[RTB:E36] Money Management Tips For Entrepreneurs w/ Jim Dew - Avoid These 3 Money Mistakes

Hey, you're listening to the Road to a Billion podcast. I'm your host, Stefan Georgi and I'm glad to have you with me here today. The Road to a Billion is a call in radio show style podcast where you can ask me and my guests questions about freelancing, entrepreneurship, mindset, scaling, money, relationships, so much more. And money is going to be particularly important today as we'll get into in a minute. The reason for the name the Road to a Billion is twofold. One is I will generate around a billion dollars in sales this year. I mean, I may have already done it, haven't done the math, but pretty close to that, that's for my own products and also primarily for my clients and then helping to make an impact on the lives of a billion people over the next 10 years. And really now it's been a year, so the next nine years. So we'll start taking your calls in about 30 minutes from now. And the way that works is you'll put questions into the Q and A in Zoom and then Ed Ray, my wonderful co host, will go in and kind of feed them to myself and my guests and, and we'll bring you on live like you would on a radio show and we'll answer it. So go ahead and pop them in in the Q and A section in Zoom. And Ed, do you want to go ahead and introduce yourself real quick?

Hey everyone, my name's Ed Ray and I'm a Facebook compliance expert. I've been doing direct response marketing for about six years and I'm really passionate about helping people actualize their untapped potential by helping them think differently.

Love it, Ed. Love that. Love that breakdown. Cool. So my guest on today's episode is Jim Du. Jim was first introduced to me through Joe Polish. I was out in Scottsdale and got to go hang out with Joe Polish for like an hour and a half, two hours. And Joe was super generous with his time. We never met before, and then he, I think I kind of mentioned something about managing money and how I'm not great at it. And he was like, you should really talk to Jim Doo. He's like, Jim has saved my ass so many times. Saved me so much money, just said a bunch of incredible things. And so he introduced me to Jim. I went over to his offices and then signed up to work with him. And then frankly, I've been dragging my feet a little bit since then and not any form of Jim's. I've just been kind of bad about it. But every time I look at the mistakes I'm making, I'm like, I really need to actually work with Jim. And so I'm in the process of onboarding with him right now. But, yeah, the guy's incredibly knowledgeable. He's the CEO and founder of Do Wealth Management, a financial advisory firm that helps entrepreneurs think like billionaires. He works with Joe Polish. He works with the V shred guys. When Jim and I were first talking, he kept listing off people, and I'm like, oh, yeah, I'm friends with them. And it's like, turns out all of the really successful people, in direct response, a huge percentage of them are using Jim. And he's making a huge difference. He helps entrepreneurs and business people to build virtual family offices, helping them maximize their time, money, and their freedom. He's been featured in Inc. Entrepreneur, Huffington Post. He's the author of Beyond a the Entrepreneur's Playbook for Expanding Wealth, Freedom, and Time. And I'm really excited to have him with me today. So, Jim, thanks for joining us.

It's great to be here.

Stefan, that was very nice introduction.

And you know, of course, just because I work with a lot of very famous entrepreneurs. Do your research. Don't take that as an endorsement, as I always try to look out for our. For listeners and people who are looking into this stuff.

Yeah, absolutely. That makes sense. But I think it'd be great if we start by just a quick background of what you do and what is a family office. Why is that valuable to entrepreneurs? I'd love to just get that background to start.

Yeah. Let me give you just a little story on how I got to where I am, and then in there, I'll weave in exactly what a virtual family office is.

So when I was in college, I.

Was very idealistic, as I still am today, and wanted to make a difference and do something that mattered. So because I was good at math, a counselor suggested I become a math teacher. So I was a public school math teacher my first five years out of college and loved the kids, but hated the system. And after five years, I realized, you know what? I am not good working in broken systems. So I looked for another thing I could do to make a difference, being good at math. And I found financial services. So I jumped into that with both feet. Four years later, I realized, in my opinion, it's a broken system. A lot of the advice comes through banks, insurance companies, broker dealers, and brokerage firms that is not always aligned with the best advice for the client. So in 1999, at the urging of my wonderful wife, we started Our own company, a fiduciary firm, in 1999, and realized that we were entrepreneurs. So we wanted to work with people like us. We decided that we would specialize working with entrepreneurs. And then about 15 years ago, there was another huge impact on my life because I always say the two best decisions I ever made was, number one, marrying my wife, number two, starting my own business 22 years ago. About 15 years ago, I thought I knew everything there was to know about wealth management for entrepreneurs. And then I learned what billionaires do. So what they do is they create something called a family office. And if you haven't heard of a family office, if you're on this call, family office is where a billionaire will hire all the needed tax, legal, insurance, and investment professionals, the attorneys and the accountants, as full time employees working for that one billionaire and his or her family. It's why Oprah has one. It's why Bill Gates has one. So luckily, through my connections, I got introduced to a billionaire family in New York. I jumped on a plane and flew out there and had breakfast with the CEO. And sometimes you meet someone where you just connect and feel like you're old friends. And that's the way I was with this family office CEO. And he said, jim, you're pretty interested in this. Do you want to stay around for a few days? And so I did.

And I learned all about how they.

Ran their family office. And on the flight home, I had all these notes and it struck me like a lightning bolt. This is the best way for an entrepreneur to manage their wealth. There's just one problem. You need about $300 million of assets before you can hire all those people as full time employees and build something like this. So then I had this crazy idea. I thought, I wonder if I could call it a virtual family office. First for my own family, because we don't have $300 million. And then for my entrepreneurs, who are all successful, but they don't have that kind of net worth.

And that's what we've built over the.

Last 15 years and that we use every day with our clients.

Awesome. And so what are the benefits of a family office? Why? For entrepreneurs who are going to, who are listening now, who are going to, why would they want to consider creating one?

A few reasons. So I'll just give you a couple big ones. So Keith Cunningham, a friend of mine who wrote the Road Less Stupid, he talks about the stupid tax that we all pay. And if you go back and think about your career as an entrepreneur and think the one Mistake or opportunity you missed, that was the biggest. How much did it cost you? So Keith Cunningham says his was $100 million mistake. So the way he framed that in his own mind was he got to go to a university where the tuition was $100 million that most people can't afford to go to. My mistake was a million dollars that happened about 17 years ago, a mistake that I made personally before we created our own virtual family office. So the first thing is reducing or eliminating the stupid tax in all these different areas that touch your finances. Another thing is your time and your energy. So every entrepreneur should do an exercise where you figure out what your time's worth. An easy way to do it is, how much revenue do you generate? Divide that by 2000, which is 40 hours a week times 50 weeks, and come up with your number. And by the way, if you're a startup, your time is going to be worth at least $1,000 an hour. Because if you said, you know, when Bezos was creating Amazon and they made no money, was his time worth nothing? No, his time was very valuable. So still, I would say probably for most entrepreneurs, it's at least $1,000 an hour. Some are $5,000 an hour if you're delegating and building a real company. So if you take those numbers and you think, how much time should you be spending in your wealth planning and wealth management? What is that costing every year and your time? So there's a couple things just off the top of my head. Why someone may want to build a virtual family office.

