Wealth Formula Podcast

By Buck JoffreyBusiness Investing

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Wealth Formula Podcast episodes

June 16, 2019 163: When Bad Debt Happens to Good People with Jorge Newbery
Debt is like a lethal weapon. It can be used for good and it can be used for greed. It can be used to create wealth and it can be used to destroy it. In short, debt is nothing more than a tool. The problem is that a fool with a tool is still a fool. Debt gets a bad name because of this. But the reality is that, in skilled hands, debt can be used to create unlimited wealth. In Investor Club, we use debt to create the extraordinary strategy of infinite returns. We also use it in Wealth Formula Banking and Velocity Plus. Debt is the weapon of the wealthy. Unfortunately, it is also the opioid of the poor who often use it to pay their bills. In situations like that, debt can be downright deadly. That said, like a loaded gun with good intentions, sometimes debt can explode at unexpected times and create unexpected casualties. That's why it is always important to respect it and fear it… just a little bit—like driving a motorcycle. If you don't, it will take you out in a flash. Many smart entrepreneurs have experienced this first hand and gone through the painful process of dealing with the repercussion of good debt gone bad. Jorge Newbery is one of those guys. He is a serial entrepreneur and, using debt, was worth millions of dollars as a real estate entrepreneur. Then it suddenly went south—literally an act of nature took down his empire. A lesser entrepreneur would have been wiped out for good. Not Jorge. Not only did he overcome the debt, but he built an entire career based on it. And he's got fantastic insight on how to deal with it now. Debt is a big part of getting rich. Learning about it is a key to becoming wealthy. That's why you should listen to this interview with Jorge Newbery now.
49 min
June 09, 2019 162: Are We Seeing the Extinction of Fossil Fuels?
These days you hear a lot of people use the word "sustainable". It's actually one of those words that I don't really understand very well. I guess by definition, it means something that you can keep on doing in perpetuity—something you can recycle and use over and over again. In that regard, the kind of investing I advocate for is "sustainable investing". Those of you in investor club know that one of the primary strategies I look for is called "Infinite Returns". The idea is to shoot for not 8 percent or 10 percent cash on cash, but instead, we want all of our invested capital back in our hands in 4-5 years while maintaining equity, cash flow, and eventually the benefit of capital gains. Meanwhile, we use the money pulled out of that first deal and recycle it into the next. It sure is a lot easier than just making more money. Anyway, the problem with the word "sustainable" is that it sometimes gets a bad rap from us capitalist types. It's a word that has some loaded connotations with imagery of hippy socialists trying to tax us into carbon submission. That's why I don't think I will ever use the phrase "sustainable investing" when describing my own strategies, although it sure seems appropriate. Imagery aside, there appears to be a growing capitalist case for renewable energies that just might not be easy to ignore over the next few years. Just like computers doubling their power every couple of years, it seems like Moore's law is starting to apply to alternative energy sources as well. In other words, in the next decade, you might see a massive shift in energy resources not because people worry about the climate impact of fossil fuels (which I do), but rather because it is so much cheaper to use the alternatives. It's just the way capitalism works. I've heard multiple smart individuals talk about this in the past year and I think its worth actually thinking about critically as an investor. So, I thought it might be a good idea to have someone on the show who can intelligently speak on the topic. Hunter Lovins certainly can do that and she is my guest on this week's episode of Wealth Formula Podcast.
