​Arnie was a bodybuilding icon in the 1960s and 70’s but he had no money. Bodybuilders couldn’t making a living from their physical accomplishments in those days. You were admired within the bodybuilding community, but viewed as somewhat of a musclebound curiosity by everyone else.

​The one thing Schwarzenegger was not afraid of though was work. He grew up in poverty in post-World War Two Austria (born 1947) and built himself up physically, perhaps in response to beatings from his violent father. He describes himself as rebellious and refused to let domestic violence form hus father quell his spirit. He wanted to become someone. He wanted to be rich. And so, before the term side-hustle had even been thought of, Schwarzenegger began exploring ways to make money.

​Arnie was a bodybuilding icon in the 1960s and 70s but he had no money. Bodybuilders couldn’t making a living from their physical accomplishments in those days. You were admired within the bodybuilding community, but viewed as somewhat of a musclebound curiosity by everyone else. The one thing Schwarzenegger was not afraid of though was work. He grew up in poverty in post-World War Two Austria (born 1947) and built himself up physically, perhaps in response to beatings from his violent father. He describes himself as rebellious and refused to let domestic violence form his father quell his spirit. He wanted to become someone. He wanted to be rich. And so, before the term side-hustle had been tinvented, Schwarzenegger began exploring ways to make money.

​One of his earliest friends was fellow bodybuilder, Mr. Olympia, and future chiropractor  Franco Colombu. They worked out together, stayed lifelong friends until Franco’s passing in 2019, and were early business partners.

​According to Arnie, in 1971: “I said to Frank you're a masonry worker, a bricklayer. Why don't we start a bricklaying business? I said, here in America they love this European bullshit. So, we called it Italian Masonry Expert and put a little ad in the LA Times.”
 
As luck would have it, LA was hit by an earthquake the very next day chimneys, patios, and masonry across the sprawling city began to fall.
 
“So, Frank and I started going out and doing estimates. Of course, we weren’t really experienced in all that stuff so we just started measuring stuff and then we always had arguments. I was always the good guy. He was the bad Italian who always charges too much. And I would say, ‘This is outrageous Frank. You cannot charge $7,600 for this. We can do it cheaper than that. No, no, no… And then he started in German, and Italian, and we started arguing. 
 
Once the theatre was over, Schwarzenegger would tell the owner he had beaten down Frank’s price to something reasonable - $5,000 – and there would be hugs all round from the home owner. Arnie says he learned these tactics while working as a sales apprentice back in Austria when he was a teenager. Instead of grooming himself for university, he worked from the age of 15 to 18 as a sales apprentice. His motto was, sell, sell, sell and this became the one of one of his Seven Rules in the new book.

​“The art of selling in this case was, when I go to a customer and he says, ‘Can you tell me how much it costs to redo this chimney?’, it sounds better if you go with how you do it in a store, ‘50% off’. But of course, first they add the 50% and then take it off.”
 
 “So, my idea was, I measured it out and I said, ‘Frank, by the time we buy the material, which will be $2,000, our workmanship, it would take us a week to do this, a thousand-500 dollars each, that’s three thousand, so that’s five-thousand dollars. Frank said, ‘Five thousand, we can do it.’ 

Then I would go to the guy and say, ‘He wants $7,800”, and the guy would freak out. ‘Oh my god, I don't know if I can afford this. This is outrageous!’. And I would say, ‘Let me work on it.’ And so I would go to Frank and all of a sudden we would have a screaming match. And then the next thing, I go back to this guy and say, ‘I brought him down to $5,000.” And the guy would say, “Thank God!’ and he would hug me and we would get the job. So, we gave them a good deal, but we also sold them on the idea they got a special, SPECIAL deal.”
 
Arnold was then the cement mixing brawn and Colombo was the guy who laid the bricks. Schwarzenegger drove his car to the local tool rental shop, picked up a concrete mixer, and drove it back to the site.
 
Of course, every client noticed how jacked the two men were but the pair didn't want to reveal they couldn’t make a living from bodybuilding. So, Arnold devised a story that he had lost a Mr. Universe title in Florida because he wasn’t sufficiently tanned, which was partly true. (The other reason he says was because he was ‘a little bit too chubby”.) For the customer though, he embellished the story by swearing he would never lose a title that way again. Laying bricks a few hours every day was his way to solve the tanning problem because it allowed him to rip off his shirt and get bronzed by working in the blazing California sun. And of course, Frank was a master mason who’d worked everywhere in Italy, including helping to build the Vatican.

