The Benefits of Living In Puerto Rico with Daven Michaels – EP 170

Interview with Daven Michaels

The Benefits of Living In Puerto Rico with Daven Michaels

Featured on This Episode: Daven Michaels

✅ What he does: Daven Michaels is a serial entrepreneur, New York Times Bestselling Author, and founder of 123Employee. He began his entrepreneurial journey at 15 with a clothing design business for musicians, later expanding into a communications company. Michaels then ventured into the music industry, becoming a prominent electronic music event producer and recording artist. He founded 123Employee, an outsourcing firm with a global workforce, leveraging his expertise in remote business management. Additionally, he authored “Outsource Smart,” a bestselling book, and actively participates in public speaking and supporting other entrepreneurs. Recently, he has engaged in the digital assets and DeFi sectors as Executive Chairman of CurrentC Group and Michaels Press.

💬 Words of wisdom: “People think there’s kind of this home court advantage to being early to market. I’m here to tell you that the bad far outweighs the good of being first to market. You can always tell who the pioneers are because they’re the ones with the arrows on their backs.” – Daven Michaels

🔎 Where to find Daven Michaels: Instagram | YouTube | X | Facebook | LinkedIn

Key Takeaways with Daven Michaels

• Source of inspiration for Russel Brunson
• Crafting apparel for rock legends at 15
• Becoming the biggest electronic music event producer
• How it pays off to become a good public speaker
• The “marketing-to-many” epiphany
• It doesn’t always pay off to be the first to market
• Puerto Rico’s attractive benefits to entrepreneurs
• Surrounding yourself with A players
• The San Juan Social Club Cruise
• Maximizing real estate tax savings
• Commitment to community philanthropy

The Power of One-to-Many Marketing with Daven Michaels

Tax Strategy Masterclass

If you’re interested in learning more about Tax Strategy and how YOU can apply 28 of the best, most effective strategies right away, check out our BRAND NEW Tax Strategy Masterclass: www.lifestyleinvestor.com/tax

Strategy Session 

The Lifestyle Investor Insider

Daven Michaels Tweetables

“I think this is an important aspect to share with everyone. One of the biggest tipping points in my business was a long time ago, and it was when I went from marketing-to-one to marketing-to-many.” – @davenmichaels Click To Tweet “The bigger benefit in Puerto Rico that nobody talks about is the deal flow. It attracts ultra-high net worth people who have a lot going on. You have to be a pioneer to pick up and move to Puerto Rico.” – @davenmichaels Click To Tweet

Resources

• DavenMichaels.com
• Daven Michaels on Instagram | YouTube | X | Facebook | LinkedIn
• 123Employee
• San Juan Social Club
• The San Juan Social Club Cruise
• Russell Brunson
• Two Comma Club award
• Napster
• Tai Lopez
• Asim Hafeez
• John Lee Dumas
• Joel Comm
• Jon Najarian
• James Hickman
• Boys & Girls Clubs of America

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Read the Full Transcript with Daven Michaels

Justin Donald: What’s up, Daven? So good to have you here.

 

Daven Michaels: Good to see you, amigo. As you can see, it’s a little windy here.

 

Justin Donald: But it’s a gorgeous view. For those of you that are watching this and not listening, we’ve got a gorgeous Puerto Rican marina behind you, which is, I mean, basically a few steps from your back door.

 

Daven Michaels: That’s right. So, we’re coming to you today from Puerto Rico, and I figured I’d open here but it is raining or it’s going to rain and it’s windy, so I’m going to go to my office but I figured because we’re talking about Puerto Rico today and all kinds of cool stuff, I thought it’d be cool to start in Puerto Rico.

 

Justin Donald: Yeah. I think that’s awesome. Well, it’s gorgeous that you have that view and that you can just pop right out and there you are. And now, by the way, we’ve got quite the background with like some record. It looks like some cool records, maybe some record-breakers.

 

Daven Michaels: Yeah. In my former life, I produced music and television for almost 15 years, so I had a very good run there. You know, it’s funny. You never really know what impact you have on anybody. I’ll tell you guys something kind of cool. So, I’m sure your listeners and viewers know Russell Brunson and Russell and I, we go so far back like back to when we were both just hustling. And so, I have some friends here in Puerto Rico and they had joined Russell’s mastermind and they went to the mastermind. And the wife of this friend of mine, Russell was walking by and she said, “Russell,” and I told them to tell Russell I said hi. So, they go, “Russell, Daven Michaels says hi,” and Russell’s like walking by and he stops… Or sorry. He goes, “Daven said hi.” He stops. He turns around and said, “Daven Michaels?” And she said, “Yeah.” He said, “You know, let me tell you something kind of interesting. I’ve known Daven forever and he’s always had that kind of wall of gold and platinum records.” He goes, “That’s what inspired me to create the Comma Awards.” And I never even knew that.

