Hey, welcome back to another bonus episode of cubicle to CEO, the podcast where we ask successful entrepreneurs, the business questions you can't google. If you're new here. Hello, my name is Ellen Yin, I'm your host. And today I wanted to continue this conversation that I started with Kaitlyn on the podcast this week. So she is installment number two in our retirement for entrepreneurs mini series on the podcast, we're going to take a pause from the series, and hopefully bring it back at a later date when we can continue to select another guest that shares a different investment strategy than the one that Kaitlyn shared, which is all about investing in the stock market. And different than the one that Erinn shared, which is about investing in real estate. So this is a TO BE CONTINUED series.
However, there were a lot of amazing concepts that Kaitlyn brought up in our interview on Monday that I have loved seeing your story tags around. And so many of you are like, Oh, my goodness, my mind has been blown by this conversation. And I concur. Kaitlyn is brilliant. And one of the concepts that I actually learned from Kaitlyn is this concept of creating an investment thesis anytime that I want to deploy funds towards any sort of investment. And this is particularly helpful because of a couple of reasons. So essentially, when I'm working with Kaitlyn as my wealth manager as my financial advisor, we have created together a plan for how I can be work optional in about 12 to maybe 15 years. And to reach that financial milestone, we have certain savings goals that we need to reach on an annual basis to build a portfolio of a sizable amount that can allow me to withdraw the income that I need each month from the portfolio in a sustainable way. So that I can again, be work optional if I choose at that point in my life. And so anytime I want to take money and put it somewhere else, instead of into my stock portfolio, I have to be clear on why this detour from the path makes sense to add. Right?
And so this investment thesis, when I first heard this word, I was like, Oh my gosh, like Is this like a multi page? You know, like, very complex dissertation, isn't it? Like I was thinking of a master's thesis where you have to like, defend your thesis? And she was like, oh, no, no, it's like, it can be one to two paragraphs. The whole point is to be clear on why you are investing your money. In this particular vehicle or strategy, what is the best case scenario for what you hope to achieve from this money? What do you want this money to do for you. And also making sure that you have assessed the risks and possible worst case outcomes, and that you've accepted the risks involved, even if that risk includes losing all the money that you have invested, you know, in whatever particular vehicle you are writing this thesis for. So that's kind of the point of an investment thesis. And I thought it might be helpful because this was a newer concept to me.
And I'm just, you know, starting to practice it. So I thought, I will walk you through two different investment opportunities that I actually wrote an investment thesis for. And another cool thing about writing this investment thesis is it's kind of a documentation of your personal journey, as an investor, similar to how my quarterly income reports here on the podcast really serve as a documentation of my process. And my journey as an entrepreneur as a business owner. So with these investment thesis is if a great one, Kaitlyn can put it into my personal documents. And so I can reflect back on my thoughts a year, five years, 10 years down the line and see how closely did the outcomes actually match up with what I envisioned for this investment? You know, was I correct about some things was wrong about some things? How do the risks actually turn out? All of these things help me become a better investor, right. And so it's another way to kind of capture what you're feeling or thinking in a moment in time, and then have an opportunity to reflect on it later. So anyways, that's kind of the concept of an investment thesis.
We didn't really dive into this much in my conversation with Kaitlyn in her interview on Monday, and so that's why I wanted to bring it to this bonus episode. But here are two investment opportunities that I recently have considered that I kind of, you know, created this investment thesis for. So I wanted to walk you guys through it. So the first opportunity was to buy a commercial building downtown. And this was, you know, this is I should say, this is a building still exists. This is a building that is selling for over a million dollars, which would be obviously by far not only the largest real estate purchase I would have ever made. If I had gone through with it, but also the largest purchase period I would have ever made right period. Not even just purchase investment, you get the point. And so when I was looking at my investment thesis for this opportunity, I came up with three things as to why I would want to invest in this property.
