How are the top 1% making money? Challenge traditional wisdom and financing and learn a new way of looking at your finances as David Wolcott lays out income-generating techniques that’ll help you earn passive income that exceeds your lifestyle expenses.

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The 5 phases of holistic wealth building
Freedom and quality of life that passive investing offers
How the ultra-wealthy structure their wealth-building strategy
Practical ways to counter your top wealth destroyers
Why you should diversify your investment portfolio
Financial benefits of learning how to self-educate


Rich Dad Poor Dad by Robert T. Kiyosaki
Rich Dad’s Cashflow Quadrant by Robert T. Kiyosaki

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Dave Wolcott started his career serving the country as a Captain in the Marine Corps.  In 2000 he and his wife won the baby lottery having triplets which inspired him to challenge the traditional financial planning advice of Wall Street.  He then started an obsessive journey to understand how the top one percent were building their wealth.   Today, Dave is the Founder and CEO of Pantheon Investments and is more passionate than ever about helping entrepreneurs build wealth by passively investing in superior real estate and alternative assets that provide predictable cash flow, tax efficiency, and upside potential as a reliable alternative to the volatility of the stock market. Dave is the author of “The Holistic Wealth Strategy”, A Framework for Building Real Wealth and Living an Extraordinary Life and is also the host of the top rated “Wealth Strategy Secrets of the Ultra-Wealthy” podcast.


Website: Pantheon Investments
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Full Transcript
Dave Wolcott  00:02
entrepreneurs are really investor avatar because that’s the background I came from. And entrepreneurs are good at solving problems. They’re very creative, and they’re good at looking things in a different way with a growth mindset.
Greg Lyons  00:16
Welcome to the passive income brothers podcast.
Tim Lyons  00:18
Here we take the fear out of real estate investing using real life stories of everyday successful investors. Let’s go. Welcome to another episode of the passive income brothers podcast. My name is Tim Lyons and today I’m joined by two rockstars, one of which being my brother, Greg, how’re you doing today, buddy?
Greg Lyons  00:33
Jim, I’m doing fantastic, great day to be alliances and a great day to be on the passive income brothers, that’s for sure. Really looking forward to our guests today, Dave Walcott, he’s just a man of many different talents and has kind of bought his business in a couple of different directions. So I think our listeners are gonna get a ton of value out of today’s interview.
Tim Lyons  00:53
Yeah, so a lot of times, I don’t love reading introductions from folks, I just like kind of ad libbing it. But Dave’s intro is really powerful. So Dave started his career by serving the country as a captain in the Marine Corps in 2000. He and his wife brought triplets into the world, which inspired him to challenge traditional financial planning advice. Today, Dave is an author, a podcast host and the founder and CEO of Pantheon investments. And he is passionate, now more than ever, about helping entrepreneurs build wealth by passively investing in Superior real estate and alternative assets that provide predictable cash flow, tax efficiency, and upside, as a reliable alternative to the volatility of the stock market. Now, as a passive income guy myself, that was a beautiful introduction. So without further ado, I want to bring you guys Dave Walker, how you doing today, Dave? Hey,
Dave Wolcott  01:47
guys, grateful to be here, connect with you and your audience, really looking forward to it. Awesome.
Tim Lyons  01:53
Well, Dave, like everybody else, everybody has a journey, right. And before we really kind of dive into your journey, I want to thank you for your service to the country, Greg and I are huge patriots. And we really support our military servicemen and women. So thank you for your service. And with that being said, you kind of give us a little bit of your background, before you got into this space, you had a whole journey before your and then we’ll take it from there.
