Jan. 6, 2026
140: How to Retire at 51 Instead of 67
At 51, I walked away from a tech executive career with $6M, not because I had “enough,” but because my portfolio generated income while continuing to grow. In this video, I break down how I built my portfolio to produce cash flow without selling assets—allowing me to retire early.
Most high earners face the “wealth trap”: accumulating millions but having no income strategy for retirement. I was stuck in this cycle until I discovered how ultra-wealthy families structure their portfolios. They don’t rely on selling assets. Instead, they build an Evergreen Portfolio: growth assets, preservation assets, and income-generating investments that fund their lifestyle without touching principal.
I’ll show you how I applied this model to my own portfolio, and how you can do the same. If you’re ready to stop following traditional advice and start building a wealth system that supports you now and in the future, watch this video.
Transcript
WEBVTT
00:00.031 --> 00:08.033
[SPEAKER_00]: If you would have told me when I was 40, that just over 10 years later, I'd be preparing to retire from the corporate world.
00:08.165 --> 00:10.007
[SPEAKER_00]: I would have thought you were delusional.
00:10.207 --> 00:12.389
[SPEAKER_00]: Not because I didn't believe I could build wealth.
00:13.030 --> 00:26.144
[SPEAKER_00]: I'd already accumulated a few million in the bank, but because I was completely clueless about how to turn that big number on the screen into dependable income my family could actually live on.
00:26.164 --> 00:32.991
[SPEAKER_00]: I could build companies, I could manage teams, I could architect complex tech systems,
00:32.971 --> 00:38.643
[SPEAKER_00]: But somehow, nobody had taught me how to architect my own retirement.
00:38.843 --> 00:47.782
[SPEAKER_00]: Today, I'm going to show you the exact framework that took me from stuck with millions to retired in financially free at 51.
00:48.343 --> 00:49.225
[SPEAKER_00]: So.
00:49.205 --> 00:52.710
[SPEAKER_00]: Let's start with the problem most high earners face.
00:53.031 --> 01:06.471
[SPEAKER_00]: You've got $3 million in your portfolio, but your financial advisor says you need 5 million to retire safely and actually probably 7 million with inflation.
01:06.451 --> 01:10.778
[SPEAKER_00]: Hmm, or maybe 10 million if you want to travel and have a summer home.
01:11.159 --> 01:13.363
[SPEAKER_00]: So, the goalpost keeps moving.
01:13.964 --> 01:19.614
[SPEAKER_00]: You save more your portfolio grows, but retirement stays just out of reach.
01:20.014 --> 01:20.696
[SPEAKER_00]: I've lived this.
01:21.337 --> 01:29.050
[SPEAKER_00]: I had a few million in the bank, but with stuck working 60 hours a week in a very stressful, tech executive role.
01:29.030 --> 01:38.751
[SPEAKER_00]: because I didn't think that there was any option besides the standard drawdown portfolio, which has you saving and waiting until I was 67 to retire.
01:38.791 --> 01:45.486
[SPEAKER_00]: The pivot came for me when I realized my three sons were growing up and I was only getting glimpses of it.
01:45.466 --> 01:50.793
[SPEAKER_00]: That's when I started studying how ultra wealthy families actually structure their portfolios.
01:50.993 --> 01:54.297
[SPEAKER_00]: And what I discovered confirmed my suspicions.
01:54.658 --> 01:58.823
[SPEAKER_00]: They weren't all tossing their wealth into stocks and hoping that the market goes up.
01:59.143 --> 02:04.290
[SPEAKER_00]: They had architected portfolios that accomplished two goals at once.
02:04.670 --> 02:11.018
[SPEAKER_00]: They were growing the principle and they were living off the income from their investments.
02:10.998 --> 02:13.541
[SPEAKER_00]: while never selling the principle.
02:13.861 --> 02:15.442
[SPEAKER_00]: So I started shifting my thinking.
02:15.823 --> 02:23.370
[SPEAKER_00]: What if my portfolio generated enough income to replace my paycheck at 51 instead of 67?
02:24.071 --> 02:28.455
[SPEAKER_00]: What if my wealth actually grew while I was living off of the income?
02:28.836 --> 02:31.738
[SPEAKER_00]: I called this the Evergreen portfolio model.
02:31.979 --> 02:39.486
[SPEAKER_00]: Right now I'm 56 and my job for the past four and a half years has been running my micro family office.
