Beyond The Stock Market Episode 09 Part 02

The Author of “Invest Like a Billionaire” Shares His Top Three Tips

Bob Fraser, Sept 17, 2026

Episode Summary

In part two of Beyond the Stock Market’s conversation with Bob Fraser, CFO and chief macro strategist of Aspen Funds, he shares what everyday investors can learn from billionaires about building and protecting wealth through alternatives and private credit.

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EPISODE 09 PART 02

The Author of “Invest Like a Billionaire” Shares His Top Three Tips

Bob Fraser, Sept 17, 2026

In part two of Beyond the Stock Market’s conversation with Bob Fraser, CFO and chief macro strategist of Aspen Funds, he shares what everyday investors can learn from billionaires about building and protecting wealth through alternatives and private credit. Fraser emphasizes treating investing like a business (including setting up a hub LLC), creating a disciplined allocation plan with uncorrelated “buckets,” and focusing far more on risk than return to avoid losses. He explains how structure through allocation limits and periodic rebalancing can help investors sell outperformers and redeploy into under-allocated areas. Fraser stresses operator selection as critical in private investing, and predicts growing retail access to alternatives. In rapid fire, he highlights compounding, sentiment, and the risks of chasing AI-driven public markets.

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Episode Transcript

Ep 09 Part 02

Brian Dally: Welcome back to Beyond the Stock Market, a Groundfloor Production. We're back for part two of our conversation with Bob Fraser, CFO and chief macro strategist of Aspen Funds. Bob, thanks again for joining us. In the last segment, we learned about your day job as a private markets investor and all that that entails and how you got there. Now, I want to turn to start picking your brain on how to think like a billionaire.

So you're a podcast host, you're a best-selling author on this topic of how to invest like a billionaire. What can everyday investors learn from the ultra-wealthy in terms of building and protecting wealth through alternative investments like real estate and private credit?

Bob Fraser: Yeah, such a great question. And, first off, it's treat your investments like a business. Too many people don't pay enough attention, they don't research, they don't go to conferences, they don't [00:01:00] network with other investors. If you were given a billion dollars of someone else's money and you're going to manage it as a professional, what are you going to do?

First thing you do is treat it like a business. You're going to find the best events, you're going to find the best resources, you're going to find good advisors, and you're going to treat it like a business. And the first thing I tell investors to do is create a hub LLC that's a business, that's your investment business, and spend money on masterminds, on investor clubs, on travel, and become a business person.

The second thing is to make a plan. To come up with a disciplined approach.

And primarily the mathematics say these uncorrelated buckets. So come up with an allocation strategy for your portfolio that has different buckets in it of the different asset classes that have different risk [00:02:00] and different correlation profiles.

And then be very, very disciplined. Another thing that the billionaires do that's different from the average guy is they focus much more on risk than they do on return. As a guy who's a sponsor, I can tell you, if I put something out out there that's going to say, "I'm going to say 35% returns," I'll get so many people to throw money at me versus if I say, "13% returns."

Even if I say the 30% is very, very risky, it doesn't matter. And it's ridiculous because it's way more important to not lose money than it is to maximize your returns. Mathematically speaking, losing money is far more impactful to your overall returns than your percentage of return.

So you need to focus on risk [00:03:00] first, much, much more. Don't lose money no matter what. It's much more important than maximizing your returns. So, big difference. And being disciplined. I found I was very unfocused when I started. Whatever deal crossed my desk that I fell in love with, I'd throw money at it. And, no, no, no. Be disciplined.

If something does not check every box, you simply pass and you wait. Don't let your money burn a hole in your pocket. You're in no rush. All the mistakes I made, the worst mistakes I made were all at the beginning, because I was just so anxious to deploy my capital, and that's a huge mistake.

And then be tax smart. And the billionaires are far better at, there was a ProPublica was it, I think, or some group came out with a big report years ago about how the billionaires pay less taxes than everybody else, [00:04:00] and they do that by using debt primarily. And so we need to get very creative with the way we use debt.

Brian Dally: So I think that taps into so many good themes about why it's dangerous to be a retail investor, especially in public markets. You lived that. You've been subject to the whims of the public markets. We talked a little bit about why alternative markets, but when you think about alternatives versus public markets, how do the billionaires use structure and not just strategy?

Because it's not just picking the right area to invest in, and having the right strategy. There's also something that you've talked about around structure. Can you describe that a little bit more?

