July 8, 2025
114: The Only Asset Class That Can Replace Your W-2
If you're looking for a way to replace your paycheck—whether it's $150K or $200K a year—with consistent income from investments, you're in the right place. I want to share how I personally made that transition using private equity real estate. This isn't just theory—I've replaced my W-2 income with $175,000 annually, and it's all thanks to this strategy.
Private equity real estate has long been the go-to strategy for the ultra-wealthy. It's not only a powerful income generator, but it's also a smart way to reduce taxes and build long-lasting, generational wealth. I want to break down why this approach works so well and how you can start applying it yourself—even if you're just beginning.
The truth is, many traditional income investments simply don’t work for high earners. Bonds, savings accounts, and even dividend-paying stocks can fall short. Yields are typically low, and worse, the income is taxed at ordinary rates. That’s why it’s time to look at what really works: private equity real estate.
What makes it different? First, it offers strong, recurring cash flow. Second, there are powerful tax advantages—depreciation, cost segregation, and other strategies can significantly reduce your taxable income. Third, it's a tangible asset that builds equity over time. And perhaps most importantly, it's scalable. Whether you're aiming for a few thousand a month or a full income replacement, private equity real estate can grow with your goals.
Through this conversation, I’ll show you why I—and many others—believe this is the best income engine for financial independence. You’ll get insights into what to look for in an investment, the typical returns you can expect, and how to manage risk in this asset class. I’ll also discuss what makes a good operator, the difference between active and passive investing, and how to start building your portfolio today.
The journey to financial freedom starts with knowledge and action. I’m here to share the lessons I’ve learned so that you can take your own steps with clarity and confidence. Whether you're a tech professional, a business owner, or simply someone seeking better ways to grow and protect your wealth, private equity real estate might be the key you've been missing.
Transcript
WEBVTT
00:00.251 --> 00:10.421
[SPEAKER_00]: If you want to replace your paycheck of one hundred fifty to two hundred thousand dollars with investment income, you need to be investing in private equity real estate.
00:10.781 --> 00:16.106
[SPEAKER_00]: Private equity real estate is the income strategy, the ultra wealthy have used for decades.
00:16.747 --> 00:21.229
[SPEAKER_00]: to create cash flow, reduce taxes, and build generation of wealth.
00:21.629 --> 00:31.833
[SPEAKER_00]: Today, I'm breaking down for you why private equity really state is this core engine of financial independence and how you can start using it in your portfolio.
00:35.654 --> 00:57.853
[SPEAKER_00]: Hello, I'm Christopher Nelson and I personally replaced my WTP check with a hundred seventy five thousand dollars of income from private equity really state and today you're going to learn why myself and other wealthy individuals are leveraging private equity real estate to be the income engine to financial independence.
00:58.373 --> 00:59.734
[SPEAKER_00]: So let's be real.
01:00.054 --> 01:04.876
[SPEAKER_00]: Let's have this real moment that many income investments don't stand up.
01:05.257 --> 01:06.937
[SPEAKER_00]: They don't work for high earners.
01:07.338 --> 01:20.384
[SPEAKER_00]: Interesting come from bonds and savings account is fully taxed at ordinary rates and you're only going to get three, four percent, maybe five or six percent at most qualified dividends from stock.
01:20.745 --> 01:27.048
[SPEAKER_00]: They can be better, but the yields are often weak and many times the majority of them are going to be under two percent.
01:27.488 --> 01:33.691
[SPEAKER_00]: And newities can yield three to five percent a year, but again, some of those gains can be taxed as income.
01:34.051 --> 01:41.075
[SPEAKER_00]: Municipal bonds to their credit are tax-free, but many times these low returns barely beat inflation.
01:41.415 --> 01:54.002
[SPEAKER_00]: So the bottom line is that many of these traditional income streams that, again, are in this traditional bucket under the purview of the SEC and managed by them, they don't generate enough income in the aren't tax-efficient.
01:54.442 --> 01:57.967
[SPEAKER_00]: So you're going to end up maybe earning more, but you're going to keep less.
01:58.468 --> 02:00.050
[SPEAKER_00]: This isn't financial freedom.
02:00.590 --> 02:01.792
[SPEAKER_00]: That's just friction.
02:02.193 --> 02:03.595
[SPEAKER_00]: Here is where it gets interesting.
02:04.035 --> 02:10.884
[SPEAKER_00]: Private equity real estate changes the entire game when it comes to investment assets.
