Nov. 25, 2025
134: $10K monthly cash flow from a $1.5M portfolio, here’s how…
What if I told you that a $1.5M portfolio could generate $120K a year in income… pay less than $10K in taxes… and never require you to sell a single asset?
In this video, I break down the exact Evergreen Portfolio model I personally use to generate over $200,000 per year in portfolio cash flow—without withdrawals, without relying on the stock market, and without slowly draining my net worth over time.
Most high earners and tech professionals are stuck in the traditional “grow and drawdown” retirement model. Your financial advisor builds a big nest egg… then you spend the next 30 years selling pieces of it just to live. It exposes you to sequence-of-returns risk, high taxes, and the real possibility of running out of money.
That’s not how ultra-wealthy families manage their wealth.
In this 16-minute breakdown, I’ll show you how to build what I call an Evergreen Portfolio—a wealth system designed to generate monthly income while your principal continues to grow. You’ll learn the same asset allocation principles used by TIGER 21 members and $20M+ family offices, adapted for individuals with $1M to $30M in assets.
Here’s what we’ll cover:
• The failure points of the traditional 4% withdrawal model
• How sequence-of-returns risk quietly destroys retirements
• Why portfolios built only on stocks, index funds, and bonds underperform
• The three Evergreen asset categories: Income, Growth, and Capital Preservation
• How to target 6%–12% annual yields with the right income assets
• How tax optimization can add 2%–3% in returns every year
• The four pillars of an Evergreen portfolio: selection, tax planning, risk management, and operational cadence
• A real allocation example of a $1.5M Evergreen Portfolio producing $143,000 in annual income
• How to start transitioning your own portfolio in a tax-efficient way
• The mindset shift from being a portfolio “consumer” to becoming the CEO of your wealth
If you’ve built a seven- or eight-figure net worth but your portfolio isn’t giving you the freedom you want, this video will completely change how you think about investing, cash flow, and long-term wealth.
And if you want to go deeper, I host a live 2-hour workshop where I help you build your Legacy Statement and Investment Thesis for your own Micro Family Office. You can register at wealthops.io/go or through the link below.
This is the exact framework I use. It’s how I built my own Evergreen Portfolio. And it’s how sophisticated investors protect and grow their wealth for generations.
If you want to stop relying on hope, stop selling assets, and start running your portfolio like an operating business, this video is your roadmap.
Transcript
WEBVTT
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[SPEAKER_00]: What if I told you that with a $1.5 million portfolio, you could generate $120,000 in annual income, pay less than $10,000 in taxes and never sell a single asset.
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[SPEAKER_00]: In this video, I'm gonna show you how to escape the traditional drawdown portfolio trap where you work for 40 years building a nest egg,
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[SPEAKER_00]: only to slowly watch it drain away in retirement.
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[SPEAKER_00]: Instead, I'll share with you the Evergreen portfolio model where your money starts working for you right now generating consistent monthly income while your principal keeps growing.
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[SPEAKER_00]: I'm Christopher Nelson and this is the exact portfolio structure I use that generates over
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[SPEAKER_00]: So if you have $1 to $30 million in assets, but your portfolio is helping you live the life you want, this is the video for you.
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[SPEAKER_00]: Let's start by examining the conventional wisdom that most financial advisors push the drawdown portfolio model.
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[SPEAKER_00]: So here's how it works.
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[SPEAKER_00]: Number one, you work for 30 to 40 years accumulating assets.
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[SPEAKER_00]: Number two, you invest primarily in index funds and growth stocks
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[SPEAKER_00]: Number three, you try and build as large of a portfolio balance as possible.
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[SPEAKER_00]: And number four, you retire and begin systematic withdrawals for as long as you're alive.
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[SPEAKER_00]: And number five, you pray that you retire in a good year.
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[SPEAKER_00]: more on that in a second.
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[SPEAKER_00]: This model typically operates using what's called the 4% rule with drawing 4% annually and hoping your money lasts longer than you do.
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[SPEAKER_00]: So let's run some actual numbers so that you can see how it works.
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[SPEAKER_00]: A 4% withdrawal on a $1.5 million portfolio is $60,000 gross annual income.
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[SPEAKER_00]: Now if you subtract taxes,
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[SPEAKER_00]: which will vary based a lot on other factors.
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[SPEAKER_00]: But for this example, let's use a 20% tax rate.
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[SPEAKER_00]: That leaves you with $48,000 net annual income.
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[SPEAKER_00]: Plus, if it's a flat or down year in the market, you're selling $60,000 of principle or to put it another way, you have less and less money to withdraw from.
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[SPEAKER_00]: Think of a drawdown portfolio like building a massive water tank and then slowly draining it.
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[SPEAKER_00]: If it doesn't rain again, meaning if markets don't perform,
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[SPEAKER_00]: You're still consuming your reserves.
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[SPEAKER_00]: And here's the biggest problem with this drawdown portfolio model.
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[SPEAKER_00]: The sequence of returns risk.
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[SPEAKER_00]: If the market drops right when you start withdrawing, you're forced to sell at the bottom.
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[SPEAKER_00]: And this can be catastrophic when compounding over 10 plus years.
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[SPEAKER_00]: Here's an example of the sequence of return risk to show how impactful it can be.
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[SPEAKER_00]: So let's say that you retired in 2009 right after the great financial crisis with a $1.5 million portfolio that was 60% in stocks and 40% in bonds.
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[SPEAKER_00]: And then let's assume that you proceeded with the 4% withdrawal rate.
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[SPEAKER_00]: Well, I've got great news for you.
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[SPEAKER_00]: your portfolio nearly tripled to $4.5 million while paying you between $60,000 and $153,000 annually for 16 years.
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[SPEAKER_00]: You, my friend, look like a financial genius.
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[SPEAKER_00]: But in reality, it was really just lucky timing to illustrate this.
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[SPEAKER_00]: Let's say that you were part of the 1.96 million people that retired in the year 2000, right at the beginning of a bear market.
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[SPEAKER_00]: Let's keep the numbers the same.
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[SPEAKER_00]: 4% withdrawal rule, $1.5 million portfolio.
