RICHARD WILSON INTERVIEW — Single Family Offices, How to Own a Niche Market, and Centimillionaire Migraines

Welcome to the Next Level Income show where our goal is to help you achieve financial freedom. I'm Chris Larsen.

And I'm Caleb Welborn.

Today we're really excited to have Richard Wilson on the show. Richard works with ultra wealthy families ranging from 30 million to $3 billion each. He's the founder of the Family Office club, the number one largest association of ultra wealthy families worth $100 million or more and their family offices with over 1600 registered member members globally. Richard's the author of the number one best selling book in the space called the Single Family Creating, Operating and Managing the Investments of a Single Family Office. And he's recently released a new book called Send to Millionaire Migraines. Richard and I met through a colleague in the industry at group rmc, Nick Bakers. And Richard, really excited to have you on the show today and share some of the things that you've been sharing here in your new book.

Great. Yeah, thank you. Thanks for having me here.

Absolutely.

So Richard, I first became a fan of you and your work when I read your book Capital the Proven Five Step System for Raising Money through Private Investors. And the system that you have in place there is so effective not just for capital raising, but also business and marketing in general. I remember just being so impressed and gaining a lot of insight from how long term and strategically you think about these things. So for our audience, could you give a little bit of a backstory of how you got to where you are today?

Sure. I'll give the short version and then ask whatever you think they actually care to hear more about. So I don't go on forever. But you know, the short version is I was doing risk management consulting. Poured out of my mind. Then I said, okay, what's going to pay me based on results? I went into a capital markets job raising capital for hedge funds, fund managers. While doing that, I found that institutional investors wanted you to have $100 million or more in AUM and normal wealth management firms didn't have all accredited investors. So I had to figure out some in between group to go to and it was family offices. And I kind of stumbled across a couple by accident. And I said to myself, well, I'm only going to work with them because all they do is serve the ultra wealthy. So why would I spend time going to just a wealth management firm? And while trying to do that, I found it very hard. And I'd been starting businesses my whole life. And so in 2006 when this was happening, I said to myself, well, I'm just going to share online what I'm learning and it's going to get deeper in my brain and I'll be smarter at working with family offices. And then it all just kind of took off. And before I knew it, I'd spoken a couple hundred times in about 14 countries. And I got a book deal with Wiley and we bought familyoffices.com and getting 10,000 hits a day on the website. Really what I found is that when you're in a niche and you're serving somebody's niche needs over and over again with information and help, then people will seek you out and reward you with doing business. And you don't have to cold call people. They will cold call you because of your niche positioning. And that's the tie together with that book on capital raising that you just mentioned and kind of the background of how I got into the space.

Yeah, that's really cool. I mean, I love the way that you talk about the choke points and your grizzly bear metaphor with the salmon coming down the river. Could you give a bit of a overview so people know what I'm actually talking about there? But I remember reading that and just thinking it was so cool. And I saw your interview with Grant Cardone where you started talking about your choke points and how to get your own sandbox, as you put it. Could you talk a bit about that?

Sure. And Grant just spoke at our event five or six days ago, the Super Summit. And so essentially one of my friends from Goldman said, how do you hunt down all these family offices? And I say, well, I don't, you know, I don't cold call anyone. I don't reach out to anyone. They call me. And the way you make that happen is you compare the energy being spent by somebody who goes fishing with a spear and they go to a lake and they go walking around through the lake trying to, you know, throw the spear at a fish swimming by or even chasing a fish, which doesn't work too well. And then you compare that to taking your time to look at the terrain, figure out the lay of the land, figure out where there's a waterfall and are there fish jumping up that waterfall? And if so, maybe you should just stand at that waterfall with a net to just catch the fish that are swimming towards you. So it's just worth investing the energy up front to figure out where is momentum, where is there a trend, where is there inefficiency, where is there an information arbitrage, where is there an investor problem or headache that's not being solved by others? That's the whole concept of being the grizzly bear at the waterfall versus, you know, sloshing around the lake trying to stab fish.