02:11.385 --> 02:18.968
[SPEAKER_00]: You can find annual yields of six, eight, even up to twelve percent cash on cash return.
02:19.428 --> 02:22.089
[SPEAKER_00]: This gives you real predictable cash flow.
02:22.409 --> 02:27.870
[SPEAKER_00]: I'm talking month of Vermont quarter of a quarter from stabilized income producing assets.
02:28.371 --> 02:29.111
[SPEAKER_00]: And that's not all.
02:29.671 --> 02:33.774
[SPEAKER_00]: You also can get bonus depreciation that offsets the income.
02:34.194 --> 02:39.838
[SPEAKER_00]: So this then drives great taxable income all the way to the bottom line.
02:40.198 --> 02:42.600
[SPEAKER_00]: Some of this income is taxed zero.
02:43.100 --> 02:46.002
[SPEAKER_00]: So then you also have it fully managed by professionals.
02:46.222 --> 02:51.966
[SPEAKER_00]: And this is arguably the challenge right is finding the right professionals, finding the right investment to make.
02:52.166 --> 02:55.729
[SPEAKER_00]: But this isn't house flipping or DIY land learning, right?
02:55.789 --> 03:11.080
[SPEAKER_00]: This is where you're able to place your dollars in institutional quality investments, multifamily, industrial, self-storage, build to rent, all along professional operators, where you're able to continue to generate this income.
03:11.380 --> 03:14.343
[SPEAKER_00]: But hold on, the goodness does not stop there.
03:15.043 --> 03:18.065
[SPEAKER_00]: income and depreciation are only half of the story.
03:18.365 --> 03:22.047
[SPEAKER_00]: Private equity real estate also delivers appreciation.
03:22.387 --> 03:26.870
[SPEAKER_00]: So that means that the asset can also continue to increase in value over time.
03:27.350 --> 03:36.076
[SPEAKER_00]: So if you do strategic renovations or you're located in an area that's appreciating and value or you have operational improvements, right?
03:36.536 --> 03:43.220
[SPEAKER_00]: Many of the value of commercial assets is also judged on business operations, the net operating income.
03:43.680 --> 03:48.884
[SPEAKER_00]: So you can see these the value of your asset increase over time and get cash flow.
03:49.184 --> 03:53.787
[SPEAKER_00]: And then if your loan is amortizing, you're also going to have equity pay down.
03:54.228 --> 03:57.550
[SPEAKER_00]: So tenants are then paying down the debt on your behalf.
03:57.950 --> 03:59.491
[SPEAKER_00]: So you're increasing your ownership.
04:00.092 --> 04:01.573
[SPEAKER_00]: All of these elements, the
04:01.793 --> 04:15.258
[SPEAKER_00]: income, the appreciation, the equity paydown, and the tax efficiency create a very unique investment that allows you to get financially independent and build generational wealth.
04:15.698 --> 04:23.761
[SPEAKER_00]: You continue to earn while you're hold, reducing taxes while you earn, and growing long-term equity the entire time.
04:24.181 --> 04:29.483
[SPEAKER_00]: That's why these assets just aren't cashflow plays, but they're wealth accelerators.
04:30.063 --> 04:33.087
[SPEAKER_00]: So then ask yourself, what are the ultra wealthy doing?
04:33.528 --> 04:36.291
[SPEAKER_00]: Is private equity really state something that they invest in?
04:36.672 --> 04:48.487
[SPEAKER_00]: Well, looking at the UBS global family office report for families that have a net worth of a hundred million dollars or more for twenty twenty four and twenty twenty five, it reveals a dramatic shift.
04:48.927 --> 05:00.218
[SPEAKER_00]: North American family offices now have fifty four percent of their portfolios in alternative meaning investments outside of the stock market outside of traditional investments.
05:00.798 --> 05:11.369
[SPEAKER_00]: This is up forty two percent from the previous year real estate alone surged from ten to eighteen percent private equity climb twenty seven percent
05:11.869 --> 05:19.952
[SPEAKER_00]: And now, a lot of family officers are making direct investments, meaning they're standing up their own teams to go by real estate themselves.
05:20.452 --> 05:30.155
[SPEAKER_00]: What this means is these families just aren't diversifying, but they're designing income first, taxed advantage, multi-generational portfolios.
05:30.515 --> 05:32.436
[SPEAKER_00]: They've got the patient money.
05:32.756 --> 05:34.437
[SPEAKER_00]: They're not waiting to retire.