44 min
June 02, 2019 161: Opportunity Zones: The Good, the Bad, and the Ugly
We've had a number of webinars and podcasts related to tax mitigation over the last several weeks. Unless you are new to the Wealth Formula ecosystem, you know that when we think about investing, we think not only about how much we are going to make, but also what we are going to keep. For those of you in the accredited investor club, we've talked about the power of utilizing bonus depreciation for passive investors, and investing in assets that are tax friendly. My friend and CPA, Tom Wheelwright, says that the tax code is simply a series of incentives for investors and small business owners. If the government wants you to behave a certain way, they can get you to do that through tax incentives. Oil and gas investing is a good example of this. Much of the world's oil reserves are in countries that don't like us much, so energy independence is desirable for our country. That's why investing in oil and gas drilling in the US has significant tax benefits. Investing with tax benefits in mind can become kind of addicting and it is important to keep tabs on yourself. You want to be careful not to let the tax wag the tail. In other words, tax incentivized investing is valuable but it's even more valuable to actually make money. After all, you aren't going to get taxed on investment losses anyway. With the new Trump tax code, it is still my opinion that bonus depreciation is still the most powerful and useful benefit available to investors like us. Theoretically, however, there is another new law that is also pretty compelling from a tax perspective. It involves what are called opportunity zones and they are being talked up big in the real estate podcast world. Is it the greatest thing since sliced bread or a bunch of hype? Well, I finally got someone on the show to talk about them. My guest this week on Wealth Formula Podcast is Mauricio Rauld. Mauricio, as you may know, is my SEC attorney and an overall great guy. He starts out by giving us a little review on the guidelines for investing in private placements and tells you what to look out for given his breadth of experience. Then we get into the nitty gritty of Opportunity Zones on which he has become an expert. Quite honestly, I thought I knew more on the topic than I did before talking to Mauricio. If you are a serious investor, especially if you are trying to figure out how to deal with capital gains taxes, do not miss this show.
48 min
May 26, 2019 160: Bull Markets in the Least Ugly Economy in the World!
I am a lousy trader. I've said it before and I fully recognize this fact. That's why, I try very hard to stay focussed on investing rather than trading. Nevertheless, I still get trapped in behaviors that I invariably regret. For example, you may know that I am a believer in bitcoin. I truly believe this will be one of the best investments of my lifetime over the course of the next few years. That's why when it dropped to $3100, I should've bought some more. But, I didn't because I got greedy. I figured it might drop even more so I waited. The end result was that by the time I bought more, it had actually doubled in price. Now, over the long run I still think that's not a bad price at all. Especially considering I believe that we will see $100,000 bitcoin within the next couple of years. However, I was kicking myself because I was timing something instead of just recognizing that it was a good time to buy. In the heat of the moment, it's hard to remember Warren Buffett's wisdom. Here's a good quote for you. "It's far better to buy a wonderful company at a fair price than a fair company at a wonderful price." The point is recognize when you have a good opportunity and can buy a quality asset at a fair price and just do it! Now some of you may disagree with me that bitcoin is a "quality" asset. We can agree to disagree. However, let's focus on that principal with another example. One of my friends is a famous home designer and is particularly well known amongst Hollywood celebrities. He told me about a house he once put on sale in Los Angeles. At the time, it was the most expensive house per square foot in all of Los Angeles. He had a very motivated buyer who happened to be the daughter of a well-known tech billionaire. My friend said that dad had three questions before he bought the house for his daughter. 1) Was the house in a desirable area? 2) Did the house have a great views? 3) Was the house built well? The broker assured him that all three answers were a resounding yes. The billionaire went on and bought that house for his daughter at full price. And, that house which was the most expensive house per square foot in LA at the time (in 2007), sold for a significant profit only 10 years later even after the housing correction. The moral of the story?—most of the time when we think we are saving money, we really aren't. It may be more expensive to buy a higher quality asset or an asset that is in a higher quality area. However, over the long run, you will come out ahead. Think of it this way. Ikea furniture is not going to appreciate. So, if you can afford it, buy something that might appreciate so that, someday, you have something of greater value. This is the kind of perspective you get over time. That's why it's a good idea to listen to people of been around for a while. Tyler Jenks is one of those guys. He's been in the financial industry since 1971. That's before I was even born! Tyler can speak on a broad base of financial topics with perspective that is both unusual and multidimensional. From the S&P 500 to gold and even to bitcoin, Tyler is a wealth of knowledge as you will see on this week's Wealth Formula Podcast.
