The Lucky Titan

How to manage your wealth like a billionaire even if you aren’t one………yet With Jim Dew

January 14, 2021
The Lucky Titan
How to manage your wealth like a billionaire even if you aren’t one………yet With Jim Dew
The Lucky Titan
How to manage your wealth like a billionaire even if you aren’t one………yet With Jim Dew
Jan 14, 2021

Jim Dew is the CEO and Founder of Dew Wealth Management. He has twenty-five years of experience building virtual family offices for entrepreneurs and is a Certified Financial Planner®, Chartered Financial Consultant®, and a Certified Private Wealth Advisor®. Jim is also known for speaking on national stages for elite entrepreneurs and has been a guest on podcasts like Entrepreneurs On Fire and Business Lunch. He has been featured in Inc, Entrepreneur, and Huffington Post magazines and is the author of “Beyond a Million: The Entrepreneur’s Playbook for Expanding Wealth, Freedom, and Time.” - Entrepreneurs On Fire Podcast; - Why you should use a Family Wealth Office to get Rich with Jim Dew; - Business Lunch with Roland Frasier – How to manage wealth like a billionaire with Jim Dew; - 9 question quiz to find out where you are in your wealth building journey.

Show Notes Transcript

Jim Dew is the CEO and Founder of Dew Wealth Management. He has twenty-five years of experience building virtual family offices for entrepreneurs and is a Certified Financial Planner®, Chartered Financial Consultant®, and a Certified Private Wealth Advisor®. Jim is also known for speaking on national stages for elite entrepreneurs and has been a guest on podcasts like Entrepreneurs On Fire and Business Lunch. He has been featured in Inc, Entrepreneur, and Huffington Post magazines and is the author of “Beyond a Million: The Entrepreneur’s Playbook for Expanding Wealth, Freedom, and Time.” - Entrepreneurs On Fire Podcast; - Why you should use a Family Wealth Office to get Rich with Jim Dew; - Business Lunch with Roland Frasier – How to manage wealth like a billionaire with Jim Dew; - 9 question quiz to find out where you are in your wealth building journey.

Josh: what is up everybody, welcome back to the lucky titan podcast and today we are here with Jim Dew he is the founder and CEO of Dew wealth management and this is going to be an exciting conversation because today we are going to be talking really about investments and what do you call them? Family offices total space in there but family offices which is a really cool unique method that the billionaire are using to make more money and now has really become available to younger entrepreneurs and a lot of you know if you hit a million dollar and you stagnated I feel like this is going to be a great conversation that going to help you kind of get your mind on what you could be going with your money next so Jim say what’s up to everybody and let’s hop in. (0:43)

Jim: hey everyone, great to be here Josh, thanks very much (0:46)

Josh: yea it’s going to be great so Jim the first thing I want to ask you is about family offices I mean obviously that’s the top of the conversation something that billionaires are doing to make more money and how was that’s becoming available to younger entrepreneurs because most places won’t even let you invest unless you are a credit investors so (1:07)

Jim: Very true, very true, so I learn about family offices about 15 years ago and I’ve been in this career serving entrepreneurs for 25 years but I have couple big moments in my career and 1 was when I realize about 5 years into the industry that really banks broker terms, insurance company and banks are not set up to really good give good adviser to set up to make profits for their shareholders and in addition and they really don’t specialize in working with entrepreneur who have their own set up problems and opportunities and then I realize that I was an entrepreneur and origin of my wife and we started our own company 21 years ago so about 15 years ago when thought I knew everything there was wealth management for entrepreneurs, I heard about this concept called the family office and I was intrigue because it sounded like a level above what I was doing with my client so I was lucky enough to get introduce to billionaire family in New York I hop on a plane throughout there and that was the CEO and we just hit it off you know sometimes you meet someone and you just be a like you are old friends or you just knew each other you know brothers from another mother something like that (2:13)