05:34.457 --> 05:38.458
[SPEAKER_00]: They're operating their wealth like a strategic business.
05:38.958 --> 05:44.506
[SPEAKER_00]: to understand why private equity real estate is so powerful in replacing your paycheck.
05:45.047 --> 05:51.777
[SPEAKER_00]: Let's look at a couple key metrics, the combination of yield versus the tax treatment of the income.
05:52.218 --> 05:53.279
[SPEAKER_00]: So let's take an example.
05:54.060 --> 05:57.882
[SPEAKER_00]: one million dollar investment across these various income vehicles.
05:58.303 --> 06:00.264
[SPEAKER_00]: So let's go for private equity real estate.
06:00.424 --> 06:03.286
[SPEAKER_00]: And let's be focused on a ten percent yields.
06:03.406 --> 06:06.808
[SPEAKER_00]: So for a million dollars, that would give you one hundred thousand dollars.
06:07.268 --> 06:22.658
[SPEAKER_00]: The estimated taxes because the depreciation would be somewhere between zero in ten thousand dollars, meaning that your after tax income from private equity real estate is ninety or a hundred thousand dollars for that million dollar investment.
06:23.038 --> 06:25.159
[SPEAKER_00]: Let's think about municipal bonds, right?
06:25.579 --> 06:28.039
[SPEAKER_00]: Three percent yield is around the average.
06:28.620 --> 06:31.080
[SPEAKER_00]: So that would then give you thirty thousand dollars.
06:31.721 --> 06:39.823
[SPEAKER_00]: It's not taxed at all in at least federally and in many states and municipalities that then you would get a thirty thousand dollar investment.
06:40.343 --> 06:45.509
[SPEAKER_00]: But the reality is that the delta between the thirty and the hundred thousand dollars is significant.
06:45.529 --> 06:53.697
[SPEAKER_00]: If you think about a qualified dividend, a million dollars invested in dividend stocks at two percent gives you a twenty thousand dollar dividend.
06:53.877 --> 07:01.486
[SPEAKER_00]: But then you're also going to take off three to four thousand dollars in taxes resulting in just sixteen or seventeen thousand dollars of income.
07:01.946 --> 07:17.779
[SPEAKER_00]: pretty hard to live off of interest income for percent that million dollars will generate forty thousand dollars but again take off fourteen to twenty thousand dollars in taxes you will then be left over with twenty to twenty six thousand dollars same thing with the new it is
07:18.379 --> 07:27.122
[SPEAKER_00]: five percent, get you fifty thousand dollars, but then minus the taxes, you're going to be left with twenty five to thirty two thousand dollars.
07:27.622 --> 07:39.846
[SPEAKER_00]: The key thing to understand is with private equity real estate, you're generating high income that's often completely offset by depreciation, especially in the early years of your investment.
07:40.266 --> 07:44.150
[SPEAKER_00]: This gives you high volume tax efficient income.
07:44.450 --> 07:57.482
[SPEAKER_00]: And when you compare it with those other traditional income vehicles, where taxes consume thirty to fifty percent of your yield, you have a much more powerful vehicle to replace your paycheck.
07:58.082 --> 08:11.084
[SPEAKER_00]: And here's the bonus, what you may not know is that your passive losses or depreciation that are not used in the current year can be carried forward to future years to offset future gains.
08:11.465 --> 08:19.826
[SPEAKER_00]: This becomes a powerful negative balance on your balance sheet that you can move forward over time to continue to protect your income.
08:20.166 --> 08:24.167
[SPEAKER_00]: This is the game that the ultra wealthy play and they play it to win.
08:24.767 --> 08:34.349
[SPEAKER_00]: So let's continue this comparison because it's so important that you understand when looking at these types of assets, where is the opportunity and also where is the risk?
08:34.729 --> 08:42.490
[SPEAKER_00]: So if we're comparing this, based on what really matters, let's look at yield, tax efficiency, liquidity, right?
08:42.590 --> 08:48.151
[SPEAKER_00]: How quickly you can access your capital, and then also the W-II replacement potential, right?
08:48.251 --> 08:50.371
[SPEAKER_00]: Can it support your lifestyle sustainably?
08:50.711 --> 08:53.492
[SPEAKER_00]: And so let's start again with private equity real estate.
08:53.932 --> 09:02.341
[SPEAKER_00]: the yield you can get, you know, and you can get low yields there too, but the yields that matter are between eight and twelve percent cash on cash return.
