The 5 Wealth Traps That Could Be Costing You Millions with Justin Donald & Dane Espegard – EP 312

[INTRODUCTION]

Justin Donald: Today's episode is a little different. I just recorded a live training call, The Five Wealth Traps, and the feedback was more than I expected. People were messaging me during and after the message saying things like, "Hey, I've never heard anyone lay it out like this before." So, I wanted to make sure you didn't miss it. Here's the big idea. Most wealth isn't lost to one bad investment. It's lost to five quiet jobs that nobody owns: tax, investment, risk, estate, and administration. These are the five functions of a family office, and each one is the solution to a specific trap. Most successful people have a great CPA, a great wealth manager, and a great attorney, and still, nobody is coordinating the whole thing.

If that's you, you're running a family office already. The only question is whether it's running by default or by design. In this episode, I'll walk you through each trap and show you what it's quietly costing you. And at the end, I'll also share the one number I believe matters more than your net worth. So, grab a pen or open the Notes app on your phone and let's get into it

[INTERVIEW]

Justin Donald: Dane, we can get started whenever you want to start, man.

Dane Espegard: Well, let's get to it so we can stick to the amount of time that we had allotted for this and, and honor everybody's time. But good to... I was about to say good to see everyone. Good to see a lot of names on here and see some awesome faces as well. I'm Dane, I'm the head of membership at Lifestyle Investor, and we're happy that you're joining us. Some quick just housekeeping for most of the next hour, a little bit of who's who. I'm essentially just going to play the role as host. Justin is going to obviously be educating and teaching during this. I'll be in the chat reading some comments and some of the questions that you put in there. I'll be kind of serving those up to Justin as we're going throughout as well.

Second, the replay of this is going to... You're going to get that. Since you registered for it, it'll get sent out to you. It's not going to include the live Q&A at the end. So, at the end of this, we'll kind of open it up for some live Q&A. That part, you've got to actually be on for that, so stick around to the end. And if you have questions, hold those. There'll be a spot for that for Justin to be able to get to those as well. And then lastly, if you can grab a pen or open a note on your phone, Justin's going to go through and give you five ideas, and I want you to have the opportunity to write down a number for each of those, and we'll get to that a little bit. That might sound a little mysterious, but we'll get to kind of what that exercise is as we're going through.

And if you can, in the chat, I know some people are obviously on video or not on video. But if you can in the chat, I think it's interesting to think about how many advisors that you work with today.

So, if you can add this up, it doesn't have to be exact, but if you think CPA, wealth manager, attorney, insurance agents, really anyone that you'd consider an advisor. So, if you could do a little inventory real quick, add that up, throw that number in the chat. Even if it's a ballpark. I see six, five. A lot of people around five. Three. Keep those numbers coming. We're going to address some of these here in a little bit. Hey, one important thing before we get moving. Obviously, this is an educational training, so I have to give, like, the little disclaimer. Neither Justin nor Lifestyle Investor is a tax, legal, or investment advisor, so nothing today is personal tax, legal, insurance, or financial advice.

And the examples are going to be used for illustration and education. So, obviously, consult your own team, CPA, attorney, advisors before acting on anything specifically. And obviously, there are no results that are guaranteed or outcomes, and those are going to depend on your individual situation. So, all investment involves risk, and I think that's my disclaimer I have to put out there. So, with that being said, I'm going to hand things over to the guy who's going to be teaching, which is Justin Donald. So, Justin, if you want to kind of take it away.

Justin Donald: Awesome. Yeah. Thanks, Dane. Appreciate it. Hey, everyone. Good to see you. And I really want to get things started with a question that I am asked almost every time I give a speech. So, generally, someone comes up to me afterwards, and generally it's a very successful person, so a business owner, someone that's crushing it in life. They pull me aside, and they say, "Hey, Justin, I did everything right. I have a great CPA, I have a wealth manager, I have an attorney, but why do I still feel like I'm leaking? Like the ship is leaking. I've got holes in it." And here's what I tell them every time: "You're not leaking because of one bad investment. You're leaking because of five quiet jobs that absolutely no one owns."

So, here's the big idea for today, and I'll say it once, and then over the next hour I'm going to prove it, and I'll continue to prove it over and over. Wealth isn't lost to just one bad investment, typically. It's lost to five quiet jobs that nobody owns, and, basically, the way out is to own every single one of these on purpose, with one person conducting all of it collectively. So, those five jobs, they have a name. They have five different functions. They're all kind of... They work simultaneously and under one roof. Many would call this, or hear this being referenced as a family office. So, tax, investment, risk, estate, and administration. And I want to frame each one of them differently than what you've probably heard before, what kind of goes into each one, because each has a function that is an individual solution to a specific wealth trap.

So, there are five wealth traps, there are five functions, and then one conductor oversees all of it. So, here's the thing. You're running a family office, whether you realize it or not. Some people, they do it with a lot of intentionality, and other people do it very blindly, very unintentionally. And that really the thing that I want you to understand is that every single person on this call, they're doing it. They're running their own family office, and if it's not intentionally, it's unintentionally. So, the only question is, who is running their family office by default, and who is running it by design? So, here are three things that I'm going to give you before we're done here today. So, number one, the number that tells you whether you're actually richer or just richer on paper, and why a number with a lot of zeros on your statement can be less than you actually think.

Number two, the one number that I believe is more important, it's a more important number in your financial life than anything else. And by the way, it has nothing to do with net worth. And then number three, the scorecard. Five questions, one trap per, and you leave with your own gaps written down in black and white. So, you figuring out where your gaps are in your own world. It takes about 10 minutes, and it's the first thing that I would do if I were you.

Dane Espegard: All right. Time for a quick pop quiz. So, play along in the chat if you can. True or false. Obviously, we're not going to, like, keep score or grades or anything, but we'll see where you stand.

Justin Donald: Yeah, but everyone's kind of grading themselves here, right? So, it's kind of like, well, you're not competing against everyone else, but there is a goal of where to get to, and you're going to show up at a certain place. And I think it's important that you're competing with yourself, like the future you of where you want to be.

Dane Espegard: So, the first question, and again, this is for your beliefs, true or false, if you have a good CPA, a good wealth manager, a good attorney, your wealth is being managed as one plan. So, again, if you have a good wealth advisor, CPA, a good attorney, your wealth is being managed as one plan.

Justin Donald: I'm just waiting to see what we have coming in here. We got a bunch of people responding. And actually, this one, we don't have too much contradiction here. I mean, maybe this was a softball. Maybe this was an easy one that we weren't sure was going to be easy. All right.

Dane Espegard: Let's see.

Speaker: I'm so glad.

Dane Espegard: Marina, can you get the everybody…

Female: About to get some extra nuggets.

Dane Espegard: Oh.

Justin Donald: Let's get some mutes going. We got people joining that are…

Dane Espegard: Gotta get those extra nuggets, too.

Doug: Sorry about that.

Justin Donald: All good. All good.

Dane Espegard: Marina, if you could just do the auto-mute, that'd be great.

Justin Donald: That would be awesome.

Dane Espegard: I like it when the not-muted ends up being something about nuggets and that stuff, like real interesting stuff.

Justin Donald: Thanks, Doug. We appreciate that.

Dane Espegard: Thanks, Doug.

Justin Donald: That's good. All right.

Doug: I aim to please.

Justin Donald: We love Doug. All right. You guys, you nailed it. It's false. Each one is good at their own piece, and almost no one is coordinating the pieces. And we'll show you what that costs you later.

