YouSaid · the spoken record

Richard Wilson

lines on the record: 50
first: 2023-03-03
most recent: 2023-03-03
sittings or episodes: 1
sources: podcast

Every line below is reproduced as it was said and linked to the record it came from. Nothing here is summarised or generated. Directory · Search · Corrections

“The best way to find out about our events coming up or our membership, if you're running a company and you want to raise capital or if you're running a fund or syndicating deals, would be go to familyoffices.com and you can check out our membership there when our events are coming up. If you are just getting into raising capital and you want our best book on the topic, it's free at capitalraising.com. Super easy, just go there and fill out short form. If you're an investor and you want to have a 10-minute call with us and come to some of our events as our guest and see how we could help you set up your family office or just help you in some way as a private investor with tax feedback, et cetera, or structure feedback more importantly, just go to investorclub.com and just fill out that 30 second form and then Laura play on our team or I will get in touch with you. If anyone needs some quick feedback on something, my email is just richard at investorclub.com or you can shoot me a text message at 305-333-1155.”
2023-03-03 · We Study Billionaires · TIP530: The Top 5 Billionaire Books w/ Richard Wilson · IDENTIFIED FROM THE TRANSCRIPT
“Often find pretty quickly if they haven't already that they need to really think ahead and proactively tax plan and use things like qualified opportunity zones to protect against capital gains taxation, for example. And a lot of families don't want to just be super tax efficient. They also want access to their capital. And so they may set up trusts and different structures and donor advice funds, et cetera. But many of them, like with the qualified opportunities zone, they might say, okay, well, let's protect 60% of the capital or whatever percentage is right for their situation against capital gain taxation today and put it in qualified opportunity zone deals. And let's find the three institutional QOZ funds to put that work into. And then we'll just take the hit on the 40% because it's a long-term capital gain and it's not as bad as being taxed on income.”
2023-03-03 · We Study Billionaires · TIP530: The Top 5 Billionaire Books w/ Richard Wilson · IDENTIFIED FROM THE TRANSCRIPT
“To grind for eight more years and not care about structuring things well until after my exit. That's basically what you're saying. So you want to be smart about that and get second and third opinions on large transactions and make sure someone's double checking even a large firm may make a mistake. And if that disqualifies your 1031 deal, I know one group had something not filed properly and missed out on $80 million in tax savings because it wasn't done correctly and the insurance policy of that large firm only covers up to $30 million. So I took a $50 million hit because of a clerical mistake. And knowing tax things to look out for, like R&D tax credits can be huge for manufacturing companies, software companies. And that can be a massive tax savings on a deal that someone may not even be aware of or even ever thought of R&D tax credits is just example. The families who are worth more than $30 to $50 million.”
2023-03-03 · We Study Billionaires · TIP530: The Top 5 Billionaire Books w/ Richard Wilson · IDENTIFIED FROM THE TRANSCRIPT
“Right, yeah. Most people know that if you or your spouse are focusing most of your time on real estate management, that you can be designated as a real estate professional in the eyes of the IRS, this allows you to use bonus appreciation in more fluid ways than you could otherwise. In general, a lot of 1031 exchanges, setting up of trusts, a lot of work needs to be done before you have an exit. If you're saying, well, I'm so busy, I'm so focused on my exit, let's just get there, and then I'll figure out all this lawyer, trust estate planning, structuring work. You've missed the boat on probably 80% of what you could have done, and you're really not doing yourself justice because if you pay 30% taxes instead of 20% overall on a transaction or 30% instead of 10%, it's equal to saying, okay, well, I just spent the last 30 years building my business, but you know those last seven years, I could have been sitting on a beach or playing with my grandchildren or traveling to 80 new countries, but instead I wanted to.”
2023-03-03 · We Study Billionaires · TIP530: The Top 5 Billionaire Books w/ Richard Wilson · IDENTIFIED FROM THE TRANSCRIPT
“I think that's just important for the ultra wealthy to hear it's okay to pass on a lot of things and you should have a strategic game plan and not just be investing based on what randomly falls in your lap and not in too many angel investments and startup seed capital investments unless it's in the niche where you created your wealth or you want to be in one of those one or two areas where that is the game you're playing now you want to become really good at that game so i think that's important for a lot of families to hear”
2023-03-03 · We Study Billionaires · TIP530: The Top 5 Billionaire Books w/ Richard Wilson · IDENTIFIED FROM THE TRANSCRIPT
“Everything you can on stem cells, go to stem cell investment events, look at 80 pitch decks on stem cells, hire a consultant on stem cells, make small little test investments on stem cells. Okay, you become pretty smart even in 12 months or three years doing that and then pull the trigger on some larger investments. And I think that that's what's lost. A lot of times people have this exit and then they start allocating a million here, three million there, 200K there, and they're funding somebody else's dream and they're just looking for someone unsophisticated with deep pockets who had just funded without really thinking, is this strategic? Is this in line with my values, my objectives? Is this a direct investment that makes sense as part of my portfolio and the chessboard I'm trying to set up for myself? And Warren Buffett says that in the game of investments, you don't strike out by not swinging at three in a row. You can just not swing for as long as you want to until there's an amazing pitch that's right in your sweet spot and you know you could nail that deal and then you can swing hard at that.”