1 hr 14 min
May 19, 2019 159: Ask Buck
You might remember me talking about a part of the brain called the prefrontal cortex (remember I spent some time in the brain surgery business). The prefrontal cortex is the CEO of the brain. It's the part that's really good about making good decisions. For example, if you see a teenager doing something very dangerous and potentially lethal, it may be due to a poorly developed prefrontal cortex. And, if you think to yourself, "I would have done the same thing when I was 16. What was I thinking?", the answer is likely that your prefrontal cortex has since become more mature. In fact, the prefrontal cortex seems to continue maturing until your late 30s and early 40s. The scientist in me wonders why that might be and I have come up with an evolutionary theory. You see, when you are younger, you need to be fit and take some chances to survive. A young caveman would need to hunt and not be afraid to chase down a wild boar that could, in fact, be a danger to him. Wisdom, on the other hand, may lead him to back down for fear of injury and to starve to death instead. But, physical prowess begins to decline for humans beginning at around age 30. Just look at NFL running backs—seems to be the magic number. In evolutionary terms, by the time you are in your mid-30s, you are pretty much useless. You've reproduced and you are not as fast as the twenty year olds. The rest of the tribe is not going to find much value in you. You are simply a waste of resources. That is, unless you have something else you can offer the tribe that younger people can not offer like say…wisdom. Recall that living well into your seventh century and beyond is a relatively modern phenomenon. Even in the United States, someone born in the 1880s might expect to live to 40. That was old back then. So, perhaps the maturing of the prefrontal cortex in the third and forth decades of life coincides with the slowing of the rest of the body and provides a reason for the young hunters in the pack to keep you around instead of pushing you down a river in a canoe with your arms wrapped behind your back. Anyway, it's just my theory. But I must say that my prefrontal cortex really took off since I hit my late 30s and I feel like I am becoming smarter every day—even if my body seems to be headed the other way. It's strange to think of myself a decade ago. I was a completely different person and definitely not as smart as I am now. How I would have loved to ask "Buck Today" a few questions back then—even though I was probably too stubborn and dumb to listen anyway. It would have been nice to have me around. Speaking of "Ask Buck", that's the show for this week on Wealth Formula Podcast. Hopefully you get something out of it—at least enough to keep me in the tribe instead of sending me down that river.
51 min
May 12, 2019 158: Tax Perspectives with Diane Gardner
In recent weeks, I have had a series of webinars for Investor Club called the Tax Day Postmortem Series. Investor Club is the Wealth Formula accredited investor email list. The webinars so far have been for strategies limited to accredited investors such as oil and gas and conservation easements. However, we will have some coming up that will be available for everyone to watch. That said, there is no question that there are more strategies for tax mitigation for people with more money. I guess that makes sense since they are the ones paying more taxes. In addition, the reality is that there are always more financial opportunities for the affluent than there are for the middle class and poor. Whether or not you think its fair is irrelevant. It's just the way it is. The good news is that most people, accredited or not, have opportunities to legally lower their taxes that they just don't know about. The key is to make learning about different strategies in tax mitigation as important as learning new strategies in investing and/or making more money. They all go hand in hand. Of course most of what I learned about tax mitigation strategies comes from my CPA, Tom Wheelwright, who is a genius in the space. But that doesn't mean I don't keep trying to learn from others. In fact, I have learned a few things along the way that some of the most sophisticated accountants don't even know about. The key to becoming an expert in anything is to learn everything you can from as many sources as possible then think for yourself. Cast a wide net on who you listen to and pay attention to everyone. When it comes to tax mitigation strategies, I have done this for years and it has really paid off. The truth of the matter is that most people I talk to, outside of Tom Wheelwright, are not telling me things that I don't already know but sometimes I catch a pearl or two. Or, I just hear the same thing from a different perspective that makes you understand it better. That's what happened to be me with Wealth Formula Banking. For that reason, over the next couple of months, I will have a few different voices on similar topics come on the podcast. This week on Wealth Formula Podcast I have Diane Gardner on the show. She's not a CPA but rather a tax coach. I didn't know who she was nor did I know exactly what a tax coach was but I was open to the idea of letting her try to teach me something. Why not? So, in the spirit of casting a wide net of knowledge sources, I encourage you to listen to the show and try to identify at least one thing that you didn't know before the episode. Let me know how it goes.