Richard, I love it. It's something that I've been trying to employ in our business with Canal Capital Partners, and it sounds great. What were some challenges that you faced in that period? Because if everybody could say, hey, I'm just going to stand at the bottom of the waterfall and let the fish jump in my net, they do that instead of go out and fish. What advice do you have to give the people or what can you share? That was a real challenge for you during that period to get to where you are now.

Along the way, people make you question yourself. So just staying focused and knowing that if you have the right focus, over time, it's going to pay off. You're going to learn how to add value to that niche if you stick to it. But one real challenge is how you build content. And I learned things the hard way that you can take blog posts and podcasts and you can turn those into articles very easily. You can take those articles, turn them into white papers or special reports, and those special reports could be chapters of a book. So as you produce content, it could all just build on each other versus saying, oh, I have to go write a book now. It's going to be this big, painful experience. If you only do 30 minutes a week on a Friday during what would normally be when you eat lunch to create content, you can have a book done within one year. And most people want to write a book and never do. So I would keep that in mind for adding value first. And then the most important thing is that when you're choosing your niche, you have to be so high conviction on it that. And it has to be so well defined that maybe there's only one or two other people competing with you in that niche, maybe zero. But you have to be careful that your niche isn't going to make you starve because it's too slim or too unrealistic. But it should have very few competitors doing exactly what you're doing in your geography with that focus. And if you're high conviction on it enough, then you should be having the attitude of, I'm just going to add value in as many ways as possible and be everywhere for the people that fit my demographic in this very specific niche. Then you're willing to do the hard work that others are not willing to do because they're not sure about the payoff. Oh, well, if I write the special report, is it going to be worth it. If I give this speech, am I going to get an ROI right away, where you don't get slowed down by those hesitations? If you know your game that you're playing, you know your position, and you're just always contributing to that.

I think that's awesome advice for anybody that you know. We have a lot of professionals that listen to our show, a lot of entrepreneurs as well, and that's advice you could employ across the board. There two things. One, I want to know how long it took you to write your first book. And then I want to talk a little bit about your last book. Send a millionaire migraines.

Yeah, sure. So it's a big contrast. The first book that I wrote took me about a year, and the first half took me nine months. And then I wrote the rest in about two, two and a half, three months. And once I made a daily habit to knock out five pages, then it went really quickly. Now I had a process that I'd like to share real quick because I was able to write this book in just two days. And basically, yeah, just two days of writing. And the cool thing is that it came up with a concept. I worked on the title a lot, the focus a lot, the outline a lot. And I'm just, like, brainstorming, like on an airplane ride when they make me shut down my computer so I can't work, can't look at the Internet. And so then I gave a speech on it. And I said, well, after speaking on it, I want to change the order. And I did that, and I gave a second speech on it, which I recorded. Then I uploaded the recording to Rev.com and they transcribed it like, you know, an hour or two later. Later that day, I had the transcription. I took the transcription, I put it into the outlines of the book, and then I spent one full day editing that and adding stories, sent it to my editor, got it back, spent one more full day and got the book done. And this is my 13th book that I've written. And some people might say, oh, well, it took two days because you've written 13 books. I'm like, okay, maybe it would take me 10 if it wasn't one of my first two books. But the whole point is, have an excellent title, an excellent outline, a very niche market that you're trying to serve, that is very valuable to serve. And it doesn't have to be a big market, it just has to be a very valuable market. And then that helps that positioning. You have high conviction in. And then give A speech on it two to four times or be on podcasts like I am right now, talking about the topic a dozen times. And it'll evolve your thinking and how articulate you can be on the topic. And then that makes it very easy to transcribe and just break it up into chapters. I think a lot of people think it's going to be painful and they make it more painful than it needs to be.

