Almost no $100 million families have their values on the wall, though most companies do.

[03:44]

"And it's so lame for me to say your company should have values, but almost no families have values on their wall. I've never met a single 100 million dollar net worth family that already had their values on the wall,"

[02:01]

"So there are about 50 questions that we've come up with that you should ask yourself, or somebody should ask you, before they design your game board."

[09:59]

"So I'm going to go to Stem Cell conferences, read every magazine, listen to the podcast, look at 100 stem cell deals and over time you'll be able to tell the good from the bad stem cell deals and start out small."

Full transcript

15 years running, our investor club uh written 13 books. A lot of our books are on Audible if you want to listen to them. One of our most recent books is sent to millionaire strategies. It's one of the only books written for 100 million plus net worth families. But there just isn't a great word for people worth over 30 million dollars, unless you say ultra wealthy investor strategies.

There's not a single word for it. So anyone who is worth 25, 30 million dollars or more, I would find this book highly helpful and you can get it for free on our website. So you need to go buy it. We have this tool for any family offices in the room, and if you can't fill out the 67 fields on this free family office dashboard field, it kind of points you to what homework you have to do next.

If you don't have certain types of tax uh strategies in place, if you don't have certain types of service providers, or if you cringe when you write down who your service provider is in a certain area, they know you need to upgrade that to someone a family office quality now that you've had your exit. Now they're making seven figures a year, or much more, and so this is a free tool you can get from us as well. One of the points I want to make is that, as a family office, you need to figure out what your strengths are, where you want to focus your energy and really what game you want to be playing, because your background is different than the person sitting next to you at the table, might be different than your father's if he created the wealth, and if you don't design the game board for yourself, then your wealth advisor will gladly design it, but they're probably going to get 200 every time you pass go, and he's going to be having more fun than you because you didn't design your own game.

So the point of the family office is to have control, have Focus, have someone playing defense for you so you can focus on offense or the things you love, or focus on sitting on the beach if that's what you want to do after earning your money. So you need to customize everything to who you are and your values and your objectives and your goals, um, we don't have time to go into great detail on that, but a lot of families don't do that, um, and I think the users need to control everything or Outsource everything, and it's usually a balance of the two, accustomed to who you are. So there are about 50 questions that we've come up with that you should ask yourself, or somebody should ask you, before they design your game board. Otherwise, they're just designing a game board to collect money from you consistently, and if they haven't asked these questions, they're just selling you a platform that may be great for you by chance, but it's probably not customized to you.

And so ask yourself these 50 questions doesn't cost anything. Again, all these ideas cost almost nothing and can save you nine months of time working with the wrong firm or 400,000 in fees paying the wrong group to help you manage your money. So a lot of things are free. We can save you a lot of time. I was at uh, Dan Sullivan's house and we were talking about the Boy Scouts, uh, which which I believe he was in as well, and we were talking about um, the boy scout, oath, and I could rattle off all these words without saying it out loud for 20 years.

So I realized how brainwashed I was as a kid, in a good way, and how my three daughters, even though for some strange reason I guess girls can be in Boy Scouts now I just wouldn't expect boys to be in Girl Scouts or vice versa, nothing against it, but my girls are not in Boy Scouts, so they're not being brainwashed in this good way, and I realize it probably did more good than I realized. And so, while it would be such a waste of your time for me to come up here and say your company should have core values, because everyone's been saying that for the last 30 years, what's interesting is that um hands here who has values for their company to find, try that 90 of the room. Who here has values for your family? On a wall at home?

And you formalized values for your family, about 12 people, maybe, like eight percent of the room. Uh, what's more important, the success of your family, your personal life or your business? And it's so lame for me to say your company should have values, but almost no families have values on their wall. I've never met a single 100 million dollar net worth family that already had their values on the wall, unless they were like Mitzi Purdue from the Purdue chicken family and like she's super focused on Legacy, Next Generation and speaks on that all over the place, or like someone like Pierre, or they have someone tracking the four thousand cousins.

Uh, nobody else really is doing that. It costs nothing again, but it's so obvious. If you want to align your energies and set expectations, what's acceptable in the family, then you obviously should have values to find. So we have ours on our our kitchen wall and my daughter came with me to New York. I don't know if uh Josh from accountable equities in the room there was my buddy Josh right over there.

So I brought my 10 year old his event, which was great. He got this Resort that was doing like 2 million in Revenue when you bought it or less, and is now doing 23 million in Revenue. He's booked 800 weddings since Cove had started, so he's uh Beast of cooking weddings through these Resorts he buys. And I brought my two-year-old to his event and she stood on stage and recited these values for the room, without looking at a piece of paper or anything to prove my point.