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[SPEAKER_00]: At the end of 16 years, your portfolio would be worth only 1.3 million.
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[SPEAKER_00]: less than when you started, while your withdrawals ranged from only $40,000 to $55,000 per year, and with inflation, that $55,000 only had the purchasing power of $35,000 in today's dollars.
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[SPEAKER_00]: You're retiring in a good year, genius, retiring a bad year, and you might be going to get another job to cover the gap.
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[SPEAKER_00]: Now let's contrast that with how the ultra wealthy family structure their portfolios.
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[SPEAKER_00]: What I call the Evergreen portfolio model is that a focusing purely on asset accumulation, this framework focuses on asset operation, and the portfolios are broken into three very important asset categories.
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[SPEAKER_00]: First, there's income.
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[SPEAKER_00]: which are investments targeting regular cash distributions.
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[SPEAKER_00]: Some examples are private equity real estate and income ETFs.
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[SPEAKER_00]: Second, there's growth which are investments targeting long-term capital appreciation.
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[SPEAKER_00]: Some examples are text stocks, growth stage real estate, and venture positions.
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[SPEAKER_00]: And lastly, we have capital preservation.
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[SPEAKER_00]: which are investments focused on protecting capital and maintaining purchasing power.
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[SPEAKER_00]: For example, treasury bonds, money market funds and inflation protected securities.
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[SPEAKER_00]: With an evergreen portfolio, you're not building a pile of money.
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[SPEAKER_00]: You're building an income generating business that pays you every month while the underlying assets continue to grow.
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[SPEAKER_00]: Now, your portfolio is probably already heavily weighted towards growth.
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[SPEAKER_00]: Stocks, index funds, maybe some company equity.
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[SPEAKER_00]: That's fine.
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[SPEAKER_00]: But if you're watching this video, you're ready to start building the income side of your portfolio.
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[SPEAKER_00]: Now, the income side itself has four major pillars.
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[SPEAKER_00]: These map directly to how family offices actually operate their wealth.
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[SPEAKER_00]: Pillar one is asset selection.
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[SPEAKER_00]: And the target here is assets generating 6 to 12 percent.
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[SPEAKER_00]: yields.
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[SPEAKER_00]: Some additional examples on top of private equity, real estate, and income ETFs are credit funds, debt funds, dividend-focused stocks, covered call options, business ownership, and other vehicles designed to generate income.
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[SPEAKER_00]: The key here is cash flow.
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[SPEAKER_00]: These are on appreciation plays.
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[SPEAKER_00]: These are assets that put money in your account every single month or quarter.
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[SPEAKER_00]: Could they appreciate?
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[SPEAKER_00]: Sure.
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[SPEAKER_00]: But that's not their job in our portfolio.
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[SPEAKER_00]: Now there's pillar two.
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[SPEAKER_00]: tax optimization strategy.
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[SPEAKER_00]: Here's where most people leave massive money on the table.
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[SPEAKER_00]: We're not just picking income producing assets, we're structuring them to minimize your tax burden.
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[SPEAKER_00]: This means setting up the right entity structures from the start and doing things like using depreciation shields from real estate to offset income and implementing strategic tax loss harvesting to offset
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[SPEAKER_00]: It's to keep more income.
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[SPEAKER_00]: At this wealth level, tax strategy can be worth two to three percent in additional annual returns.
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[SPEAKER_00]: So if you don't already have a certified tax planner on your team, this is something you need to do ASAP.
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[SPEAKER_00]: If you join our upcoming live workshop, I'll give you a playbook on how to find and interview a great CTP or certified tax planner.
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[SPEAKER_00]: More on that towards the end.
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[SPEAKER_00]: Now pillar three, risk management.
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[SPEAKER_00]: First off, despite what you've been told, owning public stocks in different industries is not diversification.
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[SPEAKER_00]: Real diversification means across asset classes, sponsors, and asset types.
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[SPEAKER_00]: I think this is more true than ever right now with how hot the stock market has been.
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[SPEAKER_00]: In addition to making sure you're diversified, the capital preservation of your portfolio comes into play here as well.
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[SPEAKER_00]: You want to make sure that you have a well-funded emergency fund of 8-12 months of expenses and maintain a 5-15% of your portfolio as the liquidity buffer.
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[SPEAKER_00]: This keeps you agile for income opportunities that may arise and a safety blanket in case of a black swan event.
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[SPEAKER_00]: And lastly, pillar 4.
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[SPEAKER_00]: operational cadence.
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[SPEAKER_00]: This is the pillar most people completely ignore and it's why they're portfolios underperform.
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[SPEAKER_00]: You can't just set up income investments and forget about them.
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[SPEAKER_00]: You need to run your portfolio like a business.
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[SPEAKER_00]: This means quarterly income distribution reviews.
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[SPEAKER_00]: you're tracking what's performing and what's not.
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[SPEAKER_00]: Annual portfolio rebalancing to maintain your target allocations as market conditions shift on going due diligence on new investment opportunities.
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[SPEAKER_00]: And regular tax planning sessions with your CPA and CTP to stay optimized your round.
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[SPEAKER_00]: Think of this like your KPIs at work.
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[SPEAKER_00]: You don't just set goals and walk away.
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[SPEAKER_00]: You monitor, measure, and optimize continuously so you hit the target.
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[SPEAKER_00]: Your portfolio deserves the same systematic approach.
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[SPEAKER_00]: To drive this point home, think about it like this.
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[SPEAKER_00]: If you had a business that generated $120,000 per year in income, would you only look at it for 20 minutes once a month?
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[SPEAKER_00]: Of course not.
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[SPEAKER_00]: You'd be trying to optimize it and grow it each week.
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[SPEAKER_00]: Now let's look at how a portfolio of this size could realistically generate this much income.
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[SPEAKER_00]: Here's a simplified allocation example of a $1.5 million evergreen portfolio.
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[SPEAKER_00]: Let's allocate $625,000 in private real estate.
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[SPEAKER_00]: That produces an 8% yield blended from the investments plus some growth.
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[SPEAKER_00]: That's going to give you $50,000 annual income.
