Episode Transcript
[00:00:00] Speaker A: Welcome to the Independence by Design podcast where we discuss what it means to be a business owner and ways to get unstuck from the day to day so we can design a business that gives us a life of independence.
The business advice ecosystem is unbelievably broken and dysfunctional, misaligned incentives, people that don't have the whole picture in mind and whether that's tax accounting, legal, estate planning, wealth management, everybody's working at their own angle and you're stuck holding the bag, making sure that you have the right outcome to manage your time, your cash flow and wealth and to weigh the trade offs of the decisions and who to engage and when. And I have been unbelievably exhausted trying to navigate this environment for my clients. And I've been interviewing people about these topics for literally a decade. And so I wanted to do this podcast today because I think that we, we need to understand how the fundamentals work so we can vet out the different providers, we can understand how to connect ourselves, what good with what good looks like. Because unless you're in the ultra wealthy that can afford a family office, like my friend Brandon Henry, who's on the podcast today, he manages the ultra wealthy's complete estate, all of the things that you could think of for the people that are in the.01%. And I've known him for a decade. He's been on the podcast quite a few times. You can see the other interviews in the show notes. And what I wanted to do in today's episode is completely demystify, like, what does it look? What does good look like for wealth planning as it relates to being a business owner? If our business is one of the largest assets and we have a lot of illiquid assets, how do we think about wealth management and capital allocation? How do we think about estate planning and making sure that our assets go to the right people after our passing? But then how do we handle tax mitigation? And so many times all of these topics get convoluted and the advisors are coming at you with all these ideas and we're not experts. And this all came to light because I have someone that got a 14 page estate tax planning PDF of what they should be doing, like, what the hell is this? And there was so much conflation between wealth management, tax planning, estate planning. And so I said, you know what, I'm going to have Brandon on the podcast because he knows exactly how to think about all this stuff and so you can actually learn, okay, what does good look like and then how Do I engage with all these different advisors and what should I expect? And how do all these pieces of the puzzle fit together? Because you, at the end of the day are going to be the one that lives with the outcome, whether you preserve your wealth, whether you mitigate taxes, and whether you have an actual strategy that all reconciles with all the different pieces of the puzzle. And the best analogy I can think of is with health.
And you're going to hear me talk about this a lot in this episode and I have in the past where the moment that I swallowed the golf ball reality that doctors are insurance salespeople and they're trying to cut and prescribe. They're not caring about your sleep, your ex, your diet, your stress, which is going to be the biggest impact on your health. They're not trained or incentivized to help you think about all of that and how all of their services are a puzzle piece towards you feeling good. And so today I want to think about this the same way where Brandon brings up this analogy where you're the general contractor, whether you have assumed the position or not. And you're, you have to be responsible for piecing all these ideas and strategies together, unless you can afford someone like Brandon, which only the handful. And when I say handful, 0.1% of the population can. So this is going to be an episode to help you navigate the waters, understand how the pieces of the puzzle fit together, what good looks like. So that way you have an idea when you're sitting across from a suit and they're giving you an idea with a big strategy that you know they're going to make a lot of money for. I don't begrudge people for making a lot of money, but we want to make sure it's the right strategy for you in the right timeline for the right reasons. So I really hope this episode's going to give you the information that you need to feel more confident when you're having these conversations. Go check out the other interviews I've done with Brandon in the show notes below, as well as the Independence by Design newsletter that is now out. And I've got a bunch of articles about business valuations and how to think about valuations, along with a bunch of whiteboarding training videos that should hopefully help you think through all of those ideas. Thanks everybody for tuning in and I really hope you enjoy this interview with Brandon. So excited to be doing this again. We saved most of the R rated conversation for off for Record. Very excited to have you here, Brandon. I was excited because there's a lot of topics that are continuing to be presented in my owner's group.
And you know, actually the podcast that just came out like a couple weeks ago, Brandon was, it was me and this guy Mike Finger who had a debate, you'll like this one a lot. About the 98% of companies that are below a million bucks. And then there's like the 2% that are above.
And like, that's who I'm focusing on, on the ownership thinking. And like, so we were on this panel and he's like, who are we even talking to here? And I was like, that's a great question. And so why I'm excited to talk to you is because you're in the 0.1% of the 2%.
But all of the problems stem all the way from your clients, all the way down for the person with a million bucks. But you had a great question that I said let's just hit record.
[00:05:14] Speaker B: Yeah. So. Well, first of all, thanks for having me back on. Always fun to riff on camera. Mostly because I'm handsome and I like seeing myself.
[00:05:23] Speaker A: You're not walking.
[00:05:25] Speaker B: I can turn that on if I flag in my ability to add hopefully useful information.
So like, what is the core pain point? Right. Because it's clearly not a shortage of people who want to sell things to successful business owners. So there's plenty of advisors out there. And so what's the thing that your ownership group and your audience is wrestling with most?
[00:05:45] Speaker A: So I, it's a perfect framework because that's what I was going to do is like, okay, like I want to put a container around the conversation. We're going to juke and jive a lot within it. But the, the issue that I'm seeing, Brandon, is that let's call it the 2%. So people that have like, and I don't want to belittle the people that have a couple million dollar business, but like, you get to a certain size where your infrastructure is big enough, you can deploy resources back into the infrastructure and hopefully provide a return. That's the why we're doing this outside of just the lifestyle. And so you get to a certain point where like let's call it a half a million dollars in cash flow and above.
So again, I'm playing around the million dollars in normalized EBITDA to 5ish.
There's outliers are there, but what Clint Fiori called the whale sharks or people that have a meaningful asset that they can reinvest into and they have to figure out how the hell to do that. That's when I met you almost a decade ago, is like there's the operational reinvestment, which is I want to grow the value of my company and that cash flow, but what ends up happening. And I was actually going to pull up this chart to show you what, like what, how I'm thinking about this and it's not even a chart, it's a graphic. And for the people listening in, I will, I will explain it is. And if. If Riverside, which is a piece of crap, will allow me to do this. All right, so this right here, so you see here, this, this chart where what everybody I'm looking at is this time quadrant on the left, which is how we spend our time, which is the most finite resource. And we want to decouple our role, our W2 job over time. And then we have cash flow, where we get it from salary or distributions, and we want to increase the availability of ownership distributions. That's not tied to our time.
And then we have this. On the, on the far right, we have the wealth pie, right? Which is we have equity and assets. So we have a business, real estate, stocks, bonds, gold, Bitcoin, whatever the hell it is in there that's preserving and growing your wealth. So when I look at that, Brandon, and then how that ties into, then what's the question that my audience is always asking about, it's like how to maintain that dynamic.
And what I have seen as you and I met 10 years ago, is like the advice and stuff that goes around that is convoluted as shit. And as it relates to wealth management, growing someone's wealth and preserving that wealth, and then income tax planning and then estate planning, which is you're giving the assets to your heirs. But like, you have to make sure you're always maintaining your half a million dollar income with the most, you know, whether you're pulling it from your business or other assets.
And then you have your wealth that you like. Most advisors, it's the eight, which is what I love your about your fee based in the family office. It's like, okay, well like. And I, I can't not do it, dude. Is like bonds are effed. So then you go, okay, well where's the return? Well, why have all the wealthy people going after private equity and real estate? Because illiquid assets provide the return that is above and beyond the basement of the dollar. So you go, okay, well all of the advisors that play in this equation is like the healthcare industry where everyone's selling you a drug Or a cutting where in our world, all of the advisors are on the. The money's on the transaction or assets under management or quality of earnings or give you a loan. And it's not unlike, hey, Brandon, you have time, cash flow and wealth.
You own the outcome. In health, you either feel good or you don't. And in wealth, you either have wealth and freedom of time or you don't. And so that's the big picture. But I wanted to hopefully, in this conversation, break out that noise and go, when is estate planning appropriate? How do we actually figure out who can help manage our illiquid portfolio? How do we deal with attorneys and all the different advisors that relates to that picture? But that's a lot. But like, what do you think about my framing so far? I mean, like, how do you think I'm thinking about it?
[00:09:42] Speaker B: I think that you've got a reasonable first principles view of the world and the advisor landscape. Perhaps it would be useful to define some of these terms. Yes, and I'll use my definitions and they're not everybody's definitions, but this will be informed by the way that we serve about three dozen first gen founder families. And so just for some context, this is not to promote our organization. The families that we serve, they've reached escape velocity. So these are people who have built big businesses, typically have enterprise values of north of $100 million, in many cases many hundreds of millions of dollars.
And they are building an ecosystem around them of professionals to try and solve for very specific outcomes. What's interesting about that is it doesn't matter if your company's worth $5 million or $500 million.
People have the same set of goals.
What we're going to spend some time talking today is maybe trying to define not just the goals, because in many cases goals are overrated, but try and identify what those priorities are. Right. Priorities are goals with constraints. And we'll talk about when families need to focus on one versus another based on where they're at in kind of their business ecosystem. And then as an entrepreneur myself, like the way that you frame the things that are available to you, the puts and the takes, those are the things I wrestle with as well.
[00:11:02] Speaker A: I'm aware we gotta get.
[00:11:05] Speaker B: Yeah, fair enough. We'll do therapy after the podcast. Sounds good. But you know, these are the constraints everybody has. So maybe we can talk about like the core areas that entrepreneurs wrestle with, the advisor community. So you think about like the entrepreneurial journey. They start off in the very beginning and, and the business is modest and they have the ability and the necessity to do all of the important things as it relates to their advisors. And maybe their advisors are a bookkeeper, maybe there's a banker involved. Once they grow a little bit, perhaps there's a CPA helping them with taxes. In many cases, entrepreneurs are getting the cheapest legal documents they can from the legal zooms of the world. As they grow, perhaps a business attorney is evolved. If you just take that snapshot there. Before they've had any distributable cash flow, before they start building an investment portfolio, before they start making real estate transactions, the fledgling business is already juggling a handful of complexities that individuals focus their entire life becoming specialist.