2023-03-03 · We Study Billionaires · TIP530: The Top 5 Billionaire Books w/ Richard Wilson · IDENTIFIED FROM THE TRANSCRIPT
“Had their money at risk in the deal, and every other deal I've seen of that type was 9 to 12%. I was like, why would you only do this for a 5% return? This makes no sense. They said, oh, well, we just didn't know, but they were about to pull the trigger and put seven figures into that. And so they don't know what they don't know. And the worst mistake I see is that they think they're being smart because wealth advisors just bang the drama diversification. And that's all they hear, diversify, diversify. But it's diversification when it comes to direct investments typically. So you want to diversify in a public market. You want to diversify maybe across a few food groups of real estate and a few brain trusts within each of those food groups, perhaps even. But with operating businesses and direct investments in the area where you made your money and you want to play offense, diversifying could be potentially a really bad idea. You can't invest in 19 different operating business niches and want full control and be really smart at 19 different niches. You're smart at zippers. Maybe you have a passion for stem cells and you want to start reading everything.”
2023-03-03 · We Study Billionaires · TIP530: The Top 5 Billionaire Books w/ Richard Wilson · IDENTIFIED FROM THE TRANSCRIPT
“Right, yeah, great point. So the thing is they might be a Titan in their industry. Like, let's say they make zippers and they're like the zipper Titan and everyone knows them and wants to work with them. They may not know, though, how to invest outside of that niche or even how to structure deals because maybe the structuring was done by an investment banker for their company. So what happens is that their knowledge runs super deep in that level, in that area for 30 years, but then they're a relative infant in the area of choosing a wealth advisor or diversifying across different direct investments or investing into real estate. And a couple things happen often. And these are $10 million mistakes that get made by billionaires is that they'll trust whoever has access to them. And because of that trust, they'll go forward with a deal that they really shouldn't be doing if they really compare it to other deals in the market. They're not familiar with common deal terms. So we have $150 million networth family, and they showed us a deal that had a 5% a year return.”
2023-03-03 · We Study Billionaires · TIP530: The Top 5 Billionaire Books w/ Richard Wilson · IDENTIFIED FROM THE TRANSCRIPT
“Just buying them or providing them debt like most other people. And then in the short term rental space, less than 1% of it is owned by institutions. So we think if we build a thousand asset portfolio, there's going to be many institutions that would like to get diversification into that. So a pretty conservative”
2023-03-03 · We Study Billionaires · TIP530: The Top 5 Billionaire Books w/ Richard Wilson · IDENTIFIED FROM THE TRANSCRIPT
“When I look at putting my money to work, we're continually getting better and better terms on, so we have equity in 23, soon 24 medical practices doing the $45 million in revenue there. And then on the investor residences side, and those are one off deals, it's not a fund. On the investor residences.com side, we can do one-off deals if we want to, but the main offering is a fund. And I have just under the $1 million mark of my cash and the fund alongside my investors. And then that can help grow our balance sheet because we want to grow a 500 or 1,000 asset portfolio of charter rental properties. And the key thing is that from learning from billionaires, tie it back to your show here, is that they don't do things where they're playing the same game as everyone else. That's why we have different investment structures we use. We see a big opportunity in providing the growth capital to medical practices versus”
2023-03-03 · We Study Billionaires · TIP530: The Top 5 Billionaire Books w/ Richard Wilson · IDENTIFIED FROM THE TRANSCRIPT
“Property is now worth 400K less or 4 million less. Maybe they have a million of their escrow money, but the property is worth 4 million less. And then meanwhile, the locked up another property right next door for $3 or $4 million less. They say, hey, we're just going to break this contract, Merry Christmas. You can keep our 80K or our $1 million. Or you can meet us in the middle, reduce the price by $2 million or $2.5 million, and then we'll still close. And if you have to relist this property, you're going to be in another 60 to 90 day closing. The rates will go up again. And the next person will probably do the exact same thing to you. So just meet us in the middle so it's somewhere fair. So we don't look dumb to our investors. You don't look dumb to yours. And we're both halfway happy, halfway not happy. So that's important to know is just that just shows the type of discounts that are happening across the board with luxury homes or multifamily. It happens to all areas of real estate as rates go up.”