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[SPEAKER_00]: If you add $250,000 in private credit with a 10% yield, that's going to be an additional $25,000 a year in income.
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[SPEAKER_00]: Now let's put $500,000 in covered call ETFs.
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[SPEAKER_00]: At a 13% blended yield, that's $68,000 of annual income.
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[SPEAKER_00]: And then you want to make sure and keep $125,000 as a liquidity or opportunity buffer.
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[SPEAKER_00]: The total annual income from this portfolio is $143,000 or almost $20,000.
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[SPEAKER_00]: $12,000 per month.
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[SPEAKER_00]: And here's the key difference compared to a drawdown portfolio.
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[SPEAKER_00]: You haven't sold a single asset.
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[SPEAKER_00]: Your principal continues growing while generating consistent income.
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[SPEAKER_00]: So here's the fundamental question that determines everything.
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[SPEAKER_00]: Are you building a wealth business?
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[SPEAKER_00]: or are you storing assets until they run out?
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[SPEAKER_00]: Let me show you side by side comparison of these two models because everything flows from this choice.
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[SPEAKER_00]: So think of the Evergreen portfolio as a wealth operating company.
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[SPEAKER_00]: It's an active business generating income from operations, reinvesting profits for growth,
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[SPEAKER_00]: maintaining and expanding productive capacity.
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[SPEAKER_00]: The drawdown portfolio is a wealth storage vehicle.
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[SPEAKER_00]: It's a passive account holding accumulated assets, systematically liquidating those holdings to fund your lifestyle, and tell us depleted.
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[SPEAKER_00]: One is a business, the other is a savings account with a countdown timer.
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[SPEAKER_00]: Let's talk about the philosophy.
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[SPEAKER_00]: The evergreen approach works like this.
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[SPEAKER_00]: build, operate, generate, reinvest in scale.
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[SPEAKER_00]: You're constructing the machine that produces income indefinitely.
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[SPEAKER_00]: The drawdown approach looks like this, accumulate, store with draw deplete.
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[SPEAKER_00]: You're filling a tank that slowly empties over time.
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[SPEAKER_00]: Now let's look at asset allocation with the
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[SPEAKER_00]: private equity, real estate, active businesses, plus your traditional investments like stocks and bonds.
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[SPEAKER_00]: Every asset is chosen for its ability to generate cash flow and operate productively.
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[SPEAKER_00]: With a drawdown model, your holding storage assets, stocks, bonds, cash, and traditional allocations.
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[SPEAKER_00]: Assets are chosen for liquidity and ease of rebalancing, not for income generation.
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[SPEAKER_00]: So what are the skills required to manage both?
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[SPEAKER_00]: The evergreen portfolio requires CEO skills, right?
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[SPEAKER_00]: I'm talking business operations, cash flow management, deal evaluation and team building.
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[SPEAKER_00]: You're running a wealth business, it requires real business competencies.
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[SPEAKER_00]: The drawdown portfolio needs basic withdrawal management, simple math for safe withdrawal rates, you're managing a depletion schedule, it's basic arithmetic.
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[SPEAKER_00]: Now let's look at the tax strategies for both.
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[SPEAKER_00]: Here's where the evergreen model really shines.
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[SPEAKER_00]: You have multiple optimization opportunities.
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[SPEAKER_00]: Depreciation from real estate, business deductions through LLCs, losses to offset gains, qualified dividends.
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[SPEAKER_00]: Your effective tax rate can drop from 35% down to 15% to 20%.
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[SPEAKER_00]: Now, with the drawdown model, you have limited options.
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[SPEAKER_00]: Capital gains from four sales or nearly income from withdrawals.
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[SPEAKER_00]: Your tax strategy is basically pay capital gains when you sell.
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[SPEAKER_00]: That's it.
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[SPEAKER_00]: And let's talk about income generation, the Evergreen portfolio generates operating profit from business assets, or targeting 6 to 12% without selling any ownership.
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[SPEAKER_00]: The business pays you dividends while continuing to operate and grow.
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[SPEAKER_00]: The drawdown portfolio generates liquidation proceeds.
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[SPEAKER_00]: You're selling 4% of stored assets annually.
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[SPEAKER_00]: You're converting ownership into cash to spend permanently.
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[SPEAKER_00]: Let's talk about your role.
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[SPEAKER_00]: With an evergreen portfolio, you're the active CEO and owner, you make strategic decisions, higher specialist manage operations, you're running the business even if you delegate the day to day execution.
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[SPEAKER_00]: With the drawdown portfolio, you're a passive account holder, you delegate everything to a Robo advisor or a financial planner.
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[SPEAKER_00]: You're a client being served by somebody
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[SPEAKER_00]: Now let's talk crisis recovery.
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[SPEAKER_00]: Here's the critical difference most people miss.
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[SPEAKER_00]: In a market crash, you're evergreen business continues operating and can pivot in the depth.
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[SPEAKER_00]: In most scenarios, your real estate still collects rent, your private credit still distributes interest, the business keeps running.
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[SPEAKER_00]: Now, with the drawdown portfolio, your storage gets depleted faster with no recovery mechanism.
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[SPEAKER_00]: market crashes, you're still selling 4%.
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[SPEAKER_00]: But now it's a 4% of a much smaller number.
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[SPEAKER_00]: You're locking in losses with no way to recover them.
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[SPEAKER_00]: Let's talk about generational transfer.
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[SPEAKER_00]: When you pass on an Evergreen portfolio, you're transferring an operating business with systems, teams, and cash flow.
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[SPEAKER_00]: Your kids will inherit an income-producing machine with complete infrastructure already built in.
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[SPEAKER_00]: When you pass on a drawdown portfolio, you're transferring whatever storage balance remains.
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[SPEAKER_00]: if there's anything left.
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[SPEAKER_00]: Your kids inherit whatever is in the account at the end.
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[SPEAKER_00]: So what's your choice?
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[SPEAKER_00]: This isn't about which approach is universally better.
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[SPEAKER_00]: It's about which model matches your skills, your timeline, and your goals.
