Connect with Edmund on LinkedIn https://www.linkedin.com/in/edmundchi…
and Instagram https://www.instagram.com/edmund.chien/
Visit his website https://edmundchien.com
Let’s get connected! You can find Nicole on LinkedIn https://www.linkedin.com/in/nicole-pe…
or Facebook https://www.facebook.com/nvestornikki
or Visit her website https://noirvestholdings.com
Edmund Chien: If you start meeting this finance material as I started, it was like, no, there are other phases beyond that you can keep going. And the next phase beyond creating or working for money is now turning your money to work for you and start leveraging it. That’s adding that leverage piece is going to get you to your first million much faster.
[00:00:16] So you work on your day-to-day, you work for your W2, but then you also have your money start to create passive cash flow for you as well. And it’s duplicating that cash flow for you is like duplicating yourself to the point where some people now start to make more passive cash flow in their investments than they do at their W2.
[00:00:35] Once you get to that phase, congratulations, you’re retired, right? So you don’t have to retire, but you no longer have to work for money, just work because you want to, not because you have.
Intro: Welcome to the share the wealth show where minority professionals can learn to escape the racial wealth gap and catapult themselves into abundance. Your host, Nicole Pendegrass grew her net worth from being negative to multiple six-figures. Join her on her investigative mission to expose the secret strategies of the wealthy. So we can all have the tools needed to build the life and legacy we were created to possess. Now it’s time for the show.
Nicole Pendergrass: Welcome to the share the wealth show.
[00:01:17] I just had the best conversation with Edmund Chen Edmond is an experienced financial professional with over 15 years of managing money for high net worth individuals. He is a former senior partner of a private equity firm that managed half a billion in assets for accredited investors and family offices.
[00:01:38] And in addition to being experienced in real estate syndications. Edmund is also a licensed stockbroker and licensed life insurance advisor. And his main focus has been finding new accredited clients and investor relations. But today Edmund is retired from the financial industry and is a coach for client-facing real estate syndicators.
[00:01:59] He spent his entire financial career mentoring junior advisors and has been doing that full-time for the last five years. As you guys heard. Edmund has a wealth of knowledge, no pun intended. And he sat down and shared with us, everything that this show is about building wealth, investing it, growing it, and how to protect it.
[00:02:20] On the back end, we talked about family offices. We talked about mindset, which is huge, which is we, they gave so many gems on how to grow your wealth and protect it. We talked about tax strategies. We talk about. Finding mentors and advisors, just everything. So you don’t want to miss the rest of this episode.
[00:02:40] So stay tuned. We’re starting right now. Hello, everyone. Welcome. Welcome to the share the wealth show. So I just went over a high-level overview of Ed’s experience and his background. And I just want to ask you about all the plethora of things that you have done and you have achieved over your lifetime.
[00:03:00] What was it that made you transition from what you were doing previously? What caused the transitions and all the different points and aspects of your career growth and your career trajectory? What made you do what you’re doing now?
Edmund Chien: I think a big part of it started with curiosity and not being satisfied with being considered a Neal fighter, a rookie in that arena, and then just pursued after and just continued to excellence.
[00:03:26] Interestingly enough, if you take a look at my back, I’ve had this habit of turning interests and hobbies. Into professional, just taking some drama classes in high school. And I ended up going to school for that. So I have a bachelor of fine arts and theater in Canada. So I went to the top theater school in Canada, which is like the Canadian Juilliard.
[00:03:43] And I ended up working on a lot of Broadway productions and things that ended up on Broadway. So it became a full professional or be considered a full professional in that. And then I switched over and while I was doing that, the company that I was working for, went under, so the big theater company, was publicly-traded as well.
[00:03:59] So I was stuck trying to figure out what to do now while I was in school, I just joined the military and enlisted in the military really like this sort of like some interest. And I wanted to learn some good habits or I wanted to learn some discipline and just experience life a little bit. So I did that to meet your university, but it ended up becoming my fault.