02:39.466 --> 02:46.216
[SPEAKER_00]: I was able to walk away from a high paying career at 51, not because I'd saved my way to $20 million.
02:46.998 --> 02:53.828
[SPEAKER_00]: But because I restructured my $6 million portfolio to generate income while continuing to grow.
02:54.028 --> 02:55.711
[SPEAKER_00]: Here's the fundamental difference.
02:55.731 --> 03:03.463
[SPEAKER_00]: The traditional model has two components, growth assets like stocks, and capital preservation assets like bonds.
03:03.884 --> 03:06.688
[SPEAKER_00]: The Evergreen portfolio has three.
03:07.310 --> 03:14.267
[SPEAKER_00]: growth, capital preservation, and the critical missing piece income focused investments.
03:14.688 --> 03:24.070
[SPEAKER_00]: The percentage of this third component that you have in your portfolio can very greatly, depending on several factors like age,
03:24.050 --> 03:28.340
[SPEAKER_00]: portfolio size, income needs, and risk tolerance.
03:28.360 --> 03:41.552
[SPEAKER_00]: For example, someone five years out from their target retirement date, you might have 25% of your portfolio allocated to income investments and the majority still compounding in growth investments.
03:41.532 --> 03:50.762
[SPEAKER_00]: Someone retiring tomorrow in exiting their active income source, they might be 50% or more in income focused investments.
03:50.783 --> 03:51.884
[SPEAKER_00]: The goal here is simple.
03:52.184 --> 03:55.368
[SPEAKER_00]: Grow your principle while funding your lifestyle.
03:55.608 --> 04:00.373
[SPEAKER_00]: So let me break down each of the three components in just a little bit more detail.
04:00.634 --> 04:03.557
[SPEAKER_00]: Component one is growth assets.
04:03.537 --> 04:10.489
[SPEAKER_00]: These are your traditional stocks and index funds, but could also include more risk investments like venture capital.
04:10.810 --> 04:16.139
[SPEAKER_00]: A growth investment is anything that has the goal of long-term appreciation.
04:16.420 --> 04:19.926
[SPEAKER_00]: Now, component two, this capital preservation asset.
04:19.906 --> 04:31.203
[SPEAKER_00]: things like bonds, treasuries, gold, and other cash equivalents that act as a ballast during volatility in a safety net in case of a black swan event.
04:31.383 --> 04:32.685
[SPEAKER_00]: But here's where it gets interesting.
04:32.986 --> 04:37.172
[SPEAKER_00]: Component 3 is your income-focused investments.
04:37.152 --> 04:44.701
[SPEAKER_00]: There are options that your advisor might mention to you, such as municipal bonds, dividend stocks, or public reads.
04:45.061 --> 04:55.353
[SPEAKER_00]: And there are options in the private markets that they likely won't bring up to you, such as private credit, triple net leases, or private equity, real estate funds.
04:55.753 --> 04:59.818
[SPEAKER_00]: Let me give you a concrete example of income investments.
04:59.798 --> 05:06.648
[SPEAKER_00]: After I moved to Austin, I bought my primary residence plus five single family rental properties.
05:07.049 --> 05:14.820
[SPEAKER_00]: The income from those five properties covered a substantial portion of my family's essential living expenses.
05:15.180 --> 05:23.072
[SPEAKER_00]: This was my aha moment, assets generating actual cash flow I could live on, but here's what really blew my mind.
05:23.052 --> 05:24.194
[SPEAKER_00]: the tax treatment.
05:24.434 --> 05:30.183
[SPEAKER_00]: When I sat down with my CPA to look at the numbers, I realized something most people miss.
05:30.524 --> 05:45.567
[SPEAKER_00]: If I needed $175,000 for living expenses and got it from my stock portfolio, I'd actually have to sell $225,000 worth of stock because I'd lose $50,000 to capital gains.
05:45.547 --> 06:05.935
[SPEAKER_00]: But with my rental properties and the private equity real estate and private credit investments that I've added since, I'd take $175,000 in distributions and most of it comes to me tax advantage or even tax free through depreciation and other strategies, same lifestyle.
06:05.915 --> 06:07.778
[SPEAKER_00]: completely different tax treatment.
06:08.259 --> 06:13.588
[SPEAKER_00]: And critically, my principal keeps growing while I'm living off of the income.
