This past week, we had an amazing call with GoBundance CEO, Matt King.

Matt returned for the second time, dropping even more knowledge bombs than before. This call was about the 3 critical steps for investing in the downturn of 2023.

Normally, we’d summarize the 3 critical steps.

But we’re going to do something a little different. Matt’s call was so impactful we transcribed the call. It’s edited down to improve readability.

Most of these are directly Matt King’s words.

Also - We are going to release the 3 critical steps over 3 days.

Why?

Each step was so valuable that it deserves its own email.

Separating out the 3 steps can help you focus on one at a time instead of being overwhelmed by information.

Let’s get into the first step:

1. Have an investment thesis

Why are you doing what you do?

The number one issue I see with successful people is they have a plan for their business, but they don't have a plan for their wealth.

And my question to them is - Why do you have a crystal clear vision for your business without a crystal clear vision for your wealth?

If I asked you about your investment thesis, I’d love to hear something like:

• I target a 15% cash-on-cash return

• I never want more than a 65% loan-to-value on any asset I buy

• I only invest in operators who have been through a downturn and have a track record of success.

Now you know:

• You need a 15% return

• Anything higher than 65% LTV is automatically out.

• The person who started their investment business last year is out. And so is the person who has no track record of success.

Use this opportunity matrix that David Osborn talks about.

You use this lens to say, “Okay, I'm gonna take this really wide funnel, which is all of the deals possible in the world. And I'm gonna say this is what I want for me. And it's gonna whittle down to like 2%.”

So now you're not like, “Oh my gosh, what do I want to do?”

You're like, “Okay, these are the exact criteria I'm looking for for my deal.”

You’re going to see opportunity everywhere in a downturn - Bitcoin, NFTs, this club, that club, etc.

Pause. Look at your investment thesis. Stick to it.

Go an inch wide and a mile deep. You’ll be miles ahead of everybody in five years.

If you try to constantly chase the rabbit, you're gonna get lost.

You might get lucky once in a while but ultimately, you’re gonna get caught chasing a million rabbits and catch zero.

It’s not gonna work.

So have an investment thesis. Go super deep on that investment thesis. Get really clear on what it's like.

As you enter the downturn, as you navigate these choppy waters, use that thesis to navigate and be your guiding light. Your star. So you know where you’re going.

To gain clarity, the best advice I can give you is to go back and watch the vision call we did.

Start with a vision. As an example:

Take your net worth. Maybe it's $10. Okay, cool.

What do you want it to be in five years? $50. Okay, cool.

So in 10 years, we need to 5x your money.

Figure out the rate of return you need to 5x your money over 10 years (17.5%).

Start with the end in mind:

What is the goal? And by when? Then reverse engineer it.

If you want to lose 50 lbs, you won’t get there by aimlessly wandering.

Instead, say “My body fat is 22%. I want to get that down to 18%. I need to lose two pounds a month for the next four months.”

Have a crystal clear plan. Then you can engineer habits into the plan.

If you don't have a vision for your life—just start where you're at.

Sit in a beautiful place and create a vision. Map out where you're going in the future. 1 year, 10 years, 20 years, 30 years….whatever you’re comfortable with.

And then reverse engineer what you need to do today to get one step closer to your goal.

And then the next day ask: “What do I need to do today to give me one step closer to this goal?”

That’s the hero's journey.

One foot in front of the other, every single day…marching towards that target. You’ll get there with goals, accountability, and habits along the way.

I would tell you—don't deprive yourself of shiny objects. It's just like sweets.

If it's your birthday, have a slice of cake. Feed your spirit. Just make sure it’s a small piece.

If you want to buy an NFT with 2.5% of your net worth, sure.

Play the game but understand the odds are not in your favor in that game.

Invest what are you willing to risk with the assumption it will most likely to zero. Put that money there and hope that it works (but know it’s probably not going to.)

Scratch the itch, then go back to the main core of your thesis (which is 90-95% of your wealth.)

Your action to take:

Write down your investment thesis. Yes, physically write it.

Physically writing it will help you think more clearly. Studies show that handwriting on paper is associated with more robust brain activity and better memory.

Here’s an example:

• I invest in mid-term rentals

• Only in the midwest. Specifically, near hospitals in cities.

• I target traveling nurses.

• The property must have 2 bedrooms and 2 bathrooms.

• The cash-on-cash return has to be 15% or higher.

It even helps to write what you will not invest in:

• I will not invest in short-term rentals

• I will not invest outside of the midwest. The property cannot be more than 20 minutes from the hospital.

• I won’t buy 3 bedroom homes because (traveling nurses don’t need that).

Look out tomorrow for step 2.

P.S. Here is the recording of Matt King’s interview

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