And the entrepreneur at the center of that hub is responsible for pinballing back and forth, asking the right questions, sharing the right information, trying to discern was academic versus actionable. Once something is actionable, they got to go do the thing, or in many cases a collection of things. They've got to report back when it's done. Then they got to maintain a monitor thing. All this stuff requires care and feeding. And so it is, it is an.
[00:12:28] Speaker A: Incredibly all without being a specialist and all that. So because you were, you were a technician or a service provider or a salesperson and you were not a finance degree.
[00:12:37] Speaker B: I mean, the families that we work with, they were red wings and blue jeans. Like these are people who built big blue collar businesses. And they never had ambitions to be finance gurus. They don't have a black belt in spreadsheets. Right? And so you're playing this role and you're doing it purely out of instinct and necessity.
And over time, that complexity grows exponentially because then you hire an investment advisor and you hire an insurance agent, and you hire an estate planning attorney. And the decisions that you make not only are consequential to your family, but you have other stakeholders. And so the High Line act gets more and more complicated, not less complicated. And in many cases, entrepreneurs, not just at a million or $2 million in revenue, but at 10 to $15 billion EBITDA are still wrestling with the exact same set of advisors and challenges. And while they've had new experiences, they're still the same people.
And their advisors around them are the same people. And so it creates a very predictable set of outcomes. And so when we think about what does it mean to do tax planning? Well, most people don't do income tax planning. They do income tax compliance. And so what might be very familiar to your audience and to your ownership group is this quarterly sprint to three Days before the quarter, they get an email from their CPA saying you owe x many thousands or tens of thousands or hundred thousands or millions of dollars of tax.
And along the way, the cpa, I'm sure in good faith asked some questions, but the business owner and their team was busy and maybe they weren't as responsive as the other way could have, or maybe they didn't provide the most comprehensive information they could have because they're not income tax strategists. They don't know what information is relevant or not. And then at the last minute we're, you know, Rob and Peter to pay Paul so we can make a quarterly estimated tax payment. That is a frustrating process if they're.
[00:14:32] Speaker A: Doing quarterly estimate while we're breaking down these, these roles and these topics. Brandon, like, let's go back and forth because I want to synthesize my view of this too, because like so agreed on, on that. And then you go, okay, well, because I, like, I spent so much time thinking about where are people's incentives? Because it doesn't mean they're bad people. It's just we're trying to understand the misalignment of incentives. So a cpa, their business model is to build two and a half times labor. Like that's what their, their job is. And so they're doing that through audits, quality of earnings, and they've diversified into bookkeeping because they realize that, well, that's a stream of income that actually makes my practice more wealthy.
And then they might venture into maybe some TPA or some forward. So they're diversifying outside that core. But like every firm I've ever worked with, 50 plus percent is two and a half times billables for their business. And they don't have an actual business model that allows them to spend the time doing income tax planning or estate. Like so I think, like, just understand.
[00:15:34] Speaker B: Is that a. I think that's completely fair. But so, so let's put responsibility on both the buyers and the sellers of these services.
[00:15:40] Speaker A: Yep, yep, yep. I like that.
[00:15:41] Speaker B: I've never met a client who said, you know what, I love this hourly business relationship. The transactional dynamic where I'm going to pay somebody hundreds of dollars an hour or thousands of dollars an hour, I'm going to give them carte blanche access to all of the information they could ever want. I'm going to get an unknown outcome at some unknown time for an unknown amount of money and best of luck to them that just does not exist. And so what ends up happening is that Entrepreneurs put their professionals, specifically their hourly professionals, on an information diet, right? So while they're forging on all of this high calorie, low nutrient information from podcasts and books and articles and everything else and all the advisors that are throwing stuff at them.
[00:16:23] Speaker A: And now AI too.
[00:16:24] Speaker B: And now AI, right, the sycophant AI. And then on the other side of this, you've got advisors who get the bare minimum. No matter how many times they ask questions, how many times they send emails, no matter how many times they beg and plead for data they get at the very last minute and they get low quality data at that. And so you have this transactional relationship where the end buyer of these services knows there's going to be a disappointing outcome. So they're not motivated to provide information. The CPA firm knows it's a schlog to get the information. Everybody pissed off anyway. So let's just, let's, let's extend and pretend and we'll figure this shit out later in the year.
[00:16:59] Speaker A: Yep, yep, totally.
[00:17:00] Speaker B: It is a, it is a perfect Yen and Yang. Just give you some context. We hired a full time person in our office. Their sold job, this is a CPA from PwC, is to manage our CPA clients.
Client asks for information, send a CPA. Send it CPA. Hey, what else do you need? Go back to the client. It is, you know, he's a competent tax planner of his own, right. But his job is to be connectivity between our clients, their management team and their CPAs. So God forbid we could do some actual tax planning versus simply tax compliance and tax admin, which is the way that most people consume their experience in the income tax rule. And, and the CPA firms are not motivated to do something different because changing the dynamic with the client is almost impossible and the client has no confidence that the outcome will be any different with their cpa. And so on average this will be the way that they interact.
[00:17:50] Speaker A: Extrapolate to extrapolate to legal, to banking, to insurance, to estate planning, to everything.
[00:17:57] Speaker B: Yeah, well it's even worse with estate planning. Like so, so here again differentiating income tax compliance or income tax strategy.
[00:18:04] Speaker A: So let's, do you want to, before even going in, do you want to lay it like how you think about taxes? Because we talked about income. So maybe we can do like the concepts. Okay, then the players and then.
[00:18:15] Speaker B: Okay, all right, so, so let's, let's, let's dig in a little bit to this delineation between income tax compliance, income tax strategy. All right, so once we have High quality information being shared in some regular interval of time. And, and there is a top of the mountain perspective of what the, what this business is and what it does and what the major levers are to create different outcomes. Now all of a sudden you can start going from being reactive, which income tax compliance is always looking in the rearview mirror, to proactive, looking at the windshield. Right. Our goal is not just to report the score, it's influence the score over time. And what does that take? Well, that takes a totally different relationship. That takes somebody being willing the client to spend hundreds or thousands of dollars to have a meeting where we don't know what the outcome is going to be. Well, the only way they can have confidence that doing income tax planning makes some sense is that we've already metabolized the complexity of sharing the right information and getting it communicated in a way that's digestible for the client and for the cpa. And now all of a sudden we find ourselves a situation where several times a year we're having business planning strategy sessions to understand why the business is behaving the way it is and what the needs of the business are in the short, intermediate term and what changes they can do in their personal and business life in order to create a different tax picture versus sliding into home at the very last second and finding out, surprise, you've got a big tax bill. And oh, by the way, I did this thing, but I'm telling you about three months after the fact and had I known in advance, one small change could have created a very different.
[00:19:38] Speaker A: Let's, let's, let's layer in a couple of ideas there that, to give some context to it, because I think this is important is one, is that your, because I know you, you're starting from the same picture that I showed at the beginning, which is it has to be within relationship to their goal because tax, income tax planning for this year, like the CPA Buy More shit. So you don't pay as many taxes. Well, I watched this guy, he bought a $5 million building in December and he ran out of cash for payroll in May for a $50 million business. Good job, everybody.
[00:20:07] Speaker B: So I think.
[00:20:11] Speaker A: And so it's. But I say that because you're coming at everything that you're saying on this episode is coming at it from the lens. I know you have like baked in the goal and made the goal clear. So we have visibility and income tax strategy. And I also think, go ahead.
[00:20:26] Speaker B: Well, violent agreement. So, so going back to this idea of goals versus priorities, right Every client wants to reduce their income tax liability. The surefire way to reduce income taxes to make less money. Nobody's ever willing to make less money. So clearly that is not our goal. There are other constraints associated with reducing taxes that, that we have to be aware of. And you can't, you can't do thoughtful planning of any kind, tax or otherwise, without having deep and intimate knowledge of what, what the family is trying to accomplish, understanding what the trade offs they're willing to accept are and then having the ability and the latitude to make difficult decisions today that might not have an impact for days, months, years or decades down the road. And what everybody's looking for, that quick dopamine hit of buy building so late appreciation take a deduction today. Like if the goal was to have a thriving business and buying this building and going out and levering up doesn't accomplish that end result, like clearly focused on the wrong things.
[00:21:26] Speaker A: Well, and I think this is where it, like I have to get this detailed for, for myself and for hopefully everybody because the way that the next layer I go into that is on that income, that the cash flow versus the wealth diagram, it's like, okay, by doing that, they became a real estate investor, which is a different capital allocation plan with their wealth than it is with their. Because technically in their business they should be getting a 20% rate of return and a building is going to generate an 8.
So it's like the wealth goal and target has to. Then, you know, where are you reinvesting that cash? So the tax, the tax, annual income tax planning has to be done within the light of that whole plan of the goals. And it can be. And that's where then it goes into then the nuances of illiquid assets where I think, you know, the, I agree with your point about you're from the top of the mountain because I know you are as the family office.
Looking at the whole picture that I showed at the beginning, where the challenge is, is like the, the let's say like I just think of I go back to health so much is like, I remember like years ago I like debriefed my doctor on all of like my stress, my diet, my exercise. And he just was like looking at me, letting me do it. So he actually let me do it, which was interesting. And then he got done. He goes, so when's your next annual?
Like he didn't give a F that I, he let me speak. So I think part of this episode we want to help people understand what the standards are. So if you decide to interview someone like a CPA and they actually like, are they going to give you lip service or are they actually going to do the stuff that we're talking about? Right. So, like, that way they don't waste their time.