Dane Espegard: All right. Question two, true or false: A family office is something only billionaires have. I would even change it to say billionaires or the ultra, ultra high net worth

Justin Donald: Look at this. Everyone answering the same. No one wants to contest. Okay. Well, I mean, the consensus is here. I would say false, and I'm going to say partially. You know, single family office is one team for one family, and that usually doesn't make sense until about roughly 500 million, most likely a billion dollars in net worth, plus, plus, plus. But the five functions exist at every size, so you're performing them either way. Later, I'm going to show you four ways that you do it that you can kind of create and operate this function of a family office, but without a billionaire's $16 million annual budget for their single family office. I think a lot of people don't know the cost that it takes. I mean, I've seen it as high as $20 million a year. So, we can do it at a much more cost-effective price point, but utilizing all the same structures, all the same frameworks, all the same strategies.

Dane Espegard: Yep, great. Let's move on to number three. True or false: the best tax moves for the year can still be made in April. The best tax moves for the year can still be made this upcoming April. True or false? We have less answers. There we go.

Justin Donald: This is good. Yeah, thanks for playing along. Are you guys feeling like this one's a little more obvious? On April of the end of the year, not your year you file. I like it. That's good, Fabio. Yeah, you guys got this one. Pretty simple. I mean, this is mostly false. A CPA, in most cases, files what already happened. The best planning moves have to be made before the year ends, and by the way, some of them even with more of a runway than that. But we'll get into what that means a little later on.

Dane Espegard: Serving up some softballs. Question four, true or false: More diversification means safer. So, if you own a 60/40 portfolio, you're set. So, true or false, false, more diversification means safer

Justin Donald: Man, oh man. Every answer. That's good. All right. Well, this one... Okay, here we go. More. Divinity equals true. Rest is false. Yeah. This one for sure, you know, this one I'm going to actually say it depends what's inside it, and I'll show you why a growing number of the largest institutions are rethinking the 60/40 split, this asset allocation that has kind of been the framework for managed wealth for a long time and what families who keep their wealth do instead, because the game is changing. And by the way, some of the biggest institutions, the ones that even give you a platform to do the 60/40 split, say that that allocation is literally dead. The largest asset manager in the world said that at a private meeting that I was at.

Dane Espegard: Let's move on to the fifth and final. So, last one, true or false: if no one has asked you to coordinate your advisors, then no one is. So, I'll say that again, a little bit of a tongue twister. If nobody has asked you to coordinate your advisors, then nobody is or no one is.

Justin Donald: All right, I like it. We finally had another answer in there. They weren't all false. The answer here is true, like, if it's nobody, then it's you. Did you even know that you held this role? Surprise, it's you. A lot of people don't know that. They don't get that, and it ends up being pretty darn obvious. Yeah, I will say, you know, don't sweat it if you miss a few of these. Well, actually, no one missed anything. I guess we had a couple people that were unsure or limbo, but the questions are going to kind of shift now towards a little bit more of you kind of critiquing yourself and where you're at. All right. We're not grading you, but soon we're going to be grading each other or you can grade yourself. But let's do one thing together before we start.

Take a deep breath in with me through your nose. Let it out slowly. The next 55 minutes or so, 50 minutes, we are going to be heads down. We're going to be pen-in-hand type of a sprint, and I want you to be fully there. So, let's rock and roll. I'm going to go through a ton of information. This is going to be fun.

Dane Espegard: And real quick, Justin, before you get rolling, in terms of the replay just one more time, you guys are going to get emailed the replay, so anything that you miss, as Justin's going through this next section of stuff, you'll get it sent back sent out to you pretty quick. And then the questions that you ask live, that's the stuff that's not going to be in the recording. So, that'll be at the end where we'll have that. Feel free to put questions in. I'm going to be watching the chat, so if you do have questions throughout, throw them in there, and then I'll kind of bookmark those, and we'll come back to them here at the end as well. So, Justin let her roll.

Justin Donald: Yeah, come up with some good questions. I definitely want to know your questions. All right. So, let me tell you who we're talking to because it matters how you're thinking about this. I said it before, I'm not a CPA, I'm not an attorney, I'm not a wealth manager. Or actually Dane said it before, but I am an investor who built a life around freedom, and I've built a lot of my life around investing for freedom, and I've spent the last several years building a community of successful families who want to do what the very wealthy do without needing a $500 million fortune or greater to do it. So, I'm always going to share with you the biggest takeaways that I've had, that I've learned, but I'm also going to share the biggest failures.

And my early mistakes in my career, in my investment career specifically, really felt like a sucker punch to the gut, yet it was the best thing that ever happened to me. I just needed to learn the lessons before kind of that next phase of my investing. Many of you know I'm part of 14 different masterminds, and that's not, I'm not misspeaking here. Like, I didn't accidentally say 14 when I meant to say four. I'm literally in 14 different communities, masterminds, groups, and I take the best things that I see in those rooms and I plug them into our mastermind, and then I throw the things out that I can't stand. So, what I'm going to give you today really is the best of that, and I've got two agendas for you today, and I'm going to just be open, honest, and upfront about both of them.

Agenda one, I'm going to teach you all the five traps and the way out of each of these traps for free. And if I do that well, and I walk away and help you walk away with a clear list of your gaps, then I've done my job here, my main and primary job. My second agenda is, at the end, I'm going to tell you a little bit about the Lifestyle Investor Mastermind, and I'm going to invite you to apply if, and only if I've decided or delivered real value to you. If this has been a major win for you in the next 45 minutes, I'd like you to at least consider it. And if I haven't, then don't buy anything from me. Does that sound fair? Towards the end, we'll share how we help families through Lifestyle Investor, through the mastermind, through the community, through many of our different projects, programs, protocols. The training really stands on its own, whether or not it's a fit for you.

So, here's the roadmap. There are five traps. Each has a name. Each a family office function that's the solution to that trap, and I'm just going to walk through each of these right now with you. There's the tax trap, and that's solved by the tax function. There's the deal trap, which is solved by the investment function. The protection trap, that's solved by the risk function. The legacy trap, solved by the estate function. And the CFO trap, solved by the administration function. And on every one, I'll show you what it looks like first by default. So, what does each trap look like by default? And then what does each trap look like by design? So, by default, it means nobody owns it. So, it just happens, no one has intentionality around it. It just happens, no one owns it. By design, someone does own it, and I want you to see the difference in what those look like. So, let's dig in

Dane Espegard: Also, and guys, if you're watching this, this is where if you can grab a pen. So, at each of these different traps, one of the things that Justin's going to ask you to do is to give yourself a number on each of these. So, earlier we asked, like, how many advisors and different professionals that you were working with. The common number was, like, five or six for a bunch of different people. So, interesting to see that, but I think that's important to keep in mind. And my guess is that if you went through later and actually wrote down all the advisors, it'd probably be a couple more than what you come up with right off the top

Justin Donald: That makes sense. Well, let's just jump in. The tax trap is the first one, and here's how it works. Most people think about taxes in March or in April. They send documents to a CPA, the CPA files, and that's it. That's their whole tax strategy. That is literally the vast majority of people. There's a big difference between a tax strategist and a tax CPA. A CPA files taxes. They're not proactive. They are compliance. They are a compliance manager. A tax strategist advises how to file the most tax-beneficial results, so they advise the CPA. So, no disrespect to CPAs. I love mine. Not all CPAs are built the same. Not all CPAs have the same level of competency. But if you're only paying them to look backwards, then you're not getting forward-looking planning. So, that's by default. The default mode here is that your CPA files once a year and they record what has already happened.