Josh: kind of this conversation Jim I mean come on 

Jim: It’s kind of like you and me, I am thinking the same thing, you and me, well after 2 and a half hour of breakfast he said what Jim you want to stay and SEO systems and our processes happy to show you and so I was obviously wanted to do that and just for the listeners if you haven't heard term family offices that’s what billionaires do to manage their wealth and this is were to hire all the needed tax, legal, insurance and investment professional, the accountancy, attorneys all is full time employees working for them at  1 billionaire and his or her family, I was convince that spending week with those codes that was the best system the best ways to manage for entrepreneur  but there was just one catch that is you need 300 million dollar of liquid assets before you can built your own before you can built your own family office and that why it’s kind of a billionaires club but I thought to myself I wonder if I could build something call it a virtual family office for entrepreneurs who were doing very well, they have successful businesses but they don’t yet have that kind money and I was kind of in mission we’ve been really working to execute on that vision for the last 15 years and we feel like we get better and better every year and that doing for our entrepreneur clients (3:27) 

Josh: yeah, and I love that because it’s I mean so my wife actually works at a family office here and they’re multiple billionaire of dollars in real estate and it’s funny to watch these companies because it’s not like investing in the SOP 500 and you’re getting return of 8% to 10% I mean were talking100%-200%, 300% return every year weather their just growing their money because, (A) They have the money they have the whole team of people managing that money  for them and I think the problem that a lot of us who haven’t done 300 million dollars liquid cash you know I mean finding the right people to manage your money without taken out for you is kind of scary hard to trust right people to do it  so I mean for you guys Jim being in that kind of industry and working with these virtual family offices what’s really the difference between that and like setting up a trust fund (4:25)

Jim: well big difference you know setting up a trust fund is usually setting up fund for whether it’s future generation or asset protection things that nature a virtual family office is really taking care of all the deep advance planning needs to happen scenarios of tax, legal, insurance and investment and really there’s 3 really outcomes you really want to work for that the family office structured gives you but billionaire and for plans that we work with and that’s absolutely confidence in your team of professionals helping you and all those areas maximizing your wealth inside and outside in your business some maximize the wealth of your business so that when you exit you’re going to get the maximum value after tax and also maximizing your money outside your business in investment that can be things like real estate private equity or stocks and bond and then the 3rd piece is having a plan to sustain well because it’s a difference skill set to build a business and make money than it is manage money and have a plan to sustainable wealth so think about those 3 in major comes and that’s where a family office structure can do for (5:29)

Josh: yea so I do have question for you Tony Robbins wrote a book ah what’s that book Called 

Jim: master and the money game 

Josh: I think so there’s the other one he just wrote not too long ago

Jim: oh yea that’s it 800 pages? Before and then he wrote another one recently 

Josh: and yea I can remember the name on top of my head I literally wrote it down just

Jim: I can’t either, I read it but I can’t remember the title 

Josh: … sorry Tony 

Jim: Yea, sorry Tony

Josh: it’s podcast right

Jim: I am sure it was amazing, I just don’t remember 

Josh: well so basically the premise of the book is saying you should be the one that managing your own money and I am kind of curious and I am not contradict to you here so I am curious what’s your thought is in relation to solo management vs doing a family office (6:13)

Jim: well in the family office you can have solo management so one thing just to make clear is that what I believe is that investment management has a lot of different ways to do that and it does shouldn’t be tight the same firm that’s building your virtual family office so for example we that’s an optional service investment management a lot of wealth management firm require you to invest a certain amount money with them or buy products for them and we believe that that’s just one of many parts of a virtual family office so for example you know real estate really well you want to manage your own real estate and that wealth outside your business no reason why you can’t do that let’s say you’re really comfortable managing wealth and just can’t brokerage no reason why you can’t do that but you need someone who coordinate all the efforts on the tax, legal, insurance and investment but you could be the investment manager or you could have an investment manager who’s not the same people who are creating your virtual family office so it’s kind one of the many pieces of investment piece you do need to know what’s going on and have checks and balance  but you really shouldn’t be doing some of the work if you’re not an expert and to where you’d be better up building your business and living your best life and focusing on how to understand insurance policies or what your legal document should look like or talking or getting the attorney or the accountant to talk together having that coordinated effort really takes a lot of experience and team approach and anyone who work with someone who’s built those high functioning teams for many years they’ll just do better than you’ll do it  (7:46) 

Josh: yea and I appreciate that as office because I mean the reality is that if you are smart Business person in general you would stop trying to everything yourself and had everything that you can over in somebody who’s more specialized in it and I love that you guys doing that in a way that’s like you’re basically managing the flow of money that it is increases and its protect it and that’s I mean as entrepreneur I thinks that’s one of the biggest scariest unknowns you know well what if I have you know a 400,000$ tax bill show up and I am like duh what do I do right and nobody wants that that moment you know when you have a ridiculous tax bill, so you know Jim when it comes to building this family offices at what point in your  business do you feel like you should build this (8:34)