[00:23:06] Speaker B: I think that's fair. But I also think there's some personal accountability that if you perpetuate the same behaviors that frustrate you with your previous cpa, you're likely to get a similar outcome because their incentives are aligned in the same.
[00:23:18] Speaker A: I forgot to tell the doctor that I drink five cocktails a day. No one, no one knows it but.
[00:23:23] Speaker B: Like, yeah, big meth addict. But other than that, everything's going great.
[00:23:27] Speaker A: Yeah, it's all good. We've got lots of energy.
[00:23:30] Speaker B: It's funny, like, I've got all these old, you know, old person saying, because that's where I am in the stage and phase of my career. One of them is this idea like you can't tell where the dining room table ends and the conference table begins. When dealing with a family business, they're inextricably linked. And so to your point about if I choose to take dollars out of my company and redeploy them back into a portfolio of real estate that I have limited experience with that has a very different return profile, different risk profile, different capital allocation framework, well, now all of a sudden, my business and my otherwise passive investments are tied in a way that means, and often I cannot do the business things that I thought I was going to do because I made some passive investment that I thought mentally was separate apart. There's this fallacy that my investment plan and my business plan and my tax plan and my retirement plan and my succession plan are all separate. They are not. If there's one thing to take away, it is all one thing. And you cannot make decisions in one area or aspect of your business or financial life as an entrepreneur that doesn't affect everything else.
[00:24:35] Speaker A: And then that's why I have be, you know, I zoned in on the, zoomed in on the separate your job from your asset. So that way you can start to see a little bit of the ripple effect. They're all commingled to your point. But if we can put a lens on what is it that, like, in the spirit of what I'm trying to accomplish, then we're putting words and concepts to it. So it's interlinked, but we're trying to like. I mean, so many of the words that I use, I've literally stolen from our conversations. Independence, escape velocity, in like the constraints and the first principle, it's like we're trying to get like this is the game. Then when we can put a word to the player that we're playing and the choice that we're making within what game, then I think it brings context. So back to the income tax planning. It's inside of that entire picture of your goals and of everything. So that way you can say, from real estate income, from my distributions, my W2, what is happening on my income. But you need to see that whole picture and the goals.
[00:25:33] Speaker B: Absolutely, yeah. 100%. And the reality is for entrepreneurial families, the tendency to collapse, the fact that you are playing very distinct roles into this is just the way that it always is, is the most common or natural tendency. This is the way I've always done it. This is the way all the people around me have done it. So it can't be any different. When in fact you are playing the ownership role and you are in many cases playing the management role. And as a consequence you might also be playing the board role. Those are three very separate things and they can and should be viewed through a unique and distinct lens. But if you're in the trenches and you don't know any different, you don't, you've never seen anybody do it different. It is natural just to fight for your life no matter how successful the business is. And you show up the next day like, man, I'm exhausted.
[00:26:20] Speaker A: Yeah. Yep. So how you view taxes in the different buckets of taxes. So now we covered income tax planning. So how do you view. Because you were going to go down to the estate planning.
[00:26:29] Speaker B: Let's talk about estate taxes or estate planning in general. So this is something that really just came home to roost for me in the last couple of years. I was hiring a, an estate tax process manager, kind of the, the cousin to this, this income tax process manager. And, and I talked a lot about estate planning and I was interviewing estate planning attorneys. These are kind of like five to ten year estate planning.
[00:26:51] Speaker A: That sounds so fun.
[00:26:52] Speaker B: We, lots of conversations.
And one of the things that became clear to me was there is an enormous difference between estate planning and estate tax planning. So estate planning is the ownership and administration of your family's assets.
I own this. It's going to go to this person. How do I make that process as simple and transparent as it possibly can? And that's things like wills and revocable trusts, and that's all of the probate new challenges that we've, we've learned and discovered, and that's unique and specific in each state. And that's an important part of planning.
But when people talk about estate planning, what they most often mean is not this. I want continuity of my stuff to go from one person to the next person. It's, I'm worried about taxes over time.
And introducing estate tax planning is a totally different animal. In both cases, it is a transactional relationship. You think about the dynamic with a, with a successful entrepreneur and a state tax planning attorney or state planning attorney.
By design, these things are meant to endure. So that means I'm going to talk to this person once every three to five years at the most frequent. And in many cases, I'm going to talk to them one time. And so I call this person when I'm in my 40s and I've got young kids, and I say, here's my business and here's what I'm trying to accomplish. And I get a document, I don't fully understand what it means, but I've been communicated that it's going to take my stuff and give it to other people that I care about. And it's supposed to keep the information relatively private and relatively simple process. I never dug into any of the actual roles. I never dug into any of the responsibilities, never dug in any of the expectations. But I knew I was going to pay $3,500, and I didn't want to spend $4,500 for this thing that felt remote. And I took these documents, put them on a shelf, and I haven't looked at them again in many, many years.
How, how well did that estate planning attorney actually know you? Did they have an inventory of what you actually own? Did they ask any questions about the type of business that you have and the constraints of that business? They have any idea that, that your, your young children, your spouse, have no desire to run this company, but now all of a sudden, they're going to be the shareholders notice. Do they know that you've got a personal guarantee on your working capital line of credit that goes into default the second you pass away from. And so we create a document that should help the administration process, but it doesn't actually do any real planning. And it's not the estate planning attorney's fault. If you gave the estate planning attorney 10 hours or 20 hours of exploratory conversation and you were willing to pay $400 an hour, 500 an hour, or $2,000 an hour, whatever the case may be, maybe you'd get there. But no, you called and said I want a will. And the estate planning dirty says, my.
[00:29:30] Speaker A: Friend has a bunch of trusts. Brandon, I've got it.
[00:29:33] Speaker B: You want a trust? I got three. Right. That is the dynamic that most people have with their estate planning attorney. Now introduce irrevocable trusts and you introduce all the tools associated with trying to reduce our estate tax liability, which today the exemptions are enormous. And so there's a very few small number of folks that actually need to do really meaningful estate tax planning. And now you take what otherwise was transactional but flexible and you make it transactional and rigid. Right. Irrevocables in the name. That means that when you're making these transfers it is hard to unwind. And so people oftentimes find themselves in a situation where they have the same dynamic. We're making permanent decisions with very limited information.
And when they call the attorney and say I want a revocable trust, the attorney doesn't know what you're going to transfer the trust doesn't know if you're going to transfer $10,000 of cash.
[00:30:18] Speaker A: There's no transaction in the middle in the midst of this either. Usually I mean it's just life insurance.
[00:30:23] Speaker B: Am I transfer my business, I'm going to transfer that real estate. I don't know what all the other constraints are with the other assets that I own and what I need personally to live on. And am I making my kids rich and me poor. That's a good tax plan. It's a bad life plan. Like all of those things feed into the way that, that people consume estate planning advice. This does not mean the state planning attorneys aren't capable and competent folks. Doesn't mean that the families looking for these negative outcomes. But when you step back and you look at the interaction, it's incredibly predictable. And I'll go back and just give you a little more context. When we first started our business, we left the bank and we didn't have any clients. And so we were cold calling families out of like the business journals book of lists. And the pitch was then and still similar today. You're rich, your plan sucks. I can prove it. And if not, I'll give you your money back.
[00:31:12] Speaker A: That's a hundred million dollar hormozy offer right there.
[00:31:15] Speaker B: That was it. Right. And it's still that today. And it's not because we have the best mousetrap and we're the smartest folks. We've got the, a great proprietary tool. It's that this dynamic of successful people working with professionals in this reactive and transactional way persists. It is the status quo. It is the way that 9 out of 10 or 9 items out of 100 successful entrepreneurs consume advice. And it creates a very predictable outcome. And so when I think about two of the most important people in your life, your state tax planning and your income tax planning team, that can for successful entrepreneurs make 6, 7, 8 figure impacts on a family. Where else are you going to get that in by investing in a lower cost version of The S&P 500? Almost certainly not. Right? Like these are the folks that can make the biggest potential impact on the family and the business long term. And the way that they consume and interact with those folks, nine times out of 10 is transactional. It's limited information.
[00:32:13] Speaker A: And, and what I think we're going to be able to unpack in this conversation and part of my mission with my framework is you have a business model where like with your flat fee, the people that actually have an estate planning tax problem are your clientele.
[00:32:32] Speaker B: Right.
[00:32:32] Speaker A: And that's where you don't have a way to work with the people listening in on this podcast, minus a handful of people, right. So there's probably going to be the Pareto principle layered right on top of this audience. There's going to be 5% or less that apply. But what we're trying to do is empower people with knowledge. So that way, like it's the same thing with health, right? Like going to the doctor and knowing all of this stuff goes, okay, I still need to go get this test. I still have a rotator cuff issue that can't be solved by stem cells and I need to actually get surgery. Like, but you're not going to go to that person to ask them about your diet, right? And so we are like, through understanding these topics and concepts, breaking it down so that way they can, we're bridging the gap between this, that dysfunction so people can use their advisors in a more cohesive way. And I think about how you framed it. So we have the income tax planning which has to be looked at as far as where is all your income coming from, what are the taxes on all those different sources of income, how does that impact your wealth target? And then you're looking at estate planning tax problems, which you're talking about $30 million as a combined income right now.
[00:33:41] Speaker B: So that's, and realistically, and this could be different for different folks, but if you're not 40 or $50 million of net worth, it probably doesn't make sense to do really sophisticated, irrevocable Planning with the exemptions as large as they are.
[00:33:55] Speaker A: Today, how good is that to just know? Right?
[00:33:57] Speaker B: Like it's like.