Okay. So, let's get the math up here good. All right. So, here's why this matters, and let me give you two different investments. So, investment A earns 8%, and it's taxed at 20%. After tax, you keep 6.4%. Investment B earns 10% and is taxed at 45%. So, after tax, you keep 5.5%. The 10% investment loses to the 8% investment. So, the investment with the higher headline return, which by the way, is what most people are going to invest in, like that's going to sway or lure people into that investment. They will think it's a better return, it's a better project because the structure that it's sat in, it changes the game. Tax structure beats the investment return almost every time. And think about it. Most people spend all of their energy trying to optimize the return, and almost none of their time and energy on the structure that the return actually sits in.

So, trying to optimize the return and not recognizing the apparatus that it's under is hurting the overall return after tax. So, I get asked what the biggest investment I've ever made is, or what's the best investment, what's the best return that I've ever gotten. And people always expect me to say, like, real estate or SpaceX or something cool and sexy and flashy, but it's actually not that. It's actually world-class tax strategy, and that's because the savings compound. Here's a simple illustration. You save $30,000 a year, and if that were invested at 15%, which is just an average across alternative investments, that return for 30 years, you'd be looking at $13 million. That is life-changing, wealth-changing, legacy-changing money, all from tax savings. So, when someone says tax strategy is boring, I say boring is where the serious money is made or lost, and usually it's invisibly done.

The family office function that solves this is tax, and it has the five parts here that each one is very important. So, you've got structure, timing, compliance, coordination, and proactive strategy. So, by default, so remember the default method where it just happens, your CPA files once a year and records what happened. But by design, which is where we want to be with intentionality, a strategist plans years ahead, so the structure and the timing are set before the money moves. And one more thing about this. Notice that I said coordination. Your tax person has to talk with your investment person and your estate person. If they don't, that's the next three traps, and that's where we're going next.

Dane Espegard: Okay. So, quick question, and if you could throw some responses, some interaction here in the chat would be great. So, the first question is, does this change things for you at all? Right. Just the short conversation there on the tax trap. Yes, no, maybe. And if so, how does it change things? And this could lead to some questions towards the end And I see the question, by the way, on thoughts on oil and gas drilling, right? So, that we can speak on that here at the end. So, proactive versus reactive. And then another follow-up, the last question would be what becomes possible now that wasn't possible before? Love that, Catherine. I feel validated that this has been my primary focus for decades.

Justin Donald: Nice job.

Dane Espegard: So, again, question. Does this change things for you? Yes, no, or maybe. How does it change things for you? And then what could potentially become possible for you that wasn't possible before? Ways and options, investment plus, yep, so taking in the investment, or excuse me, the tax piece of it when you're considering the investment. Having them speak with each other. I love this country because the tax… Likewise. That's great. Crystallizes the idea that coordination is key. Yeah, so if you're still typing, keep popping some things in the chat there because again, that's what we'll use here towards the end when it comes to some of the Q&A. Justin, move on to the next.

Justin Donald: Yeah. Well, and before we get to the next one, I want you to write down tax trap number one. Or trap number one, which is the tax trap. And I want you to write, like think about this. How many of the five tax parts have a named owner in your life right now? So, the structure, the timing, the compliance, the coordination, the strategy. Zero to five, write it down. We'll come back to that later. Okay. Let's dive in. All right. Anything else you want to chat on that, Dane, or should we move on?

Dane Espegard: I think we're ready to move on.

Justin Donald: Okay, cool. All right. So, we'll talk about trap number two now. This is the deal trap, and here's what it looks like. You do one deal in January because a friend recommended it to you. Another one in April because the sponsor was great on the phone and you. You trust them. They sound good. Another in August because your advisor had a product that they recommended you in. By December, you've got a pile of deals. You've got a pile of things that you've invested in, but you couldn't draw me or anyone else a picture of how it all fits together. So, the default mode of this investment category is just a pile of one-off deals and then a 60/40 portfolio split that has stopped doing its job.

That's default mode with no intentionality. But here's what the best run families do instead. They start with the strategy first. Then they work on deal criteria, then people. So, strategy first, people, advisors, experts second. So, first, strategy. And allocation is key here. I look at what's published about single-family offices, multi-family offices, how these family offices allocate their resources, their capital. You see public equities generally 15% to 30% of their net worth. Private equity is 25% to 30% of their net worth. Real estate's 10% to 20% of their net worth. Private credit, 5% to 15%. Cash, 5% to 10%, so on and so forth. You can take a look here at this pie chart so you can get a better idea of what this actually looks like.

But the reason that the wealthiest families invest across all these asset classes is so that they're never undone by one single asset class. And I think it's really important to point out that where you have Wall Street talking about how the wealthiest people have most of their wealth in the stock market. When you look at the data, the single-family office data and the multi-family office data, it is very clear that 50% to 60% of the net worth of the wealthiest people in the world, and specifically in the US, tend to be in alternative investments. So, the second thing that matters, and why this matters, is most business in the world is private. 87% of US companies over $100 million in revenue are private companies.

If all of your portfolio sits in the public pond, you're fishing in one of the smallest lakes out there. Let me say this again. The public equities in the US represent 0.016% of all businesses in the US. So, if you’re investing only in the stock market, you’re literally not just under 1%. You’re way under 1% of all available businesses in the United States. And then third is manager selection. This is the one that I think surprises a lot of people. In alternative investments, the gap between the top manager and the bottom manager is enormous. In large-cap stocks, so if you’re investing in public equities, in the stock market, the spread is really only about 1.5%, you know. Sometimes maybe a little more, all right? But 1.5% is pretty common.

There’s not a lot of variance between, like, a top quartile performer and a bottom quartile performer. But in private equity, in buyout specifically, it’s 14%. In early-stage venture, it’s more than 22%. So, the allocation is only as good as the access that you have to good managers. So, I just want to repeat that. Like, on the private side of deals, the gap between a good and a bad manager in private equity is a 14% delta. In early-stage venture, it’s a 22% delta. That’s enormous. So, if you are not getting the best managers, you are probably not performing great on the private side of things. And I’ll say it plainly, if a deal made it to you, ask yourself why. If it made it to you, that means the institutional buyers didn’t buy it.

And then just a word on the 60/40 split. For decades, the model was 60% stocks, 40% bonds. In the last few years, some of the largest institutions have been saying publicly that the 60/40 split is under pressure, it’s dead, it’s changing, it doesn’t exist anymore. It used to be uncorrelated. It’s now completely correlated. And what’s happening is we’re seeing shifting towards a 60/20/20 or even a 60/0/40, meaning 60% stocks, 0% bonds, 40% alternatives. So, this category of 20% to 40% alternatives. And by the way, when you get into the ultra-high net worth, when you get into the ultra-wealthy, you actually see that more in the 50% to 60% of their net worth. So, I’m not telling you to do any of that. I’m telling you to ask who in your life is thinking about all this.

Hopefully, someone is thinking about this. Someone is allocating. You pay someone that is paying attention to this all the time, like every day, every week, every month. And here's why this matters for The Deal Trap. There's this report. It's called the Julius Baer Global Wealth and Lifestyle Report, and it tracks a basket of luxury goods. So, last year, the basket rose 10.2%. Now, this is not the same as the CPI index that the government reports on. So, remember, the CPI index what are we at? 3.4% or two point... What is it? Yeah, 3.4%. Okay. So, when you look at that number, I think it's important to recognize two things. Number one, the basket of items that the government is tracking are supporting a method to keep that number lower than it really is, so it doesn't feel as alarming. All right?

