Work Optional: Redefining Wealth, Purpose, and Identity with Keith Blackborg

WEBVTT
00:00:19.056 --> 00:00:24.344
One of the biggest things people say is I don't know what I'm going to do next and so I'm not going to retire.
00:00:24.344 --> 00:00:27.746
They can't imagine what that future is.
00:00:27.746 --> 00:00:35.689
And there's some things that we can do, whether it's through me or through a coach or a counselor.
00:00:35.689 --> 00:00:38.393
You've got to really think about next.
00:00:38.393 --> 00:00:42.350
So some of that might even be tied into religious beliefs.
00:00:42.350 --> 00:00:44.564
If you're a Christian, you might think one way or about it.
00:00:44.564 --> 00:00:49.037
If you're more secular, there might be other vision exercises you might use.
00:00:49.037 --> 00:00:58.543
But whatever that pathway is, it starts with getting clear on that vision and really imagining what would life work like if I didn't have to work.
00:00:58.543 --> 00:01:04.584
Work optional is now I can pick and choose what I'm going to do, where I'm going to do it.
00:01:04.584 --> 00:01:11.033
It allows you to be more intentional and have some buffer in life and it opens up a whole new realm of possibilities.
00:01:15.921 --> 00:01:18.766
Welcome to the Senior Housing Investors Podcast.
00:01:18.766 --> 00:01:26.671
If you are an owner operator, investor, developer or buyer of senior housing, you've come to the right place.
00:01:26.671 --> 00:01:34.046
The best way to stay connected with us is to sign up for our weekly newsletter at havenseniorinvestmentscom.
00:01:34.046 --> 00:01:38.084
This podcast doesn't exist without you, our community.
00:01:38.084 --> 00:01:41.879
Thank you for listening and reach out to us anytime.
00:01:41.879 --> 00:01:43.322
And reach out to us anytime.
00:01:46.409 --> 00:01:47.632
Welcome back everyone.
00:01:47.632 --> 00:01:51.790
Today's episode is extra special as we welcome our guest, Keith Blackborg.
00:01:51.790 --> 00:01:58.007
Founder of Financial Journey, Keith brings deep insight into retirement planning and financial wellness.
00:01:58.007 --> 00:02:07.165
With our host, John Hauber's experience in the senior housing market, this conversation is sure to bring valuable perspectives for investors and operators alike.
00:02:07.165 --> 00:02:09.693
Let's dive in, John.
00:02:10.719 --> 00:02:11.222
Kelsey.
00:02:11.222 --> 00:02:14.771
Thank you so much and welcome to the show, keith.
00:02:14.771 --> 00:02:16.625
Thanks for having me, john.
00:02:16.625 --> 00:02:20.907
Yeah, no problem, and it's a pleasure having you on.
00:02:20.907 --> 00:02:26.554
I've known you for many, many months and what you're doing is incredible, so we wanted to make sure we got you on.
00:02:26.554 --> 00:02:33.469
I've known you for many, many months and what you're doing is incredible, so we wanted to make sure we got you on the show so that you can describe to our audience how to create wealth in their life.
00:02:33.469 --> 00:02:34.715
So this is going to be an awesome show.
00:02:34.715 --> 00:02:41.587
Stick with us through it, and I will start off by understanding a little bit more about Keith.
00:02:41.587 --> 00:02:44.933
And how did you retire at 32 years old?
00:02:45.675 --> 00:02:50.331
Yeah, and just respond to something you said about creating wealth in your life.
00:02:50.331 --> 00:02:54.204
I think it's important to recognize it's not just about the money.
00:02:54.204 --> 00:03:03.066
There's other types of wealth too that really live out, and that's been something that's really I've learned along in my journey.
00:03:03.066 --> 00:03:14.193
So my background, in a nutshell, started off as a CPA at Deloitte, ended up starting my own CPA firm focused on high net worth real estate investors.
00:03:14.193 --> 00:03:18.268
Along the way, we started buying rental houses.
00:03:18.268 --> 00:03:20.271
We've heard Robert Kiyosaki speak.
00:03:20.271 --> 00:03:29.968
I know he's a popular guy and so I'd like to think I was brilliant, but I think I was really lucky to also start buying houses in 2010.
00:03:29.968 --> 00:03:43.945
So we started doing flips and wholesaling and owner finance and all the rentals and along the way, we transitioned to hotels and apartments in 2013.
00:03:43.945 --> 00:03:48.835
And that ran its course, had some growth, raised money from investors Along the way.
00:03:48.835 --> 00:03:52.112
As part of that, my wife was running our real estate business.
00:03:52.112 --> 00:03:57.207
I was more focused on the CPA firm and then we'd collaborated on some things.
00:03:57.207 --> 00:04:01.484
I also served as director of acquisitions for hedge fund, bought 875 houses for them.
00:04:01.484 --> 00:04:06.611
So in many ways, we were a tear like going for that success.
00:04:07.233 --> 00:04:10.784
And then 2015, 2016, I was.
00:04:10.784 --> 00:04:12.468
We were both so caught up in work.
00:04:12.468 --> 00:04:17.607
We were working, traveling et cetera, and we kind of lost sight of ourselves in the busyness.
00:04:17.607 --> 00:04:20.392
And divorce was considered I.
00:04:20.392 --> 00:04:34.790
It was a really big eye opener, for for me it was either I could continue on this path of success, but I knew more money wasn't necessarily going to make me happy, and so we had a shift in what we thought our priorities were.
00:04:34.790 --> 00:04:36.144
So we had an exit.
00:04:36.379 --> 00:04:38.086
I thought that, well, a couple of things.
00:04:38.086 --> 00:04:40.127
One I thought the real estate market was going to crash.
00:04:40.127 --> 00:04:42.769
Hillary Clinton was going to get elected in 2016.