Yeah, I think that's awesome. And I love the look at what your hourly rate is. I talk about that a lot, too. And even with freelancers, what your effective hourly rate is, because an issue freelancers will have is like, well, what should I charge? And it's like, well, you know, kind of like, what do you want? What are your income goals? Like, what do you want to be making an hour? How many hours is this going to actually take you to complete? That's what you can charge. But then really understanding it helps with a lot of rationale and decisions. Like, I, like, my ideal effective hourly rate is like $5,260 or something. That's basically so that if I'm making a million dollars a month in income, right? But realistically, I'm not. Like, I've had. I've flirted with it. Right now I'm making maybe 300 to 400,000amonth in income, which is still great, right? But like, but I have to Think about that. Because if I make even justifying things like flying on a private jet for me, right? And I'm like, well, I'm going to save, you know, seven hours. And it's like, well, if my time's worth $2,000 an hour, it's very different calculus than if my time's worth $5,000 an hour. So I think, like, I know that's very high level and hashtag blessed and all that kind of shit, but at the same time, like, I do think, you know, thinking about that stuff in the hourly rate, like, is really very valuable because it helps how you allocate your time, the decisions you make.

Right, very true. And you have to think, I always say, how important is it that you're trying to. What is it that you're doing? How important is that? And can you delegate it to someone who's an expert in that area? I would say your wealth planning is very, very important. It's critically important. It's why we do what we do is you gotta make a difference, you gotta build companies, but also to create financial freedom for our families. So I would say it's very important. And then can you find someone? It's kind of my friend Ben Hardy's. Who, not how book, right? I mean, can you find who can do that for you so that you don't have to build all these structures to manage all these different areas of tax, legal, insurance and investment?

For sure.

I'm curious, Jim, like, what are some of the big mistakes you see entrepreneurs making with money? Because to speak from personal experience, I notoriously was very bad with managing my money. I'm a bit better now. I've just set up stupid things. Not stupid, but I have money going into a Vanguard index fund. Every month it just gets pulled out of my account. I told my wife recently, I'm like, I'm so glad I did that because maybe it's not the best investment in the world, but at least that money is just getting yanked out. I forget it exists. And no matter what, it's going somewhere where hopefully it's going to appreciate over time. If it doesn't, then we've got bigger problems over a long enough horizon. I have a bit of real estate now, things like that, but. But again, I think I'm not alone in that. It was always very confusing and hard as an entrepreneur to figure out how to manage my money, what to do with it, and then to not make stupid decisions like buying fancy things and stuff like that. What are some of the mistakes you see Entrepreneurs making regularly.

I'll give you three big ones and then I'll tell you kind of from a higher level, a mistake that causes those mistakes. So you mentioned investing, so I'll just cover investing for a second. One of the most important things every entrepreneur needs to do is have a target allocation. Because here's what entrepreneurs do. They have a buddy that says, oh my gosh, you see what Bitcoin's doing? You need to buy some Bitcoin or the other varietals, right? Ethereum, and on and on. Or you have someone say, oh, you got to invest in the startup. This thing's going to be worth billions of dollars. And so entrepreneurs are just randomly finding stuff that looks really exciting that they invest in. Every great investor is disciplined, and so you have to get disciplined in how you're going to invest. So here's the thing. Entrepreneurs get rich by being concentrated in a business. They stay rich by being diversified outside of the business. So stay concentrated on your business. Often entrepreneurs are getting sidetracked researching Bitcoin and hard wallets and all this stuff when they should be building their business and focusing on that. Not that you shouldn't invest in crypto and stuff like that, but don't get distracted. You're going to get rich by building a great business and staying focused there. And you're going to stay rich by being diversified outside of your company. Getting diversified outside your company. You need a target allocation. So what we like to do with clients, we start with our current allocation. Here's where your money is today, and most of it's in your business. And then you want a glide path toward where you want to get to. And so we start with a billionaire model. So billionaire, there's a survey done by UBS every year or every couple years where they survey the wealthiest people in the world and they say, where's your money? We take that as kind of a target because everything we do for entrepreneurs is based on what billionaires do. Because it's a pretty smart way to model yourself. It doesn't mean you have to have the allocation like billionaires, but it's a starting point. And then build out your allocation. Because if your allocation says you need 10% in cryptocurrency and you already have 15% in cryptocurrency, and then someone comes to you with a coin, you're going to go, I'm already over allocated, so I'm going to say no. Or if you have 20% of your portfolio is going to be private equity or venture capital. And you've only got 10% and someone comes to you with a good private equity deal, you're going to be interested and say, I want to spend some time on that because I'm under allocated in private equity and venture capital. But if you don't have that allocation, you're going to end up getting way overweighted. Or you're just going to chase the stuff that sounds exciting to you. And that may not always be the best thing. Because what excites entrepreneurs the most are usually the highest risk, even though they don't think it's the highest risk. And any entrepreneur that's been around for a while is what I call an experienced investor. That means you invested in something and lost all your money. So that's the investment front. The second thing I talk about is tax planning. Most CPAs or accountants in my experience are what I call tax historians. So they take all the information looking in the rearview mirror, they put it in the right places, file the forms and tell you what you owe in estimated taxes. What you need is a tax planner. That's someone who's looking at the price, your P and L and forward looking. Based on the way things are going this year, what are the things that we can do to reduce your taxes? Because if you're a successful entrepreneur, one of your biggest expenses is going to be taxes. So that's number two mistake. And then the third mistake that I see often with entrepreneurs is not thinking about their exit. I tell this all the time to entrepreneurs when I speak. You will exit your business. I don't care who you are, you will exit your business. How do I know that? Because you're either going to sell to a strategic or a financial buyer. You're going to die or get disabled. You're going to give it to your kids, you're going to sell it to your employees, you're going to get crushed by competition, or you're just going to watch it gradually reduce cash flow until it disappears. You will exit your business. And the sooner you start thinking about that exit, the better you can plan for it and get the best tax and asset protection outcome. So I like entrepreneurs thinking at least three years in advance, sometimes five years in advance, about the exit. But here's the funny thing that happens when you start building like you're going to exit, even if you never exit, your company becomes more profitable and your life gets better. Let me just give you two reasons why that is. Your company gets more profitable. Because if you're focusing on selling it, you've Got to make the profits look good. And entrepreneurs often get caught in the trap of grow, grow, grow. But if you don't have any profit, just because you have revenue doesn't make you very attractive to a buyer. Buyers like profit, and. And they also like things like recurring revenue so that they can monetize that purchase. So that makes your company more profitable. It makes your life better. Because one of the most important things if you're selling is that your company runs without you. If your company runs without you, you're much more attractive to another buyer.

And guess what?

Your life gets better. Because if you want to take three months off to travel the world, or you want to take care of a sick relative, or you want to spend time with your kids, you can do that. You have the choice. And even if you don't take advantage of that choice, and I'm guilty of this, working all the time, you feel better knowing you have the choice, and your life is better knowing you have the choice. So those kind of the three mistakes that I see, and then I can talk about the overriding bigger mistake that causes those mistakes. If you want me to go into that.