 

Justin Donald: That’s cool.

 

Daven Michaels: It’s super cool. And I never even knew that. Russell never told me. So, you never know what impact you’re going to have.

 

Justin Donald: Well, I love your background and it is inspirational. It kind of whenever I hear the Comma Club, it always reminds me of the Silicon Valley episode, Tres Comas, which is quite hysterical.

 

Daven Michaels: I’m sure I remember that one.

 

Justin Donald: The character that plays the billionaire is just so funny and it’s so traumatic about when he’s a billionaire, when he loses that third comma and now life is over.

 

Daven Michaels: Oh, yes, I remember that.

 

Justin Donald: He’s only worth 950 million.

 

Daven Michaels: Yes, that’s a great episode. It’s a great episode. Yeah.

 

Justin Donald: Well, I’m excited to kind of chronicle your journey because you started very young as an entrepreneur. You’ve started, founded, and sold many businesses and you’ve also had a lot of like reiterations of yourself and how you’re showing up in the world. And so, I think it’d be fun to tell your story but also through the lens of like, “Hey, how can we help people who are maybe on the corporate side wanting to move to the entrepreneurship side or people that are entrepreneurs looking to scale?” Or what I think you’ve done beautifully is be an entrepreneur that has removed himself from the business but the business still scales at a high level.

 

Daven Michaels: Yeah. No, I appreciate that. Absolutely. So, I used to think I had this remarkable story until I started speaking all over the globe to entrepreneurs, just like everyone watching. And I find that all entrepreneurs have like an incredible story, right? It’s an entrepreneur story but mine is certainly an entrepreneur story. I started my business at 15. I was in the clothing business. I was designing clothing for music groups and none of my groups had anything going on. They were all broke. I didn’t know what the heck I was doing but an amazing thing happened. A short while after we opened for business, MTV came on the air, changed the face of music, changed my life. I was working with these bands that had nothing going on then about 90 days, most of my bands had record deals. Within a year, they’re selling millions of albums and we rode that wave and it was an incredible ride, especially at such a young age. And I remember we had our first big event, 600 people at that event. And then I travel with the groups.

 

Then we had 1,000, 2,500, 5,000, 10,000, 25,000, 50,000 people in stadiums. It was mind-boggling. And I was designing clothing for all the biggest bands of the 80s and 90s. That was my first company. Then I started a telecommunications company, had a really amazing exit at a very young age that changed my life. Sold to another company that was public but took back some stock in that deal and that was awesome.

 

Justin Donald: And by the way, actually, the structuring of that deal was unique because you got paid out some cash but then you got to roll forward some of it in stock. And then that company got bought by a public company, right?

 

Daven Michaels: How do you know this story?

 

Justin Donald: I don’t know if we’ve talked about it.

 

Daven Michaels: Okay. Great memory.

 

Justin Donald: I have a knack for remembering all kinds of interesting details about people.

 

Daven Michaels: Great memory because it’s so long ago. So, yes, that’s what happened. So, it’s a really cool story and I think there’s a lot to be gleaned from it so I’ll kind of share the short version. So, when I went to sell my company, I was in the paging business and you think pages, I mean, they’re gone, right? It’s an example of a technology that tech age, right? But back in the day, that was the cell phones of the time. Everybody had a pager and we had a paging network and cell phones were coming out. They were about a year out, maybe a year or two out. I knew it was the end of the paging business. Now, in our industry, the people in the industry thought that we would just sell more pagers because initially it was $0.50 a minute for your cell phone and so you would page your friends and then they call you back. But I knew eventually the bottom would fall off from the market and there’d be no pagers.

 

So, I knew I had to sell my company and I knew that I had about a year window and I hired a business broker and we didn’t have a lot of success but then eventually all of a sudden, one of my suitors just reached out to me and wanted to do the deal. And I thought it was fishy that for a year we chased them but all of a sudden now he wanted to do the deal and he had a public company. It was small by public standards but big by private standards. And all of a sudden, he was interested in buying. And so, we sat down to hammer out a deal at a Winchell’s Donut shop because he liked donuts. And I told what my number was. He said, “I’m not going to give you that kind of money.” And I said, “No.” I said, “I think you can.” I said, “Why don’t you give me some cash and a note and I’ll take some stock back in your company?” And he said, “Well, I could do that deal,” and because it was a paper deal for him. It was kind of buy now, pay later. And I said, “Great. Let’s do the deal.”