Dave Wolcott  02:14
Yeah, for sure. Tim and I know have a lot of similarities with both of you guys. But really, for me, it started with just growing up in a middle class family, we really didn’t have a lot, it was ends meet, you know, most of the time. And we were basically taught that the recipe for success was go to school, get good grades, you’re going to get a good job, and life is just going to work out for you. So that was really conventional wisdom at the time, I think it still kind of is really today. So I kind of followed down that path. Got into the Marine Corps, because I really wanted to serve my country, and really learn a lot of skills that they really don’t teach in academia or other parts of the world, things like leadership, things like integrity, and teamwork that you really get a chance to see. So I had a phenomenal experience I’m actually got to go into combat was the end of the first Gulf War, also was in Somalia after Blackhawk down happened. So it was very interesting. And you got to really work with some solid people. And then after that, I transitioned into corporate America. And I just really quickly got frustrated with the bureaucracy, trying to do the right thing, and sometimes getting stabbed in the back because other people are on some quarterly results type progression, and you know, just not doing the right thing. Right, I missed that sense of purpose from the military. It just wasn’t really there in corporate. So in the same time, started investing in the stock market going through different financial planners. And on October 24 2000. Guys, I literally, I mean, I still couldn’t believe it. To this day, my wife and I, we had a toddler, an 18 month old, and then we just thought we’re gonna have another kid and we had triplets. So I can assure you that nothing will have you evaluating your financial plan more than quadrupling the size of your family. So I literally just had it with financial planners at that time. And so it just put me on this trajectory to say, you know, what, how are the top 1% really building wealth? Because no one seems to be making money in this game of, hey, the markets gonna go up, it’s gonna go down, but just invest for the long time. You’ll be fine over the long term, right? So I started studying and keep in mind this is around 2000. So Kiyosaki, I mean, Rich Dad, Poor Dad had literally like just came out. And a big light bulb moment was when I read Cashflow Quadrant, realized, Hey, I’ve got to be a business owner. I’ve got to be an investor if I’m going to play this game of capitalism and build my own chessboard. So I kind of set out on that journey and started investing in all kinds of alternative assets, everything from oil and gas. access to raw land to retail space, office space multifamily, lots of different asset classes. And then I also started building businesses. And I built a tech consulting business which I went full cycle on. And when I was running businesses, I learned a ton about taxes, right, and really how to optimize your business and taxes, and how investing really ties into that. So fast forward today, 20 years later, we’ve really developed what we call the holistic wealth strategy, which is the book that I put out. And essentially what this is, is just trying to help other people really encapsulate a systematic approach to building wealth through an alternative methodology, right? That’s completely different than what your financial planner is telling you. That’s
Greg Lyons  05:51
interesting. I think, you know, a lot of people especially listen to this podcast, different real estate and business podcasts, we all kind of have that moment where we kind of not go against the grain, but you go against kind of conventional thinking, and I had that myself is similar to you. And when Tim and I started cityside, capital, we were kind of taking our investing into our own hands, instead of just relying on the 401k, or the financial planner. And I guess your moment was with triplets. And God bless you for doing that whole thing. Mine was just more like, hey, we need to do something else. And we didn’t add three people to our family. So that’s neither here or there. But when you do kind of question stuff, and go against the grain a little bit, you have this opportunity to build something fantastic. And I think you’ve really taken that, hey, I want to do something different, and build a tech startup, build Pantheon investments, and kind of did something great with it. But the thing about this is that you’re bringing other people along. And that’s kind of why we have this podcast. That’s why you’re building your business. You bring others along, where you’ve kind of found success and had an investing success. When you talk about the holistic wealth strategy. What are some of the key points in that book that people should be aware of? Yeah, sure,
Dave Wolcott  07:13
Greg. So as I said, I went through this journey, and you read all these great books, like Kiyosaki his books and everything, but they’re very conceptual, when you get some good insights and everything, and then you’re trying to say, Okay, what is the blueprint? Right? How do I really take action. So over the course, like I said, of 20 years, I found that there were basically five different phases that you have to really go through, right. And it all starts with creating a vision for yourself, if you don’t have a target, you’re gonna miss every time. Right? So getting crystal clear on what is that vision statement for you and your family, and where you’re headed. It’s just like getting in the car in the first thing you do is plug in your GPS coordinates, so you know where you’re going. Right. So that’s really the underlying factor is creating that vision. And then we move into Phase one, which is all about mindset. I mean, I’ve talked to so many people, including family members, people I’ve known for many, many years. And basically people have limiting beliefs, they don’t want to learn about passive income theory, they say, hey, it’s too risky, don’t understand it. But in the meantime, they’re taking advice from their planner, who’s saying, hey, just put everything in the 401 K, and they’re down 25% This year, and they’re not really understanding. So