From Entrepreneur to Investor – How to Build & Manage Wealth After an Exit with Dr. Tony Jacob – EP 230

Justin Donald: What’s up, Tony? Good to have you back on the show.

Dr. Tony Jacob: I can’t believe it. It’s been three years. Glad to be back.

Justin Donald: I can’t believe it’s been three years, either. I mean, it doesn’t feel that long since you and I get a chance to hang out a lot more than that, generally, at least monthly. But wow, a lot has changed and a lot has happened in the last three years for both of us, but we get to tell some of your story today.

Dr. Tony Jacob: Yeah, it’s fun. So glad to be on here again. I have to say, after I got off that last podcast, you have such amazing listeners and fans that have reached out. And I was happy to go ahead and help a couple of them that really wanted some direction on a few things. So, that was fantastic.

Justin Donald: That’s awesome. Well, thank you for just being there for people that are in our audience and people that want to reach out for help and support. I think that’s awesome of you. It doesn’t surprise me. That’s how you show up and that’s how you’ve always shown up for me. In fact, you and I were talking off camera here about a situation I’m dealing with, and you’re like, here, I’ve got a few things that can help. I’ve got a contact you need. You’re just always so good about showing up for people. And I feel it as a friend, but it’s cool when I see it to complete strangers.

Dr. Tony Jacob: You’re very kind. Thanks for mentioning. And of course, happy to be there for you, so...

Justin Donald: Well, let’s talk about what’s happened in the last three years, and just for people to catch up, certainly go back and watch Tony’s episode, the original one that we recorded, so you can hear some of that story. But three years ago, you had the largest private optometry roll-up in Texas history, right?

Dr. Tony Jacob: Yes.

Justin Donald: And so, talk us through that a little bit. How many locations did you have? And how long was that process? And was it a complicated process? I’d love to hear all the ins and the outs.

Dr. Tony Jacob: Yeah, that is right when I had my exit and I think we had just come off of that high and it was great. Yeah, so three years ago, we had a fantastic investment banker that had looked at us and said, “Look, you’ve got a fantastic practice. Perhaps, it’s time for you to consider some other ways for this organization to grow.” It might have been beyond my skill set. And I think when he had approached me, it was the right thing to do.

So, we were operating in several counties, over a dozen counties in Texas. Very healthy locations, very healthy practices. We had a great team, built it from scratch, just thinking about the trajectory, but we really started scaling in 2017. 2021 is probably the year that I took my foot off the gas and transitioned to having a full leadership team that worked its decisions independently.

And coming right out of COVID, that’s exactly what I needed is more brains to help make executive decisions. And so, during that process in 2021, not only did we grow and become a formidable company in the state, but we were starting to get a lot of attention from both private equity strategics and things like that. So, we were very fortunate that it just fell into our lap and the timing couldn’t have been better because we all know what happened in 2022 with the market really shifting and seeing multiples compress. And so, I think that the timing was very fortunate, but it was a great journey. And to go from doctor to CEO and then chairman and having an exit, it was just a rocket ship the entire time.

Justin Donald: Well, no kidding. You had tons of experience as an entrepreneur and you transitioned into this new world of investing. Not that you hadn’t invested along the way. I know you have done some investments, but now, I mean, professionally, you are investing, you’re doing some consulting. But I mean, you invest, right? You actually have assets now that you are responsible for in a much different way than you had when it was all tied up in your business. And so, I’d love to talk about that transition from, hey, I was an entrepreneur. That skill set served me well there. It actually didn’t serve me very well as an investor. I had to learn a new skill set and what it was like kind of building your family office.

Dr. Tony Jacob: Yeah. It’s an interesting evolution, right? Because you go from being super relevant in your company. And for me, in particular, the emails just shut off the next day. I got to just kind of ride off into the sunset, which was great. And I think there’s two or three months where you really revel in, “Wow, I’ve got a lot of free time. What am I going to do with myself?” And then post-exit, there’s a lot of contemplation that occurs and you start thinking about, well, what am I going to do? And one of those things that you’re going to do is be a steward of these resources, hopefully.

Justin Donald: That’s right.

Dr. Tony Jacob: And it’s been a fun evolution. Justin, one of those things you do is you start learning new things and I love to learn. And I didn’t really know how to invest. So, candidly, there’s a whole bunch of groups that you can join and yours being one of them. And I kind of had to learn trial by fire, make couple of mistakes along the way. Hopefully, you have more winners and losers and become basically a capital allocator.