 

And then we hammered out the deal in 45 minutes on a Winchell’s napkin and the deal was done. And so, in the end, he gave me cash, notes, some stock, and he gave me two of his 42 classic cars. He gave me a 1958 Pink Cadillac and a 1965 Mustang convertible with Pony interior. And the deal was done. We went through the escrow on this add but it happened. And why did I do the deal? Well, for a couple of reasons. One is he was the last of the – there were only two public companies left that hadn’t consolidated. And I thought it was odd that he just called me out of the blue to do the deal. And, look, I was young. I could take chances and so I did. And half the company got bought out a year later and that moment in time changed my life. From there, I became the biggest electronic, well, I was a recording artist for a minute then I became the biggest electronic music event producer in the US.

 

And actually, sorry, that was first because I had a built-in fan base, I could throw my own concerts. So, then I had distribution. Then I had a record deal, put out a couple of albums, had success there, and then started writing and producing music. And I thought I was just going to do that for a bit and go back to being an artist but my partner, Layla, discovered Tupac and that plummeted me into the hiphop world. Yeah, it changed my life, changed the face of music again.

 

Justin Donald: That’s incredible.

 

Daven Michaels: Yeah. That was incredible and fortuitous and also planned. I aligned myself with Layla because I knew what she was capable of doing and with her connections and her mission. And so, that happened. Changed my life. I produced a lot of big bands, obviously. And then I got out of the business. And so, why I got out of the business? Well, I was doing great but Napster came out, 50 million people were downloading free music. And I saw the writing on the wall, especially when a Tupac record that we were working on came out on the streets before it came out with the record label. And that really threatened all of us. It was bad. So, I bounced. I didn’t know what to do but I knew how to produce. I was like, “Well, maybe I could produce television,” and this was the beginning of reality television. So, I hired a team. Unbeknownst to them, they taught me how to produce television, and I never really had any success in the television business. I didn’t have any hits because I was only there a few years.

 

And I started a sleepy little company in the outsourcing business called 123Employee and I would love to say it was a rapid-growth company, but it wasn’t. I spent 15 hard years building that company, but it was a blast. There’s a couple of things that I can do uniquely or well. One is I’m very good at leading people, and two, and I can’t take the credit for this. It was really my partner, Beejal, that got me into this but I learned that I could bring my personality into my business. And so, I was an entertainer. So, I started speaking and teaching and that took me to 51 countries all over the globe. And it was great and that allowed me to get that entertainment out of me. And so, I have recently had a merger and have moved on from 123, but they kept me on as CEO and so I still handle some day-to-day there. But today, I’m on the board of several companies. I’m really focused on the things I’m passionate about, a lot of cool philanthropic projects. And, yeah, that’s where I’m at today.

 

Justin Donald: Well, that’s incredible. And it’s interesting because you’ve had a few different seasons of life, a few different iterations as an entrepreneur, and I’m curious if you feel like any are more meaningful than the others or any were bigger leaps than the others. Like, sometimes you feel like the first time it’s like, “Whoa, this is incredible,” but also sometimes it’s the bigger dollar amount. Sometimes it’s the one that gives you a second bite at the apple. I’m curious kind of how you look at it.

 

Daven Michaels: Yeah, that’s an excellent question. So, had a couple of good exits in my lifetime. And those, of course, are game changers, right? Some people will work in a business forever making minuscule profits, and then they’ll have a payday, right, when you have an exit. And I was able to do well with the businesses I had big exits on. But of course, the exits were the leapfrogs, right? They kind of change everything. And so, yes, those had the biggest impact on me, probably personally and financially. The biggest tipping point in my business was when I became a New York Times best seller. That really was a leapfrog, if you will. And then I have to say, the two businesses that I learned the most from, and maybe it’s even three. So, one was entertainment. Tai Lopez said something to me several years ago. Love or hate Tai. A lot of people hate Tai. All that means is he’s very big. If you don’t have haters, nobody knows who you are. And so, Tai has got a lot of haters. It’s because he has a huge audience and Tai is actually a neighbor here in Puerto Rico.

 

I actually really like Tai. I think he’s one of the brightest people I’ve ever met. And Tai said something years ago. He said, “If you’re an educator, you’re already out of business. You don’t realize it. You’re already done. You have to entertain especially now.” And so, entertainment is something that is just in my blood. It came by osmosis from when I was in the music business. And so, that has certainly been beneficial for me in everything I do. And then you may spank me out there for this but I have to say probably the greatest thing I ever learned in business was the lessons I learned from MLM. And over the years I did a few MLMs and I did really, really well in them. Yeah, I wouldn’t say I’m an MLMer at all but I did have some very good experiences. And boy, I learned so much there, how to lead people, how to inspire people. A lot of people don’t have success initially, so you’ve got to keep them in there until they do have some success and that’s a big deal.