Bob Fraser: Well, and it is about buckets. It is about making sure you allocate. So right now, most billionaires are literally roughly 20% to 30% in public markets. [00:05:00] Right now, the public markets are massively overpriced. And now, they could get more overpriced. And I'm not saying they're going to go down. Who knows how high a tree can grow? But the risk is there. So play the public markets, but if only 20% to 30% of your portfolio is in there, and it takes a dump, you're fine.

So, you must have uncorrelated things. So what's going to happen to the price of oil if the market crashes? Nothing. Very little. They're just simply uncorrelated. So natural resources is extremely uncorrelated. Infrastructure is extremely uncorrelated. So you have your allocation buckets, and you do not violate them. When your bucket's full, you pass on deals in that space. And then what you do is you do portfolio rebalancing. Once a year. You don't want to do it too often. So when there's big moves in the market, you can rebalance [00:06:00] in any one of your markets, or just once a year or even once every other year, you rebalance. And what that means is, anything that's now grown past your target allocation, you sell it off.

And guess what? You're selling at the top. And you may not be selling at the top, but you're selling at a top. And then you're redeploying that into the places where you're under-allocated, which means these things are on sale. So, it's simply using structure as your strength, and it's all mathematically based.

Brian Dally: I like the way you described that. I think, certainly growing up as an investor, I learned a thing or two about that. I wonder though, when billionaires are looking at different asset classes they can invest in, like you were talking about, they also have to select an operator, and you've got to balance [00:07:00] asset risk with operator risk. What is that dimension like? How does the assessment of operator risk work?

Bob Fraser: This is one of the things that the billionaires and the professional investors are way different than retail. They invest an enormous amount of effort and energy in evaluating operators. And because, as I said before in the previous episode, the example of the REITs. A public market REIT, the best guys are a tiny bit better than the worst guys. You go to the public side, the best guys are double the returns of the public side. The worst guys lose money. They can't even make any money. So what does that tell you? You can make a lot more money than the public markets. You can beat the public markets, but you can also get creamed.

And so operator selection is everything. It is everything. So first most important thing is your buckets. [00:08:00] Manage your buckets and don't overallocate. The second most important thing in private investing is operator selection. Do operator selection.

And I'm telling you, they spend just enormous amounts of time and effort. I read all of David Swensen's materials, who was the guy who founded this whole model and the guy who ran the Yale Endowment, for many, many years. And he said the amount of effort that they spend to do sponsor due diligence is insane.

Brian Dally: Well, because the asset and the buckets will get you in the neighborhood, but that doesn't mean you're in a great house. You've got to make sure it's well-built and properly constructed and maintained. Yeah, that makes a lot of sense to me.

Bob Fraser: A I've, uh, And I've made plenty of stinker investments. And almost all the stinker investments I've made were sponsor-related stinkers.

Brian Dally: Yeah, so you're in the right neighborhood, but just wrong house.

Bob Fraser: Yes.

Brian Dally: Wrong street. Where do you see [00:09:00] alternative investments going over the next five years?

Bob Fraser: They're clearly on a massive upward trajectory. I have a couple charts in the book. There's a lot of reasons to love them. Retail is finally starting to discover them, but still barely. Some of the data I've seen is something like, the average retail investor has 2% of their wealth allocated to private alts, when the billionaires have 50% to 60%.

So there's a lot of room. You're very familiar with the investment advisory space, and they are completely untrained on alternatives, and there's a lot of pressure on them, from their clients, to get placed in alternatives. And mostly they're just-- it's not working. They're just trying to scare the shit out of their customers, like, "Oh, you'll lose all your money in that." And it's not working as much as it used to.

Brian Dally: I guess they just sell [00:10:00] the biggest brand name they can get their hand on, and allocate people into that.

Bob Fraser: And advisors, people don't realize your advisor probably knows nothing about alternatives. They don't have to know anything. The Series 65, the Series 7, there's one page on alts. I took the test and I was shocked. So they really don't know anything, and so they're really unqualified to evaluate these opportunities, and they're off platform. They're a pain in their butt. But what's happening, you are seeing retail pushing massively into this space. And what is yet to happen is, we're going to start seeing it, some advisors who are alts heavy. They're starting to do it. I call them unicorns.

We're also seeing a big push to 401(k)s. I don't know if you've seen that. There was a, who is it? Wellington and, I think Blackstone and Schwab, or, I can't remember. There was a [00:11:00] triad of these giants who really had a 401(k) product, a couple 401(k) products in alts, and they were good. I looked at them and, honestly, very impressive.

