Brett Farren first discovered the power and possibilities of entrepreneurship while running a chimney inspection business in high school in his hometown of Cobourg, Ont. He applied that same gumption to his first real estate investment in his 20s, a multiunit residential building that he bought after scraping together his savings and taking an advance on his credit card.
Today, Mr. Farren has a highly diversified portfolio including his own businesses, real estate and equities across various assets classes. Not only is Mr. Farren the founder and chief executive officer of Match Marketing Group, he also owns Fire Inspired Foods, which includes 10 Montana's restaurants in Ontario. The Globe and Mail spoke to Mr. Farren recently about how he built his wealth to date, and why he believes all investors should be one call away from the experts that manage their money.
What does your investment portfolio look like today?
I invest across three main categories: businesses I own and operate, real estate and equities. The first two I understand and am comfortable making direct investments myself. Equities I'm not, so I partner with trusted advisers that are leaders in their respective fields. I have three advisers that each serve a very distinct purpose.
Why do you need three advisers?
Each is based on an expected rate of return. One is focused on dividends and income that would be distributed on an ongoing basis that traditionally has been resources, real estate and infrastructure: Things that are long-term investments that generally wouldn't be tremendously affected by a closing stock price. Then I have exposure to international markets and income funds at a moderate level. Then, for a higher rate of return, it's more category plays through hedge funds, covering growth categories such as health, non-bank financials, media and software. That's where you can play a sector but not be affected by one individual company.
Describe your real estate investing.
My first real investment was in real estate – a multiunit rental in my early 20s – and I continue to have a passion for that. I built up a nice portfolio of student rentals around the University of Toronto, but have since exited that and got into residential redevelopment. Over the years, I have diversified across multiunit rentals, commercial and residential real estate. That acts as a hedge against inflation and also has historically been one of the most stable and rewarding returns in the Canadian marketplace.
Where won't you put your money?
I won't generally invest in markets or into companies that are indexed into countries that offer great returns but perhaps an unstable government. That would probably be the only one. Despite all good intentions, someone could wake up one day and repatriate your asset. That wouldn't be fun. I try to only invest in businesses I understand.
What is the best investment move you've made?
U.S. real estate. The appreciation in prices in recent years, mixed with the stronger U.S. dollar, has produced much higher returns.
What is the worst?
I had a negative experience back around the start of the century. I was focused on growing my business and entrusted my portfolio to a broker. He had a passion for tech, but turns out he didn't have a passion for picking up the phone and providing me advice [during the dot.com bust]. I took what I felt was an unnecessary haircut. It took a year or two to shake that off. I retrenched in my own businesses and real estate, which I understand. I then went into other dividend-producing areas that I understood.
What did you learn from that experience?
I learned you have to own your decisions. I entrusted the portfolio to someone whose interests weren't aligned with mine. I would never invest or entrust a portfolio with an adviser where I couldn't pick up the phone and have direct contact. You need to know that someone has your interests in mind and that they are also invested in the same scenarios, so their fate is tied to yours.
The interview has been edited and condensed.
For this series, a high-net-worth investor has investable assets of more than $750,000.