Oct. 21, 2025
129: How to NEVER make a bad investment again
The Truth About Investing: Why Trusting Your Gut and Doing More Research Won’t Work
Hi, I’m Christopher Nelson. After growing my portfolio to over $8 million while living off the cash flow, I’m here to share the real truth about investing—and why the advice to “trust your gut” and “do more research” is actually holding you back from success.
In this video, I’ll debunk the biggest investment myths that keep high earners stuck in a cycle of bad decisions. You’ll learn why trusting your instincts can lead to major losses, and why doing endless research doesn’t always bring better results.
I’ll also introduce the decision-making framework that ultra-wealthy family offices use to make smart, emotion-free investment choices. This includes two key documents—the Legacy Statement and the Investment Thesis—that guide every investment decision. Once you have these, your decisions will be clear and confident.
Ready to stop making emotional investment choices and start making strategic, profitable decisions? Join my live Architect Workshop, where I’ll walk you through creating your own Legacy Statement and Investment Thesis. This is the exact process I used to build my $8 million portfolio.
Transcript
WEBVTT
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[SPEAKER_00]: The biggest myth in investing is that you need to trust your gut and do your research to make good decisions.
00:07.705 --> 00:12.394
[SPEAKER_00]: This advice isn't just wrong, it's the root of most bad investment decisions.
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[SPEAKER_00]: I'm Christopher Nelson and after growing my portfolio to over $8 million, while living off the cash flow, I've learned that the real key to never making a bad investment
00:23.555 --> 00:25.458
[SPEAKER_00]: isn't instinct or analysis.
00:25.758 --> 00:31.107
[SPEAKER_00]: It's having a decision-making framework that removes emotion from the equation.
00:31.247 --> 00:43.606
[SPEAKER_00]: Today, I'm going to debunk the most dangerous myths about investing that keep high-earners stuck and show you exactly what the ultra-wealthy family offices actually do instead.
00:43.866 --> 00:49.815
[SPEAKER_00]: Let's start by exposing the most costly myth.
00:49.795 --> 00:53.203
[SPEAKER_00]: Here's what nobody tells you about trusting your gut and investing.
00:53.383 --> 00:55.308
[SPEAKER_00]: Your gut is terrible at it.
00:55.528 --> 00:58.175
[SPEAKER_00]: And I don't mean that as an insult to you personally.
00:58.195 --> 01:06.133
[SPEAKER_00]: I mean that your brain, all of our brains, are hardwired with cognitive biases that make us awful investors.
01:06.113 --> 01:13.684
[SPEAKER_00]: We're designed for survival on the savanna, not for evaluating investment opportunities in complex financial markets.
01:13.804 --> 01:15.266
[SPEAKER_00]: Let me give you a real example.
01:15.526 --> 01:29.466
[SPEAKER_00]: During my second IPO at Yacht, I watched a colleague, a brilliant guy, VP at the company, hold onto his entire equity long after the lockout period because he believed in the company.
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[SPEAKER_00]: He trusted his instincts.
01:31.409 --> 01:34.833
[SPEAKER_00]: The stock was at $27 a share at its peak.
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[SPEAKER_00]: A year later, it was at $15 a share.
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[SPEAKER_00]: By the time he got out, his equity position was down over $1 million from its highs.
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[SPEAKER_00]: What he called belief in the company was actually just FOMO in attachment bias.
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[SPEAKER_00]: He couldn't separate his identity as a loyal employee from his investment.
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[SPEAKER_00]: In here's the thing, this guy wasn't dumb.
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[SPEAKER_00]: He was objectively brilliant.
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[SPEAKER_00]: But when you're making investment decisions based on how you feel about an opportunity, you're not investing.
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[SPEAKER_00]: You're gambling with a narrative you've convinced yourself is analysis.
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[SPEAKER_00]: The problem with trust your gut advice,
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[SPEAKER_00]: is that it sounds empowering.
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[SPEAKER_00]: It makes you feel like a decisive leader.
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[SPEAKER_00]: But what you're actually doing is letting your lizard brain, the part that panics during market crashes and gets you for it during bubbles, control millions of dollars.
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[SPEAKER_00]: We should never let the lizard brain run this show.
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[SPEAKER_00]: And the data backs the sub.
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[SPEAKER_00]: The average investor underperforms the S&P 500 by nearly 4% annually, and it's not because they pick bad investments.
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[SPEAKER_00]: It's because they buy high when they're feeling optimistic, and they sell low when they're feeling scared.
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[SPEAKER_00]: Your gut isn't giving you information.
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[SPEAKER_00]: It's giving you feelings.
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[SPEAKER_00]: And a lot of time, they aren't even your feelings.
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[SPEAKER_00]: There are some guys from a podcast that you adopt, and feelings are not an investment strategy.
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[SPEAKER_00]: Myth number two,
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[SPEAKER_00]: Okay, so if you can't trust your gut, you just need to do better research, right?
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[SPEAKER_00]: Wrong.
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[SPEAKER_00]: And this is where even sophisticated investors get tripped up because research feels productive.
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[SPEAKER_00]: You're listening to earnings calls, interviewing GPs, studying market trends.
