Episode 5: Designing Freedom: From Corporate Career to Strategic Private Investing with Bryan Hancock

Foreign.

You're listening to the Potentializer, the show where small apartment investors learn how to grow wealth faster with less effort, more credibility and real impact. Hosted by best selling author and platform builder Lance Edwards, this podcast is your inside track to smarter models, collaborative deals and overlooked opportunities that create true freedom. Whether you're just getting started or ready to scale with partners, platforms and purposes, this is your launchpad.

Well, hello everyone. Welcome to this edition of the Potentializer podcast. This is the show where we spotlight real stories, bold strategies and smarter ways to build wealth without the grind. You're ready to break free from the old rules and unlock your true potential through partnerships, platforms and powerful investments. You're in the right place. And we have a Special guest today, Mr. Brian Hancock. He's a seasoned entrepreneur, investor and the chief dealmaker behind the Texas Freedom Fund. We're gonna be talking about that today. After two decades in high level roles at companies like Microsoft, Dell and Schwab, Brian made the leap to move into in private investing where he now helps high income professionals escape the corporate grind by building real wealth through alternative investments like oil, gas and real estate. He's raised millions, launched successful ventures, and specialize in helping others take control of their financial future. Brian, welcome to the show.

Thanks, Lance. I appreciate you having me.

Great to have you here. You're speaking on a topic that's going to ring true with our listeners. I want to start off with this. Brian, first question. You've helped many executives break out of what I call the corporate cage and I was one of them at one point, 20 years ago. What was your personal turning point that made you walk away from the W2 world?

Believe it or not, Lance, I'm still trying to juggle all the things I do, still have a corporate career, very purposefully have kept the corporate career. I like what I do during the day and for most people, it's not so much about that specifically. It's about having the tools to be able to live the life that you want. Right? And so if you've got a work from home job or young kids at the house, people think about the world and the risk topics a little differently than, you know, if you're a later stage of your life or maybe you're earlier in your career. To me it's kind of like one big blended thing to talk about the freedom discussion, which is, you know, kind of kind of the point my wife and I are about both at in our careers right now too. A lot of people listening are probably making quite a bit of money in Their corporate career too. So it's, it's a very mindful discussion about when you step away from that, the goal for private investing in general should be to try to get your dollars working as hard as they can for you and maximize after tax gains, not minimize taxes. That's the conversation I like to have with folks interested in these topics. How are you optimizing for that?

Excellent. Very good, Very good. So you're doing both. That's great. And you mentioned something and I want to talk about mindset because this is a big topic that I speak about. What mindset shifts did you have to go from being solely in the corporate world to now where you're doing this mix? What was difference between that versus what you're doing now, mindset wise?

You know, I kind of struggle with this one a little bit because I've always wanted to design my own thing and I think that's the corporate career that I've selected. The program management career. I like that because I get to do lots of different things. There's a program, there's a problem. You're trying to take the organization from one state to another. Right. So I think that that entrepreneurial mindset, it's a mindful discussion about whether or not that's something that people are born with or they kind of design over a period of time. And I'd like to think it's a little bit of both. I think a lot of people have those entrepreneurial genes, but they tend to get trapped in somebody else's frame. You're trapped in somebody else's idea of what they should be doing with their time instead of utilizing what they're doing in their corporate career to really design their own legacy. We have a podcast called the Executive Connect podcast. Our mantra is break free, design your legacy. And that's kind of like a lot of that same mindset is how are you living life on purpose and how are you leveraging all of your resources? Whether it's investing mindset, how you're, you know, showing up in the world, how you're leveraging your relationships, I think all of those things are core components to, to being able to do what you know, to live on purpose.

And 100 agree with you. I call it. Well, this is the potentializer podcast. That means how you achieving your full potential out of your ability. I think that's what I'm hearing you say as well. It's a, it's a challenge because so many high income professionals fail to build real wealth because they're lured to that impressive paycheck. That's what you were talking about a moment ago. And let's talk about why that is and what's the trap you see most often? And is there a secret to escaping the trap?

