In our increasingly digitally borderless world, the dream of international expansion is more accessible than ever for American entrepreneurs. The reach of social media and a strategic web presence has the power to make your brand visible to a global audience in seconds. Yet, as U.S. small and medium-sized businesses (SMBs) increasingly venture beyond borders, a significant yet often underestimated challenge emerges: currency volatility.

From selling goods in Europe to sourcing materials from Asia, or managing a remote team spread across continents, operating internationally inherently means SMBs are engaging with different currencies. This involves added layers of complexity, not only because it entails managing Profit and Loss (P&L) statements in multiple currencies, but because the value of one currency against another is not static. A currency’s value can shift due to geopolitical events, economic news and market sentiment, often quickly and without warning. For small businesses, this can directly impact their bottom line in ways they might not be prepared for.

Consider this scenario: You’re a small business owner and the U.S. dollar strengthens significantly against the currency in which you’ve priced an export contract. This means that your expected profit in dollars could sharply diminish upon conversion. Conversely, a weaker dollar could drastically increase the cost of imported goods, squeezing your profit margins or even making your products less competitive in the market. Beyond profitability, currency swings can make it difficult to accurately forecast spending or build a predictable budget. What you forecast to pay one month could significantly vary more or less the next, leading to instability that can derail your financial planning.

For any U.S. small business looking to succeed in multiple markets, it’s essential to mitigate these risks by adopting a proactive currency management strategy. Here are three simple steps SMBs can take to hedge against currency volatility.

Related: How to Solve the $800 Million Problem That’s Stopping Small Businesses From Expanding Overseas

1. Assess exposure

Small business owners should start by assessing how currency movements could affect their business. Consider which countries the business operates in and investigate the stability of local currency values over time. This provides an up-front indication of the level of risk you are taking on.

From there, the next step is to establish the best way to manage a cross-border cash flow. For example, if you know you’re sourcing goods and materials from local vendors in a country with a volatile currency, you may want to keep most of the funds siphoned for those payments in USD until the time comes for you to actually make the payment. Alternatively, if you’re working with a foreign currency that is considered stable, it might be more cost-effective for your business to hold funds in that local currency consistently using a multi-currency account. By keeping those funds readily available, you can reduce the number of times you pay conversion fees and manage that revenue stream just like you would in dollars.

It’s also worth noting that some businesses and individuals living and working in countries with volatile currencies may request to be paid in a non-native currency themselves, including USD. So it’s worth checking with suppliers and employees what their preference is before setting up payments.

Related: How a Strong vs. Weak Dollar Impacts U.S. Businesses

2. Rethink your supply chain

Once SMBs have established their currency exposure, it’s time to start thinking strategically about how they’re spreading risk across the business. Especially this year, as new tariffs — taxes on imported goods — have created additional complexities for many small businesses, it’s more important than ever to mitigate the risk of unforeseen costs.

A good place for SMBs to start is to take inventory of their suppliers. If they are all concentrated in one region with a volatile currency, it might be worth exploring alternatives. Similarly, if retail-based businesses shipping goods abroad are consistently paying cargo fees that they can’t readily predict, they might look for local suppliers of those same goods to avoid paying import charges on every order.

Diversifying where the business buys and sells goods and services can significantly smooth out both currency risk and the impact of sudden tariff changes. In other words, rebalancing purchasing zones is a smart way to distribute and lessen overall financial exposure.

Related: ‘Uniquely Positioned’: How Small Business Owners Can Successfully Navigate the Tariffs

3. Embrace multi-currency financial platforms

Regardless of a businesses’ chosen international structure, it’s crucial to choose financial tools that make managing a global cash flow simple. As I’ve already alluded to, multi-currency accounts can be a game-changer for SMBs operating across borders, allowing them to hold funds in multiple currencies and send money like a local to foreign accounts.

Some multi-currency account offerings even allow businesses to set thresholds for automatic currency conversions, which means their account will automatically convert funds when a currency hits a designated rate. This seamlessly allows SMBs to capture gains and avoid losses without adding to their mental load.

It’s also important to choose fast, affordable and transparent financial services providers. Faster international payments mean funds arrive quicker, reducing the window of exchange rate exposure. Some providers also offer a fixed exchange rate within a certain time frame, so businesses know that even if funds arrive the next day, it will be the exact amount they expected — no more, no less. For SMBs, having clarity on how much they’re paying in fees, when their money will arrive and how much their recipient will receive can be an enormous relief.

Ultimately, managing exchange rate risk isn’t just about protection; it’s about creating opportunity. When currency volatility is well-managed, it can become a lever for competitiveness. Businesses that have the right tools can leverage these variations to optimize their purchases or strengthen their positions in critical markets.

For U.S. entrepreneurs venturing into the global marketplace, understanding and proactively managing currency risk is no longer optional. By embracing transparency, demanding speed and prioritizing control over your international finances, SMBs can protect their margins, empower their growth and unlock the vast potential of the international economy.

We cover five pillars: Financial psychology, Increasing your income, Investing, Real estate, and Entrepreneurship. It’s double-ii FIIRE.

Today, we’re diving into Pillar Three: Investing.

Pillar III | Investing

This letter “I” could very well be called the letter T right now — tariffs, trade war, and turbulence.

Tariff increases went into effect earlier this month, and the markets treated it like old news. Stock indexes were mixed.

And that’s to be expected. We’ve known since April that this on the horizon, and these policy changes have already been priced into the market.