So, for me, what I did personally was take a year off and really not invest too heavily. And I think that time is what you need right out of the exit is figure out what that looks like for you, have a lot of conversations. And that was very unique because selling a company sounds great, but after you come out of it, it can be very disorienting, especially because your day to day was so vastly different. You might be home more with your family. Your friend group has changed. Who you’re seeing at work is totally different and different phone calls now. So, that was all something that I had to really live through.

Justin Donald: Well, I love that you took a year off and I love that you didn’t rush into any investments. The number one thing I see when people join Lifestyle Investor, our mastermind, is just some incredible people, but they all want to rush into deals so fast when they join. And we got to say, “Hey, slow down. The goal here is not to deploy your money as fast as possible. The goal here is to make wise investment decisions.” And those decisions have to align with your investment criteria and with your goals. And your goals are different than the other person’s goals and the next person’s goals. And so, we actually need to get a lot of clarity around it, but let’s not rush into anything, except for the education. We can rush into education, but let’s not rush into investing. So, I love that you did that. I think that’s super smart.

Let me break this down. So, you are running a business. Ton of people that watch and listen to the show are entrepreneurs or people that are looking to transition into entrepreneurship. And as a business owner, you have this asset that is being built that eventually, probably becomes a lopsided component of your asset allocation, which is very risky if things don’t go well in the business, which happens to a lot of people. They lose the majority, if not all their wealth, because they keep reinvesting almost all their profits back into their business. So, you, like many of our mastermind members, you had an exit, had a liquidity event. You had a bunch of cash.

Well, now this is a different season of life. And people that are in this situation, they either have just tons of money even while they have a business or they have a big exit, so they’re sitting on a lot of cash. They build a family office or they join someone else’s family office. So, you either build a single family office which supports just your family. It’s the people that kind of manage your assets and help you vet deals and manage the finances and do the taxes and do all the things. Or you can join a multifamily office, which may have 50 to a couple hundred families, or you can just pool a few friends together and you can all split the costs, right? So, maybe it’s like four or five or six friends and you all hire a team that manages it.

So, I wanted everyone to understand what a family office is. Anytime someone hears, it’s becoming a little bit more of like a catch phrase today. I think people use it and abuse it. But in your situation, you have a real family office. You had a stockpile of cash and you don’t want to deploy it immediately. You want to educate. You want to get smart people around you. So, what are some of your family office insights?

Dr. Tony Jacob: Yeah. I think that’s a great question. But you mentioned something that your listeners sometimes may fall prey to. And I do think that having money, burning a hole in your pocket is a dangerous thing. There is nothing wrong with waiting, maybe a year or even two years and really understanding what you’re getting yourself into. Size your bets correct, that’s part of what this is, right?

So, as I was building into this family office, which was a term I was unfamiliar with in 2021, needless to say, really, was 23 when I realized that’s what I was doing. But yeah, so let’s kind of talk about that evolution, right? And by the way, you mentioned different ways of setting it up. There’s also another one. There’s another option which is I could have a multifamily office or be part of that group or start a single family office, whatever it may be. But you can decide what part of your portfolio is managed by others, by yourself, or is even part of this group.

Justin Donald: That’s right. Good point.

Dr. Tony Jacob: So, I mean, it’s not one size fits all. You can definitely hybridize it to whichever way you want. And that’s what I basically did. So, you sit there and you’re like, “Do I want to go put all of this cash in treasuries and do something with it?” Well, at the time, in 2022, if you were buying bonds versus just sticking it in treasuries, that may not have worked out, depending on which side of the fence you were on. So, you start learning about the most basic instrument, which is cash, right?

And then so you’ve got to start paying attention to a little bit more macro. And for some people, there’s nothing wrong with this. And it’s just too much work or that’s not worth their time, and you can go higher outside for that. There’s a bunch of advisors that I’d recommend that can do that to a great degree. But if you are naturally inquisitive and you have the time, it’s probably the first place I’d start is how do I manage cash, right?

So, once you’re past that little step, the next step goes into what are all the different buckets that you can allocate into. And everyone’s got different versions of this, but there’s public markets and private markets, and private markets is so much– it’s very deep. And Justin, this is interesting because I didn’t know any of this really. It was just cash in my business. That was it. Maybe some real estate.