Yeah, I thought I did my book in about three weeks and then we edited in about two more weeks. Two days is incredible. It gives me something to shoot for. So tell us. We have your book on the screen here behind us. A lot of people know what a billionaire is, Richard. You know, here in the news you hear during election season a lot. You know, if you turn on cnbc, Sent a Millionaire. What is that for people that don't know? And why did you choose this niche for this book?

Right. So Sent a millionaire is simply somebody worth $100 million or more. And it's a term that's already been used for decades, just like the term billionaire, but 44,000 times a month, I think the number is people search for a billionaire and only 300 times a month people look for centimillionaire. Nobody talks about this term. Bloomberg has 12 full time reporters on billionaires. No reporters that I know about that are focused on centimillionaires. And it's strange because there are so many more millionaires. The Financial Times reports that there's around 3,000 billionaire individuals in the world. It's not counting families that together are worth a billion, but about 3,000. And the same sources report somewhere between 40 and 50,000 centimillionaires in the world. So there's far more of these people out there. They have less gatekeepers. They need almost as much help in many cases. A $600 million net worth family needs a lot of help in many ways and they're going to invest a lot of capital. But they're just being ignored by mainstream media, ignored by a lot of financial providers and financial advisors. And that's the point of putting out the sentimillionaire migraines book is just to talk about the hundred families I've worked with that are worth over $100 million each. And helping them with setting up their family office, helping them get best in class solution providers in place and really provide just practical solutions and models for thinking about their wealth and structuring things in a way that reduces the painful headaches that just comes with wealth.

Awesome.

Yeah.

And so for people listening who may not be familiar with this space, can you give us an idea of what an average week looks like for you? What you're doing, where you are, who you're talking to?

Sure. So today I was speaking to a $6 billion family office in Boston that we're doing work together with a client that that's worth a couple hundred million dollars. He owns a series of commercial real estate properties and they are engaging with him on a couple different levels. And they got connected through the family office club investor summits earlier today. We had some reports, they're called capital raising audits that we do for family office club charter members, for people who are raising capital for charter members in the family office club. We do a review of all their marketing materials and we write up a six page analysis of how they could position themselves differently, things would change on their pitch deck websites, et cetera. We've got two or three members of our team here full time now. I guess it's three that just focus on our Pitch Decks.com Investor Marketing Materials division. Yeah. And so our platform is really the family office club in the center. And I do all the thought leadership and I manage the work directly with the sentimillionaire families and ultra wealthy families. My team runs the conferences, the data, the training, pitchdecks.com et cetera. So my daily work is thought leadership like this right here, managing the platform and really working with the families day to day. Like the family that I was talking with earlier, they're onboarding with the family office and looking to get work done before the end of the year. Another client sold his business for over a billion dollars earlier this year and they need to get some nonprofit structures in place before the first of next year. So they're kind of scrambling to get that in place in time. And we're helping them put together kind of a framework for thinking about their family office going forward to help keep them focused on where they can create wealth most effectively. So a lot of those types of activities and we had a big thousand person conference last week. So catching up on things from that, obviously.

Yeah. So how many. I mean, you got to meet some awesome people, some really interesting people. How many different families do you work with?

So we have several dozen under contract formally right now. We're helping them on their direct investment portion of their portfolio. We're helping them set up their single family office or helping them manage their single family office. We then have a strategic alliance with a multibillion dollar family office that serves 35 families that are worth $200 million each on average. And then a lot of family offices, we've got three to 400 that speak on stage at the family office club events each year. And then we've got probably about 1,000 who are attending those events. And so a lot of families, we keep in touch because they might want to be connecting with other manufacturing families or families that are only deals that are self storage only in South Florida and that's the only thing they need help with. So let's keep in touch and they might come to a private dinner of ours or something. But the family office industry is a lot about, I'm sure you guys know, like planting seeds for the long term, like how do I add value short term and just keep in touch.