00:04:42.769 --> 00:04:44.004
I was wrong.
00:04:44.004 --> 00:04:48.925
Hillary Clinton was going to get elected in 2016.
00:04:48.925 --> 00:04:49.206
I was wrong.
00:04:49.206 --> 00:04:52.935
Apparently, the real estate market went on for like another six, seven years after that and I missed out on some of that.
00:04:52.935 --> 00:04:59.744
But the flip side of that was we spent three years traveling the world and I got the best souvenir possible my firstborn son.
00:04:59.744 --> 00:05:03.009
So now we've got boys ages three and six.
00:05:03.009 --> 00:05:07.569
And so, all that to say, we had some early success that really set us up.
00:05:07.569 --> 00:05:23.653
We started when we were 25, really buying and growing, and some of it was recognizing the opportunity and then also just being lucky and having the best run up in the real estate market ever in history and being positioned to take advantage of that.
00:05:24.641 --> 00:05:36.060
Yeah, that's an incredible journey and I wish I had that mentorship at 25 to you know to say, hey, you know, assets are where where wealth is created.
00:05:36.060 --> 00:05:52.461
I mean and didn't have that mentorship when I was a little bit older than you, but when we were going through school, we had to go through, you know, college and then go get a job, a W-2 job, and work, and work, and work, and work and save and save.
00:05:52.461 --> 00:05:54.185
You got your 401k and such.
00:05:54.185 --> 00:06:04.310
And so no one ever came to me, Keith, and said do you know, you can live your life in a work optional mode in three to five years?
00:06:04.310 --> 00:06:08.285
And if someone would have come to me and said that, I would have been like how?
00:06:08.285 --> 00:06:19.485
And so I'm asking you now that you consult with individuals high net worth individuals, W-2 employees how does someone become work optional in two to five years?
00:06:20.687 --> 00:06:26.120
So my favorite people to work with are those that already have some assets.
00:06:26.120 --> 00:06:32.314
If you're just getting started, I would suggest focus on your net worth, grow that business, explore entrepreneurship.
00:06:32.314 --> 00:06:40.053
But our typical client avatar is somebody who's already grown and is now trying to optimize those existing assets.
00:06:40.053 --> 00:06:45.892
And so one of the calculations we will do is what is your lifestyle expense?
00:06:45.892 --> 00:06:48.226
What is your expected rate of return?
00:06:48.226 --> 00:07:02.992
8%, 12%, whatever that number is and we can do the math of what is the net worth needed to live off to, based on a certain rate of return, to produce the desired amount of cash flow to cover your lifestyle expense.
00:07:03.100 --> 00:07:07.435
And if you're there, often we're just repositioning existing assets.
00:07:07.435 --> 00:07:15.279
Or if you're possibly close to that, often within just a few years you can get into a few equity growing investments.
00:07:15.279 --> 00:07:21.552
That allows for a quick turnaround and boost your net worth as a result of that.
00:07:21.552 --> 00:07:38.810
And so once you've made it across that finish line, or if you've got those assets like you're a business owner looking for a sale, you're a real estate investor, you've got existing assets now we're shifting some of that equity into relying, cash flowing investments in all sorts of asset classes out there.
00:07:38.810 --> 00:07:40.725
That can really make a difference.
00:07:41.769 --> 00:07:53.052
That's great, keith, and so, as a business owner myself, not ready to retire but owning multiple businesses it's always what's my exit strategy going to be Now?
00:07:53.052 --> 00:08:15.973
As our audience knows, we help individual business owners that own assisted living, memory care, independent living communities many of them mom and pops and they're saying to themselves well, I want to retire, I want to sell my business, but I don't know what the next steps are associated with it.
00:08:15.973 --> 00:08:21.312
So many of these individuals have all of their wealth tied up in their businesses.
00:08:21.312 --> 00:08:26.829
How about you address that, not only as a CPA, but running financial journey?
00:08:27.732 --> 00:08:29.887
Yeah, so a few things.
00:08:29.887 --> 00:08:39.227
One there's the hard numbers side of things, but there's also the softer, the emotional side, the identity side that comes with that.
00:08:39.227 --> 00:08:40.586
That is often overlooked.
00:08:40.586 --> 00:09:01.369
And so, while the CPA allows me to talk all about the numbers how to sell, how to optimize for sale, tax efficiency, how to optimize a business for sale, for operations Part of it is, if you look at people who've gone through recent exits, there's a lot of people that have regretted selling their business afterwards.
00:09:01.568 --> 00:09:04.706
And part of that what needs to be addressed is your identity.
00:09:04.706 --> 00:09:09.788
So often people, even when I sold the CPA firm, my identity was tied up in the.
00:09:09.788 --> 00:09:18.240
In the CPA firm I had four to 500 high net worth clients with tons of tax returns and I felt really valued and important.
00:09:18.240 --> 00:09:21.645
When that went away, it was a tough thing.
00:09:21.645 --> 00:09:23.288
It's like what am I doing next?
00:09:23.288 --> 00:09:29.052
And so some of it is just stopping from, just focused on running away from something.
00:09:29.052 --> 00:09:45.291
You may be exhausted or tired in your business, but you really got your, set your eyes on what do you want, get clear on that future vision and once you've got clarity there, we can reverse engineer the wealth and all the tax and legal and wealth stuff that helps get you there.
00:09:45.291 --> 00:09:53.966
But you really got to address the personal side of this and think through the relationships and other elements that will shift if you sell a business.
00:09:54.788 --> 00:10:02.172
So tell me the top two things that come up with someone on that side of the fence, the emotional side, when they come to you.
00:10:02.172 --> 00:10:06.429
What are some of the language that they're using in terms of feeling language when they're?
00:10:09.195 --> 00:10:14.538
One of the biggest things people say is I don't know what I'm going to do next and so I'm not going to retire.