 

A lot of those leadership skills, all the personal development stuff I learned in the early days in network marketing. So, those were very valuable. And then also being a public speaker, only about 5% of the world feels comfortable speaking publicly but there are so many diamonds in speaking publicly. I mean, it builds a brand. It’s incredibly enjoyable. You get paid to travel if that’s your thing. It’s like it’s a blessing. I mean, I would do it for free. The fact I get paid for it is just remarkable. And I think this is an important aspect to share with everyone. So, one of the biggest tipping points in my business was a long time ago, and it was when I went from marketing-to-one to marketing-to-many. And, Justin, you can relate to this because you only market to many. Okay? In the early days, we always marketed one-to-one and, of course, info marketing is a much bigger audience today. Many more people do this. I was a pioneer in info marketing, but so many businesses market one-to-one. But we made a shift in our business many, many decades ago. And actually, let me back up for a second and tell you how this happened because there’s another insight within an insight here.

 

Justin Donald: I love it.

 

Daven Michaels: Okay, cool. So, when I started 123Employee, we were way too early to market. We were first to market. Literally, there were two companies out there. One died and it was us and that was it. And people think there’s kind of this home court advantage to being early to market. I’m here to tell you that the bad far outweighs the good of being first to market. You can always tell who the pioneers are because they’re the ones with the arrows on their backs. And that was certainly us. We were way too early. We initially were in the business. We did virtual assistant services for entrepreneurs. We later grew into larger enterprise clients. And so, all entrepreneurs needed us. They absolutely needed us. They were all buried. They needed our help, but none of them wanted us because they didn’t know we existed. And everyone’s always trying to sell into a need. Forget about a need. I mean, I need health insurance, but I’m not excited about it but I want the new Tesla truck and I’ll do anything to get that damn thing, right? So, you want to sell into one, but nobody wants us because they didn’t know we existed.

 

Justin Donald: Got to do a marketing campaign, right? You have to educate the market to let them know that they want you.

 

Daven Michaels: Exactly. And so, that’s what we did. Early on, we adopted an educational model. I started writing books. Tenth book is out now. We started creating info products. I started doing webinars. I started speaking on stages all over the globe and we started doing our events globally, Australia, the US, Europe, Asia, and New Zealand and we began educating our prospects, turning them into clients, which of course you can relate to. And that’s what we do today. And that was by far the biggest tipping point in our business for sure. Because if you can go from marketing-to-one to marketing-to-many, it’s monstrous for your business.

 

Justin Donald: Oh, no doubt. And you made a comment that maybe one of the biggest successes or one of the most exciting personal achievements you’ve had is becoming a bestselling author. And I remember early on, as I was writing my book, I had a really good friend say to me, “Hey, Justin, there’s life,” and he was a bestselling author. He goes, “There is life before becoming a bestseller and there’s life after becoming a bestseller,” and it is nothing alike. And I kind of chuckled at that. I’m like, “Okay. Whatever. We’ll see.” That is one of the truest statements and pieces of information, education that I have ever gotten because it is a whole different world out there. And the opportunities that exist because of assumed authority or presumed authority just it’s endless.

 

Daven Michaels: Absolutely. Absolutely. Yep. A lot of gold there.

 

Justin Donald: I mean, I even tell people you can write a book. The book doesn’t even have to be good.

 

Daven Michaels: Most people won’t make it until the end of your book and a lot more even never opened it, right? But they’ll call you. They’ll go to your website. They’ll buy your stuff.

 

Justin Donald: Yeah. There’s no doubt. Now, one of the cool things about you, though, is you said, “Hey, I’m going to be an early adopter with Puerto Rico.” And I’d love to talk about this because having some exits while in Puerto Rico has been massively beneficial for you from a tax savings standpoint. The amount of money you’ve been able to save legally is astronomical compared to if you had still lived in the States or in the continental U.S.

 

Daven Michaels: Yeah. I was excited to kind of share this with your audience because you’re all about having passive investments. Being the lifestyle investor, right, having passive investments that support your lifestyle. And if you’re not quite at that point, you’ve got some money you’re investing but it’s not enough to get you free, if you will. You know, one option is you move to a place like Puerto Rico, which is the last tax haven for U.S. citizens, and now your tax drops dramatically, and then it could work. Like, I’ll give you an example. I have some dear friends that I moved out of here. I moved a lot of people out here. I have dear friends I moved out here and they make a lot of money but they didn’t feel like it was enough to retire. But they moved here and they’re like, “Okay. Now, we can retire.” I mean, it’s so cool. So, let’s unpack that. So, just to be clear, actually you can’t come over here and just take an exit. It’s based on what the value of your business was when you left and when you got here. And there’s a formula.