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[SPEAKER_00]: You're being diligent, but here's what I learned after investing in dozens of deals.
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[SPEAKER_00]: More information about
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[SPEAKER_00]: doesn't necessarily lead to better decisions.
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[SPEAKER_00]: It leads to decision paralysis and false confidence.
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[SPEAKER_00]: I see this consistently with people when they first join our community.
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[SPEAKER_00]: They've got spreadsheets comparing 15 different real estate syndications.
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[SPEAKER_00]: They've analyzed every possible metric and they're completely stuck because they think if they just find one more data point, they'll be able to pull the trigger on one of them.
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[SPEAKER_00]: But that's not how most successful micro family office operators work.
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[SPEAKER_00]: They're not drowning in analysis.
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[SPEAKER_00]: They have something else entirely.
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[SPEAKER_00]: Now, before I tell you what it is, let me tell you actually what happened when I had my aha moment about this.
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[SPEAKER_00]: I was sitting in my office in Midtown, Manhattan.
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[SPEAKER_00]: At the time, I was the CIO or Chief Information Officer.
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[SPEAKER_00]: I had the title, I had the salary, but I was miserable.
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[SPEAKER_00]: Working late every Friday night, disappointing my wife and kids feeling trapped.
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[SPEAKER_00]: And I remember looking at my portfolio and thinking, I have millions of dollars,
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[SPEAKER_00]: but I have no idea what I'm actually trying to accomplish here.
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[SPEAKER_00]: I was making investment decisions the way everybody told me to diversify across asset classes, rebalance quarterly, chase returns, but I had no framework for why I was doing any of it.
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[SPEAKER_00]: And that's when it hit me.
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[SPEAKER_00]: The problem wasn't that I needed more research.
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[SPEAKER_00]: The problem was I was trying to make decisions without a decision making framework.
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[SPEAKER_00]: or should I?
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[SPEAKER_00]: And that's the critical distinction.
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[SPEAKER_00]: So let me show you what ultra wealthy families managing a hundred million, five hundred million, and a billion dollars actually do differently.
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[SPEAKER_00]: They don't start with deploying capital into investments.
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[SPEAKER_00]: That's actually the third step in their process.
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[SPEAKER_00]: They start with two foundational documents that guide every single decision they make.
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[SPEAKER_00]: The first is what they call a family mission statement, but I call it a legacy statement.
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[SPEAKER_00]: And the second is an investment thesis.
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[SPEAKER_00]: Let me break these down because this is the framework that changes everything.
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[SPEAKER_00]: Let's start with the legacy statement.
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[SPEAKER_00]: Your legacy statement is not some fluffy vision board exercise.
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[SPEAKER_00]: It's a strategic document that answers one question.
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[SPEAKER_00]: What is my money for?
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[SPEAKER_00]: Not how do I make more?
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[SPEAKER_00]: Or what should I invest in?
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[SPEAKER_00]: But what is this wealth supposed to accomplish?
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[SPEAKER_00]: For me, after that moment Manhattan, I got crystal clear.
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[SPEAKER_00]: My wealth exists to create freedom.
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[SPEAKER_00]: For me, that means spending time with my wife and three sons.
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[SPEAKER_00]: The ability to take trips whenever and to wherever we want and to build something that I can pass down to my sons for future generations.
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[SPEAKER_00]: That clarity changed everything.
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[SPEAKER_00]: Because suddenly, when somebody pitched me
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[SPEAKER_00]: I was in asking, is this a good investment?
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[SPEAKER_00]: I was asking, does this get me closer to replacing my income so I have financial freedom?
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[SPEAKER_00]: Completely different questions, completely different decision-making process.
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[SPEAKER_00]: And then the investment thesis is where you
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[SPEAKER_00]: translate your legacy statement into an actual investment criteria so that you can make sure you never make a bad investment again.
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[SPEAKER_00]: This document defines your asset allocation strategy, your risk tolerance, your liquidity requirements,
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[SPEAKER_00]: Your return expectation, it's your investment constitution.
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[SPEAKER_00]: Here's what mine looks like.
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[SPEAKER_00]: First, our goal is to generate $350,000 a year in annual income.
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[SPEAKER_00]: That was the number that would give us complete freedom.
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[SPEAKER_00]: Not just covering our lifestyle, but actual freedom.
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[SPEAKER_00]: Currently, we're at around $200,000.
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[SPEAKER_00]: Second, I split my portfolio into three asset categories.
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[SPEAKER_00]: 48% income assets.
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[SPEAKER_00]: 48% growth assets in 5% capital preservation.
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[SPEAKER_00]: Notice I didn't just say generate cash flow.
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[SPEAKER_00]: I defined exactly what percentage of my portfolio had to be working in each role.
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[SPEAKER_00]: The income bucket has to produce 6 to 8%
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[SPEAKER_00]: Belended returns minimum, things like multi-family funds, debt funds, self-storage.
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[SPEAKER_00]: The growth bucket targets 10 to 15 percent returns to double every six to eight years.
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[SPEAKER_00]: In capital preservation was just my cash reserves growing at three to four percent just trying to stay ahead of inflation.
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[SPEAKER_00]: In third,
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[SPEAKER_00]: I'm divesting from my concentrated GitLab position systematically.