So, if you're at a lower percentage, and by the way, you don't count food in this report, and you don't count energy in this report, which are two of the… You see inflation the most in those two, in those two items. But let's just look at this other report, which is a basket that people like us, everyone on this call, is kind of more dealing with from the standpoint of legal fees and hotels and insurance and education, and the list goes on and on and on. It's been going up 10% for 40 years consecutively. All right. So, if your family had $50 million 50 years ago and the dollar kept losing purchasing power at that pace, what you can buy with it today looks closer to 11.5 million. So, you can be richer on paper and poorer in real life.

Okay. So, the family office function that solves this is the investment function. So, there's asset allocation, manager selection, performance monitoring, and treasury management. And the manager selection is listed first for a reason. It's not just what to buy. It's who makes sure all of this is working together, how much liquidity do we hold and when, what's the cadence? So, this trap by design, or this function by design, is strategy first, deal criteria second, with vetted managers and an allocation like families who keep their wealth third. So, default is drastically different than by design. And that's why in our community, we don't just vet a deal and say yes or no. We teach people to build their own investment criteria.

We teach people to understand why we like a deal, why we don't like a deal. But what's even more important is how does that deal line up with what is a priority in your life based on your investment criteria that matches your needs, your desire for cash flow, your end in sight based on retirement or transitioning roles or starting a business or selling a business, all of that.

Dane Espegard: That's great. So, Justin, on this one, something comes to mind too as you were talking about that. At the very end, you talked about how in the group we don't just vet a deal and say yes or no. We teach people to build their own investment criteria. That shifted, right? So, the first couple of years of the mastermind very much was, "Hey, this deal looks great." And it was kind of invest alongside or get into the deals that Justin wants to invest in. And as the group grew, you and Ryan looked at it and said, "Hey, we really want to spend more time focusing on the individual investor, not just on the deal," right? And this is a little... You know, we didn't necessarily talk about this, but anything to speak on that in terms of, like, the amount of time that you've spent specifically on investment criteria and some of that stuff as well?

Justin Donald: Yeah. I mean, I think no one should invest until they've come up with their own investment criteria. I think that's a first move. It's like, know what you want. Like, if you're unclear, then you're going to invest in things that lock your money up when really you want cash flow. You know, if you need cash flow, you should probably not invest in anything that doesn't give cash flow until you have the amount of cash flow you want. I mean, that's just one simple criteria. Imagine all of it.

Dane Espegard: Yeah. That's great. So, on this trap here, one more time in the chat here, if you're willing to stay involved, if you could jot down again, does this change things for you, this conversation here on this function, this trap? Does this change things for you? Yes, no, maybe. And if so, how does it change things for you? I see Stuffy. You just had your question answered, which is great. Stacy, I wrote down your question. We'll come back to that a little later. I also saw an oil and gas question. I jotted that down for later. It just said Zoom user, so not quite sure who that is. But again, in the chat, the question here on this, right, would be on this specific trap, right, the deal trap, does this change anything for you hearing this conversation? Yes, no, maybe. And if so, what is that change?

Justin Donald: And then as you're doing that, I also want you to write down next to trap two, what is your number, zero to five? Do you have a written asset allocation, a written deal criteria, vetted manager list, performance tracking, someone managing cash? Count the answers to that as yeses or nos. If you have all five of those, maybe you're a five. If you have one of those, maybe you're a one. If you have none of them, maybe you're a zero. But I would definitely be tracking at each trap. We're going to go through each of these traps, and it's good to assess where you are today, and then at the end, we'll talk about maybe where you want to be.

Dane Espegard: I'm going to throw these in the chat as well, so you can grade yourself on these. And that's really, I think, where the benefit of some of this comes in, is you using this as an opportunity to kind of self-audit. So again, those five things, written allocation, written deal criteria, vetted manager list, performance tracking, and someone managing cash, right? So, if you have one of those, you'd be a one. You'd give yourself a score of a one. If you have all five, great, give yourself a five on that.

Justin Donald: I love Catherine's response here. That's great. She's making them read my book. That's awesome. I hope they do it. I hope they do it. And Stathi, I love the joke. Yeah, we got to hold out for 12 more years. Too funny. Too funny. But that's what you're going to get. It's hysterical. All right. Good stuff here. Keep the feedback coming. Dane, I think I'm just going to go on to the next one.

Dane Espegard: Yeah, that sounds great. Two down, three to go.

Justin Donald: Yeah. All right. So, trap three is the protection trap, and I'm going to tell you a story about myself, because I live in this world, and I'm pretty well-versed and well-read on this stuff. And yet, when I did an audit of my own insurance, they found so much fluff. All right, so here's this category by default. Policies that were right years ago for you, they were right at one point in time, haven't been reviewed since your wealth continued to grow. So, they're probably not right. That's the default in this protection trap. So, here's what the audit found. All right. I had two umbrella policies. One carrier allowed up to 10 million. That was their ceiling, and the other one allowed up to 40 million. And so, I had both of them because I was trying to get to 50 million and for whatever reason, I couldn't find one carrier to do it.

But because of the way they were structured, they didn't complement each other. So, one of them actually wasn't working. I was paying for something, and I wasn't truly covered under it. I was paying money and literally getting zero coverage without knowing it. So, not only did my bill go down after I did my audit and found a group that could really give me a true assessment, but my coverage went up. So, I paid less for more coverage. Less money, more coverage, what a great idea. We bundled more things. Cybersecurity was as high as it should be, which, by the way, I'll talk more about that. You got to get that one right. You need to have the right amount of umbrella insurance. Everyone should have an umbrella policy.

You don't know what you don't know. And I'll tell you what else I see all the time. Many of you own assets in your personal name instead of in a business or a trust or some other entity, and so you don't have the right type of insurance to protect them. That's a double whammy. And if you have kids who drive, you need an umbrella policy, period. Umbrella insurance is a mandatory must if you have any kids driving. It's one of the lowest-cost products for the highest protection benefits. So, that's not advice for your situation. That's just a question or a thought to bring up with your insurance professional. Let's talk about cybersecurity and wire fraud.

And I'll say this carefully. In today's world, cyber and wire fraud protection is something you should be asking your insurance professional about because there are people on calls like this who have gone through both, unfortunately. This is becoming more prevalent by the day. And I want to make sure this is super clear. Preventing a $10 million loss is equivalent to generating a $10 million gain, and preventing it is often a lot easier and a lot cheaper. So, that's the point of the risk function. It protects what the other four functions build. So, the function is risk, insurance across the board, coordinated under one roof, asset protection, cybersecurity, contingency planning. So, by design, what this looks like is it's a full risk audit, umbrella coverage, assets held outside of your personal name and properly in the entities that they're supposed to be in, cybersecurity protection, and wire fraud protection.

