A million dollars to invest. Four investors. Very different answers.
I joined Chris Larsen, Rob Beardsley, and Bronson Hill for a webinar moderated by Tim Ensmann on how we’d approach that allocation.
The interesting part is what each of us needs the money to do.
Someone building a company, someone approaching retirement, and someone whose income already covers everything they spend can look at the same deal and reach different conclusions. Each could have a reasonable case.
That’s where this conversation got useful.
For me, a meaningful part of the answer is private credit. That might seem unusual given my age and how much of my time goes toward building companies.
But those two things fit together.
When you’re growing a business, cash gets reinvested. You hire people. Buy equipment. Build systems. The equity you’re creating may be worth substantially more down the road, while the amount you can comfortably take home stays limited.
I’ve deliberately delayed some of that compensation because I care about what those businesses can become over the next few decades.
Cash flow from other investments helps me do that from a place of financial stability. I can give the businesses more time without needing every one of them to fund my life today.
That changes how I evaluate an investment. Maximizing the projected return on each individual deal isn’t necessarily what makes the whole thing work.
Rob made a useful point from the other direction: once your cash flow needs are covered, additional income can create a tax burden you don’t particularly need.
An investor with substantial business income may have more reason to prioritize long-term appreciation. Someone trying to replace a paycheck may need distributions much sooner.
Bronson kept bringing the discussion back to that question. Cash flow, tax benefits, appreciation; people often say they want all three. But when the tradeoffs show up, which one actually matters most?
That answer should influence where the money goes.
The conversation also got into an opportunity I see directly in our paving businesses: the gap between doing profitable work and getting paid.
We might finish a job in a day, pay the crew, cover equipment and overhead, and then wait 90 days to collect.
Now have a few record months in a row.
Revenue looks great. Cash can get very tight.
That’s why I’m interested in receivables financing for blue-collar businesses. There’s a real operating problem behind the investment opportunity: companies need working capital to keep delivering work while they wait for customers to pay.
It’s also an example of why I like going deeper into businesses I understand.
At one point, I’d invested in roughly 100 deals as an LP. There are allocations I’d rather have back, and I’ve become much more selective about where I put both money and attention.
Fewer investments can give you more room to understand the operations, the people, and what could go wrong. Concentration still carries risk. Understanding something well doesn’t make that risk disappear.
Rob added another distinction worth considering: owning different types of investments doesn’t necessarily mean you own different underlying exposures. Several positions can still depend on the same favorable interest-rate environment.
Counting deals only tells you so much.
The other big change in my own thinking is liquidity.
I used to be much quicker to put incoming cash back to work. Today, I’m more comfortable waiting. I think about personal expenses, what the businesses might need, and which money I could access under different circumstances.
I’m willing to give up some return for that flexibility.
Having cash available when other people need it can create opportunities. It also gives you more room to make decisions without being forced into them.
That’s how I’d frame the $1M question: start with the commitments, income needs, and risks already in your life. Then decide what role the next allocation should play.
Watch the full webinar, “How I Would Invest $1M Today,” for the panel’s perspectives on private credit, multifamily, operating businesses, and how we weigh cash flow against long-term growth.
– Sam Silverman
Silverman Capital