Um, and just bringing her to the business conference is part of the point of sharing the family values, so that I'm not gone traveling all the time, Etc. Um and so when they wanted to buy, it's a picture from when we lived here in Key Biscayne a few years ago, and they wanted to buy an electric toy car, Tesla. They cost 350 dollars and said: well, I'm just not going to buy you this 350 toy on a whim, so you earn the money. If you want it, then earn it, and I don't care, spend 100 of what you earn on it if you want to.

So we did. Lemonade stands here in front of us where our office was in cubis game, there's about a block from Starbucks and the first time we did it, uh, my wife said, oh, you're gonna do at the end of our driveway. I was like, no for sure not, because we don't have good traffic there. You know, we need to go somewhere.

That's got a whole bunch of people going by. There's like an annual techno sort of concert type thing that goes on. Uh, in the Miami area it's like 200,000 techno nerds with neon, whatever stuff going on and, uh, a lot of them are staying in keyless games. But have these people come by all their friends and get lemonade and people like to keep a stain recognizing us and they bring in 55 a day and one.

Would we taught one to call out to people on the other side of the sidewalk instead of saying you want lemonade and say, do you want some cold ice, cold, fresh strawberry lemonade? It would teach them to be outspoken and teach them to speak on stage in an event like Josh's and teach them: if you want something, you got to make some money to get it. I'm just going to hand you money your whole life and so I think you saw that come up with some of the talks. Uh, here today here talked about empowering the Next Generation, not not spoiling them.

Um, we have over 1300 videos and podcast episodes that we've recorded for you. They're absolutely free, have been downloaded over two million times. Right now we're on episode eight or nine that we're releasing in our everyday new episode comes out in our 14 part free series on YouTube and our family office podcast called how to start family office. So if you or anyone you know is looking to start a family office, they don't have to pay us a dollar to get a whole ton of information from us.

They can get a book literally called how to start a family office. You can watch our mini series on YouTube or the podcast and what we find is that the more we give away, just like anyone who runs a podcast, the more relationships we grow and the more great people we get to meet and work with over time. We used to charge seven thousand dollars a month to set up family offices. I realize some families are getting their brains all twisted around like, oh, how many hours of your time do we get?

How do we cancel it? What's this class? What's that causes our business group? We realized we didn't want a bunch of friction of these 400 million dollar or 50 million dollar number of families working with us. We said: forget the retain, thank you, we'll help you for free, get stuff set up, introduce you to service providers, upgrade your wealth advisor, do all these different things for you at no cost and I bet, after getting to know you, you'll enjoy coming to one of our events, like an event like this, or speaking on stage, um, and then we'll do business over time.

Maybe they put a little bit of money into a medical practice that we have equity in, maybe put a little bit of money into the investor residences.com Airbnb fund or something like that, and so that's the model that we teach at our workshops, is to add value first to investors, and then it's de-risk, because you're in a bubble, in a context of trust, and it's not a random person at the airport trying to sell you a vacuum or Rolex or an apartment building. It's someone that you already know. You already got value from them. That's why I spent fifty thousand dollars a year to be in Dan Sullivan's, you know uh Group is because I already got hundreds of thousands of dollars of value from them.

Um, and so that's the type of uh marketing we recommend for those of you raising capital, and those are some of the resources you can use if you're starting a family office. If you missed this morning: uh, we bought billionaires.com last year for half a million dollars. Took us 12 years following up until they cracked and they, they wanted 1.2 million for over a decade. So we got it for half a million, uh, a steal.

And uh, we interviewed Mark Newman recently and get a whole bunch of insights there directly from billionaires. If you're running a family office here, this is how the wealthiest families that stay wealthy and grow their wealth and have a good offensive game think about their wealth and my experience, almost all of them think this way. They think about the Brain Trust that's playing defense for them. So that would be in bucket one, their Diversified Market exposure.

And maybe they tell their wealth advisor they love Costco and Amazon and Tesla, whatever it is, but then they let them just diversify them otherwise and they have a different Brain. Trust typically helping them with conservative cash flowing: real estate, maybe 10, 20 of it is development, maybe more if they're more open to risk. And real estate is the second bucket to have sleep at night: assets, so that trust, maybe some of it, not um, so that you can play defense, track inflation maybe, and also grow your wealth by having assets are less likely to go to zero and some types of operating companies. And then the third area is your operating business area.