Yeah, absolutely. And I love the idea that you will exit your business one way or another, because I think that a lot of entrepreneurs are resistant to that because they think about, like a liquidity event, right. They think about selling. And if they don't think they're going to sell or whatever it is, and, well, I won't. But I think the idea of that your exit is inevitable is very profound and a good mind shift. And I want to give Peter Feichena, who's watching on Facebook Live, said, this is a crazy episode. Fifteen minutes in mind, blown doesn't cut it. So you're already blowing people's minds, Jim, which is awesome.

I like it.

Yeah, man. But, yeah, I'd love to hear what is the overriding.

So the overriding is to build a virtual family office structure. You need what we call a linchpin partner to help you decide who on your team is the right fit. Do you have the right attorney? Do you have the right accountant? Do you have the right insurance agent just to build the entire structure. But the linchpin partner typically is someone in wealth management, but with three distinct qualities. So first, you need someone in wealth management who has a specialization in working with entrepreneurs, because most people in wealth management are generalists. If you have a lot of money, they'll work with you. And there's a big difference in the opportunities and problems facing an entrepreneur than someone who's a W2 wage earner or someone who inherited their money. The second thing you need is a wealth management person who has experience building these virtual family offices. And the reason why that's important is you don't want someone trying to build these structures for the first time or on your dime. And then the third and maybe the most important thing is you need someone in wealth management who takes a fiduciary position with you, which means a legal representation where they always put you ahead of themselves. Now this is where it gets tricky. Because just because someone's a fiduciary doesn't mean they don't have conflicts of interest. But generally those conflicts are disclosed in a big document that nobody reads. So here are the things I'd look for if you're finding a link partner. Besides specialization, experience building these virtual family offices. But on the fiduciary front, here's what I look for. You'd like someone who doesn't sell products but still represents you when you're buying those products. So I'll give you just an example on that. So one thing that a lot of entrepreneurs get pitched on is buying life insurance to build up cash and then to get cash tax free income on the back end.

And you're nodding on this many times.

Yeah, so sometimes it's referred to as, you know, some something to do a bank with a bank, like you own your own bank in some way. And truthfully, that concept or that strategy can work for some entrepreneurs and it doesn't work for other entrepreneurs. But the mistake entrepreneurs make is once they decide to buy that, they buy the life insurance from whoever used that marketing strategy to get their attention. So one thing that billionaires do when they're buying life insurance, because they buy life insurance too. So they'll either buy private placement life insurance, which is a whole other conversation, or they'll buy retail products just like you and I will. But they do it differently than most entrepreneurs. So when they buy life insurance, they always have someone who represents them who knows life insurance but doesn't get paid, rewarded or compensated in any way if they buy the life insurance. So a few months ago we had a client who fit that strategy. So that life insurance strategy of building up cash and tax free income on the back end made sense. So he wanted us to use his agent who was a friend of his. So we said, okay, fine, he's got to do it the billionaire way for us. So we always require the first thing is that commissions are disclosed. So this was $100,000 premium for 20 years and then tax free income on the back end for the next 20 years. Once we got involved, we require that commissions be disclosed. Any guesses on what that agent was getting paid on that first year? $100,000 commission.

I'm going to guess it was pretty high. I don't want to give a number, but yeah, I'm guessing it was pretty shockingly high.

$112,000 in the first year. So we negotiated and by the way, this is one of four or five things that we do when we're helping an entrepreneur by life insurance. We negotiated that down to 23,000. That one change without any other changes on the back end added $907,000 of tax free income on the back end of that policy. That one thing. So it's not that life insurance is good or bad, it's a tool. But if you're buying it, you need to buy it in the billionaire way and have someone represent you. So for that reason, we don't sell products. We also believe that when you work with wealth managers who have an investment requirement where you have to give them a million dollars or $5 million or $10 million and then they'll work with you. We decoupled from that years ago because we think entrepreneurs, maybe they should be buying real estate, maybe they should do it themselves like you do with your Vanguard index fund. Maybe they should buy crypto. So we don't care. And we completely decoupled from that. So those would be a couple questions I'd ask about fiduciary position is do you sell products? Because that's a conflict. And do you have a requirement on the investment side? Because if they do, that's a conflict. Because if you say should I pay off my house, then they're going to be conflicted.

Right?

Because they'd rather have you give the money for them to invest rather than pay off your home. So anyway, that's a couple things on what we call the linchpin partner and that's really important because that avoids a lot of those other mistakes I mentioned because the linchpin partner will make sure you have a great CPA or accountant who's doing the tax planning. They're going to make sure you have a billionaire allocation so that you can map toward that. They're going to make sure you're thinking about the exit and properly structuring the entities within your business or businesses for a future exit.

Yeah, that's really interesting. It's a crazy story on the life insurance side, but I'm sure it's not uncommon. And I do like the allocation side too, because I think one thing, as you start to generate kind of some assets and have, I guess, free money or spare money, it actually, it becomes very difficult to know what to do with it. Right. Like, even from a real estate perspective right now it's like, I. I want to buy a house in my neighborhood in Vegas because I really like the neighborhood and I think it will grow. But then looking at more, I don't know, houses are more investment properties that are maybe a third of the price of what's in my neighborhood, but might grow. Then I saw something in San Diego recently, and I already have a house in San Diego. And then I'm like, but there's just so many different options. And of course, well, if I had all the money on the road, I would do everything. But I don't. You start feeling overwhelmed. And then I told my wife recently, I'm like, I can see how people who have a lot of money end up just finding a financial advisor and just being like, handle it all for me, because they get overwhelmed. Which is, again, blindly hiring a financial advisor is not the way to go either, especially in an investment. Somebody's going to do their investments for them. But, yeah, I think that all makes a lot of sense. A question I want to pivot to. Not a huge pivot, but one thing you said to me when you and I met in person, and I had a mentor who kind of mentioned this to me years ago as well, was the fact that you're always worried about, oh, we're at the top of the market and maybe recession's coming and things are crazy. And, you know, basically, like, what my mentor had said, and you said something similar, is like, look, ultimately, if things go that far south, then we've got way bigger problems, right? It's like, there's going to be dips. Nobody's saying there's not. But like, worrying about everything just falling apart. It's like, if that happens, you know, you're going to be more worried about finding food and like, do you have enough guns and stuff like that? Right. And not. But that being said, I mean, do you have any. I'm not going. I'm not asking you to be a psychic or anything like that, but I mean, I'm just curious what you think of kind of where we're at right now with the economy and maybe even the real estate market, too, because it just seemed like a very weird time. It's hard for the average person. Like, me to make sense of it. I'm curious what your insights are there.

Great, great question, Stefan. Let me cover a couple first.

Let me cover before and I can get into where I see things right now in the different cycles.

But before I get into that, there's.

A more important thing to think about when you think about investing, and that is you have to invest based on probabilities, not possibilities. And I see often entrepreneurs are investing based on possibilities. Oh, the dollar could collapse.