[00:04:15] So I ended up going full time for a little while and once again, turning into an interest and I became a full-time soldier for two years and I was like a boot camp instructor. So I became a professional in doing that. And while I was doing, and now I’m getting a salary and I figured, you know what, I wanted to learn how to invest my salary properly and not waste my wealth and start investing a little early.
[00:04:34] So I just started reading a lot about personal wealth and personal finance. I just cleared the library shelf on money, man. And then I ended up turning that interest or hobby and becoming a fully licensed stockbroker. I was a private equity specialist for real estate and that’s the last 20 years of my life.
[00:04:50] And I became a full-fledged professional in the industry. So I’ve done that like maybe three times now.
Nicole Pendergrass: Okay. That’s interesting. And what’s so funny. I didn’t even know that first part like I knew the military background, but I didn’t know that you were in theater and drama for a while before, like on the professional level.
[00:05:07] That’s cool. Okay. This is a random question because I always have it. And I just assume that some of my audience may have it. Maybe they don’t, but private equity. I know what that means. As far as raising funds for real estate deals, I know there’s a whole other private equity world out there. What is that exactly?
[00:05:27] Like? What are you doing? And private equity is that wealth management is considered private equity. That is, those are those terms entertaining.
Edmund Chien: Yeah, that’s a really good question. It’s different. We call verticals and financial services and there’s the main focus on the different types of investment brokers as well.
[00:05:42] So stockbrokers, you would consider them like RIA. So registered investment advisors and their responsibility are to do wealth planning for somebodies entire wealth, including their 401k’s and IRA’s investment accounts. And it’s, they’re focused more on things like asset allocation and investing in public stocks.
[00:05:58] Now in that arena, there’s a small segment that you have for an alternative. Now alternative investments, the CA in that category, you can have a section that’s considered what we call private equity. So private equity is something that’s not a publicly-traded stock. So private equity means a private company.
[00:06:16] So what we ended up doing, so if somebody owns like a dry cleaner or somebody owns a business, that person technically is running a private company or private equity because they own the equity. Investors private investors can now also go alongside that person in buying a private company and that’s private equity.
[00:06:33] So real estate, you can invest it in the same way. So in real estate, you can invest it into a real estate income trust or REIT. So if you buy an, a REIT that is a public version of. Or you could buy the same asset class without the public market and just create your syndication and a group of individuals.
[00:06:50] And that would be considered private equity. So that’s a private equity arm inside the greater umbrella of wealth management. Now, as a side note, there’s also a vertical called venture capitalist or VC. How VCs differ from private equity is the collateral. So on a VC, they’ll have a lot of tech firms.
[00:07:08] So tech firms are a lot of ideas and innovation. But if you invest in that and the company fails, you can’t foreclose on a property. There are no bricks and wood there. So because there’s no asset there, it’s not considered private equity. It’s considered a venture capitalist consider VC because there’s very little collateral.
[00:07:24] The first collateral you could get is IP or intellectual property if they have patents, but that’s about it. And the multiples are higher than in private equity, but in private equity, you end up with more collateral or potential. Yeah. So my specialty was private equity as well as wealth summit, and total wealth management in cause I was a licensed stockbroker as well.
Nicole Pendergrass: Oh, okay. So you did private equity and the RIA
Edmund Chien: Okay. In private equity, you can break it down a little bit more. So private equity, you can have private companies and you can have real estate. So my private. The experience was primarily focused like 90% focused on real estate.
Nicole Pendergrass: Okay. Okay. And real estate, meaning in your capacity you would be investing clients’ money into rates and other things, or would you also do syndications?
Edmund Chien: REITs are public-private equity side and real estate. Or paid syndications here in Canada, we call them real estate limited partnerships. So we put it through LP is not LLC.
Nicole Pendergrass: Aha. Okay. Perfect. Now between REITs and syndications, do you have a preference for building wealth and why or why not? If you had to pick between one of
Edmund Chien: those.