Dane Espegard: Okay. That one was a little quicker, hard-hitting. The cybersecurity, that's such a, I don't want to say new, but I think it's new to individuals instead of just for companies. So, question on this one. Question again, does this change anything for you? And as this agenda was put together, the idea is I'm sure there are some that are like, "Oh man, that's totally new or not on my radar," and others that you're like, "I feel great with this." So, is there anything that this change? And if so, what does it change for you? Got some stuff in the chat here. Justin, you can probably, as you guys are throwing some stuff into the chat here, I think that question just popped up could be relevant, Justin. Do you want me to…

Justin Donald: Yeah. But I think we need to wait until Q&A. I just want to get through everything in time, but it's a great question, and where everything sits. So, we can definitely go back and talk through that. So, Dane, if you can jot that down, that would be good.

Speaker: Yep.

Justin Donald: I love it. Catherine said this wasn't on her radar.

Speaker: Yep.

Justin Donald: Oh, nice, Stathi. I like that. Actually, reading a book on this stuff. That's good. So, I want you guys to write down next to trap three what your number is, zero to five. So, when was your last full risk audit? If it was inside 12 months and you can name every policy, give yourself a five. If you're guessing, give yourself a one.

Dane Espegard: I'm a one on this one. It's the same. I agree with Stathi where it's looking at the cybersecurity. It's like, "Ah, I don't need that."

Justin Donald: I love it. Amy's actually a five, but she's also a member of the mastermind, so I like that. I feel really good about that. But even members of the mastermind who are new are not fives in everything. Like, it just takes time to build up to it, right? All right, let's move on. All right, trap number four. This is the legacy trap, and I'm going to be blunt here. This is where most people lose the most, and it's the one that most people put off the longest. So, most people defer this indefinitely, and the cost of deferral can exceed any investment loss. Often, this is people's greatest loss financially. So, if we look at the legacy trap by default, or the legacy portion of this, if you're unintentional, it's that documents are there, but they're old. Maybe there are no documents, but if there are documents, they're old. They're unsigned or unknown to the rest of your family.

So, we had an estate planning panel at our live event last month, and one thing that stood out is the place where most estate planning fails is the lack of coordination between how your assets are titled and what your trust actually says. So, you can have a will, you can have a trust, power of attorneys all done. But if the assets are titled the wrong way or if the trust was never funded, there's a mechanism called funding, which means that you're just actually contributing capital to it, or the beneficiary designations don't match, the plan can literally end with an outcome nobody intended. So, the work was done.

A lot of times, the money was spent to get it all done, but the things you need to actually seal it and make it official never happened. So, the panelists, get this, the panelists said that close to 100% of the clients they serve didn't do everything that they were asked to do after the plan was drafted. That's not a character flaw. It's what happens when nobody owns the follow-through. And I mean, just to be clear, it isn't just paperwork. It's people. It's the unintentional family that prepares wealth for their heirs. The intentional family prepares heirs for their wealth. I was recently at a dinner where families didn't know how to involve their kids, or when they tried, it backfired. So, start with family vision and values, not products.

Okay. Let's talk about the estate function. All right. So, the function for this trap. So, it's wills, trusts, powers of attorney, medical directives, succession, and next-generation preparation. Trusts give you control without necessarily the ownership and a layer of protection, but how and which is for your attorney, not for me. So, this estate by design is going to look different than default. So, by design, it's a current plan that your family understands, plus heirs who are prepared for the wealth. Dane, you want to jump in?

Dane Espegard: Yeah, this is great. And Stathi already put in there, just updating his. This is trap four, so if you want to throw in there, same thing in the chat. Does anything come up for you on this? Is there an aha on this specific pillar or section?

Justin Donald: We'll give people a moment to do that. And while you're doing that, I want you to also put a number next to trap number four. All right. Is every document current? Is every document signed? Is every trust funded or entity funded? Does your family know where they are and why? Give yourself a score, one to five. For most people, this score is going to be very low

Dane Espegard: Yeah, this is great. Scheduled update in 2027. Currently working. Amy's a four

Justin Donald: Yeah, Patrick did. That's good. It exists, and it's funded for Patrick, but not what he feels is optimized for multi-generational planning. Meaning, by the way, great job having the plan, like, having it in place, but it's really important every year that we're updating it and upgrading it, and making sure that it matches. So, great job having it there, and then it's every year we need to make sure that the new assets that are acquired are listed correctly. Assets that are sold were actually transferred or conveyed properly.

Dane Espegard: Yeah. And, and Justin, this was the last... The thing that you said in there that hit a note for me, I went through, did all this with Lifestyle Investor, and at that last retreat, the thing that hit was the not preparing the wealth for the heirs, but the heirs for the wealth, right? And the idea of so much of the family planning is what we're doing with the family, not just on the entity side and the legal side. That's good. All right, let's finish out last trap, number five.

Justin Donald: Man, we're getting some great commentary here, though. Thank you, guys, for playing full out. I really, really appreciate that. All right. We're going to land the plane here. Let's talk about trap number five, and it's the quietest or least obvious of all the traps. It's the one that you're probably in right now, and you don't even know it. So, this trap or this function by default is you. Uh, it's you chasing K-1s, and wires, and statements with no single view of everything. Administration is not exciting. All right? It's reporting, it's entity management, document management, coordination. It's the unglamorous function that makes everything else work, and I'll tell you why it matters. If you can't see your complete picture, then you can't manage it.

Think of a business dashboard. You would never run a company, a business, without one. Most families, however, run their own balance sheet without a dashboard. They don't even know what's going on with their own balance sheet. So, here's a small example from my own personal life. People ask me, "How did you forget to dissolve that LLC, that entity?" Well, because I have a lot of them. I don't know. I had an LLC that needed to be dissolved. It wasn't. That meant that we kept paying money for something that did nothing, and then filing taxes for it and paying money to do that. We've got a ton of entities, and when I was in charge of it, I missed it. I missed one of the mailings or the one of the filings.

There was one time where I had to pay some fees on it, but that's what administration does. It's entities, filings, books, the whole picture, one place. And I'll be honest, most people in this group right now, in this room, in this Zoom, in this webinar, would not enjoy this. They wouldn't enjoy doing this themselves. They wouldn't enjoy this function. There's a small percentage of people who would love it. That is not me, so I hired for it. Remember, I promised you that the most important number in your financial life, I was going to talk about, I was going to share, and here it is. But before I share it, first, your freedom number. All right? So, this isn't that number, but this is the next most important number. But what does it cost you to live on your terms?

When your passive income covers that, you make better decisions. I guarantee it. I absolutely guarantee it. There's one side of the coin where you're making more than what it costs you to live. There's another side of the coin where you're making more passively than it even it costs your business to run. It covers all your business expenses. But I really believe that financial freedom trumps net worth every day of the week. Net worth is a total vanity metric, all right? Second, and the most important number I want to talk about, is the hidden asset class, and that is you. I spend a minimum of $300,000 a year on myself, somewhere between 300,000 and 500,000 every year on myself, my network, masterminds, peer groups, conferences, coaching.

You could throw health in there, and that number would probably tick up a little bit more. But most years I am spending more on me than I'm spending on any single investment. So, ask yourself, what was the biggest investment that you made last year, and how does that compare to what you invested in yourself? And here's why this fits here. When you're the unpaid CFO, you're spending your most valuable asset, your time, your attention, on the lowest-value tasks. The administration function, when you get that right, gives you or buys that time back. So, again, the function here is administration, reporting, entity, maintenance and management, document management, and coordination. So, by design, what that looks like is this: the right support so that you can see your whole picture on one page, but that support is done by someone else, not you. Dane?