34 min
May 06, 2019 157: Harvest Returns
Back in 2014, two of my medical businesses were KILLING it. I was making money hand over fist. Unfortunately, however, I made a mistake that many entrepreneurs make. Instead of taking money off the table and putting most of it into stable assets, I decided to dump the majority of it back into the business to grow even bigger. In fact, I went on a national campaign opening offices across the country all on my own dime. I figured if I could crush it in Chicago then it would be a cinch for me to do the same in middle-markets across the country. I was fueled by people around me telling me that it was the right thing to do which emboldened me even more. Unfortunately, I was wrong. As good as I am as an entrepreneur seeing opportunities at a high level, I didn't know what I didn't know about being a multi-state operator. I didn't have a sense for the staff I would need, the time it would take to turn profitable, or the marketing capital I would need to put on the line for a successful campaign. I learned a lot from that failed national campaign and lost a lot of money. In hindsight, the smart thing for me to do back then was to milk these high performance businesses for all the profit and buy as much real estate as I could. Had I done that, I would have been millions of dollars ahead of where I am today. You see, there were lots of opportunities in real estate in 2014 that were ripe for the taking. Luckily my friend Rick, who is a mortgage broker in Chicago, sent me a couple of apartment buildings that he thought I should buy and, fortunately, I took his advice. While I lost millions of dollars in that failed national expansion of 2014-2015, those buildings I bought ended up being a gold mine. In 2018, I sold them for 500% and 600% returns. It was a good chunk of money. It was still not even close to the losses I incurred on the failed business venture, but it showed me the power of staying disciplined and not getting greedy like I did. At the time, buying those buildings didn't seem particularly exciting. I knew that real estate is where I wanted to invest, but it was a lot more fun making money rather than investing it. Now I understand the power of investing and I also understand the power of boring. What do I mean, boring? I mean that when you find something that works or an operator that you like, you don't have to keep playing the field. There is nothing sexy about multifamily real estate or self storage facilities, but they make for great investments. If you are a passive investor that has found a group or two that you like, you don't have to go find another group to "diversify". I can tell you from experience as an investor, boring works. On the other hand, there is no reason not to take a little money to play with on high risk high reward endeavors. If you want to grow your business, do it. But don't put every penny you have into it and create a single point failure scenario for yourself. As you might know, my hobby these days is cryptocurrency. Of course that's where I use money that I would otherwise blow on a Maserati or vintage sports car. Maybe I'll get lucky and 100X on my portfolio…you never know. However, most of my money is still going into real estate with the same old operators. Speaking of topics that might not seem sexy, this week's podcast is an interview I did with the founder of Harvest Returns. Investing in agriculture may not sound exciting, but people do need to eat and, as far as I can tell, that's not going to change anytime soon. That alone should get you to listen to this week's Wealth Formula Podcast.
35 min
May 05, 2019157: Harvest Returns
Back in 2014, two of my medical businesses were KILLING it. I was making money hand over fist. Unfortunately, however, I made a mistake that many entrepreneurs make. Instead of taking money off the table and putting most of it into stable assets, I decided to dump the majority of it back into the business to grow even bigger.
In fact, I went on a national campaign opening offices across the country all on my own dime. I figured if I could crush it in Chicago then it would be a cinch for me to do the same in middle-markets across the country. I was fueled by people around me telling me that it was the right thing to do which emboldened me even more.
Unfortunately, I was wrong. As good as I am as an entrepreneur seeing opportunities at a high level, I didn’t know what I didn’t know about being a multi-state operator. I didn’t have a sense for the staff I would need, the time it would take to turn profitable, or the marketing capital I would need to put on the line for a successful campaign. I learned a lot from that failed national campaign and lost a lot of money.
In hindsight, the smart thing for me to do back then was to milk these high performance businesses for all the profit and buy as much real estate as I could. Had I done that, I would have been millions of dollars ahead of where I am today.
You see, there were lots of opportunities in real estate in 2014 that were ripe for the taking. Luckily my friend Rick, who is a mortgage broker in Chicago, sent me a couple of apartment buildings that he thought I should buy and, fortunately, I took his advice.