I think there's really a secret. I mean, humans are kind of designed to be on what's called the hedonic treadmill, right. And that's kind of a peer group thing. You're kind of the average of the five people you spend the most time with. If you're spending most of your time with corporate types, they're going to tend to think like corporate types. And so, you know, Bob and Sally get the bigger boat and you want the bigger boat. So one of the things that my wife and I have very purposefully tried to do is design enough free cash flow to set some money aside. And that's the powder that you're going to need to be able to, to make the investments. Right. Most people doing this have done it over some period of time. It's not like this big shot, you know, success magazine moment. You know, it's really the boring small things you do day to day, year to year. To build something over time most people struggle with is like the discipline to do that, the very disciplined approach to do that. Because it's not something for most people of a certain means when they're starting, they're not going to just start out on third base with all the resources they need, but something that they got to build over some period of time. And everybody's situation is a little different. You know, some people have, you know, they're single, some people have a spouse, some people have families they're trying to raise. There's not really a cookie cutter way of doing this. One of the fundamental elements is you got to make sure that you're spending less than you make and you're able to build up some powder over time. Then you got to make sure that you're making the right investments with it. If you're doing it the right way, those small successes should compound over time to where you're able to get to that exit point, some point in the future.

Brian, I like what you say about the discipline side of it. And it's a day by day habits and the day by day discipline of doing what you want to do towards a goal. I think that's what I'm hearing you saying, correct?

I don't know if you've ever heard of the book Atomic Habits before. It's not so much, it's kind of like part of it is being the person, you know, like in your brain, the thought process that you're trying to get there. And that person that would be that, you know, you know, in that state, what are the sorts of things that they would do, and making the small adjustments day to day to increment your way to where you need to be. And I think that most people struggle with that. And it's just like anything hard, like diet and exercise is hard. Right. It's not something that you get, you know, immediate results for. So consequently, you got to have that disciplined approach to get there. And I think that's what most people struggle with.

Great analogy. All right, let me shift a little bit. We're talking about alternative investments, private investments. So why do you believe private investments? Talking about energy, I know you've also been involved with real estate offer a smarter path of freedom than the traditional 401k, which we've all been taught, and the index funds approach.

I honestly think a mix of both is the right approach. Some portion of your portfolio should be in the boring 60, 40 allocation. There's tried and true reasons for that. But I think private investments offer a lot of advantages for people in most life situations. A lot of your audience is probably high income earners. It isn't all about tax benefits, but how are you doing things purposefully to keep more of what you're making? Real estate offers a lot of advantages for. The challenge for most folks is that you can't claim real estate professional status. If you're making active taxable income, you need to have active losses to go with it. Most people doing it right will have some passive income too, but that goes with passive losses. Most traditional ways of investing in real estate have that problem that's initially attracted me to private oil and gas ventures. I've been going to the same commercial real estate meetup for at least 10 years, and there was a oil and gas broker that stood up at one of these meetups. This is probably about four years ago now. I said, here, who. Who here in the audience has a really high tax, you know, taxable income? And my ears kind of perked up because my wife and I have this situation. And he mentioned oil and gas and like this thing called intangible drilling costs, which I've never heard of. It's kind of interesting. I grew up in Austin and everybody thinks that everybody in Texas kind of rides around on with cowboy hats on and on horses. But I didn't know anything about this growing, having grown up in Austin. And so we proceeded to work with this individual to visit the principals, dipped our toe in the water, did one investment, which led to another, which led to another. This is just kind of the way we think about investing. We are more careful with our own money than we are with investor money. We wanted to make sure we understood things really well before we ever decided to open it up for other folks here. Over the last six months or so, we've opened up our own fund. It's called Texas Freedom Fund, and it's very specifically designed so that people didn't have to have the same experience that we did most of these private wool deals. You mean you have to invest on the order of a quarter million dollars to get in? We've set it up where people can invest as little as $25,000 just to learn it. The perception and part of the reality with oil and gas deals is that they're super risky. In the old days, when you're out wildcatting and you're trying to put a soda straw on the ground and find oil, they were risky. And so the tax laws were set up very specifically to encourage domestic production back in the 80s. But technology has advanced a lot and the tax laws haven't changed. Now, instead of sticking a soda straw straight in the ground, you turn it sideways and you go through a giant shale formation for maybe half a mile. You've got production data through the railroad Commission all around you. So you know what all the deals around you are doing in terms of production. And so it's just a materially different risk profile. You also fan out to multiple wells and then you frack things. You can probably screw that up if you're really trying. It's still underground construction, but the overwhelming likelihood is not that you're going to miss oil entirely, it's that you're going to get stuff out slower than you wanted to. The price of oil and gas is very volatile, so it could drop quite a bit. There's Covid times where it's dropped precipitously. So there's certainly risks. It's just a different type of risk. And it's suitable for people that want to take that risk. They're going after the tax benefits to go with it. There's a thing called intangible drilling costs almost 100 cents on the dollar, well into the 90% range of all the money you invest in year one deductible against your active taxable income, which I think is really cool. Nobody should invest in any investment like this specifically for the tax reasons. If It's a crappy investment. You shouldn't do it. The great thing about these is they usually return capital in three, four years, something like that, and then it's a nice steady income stream after that. Another tax benefit is once you start to get oil out, 15% of the net is also tax free. Right. So it's just a very well structured tax investment. But I like to tell everybody what you should be after is the optimal after tax benefits, not after minimizing taxes. So that people should definitely do their diligence on that and the people they're investing with.