Absolutely, yeah, yeah, thanks for sharing that. A bit ago you mentioned commercial real estate. What can you share a bit about what you've seen with real estate in the portfolios of these ultra high net worth families?

For sure. And before I forget is when people are listening to this, one thing I want to mention is that those of you who are raising capital from high net worth investors, it's good to know that these people might seem very hard to find people that are worth 30 million, 50 million, 100 million plus, but you might only need one or two of them to be a repeat anchor investor in your deals or your company. And it can really propel you into that world and they could make referrals to others and you can learn how to work with people like that or just give you a nice capital base. So it only takes a few great relationships and a lot of business can be done. It might be worth 20 smaller investors or 100 smaller investors. I think that's just important to point out. One person the other day said, how come you don't have 300 clients? I'm like, well, we're only at an 18 person team. You know, I try to create more hours in the day but you know, it's not possible. So your, your last question you just asked was about what the commercial real estate looks like within the family office portfolio, is that right?

Yes.

What observations?

Yeah, sure. We did a benchmark survey and we found that 75% of the families we surveyed, which is about 180 of them, had a strategic allocation to commercial real estate and when they did, it usually made up 25% of their portfolio. But probably more insightful is just that a lot of families gravitate towards things they can understand, so they're less likely to invest in A warehouse or a data center or mobile home park. They're more likely to invest in a multifamily, a self storage, maybe an office park, maybe the office building that they're operating out of. And I think a lot of it comes down to trust. And I think to get a deal done, people have to trust in the individual deal, the exact deal that's being put in front of them. They have to have some awareness, understanding of the industry overall that they're getting into like the office park space in general. And then they also have to really trust the team or the individual behind the deal. And when all three things are in place, the deal goes very quickly. Usually people start out, you only have one of those things in place and you leverage that into getting them across the finish line. And then usually it's a complete waste of time if they don't have any of those things. You know, they're not familiar with data centers, they don't know how the industry works, they're not close to the asset that's being acquired, so it's hard to go see it. They don't know who you are and you're representing the deal, then it's probably going to be a complete waste of your time to pursue that lead.

You talk a little bit about deworsification in your book, Richard, and when you're dealing with $100 million or sometimes more, how many assets do you need? At what point do you get properly diversified? At what point do you say, okay, this is too many, we have the relationships we need, we're getting to the point where we can't really control. Tell us a little bit more about what you would call diversification in these large portfolios.

Yeah, sure, sure. So I think it's important first to segment the portfolios into three sections. Because in a traditional part of your portfolio, which for one family maybe it should be 90%, for other families it might be 20%. But the traditional portion would be like what people think about for wealth management. Stocks, bonds, REITs, commodities, fully diversified, 100% defense. They're almost always relying upon a very smart private banking group or multifamily office or wealth manager to do that. And that's the first bucket. And you should be highly diversified there. The whole point is to be diversified in that bucket. The second area is commercial real estate. That's cash flowing and that's a conservative allocation, typically by families. And in that bucket the families get to have some control because most of these people are entrepreneurs and first gen wealth creators. So they like to have transparency, be able to see what's going on, change out management if needed. They might even like selecting the assets asset by asset instead of going through a fund. So the commercial real estate cash flowing area could be diversified, but typically I encourage families to just focus on one or two types of assets so they can become very wise and smart at what is a good deal in self storage in Atlanta or what is a good deal in multifamily in the New York area. If you're investing in all types of commercial real estate all over the world, unless you're a three to five billion dollars plus organization, you're going to really struggle evaluating that office park in Singapore or Jakarta. Whereas if all you do is invest in self storage in Southern California and multifamily in New York, after you see 50 deals in those areas, you're going to know a lot. You're going to know the players, you're going to have specialized due diligence, you have high conviction on valuation, and that focus helps you improve returns and defends you against bad actors, bad deals, et cetera. And then the third bucket is usually where the family created their wealth. If it's not in real estate, then that third bucket is usually with an operating business, or it could be the public markets in some niche area. But typically it's an operating business and the family can play the most offense there because they created the wealth there. They can have full control. They don't need to go through an independent sponsor. They could run an asset themselves if they wanted to, or be on the board. So the important point about saying all of that, it's like the longest podcast answer ever, I feel like, is that in the one you want full diversification and everybody, I'm all for that. In the other two buckets, you have a moderate level of control and transparency, but you're still relying upon third parties, typically a property manager, an independent sponsor, and then the operating business bucket where you created your wealth. If that's the case for your family, that's where you typically have the most control, most transparency. And that's where it's the worst in my mind to go diversify and say, oh, we're going to do a mobile app investment, a biotech investment, this new cannabis startup, this guy with this new technology that's going to be the next Facebook or something. Because then it's just so hard to do the due diligence and figure out which deal is good and bad.

