If you’re searching this question, you’ve already made the harder decision: the status quo on Wall Street isn’t worth the risk anymore. Not for the size of retirement you actually want.
Now you’re trying to figure out the practical money side. How much do I need? What should be in place first? Where do I even start?
Here’s the honest answer most articles won’t give you.
Most blogs will tell you you need a quarter million or half a million sitting around before you can play in private deals. That’s not true.
If you’re accredited — and as I covered in an earlier post about accredited investor access, there’s a real chance you already qualify and don’t know it — then $100,000 of investable capital is plenty to start. You can easily allocate that across two to four deals.
A reasonable rule of thumb: if you’re earning a strong income (and most accredited investors are), you should be putting at least 25% of that income into alternatives every year. Not into your existing 401(k). Not into more index funds. Into actual private deals.
Inside the SMART Flex Fund, repeat investors can sometimes commit as little as $25,000 per deal — which means even at $50,000 of fresh annual capital, you can be putting yourself into two new positions a year. Over five years, that’s ten different deals across different sponsors, markets, and asset classes. That’s a real portfolio, not a single bet.
Now the part most advisors won’t talk about, because it requires re-thinking how you build your financial foundation in the first place.
Conventional wisdom says: build an emergency fund in a high-yield savings account, max out your 401(k), open a 529 for the kids, pay off all consumer debt, and *then* maybe consider alternatives.
I disagree with most of that.
Long ago I subscribed to something called the Infinite Banking Concept. I have nine high cash value whole life insurance policies built over the last fifteen years. Those policies are contractually guaranteed to grow and compound — uninterrupted — and they form the foundation that every alternative investment I make sits on top of.
Whole life isn’t an investment. That’s the point. Investments aren’t guaranteed. My policies are. Even while I actively borrow against them through lines of credit to deploy into deals, I maintain one to two years of expenses in liquid form at all times. That liquidity is what lets me take bigger swings on the actual investment side without a single sleepless night.
This flies in the face of conventional wisdom. Conventional wisdom is keeping the middle class broke and the upper-middle class terrified they won’t have enough to retire. You have to be willing to re-think your thinking and learn a different way.
The first deal is often a scary one. My job isn’t to talk anyone into it. The deals we vet inside the fund are usually so attractive on the merits that I never have to twist an arm — and remember, I’m investing alongside every one of them.
Two things to know going in:
Let me show you what this looks like in practice. I’ll call her Susie.
Investor Build — “Susie”
Source of capital: Self-directed Roth IRA + Solo 401(k)
| Deal #1 | $50,000 — Self-storage facility (cash flow + growth) |
| Deal #2 | $50,000 — Private lending deal (monthly distributions) |
| Deal #3 | $150,000 — Private equity “home-run swing” |
| Potential payoff on Deal #3 alone: | $1.2M+ |
That third deal is what I call a home-run swing — a private equity opportunity where the downside felt very well mitigated, but the upside was huge. They don’t all hit. But the ones that do can singlehandedly change a portfolio. The point isn’t that every deal is a home run. The point is that with two cash-flow base hits already in the portfolio, Susie had the foundation to take a bigger swing on deal three.
By the way — first check sizes across my investors range anywhere from $25,000 to $300,000. It depends on the investor’s experience, liquidity, and conviction in the specific deal in front of them. There’s no “right” first number.
It’s not what you’d think. The biggest mistake isn’t going too small or too big on a single deal.
The biggest mistake is over-allocating into a single asset class while believing you’re diversified.
The multi-family meltdown of the last three years is the textbook case. I’ve talked to plenty of investors who owned positions in five different multi-family operators in five different markets and patted themselves on the back for being “diversified.” Then 2022 hit. Interest rates climbed. Every one of those positions got hammered at the same time, because the macro risk was the same across every deal.
That’s not diversification. That’s concentration with extra steps.
The actual holy grail of investing — and something institutional investors understand far better than the public-market crowd — is eight, ten, or twelve truly uncorrelated assets. Different asset classes. Different drivers. Different macro exposures. So when one zigs, another zags. That’s how you build something that doesn’t blow up when one piece of the world has a bad year.
Most accredited investors I talk to have far more capital to put to work than they realize. It’s not sitting in a brokerage account waiting to be deployed. It’s locked inside structures most people were taught to leave alone:
Once you know how to look at your own balance sheet through this lens, the question stops being “how much money do I need?” and becomes “why isn’t more of what I already have working harder?”
If you’re sitting at $100K+ in deployable capital and you’re accredited, you have enough to start. The question is whether the rest of your financial foundation is built to support it — and whether you’re ready to think about your money differently than you’ve been taught.
A short self-assessment to see whether you’re actually ready to start deploying capital into private deals — and what gaps you may want to close first. Free, takes about 5 minutes.
Disclaimer: This article reflects the personal experience and opinions of Kent Leach and Hickory Creek Capital Partners. It is not tax, legal, or investment advice. Always consult a qualified CPA, attorney, and financial advisor before pursuing any private investment or insurance strategy. Whole life insurance, IBC concepts, and self-directed retirement vehicles all involve specific structuring requirements and risks. Past performance does not guarantee future results. Private fund investments are limited to accredited investors and involve substantial risk, including total loss of principal.