Asset Trip with Richard McBeath: Inside a Startup Founder’s Hands-Off, Smartphone-Friendly Investing Strategy

MoneyMade founder Richard McBeath talks big crypto wins, buying stocks for the first time, intuition, and moving away from quick wins to focus on the long game.

Aug 24, 2021

Asset Trip with Richard McBeath: Inside a Startup Founder’s Hands-Off, Smartphone-Friendly Investing Strategy

I try to invest every last dollar. I want to earn as much as I can on each dollar.

Richard McBeath

The basics

Fintech Founder

Fintech Founder

36 years old

36 years old

Los Angeles, CA

Los Angeles, CA

Married, two kids

Married, two kids

10% income invested

10% income invested

Big Ws & Ls

Started investing:

29

29

First investing platform:

Robinhood

Robinhood

Biggest win:

Bitcoin and Ethereum

Bitcoin and Ethereum

Biggest loss:

Listening to the hype around cryptocurrencies TRON and Electroneum instead of going with his gut

Listening to the hype around cryptocurrencies TRON and Electroneum instead of going with his gut

Most consistent returns:

Fundrise

Fundrise

Least risky:

Worthy

Worthy

What do you invest in and how is it divvied up?

I would classify myself as a power investor in the alt space. I’ve been exposed to a lot of different opportunities [in alternative investing], so just the fact that I’m aware of them is a key driver for that.

My portfolio is still predominantly in stocks with Robinhood as my broker, the reason being that I was actually like the 100,000th user on their waitlist. It was my first time investing in stocks. I came back from Dubai. I’d just landed, and I downloaded Robinhood. I thought it was super intuitive, clean, and simple. The user experience and ease of access is what drew me to fintech. So I’ve got about 70% in stocks.

Then I’ve got another 15% in real estate. Another app I downloaded early was Fundrise. I started just dabbling, the reason being to diversify. Even with little understanding of how investing works, it seemed crazy to have all my eggs in one basket. I only put cash I don’t need to access for at least 5 years [in Fundrise]. I’m earning passive income and diversifying, and I can kind of just set it and forget it.

Then there’s loans. I use Groundfloor for passive income. Loans was a new space, and I didn’t have a lot of knowledge on real estate. [With Groundfloor] there was a low barrier to entry...I think $10, and it’s quite simple. [The loans] are 6 to 12 months so it wasn’t locking me up, and I average 10% returns.

I also use Worthy for bonds. That felt like a savings account on steroids. I get a fixed 5% return with no minimum length, and I can withdraw any time. It’s basically a secondary savings account. They also lend to small businesses which is kind of cool. We’re a startup so it’s nice to also help out others in that space.

On the crypto side...I dabble. It’s less than 5% of my portfolio. It fluctuates. Crypto is something I’ve been deeply baked into. My first job was in crypto raising money for Blockchain companies via STO's or Security Token Offerings. This is where we tokenized securities (shares), allowing investors to own equity in the form of a token that was stored on the blockchain. I definitely understand the use case for blockchain but it’s a pretty turbulent space for me. I’ve got a pregnant wife and a two and a half year old daughter. I need stability. We just bought a house. I can’t be rolling the dice on crypto as much as I could if I were single.

I have almost no savings, or money in cash accounts, I mean. It’s like less than 3%. I try to invest every last dollar. I want to earn as much as I can on each dollar. It’s more a case of liquidity needs. I keep at least six months of available cash invested in liquid markets.

What are your investing goals?

I definitely invest for the long term, to be drawing from it in years to come. But there is something inside me that likes the short term reward of dividends and interest payments. There is that moment of delight when you see you’ve just earned X amount of money on your investment.

When did you start investing?

I started investing at 29. My 20s were all fun, travel, live to get a dollar and use it to have a good time. If I looked back I definitely would have played it safer. When I first landed in the US, Robinhood was the catalyst that got me investing.

How do you balance paying off debt and investing?

I’ve been lucky enough to just never have debt. I’ve always just paid my debts. I will typically cover debts and then invest.

What’s been your biggest investing win?

Bitcoin. Bitcoin and Ethereum, definitely. Back in 2016/2017. Also getting in early on a few stocks, like Square. It was a business I just believed in so I went in quite early. Apple as well. My most steady investment is actually Fundrise. I know how much I’m going to get every quarter and every year. From a comfort level...it’s just safe.

What’s the biggest mistake you’ve made while investing?

In my crypto days, the days of ICOs [Initial Coin Offerings], you almost couldn’t fuck up. You were almost annoyed if you didn't make north of 100% in like 3 days. But for mistakes...I’d say listening to all the noise a few times instead of going with my gut or my intuition. Definitely go with your gut if it’s telling you something. During the whole AMC/GME saga, I was watching it unfold like “just do it just do it” [invest]. But I didn’t because I reflected. Now I’m a lot more set it and forget it. I don’t day trade. I’m putting money into stocks with the intention of looking at it 10 years down the road, not investing to get quick wins.

Are there any alts you've been eyeing? Any new types of investments you’ve been considering?

I’m quite interested in impact investing on the sustainability side of things...that’s where I’m beginning to head, putting money in things that can make a positive impact. Before I was more focused on the dollar returns, but now you can do both.

If you could hop in a time machine and go back to age 18, what would you do differently when it comes to investing?

I would 100% start investing even if it was just $100 or $200 a month...not even for returns but just to understand how it works. It takes years to build an understanding of what works for you and what doesn’t with investing. If you start at 18, it’s not just starting your investment journey, starting your education journey.

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