Yeah, no, that's good advice. And that's one of the things my Favorite saying is act as if I'm not a millionaire. But I read the book because I want to see what should I be doing going forward, how should I structure that? A couple pieces of advice if you could give our audience, for those that are worth, say, less than $5 million and they're looking for some things, I think you already gave some good advice in your answer. And then for those that are below that ultra high net worth threshold of 30 million. So say below 5 million. Above 5 million. What advice would you give those individuals that are looking to continue to grow their wealth but aren't quite there where you guys, your clients are?

I would focus on areas that are rising tides, where there's a lot of momentum behind a trend or a type of deal or a type of structure. I would also look for things that are inevitably changing and try to expedite that inevitability and get ahead of a trend and push it forward and be ahead of the game a little bit. And I would also look for things where you could have excellent positioning for something that's upcoming. So when that time comes, you're going to be positioned in a great spot and be able to make a lot of progress. And a lot of that comes down to self reflection of where your environment is, what other people are doing, and then knowing yourself well enough to know what your strengths are and where you produce most value per hour, where there's a gap in the marketplace and they value that value that you're creating and making sure that's all lined up and thought through well, so that when you're investing your time, your energy, your money, you're getting more roi, because there's all these synergies kind of lined up, these different filters that you've used to protect your time.

Yeah, that's great advice. And that's funny what you say there, the rising tide. That's actually one of the chapters in Chris's book. That's one of them's titled Multifamily Real Estate. Cool. Good to hear.

We're on the right track there.

So it's really impressive hearing everything that you've built and the vision that you had, even when everyone, well, not maybe not everyone, but you're saying some people were kind of like, what? What are you doing? You know, why is he trying to do this? And then you did it and now you're. It's really impressive. So if with everything you've learned in that journey to where you are now, if you could go back in time and talk to young Richard like early 20s with everything, you know. But you can only give him one piece of advice. What would that piece of advice be?

I think it would be to start with the niche and then go more broad, because I started with family offices and added a lot of value there. But then I realized, well, single family offices, they're harder to contact, harder to get a hold of. I'll write the single family office book. We'll do our annual summit, which we've done five times now, and that was a step more effective. And it would have been faster to start at that single family office level. But after that, I learned, well, the family offices just starting a family office are the best. They need the most help. They don't have gatekeepers around them yet. They need lots of guidance and solution providers. So we wrote a book, how to Start a Family Office. We started helping people set them up four or five years ago. I think starting with the niche allows you to add more value. Like the Centimillionaire Migraines book. It's not just about the topic and the niche within the topic. It's like the actual demographic and what are the pain points in their life, day to day, and entering that conversation in their head and providing solutions in a $3 book that release pain for someone who's worth over $100 million is more dialed in than the other work I've done. And the more you dial it in, more ROI you get for what you produce. I just wish I had started very niche focused and then went more broad once I had momentum. I think I did it, like, the hard way, and I paid for that probably in years and lost revenue, but learned a lot along the way. And that's the whole point of what we're doing, is just to document what we're doing and share it with everybody on your podcast and everywhere else we can.