[00:33:58] Speaker A: And I, and that's what I like. Why I think our relationship's so fun because all these top, you and I just have different business models to solve different people. But we're trying to bridge the gap of that knowledge. And then you go, okay, well if estate tax planning is pretty much irrelevant for me, then the estate planning of how do I move my stuff for everybody, super relevant my stuff to Brandon without the courts. Got it. So then this like spotting the serpents in this in the, in the, in the weeds is the person that says they can do all of it, which is the middle market CPA firm, the middle market M and a firm who goes, we can do estate planning, tax planning, income planning, wealth management. And you just go whoa, whoa, whoa, like what's your business model? How do you do this? And so now we've got the estate planning which you isolated I think is very helpful, which shouldn't be overly complicated but like should still be up to date. If you're like there's, there still should be some TLC on that.
[00:34:54] Speaker B: Yeah. And one additional tip, they're like, hire an attorney. Don't download the docs from one of these online services. Maybe, maybe at some point that's the case, but not yet. Don't let your bank or your wealth management firm like prepare the docs for you. That stuff is happening all the time. It's worth spending the dollars and talking.
[00:35:12] Speaker A: About like five grand for an estate.
[00:35:13] Speaker B: Plan sub for most people it's probably 2,500 to $5,000.
[00:35:18] Speaker A: So this is so helpful because then you go, okay, an estate tax planning, you're probably not going to be in that bucket. And if you are, you can afford.
[00:35:27] Speaker B: Someone like you estate tax plan. You can easily spend tens of thousands or hundreds of thousands to save tens or hundreds of millions. But if we're talking about folks sub 40, $50 million of wealth that aren't 23 with a rocket ship growth trajectory. But blocking and tackling estate planning should be a relatively low cost proposition designed to provide clarity and confidence to the people you care about most. And I joke, this touches everyone you love and everything you own. Other than that it's not important.
We can't spend 2,500 or $3,500 on making sure that you've got a document that's that works. Now what that also means is somebody's got to like build a balance sheet. And so, so we'll dig into what it means to get advice because you're right, like the families that we serve, small subset. But even so, even if we could handle a lot of clients in terms of the families that we target, we only onboard a couple of families a year. We grow exclusively from referrals from existing clients, which is a wonderful place to be. This is not saying our organization is a solution, but what I will tell you, we are. We're project managers.
With the right process and the right framework, anybody, other financial folks, legal tax folks, or the entrepreneurs themselves can get to your point? 80 for 20. Most of the value here is doing the simple things right. Like the edge cases are where the complex complexity lives. But you can get most of the benefit by knowing how to issue, spot and pattern, recognize the core challenges.
[00:36:54] Speaker A: That right there is what we're trying to do for these people. And I. So you got the estate planning, which is what you cover, then the state tax planning, which we don't think we have to dive too much into, and then we've got the income tax planning. A couple other places that I want to hover in around is like wealth management.
And I'm wondering, so I have a question for you about the order this Brandon. So the wealth management of how do we look at wealth? Generating assets and preserving that wealth and growing that wealth and generating income off that wealth, business or no business. But then talking about the transaction and where the piranhas come out to feed. Do you think we cover wealth management first and maybe some of these other roles first before talking about the nuances of a transaction?
[00:37:37] Speaker B: Yeah, let's, let's, let's set the table for the core way that the advice is consumed in the financial services system and then we can talk about specifics.
[00:37:46] Speaker A: Okay.
[00:37:47] Speaker B: One additional point I skipped over. When thinking about the income tax strategy for entrepreneurs in particular, business structuring can make an enormous impact.
I've asked a thousand entrepreneurs over the course of my career, what type of company do you have, how's it taxed? And I hear I have an llc that is not a tax election.
Right. And so by working with competent folks, whether it's, you know, your network, cpa, others at setting up a new business, creating a new division, buying a new meaningful asset by getting some of the structuring right in the beginning, it solves a third or more of the complexity down the road. And that's just, that's a public service now. I don't feel like people spend enough time early on thinking about that structure.
[00:38:36] Speaker A: You want to give a couple examples.
[00:38:38] Speaker B: Yeah, well so the one that today that is getting all of the love is QSBS or section 1202. This idea that I can create a business.
I'm creating a business and I think there's better than a coin flip that I'm going to sell it five or 10 years into the future and I might be able to sell it and pay zero tax, not some zero. And along the way I'm going to compound at 21% versus 29.6 versus 37% federal only not focusing on folks like yourself in Minnesota with high state that's a meaningful difference. And what we see the default is often I'm going to download a document that's low to no cost. I'm going to check the box on an election that my other friends have made. It's often S corporation. I don't understand the rules and the trade offs that that makes and over the short intermediate term maybe I'm to the good but over the intermediate to long term I've sacrificed hundreds of thousands or millions of dollars of total value creation over time. And so if you're first getting started and it's a fledgling business, it makes all the sense in the world that you're just trying to get up and running. But as soon as you get some momentum, being really mindful about how that structure works can solve a lot of the problems and keep you from having to slam your hat in the car door over and over again with trying to plan around the margins. Sometimes it makes sense just to take some medicine and think about the kind of the foundational structure of the organization.
[00:40:02] Speaker A: Which then roll right into the tax planning and all that kind of stuff too. Because C Corp, you know, S Corp election or all that kind of stuff. And what's the goal I think is so important? Understanding what the taxes and the income will be between now and then and what the wealth will be and then put it within this picture. I think that's super helpful. So then the business or the financial advice space, that's where I get fired up. Well me too because like I, I'm like literally like embarrassed to say that I got my series 65 and I was in wealth for like a hot 18 minute or once back in 2014 a decade ago. And I but I learned that's where I learned all this of like all these business models where the incentives lie. It's right around the same time that Tony Robbins released his book. But like what let's walk through the whole spectrum of like different Ways of people, like what are they trying to solve for? Like where did this industry come from and what are they trying to solve for? And then what are the different models that people solve for that? Because I think you and I have come to this the contrarian way, which is all of that is very difficult to win in.
[00:41:06] Speaker B: Well, so we just start by saying like for this whole conversation, incentives are the most powerful force in the universe. Right? And so you focus on the incentives, you typically end up getting to the right outcome, even if you don't have the right questions.
Drill down on the incentives.
So if we think about the way the financial advice ecosystem works, you go back 45 years ago and stockbrokers were literally oracles. They were the only one that had any financial information of any utility. And if you wanted to have financial prosperity, you literally were calling them and placing a trade over the telephone. And they could take your firstborn child in form of commissions in order to accomplish that.
And then in the mid-80s to early 90s, some regulation was passed that allowed for discount brokers and then the old wirehouse stockbrokers had to really reassess their business. And people went from, and I think the names here matter went from stockbrokers to some combination of financial advisory. That was kind of the first iteration and that was a massive improvement. The ability to not only manage your own portfolio on the Charles Schwab's and the fidelities and the vanguards of the world, but it dramatically reduced the cost associated with just buying and selling big companies. Everybody's hurt.
And as the shine wore off of financial advisor and commission based products, what's happened is there's been this evolution of effectively doing the same thing with slightly different fee relationships for the last 25 years. And so what we've seen is financial advisors morph into financial consultants, which has morphed into financial planners, which morphed into wealth managers. And we're on the cusp now of wealth managers being called family offices.
And the reality is if you go to a dozen of the biggest firms out there, and I were to remove the logos and remove the firm names and I were to read to you the way they describe themselves. They all are using the exact same language. No financial services firm will say we're not objective. No financial firms firm is not going to say we're planners. No financial service firm is say that we're not holistic. So they use the exact same language to describe, in many cases, wildly different business models. There are more people who work for large organizations. They are commission sales agents. They make more money selling their firm's proprietary stuff.
That is very different than a person who works in a small boutique registered investment advisor and charges assets under management. But they use the exact same language, they have the exact same designations. And so the words cease to mean anything today.
[00:43:35] Speaker A: And I think everybody knows that. And they're fatigued as all hell, I'm exhausted.
[00:43:39] Speaker B: I mean we work with our clients, with their investment folks all the time. It's like what are you doing? What hat are you wearing right now? And you said these things, but you're behaving in this way. How is this congruent? And the reality is the financial services industry has gotten much better. There is no question that an asset based relationship with a client is better than a commission based relationship on the whole. Now there's unique things around the margins, actually some real tax planning where commissions actually might be slightly better. But generally, as far as the objectivity for a client, it has gotten better.
Now, better does not mean good. And so when we think about the way that entrepreneurs in particular interact with the investment industry, it is all about assets under management. Big firms, small firms, they want to charge somewhere between 20 and 120 basis points on your portfolio to oversee what is almost exclusively a diversified portfolio of stocks and bonds using ETFs.
They all own the exact same securities.
The underlying investments have been commoditized at a level today that it is indistinguishable what the value proposition of the investment prowess itself is.
Most firms have gotten to the idea that it's almost impossible to outperform by actively managing, almost impossible outperform by tactically allocating. And so they're providing long term strategic asset allocation in a diversified portfolio of stocks. And you could build a portfolio from A, from B and from C. And if you X ray into those portfolios, they are the exact same thing, whether.
[00:45:06] Speaker A: It'S a million dollars or $100 million too.
[00:45:09] Speaker B: We have a family, just for some context, that's got north of $500 million being managed by one of the largest banks on the planet.
The portfolio consists of the exact same separately managed accounts that you can get at 250 000.
That is it is identical. If I move some commas around, you would never know. Now they're doing a fine job. Portfolios perform exceedingly well.
[00:45:32] Speaker A: Well because, because of, because they have.
[00:45:35] Speaker B: Added no value, no incremental value on the investment merits itself. Now they're nice people, they've got a good relationship with the client. They're, they're, they are 1% of 500 million.