00:10:14.538 --> 00:10:17.900
They can't imagine what that future is.
00:10:17.900 --> 00:10:24.405
And there's some things that we can do, whether it's through me or through a.
00:10:24.405 --> 00:10:28.369
You're a Christian, you might think one way or about it.
00:10:28.369 --> 00:10:39.167
If you're more secular, there might be other vision exercises you might use.
00:10:39.167 --> 00:10:54.316
But whatever that pathway is, it starts with getting clear on that vision and really imagining what would life work like if I didn't have to work, work optional, work optional.
00:10:54.316 --> 00:11:00.897
That's why it's not called retirement, because trying to tell one a bunch of business owners that they're, or entrepreneurs, that they have to retire and do nothing, sounds terrible.
00:11:00.976 --> 00:11:02.662
The people who are running full force.
00:11:02.662 --> 00:11:03.383
I know.
00:11:03.383 --> 00:11:04.285
For me there was a.
00:11:04.285 --> 00:11:07.221
There was a time when I was traveling around the world and people like, what are you doing?
00:11:07.221 --> 00:11:20.418
I'm like I'm retired and I'm early thirties, and they're like no, that doesn't make sense and there was a big time frame and that's why it really shifted to work optional is now I can pick and choose what I'm going to do, where I'm going to do it.
00:11:20.418 --> 00:11:26.845
It allows you to be more intentional and have some buffer in life, and it opens up a whole new realm of possibilities.
00:11:27.936 --> 00:11:35.107
It's interesting is that what pops into my mind is remember that book, the purpose driven life, yes, okay.
00:11:35.107 --> 00:11:45.062
And so I wake up every morning like really full of purpose, because I know what a crisis we have for in the senior living space.
00:11:45.062 --> 00:11:51.341
We don't have enough housing for our most vulnerable populations and it's getting worse and worse and worse.
00:11:51.341 --> 00:11:52.926
So that's a purpose for me.
00:11:52.926 --> 00:11:55.381
I wake up it's not like work to me, it's I'm building these and worse, so that's a purpose for me.
00:11:55.381 --> 00:12:07.029
I waked up it's not like work to me, it's I'm building these businesses, but there's a purpose behind those businesses and I can't imagine if that purpose went away without something to replace that purpose.
00:12:07.029 --> 00:12:12.628
When someone is says, okay, we're going to sell our business, ultimately, what do they come to do?
00:12:12.628 --> 00:12:14.126
They come to a realization of what their purpose is going to sell our business.
00:12:14.126 --> 00:12:14.365
Ultimately, what do they come to?
00:12:14.365 --> 00:12:17.741
Do they come to a realization of what their purpose is going to be after they sell their businesses?
00:12:18.895 --> 00:12:23.764
Usually there's some exploration of or understanding of what those purposes are.
00:12:23.764 --> 00:12:28.644
Sometimes they're so exhausted that they don't, and they do that process afterwards.
00:12:28.644 --> 00:12:34.162
I have one of our members sold a business, kind of freaked out on what income he was going to do.
00:12:34.162 --> 00:12:35.225
I really encourage you.
00:12:35.225 --> 00:12:37.964
You should ideally not buy something.
00:12:37.964 --> 00:12:51.326
You should take a break for at least one to three months and, if you can like, 12 months, and he jumped in straight into another business after selling one and I think he really deprived himself of a personal growth opportunity.
00:12:51.936 --> 00:13:02.841
But where you can get vision and think about the future and really, for me, being in a community of other people who have been through this, there is no single answer that's going to fit everybody.
00:13:02.841 --> 00:13:23.342
But by being around other people that have been through this and sometimes having a coach that has personally been through this and seen lots of others, it's that combination of a strong coach or consultant, depending on how you look at it, and a community, you start to see how other people have handled it and you can pick and choose the elements that really make sense for you.
00:13:24.125 --> 00:13:25.368
We call that the tribe.
00:13:25.368 --> 00:13:37.500
Right, the tribe actually gets you instead of isolating yourself after selling your business, what tribe can you get into that will then take you to your next purpose?
00:13:37.500 --> 00:13:44.044
And so one of the things I always thought about okay, I sell my businesses and everything else and I've got this wealth.
00:13:44.044 --> 00:13:59.307
Okay, and I've done all the tax strategies which we'll talk about later in this conversation, but all of a sudden I've got this wealth that's producing income for me, and now can I become a CEO of my own wealth?
00:13:59.307 --> 00:14:03.511
I mean, is that what we're trying to get to when we talk about financial journeys?
00:14:15.294 --> 00:14:15.535
the business.
00:14:15.535 --> 00:14:17.866
There's your work, whether it's a business you own or you're a high income earner or employee, whatever it is.
00:14:17.866 --> 00:14:29.239
You've got your income side I think about it as like financial statements and then you've also got the wealth side, which is more like your balance sheet, where you've got your assets, maybe some liabilities, and of course, that hopefully produces some income as well.
00:14:29.239 --> 00:14:41.219
And then you've got your expenses, like your lifetime expenses, maybe your giving, the fun stuff you get to do.
00:14:41.219 --> 00:14:41.520
Those are all.
00:14:41.520 --> 00:14:43.168
I see those as different divisions that roll up into wealth as a business.
00:14:43.168 --> 00:14:45.496
And when you start viewing it that way, you start thinking okay, my wealth is a business.
00:14:45.496 --> 00:14:47.802
Do I need to grow up, build up my assets?
00:14:47.802 --> 00:14:52.743
Do I need to simply keep doing what I'm doing, with some work to have more income, to buy some assets?
00:14:52.743 --> 00:14:59.024
But, as you said earlier, it's really the assets that create the wealth, that make the biggest difference.