2023-03-03 · We Study Billionaires · TIP530: The Top 5 Billionaire Books w/ Richard Wilson · IDENTIFIED FROM THE TRANSCRIPT
“SFR build to rent communities are being sold at just about the same cap rates as a multifamily asset. This is basically a horizontal multifamily asset. And so people can argue against what he said. And I have never said buying a single family home is garbage because we're buying a transaction with those every three to five weeks in our fund, of course. But I think that's partially why he said that just because the multifamily space has so much money chasing it. And over the long term, lots of people have done quite well until probably about February, March last year, what's been happening as rates go up, especially those that had no interest rate insurance in place or had bridge loans or floating rate loans, et cetera. Now what happens is people go to the table to buy a multifamily asset from someone who's really excited to exit his rates went up. The person says, well, wait, rates went up three times since we put our offer in. And I know you have 80K of our escrow money, but the”
2023-03-03 · We Study Billionaires · TIP530: The Top 5 Billionaire Books w/ Richard Wilson · IDENTIFIED FROM THE TRANSCRIPT
“Yeah, it's interesting. I mean, he likes to say something, he'll say things that are polarizing in 25% of people are like, oh my God, I can't believe he just said that. That's so rude. Whatever. And so you have to know that about his marketing persona, right? His kind of like he does that on purpose, I believe, and he's good at it and he's built a huge brand, so more power to him for pulling it off and not offending people as much as Trump while still using that strategy, I think. And so that's part of it. Part of it, I think, was him making a point that multifamily gets valued at such a low cap rate compressed cap rate compared to a single family residential asset that all else equal, why would you put your money in buying a couple more vacation homes? And then his conclusion, I think, is like maybe you should put some money with me. And then in our multifamily deals or in somebody's multifamily deals, it's just a better space for your money was his argument. Obviously, sophisticated investors in the space know that”
2023-03-03 · We Study Billionaires · TIP530: The Top 5 Billionaire Books w/ Richard Wilson · IDENTIFIED FROM THE TRANSCRIPT
“Different perspective. He just said to hire people that are much smarter than him. I think that's important for people to hear because it's unusual. And you hear Ariana Huffington say, oh, you have to sleep. You have to take care of your body and your health because she passed out and like broke her chin or something on a desk because she hadn't slept in a couple days and was working too much. But when people hear that and they know that you did work that hard for 15 years first and now you're all about meditation and only working X number of hours a day to kind of say, okay, but you grinded for 15, 17 years. And if you didn't do that, maybe you wouldn't be Ariana Huffington, right? So it's good to hear from someone who from the beginning was always like that versus a convert. And then Larry just focused on creating something really unique at the low cost basis. He was basically saying like, well, we can get access to this movie trailer content for no cost. They'll pay us to put out their movie trailer content. So our cost of production is really low on creating this.”
2023-03-03 · We Study Billionaires · TIP530: The Top 5 Billionaire Books w/ Richard Wilson · IDENTIFIED FROM THE TRANSCRIPT
“Trade is in your face person who's really direct or aggressive. But he basically says you have to treat others well and get them to like and want to work with you. It's not about just being a jerk and ordering people around. So those are some of the insights I took from him. And then at our New York event last year, we had the founder of eChannel, Larry Namer, who spoke on stage with like a fireside chat with him. He sold for $3 billion to Comcast. What was most interesting about him is that nowhere along the way did he have a grueling grinded out mentality work ethic like Steve Schwarzman will say I sleep five hours a night I'm up at 4 a.m. every day I'm high energy and I do this this and this he doesn't say the only reason he's successful is he gets up at 4 a.m. But that's how his work ethic is and you'll hear Mark Cuban say like that he will outwork you and he will out research and study the space and Larry had a totally”
2023-03-03 · We Study Billionaires · TIP530: The Top 5 Billionaire Books w/ Richard Wilson · IDENTIFIED FROM THE TRANSCRIPT
“Yeah, sure. I can go through a couple others here. So another one is how to win at the sport of business by Mark Cuban. If you haven't read any books from a billionaire before, this one is not hard. It's like an hour and a half. You'll get through it quickly and you'll start to see why you should only read books written by billionaires until you run out of them logically. And Mark talks about how businesses of 24-7, 365 game. And the person who knows the most is going to have a huge advantage. And so reading everything possible on your niche, becoming really over specialized and informed helps a lot, but also the side effect of that is you become really connected and well networked over time. And then his message to our community when interviewing him was just that you should be kind and generous with others because people think in business you have to be a jerk to win. And sometimes on Shark Tank, you know, or in the media and the sidelines of a basketball game, you can be pretty”
2023-03-03 · We Study Billionaires · TIP530: The Top 5 Billionaire Books w/ Richard Wilson · IDENTIFIED FROM THE TRANSCRIPT
“Yeah, sure. My favorite one is Steve Schwarzmann's book, What It Takes. I've listened to it twice on Audible. I'll probably listen to it at least once a year for the next couple of years. We talked a little bit earlier about how different parts of your business can inform the other divisions. Not only makes more diversified company, but being smart in this one area makes you a lot more effective maybe in other areas. He also talks about how he likes to do really big things that can have big consequences instead of spending time on chasing a bunch of little rabbits. He wants to focus on one elephant and get that done within different business segments and units. And he also talks about just an expectation of excellence across his organization and anything less than excellence will not be tolerated. And that's something I found through several billionaires is their expectation of excellence and just finding people who can do that and perform at that level. And otherwise, they don't remain on the team. So for the first book,”
2023-03-03 · We Study Billionaires · TIP530: The Top 5 Billionaire Books w/ Richard Wilson · IDENTIFIED FROM THE TRANSCRIPT
“Yeah, yeah. He's better. He added more value than any family office or billionaire or billion-dollar plus family office CEO have had for a few reasons. And for those of you who don't know who Jeff Hoffman, you should definitely go and see him speak in person sometime. He spoke at our annual event, the Family Office Super Summit. We had 800 and some people in the room. And the demographic was your average investment event, maybe 48 to 54 year old.”