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[SPEAKER_00]: I set a hard rule to reduce company stock to less than 10% of my net worth within two to three years.
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[SPEAKER_00]: No exceptions.
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[SPEAKER_00]: No, but the stock might go up.
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[SPEAKER_00]: The framework decided
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[SPEAKER_00]: not my emotion.
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[SPEAKER_00]: And here's the magic.
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[SPEAKER_00]: Once I had my legacy statement and investment thesis, all documented, all the investment decisions became almost mechanical.
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[SPEAKER_00]: Someone would pitch me on a venture capital fund.
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[SPEAKER_00]: I look at my investment thesis and see this doesn't generate income.
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[SPEAKER_00]: It locks up capital for seven to ten years and I don't need home run returns.
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[SPEAKER_00]: Pass.
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[SPEAKER_00]: Two-minute decision.
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[SPEAKER_00]: No emotion, no phomo, just does this align with my framework or not.
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[SPEAKER_00]: This is what family offices do.
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[SPEAKER_00]: They don't make investment decisions in isolation.
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[SPEAKER_00]: Every decision is filtered through their strategic framework.
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[SPEAKER_00]: And I'm going to show you exactly how to build yours.
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[SPEAKER_00]: But before we get to implementation, let me quickly destroy two more myths that keep people stuck.
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[SPEAKER_00]: Myth number three, good investors react quickly to market changes.
09:03.963 --> 09:09.729
[SPEAKER_00]: good investors have frameworks that tell them what to do before market changes happen.
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[SPEAKER_00]: When COVID crashed the market in March of 2020, I didn't panic because my investment thesis already told me in a market crash, continue operating according to plan.
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[SPEAKER_00]: I had pre-decided my response.
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[SPEAKER_00]: And yes, some people did profit big when they yellowed into investments like Zoom, but plenty of others got destroyed for making real time emotional decisions.
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[SPEAKER_00]: diversification equals safety, diversification without strategy is just owning a bunch of stuff you don't understand.
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[SPEAKER_00]: I see people all the time with 40 different types of investments, venture funds, crypto, real estate, public stocks.
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[SPEAKER_00]: They call it diversified, but they have no idea how these assets correlate, how their tax efficient, how
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[SPEAKER_00]: or how they align with their goals.
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[SPEAKER_00]: That's not diversification.
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[SPEAKER_00]: It's asset hoarding.
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[SPEAKER_00]: Real diversification is strategic allocation across asset categories that serve your investment thesis.
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[SPEAKER_00]: So how do you create your own framework?
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[SPEAKER_00]: All right, to actually build this, let me walk you through the high-level process, this is what we do in the architect phase of the microfamily office accelerator.
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[SPEAKER_00]: right now.
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[SPEAKER_00]: Step number one, create your legacy statement, block out one to two hours with no distractions and answer these questions.
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[SPEAKER_00]: What is the core purpose of your family's wealth?
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[SPEAKER_00]: And what message do you want your airs to carry forward from your life?
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[SPEAKER_00]: What are the foundational values that you have when it comes to managing money?
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[SPEAKER_00]: Is it independence, service, resilience?
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[SPEAKER_00]: What are going to guide your family's major decisions, investments, and philanthropy?
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[SPEAKER_00]: And then if you're portfolio where a multi-generational business, what is its mission?
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[SPEAKER_00]: And how should that mission be used to create value?
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[SPEAKER_00]: Not just consuming.
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[SPEAKER_00]: Don't make this complicated.
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[SPEAKER_00]: My original legacy statement was literally one paragraph.
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[SPEAKER_00]: I want to replace my W2 income with portfolio income, so I can control my time, take my family on international service trips, and build something that teaches my kids about stewardship.
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[SPEAKER_00]: That's it, but it was crystal clear.
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[SPEAKER_00]: Step number two, build your investment thesis.
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[SPEAKER_00]: This is where you translate your legacy statement into investment criteria.
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[SPEAKER_00]: You need to define what is your income replacement target?
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[SPEAKER_00]: How much annual cash flow do you need?
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[SPEAKER_00]: For me, it was $175,000.
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[SPEAKER_00]: That number came from my lifestyle, cost, plus a buffer.
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[SPEAKER_00]: Your asset category allocation strategy.
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[SPEAKER_00]: What percentage goes into each asset category?
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[SPEAKER_00]: Family offices typically do something like 25% allocated to income, 50% allocated to growth, and 25% allocated to capital preservation.
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[SPEAKER_00]: You need to customize this based on your goals, but you need to plan your risk parameters.
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[SPEAKER_00]: how much volatility can you handle, how much can you afford to lose?
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[SPEAKER_00]: This is where most people mess up.
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[SPEAKER_00]: They take on way too much risk in areas that they don't understand or they're so conservative, they never hit their income targets.
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[SPEAKER_00]: Your investment sizing, how much capital goes into any single investment?
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[SPEAKER_00]: The rule I use is never more than 10% of liquid network into a single investment.
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[SPEAKER_00]: And that's on the high end.
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[SPEAKER_00]: This prevents any one deal from destroying your portfolio.
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[SPEAKER_00]: And here's the critical part.