What we don’t know are the long-term effects, but those impacts are incremental — and that story will play out over the coming months and years, rather than days or weeks.

We also know that there’s plenty of good news in the economy. The GDP is up 3 percent (partially due to reduced imports) and consumer spending is strong (even though sentiment is weak … but actions speak louder than survey responses).

The markets have priced in two Fed rate cuts over the remainder of the year, with the first cut likely when the Fed meets on September 16-17.

Home sales are at a 30-year low (great for buyers), but the expected rate cuts may help boost that volume.

And so, I’d like to suggest three other words represented by the letter T, which serve as a reminder for how to handle your portfolio.

#1: Timing the Market (Don’t)

Remember early April? The markets plummeted, and many people panicked.

There was a period of about a week or two when I was flooded with DMs, emails, and voice messages from people who were incredibly worried about their dwindling portfolio balances.

Nobody talks about that anymore.

Why? Because the markets have recovered 28 percent from their low in April. That stress is now a distant memory.

If you panic sold, you missed the recovery.

The thing about panic selling is that most people don’t announce, “Ahem. Ladies and gentlemen. Attention. Attention. I am about to panic sell. Thank you.”

That’s not what you tell yourself.

Instead, panic selling usually happens through post-hoc rationalizations.

People will say:

• “I’m getting more conservative as I get older” (even though you’re 35 and nothing about your timeline changed)
• “I want to take some profits while they’re still there” (translation: I’m scared they’ll disappear)
• “The fundamentals have changed” (code for ‘this time it’s different’)
• “I’m just rebalancing” (my friend, you rebalanced two months ago)
• “I’m moving to a more diversified strategy” (translation: I’m fleeing to cash or bonds because I’m worried)
• “I need the money sooner than I thought” (no you don’t)

The pattern is the same. It’s rational language used to justify emotional decision-making.

These rationalizations are how we give ourselves permission to panic, without admitting — to the world, or to ourselves — that’s what we’re doing.

It sounds good on the surface, but it’s masking deep-seated anxiety.

If you panic sold in early April, there’s no shame in it. Those missed gains are the cost of self-knowledge. You’ve battle-tested your risk tolerance. You’ve gained knowledge about your investment strategy. You know how to actually asset allocate accordingly.

If you held steady or — better yet — bought the dip in early April, first, congratulations. Second, your real gain is also self-knowledge. You’ve tested your spot on the risk-reward spectrum.

Here’s the reality: We might be headed for a recession. That was true in early April, and it continues to be true in early August.

But even if we do go into a recession, we don’t know its severity or its duration. And recessions are not necessarily synonymous with steep or protracted market declines.

So even if we do go into a recession, there’s no need to sell. In fact, it’s often a fantastic time to buy if you have a disciplined investment strategy in place.

#2: Timeline

The second T is about the only type of “timing” you should participate in: investing based on the timeline of your life and goals.

You’re not timing the market. You’re timing your life.

Let’s go back to the excuse that many people use when they panic: “I need the money sooner than I thought.”

This happens a lot when the markets get choppy. People suddenly decide that their 15-year time horizon has shrunk down to five. But has it really? Do you have a written plan?

Here’s the thing: if you don’t need the money for a decade or more, today’s market movement is just noise. Static. Background chatter.

Your real timeline hasn’t changed just because your stress level has.

Try this: associate a specific goal with every investment.

Is that money for a short-term goal (less than 5 years), like buying a car, travel, or a home renovation?

Is it for a medium-term goal (5-10 years) with a highly flexible date, like buying a vacation home? Or does your medium-term goal have a fixed date, like college?

Or are you not tapping that money until 2035-2040+ ?

Some accounts have clear, obvious associated goals: 401k, IRA, 529.

But there’s a decent chance you might have accounts that don’t have specific goals.

Maybe you don’t know when/how you want to tap your taxable brokerage account.

Maybe you’re in the early stages of planning a potential early retirement using the SEPP 72(t), or living a Coast FI or Barista FI lifestyle.

Maybe Roth conversion ladders (and other sophisticated techniques) have entered the chat.

Suddenly the timeline is malleable. And that makes everything feel fuzzy.

You could Coast FI into a work optional lifestyle in … 4 to 5 years. Or maybe 7 to 8 years. Or maybe 10 to 12 years.

“It depends!,” you say when asked. It depends on how lean FI / chubby FI / fat FI you want to live, and on how well the markets perform, and whether or not your equity stake in your company fully vests …

… that’s why the timeline and goals are so amorphous …

… but you don’t know how to manage investments in the context of a timeline that’s so fuzzy.

And that’s when you’re prone to panicking at the first sign of market turbulence.

You need an anchor.

Get clarity on the timeline, and the question of “What should I do with my investments?” will often answer itself.

Because once you’re clear on the timeline, then the rest is a simple matter of asset allocation and aligning with your long-term investment strategy.

#3: Trust (the Process)

The third T is about trusting the process you set up when you were thinking clearly.

You didn’t randomly pick your asset allocation. You didn’t throw darts at a board to choose your investment mix.

You thought about it. You researched. You considered your goals, your timeline, your risk tolerance.

You set up automatic contributions. You chose low-cost index funds. You decided on a rebalancing schedule.

That person — the calm, rational you who made those decisions– was operating with a clear head. No market stress. No daily news cycle anxiety. Just good, solid financial planning.

But when markets get volatile, we suddenly think that stressed-out version of ourselves is smarter than the person who thoughtfully designed the plan.

Spoiler alert: we’re not.