2023-03-03 · We Study Billionaires · TIP530: The Top 5 Billionaire Books w/ Richard Wilson · IDENTIFIED FROM THE TRANSCRIPT
“Yeah, for sure. And it's not popular. Other people say, why are you buying? Why are you buying? Like, literally yesterday, someone was like, well, why are you buying at the top? It doesn't make any sense to buy these peak prices. And we say, well, we're nowhere near the top right now. If you're paying what the market was at before rates got raised, then you're getting a raw deal for sure. Deals have come down across the board, in my experience. And you might still have to look at 300 deals to get one or two amazing deals done. That's the nature of any market. But yeah, you're totally right. It could be your own pain and suffering and kind of licking your own wounds, but then trying to press forward versus doing that at the top of the market.”
2023-03-03 · We Study Billionaires · TIP530: The Top 5 Billionaire Books w/ Richard Wilson · IDENTIFIED FROM THE TRANSCRIPT
“Can time the bottom perfectly. So layering into the bottom is one lesson to take from Howard Marks. It's just that the more that other people see risk, the more that there's actually less risk in the market. And I think that's an important point to point out in terms of like where flows are going and when they're going in what direction.”
2023-03-03 · We Study Billionaires · TIP530: The Top 5 Billionaire Books w/ Richard Wilson · IDENTIFIED FROM THE TRANSCRIPT
“You might think it's going to come off as dry and analytical, but one of his books, The Most Important Thing, is really great. And he talks about how when there is perceived risk and people start to sit on their hands instead of allocate to things, that is when there is less risk because now you're getting a 20-25% discount. In investor residences.com, our average discount is 23.5% on each property we're buying and we're offering all cash, high earnest money, $14 to 40 day closings, and there's no bank involved. And the average home that goes under contract has a 27% chance of not closing right now because the bank doesn't approve something at the last minute or ask for 19 things the night before closing like they love to do. So we just take banks out of the equation. And Howard Marks emphasizes that you should be pessimistic when others are optimistic and everyone's heard, oh, you should invest when there's blood on the streets. But actually do that takes some courage. And no one”
2023-03-03 · We Study Billionaires · TIP530: The Top 5 Billionaire Books w/ Richard Wilson · IDENTIFIED FROM THE TRANSCRIPT
“I'm saying is that a lot of people can conduct these benchmark surveys and they're always delayed by a good amount. And at the end of this last cycle, before rates have gone up the last four or five times, and they were just starting to go up, a lot of the smarter investors in real estate were like, wow, the Fed has signaled we're going to raise rates. And so we know real estate is going to take this hit. So they're looking for something that can force the appreciation and still grow. And perhaps an exciting private equity opportunity could be that. But technology investment flows are down right now. Real estate flows are way down. Cannabis flows are down 90% over the last 18 months. So I think flows across the board are down a whole lot. But what's really exciting about that is that one of the, like I'm reading every book I can from billionaires. And one of the most surprisingly good ones is from Howard Marks. And it's not surprising because I didn't think he wasn't an intelligent person. But sometimes when you think about a hedge fund billionaire,”
2023-03-03 · We Study Billionaires · TIP530: The Top 5 Billionaire Books w/ Richard Wilson · IDENTIFIED FROM THE TRANSCRIPT
“Law on us when we trust them with our investors' money. They sell at really high multiples once you have 10, 12 locations or more. So we're always looking at what's crowded in the investor space and then what is a niche that is not crowded yet, but is going to have big future demand. And we've learned that from working with Naomi offices as well. So you don't want to play the same game that everyone else is playing. You want to do something unique and has a real high conviction edge over what kind of the masses are doing in your space.”
2023-03-03 · We Study Billionaires · TIP530: The Top 5 Billionaire Books w/ Richard Wilson · IDENTIFIED FROM THE TRANSCRIPT
“A rider participation could just be when the company sells for 100 million and you're getting 4% of it, you're getting a $4 million participation in that. But it's almost like the equity doesn't activate until that sale happens. When we talk to medical practice owners, a lot of times they say, well, we need to recruit doctor talent more to scale our five or ten or twenty location medical practice platform. We want to grow to 100 million or a billion dollar valuation. We can go and get debt or we can sell our sold to private equity and now we have a job. They don't have to navigate that. And then worst yet is that they don't know how to structure it. So they'll give away 20, 40% equity and they will not know that there are other options to do that. And so it becomes a time suck. And then they have no idea that these other structures are open. So we just love working with the doctors because they usually have gone to school for a decade. They then did a residency, started their medical practice, are very unlikely to run away to Venezuela.”
2023-03-03 · We Study Billionaires · TIP530: The Top 5 Billionaire Books w/ Richard Wilson · IDENTIFIED FROM THE TRANSCRIPT
“Right. So, this could be said from a few different directions. One is the benefit to the company owner is maybe if they're getting”
2023-03-03 · We Study Billionaires · TIP530: The Top 5 Billionaire Books w/ Richard Wilson · IDENTIFIED FROM THE TRANSCRIPT
“And they got an offer from a billionaire I work with to invest $250 million into their strategy over time. But what's interesting is talking to them, they said, hey, these terms look harsh. I mean, I don't think these are fair terms. I said, okay, well, if you want to go out and compare it against other institutional term sheets, please do. I mean, what do you think? Like what terms look worse than other term sheets you've gotten from people offering a quarter of a billion dollars? And they said, oh, well, we've never seen another term sheet from anyone else at that level. I said, okay, well, feel free to go and shop it around. And if anyone will even let you see a term sheet, much less offer you one, then we can compare it. And people are afraid of getting a Scotty Pippin contract. I get it. And that's important to think about long term. But you can skip college ball and AAA minor league baseball and go straight to the major leagues if you want to operate on these terms. So I think that's important to say for those who are looking to partner with bigger families.”