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[SPEAKER_00]: Once you document these criteria, you commit to them.
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[SPEAKER_00]: They become your filter for every opportunity.
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[SPEAKER_00]: or as I like to say, they become your buy box.
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[SPEAKER_00]: Now, before I wrap up, let me warn you about the three biggest mistakes people make when trying to implement this.
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[SPEAKER_00]: Mistake number one is starting without clarity.
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[SPEAKER_00]: If you want to build your investment thesis before you have a clear legacy statement, you're going to end up with a hotspot of investments that don't serve any real purpose.
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[SPEAKER_00]: You have to start with why mistake number two, copying someone else's framework.
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[SPEAKER_00]: Your friends and investment thesis won't work for you because your goals are different.
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[SPEAKER_00]: Don't copy what work for somebody else, build your own and mistake number three, not documenting it.
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[SPEAKER_00]: If it's just in your head, it's not a framework.
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[SPEAKER_00]: It's wishful thinking.
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[SPEAKER_00]: So make it specific, write it down, print it out.
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[SPEAKER_00]: Heck, even frame it if you want.
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[SPEAKER_00]: Whenever you do, don't skip this step.
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[SPEAKER_00]: Look, here's the truth.
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[SPEAKER_00]: You will never stop making bad investments as long as you're making decisions based on emotion, foam, or some podcasters opinion, but the moment you build a decision-making framework, a legacy statement that defines your why, an investment thesis that defines your how, everything changes.
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[SPEAKER_00]: You go from reactive to strategic, from emotional to systematic, from hoping
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[SPEAKER_00]: You just learned why most investors fail before they even choose an investment and exactly what to do instead.
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[SPEAKER_00]: But here's the reality.
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[SPEAKER_00]: Watching this video and actually building your legacy statement and investment thesis are two totally different things.
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[SPEAKER_00]: Now in our live architect workshop, I walk you through creating both documents step-by-step, the same process I use to structure my $8 million portfolio and that our students use to build their microfamily offices.
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[SPEAKER_00]: The next workshop is in a few days.
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[SPEAKER_00]: So if you have $1 million to $30 million in that worth and you're ready to stop making emotional investment decisions,
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[SPEAKER_00]: Click on the link below this video or head to wealthops.io.
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[SPEAKER_00]: Let's build your framework.
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[SPEAKER_00]: And in the meantime, if you want to learn more about setting up your own microfamily office, you should check out this video.
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[SPEAKER_00]: I hope to see you at our live workshop in a few days.
00:00.031 --> 00:07.445
[SPEAKER_00]: The biggest myth in investing is that you need to trust your gut and do your research to make good decisions.
00:07.705 --> 00:12.394
[SPEAKER_00]: This advice isn't just wrong, it's the root of most bad investment decisions.
00:12.675 --> 00:23.575
[SPEAKER_00]: I'm Christopher Nelson and after growing my portfolio to over $8 million, while living off the cash flow, I've learned that the real key to never making a bad investment
00:23.555 --> 00:25.458
[SPEAKER_00]: isn't instinct or analysis.
00:25.758 --> 00:31.107
[SPEAKER_00]: It's having a decision-making framework that removes emotion from the equation.
00:31.247 --> 00:43.606
[SPEAKER_00]: Today, I'm going to debunk the most dangerous myths about investing that keep high-earners stuck and show you exactly what the ultra-wealthy family offices actually do instead.
00:43.866 --> 00:49.815
[SPEAKER_00]: Let's start by exposing the most costly myth.
00:49.795 --> 00:53.203
[SPEAKER_00]: Here's what nobody tells you about trusting your gut and investing.
00:53.383 --> 00:55.308
[SPEAKER_00]: Your gut is terrible at it.
00:55.528 --> 00:58.175
[SPEAKER_00]: And I don't mean that as an insult to you personally.
00:58.195 --> 01:06.133
[SPEAKER_00]: I mean that your brain, all of our brains, are hardwired with cognitive biases that make us awful investors.
01:06.113 --> 01:13.684
[SPEAKER_00]: We're designed for survival on the savanna, not for evaluating investment opportunities in complex financial markets.
01:13.804 --> 01:15.266
[SPEAKER_00]: Let me give you a real example.
01:15.526 --> 01:29.466
[SPEAKER_00]: During my second IPO at Yacht, I watched a colleague, a brilliant guy, VP at the company, hold onto his entire equity long after the lockout period because he believed in the company.
01:29.646 --> 01:31.429
[SPEAKER_00]: He trusted his instincts.
01:31.409 --> 01:34.833
[SPEAKER_00]: The stock was at $27 a share at its peak.
01:35.193 --> 01:39.138
[SPEAKER_00]: A year later, it was at $15 a share.
01:39.438 --> 01:44.704
[SPEAKER_00]: By the time he got out, his equity position was down over $1 million from its highs.
01:45.025 --> 01:50.931
[SPEAKER_00]: What he called belief in the company was actually just FOMO in attachment bias.
01:51.212 --> 01:55.797
[SPEAKER_00]: He couldn't separate his identity as a loyal employee from his investment.
01:55.777 --> 01:57.980
[SPEAKER_00]: In here's the thing, this guy wasn't dumb.