you really have to have a growth mindset to be able to understand, right? How to get rid of some of those limiting beliefs, you have to start creating goals for yourself to achieve what’s my passive income number I want to achieve and 2020 3am I setting up habits to actually support those goals, right? Or are my habits actually taking me away from those goals? So that’s really phase one. And phase two, we move into really increasing your IQ around your financial IQ, your mindset IQ. Also, we talk about health, IQ, right? Because some people are constantly trading their health to gain wealth, and could have all the wealth in the world. But if you don’t have your health, where is that going to get you? And I’m sure you can appreciate that. Greg, division one athlete, right is something very huge. So I think health is something that really helps you foundational in terms of being wealthy. And also what does wealth really mean to you? Right? So So these key things around basically increasing your IQ are really good and getting smarter. And then you start to reduce your risk because you start to learn about some of these other things. And then we move into Phase Three, which is actually all about creating an infrastructure for yourself, right. So I learned about almost 10 years ago now this amazing concept around infinite banking, where you can actually create this store or have capital, this liquidity pool that completely compounds tax free, you can give it to your heirs tax free, you can create an income stream completely tax free, and you have this liquidity bucket to be able to reach into and then go invest in different opportunities when they present themselves. Or right now, in 2023, we’re facing recessionary times, what a great place to have some capital reserves. So we talked about setting up things like infinite banking is part of your infrastructure. We also talk about tax strategy and setting up a proactive tax plan. That is really key. And I fired five CPA firms over many, many years, because I kept getting unexpected surprises. But just think if you could reduce your taxes by 10%, a year perpetually, and you’d have that much more capital to invest. I mean, what would that do to your wealth trajectory? Right? Those are really big numbers. So we have to think about not only multiplying our wealth, but also what are the key wealth destroyers, right, and taxes are number one. And then the last thing in phase three, two, asset protection is really key. Because again, it’s about multiplying, and also protecting your wealth. So we want to make sure that we’re covering our bases all the time. So that’s phase three, we started with mindset, we moved into phase two, improving your IQ. Phase three, we talked about creating an infrastructure. And then at this point, a lot of people will say, Hey, Dave, that sounds really great, might want to be interested in investment or doing something, but they don’t have capital, right. So that next phase four is all about asset repositioning. How can you look at your existing portfolio and actually reposition it into assets that are creating more velocity for you? So for instance, eight years ago, I basically took I was so bullish on multifamily syndications, investing in private. And you know what I did, I built a calculator. And we have this, we’ll send this to investors if they’re interested. But we built a calculator that says, if I take my 401 K, if I take 100k, in my 401k, and I sell it today, pay the 10% penalty, 35% taxes. I’ve got 55k. Net investable, when would I break even if I start investing in some conservative asymmetric assets like multifamily? Where would I be in 20 years? When would I break even? Well, I ended I thought I would break even around year four or five, I ended up breaking even and year three, and I’ve tripled my money since and I deferred all of the taxes and the penalties on that. Right. So it is absolutely amazing when you start to like put some numbers down, and you can see objectively, when you model this out, if you grow at a 20% return on interrupted tax free compounding at the end of 20 years, can yield over 2 million, versus it’s going to be about 250k less taxes if you kept it in your 401 K. Okay, so that’s really powerful. So, asset repositioning. 90% of Americans basically have their capital tied up in either their primary residence or in government sponsored qualified plans. So we talked about the 401 K, but also primary residence, some people are so risk averse, and I don’t blame them. I mean, I was the same way. Right. We all heard like the Dave Ramsey’s of the world saying, you know, pay down your debt, right? I mean, that’s the middle class philosophy, right? pay down your debt? Well, the fact is that equity in your house, the rate of return on it is what? It’s zero. So, can I do better than that? So even if I borrowed and did a HELOC and borrowed at a rate of even today’s higher rates at 6%, but I can be making 20% in a syndication somewhere else, and getting cash flow, plus I’m getting additional tax benefits, right? I’ve got more interest deduction to take off, right? Then you can really be much more efficient, right with your whole portfolio. And then finally, guys, we move into the Phase Five, which I know you’ll love, right? It’s all about building massive passive income. Right? So looking at different alternative assets. And obviously, we’re trying to bypass Wall Street here and invest directly with Main Street. And I love to basically think about this as like solution based, right, because I kind of come from that consulting background and through my journey, I realized like we have tons of doctors, dentists, lawyers, I mean high paid income professionals. So for instance, we have an oil and gas on where you can completely offset active income, not just passive income, but active income, which is massive, right? For a lot of people, right? And then we have passive income that it grows. So you’re basically trying to build your base that has a diverse set of different operating teams, different asset classes, maybe different markets, right, that you’re operating in. And then that passive income just continues to grow and grow and meet or exceed really your lifestyle expenses.