Jim: I would say absolutely when you are more than a million which is such a million profit that’s at the point where the tax benefit and the planning, the asset protection and the insurance planning all of that is going to have a benefit that is going to pass the cost the building one of you are attract to get let’s say you’re half a million profit you’re going to be here within 12 to 24 months that’s when you should start doing research and considering it and then certainly well beyond that you know you’re doing 2,3,4 million dollars of ivida or profit or 5 or 10 if you haven’t done it yet you want to build a structure like this 9:10 

Josh: yeah love that and I really thing that a lot of people they get scared of this kind of stuff right it’s how I’ll deal with it later but I mean I love you know the way you are putting it’s like when you’re pass that million dollars mark that’s really the point for most people when they’re like wow, I don’t really know what to do with my money right like how do we invest another 500,000 dollars into our company to grow it for example you know a lot of people listen to this or trying to scale and scaling requires money and of course investment so I love that, so I do want to change direction here a little bit Jim I mean it’s obviously still the same thing but one the reason I brought you is to talk about the ostrich, the jugular and the air traffic controller which if you are like me you’re like how on earth does even relate to each other so let’s hop in 9:58

Jim: yea it is something that I create, I called the mastery metrics and this is where wealth management can be easy or hard and it can be excellent or can be poor as far as your result so picture kind of  four square metrics and then in upper left hard corner is of course for metrics is  where wealth management is easy but the results are poor and that’s the ostrich so the ostrich is the entrepreneur that will say things to me like you know Jim I’m just going to worry about building my business and making more money and all that wealth management stuff I’m just going to let that take care of itself that’s the ostrich the lower left hand corner is the jugular and that’s where wealth management is hard coz you’re now ignoring it it’s where your trying to manage everything on your own and so the jugular it’s hard result are usually poor because you’re trying to do all these things as an entrepreneur that really you don’t have expertise in then in the lower right hand of quadrant that’s the air traffic controllers the air traffic controllers the entrepreneur who has excellent advisers and excellent CPA, excellent attorney, excellent insurance agent, excellent advisers around him or her but the entrepreneur is the one managing all of those relationships so just like the air traffic controller it’s very stressful you have to watch everything and if you’re not paying attention something could crash but you can get excellent results being the air traffic controllers just probably you’re not best use of time and energy and then finally the upper right quadrant which is where wealth management is where easy and the result are excellent is the family office structure so I would say identify where you are and sometimes entrepreneurs you might be struggling in couple of those box on somethings you might be the jugular and another things you might be the ostrich so if you are one foot each box that can happen well but you want to move toward a family office structure because that’s going to get you best control the best clarity the best piece of mind and also the best life because you’re not going have to do all the things that takes to put this together and you’re going to have people representing to you that are looking out your best interest doing that 12:00

Josh: yea I love that and I mean, I think that’s one of the number 1 problem for most entrepreneurs is saying like who do I hire here and just saying how intimidating them that is by well have to have accountant and lawyers and all that stuff I mean most of the people we talk to hits those figures doesn’t even have a lawyer yet (12:20)