00:14:59.024 --> 00:15:18.278
And then just realizing that your lifestyle not that orientation of wealth business at the top just recognizes that all those divisions have an impact on that together and if you think from a financial sense, your goal is an optimal wealth business that covers your lifestyle expense there's a reorienting of your thinking.
00:15:18.318 --> 00:15:22.341
I'm no longer thinking about oh, I need my next promotion or I just this much of a net worth.
00:15:22.341 --> 00:15:24.744
I don't need to focus on growing my career so much.
00:15:24.744 --> 00:15:42.263
I really need to focus more on how do I optimize my rate of return on my investments.
00:15:42.263 --> 00:15:50.258
Grow that element, because a 10% return on $50,000 is only $5,000 in income.
00:15:50.258 --> 00:15:53.903
But if you've got 5 million in assets, that's five hundred thousand dollars a year.
00:15:53.903 --> 00:15:58.697
So there's a bigger priority the more your net worth goes on really optimizing your assets.
00:15:58.697 --> 00:15:59.780
And so there's this.
00:15:59.780 --> 00:16:11.679
Really you start shifting into like a small family office where you're managing your own wealth and what we do is is a little different than like a financial advisor where they're going to try and take your money and do it all for you.
00:16:11.679 --> 00:16:12.782
There's a time and place for that.
00:16:12.782 --> 00:16:19.942
We really like to teach people how to fish rather than just catch the fish, so you learn how to manage wealth as the business.
00:16:20.702 --> 00:16:39.902
That's extremely important because you know we're dealing with high net worth individuals and registered investment advisors and trusted CPA advisors every day, right, and they keep telling me individuals come to them and are afraid of risk what do I put my money into?
00:16:40.676 --> 00:16:53.044
So they're really relying on others, and what I hear you saying, keith, is that you actually, through Financial Journey, actually teach them how to do it themselves, and you're a guide and a coach and everything else.
00:16:53.044 --> 00:17:09.454
And so how does an individual that maybe is W-2 and is a high income earner or is relying on others to help them through their process, how do they look at risk and how can they minimize risk when it comes to investments?
00:17:09.454 --> 00:17:11.299
Because it's really scary.
00:17:11.299 --> 00:17:22.736
If I own a business and that's all my life, my whole life is running that business, I'm maximizing the value of that business, but I'm not even thinking about stocks, I'm not thinking about passive investments in other things.
00:17:22.736 --> 00:17:33.707
So tell me how we transition someone in that mode from either owning their own business or being a W-2 employee to what you're describing as a CEO of their own wealth.
00:17:34.755 --> 00:17:35.877
Now, to be clear.
00:17:35.877 --> 00:17:40.576
There are certain personalities that are always going to want somebody else to do it for them.
00:17:40.576 --> 00:17:43.443
They don't want to understand this and that's fine.
00:17:43.443 --> 00:17:47.423
They're going to pay their percentage, their cost, to a financial advisor.
00:17:47.423 --> 00:17:47.965
That makes sense.
00:17:47.965 --> 00:17:50.519
But we can also work with financial advisors.
00:17:50.519 --> 00:17:59.126
The way we view the world is really we look at what are the billionaire family offices doing and we're adapting those strategies for millionaires.
00:17:59.728 --> 00:18:07.803
So often financial advisors, especially with traditional assets, have a tremendous place in all that, especially in the traditional assets.
00:18:07.803 --> 00:18:14.124
But usually when it comes to alternative assets, they don't have much of an understanding.
00:18:14.124 --> 00:18:15.406
They don't have that risk.
00:18:15.406 --> 00:18:17.278
Sometimes there's a due diligence.
00:18:17.278 --> 00:18:22.260
They often have a due diligence process through their brokerage, but there's usually less fees.
00:18:22.260 --> 00:18:25.347
They're not incentivized to sell those and so they don't.
00:18:25.347 --> 00:18:36.438
You're stuck in stocks and bonds and you get mediocre results and for many people that feel safe For all alternatives, it's almost like stepping in the Wild West.
00:18:36.438 --> 00:18:42.679
In some cases you can start getting pitches from anybody and there's also risk with that.
00:18:42.679 --> 00:18:44.385
So there's you got to pay attention.
00:18:44.788 --> 00:18:54.144
So the way that billionaire family offices do it is they have a due diligence counselor, an investment committee that will review all those assets in detail.
00:18:54.144 --> 00:18:57.348
So, for example, in our community we do something similar.
00:18:57.348 --> 00:19:02.465
We've got volunteer community members who have background experience in different asset classes.
00:19:02.465 --> 00:19:07.748
So our doctors and lawyers in the group know nothing about vetting an oil and gas investment.
00:19:07.748 --> 00:19:15.741
We've got the chief drill officer of a publicly traded company that does, and so when we're vetting an oil and gas investment, that gentleman will come in.
00:19:15.741 --> 00:19:18.146
It's a company that most of you would recognize.
00:19:18.146 --> 00:19:23.567
He doesn't advertise it but he's able to go many layers deep into the technical analysis.
00:19:23.567 --> 00:19:35.717
Plus, if we bring in a couple other outside oil and gas engineers, you've got multiple eyes on things that are reviewing the assets, the team, the documents, and that really helps reduce our risk.
00:19:35.958 --> 00:19:40.028
We eliminate 80% of the deals we see because we don't like something about them.
00:19:40.028 --> 00:19:49.768
But even real estate, like your senior living investment, we kind of put you through the ringer for a few weeks while we reviewed things, but then we ultimately reviewed and passed.
00:19:49.768 --> 00:19:53.743
We referred your deal to our members, so a lot of people.
00:19:53.743 --> 00:19:58.000
We really funnel it down to a few high quality investments.
00:19:58.000 --> 00:20:01.788
That helps eliminate the risk of due diligence.