​Arnold attributes hard work for his success. He built his body lifting weights daily. He went to America with nothing. He got on the Merv Griffin show because of his physique where Lucille Ball saw him and phoned him up him out of the blue to read for a minor role as a masseur. 
 
Schwarzenegger didn’t know much English, he had a thick Germanic accent, and he’d never acted. But he’s a Yes-and …” kind of guy with a ‘take action’ personality. 
 
“I learned the language quickly. I remember I went to Santa Monica City College and took English classes, then eventually took business classes, and all the stuff I learned as an apprentice - selling, marketing, publicity, and accounting, mathematics, micro and macro-economics, and all this stuff. 

Arnie dreamed of being a leading man like Clint Eastwood, Charles Bronson and Marlon Brando – because they were all earning more than a million dollars per movie in the early 1970s. But he soon learned that life changing wealth can be generated in other days.
 
“There was an apartment building for sale for $240,000. And I needed $37,000 for the down payment. I had in my bank account $27. 
 
So I went to Joe Weider, who was the publisher of the body building magazines, and I said, ‘can you go and loan me $10,000 for one year?’ And he said, absolutely. And so, I bought this building.
 
Two years later, someone comes to me and offers me $500,000 for the same building. This is how much real estate went up in the 70s because of the high inflation rare. So, I immediately sold this building, took the profit and traded up to a 12-unit apartment building. Then I sold that two years later and traded up to a 36-unit building. So, in the 70s I was already a millionaire.”
 
This post has borrowed liberally from Dana Carvey and David Spade’s podcast Fly on the Wall when the two stand up comedians interviewed Arnold Schwarzenegger. The episode was published  October 25, 2023. Please listen to it – nothing replaces hearing Arnold talking. And read Arnold Schwarzenegger’s book, Be Useful: Seven Tools for Life. The building where Carvey and Spade recorded their interview was actually built by Schwarzenegger in 1984 and is now worth a small fortune compared to what he paid.
 
https://shows.cadence13.com/podcast/fly-on-the-wall
 
https://tim.blog/tim-ferriss-books/#tools-of-titans

One of the biggest limitations for newcomers to real estate investing is the accredited investor rule.
 
Accredited investors don’t qualify by virtue of their specialist knowledge about investing, finance, or business. In fact, they don't need any of the above. The rule is solely based on wealth and income. If you have a lot of either, you are permitted to invest in private securities like syndicated mortgages, partnerships, and a joint ventures. If you don’t, these investment opportunities are officially prohibited.

So, what’s a Private Security?
A private security is one that’s not sold on a public stock exchange like the TSX in Canada), and the NASDAQ and New York Stock Exchange in the U.S.. Air Canada, Royal Bank and Tim Hortons are random examples of public companies whose shares you can buy on the TSX. Each must abide by the rules of a publicly listed company, which include using common accounting standards, producing financial results four times a year, and holding shareholder meetings.
 
Publicly-traded companies are meant to be transparent and rules-driven so that investors can make decisions about which of them they would like to invest in. The drive to create open information about the financial performance of public companies began after the cataclysmic crash of the US stock market in 1929 which sparked general economic collapse and The Great Depression. 
 
The stock market crashed because there were no rules preventing companies from being honest about the strength of their businesses. Many listed companies were bogus and had little or no revenue. People who bought their shares didn’t know these companies were scams, because there was no way to find out. There is a parallel here to many crypto coins. 
 
As the economy softened in the late 1920s, weak companies went bust and every other publicly listed corporation – even the financially strong ones – were dragged down with them in an explosive and destructive freefall. This is similar to the subprime mortgage crisis in 2008 when assets across the board got caught up in the downdraft caused by all the U.S. mortgage loans that were defaulting. Borrowers were defaulting because they never had the creditworthiness to be given a mortgage in the first place. Lending standards by American financial institutions leading up to 2008 were criminally lax.
 