Dane Espegard: Yeah, there we go. There's the fifth. So, same question on this, and then we'll kind of transition a little bit. Does this change anything for you? Different perspective? How does it change things for you? Any ahas? The CFO trap. You know, you may have a similar situation of, I know I do, of that LLC that you were done with or didn't realize was still open that you're spending money on.

Justin Donald: Yeah, this one's tricky because no one thinks that they are the family CFO, but if you don't have one, then you are it. And if no one's owning that role and all the different components of that role, it's yours. And if you're not doing it, then no one's doing it, or it's not being done well. Things are slipping through the cracks. All right. Stuff's starting to come in here. It's definitely mine right now. I like that, right now, meaning in the future maybe it's not you, right? But it's just good to know.

Dane Espegard: Jeffrey, I'm jotting your question down.

Justin Donald: Also, go ahead and write down next to trap number five your number. All right? So, what is the number? One to five or zero to five. Can you see your whole balance sheet on one page today without asking anyone? If yes, give yourself a five. If no, give yourself a zero. If you've got to call more than one person to figure it out, that's a zero.

Speaker: This is great.

Justin Donald: This is so good. By the way, I really appreciate people's willingness to be open and transparent and say where they are, even if it doesn't look or feel good right now. But it's great to recognize it for where you want to go, right?

Dane Espegard: And I think it's really interesting to see some people that had a one in one category, have a five in another category. So, if that's all five, by the way, so if you could take a second, add up your five numbers, right? Take a look at what the total score is for you on these five. And out of a full score of 25, where'd you land, right? If you're comfortable, feel free throwing it in the chat. Some people may not, that's okay. So, as you're adding those things up, Justin, what would you do with this after somebody means just like too low.

Justin Donald: I love it. Too low. That's a great response.

Dane Espegard: What would you do with it?

Justin Donald: Oh, that's good. Well, I mean, I would look over these numbers because this is the scorecard. So, I told you at the beginning we were going to create a scorecard, and that scorecard was going to be a number that you could kind of assess your gaps and have an action plan moving forward. So, if you are under 15, I'd even say if you're under, like, 18, 19, maybe even 20, but definitely if you're under 15 out of 25, you have gaps. And by the way, that's normal. You don't have to feel bad. You don't have to freak out. But here's the big reveal. Everything we just covered has a name. The wealthiest families call it a family office. The family office handles one person, one team, one group under one roof, handles tax, investment, risk, estate, administration, working on it together as one plan and one team rather than five separate silos, or even worst case, in some instances, it's 10 separate silos, right?

So, the reason it fails is because most wealth advisors treat every one of these separately. The tax side doesn't interact with the investment side, and that doesn't interact with the estate side, and that dysfunction is going to cost you a lot. Like, at its highest level, that is pure dysfunction. It will cost you a lot. The gaps that exist cost a lot, and unfortunately, a lot of the professionals out there don't know it, don't understand it, and exacerbate what's going on because they continue to push the siloed approach. So, the solution is somebody who coordinates all the silos. I like the word conductor. One of our members who has a family office talks about this and taught me that comment.

A lot of people say, "Hey, I want a quarterback that kind of handles this," and they hand the ball off or they lead the plan. But I actually don't want a quarterback. I want a conductor. A conductor doesn't play a single instrument. They make sure everyone else is doing so, playing their instrument at a very high level, the right speed, the right pace, so it sounds beautiful together. And if you don't have one, it's you. Did you even know that you held this role? Surprise, you do if you don't have one. There are 10 differences between an intentional family office and an unintentional family office, and I'll give you three of them. If you look at the advisors category. an unintentional family office, each advisor sits in a silo. An intentional family office, they coordinate.

All the work is done under one roof, one team. Let's talk about strategy. Unintentional is a collection of advisors. That's most people. Intentional is strategy first, then people second. The stopping point. Here's a big one for successful people. So, unintentional, it's just always accumulating more. Just more, more, more, more, more, more money, more wealth, more businesses, more scale, more success. Intentional is they know what the wealth is for. And if you don't have an enough number, if you haven't figured out what that number is for you, an actual number that is enough for you, you will never have enough. The goalposts will always move.

And if you haven't put time and intention to it, unfortunately, the left side of this category is where you and your family reside. But I would imagine that's not where most people want to reside. The good news here is there are four ways to do this. You don't need, oh, by the way, this is really funny. Family offices are not just for billionaires playing on their yachts, all right? It's not just like the show, Succession, that many of you have probably watched, all right? So, there is good news. And so, there are four ways to think about a family office or to hire a family office or work with a family office, all right? There's a single-family office. I don't have a slide for this, so I'm just going to tell you. Actually, I do have a slide. We should include it in this, but it's not here.

A single-family office is dedicated. It's a dedicated team to one family or for one family. It's powerful, but it's expensive. Usually, this is the class of the billionaires because an all-in staff is going to cost generally about 4 to 6 million on the cheapest side of things, on up to 16 to 20 million on the most expensive side of things. And it usually doesn't make sense before about $500 million in net worth, and most of the time, even that is too low based on the cost. So, you usually see this at the billion dollars of net worth and above. Then you've got the multi-family office. So, it's one firm. It's a shared team, several unrelated families a few hundred of them in the US, and you hire them. The MFO or the multi-family office owns it, not the family, so that's the difference there.

There's a virtual family office with specialists coordinated remotely around your plan without the overhead of an office, so it can be more cost-effective. And then there's fractional, which is part-time leadership, like a fractional family CFO, so you can get the conductor that you need without the full-time salary. But one caution to this list: you'll find wealth managers that have rebranded as family offices. And I don't want to disparage anyone, but ask them, ask whoever your wealth manager that is trying to act as a family office what the five functions are of a family office and who's actually conducting. A lot of these wealth managers are serving clients that are 2 to 10 million in net worth, and they're changing their name or changing the sign on their door to say that they're a family office, but they're not really a family office. They're a wealth manager doing one function, maybe two functions of the five I just talked about.

They're not actually a single or multi-family office. Okay. So, question herewho coordinates? Whatever model you choose there are three questions. Who owns each of the five functions? Who conducts? How would you know if someone dropped the ball? Like, those questions matter so much. All right, Dean.

Dane Espegard: Yeah, Justin, this has been fantastic. There's a bunch, obviously of there's been some great conversation in the chat here as well. How would somebody put all of this together? How could they put this into practice? And I think that's, at least for me, I've got some that are lower, and I'm looking at this, and what are the steps to put this all in practice?

Justin Donald: Yeah, I mean, here's where we are. You know the five traps. You've got your scorecard, so you know where you're deficient, you know where your gaps are. You know the way out is a family office function owned on purpose with one conductor. Now, two honest things. First, you can take what I just gave you and do it yourself, and I mean that. Just take your scorecard to your CPA, your attorney, your advisors, and start closing the gap this week. Second, for a lot of people, it's not easy to do alone because the traps live between the advisors, and you're the only one standing in the middle. So, that's why I built what I built. That's why I built the Lifestyle Investor.

So, let me tell you a little bit about it. It's called the Lifestyle Investor Mastermind. It's a private, application-only community of entrepreneurs, investors, executives, and families. It started back in 2020, and we have about 105 members. It's built for accredited investors, typically 5 million in net worth to 100 million-plus in net worth. We've got a couple, few, actually a few billionaires in it. You know, most of these people are allocating $300,000 or around there, sometimes less, sometimes more, a year. Spouses are members, too, so they are included in everything that we do. And the whole purpose is to give you what the best-run families have without needing a billion-dollar office or a billionaire's budget.