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[SPEAKER_00]: If you want to see how ultra wealthy families with 20 million plus manage their portfolio, we have hard data on it from the Tiger 21
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[SPEAKER_00]: At the time of the report, they had 28 percent of their wealth in private equity, 28 percent in real estate, 23 percent in public stocks, 9 percent in cash, 7 percent in fixed income, and 5 percent in miscellaneous holdings.
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[SPEAKER_00]: They're following the evergreen portfolio model.
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[SPEAKER_00]: They're not hoping the S&P 500 performs.
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[SPEAKER_00]: they're building a diversified income system that operates like a business.
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[SPEAKER_00]: If this approach resonates with you, here's how you can get started transitioning to an evergreen portfolio.
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[SPEAKER_00]: Step one, assess your current allocation.
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[SPEAKER_00]: Look at what you own right now.
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[SPEAKER_00]: What percentage is in growth only assets that produce zero cash flow?
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[SPEAKER_00]: What concentration risk do you have?
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[SPEAKER_00]: For a lot of people, they're more than 50% in company stock or broad index funds that don't generate income.
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[SPEAKER_00]: This is critical.
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[SPEAKER_00]: You don't liquidate everything at once.
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[SPEAKER_00]: Tax implications matter here.
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[SPEAKER_00]: And when done wrong, a careless move could cost you big.
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[SPEAKER_00]: For most people, this will be a systematic process.
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[SPEAKER_00]: Over 12 to 24 months.
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[SPEAKER_00]: If you have the certified tax planner, this is a conversation you need to be having with them.
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[SPEAKER_00]: The goal is to transition without triggering a massive tax bill all at once.
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[SPEAKER_00]: In step number three, redeploy according to your investment thesis.
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[SPEAKER_00]: Here's where most people get stuck.
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[SPEAKER_00]: As you free up capital, you need to know exactly where it's going.
16:08.192 --> 16:12.721
[SPEAKER_00]: What percentage into income investments, growth investments, and preservation?
16:12.901 --> 16:15.586
[SPEAKER_00]: What specific asset classes within each category?
16:15.686 --> 16:17.570
[SPEAKER_00]: What your target cash flow needs to be?
16:17.630 --> 16:20.235
[SPEAKER_00]: This is what I call your investment thesis.
16:20.215 --> 16:27.970
[SPEAKER_00]: your personalized blueprint for how your portfolio should be structured based on your specific goals, timeline, and risk tolerance.
16:27.990 --> 16:39.211
[SPEAKER_00]: Without this blueprint, you're just guessing you might overallocate to income and sacrifice growth or chase high yields in risky investments because you don't have clear targets.
16:39.571 --> 16:43.759
[SPEAKER_00]: This part is exactly what I cover in my live monthly workshop.
16:43.739 --> 16:45.321
[SPEAKER_00]: I'll tell you more about that in a minute.
16:45.502 --> 16:49.848
[SPEAKER_00]: So here's the fundamental question every sophisticated investor faces.
16:50.209 --> 16:57.520
[SPEAKER_00]: Are you building a portfolio you'll eventually consume or are you building a wealth system that generates income indefinitely?
16:57.820 --> 16:59.683
[SPEAKER_00]: One approach might fund your retirement.
16:59.883 --> 17:03.088
[SPEAKER_00]: The other funds your independence in your family's future.
17:03.248 --> 17:05.612
[SPEAKER_00]: The ultra wealthy chose long ago.
17:05.592 --> 17:09.017
[SPEAKER_00]: They build wealth businesses, not just portfolios.
17:09.398 --> 17:16.668
[SPEAKER_00]: If you made it this far in the video, then I know you're serious about this, and I'd love to invite you to my upcoming live workshop.
17:16.828 --> 17:27.043
[SPEAKER_00]: We will spend two hours together, and by the end of the evening, you will have your legacy statement and investment thesis fully built out for your microfamily office.
17:27.023 --> 17:31.536
[SPEAKER_00]: and you'll be well on your way to implementing your own evergreen portfolio.
17:31.717 --> 17:39.279
[SPEAKER_00]: If that sounds interesting to you, then head to wealthops.io forward slash go or click in the link below this video to register.
17:39.480 --> 17:48.306
[SPEAKER_00]: But if you're not ready and just want to learn more about the evergreen portfolios and microfamily offices, you should check out this video.
00:00.031 --> 00:13.393
[SPEAKER_00]: What if I told you that with a $1.5 million portfolio, you could generate $120,000 in annual income, pay less than $10,000 in taxes and never sell a single asset.
00:13.413 --> 00:21.887
[SPEAKER_00]: In this video, I'm gonna show you how to escape the traditional drawdown portfolio trap where you work for 40 years building a nest egg,
00:21.867 --> 00:25.092
[SPEAKER_00]: only to slowly watch it drain away in retirement.
00:25.332 --> 00:37.811
[SPEAKER_00]: Instead, I'll share with you the Evergreen portfolio model where your money starts working for you right now generating consistent monthly income while your principal keeps growing.
00:38.151 --> 00:47.605
[SPEAKER_00]: I'm Christopher Nelson and this is the exact portfolio structure I use that generates over
00:47.585 --> 00:56.014
[SPEAKER_00]: So if you have $1 to $30 million in assets, but your portfolio is helping you live the life you want, this is the video for you.
00:56.394 --> 01:03.322
[SPEAKER_00]: Let's start by examining the conventional wisdom that most financial advisors push the drawdown portfolio model.
01:03.582 --> 01:04.463
[SPEAKER_00]: So here's how it works.
01:05.084 --> 01:09.468
[SPEAKER_00]: Number one, you work for 30 to 40 years accumulating assets.
01:09.889 --> 01:15.955
[SPEAKER_00]: Number two, you invest primarily in index funds and growth stocks
01:15.935 --> 01:20.823
[SPEAKER_00]: Number three, you try and build as large of a portfolio balance as possible.
01:21.023 --> 01:26.612
[SPEAKER_00]: And number four, you retire and begin systematic withdrawals for as long as you're alive.
01:26.632 --> 01:31.800
[SPEAKER_00]: And number five, you pray that you retire in a good year.
01:31.780 --> 01:32.842
[SPEAKER_00]: more on that in a second.