2023-03-03 · We Study Billionaires · TIP530: The Top 5 Billionaire Books w/ Richard Wilson · IDENTIFIED FROM THE TRANSCRIPT
“Capped at a 2x return and then out. They want the upside for the risk they're taking, but everybody that I know would rather not be a liquid forever and just be playing with house money and get their initial investment off the table. And now everybody can be winning together more handsomely as true partners. Now you're not at risk of losing the other person's money and it's just playing for the upside. And I really like one thing they say on Shark Tank is about one of the points I made earlier. They basically say, oh, yeah, that's great that you raised the $7 million valuation for your Nothing Burger mobile app idea that's mostly a dream. But now you're in the shark tank and you only have 400K in revenue. So if you want my partnership, it's 25% equity. You know, it's done to be dramatic on TV and somewhat comical. But that's what some people can't say in exact words, but basically if you want the attention of a big strategic partner, you're going to have to give them different terms. We had one group in our investor club who basically had 30 million of assets under maintenance.”
2023-03-03 · We Study Billionaires · TIP530: The Top 5 Billionaire Books w/ Richard Wilson · IDENTIFIED FROM THE TRANSCRIPT
“Right, right, yeah, for sure. So if you have a chance to do a deal with a billionaire, their level of sophistication is max, their institutional level or above. And so the terms are going to have to give to them and the dilution you might need to do to get them on board is going to be different. They may still appreciate having a gross revenue royalty until at least their principal gets off the people and now they can recycle that cash into the next deal. They might put 10 million in your company. You might not have an exit for 12 years, but maybe they get that 10 million out through royalties over three years. Now they can put 10 million in the next company and do the same thing over and over again while still having a decent equity stake. And they may feel more comfortable doing that and owning 20% of your company or 40% instead of owning 25% or 45% because now their money is freed up and they're not illiquid for a decade crossing their fingers. You're going to have some magical exit to Amazon like the ring company did. So I think that's really important to note the higher the level of sophistication, typically the more that the investor does not want to be.”
2023-03-03 · We Study Billionaires · TIP530: The Top 5 Billionaire Books w/ Richard Wilson · IDENTIFIED FROM THE TRANSCRIPT
“And it allows the company owner to grow and not be diluted as much. If you're diluted permanently, people on Inc. 500 have often sold their soul and they only own 12% of their own company. So it's great that they're big, but is it really their company anymore? They almost have a job at some point because some of them only own one or two percent. And so you can use royalties to protect equity and make it so you get all the capital you need and you only get diluted by one or two percent each time you raise capital instead of 10%, 20%, 30% right out of the gates getting massively diluted. Or it could be flipped the other way and made really good for the investor or right down the middle. Like with a manufacturing company or another medical practice dealie did, you get all your money off the table off a royalty and then you're just an equity holder or just an equity warrant holder at the end of the day. So there's 100 options on how to structure all of that, but it's just like you can make it really good for either party or write down the middle. People like to complain about Mr. Wonderful because it's comical.”
2023-03-03 · We Study Billionaires · TIP530: The Top 5 Billionaire Books w/ Richard Wilson · IDENTIFIED FROM THE TRANSCRIPT
“We could do a whole episode just on royalties, and I would love to do it because I just love this topic. Of all the family offices I've spoken to in 16 years, I've met one family from Norway that's ever done a royalty deal. It's very uncommon, but it can be structured to be really great for the business owner or be really great for the investor or be really balanced. But it's just a nice way to align yourself. And so a few examples of why it's great for the business owner. Sometimes in a medical practice deal, we will bring in investors and then the investor will get a certain treatment, let's say 3% of gross revenues, until they double their money. Now they've already doubled their money and they could be out of the deal at that point and capted a 2x return. Sometimes we'll structure in a rider participation. So when the medical practice sells to private equity one day, they get an extra little boost of their return. Other times it might get their equity reduced from 10% to 2% because they've already doubled their money or some sort of treatment like that.”
2023-03-03 · We Study Billionaires · TIP530: The Top 5 Billionaire Books w/ Richard Wilson · IDENTIFIED FROM THE TRANSCRIPT
“And having a lot of ownership of choke points and influence and distribution, they'll get sweetheart deals where the valuation is so good for them, they also like Warren Buffett always negotiates extra warrants or extra collateral, et cetera. And it's just like an amazing deal because they really want to do the deal with him and not somebody else. So that's the most powerful thing that you can do. And that goes back to seeing deals first exclusively.”