That's really cool. How does someone know if they have the right niche?

I think that if you're not getting traction and you've put in a lot of the effort and you can see that you're either too early or it's just too painful to be working it to get that traction, you should see some signs that people like what you're creating or they want what you have, or that there is a gap for it. If you're banging your head against the wall over and over again, then maybe try another niche, you know? So I think that you have to have high conviction because there is a gap. Not too much competition, but enough flow that you can stay in business. And then just have some position that is so exciting that you tell yourself, well, it doesn't matter even if it takes four years or seven years or 15 years, if I ever get to the top of that mountain, it would be so valuable to have that position. I'm willing to do any amount of work to get to that position and then just dig in and do it and figure out how you can monetize along the way to make it there. I think that ironically in the investment world and with family offices, when you have that attitude of taking however long it takes to get there, that it will take less time than the person who's always taking shortcuts and like, well, this better work out or I'm just to going to be out in one year. And that's their attitude. And they're always looking for the shortcut. They don't want to hear about systems, they don't want to hear about investor relations advantages. They just want to get a call list of investors and call them up and try to close them instead of worrying about positioning. And I feel like that's the longer road. It feels like the shorter road. But it's kind of counterintuitive that people won't trust you if you're always trying to take the shortcut. They want to work with the person who is serious, long term, dedicated, you know, doing the hard work in the space for a long time. And so it builds trust and credibility and knowledge doing it this way. And it actually speeds up your success more so than if you say, oh, I don't have time for any of this stuff. I just want to just get me five investor leads. I know I'll close one. You know, it's just not how the world works.

I think, I think you nailed it. There's. I don't know if it's Carol Dweck or Mindset, but a couple of those books on psychology show the number one predictor.

Yeah, the growth mindset.

Yeah, the growth mindset. And it's not talent, it's the growth mindset. And do you have that long term vision? And that's something that I've heard you talk about and read in your books as well.

Yeah. So true.

Yeah. So if people want to get your send a millionaire book, Richard, your send a millionaire migraines or the book that we were featured in, my partner Peter Cannell was in your multifamily syndicate book. What's the best way for people to get in touch with you and see all the books that you have to offer?

If you're listening and just want a free PDF version of the book. We don't really write the books to make money. You can just email me just richardamilyoffices.com if it's a question about what we're doing. I'm going to be having my staff reply to your email, but we'll get you the book or reply to your questions. If you want to see what we're doing with the family office club and charter membership, it's@familyoffices.com and we have a free book on family offices that there in case someone's looking to figure out if they need one or not or want to learn about the industry. And the book on capital raising you mentioned, it's free as well on capitalraising.com and all the books are on Amazon for sale, three to five bucks each typically. But you can get them for free at those places. And if somebody's out there and they're running a commercial real estate firm or raising capital, we have a lot of fun doing our Live Fast workshops and we're doing them in four different cities in January. And I know it's not the point of this call to talk about it, but it's very intensive. Like 45 different ideas about raising capital and they're a lot of fun. And those are on the homepage of familyoffices.com if anyone wants to check one out. It's like 99 bucks to come check it out and see if our platform's for you.

Awesome. Where's the warmest city you're going to be in? January, Maybe we'll check you out there.

January. Let's see Dallas in January, but then we'll be down here in Miami February 5th as well. So two options. Yeah.

Terrific. Well, we look forward to catching up with you more in the future, Richard, for sure.

Yeah.

Thanks for being on the show, Richard. We really appreciate it. Look forward to talking with you more soon and wish you the best with your endeavors. And I know I've learned a ton from reading your books, so just want to say thanks for that as well.

Sure. Thanks for having me on here, guys.

Appreciate it.

Absolutely. And you can check out nextlevelincome.com youm can check out our show notes if you have any questions to get ahold of Richard and also see all of the many books that he's written and get ahold of all his resources.