[00:45:49] Speaker A: $5 million would be really nice.
[00:45:50] Speaker B: Yeah, it's discounted. They're getting paid about a million bucks a year to manage the portfolio. That same portfolio could be managed for effectively nothing. Right. Like we know what it costs to allocate today there are great firms that are very smart that provide strategic asset allocation for 5 or 10 basis points.
And you could go buy an ETF yourself and do it for 1 or 2 basis points.
Now there is something to be said about helping people to stay invested. That is different than access the markets. But the accessing the markets thing, that is commodities, that is zero value. Today everybody has access to the financial markets. And so when you think about what it means to defend your margin as a wealth manager.
So it used to be that these were incredibly profitable businesses. And you could manage a business, make 50 to 60% net margins work relatively little compared to the amount of revenue and net income that you're able to.
[00:46:48] Speaker A: Generate compared to all the people that you're managing their money of.
[00:46:51] Speaker B: Think about it, back in the day, I could charge one and a half percent on a million dollar portfolio. I'd make $15,000 a year. I would meet with that person four times a year.
I'm managing their portfolio same way I manage portfolio. And that is, that might be generous. I do 30 minutes of prep work. I meet with the family for an hour and a half. That's two hours. Four times a year it's eight hours. I'm making 800 to 900 an hour.
Right. And that is on. In the terms of wealth management, that's a small client that scales. Right. Well, that no longer works. There's been concerns for a long time with the wealth management industry that revenue was going to be compressed, there's going to be fee compression. People were wrestling with, you know, is it 50 basis points? It should be 75 basis points. We haven't seen that in the wealth management industry. What we've seen is margin compression. So that same firm that was making 50 or 60%, now they're making 35%.
Why? They're throwing ancillary services at clients to defend margin, to defend that top line revenue and defend that fee. And so what happens?
Well, I was a wealth man or I was a financial advisor, then I became a financial planner, now I'm a wealth manager. What does wealth management. Well, in addition to helping you to manage your investment portfolio, remember commodity is access to the markets. So I'm providing some psychological support, emotional support, to keep you invested. Maybe I'm building an asset allocation plan that you feel comfortable with. Now could this be done by chat GPT? Could this be done in Excel? Could it be done by yourself? Absolutely. But in the same way people have trainers, they need somebody to hold them accountable. Maybe there's some value there. Maybe they can help you make informed decisions about how much is safe for retirement or how much to save for for, for college.
[00:48:32] Speaker A: On track, off track money call simulation.
[00:48:34] Speaker B: All of that stuff is, is being thrown at clients in order to defend the base underlying access to the broader markets.
It's, it's out of whack with their real value proposition. Their real value proposition is financial counseling.
They haven't built a mousetrap to charge for that. Certainly not at scale. And so what ends up happening is they say look over here, we're still wealth managers but we're getting paid to manage your portfolio. Well how does that work if you're a business owner? If 95% of my wealth is in this thing that you cannot monetize and all the value proposition is planning for this thing that you cannot monetize and I'm going to pay you $10,000 a year to manage my investment portfolio. But the thing that actually moves my family forward is this business that takes way more time and is way more complex and way more involved. And by the way, you don't get to check in three or four times a year. Like I need help and strategy around this. This is, this is boots on the ground on a regular basis. That's a bad business. And what we've seen in the wealth management industry is private equity firms have been gobbling these firms up paying 10, 15, 20 times EBITDA. The way they, the reason they do that is a. They're not changing business models like we're not democratizing advice on a flat retainer. That's not happening. It is by these firms consolidate by putting a bunch of centralized services somewhere else that's low cost. All of the high cost admin and all the high cost support is being consolidated and we're synergizing and we're driving margin that way it's calcifying all of these behaviors around the way the device is consumed and entrepreneurs are left holding the bag.
[00:50:11] Speaker A: Well and why they're left holding the bag is like as it. As those same beige words have been used about like what they're actually trying to as people are as it's been more towards the same words being used of like we're holistic planners like this is where illiquidity of a business and illiquid assets exempl or magnify the problem. Because I watch where even people that are labeling themselves as wealth management and planners are still not doing income planning for these people in a way or actually doing financial planning. Should I take out a HELOC or buy a house or like they're still not even doing that stuff for the normal W2 worker, let alone as a business owner who has to make capital allocation decisions. And the way that we get visibility into that those assets is through a three statement forecast. So like as a business you have a three statement forecast to see your distributions and your working capital and then a commercial real estate or anything that you own that's real estate, you have a cash flow statement. And so then there's like no one helping here. And here's where I think it's interesting to also add to like what you just explained about the wealth management is also the problem with the CPA world where like they're still just doing tax returns, but all of this stuff is growing out on ancillary margin compression and their main business model is still doing tax returns or audits. And so all of this confusion going down and like then the owner sitting there going like, okay, and here's where I'm going to layer in a couple of my. I have to think like this, otherwise you have to tell me I'm wrong or I shouldn't or what I should think about is the way to outpace the money printer, which is 8% money debasement a year. We have to actually look at illiquid investments because they're the ones providing the return. Like the 40% of the 60 40s effed right now you're locking in losses if with the debasement and like, unless that, like I need to be seeing the proof of how that's wrong. But so then as the debasement is accelerating our need to have illiquid investments, we now have this situation where the actual investment advice that they were good at is not as valuable as it originally once was anyways.
And we have to put more emphasis on the tax planning, the actual valuation of the estate where half of it might be illiquid and there's just a bigger gap where we as middle market owners have to be these investment thinkers at the same time.
[00:52:50] Speaker B: Yeah, I mean ultimately, at the end of the day, the role that needs to be filled, whether it's by the entrepreneur, by somebody else, is that of the general contractor.
You don't expect the general contractor to be swinging the hammer and building the house. But you do expect to make sure they have the right people at the right time. All the products that need to show up, show up and that you're not having to make the million individual decision necessary to bring the project fruition. And, and it's totally natural natural for for the entrepreneur to get totally fatigued because nobody is built to provide advice to entrepreneurs. If you go look at the average wealth management firm that talks that mentions entrepreneur, it's all about an exit. It is managing liquidity. Post exit. It is not about working.
[00:53:31] Speaker A: You're like here, where's the money?
[00:53:33] Speaker B: Because my business model hasn't changed. I have one way to generate revenue. And so I can either work with people who have money today or I work with people who promise give me money tomorrow. But it's all coming from the exact same source, which is assets under management. And take it one step further. So you think about like the average technology that a financial advisor is using.
They call themselves financial planners since they use things like E Money or Money Guide Pro which are the kind of the gold standard planning software.
E Money cannot model cash flows from a business, it doesn't know how to tax them.
It also cannot model cash flows from a trust, it doesn't know how to tax them. And so the biggest software stacks available to financial advisors who say that they're doing planning the fundamental tools don't know how to plan for an S corp that's getting qbi taxation at 29.6 and how do we toggle that up or down? And oh by the way, if we put that in trust, does that convert the tax liability? Does it change the tax? Is it a grantor? Is it complex? It doesn't know how to do those things. The vice ecosystem was not built for illiquid entrepreneurs.
[00:54:38] Speaker A: And I'll add to that is it was literally 11 years ago when I was working in the financial space and I asked E Money if they could model out a transaction where we would get half of it in cash, half of it in the seller's note. And I walked through the a.m. schedule, the seller's note and then some of it in earn out and rolled equity and their brains exploded and like so here they are. So not only the illiquid assets but also what happens when all that wealth gets moved around into different risk profiles, a different of a deal structure.
[00:55:14] Speaker B: It's still Excel and PowerPoint. And so go back to the, the the core business thesis, like what is infinitely scalable Is asset management.
Everything else that is not asset management is less scalable. And so I want to do less of that, more of the asset management something. And when you think about the way that advice is provided to, to individuals who are closely held business owners with no prospect of a third party transaction, so no prospect of getting paid for the work I'm doing today, like there's no reason why somebody's going to dedicate the tens or hundreds of hours a year necessary to really influence the score. It just, it the. There is a misalignment and it's not. These aren't bad people generally good folks. It just the system that apply. They're playing a different game. And as a consequence the entrepreneur has to be their own general contractor. They have to, to run the intersection between tax and legal and investments and risk management or insurance.
[00:56:09] Speaker A: Well and the way that I am layering that into my owner's framework, Brandon, is what in as we move on to then like how to think about like actually organizing these people. I'll walk you through how I think people can do it. And then I'm curious on like because again if they can't hire you, they have to be their own general contractor. So I think that you know, even with your clients, we have a shared mutual client now where it's like we're focused on then the business and how to run the business as like, like a lens for private equity. Knowing that you don't have to sell but like capital allocation in, in conjunction with you as the family office. The, the ability to, to say okay, I am going to be a, trying to think of how to, how to phrase this. You're the, you're talking about the general contractor. So to use kind of those words is you have to be the general contractor for your wealth. But that's part of what I'm saying is part of the owner's role as a capital allocator. So you are like effectively building your own family office and private equity firm for yourself.
And so you have to be the architect of your whole plan. That's everything.
And you have to be the general contractor for your family office stuff as well as then the CEO. But the goal is to get that escape velocity where I would say that let me know if you think that this is on track where your clients, they want to be the architect, the visionary and then you're the general contractor. So these, these positions all are there and that's why I'm showing like here's what ideal looks like so that we can map to ideal and then work to closing that gap. But so the general contractor word, I would say is like the doing of the pinball of this plan, but that's different than the actual plan, which is more the design and then this part of the ownership cadence.