Tim Lyons  15:35
Well, Dave, I’m ready to do some pushups in the Iowa if anybody wants to join me, because that was just a masterclass on how to get ahead, right. And like, here’s the thing, like each one of those phases, that could be a show in and of itself, right, because so much of what you just said, I mean, obviously, you’ve been doing this for a long time. So you’ve been able to distill it into these five phases. But just for example, when I talk to somebody who I just meet at a party, or I meet them at a barbecue, or it’s a co worker at the firehouse, they’ll say something like, I can’t wait to pay off my house. And I have to really, really grapple with that, you know, and say, Do I really want to jump into that next conversation of? Well, tell me more about that? Why would you want to pay off your house, you know, the return on equity is zero, and none of the, because if you’re not ready to hear it, if you’re not ready to or willing to understand or learn a new way of looking at your finances, it’s gonna fall on deaf ears, right? And that’s the problem by Greg and I always talked about our parents did the best they could bringing us up, right? Very modest upbringing for Greg and I. And it was the same thing, right, Dave, go to school, get a good job, max out the 401k. Get a good job, stay there, get a pension benefits, but and when you’re 65 or 70, start living start joining, maybe your taxable income will be lower at that point. So when you take distributions and your 401 K, I mean, raise your hand right now, if you want to have lower income, right? When you’re 65 and 70. Then right now, I mean, that’s incredible, like, how does that even compute for people these days? Right? So a couple of things I just wanted to dive into was, you said something about mindset and having the growth mindset people have limiting beliefs. They don’t understand what we’re talking about, right? And we’re talking about alternative assets, and why they’re called alternative assets. Dave, I still I don’t know, right? Because to me, these are the primary assets, we have to live somewhere every day, when we go to work, we go to work in a building or a property or whatever. But education is the antidote to fear and risk, right? So that’s what I love. So Dave, when you’re talking to investors, or somebody gets into your ecosystem, and now they schedule a call with you, and they’re brand new investor, how do you run through the five phases with them is a time sequence is that a couple of phone calls? Because people have to be willing to receive this information? And they’re not going to get in a 30 minute call? Yeah, it’s a great question, Tim.
Dave Wolcott  18:04
And we’re becoming more and more exclusive with our community and only working with people that really want to work with us. I mean, this is a passion project for us. I didn’t start this company to line my pockets. I’m trying to drive for the betterment of other people and drive this education to really help people. So they have to be coachable. And they have to be able to learn. And also people can be a different aspects of their journey, right? We have like, right now, I was just talking to a doctor yesterday, who’s built his entire career following the traditional path that we talked about going in medicine, very successful. But he’s realizing, you know, he’s not necessarily having the quality of life that he would like for him and his family. So how can he really restructure that, right? Because isn’t this all about really freedom, at the end of the day, it’s not only freedom of money, right? To do what you want to do, but it’s also freedom of purpose, right to spend your time how you want to spend your time, create your ideal day, it’s about freedom of relationship to be able to work and spend time with quality people that you want to work with. And freedom of time, right to be able to do that whenever you want to right, whenever it makes sense. So I think ultimately, that’s what drives a lot of us, right? It’s all about that drive for freedom. So if you have that drive, and again, I love like entrepreneurs are really our investor avatar because that’s the background I came from. And entrepreneurs are good at solving problems. They’re very creative. And they’re good at looking at things in a different way with a growth mindset and everything. So, and that’s why we put it at phase one, right? Because if you don’t have that growth mindset, and frankly, Tim, I mean, I stopped having those conversations with people at the neighborhood parties that they don’t want to learn because they just Shut the wall down. And it becomes more of like, say, a political or religious type of discussion. And that’s fine. You know, people have different views. This is not for everyone. So
Greg Lyons  20:12
you know, the thing I like I really love what you’re doing is I think you’re right about like the Asahi and so forth, when they were just coming out with their stuff. And their content. They gave you the blueprint. But what I like about you is you have the action and the phases, people can take. And I’ve kind of zeroed in on the third phase, the infrastructure phase, you talk about Infinite Banking. And we’ve had many different guests on the show that talks about a variety of different passive income strategies, note investing, land flipping, stuff like that. But if you could kind of give us a couple minutes on Infinite Banking, give us kind of the overview and how that helps someone kind of get ahead in their financial success.