Back to 1929 & The Great Depression
To prevent a repeat of the 1929 collapse of the stock market, the Securities and Exchange Commission (SEC) was created. Its mandate was to police publicly-listed companies by setting standards of disclosure and organizational certitude so that those investing them would feel secure in knowing their claims about revenue and expenses were accurate. 
 
Of course, if it had been doing its job, the 2008 subprime mortgage crisis would never have happened. Nor would the Bernie Madoff Ponzi scheme. So, let's just say, the SEC tries to regulate U.S. public markets.
 
Back to being an accredited investor
If you are investing in real estate joint ventures and partnerships, you must be an accredited investor if you are not wealthy or have a large income. So, how wealthy and how large?
 
Unlike the United States, where the SEC oversees all publicly listed exchanges, Canada does not have a national body that enforces securities law. We have provincial bodies and they often don’t collaborate. There have been many examples of fraudsters scamming investors in one province only to move somewhere else and do it all over again and the provincial oversight body had no idea they were dealing with a serial offender.
 
The federal government has come close to creating a national investor protection body but some provinces refuse to give up their provincial powers and want to keep the status quo. This issue has dragged on for years and has proved an impossible nut to crack.
 
British Columbia’s Securities Commission defines accredited investors the following way:

• financial institutions
• registered advisers or dealers
• pension funds
• corporations, limited partnerships, trusts or estates having net assets of at least $5 million
• individuals who have at least $1 million in financial assets (cash and securities) before taxes. (In calculating an individual's financial assets, any outstanding loans incurred to acquire those assets must be deducted.)
• individuals whose net income before taxes exceeds $200,000 (or $300,000 combined income with spouse) in each of the two most recent years and who reasonably expects to exceed that net income in the current year
• individuals who have at least $5 million in net assets

Source: https://www.bcsc.bc.ca/industry/issuer-regulation/raising-capital/private-early-stage-businesses#:~:text=An%20accredited%20investor%20includes%3A,of%20at%20least%20%245%20million
 
In short, to be an accredited investor, you must be either wealthy or have a large income.
 
When doing private real estate deals, the BC Securities Commission also sets standards for what it terms  ‘unfair practices’:

• putting unreasonable pressure on a person to purchase, hold or sell a security,
• taking advantage of a person's inability or incapacity to reasonably protect his or her own interest due to a physical or mental infirmity, ignorance, illiteracy, age or inability to understand any matter relating to a decision to purchase, hold or sell a security, and
• imposing terms or conditions that make a transaction unfair.

If you do any of these prohibited actions, you have broken B.C.'s securities laws. This could result in a fine up to $3 million, or imprisonment for up to three years, or both.
Serious stuff. And fair enough too. These rules exist to protect investors because private securities (like real estate deals) by unregistered dealers are opaque investments and their risk level is hard to determine because the issuer (the person offering the JV or partnership) does not need to provide an offering memorandum or abide by any of the other disclosure rules that publicly-traded companies are required to.
 
This lack of transparency makes private securities high-risk investments. But their opaque and niche nature also makes them some of the most lucrative opportunities you will ever find.
 
Trust is key. Well-constructed contracts that protect the rights of all signatories are essential. But I’ve met scammers who would sign any contract put in front of them knowing full well that they never plan to honour the terms. In addition to well-constructed contracts, you need business partners to have honest intent and to be honorable people in their personal and professional dealings.
 
I have a Major Problem with how Securities Law Determines Accredited Investor Status
I’m not a fan of how accredited investors are defined. What’s meant to protect unsophisticated investors from putting money into ventures they don’t understand harms them in other ways. 
 
In practice, this securities law creates regulatory capture. It helps rich people to get richer and blocks those aspiring to create wealth from accessing lucrative business deals.
 
There is no correlation between the amount of money someone possesses and their financial sophistication. What accredited investor rules really mean is that you are permitted to invest in private business deals because you already have a lot of money and it won’t hurt too much if you lose some of it.
 
I know many people who are financially literate but prohibited from buying private securities. The only exception for unaccredited investors is if the deal they are being offered comes from “a family member, friend or close business associate”. These are private securities exceptions in British Columbia and many other jurisdictions.
 
