helpful for people also to do some of their own, as part of your due diligence, right?
You know, just reach out and go to a specific market, you know, if it’s a multifamily property, drive around yourself and get a feel for, you know, how busy is the area, right? Are the shopping malls, you know, teaming with people going in and out, you know, or is it kind of dead, right? You know, all of those kinds of things, which is what’s so great, right, about investing in real assets.
Yeah. Real assets and hard assets. That is one of the coolest parts to me. Like I think you nailed it. You know, it’s, changes the investors and my own perspective, walking on the sidewalk, walking through the, through the apartment community, looking at the units. mean, you know, talking to people that live there, like, like that, that stuff makes it tangible in a way you just can’t necessarily do when you’re buying a share of Apple stock, and so like for what it’s worth, I do think that that is a spot on observation, particularly if you want to go to the, do some more, de-risking.
See the neighborhood, right? I think that the market insight there for folks who are still kind of newer to this space that you’re hitting on Dave is so profound, which is we all read the newspaper and when we see it say real estate’s up, real estate’s down, the market is up, the market is down. I don’t give much credence to that in real estate because it’s hyper local. It’s always been, you know, and of course there’s, there’s broad correlations, but yeah, you got to see the block.
Yeah, yeah, for sure, Spencer. If you could give just one piece of advice to listeners about how they could accelerate their own wealth journey, what would it be?
Man, set the goal based on income or net worth that you want to hit within what time, to be specific, you know, Jennifer and I sat down, this is back in around 2016. This is a brief. said, how much monthly passive income do we want to hit and by when, and it was a very challenging exercise, but that created a compass for us and It’s what eventually allowed me to move on from my full-time strong income W2 and eventually Jennifer, leave hers in 2021.
Set the goals based on income or net worth that you want to hit and within that time the clariy of that goal is everything.
Of course we’ve adjusted that along the way as life evolves, but it starts there, you know, as, simple as it sounds, pick a number, put it on a certain time bound, timescale and then work toward that, but don’t make it too soon. Like that’s the one caveat I would say is that any of us can come up with a wonderful excuse not to take action if we do something and we give ourselves too urgent of a deadline. This is a big picture thing. So give yourself some time. We said 15 years in our first slice for the goal. And then we came back the next week and had set it to seven. But we ended up hitting it in five. So, you know, it’s the clarity of that goal is everything.
Yeah. Now, love it. think, you know, being crystal clear on your vision is so powerful, right? When you have that, like you say, it’s a compass and you mentioned something earlier, I think that was just so spot on for people to tune into, right? Which was, you know, the best investment was the most boring, right? When you talked about self storage and, you know, it’s really important to understand that this is really about a process, right? So once you have your goal in place, you work on your process and start to optimizing it, right? Because you can be making, you have to be making strides every day, every week, every month. But if you don’t have that goal in place, you’re not going to get there.
100%. I mean, learning to love the process is its own challenge. it’s say once you can get there, it becomes more, it blurs the line between work, passion, hobby, calling, as nerdy as that sounds. I really believe that that has been an important part in my own investing journey is realizing this can be fun. I know for a lot of people that are sitting there thinking, like I probably thought earlier in my career, finance and investing is boring as heck.
We’re talking to a guy who used to literally say, I don’t want to be in business ever when I used to play in punk rock bands. Right. And since coming full circle to say, it’s fun to, to nerd out on this stuff, but it’s also done in service of the most important thing in life, which is liberating oneself to focus on your family, your, your calling, your true calling, whatever that happens to be. because that’s why money’s just a tool, man. I mean, the, money is the tool of the money. Isn’t the end all for us for some people, it might be no judgments if that’s the case.
But the clarity of the goal, loving the process, executing regularly, that moves you materially toward the place where you have the tools to go and focus on the things that matter the most. And that’s why I brought up upfront, like, Hey, living in another country for five weeks with your young kids, that would have been so unrealistic sounding to me earlier in my life. But the process over the course of now coming up on eight years of this journey for me, it has, has, has yielded that opportunity.
Yeah, that’s that’s awesome, Spencer. I find it really fascinating, right? A great example of, you know, building wealth is just a process is think about how many people that are, you know, multimillionaires, centimillionaires, even billionaires that have actually lost everything, and guess what? They got right back to where they were or exceeded that, right?.And how do you think they did it?
Totally.
They lost all of their capital. How do you think they did it? It’s because they figured out the process in the game, right?
And they channeled those painful learnings forward. Right. I think, gosh, that is a really good insight to bring up Dave. I feel like that is why there’s now, I think there’s even a show or two reality show or two, where they give like capable wealthy people who have lost it all to get it all back.
They give them like 50 bucks or a hundred bucks and they have to go turn that into a much larger number quickly. for exactly the ways that you just described, they, they, they know the game, they know how to play it and they also have an immense awareness of their own skill of resources and relationships too, you know, and understanding the relationships available to them. All of those are in the toolkit for an investor to go and learn because the books help as a starting point, but you also have to go out and start taking some action at some point too.
Yeah, awesome. Spencer, always a pleasure to get together and really appreciate your time and sharing your insights and strategies with the community here. If anyone would like to learn more about you, connect, or learn more about Madison, what is the best place for them to reach out?
Yeah. Well, folks can find this at madisoninvesting.com. they can request an invite to join our investing club and, you know, it’s a no obligation thing to set up a call with me. Just like to nerd out on investing and try to be a resource for folks. this has been a blast, Dave. Thank you so much and it’s just really great to reconnect with you. It’s been a long time.
Yeah, appreciate that for sure, Spencer. And to the audience out there, we will see you next week. Thanks for listening. Make sure to subscribe so you make sure you don’t lose any episodes like this one with Spencer.