[00:57:55] Speaker B: Yeah, I think that's completely fair. I mean, the uncomfortable truth is if you're not doing it, it's being done to you. Everybody has a plan, and we can define plan lots of different ways, but if we're not taking, not taking responsibility for the interaction or the collision between all of these various disciplines, those things are happening and they're being designed by state and federal bureaucracies, not for the benefit of your family or your business. And so the first step is to recognize that there is. There are things that are being done that might not be in you and your family's best interest or in your desires. And somebody's got to take ownership for it. If you can't hire that rule, you got to take this seriously. Nobody, I don't know a single entrepreneur that favorite time of the year is business planning. Like, where they sit down are like, oh man, let's break open the spreadsheet. Let's talk about forward year projections or you know what I want to do. Let's talk about shared services and how we're going to allocate these amongst the various companies. But they do it because they know it's a necessary evil. In the same way, today, in our environment where there is unlimited information, there is no excuse for you not to get the basics Right now it would be wonderful if you had a third party that you trusted and you should have a team around you. Because the reality is, no matter what the wealth is, people outsource their most technically demanding tasks. Tax, legal, insurance, investing. That stuff is being outsourced to experts. So your first step is build a team. Well, that's if you're working with the same CPA or the same attorney you've always worked with and you've grown and scaled and they haven't. And the reason you met them is because they work with your other. Your Buddy's small business 15 years ago.
They might not be the right folks, and that doesn't mean they're not nice people. That doesn't mean that they're not interested in your success. That doesn't mean that they can't be a sounding war, but they're probably not your go to market strategy for reorganizing your business or for enveloping an investment plan or for coming up with cutting edge tax strategy, let alone never selling the business. This is like the blocking tackling of owning a company. So high grade your team, have people that you trust and respect. Ask the tough questions about aligning incentives. Make sure that to the extent there are conflicts and there's conflicts with every business, you know about them, put words to them, try and do what you can to try and engineer those out and be aware, don't be Pollyanna about it. And everybody's got my best interest at heart. And you know, Jeff's just a nice guy. Well it's not that Jeff's not a nice guy. Jeff literally is structurally designed to have a different outcome than what you're looking for.
[01:00:16] Speaker A: Well that just what's Andrew Huberman's new phrase I love is I'm not telling you what to do, but know what you're doing, but know what you're doing. And I'm just like, because he's always given advice about all the, that I'm trying to quit.
[01:00:28] Speaker B: Right.
[01:00:29] Speaker A: It's like, ah, but know what you're doing, but know what you're doing. And, and I think it's, it's what we're trying to do here too is help people know how to interview these people too. So like even if the outcome is misaligned, you still need certain people for certain things and then you can hopefully align the. It's the whole traction get it one. It has the capacity for that role of your advisors. Knowing that and like what I think Brandon too is so crazy helpful is like why I think that three statement forecast has to be done for everybody as one of the first foundational things is then they can see into the future after taxes, working capital and debt. Like how much take home do I have? Well it's like hey if next quarter it's 150 grand and I have a little surplus, maybe I can afford the 25 to 30 grand to actually start working with these advisors. And it's an add back too.
[01:01:18] Speaker B: Right.
[01:01:19] Speaker A: So it's this whole like, like, you know, first of all, can we afford to even hire the basic team? When can we do that? When we have a surplus and then just taking the stress out of it saying like we can afford the basics but we got to do these and then we're going to do it in this quarter is just like an easy way or easier way to think about it.
[01:01:35] Speaker B: Yeah, I think having a fee and time budget understood in advance, you know what to expect and then you don't have to do it all or not like this idea that the only way that I could be successful is if I get everything done. I get everything done over the next quarter versus let's make methodical and incremental improvement. Going back to this health thing. 60% of Americans are obese. It's not because they know they should eat less and move more. There's a difference between simple and easy. So let's take care of the things that are directly in our control. Let's make forward progress. And by the time you do recruit additional talent to help and there are a lot of folks that are interested and motivated to help, at least with parts of this, you're not starting day one. And the reality is that your knowledge compounds and the impact that your planning has will compound over time. And so what do you say? The best time to plant a tree was yesterday. Second best time is today. Like get busy on some of this.
Dedicate the time, get disciplined around it. And when you do, hire a third party to help. Whether it's a fee only financial Planner that charges $250 an hour to help you think through maybe not the most sophisticated planning, but an aspect of your life, those folks do exist. And you can dedicate single digit thousands of dollars to help make better, more informed decisions. It's not you don't have to have the world's most sophisticated family office in order to make meaningful progress. But you do have to take accountability and responsibility.
[01:03:00] Speaker A: And that's why the, the ownership rhythm of the Monday or the monthly, the quarterly and the annual where it's on the business stuff and it's an actual playbook. So it's not just fictitious on the business but it's. It's the private equity thinking of the capital allocation as relates to the business and tying the operations, operations outcomes to the owner's goals and thinking about this stuff at the same time. So then going back to then you know with, with the landscape of the wealth management. So the, with this. I mean you just look at any allocation exposure to any big portfolios and it's been leaning towards the illiquid which is why we need to do this stuff because it's even more on our shoulders to preserve and grow our we health.
Then there's this whole like so I'll layer in and please everybody listening. Go check out the the new newsletter. What I've got all these whiteboard videos of brand. I've been walking whiteboarding out and putting it all out in my newsletter of how to think about valuations and I've got this pyramid of the owner's utility value, which is how is their time and cash flow tied to the company. So like as we get escape velocity, we want to get our ownership distributions that equal our income without our time.
And then that's actually based on the discounted cash flow. The market valuation is the four KPIs, normalized EBITDA, the multiple net debt and working capital. And then the third lens is a strategic deal where there's Brandon's going to buy Ryan. Here's the deal structure, here's how it's going to work. But like we can stack this all on and then layer it into our goals.
So then there's this, this situation where like when we think about just blocking and tackling, like you're talking about this rhythm, there's no transaction at site, but we're still looking at constantly growing free cash flow and growing the value with our goals in mind. But then we take a step out and we go, okay, what's going on in the marketplace?
And then like, is there, is there a premium to my cash flow valuation? Like how is it all going right now and what ends up happening? Like, you know, until I'm around for a lot longer, most people are going to be react because they get an out of the blue offer, they go to the conference and some shit happens and then the deal train leaves because everyone's drooling because there's blood in the water. So let's talk about all of the shit that goes wrong when that happens and then ideally how we should approach it. So like, I mean you and I probably have endless stories about this, but like, what's, what's some of your favorites?
[01:05:13] Speaker B: Yeah, yeah, I learned from somebody years ago, I can't recall who, the idea of sustainable, predictable and transferable cash flow, I don't know who that was.
And you know, obviously that's the hallmark of a great business. That's your hallmark of a great business you want to own. It's also a hallmark great business other people want to own. Right. And so separating this idea that we should be getting the business in fighting shape, whether it's for us or for our kids or for some other person like that, that is our responsibility as a steward and entrepreneur. That does not mean that you're ready for a transaction. And you think about like, maybe we'll reverse engineer this idea, like what is good look like? And then in relief we can identify all the things that.
[01:05:52] Speaker A: Okay, I, who should go first? I want to talk about what good, you go first. Okay, so I'll I'll approach it from my end and then you'll probably double click on your side. So if you called me and I've got a tombstone back there from one of my previous clients, it's so. It's so fun because like this is what I know is possible. I get this question at the vintage workshops and stuff and I go, okay, what happens if you get an offer? So first of all, I would know what I want with my time, my cash flow, my wealth targets in a very specific timeline, exactly what I want. And then I would say, okay, well Brandon called me and I would have a three statement forecast of all of my.
[01:06:27] Speaker B: How long does it take for you to know those things? How much work is required to really get take ownership and control over those outcomes?
[01:06:37] Speaker A: Well, I'm going to do a plug for myself here because I actually just about am close to launching my 90 day boardroom blueprint program offering, which is actually going to be my onboarding into my monthly reoccurring coaching program.
Or someone can take an. They'll actually have a plan like, because I was, I did a lot of work on this in Taki Mora's coaching conference. In the program that I'm in, it's like at the end of 90 days, someone want some guy that was telling me who's at one of the ideal client profile saying, I want a fricking plan that's usable, like not just some bullshit 40 grand for this. Like, so I'm gonna charge 10 grand for a 90 day program where they actually go through okay, excited because of that chart that I showed. It's like, okay, well what do we need to know if for Brandon to know his goals, it's like, well, we have to actually go through and learn a little bit about what time cash flow wealth means. So understanding those, going through some exercises, going through some education, how valuations work.
So in this program they're going to go through and learn, then they're going to use the tools to clarify it. And then I said, okay, well what would be the best fricking thing that anybody could have if they walked away and like I didn't work with them after this, they would have a three statement forecast that's a base case. Like, okay, well into the future, like not just my income statement, but can I see my cash flow flow? And they would have a cash flow valuation to see actually where am I at?
So I think it can be done in 90 days, but like there hasn't been a cohesive program because it's like, hey, Good luck looking through 500 podcasts. You know, I mean, so like it's, it takes too much time right now. So I've been working on where I think I can get it done in 90 days. The, the trial's out or the jury's out on that. But let's say they get that done in 90 days.
[01:08:12] Speaker B: But even just take that away like that 90 days, which in the rear view mirrors don't feel like a flash in the band very quick. But you know, going through it, it's like, man, three months to understand my goals. Like, and there isn't a program that can even do it in six months. Like, or it's read five books and then, you know, and then hire 17.
[01:08:30] Speaker A: Advisors and spend two years and get nothing.
[01:08:32] Speaker B: That's right. All right, so goal number one is.
[01:08:35] Speaker A: Take out, figure out what the hell you want, what it is you want. So then like if we took them the I believe button. So thank you. Kyle Schuel, one of my clients who's like just, Brian, hit the I believe.