Possible but not probable.

The stock market could crash and never come back for 10 years. Possible but not probable. So when you start giving yourself, you give into possibilities, then you end up investing either not enough or you wait and wait and miss opportunities. So really you have to invest based on probability. So the probability is 10 years from now, stocks are going to be higher than where they are today. The probability is that real estate in 10 years is going to be higher than it is today. So you have to bet on probabilities, not possibilities. And that's how you become a great investor. If you try to be so smart and time the market and try to predict what's going to happen. You know, Yogi Berra said predictions are hard, especially about the future. If you're trying to predict stuff all the time, guess what? Nobody knows.

And yet if you go online or.

Talk to your friends, there's someone who knows. There's someone who knows what's going to happen.

Right before the election, I had clients.

Saying to me, jim, I guarantee you this was the actual wordage. I guarantee you if Biden gets elected, the stock market's going to crash. I said, you guarantee me? I guarantee you. I said, well, look, I've studied this stuff for 26 years and I have no idea.

But okay, maybe you're right.

Yep, I'm going to sit in cash and as soon as it crashes, I'm going to buy.

What happened?

Biden got elected one of the best Novembers in the history of the market. And that just goes to show that even though you can create a story in your mind about what's going to happen in the short term, nobody knows for sure. So that's what you want to do is invest on probability. So for example, if I gave you the choice of two investments. So investment A averages about 6% a.

Year and has for the last since 1950. So that's 70 years. So the last 70 years since 1950, there's never been a five year rolling period where that investment lost money. So I'll say that again, average is about 6% there's never been a five year rolling period since 1950 where it's lost money. So that means 1950-5519-5156-1952-1957, never lost money in a five year period. In 70 years, averages about 6%. The other investment is an investment that's guaranteed over the next 10 years to lose you 20%. So do you take the first one, never lost money in any five year period, averages about 6%. Or do you take the other one which will guarantee you a 20% loss in the next 10 years?

I mean, yeah, it seems like pretty obvious. I feel like it's a trick question, but it seems pretty obvious. You take the first one, right?

It is, it is kind of a trick question. So the first one is just a 50, 50 stock bond mix. 5050 stock bond mix. The other one is cash. So if you think about cash, cash is paying. I always forget this right now. Oh yeah, zero. Cash is paying zero right now. Inflation's about 2%. So over the next 10 years, if you're sitting in cash, you're going to lose 20% guaranteed. Pretty much guaranteed. So if you think about those two investments, here's what I see from entrepreneurs. A lot of times they're sitting on a ton of cash and they're like, well, real estate's too high or I don't know what's going on with the stock market and all these things. And look, you gotta get started now.

Cash.

If you say is cash trash or is cash king? It depends. If you have a discipline and you know exactly when and how you're gonna invest, cash can be king. If it's just sitting there because you're waiting for the skies to open up, or you don't know what you're gonna do, that's a mistake. Or if you're holding it cause you're gonna buy a property or something like that, that's where cash is king. So you wanna think about why you're holding cash and what you're doing. And even if you get invested over time and say, okay, I don't know what's gonna happen, I've got a million dollars of cash, I'm going to invest it over the next two years and put it in every month over the next two years to eliminate some of the point in time risk, that's okay. But you have to have a strategy about how you're going to do that. And I'll just finish one more thing. I can kind of get going on this stuff. I get excited this is my passion. But if you invested a dollar on January 1st, and on January 2nd, that dollar doubled to $2. And on January 3rd, it doubled to $4. And then it doubled to $8. And you did that for those 31 days in January. Any guesses on how much you'd have on January 31st?

I'm terrible at math. I know it's going to be quite a bit, so I'll let you share.

$1,073,742,000. Here's the other thing, though. If you did the exact same thing, but you missed the first week of January, just the first week, and then you double, double, double, double on January 31st, you'd only have 8.3 million.

Yeah, it's crazy.

Now, if you look at 8.3 million versus just over a billion, that's 8 million is less than 1% of a billion. So you lost 99% of your gains by missing the first week. And that's why this is compound interest. That's why you have to get invested. And when cash is earning nothing, get invested in something. So get your plan together. Don't just wait for your buddy to tell you what to do or wait for Bitcoin to drop to 30, $30,000. You got to get started investing. Because I see this huge mistake with entrepreneurs is they want something sexy and cool and then they want to hit a home run. That's what your business is for. When it comes outside of your business. A lot of the stuff you do should be boring and reliable to get you to a point of financial freedom. If it's too exciting, if you're too into it and you're an entrepreneur, maybe you're putting too much into that.

Yes. That's awesome, Jim. I see. Jaz said, Jaz make sure you do all panels and attendees. But Jaz said, I love this episode. Yeah, I think this is. There's just so much gold here. And. Yeah. And again, I think, like, what you're doing, working with so many entrepreneurs is really a valuable service. I mean, obviously it's not a charity and you charge for it, though, frankly, for everyone who's curious, I mean, all things being relative, I thought very reasonably priced and stuff like that. I mean, it's like a flat fee for most things. Right. I mean, if you, if you do assets under management, I think you also take a fixed fee on that. Right. But I think primarily for all the stuff you guys do, it's a, it's a flat fee, right?

Yeah. What we do, we do a flat Monthly fee stop anytime. I mean, we just want to add more value than what we cost. But yeah, my good friend Roland Frazier, you might know Roland, he's always telling me that we're underpriced. But I always, you know, I believe. And Roland also says this, the zone of fairness. And with what we provide, I feel like we're priced well and I love our retention as a business owner. I don't want to have to keep chasing business. And so I know we could charge more, but I think what we're charging is fair. And typically it's between. To build a virtual family office, at least for us, on the low end is the equivalent of hiring one full time $12 an hour employee. On the high end, it's equivalent to hiring one full time $42 an hour employee. So we feel that for a business owner, it's priced very well and we deliver a lot of the value. And then on the assets under management, it's an optional service. We kept it because often we'll see entrepreneurs that we help them through an exit. We've helped with exits as small as 2 million to the largest exit we were a part of actually just sold to Blackstone for 1.6 billion. So we've seen a lot of stuff in our years, but we've seen where they have exits and then they have a lot of money and some of the portfolios that are recommended to them we feel are expensive and not well managed. So we kept that as an option. And but just since we're talking about that, we're typically about 60 to 70% cheaper than other firms because we price that accordingly as an optional service and really only priced it where we thought that an entrepreneur would reasonably want to pay for it. But again, optional service people want to do it themselves. They want to do Robinhood, they want to buy crypto, they want to buy real estate. But we just want to make sure they have a smart allocation so that they're not just running wild and hoping they're going to get rich by chasing all these opportunities.

That makes perfect sense.

So cool. So for everyone who's watching on Zoom.

Especially if you have a question, put.

In the Q and A.

We'll get to those in a couple minutes here pretty soon.

Let me ask that too, Jim. I mean, having gone through help guided a lot of entrepreneurs through different exits. I've never exited a business. I've acquired a couple of businesses and.