01:58.181 --> 01:59.783
[SPEAKER_00]: He was objectively brilliant.
01:59.863 --> 02:05.572
[SPEAKER_00]: But when you're making investment decisions based on how you feel about an opportunity, you're not investing.
02:05.752 --> 02:10.099
[SPEAKER_00]: You're gambling with a narrative you've convinced yourself is analysis.
02:10.419 --> 02:12.823
[SPEAKER_00]: The problem with trust your gut advice,
02:12.803 --> 02:14.105
[SPEAKER_00]: is that it sounds empowering.
02:14.205 --> 02:16.388
[SPEAKER_00]: It makes you feel like a decisive leader.
02:16.648 --> 02:26.822
[SPEAKER_00]: But what you're actually doing is letting your lizard brain, the part that panics during market crashes and gets you for it during bubbles, control millions of dollars.
02:27.102 --> 02:30.026
[SPEAKER_00]: We should never let the lizard brain run this show.
02:30.287 --> 02:31.909
[SPEAKER_00]: And the data backs the sub.
02:31.889 --> 02:39.940
[SPEAKER_00]: The average investor underperforms the S&P 500 by nearly 4% annually, and it's not because they pick bad investments.
02:40.180 --> 02:45.928
[SPEAKER_00]: It's because they buy high when they're feeling optimistic, and they sell low when they're feeling scared.
02:46.088 --> 02:48.311
[SPEAKER_00]: Your gut isn't giving you information.
02:48.591 --> 02:49.933
[SPEAKER_00]: It's giving you feelings.
02:50.194 --> 02:53.298
[SPEAKER_00]: And a lot of time, they aren't even your feelings.
02:53.318 --> 02:58.865
[SPEAKER_00]: There are some guys from a podcast that you adopt, and feelings are not an investment strategy.
02:59.146 --> 03:01.609
[SPEAKER_00]: Myth number two,
03:01.589 --> 03:05.655
[SPEAKER_00]: Okay, so if you can't trust your gut, you just need to do better research, right?
03:05.915 --> 03:06.255
[SPEAKER_00]: Wrong.
03:06.536 --> 03:11.903
[SPEAKER_00]: And this is where even sophisticated investors get tripped up because research feels productive.
03:12.083 --> 03:16.910
[SPEAKER_00]: You're listening to earnings calls, interviewing GPs, studying market trends.
03:17.150 --> 03:21.416
[SPEAKER_00]: You're being diligent, but here's what I learned after investing in dozens of deals.
03:21.917 --> 03:23.479
[SPEAKER_00]: More information about
03:23.459 --> 03:26.163
[SPEAKER_00]: doesn't necessarily lead to better decisions.
03:26.644 --> 03:30.611
[SPEAKER_00]: It leads to decision paralysis and false confidence.
03:30.971 --> 03:34.718
[SPEAKER_00]: I see this consistently with people when they first join our community.
03:34.818 --> 03:39.225
[SPEAKER_00]: They've got spreadsheets comparing 15 different real estate syndications.
03:39.445 --> 03:47.779
[SPEAKER_00]: They've analyzed every possible metric and they're completely stuck because they think if they just find one more data point, they'll be able to pull the trigger on one of them.
03:47.759 --> 03:51.969
[SPEAKER_00]: But that's not how most successful micro family office operators work.
03:52.069 --> 03:53.733
[SPEAKER_00]: They're not drowning in analysis.
03:53.954 --> 03:55.918
[SPEAKER_00]: They have something else entirely.
03:56.099 --> 04:03.777
[SPEAKER_00]: Now, before I tell you what it is, let me tell you actually what happened when I had my aha moment about this.
04:03.757 --> 04:06.440
[SPEAKER_00]: I was sitting in my office in Midtown, Manhattan.
04:06.641 --> 04:10.245
[SPEAKER_00]: At the time, I was the CIO or Chief Information Officer.
04:10.486 --> 04:13.750
[SPEAKER_00]: I had the title, I had the salary, but I was miserable.
04:13.930 --> 04:18.756
[SPEAKER_00]: Working late every Friday night, disappointing my wife and kids feeling trapped.
04:18.997 --> 04:23.082
[SPEAKER_00]: And I remember looking at my portfolio and thinking, I have millions of dollars,
04:23.062 --> 04:26.145
[SPEAKER_00]: but I have no idea what I'm actually trying to accomplish here.
04:26.325 --> 04:38.515
[SPEAKER_00]: I was making investment decisions the way everybody told me to diversify across asset classes, rebalance quarterly, chase returns, but I had no framework for why I was doing any of it.
04:38.776 --> 04:39.756
[SPEAKER_00]: And that's when it hit me.
04:39.977 --> 04:42.419
[SPEAKER_00]: The problem wasn't that I needed more research.
04:42.659 --> 04:53.068
[SPEAKER_00]: The problem was I was trying to make decisions without a decision making framework.
04:53.048 --> 04:53.809
[SPEAKER_00]: or should I?
04:54.030 --> 04:55.532
[SPEAKER_00]: And that's the critical distinction.
04:55.753 --> 05:04.969
[SPEAKER_00]: So let me show you what ultra wealthy families managing a hundred million, five hundred million, and a billion dollars actually do differently.