 

Justin Donald: You need to be there three years.

 

Daven Michaels: Well, you have to be more than three years. So, for example, if you built a business for ten years and you want to take advantage of the ten years of we know when you sell it, you’d have to be here for ten years but you could write off a percentage. But the fact that you just save money on your taxes is huge and there are even more benefits than that. So, let’s unpack it and I’ll explain. So, Puerto Rico is in the US, for those of you that don’t know. Most people do. A lot of people don’t. First time I came here 25 years ago, I didn’t know. We are a territory and we are not governed by the IRS. We do report to the IRS. They have an office here as well as we have the FBI here too. So, there’s oversight. But our tax authority is called Hacienda, and that’s who taxes us. And so, the US government, and I apologize if I get a little of this wrong, I’m not an attorney or a politician, but the US government allows these territories to offer certain incentives, economic incentives to attract people to their islands.

 

And so, there have been economic incentives here in Puerto Rico, it depends on who you ask, I will say since the 40s, Operation Bootstrap, but honestly, it goes back to the Spanish. When Spain was here, they offered economic incentives to attract people to Puerto Rico. But anyways, if you are a US citizen and you jump to the legal hoops, you make Puerto Rico your home, you have to live here, you have to be here at least half the year, there’s some exceptions to that, by the way, which I can share. But if you make Puerto Rico your home, you’re a bona fide resident, then your federal income tax is 4%. Okay.

 

Justin Donald: That’s massive.

 

Daven Michaels: I’m not talking about state taxes. Your federal income tax. So, you might be in a 43% bracket. Now, it’s ten times less 4%. So, that’s number one. Your personal capital gains are 0%. Okay. So, if you’re a lifestyle investor and you’re living off of your investments, not paying tax, you’re getting a 20% bump right away. If you’re involved in something that has short-term gains like trading, then you’re getting a 40% bump right away. That is huge. And then lastly, you’re not taxed on dividends. So, you might be here and you might pay yourself, let’s say, a few hundred thousand dollars paycheck, you’re going to pay regular taxes on that just like you would in the States. But then if you had a phenomenal year and you’ve got a million in profits, you could pay yourself out as a dividend, that would be tax-free. So, it’s pretty cool.

 

Justin Donald: Incredible.

 

Daven Michaels: It’s incredible. Now, there are some even bigger benefits, in my opinion. First of all, I think the biggest benefit that nobody talks about is the deal flow because now you’re hanging out with first of all, and by the way, there’s not a lot of us here. I want to say maybe 7,000 on the island. That’s it. Out of a population of a few million, just shy of a few million.

 

Justin Donald: We have one of our mastermind members and dear friend of mine, Asim Hafeez, that lives out there and is going through the program, has been there three years.

 

Daven Michaels: I think I know him. I think he’s in my San Juan Social Club.

 

Justin Donald: I think so because I connected you guys early on.

 

Daven Michaels: Yes, yes, yes. Yeah. And cool guy. Cool guy.

 

Justin Donald: Yeah. He’s awesome. His company has taken off. I mean, he’s doing some cool stuff.

 

Daven Michaels: What does he do?

 

Justin Donald: He’s in solar. Well, he’s in a lot of different things, but his solar company has really taken off.

 

Daven Michaels: I have to talk to him about that.

 

Justin Donald: I’ll have to get him on the podcast and have him share his story.

 

Daven Michaels: That’s awesome.

 

Justin Donald: Yeah. He’s doing great.

 

Daven Michaels: That’s cool. And the tax I’m sure helps.

 

Justin Donald: That’s right.

 

Daven Michaels: So, the even bigger benefit though that nobody really talks about is the deal flow because it attracts very ultra-high net worth people who have a lot going on, really out-of-the-box thinkers. Also, they’re pioneers. You have to be a pioneer to pick up and just move to Puerto Rico, right? And so, as a result, it’s incredible. So, when I moved here, I knew a couple of billionaires, barely. If you ask them my name, they might have remembered it. But now you have got 20 on speed dial and we go jet skiing together all the time. And from that, I mean, the deals I do now are much, much bigger deals, I think much, much bigger. It’s just a whole different ball game. And I love it. So, that’s a huge benefit.

 

Justin Donald: That’s cool. By the way, just to pause you real quick, there is no better investment than doing what it takes, finding what you need to do to get around people playing the game of business in life and wealth creation at a higher level than you so that you can learn vicariously through them so your mindset can be impacted by them. Even passively, it will be impacted just hanging around, hearing the conversations. I mean, to me, there’s no single thing that someone can do that is better than investing in their peer group, investing in the intentionality with who they spend time with.