The YOU who planned this strategy was thinking about decades. The you who wants to change it is thinking about today’s headlines.

Trust the process you built. Trust the person who built it. That person was you, thinking clearly.

The whole point of having a long-term investment strategy is so you don’t have to make investment decisions when you’re emotional.

You already made them.

______________________

Check out more investing topics here.

Since 2022, commercial real estate (CRE) investors have been slogging through a brutal downturn. Mortgage rates spiked as inflation ripped higher, cap rates expanded, and asset values fell across the board. The rally cry became simple: “Survive until 2025.”

Now that we’re in the back half of 2025, it seems like the worst is finally over. The commercial real estate recession looks to be ending and opportunity is knocking again.

I’m confident the next three years in CRE will be better than the last. And if I’m wrong, I’ll simply lose money or make less than expected. That’s the price we pay as investors in risk assets.

A Rough Few Years for Commercial Real Estate

In 2022, when the Fed embarked on its most aggressive rate-hiking cycle in decades, CRE was one of the first casualties. Property values are incredibly sensitive to borrowing costs because most deals are financed. As the 10-year Treasury yield climbed from ~1.5% pre-pandemic (low of 0.6%) to ~5% at the 2023 peak, cap rates had nowhere to go but up.

Meanwhile, demand for office space cratered as hybrid and remote work stuck around. Apartment developers faced rising construction costs and slower rent growth. Industrial, once the darling of CRE, cooled as supply chains froze and then normalized.

With financing costs up and NOI growth flatlining, CRE investors had to hunker down. Headlines about defaults, extensions, and “extend and pretend” loans dominated the space.

Signs the Commercial Real Estate Recession Is Ending

Fast-forward to today, and the landscape looks very different. Here’s why I believe we’re at the end of the CRE downturn:

1. Inflation Has Normalized

Inflation has cooled from a scorching ~9% in mid-2022 to under 3% today. Lower inflation gives the Fed cover to ease policy and investors more confidence in underwriting long-term deals. Price stability is oxygen for commercial real estate, and it’s finally back.

2. The 10-Year Yield Is Down

The 10-year Treasury, which drives most mortgage rates, has fallen from ~5% at its peak to ~4% today. That 100 bps drop is meaningful for leveraged investors. A 1% lower borrowing cost can translate into 10%+ higher property values using common cap rate math.

If the 10-year Treasury bond yield can get to 3.5% and the average 30-year fixed rate mortgage can get to 5.5%, I expect to see a large uptick in real estate demand. We’re not that far away, especially if the Fed cuts by 100 basis points (1%) over the next year.

3. The Fed Has Pivoted

After more than nine months of holding steady, the Fed is cutting again. While the Fed doesn’t directly control long-term mortgage rates, cuts on the short end generally filter through. The psychological shift is also important: investors now believe the tightening cycle is truly behind us.

The below chart indicates about six Fed rate cuts until the end of 2026, totaling ~1.5%. Such market expectations will change over time, but this is where we’re at right now.

4. Distress Is Peaking

We’ve already seen the forced sellers, the loan extensions, and the markdowns. Many of the weak hands have been flushed out. Distress sales, once a sign of pain, are starting to attract opportunistic capital. Historically, that transition marks the bottom of a real estate cycle.

5. Capital Is Returning

After two years of sitting on the sidelines, capital is coming back. Institutional investors are underweight real estate relative to their long-term targets. Family offices, private equity, and platforms like Fundrise are actively raising and deploying money into CRE again. Liquidity creates price stability.

Where the Opportunities Are In CRE

Not all CRE is created equal. While office may be impaired for years, other property types look compelling:

• Multifamily: Rent growth slowed but didn’t collapse. With little-to-no supply of new construction since 2022, there will likely be undersupply over the next three years, and upward rent pressures.
• Industrial: Warehousing and logistics remain long-term winners, even if growth cooled from the pandemic frenzy.
• Retail: The “retail apocalypse” was overstated. Well-located grocery-anchored centers are performing, and experiential retail has staying power.
• Specialty: Data centers, senior housing, and medical office continue to attract niche capital. With the AI boom, data centers is likely to see the most amount of CRE investment capital.

As a capital allocator, I’m drawn to relative value. Stocks trade at ~23X forward earnings today, while many CRE assets are still priced as if rates are permanently at 2023 levels. That’s a disconnect worth paying attention to.

Don’t Confuse Commercial Real Estate With Your Home

One important distinction: commercial real estate is not the same as your primary residence. CRE investors are hyper-focused on yields, cap rates, and financing. Homebuyers, on the other hand, are more focused on lifestyle and utility. As a result, the rise in interest rates tend to have less of a negative impact in residential home prices.

For example, I bought a new home in 2023 not to maximize financial returns, but because I wanted more land and enclosed outdoor space for my kids while they’re still young. The ROI on peace of mind and childhood memories is immeasurable.

Commercial real estate, by contrast, is about numbers. It’s about cash flow, leverage, and exit multiples. Yes, emotions creep in, but the market is far more ruthless.

Risks Still Remain In CRE

Let’s be clear: calling the end of a recession doesn’t mean blue skies forever. Risks remain:

• Office glut: Many CBD office towers are functionally obsolete and may never recover.
• Debt maturities: There’s a wall of loans still coming due in 2026–2027, which could test the market again.
• Policy risk: Tax changes, zoning laws, or another unexpected inflation flare-up could derail progress.
• Global uncertainty: Geopolitical tensions and slowing growth abroad could spill into CRE demand.