While I lost millions of dollars in that failed national expansion of 2014-2015, those buildings I bought ended up being a gold mine. In 2018, I sold them for 500% and 600% returns. It was a good chunk of money. It was still not even close to the losses I incurred on the failed business venture, but it showed me the power of staying disciplined and not getting greedy like I did.
At the time, buying those buildings didn’t seem particularly exciting. I knew that real estate is where I wanted to invest, but it was a lot more fun making money rather than investing it. Now I understand the power of investing and I also understand the power of boring.
What do I mean, boring? I mean that when you find something that works or an operator that you like, you don’t have to keep playing the field. There is nothing sexy about multifamily real estate or self storage facilities, but they make for great investments. If you are a passive investor that has found a group or two that you like, you don’t have to go find another group to “diversify”. I can tell you from experience as an investor, boring works.
On the other hand, there is no reason not to take a little money to play with on high risk high reward endeavors. If you want to grow your business, do it. But don’t put every penny you have into it and create a single point failure scenario for yourself.
As you might know, my hobby these days is cryptocurrency. Of course that’s where I use money that I would otherwise blow on a Maserati or vintage sports car. Maybe I’ll get lucky and 100X on my portfolio…you never know. However, most of my money is still going into real estate with the same old operators.
Speaking of topics that might not seem sexy, this week’s podcast is an interview I did with the founder of Harvest Returns. Investing in agriculture may not sound exciting, but people do need to eat and, as far as I can tell, that’s not going to change anytime soon. That alone should get you to listen to this week’s Wealth Formula Podcast.
As a career naval officer, Chris Rawley traveled the world. Over the course of visiting dozens of war-torn and poverty stricken countries, he began to appreciate the importance of farming to every single person on earth. As a professional investor, he decided to invest in a farm, but discovered that these types of investments were inaccessible to the average person. He created Harvest Returns in 2016 to democratize investments in agriculture.
Rawley has held corporate management roles in Jones Lang LaSalle, Electronic Data Systems, L-3 Communications, and served as a defense consultant at Special Operations Command headquarters with Blackbird Technologies. He has invested in real estate and income-producing agriculture for nearly two decades. Chris has been an angel investor in early stage agriculture and food companies, including the Indian agriculture FINTECH company Jai Kisan. He serves on the advisory board of the AGTECH start-up AgroFides.
As a Captain in the United States Navy Reserve, Rawley is Chief of Staff for the Naval Reserve Surface Forces, helping to oversee 3,800 sailors supporting fleet units around the world. During his 26 year military career, Rawley has filled a variety of leadership positions in naval, expeditionary, and joint special operations units afloat and ashore. He has deployed to Afghanistan, Iraq, throughout Africa, the Middle East, and Western Pacific. Rawley has a degree from Texas A&M University, earned an MBA at George Washington University, and is a graduate of the U.S. Naval War College.
Shownotes:
Chris Rawley’s background
Agriculture and Crowdfunding
Operators for Harvest Returns
How Harvest Returns mitigates overseas risks
The Harvest Returns platform
Expected yields
Why Agriculture?