00:20:01.788 --> 00:20:07.996
And I'm not getting paid on all everybody's investments, it's really we want the truly the best investments for our members.
00:20:07.996 --> 00:20:18.631
So often our deals we've got stuff in all different asset classes, from senior delivering to oil and gas to different startups where it helps eliminate the downside.
00:20:18.631 --> 00:20:28.890
We often have better investments than even financial advisors who are kind of picking and choosing because those guys are having to pay people to bring them money.
00:20:28.890 --> 00:20:32.414
Most of our deals people find out about it and it's all referral.
00:20:32.414 --> 00:20:35.441
Everybody loves the deals and it just kind of grows itself.
00:20:36.282 --> 00:20:36.564
All right.
00:20:36.564 --> 00:20:41.778
So what I hear you saying, keith, is that you have a tribe currently financially.
00:20:41.778 --> 00:20:44.423
Yes, may I ask you how big that tribe is?
00:20:44.423 --> 00:20:47.195
Yeah, we've been around 80, 90 people.
00:20:47.195 --> 00:20:57.423
Okay, so you have 80 and 90 high net worth individuals, or maybe they're still in their job or they're out of their job and they're managing their CEOs of their wealth.
00:20:57.423 --> 00:21:00.229
Tell me about that ecosystem.
00:21:00.229 --> 00:21:03.644
Is there like phone calls that you have?
00:21:03.644 --> 00:21:06.873
Is there like trips you go on together?
00:21:06.873 --> 00:21:11.363
Or tell me about that ecosystem on how everyone works together.
00:21:11.363 --> 00:21:25.464
Now, as a caveat, I've been to one of them, so I just want I don't want to describe it I want you to describe what that ecosystem looks like and how everyone kind of works with each other, learns from each other to increase wealth.
00:21:25.464 --> 00:21:28.474
So you're not doing it on your own as CEO of your own wealth.
00:21:28.474 --> 00:21:31.896
You actually are part of a tribe that is all doing it itself.
00:21:32.478 --> 00:21:33.400
Yeah, absolutely.
00:21:33.400 --> 00:21:37.226
So there's a few key things that we really help people do.
00:21:37.226 --> 00:21:42.576
So we help people find superior investments, we help with the tax strategy.
00:21:42.576 --> 00:21:49.669
We connect them with a community of genuine, generous people like you that are helping each other out.
00:21:49.669 --> 00:22:01.689
So that ends up looking like a mixture of some one-on-one ones with me, my team, who have deep experience in things, and then sometimes it's also more in the community.
00:22:01.689 --> 00:22:07.938
I have only had one lifetime to learn, and while I think I've learned a bit, I've learned oil and gas.
00:22:07.938 --> 00:22:16.894
I can't have three decades of experience in commercial real estate, oil and gas and all these things, and so sometimes it's just connecting you to the right person at the right time.
00:22:16.933 --> 00:22:28.154
Whether you're buying a business, selling a business, transitioning, there's somebody as a result, and so we protect our community, we try to have the right people in there and that makes a difference.
00:22:28.154 --> 00:22:33.086
And then we'll meet one-on-one, we'll meet weekly as a community.
00:22:33.086 --> 00:22:38.063
We've got our monthly family meetings where we really go more deep with each other.
00:22:38.063 --> 00:22:46.661
We'll do portfolio mentoring, where somebody stands up and says, hey, this is my $5 million portfolio, whatever it is, how would you guys adjust this?
00:22:46.661 --> 00:22:51.084
And people can really weigh in when your tax returns get filed, I get to meet with you.
00:22:51.084 --> 00:22:53.037
If you desire, review the draft.
00:22:53.037 --> 00:22:56.098
I'm often saving members five figures on their tax savings.
00:22:56.558 --> 00:22:57.559
And then we do our events.
00:22:57.559 --> 00:23:03.545
And that's probably the most exciting thing is at least twice a year we get together as a community.
00:23:03.545 --> 00:23:06.567
We'll do speakers, but we'll also do dinner the fun stuff.
00:23:06.567 --> 00:23:07.588
They're always someplace neat.
00:23:07.588 --> 00:23:12.112
So you joined us at our West Palm Beach event, which I hope you had an amazing time.
00:23:12.112 --> 00:23:13.395
It was great.
00:23:13.395 --> 00:23:24.800
It's tough to promise this, but often there are organic things that happen where somebody stood up and says, hey, I'm going to Turks and Caicos, I've got a house on the beach, I've got space for 10 more.
00:23:24.800 --> 00:23:26.701
Who wants to join me?
00:23:26.701 --> 00:23:39.695
And so it can feel lonely at the top, and so some of these folks with money would like to be around other people like them and they're often willing to share some of their experiences or resources and enjoy it with each other.
00:23:39.695 --> 00:23:46.057
And so there's enough just organic things that happen that it's way beyond the official structured stuff.
00:23:46.057 --> 00:23:48.644
Then that's truly the reason why people join.
00:23:48.644 --> 00:23:53.324
They come for the results of especially the one-on-one and they stay for the powerful community.
00:23:59.095 --> 00:24:08.165
That's what I experienced coming down to West Palm Beach to your event is that everyone is there to help each other, and everyone's sharing what the you know how they succeeded and how they failed also Right, and coming together as a group.
00:24:08.165 --> 00:24:09.255
It was just quite amazing.
00:24:09.255 --> 00:24:21.660
I haven't seen that since the dot-com phase, where, for a table for dinner, there was 65 people at that table spending four hours together just speaking and talking with each other and really enjoying each other's company.
00:24:21.660 --> 00:24:25.056
So I really appreciate that invite, keith.
00:24:25.056 --> 00:24:27.019
It was really a fantastic thing to see.
00:24:27.019 --> 00:24:33.246
And the other thing I noticed is that you know those who are standing up to teach others.