But cycles don’t end with all risks gone. They end when the balance of risks and rewards shifts in favor of investors willing to look ahead.

Why I’m Optimistic About CRE

Roughly 40% of my net worth is in real estate, with ~10% of that in commercial properties. So I’ve felt this downturn personally.

But when I zoom out, I see echoes of past cycles:

• Panic selling followed by opportunity buying.
• Rates peaking and starting to decline.
• Institutions moving from defense back to offense.

I recently recorded a podcast with Ben Miller, the CEO of Fundrise, who’s optimistic about CRE over the next three years. His perspective, combined with the improving macro backdrop, gives me confidence that we’ve turned the corner.

CRE: From Survive to Thrive

For three years, the mantra was “survive until 2025.” Well, here we are. CRE investors who held on may finally be rewarded. Inflation is down, rates are easing, capital is flowing back, and new opportunities are emerging.

The end of the commercial real estate recession doesn’t mean easy money or a straight-line rebound. Unlike stocks, which move like a speedboat, real estate moves more like a supertanker – it takes time to turn. Patience remains essential. Still, the tide has shifted, and this is the moment to reposition portfolios, acquire at attractive valuations, and prepare for the next upcycle.

The key is to stay selective, keep a long-term mindset, and align every investment with your goals. For me, commercial real estate remains a smaller, but still meaningful, part of a diversified net worth.

If you’ve been waiting on the sidelines, it might be time to wade back in. Because in investing, the best opportunities rarely appear when the waters are calm—they show up when the cycle is quietly turning.

Readers, do you think the CRE market has finally turned the corner? Why or why not? And where do you see the most compelling opportunities in commercial real estate at this stage of the cycle?

Invest In CRE In A Diversified Way

If you’re looking to gain exposure to commercial real estate, take a look at Fundrise. Founded in 2012, Fundrise now manages over $3 billion for 380,000+ investors. Their focus is on residential-oriented commercial real estate in lower-cost markets. Throughout the downturn, Fundrise continued deploying capital to capture opportunities at lower valuations. Now, as the CRE cycle turns, they’re well-positioned to benefit from the rebound.

The minimum investment is just $10, making it easy to dollar-cost average over time. I’ve personally invested six figures into Fundrise’s CRE offerings, and I appreciate that their long-term approach aligns with my own. Fundrise has also been a long-time sponsor of Financial Samurai, which speaks to our shared investment philosophy.

To expedite your journey to financial freedom, join over 60,000 others and subscribe to the free Financial Samurai newsletter. You can also get my posts in your e-mail inbox as soon as they come out by signing up here.

Many business owners feel like they have an obligation to find the best expense management system for their business, regardless of the cost. Frequently, they don’t consider the whole cost, including what rewards they might be leaving on the table.

Many of those same business owners maximize their earnings on personal credit cards, but they choose a different path for their company, where they likely have much greater total expenses.

Are expense management platforms such as Ramp, Rippling and Brex the right choice for your business? The devil is in the details.

What do expense management platforms offer?

Companies such as Ramp offer expense management and credit cards in one place. Rippling and Brex are examples of two platforms that offer some level of “rewards” when you spend money on their credit cards. Rippling is more straightforward, offering up to 1.75% cash back, while Brex offers its own points to businesses. The Brex rewards are more valuable when redeeming toward travel expenses but are otherwise much less lucrative than traditional corporate credit cards that earn rewards.

The added value programs like Ramp, Rippling and Brex tout is control over expenses, spending rules and card issuance. They offer a number of APIs that promise to connect your key systems to their expense management software to streamline bookkeeping and expense management.

How much expense management do you need?

Many businesses set out to decide which expense management platform is correct, but I think that’s the wrong question. The best question to start with is: “What sort of expense management is best for your business?”

Many popular accounting platforms can provide automation for importing and reconciling credit card charges. Where you might need a more all-in-one platform, such as Ramp or Rippling, could be if you need to have very stringent or specific spending policies. Many corporate credit cards will allow you to set advance spending controls, but companies such as Rippling build in rules-based logic, such as allowing a higher airline fare if the employee is booking during a peak travel period.

Crunch the numbers

Once you know the ideal level of expense management that makes sense, consider what you’re leaving on the table. At a minimum, you should expect to find a 2% cash-back card that fits your business needs. When you compare that to Rippling’s advertised 1.75% cash back, that might not seem like a very big gap.

However, you should consider that you can earn points and miles at higher rates. For instance, you can earn 10 miles per dollar spent on hotels and car rentals booked through the Capital One Travel portal when making purchases with the Capital One Venture X Business. That’s effectively a 10% rebate on select travel expenses, which can be huge if you have a lot of those.

Strike the right balance

Some businesses absolutely need rigorous expense management, but in many cases, they leave money on the table by going all-in on and foregoing valuable rewards that can be earned from popular business credit cards. A hybrid strategy is usually a better bet.

For example, at my business, we use an accounting system tailored to our restaurants. This system automates a number of repetitive tasks and syncs up invoices and expenses from many of our key vendors. And the platform also makes it easy to sync up our corporate credit cards.

The rewards we earn on those corporate cards go much further than just paying for my next family vacation. They enable us to send employees on dream trips or make sure they don’t have to worry about expenses when they need to visit a sick family member.

Bottom line

Take a look at the full picture of benefits before deciding if spending through an expense management platform really makes sense for your business.

They can be helpful if you have a lot of employees who travel and dine on the company’s dime. However, it’s harder to justify having spending controls in other categories (such as shipping or advertising) when you could be leaving considerable rewards on the table.