I'm sure every deal is very different.

What are some of like the big.

Surprises or sort of hazards that Entrepreneurs.

End up kind of getting maybe blindsided.

With or don't expect when they are going through an exit for their business.

Great question. I could go on for hours on this one. One thing is you want to make sure you have someone involved in your life who sees some of the different perspectives about what you need to prepare for. So everyone gets an investment banker and an M and A attorney, but sometimes they don't see opportunities. We had an exit last year where we were able to actually this year. But last year we were able to decant some of the company stock into a Nevada trust where you live to avoid the state income taxes where these clients lived. And that alone, we did the math. That was like 37 years worth of our fees in one month just because of doing that. But the investment banker and M and A attorney didn't come up with that idea.

Why?

Because they're focused on the deal and getting you the highest price possible. You, you need also someone on your team who's focused on how do you get the most after tax in your pocket based on your relationships and your goals. If do you want to create a dynasty, which a legacy is something you do for kids and grandkids or for a charity, a dynasty is something that goes at least five generations beyond you. So there's things you can do with company stock years in advance to have huge tax benefits and then to create that dynasty if you want to. So have someone in your life along those lines. In general, on deal structure and on selling, one thing I would tell you is you have to know the game that you're playing. So usually you're being bought by a private equity firm. That's what we see most of. And private equity firms have done hundreds, if not thousands of these deals. And often it's the first time the entrepreneur has ever sold. That's why you've got to have a great team, great investment banker. Really important to have a great M and A attorney to protect you. But you also have to understand their game. So pro private equity firms are notorious for finding ways to knock down your valuation. They're notorious for exhausting you. So they get you, first of all, your eye off the ball. So you start focusing on the sale and you don't focus on your business. And then your revenue drops for a couple quarters. And guess what they do? They come back and go, oh, your revenue just dropped for two quarters. We got to readjust this valuation. That's one of the games they play. So you got to remember, even though you're getting courted by private equity, you got to stay focused on your business so that you keep the numbers up so that you don't get hit on the valuation and just know they're going to try to wear you down and get you tired until you just take a deal that you don't want to deal. So those are a couple things off the top of my head. When you're dealing with selling your company, and you got to be in the mindset that you can walk away. If you are comfortable walking away, you're always in a better negotiating position. And sometimes entrepreneurs fall in love with the idea of they can see the private jet, they can see hanging out on the island, drinking the umbrella drink, I guess, drink with the umbrella in it, all those kinds of things. And then you fall in love with that vision, and then you end up being in a position where you negotiate at a disadvantage.

Yeah, those are. That's awesome. I have. Yeah, I've heard that with private equity as well. And I know I have a friend in this, you know, in the industry where they basically had a private equity company, you know, dangling this massive sort of investment in. And then they're like, if you can get to this next tier of sales goals, we're going to pay you some crazy multiple. It was like, you know, 250 million if they got to 100 million. And then they basically did that, but then sacrifice profitability and all this other stuff to get there to a hundred million. And they got close to it, and the private equity firm was like, whoa, whoa, but where'd your profit go? We can't do that. And they basically offered them, I don't know, 25 million or something like that for what they had dangled at 250 million. It was some crazy. And they ended up not selling. And the one person actually left the business, the other one is kept going. But I think the allure of $250 million payday, right. It really distracted them from the fundamentals of their business. And then it ended up. It's taking them years to kind of get back, and they're still not really, frankly, 100% there. So that's a really good kind of warning, I think. Cool. So, yeah, a couple good questions this second. If you have questions, don't feel shy. Everyone put your questions in the Q and A. I know Isaac said he's afraid I'm not thinking high enough business level for my question to be relevant to Jim. Just ask it anyway. If it's a terrible question, we'll just ignore it. Isaac mostly just Kidding. I'm sure it'll be awesome. One last question, and I'll give you a chance to ask questions in a second, too. And one question I have for on behalf of Ed is Ed is super young. I always forget how old I is. Like 20. Are you 21 yet, Ed? You're 20?

No, I'm still 20.

20, you know, but. But doing quite well. I mean, you know, and I don't know what you're making per month now. Like, let's just say anywhere from like 10 to $30,000 a month. Maybe it's more some months, whatever.

But the point being about that range.

Yeah, like, for someone like Ed, because again, I was not doing anything with my investing when I was 23 or 20 when I was young. And one cool thing about this community we've built and all these entrepreneurs and whether they're freelancers or business owners, is people are making money. So I guess, is there any advice you'd have to, like, the younger people who are watching or who will watch the replay or listen for what they should be thinking about or doing now so that they're in a really great position by the time they're in their mid-30s or 40s, whatever it may be.

I love that question.

When I first work with an entrepreneur, we usually.

In my 26 years, every entrepreneur I've.

Met is really in one of four buckets, so to speak. And I kind of put characters to most of these. So the first is the ostrich. That's the entrepreneur that ignores and avoids wealth management. So they say, I'll deal with that later. I'm focused on my business and living my life. That's the ostrich. And it's easy to be the ostrich. But your financial planning and your wealth management is usually. The results are usually poor.

Then there's a juggler.

That's the entrepreneur that's trying to handle all these things himself or herself. Just like the juggler. It's hard to be the juggler, and the results are usually poor. The third character is the air traffic controller. And this is where you get excellent advisors around you. So you get a really good cpa, you get a really good insurance agent, you get a really good attorney, you get a really good banker. So you get these professionals around you. Now, the air traffic controller is a hard job because just like an air traffic controller, you have to watch everything all the time and make sure all these professionals are doing their job and doing it well. Ultimately, you want to move toward the family office structure. But if you're not ready yet to hire someone to help you do that, then I'd say the next best would be the air traffic controller. So as a young person, you want to start thinking about, okay, who are my professionals that I'm currently working with and are they a players? So if you have an accountant or a CPA who never really talks to you, never reaches out, never brings you ideas, and just files your taxes, you want to start actively looking for a CPA or accountant who's going to be proactive and bring you ideas. Often entrepreneurs have to bring the tax planning ideas to the accountant, and it shouldn't be that way. It should be the other way and the same thing. Make sure you have a great insurance agent, make sure you have a great attorney. Start building your team. That would be paramount. And for a while, you just have to be the air traffic controller. And then one other thing is, as I said with my compounding example, get started investing outside of the business. So even if you say, all my money's going toward my business, if you can put 50 bucks a month away towards something, start doing that. And the reason why is you will start getting the mindset of being an investor rather than just, I'm a business owner. So you want to be a business owner, but you also want to be an investor.

The other reason why that's important is.

Once you're doing that, every time you make more money that you think is sustainable. So let's say you're making $20,000 a month, and all of a sudden you go, hey, Now I'm making $30,000 a month. What I would say is every time you make more money, some save and.