Justin Donald: I hope everyone listening that we have so many people that have been introduced to alternative investments that tune in here. But what you’re saying is what most entrepreneurs recognize, there’s the business, there’s whatever, cash and liquidity that you have, and then maybe a couple other things you’ve looked at over the years. In your case, maybe it was real estate, right? And it was more kind of just like, oh, let me just put a little there. And that’s really how most people do it.

But the wealthiest people actually don’t do it that way. The wealthiest people have an asset allocation, as I talk about all the time, with a different percentage, that’s their target percentage in each of these different asset classes, which is now what you need to do and your team needs to do, right? Because you’re not trying to make that big take. You already have. Now, you’re trying to preserve it and grow it. And that’s a different game. The diversification game is a different game than the accumulation game. And most entrepreneurs and most wealthy people, they make their wealth via concentration in one area, one thing, primarily, business, but they preserve and grow it for legacy purposes, for impact, for just many of the other things, many of the other reasons. They do it through diversification.

Dr. Tony Jacob: Well, you bring up a great point, and that is true. Entrepreneurs are great at solving their problems, building this fantastic business. You have this amazing wealth creation story and event, and then all of a sudden, you’re thrown into, well, yeah, should I diversify, right? I’m so good at concentrating my bets. Well, what does diversification in terms of diversification even look like? What does preservation look like? So, that was a completely different mindset for me to have as well.

And so, in that education process, I think the next step would be for anyone looking at this post-exit is, well, what are the different asset classes and really understanding them? So, you’ve got venture, which is basically like starting a seed in a company and watching it grow. It can be very risky, but also high reward. Then you’ve got private equity where you might be buying a small to middle sized business, middle market type deals, or even larger if it’s a larger fund and you’re changing company strategy or value adding or creating some type of value in there, that then it creates and then will eventually sell.

Then you’ve got hedge funds. You’ve got private credit deals that you could do. You’ve got real estate still and LP or GP forms. You’ve got all these different buckets that perhaps you want to understand. And I’ll even throw another one, which has been really fascinating for me is oil and gas, which is a type of real estate, if you think about it. It’s a form of real estate.

And so, one of those things that you do is maybe you decide, look, I am going to be another entrepreneur. I’m going to start another company. Great. I’m not sure if everyone’s wired or built that way. And for the folks that do it, I have tremendous respect, either way, whichever decision you choose. But once you’re in that preservation mode, that question of diversification was a really difficult one for me. I didn’t really know which way to diversify. And you and I both know this, we’ve invested in some of the same things together. It’s importantly or whatever and learned some interesting things and made some mistakes along the way.

Justin Donald: That’s right. Every investor at some point is going to make mistakes and they’re going to learn the hard way. And hopefully, it’s hard enough and small enough that it teaches the lesson that you don’t repeat.

Dr. Tony Jacob: You said it right. That’s sage advice. And you’re going to make those mistakes. And hopefully, overall, your portfolio has done better and you’re wiser for it, right? But along that position sizing, the initial thing that I did, which is I’m sure what everyone does, I’m just here to say that I’ve done it too, is spray and pray.

Justin Donald: Explain that, please. Help people understand this. This is the worst, all newbies are like this, all new investors do this.

Dr. Tony Jacob: So, I took a a chunk of money. Wasn’t super big, but small enough where everything sounded great. Well, that’s more of a symptom of I don’t know how to diligence deals properly, but they sound great because you’ve got a great sponsor or they’re potentially advertising great returns or your friends are doing it. These are all things to really stop you dead in your tracks and think about. Okay?

So, let’s just say you start off year one and you invest in 200 deals or 100 deals and various check sizes, right? It doesn’t really matter. That’s spray and pray because there’s so much deal flow coming at you potentially that you just feel like you’re going to miss out and you have to be involved. I would argue that’s probably, it’s definitely a rookie thing to do. I can’t necessarily say it’s a mistake because you’ll learn what you’ll learn something along the way, right? So, maybe this is your price of education and that’s the cost to you.

But let me tell you, managing something like that is also quite a headache as well. Between K-1s and reporting and whatnot. I’ve shifted more and this just came with time over the last three years to really buying into either the founder or the sponsor, diligencing the deal of taking my time, more deals will come. If you miss it, That’s okay. Really exercising caution there and observing that number one rule of capital, which is don’t lose money. So, I would suggest that those are probably the things you want to do and take more concentrated bets, position size that well. That’s probably how I would start first.