When I worked in Equities at Goldman Sachs and Credit Suisse, we would occasionally bring a hot IPO deal to market. During the company roadshow, we’d take management around to meet one on one with our largest investors and clients. Sometimes the IPO was so in demand that many clients could not even get a one on one, and instead had to settle for a group breakfast, group lunch, or group dinner.

After meeting management, clients would submit their indications of interest. As the lead book runner of the IPO, we decided how much of an allocation each client would get. And let me tell you, that process was more difficult than deciding which friends and relatives to leave off the guest list for a limited budget wedding.

Some clients got zero shares, which made them understandably angry. But they were zeroed because they either did too little business with us or were known for flipping shares for a quick profit soon after trading began. Think small hedge funds.

Other clients received far more than the average allocation. If the IPO was ten times oversubscribed, the average client might get 10 percent of their request. But our biggest clients might get 30 percent to 70 percent of what they asked for, based on the business they generated. Think Capital Group, Fidelity, and BlackRock.

When trading began, there was often an immediate pop in the share price, delivering instant gains to these institutions. In other words, the wealthiest clients who paid the most in fees often got the largest allocations and the greatest returns.

You Are Not Rich or Famous Enough to Get a Large Allocation in a Hot IPO

Trying to get a meaningful allocation in a hot IPO is a futile process for the average retail investor. Without enormous wealth, fame, or connections, you simply have no chance. Take Figma (FIG) for example. The design company raised $1.2 billion in its IPO, valuing it at $19.8 billion, the same price Adobe had tried to buy the company for a few years earlier.

Figma and its book runners allocated a tiny portion of shares to retail trading platforms like Robinhood. If you were a Robinhood client, you could indicate your desired allocation, but you would be filled entirely at their discretion. With Figma’s IPO forty times oversubscribed—$48 billion in demand for $1.2 billion in shares—the average allocation was just 2.5 percent of what was requested. In reality, many retail investors got 1 percent or less.

Imagine requesting 1,000 shares worth $33,000 and getting just one share worth $33, like one investor below who had $10 million with his broker. What a slap in the face!

Put in a 1,000 share indication for Figma $FIG IPO on $HOOD, with expectation of the usual 100 share allotment.

Got 1 damn share and I have over $10M with this broker.

There is literally not point to 1 share. Wasted real estate on my screen. pic.twitter.com/e5ur0Ig9op

— Say No To Trading (@SayNoToTrading) July 31, 2025

Or maybe you were luckier, and got 1 share out of a 600 indication of interest like this fella below. But who cares? 1 share doesn’t do anything for anybody at $33/share.

Examples like these are everywhere. Book runners know that many clients and individuals play the game of inflating their indications of interest, so they tend to cut allocations even further to offset the bluffing.

Big Gain On IPO Day

Figma’s IPO ended up popping by 333 percent on its first day of trading, closing at $122 a share. The bookrunners knew it would likely perform well because they had already seen strong demand from institutional clients willing to buy at even higher prices.

If the bookrunners played their allocation cards right, they enriched their most valuable clients by giving them more than the average allocation and making sure those clients knew it. In return, those clients should reward them with more business.

It is not written down anywhere, but that is how business is done. You take care of your clients, and your clients take care of you. Imagine getting a $10 million allocation and making $27 million in one day. It’s like free money if you’re already a big client.

The Johnny Come Lately IPO Investor

After a 333 percent pop on day one, would you aggressively buy a stock trading at ~600 times forward earnings? Probably not. Yet plenty of retail investors get swept up in the hype and jump in. Why not? YOLO for even greater riches.

The problem is that when it is in the headlines, it is already in the price. Once a company is public, the advantages and relative safety of being an early investor vanish. You are now at the mercy of market sentiment and unpredictable outside events.

Say you bought Figma after its IPO jump to $122. The next morning you might have been thrilled to see it spike to $133. But by the end of the day, it had fallen more than 20 percent from that high. That is a rough ride for a new shareholder.

Nobody knows where Figma’s share price will go from here. But if your entry was on IPO day, your average cost is somewhere between $107 and $122 a share at a 600 times forward P/E multiple. That is a steep hill to climb for positive returns. The company now has to set ambitious revenue and earnings targets and beat them consistently to justify that valuation.

Companies Are Staying Private For Longer

In the past, investing in a company during its IPO was safer. For example, Google was a private company for six years (9/1998 – 8/2004) before it IPOed, raising $1.67 billion at a $23 billion valuation. If you invested in Google during its IPO and held on until today, you would have obviously done very well.

But today, companies are staying private for longer with more of the gains accruing to private investors. As a result, it’s only logical to allocate a larger percentage of your investable capital to private growth companies. I aim for between 10 percent to 20 percent.

The Better Way to Invest in Hot IPO Companies

Do you want to fight for IPO scraps and overpay once a growth company goes public? Or would you rather own shares before the public bidding frenzy even begins? Most rational people would choose the latter.

The reality is that many investors either do not understand how the IPO process works or do not realize there is a more strategic way to gain exposure before a company lists. A big reason for that is most people are not accredited investors and are therefore locked out of private company and private fund opportunities.

If you are accredited and want to own stakes in fast-growing private companies—many in the tech sector—you can allocate a portion of your capital to venture capital funds.

The traditional model typically requires a minimum investment of $100,000 to $200,000 and relationships with the fund’s general partners to even get in the door. Once in, you generally commit capital over three years, hope the partners choose wisely, and pay two to three percent in annual fees plus 20 to 35 percent of profits.