 

Daven Michaels: I would totally agree. I think completely different than I did six years ago. You know, I know so much more. It’s a whole completely different mind shift.

 

Justin Donald: There’s a compounding effect on it. So, it’s not like you just hang out in this one conversation or this one year you get what you get. I mean, over time, that compounding and the direction that you take your life, the way that you see things, the people you have access to, to help you vet or to partner with or to, I guess, glean their expertise. Like, it up levels you in so many ways but the way that it exponentially compounds over time I think most people underestimate.

 

Daven Michaels: Yeah, I totally agree 100% and that’s certainly been my experience. So, some of the other benefits of being here, it’s beautiful. I mean, Puerto Rico is gorgeous. It’s a tropical island but if you haven’t been here before, don’t think that it’s like, “Hey, mom, welcome to Labadi.” It’s not like that. I mean, you can find your STK Steakhouse. All your favorite chains are here. Morton’s is packed. I mean, you’re in the US, kind of Miami-ish but at the same time, you’re also on a tropical island. It’s beautiful. The weather here is great all year long. Yes, we do have a hurricane season, of course. Yes, a once-in-a-hundred-year hurricane decimated Puerto Rico about five or six years ago but that’s not the norm. And the weather is amazing. So, I’d always thought that we used to live in California where we’re paying an egregious amount of tax. And I thought one day we live half the year in California and half the year in Australia, and I’d have summer all year long because I hate cold weather, but I ended up getting it here.

 

We have great weather all year long. It’s always warm here. If anything, it gets boring because it’s just one type of weather like perfect. I mean, it can get hot and humid in the summer but it’s perfect. The food is great. The people are lovely, some of the nicest people I’ve ever met in my life. They are just the type of people that would give you the shirt off their back. It’s really neat. It’s really neat. And so, yes, there are so many benefits to being here in Puerto Rico. I totally dig it and I absolutely recommend it.

 

Justin Donald: I love it. Well, there’s so much I’ll just say at a minimum, it’s worth it to go and vacation and do extended stay and check it out and spend some time. I’ve had the privilege of spending some good time there. And you know, we share several mutual friends in common. Last time I was there, this is years ago now, but I went and hung out with John Lee Dumas at his place, who I know you know very well.

 

Daven Michaels: Just down the street from me.

 

Justin Donald: That’s right. That’s right. And so, we had an incredible time just all over the island. We went to El Yunque. I mean, we just checked everything out and it was a blast and it’s such a cool place. So, at a minimum, go vacation. Go check it out. If you’ve never been, go. If you haven’t been in a while, it is a different place today for sure.

 

Daven Michaels: Yeah, for sure. It’s really, I mean, you can see how much change has happened over the last six years. And a lot of that has to do with the economic incentives. It’s attracting a lot of brain trust and money to the island to affect change. And then on top of that, compound that with a ton of bright and successful Puerto Ricans as well and it’s just a recipe for greatness. I believe that this is actually going to be a renaissance for Puerto Rico. This is very interesting. So, when Puerto Rico created that last iteration, let’s call it, of these tax incentives, this was back in the 40s, Operation Bootstrap, Luis Muñoz Marín, who was the first Puerto Rican governor of Puerto Rico. And they created these economic incentives in the 50s and in the 60s. People came from all over the world to see what Puerto Rico is doing, and they copied it. Leaders from Singapore, Ireland, they went back to their respective countries. And look what they created in Singapore, like unbelievable.

 

Justin Donald: They went from third-world to first-world in a very short period of time.

 

Daven Michaels: Thirty years became the crown jewel of Asia. Now, that didn’t happen for us. Why didn’t it? Like, we were the creator. Remember, I always say you can always tell the pioneers, the ones with arrows on their backs. But why didn’t that happen for us? A lot of great things did happen for us. Initially, about 140,000 jobs were created from those tax incentives the first time around or one of the times around, let’s call it. It attracted drug manufacturing to the island and that was huge.

 

Justin Donald: This is legal drug manufacturing for the record because the water is so pure and clean. I just want to clarify that.

 

Daven Michaels: Yeah. So, anyways, it was wonderful for Puerto Rico but then that went away and Puerto Rico went into a 20-year landslide, which is they’re now kind of coming out of. Why? Well, a lot of this was governmental mistakes that were made on a governmental level but I believe now could be a perfect storm in a renaissance for Puerto Rico. Why? They have new programs in place, great tax incentives. People are taking advantage of them. Puerto Rico is flush with billions of dollars from FEMA relief. And so, that’s coming through. Puerto Rico went bankrupt, first really territory of state to go bankrupt, but that has now been settled. And so, the day will come when Puerto Rico will have a good credit rating again. So, there are just so many great things going on. In fact, they’re looking at possibly launching rockets out of Vega, which would be huge. That would be massive for Puerto Rico. So, there are so many great things going on here. I think a lot of people, when they think of Puerto Rico, “Oh, they don’t have power, right?” No. We have power. Okay.