2023-03-03 · We Study Billionaires · TIP530: The Top 5 Billionaire Books w/ Richard Wilson · IDENTIFIED FROM THE TRANSCRIPT
“Divisions. So if they know commodity sales are about to tank, they can write in an option on a railroad deal or LBO division to lower the price that acquisition based on having extra information that other people don't have. And in the public markets, extra information is sometimes insider trading and illegal and you go to jail. In the private markets, and many times it just means you're a better investor and you're smarter and can move with more high conviction. And the other thing is that many times when people come to you and they really want your help, like we had a deal last year where the company wanted us to invest. And so we bought 5% of the company, but we only invested 2.5%. They gave us the rest in advisory shares. We had another company last year that gave us 33% of their company to help them strategically grow and scale that because they knew the company would become much, much larger if they could plug into our investor club and our family office relationships. And so big families, when they grow a reputation of being very strategically helpful,”
2023-03-03 · We Study Billionaires · TIP530: The Top 5 Billionaire Books w/ Richard Wilson · IDENTIFIED FROM THE TRANSCRIPT
“Yeah, really great question. And that auto part example, the reason why that's so powerful is now every company you go to in the auto part space, you can say, oh, well, we can boost you through our Amazon division. We can boost you up and put you on the front page of our website. Or your best deal flow might come from looking at the website, see who's selling a lot, negotiate with the top three in that category, and then boost them to be number one in the exclusive person sold on that website. And so leveraging things like that, it's basically a strategic choke point is one of those strategies that you can do as your business becomes more sophisticated. And a lot of these families, they look at things like a chessboard, like, okay, this business moves forward and makes me smarter in this way. Or like in Steve Schwarzman's book, What It Takes, he talks about how doing M&A work and also LBO work create consistent fees and then big jumps and profits when things go well. But then let's say they take a head partner at Goldman Sachs and commodities and they open a commodities division, that now informs their other”
2023-03-03 · We Study Billionaires · TIP530: The Top 5 Billionaire Books w/ Richard Wilson · IDENTIFIED FROM THE TRANSCRIPT
“Because we don't really know exactly where they want to go. And if nobody's asked them those questions before, they might not know exactly where they want to go. And so you'll sometimes talk to people in the family office space and they'll say, oh, yeah, we'll look at anything. But, you know, really, do you want to invest in a dry cleaner in Australia that's just a startup? Probably not, right? Like you probably have some areas that you are more interested in and are the best use of your time while other people diversify you into other areas. So we help set up family offices at no cost. We end up just doing business with them over time, but we earn their respect and time by saying, well, instead of just buying some auto parts companies, why don't you buy a top three distributor of auto parts on a direct-to-consumer website? That's where the trend's going, and buy auto parts.com or whatever it would be, and then find a top five Amazon distributor and buy one of them as well.”
2023-03-03 · We Study Billionaires · TIP530: The Top 5 Billionaire Books w/ Richard Wilson · IDENTIFIED FROM THE TRANSCRIPT
“In any undergraduate business school course, what I find is that most families, even ultra wealthy families, don't have their family values. And so having your family values above your kitchen table and having those around in your house or your family unit, your family office is acting in line with those values and you hire and fire investment managers based on that is really important. So like two of my business partners in one entity are Eagle Scouts and I happen to be an Eagle Scout as well. And we were comparing three different capital partners that were all willing to provide all the capital we needed to scale this platform. And we said, well, let's just, it's apples to oranges in terms of the actual investment terms. So let's select them based on their values. And kind of half-jokingly, we said like, well, if they don't really fit the Boy Scout law of the 12 values of being in the Boy Scouts, then they're an outlaw and we just don't do business with them. So not having your values and objectives and your mission of your family office identified means we can't really work with the family yet in a way that respects their interests.”
2023-03-03 · We Study Billionaires · TIP530: The Top 5 Billionaire Books w/ Richard Wilson · IDENTIFIED FROM THE TRANSCRIPT
“Sure. We first talk about what their values and objectives are. Is your goal to spend one hour a week on email and phone calls and spend the rest of the time on the beach? Is your goal to grow from 200 million net worth to be worth 2 billion? Is your goal to donate a billion dollars in your life or to pass on $100 million to your kids? So all of those goals are meaning a different investment of your time, different level of cost, different level of complexity in your family office. You want to just play pure defense and go for income portfolio. It's completely different than what you should do if you want to quadruple your net worth in 10 years, right? And so all of that, the most important thing is that you really customize it to who you are and what your values and objectives are. And that's where we always start because otherwise every hour of time you spend or dollar you spend and who you hire completely changes. And while it's so obvious that every company should have their company values and everybody talks about that.”
2023-03-03 · We Study Billionaires · TIP530: The Top 5 Billionaire Books w/ Richard Wilson · IDENTIFIED FROM THE TRANSCRIPT
“Yeah, sure. Many times it can be helpful and advantageous to have an LLC or a business structure around the actual family office entity. It allows you to write off more things that otherwise might be scrutinized, such as traveling with family members or going somewhere to look at assets together with family members. Someone might say, oh, is that really a business expense? But then you can show that this is our P&L of this business. So many times that is done. Many times a lot of restructuring is needed, not so much because of the family office LLC needing to be the managing member of every other LLC, perhaps, but just because as an entrepreneur is moving very quickly, they might invest in a company and then didn't really read the fine print of the operating agreement inside of that company. And what was promised over email was never put into and baked into the operating agreement.”