00:24:33.246 --> 00:24:36.237
It's a wide class of asset classes.
00:24:36.417 --> 00:24:39.869
Okay, so you know someone came up and talked about platinum.
00:24:39.869 --> 00:24:41.836
I'd never heard of platinum before.
00:24:41.836 --> 00:24:43.701
You know mining platinum is.
00:24:43.701 --> 00:24:44.142
You know.
00:24:44.142 --> 00:24:45.905
Others talked about Bitcoin.
00:24:45.905 --> 00:24:47.914
We talked about the senior housing space.
00:24:47.914 --> 00:24:49.715
Others you know spoke about just really get a 10% return on storage.
00:24:49.715 --> 00:24:53.615
Others you know spoke about just really get a 10% return on storage.
00:24:53.615 --> 00:25:01.157
Right, it was really a beautiful event in a beautiful area, so thank you very much for continuing to do that Now.
00:25:01.157 --> 00:25:05.719
Where you and I met was at your main event.
00:25:05.719 --> 00:25:09.640
So tell me about this main event that is coming up here fairly shortly.
00:25:10.539 --> 00:25:21.167
So if you go to PassiveInvestorEventcom, we do one large event per year that's open to the public, so October 23rd it's for accredited investors.
00:25:21.167 --> 00:25:22.348
It's a great way.
00:25:22.348 --> 00:25:30.694
Two things One, I want to have a big impact on a lot of people, and so for some people it makes sense to be in financial journey or private community.
00:25:30.694 --> 00:25:35.337
For others, you can come once a year see, get your own private wealth plan done.
00:25:35.337 --> 00:25:38.308
Meet some other great investments.
00:25:38.308 --> 00:25:44.006
Like yourself, I don't really want to tell everybody that I vet everything, but there's a certain amount of.
00:25:44.006 --> 00:25:45.349
We really want to put people.
00:25:45.349 --> 00:25:55.186
Connect people with solid investments that we've had some relationships with, gotten to know, and you get a one-stop shop to meet your professional services.
00:25:55.186 --> 00:25:58.847
Connect with other investors we break everybody up into many masterminds.
00:25:58.847 --> 00:26:06.732
There's a ton that goes into it and it's really unlike anything you've ever done before, and we sell our tickets about at cost.
00:26:06.732 --> 00:26:10.567
So right now I think those tickets are around $250 for a day.
00:26:10.567 --> 00:26:14.583
We feed you good, we do all that and it's really meant to make a difference.
00:26:15.304 --> 00:26:18.191
Now this is in Dallas, correct, it's in Dallas.
00:26:18.191 --> 00:26:19.373
Ok, dallas, texas.
00:26:19.373 --> 00:26:27.142
And so you know, as a guest I went last year and it's wonderful, I mean you know.
00:26:27.142 --> 00:26:30.612
I just want to let our audience know well worth the time.
00:26:30.612 --> 00:26:37.599
If you're outside of Texas, fly in the time.
00:26:37.599 --> 00:26:38.363
If you're outside of Texas, fly in.
00:26:38.363 --> 00:26:47.145
This is absolutely fantastic because Keith and his team actually come at coaching and consulting with the servant part, a loving part, one of the few people I've ever encountered that actually loves on.
00:26:47.145 --> 00:26:52.705
And he even gave me a hug right, I mean, I'm a huggy kind of person and man Keith was all in.
00:26:52.705 --> 00:26:53.888
He gave me a big old hug.
00:26:53.888 --> 00:26:57.182
So great group of people that are part of his team.
00:26:57.182 --> 00:27:02.733
So let's switch gears here real quick and get into tax strategies.
00:27:02.733 --> 00:27:16.452
Okay, if someone can't come to your event here in Dallas, give us like three really awesome tax strategies that their CPA or their wealth advisor probably wouldn't give them.
00:27:17.500 --> 00:27:23.153
So each of these are for different niches, and so let's start with discounted rollovers.
00:27:23.153 --> 00:27:31.704
I own discounted rolloversgetcom and we're rolling out a nationwide service that we've previously just done for our private community.
00:27:31.704 --> 00:27:44.923
And let's say you were to put $100,000 and we were to invest with you and maybe you're originally buying a hotel that happened to be structured in a way that could be in a senior living facility.
00:27:44.923 --> 00:27:50.497
So if we were to buy a hotel, shut it down day two.
00:27:50.497 --> 00:27:52.561
What's a shutdown hotel worth?
00:27:52.561 --> 00:27:54.646
A whole lot less than you paid for it.
00:27:54.646 --> 00:28:06.593
If you had done that investment from a traditional self-directed retirement account IRA 401k then we get a new valuation down as a shutdown hotel independent third-party appraiser.
00:28:06.593 --> 00:28:11.070
Maybe it comes back at being worth $50,000, your portion of that.
00:28:11.070 --> 00:28:13.144
We do a rollover of the asset, not the cash.
00:28:13.144 --> 00:28:15.008
Your portion of that we do a rollover of the asset, not the cash.
00:28:15.008 --> 00:28:25.365
We pay taxes on the $50,000, but then it rolls over to being within a Roth account.
00:28:25.365 --> 00:28:26.769
You reopen that facility as a senior living facility.
00:28:26.769 --> 00:28:33.307
You benefit from a much stronger multiple and maybe it's now worth $200,000 within a Roth and never taxed again.
00:28:33.307 --> 00:28:39.827
So just kind of backing up logistically you've got $100,000 tax deduction putting that money into your retirement account.
00:28:39.827 --> 00:28:52.287
You had to pay $50,000 in taxes to do the rollover, but you're still $50,000 ahead in immediate savings and now you've got $200,000 that's never taxed again and all the growth that comes with it.