In other words, unless my best buddy, my sister, or a close associate at work is offering an unaccredited investor a real estate investment deal, they can’t take part. But if they have a well-paying job or a lots of cash, have at it!
 
That could be about to change. Maybe.
A glimmer of hope exists. And it’s coming from south of the border.
 
The United States led the way in investor protection by creating the SEC in the 1930s. Now a (gentle) push is underway to redefine what an accredited investor is.
 
In the U.S., only people with $200,000 or more in annual income or $1 million in net worth, excluding the value of their home, are accredited investors. 
 
In a rare example of bipartisanship, two bills have passed through the U.S. House of Representatives that seek to remove the wealth-exclusiveness of the accredited investor club.
 
One bill called the Fair Investment Opportunities for Professional Experts Act recommends that those with certain licences and job experience should be accredited. This would likely include investment advisors, brokers, and ither professions. Here is the exact wording:
‘any natural person the Commission determines, by regulation, to have demonstrable education or job experience to qualify such person as having professional knowledge of a subject related to a particular investment, and whose education or job experience is verified by the Financial Industry Regulatory Authority or an equivalent self-regulatory organization (as defined in section 3(a)(26) of the Securities Ex- change Act of 1934)’
You can see the full Fair Investment Opportunities for Professional Experts Act here:
https://docs.house.gov/billsthisweek/20230605/H835_SUS_xml.pdf
 
The other bill to pass the House in June 2023 was the Accredited Investor Definition Review Act. Its intent is similar to the above Fair Investment Opportunities for Professional Experts Act, so I don’t know why we need two bills to be launched that are trying to achieve the same outcome. But both received bipartisan support and were approved by voice votes. 
 
The second bill worded its request this way:
‘an individual holding such certifications, designations, or credentials as the Commission determines necessary or appropriate in the public interest or for the protection of investors’
The full bill can be found here:
https://docs.house.gov/billsthisweek/20230605/H1579_SUS_xml.pdf
 
These two bills have moved to the Senate and it’s anyone’s guess if they will be supported there. There is very little Democrats and Republicans agree upon, and even if they do, U.S politicians usually find ways to nullify bipartisan agreement through tribal beliefs and blood feud allegiances that are kindly referred to as differences in ideology. Really, it’s a cut-off-my-nose-to-spite-my -face parochialism. It’s the Hatfields versus McCoys: if they propose it, I’ll oppose it, even if I agree with them.
 
Nonetheless, we should be glad a conversation has started about what it means to be an accredited investor. This conversation, as tepid as it is, is important because if changes are made in the U.S., similar legislation could be proposed here in Canada. Canada is a more difficult jurisdiction to achieve change however.  The absence of a national markets regulator like the SEC means investor laws would have to be changed province by province.
 
But if the U.S. changes to its accredited investor rules, so should we. In fact, why wait. Canada, do it now! Those with financial acumen should be allowed to invest in private securities, no matter their level of wealth.
 
A Much Better Solution
The two American bills currently under consideration ask for people who possess certain licences and professional designations to be accredited. 
 
That is still discriminatory. The best answer would be creating an accredited investor curriculum. Anyone could study the curriculum and take an exam. Pass it and you would be an accredited investor, no matter your age, gender, or socio-economic status. This would be fairer. It would open up new investment opportunities for the educated who would now have the certified skills to assess the risk of their investments. And it would create a larger pool of money that could be invested in private real estate deals, start-ups, and other entrepreneurial endeavours. Win-win.
​

But there is nothing cheap about a design that also graces parts of the Versailles palace in France, one of the world’s most sumptuous spaces. You can also find checkerboard tiling in buildings from ancient Egypt and Rome, not to mention their ubiquity in Victorian entryways.

Checkerboard tile works well in transition areas: hallways, foyers, porches and laundry rooms. Think well-trafficked, hard-working, non-intimate spaces. The tile most commonly used for checkerboards is heavy duty, so it wears well, but it can also lend a sense of elegant pizazz to an otherwise plain room. 
 
It’s best to leave checkerboard designs out of bedrooms and living rooms. Their natural chaos (busyness) is at odds with the lay-back-and-relax tone that bedrooms and living rooms strive to evoke.