Let us. This is very interesting. So for everybody, it's the Texas Freedom Fund. And before I go, let's give everybody contact information you were sharing with me. Go ahead and share with everybody. How can they get more information about what you're doing in the Texas Freedom Fund? Brian.

Believe it or not, we've had so much interest from people that we don't have a website set up yet or anything that's on our roadmap of things to do. The easiest way to contact me is I'm on LinkedIn. It's Brian with a Y Hancock. H A N C O C K. Connect with me and DM me the word freedom. I'd love to have a conversation with you about this.

All right, so everyone, it's Brian Hancock. Go to his LinkedIn, Brian B R Y A N Hancock and message him the word freedom and he'll get you some information about the Texas Freedom Fund. Brian, what would you say is the least understood benefit of these deals?

I'd say probably the taxes. Most CPAs really have never heard of this too. There's some bigger CPA firms in Texas that really specialize in this. We had to spend quite a bit of time with the fund structure setting it up. There's firms like Vincent and Elkins in Houston that would charge like a quarter million dollars to set up a fund like this. I was able to leverage a securities relationship that I've had for almost 20 years in the real estate space to be able to set this up on the cheap. So that's one of the things we're trying to do and that's how we're trying to keep everything very accessible. In terms of the investment size too, I'd like to think that that's hard for people to do, but the tax benefits are really not very well understood. Just in the travelings that I've had.

What you were just saying, 90 plus cents of every dollar in the first year of your investment is Deductible. Did I hear that right?

Yeah, it's pretty hard to believe. So I think that's sort of the first reaction that most people have to it or Most of the CPAs that we present it to. But we can give them the RC codes and all that and there's some literature that we can send just to describe it a little bit more.

Outstanding. All right, doing the research, preparing for our conversation today. One thing you talk about the power of networks and finding off market opportunities. What would you say what makes executive deal flow different from what the average investor sees on the Internet?

The word executive means different things to different people. I guess what I would say is to the extent that you're trying to invest in private deals, what you should try to do is get really good at one or two things, right? How do I really analyze this deal? Well, it could be commercial real estate, trust deed investing, it could be oil and gas deals, you know, it could be whatever. But it's hard to be good at lots of different things. If you really know what your buy box is really well and you've got everything very well characterized, you can get really good at one thing, right? But it's really going to be kind of hard to do that same amount of work on lots of different deal types, right. And that's what makes it hard for folks is they're busy. Executives specifically, they're raising a family for the most part. They've got a lot of demands at work and they're still trying to live a private life too, and hang out with their buddies and have a normal life. It's hard to put in all the reps needed to get really good at one thing. That's why leveraging the power of somebody you know like and trust that's able to spend those cycles on a particular type of deal is really valuable. I tell everybody, and that's kind of why we've got the fund designed the way it is, is, you know, the best way to invest is to grow a relationship slowly, right? If you can invest a small amount, make sure the person does what they say they're going to do, and then up that investment over time as they're able to prove themselves. That's how the banks grow relationships too. You don't borrow $20 million on your first deal with the bank unless you're already worth a hundred million dollars, in which case it's no big deal. They like to grow the relationship slowly. And I think that a lot of that's because they've navigated risk Cycles and cycles in the market. So they kind of know that's generally how relationships are grown. It's the same in the private equity space. If you're doing it right, those relationships should grow and mature slowly. Ask tough questions from the person you're dealing with and check on references. Do all of those things. I think all of that is what really smart investors should do.

You were at a real estate meetup when you met Boiling Gas guy. Your network started there.