06:13.849 --> 06:16.734
[SPEAKER_00]: That's when I knew that this wasn't just a better approach.
06:17.535 --> 06:20.440
[SPEAKER_00]: It was the only approach that made sense.
06:20.861 --> 06:21.342
[SPEAKER_00]: So,
06:21.322 --> 06:24.887
[SPEAKER_00]: Let me show you what this looks like with real portfolio numbers.
06:25.248 --> 06:33.280
[SPEAKER_00]: I'm going to start with a very simple example, a $3 million portfolio with a 50-50 growth in income split.
06:33.580 --> 06:40.611
[SPEAKER_00]: You allocate $1.5 million to income focused investments at an 8% blended yield.
06:40.911 --> 06:43.616
[SPEAKER_00]: That's $120,000 in annual cash flow.
06:43.856 --> 06:50.586
[SPEAKER_00]: Then you add $1.5 million in growth assets,
06:50.566 --> 06:51.568
[SPEAKER_00]: that's another $15,000.
06:51.608 --> 06:59.560
[SPEAKER_00]: That is a $135,000 of annual portfolio income without touching the principle.
06:59.921 --> 07:01.924
[SPEAKER_00]: Now, of course, this is simplified.
07:01.964 --> 07:09.115
[SPEAKER_00]: You'd also want to add capital preservation assets, but it shows you that you might be closer to retirement
07:09.095 --> 07:09.876
[SPEAKER_00]: then you think.
07:10.217 --> 07:13.001
[SPEAKER_00]: Let's look at another example and answer the question.
07:13.242 --> 07:21.194
[SPEAKER_00]: How would you structure a $6 million evergreen portfolio for someone that is knocking on the door of retirement?
07:21.455 --> 07:28.827
[SPEAKER_00]: The risk adverse and they want to maintain a comfortable lifestyle with $250,000 in annual burn.
07:29.187 --> 07:30.650
[SPEAKER_00]: Here's one way to structure it.
07:30.990 --> 07:32.773
[SPEAKER_00]: Start with your growth bucket.
07:32.753 --> 07:35.375
[SPEAKER_00]: 30% or 1.8 million dollars.
07:35.776 --> 07:43.883
[SPEAKER_00]: This continues compounding at market rates and kicks off about 1% in dividends, roughly $18,000 annually.
07:44.724 --> 07:46.425
[SPEAKER_00]: Next, you're income bucket.
07:46.926 --> 07:49.188
[SPEAKER_00]: This is the work horse of your portfolio.
07:49.548 --> 08:00.178
[SPEAKER_00]: That's 50% or $3 million generating an 8% blended yield which produces
08:00.158 --> 08:08.472
[SPEAKER_00]: Add those together and you're at $258,000 per year, comfortably covering your $250,000 lifestyle.
08:08.672 --> 08:09.774
[SPEAKER_00]: And here's the safety net.
08:10.275 --> 08:15.383
[SPEAKER_00]: You still have $1.2 million sitting in your capital preservation bucket.
08:15.363 --> 08:21.473
[SPEAKER_00]: 20% in low-risk investments keeping pace with inflation there when you need stability.
08:21.734 --> 08:25.961
[SPEAKER_00]: Now, your specific allocation will look different based on your goals.
08:26.302 --> 08:27.544
[SPEAKER_00]: Are you legacy-focused?
08:28.025 --> 08:33.314
[SPEAKER_00]: You're going to reinvest more of that cash flow to maximize compounding on the next generation.
08:33.554 --> 08:35.177
[SPEAKER_00]: Bullish on the markets?
08:35.157 --> 08:41.209
[SPEAKER_00]: tilt heavier towards growth, are you more conservative increase your capital preservation bucket?
08:41.510 --> 08:47.341
[SPEAKER_00]: The right portfolio structure is the one that hits your goals, not some generic formula.
08:47.602 --> 08:55.798
[SPEAKER_00]: And if you want help establishing these goals and defining your investment thesis, head to our upcoming free live workshop.
08:55.778 --> 08:57.722
[SPEAKER_00]: I'm going to share the link at the end.
08:58.043 --> 09:00.909
[SPEAKER_00]: Now, here's why this matters so much.
09:01.410 --> 09:11.271
[SPEAKER_00]: If you retire using a traditional drawdown portfolio, your success depends heavily on when you retire, not just how much you saved.