Jim: and I would say that probably I called this the linchpin partner if you, you know my friend Ben Hardy just wrote a book called WhoNotHow and who if you can find the right who it’s much easier than trying to figure out the how and the most important who in building the virtual office is what we called the linchpin partner and this is to typically someone wealth management who has 3 distinct qualities just to give you analogy if you were an world turn country and you’re trying to get through a minefield go get through that minefield you want to hire local but not just any local , a local with 3 distinct qualities first specialize knowledge about that particular minefield not just minefield in general but that particular minefield, second experience someone who’s walked to that particular minefield thousand times and then 3rd a standard of care or that local cares more about you getting through that minefield even then themselves so if you find that locally just walking their footsteps to get through the minefield same thing with building a virtual family office you need to find a linchpin partner or someone wealth management with 3 distinct qualities first specialization because entrepreneurs have different problems and opportunities then to people inherited their money then professional athletes different so you need someone with specialization easy to figure that out or you have to do is go in website of your of the wealth manager and if they say we serve business owners and people who inherited their money and professional athletes and doctors and you know they’re not specialize they’re general is the work with anybody who you know that’s most financial adviser are generalist second experience and also easy to figure out how long have they been doing these type of structures and then 3rd a few dew series standard of care which is a fancy legal term that means they put you interest ahead of their own how do you tell a few dew series well most wealth managers are dew register what that means is sometimes they’re worry to have actually Robbins  talk about this and interview he did with Lewis Howes after he wrote master the money game so part of the time they are worry to have representing you and then part of the time they are worry to have representing a brokerage firm, broker dealer or product but they don’t often tell you when they are switching hats really you want someone who always represents you a few dew  but here how plays our way that you can understand as a listener make sure you hire someone who doesn’t sell products who doesn’t take hidden commissions who doesn’t take referrals fees, kick back or revenue sharing because you want them only compensated transparent way that you want to understand and by the way that they don’t have some required investment minimum or you have to give them investments to hire them I think that’s the ideal situation for linchpin partner then also they said a long history building these types of virtual family office is because a lot of wealth management folks will talk about kind of being your quarter back but in my experience often with that means is they say here’s a good estate attorney, here’s a good CPA, here’s a good insurance agent and that’s a silent approach what you want someone who’s actually saying okay I will call the attorney I will call the CPA, I will coordinate everything and then will bring you one, once we bet it all the different strategies and tactics  so you can make a good decision but they represent you 100% of the time and they get paid accordingly because transparency is really important in this type of strategy (15:45)

Josh: yea hundred percent when so my question for you is where you find people like that because I mean if you’re on LinkedIn then probably get up to 25x a day by wealth planners who work for like north western 

Jim: yea so there’s a few ways you find people like that so one way is if you get recommend I mean I would ask around so I ask for people who have, who know who build virtual family offices or entrepreneurs another way is once you find those folks or introduced I check their website when you tell they’re specialist because if they say they work with you know 6 types of people they’re really generalist and I think entrepreneurs are better specialist you can go in regulatory website like finra broker check or the SCC adviser info search and those can help you find if they show up in finra and it doesn’t say moving you now to a different website then they are probably do registered advisers so really when you look them up if it says broker and investment adviser they do register if it is just investment adviser and that means they could be a few dew saurian  in that sense of the word but then you also want to find out do they sell products do  they take referral fees do they get paid and another ways and then just I would say looking at what they do for their clients because building a virtual family office is a very specific infrastructure and I can tell you from experience we skinned our need a lot over the years figuring out how to run those very efficiently and effectively and we game a lot of mistake you don’t want someone figuring it out with your whole life in their hands (17:33)

Josh: yea, for those people because they have to start somewhere right don’t start with me right (17:38)

Jim: exactly you don’t want to be the first the first open heart surgery for that surgeon right (17:44)

Josh: exactly yea and money is just about the danger on that so well you know Jim we’ve covered a lot of different topics here and I want to ask you what would be kind of your first action steps that you give people if they want to quick win this area (17:59) 