Dave Wolcott  20:54
Yeah, sure, Greg. Like I say, I’ve been using this almost for a decade now successfully with my wife. And I felt so strongly about it, we actually had Pantheon have our license. So we’re able to set that up for people. And I think this is one of those things that there’s a lot of misunderstanding in the marketplace and how to utilize it. And a lot of people aren’t even familiar with it. But effectively, I mean, I spent a lot of time with family offices, ultra high net worth, they use this as one of the cornerstones, right of their wealth strategies. So I think you to kind of learn more about it, right? But if you were to visualize a pyramid, we have what’s called the Pantheon wealth pyramid, okay. And you visualize that pyramid. And at the bottom of the pyramid, what do you want, you want tax efficiency, you want liquidity, you want safety of principle, right? Something that’s completely as safe as possible. And then on top of that pyramid, you start building these asymmetric assets like multifamily syndications, these other great alternative assets that have tax efficiency, predictable passive income, and some type of opportunity for upside on the back end. And then on top of that, you can move into your more skeptical, right, or types of investments, right? And things like crypto and stuff like that, right? higher risk type assets, when you think about that Wall Street is saying is it’s actually the opposite, they tell you to put everything in your 401 K, your IRA, right. So it’s basically stocks, bonds and mutual funds, which in my mind, are completely one dimensional, because you’re only getting basically one return on that. And the risk level is so much higher. So going back to our wealth pyramid, and answering your original question, we really like to use and this is, like I said, again, how the ultra wealthy are structuring their wealth strategies is to have this whole life, it’s a cash value, whole life insurance policy, where you can store liquidity in here, right, and you have the ability to literally take out that money and use it for anything you want. You can pay for your kids college with it, you can pay for you lost your job, and you need nine months of runway till you figure out your next thing. Well, you can go in here, you can also build up dry powder for that next deal that you want to invest in, but you don’t have 50k Yet, well, I’ve got 25k, well, I can put it in here. And you can make about a 6% return on it. And it’s compounding completely tax free, you have access to it. And then you also are able to give this to your heirs tax free. So there’s a nice bit of legacy planning component to it. It also has inherent risk protection, because it’s actually structured inside a life insurance policy. So if there’s a car accident with one of your kids or something, and a creditor comes after you the first place they’re gonna look is your primary residence and your stocks, bonds and mutual funds. And they’re gonna go after that. Well, it’s safe over here. Right? So these are just a couple of the highlights, right? Also say that one of the keys things that I’ve learned about studying ultra wealthy, right, is that it’s all about looking for multipliers with our money. Okay, if I buy $1,000 worth of Tesla stock, what do I have? I just have $1,000 in stock, and all I can hope is that that stock is gonna go up in value, right? In the meantime, if I go into something like this, I’ve got asset protection. I’ve got liquidity. I’ve got tax free compounding, right. I can give it to my heirs tax for me, you know, all of these different things. So when I look at that, from a value standpoint, it’s huge. Same thing with some of these syndications we’re talking about they’re multi dimensional in nature, you get a trifecta with it, versus a one to many She’ll return, who
Tim Lyons  25:00
would want risk free 6% compounding interest on investment, I mean, raise your hand, if you wouldn’t take that I would take that. I mean, I don’t have one of these yet. I’m always always on my to do list Dave and all full disclosure, but from what my understanding is that you can take a loan against this policy, right, and then use that cash value to go invest in, say, pretty much anything you want, right? A one to four unit duplex, or whatever. Or you can do it into a syndication or an oil and gas deal. And the beauty of it now is that you’re still getting paid five or 6%, inside the policy, and that money is loaned out, right and redeployed into another asset that’s also either cash flowing, or there’s gonna be a multiple on that investment. And it’s just like you’re getting paid in two places at once. So I have that correct.