05:05.170 --> 05:07.814
[SPEAKER_00]: They don't start with deploying capital into investments.
05:08.075 --> 05:10.199
[SPEAKER_00]: That's actually the third step in their process.
05:10.519 --> 05:16.069
[SPEAKER_00]: They start with two foundational documents that guide every single decision they make.
05:16.049 --> 05:20.957
[SPEAKER_00]: The first is what they call a family mission statement, but I call it a legacy statement.
05:21.157 --> 05:23.321
[SPEAKER_00]: And the second is an investment thesis.
05:23.661 --> 05:28.830
[SPEAKER_00]: Let me break these down because this is the framework that changes everything.
05:29.030 --> 05:30.913
[SPEAKER_00]: Let's start with the legacy statement.
05:30.933 --> 05:35.641
[SPEAKER_00]: Your legacy statement is not some fluffy vision board exercise.
05:35.921 --> 05:39.186
[SPEAKER_00]: It's a strategic document that answers one question.
05:39.206 --> 05:41.049
[SPEAKER_00]: What is my money for?
05:41.290 --> 05:42.732
[SPEAKER_00]: Not how do I make more?
05:42.712 --> 05:44.373
[SPEAKER_00]: Or what should I invest in?
05:44.554 --> 05:46.856
[SPEAKER_00]: But what is this wealth supposed to accomplish?
05:47.116 --> 05:51.079
[SPEAKER_00]: For me, after that moment Manhattan, I got crystal clear.
05:51.400 --> 05:54.122
[SPEAKER_00]: My wealth exists to create freedom.
05:54.322 --> 05:57.985
[SPEAKER_00]: For me, that means spending time with my wife and three sons.
05:58.306 --> 06:07.373
[SPEAKER_00]: The ability to take trips whenever and to wherever we want and to build something that I can pass down to my sons for future generations.
06:07.694 --> 06:09.155
[SPEAKER_00]: That clarity changed everything.
06:09.295 --> 06:12.718
[SPEAKER_00]: Because suddenly, when somebody pitched me
06:12.698 --> 06:15.184
[SPEAKER_00]: I was in asking, is this a good investment?
06:15.384 --> 06:21.980
[SPEAKER_00]: I was asking, does this get me closer to replacing my income so I have financial freedom?
06:22.201 --> 06:26.592
[SPEAKER_00]: Completely different questions, completely different decision-making process.
06:26.872 --> 06:30.100
[SPEAKER_00]: And then the investment thesis is where you
06:30.080 --> 06:39.754
[SPEAKER_00]: translate your legacy statement into an actual investment criteria so that you can make sure you never make a bad investment again.
06:39.994 --> 06:47.565
[SPEAKER_00]: This document defines your asset allocation strategy, your risk tolerance, your liquidity requirements,
06:47.545 --> 06:51.390
[SPEAKER_00]: Your return expectation, it's your investment constitution.
06:51.611 --> 06:52.812
[SPEAKER_00]: Here's what mine looks like.
06:53.013 --> 06:57.980
[SPEAKER_00]: First, our goal is to generate $350,000 a year in annual income.
06:58.180 --> 07:00.864
[SPEAKER_00]: That was the number that would give us complete freedom.
07:01.124 --> 07:03.968
[SPEAKER_00]: Not just covering our lifestyle, but actual freedom.
07:04.169 --> 07:06.832
[SPEAKER_00]: Currently, we're at around $200,000.
07:07.233 --> 07:12.220
[SPEAKER_00]: Second, I split my portfolio into three asset categories.
07:12.200 --> 07:14.084
[SPEAKER_00]: 48% income assets.
07:14.585 --> 07:18.754
[SPEAKER_00]: 48% growth assets in 5% capital preservation.
07:19.075 --> 07:21.760
[SPEAKER_00]: Notice I didn't just say generate cash flow.
07:22.041 --> 07:27.593
[SPEAKER_00]: I defined exactly what percentage of my portfolio had to be working in each role.
07:27.833 --> 07:32.082
[SPEAKER_00]: The income bucket has to produce 6 to 8%
07:32.062 --> 07:38.174
[SPEAKER_00]: Belended returns minimum, things like multi-family funds, debt funds, self-storage.
07:38.434 --> 07:44.506
[SPEAKER_00]: The growth bucket targets 10 to 15 percent returns to double every six to eight years.
07:44.867 --> 07:52.181
[SPEAKER_00]: In capital preservation was just my cash reserves growing at three to four percent just trying to stay ahead of inflation.
07:52.341 --> 07:53.243
[SPEAKER_00]: In third,
07:53.223 --> 07:57.372
[SPEAKER_00]: I'm divesting from my concentrated GitLab position systematically.
07:57.712 --> 08:05.108
[SPEAKER_00]: I set a hard rule to reduce company stock to less than 10% of my net worth within two to three years.
08:05.448 --> 08:06.230
[SPEAKER_00]: No exceptions.
08:06.791 --> 08:08.615
[SPEAKER_00]: No, but the stock might go up.
08:08.916 --> 08:11.080
[SPEAKER_00]: The framework decided
08:11.060 --> 08:12.041
[SPEAKER_00]: not my emotion.