 

There are so many great things going on here. And I just love being an advocate for Puerto Rico. And also, I want to share something, Justin, because you mentioned JLD. So, John Lee Dumas is a dear friend, a neighbor, and one of the reasons I actually moved to Puerto Rico. And so, I’ll explain how that segues in a second. So, as you know, Justin, I created a group here so I love to create communities. I have millions of followers globally. In my community, I have millions of followers globally but here in Puerto Rico, I also started a community. About six years ago when I first got here, we started doing monthly events across the island. Just doing it as a public service. It’s nothing I charge for, and I created them because I wanted to bring Puerto Ricans together with New Ricans like me for compensation and dialog. And then from there, anything’s possible. And so, fast forward over five years later, we have over a thousand people in the San Juan Social Club, and we do events at curated locations once a month across the island.

 

And a few months ago, as you know, I announced our first-ever San Juan Social Club Cruise and that is actually leaving out of San Juan on Virgin. It’s for people that live in Puerto Rico and people that are interested in Puerto Rico that want to network, make friends, and learn about all of Puerto Rico’s amazing resources and opportunities like the tax incentives. And there’s more but that’s one. By the way, just so you all know, there are 70 of these acts that are tax incentive. As a matter of fact, I want to talk about a few of those in a second.

 

Justin Donald: Wow. 70. That’s incredible.

 

Daven Michaels: And they’re all neat. So, I’ll explain a few in a second. But we announced the San Juan Social Club Cruise. We’ve already had 250 people book it, which is exciting. JLD is speaking, as are some other world-class speakers. We have a couple of former Secretaries of Economic Development in Puerto Rico. They’re speaking. We have some big celebrities. Joel Comm, New York Times best-seller, he’s speaking, Jon Najarian from CNBC, etcetera. Can I give out the website?

 

Justin Donald: Sure. Go for it.

 

Daven Michaels: Okay, cool. And we’ll put it in the show notes, too. But it’s SanJuanSocialCruise.com. You get information on the cruise. Next one is March 9th to 16th but it’s annual so check us out any time. I’d love for you to cruise with us. We’re on Virgin, hottest cruise line on the seas, and it’s just going to be I’m so excited about. So, let’s talk about…

 

Justin Donald: It sounds awesome.

 

Daven Michaels: It is. As a matter of fact, Justin, you should come and we should put you on stage.

 

Justin Donald: Well, you know what? We can talk about that for a future year for sure. I know this year will be tough for me, but future years.

 

Daven Michaels: Yes, I think I asked you ready already. Yes.

 

Justin Donald: Most certainly. I love the idea of this.

 

Daven Michaels: That’s awesome. Now, let’s share a few more of the acts so that people can hear.

 

Justin Donald: Yeah, let’s do.

 

Daven Michaels: Okay. So, just to give an example. First of all, most of you out there, if you’re in the US, you probably know about OZs or opportunity zones. And opportunity zones are sort of underserved areas, if you will, like depressed areas where you can go in and buy a property and renovate it. And if you hang on to it for X amount of years, I think it’s ten years to take full advantage, you can defer taxes on that, which is it’s a great program. It’s not perfect because you have to go into some I think what can be some dodgy areas but it’s great. I mean, it’s built to bring up those areas. Well, let me tell you something crazy, 97% of Puerto Rico is an opportunity zone. And that’s not because 97% of Puerto Rico looks like sh*t. It doesn’t. It’s beautiful. It’s great and beautiful areas. Believe it or not, the area that I live in, which is quite upscale, is also an opportunity zone, which is insane. So, yeah, it’s incredible.

 

Now, if you live here, you don’t care because you’re not paying taxes anyways, right, if you are somebody that has relocated to Puerto Rico. But if you’re raising money for projects, you do care, right? Because if you bring money from the US and what have you, then they can defer their taxes or alleviate their taxes, which is great. So, that’s one. My favorite is the hospitality incentive. So, if you come here and you buy a property, it has to have I believe it’s either seven or eight bedrooms and baths. Okay. Now you can buy it. It could have six bedrooms or baths and you could add that extra one or two. But if it has, it’s either seven or eight, then and let’s just say you pay $1 million to keep the numbers around, you pay $1 million for it, and you put a million into rental, which you probably wouldn’t. I mean, you probably put in like 400K or 400 probably. But let’s say you buy it for a million, put a million around, you receive back a 40% tax credit.