01:33.102 --> 01:41.778
[SPEAKER_00]: This model typically operates using what's called the 4% rule with drawing 4% annually and hoping your money lasts longer than you do.
01:42.079 --> 01:46.287
[SPEAKER_00]: So let's run some actual numbers so that you can see how it works.
01:46.307 --> 01:53.179
[SPEAKER_00]: A 4% withdrawal on a $1.5 million portfolio is $60,000 gross annual income.
01:53.460 --> 01:55.223
[SPEAKER_00]: Now if you subtract taxes,
01:55.203 --> 01:57.485
[SPEAKER_00]: which will vary based a lot on other factors.
01:57.906 --> 02:00.809
[SPEAKER_00]: But for this example, let's use a 20% tax rate.
02:01.049 --> 02:04.372
[SPEAKER_00]: That leaves you with $48,000 net annual income.
02:04.552 --> 02:14.843
[SPEAKER_00]: Plus, if it's a flat or down year in the market, you're selling $60,000 of principle or to put it another way, you have less and less money to withdraw from.
02:15.243 --> 02:20.669
[SPEAKER_00]: Think of a drawdown portfolio like building a massive water tank and then slowly draining it.
02:20.849 --> 02:24.973
[SPEAKER_00]: If it doesn't rain again, meaning if markets don't perform,
02:24.953 --> 02:26.575
[SPEAKER_00]: You're still consuming your reserves.
02:26.996 --> 02:30.561
[SPEAKER_00]: And here's the biggest problem with this drawdown portfolio model.
02:30.581 --> 02:33.205
[SPEAKER_00]: The sequence of returns risk.
02:33.225 --> 02:38.032
[SPEAKER_00]: If the market drops right when you start withdrawing, you're forced to sell at the bottom.
02:38.592 --> 02:42.638
[SPEAKER_00]: And this can be catastrophic when compounding over 10 plus years.
02:42.878 --> 02:47.485
[SPEAKER_00]: Here's an example of the sequence of return risk to show how impactful it can be.
02:47.465 --> 02:59.284
[SPEAKER_00]: So let's say that you retired in 2009 right after the great financial crisis with a $1.5 million portfolio that was 60% in stocks and 40% in bonds.
02:59.304 --> 03:02.469
[SPEAKER_00]: And then let's assume that you proceeded with the 4% withdrawal rate.
03:02.629 --> 03:04.933
[SPEAKER_00]: Well, I've got great news for you.
03:04.913 --> 03:15.456
[SPEAKER_00]: your portfolio nearly tripled to $4.5 million while paying you between $60,000 and $153,000 annually for 16 years.
03:15.877 --> 03:18.322
[SPEAKER_00]: You, my friend, look like a financial genius.
03:18.583 --> 03:22.872
[SPEAKER_00]: But in reality, it was really just lucky timing to illustrate this.
03:22.852 --> 03:31.489
[SPEAKER_00]: Let's say that you were part of the 1.96 million people that retired in the year 2000, right at the beginning of a bear market.
03:31.590 --> 03:32.772
[SPEAKER_00]: Let's keep the numbers the same.
03:32.792 --> 03:36.460
[SPEAKER_00]: 4% withdrawal rule, $1.5 million portfolio.
03:36.660 --> 03:42.632
[SPEAKER_00]: At the end of 16 years, your portfolio would be worth only 1.3 million.
03:42.612 --> 03:58.022
[SPEAKER_00]: less than when you started, while your withdrawals ranged from only $40,000 to $55,000 per year, and with inflation, that $55,000 only had the purchasing power of $35,000 in today's dollars.
03:58.002 --> 04:05.133
[SPEAKER_00]: You're retiring in a good year, genius, retiring a bad year, and you might be going to get another job to cover the gap.
04:05.354 --> 04:09.280
[SPEAKER_00]: Now let's contrast that with how the ultra wealthy family structure their portfolios.
04:09.621 --> 04:22.902
[SPEAKER_00]: What I call the Evergreen portfolio model is that a focusing purely on asset accumulation, this framework focuses on asset operation, and the portfolios are broken into three very important asset categories.
04:23.343 --> 04:25.326
[SPEAKER_00]: First, there's income.
04:25.306 --> 04:28.731
[SPEAKER_00]: which are investments targeting regular cash distributions.
04:29.391 --> 04:33.517
[SPEAKER_00]: Some examples are private equity real estate and income ETFs.
04:34.018 --> 04:38.684
[SPEAKER_00]: Second, there's growth which are investments targeting long-term capital appreciation.
04:39.325 --> 04:43.851
[SPEAKER_00]: Some examples are text stocks, growth stage real estate, and venture positions.
04:44.231 --> 04:46.875
[SPEAKER_00]: And lastly, we have capital preservation.
04:46.855 --> 04:51.720
[SPEAKER_00]: which are investments focused on protecting capital and maintaining purchasing power.
04:52.181 --> 04:56.545
[SPEAKER_00]: For example, treasury bonds, money market funds and inflation protected securities.
04:56.826 --> 05:00.009
[SPEAKER_00]: With an evergreen portfolio, you're not building a pile of money.
05:00.269 --> 05:06.356
[SPEAKER_00]: You're building an income generating business that pays you every month while the underlying assets continue to grow.
05:06.596 --> 05:10.160
[SPEAKER_00]: Now, your portfolio is probably already heavily weighted towards growth.
05:10.640 --> 05:13.564
[SPEAKER_00]: Stocks, index funds, maybe some company equity.
05:13.724 --> 05:14.905
[SPEAKER_00]: That's fine.
05:14.885 --> 05:20.272
[SPEAKER_00]: But if you're watching this video, you're ready to start building the income side of your portfolio.
05:20.553 --> 05:23.516
[SPEAKER_00]: Now, the income side itself has four major pillars.
05:24.137 --> 05:28.964
[SPEAKER_00]: These map directly to how family offices actually operate their wealth.
05:28.984 --> 05:30.646
[SPEAKER_00]: Pillar one is asset selection.
05:30.826 --> 05:35.172
[SPEAKER_00]: And the target here is assets generating 6 to 12 percent.