08:12.382 --> 08:13.223
[SPEAKER_00]: And here's the magic.
08:13.643 --> 08:22.815
[SPEAKER_00]: Once I had my legacy statement and investment thesis, all documented, all the investment decisions became almost mechanical.
08:23.056 --> 08:25.639
[SPEAKER_00]: Someone would pitch me on a venture capital fund.
08:25.879 --> 08:29.704
[SPEAKER_00]: I look at my investment thesis and see this doesn't generate income.
08:30.185 --> 08:34.671
[SPEAKER_00]: It locks up capital for seven to ten years and I don't need home run returns.
08:34.651 --> 08:35.192
[SPEAKER_00]: Pass.
08:35.472 --> 08:36.273
[SPEAKER_00]: Two-minute decision.
08:36.573 --> 08:41.699
[SPEAKER_00]: No emotion, no phomo, just does this align with my framework or not.
08:41.859 --> 08:43.441
[SPEAKER_00]: This is what family offices do.
08:43.601 --> 08:46.043
[SPEAKER_00]: They don't make investment decisions in isolation.
08:46.364 --> 08:50.288
[SPEAKER_00]: Every decision is filtered through their strategic framework.
08:50.308 --> 08:53.271
[SPEAKER_00]: And I'm going to show you exactly how to build yours.
08:53.492 --> 08:59.078
[SPEAKER_00]: But before we get to implementation, let me quickly destroy two more myths that keep people stuck.
08:59.098 --> 09:03.983
[SPEAKER_00]: Myth number three, good investors react quickly to market changes.
09:03.963 --> 09:09.729
[SPEAKER_00]: good investors have frameworks that tell them what to do before market changes happen.
09:09.910 --> 09:20.421
[SPEAKER_00]: When COVID crashed the market in March of 2020, I didn't panic because my investment thesis already told me in a market crash, continue operating according to plan.
09:20.682 --> 09:22.343
[SPEAKER_00]: I had pre-decided my response.
09:22.624 --> 09:32.755
[SPEAKER_00]: And yes, some people did profit big when they yellowed into investments like Zoom, but plenty of others got destroyed for making real time emotional decisions.
09:32.735 --> 09:40.345
[SPEAKER_00]: diversification equals safety, diversification without strategy is just owning a bunch of stuff you don't understand.
09:40.606 --> 09:47.054
[SPEAKER_00]: I see people all the time with 40 different types of investments, venture funds, crypto, real estate, public stocks.
09:47.495 --> 09:53.663
[SPEAKER_00]: They call it diversified, but they have no idea how these assets correlate, how their tax efficient, how
09:53.643 --> 09:55.265
[SPEAKER_00]: or how they align with their goals.
09:55.665 --> 09:57.507
[SPEAKER_00]: That's not diversification.
09:57.668 --> 09:58.669
[SPEAKER_00]: It's asset hoarding.
09:58.869 --> 10:07.178
[SPEAKER_00]: Real diversification is strategic allocation across asset categories that serve your investment thesis.
10:07.439 --> 10:09.862
[SPEAKER_00]: So how do you create your own framework?
10:10.102 --> 10:23.397
[SPEAKER_00]: All right, to actually build this, let me walk you through the high-level process, this is what we do in the architect phase of the microfamily office accelerator.
10:23.478 --> 10:24.019
[SPEAKER_00]: right now.
10:24.239 --> 10:31.446
[SPEAKER_00]: Step number one, create your legacy statement, block out one to two hours with no distractions and answer these questions.
10:31.807 --> 10:34.570
[SPEAKER_00]: What is the core purpose of your family's wealth?
10:34.710 --> 10:38.614
[SPEAKER_00]: And what message do you want your airs to carry forward from your life?
10:38.834 --> 10:43.599
[SPEAKER_00]: What are the foundational values that you have when it comes to managing money?
10:43.820 --> 10:46.583
[SPEAKER_00]: Is it independence, service, resilience?
10:46.903 --> 10:51.628
[SPEAKER_00]: What are going to guide your family's major decisions, investments, and philanthropy?
10:51.608 --> 10:56.494
[SPEAKER_00]: And then if you're portfolio where a multi-generational business, what is its mission?
10:56.774 --> 10:59.577
[SPEAKER_00]: And how should that mission be used to create value?
11:00.198 --> 11:01.559
[SPEAKER_00]: Not just consuming.
11:01.579 --> 11:02.901
[SPEAKER_00]: Don't make this complicated.
11:03.081 --> 11:06.345
[SPEAKER_00]: My original legacy statement was literally one paragraph.
11:06.365 --> 11:17.417
[SPEAKER_00]: I want to replace my W2 income with portfolio income, so I can control my time, take my family on international service trips, and build something that teaches my kids about stewardship.
11:17.477 --> 11:19.860
[SPEAKER_00]: That's it, but it was crystal clear.
11:19.840 --> 11:22.626
[SPEAKER_00]: Step number two, build your investment thesis.
11:22.987 --> 11:27.357
[SPEAKER_00]: This is where you translate your legacy statement into investment criteria.
11:27.578 --> 11:30.685
[SPEAKER_00]: You need to define what is your income replacement target?