Dave Wolcott  25:50
100%. And that’s exactly it. And that’s why it’s a multiplier, right? You’re using the same dollar twice, right, you are able to borrow against the policy, a certain loan percentage, and then you typically have a spread of one to two points spread there, where you’re always making some money. And then also add on to that, again, we built another calculator that says, okay, at a 5.75%, tax free compounding, how do you do over 20 years? What do you think that’s a better return, or the s&p at eight and a half 9%? Well, the tax free on it, uninterrupted compounding is significantly higher. And this is the thing that this is what gets me really fired up guys, because I think that this $30 trillion, financial services industry in this behemoth is really doing our society an injustice. And people need to be educated because they’re not talking about what’s happening at the end of the road in retirement. And that’s why this country has such a massive problem, which is they never talk about taxes, fees and inflation, right, which completely erodes things. And let me give you like a really good, a simplistic example, right for listeners out there. So if you were to follow typical financial planning advice, right, and they boast to have accumulation theory, okay, so you build up a big nest egg. So let’s just say you worked really hard your whole life, and you saved up 4 million by retirement, okay, at 65. And then they’re going to use this Monte Carlo simulation, and say that you can withdraw 4%, which it’s even less than that right now. But let’s just go with 4%. So you can withdraw 4% a year. So 4%, on 4 million, you’ve got 160k. But we haven’t really factored in the fees they’ve been collecting all the way or taxes at that rate. So once you factor in taxes, maybe that 160k is more like 110, maybe 120, if you’re lucky, right? If you’re living poor, right? And then each year, you’re down by 120k. Right? Your 4 million just keeps going down and down and down. So let’s just take that same scenario now and say what if I had 4 million in a group of diverse set of syndications, we had 20 Different syndications that are cash flowing at an average of 8%. Okay, the same 4 million at 8%. That’s 320k of income. If you’re invested in the right assets, you’re not paying taxes on that. So now you’ve actually tripled the amount of income that you’re making with the same amount of money. And oh, by the way, each year, instead of killing your golden goose, it actually gets bigger and bigger, because you still have the equity growth appreciation by another 10%, maybe even more each year. And that’s how you can create legacy wealth.
Tim Lyons  29:03
Dude, I love that, you know, I find myself like, I’m with you, Dave. Like when I first started this business, I would take every single phone call, I try to convert people I you know, what I found was that I was spending an incredible amount of time trying to convert the uncomfortable. And to hear some of this stuff, you have to be willing to be a student to to learn to know what you don’t know, to follow people that have kind of done this before you. I mean, let’s be honest, you didn’t invent this. I didn’t invent this, but like, it’s a thing, right? And that’s why we started this podcast and get it out there to talk to people like you. But giving like real world examples is really powerful. I mean, like the s&p was down, I don’t know 20%. there abouts in 2022. All of a sudden, we turn the page into 2023 People like man, I’m back to square one. This is great. My year to date is not showing a minus 20. Again, it’s now showing maybe plus a half so far, who knows. But keeping with that example, if you had 100 grand or simplistic numbers, in an account and 22 Only two in saying the s&p and I went down by 20%. So now your capital account is showing at Grant. If the next year it goes up by 20%, well, guess what, that’s only going to be $96,000. Right? You would need to have your account, go from 80 grand, and then add 25% Just to get to even just to get to that 100 grand again. And this is happening every day. It goes down. 1%, up 1.2, down, 2.4. Up one. And what’s that this is a topic that I’m passionate about, because this is all I’ve ever known. And I feel like I’ve almost been lied to before I kind of gotten to this new space. Right? So with that being said, I mean, the other thing I feel like I’ve been lied to about it’s about taxes. As a W two employee, you really have no significant tax write offs, right? So you can go to school, become a doctor, if you’re a neurosurgeon, you’re doing medical school, seven years of residency, and another two years of fellowship before you know it, you’re like, 48 you’re just getting your first like, real paycheck. And yeah, the money is great, but you’re a W two employee, like you’re gonna get crushed in taxes, right? And so when you find out through these Kiyosaki books, Rich Dad Poor Dad Cashflow Quadrant, right, all these books that are out there, tax free wealth by Tom wheelwright, is that you are now working until May of each year just to pay your tax liability. And when I heard that, I was like, Man, that is incredibly like crazy to think about how do I change my circumstances? How do I change my facts, as Tom wheelwright likes to say, so can you talk a little bit about full disclosure, you’re not a CPA, I’m not a CPA, Greg, not a CPA. But can you talk a little bit about some of these deals that you get involved in in this quote, unquote, alternative space, that can really have a tax impact that’s tangible to investors?