HarvestReturns.com
37 min
April 29, 2019 156: Centimillionaire Secrets with Richard Wilson
Lately, I've been getting a lot of questions from investors on how to choose investments—particularly private placements that are readily available to accredited investors. First, let me be clear that there is no magic solution to getting all of your investment picks right. In fact, if you invest long enough, something will go wrong. Next, nothing I say should be construed as investment advice. All I can do is to share my experience. Experience is the way I have learned the most. I started looking into private placements about 7-8 years ago. My primary focus was something I felt like I knew a little bit about—real estate. But from there I had no roadmap to follow. Where do you start when you are new at this stuff? Well, unfortunately I started with google and ended up finding a guy who is a bit of a charlatan in the space. I spoke to him and he suggested that maybe I join his team given my real estate experience. That sounded like a great idea. Essentially, I would get to participate in the limited partner side and the general partner side and leverage that part as well. And, I reasoned, I would learn something about being a fund manager in the process. So, I signed up. Every week there was a team call and this guy would lead it. You see, I was not the only one he thought was special and worth bringing on to his exclusive team. There were a lot of us special people. We came from different backgrounds but we all had one thing in common—we all had a circle of friends/community that had money. In my case, I was tagged as a guy who could bring money in for doctors. Ok. So, that in and of itself is not a bad thing. In fact, if you can bring people to great opportunities and get some additional benefit for yourself, that's great. You are solving a problem and helping others in the process. Now…here was the unfavorable part of this fund. On these team meetings it was very clear that this self proclaimed "hedge fund manager" had very little interest in making investors money at all. Every conversation was about the fees we could charge (which he kept for himself) and the need for us partners to bring in more money. He urged me countless times to put together a group of doctors for him to speak with and even to get my father involved. Luckily, I didn't. It was pretty clear to me that this guy was a shyster and that I should distance myself from him as soon as possible. In the end, the money I invested was lost. For the last 6-7 years I have been receiving a K1 with no income. Meanwhile, I know the guy made a ton of money up front and doesn't really care about losing investor money in the least. So, what mistake did I make here? Well, I looked him up on google and he was a guy who made the podcast rounds and even spoke at events. He was a great salesman. I mistook that for someone who was a good fiduciary for my money. You think that is an uncommon mistake? Think again. While a number of these individuals that are prominent on social media and on the podcasting circle are not crooked, they have not really proven anything to you other than that they are good at getting your attention. So, if not google then where do you start? Well, in this age of the internet and social media, I actually rely on something a lot more mundane—positive feedback from previous investors who I know like and trust. The real estate operator that I work with the most did not find me nor did I find them on the internet. I found them through people in our investor club that told me about their experience and the kinds of returns they were seeing. That's what got me initially interested. Next, I did some good old fashioned reconnaissance. I talked to several different people on their team, tracked the ongoing sentiment of known investors of theirs, and made a trip out to walk properties with them and meet them in person. Finally, I got a stellar reference from someone within the same field with tremendous integrity. With that kind of social due diligence, I felt very comfortable moving forward and looking at the numbers and track record closely. Notice how the numbers came at the end and not the beginning. Anyone can make an investment look good on paper. In fact, I can honestly say that the glossier and fancier the offering memorandum, the less I trust it. I want to know the people and know the numbers…in that order. Of course not everyone has the time to do vetting like that and that's why a group like our accredited investor club provides a useful team approach to utilize collective wisdom. At the end of the day, it's not all that easy to find good operators. That's why I don't work with more than a handful of them. After all, the wealthiest people in the world get there through specialization and focus, not by chasing the next shiny object. Just look at Warren Buffet. My guest on this week's Wealth Formula Podcast today can attest to what I'm saying. He's been around some of the wealthiest Americans in the country and has learned the secret sauce behind their success and the way they think. His name is Richard Wilson and he is the founder of Family Office Club. If you want to learn to think like the rich, you are not going to want to miss this show!
45 min
April 28, 2019156: Centimillionaire Secrets with Richard Wilson
Lately, I’ve been getting a lot of questions from investors on how to choose investments—particularly private placements that are readily available to accredited investors.
First, let me be clear that there is no magic solution to getting all of your investment picks right. In fact, if you invest long enough, something will go wrong. Next, nothing I say should be construed as investment advice. All I can do is to share my experience.
Experience is the way I have learned the most. I started looking into private placements about 7-8 years ago. My primary focus was something I felt like I knew a little bit about—real estate. But from there I had no roadmap to follow.
Where do you start when you are new at this stuff? Well, unfortunately I started with google and ended up finding a guy who is a bit of a charlatan in the space. I spoke to him and he suggested that maybe I join his team given my real estate experience. That sounded like a great idea. Essentially, I would get to participate in the limited partner side and the general partner side and leverage that part as well. And, I reasoned, I would learn something about being a fund manager in the process. So, I signed up.