11:30.845 --> 11:32.810
[SPEAKER_00]: How much annual cash flow do you need?
11:32.970 --> 11:34.113
[SPEAKER_00]: For me, it was $175,000.
11:34.353 --> 11:39.064
[SPEAKER_00]: That number came from my lifestyle, cost, plus a buffer.
11:39.044 --> 11:42.250
[SPEAKER_00]: Your asset category allocation strategy.
11:42.490 --> 11:45.235
[SPEAKER_00]: What percentage goes into each asset category?
11:45.436 --> 11:56.416
[SPEAKER_00]: Family offices typically do something like 25% allocated to income, 50% allocated to growth, and 25% allocated to capital preservation.
11:56.696 --> 12:03.128
[SPEAKER_00]: You need to customize this based on your goals, but you need to plan your risk parameters.
12:03.108 --> 12:06.754
[SPEAKER_00]: how much volatility can you handle, how much can you afford to lose?
12:07.094 --> 12:08.616
[SPEAKER_00]: This is where most people mess up.
12:08.837 --> 12:15.987
[SPEAKER_00]: They take on way too much risk in areas that they don't understand or they're so conservative, they never hit their income targets.
12:16.308 --> 12:21.015
[SPEAKER_00]: Your investment sizing, how much capital goes into any single investment?
12:20.995 --> 12:26.907
[SPEAKER_00]: The rule I use is never more than 10% of liquid network into a single investment.
12:27.108 --> 12:28.250
[SPEAKER_00]: And that's on the high end.
12:28.451 --> 12:32.018
[SPEAKER_00]: This prevents any one deal from destroying your portfolio.
12:32.178 --> 12:33.361
[SPEAKER_00]: And here's the critical part.
12:33.661 --> 12:37.169
[SPEAKER_00]: Once you document these criteria, you commit to them.
12:37.309 --> 12:40.135
[SPEAKER_00]: They become your filter for every opportunity.
12:40.115 --> 12:42.879
[SPEAKER_00]: or as I like to say, they become your buy box.
12:43.039 --> 12:49.808
[SPEAKER_00]: Now, before I wrap up, let me warn you about the three biggest mistakes people make when trying to implement this.
12:50.209 --> 12:53.614
[SPEAKER_00]: Mistake number one is starting without clarity.
12:53.894 --> 13:03.367
[SPEAKER_00]: If you want to build your investment thesis before you have a clear legacy statement, you're going to end up with a hotspot of investments that don't serve any real purpose.
13:03.727 --> 13:09.295
[SPEAKER_00]: You have to start with why mistake number two, copying someone else's framework.
13:09.275 --> 13:13.380
[SPEAKER_00]: Your friends and investment thesis won't work for you because your goals are different.
13:13.581 --> 13:19.769
[SPEAKER_00]: Don't copy what work for somebody else, build your own and mistake number three, not documenting it.
13:20.029 --> 13:23.033
[SPEAKER_00]: If it's just in your head, it's not a framework.
13:23.053 --> 13:24.094
[SPEAKER_00]: It's wishful thinking.
13:24.415 --> 13:27.559
[SPEAKER_00]: So make it specific, write it down, print it out.
13:27.939 --> 13:29.581
[SPEAKER_00]: Heck, even frame it if you want.
13:29.842 --> 13:32.345
[SPEAKER_00]: Whenever you do, don't skip this step.
13:32.485 --> 13:34.067
[SPEAKER_00]: Look, here's the truth.
13:34.047 --> 13:52.084
[SPEAKER_00]: You will never stop making bad investments as long as you're making decisions based on emotion, foam, or some podcasters opinion, but the moment you build a decision-making framework, a legacy statement that defines your why, an investment thesis that defines your how, everything changes.
13:52.344 --> 14:02.434
[SPEAKER_00]: You go from reactive to strategic, from emotional to systematic, from hoping
14:02.414 --> 14:09.170
[SPEAKER_00]: You just learned why most investors fail before they even choose an investment and exactly what to do instead.
14:09.290 --> 14:10.293
[SPEAKER_00]: But here's the reality.
14:10.473 --> 14:17.470
[SPEAKER_00]: Watching this video and actually building your legacy statement and investment thesis are two totally different things.
14:17.450 --> 14:31.285
[SPEAKER_00]: Now in our live architect workshop, I walk you through creating both documents step-by-step, the same process I use to structure my $8 million portfolio and that our students use to build their microfamily offices.
14:31.585 --> 14:33.147
[SPEAKER_00]: The next workshop is in a few days.
14:33.407 --> 14:41.095
[SPEAKER_00]: So if you have $1 million to $30 million in that worth and you're ready to stop making emotional investment decisions,
14:41.075 --> 14:44.852
[SPEAKER_00]: Click on the link below this video or head to wealthops.io.
14:45.113 --> 14:46.659
[SPEAKER_00]: Let's build your framework.
14:46.680 --> 14:52.585
[SPEAKER_00]: And in the meantime, if you want to learn more about setting up your own microfamily office, you should check out this video.
14:53.650 --> 14:56.181
[SPEAKER_00]: I hope to see you at our live workshop in a few days.