Even in venture funds, who you are determines how much you can invest. If a fund is run by a general partner with a stellar track record, demand to invest can exceed the fund’s target raise.

Sequoia Capital, one of the best venture funds in history, is a prime example. Only employees, jailed star founders like Sam Bankman-Fried, large institutions, and close friends and family typically get in—and their allocations are still often reduced.

The Venture Capital Funds That Invested in Figma

Here are some of the VC firms that backed Figma before its IPO and the returns they saw at the offering price. Most investors would not have had the chance to participate in these funds. And even if you did, your allocation would depend heavily on who you are.

Every venture fund sets aside a portion for friends and family as a goodwill gesture and strategic move. Fundraising can be tough, and getting on the capital table of the next hot startup is fiercely competitive. If a VC is raising a $500 million fund, they might earmark $50 million for friends and family.

A personal finance blogger and two-time national bestselling author might be invited to invest $150,000 in such a fund. That investor could add value by promoting the fund’s portfolio companies or aiding future fundraising.

Meanwhile, the CEO of a public company with a strong track record of angel investing could be offered the chance to invest $1 million to $2 million in the same fund. Their involvement elevates the fund’s profile, opens doors to promising startups, and can even lead to strategic partnerships. If appropriate, the CEO’s company might even become a major client for one of the fund’s investments, e.g. Microsoft being an investor and customer of OpenAI.

Demand For Becoming A LP In These Venture Capital funds

Given the success of the Figma IPO for these funds, demand from individuals and institutions to invest in future vintages will only grow. The venture capital firms will then have to decide how large a fund to raise and how to allocate space among investors.

I am personally invested in three vintages of one of the venture firms that backed Figma. Unfortunately, my investment amounts in each are not large enough to create truly life-changing wealth if another Figma emerges. Part of that is because I have a relatively small investment amount ($140,000 – $200,000 each). The other part is that my definition of “life-changing money” has shifted upward since changing my life for the better in 2012, when I left my job.

The Better Way to Invest in Companies With Promising IPOs

Instead of scrambling for scraps during an IPO or paying inflated prices once a company lists, I prefer to invest while the business is still private. As a private investor, here are the key decisions you must make:

1. Choose the fundraising stage wisely.
   Not every private company makes it to an IPO or has an enriching liquidity event. Historically, Series B or C rounds tend to offer the best balance between risk and reward for companies that could eventually go public.
2. Identify the right company or venture capital firm.
   This is easier than most people think. Data on VC firm performance and company growth is widely available. The challenge is gaining access. Being an angel investor is extremely difficult given you often don’t get the best looks.
3. Network and provide value.
   Money is abundant. What is scarce is value-add capital—investors who bring expertise, connections, or platforms that help a company grow. To get into top-tier opportunities, you must offer something more than a check.
4. Be patient.
   Once you secure an allocation, you fund capital calls, provide support where possible, and wait—often 5 to 10 years—for liquidity events.

An alternative approach, and the one I am pursuing more now, is to invest in an open-ended venture fund that already owns private companies I want exposure to. With no gatekeeping or throttled allocations, I can decide when and how much to invest. If I ever need liquidity, I can sell shares.

Not Participating In The Hunger Games for IPOs

I doubt most retail investors had even heard of Figma before its IPO. But I am confident far more people know OpenAI, Anthropic, Databricks, and Anduril. If and when these companies go public, I expect their IPOs will be just as oversubscribed as Figma’s.

As a private investor in these names through Fundrise Venture, I will not have to beg for IPO shares. I will already own them. When they go public, I will be on the receiving end of the liquidity event, not chasing it in the open market. I vastly prefer this position. And the amazing thing is, everybody can position themselves in the same way given anybody can invest in Fundrise Venture. It’s just that not everybody pays attention or reads sites like Financial Samurai.

The difference in opportunity between private and public investing is staggering. And I do not expect that gap to close anytime soon, because most people stick to index funds and ETFs. That’s perfectly fine as it’s a proven path to steady wealth building. But I enjoy the calculated risk of chasing multi-baggers.

I caught my first one during the Dotcom bubble in 2000, when a 50x return in VCSY gave me the down payment for my first San Francisco property in 2003. That win opened my eyes to what’s possible. I have had plenty of losers too, but that is part of the game when you reach for outsized returns.

Chasing Hot IPOs Is a Tough Way to Make Money

Trying to get a meaningful allocation in a hot IPO as a retail investor is like bidding on a fully remodeled, panoramic view home on a triple-size lot in the most desirable neighborhood. Everyone wants it, and the odds are stacked against you in a crazy bidding war.

If you want better odds, you need to change your approach. That means gaining exposure before the crowd even knows the opportunity exists. Instead of waiting for the hot property to hit the market, why not send personalized, handwritten letters to off-market owners to see if they’d be willing to sell? Or hire a top agent with access to private listings for a first look.

Outperforming in investing requires access, patience, and a willingness to take calculated risks. Build your network, create value, and enhance your reputation to gain access to private investment opportunities.

Or, you can skip all that and just invest in an open-ended venture fund which owns companies you want to invest in.

After Figma, the next company I’m most excited about seeing go public is Rippling, also based in San Francisco. You’ve probably never heard of it either. It’s in the HR software space. However, for those who know the backstory, it’s a fascinating tale of redemption and growth. If it does IPO, I’ll be sure to share how it goes!