Jim: quick win and so I would say several things and I would break it down to the 3 main areas that you should be concern about protect manage and grow so maybe I just can run through and give a quick, so protect first thing I would say is make sure you have the right liability protection and insurance for your business so one of the areas we’ve see a lot of lax on is employee  practices liability EPLI there are more on law suits of employees against employers things like discrimination, wrongful termination so read through them and look for anything that is in exclusion like for example we have a client recently who there’s an exclusion or EPLI and said if you can contribute anyway to the consumption of alcohol you have no coverage we ask them if oh yea we throw a holiday party ever year and we give out drink ticket to the people who attend so well you know things you can do to mitigate also should make sure you have covered in your EPLI so make sure you have right liability protection on that, that’s an easy win another thing is make sure you have a personal umbrella that’s big enough on your other one home and check to make sure that that umbrella also has named your family trust as traditional insured because often that’s mess, there’s a couple quick protection strategies and now you can also go to a much higher level which is entity design and structure and there’s a lot advance things that you should think about under protect, under manage the first thing I would do was evaluate your current player so think about all the professional that are working with you currently and evaluate them and I call it the 5 eyes of four advise so you want to look for attention like how they response they are  pro-active, do they reach out to you with ideas ignorance there’s lot of professionals that no a little more than you  but they don’t know that much in doctor and nations sometimes you work with professionals where in doctor in certain system and they see world through one perspective let’s see what my other 2 eyes incentive is a huge one find out how people are getting paid and why and then incompetent we see a lot of bad work but really start looking your professions and find one good professional you can that you can really make sure you have a player and then start getting those professions and talk  to each other also under manage we would say start thinking about your exit every entrepreneurs exits their business and that’s whether because you die and get disabled or because you sell to strategic or financial buyer or you give it to your kids or sell to your employees or you get like competition ever entrepreneurs is going exit their business and start thinking ahead 3 to 5 years in advance at least about how you want exit so you want to get the best tax and asset protection outcome so that things like gifting shares and doing the trust can be an asset protection strategy or things like qualifying for 12  or 2 stock treatment where if you hold for 5 years and you qualify 10million dollars or 10 times bases excluded sale 10million dollars at a 20% capital against bracket is a 2 million dollar savings so start thinking the advance in the exit planning and then under grow the first and biggest part is tax planning  having a well though out any updated and implemented tax plan is critical most CPA’s I found are tax historians they check all the information they put the right places they tell you what your estimated payments are but they’re not pro-actively looking at the panels and your taxes every quarter and reaching out to you and saying hey these are some things that we could do to reduce your taxes legally so you want to have what we called a tax planner in that area throughout couple simple tax planning tips so one that a lot of entrepreneur can use this 280 A called be a Gustar rule and rather than explaining the whole story where it’s called at it’s really named after Gustar George  coz masters Golf tournament which was just play so that’s an interesting conversation but maybe for another day but what it allows you to do is you can ranch your home to anyone for up to 14 days a year so it’s also true for vacation properties and another types of situation but the reasons why important to entrepreneur is you have a business that separates from you so you can rent your home and your business after 14 days a year it’s tax deductible to the business it’s tax free income to you so that’s a very easy win that everybody can do and often saves entrepreneurs between 20 and 50 thousand dollars a year depending on what kind of home you own and what kind of area you live in so tax plan is really important I think knowing your numbers is also part of the grow p’s to knowing what critical drivers for cash flow in your panel and making that easy to monitor and improve those critical drivers often we see entrepreneurs who are always focus on top line revenue grow, grow, grow but they forget the profit margin and the also forget that there’s some areas that maybe growing very fast with slim profit margin others areas that they pay more attention and spend more time and money on would grow faster but have much bigger profit margins and just because they don’t know their numbers so I’d stand to grow it’s really important to know your numbers and then lastly under grow have a plan on growing wealth outside of your company because often an entrepreneur are thinking that their company is most important thing and it is usually but 80-90% of their net worth but if you are not gradually sighting  money often put in areas like real estate stocks and banks private equity own in another companies or even cryptocurrency for some entrepreneurs to  small degree precious medals or any of those things but sighting money out your business your building wealth outside your business so that’s like what I said in my book you can eventually get enough money outside your business where you turn on income that would replace your business now you have true freedom with if your business failed or not, when you get tired running your business or not once you have that built you have true freedom (23:46)

Josh: I love that and everybody hope you are listening to that go back listen to it again take notes coz I was basically a checklist to save you tens thousands of dollars if not much, much more if you are further line in the business journeys so thank you so much Jim for bringing that to table so you also have an assessment that people can take to help them with this stuff right so can you let us know where to find them? (24:11)

Jim: if you go to, we have a 9 question quiz that will help you evaluate where you are and your wealth planning and under each section we’ve got 3 question for protect, 3 question for manage and 3 questions for grow once you complete 3 question for protect then based on your score I put together a little advise about hey here’s probably where you are, here are the couple of things you need thinking about under your protect section and I’ve done that for all 3 of those section and once you’re done with that you can answer few other question if you choose and if you qualify we might even do a strategy session together but really no matter who you are or where you are do the 9 question quiz I think you’ll find that very useful no matter what (25:58) 

Josh: yea 100% so make sure you go check that out so go check that out fill out the quiz no matter where you’re at and also Jim is opening it up to be able to actually schedule a time with him, if you are qualified so make sure you actually go thorough there and intentionally do this so skip the checklist now and do that he’s got it for you so go check that out and Jim thanks so much for coming on today Man. 

Jim; I appreciate you do a great job on this podcast and I appreciate all that you are doing for entrepreneurs. (25:59)