Investing Education 109: The False Pitch

Introduction

After 40 years in the investment market, I’ve seen the same destructive pattern play out countless times. I call it “the false pitch,” and it’s costing investors millions in unnecessary taxes, fees, and missed opportunities. Today, I want to share why this cycle exists and how you can break free from it.

The All-Too-Familiar Sales Pitch

Whether it’s financial planners, alternative investment sponsors, cryptocurrency promoters, stock traders, or insurance salesmen, they all follow the same playbook:

“Let me tell you why you should own this asset. Let me tell you why you should buy what I’m selling today.”

They’ll promise exciting distributions, preferred returns, or delayed distributions with double-digit internal rates of return that sound too good to pass up. But here’s the catch: very few actually deliver cash distributions. It’s usually just a promise that “one day when it rains, there’ll be a rainbow.”

The Dangerous Cycle

Here’s how the pattern unfolds:

1. Invest – You put money into their “great asset”
2. Wait – Get some distributions and preferred returns for about two years
3. Sell – They convince you to sell because “the market has shifted” and there’s a “better shiny nickel”
4. Repeat – Use tax avoidance strategies (like 1031 exchanges) to roll into the next investment

This cycle repeats every 36 months like clockwork. Sound familiar?

What’s Really Behind the Scenes

You need to understand that 99% of people do what’s best for them, not what’s best for you. Each time they convince you to sell and reinvest, they earn fees, commissions, and equity positions. When you exit, you sign a release absolving them of liability, and they’re already positioning you for the next deal.

It’s like being in quicksand – the more you get in, the harder it becomes to get out.

How Billionaires Actually Invest

Here’s what wealthy investors with $50-200 million portfolios do differently: They don’t sell.

Billionaires and deca-millionaires focus on asset retention. They ask themselves: “If I have an asset that’s working, why would I want to sell something that’s performing to take a speculative risk on something new?”

Every time you cross from investment A to B to C, you face:

• Timing risk
• Economic risk
• Policy risk
• Fees and deterioration
• Tax consequences
• Brand new levels of risk

The Critical Questions You Should Ask

Finding money is easy. Finding a great asset is damn near impossible.

If it’s so difficult to find truly great investments, how do these sponsors conveniently find excellent opportunities every 36 months when they want to sell you out? The answer is simple: they don’t. They’re just moving you along the conveyor belt of fees and commissions.

Why Investors Keep Crossing the Road

Investors don’t realize that what’s across the road isn’t nearly as good as what they have right now. Like a cow leaning against a fence trying to eat grass on the other side, we’re often manipulated into believing the grass is greener elsewhere.

Sometimes the grass is greener right underneath your feet.

A Better Path Forward

The accumulation of wealth is the avoidance of taxes and the retention of performing assets.

Instead of constantly crossing the investment road, focus on:

• Finding assets that work and keeping them
• Letting investments generate value through distributions and growth
• Avoiding the tax consequences of unnecessary sales
• Being more selective about what you get into initially

The Real Test

If someone shows you an investment with an impressive internal rate of return (IRR), ask them to run the numbers without a sale. Ask: “What does this look like not in three years, but in six years, in 10 years if I never sell this asset?”

If the investment can’t achieve the financial results you need for your portfolio without a sale, you have a problem.

Final Thoughts

Stop being herded from one investment to another. The accumulation of real wealth comes from finding quality assets and having the discipline to hold them. Every time you cross that investment road, you risk getting run over by bad actors, economic shifts, or policy changes.

Be more careful about what you get into, rather than relying on the anticipated sale to achieve your financial goals. Your future self will thank you for breaking free from the false pitch cycle.