09:02.681 --> 09:09.368
[SPEAKER_00]: As we know tax efficiency, it's very high giving you depreciation that can wipe out paying taxes on the income.
09:09.688 --> 09:10.789
[SPEAKER_00]: Now, where's the risk?
09:10.969 --> 09:13.292
[SPEAKER_00]: The risk is going to be in the liquidity.
09:13.772 --> 09:22.001
[SPEAKER_00]: Many of these investments are illiquid, meaning that you're locking up your capital for one, three, five, maybe even ten years.
09:22.402 --> 09:24.504
[SPEAKER_00]: So that's where the risk is in these investments.
09:24.864 --> 09:31.031
[SPEAKER_00]: But it has the highest potential to generate high income and make it tax-efficient as well.
09:31.471 --> 09:34.735
[SPEAKER_00]: The return on reads is somewhere between three to four percent.
09:35.156 --> 09:37.519
[SPEAKER_00]: And there is no shelter on taxes.
09:37.579 --> 09:41.423
[SPEAKER_00]: You do not have the same advantages to take the depreciation.
09:42.024 --> 09:44.507
[SPEAKER_00]: Somebody else is taking that down the line.
09:44.847 --> 09:46.690
[SPEAKER_00]: And so, but it does have liquidity.
09:47.130 --> 09:52.134
[SPEAKER_00]: Are you a daily liquidity, so you can actually get out of those investments very quickly and very nimbley.
09:52.435 --> 10:00.001
[SPEAKER_00]: But when you think about replacing your W-II, it has low yield and low tax advantage, so it's not going to provide you what you need.
10:00.481 --> 10:05.265
[SPEAKER_00]: Municipal bonds as well, two to four percent, yes, they're very tax efficient.
10:05.606 --> 10:06.726
[SPEAKER_00]: They're also liquid.
10:06.827 --> 10:09.629
[SPEAKER_00]: You can trade them, get in and out of them very nimbley.
10:10.029 --> 10:17.872
[SPEAKER_00]: But the low yield is something that's not going to allow you to take two, two and a half million dollars in really replace your paycheck.
10:18.372 --> 10:20.892
[SPEAKER_00]: And it goes back to dividend bearing stocks as well.
10:21.413 --> 10:22.393
[SPEAKER_00]: One to three percent.
10:22.833 --> 10:24.874
[SPEAKER_00]: You also are getting taxed on that as well.
10:25.394 --> 10:26.474
[SPEAKER_00]: And is liquid.
10:26.734 --> 10:28.735
[SPEAKER_00]: They're also appreciating assets as well.
10:28.795 --> 10:30.035
[SPEAKER_00]: So many advantages there.
10:30.375 --> 10:34.177
[SPEAKER_00]: But from a paycheck replacement, it's going to be low.
10:34.697 --> 10:38.178
[SPEAKER_00]: And it's not going to give you the income that you need to replace it.
10:38.558 --> 10:40.959
[SPEAKER_00]: And this again goes back to annuities.
10:41.439 --> 10:47.261
[SPEAKER_00]: Something that has lower income, three to six percent, you're being taxed as ordinary gains.
10:47.741 --> 10:50.262
[SPEAKER_00]: And again, that's a very ill-liquid as well.
10:50.382 --> 10:56.644
[SPEAKER_00]: So now you have low return, you have no tax advantages and you're locked in for a long period of time.
10:57.024 --> 11:00.805
[SPEAKER_00]: That is not going to be a great advantage resource to replace your paycheck.
11:01.245 --> 11:15.150
[SPEAKER_00]: So, this is where I'm trying to with details paint this picture that states, only private equity real estate offers the yield, the tax efficiency, and the ability to consistently replace high-income salaries.
11:15.710 --> 11:20.832
[SPEAKER_00]: This is why everybody's talking about it and it is a key play of the ultra wealthy.
11:21.372 --> 11:24.013
[SPEAKER_00]: The reality is this just isn't about returns.
11:24.473 --> 11:36.778
[SPEAKER_00]: It's about building a diversified portfolio that functions like a business where you have a key income generating arm that's tax-optimized and scalable to truly replace your paycheck.
11:37.318 --> 11:45.601
[SPEAKER_00]: This is exactly why wealth-offs is built around private equity real estate as the core income engine of our microfamily office strategy.
11:46.221 --> 11:52.406
[SPEAKER_00]: We help tech professionals just like you with high income and large equity holdings.
11:52.687 --> 12:01.875
[SPEAKER_00]: Understand how do you unlock your wealth in equity and create evergreen income portfolios that can truly replace your paycheck?