Justin Donald: Yeah, I love all that. And you’ve made mention of this twice now, and I just want to point it out because it’s powerful. Everyone’s going to lose money. Like, that is going to happen. But if the majority of your deals go well, then your portfolio grows. So, even though you may have done some poor deals, your portfolio still grows as a whole. And that’s the goal. It’s like you’re going to win some, you’re going to lose some. You want to win more than you lose. And as long as that’s happening, you’re going to keep getting better, as long as you’re willing to be a student of it, willing to surround yourself with other smart people. This is why I always talk about the importance of peer group, mentorship, experts, and experience and education, right?

Dr. Tony Jacob: Yeah, definitely.

Justin Donald: What most people...

Dr. Tony Jacob: Investing is slow, too, right?

Justin Donald: Totally.

Dr. Tony Jacob: You won’t see results super quickly. This isn’t– I mean, you might get some deals that are private credit that pay you differently or more of like an annuity type deal where you can see that and especially being an entrepreneur, where my ADD, for instance, would make me want to hit the smash button or it’s just like money burning a hole in your pocket. That behavior is not always the best thing in investing, right? So, you learn to become patient. And I think that’s part of the evolution from entrepreneur to post-exit is figuring that out for yourself. And you learn a lot about yourself that way too, and just because you’re a great entrepreneur doesn’t necessarily make you a great investor.

Justin Donald: That’s right. Well, it’s interesting because I find that most entrepreneurs don’t spend enough time with other entrepreneurs playing the game of business and life at a higher level. But the ones that do, they join these masterminds in these groups. I was at just MMT last week or Mastermind Talks, which is incredible. I mean, it’s 100% entrepreneurs. Really, really cool group.

I was at TIGER 21 with you a couple weeks before that. I was at Strategic Coach’s Free Zone Frontier. That’s their highest level in their ecosystem, a 50k group. I was at that one two weeks ago. So, I’ve been at three events in the last four weeks, and I actually just got back from just this morning, the NFL and Pro Athlete PAC event. So, I got a chance to hang out with 250 to 300 pro athletes all active today and kind of teach a lot of what I know and love about investing and some of the pitfalls and some of the things we’re going to discuss here today.

But I just think, you at least have these entrepreneurs that are smart enough to recognize I need to be around some other people that are bigger fish in the ponds. But rarely, do you find people who say, “Hey, I should actually be in masterminds and peer groups and networks with other people that are playing the wealth game at a higher level than me”? So, most people don’t do the peer group thing very well.

The intentional ones are doing it, joining for business, but very rarely do I see people saying, “Hey, I want to join a group where I can learn to grow my wealth. I can learn to multiply it. I can learn to mitigate taxes at a high level, all legally and by the book.” But you don’t see that and that’s a shame, because that’s the thing I think people should focus on the most.

Dr. Tony Jacob: It’s such an important component. I wish I’d known about groups like this 10 years ago. And I’m glad that you’re getting your message out. It’s fantastic, I think, what you’re doing for the community as well and to be that support that entrepreneurs really need during, right? So, it’s been a fantastic journey even going through this process because you touched on something that I think is important. It’s after you’ve built out this family office or you’ve had your wealth creation event, what do peer groups look like? And because your friends may have a different life than you at that point, right?

And so, it’s difficult finding other capital allocators all of a sudden that you trust, and so, I think that can be a fun process if you’re inclined to really learn and study that. Again, there’s always easy button and call UBS and go here, go manage this for me or whatnot. But I think the other part of all this is you start really asking some bigger questions. What does posterity look like in the future generations? What do I look like in terms of my happiness, my health, my family, my friendships? What matters really, at the end of the day, right? Who you can count on.

Of course, the wealth will continue to grow because I’m an eternal optimist, and especially in the American economy here, that maybe it’s not number always go up, but it is that I do believe that even if you were just be very passive and just leave your money, a good portion of it, say, in the S&P, you’ll still do very well, right? So, all the other components really become very, very interesting. And so, I’ve had the chance over the last two years to go sit with and interview larger family offices and form my own version of my mini board of directors or peer groups that I would want to emulate. And Justin, that’s been the most fun thing so far. And everyone does it differently. And I feel like I’m still learning and it’s been really gratifying.