Yeah, but I mean the Persona types are similar. Right. You're around a lot of folks that are of a certain mindset. So it's a lot easier to have those conversations with people who are already most of the way there than it is to talk to a corporate executive that's spending almost no time trying to do private investing on their own. That's a lot longer life cycle trying to get them to the right mind space than it is to be around real estate investors who are already receptive to that. Different types of deals and it's a lot of it is a mindset thing for sure.

You know, we've been using the term mindset several times through this and it's something that I'm always speaking to. And so I've got another question for you related to that, Brian, is one of the things I saw you talk about thinking like an owner. So I'm going to ask you, what does thinking like an owner mean to you and how does it change how someone approaches their career and their investments? This thinking like an owner mindset?

Yeah, I think a lot of it has to do with the end state. I've never really thought about classically retiring. Right. It just, it's a weird concept for me even just putting money into self directed IRAs or solo KS or things like that. Because I always think about optionality too. It's like how am I constraining myself by making those selections to try and optimize for tax benefits. And the taxes certainly matter. But I think what really matters the most is like are you living your life on purpose and do you have a plan? One of my buddies I have lunch with all the time and I get in this debate a lot because he works as a high commission person at Cisco. He thinks about his business as selling his services to Cisco. But I have a hard time wrapping my brain around that. Are you really in the control position of being able to make decisions that are in line with what's best for you and your family? Right. Or are you really living in somebody else's frame? Somebody else's paradigm for how they want to utilize you as a resource to build their thing. Right. And so I think that people that are thinking like an owner, that's kind of like their general thought process is like, how are they able to control this thing? And are they able to make decisions that are in their best interest and not have decisions made for them that are potentially in somebody else's or some collective group of other people's interest?

Very good. Yeah, I think the word control kind of very important in this conversation as well. Taking control of your wealth creation, your investments. I've got one more final question here, Brian. This has really been excellent. Looking back over your career, you've built businesses, you've raised capital, you've navigated complex scenarios. What's one piece of advice you'd give to someone starting their wealth building journey today? Someone who's listening to this saying, you know, that guy Brian Hancock makes a lot of sense. Having been down the journey, what's the single most important piece of advice you'd share with them?

I asked this when I was rather young. I remember I kind of started my investing journey when I was probably 20, 22 years old. And I got a really good piece of advice from a graybeard that's much older than I am right now. He said, liquidity is stay power. One of the things you have to really be mindful of in the private investment space is risk and returns go together. There's no free lunch, right? Part of this is a liquidity game, right? If you're investing in these private opportunities, you might have to be in them for the very long haul, depending on what, you know, type of investment that you're in. So you need to be mindful of your liquidity situation. And that liquidity situation also needs to be kind of matched with your, you know, your overall goal. If you're raising a family, you're probably going to need to be a little bit more risk averse than if you're in a different situation in life. That's something to be really cognizant of, especially in the private investment space is making sure you're maintaining your liquidity at a level that is comfortable for you.

Excellent. All right, everyone. So Brian Hancock, Texas Freedom Fund. Oil and gas phenomenal. Had no idea. 90 plus cents of your investment in the first year goes to tax deduction. For more information, go to Brian's LinkedIn page at Brian Hancock. Message him, put the word freedom in there and get some information. Brian, any last comments you'd like to share with everyone or thoughts before we wrap up today?

I know most of your viewers are commercial folks or real estate folks. That's what I've been doing for 20 years. What I love about this is that it's mailbox money and I don't have to deal with the complexities of chasing contractors around, losing your hair tenants and toilets. Any of that stuff you send a check in, money comes back out. It's really that simple. The tax benefits to go with it. Love to have a conversation with folks. And Lance, I really appreciate you having me on the show.

Oh, it's my pleasure. And I tell you what I'll do everybody. We'll put, we'll put in the show notes. I'll put Brian's LinkedIn URL so everybody can just click and get the information. And so everyone for the show notes go to the potentializer podcast.com potentializerpodcast.com thank you for joining us today. This is all place where we turn possibility into profit and Brian's showing you exactly how to do that today. Go to potentializer podcast.com you can catch the show notes, catch this replay and look forward to seeing everybody on the next taste of your podcast episode. Take care everybody. Foreign.

Thanks for tuning in to the Potentializer where we unlock the true potential in people, properties and partnerships through small apartment real estate. If today's episode helped you see a smarter path to wealth, authority or impact, be sure to subscribe, leave a review and share the show with someone ready to grow. To plug into the platform, join the Mastermind or or discover how to potentialize what you already have, visit wealthmastermindnetwork.com.