00:28:52.287 --> 00:28:56.583
It's a really smart way to move money over as you go.
00:28:57.484 --> 00:29:01.474
Number two Number two If you're a business owner.
00:29:01.474 --> 00:29:02.518
Here's two.
00:29:02.518 --> 00:29:07.452
So if you're earning a net $50,000 or more in a business, do an S corporation.
00:29:07.452 --> 00:29:09.861
That's a simple one that you should be doing.
00:29:09.861 --> 00:29:12.482
You'll save a ton on the self-employment tax.
00:29:12.482 --> 00:29:14.384
Now here's the more advanced one.
00:29:14.384 --> 00:29:25.376
If you're a business owner, especially if you're making at least a half million dollars a year in net income, there's probably some things you do really well, like some sales processes, some standard operating procedures.
00:29:25.376 --> 00:29:30.772
Maybe you've got the method that allows you to drive sales.
00:29:30.772 --> 00:29:37.326
If you follow this method, then you get this result that can be documented as intellectual property.
00:29:37.326 --> 00:29:47.484
So let's say you're making a million dollars a year in net income and we go out and we value all these assets as intellectual property, similar to what, like Google and the other big players do.
00:29:47.484 --> 00:29:55.291
Maybe we come up with a $15 million intangible intellectual property asset Once that's recognized.
00:29:55.291 --> 00:30:00.425
Now we can amortize that over 15 years, which creates 15 million.
00:30:00.425 --> 00:30:07.689
Divided by 15 years is a million dollars a year in a tax deduction and now we've really wiped out your income.
00:30:07.689 --> 00:30:09.621
For the year your net income was was a million.
00:30:09.621 --> 00:30:11.384
Your tax deduction is a million.
00:30:11.384 --> 00:30:14.031
You can see how this could have some big results.
00:30:14.092 --> 00:30:17.146
It's kind of like a lot of people have heard depreciation for real estate.
00:30:17.146 --> 00:30:24.112
Many people aren't taking the next step and actually recognizing the intellectual property assets they have in their business.
00:30:24.112 --> 00:30:35.289
Step three for real estate investors, I'm guessing a lot of your audience has heard of cost segregation studies to accelerate the depreciation.
00:30:35.289 --> 00:30:41.372
The second half of that that they're often missing is special allocation of the sales price.
00:30:41.372 --> 00:30:42.642
What do I mean by that?
00:30:42.842 --> 00:30:49.020
Let's say we were to invest in an apartment complex for you, buying it a million dollars.
00:30:49.020 --> 00:30:55.550
A few years in we are replacing a dishwasher for 500 bucks.
00:30:55.550 --> 00:31:03.369
Well, years later when we sell that maybe five years later you double the sales price at $2 million.
00:31:03.369 --> 00:31:12.988
Most CPAs are going to take that doubling and spread it across all your asset, meaning that $500 dishwasher that's been used for five years is now worth $1,000.
00:31:13.608 --> 00:31:18.280
You and I both know that a used dishwasher doesn't truly double in value.
00:31:18.280 --> 00:31:19.743
It loses value.
00:31:19.743 --> 00:31:22.990
So maybe it's worth 50 bucks on the open market.
00:31:22.990 --> 00:31:28.373
So we're going in and especially assigning that, that, that sales price, to $50.
00:31:28.373 --> 00:31:38.134
And the net effect is it reduces your depreciation recapture from a high of 37% down to a capital gains rate of 15 to 20%.
00:31:38.134 --> 00:31:45.359
So that has a 20%-ish difference on your tax rate by simply employing that tax strategy.
00:31:45.359 --> 00:31:51.909
So there's a lot of overlooked things that people just aren't aware of and most CPAs aren't paying attention to the details.
00:31:51.909 --> 00:32:00.361
And this is where we like to come behind, provide another set of eyes and 65% of the time we're saving our members five figures or more in taxes.
00:32:00.961 --> 00:32:04.189
That's huge, and so you know what's coming up next.
00:32:04.189 --> 00:32:07.580
Right, and that is the big beautiful tax bill.
00:32:07.580 --> 00:32:22.237
Right, it's being discussed in the Senate, and so part of this big beautiful tax bill is depreciation and 100% deduction on depreciation in the first year.
00:32:22.237 --> 00:32:27.612
So discuss what this means to real estate investors.
00:32:28.721 --> 00:32:33.932
It allows for a more immediate write-off of your investment.
00:32:33.932 --> 00:32:44.901
When you invest in a real estate deal like a senior living facility, having that immediate write-off can yield significant results and really make a difference.
00:32:44.901 --> 00:32:49.922
So you're not only making money from a great investment, but you're also getting a tax write-off as a result.
00:32:50.663 --> 00:32:51.265
That's huge.
00:32:51.265 --> 00:32:53.009
Now it hasn't been that way.
00:32:53.009 --> 00:32:55.653
Tell us how it's been for the last four years or five years.
00:32:56.539 --> 00:33:02.880
We had 100 percent bonus depreciation, like up through I want to say, 2020, 2021.
00:33:02.880 --> 00:33:19.827
And then at some point in that range, it phased out and it's been going down, lowering as a result, and so this new bill is going to put it back up to the 100% and allow for a more immediate write-off of all those expenses.
00:33:19.827 --> 00:33:21.833
There's a lot of things he's considering.
00:33:21.833 --> 00:33:38.153
Truthfully, I really start talking about it once it's passed and I like certainty, and so I expect it to come out before the end of this year and it'll be a big boost, especially for the real estate investors.
00:33:38.795 --> 00:33:39.115
Excellent.
00:33:39.115 --> 00:33:48.654
And so when you mentioned cost segregation, I just want to let our audience know that we did have on our show a CEO of a cost segregation company.
00:33:48.654 --> 00:33:54.579
That speaks about that aspect, so we don't want to get into cost segregation.