So, I'll tell you the investment up front because I don't believe in hiding the ball. I just want to share with you. The Mastermind is $55,000 a year. Now, let me put that into context. A single-family office, as I shared earlier, just in salaries, is going to be generally $4 million to $16 million, or even $20 million a year, and that's before you buy any insurance, any tax work, any investments. The Mastermind is built to give you the function and the frameworks and the people and the tools and the peer group that these family offices have, but for a fraction of that price. So, another number I told you before, I personally spend at least $300,000 a year on masterminds, coaching, groups, my network.

And also our group, our Mastermind's due diligence budget is about $350,000 a year, so you're benefiting from that, too. And I'd just rather be honest than hype here. My goal is always that you're getting a 10X value for your time with us. Like, that's the goal. It's for every member that what they spend is a 10X return every year. So, it's not a guarantee, because it depends on what someone does with it and the results. I mean, our renewal rate is extremely high, especially for high-ticket programs, because so many people are doing it and getting the benefit from it.

Dane Espegard: Awesome. And if you're watching this and you want to apply, Justin's going to keep going with some other stuff here, but I just threw in the chat the actual link to the application. It's a short application. And I'll put it back in there in a little bit as well. But, Justin, if you want to kind of continue here as we wrap.

Justin Donald: Yeah. I'll share a few more things. So, here's what's in the room, and I'm going to map every item back to the five traps. All right, so number one for the tax trap, there's proactive planning instead of reactive compliance. So, you get exposure to advanced tax strategies and the professionals who understand how high-net-worth investors think about protecting and compounding wealth. So, that's the tax function, the people around it. And I can't promise any savings because every situation's different. And you'd run everything past your own CPA, though I will say our members would tell you that they've saved a tremendous amount in taxes each year.

Number two, for the deal trap, our deal flow and the frameworks that we have to judge it, we have one to three deal calls a month. We do 12 to 15 deals a year. We have eight to 10 deals open at any given time, in addition to that. And every opportunity has gone through an initial review before it's presented to you for your evaluation. So, you also get preferred terms, because we negotiate that based on the leverage we have with the capital that we aggregate. And you get to learn to build your own investment criteria and learn the way that the wealthy allocate with confidence.

Number three, for the protection trap, we've got vendor discounts, intro calls, the insurance audit. But our vendors, we have so many people that we call them preferred partners. And an auditor in our community who's found me more coverage for my insurance for less money, that's winning, and we want that for all of our members. Number four is the legacy trap. So, education and family office framework, and we do a monthly education call, sometimes more, but always at least monthly. All of our courses are free. All of our content and recordings and events are free. Plus the family office framework and the next generation content. And then number five, for the CFO trap, the tools and the people that can be your conductor.

We have a family office AI project, and I've opened up my own family office team to our members, which I'm really excited about. And then number six, and really the thing nobody can copy is the room. I host at least two calls a month, including a monthly member discussion with me. Actually, I just did one yesterday. Around 10 member-hosted meetups a year in different cities. We actually have our Napa event next what? In two weeks. Yeah, two weeks. A complimentary spring and fall live event. A private year-end retreat. Spouses are welcome. And the network, the tax strategy, the education are often what members talk about the most. And, oh yes, of course, access to my personal sommelier, Mario Matavesco. People love that. It's just a blast

Dane Espegard: But this slide here is awesome. So, our members come to us for a lot of different reasons, and you can see on the slides here, there's a few. These are call it member wins. There's, in our private community on Circle, some of the members have posted some of their wins, and you can see here Evan cutting his 2025 tax liability by 85%. He's a medical professional, right? And being able to keep the capital compounding. There's more obviously that you can read in there. Steve Randazzo wiping out nearly a million dollars in taxes in 2025. John Bolger reducing his taxable ordinary income by 65%. So, people are talking about the tax piece, but then obviously on the other side of that is what are they doing with those taxes? And then Drew McWilliams selling his business for 90% more than what his plan was.

And I remember with meeting with Drew prior to joining the community, talking about a potential exit, and it was neat to see that kind of go full cycle while he was a member in the group as well. So, if you're sitting here thinking that you'd love to join us, but maybe you aren't at the mastermind level yet, that's often something that I hear from people. We know that the mastermind, the Lifestyle Investor Mastermind isn't the right fit for everyone on the call, and that's really by design. And so, if your net worth is potentially at the $1 million to $5 million range, Tribe of Investors might actually be the fit for you. So, this is meant for a group, and you can see all the information on here, meant for the individuals that are allocating call it, sub-250 a year.

There are some individuals that are allocating a little bit more, but for a lot of these individuals, it could be anywhere from 50,000 to 250,000 a year. Justin's involved with one monthly call with this group. Ryan, our COO, leads a monthly group education call, and then there's also open member discussions. This one here, they get about six to eight new deals a year passed down from the Lifestyle Investor Mastermind, and there's typically six open or so at, at any given time. The deals are they're shared as recordings. There's also three to four member meetups a year. That's been in the past. This next year, there's going to be access to quite a few more as I'm heading those up. I'm excited about that.

And then you get the same complimentary spring and fall live events, private year-end retreat that's coming up as well, and then all the courses are free, the Family Office AI project, the preferred deal terms, the vendor discounts, all the stuff that Justin was talking about as well. So, That's the Tribe of Investors, and you can see right there for a $30,000 annual investment. There's about 70, I think there's 75, closer to 80 members now in this community here as well. So, in terms of what we covered today with the traps, the education, the deal trap, the tax content, building your own investment criteria, every deal gets measured against your goals instead of somebody's pitch deck, which I think is really valuable for the people specifically in this range here, right?

That Tribe of Investors can really fit that group well. It's the same application that I threw in the chat before, so it's the same thing there, right? And just so everybody understands how this goes because I want to make sure the people feel zero pressure. When somebody applies, they meet with someone on our team. Often it's myself or somebody else that's on our team. And on that conversation, we talk about fit. So, we talk about goals, alignment. That's it. And it's really a two-way street. It's for you to decide if you're right, if you feel like the group is right, and it's also for us to decide if you're right for the group. And if we're unsure, it's just a no. It has to be a heck yes for us.

We turn down people every month, and we'd rather choose to have a smaller room of the right people, and I know that our members really appreciate that, because anytime we do invite a new member into our community, they're really excited to meet that person because we built a lot of trust with them around that. So, keep in mind, when somebody applies, that's just the next step. People are never obligated to do anything after applying as well, right? So, now here's the real reason that we were doing this webinar, if you will, today, is that this is the last opportunity of the year for someone to join and still be eligible to attend our member retreat this December.

So, applications will close within 72 hours of this here. So, this is really the last window because there's a ton of planning that goes into our end-of-year retreat. The retreat is where you meet the entire community all in one room, face-to-face. And for new members, it's at the beginning of their 12 months, which is great. And they start relationships in person, face-to-face, and then they carry those throughout the year. Spouses are welcome, and most of our members bring their spouses to this event. It's one of the great things about this member community. And we cap the room. And so, there's a good amount of people, but it's also very intimate. And just so no one misses, again, it's 72 hours from this training is where the cutoff is going to be.