05:35.152 --> 05:35.713
[SPEAKER_00]: yields.
05:36.133 --> 05:49.671
[SPEAKER_00]: Some additional examples on top of private equity, real estate, and income ETFs are credit funds, debt funds, dividend-focused stocks, covered call options, business ownership, and other vehicles designed to generate income.
05:49.831 --> 05:51.633
[SPEAKER_00]: The key here is cash flow.
05:51.653 --> 05:53.035
[SPEAKER_00]: These are on appreciation plays.
05:53.416 --> 05:57.421
[SPEAKER_00]: These are assets that put money in your account every single month or quarter.
05:57.601 --> 05:58.462
[SPEAKER_00]: Could they appreciate?
05:59.003 --> 05:59.323
[SPEAKER_00]: Sure.
05:59.924 --> 06:02.628
[SPEAKER_00]: But that's not their job in our portfolio.
06:02.908 --> 06:04.450
[SPEAKER_00]: Now there's pillar two.
06:04.430 --> 06:06.573
[SPEAKER_00]: tax optimization strategy.
06:06.693 --> 06:09.457
[SPEAKER_00]: Here's where most people leave massive money on the table.
06:10.138 --> 06:15.846
[SPEAKER_00]: We're not just picking income producing assets, we're structuring them to minimize your tax burden.
06:16.006 --> 06:32.209
[SPEAKER_00]: This means setting up the right entity structures from the start and doing things like using depreciation shields from real estate to offset income and implementing strategic tax loss harvesting to offset
06:32.189 --> 06:34.295
[SPEAKER_00]: It's to keep more income.
06:34.516 --> 06:40.191
[SPEAKER_00]: At this wealth level, tax strategy can be worth two to three percent in additional annual returns.
06:40.532 --> 06:47.211
[SPEAKER_00]: So if you don't already have a certified tax planner on your team, this is something you need to do ASAP.
06:47.191 --> 06:55.520
[SPEAKER_00]: If you join our upcoming live workshop, I'll give you a playbook on how to find and interview a great CTP or certified tax planner.
06:55.721 --> 06:56.802
[SPEAKER_00]: More on that towards the end.
06:56.982 --> 06:59.044
[SPEAKER_00]: Now pillar three, risk management.
06:59.265 --> 07:05.912
[SPEAKER_00]: First off, despite what you've been told, owning public stocks in different industries is not diversification.
07:06.192 --> 07:11.538
[SPEAKER_00]: Real diversification means across asset classes, sponsors, and asset types.
07:11.759 --> 07:15.763
[SPEAKER_00]: I think this is more true than ever right now with how hot the stock market has been.
07:15.743 --> 07:21.869
[SPEAKER_00]: In addition to making sure you're diversified, the capital preservation of your portfolio comes into play here as well.
07:22.169 --> 07:32.660
[SPEAKER_00]: You want to make sure that you have a well-funded emergency fund of 8-12 months of expenses and maintain a 5-15% of your portfolio as the liquidity buffer.
07:32.940 --> 07:39.567
[SPEAKER_00]: This keeps you agile for income opportunities that may arise and a safety blanket in case of a black swan event.
07:39.847 --> 07:41.869
[SPEAKER_00]: And lastly, pillar 4.
07:41.849 --> 07:43.152
[SPEAKER_00]: operational cadence.
07:43.432 --> 07:48.965
[SPEAKER_00]: This is the pillar most people completely ignore and it's why they're portfolios underperform.
07:49.245 --> 07:52.232
[SPEAKER_00]: You can't just set up income investments and forget about them.
07:52.432 --> 07:54.978
[SPEAKER_00]: You need to run your portfolio like a business.
07:55.218 --> 07:58.305
[SPEAKER_00]: This means quarterly income distribution reviews.
07:58.285 --> 08:00.407
[SPEAKER_00]: you're tracking what's performing and what's not.
08:00.688 --> 08:09.177
[SPEAKER_00]: Annual portfolio rebalancing to maintain your target allocations as market conditions shift on going due diligence on new investment opportunities.
08:09.497 --> 08:14.863
[SPEAKER_00]: And regular tax planning sessions with your CPA and CTP to stay optimized your round.
08:15.003 --> 08:16.925
[SPEAKER_00]: Think of this like your KPIs at work.
08:16.945 --> 08:18.647
[SPEAKER_00]: You don't just set goals and walk away.
08:19.087 --> 08:23.572
[SPEAKER_00]: You monitor, measure, and optimize continuously so you hit the target.
08:23.813 --> 08:26.976
[SPEAKER_00]: Your portfolio deserves the same systematic approach.
08:26.956 --> 08:29.139
[SPEAKER_00]: To drive this point home, think about it like this.
08:29.499 --> 08:36.729
[SPEAKER_00]: If you had a business that generated $120,000 per year in income, would you only look at it for 20 minutes once a month?
08:37.670 --> 08:38.291
[SPEAKER_00]: Of course not.
08:38.531 --> 08:41.515
[SPEAKER_00]: You'd be trying to optimize it and grow it each week.
08:41.535 --> 08:47.162
[SPEAKER_00]: Now let's look at how a portfolio of this size could realistically generate this much income.
08:47.362 --> 08:53.250
[SPEAKER_00]: Here's a simplified allocation example of a $1.5 million evergreen portfolio.
08:53.230 --> 08:57.559
[SPEAKER_00]: Let's allocate $625,000 in private real estate.
08:57.799 --> 09:01.968
[SPEAKER_00]: That produces an 8% yield blended from the investments plus some growth.
09:02.148 --> 09:05.034
[SPEAKER_00]: That's going to give you $50,000 annual income.
09:05.255 --> 09:13.652
[SPEAKER_00]: If you add $250,000 in private credit with a 10% yield, that's going to be an additional $25,000 a year in income.
09:13.632 --> 09:17.597
[SPEAKER_00]: Now let's put $500,000 in covered call ETFs.
09:17.617 --> 09:22.503
[SPEAKER_00]: At a 13% blended yield, that's $68,000 of annual income.
09:22.644 --> 09:27.750
[SPEAKER_00]: And then you want to make sure and keep $125,000 as a liquidity or opportunity buffer.