Invest in Private Growth Companies

Companies are staying private longer, which means more of the gains are going to early private investors rather than the public. If you do not want to fight in the “Hunger Games” for a tiny IPO allocation, consider the Fundrise Venture instead.

Roughly 80 percent of the Fundrise venture portfolio is in artificial intelligence, an area I am extremely bullish on. In 20 years, I do not want my kids asking why I failed to invest in AI or work in AI when the industry was still in its early stages.

The investment minimum is only $10, compared with most traditional venture capital funds that require $200,000 or more—and that’s if you can even get in. With Fundrise Venture, you can also see exactly what the fund is holding before deciding how much to invest. You don’t need to be an accredited investor either.

For new investors, Fundrise currently offers a $100 bonus if you invest between $10,000 and $24,999, and a $500 bonus if you invest $25,000 or more. I did not realize this until I opened a new personal investment account earmarked for my children, so I decided to invest $26,000. This is on top of the ~$253,000 I have invested ($100,000 added in June 2025) through my corporate account.

Fundrise is a long-time sponsor of Financial Samurai. I am thrilled to have a partner I both believe in and invest in myself. I have met with and spoken to Ben Miller, Fundrise’s cofounder and CEO, multiple times, and our investment philosophies are closely aligned.

Ever since I left my day job in 2012, I’ve used a form of the dumbbell investing strategy to grow my wealth while protecting against large losses. It’s a framework that’s helped me stay invested during uncertain times—especially when I felt the urge to hoard cash or sit on the sidelines.

If you’re in a situation where you know you should take some risk, but you’re also worried about losing money, the dumbbell investing strategy is worth considering.

What Is the Dumbbell Investing Strategy?

The dumbbell investing strategy involves allocating a roughly equal portion of your investable assets into high-risk, high-reward investments on one end, and low-risk, capital-preserving investments on the other.

If you’re operating with a 50/50 risk split—like I suggest in my post about when to stop taking excess risk—you’re already applying a version of the strategy. It’s especially useful when you’re uncertain about the macroeconomic environment or your personal financial situation.

Why I First Embraced the Dumbbell Strategy

The most uncertain times in my life were:

• Graduating from college without a written job offer in finance (came a month later while I was traveling in Japan)
• Leaving my career at 34 and wondering whether I had made a huge mistake betting on myself
• Becoming a father in 2017 and questioning whether our passive income was truly enough to keep up with inflation

Each time, I wanted to invest in my future and my family’s, but fear of loss made me hesitate. That’s why I turned to the dumbbell investing strategy after I retired and became a father. It gave me the psychological permission I needed to take action. Because the longer you sit on the sidelines avoiding risk, the more likely you are to fall behind.

Note: When I started working at Goldman Sachs in July 1999, I felt like I had won the lottery and decided to invest 100% of my savings into stocks. With strong income potential and modest expenses, going risk-on seemed appropriate. But I quickly received a rude awakening when the dot-com bubble began to burst on March 10, 2000. The NASDAQ would bottom on October 9, 2002, down 78%, and it wouldn’t fully recover until April 24, 2015—a long 15-year wait just to get back to even.

Why I’m Deploying the Dumbbell Strategy Again in 2025

Today, I’m more financially secure than in the past. But I’m also a lifelong investor, and right now the market gives me pause. Between tariffs, new legislation, stretched valuations, elevated interest rates, and AI hype cycles, I’m not rushing to load up on the S&P 500 at 22X forward earnings.

Still, I believe in dollar-cost averaging and that the market will be higher over time. But when uncertainty is high, the temptation to hoard cash increases. The problem? By the time certainty returns, the easy gains have often already been made.

Take the March–April 2025 tariff-induced selloff. If you waited for resolution, instead of buying the dip during the period of most uncertainty, you would’ve missed out on a 20%+ rebound. The best returns tend to go to those who act when others are frozen.

This is why, rather than stop investing, I’m leaning on the dumbbell strategy again.

The Conservative End of My Dumbbell

As the person responsible for our family’s financial well-being, I feel constant pressure to deliver a good-enough lifestyle, if not a great lifestyle. Every dollar saved or invested in risk-free income is a step closer to peace of mind.

My ultimate goal is to generate $380,000 in gross passive income a year, up from about $320,000 currently. That $60,000 gap is what I’m methodically trying to close by the end of 2027. Once achieved, I will deem us financially independent once more.

With Treasury yields still above 4%, I saw an opportunity to lock in solid returns with no risk. So I deployed capital into a mix of short-term and longer-duration government bonds.

On one end of my dumbbell, I purchased:

• $100,993.74 in 3-month Treasury bills yielding ~4.4%
• These will mature soon, and I’ll continue to roll them into similar duration or longer-term bonds, depending on interest rate trends

Over the next 12 months, this position alone will generate roughly $4,400 in risk-free passive income, reducing my annual deficit to about $53,600. Passive income progress feels wonderful!

The Aggressive End Of My Dumbbell

Now that I’ve shored up the conservative end of my dumbbell investing strategy, it’s time to swing to the aggressive side.

I could simply invest another $100,000 into the S&P 500, which I normally allocate around 70% of my public equity exposure to. But the S&P 500 feels expensive today, and I’m already heavily invested. Instead, I want to put capital toward what I’m both most interested in—and most concerned about: artificial intelligence.

AI is already disrupting the job market, and my biggest worry is that it will make spending a fortune on college an increasingly poor financial decision. Entry-level jobs are at the highest risk of being automated or eliminated. As a parent of two young children (8 and 5), this concern weighs heavily on my mind.