12:02.395 --> 12:14.358
[SPEAKER_00]: Also understanding how you leverage the tax benefits of depreciation to protect that income, so it's not only large at the top line, it's also substantial at the bottom line as well.
12:14.678 --> 12:23.300
[SPEAKER_00]: And then also by structuring your entity or microfamily office in your investments, this is where you continue to reduce your tax drag.
12:23.840 --> 12:27.383
[SPEAKER_00]: Remember, this isn't about DIY rentals, right?
12:27.463 --> 12:33.547
[SPEAKER_00]: This is about intentional capital deployment using vetted institutional quality vehicles.
12:34.068 --> 12:36.870
[SPEAKER_00]: I'm not talking about your neighbors next door syndication.
12:37.450 --> 12:47.698
[SPEAKER_00]: I'm talking about private equity companies that have been operating for many years and they execute like institutions, but they take retail capital.
12:48.278 --> 12:57.303
[SPEAKER_00]: Many of our clients here go from zero percent income from alternatives to two hundred thousand dollars in tax sheltered income, often in under twenty four months.
12:57.804 --> 12:59.004
[SPEAKER_00]: So here's the big takeaway.
12:59.605 --> 13:01.546
[SPEAKER_00]: It's not just about earning more.
13:02.146 --> 13:05.028
[SPEAKER_00]: It's about managing your money to work for you.
13:05.528 --> 13:10.632
[SPEAKER_00]: Private equity really state is the most tax efficient, high yield income asset in the market.
13:11.073 --> 13:13.375
[SPEAKER_00]: It's the foundation of your financial independence.
13:13.835 --> 13:27.948
[SPEAKER_00]: If you are still investing in a drawdown portfolio and you're still relying on hope, it's time to start operating your portfolio like a business that you're the CEO of because real wealth does not come from selling assets.
13:28.528 --> 13:31.992
[SPEAKER_00]: It comes from cash flow, control, and strategy.
13:32.492 --> 13:33.473
[SPEAKER_00]: This is wealth ops.
13:33.914 --> 13:44.885
[SPEAKER_00]: If you want to learn more every month, we won a live master class, the wealth ops way that teaches you how to architect the portfolio that you want to run is a micro family office.
13:45.445 --> 13:48.368
[SPEAKER_00]: Go to wealth ops.live right now to apply.
13:48.388 --> 13:49.530
[SPEAKER_00]: Thank you very much.
00:00.251 --> 00:10.421
[SPEAKER_00]: If you want to replace your paycheck of one hundred fifty to two hundred thousand dollars with investment income, you need to be investing in private equity real estate.
00:10.781 --> 00:16.106
[SPEAKER_00]: Private equity real estate is the income strategy, the ultra wealthy have used for decades.
00:16.747 --> 00:21.229
[SPEAKER_00]: to create cash flow, reduce taxes, and build generation of wealth.
00:21.629 --> 00:31.833
[SPEAKER_00]: Today, I'm breaking down for you why private equity really state is this core engine of financial independence and how you can start using it in your portfolio.
00:35.654 --> 00:57.853
[SPEAKER_00]: Hello, I'm Christopher Nelson and I personally replaced my WTP check with a hundred seventy five thousand dollars of income from private equity really state and today you're going to learn why myself and other wealthy individuals are leveraging private equity real estate to be the income engine to financial independence.
00:58.373 --> 00:59.734
[SPEAKER_00]: So let's be real.
01:00.054 --> 01:04.876
[SPEAKER_00]: Let's have this real moment that many income investments don't stand up.
01:05.257 --> 01:06.937
[SPEAKER_00]: They don't work for high earners.
01:07.338 --> 01:20.384
[SPEAKER_00]: Interesting come from bonds and savings account is fully taxed at ordinary rates and you're only going to get three, four percent, maybe five or six percent at most qualified dividends from stock.
01:20.745 --> 01:27.048
[SPEAKER_00]: They can be better, but the yields are often weak and many times the majority of them are going to be under two percent.
01:27.488 --> 01:33.691
[SPEAKER_00]: And newities can yield three to five percent a year, but again, some of those gains can be taxed as income.
01:34.051 --> 01:41.075
[SPEAKER_00]: Municipal bonds to their credit are tax-free, but many times these low returns barely beat inflation.
01:41.415 --> 01:54.002
[SPEAKER_00]: So the bottom line is that many of these traditional income streams that, again, are in this traditional bucket under the purview of the SEC and managed by them, they don't generate enough income in the aren't tax-efficient.