2023-03-03 · We Study Billionaires · TIP530: The Top 5 Billionaire Books w/ Richard Wilson · IDENTIFIED FROM THE TRANSCRIPT
“Have their wealth advisor usually just one sometimes maximum three, and that's pure defense really. And then they have their real estate allocation. If they didn't make their money in that niche, they usually do a percentage of real estate development, a large chunk of cash flow in real estate, and that sleep at night money that should grow and match inflation over the long term. And then the third niche area is really where they play offense, and that's their operating business niche, where they created their wealth or those one or two areas where they want to really be strategically hands-on involved.”
2023-03-03 · We Study Billionaires · TIP530: The Top 5 Billionaire Books w/ Richard Wilson · IDENTIFIED FROM THE TRANSCRIPT
“Right around the $10 million mark, it also depends on how complex your portfolio is. When you get beyond owning your primary home and let's say your other investments are just a wealth advisor and maybe one or two past homes you used to live in or one or two vacation homes, once you get beyond that level of complexity and you start doing angel investments or operating business investments and real estate syndications and passive deals and you're a LP in funds and you have half a dozen extra LLCs, et cetera, you're starting to feel the need because the level of chaos around you is growing and then your net worth is growing so much you say to yourself, I want to make less expensive mistakes that feel dumb and I want to move faster and play a greater offense. Like most of the really ultra wealthy families I know specialize in just one or two niches, maybe three at most where they're playing offense and then they have a strong defensive team and strategy. They're not playing all defense and just diversifying into 400 niches. They're having three segments of their portfolio.”
2023-03-03 · We Study Billionaires · TIP530: The Top 5 Billionaire Books w/ Richard Wilson · IDENTIFIED FROM THE TRANSCRIPT
“Her client, but virtual family office, single family office, and multifamily office are the three main types. But people throw around the term, you know, and some people who are really just raising capital say, oh, we have a family office. But next minute you talk to them, they're trying to sell you their real estate deal and they're really just syndicating real estate. So we have to watch out for a legitimate one versus ones that try to look like one but are really just an investment company.”
2023-03-03 · We Study Billionaires · TIP530: The Top 5 Billionaire Books w/ Richard Wilson · IDENTIFIED FROM THE TRANSCRIPT
“Each mistake costs you much, much more. And then you probably are very powerful at creating new wealth. And so you doing everything makes less and less sense as you build teams around you. You should only be doing what your best ability allows you to do or your unique ability, as Dan Solden says often. And so I think that's really critical. And there's three types of family offices. There's a virtual family office for those that are worth 10, 20, 50 million, maybe $100 million or a little bit more. And that's a super lean family office structure. We don't have very many full-time employees. It's usually just remote, maybe a half-time CEO, half-time CIO, et cetera. And then you could have a single family office, which is full-fledged. You might have two, three, five, ten full-time employees, even dozens or 100 plus full-time employees. And then you could have a multi-family office, which is really just a wealth advisor who's geared everything towards the super ultra-wealthy. And some of those will take in $10 million net worth clients. Others have a minimum of $100 million networth.”
2023-03-03 · We Study Billionaires · TIP530: The Top 5 Billionaire Books w/ Richard Wilson · IDENTIFIED FROM THE TRANSCRIPT
“Sure. Yeah. So a family office is just an ultra wealthy investment management wealth management solution. It really manages many aspects of their life. The reason why it's important is if you're worth $1 million and you mess up a tax filing or one of your two LLCs you have in place, et cetera, maybe the penalty is $1,000 or you lose $1,000 because you made a mistake on a filing date. When you become wealthier and you have dozens of LLCs and 100 employees or 1,000 employees, et cetera, one little mistake could cost you $50,000, $400,000, maybe $4 million. And as you grow, you get busier and busier and your time is worth more per hour. So you just need people around you helping you allocate capital, make things more tax efficient, make sure the investment you want to make today is going out of the right structure at the right time, that reporting is done and systematically track all your holdings and K1s and LLCs. And you're more likely to make a mistake the busier you get.”
2023-03-03 · We Study Billionaires · TIP530: The Top 5 Billionaire Books w/ Richard Wilson · IDENTIFIED FROM THE TRANSCRIPT
“People feel that. And so that position of authority as a titan in the industry, whether you're worth $100 million or a billion, attracts business deals. And one of the most important things I've learned in 16 years is that as a family office or as an ultra-wealthy investor or billionaire, your wealth will compound exponentially faster if you can see deals first exclusively and at a better valuation than other people, then you are going to compound your wealth very quickly. And so I think that's the most powerful thing that I could probably share from studying the billionaires and starting up all these family offices. If you're not known so well in your niche at least, or the niche type of deal flow you want, you're not seeing deals first exclusively and at a better valuation, then you're at a disadvantage to what you could be at.”