Dave Wolcott  31:53
Yeah, you know, Tim, you really hit the nail on the head, right? And this is why, I mean, before we jump into that, I think it’s really so timely, right? We’re just kicking off 2023 There’s so much negative noise in the air. And I think people are scared and rightfully so. And we’re probably going to feel this recession somewhere. We’re all going to kind of feel it right. And what is the kind of the impact to that? But, again, it’s very interesting how, when you’re looking at some of the top sovereign wealth funds, what are they doing, where the top family offices doing ultra high net worth? Like, what are their strategies, they invest for 25 years cycle? Okay, that goes through multiple different cycles. And it’s all about having a strategy, like I said, and, you know, that’s why I come at this game, not just as a real estate investor, commercial real estate, okay, that’s a great asset class, but I’m an investor first and foremost, right. And I’ve been studying this for 20 years. So what you talked about is really the top three wealth destroyers, its taxes, government sponsored qualified plans, and it’s also stock market losses. And you’re 100% with the stock market losses, your advisor is not telling you about that, right. But if you model it all out, and you can look for the past 20 years, that’s why you always get to maybe a 7% return right over a 20 year period. So 20 years, that’s a long time, right at only 7%. And by the way, that’s before taxes. Okay, as before taxes. So if you have this comprehensive strategy, you can actually focus on reducing some of your top expenses, right, that’s really key. And that’s something we work on, like, all the time, I’m always every move I do every time I buy something, I’m always thinking about the tax component to it. And in fact, it’s like a challenge to me, Hey, you know, whatever it is, even if we go buy a boat, right? Can you take your like Kiyosaki says, right? Could you take something that’s such a doodad, such a liability and turn it into an asset? Well, you know, what I can buy, I can create a charter business out of that boat, right? It’ll be tax deductible, I can drive income off of it, and then I can use it when I want, I can do things like that. So then to go back to your original question, right? What type of asset classes and things are good. And it is interesting, right? bonus depreciation. This year, it’s down to 80%. Still very strong. But yeah, we’re always looking for tax efficient type of investments. And again, this is very, needs to be very personalized in what you do. If you’re a doctor making 500k Or a million, you really need to look at how can I reduce those taxes? And in some cases, right, it could be a play that’s more about this proactive tax planning where you can create a different structures, right, you could set up say an S corp type entity and pay yourself that way versus a W two And then just build back the corporation in a certain way. Right? So. So there’s a lot of really good strategies that you can do. And yet Tom wheelwright is awesome. And it’s all about being basically a partner with the government, right in terms of taxes. So why did they give these great incentives and real estate and oil and gas? Well, like in oil and gas, right, it’s 100% deductible. And the reason is, because it’s such a, this supports the GDP of this country, it supports our strategic defense, I mean, all of these different things. And 80% of the industry is actually small businesses just mining for production of hydrocarbons, right. So they want to provide incentives to do that. They provide incentives for real estate, because people need a place to live. And we have huge shortage in this country, right of housing. So we’re always looking at asset classes like that, that can solve something for someone depending on really where they are. But those are probably some of our favorite asset classes that we like right now.
Greg Lyons  36:06
Well, Dave, I’m not sure about the listeners, but I am gonna go back and make sure I have my ducks in a row, making sure I have everything just the way it needs to be. Because there’s so many different things to think about. When you’re thinking about your wealth, and the wealth destroyers, you know, taxes, qualified plans, stock market losses, what are you doing with your money, not on autopilot? What are you proactively doing with your money to build wealth? And I think that’s the most important question, to ask yourself, and to align yourself with the people that really have the good answers for some of these things. Maybe oil and gas multifamily may not be for everyone. But if you know they’re out there, you should really study these different things, and you’re going to find your niche somewhere. But taking action and jumping into some of these things, I think is really, really a good thing. This has been fantastic. And we are going to move to our final three questions that we ask every guest. And the first question is, what do you say to people when they come in? I know you don’t talk to these future investors any longer. But what do you say to people when they say investing in real estate is too risky?