09:28.031 --> 09:33.818
[SPEAKER_00]: The total annual income from this portfolio is $143,000 or almost $20,000.
09:33.798 --> 09:35.302
[SPEAKER_00]: $12,000 per month.
09:35.522 --> 09:38.409
[SPEAKER_00]: And here's the key difference compared to a drawdown portfolio.
09:38.569 --> 09:41.416
[SPEAKER_00]: You haven't sold a single asset.
09:41.597 --> 09:45.667
[SPEAKER_00]: Your principal continues growing while generating consistent income.
09:45.887 --> 09:49.055
[SPEAKER_00]: So here's the fundamental question that determines everything.
09:49.235 --> 09:51.300
[SPEAKER_00]: Are you building a wealth business?
09:51.280 --> 09:53.563
[SPEAKER_00]: or are you storing assets until they run out?
09:53.784 --> 10:00.173
[SPEAKER_00]: Let me show you side by side comparison of these two models because everything flows from this choice.
10:00.554 --> 10:04.480
[SPEAKER_00]: So think of the Evergreen portfolio as a wealth operating company.
10:05.020 --> 10:10.909
[SPEAKER_00]: It's an active business generating income from operations, reinvesting profits for growth,
10:10.889 --> 10:13.753
[SPEAKER_00]: maintaining and expanding productive capacity.
10:13.833 --> 10:16.656
[SPEAKER_00]: The drawdown portfolio is a wealth storage vehicle.
10:16.897 --> 10:25.147
[SPEAKER_00]: It's a passive account holding accumulated assets, systematically liquidating those holdings to fund your lifestyle, and tell us depleted.
10:25.507 --> 10:29.612
[SPEAKER_00]: One is a business, the other is a savings account with a countdown timer.
10:29.913 --> 10:31.335
[SPEAKER_00]: Let's talk about the philosophy.
10:31.595 --> 10:34.078
[SPEAKER_00]: The evergreen approach works like this.
10:34.058 --> 10:38.044
[SPEAKER_00]: build, operate, generate, reinvest in scale.
10:38.685 --> 10:42.290
[SPEAKER_00]: You're constructing the machine that produces income indefinitely.
10:42.550 --> 10:49.159
[SPEAKER_00]: The drawdown approach looks like this, accumulate, store with draw deplete.
10:49.460 --> 10:52.684
[SPEAKER_00]: You're filling a tank that slowly empties over time.
10:52.925 --> 10:58.733
[SPEAKER_00]: Now let's look at asset allocation with the
10:58.713 --> 11:04.779
[SPEAKER_00]: private equity, real estate, active businesses, plus your traditional investments like stocks and bonds.
11:05.179 --> 11:10.825
[SPEAKER_00]: Every asset is chosen for its ability to generate cash flow and operate productively.
11:10.965 --> 11:18.012
[SPEAKER_00]: With a drawdown model, your holding storage assets, stocks, bonds, cash, and traditional allocations.
11:18.432 --> 11:24.057
[SPEAKER_00]: Assets are chosen for liquidity and ease of rebalancing, not for income generation.
11:24.358 --> 11:26.880
[SPEAKER_00]: So what are the skills required to manage both?
11:26.860 --> 11:30.364
[SPEAKER_00]: The evergreen portfolio requires CEO skills, right?
11:30.384 --> 11:35.370
[SPEAKER_00]: I'm talking business operations, cash flow management, deal evaluation and team building.
11:35.570 --> 11:39.855
[SPEAKER_00]: You're running a wealth business, it requires real business competencies.
11:40.115 --> 11:50.387
[SPEAKER_00]: The drawdown portfolio needs basic withdrawal management, simple math for safe withdrawal rates, you're managing a depletion schedule, it's basic arithmetic.
11:50.367 --> 11:52.631
[SPEAKER_00]: Now let's look at the tax strategies for both.
11:53.152 --> 11:55.337
[SPEAKER_00]: Here's where the evergreen model really shines.
11:55.537 --> 11:57.701
[SPEAKER_00]: You have multiple optimization opportunities.
11:57.962 --> 12:05.777
[SPEAKER_00]: Depreciation from real estate, business deductions through LLCs, losses to offset gains, qualified dividends.
12:05.757 --> 12:10.768
[SPEAKER_00]: Your effective tax rate can drop from 35% down to 15% to 20%.
12:11.088 --> 12:13.594
[SPEAKER_00]: Now, with the drawdown model, you have limited options.
12:13.975 --> 12:18.103
[SPEAKER_00]: Capital gains from four sales or nearly income from withdrawals.
12:18.805 --> 12:23.074
[SPEAKER_00]: Your tax strategy is basically pay capital gains when you sell.
12:23.645 --> 12:24.106
[SPEAKER_00]: That's it.
12:24.466 --> 12:36.159
[SPEAKER_00]: And let's talk about income generation, the Evergreen portfolio generates operating profit from business assets, or targeting 6 to 12% without selling any ownership.
12:36.319 --> 12:40.724
[SPEAKER_00]: The business pays you dividends while continuing to operate and grow.
12:40.844 --> 12:43.848
[SPEAKER_00]: The drawdown portfolio generates liquidation proceeds.
12:44.128 --> 12:47.192
[SPEAKER_00]: You're selling 4% of stored assets annually.
12:47.632 --> 12:51.096
[SPEAKER_00]: You're converting ownership into cash to spend permanently.
12:51.276 --> 12:52.858
[SPEAKER_00]: Let's talk about your role.
12:52.838 --> 13:07.116
[SPEAKER_00]: With an evergreen portfolio, you're the active CEO and owner, you make strategic decisions, higher specialist manage operations, you're running the business even if you delegate the day to day execution.
13:07.316 --> 13:14.986
[SPEAKER_00]: With the drawdown portfolio, you're a passive account holder, you delegate everything to a Robo advisor or a financial planner.
13:15.226 --> 13:18.610
[SPEAKER_00]: You're a client being served by somebody
13:18.590 --> 13:20.592
[SPEAKER_00]: Now let's talk crisis recovery.
13:21.073 --> 13:23.175
[SPEAKER_00]: Here's the critical difference most people miss.