Justin Donald: Oh, I love that. That’s so fun. There’s so many different directions we can go there. And I have so many other things I’d love to chat about too. You had mentioned the spray and pray philosophy, which was a mistake early on. I’d love to know one or two other mistakes that you made that we could definitely help our audience out by helping them avoid.

Dr. Tony Jacob: Yeah. Spray and pray is probably the safer rookie one because out of 100, say, you have 10 bad ones and hopefully 30 do average, or 38 to 50 do average. And you’ve picked out a whole bunch of exceptional ones, right? So, that may not be the worst mistake. I think the tougher mistake is jumping into deals just because other people are doing it. It’s a really, really tempting thing to do. I have some meaningful PTSD from doing deals like that before because it just throws everything into disarray. Don’t let your guard down just because other friends are doing it. It could be a red herring. You may not know the sponsor super well. I would probably say that’s the biggest one.

So, trust your gut. Have your own team look at it, diligence it. If it’s just you, really read through it. It takes a lot of time. But there are great companies out there that can do that for you. But I would say, by and large, just because someone else is doing it, don’t jump off the bridge with them.

Justin Donald: Yep. I couldn’t agree more with you on that one. And we hear it all the time. All my friend who knows way more about this than I do, they’re in it. Or this big-name person is in it and you’re like, yeah, but Mark Cuban can lose $1 million, $10 million, $50 million and it doesn’t matter to him. It doesn’t change his life. Whereas $100,000 could be material enough to change your life, right? I mean, not you, but like someone listening here. You’re playing the game of life and wealth and business at a very high level these days. You’ve always played at a high level, but you’ve seen the material result of it, which is cool.

And one of the things that I would love to talk about is kind of like life before, life after an exit, because I know that there are some finer things in life that you do enjoy. And in my mind, kind of the biggest thing that is kind of what I would call like a major shift or major mover in a lifestyle change would be this whole idea of flying private. Private aviation of what that looks like and the opportunities that opens up. And I know you’ve had a lot of experience with this and you’ve had your own plane before and you, unlike most people, have actually made money on owning a jet, which is pretty cool. It’s pretty rare.

Dr. Tony Jacob: Yeah. Let’s blame that on COVID and the artificial inflation of prices. Most people don’t get to do that. That was a once-in-a-lifetime type of thing. So, that happened to work out. But I will say, going back to what life looks like before and versus after, you can appreciate this being an entrepreneur. The emails never stop. So, I will say, even outside of that post-exit, the emails don’t stop because now you’re getting deal flow or you’re getting very interesting things that you want to study, maybe it’s health and longevity or it’s this and that.

So, I find myself still trying to balance time just as much as I did before, but maybe a little less structured. So, life before was nurturing a team, making sure my employees and team were taken care of, setting a vision and growth, and then putting the best brains to go run it. And I did have a great team of docs and leadership team that carried out that vision for a long time. So different because now, after you’ve had this opportunity to exit, your focus now is whatever you want it to be, right? And so, maybe you’re trying to equalize all those buckets in your life, whether it was your health, your family and relationships, yourself. Maybe it’s to find new meaning or experience things differently, right, and reinvent yourself.

And I think people do go through that. Maybe they meander through it. So, I’m just trying to keep things more balanced and level at this point here. And the things that may have mattered for me five years ago may not have mattered as much. So, just being a realist over there, and to your last point, I mean, I think the finer things are much more enjoyable when you’re sharing it with friends and family.

Justin Donald: And you’re great about that. So, number one, you’re always inviting me to fly private with you, which I appreciate. That means a lot. Number two, we enjoy incredible wine together. Number three, we enjoy incredible meals together at killer restaurants, killer cuts of meat. I mean, just...

Dr. Tony Jacob: You’ve got great taste, I mean, in your plate, I can’t keep up in all the events you’re doing. Yeah, you’ve figured out how to multiply your time. Please teach me.

Justin Donald: Oh, I love it. Well, I think you and I are two peas in a pod when it comes to just high quality experiences and just great quality time. And I want to give you a shout-out because one of my favorite moments of all of last year was our double date daddy/daughter trip to Legoland. You brought your daughter, I brought my daughter, and we literally had the time of our lives. We had a blast. Those two had so much fun. But then we had just a great time hanging out. It was wonderful. And you spearheaded that.