00:33:54.579 --> 00:33:56.645
Speaks about that aspect, so we don't want to get we don't want to get into cost segregation.
00:33:56.645 --> 00:34:02.041
But is there anything I haven't asked you so far, keith, that you absolutely we need to address with our audience?
00:34:02.884 --> 00:34:05.169
Just one thing I wanted to speak to.
00:34:05.169 --> 00:34:10.047
If I want to make as much money as possible, I go back to commercial real estate and syndication.
00:34:10.047 --> 00:34:25.815
The reason I'm doing this, the reason I started this business, is I truly enjoy having an impact on people and I would love the opportunity to connect, even if it's for a quick call, just to get to know you or see you at our passive investor events passiveinvestoreventcom.
00:34:25.815 --> 00:34:32.193
Or even if the discounted rollover strategy is interesting, look us up at discountedrolloverscom.
00:34:32.193 --> 00:34:38.213
We're really looking for synergistic services that are going to make a big difference on people's lives.
00:34:38.213 --> 00:34:43.972
And then, beyond that, it's not just about we talk strategy, but what do you want to do with that?
00:34:43.972 --> 00:34:51.333
Having a higher investment return, having lower taxes legally, helps you be a better steward.
00:34:51.800 --> 00:34:55.690
Think about the people you can impact, whether it's family, it could be a charity.
00:34:55.690 --> 00:34:58.235
That's the part that really gets me excited.
00:34:58.235 --> 00:35:02.789
I never want to tell you how to spend your money, but I do want you to be intentional with it.
00:35:02.789 --> 00:35:08.652
And so many people are just going through their motions that they don't think about what's possible.
00:35:08.652 --> 00:35:17.025
They don't think about work optional, because they don't think about what they would do with their time, like it just feels like this big thing If they didn't have time.
00:35:17.789 --> 00:35:22.626
Believe me, if you have the time, you'll fill it with something, and I want you to be intentional with that.
00:35:22.626 --> 00:35:23.951
I would rather give you the life.
00:35:23.951 --> 00:35:26.849
It's almost like I don't want a million dollars because I wouldn't know how to spend it.
00:35:26.849 --> 00:35:42.827
Well, if I give you a million dollars, but a million dollars worth of time and now you can have a bigger impact, you get more time with your relationships, it's just a huge opportunity for you in your life and I would love hope your audience, whether they work with me or just take something from this and implement it.
00:35:42.827 --> 00:35:45.427
I hope, I really hope this makes a difference for them.
00:35:46.210 --> 00:35:49.329
Awesome, so it's also financialjourneylife.
00:35:49.329 --> 00:35:52.219
Life is my primary website, you're right.
00:35:52.219 --> 00:36:01.391
Yeah, that's where you're to find out all about what we spoke about, and I do want to end this with you getting more personal with our audience Today onwards.
00:36:01.391 --> 00:36:02.432
What's your intention?
00:36:02.432 --> 00:36:03.855
What's your purpose?
00:36:10.391 --> 00:36:11.635
And where do you see your life in five years?
00:36:11.635 --> 00:36:13.079
So I'll take this out even further.
00:36:13.079 --> 00:36:15.657
So I plan to be doing financial journey until I can't Maybe 75, 80, 85.
00:36:15.657 --> 00:36:16.019
I don't know.
00:36:16.019 --> 00:36:19.210
Warren Buffett seemed to have a really good run going up through his ears.
00:36:19.210 --> 00:36:21.168
If I could do that, I would love to do that.
00:36:21.168 --> 00:36:30.266
This I see my life purpose right now is there is the wealth and the tax side of things that I am good at technically.
00:36:30.266 --> 00:36:45.965
There's the other side of things, of really wanting people to have a better life, to have a better impact, to have a better impact for this life and the next, and that is my purpose is really to help people have freedom in this life and the next.
00:36:45.965 --> 00:36:56.880
And there's all sorts of ways to get there, but it starts with me listening to you, understanding where you want to go, understanding your purpose and maybe even helping you draw that out.
00:36:57.481 --> 00:37:01.509
On a personal note, my kids my boys are three and six.
00:37:01.509 --> 00:37:04.193
I am loving this season.
00:37:04.193 --> 00:37:05.501
It is so much fun.
00:37:05.501 --> 00:37:13.384
Every night, every weekend, we're in the Dallas area, we get to have another adventure, just our family.
00:37:13.384 --> 00:37:15.791
This has just been a beautiful season.
00:37:15.791 --> 00:37:25.407
I've done the big traveling and now I really want to be present with them, and one of the softer sides of things in our community is the kids.
00:37:25.407 --> 00:37:33.545
So if we have, especially when we get 10, 15 kids there, we'll do private breakouts and things about just for the kids.
00:37:33.545 --> 00:37:47.648
And we're often talking about how do we grow entrepreneurship or set up our kids while nobody wants a spoiled child and there's all sorts of ways to do it wrong but we're really mindful about what we're doing for the next generation and that's where my heart is, is really with my kids.
00:37:47.648 --> 00:37:58.344
Right now, I have something most people never achieve and that's enough and I have enough, and so now I want to share abundantly with everyone I can.
00:37:58.364 --> 00:37:59.648
Well, thank you, my friend.
00:37:59.648 --> 00:38:02.742
It's been a pleasure getting to know you over the last year.
00:38:02.742 --> 00:38:12.260
Thank you for coming on the Senior Housing Investors Podcast and once again reach out to Keith full endorsement of what he and his team are doing over there at Financial Journey.
00:38:12.260 --> 00:38:13.563
So thank you very much.
00:38:13.563 --> 00:38:17.911
Have a wonderful end of the week and look forward to seeing you again soon.
00:38:18.512 --> 00:38:19.594
Thank you, it's been a pleasure.