[00:08:30] Yeah, 100%. I’m a full private equity guy, even though I was a licensed stock broker and through to the bone. And the reason why I like that is you have a lot more control. What I don’t like about public markets is that you can have hedge funds that come in and short sellers, essentially that can come in and clip your returns because when you go into an open market, Control who comes into your deal.
[00:08:51] Anybody can buy your deal if they want to. And there can be people that are trying to exploit an opportunity or they’ll come in and short sell, and then try to ruin your reputation, just to try to drive their stock price down. When you have a private company, I interview every single person I’d let into the deal.
[00:09:08] So if there’s somebody that I think this is not going to be a great person to, to put into this project. We don’t want to put them into this deal. One of the things that we had in our private equity firm is we had a minimum, but we also had to match. Any one investor to be able to control the whole deal.
[00:09:21] So because if that person is this crazy person or there’s Yahoo, then they can come in and dictate and demand too many things. So that protects everybody, including the GP, as well as all the other investors. So we have a lot more control when it comes to private. The other component of PE is, or private equity is the price to earnings ratios tend to be lower.
[00:09:40] So price to earnings on a typical price to earnings on a public stock has anywhere from 15 times earnings and above. So it goes to 15 to 40 times earnings. If you take a look at average PE ratios PEs on private assets tend to be more around the three. And what PE basically means is what’s the price times earnings, right?
[00:10:00] So if you’re going to go and buy. A whole company. So say you and I wanted to go out and buy a dry, cleaner, a tip and more price to earn. We take a look at its earnings and it’s usually three times earnings is what the average price would be for a private company. You have to buy the whole company, but when you take a look at a public stock, we’ll be paying 15 times.
[00:10:18] Also, if you take a look at like Tesla, Tesla is a ridiculously high piece, right? So you’re paying a ridiculous amount more than if you were to buy it privately. So my preference is to buy the assets privately because you get it at a better price. I’m a value investor. So that’s my philosophy is I’d rather buy assets at a better.
[00:10:35] In public stocks or real estate income trust. I can’t control that the PEs tend to be higher. So the price is in my view, you’re overpaying for that asset.
Nicole Pendergrass: Okay. And that’s exactly why you get such a much larger upside. If you are on the VC side of a company before they IPO or anything like that, because you took that extra risk, but your P is going to be lower as.
[00:10:59] Yeah, peace
Edmund Chien: really aren’t considered in a VC space because they don’t have any earnings they’re pre earnings. So that’s not a metric. What happens in these spaces that because of the risks, because we don’t know if it’s going to go to market and it’s basically rolling the dice. So because of that level of risk, which we expect a much higher, multiple and returns.
[00:11:17] So a typical return in a VC space is anywhere from 10 times to 15 times earnings or sorry, 10 to 15 times our investment, whatever we put out in three to five. And that’s early money, so like seed money or very early money. Okay. All
Nicole Pendergrass: right. Cool. Wow. I already learned so much just in the first I dunno how many minutes I was like five, 10 minutes.
[00:11:39] So that was crazy also. Okay. So I guess for the real point of this show is to give the listeners some type of. Insights or information for their own wealth building and wealth plans to create generational wealth, to create wealth that they can even access and enjoy today. What out of, I know you’ve had tons of clients you have years and years of experience, you’ve seen all different types of investment strategies and things that people use, like vehicles, things that they invest in, whether it’s a combination of life insurances, maybe.
[00:12:16] But stock options, like you’re saying VC, just like the different avenues that someone could use in order to build wealth, if you are non-accredited or maybe you’re right at the edge and you haven’t crossed that threshold yet you make less than 200,000 a year, or you have less than a million dollars in net worth outside of your primary home.
[00:12:35] For those who don’t know what accredited standards are. Those are at. And if you are right below that, or maybe you’re even working your way up, maybe you’re way below it in either case, what is your suggestion? What are some of the starting points that people should look at? How could they get the ball rolling?