01:54.442 --> 01:57.967
[SPEAKER_00]: So you're going to end up maybe earning more, but you're going to keep less.
01:58.468 --> 02:00.050
[SPEAKER_00]: This isn't financial freedom.
02:00.590 --> 02:01.792
[SPEAKER_00]: That's just friction.
02:02.193 --> 02:03.595
[SPEAKER_00]: Here is where it gets interesting.
02:04.035 --> 02:10.884
[SPEAKER_00]: Private equity real estate changes the entire game when it comes to investment assets.
02:11.385 --> 02:18.968
[SPEAKER_00]: You can find annual yields of six, eight, even up to twelve percent cash on cash return.
02:19.428 --> 02:22.089
[SPEAKER_00]: This gives you real predictable cash flow.
02:22.409 --> 02:27.870
[SPEAKER_00]: I'm talking month of Vermont quarter of a quarter from stabilized income producing assets.
02:28.371 --> 02:29.111
[SPEAKER_00]: And that's not all.
02:29.671 --> 02:33.774
[SPEAKER_00]: You also can get bonus depreciation that offsets the income.
02:34.194 --> 02:39.838
[SPEAKER_00]: So this then drives great taxable income all the way to the bottom line.
02:40.198 --> 02:42.600
[SPEAKER_00]: Some of this income is taxed zero.
02:43.100 --> 02:46.002
[SPEAKER_00]: So then you also have it fully managed by professionals.
02:46.222 --> 02:51.966
[SPEAKER_00]: And this is arguably the challenge right is finding the right professionals, finding the right investment to make.
02:52.166 --> 02:55.729
[SPEAKER_00]: But this isn't house flipping or DIY land learning, right?
02:55.789 --> 03:11.080
[SPEAKER_00]: This is where you're able to place your dollars in institutional quality investments, multifamily, industrial, self-storage, build to rent, all along professional operators, where you're able to continue to generate this income.
03:11.380 --> 03:14.343
[SPEAKER_00]: But hold on, the goodness does not stop there.
03:15.043 --> 03:18.065
[SPEAKER_00]: income and depreciation are only half of the story.
03:18.365 --> 03:22.047
[SPEAKER_00]: Private equity real estate also delivers appreciation.
03:22.387 --> 03:26.870
[SPEAKER_00]: So that means that the asset can also continue to increase in value over time.
03:27.350 --> 03:36.076
[SPEAKER_00]: So if you do strategic renovations or you're located in an area that's appreciating and value or you have operational improvements, right?
03:36.536 --> 03:43.220
[SPEAKER_00]: Many of the value of commercial assets is also judged on business operations, the net operating income.
03:43.680 --> 03:48.884
[SPEAKER_00]: So you can see these the value of your asset increase over time and get cash flow.
03:49.184 --> 03:53.787
[SPEAKER_00]: And then if your loan is amortizing, you're also going to have equity pay down.
03:54.228 --> 03:57.550
[SPEAKER_00]: So tenants are then paying down the debt on your behalf.
03:57.950 --> 03:59.491
[SPEAKER_00]: So you're increasing your ownership.
04:00.092 --> 04:01.573
[SPEAKER_00]: All of these elements, the
04:01.793 --> 04:15.258
[SPEAKER_00]: income, the appreciation, the equity paydown, and the tax efficiency create a very unique investment that allows you to get financially independent and build generational wealth.
04:15.698 --> 04:23.761
[SPEAKER_00]: You continue to earn while you're hold, reducing taxes while you earn, and growing long-term equity the entire time.
04:24.181 --> 04:29.483
[SPEAKER_00]: That's why these assets just aren't cashflow plays, but they're wealth accelerators.
04:30.063 --> 04:33.087
[SPEAKER_00]: So then ask yourself, what are the ultra wealthy doing?
04:33.528 --> 04:36.291
[SPEAKER_00]: Is private equity really state something that they invest in?
04:36.672 --> 04:48.487
[SPEAKER_00]: Well, looking at the UBS global family office report for families that have a net worth of a hundred million dollars or more for twenty twenty four and twenty twenty five, it reveals a dramatic shift.
04:48.927 --> 05:00.218
[SPEAKER_00]: North American family offices now have fifty four percent of their portfolios in alternative meaning investments outside of the stock market outside of traditional investments.
