They'll sell you out in two seconds: you will pay a brutal price for that. Never do that. Never never! Never! Never they loved their lifestyle. They went to zero.

You must be ready to absolutely write that off because there's a 50 50 chance. You will what's up you guys it's graham here and uh. Well, i never thought this would happen. A year ago i started my second channel.

The graham stefan show where i randomly reacted to a series on cnbc make it called millennial money which follows the financial lives of millennials and breaks down their spending habits in a totally unexpected turn of events. Those videos ended up getting enough views for cnbc, make it to actually take notice, and after a few months they invited me to be a guest on the series i loved so much millennial money. But if i thought things couldn't possibly get any better than that, i was wrong. Cnbc recently posted an episode of millennial money where they had none other than kevin o'leary.

Reacting to my spending habits and giving me his advice on how i could improve. So i responded to kevin o'leary in a follow-up video and then at the end of that video i made him an offer. I told him he could come on the channel and we could hash things out in person and he responded well. It turns out he's in town now, and what he doesn't realize is that this is not going to be just a typical meet and greet where i tell them how big of a fan i am of shark tank.

Instead, i'm going to have them react to my entire 10 million dollar investment portfolio so with that said, make sure to destroy the like button for the youtube algorithm and now, let's bring on kevin o'leary. So i want to first start out by showing you this picture. I don't think you're going to remember it but check this out. Where was that lax airport you're kidding yeah when that was taken about eight years ago, wow kidding, you were just a spring chicken.

I was traveling back from toronto, seeing a family yeah. You were in the airport, traveling yeah and i was pointing to my dad, like that's kevin o'leary and he was telling me to go. Take a picture but i didn't have. I was so nervous, that's great! So then, i think you were about to get in the in a car, and i figured this is my last chance to do this.

Is this lax yeah? This is lax, probably coming in to shoot shark tank yeah. Your initial reaction to me on millennial money was that i was a dick. You know i just started watching. I thought this guy's gon na be a dick yeah.

Why? I just you know, i mean the way that was set up was watch this video and i thought this guy's gon na be a dick and i just thought you know and then the more i listened to what you were saying. I said: hey the guy's got he's saying some things that i agree with around portfolio analysis around. You know budgeting around understanding, burn rate and by the time that was over, i said no, not a dick, like you know the guy. No, i agree with what he's talking about, so i want you to react to something sure i have my entire portfolio yeah worth a little bit over 10 million dollars, so i want you to go through one by one.

Just give me your individual stocks. No, this is everything this is real estate. This is every single one of my investments got it. So i want you to look through this okay, so this is a piece of property number one purchased in 2012..

59. 000 cash. 12. 000, reno, out-of-pocket, 71, rent 14 000..

So this is a good investment that was, unfortunately a cash deal. That was the whole thing was a cash deal. I was all in seventy one thousand. Five hundred you couldn't get credit for that right.

I didn't have a credit card right, so no bank wanted to give a 21 year old a loan, because i had no credit history. Okay, so right there. Um is an important lesson and i tell every millennial, even though i don't endorse credit cards, it's very hard to advance your credit rating without having one. So it's good to get a credit card put, maybe a thousand dollar limit on it and then start paying off.

You know, use 200 bucks a month and pay it off every month. So i told my son as soon as you get one trevor put 50 bucks on the card and pay it off and now he's got a pristine credit rating and he's only ever put a few thousand bucks through the car. Everybody should understand that. There's no way to game that system.

You've got to establish a credit rating or you can't borrow yeah property, two purchase 2012 cash again. Seventy two thousand eight thousand renovation, okay, so now you're, eighty thousand in the hole rent twelve hundred a month, net 900 after cost right yep, another 280 thousand dollars, because the market is appreciated. Yes, you're putting up a lot of your net worth at that time. That was everything i sold my car at the time, so i can go and buy real estate yeah.

I get it. Okay, property three trip purchase 2012 again same thing: 125. 000. Right! Okay, that's that's a serious chunk of shipping! I used four years of savings to buy these.

I said you're still not using any leverage. Nothing. Okay! Well, that's remarkable! 15. 000, renault on top of that, so now you're in out of pocket.

140. 000.. That's a little nerve-wracking red 21.45 per month after cost 1500. worth 400 000 today.

So that's a really significant bump. Yeah um, but you know, you've got to admit you've. You've benefited from the appreciation of this one asset class real estate, as interest rates went down correct. So there is an inherent risk of concentration here.

Your entire net worth is only in real estate. So far, okay, that's that's! That's an issue property four um purchase 2016. 780. 000..

You must have used that i did 60 000 rental on top of it out of pocket. 210. 000. That's your principal down payment plus renovation! Okay, that's good! That's! You know also a great investment, but now we've brought leverage into the portfolio.