[00:12:50] What is the some, a foundational piece that they should maybe look into first, as far as an investment vehicle, that’s a great way to help them build up to bigger investment opportunities that they may not have access to. Now
Edmund Chien: there’s a lot to unpack and that discussion. I think a big part of it, learning what you don’t know and being able to figure out what you don’t know.
[00:13:11] And I think that, especially for a visual minority communities, there’s a bit more of a challenge there because I think a lot of it, like there was a pivot in my life. So my parents immigrated from Hong Kong in the seventies and they came to Canada. I’m born and raised in Toronto. And when I was young, I would get mentorship from my parents and my parents would give me all this advice and tell me, and what my parents were was able to do was help me how to get a figure out how to get a great job, how to get an income, how to get an education, how to get a degree, all these types of things.
[00:13:42] But then there came to a point where, and this is a struggle for a lot of people that become accredited investors that essentially a mass, a million dollars, their first million. You really challenging me to get to is probably the hardest million to make as the first million. One of the things that I discovered is that when I’m trying or I’m coaching and advising millionaires first question I ask them is, are you the first in your family to get to this threshold?
[00:14:03] Because if you’ve now surpassed your parents in income generation, in and collection of wealth, then as much as you love your. Their advice is behind you now. And it’s, it took me forever to realize that. So if you’re at a certain stage, take a look at where you’re getting that advice from because I spent my entire and for our parents is really difficult because especially in different communities in the Asian community, especially we have this heavy emphasis about respecting your elders, but when it comes to.
[00:14:32] Insulate when it comes to finances, I’ve surpassed my parents. So how do I still show respect a level of my dad’s trying to give me investment advice. And I try to gently tell them that two decades worth of wall street advice on this, like a licensed stock broker for 20 years. It’s don’t really teach me anything about how.
[00:14:51] Yeah, you have to be gentle with that. So the next phase to get to that is recognized. Who is your own personal life? You’ve got a great W2. You’ve got some wealth behind you, but now take pause and take an audit of who do you want on your sort of personal board of directors and are they qualified to be there because the people you want to get that advice from, are they where you want to end up or are they where you use.
[00:15:14] So if everybody on your board of directors or your, like your aunt, your cousin, and they haven’t had mass as much, as their successes, you, why are they on your board of directors now? It’s you can still have a personal relationship with them, but when it comes to career advice or wealth building advice, they’re probably not qualified anymore.
[00:15:31] So you’ve got to look for other people to mentor you. And if you can’t physically find somebody that’s there that you have to connect. Then I started replacing it with books and people that have had poor dad, rich read all this other kind of material from people that are where you want to be and use them as your board of directors, until you can find great mentors and great coaches to help you.
Nicole Pendergrass: Yeah. I actually was just about to interject and ask that. Okay. How do you get someone who’s way ahead of you to want to be on your board of directors when you’re not there yet? Because now they’re reaching back. Behind them to help, and sometimes you can find somebody who has that ethos that they want to actually help someone else rise up.
[00:16:10] But if you are still trying to grow, how do you get that person to want to be on your advisory team? But if you can’t, like you said, books or. A hundred percent, but that’s that question still stands. You have in advice for getting someone who’s ahead of you to help want to advise
Edmund Chien: you. Yeah, absolutely.
[00:16:28] So I’m trying to help everybody that’s out there doing this and what I coach and I explained to every professional is that no matter where you are in. Somebody else wants to be where you are, somebody struggling to get to where you are. And this is one of the reasons why there’s so much imposter syndrome and limiting beliefs.
[00:16:46] There is a benefit to the individual that wants to coach other people. So if you want to mentor somebody, pick some guy, I tell people, you should always have a mentor and you should always be mentoring somebody else and just giving them some tips and advice. And when you take a look in the mirror, a lot of us tend to say I’m nobody special, especially if you have like teenagers.