05:00.798 --> 05:11.369
[SPEAKER_00]: This is up forty two percent from the previous year real estate alone surged from ten to eighteen percent private equity climb twenty seven percent
05:11.869 --> 05:19.952
[SPEAKER_00]: And now, a lot of family officers are making direct investments, meaning they're standing up their own teams to go by real estate themselves.
05:20.452 --> 05:30.155
[SPEAKER_00]: What this means is these families just aren't diversifying, but they're designing income first, taxed advantage, multi-generational portfolios.
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[SPEAKER_00]: They've got the patient money.
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[SPEAKER_00]: They're not waiting to retire.
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[SPEAKER_00]: They're operating their wealth like a strategic business.
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[SPEAKER_00]: to understand why private equity real estate is so powerful in replacing your paycheck.
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[SPEAKER_00]: Let's look at a couple key metrics, the combination of yield versus the tax treatment of the income.
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[SPEAKER_00]: So let's take an example.
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[SPEAKER_00]: one million dollar investment across these various income vehicles.
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[SPEAKER_00]: So let's go for private equity real estate.
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[SPEAKER_00]: And let's be focused on a ten percent yields.
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[SPEAKER_00]: So for a million dollars, that would give you one hundred thousand dollars.
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[SPEAKER_00]: The estimated taxes because the depreciation would be somewhere between zero in ten thousand dollars, meaning that your after tax income from private equity real estate is ninety or a hundred thousand dollars for that million dollar investment.
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[SPEAKER_00]: Let's think about municipal bonds, right?
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[SPEAKER_00]: Three percent yield is around the average.
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[SPEAKER_00]: So that would then give you thirty thousand dollars.
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[SPEAKER_00]: It's not taxed at all in at least federally and in many states and municipalities that then you would get a thirty thousand dollar investment.
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[SPEAKER_00]: But the reality is that the delta between the thirty and the hundred thousand dollars is significant.
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[SPEAKER_00]: If you think about a qualified dividend, a million dollars invested in dividend stocks at two percent gives you a twenty thousand dollar dividend.
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[SPEAKER_00]: But then you're also going to take off three to four thousand dollars in taxes resulting in just sixteen or seventeen thousand dollars of income.
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[SPEAKER_00]: pretty hard to live off of interest income for percent that million dollars will generate forty thousand dollars but again take off fourteen to twenty thousand dollars in taxes you will then be left over with twenty to twenty six thousand dollars same thing with the new it is
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[SPEAKER_00]: five percent, get you fifty thousand dollars, but then minus the taxes, you're going to be left with twenty five to thirty two thousand dollars.
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[SPEAKER_00]: The key thing to understand is with private equity real estate, you're generating high income that's often completely offset by depreciation, especially in the early years of your investment.
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[SPEAKER_00]: This gives you high volume tax efficient income.
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[SPEAKER_00]: And when you compare it with those other traditional income vehicles, where taxes consume thirty to fifty percent of your yield, you have a much more powerful vehicle to replace your paycheck.
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[SPEAKER_00]: And here's the bonus, what you may not know is that your passive losses or depreciation that are not used in the current year can be carried forward to future years to offset future gains.
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[SPEAKER_00]: This becomes a powerful negative balance on your balance sheet that you can move forward over time to continue to protect your income.
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[SPEAKER_00]: This is the game that the ultra wealthy play and they play it to win.
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[SPEAKER_00]: So let's continue this comparison because it's so important that you understand when looking at these types of assets, where is the opportunity and also where is the risk?
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[SPEAKER_00]: So if we're comparing this, based on what really matters, let's look at yield, tax efficiency, liquidity, right?
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[SPEAKER_00]: How quickly you can access your capital, and then also the W-II replacement potential, right?
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[SPEAKER_00]: Can it support your lifestyle sustainably?
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[SPEAKER_00]: And so let's start again with private equity real estate.
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[SPEAKER_00]: the yield you can get, you know, and you can get low yields there too, but the yields that matter are between eight and twelve percent cash on cash return.
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[SPEAKER_00]: As we know tax efficiency, it's very high giving you depreciation that can wipe out paying taxes on the income.
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[SPEAKER_00]: Now, where's the risk?
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[SPEAKER_00]: The risk is going to be in the liquidity.
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[SPEAKER_00]: Many of these investments are illiquid, meaning that you're locking up your capital for one, three, five, maybe even ten years.
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[SPEAKER_00]: So that's where the risk is in these investments.
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[SPEAKER_00]: But it has the highest potential to generate high income and make it tax-efficient as well.