13:23.516 --> 13:29.923
[SPEAKER_00]: In a market crash, you're evergreen business continues operating and can pivot in the depth.
13:29.943 --> 13:36.591
[SPEAKER_00]: In most scenarios, your real estate still collects rent, your private credit still distributes interest, the business keeps running.
13:36.831 --> 13:42.758
[SPEAKER_00]: Now, with the drawdown portfolio, your storage gets depleted faster with no recovery mechanism.
13:42.738 --> 13:44.921
[SPEAKER_00]: market crashes, you're still selling 4%.
13:45.842 --> 13:48.545
[SPEAKER_00]: But now it's a 4% of a much smaller number.
13:48.725 --> 13:51.648
[SPEAKER_00]: You're locking in losses with no way to recover them.
13:51.869 --> 13:53.571
[SPEAKER_00]: Let's talk about generational transfer.
13:53.831 --> 13:59.918
[SPEAKER_00]: When you pass on an Evergreen portfolio, you're transferring an operating business with systems, teams, and cash flow.
14:00.178 --> 14:06.105
[SPEAKER_00]: Your kids will inherit an income-producing machine with complete infrastructure already built in.
14:06.386 --> 14:11.952
[SPEAKER_00]: When you pass on a drawdown portfolio, you're transferring whatever storage balance remains.
14:11.932 --> 14:12.994
[SPEAKER_00]: if there's anything left.
14:13.234 --> 14:17.340
[SPEAKER_00]: Your kids inherit whatever is in the account at the end.
14:17.380 --> 14:19.003
[SPEAKER_00]: So what's your choice?
14:19.343 --> 14:22.348
[SPEAKER_00]: This isn't about which approach is universally better.
14:22.688 --> 14:28.237
[SPEAKER_00]: It's about which model matches your skills, your timeline, and your goals.
14:28.497 --> 14:40.335
[SPEAKER_00]: If you want to see how ultra wealthy families with 20 million plus manage their portfolio, we have hard data on it from the Tiger 21
14:40.315 --> 14:56.456
[SPEAKER_00]: At the time of the report, they had 28 percent of their wealth in private equity, 28 percent in real estate, 23 percent in public stocks, 9 percent in cash, 7 percent in fixed income, and 5 percent in miscellaneous holdings.
14:56.856 --> 15:00.260
[SPEAKER_00]: They're following the evergreen portfolio model.
15:00.421 --> 15:03.825
[SPEAKER_00]: They're not hoping the S&P 500 performs.
15:03.805 --> 15:07.829
[SPEAKER_00]: they're building a diversified income system that operates like a business.
15:08.129 --> 15:13.534
[SPEAKER_00]: If this approach resonates with you, here's how you can get started transitioning to an evergreen portfolio.
15:13.694 --> 15:16.256
[SPEAKER_00]: Step one, assess your current allocation.
15:16.476 --> 15:17.718
[SPEAKER_00]: Look at what you own right now.
15:18.138 --> 15:22.081
[SPEAKER_00]: What percentage is in growth only assets that produce zero cash flow?
15:22.342 --> 15:24.123
[SPEAKER_00]: What concentration risk do you have?
15:24.303 --> 15:33.812
[SPEAKER_00]: For a lot of people, they're more than 50% in company stock or broad index funds that don't generate income.
15:33.792 --> 15:35.094
[SPEAKER_00]: This is critical.
15:35.435 --> 15:37.238
[SPEAKER_00]: You don't liquidate everything at once.
15:37.578 --> 15:39.301
[SPEAKER_00]: Tax implications matter here.
15:39.762 --> 15:42.627
[SPEAKER_00]: And when done wrong, a careless move could cost you big.
15:42.747 --> 15:45.331
[SPEAKER_00]: For most people, this will be a systematic process.
15:45.912 --> 15:47.334
[SPEAKER_00]: Over 12 to 24 months.
15:47.895 --> 15:52.323
[SPEAKER_00]: If you have the certified tax planner, this is a conversation you need to be having with them.
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[SPEAKER_00]: The goal is to transition without triggering a massive tax bill all at once.
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[SPEAKER_00]: In step number three, redeploy according to your investment thesis.
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[SPEAKER_00]: Here's where most people get stuck.
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[SPEAKER_00]: As you free up capital, you need to know exactly where it's going.
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[SPEAKER_00]: What percentage into income investments, growth investments, and preservation?
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[SPEAKER_00]: What specific asset classes within each category?
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[SPEAKER_00]: What your target cash flow needs to be?
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[SPEAKER_00]: This is what I call your investment thesis.
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[SPEAKER_00]: your personalized blueprint for how your portfolio should be structured based on your specific goals, timeline, and risk tolerance.
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[SPEAKER_00]: Without this blueprint, you're just guessing you might overallocate to income and sacrifice growth or chase high yields in risky investments because you don't have clear targets.
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[SPEAKER_00]: This part is exactly what I cover in my live monthly workshop.
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[SPEAKER_00]: I'll tell you more about that in a minute.
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[SPEAKER_00]: So here's the fundamental question every sophisticated investor faces.
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[SPEAKER_00]: Are you building a portfolio you'll eventually consume or are you building a wealth system that generates income indefinitely?
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[SPEAKER_00]: One approach might fund your retirement.
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[SPEAKER_00]: The other funds your independence in your family's future.
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[SPEAKER_00]: The ultra wealthy chose long ago.
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[SPEAKER_00]: They build wealth businesses, not just portfolios.
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[SPEAKER_00]: If you made it this far in the video, then I know you're serious about this, and I'd love to invite you to my upcoming live workshop.
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[SPEAKER_00]: We will spend two hours together, and by the end of the evening, you will have your legacy statement and investment thesis fully built out for your microfamily office.
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[SPEAKER_00]: and you'll be well on your way to implementing your own evergreen portfolio.
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[SPEAKER_00]: If that sounds interesting to you, then head to wealthops.io forward slash go or click in the link below this video to register.
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[SPEAKER_00]: But if you're not ready and just want to learn more about the evergreen portfolios and microfamily offices, you should check out this video.