Invest half, spend half. And the reason why I say that is if you do that over time and you're 20 years old or 21 or 22, by the time you're 30, you're going to be saving a ton of money and you're going to have a great lifestyle. Entrepreneurs fall into the lifestyle trap where all of a sudden they just keep spending, spending, spending. Then pretty soon they have the Lambo and they have the cool pad and they have all that stuff. And then they sit down with me and then they tell me, embarrassed, gosh, Jim, I really don't have any money. And I look at them and go, you're kind of broke. You got a cool car, but you don't really have anything. And if you ever have a problem with your business, like when Covid hit right, a lot of entrepreneurs had to pivot and they had a Few months of no revenue. If they had a bunch of investments outside their company, they weren't afraid because they said, look, I can always tap into that money. I've got this money to fall back on. So as a young person, become the air traffic controller and start putting money away. And every time you make more money, save half, spend half. So you continue to enjoy yourself and increase your lifestyle, but you also are creating meaningful savings and investments for your future, because I see that all the time. Either people tell you you got to save more, and then you don't have any fun. You need to enjoy your success.

Or.

What happens more with entrepreneurs is they got a cooler car than all their friends. And, you know, if they're single, all the ladies like the car and, you know, all that stuff, whatever it might be, or if you're a woman, you know, the guys like your car, whatever it might be. And it's better to have a game.

Plan and a discipline.

Yeah, that's. That's fantastic advice. And I know Eli on Facebook Live also just said, this is incredible advice.

Yeah.

I think one thing I'll say for you, Jim, and on your behalf and to other entrepreneurs speaking to them is I think sometimes, like, some entrepreneurs, too, will avoid working with somebody because they're almost embarrassed because of what you just said. It's because, like, they. They feel like they should have more money saved away or they should have. I mean, honestly, I was that way for a long time with stuff, too. And I'm still frankly, like, I, you know, like, I've got some assets, but I don't have nearly as much as I should. And it is kind of, like, embarrassing sometimes. But then the thing I got over with was like, I'm like, I could kind of. I can keep being annoyed by that and embarrassed and not take action. I'm like, or I can just sort of accept that's the reality and then start investing and start building assets through all that. Right. And I think that's the big thing for just. For other entrepreneurs out there, I think, who maybe were considering working with you or whoever it is, it's just really, you know, being. It's okay. Like, I'm sure, Jim, you see, you know, I don't know. You see it all the time. Right. It's not like you're gonna come and they're like, oh, I've got this nice car, but I actually don't have that much in the bank. And you're gonna be like, oh, my God, you're like a failure and a fraud. You're gonna be like, yeah, that's exactly. That's why you hired me. Right? Let's fix it. And I just want people to kind of understand that as well.

That's a great point.

And I would say it doesn't matter where you are.

It ends up, you know, where are you going to be in five years?

Where are you going to be in 10 years? That's what's most important, not where you are today. And you can't change destination overnight, but you can change direction overnight. If you change your direction, you're going to ultimately change your destination. In the book, which I know you said something about later. In my book, Beyond a Million, I tell a story in the beginning about someone who. I changed his name, but a very famous entrepreneur that most people on this call would know. He came to me and he was famous for having an exit. Sold his business for $80 million. And by the time we sat down, first thing he said is, I'm not as rich as you think I am. And I said, what makes you think I think you're rich? And he said, because everyone thinks I'm rich because of my exit and everything else.

And then he told me the story. They had brought on private equity, so by the time they sold, he owned a little more than half. And then he had to pay taxes. He had no tax plan, so he had to pay more than he should have paid. And then he invested with some of his friends and did a bunch of dumb things and lost his money. And anyway, by the time we sat down, he had $5 million left, and he was very embarrassed. But you know what I told him, which I tell all entrepreneurs, is like, it doesn't matter where you are today, but you're going to have a future in five years or 10 years, and you got to get going to get to a place where you're going to be much happier. And the truth of it is, all entrepreneurs are the same. I have almost never met. Well, I shouldn't say never, but it's rare when I meet an entrepreneur who's. The way they live actually is representative of the wealth they have. And often the more. I mean, my wealthiest clients, they. They drive Ford trucks, they wear blue jeans. I mean, they had a construction business that sold for a lot of money, and you would never know. And what's funny is those guys, like, if they come to an event or they meet some of our other clients, they always come to me and go, gosh, Jim, I'm sure we're like some.

Of your smaller clients.

Because they're living so humbly that they see all this stuff. And so that's the thing that as entrepreneurs, we do. We kind of compare ourselves to others. But the ones that are on stage talking about how they sold a billion dollars in this or a billion dollars in that, often those are the ones that want to keep up an image and don't have the true wealth. Because I've had other entrepreneurs who have a business that they're like, oh, gosh, you know, I'll meet them through a mastermind group. They don't say anything during the group because they say, I really don't have much to offer. All these people are smarter than me. They sit down with me and they show me their business, and I'm going, you have, like, a seriously amazing business that's like crushing it. Like, look at your profits, look at your cash flow. And they go, I'm sure you see people that are way wealthier than we are. So that's something that we all compare to each other. But unlike things like your physical fitness, where you can usually see, you can't see someone's financial fitness, and it doesn't matter where you are, you can always get more financially fit. But to your point, look, if someone was, let's take a physical thing. If someone's out of shape and they're overweight and they say, well, you know what? I'm embarrassed to go to the gym. I'm embarrassed to see the trainer. I'm embarrassed. That doesn't matter. What matters is where are you going to be in five years? And we all have to get over it. Because you know what? All of us could do better. All of us have made mistakes. And that's part of the entrepreneurial journey. It's a zigzag. You don't do everything right all the time. And just like Keith Cunningham, he made a hundred million dollar mistake. Think about that. And now he's a very wealthy man. So you can come back from all kinds of mistakes. The whole thing is learn from them and do something different going forward so you have a better outcome.

Yeah. That's amazing.

Awesome.

And for. On the Facebook live, Blake Crothers, I know you said, great point. And Donnie French said he just gave away gold. I agree with that. So, yeah, so much good stuff here. Ed, do you want to ask. I've got two questions in the Q and A. Now, do you want to ask any questions to Jim before we turn to our audience?

Well, you asked a good question on my behalf, which is kind of what I was going to ask, what is something that you think especially younger people should look out for when it comes to keeping, growing and multiplying their wealth that most people aren't even aware of?

Great question. I'd say, boy, it's a really good question. The first thing that comes to my head is asset protection. So when you're young, you feel like you don't have to protect your assets. And I'll just tell you one story. So there was two young guys, probably about your age, and they started a business. It was a Internet based online business and they had a little teeny office in a strip mall and nobody came into that Office but the FedEx and the UPS. So no one was ever in the office. And so when they started their business, when they were looking at their commercial insurance, they said, we don't really need liability insurance because no one comes in here, no one's in the office, we have no risk. Luckily, their insurance agent, who's someone I know is very good, said, I don't care if no one comes in your office, you need liability protection. Because what a lot of people don't know is general liability insurance, which is, this is a very boring subject, but very important, doesn't just cover someone slipping and falling in your little place of business. It also covers things which in this case came to fruition, things like false advertising. So they got sued by a huge international company saying that their advertising was infringing upon their intellectual property. And had they not had this policy, they would have gone out of business. But because they had this policy, all the legal fight, the attorneys that were hired by the insurance company to protect them and fight for them, all that money was there. And the insurance company attorneys won that lawsuit. And because of that they were able to continue the business. They sold that business two years later for $10 million. So a lot of times as a young person, you're thinking, I don't have any money, I'm not making any money. Why do I need things like asset protection, like certain kinds of insurance. So when you talk about a young person, I mentioned some of the things already like hiring the wrong CPA or accountant and doing some of those other things. But that's an area that most young entrepreneurs are not even going to think twice about. But you should make sure that you have good coverages for something that you can't see that could happen that would have destroyed their business. And yet they ended up selling it for a nice exit. When you're 25, you get 10 million bucks and split it between two guys. That's pretty good.