When laid diagonally at a 45-degree angle, designers say checkerboards create a more dressed-up and traditional look, while straight-laid checkerboards are said to be more playful and contemporary.
 
I personally prefer the diagonal method. Just note that this will cost more to install and there will be additional wastage of 10 to 15 percent due to all the cut-offs on the edges. I also recommend matching your grout to the lighter-coloured tile.

​Be careful when choosing tile size. Small checkerboard tiles in a large room will feel overwhelming, like being stuck in a life-sized, overly-pixelated photograph. Or in a Roy Liechtenstein image. If you use tile that is too large in a small room, the pattern won’t repeat enough.

A modern twist is to paint a checker board on to wood flooring – which I’m not wild about – as well as experimenting with colours beyond the traditional black and white. That last experiment I can get on board with.

12 bedrooms | 18 bathrooms | 
Jenifer Lopez and Ben Affleck lived in this Beverly Hills, Los Angeles, home for two years as newly weds while they looked for a palace ... place ... to call their own.  Owned by Australian tycoon James Packer, a former love-partner of Mariah Carey, it is currently listed for $85 million USD. 

Before Packer, the 1930's-built house belonged to Danny DeVito and Rhea Perlman who lived there for two decades before selling up for $26.6 million USD in 2015.

Architectural Digest says, "The property hosts several additional well-appointed structures: a one-bedroom pool house; a three-story ADU connected to a six-car garage with additional living quarters, a gym, a sauna, a bar, and a staff room with its own sauna; a 5,000-square-foot theater with a bar, game room, two bathrooms, a cigar room, and a wine cellar; and an additional two-car garage."
​
https://www.architecturaldigest.com/story/jennifer-lopez-and-ben-afflecks-former-beverly-hills-rental-lists ​

Oh, and this James Packer/Ben Affleck/J-Lo/Danny De Vito luxury pad has a glorious diagonal checkerboard floor down the hallway and out into the expansive opening at the foot of the staircase. Just in case you were wondering.

3630 Willowick, River Oaks | 15,000 square feet | 5 bedrooms | 11 bathrooms | 1.55 acres 
​This French chateau is actually located in Houston, Texas and is on the market for $29 million USD, making it the city's third most expensive home. The dining room (below) has a hand-painted ceiling and showstopper chandelier. You have to really, really, REALLY like the colour blue, however.

https://www.papercitymag.com/real-estate/river-oaks-mansion-3630-willowick-listed-29-million-french-chateau/ 

2118 North Cleveland Avenue | 6,500 square feet | 7 bedrooms | 5.5 baths | 16 rooms | built in 1889
​The realtor's take: 
"A rare and wonderful historic treasure, nestled in a beautiful, tree-lined East Lincoln Park location. This grand stately home was built in 1889 on an oversized 40' lot and boasts exquisite architectural details at every turn.

Beautifully maintained, completely updated and perfectly appointed for modern life, experience luxurious living in 6,500 sq ft of extraordinary space. Stunning details include a hand carved walnut staircase, original woodwork and wainscotting, curved doorways, leaded glass windows and elegant inlaid hardwood flooring.

Grand entrance leads to luxurious formal living room and dining room. Splendid chef's kitchen features loads of custom cabinetry and deluxe appliances. Huge family room and breakfast room overlook the picturesque landscape that includes a lovely bricked outdoor space as well as a large, oversized deck with pergola above a heated three-car garage.

Seven bedrooms plus incredible playroom and 5 full and 1 half bath. Primary bedroom includes luxurious sitting room, and beautifully appointed marble bath. Coveted walk to everything location in the heart of East Lincoln Park. Steps to Oz Park, Lincoln Park, the Zoo, Lake, shops, restaurants, and transportation."

https://www.christiesrealestate.com/sales/detail/170-l-84018-f713740770/lincoln-park-chicago-il-60614#

The kitchen gets some subtle checkerboard playfulness on the shelving and walls inside the upper cabinetry.

One of the bathrooms gets a modest checkerboard floor using small tiles. 

Another bathroom gets a modern twist on the checkerboard motif for its floor.

Even the rooftop patio has a painted checkerboard pattern on the wooden boards. If you pay attention, checkerboard floors are everywhere. The more you look, the more you'll spot them.