[01:08:44] Speaker B: Button for a second. I'm oh, like okay, fine.
[01:08:45] Speaker A: Because I was just a skeptic and your clients should do that to you. Like, Brandon, just hit the I believe button. So let's, let's, let's say that they built out a three statement forecast where like if I had that, which my client back there did, and I knew over the last 24 months budget to actual I went through and I was actually budgeting and then I knew within the percentage of how close I was accurately predicting that, that, that plan, then I would have a 12 month monthly budget and then I would have it a five year out year, which is just like higher level assumptions where it's a column for years 26, 27, 28, 29, 30. And then I have a valuation tab that says, okay, if I did my normalized EBITDA and I did 5 million normalized EBITDA in 5 years and there would be a 7 multiple and here would be my net debt and here'd be my working capital 30% tax. This is how much I would get. And so I can see into the future as an owner when I can hire my CEO, when I can keep collecting my half a million to a million dollars in distributions, what the valuation would be. So if I have that and I have an idea of like where I'm at, then if you call me and say, okay, Brandon, here's the deal, I'm going to, we're going to sign an NDA, I want $20 million minimum cash on the barrel head, otherwise you can pound sand and you're not going to talk to anybody. And so like my client was like 50 million bucks, not a dollar underneath that private equity firm is like, yeah, yeah, sure. Private equity firm flies there after that whole conversation because he even actually had a due diligence library. This is back like five years ago when I was doing some of that stuff. So sent him the due diligence library, sent him the financials at $50 million. I've got partners and family and debt and all this shit and this is what I need.
PE firm lands gets in the car, Brandon and is going to start having a conversation. The guy's like, well, you know, and he goes, get the F out of my car right now.
And he goes, oh God.
And he ended up selling it for the exact dollar amount because he knew what he wanted, he knew all of his numbers, he knew what the company was worth to him over the next five years and what it would be worth in that five year mark. And then it was like, okay, now we're having a conversation. That's where the top of the business valuation of like now it's a strategic transact transaction that gives light to what are my other options compared to ESOPs and compared to everything else, what does it mean if I were to keep the company and then I know what value is.
So on the business side, that's where like even then like holding terms and conditions, what's going to happen with the employees, what's going to happen with the deal structure? You're not screwing around with me on that stuff. So that's on the business side. So if, if someone got an audible offer, that's what would happen. And then they would either be like, yes, let's do this and they close that company and like.
Or no, let's not waste any time with this conversation. But that does not cover your area of expertise.
[01:11:24] Speaker B: Yeah, Fast no's are always okay. Slow no's are the worst. And so having a very clear bullseye makes it possible for fast nos. Right? It doesn't fit. It doesn't fit. Yeah. So for me, everything you said and. Right. And we have been thoughtful about the tax and legal infrastructure so that when we have a transaction we have increased our options and reduced our friction. Right. Like unnecessary income and estate taxes are the sand in the gears of a business transaction. And so if the company was really only worth 45 million, but we needed 50 because we had not been thoughtful around tax planning, can we increase the number of potential buyers for this business by structuring the business in a way that when that out of the blue offer comes, we have the lowest tax friction or we have the ability to pivot to the lowest tax friction. Do we have the ability to do some pre transaction planning so that we have the option for more potential buyers? A perfect example. S Corps are the most popular federal tax election around. My understanding is there's more S Corps than there are C Corps and partnerships combined.
S Corps have limitations on who can own them. Private equity and public companies cannot own S Corps.
So in advance of doing a transaction, you're going to end up doing some version of company reorganization and things get broken and missed early on in that process. Especially if you're doing it the final minute and you're having to rush to get things done. I've seen more than a handful of deals get held up at the last minute because something was missed. Rushing and we either took a concession on terms, took additional risk as part of our as our reps, or we took smaller proceeds than we originally had intended. So if we know we've got an S Corp and we know that there's a potential for a transaction, does it make sense for us three years out, five years out, 10 years out from that offer for us to get serious about our organizational structure, to get serious about the MSAs and the transferability of MSAs, to get serious about our stay bonuses and codifying our LTIPs for our management team to the extent that we have them? Can we actually get ourselves into shape so that if a transaction happens, the data room's a breeze?
We don't get stuck on that deal train with all this emotional, financial and intellectual baggage tied up on it because it was such a slog to get here. And now all of a sudden you find out that we're not going to go through the transaction unless I make some giant concession? And so being methodical about structuring the business, working through the trade offs to this versus that and doing that early on can not only save millions of dollars of income taxes and potentially remove the need to sell for estate tax purposes, but also dramatically improve the process along the way so that it's not so painful, so that you've got more emotional reserves to make a better decision for your family.
[01:14:17] Speaker A: And, and I know you're always looking at that through the lens of every one of those choices. How much optionality does it leave us into the future versus what is it getting us today? And like just a couple layers for the audience that might have because that was all perfectly said. It just expanding on some of it were, you know, investment. You know, I've really broken down. Brokers are real estate agents with a business license where they do listings. Investment bankers are a FINRAN SEC certified and they can do stock transactions. So asset transactions are where the brokers play. Stock transactions which are capital gains where you have a lot of creative deal structures are investment banking territory. So that right there is a huge like you know, partying the red Sea between those two different services. But then the business structure on top of then like Even with the ESOP, the C Corp conversion of the 1042 are all of those things. As you're getting closer to that escape velocity, opening it up when you can like then have investment bankers then look at your business structure and you're having all that thought through regardless of whether you're going to sell or not. Because I had my old partner at the I don't know if you remember Jim Carlisle. I had him on the podcast again really the M and A attorney from Dinsmore. And we were talking about how he helps people with the business continuity plan where if you actually want to keep this business in your estate, then there's got to be continuity of the people and then like who's making decisions and all that stuff. So he's probably some attorney that your team would work with. But regardless of the outcome, you're like looking at all of that structure stuff and then can you now isolate because we talked about estate tax planning as when you what you're trying to mitigate the 30 million at death and then how all of a sudden at a deal estate tax planning in look at your smile. Income tax planning. And like all of the vultures start coming out saying we can do all of this, but maybe I don't know how we unpack like what that noise is and how to. How to start thinking about it.
[01:16:14] Speaker B: Yeah. So money in motion brings the advisors out, state Planning attorneys and CPAs and investment folks is much easier to plan for liquid wealth than it is illiquid wealth. And so that makes perfect sense.
The reality is that the biggest impact that one can possibly make to creating different outcomes down the road is planning when it's difficult, when it is a liquid operating business, not at the very end. And so maybe some, some high level just like rules of the road and then specifics. I am not.
I don't believe people can do more than one or two things at a time. They will. This idea that multitasking is a skill I think is A complete fallacy. Some people are okay at task twitching, but that means we can do two things, not one thing. Certainly doesn't mean we can do five things. And so trying to simultaneously get comfortable with what my family's financial needs are emotionally get comfortable with no longer being the decision maker shot caller at the business, trying to reorganize my tax and legal infrastructure to maximize the best outcome. Going through significant negotiations with a third party party about everything I've ever worked hard for, the sum total, my life's work, trying to become an investment manager for the very first time and talking about our asset allocation, going through life insurance underwriting, getting comfortable with irrevocable estate planning structures because I've got to do it before I sell the business or else that's, that's really hard.
And oh, by the way, I might need to run a business at some point along the way as well and maybe have a life and maybe not be an to my kids and my wife.
So people defer, defer, defer, and then they try and cram all of this into the last six months of business ownership. And there's a tremendous amount of pressure from the investment advisors who they know the sooner they get that person locked up, they've got a client for life. And oh, by the way, if I don't lock this person up, I know they're getting phone calls from 50 other people. So there's a lot of pressure there, the estate planning attorneys and the CPAs, some of it valid, others maybe less. So there's a tremendous amount of pressure because our biggest kind of competitor, if you will, is inertia and a busy calendar. It's the same thing for estate planning attorneys and CPAs. And so they know that people are focused on these things and the consequences are tangible. I can see this tax liability six months from now versus 16 years from now. And so people are more likely to make a decision. And so there's this immense amount of pressure to do this or else. And, and in many cases, not all, but in many cases, there are very few things, at least in the estate planning in the investment realm that you can't do after the transaction, that you can do before the transaction. There are some income tax structuring items to be aware of. But I go back to if we're being mindful, we want to have, we want to understand an issue, spot the things that actually make an impact, so that way we're not having to go to school and start from scratch because there's too many situations to count where somebody is getting pressure from the investment advisor to, to, you know, put this portfolio in place, send us the wire. Don't even take the wire in your bank account. We're going to get started right away. Here's our state planning chart. Let me make an introduction. Let me get this out of your estate. And in a trust, whether or not it's appropriate, the reality, like think about this just from a first principles perspective.
If an investment advisor you know very little about is proposing irrevocable estate planning structures, who, if he doesn't know much about you, he can't possibly know about whether or not these are good or bad. In front of a transaction that you don't even have full comprehension of the implications and your personal needs and what the, what the future looks like. What are the chances that by the grace of God and good luck, that that's going to be a positive outcome?
[01:19:55] Speaker A: It just gets me a heartburn thinking about it. Well, let's talk about like, you know, I've got a client right now who we've discussed and I'm going to be sending in this to him because he's got a lot of these, this heart like you did the last five minutes was just, you summed up his massive heartburn that he's got going on right now and needs to clean up the operating agreement because he's got partners like that he has to take care of before a transaction to make it clean. So there's not a bunch of crazy stuff going on.