Dave Wolcott  37:18
I’d say they don’t know enough, right? That goes back to that financial IQ and you need to basically get you know, smarter, right and learn once you learn more about the asset class. Right, you can realize it’s actually a lot less risky than the stock market. I mean, the stock market to me is literally like going to a casino.
Tim Lyons  37:39
Oh, I love how direct that was. Greg, did you feel that that a resume? I think you need to go get educated because you don’t know what you’re talking about. That’s awesome. I love exactly day. Number two, Robert Kiyosaki, obviously a very big influence in the real estate space, the investing space. And he can say something that can turn people off sometimes if they don’t know the context in which he’s talking about. And the quote that he has is, savers are losers and debtors are winners. What does that mean to you?
Dave Wolcott  38:08
So he goes with this philosophy, right that your house is not an asset. And that’s one of his biggest contrarian type viewpoints, right, where a lot of people think, hey, the house is an asset, right. But in his mind, an asset is something that’s actually producing cashflow. Right, so that’s a little bit about the kind of the backdrop there. And it’s also really about using debt as an asset. Right. Now, this is interesting, right? Because debt can be a double bladed sword, right, it can actually accelerate your wealth. It can also decelerate it really fast. Right, you know, talk to people like rod Cleef out there, right, who were overextended, like in the last downturn in different folks, right, who might have overused leverage, right, they can use that. But using leverage properly, and manage to your risk can actually be an asset in itself.
Greg Lyons  39:09
Absolutely. And your final question is from Jim Rohn. And I feel like this whole podcast has been self education here, Tim, but Jim Rohn says that formal education will make you a living, self education will make you a fortune. I think if you’re listening to this podcast, you’re on the self education kick. But what does that mean to you?
Dave Wolcott  39:31
I mean, that is really the basis right of our whole wealth strategy. It is really getting educated about these different things, and also taking ownership, right, becoming self reliant again, as we move into this year, and there’s just a lot of fear and noise out there and everything. I would really encourage people to get educated Get Smart, right? Because that’s what’s going to actually reduce your risk is going to make you confident, right, and once you have that confidence, you can gain In some new capabilities, you can gain some new clarity. And we can actually be sitting here having this conversation a year from now. And you’ve actually made success while the rest of the world is panicking.
Tim Lyons  40:12
Dude, I love that it’s totally changed my life. It’s totally changed Greg’s life. I mean, I sleep very well at night, Greg and I have been fortunate enough to do over a billion and a half of commercial real estate. Are there challenges? Of course, there’s challenges. If it was easy, everybody would do it, right. But you know what, I sleep very well. And I don’t even check the stock market. As crazy as it sounds. I mean, I used to change check in about 15 times today, see what he’s doing. But I don’t do that anymore. Because it wasn’t we chose to go down this avenue, we got educated, we surrounded ourselves with the right people. We got into the right rooms, we started asking the right questions. And it’s actually it’s been an amazing journey. So Dave, I am very grateful that you were able to come on here and share your vision and your story and your five phases. If people want to hear more about what you’re doing or see what you’re working on. How can they best get in touch with you?
Dave Wolcott  41:03
Yeah, thanks, Tim. Really, the best place is to go to our site, you can get an ebook version, actually of our book at pantheon. forward slash wealth, hyphen strategy, you can download an ebook there. You can also check out our podcast as well, well, strategy secrets of the ultra wealthy. And our book is on Amazon as well, the holistic wealth strategy.
Tim Lyons  41:29
So we’re gonna list all that in the show notes for our listeners. Dave, thank you again for spending the time with us. We also want to thank the listeners for spending another week with us and we look forward to serving you again next week.
Thank you really appreciate it.
Tim Lyons  41:44
Awesome. Thank you for listening to another episode of the passive income brothers podcast. We would be grateful for your support of our podcast by giving our show a five star rating and review and subscribing to our show on your favorite podcast platform. Don’t forget to take inspired action after listening to this show, so that you can start building out your passive income streams. Finally, head on over to cityside to connect with us and find out more information about how to get started passively investing in real estate