Yes, this is the one that you saw. This is the one that i was house hacking on, that you thought was a good idea. Yeah 585 loan 620. wait a second you borrowed more than the purchase price because they did a cash out refinance yeah.

So what i did is i fixed this place up. I put about right here, two hundred and twenty thousand dollars total, and so now it's worth about one 250 and i did a cash refinancing. It was a real junker right yeah because that's a serious amount of change you're putting in yeah that one. You did a lot of work so now you're using leverage and your spending to invest, including adding more leverage correct.

So what i like to start thinking about in terms of debt, particularly leverage on real estate or any investment if the pupil hits the fan and values go down across any asset class, including real estate, you still owe that million dollars correct. So you got to start being sensitive to how much debt you want to bring into your world a lot of people. Don't understand how debt can put you out of business. If things go fast, you have to be ready to pay that million off at any time.

Great analogy, i met a very, very wealthy, real estate developer in new york that came over with nothing from europe when he was young when he was 18 years old, he's a multi-billionaire now and each time he bought a building, he did apartments. He would call it either a pasta or a protein building, and i said what does that mean? He said. Well, i start with my first building and i would take a lot of debt down and i would get the rent roll up. So i was 100 at least out and i would only eat pasta until i paid off all the debt.

I said really. He said yeah because it was just my wife and i and we had all this mortgage on that building and i got i know what happens during you know cycles and so once they paid off that building and now all the cash flow was coming out of The building with no debt on it, he'd start that to eat protein barrier and his whole life was always making sure that he had enough buildings with no debt on it to sustain the downturns, because the new york in those days every seven years, would take a Dive of 30 percent, so what he would do is he'd always have a couple of protein buildings. Spinning cash when the correction hit he'd use that cash flow to buy new buildings, but he never let he never went bankrupt because he never extended himself so far that the protein buildings couldn't pay off the mortgages. You know of the past the building right you get! The energy right, my thought, has always been the interest rate, is so low fixed for 30 years cash flow sustains it yeah and between the write-offs and maybe inflation.

Maybe we don't see it, but either way. The worst case for me has always been a break even on the interest rate that i'm paying so okay, we go on here, okay, so this is property number six yeah six. This is another duplex. Every one is going up.

Yes like we're spending more. Yes, we're putting more debt on this is 815. 000 loan. 680.

So you put there's a little equity from day, one right right: 3.625, very good down payment. 115. 000 worth 965. yeah.

Okay! So that's good and all of these by the way are rented under market value. I get it, but how long are the are the leases for one year and so do you get to bump it up? I don't raise rents, believe it or not. What yeah, really really, why not um my thought is if i have a really good tenant who always pays on time and no issues, i would rather just not raise the rent and keep them there a long time, and if they do move out, then it's kind Of like gravy to me, because i'm able to rent it out for even more to the next tenant and then tell them they could stay there as long as they want at that price yeah and for me, i've had some tenants now for seven or eight years Property: seven purchased 2.1 million. That's our number one right on the hit parade right.

This is this year yeah. So this is where i am living now: okay, loan! This is your primary residence! That's where you got the 2.875 right now at the end of this journey. What is your total debt nut across all the buildings about 2.9? Okay, i'm just saying that would start to make me nervous just not because it isn't well invested. That's a big number like a lot of it.

Can you take the hit if just look at it that way? Yeah? Can you pay down? You know 3 million bucks. Yes, as long as you can say. Yes to that, you can continue to do this, but the minute you get so levered up that you can't find 15 million dollars. I don't have any debt, i don't.

I've got to a point in my life, where i just don't like that. So i buy things for cash and i understand why debt works in this model, assuming the rental market remains buoyant, but there comes a point in your life and you're still too young. I don't want any obligation to anybody, but don't you think? That's because you already have so much money now that, for you going and trying to borrow it, three percent to make five might not be worth your time versus just the hassle free of i'm gon na, buy it cash think about it. Well, except because i'm older than you, i've seen a lot of things and i've been through a lot of down cycles.

Lots of my friends got wiped out, i mean imagine, being in your 40s and being wiped out having to go bankrupt like that changes your life forever, because you have that on your back. I would never want to wish that on anybody, because it is a horrible thing to happen and the only reason it happened to them is they didn't respect debt, you're being disciplined you're, buying assets that have income. They were buying boats and cars and watches and getting divorced. They loved their lifestyle.

They went to zero. You have to you, have to respect that and you do this makes sense to me. But again i go back to that guy in new york, protein building past the building and the whole idea of respecting how debt can rip your life apart. That's, but so far i don't see any credit you're, not using debt to buy stupid stuff right.