Every week there was a team call and this guy would lead it. You see, I was not the only one he thought was special and worth bringing on to his exclusive team. There were a lot of us special people. We came from different backgrounds but we all had one thing in common—we all had a circle of friends/community that had money. In my case, I was tagged as a guy who could bring money in for doctors.
Ok. So, that in and of itself is not a bad thing. In fact, if you can bring people to great opportunities and get some additional benefit for yourself, that’s great. You are solving a problem and helping others in the process. Now…here was the unfavorable part of this fund.
On these team meetings it was very clear that this self proclaimed “hedge fund manager” had very little interest in making investors money at all. Every conversation was about the fees we could charge (which he kept for himself) and the need for us partners to bring in more money. He urged me countless times to put together a group of doctors for him to speak with and even to get my father involved.
Luckily, I didn’t. It was pretty clear to me that this guy was a shyster and that I should distance myself from him as soon as possible. In the end, the money I invested was lost. For the last 6-7 years I have been receiving a K1 with no income. Meanwhile, I know the guy made a ton of money up front and doesn’t really care about losing investor money in the least.
So, what mistake did I make here? Well, I looked him up on google and he was a guy who made the podcast rounds and even spoke at events. He was a great salesman. I mistook that for someone who was a good fiduciary for my money. You think that is an uncommon mistake? Think again.
While a number of these individuals that are prominent on social media and on the podcasting circle are not crooked, they have not really proven anything to you other than that they are good at getting your attention.
So, if not google then where do you start? Well, in this age of the internet and social media, I actually rely on something a lot more mundane—positive feedback from previous investors who I know like and trust.
The real estate operator that I work with the most did not find me nor did I find them on the internet. I found them through people in our investor club that told me about their experience and the kinds of returns they were seeing. That’s what got me initially interested.
Next, I did some good old fashioned reconnaissance. I talked to several different people on their team, tracked the ongoing sentiment of known investors of theirs, and made a trip out to walk properties with them and meet them in person. Finally, I got a stellar reference from someone within the same field with tremendous integrity. With that kind of social due diligence, I felt very comfortable moving forward and looking at the numbers and track record closely. Notice how the numbers came at the end and not the beginning.
Anyone can make an investment look good on paper. In fact, I can honestly say that the glossier and fancier the offering memorandum, the less I trust it. I want to know the people and know the numbers…in that order.
Of course not everyone has the time to do vetting like that and that’s why a group like our accredited investor club provides a useful team approach to utilize collective wisdom. At the end of the day, it’s not all that easy to find good operators. That’s why I don’t work with more than a handful of them. After all, the wealthiest people in the world get there through specialization and focus, not by chasing the next shiny object. Just look at Warren Buffet.
My guest on this week’s Wealth Formula Podcast today can attest to what I’m saying. He’s been around some of the wealthiest Americans in the country and has learned the secret sauce behind their success and the way they think. His name is Richard Wilson and he is the founder of Family Office Club. If you want to learn to think like the rich, you are not going to want to miss this show!
Richard C. Wilson helps $100M+ net worth families create and manage their single family offices and currently manages 14 clients including mandates with three billionaire families and as the CEO of a $500M+ single family office and Head of Direct Investments for another with $200M+ in assets. The Wilson Holding Company is also the exclusive wine importer and a wine brand representative for Hofkellerei des Fursten Von Liechtenstein, the 600 year old vineyard owned by the princely family of Liechtenstein.
Richard is author of the #1 bestselling book in the family office industry, The Single Family Office: Creating, Operating, and Managing the Investments of a Single Family Office and a book called How to Start a Family Office: Blueprints for Setting Up Your Single Family Office. Richard has his undergraduate degree from Oregon State University, his M.B.A. from University of Portland, and has studied master’s level psychology through Harvard’s ALM program while previously residing in Boston. Richard currently resides 10 minutes from downtown Miami on the island of Key Biscayne, Florida with his wife and three daughters.
Shownotes:
The most common sources of the wealth
The Centimillionaire’s mindset
The two types of family offices
Why do you need a Family Office?
How Centimillionaires invest their money
Family Office Podcast
familyoffices.com
capitalraising.com
Centimillionaires.com
45 min