To hedge against a potentially difficult employment future for them, I feel it’s imperative to invest in the very technology that might harm their prospects. Ideally, they’ll learn how to harness AI to boost their productivity, or even join an AI company and build wealth of their own. But those outcomes are uncertain.

What I can do now is invest directly in the AI revolution on their behalf.

Investing In Artificial Intelligence

As a result, I’ve invested another $100,000 in Fundrise Venture, which holds positions in leading AI companies such as OpenAI, Anthropic, Databricks, and Anduril. If AI ends up eating the world, I want to make sure they have a seat at the table—at least financially. I’m also investing additional capital through closed-end venture capital funds as they call capital.

My hope is that owning a basket of private AI companies will compound at a much faster rate than the S&P 500, given these companies are growing much faster. But of course, there are no guarantees.

The Dumbbell Investment Strategy Is Best for Deploying New Cash

The dumbbell investing strategy made it easy for me to reinvest a little over $200,000 in cash from my home sale. Allocating $100,000 into T-bills gives me peace of mind that, no matter how bad the economy or markets get, at least half of my investment is completely safe and earning risk-free interest.

Meanwhile, if AI mania continues, I have $100,000 positioned to ride the wave higher. Both allocations make me feel good—and how you feel about your investments matters. The more confident you are, the more likely you’ll stay invested and keep building wealth by investing more regularly. That’s why, if I receive another influx of cash or want to redeploy existing funds, I’ll likely continue growing this dumbbell strategy.

The dumbbell approach works best when you have new money to invest or idle cash sitting around during uncertain times. However, rebalancing an existing portfolio into a 50/50 split between risk-free and risk assets is a different matter. Your broader asset allocation should reflect your age and stage in life. A 50/50 allocation might be appropriate, but large rebalancing moves can trigger tax consequences you must consider carefully.

Example Of Using The Dumbbell Strategy To Get To An Ideal Overall Net Worth Allocation

For example, suppose I already have a $1 million investment portfolio and inherit $200,000 in cash, bringing my net worth to $1.2 million. At 38 years old with 15 more years of planned work ahead, I’m comfortable taking more risk. I’d be fine investing 90% of my net worth ($1,080,000) in risk assets and starting a side business to pursue growth opportunities.

If my original portfolio consisted of $980,000 in risk assets and $20,000 in cash and bonds, I could easily apply the dumbbell strategy by allocating $100,000 of the new cash to municipal bonds and $100,000 to stocks. This would bring my total to $1,080,000 (90%) in risk assets and $120,000 (10%) in risk-free investments—perfectly aligning with my ideal 90/10 allocation.

A Simple Investing Framework for Peace of Mind and Growth

The dumbbell investing strategy offers a clear and practical way to deploy new cash, especially during times of uncertainty. By allocating capital to both low-risk and high-risk assets, you gain the emotional reassurance of safety while maintaining exposure to upside potential. It’s a flexible approach that can be tailored to your financial goals, risk tolerance, and stage in life.

Whether you’re investing an inheritance, reallocating proceeds from a home sale, or simply sitting on excess cash, the dumbbell strategy provides structure without sacrificing opportunity. Best of all, it helps you stay motivated and confident—two essential ingredients for long-term investing success.

So the next time you find yourself with idle cash and decision paralysis, consider the dumbbell approach. You just might sleep better at night while still building wealth during the day.

Readers, have you ever considered using the dumbbell investing strategy during times of uncertainty? What potential flaws or additional benefits do you see with this approach? I’d love to hear your thoughts.

Balance Risk and Reward With a Free Financial Check-Up

If you’re sitting on new cash or reevaluating your portfolio during uncertain times, a second opinion can make all the difference. One smart move is to get a free financial check-up from a seasoned Empower financial advisor.

Whether you have $100,000 or more in taxable accounts, savings, IRAs, or a 401(k), an Empower advisor can help you spot hidden fees, unbalanced allocations, or overlooked opportunities to improve your risk-adjusted returns. It’s a no-obligation way to stress-test your current strategy—whether you’re building a dumbbell portfolio or considering a full rebalance.

Clarity brings confidence. And when it comes to investing, confidence helps you stay the course.

The statement is provided to you by Financial Samurai (“Promoter”) who has entered into a written referral agreement with Empower Advisory Group, LLC (“EAG”). Click here to learn more.

Diversify Beyond Stocks and Bonds

A classic dumbbell strategy includes bonds and equities—but don’t forget about real estate. I like to treat real estate as a hybrid: it offers the income stability of bonds with the potential appreciation of stocks.

I’ve invested over $400,000 with Fundrise, a platform that allows you to passively invest in diversified portfolios of residential and industrial properties—many in the high-growth Sunbelt region. With over $3 billion in assets under management and a low $10 minimum, Fundrise has been a core part of my investment strategy, especially when I’ve had cash to redeploy.

Fundrise also offers Venture, giving you access to private AI companies like OpenAI, Anthropic, and Databricks. As mentioned earlier, I’m heavily focused on AI’s transformative potential and want exposure not just for returns—but for my kids’ future too.

With a dumbbell strategy, it’s not just about balance—it’s about positioning yourself for both security and growth. Fundrise is a long-time sponsor of Financial Samurai as our investment philosophies are aligned.

To increase your chances of achieving financial independence, join 60,000+ readers and subscribe to my free Financial Samurai newsletter here. Financial Samurai began in 2009 and is the leading independently-owned personal finance site today. Everything is written based off firsthand experience.