Dr. Tony Jacob: No. Thanks for mentioning that. That was such a great memory. And we think about, we look back at that memory. And she still talks about it because, she’s like, “Dad, you’re out there running around with me.” And she remembers you running around there as well too. And just every single day, we were tired as heck, but we just ran around that park for two full days and got to catch up with and just really have quality time. And that wasn’t one of those things where we’re having a great meal or wine. It was just quality uninterrupted focus, beautiful time.

Justin Donald: That’s right.

Dr. Tony Jacob: I’ll never forget it.

Justin Donald: And we were like big kids. Like, we were having a blast watching how much fun they were having. And it was awesome. And then it’s something just for anyone that’s listening that’s like, “Hey, I want to do an epic day for my child,” I’m telling you, Legoland in Carlsbad, you fly in to San Diego, it is an epic experience. They do everything right there. It was really cool, but upgrade the experience. Tony, this was because you did the research. So, tell them what they need to do.

Dr. Tony Jacob: Well, you call ahead and you ask for the one-on-one VIP experience. So, it’s you and your child. Maybe you’ve got another person with you as well, and they will literally give you the behind the scenes of the entire park. You get to go, they’ll pull you with a master Lego builder, pull you behind the scenes, get to build something real time. You get to skip the lines, of course, but they give you some really nice souvenirs as well. And they’re really just taking care of you and making sure that you become a Lego fan for the rest of your life. And I am now. I mean, I’m buying Legos left and right over here.

Justin Donald: They’re darn good at it. I mean, they treated us like kings and queens and it was just so much fun. And they literally escorted us to every single activity. And we didn’t have to wait in a single line anywhere is wonderful. Totally worth it. Highly recommend it. So, thank you for that experience. Now, we can’t have a podcast episode where we don’t talk at least about Bitcoin a little bit, right? You and I love it.

Dr. Tony Jacob: We’ve been meaning to so...

Justin Donald: Yeah. We’ve been talking about it for years. You and I are early adopters, but please share with our audience your views on Bitcoin and why it’s an important part of your asset allocation.

Dr. Tony Jacob: Yeah. I think there’s been so many greats, even before our time that have been preaching from the rooftops. And it sounds maybe like it’s preachy, but I don’t think it really is anymore. We’ve got the institutions have arrived. Now, we have nation states really considering adopting it. I’ve spent hundreds of hours studying and understanding it. And I think I would do no justice trying to explain it here with the amount of time that we have, but there are so many resources now. It’s in front of you. But I do think now that we’ve got BlackRock, Fidelity, MassMutual, the larger companies on the retail on the public side available.

But it’s really what’s going to happen with our governments across the world. I think that’s the most fascinating play here. And maybe it’s a little bit of game theory playing out, which is the argument. But I do think there’s a use case for it. Our president believes it so as well. And we’re starting to see the beginnings of that. And I think if I remember correctly, more than 20 states have already introduced some type of strategic reserve bill.

Justin Donald: That’s right. To date and more are literally coming online every week.

Dr. Tony Jacob: And this is one of the first times where you have an opportunity to be an equal player in this monetary revolution and perhaps even front run. So, I’d encourage anyone that hasn’t really spent any time learning about Bitcoin for that matter, really set aside a weekend. And there’s some great resources out there and great books. I love Jeff Booth’s Price of Tomorrow as well. There’s Layered Money, Bitcoin Standard by Saifedean Ammous. There’s just so much out there.

Justin Donald: Digital Gold.

Dr. Tony Jacob: Digital Gold, stuff that really wasn’t even out there for us 10 years ago.

Justin Donald: The Internet of Money.

Dr. Tony Jacob: Yeah, there’s some great kind of novels.

Justin Donald: Yeah, there’s just some amazing books and information. There’s some great podcasts out there. And I want people to become educated because this is where I believe things are going to move in the future. I mean, you’re already starting to see the sovereign wealth funds of the world taking huge positions in Bitcoin, and it’s just a matter of time. You get one G7 country to load up their treasury reserves with Bitcoin. Mark my words, the rest of them are going to follow in line. And I’m not saying any one of– like it could be any one of the G7 countries and the rest are going to have to line up because you can’t take the risk that you fall behind another country.