And the link, again, is right there in the chat, lifestyleinvestor.com/mastermind. So, you can go there. We'll meet with you, talk about fit, goals, alignment, all of that. And then we'll see if you're eligible for the year-end retreat there as well. Two paths from here. First one is take today's scorecard, take it back to your team, close the gaps yourselves. I saw someone in the chat say, "I love knowing..." I think it was Catherine, "I love knowing where the gaps are at.” So, finding those gaps, that's an awesome outcome, right? The second path is someone from what they found today. They apply, they sit with our team, they find out if it's a fit, and then they're potentially in the room in December with a bunch of lifestyle investors, either in the Mastermind or in the Tribe.

Either way, both of those are a big win, right? So, before we jump to questions, last time you can scan this. It'll take you right to the application. And Justin, let's get into some questions here.

Justin Donald: Okay. Sounds good.

Dane Espegard: Do we have any... I'm going to go back to one that we had before. Hiring a VA for CFO position. Have you heard of that? And how would somebody go about finding one?

Justin Donald: I think you could hire a VA for bookkeeping. I think it's going to be hard to hire a VA for like a CFO would be a higher tier. So, you kind of have like a CFO, a VP of finance, and you're going to have... I mean, depending on the organization, you could have a controller under there. There's a bunch of different things. But you know, I, I would be very hesitant to hire a CFO through a VA, because I don't think they're going to have the capacity to do the higher-level work that's needed in that role.

Dane Espegard: There was a question on there earlier from Stacy T. about questions to find a good tax strategist. I know we have a resource on that, so I'm going to send… I sent her a message and just said, "I'll send that to you individually." Anything else that you want to add for that?

Justin Donald: I mean, usually we try to keep our preferred vendors just for our community so that we're not giving them too many people, and they can't service our members. But I just think the most important thing is you have someone who advises your CPA. Your CPA likely is not a tax strategist. And even if they call themselves a tax strategist, it is probably a super loose term. If you look at a family office org chart, there is always a tax strategist and, in many cases, several tax strategists. So, for me personally, I have three different tax strategists that all advise down to my CPA.

Dane Espegard: Yep. That's great. Patrick Turley asked earlier, "Do umbrellas need to comprehend trust structure versus personal?"

Justin Donald: So, you want to get an attorney that's going to cover this. All right. So, you've got an estate, and then you've got, so there are assets in your estate, assets out of your estate, and then there's also liability. There's some liability protection by having a business, an entity. There's liability protection by having a trust. But then you have personal assets. Like if you have a car that's not in your business name, it's in your personal name. If you have a kid driving your car there is liability if there is an accident that you can get sued and they can go after other assets that you own. And so, you want an umbrella policy as a catchall for anything that may be missed any assets that aren't titled the right way, any assets that haven't conveyed properly to the entity that they are supposed to be in.

So, this would coordinate together your estate plan with your insurance would coordinate together, but it's going to be two different people that are going to do the work there.

Dane Espegard: That's great. Those were the main ones that I saw in there. If anybody has any questions specifically on the mastermind either, feel free to throw those in the chat. Justin, I got sent one message independently that wasn't in here. And it was more of a question on somebody feeling like, "I don't know that I'm necessarily at the place for the mastermind yet." What would you say to someone in that situation?

Justin Donald: Well, I think it's important that you figure out where you want to be in the future and how to get there. So, I think there are probably a lot of people that feel like, "Hey, Lifestyle Investor may be at too high of a reach for me." And whether it be in net worth or investable assets or price point, and that may be true. You've got other people that may say, "Oh, Tribe of Investors makes more sense. It's at a lower price point. And I kind of fit in the net worth range a little bit more." And then I mean, technically, we have our young adults program, too, our Foundations program. We didn't talk at all about that, but it's mainly like 18 to 34-year-olds. So, it's a great, you know, it can be a good starting point for a lot of people or even for kids of some of you that are on this call. But I think everyone needs to start somewhere.

And we'd love it to be with us, but even if it's not with us, find a group you can get in. A peer group that has mentorship is going to be the greatest investment you can ever make. I say this from personal experience and, I mean, it's just how I feel. I wouldn't be where I am if I hadn't invested in myself in this way. Like, this is, to me, the greatest investment that you can make, is investing in your education, your peer group, your mentorship, and by proxy, that happens for your children, for your family, and everything beyond.

Dane Espegard: Yeah. And I can speak to also. Like, I regularly hear from people when people fill out the application, "I don't know that I'm right for this or ready for this yet. It might be in a year or two." And people often feel like, "I've got to do all these things before I'm ready." And my response to them is, "Do them in the group." Because you're going to be around a bunch of people that have probably already navigated those same situations. And so, you're metaphorically bending the curve, right? In other words, you're going to be able to move faster in that when you've got a peer group that is speaking the same language. And many of our members, we hear this from them often, that they feel like they're a little bit of a loner or on an island when they're going down this stuff.

And I think it was Catherine in here that's like, "Ah, you validated how I felt." And you've got a lot of people in the mastermind that that's exactly what they're going through. Mike just threw in the chat, "How do the family office strategies change for high W-2 earners?"

Justin Donald: Well, I think the way a family office works, I mean, so generally and everything varies, but generally your income, your net worth, like, that's going to dictate it more than if you're a business owner versus a W-2. There are still the assets that you need to protect. There's still the coordination that needs to happen. You're still earning an income. You're still paying taxes. By the way, is the tax code built to be more friendly to a business owner? Most certainly. But are there tons of tax strategies out there for W-2s? Yes, and most of them don't even know the best ones. So, I mean, this is the importance of finding a great tax strategist. So, I'd actually make the argument, if you are a W-2, it's even more important that you find a tax strategist because you probably don't have people in your life speaking to that.

From the standpoint of a business owner, and really it's a function of how much you're making. Like, if you don't have a tax strategist, let me just put it this way. You are tipping the government. Plain and simple. That's it

Dane Espegard: And Mike, I'm going to mention, that slide that we had with the kind of testimonials from some of the members, three of the individuals that were talking about this. These huge tax savings that they had were W-2. And so, it's not the tax strategies. Yes, there are more, but there's plenty for the W-2 earners as well. Well, we're pretty much out of time. We're over on time. So, let me just kind of wrap this thing up. today, obviously, Justin walked through the five wealth traps. Each one has a family office function as its solution. Tax trap solved, excuse me, by the tax function. The deal trap solved by the investment function. The protection trap solved by the risk function. The legacy trap solved by the estate function. And then lastly, the CFO trap solved by the administration function.

And the way out of all five is to own each function on purpose with one conductor, not a quarterback. So, next steps, as we talked about, add up your scorecard. If it's under 15, you've got some gaps worth closing. And if you want help with it, we're here for you, lifestyleinvestor.com/mastermind. One application covers both, and we'd be looking forward to having a conversation with you. Just remember the deadline in the next 72 hours for that as well. The replay is going to hit your inbox pretty shortly after this. Justin, any last words?

Justin Donald: Yeah. I mean, if you're looking for what 72 hours is, it's Monday, November 2nd. But really for me, I just want to say thank you. Thank you for spending the time with us. I know there are a lot of other things that you can be doing, so I just want to honor you for making the choice to do something that you feel like is going to benefit you and your family and your legacy. And I hope that this was informative and useful. And my challenge to you is to go close one of those gaps this week. Find one gap that you can close, that you can work on, and then focus on the others later.

Dane Espegard: Fantastic. All right, everybody, have a great rest of... Is there a link to watch? Yeah, Tony, you're going to get it sent to your email. Since you registered, we'll email you the link to rewatch this as many times as you'd like. Have a great rest of your evening, everybody.

Justin Donald: Good to see you, Tony. I just saw Tony in the pickleball court.

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