So in real estate you may say, oh, I think Arizona, Florida and Texas are good and I love storage and Senior Living, I love mobile home parks, whatever it may be, and you're usually choosing food groups, maybe the locations, and usually, unless you choose one Niche, you love the self-manage, you're trusting third-party funds and advisors to getting you that real estate exposure, but you aren't choosing the locations and the strategies. A bit if you're a big family office, that's. That's mature over time. Um, with the operating business area, I usually focus on just one or two niches and it could be the place where you create your wealth.

Or maybe you made your wealth and stem cells and now you want to focus only on manufacturing for some reason, or the opposite direction is more common and you think, okay, well, that's the future. So I'm going to go to Stem Cell conferences, read every magazine, listen to the podcast, look at 100 stem cell deals and over time you'll be able to tell the good from the bad stem cell deals and start out small. But the point is to have a focus in just one or two areas. We've met three and five billion dollar family offices and most of the most effective ones just have one to three focuses where they really get their hands dirty and they know enough that they could be chairman or CEO temporarily if they needed to add value to the company.

So that's important to realize and so you have the most diversification, least control at the top, a little bit more focused in the middle. You're not walking and checking out the roof and Foundation yourself, typically handling if your property managers and investment advisors. And the third area is investing deeply in one or two industries that you know really well or you want to know really well, um, we're not going to go into detail here because I think I'm talking too much, but, um, doubling your deal flow is more important than most families know. I have a client here in town that sold their company to a publicly traded entity for 40 million dollars.

He's a friend, not a client, um, and after his 40 million exit he said: man, I've been bombarded with deal flow. I've probably seen 30 deals the last three years, um, but some people here on stage you see 30 deals just during this event and their email inbox from people that they didn't be here at the event for 30 deals in a day. And so when you only see 30 deals, what's the top one percent? Like, maybe none of us were top one percent, or maybe you get lucky and five of them are.

If you see thousands of deals or hundreds and hundreds of deals are more likely to see top 0.1 percent of deals. And so we help families figure out what should be their direct buy box, their direct investment buy box or strike zone. And also, if you want to buy dry cleaners in Austin, then maybe think about doing what every Billion Dollar Plus private Equity Group does. They create a universe of 400 dry cleaners or, in Austin they have a certain level of Revenue, pick up contact details for all of them and systematically email, call me and have cups of coffee, know all the brokers in that Niche and they know everyone better than anyone else in that area if they're serious about originating deals.

And that's how you get off Market deals. And as a family office, most important part of this slide is that you want to see deals first, exclusively and at a better valuation than anyone else, just like Kevin Harrington gets to do because of his background, and then that is going to Compound on your balance sheet and really be a strong offense for you to be playing. Strategic choke points are just points where, once you acquire that, things go faster. I was buying the largest social media asset in the dental industry because we invest in medical and dental practices, with 375,000 members in it three months ago.

Now we get more Dental deals done and we know more dentists, and so, having that as a choke point, we're not going to sell it now that we own it. Same with billionaires.com or writing a book called how to start a family office. These are all choke points that give us momentum. So, whatever unique game board you've designed for yourself, that you should be acquiring strategic choke point assets that might be free to acquire.

Just take hard work, like writing a book, or it might cost half a million dollars, but maybe you could group together with three other people and buy that asset. So you'll notice that a lot of these strategies are what families did to create their wealth and Propel their wealth, but it's also how you can create your initial wealth if you're not yet a family office. Uh, we have a five and a half hour workshop on investment structure strategies. We're going to take about 30 seconds to talk about it now.

But you take a mediocre deal and you love it. Structured however I want for my client, it can make it amazing. So you have all the risks, we have all the collateral, you get all the income. We double our money first, and if you take a media or if you take a really great deal and structure it poorly, then it's a really bad deal, and so we believe in that really strongly.

That's exactly why we structure a lot of our deals the way we do, or we don't charge dollar Asset Management fees for the Airbnb fund. Tell you: double your money. We also, in our Medical Practice deals, are typically doubling people's money through gross revenue royalty structures within 13 deals using gross revenue royalties, and most people have never done a single deal in that area. I really like the flexibility of them.

So we don't have time to go deep in this. We just know that um, building your muscle in the area of structuring deals wisely can really compound your returns as an investment manager or as a family office, more so than I realized the first decade running this investor club and go to these events all the time. I overlooked it for a really long time. Okay, so when you're filming your family office, think about upgrading your Wealth Advisors.

Uh, think about onshore, offshore trust and estate managers. Um, we help people figure out the direct investment, buy box, fuel origination, service provider upgrades, getting their dashboard figured out. Um, and just leveraging the four million dollars a year in overhead we have running our club to help them run it faster or better, and I hope that some of you here in the room are not a family office yet, go the full circle and you work with us two years from now or ten years from now when you are at that level. So I'd love to keep in touch with you, uh, as you go through that process so