That's basically what's going on here all right, so this now is uh. Since your video he's got a little bit more to go in terms of diversification, he wasn't a 10 because he didn't diversify enough yeah. Well, i'm glad to see that, because i never let one asset class ever become more than 20 of my net worth. Clearly, real estate still remains more than 20 of your net worth.

One of your goals should be over time is to make it to get such a broad portfolio in your net worth that real estate's only 20. So if that asset class really has a hard time, it can't take you out of business, got it. So, let's look at this stock market investments, individual stocks, 1.14 million index funds; seven, that's good: 772, 000, um, california, state free bonds, very good, 150, 000, silver, 12, 000 acorns. So using acorn, that's good yeah! I tested all the apps, so i could give that's fine.

Okay, cash uh 320.. That's within the stock market brokerage, it's not all cash just so i i continually buy into the market. The discipline is every 90 days to trim back anything over five percent and put it into something else that you decided to go into. What happens to portfolios like this, that aren't it's like trimming, a hedge, no sector, more than twenty percent no stock, more than five you've got three stocks here over five, you give up some of the upside, but when the correction hits like a tesla rolls over and Goes down 38, you don't take the full hit because you've taken profit out on the trimming.

I'm worried about taxes yeah, because it's 50 yeah and i'm telling i'm telling you that's. The biggest mistake you can make in your life is to worry about taxes. The fact that you have to worry about taxes is a wonderful thing. It means you're making money but to say, oh, i don't want to sell.

You know stock, that's now 11 percent of my portfolio, because i don't want to take the tax hit. You will pay a brutal price for that. You will have a massive correction, you won't have taken any gains and you will hurt yourself immensely. That's the one thing mistake, you're making here so you've got to do your work.

Are you using any margin? No, that's the other thing, never use margin in stocks. Never do that. Never never. Never.

Never people think margins free. When there's a correction, you get slaughtered right. They'll sell you out in two seconds: cash position: 1.8 between cash, 1.75, 12 months, cd, 200, 000 cash, and but you need this to make down deposit to make deposits on real estate. What is cash for your total net worth? How much cash do you have uh versus your entire net worth so cash would be about 30 percent.

That's helpful. I actually have more than 30 in cash really yeah yeah i've had some uh exits in real estate. Recently, i sold my commercial real estate and i'm going to wait until i see what the economy looks like in 36 months to go back in, but as a result, i'm sitting on a ton of cash. This is a really exciting one.

I don't know if i can mention this in the video because i haven't announced it yet, but i put a company called: there is startup, valued i've learned from shark tank. This is a shark tank investment type thing. You must be ready to absolutely write that off because there's a 50 50 chance, you will it'll be a tax loss. Very few people can achieve this.

I didn't achieve it when i was 30.. That's really really hard to do and the reason you got there is you're extremely disciplined. You only deployed capital into assets that you thought might appreciate primarily real estate. Listen, the only negative i could say about you is that you got too much real estate, but that's how you made your money in the first place, working on it yeah.

So what would you give this one out of 10? I think you gave me an eight point, two, three, four. As an operator, you know you were an eight, but as a portfolio manager, i got to bring you down to probably a seven, maybe a six and a half why over concentrated one asset, fair enough. So if i just looked at this without knowing who you were i'd say this guy is too much real estate, okay and so um, you know, but if you real estate is who you are so i get it, but every all your all you're maneuvering now should Be raise more cash, buy more diversity, maybe a little more conservative. You know my portfolio of i probably have a thousand stocks, but the majority of them all pay me and they pay me monthly.

So i have a really strong cash flow every month and my biggest problem is what i do with the cache and that's how i buy watches here we go, you got to get him to say, smash the link. Oh yeah, yeah, destroy the like. You got to say, destroy the like button for the youtube algorithm. The like button, yes destroy the like button for the youtube algorithm and one last thing you've got to remember to destroy the like button, destroy the like button for the youtube algorithm.

One more thing: you've got to remember: to destroy the like button for the youtube algorithm: do it and subscribe and subscribe of course, cool. That's it thanks! So much you got it so with that said, you guys thank you so much for watching. I really appreciate it as always make sure to destroy the subscribe button, and the notification bell also feel free to add me on instagram, i posted pretty much daily. So if you want to be a part of it, there feel free to add me there.

As on my second channel, the graham stefan show i post there every single day - i'm not posting here. So if you want to see a brand new video for me every single day, make sure to add yourself to that. And lastly, if you want a totally free stock worth that minimum eight dollars and all the way up to one thousand six hundred dollars, weibull is going to give you that free stock when you deposit 100 on the platform. So let me know which free stock you get.

Thank you so much for watching and until next time.