I didn't look at the specific allocations and the specific things they're placing into, but the structure of this thing is very, very nice.

Brian Dally: So I know for a lot of retail investors, 401(k)s are where they think about the lion's share of their investing. Especially, you pay yourself first out of your paycheck, you get the tax deferral, and everybody wants to grow that as much as they can on a tax-deferred basis, right? So that's pretty exciting for people.

That's one example that you've cited about what's coming for retail investors. What else do you see coming? If they're going to get 401(k)s and they're going to get advisors who actually go deep in this area so that they don't have to go it alone, what else do you think retail investors can look forward [00:12:00] to?

Bob Fraser: I don't know. Those are pretty big, so I'm going to go with those.

Brian Dally: Those are good. Well, we're of course interested at Groundfloor to see how that plays out.

Bob Fraser: I know. What's interesting, it just was launched in June, I think, this big product. But if I'm right, and the public markets are massively overvalued right now, and if they do take a dump, what's going to happen is this alt offering that they have is going to massively outperform.

So the truth is, when the public markets are on fire, no privates can keep up with them. When you're doing 24%, 25%, and 16% returns as it's done the last three years, that's insane, right? But market takes a dump, this is where you're going to be, you're going to learn, because these privates are not taking that kind of dump.

And they're going to outperform.

Brian Dally: There's more downside protection it feels like in a lot of them. Unless [00:13:00] you're in a bad neighborhood or a bad house in a good neighborhood.

Bob Fraser: That's exactly right. But because of the zigzag thing, the uncorrelated thing, right?

Brian Dally: We love to finish these interviews up with a rapid fire Q&A, if you're game. Feel free to try to answer these in one sentence if you can. If you want to expound, okay, too. First one, most misunderstood concept in investing?

Bob Fraser: Compounding. People don't understand that volatility affects compounding, that an unvolatile or a volatile investment does not compound, and a steady investment does.

Brian Dally: One market signal you never ignore.

Bob Fraser: Sentiment. My mother was my best indicator when I was doing the stock tradings. She would call me up and say, "Bob, back up the truck. Invest everything you have right now. It's only going up." I say, "Thank you so much, Mom," and I would sell everything.

And [00:14:00] then at the bottom she'd say, "Sell everything. It's all going to the pooper." I'm like, "Thank you, Mother." And I'd start backing up the truck and buying.

Brian Dally: I love that. What's the biggest mistake you see investors making right now?

Bob Fraser: Chasing the public markets. To me, this is deja vu all over again. This AI craze is like the dot-com craze. It can only go up, and oh my gosh, I just see so many warning signs.

Brian Dally: I mean, right down to the circular financing. I remember being in Silicon Valley in the late '90s and it was the same game.

Bob Fraser: Right. Or you see this open source AI that has no cost. It's a super high-priced product that is competing against a zero price product.

Brian Dally: It's pretty amazing.

Bob Fraser: Oh my gosh. And not to mention that every single AI chip is coming out of TSMC in Taiwan. One drone strike and the AI revolution is over.

Brian Dally: Harrowing to think about.

Bob Fraser: People don't understand the [00:15:00] risk.

Brian Dally: All right. A deal you passed on that you still think about.

Bob Fraser: I remember I was offered to buy data centers for 5 cents on the dollar after the dot-com crash. And they could not unload this stuff.

Brian Dally: Well, how things change. What's the most overhyped trend in finance?

Bob Fraser: Oh, definitely AI.

Brian Dally: Okay. Yeah. If you weren't in finance, what would you be doing?

Bob Fraser: I'd probably be doing another tech startup.

Brian Dally: You can take the guy out of computer programming, but you can't take the computer programming out of the guy.

Bob Fraser: Exactly.

Brian Dally:All right. And if you could leave listeners with one lesson about investing, you've already dropped so many, of people that paid attention along the way. But if there's one lesson you could leave of them with, about investing in risk, what would it be?

Bob Fraser: Managing your downside is far more important than maximizing your upside.

Brian Dally: I love it. That's great.

Time to wrap things up. I really appreciate your time, Bob, and thanks for joining us. It's a pleasure having you here. Hopefully we're all one step closer to thinking like a billionaire now. I hope so.

And for our audience, you can connect with Bob via his LinkedIn, which we'll include in the show notes, or you can visit aspenfunds.us. You can check out all of our podcast episodes at groundfloor.com/podcast. And I just want to thank you for tuning in to Beyond the Stock Market.

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