The Secret Weapon Of High-Net-Worth Individuals Is Their Network

Importance of Networking to find out about alternative investments

We already know that in real estate it is location, location, location. When it comes to getting exposed to alternative wealth strategies, being exposed to people who are investing in these deals, can help. Networking with rich individuals facilitates both wealth accumulation and access to exclusive investment opportunities, benefiting both parties involved.

“A prime example of how networking creates and facilitates job and business opportunities was the topic of an article on Entrepreneur by business writer Alp Mimaroglu. He related how Eloqua, a marketing automation and intelligence platform, was sold to Oracle ORCL for $871 million in 2012. The entire deal went through seamlessly because Eloqua co-owner Paul Teshima had built strong, shared relationships with the people at Oracle. How valuable was Teshima's network? Eloqua was purchased for more than 200 percent of its estimated public market value, a $400 million-plus increase in shareholder net worth.” 1

The truth about alternative investments is that the good ones typically have a finite size. For example, most DSTs have $25-150M of equity available. Any of the large firms like Vanguard/Blackrook probably just raised that amount while you read the preceding sentence. If you are working with a syndicator, those are also equity limited since they normally deal in real estate and will only raise as much equity as the property allows. Bottom line on capacity, these alternatives don’t stay “on the shelf” long so it’s imperative you have access if you want to have choice.

Access to Exclusive Investment Opportunities

They say you are an average of the 5 people you hang around with the most. In addition, when you expand your network to include peers to those “doing more than you” you tend to be exposed to people doing things “big” and most get motivated to feel that can apply to them as well. I’ve been a member of a great men’s only group that has expanded my investment options, but more importantly expanded my circle of “great people” who are motivated and remind me anything is possible.

Besides sharing alternative investment ideas at these higher-end groups, you also learn what not to do. Many investments fail, and the better groups share their wins and losses. Knowing what and how something “blew up” can help you analyze other deals.

Benefits of a High Net-worth Networking Group

It’s a concept that is already familiar; people in your circle have access to different information and opportunities, and crowdsourcing for the best plumber, backpack, or child care is a vital part of getting local, accessible, real-time information from a source that isn’t pushing their product or service. The same way you’d vet the source of the recommendation, we also avoid asking for information from the wrong sources. Your little brother that sleeps until noon and lives in a tent on the beach isn’t a smart resource if you need a dry cleaner, but he’s a great one if you need camping equipment or a recommendation for surfing.

Joining investment or exclusive high net-worth groups not only grants early access to market trends and insights through expert-led mastermind meetings but also fosters a sense of camaraderie, providing affluent individuals with reciprocal benefits. This interconnected network allows for easier access to expert referrals and insights, enhancing investment opportunities and knowledge exchange within the group.

Networking regularly builds your credibility and influence with those in your social circles. Joining a select membership organization with high net-worth members and networking with them will provide you a more diverse perspective on information and opportunities. Access to exclusive investment opportunities and market trends will expand your investment horizons and ultimately impact your wealth accumulation and investment success.

Do you have an alternative investment question? Or would like an article reviewing a particular type of investment, just drop me a note on my linkedin or facebook page.

Frederick Hubler is the founder and CEO of Creative Capital Wealth Management Group, a retainer-based wealth strategy firm specializing in alternative strategies located in Chester County, PA.

Securities are offered through Arkadios Capital. Member FINRA/SIPC. Advisory services are offered through Creative Capital Wealth Management Group. Creative Capital Wealth Management Group and Arkadios are not affiliated through any ownership.

This material was created for educational and informational purposes only and is not intended as tax, legal or investment advice.