The attorney that was working on his due diligence library was like, we have an estate planning division and the estate planning division has a friend in the wealth management. I got a 15 page PowerPoint of entity charts that were like, if you change your operating agreement right now, you have to do this. And it was like jam shares into this trust and that irrevocable one. All this stuff. And I think the main thing is Minnesota tax plan, a Minnesota income tax. And it's like, dude, the chances of this up are so high right now. When you are trying to build a due diligence library, you're talking to the investment banker, you're talking to all these people. It's like, it's insane. And I'm going like, and I called you and going, okay, like, I don't even know. I know this stuff well and I don't know what I'm looking at. And it's like, what's the risk versus return? And it's the convolution of estate taxes, income taxes, wealth management, all into one from a guy that doesn't have any background doing this stuff.
[01:21:20] Speaker B: That's right. Well, once again, still running a business and navigating a transaction, trying to get contract signed.
[01:21:25] Speaker A: Yeah, he's like, I gotta get contract signed.
[01:21:27] Speaker B: That's right. That's right. I mean these are high stakes decisions, often irrevocable high stakes decisions. If you think about the fundamental components of estate planning, not so much income tax planning specifically for state and local, but fundamental components of income or estate tax planning is I make my kids rich and I make me poor.
That's the way that you reduce estate taxes over time.
Every deviation of that dramatically increases complexity. And which also means that we've increased risk to some degree. And so when you've got all of that going on to make a decision to irrevocably enrich your children, when you don't know exactly what your own financial needs are, you don't know what it is you're interested and motivated by. Is you know, is he going to sell the company and be totally content or is he a serial entrepreneur and he's go back and start something new tomorrow.
[01:22:18] Speaker A: What if it doesn't sell and all of a sudden he's got all these shares stuck in there? And you told me I don't worry.
[01:22:22] Speaker B: About the radical nature of the gift. Right?
[01:22:23] Speaker A: Yeah, well, right. And like you told me this story that forever rings true of like someone did that and then they were still stuck with the annual tax bill and then they couldn't take the out of the boo offer because the tax bill that would come with the out of the bua for all the while kids are super rich.
[01:22:38] Speaker B: I just saw a pop up on my teams that call. There's a call with that family happening right now. I mean these are, these are real challenges. Once again, wonderful income tax plan, wonderful estate tax plan. Not a particularly good life plan. Right. And, and so when we think about getting prepared for just being a good steward, you have to build optionality into it. I think it's, it is inappropriate, unrealistic to think that the only people who ever run this business successfully are your family. And it's also unrealistic and inappropriate to think that the things that a private equity might buy or strategic buyer might want at some point down the road also would be good for your family. And so just creating a business that has as much flexibility and as much durability as possible is a mission critical decision. And then with audible offer comes let's run downhill instead of uphill so I.
[01:23:33] Speaker A: Can Hear by the messages, you probably got some.
[01:23:36] Speaker B: My teams is going crazy.
[01:23:37] Speaker A: It's all good. As we wrap up here, what I was thinking is because you and I have both been on missions to help this middle market, however we define that, I think you and I are, according to this Mike finger in the 2%, you're in the. You're to the right of the decimal point. But the.
I think that the ideal is an archetype that even the person doing a million or 10 million or 100 million, everyone can strive to. The ideal, and that's the who point of having archetype is that we have a vision that we can actually work towards to make our hard work meaningful.
I'd like to hear from you, like, what does the ideal look like? Like what? Like when. If you were to, if you were to sit in a quarterly meeting with one of your clients or end of the year or whatever, and you were just to say this is, this is what it looks like, what they're doing, what they're talking about, the sediment and emotions, the work that's been put in and where they're going. Like the. Just paint the picture of what you think.
What is it that you and I are trying to help everybody with?
[01:24:36] Speaker B: Yeah. So I just asked my team this recently, what do you think we do here?
And the initial results were some combination of. We help entrepreneurs to save taxes.
Yeah, that's part of what we do here. Some of the tasks and responsibilities day in and day out. At the end of the day, our job is to preserve family harmony and perpetuate family business.
That's it. And mitigating taxes is part of that. Right. Fewer taxes mean the business has a higher potential to be successful in the future. And the shareholders and stakeholders can do interesting and unique things with it. In the same way helping families to keep themselves from making toe stubs with their financial and insurance folks. It's not because it benefits us, it's just better information helps them to make more informed decisions, which has better outcomes, which has a positive feedback loop for all of the people in their ecosystem. And so when I think about like at the end of the day, what's our job? Our job is to do it for them. Your organization was built to provide people the information necessary to make informed decisions and do it with scale because you're not actually in the weeds doing the work individually. I built a 28 person organization for 35 families. We spend 500 to 1,000 hours per family. We're doing it for them. These things are inherently not Scalable, but it's the same mission.
Help people make the most informed decision possible and cut through all the bullshit, cut through all of the noise and to do so from the most objective lens possible.
And what ends up happening is you get to work with brilliant folks who are doing interesting things. They trust you implicitly. So you get to have a lot of fun in service of accomplishing big hairy, audacious goals and bhags. And along the way get to work with really smart professionals and do it from the side of righteousness, not what's in it for me. And clients resonate with that message. And as a consequence they end up making really good, really informed decisions. Not everybody can build that team, not appoint one person, not everybody's in that place. There aren't a lot of businesses like that. The reality is that is what a single family office is intended to do. But we're talking about millions and millions of dollars of annual commitment in order to make that happen.
But you, once again, you can get 80% of the benefit by knowing which questions to ask, knowing what good looks like, holding people accountable, paying attention to the incentives, dedicating the time necessary to focus on this stuff, and being willing to spend a little money with the existing team if you've high graded them so that they can actually add value around the margins versus being in that information deficit information diet along the way.
[01:27:18] Speaker A: I love it, man. And you know what I think?
Yes. And it would just for me, dude. And I think for all the people that I'm working with is like the exhaustion of all this shit is like I want people to make better decisions so they know what to focus on. I think Brandon, like one of the biggest problems, I mean this is why I spent 10 years learning all this shit. It's like, what should I be doing right now?
I don't, I literally don't fucking know. Like, should I be creating a private equity firm? Should I like scale another company? Should I, you know all these things. And it's like, well why? What's the return? Well, I need some time, I need some cash flow, I need some wealth. And then I need a freaking purpose. And I think it's what I watch with people's exhaustion is like knowing whether they've labeled it or not. The inherent misalignment with everyone around them. They're in that spot, that commingled spot of everything alone and we don't know what to work on.
And so I think providing meaningful context to the hard actually, like, I mean this is where I get into the neuroscience geekiness. I don't know if you. So I watched. I don't know if I sent it to you, but Huberman and Peterson did a podcast like three months ago that I tell you about this, okay?
So I. This will be my wrap up, and then I can let everybody go. So I learned this. I was like, holy, this is the. This is the elixir of life. Because, like, I'm a dopamine addict, right? And I think a lot of entrepreneurs also, it's like with just this high feedback loop of just great going on. And like, it's like, okay, well, when we don't know what we're working on, that brings anxiety. So chaos and lack of clarity provide anxiety.
And dopamine is a release of chemical. As we bring the unknown known or the chaos into order. So when Huberman and Peterson were on this podcast, like four hours, he's just like intellectual porn for me, dude, it was like, it was the best in neuroscience and the best in psychology, talking about how both sides work together. So when they quantified, they said, okay, the highest noble aim, which we can make up. We can literally say, what's my random goal? So you say, the highest noble aim brings context. So then everything around you orients around this highest noble aim. And then you say, okay, okay, well, every unit of progress. So it's the highest. So what. What they were saying is highest noble aim that impacts the most amount of people over the longest time span, which really is the archetype of Christ. Like, pick up your effing cross and go. Cause life is good. Nihilism sucks. It doesn't work. So then you go, okay, well, if that's the case, and I hit the. I believe I have to have a noble goal for true altruistic reasons. Impacts good amount of people over the longest time. Spanish Then in that situation, every unit of progress, Brandon releases the highest unit of dopamine.
So I was like, I just perfectly. Yeah, I just sat the arm. Like, I literally, like. I think that we as entrepreneurs can engineer the best life because we can use this business as a platform and vehicle to get all this stuff done. But the only way to get that dopamine, which is we're excited, is to have clear outcomes and to know what we're doing. And if we don't, that's where the en. Heightened anxiety comes from and all of the stuff that comes with the deal or these topics or anything like that. So going back to kind of my. Why is if we can frame this all up, I think we can provide a playground of just a shitload of fun and self actualization for people, but we have to do the hard work to understand the game.
So that way we don't get sucked up into that vortex of complexity and anxiety and stress, which I think is where people hit the escape hatch.
And because it's like I see people like you have so much freaking opportunity right there and you're just burnt out from the wrong things.
[01:31:06] Speaker B: Yeah. The heuristic that you shared years ago with me and is obviously fundamental to your business now is this idea, do you want to escape your asset or your job?
And I mean truly, if somebody digs in, at least in my experience, the overwhelming majority aren't looking to jettison mass.
And so being really clear about those roles and responsibilities, organizing around that highest noble aim, it can be one of, if not the most rewarding non family part of somebody's life.
[01:31:40] Speaker A: Yeah.
So fun, man.
I could go on forever. But I appreciate you your time because I know your time is busy, you have a lot of people pinging you and we will get you.
[01:31:51] Speaker B: I muted those sounds, I apologize.
[01:31:53] Speaker A: No, no, you're fine. It's just a better way for me to give you shit of like. We will create escape velocity from your professional services firm, which you even labeled. We are a project management company, which they can scale project management companies.
[01:32:06] Speaker B: All right, let's again jump off this and I'm gonna lay down on the couch and you can be my therapist.
[01:32:11] Speaker A: Thank you so much, Brandon. I appreciate it, man.
[01:32:12] Speaker B: Thanks, Ryan. Hope this was helpful, man.
