Investing Again

When I started at my current company there were many things that were discussed. The firm was newly formed when I first walked through the door in September 2013. In fact, the owner of the company was still waiting for the cable company to arrive later that afternoon to set up the internet. It was an interesting experience and much different from the previous conversation I had with her.

It was during that initial discussion when we talked about the clients, my role in the company, and many of the other benefits that would be part of my employment including healthcare, profit sharing, and a 401K (among others). Every salary position I have ever had, and then some, have offered healthcare so that was not a surprise to me. However the other two piqued my interest and were really bonuses to the position that I was not expecting.

Since that time over a year and a half ago, she has been true to her word. While none of us expected any sort of profit sharing at the end of 2013 we weren’t really holding out for 2014 either. After all, we are a new company. However, we were all pleasantly surprised at the end of the year when we each received an extra deposit into our accounts (which was particularly useful at that point in time).

Toward the end of last year we also continued our conversations regarding setting up a 401K. It had taken some time but things were progressing and as the calendar turned over we all started contributing to the future. While we don’t have much extra at the moment, I started with a small contribution from each pay check.

While I have had investment accounts in the past, this was my first time having a 401K. Previous accounts have long since been liquidated to pay for graduate school and other expenses. Many would consider this a tremendous loss but given the fact that I finished graduate school in the spring of 2008, it wasn’t a bad way to use the funds.

Since that time, my ‘investments’ have been on a much smaller scale and consisting of hard assets. I honestly can’t recall how many times I bought silver (and a tiny bit of gold) over the past decade but it is safe to say that I didn’t lose money or break even. A coin here and there can add up especially before the market shifted and the prices began to spike.

All the small items were nice and served a purpose when we needed that little extra. Now, it is a great feeling to be contributing to our future even though it may be one small deduction from my pay every couple of weeks. It may not seem much at the moment, it never does, but it will certainly add up in the end (especially when I start decreasing my take home pay). And it sure beats flipping coins.

Can A Hedge Fund Have A Heart?

(L-R) President Elect Sean M. Teaford, Guest Speaker Deepta Hiremath, President Dr. Sherman Leis. Photo by Past President Richard M. Trivane.

Anyone who has ever watched Shark Tank can recognize when someone has it and when someone doesn’t. Even with a great idea the entrepreneurial spirit is not always present. As soon as Deepta Hiremath began presenting yesterday at our Rotary meeting I could tell she had it.

Our guest speaker two weeks ago who spoke about the mortgage market and the potentially drastic changes on the horizon and how the process for people to get mortgages in the future will differ from today’s market. However, that doesn’t address the distressed mortgages and struggling families that are already in the marketplace and are trying to find a way to get their heads above water. This is where the focus of our discussion was yesterday.

Deepta owns and operates a real estate hedge fund by the name of King Peak LLC. While that term has fallen from favor in recent years there are still people out there running hedge funds that exemplify the four way test. Those people are not focused solely on the bottom dollar but are also looking for a mutually beneficial arrangement that is fair for all parties concerned. While the objective of any business is to be profitable it doesn’t mean you can’t help people along the way.

It is no secret that as a result of the crash in 2008, over-leveraged banks have been selling off second mortgages at drastic discounts in order to recoup guaranteed money which can be funneled back into the capital reserve. Who buys these mortgages? Debt collectors and entrepreneurs like Deepta.

While credit collectors will commonly flip the paper using high volume deals without any thought given to the lives and livelihoods that those mortgages represent, Deepta invests more than her money into these transactions. She invests her time, her energy, and her heart. Deepta focuses on the mortgages that commonly have the most devastating impact… second mortgages.

Due to the steep discount at which she purchased the paper, it opens up the opportunity to help and try to work with homeowners so that they can remain homeowners. She evaluates many of these mortgages on an individual and very personal basis and tries to find the best solution for everyone. Given the margins and the huge number of buyers, Deepta is almost guaranteed a profit. She doesn’t need to take the extra step but she does because she knows that what she holds in her hand is more than just paper.

It is part of the American dream to have the spouse, the house, and two and a half kids but sometimes we all need a little help to maintain that reality especially in these still trying times. As Rotarians we try to do right by others and ourselves every second of every day and while sometimes we may falter and show our human shortcomings it helps to have a business plan which helps us to live those principals. We can learn a lot from Deepta as well as other intelligent and driven entrepreneurs like her which will not just help to reinforce the Rotary principals but also as a reminder to ourselves of what can be done when we embody those principals.