Number one was, for this particular investment, I would be kind of banking on asset appreciation for a return on my money. So I wasn't looking at it from a cash flow perspective, which is different than how I would look at most rental property opportunities. Like if I were to buy, let's say, a vacation home to have as a short term rental. Or if I were to buy a single family home, or a multi family home and rent it out to long term tenants, that would be an investment where cashflow would be my top priority. If the property doesn't cashflow, then I'm not interested in making that investment. For this particular asset. I know that the value of the property downtown is only going to increase exponentially over the next decade, as there is continual development in this area. As the city grows, I live in the capital of Oregon. So actually, not a lot of people, you know, pay attention to what's going on in this area because Oregon's mostly known for Portland. But I know that there's a lot of economic activity, that will inevitably bring more demand to downtown. And so for me, I saw this opportunity as a long term hold, like you would buy this property and hold it for at least 10 years, potentially even decades. And then the returns will really come from the sale of the building eventually. So I was looking at it through the lens of asset appreciation, which is different than cash flow.
So this is important because essentially, in my investment thesis, I'm recognizing that I may not see a lot of activity, in the meantime, in terms of profit, or in terms of ROI from this building, because it is a long term play. So you have to again, assess that risk and be okay with it. Like am I okay with my money essentially sitting in this building, and not seeing any returns from it for several years, potentially, you know, more than a decade. The second thing I considered in my investment thesis was that this building would provide tax benefits. So anytime you buy real estate, there's tax benefits, right? There's certain laws that benefit you that you can only utilize if you own property. And so I recognized that there were several potential buckets or opportunities for me to leverage this building for tax benefits, not only from personal income, but also for my business, my active business. And so that was another pro that I considered when I was making my investment thesis for this.
And then finally, this one is kind of more personal. And that's the thing I think a lot of people don't realize about investments is a lot of it is based on personal interests and personal strengths, right? Investments are not just about numbers. It's also about like, what's important to you, and what do you uniquely have unfair advantages in whether that's in relationships, skill sets, experience, resources, whatever that may be, or unique interests in that you want to learn more about in commercial real estate is something I have a desire to learn more about. And so for me, there was that personal interest side of why I wanted to invest in a commercial property. And also, because I live in this community, there's community ties, right, I'm very involved in the business community here. And so I thought this could be a great way to even further I guess, insert myself into the community and and be a part of its growth. So those were kind of my main pros for why I wanted to consider investing in the commercial building. And I kind of already mentioned, you know, some of the risks, obviously, ultimately, the financing was the issue that made this deal fall through where there were a lot of uncertainties in the financing that made it riskier than I wanted it to be.
And so, you know, I didn't go through with this opportunity. But I thought it might be helpful still to share my thought process around it as I was considering it. And I will say the coolest thing about doing this investment thesis and even considering and having conversations around this opportunity was that even though the deal didn't go through, I still learned so much from this, like I learned so many new terms. I learned new just concepts about commercial real estate that I never would have known before I built a couple new relationships around this that I can leverage in the future for it different commercial property if one comes on the market that makes more sense for my situation. And so there were so many benefits tied to even just getting my hands like in the deal making process and asking a lot of questions and learning more about this. So, zero regrets. Anytime I get to learn something like that's always a pro in my book.
Alright, the second opportunity that I was able to create an an investment thesis on is actually something a little bit more recent. And this was an opportunity to be an angel investor in a brand new supplement startup. This was really exciting because this opportunity came from a relationship I built more than four years ago, this is actually someone that I've worked with previously, she was my client, her previous business was a business that I worked inside of. And it was really cool to see it come full circle, and to be presented with this invitation in this honor to go on this next adventure that she's starting. And this project is still very much in the early stages. So I can't reveal too much yet. And I signed an NDA. So it sounds a little bit vague. That is why, but when I was looking at the investment thesis for why I wanted to invest in this opportunity, there were a couple things that came up first, I think this experience will be one of the best relationship building tools that are tools might not be the right word even. But the one of the best relationship building opportunities that I will come across.
And for me, that's actually something I was thinking about when I was looking at the cash investment that I would make in this business is, in a worst case scenario, even if I made $0, back, if I looked at my investment as a price of tuition to get in the rooms, that I'll be in, as this business is being built and to meet the people and develop the relationships and learn from the mentors that I'll be exposed to as a result of being involved in this process. Would that be worth it to me? And the answer was, undeniably Yes. And so with that in mind, I was like, I really can't lose in this investment. Even if it doesn't make money, I can't lose, because I would have paid that anyways, just to again, have those relationship building opportunities. So that was like, number one, when I was thinking about this particular investment thesis, then for this investment, I was thinking about, Okay, what's the actual like monetary ROI? Like, again, why would I put money in this versus just continuing to utilize this to make progress toward my financial independent schools through my stock portfolio. And for this particular investment, there's really two sides, two opportunities to earn not only my investment back, but many times over what I've invested into the business.