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[SPEAKER_00]: The return on reads is somewhere between three to four percent.
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[SPEAKER_00]: And there is no shelter on taxes.
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[SPEAKER_00]: You do not have the same advantages to take the depreciation.
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[SPEAKER_00]: Somebody else is taking that down the line.
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[SPEAKER_00]: And so, but it does have liquidity.
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[SPEAKER_00]: Are you a daily liquidity, so you can actually get out of those investments very quickly and very nimbley.
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[SPEAKER_00]: But when you think about replacing your W-II, it has low yield and low tax advantage, so it's not going to provide you what you need.
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[SPEAKER_00]: Municipal bonds as well, two to four percent, yes, they're very tax efficient.
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[SPEAKER_00]: They're also liquid.
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[SPEAKER_00]: You can trade them, get in and out of them very nimbley.
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[SPEAKER_00]: But the low yield is something that's not going to allow you to take two, two and a half million dollars in really replace your paycheck.
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[SPEAKER_00]: And it goes back to dividend bearing stocks as well.
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[SPEAKER_00]: One to three percent.
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[SPEAKER_00]: You also are getting taxed on that as well.
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[SPEAKER_00]: And is liquid.
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[SPEAKER_00]: They're also appreciating assets as well.
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[SPEAKER_00]: So many advantages there.
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[SPEAKER_00]: But from a paycheck replacement, it's going to be low.
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[SPEAKER_00]: And it's not going to give you the income that you need to replace it.
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[SPEAKER_00]: And this again goes back to annuities.
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[SPEAKER_00]: Something that has lower income, three to six percent, you're being taxed as ordinary gains.
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[SPEAKER_00]: And again, that's a very ill-liquid as well.
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[SPEAKER_00]: So now you have low return, you have no tax advantages and you're locked in for a long period of time.
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[SPEAKER_00]: That is not going to be a great advantage resource to replace your paycheck.
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[SPEAKER_00]: So, this is where I'm trying to with details paint this picture that states, only private equity real estate offers the yield, the tax efficiency, and the ability to consistently replace high-income salaries.
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[SPEAKER_00]: This is why everybody's talking about it and it is a key play of the ultra wealthy.
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[SPEAKER_00]: The reality is this just isn't about returns.
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[SPEAKER_00]: It's about building a diversified portfolio that functions like a business where you have a key income generating arm that's tax-optimized and scalable to truly replace your paycheck.
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[SPEAKER_00]: This is exactly why wealth-offs is built around private equity real estate as the core income engine of our microfamily office strategy.
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[SPEAKER_00]: We help tech professionals just like you with high income and large equity holdings.
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[SPEAKER_00]: Understand how do you unlock your wealth in equity and create evergreen income portfolios that can truly replace your paycheck?
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[SPEAKER_00]: Also understanding how you leverage the tax benefits of depreciation to protect that income, so it's not only large at the top line, it's also substantial at the bottom line as well.
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[SPEAKER_00]: And then also by structuring your entity or microfamily office in your investments, this is where you continue to reduce your tax drag.
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[SPEAKER_00]: Remember, this isn't about DIY rentals, right?
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[SPEAKER_00]: This is about intentional capital deployment using vetted institutional quality vehicles.
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[SPEAKER_00]: I'm not talking about your neighbors next door syndication.
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[SPEAKER_00]: I'm talking about private equity companies that have been operating for many years and they execute like institutions, but they take retail capital.
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[SPEAKER_00]: Many of our clients here go from zero percent income from alternatives to two hundred thousand dollars in tax sheltered income, often in under twenty four months.
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[SPEAKER_00]: So here's the big takeaway.
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[SPEAKER_00]: It's not just about earning more.
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[SPEAKER_00]: It's about managing your money to work for you.
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[SPEAKER_00]: Private equity really state is the most tax efficient, high yield income asset in the market.
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[SPEAKER_00]: It's the foundation of your financial independence.
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[SPEAKER_00]: If you are still investing in a drawdown portfolio and you're still relying on hope, it's time to start operating your portfolio like a business that you're the CEO of because real wealth does not come from selling assets.
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[SPEAKER_00]: It comes from cash flow, control, and strategy.
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[SPEAKER_00]: This is wealth ops.
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[SPEAKER_00]: If you want to learn more every month, we won a live master class, the wealth ops way that teaches you how to architect the portfolio that you want to run is a micro family office.
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[SPEAKER_00]: Go to wealth ops.live right now to apply.
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[SPEAKER_00]: Thank you very much.