Not bad. Yeah, it's funny you mentioned that, because I literally just applied for critical disability insurance because I am my asset.

Yeah. So true. And a lot of people think, too, if I don't have assets, someone can't sue me. Well, they can also garnish your wages. So if you're making a lot of money and. And all your money's in the Lambo, they can still sue you and garnish your wages. And that would be. Can you imagine if they're taking 5 or 10,000amonth out of your income for 20 years to pay for some claim that puts a ding in everything you're trying to do?

That's not fun. Not fun at all. Yeah, that's really good. Cool. So I think we have two questions in the Q and A. You want to set those up? And then, Jim, the way it works is we'll let the person come on and kind of ask the question, and then you'll answer. I'll chime in if I have anything to add, but we'll do it that way.

Perfect.

For sure.

I was just taking some notes. Awesome. So, question from Isaac about making educated decisions for more established business owners. Stefan, I need co host.

Oh, my goodness. Sorry about that, Ed. I swear to God, one day I'll remember to actually make you co host at the beginning.

Yep. So Isaac's gonna come on and ask his question.

Cool. What's up, Isaac?

Hey, guys. How you doing?

Good.

Hey, Isaac.

Cool.

So, yeah, like I said, like, in chat, because of where I am, like, I'm not sure exactly how to frame it, but it's really just. Even though I'm not, you know, at where I think I need to be to. To be thinking about, like, all different kinds of investments and stuff. And like, you mentioned, like, once you have all this money, like, where the. Where the hell do you put it? Like, where do you invest it? I'm still very much in the startup section, but I figured I'd ask Jim, like, you know, what is the kind.

Of.

Education or, you know, learning that I should be focusing on now so that once I'm at the point where I, you know, worried about all these different things that I'm not just like, oh, crap, like, now I need to figure this crap out now, you know, have kind of, like a fundamental knowledge of it.

Yeah, great question. So I recommend a book or two for you, and then I'll kind of give you some other guidance. So one book was written years ago by my friend David Bach. Called Automatic Millionaire. It's a very basic book for the masses. But as a young entrepreneur, I think it's very helpful just to show you how to automate things. Getting things automated is part of the game to getting going on investing, like I said, even if it's $50 a month. So there's a book that I would consider if I were you, another book which is more recent. I already mentioned Keith Cunningham, but the Road Less Stupid. I think every boner, every business owner should read the Road Less Stupid because there's so many great ideas in there. And he talks about thinking time, which is scheduling time to sit and think every week. And that would be really important for any young entrepreneur to try to make sure that you don't make mistakes and you build a good business then on the basic stuff. So you get going on an investment plan. You need some basic legal documents. Every entrepreneur does, whether you have kids or not. If you're single, I get this question a lot. I'm single. Why do I need a will or any of those other things? You need those things because they have these things like powers of attorney for finance and healthcare. And if you get sick or injured, if you're single and you're an adult, there's no obvious choice. So the hospital doesn't know who to talk to. The doctors don't know who to talk to. Someone can't help run your business or manage the finances or pay your electric bill. So get at least a will, powers of attorney for finance and healthcare, possibly a trust, especially if you have young children. So some basic legal documents would be really important. And then start with a basic asset protection plan, starting with the insurance. Get the right liability coverages on the insurance. Then start thinking about things like entity design, how can you structure the entities in your business to protect against things like lawsuit? And then getting a really good CPA or accountant to do tax planning if you're not making much money yet, it's not that big a deal, but the more you make, the more important a good tax plan is.

Awesome.

Thanks. I was writing that all down, so, yeah, I'll get both those books. I'll tear through them and really appreciate it, Jim.

All right. Good luck, Isaac.

Thank you.

Good question, Isaac. Yeah, especially that thinking time is so cool. I'm not the best at it. I try, but it's like Bill Gates has thinking time. All these, the most wealthy, successful people ever all seem to have that similar habit. And does that mean you're going to have thinking time, become a billionaire? No. Does it Mean, it's probably for a good reason that they do it and it could benefit you. Yes. So I think, I love that idea of thinking time for sure.

Should definitely do more of that.

Right.

It's. Well, it's hard because I think as an entrepreneur, there's like the whirlwind, right. There's the four disciplines of execution, which I think is a really good book on business. But they talk about the real one, which is how there's just stuff flying at you all the time. And you know, you feel like, especially if your business isn't really dialed in, you feel like you're a full time kind of fire. I don't whatever. Like I think of the word fireman. Right. A firewoman, where you point out fires all the time, but because of that, you never just get to stop, pause and think about the bigger picture. And I think that ultimately that that's really detrimental. Cause the week goes by, you're exhausted, then you want to spend time with your family. But if you don't write, the hard, soft time always gets moved by hard time. So if you don't, like schedule some like, hard time in there to actually think and evaluate, then it won't happen. But I think it is really beneficial. Cool. I think, I think next we have Jazz. Is that right, Ed?

Yes, sir. Chad's got a question here about Ed.

Sorry, one thing before we do Jim. I want to do Jaz's question. We'll see if there's any more. But I want to do this now before it gets too late in the episode. For people who want to connect with you and want to learn more about you and what you do, maybe they want to work with you and your team or your firm, maybe they want to just read your book. What's the best way for people to get a hold of you?

You mentioned my book. So my book is I put two years into writing this thing and I put a lot of really good information, good ideas in there. So I would recommend that I'm not. Look, I don't make any money selling books. It's just I brag to my wife Mimi. I'm like, look, I'm a paid author, you know, because I get these little teeny checks. So I don't barely make money off the book, but it is really good information in there. So that would be one recommendation. We also created a nine question quiz where you can figure out where you are on your wealth building journey. If you go to makerichreal.com makerichreal.com I could probably Put that in the chat here in a second. You can take the nine question quiz and after each section we have it broken down to the three main areas of protect, manage and grow. After each area there is dialogue. It'll tell you kind of based on your score. Here are your next steps of what you should do that make retrieval will also allow you to get on our drip list where we send out a video every couple of weeks about a planning idea. It's never a pitch. We've never sent out a pitch for our services. It's just to help educate you. And that also gives you the opportunity, if you fit certain criteria, to jump on a call with me or one of our advisors.