Dr. Tony Jacob: Well, Bitcoin is $84,000 today. I bet in a few years, it won’t be $84,000. The number would likely be a lot higher. And I think you bring up a good point. So, it’s between sovereign wealth funds and nation states buying it. You almost wonder if there is some level of secrecy in the buying that’s occurring too, because what happens when everyone’s rushing to grab an asset that is truly finite.

Justin Donald: Only 21 million ever made. Probably about 4 million of them, if not more, lost. It’s finite. That’s as finite as you get.

Dr. Tony Jacob: And again, perhaps you’re not fully bought in, but it’s still worth considering that if it does in fact move and as such– and does become an asymmetric bet, the small allocation to it is, in my opinion, worth the risk.

Justin Donald: Yeah. This is why family offices generally have between 1% and 5% of their net worth in Bitcoin. You have BlackRock, the largest asset manager in the world, I think $12 trillion in assets under management recommending at least 2% of your net worth in Bitcoin. And at this last meeting in Davos, I think they actually talked about how it would be 2% up to 5%. So, they actually open the door for just regular people like us having 5% of our net worth in Bitcoin.

And then you’ve got Michael Saylor out there, yeah, MicroStrategy, well now just Strategy, right? And he says you put in 1,000 hours to study in Bitcoin, and there’s just no way you’re not going to invest heavily into it. And I totally believe that. You and I have put in countless hours. But he actually thinks that it makes sense to use this as an equivalent to your fixed income where it would be 5% on the low end to 15% for most people with a good number of people even going as high as 20%.

Dr. Tony Jacob: Yeah. And Justin, you and I are both part of groups, private groups that have chit-chatted about the allocation percentages and some of them feel like they don’t have enough when their allocations are at 50%, 60% already. And that’s also been a factor of, well, this investment has grown over the last five years. It just represents such a large part of their overall allocation. What do you do in that situation, right? But anyways, that is something to consider.

Justin Donald: It is.

Dr. Tony Jacob: Rebalance every five years.

Justin Donald: Rebalancing the portfolio. And that makes sense, although your Bitcoin maximalists probably won’t do it.

Dr. Tony Jacob: Right.

Justin Donald: It’s hard to part with the thing that you think is going to be the greatest asset ever made. So, your true purists, your true maximalists are going to have a hard time rebalancing. But I do think for anyone, it makes sense to at least evaluate rebalancing your portfolio every year. A lot of professionals do it every quarter, but at least once a year.

Dr. Tony Jacob: Yeah. And for me, I haven’t had the opportunity to properly rebalance. I start harvesting most of the recent stuff, still has at least another two years to maybe seven more years because most funds are anywhere from 3 to 5, 7, 10, very common. I’d call a 5 at the middle, at very early, 2. So, I’m still waiting to see how good of an investor I am. But so far on paper, although things look good, a lot of people look at this asset, Bitcoin specifically being a 20, 30-year-old hold, right? It’s the equivalent of maybe buying a Microsoft or an Apple or an NVIDIA.

Justin Donald: That’s right.

Dr. Tony Jacob: Really, really early. So, what do you do in that case? Well, I don’t know if it’s necessarily fair to rebalance quite yet or take profits on something that continues to outperform. In fact, there’s a great book called 100 Baggers. I think your audience would love that.

Justin Donald: It’s a great book.

Dr. Tony Jacob: It’s a great book. And it really just helped me think about how that, being able to hold for such a long time because it’s so tempting to trade and trade yourself out of a really valuable company or deal or things like that. And I think it’s just a good way to study that mindset and be a little bit more bulletproof there.

Justin Donald: Yeah. One of our mastermind members invested in Microsoft. I want to say it was over 40 years ago, 30-plus years ago. I mean, really early days, and this was, I believe, the guidance of her parents. And she has siblings. And along the way, each of the siblings has sold their position, most of it, I think it’s all of it. But she never sold. And so, you could make the argument, like, hey, you probably should have been rebalancing your portfolio as that was the largest holdings of your net worth. But she has so much confidence in this being like the thing that she never sold. And so, she still owns all those shares today. And we just had a conversation, I don’t know, a few months ago about should she rebalance now finally or should she lie to keep riding. But it’s interesting because Microsoft with all the moves are making the AI, all the different avenues they’re going, they can just continue to rally for years and years to come.