[00:17:05] You hang out with a teenager and you feel like you’re the biggest idiot on the planet, and you’ve heard to get the latest, but when you mentor somebody, I remember mentoring some kid that he was doing me a favor, and I was going to mentor him a little bit, just trying to get into financial services. So it was giving them some tips and he stopped and he looked at me.
[00:17:21] He was like, What I would do to be who you are, what you’ve achieved, you’ve know so much. And it just blew me away, was like, wow. It’s I actually know a lot of stuff. And this kid wishes, he could be me. And it was really gratifying stuff down in my gratitude journal. It’s don’t forget that you’ve achieved quite a lot of.
[00:17:40] So we tend to forget that we tend to focus too much on what we don’t have an over-consumption in the Western world has taught us that if you just take a look at the ads, you’re like, you’re not good enough unless you use our soul. And by the way, if you buy our soap, you’re not good enough to just use our shampoo.
[00:17:54] And we’re bumping hard with that. So we always feel that we’re not enough, but when you start mentoring somebody, those people will show so much gratitude in return. Especially if you do it for free, you’ll show much gratitude in return. And they’ll say I wish I could be you. You’re so knowledgeable.
[00:18:09] And it’s a great reminder. So always be mentoring somebody. And that’s the benefit of somebody when you go and look out for a mentor, look for kind of understanding and ability. So the next piece to that is make sure that you don’t waste their time. So for me, when I look for somebody that I met. I want to give a whole bunch of advice, but I don’t want to throw my pearls before pigs.
[00:18:30] So if I give you all this advice and you take it and you go, nowhere, that relationship will start to probably will probably wind down. But if I give you some advice and you’re able to take it and you’re like a rocket ship and you just run off with it, that is incentivizing. You know what? You’re not wasting my time and you’re not wasting my advice and you’re going to make something of yourself and that’s gratifying for me.
[00:18:49] And I would love to help people see. It’s this mindset of abundance. And that’s the value that a mentee can provide to a mentor, which is this concept. The way I do this, as I was taught a high tide raises all boats. So if I was an immigrant and I never went to private school, I never got access to these.
[00:19:06] Great, because I remember being an RIA. There was a, another advisor that was linked into a very wealthy. And there’s no way that I would be able to break into that kid of immigrants. So I don’t have that upper-class kind of connection, but he was able to bring in tons of money. And I thought to myself where people at Tony’s you need to find a really successful community like, like that guy did.
[00:19:28] But if I found a really successful community, I would be an outsider. They wouldn’t really let me in. And it would be very difficult for me to be considered one of the club. So instead of that, but what I realized. Why don’t you make a success around you? Connect with people in a high tide will start to raise all boats.
[00:19:47] And if you can surround yourself with really good context and help other people succeed, they become successful. Now that a network of successful people all around you that have that owe you a favor because you helped them. And it’s not just one person. Imagine having 80 people around you like that. And now you’ve got this incredibly successful community that you built, and that’s the mindset of why you should coach other people to help build them up.
[00:20:11] Because when I mentor people, I want to make sure that you’re successful because one day that success, I might end up working for you because you’ve got such a great idea. So now my life, while I still can, because eventually I hope that he gets a pass me. And that’s just not one person. If I could do that for 60 people, then eventually we all help each other.
[00:20:29] That’s what I’m looking to do. And I think that really good mentors have that understanding of, okay. Yeah.
Nicole Pendergrass: That’s actually everything that you just said is everything like, because adopting an abundance mindset is really hard in this society because everyone thinks that in order for you to win, I have to lose something.
[00:20:47] And that’s not what abundance is about. It’s about helping everyone and that there’s enough in the universe for everyone to succeed. And especially when raising private money for syndications or things of that, it’s oh, I don’t want to, I keep my investors close to my chest because I don’t want someone stealing my investors.
[00:21:05] So that I understand that you do marketing and you do a lot of outreach and maybe it takes a while for you to build up your investor list. But that’s also a limited mindset. That’s a fixed mindset that you won’t have new investors or that the money for deals that you need, won’t find its way to you.