Awesome. Cool. And I did just put the link into the Zoom chat and on Facebook Live I put directs to the form that you do for the quiz. But I'm gonna put the actual domain to make richreal.com for those that's watching on Facebook Live. Cool, awesome. I want to make sure we got to that because you only see at the very end, but it's like. Yeah, I like to kind of do it earlier when I can, so.

Thanks, Stefan.

Sure. Awesome.

Cool. So cool. Now, Ed, obviously didn't mean to cut you off. Let's go back to no worries.

Yo, I can't wait to get on that newsletter. That's so sick.

Yeah.

So we got a question from Jaz about the importance of insurance agents and attorneys.

Hugely important. Yeah, I think sometimes people think, sorry.

I'm sorry, the format.

But yeah, I do want to hear what you have to say. But Jaz, go ahead and you're going to ask that question first. Jaz.

Yeah, it's a pretty straightforward question because.

Like Ed, I'm pretty young, so didn't even know I needed this stuff. So I just want to know the importance of all this stuff. Great question. I'll cover each of these separately. So the importance of an attorney. Hugely important. So the first thing you need when you're starting a business is a corporate attorney. That's who's going to help you decide whether you're going to be an LLC or a partnership or an S corp or a C corp, and that also is the person who's going to help create your corporate documents. Often we see corporate documents that are done very inexpensively, very poorly, and especially if you have a business partner can create all kinds of problems in the future. So a corporate attorney is going to be a really important person to have on your on your team and then the insurance agent as well. And by the way on the attorney. Also, you'll need an estate attorney to do, you know, you will your powers of attorney, maybe a trust, and then the insurance agent. Really important. Often people think insurance, like auto and homeowners insurance or insurance for your business is a commodity. And all the ads are supporting that, you know, save 20% if you call us up, and all that kind of stuff. But there's a big difference. If we look at, let's say, umbrellas, and when I say umbrellas, I mean umbrella liability policies that are really important in your personal life and in your business life. They're usually less expensive than most kinds of insurance, and they cover everything just like an umbrella. They kind of overreach everything that's going on. So they're really important. But an umbrella with company A and an umbrella with company B might be completely different as far as the quality of the policy itself. And that's why you need an agent who actually knows things like the exclusions. And I would encourage all of you to pull up your liability protection and read through the exclusions because there may be some stuff in there that you want to know about. And you want to either use a different carrier or go back to the insurance agent, say, hey, I need these coverages because it's making me susceptible to a problem in the future. Because here's what I usually see. Entrepreneurs buy insurance like it's a commodity. And you know, when they read the policy after they have a problem. And once you have a problem, reading the policy doesn't help because you can't change the policy. One time in the last couple years, we looked at, we were reading through the exclusions for a client of ours, and it actually said, if the business owner in any way contributes to the alcohol, to the consumption of alcohol, there is no coverage. So we went back to the client and said, hey, do you do anything with alcohol in your business? And they go, yeah, we throw a holiday party every year. And do you contribute to the drinking? Well, we give out drink tickets. We give everyone two drink tickets. That would be a yes. So that means that if someone has a problem, they might have no coverage. So how do you rectify that? Well, number one, we went back to the agent, said, either you've got to get them to remove that restriction or we need to go to a different carrier because we need coverage if something goes wrong. And then of course, you do things to mitigate it. So we got them to have them pass out Uber cards and all this stuff so that you're reducing the risk. And then Just keep your eye out to try to make sure someone's not drinking too much. So knowing what's in those policies, which is really the job of a good insurance agent, is really a critical piece.

Super interesting. Jaz, was that helpful to you? Yeah, that was really helpful.

Thanks.

Very cool. Cool. So, yeah, I think we don't have any other questions in the Q and A, but I know it's funny because the engagement on this has been super high between Facebook Live and the chat. And I think while people are just sitting here having deep thoughts about their own kind of investments and their assets and their businesses and things like that. So we'll kind of wrap it up here. Jim, any last sort of pieces of wisdom or advice? And by the way, again, everyone's makerichreal.com so go check that out to do the quiz. But any last pieces of advice for people who are watching listening or who are going to listen to the watch on YouTube, anything like that?

Yeah.

To be successful as an entrepreneur in.

Your wealth building, there's really three outcomes.

You need to focus on. So the first is having a compelling focus for your wealth. And that really comes out of your values, your goals, and your important relationships. And by the way, if you don't have a compelling focus, you can hire someone to give you a compelling focus. When Covid hit, they closed all the gyms. I'm in Arizona, even though we have clients all over the country, they closed all the gyms. And I had a guy who's a personal trainer said, jim, I can get you in a private gym, but you got to pay me.

And I thought, I've been going to.

A gym for 30 years. I don't need to pay a trainer. But that was my only choice. I found out two weeks later that those were the two weeks of workouts I two best weeks of workouts I'd had in, like 10 years. And the reason why is because he gave me a compelling focus. I wasn't listening to podcasts, I wasn't saying hi to friends. I just showed up and, man, he was working me. So you don't have to come up with a compelling focus. You can have someone help you do that, but you need a compelling focus. Second thing you need is something we call wealth discovered. Most entrepreneurs who have successful businesses are making enough money to become seriously wealthy.

But they don't know where it's all going.

So you need to find out where your money is leaking. Is it leaking because you're paying too much in taxes, Too many legal fees? Do you have A bunch of subscriptions that you're paying for that you don't even use. Find out where the money is leaking and shore that up. And then third and most importantly is having impeccable infrastructure. So that's the people and the process by which you make financial decisions.

We see it as a virtual family office model, but those are the three things you have to really get right. And the billionaires do very well in those three areas.

Awesome, Jim, that's great advice. One question that came in, that's a quick one, was from Ken Zhang. He just said, what amount of money or assets or income do you recommend people reach before they then kind of reach out to you and your company?

Yeah. So kind of a delineating point for us is a million dollars profit or you will be at a million dollars profit within 12 to 24 months. That's usually the starting point for us because once you have a million profit, not revenue, because we have some clients that are doing 30 million of revenue and 1 million of profit and some that are doing 3 million of revenue and 2 million of profit. But once you're making a million dollars through various resources, that's when you're going to really need this. And this is where the needle can be moved for you. So a million dollars profit or will be there within 12 to 24 months. So if you're really ramping up, that can be a good time as well.

Awesome. Cool. Hopefully that helps, Ken. So. All right, Jim, again, thank you so much for joining. Really appreciate your time. It was awesome having you here.

Thanks, Stefan. Great to see you. Great to meet you. Ed and I know we'll be in touch.

So take care.

Absolutely. Cool. So for everybody, we're going to wind up here. This was the road to a billion. If you watch on YouTube, we'll put the replay up on YouTube. Make sure to leave a comment like, you know, hit the like button. Subscribe if you're not subscribed to my channel, but let us know in the comments, you know, what you got valuable or what you found was valuable from this episode. If you listen on itunes later, make sure you are subscribed there on itunes. Make sure you leave a review. And thanks everyone for joining us and we will see everyone next week. Thank you so much. Thanks, Ed as well. Always.

You got it.

Awesome.