2023-03-03 · We Study Billionaires · TIP530: The Top 5 Billionaire Books w/ Richard Wilson · IDENTIFIED FROM THE TRANSCRIPT
“Yeah, for sure I have a couple times. One is in Howard Mark's book called The Most Important Thing. He talks about how they don't like to chase deals. They like to be known in the industry. So deals come to them so that when people come to them, they have a big edge because they're the ones that are asking for the business. They're not going out and asking to invest in somebody's deal. And that way they get much, much better terms. So that's kind of like an attraction factor type position instead of chasing people. And then the other one is more generic across most types of billionaires is that there's the opposite of blackmail you could call white male or alpha male and is basically has nothing to do with your gender it's just basically that like when you instead of saying if you do something if you don't do something in for me i'm going to break your window it's just an implied unsaid thing that if you can get in business with opra or warren buffet that really good things are going to happen you don't have to even say it out loud right”
2023-03-03 · We Study Billionaires · TIP530: The Top 5 Billionaire Books w/ Richard Wilson · IDENTIFIED FROM THE TRANSCRIPT
“Next job offered the blog was making me over six figures a year, and we did seven figures in revenue, our third year in business 13 years ago. But the real shortcut was I just studied everything going on in the industry. Like Mark Cuban always recommends you do. Just read everything possible in your industry, digest it, interpret it, put it back out there for other people who don't have time to go and read everything. And then when I got a book deal with Wiley and I bought family offices.com, I just interviewed 35.”
2023-03-03 · We Study Billionaires · TIP530: The Top 5 Billionaire Books w/ Richard Wilson · IDENTIFIED FROM THE TRANSCRIPT
“Yeah, sure. So I have no authority then. I went and worked for a capital raising placement agent firm. And what I did is I asked them, like, well, you hire me? They said, no, we want people's seven years experience who raised $100 million, so go away. And I said, well, I'll quit my six-figure job at least for three days a week, and I'll work for free for three days a week, calling investors for you to show you I can do the work. And I'm a hard worker. And you'll want to pay me after a few months. So after a few months, you started paying me for one day a week, then two days a week, then three days a week. And eventually he paid me to be there full time. I took a big haircut on what I got paid, but I had potential commissions. And then once we had brought in over $100 million in allocations, but my website was also taking off, he said, hey, look, I'm a regulated broker dealer entity. You have to either shut down the silly blog or leave the company. And at that point, I was like, well, I'll just find another capital raising company that would appreciate the exposure and the insights I'm getting by creating this website. And by the time I got”
2023-03-03 · We Study Billionaires · TIP530: The Top 5 Billionaire Books w/ Richard Wilson · IDENTIFIED FROM THE TRANSCRIPT
“Influence principles at once, right? You get mass reciprocation across everybody given your content, you're very consistent with how you put out the content and it positions you as an authority on billionaires or starting a family office, et cetera.”
2023-03-03 · We Study Billionaires · TIP530: The Top 5 Billionaire Books w/ Richard Wilson · IDENTIFIED FROM THE TRANSCRIPT
“Yeah, that got thrown to the mix because I had always wanted to take some courses from Wharton or Harvard. And then I was in Harvard Square inside of the Coop bookstore and somebody having a cup of coffee next to me said, hey, I don't know if you've read this book before by Caldini, but it's amazing. And he had me read it. And I just said, wow, this is super powerful. So our whole business is structured based on that. And if you know the Caldini influence principles, you'll know a few of them have a position of authority, scarcity adds to influence, reciprocation. You do something for someone, they want to do something back to you. And then commitment and consistency. And so what I found is if you stack all those on top of each other and you consistently provide a lot of thought leadership to a very small niche group like ultra-wealthy super ultra-wealthy families, and you do that over and over again over 16 years, just like you guys have with your podcast and I have a family office club and now billionaires.com that you enact all these different”
2023-03-03 · We Study Billionaires · TIP530: The Top 5 Billionaire Books w/ Richard Wilson · IDENTIFIED FROM THE TRANSCRIPT
“Well, I've been doing risk consulting, and it was really boring, but I paid for my MBA in cash. And then I said, okay, who else is going to pay a 21-year-old kid, $100,000 a year? And I figured it was selling commercial real estate or raising capital. So I went to the capital raising world, studied psychology of influence. And while raising capital, I started a website sharing information on hedge funds, capital raising, and family offices. And the family office content just took off. There were no other thought leaders in the family office ultra-wealthy niche that were really putting out helpful information. It was just like a journalist article here and there. And so when we started doing that, we got 3,000, 5,000, 7,000 hits a day to the website. I got on the front page of the Boston Globe when I was 24 years old, and I spoke in over 16 countries a couple hundred times. And that's how the family office club really got started.”
2023-03-03 · We Study Billionaires · TIP530: The Top 5 Billionaire Books w/ Richard Wilson · IDENTIFIED FROM THE TRANSCRIPT
“Yeah, sure. Happy to do so. So the business I set up 16 years ago and still operate is called the Family Office Club. And it took us 12 years to buy billionaires.com. We followed up every two to four months for over a decade. And then they finally cracked on the price and we wore them down and acquired that. So last year I structured and sourced $85 million worth of transactions that we closed with our clients. And some of our clients are billionaires. Some are sentimentaires. But I'm just curious why everyone doesn't want to study billionaires, right? It's kind of like we were talking before the recording. If you want to learn how to play basketball, you can study college athletes, which would be average business book writers like myself. I've written many books. I'm not a billionaire. Or you can go and study a book written by LeBron or Michael Jordan, Larry Bird, and you might as well start with the NBA players and not study the college players because maybe the college players are good at marketing their book and making it look awesome. But at the end of the day, probably should study the billionaires first.”
2023-03-03 · We Study Billionaires · TIP530: The Top 5 Billionaire Books w/ Richard Wilson · IDENTIFIED FROM THE TRANSCRIPT