[00:21:20] If you don’t do things ethically and keep up transparency and communication and just be a good person and things will happen in your favor when it’s time for it to happen. And sometimes you have to put feelers out there. You don’t know when that will come back to you, but you have to have faith and believe that.
[00:21:36] That you’re on the right journey and you’re on the right path. And just to also add to that, like I’m reading the gap in the gain right now and literally completely changed my ethos and I’m an optimistic person. And that just changed it, it filtered the way I thought about. Comparing and my journey and being grateful for where I am today and not so focused on the goals that I haven’t reached yet.
[00:22:00] And I think it’s like, if anybody has not read the gap in the game, you definitely should. It definitely changes the framework in your mind about how you look at your current situation and being present in the moment. So thank you for that. And I think we also, we were on the journey to. Oh, I was talking about foundational investment pieces and we got on the tantra and mindset is such a critical point to this, regardless, like you have to start with mindset.
[00:22:24] So I’m glad we went down that rabbit hole, but yeah, I think we’re talking about foundational investments just to get people started.
Edmund Chien: Yeah. So I think a big part of it is that if you’re taking a look at the progression of wealth building, the first foundation you start off with is learn how to be successful at working.
[00:22:41] And increase that efficiency. So that’s being great at your W2, getting an education, great W2, perfecting that and getting to a decent salary. Now, once you get to that phase, that’s when I say it. Okay. Now you’ve take a look at who you have on your board of directors. And who would you have as a board of your advisor?
[00:22:57] And are they able to get you to the next phase that a lot of people end up missing? So a lot of people get stuck into this great W2. They’re making 150, $200,000 a year. They think they’ve made it because all of the surroundings and their family. And especially if like me, if you’ve got immigrant parents, so they stopped giving you advice and you just stay there and you can just do that for the rest of the next 40 years of your.
[00:23:18] But if you start reading this finance material, like I started, it was like, no, there’s other phases beyond that you can keep going. And the next phase beyond creating or working for money, it’s now turning your money to work for you and start leveraging it. That’s adding that leverage piece is going to get you to your first million much faster.
[00:23:35] So you work on your day to day, you work for your W2, but then you also have your money start to create. Cash for passive cashflow for you as well. And it’s duplicating that cashflow for you. It’s like duplicating yourself to the point where some people now start to make more passive cashflow in their investments than they do at their W2.
[00:23:55] Once you get to that phase, congratulations. So you don’t have to retire, but you no longer have worked for money. Just work because you want to not because you have to.
Nicole Pendergrass: Nice. I love it. Yeah. Yeah. It definitely makes sense. That’s what I’m in the journey of doing now and I’m building it up and grateful for where I’m at now, because I’ve come so far from where I was before, but just one of those.
[00:24:17] Help other people just realize and open up their minds and be more thoughtful and intentional about moving forward and creating that plan for their future. And just knowing all the details and not just going with the flow of what the sheep in the herd is doing, because it’s easier. Sometimes the system is set up to make you do things.
[00:24:35] It wants you to do because it’s more profitable for them and people who are higher up and you think it’s a great idea as everyone else is doing it. And it’s just something that is easy to implement that they make it easy to implement for a reason. So that’s why it’s so imperative to, to get people like yourself or whoever else as advisory and on your team and increase your knowledge base and really start digging into that information.
[00:24:59] So you know what to look out for in the future. Okay guys, don’t kill me, but I’m going to have to cut this episode short. This is too juicy and we need to do this in a part two. So stay tuned for the next episode that airs and you can hear the rest of our conversation.
Outro: Did you love this episode of Share the Wealth Show?
[00:25:20] Be sure to connect with Nicole by following her on LinkedIn, Instagram or Facebook, if you picked up any of the gems that were dropped by today’s guest. Make sure you not only put them in your bag but if you know of someone who would benefit from this information, don’t keep it to yourself, share the wealth and make sure to leave us a rating and review. We’ll see you for next week’s episode. Subscribe so you’ll be notified.
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