 

So, if you buy a place for a million, put in a million, you will receive back 800,000 in tax credit. Now, you may say, “Well, I don’t need that tax credit or whatever.” You could sell the tax credit for about $0.95 on the dollar. So, essentially you invest $2 million and you’re going to get almost $1 million back. Oh, I mean, that’s the craziest thing ever. Yeah. It’s over a four-year period but it’s huge. Absolutely huge. And there’s always kind of these little caveats to each act as well that’s cool too. Like, for example, let’s hear a little title on cash doing this deal. You can take a lower back end but get 10% upfront like as soon as you fund. So, let’s say you finance and let’s say you had to put a couple hundred thousand down on this $2 million full construction package but you say, “I’ll take my economic incentive 10% upfront and I’ll take 10% less in the back,” then you will then be able to pay back what you put into the deal, and then at that point you’d be $0 in of your own money. Like, that’s insane. That’s really insane. Okay, here’s one more.

 

Justin Donald: I love it.

 

Daven Michaels: We have a 40% tax credit for entertainment, for shooting. So, my cousin, Danny, is a showrunner. She’s a producer and she came here and shot her pilot for Amazon. We got to hang out because she got 40% back. They shot it here. Her pilot took place in Cuba. So, they just cheated it so that this looked like Cuba. Super awesome. I’ll give you one more that’s really cool. So, Puerto Rico is, of course, a big proponent of sustainable energy. So, if your car has a plug, so there’s a 30% import tax if you want to bring your car over here. If your car has a plug, then you pay zero import tax. So, I brought over, I have a supercar. It only gets 19 miles on electric but it’s got a plug. So, I’ve got to bring it over here for it’s a plug-in hybrid. So, I got to bring it over here tax-free, which is so cool. I think I spent $1,500 to bring it over here. It was ridiculous.

 

And that’s just some. There are so many of these tax incentives. And that’s because that’s what these territories get to offer. They need something to attract people to them, right? And so, I just think it’s so cool. And I’m fascinated with Puerto Rican history and the history of the economic incentives. There’s a lot to be gleaned from it.

 

Justin Donald: I love it. That’s so cool. Well, I’m a huge fan and I feel like you’ve shared so much insight with us on your journey and on Puerto Rico. You know, I did an earlier podcast episode years ago with James Hickman, who’s a good friend that lives out there, at least part of the year.

 

Daven Michaels: Oh, James Hickman? Yeah. He lives here and he lives in Whistler. Yeah. And this is really cool, too, by the way, is if you come out here and you say, “I’m not going to contribute at all. I was going to come here, do my time, and go home,” you’re still going to contribute because you’re going to hire people. You know, you’re going to hire your cooks, your cleaning people, your maid, or this or that. You’re going to patronize local restaurants and so on and so forth. So, at the bare minimum, you will make an impact by coming over here. But there’s a lot of people that come over here and they say, “Hey, I want to make an impact where I live.” Like, for me, my goal is to leave this island a better place than when I arrived. And so, that’s why I created the San Juan Social Club. That’s why we have a philanthropic arm as well. Last year, we gave 1,500 toys to the orphans. We’re about to do that again this year. We helped Boys & Girls Club raise $300,000 in a day, which was a record for them. We’re doing all these cool things.

 

And James is another example. He came here and he started Roundtable Media. Now, James is the former president of Sports Illustrated online and a very smart individual, super smart, great guy. And he came over here to start Roundtable Media, which is almost a kind of it’s like a news version of Sports Illustrated online, but it emanates from here in Puerto Rico. So, it’s just an example of the movers and shakers that are coming to the island and effecting change.

 

Justin Donald: Yeah. It’s such a cool spot. Well, I appreciate your time. Where can people learn more about you if they want to inquire? Obviously, you’ve already listed the website for the cruise, but if people are interested more in connecting with you.

 

Daven Michaels: Sure. DavenMichaels.com. That’s D-A-V-E-N M-I-C-H-A-E-L-S dot com and I’m Daven Michaels on everything so just @DavenMichaels in any social media and you’ll find me except TikTok where I’m DavenMichaels1. Somebody scooted me on my name, otherwise, just Daven Michaels.

 

Justin Donald: I love it. Well, so good spending time with you. I’m going to wrap up our episode the way I wrap up every episode, which is with a question that I want to ask our audience. So, for those of you listening, for those of you watching, my question for you again this week is what is one step that you can take today towards financial freedom and towards the life that you truly desire, one that’s on your terms so not by default, like most people live and like I did in the past, but by design, with intentionality, being proactive? What does that look like and what one tangible thing can you take from Daven today? Thanks. And we’ll catch you next week.