And the first is that this business is being built for acquisition from day one. So the goal is to sell the company within five to seven years. And so I know that the value of this company based on past performance, and based on knowing like what they're wanting to build will result in in a large liquidation event, right where my equity in the business, I would get to cash out at that point if a larger company bought this business. So there's the liquidation event that is in the near future, like five to seven years is kind of like, to me short, short to mid term, right? It's not It's definitely not like a situation like the previous one where I was planning or would have to mentally prepare for allowing my money to sit and just hold long term five to seven years is pretty reasonable turnaround in terms of having an opportunity for a huge liquidation event where you could get a lot of money out of the business if it sells. So that's one way that I could make money off of this deal.
Another way is through cash flow through the profit sharing, which is an amazing part of this deal that the lead investor in the founder is generously making possible for her early investors, which I think is incredible. So there's again there's the two two sides of it, right? Like you can make money in the meantime before the business sells through profit sharing, but then there's also the big moneymaker at the end when the business sells I say when because I've always the eternal optimist, and so I really believe there's power in stating your reality and and what you want into the world. So that's kind of more of the money side of things. And then again, when you're looking at like, Why else do you want to invest in this particular opportunity versus other opportunities? For me, it's a lot about my personal growth through the six perience this would be my first time being an angel investor, it would be my first time being a board member of a for profit company, which is another invitation another honor that she extended to me. So none of this is, again, this is very early stages. So like, I can't share too much yet. But I'm hoping to bring you guys along the journey as I go through this process of being an angel investor for the first time. And I'll reveal more as I'm able to.
But just having those two experiences like learning how to be an angel investor, learning how to be a board member of a for profit company, is invaluable to me experience building a consumer brand, right, like the business that I'm currently running as my full time business is not necessarily a consumer brand. It's I mean, we have a media companies, that's a completely different industry than food and supplements. And it's also completely different building a digital content based business, which is what our media business is, versus a product based business like a physical consumable product that people utilize in their everyday lives. So this will be that experience alone, like being behind the scenes of building an econ business. I've done that before many times as a person working inside their clients, businesses, but I've never done it from behind the scenes as someone who actually has ownership in a business. So that to me is a huge learning opportunity.
And then finally, just my, again, from the personal interest side, I know that being an investor in a company like this will require travel, and I love traveling. I think that anytime I can meld my love for travel with something, I'm doing some endeavor and business, that's a huge win for me. And I also really love the people behind this project, I think that's really important to me, too, is when I'm looking at this investment opportunity. It sounds like a fun time. Like there's hard work involved, obviously. But you want to do business with people that you actually enjoy, right. And like I said, I've had this relationship for many years. And in the past, the things that we've worked on, there are so many great memories tied to that past project that we worked on together. And so I'm getting a chance to create new memories with this person and other people involved that I also have relationships with is just such a blessing and something that you really can't put a price tag on.
So anyways, as you can probably tell from what I've shared with this second opportunity, this is the one that I actually did decide to move forward on. So we're in the process of finalizing some paperwork on that this week. And I'm so excited for this next phase like getting to add investor to my I guess my bio or to my life experience is really exciting. And I can't wait to share as much as I can with you when I can and hopefully impart some learnings in this new world that I've not really served in before.
Anyways, thank you for listening. I hope that this conversation on investment thesis, and how I'm applying that in my own life was helpful to you if you learn something new. Or if you're considering investing in something I would love to hear from you share with me your investment thesis. What are you thinking about investing in? Why have you assessed the risks? Have you accepted the risks? Shoot me a DM @MissEllenYin and share what you're up to with me. Alright, I will catch you in the next episode.
If you are enjoying two doses of cubicle to CEO and your podcast feed every week, will you help support our efforts and continuing to bring you more quality free content by going to ratethispodcast.com/cubicletoCEO and sharing a review for our podcast. If you go to ratethispodcast.com/cubicletoCEO, it will allow you to choose which podcast player you want to leave us a review or rating on it's super easy. It takes less than 30 seconds. You can even leave just a reading without having to write a review so it's literally as simple as one click but it goes so far and helping us continue to pour into these resources for you. So thank you so much if you choose to do that to support our show. Again the link is ratethispodcast.com/cubicletoCEO will also link it below in the show notes