Dr. Tony Jacob: Well, you’ve heard that Buffett told Gates that he should diversify out and buy into other things and had Gates just held on to his shares, his bottom line number would probably still be high, it would have been higher than actually doing some of the other things he did is what I’ve heard anecdotally. But yeah, that’s a good point. How do you rebalance an asset that you think is performing so well? There are good resources out for that. And I’ve spent a lot of time thinking through that question.

Justin Donald: Yeah, 100%. Well, I feel like this would be a good time to just talk real quick about estate planning. We talk a lot about this in the Lifestyle Investor Mastermind. I’m always upleveling our estate plan, revisiting it, checking in, making sure that it’s done right. I’m so pleased with our estate plan and I’ve worked with York Howell, Andrew Howell specifically on it. And I’m just thrilled with it. But we created another layer here this year and it was a necessary one for us. But I’d love to hear kind of your thoughts and what you’ve done.

Dr. Tony Jacob: Yeah. Estate planning is something that you start thinking about, and especially if you’ve got a family, you’re starting to build a business or building a portfolio that needs to be protected or passed down, right? And so, we have this unique ability in this country where we can do that. And I believe the exemptions are still quite high, especially if you’re married. It’s $14 million a person, set to change I think in another year, but we’ll see what happens. I think it’s going to continue on.

And I would recommend it. It seems very, and again, by the way, my estate planning was done presale that early. I was able to talk to the right people and was introduced to the right people at the right time. And I would recommend entrepreneurs that are doing this today to, again, it’s one of those things, carve out a weekend to go study Bitcoin, carve out a weekend to go think about estate planning.

Justin Donald: Yes.

Dr. Tony Jacob: We know so many people, we both know people that have exited and then have to think about their estate planning. And it’s just so much more work.

Justin Donald: It is. And there’s less tax strategy you can do too, like there’s so much you can do it from estate planning standpoint before an exit that can help you mitigate the taxes that you’re going to owe upon that exit.

Dr. Tony Jacob: Well, it only becomes more complex later, right? So, if you’re at this point today and you don’t have an estate plan, it’s something that you should think about, I guarantee you that your holdings, your business, your life just becomes more complicated with time. So, the earlier you do it, the better.

And there are so many different methods out there. And we’ve got a lot of great options in Texas, but there’s versions of SLATs that you can do. There’s GRATs. There’s too many in the list, but I do think talking to the right T&E attorney, tax and estate attorney is a move that every entrepreneur should think about once they start to accumulate any serious wealth.

Justin Donald: Yeah, 100% agree with you on all levels. Tony, you’re so bright. You figured so much stuff out. And some of it is through mistakes, but a lot of it is just through persistence and being around the right people, learning and growing. When are you going to write a book? I feel like you got to put your wisdom out into the world.

Dr. Tony Jacob: Still learning. And it’s just, every time I think I know something, I keep getting schooled. But I do think at some point, there could be something that comes out. What life after exit looks like is something that I would have really appreciated and enjoyed. I wish there were more resources. But it’s just been fun going through with the evolution and checking some boxes from going from W-2 to entrepreneur and the doctor entrepreneur and CEO and chairman, and then building a family office. There could be some lessons in there. So, you never know. I think I could be coming, but I appreciate the encouragement and maybe it happens soon.

Justin Donald: Well, we’re all here rooting you on. Where can our listeners and those watching this learn more about you? Where can we find you?

Dr. Tony Jacob: Yeah, you can find me on Twitter. You can also find me on my main company website, RORHRO Ventures. And of course, find me on Justin Donald’s podcast and website. I’ll have all my links up there as well. I love chatting with docs, entrepreneurs, people at our post-exit as well. So, again, you’ve got a great audience, and I’m here to be a resource as well.

Justin Donald: Well, thank you so much. I’ve loved our time. You’ve done so many cool things in life. You’ve really succeeded at the highest levels, and not just in business, not just in investing, not just in wealth creation, but in relationships, which I think matters most of all. So, we’re blessed to have you.

And I like ending every episode with a question to our audience. My question is the same every week, but my question is this. And I hope those of you watching, those of you listening, that you really internalize this, but what is one step that you can take today to move towards financial freedom and really move towards living a life that you truly desire on your terms, so again, not by default, but a life by design? What’s one thing you can take today from Tony that you can implement into your life immediately to move you in that direction? Thanks so much, and we’ll catch you next week.

Dr. Tony Jacob: Awesome. Thanks, Justin.