09:11.612 --> 09:14.398
[SPEAKER_00]: This is called the Sequence of Return Risk.
09:14.418 --> 09:15.981
[SPEAKER_00]: Look at these two scenarios.
09:15.961 --> 09:26.996
[SPEAKER_00]: scenario number one, you retire in 2008 after the great financial crisis with a $3 million portfolio, 60% stocks, 40% bonds.
09:27.336 --> 09:36.248
[SPEAKER_00]: Over the next 16 years, it almost triples in value while paying you $120,000 to $300,000 annually.
09:36.228 --> 09:44.159
[SPEAKER_00]: scenario two, you retire in 2000 heading into the dot com crash with the exact same portfolio.
09:44.459 --> 09:52.470
[SPEAKER_00]: After 16 years, it's worth less than when you started and only paid you $80,000 to $120,000 per year.
09:52.750 --> 09:56.636
[SPEAKER_00]: Same strategy, same discipline, different timing.
09:57.076 --> 09:59.940
[SPEAKER_00]: One person retires comfortably for life.
10:00.089 --> 10:01.831
[SPEAKER_00]: the other might have to go back to work.
10:02.372 --> 10:06.197
[SPEAKER_00]: This is why I think about portfolios completely differently now.
10:06.517 --> 10:10.662
[SPEAKER_00]: A drawdown portfolio is like filling a grain silo throughout your career.
10:10.723 --> 10:16.270
[SPEAKER_00]: Then slowly emptying it in retirement, hoping that you don't run out before you die.
10:16.690 --> 10:19.694
[SPEAKER_00]: An evergreen portfolio is like planting an orchard.
10:20.255 --> 10:29.927
[SPEAKER_00]: Your assets produced annual harvest without chopping down the trees.
10:29.907 --> 10:33.334
[SPEAKER_00]: because you're living off cash flow, not selling assets.
10:33.775 --> 10:36.740
[SPEAKER_00]: So, how do you actually make this transition?
10:37.081 --> 10:42.211
[SPEAKER_00]: I break it down into three sequential phases, architect, build, and run.
10:42.532 --> 10:46.920
[SPEAKER_00]: In the architect phase, you get crystal clear on your why.
10:46.900 --> 10:53.567
[SPEAKER_00]: define your legacy statement, develop your investment thesis, assess your risk tolerance and timeline.
10:53.908 --> 10:57.552
[SPEAKER_00]: Most people skip this and wonder why they can't make progress.
10:57.852 --> 10:59.454
[SPEAKER_00]: The second phase is build.
10:59.934 --> 11:07.823
[SPEAKER_00]: This is where you create the infrastructure, your portfolio business structure, your team org chart, your systems and technology.
11:08.443 --> 11:16.452
[SPEAKER_00]: You start making the actual moves,
11:16.432 --> 11:18.254
[SPEAKER_00]: optimizing your tax structure.
11:18.454 --> 11:20.196
[SPEAKER_00]: And the third phase is run.
11:20.377 --> 11:25.983
[SPEAKER_00]: Here you're transitioning into your operating rhythm, monthly, quarterly, and annual reviews.
11:26.644 --> 11:33.011
[SPEAKER_00]: You're managing your wealth like a business now, monitoring performance and making strategic adjustments.
11:33.031 --> 11:38.878
[SPEAKER_00]: But as you move through these three phases, there are three costly mistakes that you have to avoid.
11:39.259 --> 11:43.924
[SPEAKER_00]: One,
11:43.904 --> 11:45.967
[SPEAKER_00]: divesting requires strategy.
11:45.987 --> 11:56.280
[SPEAKER_00]: You need to have a well-thought-out game plan and engage somebody like a certified tax planner to ensure that you execute this the most efficient way possible.
11:56.480 --> 12:09.878
[SPEAKER_00]: Number two, over indexing on income investments too early, you still want compounding working for you on your growth investments, especially in your 30s, 40s, in early 50s.
12:09.858 --> 12:11.820
[SPEAKER_00]: poor investment sizing.
12:12.480 --> 12:18.686
[SPEAKER_00]: You don't put $1 million into a single investment from a $3 million portfolio.
12:18.926 --> 12:27.514
[SPEAKER_00]: The rule of thumb I tell people is that no single investment should be more than 10% of your portfolio and for me personally it's more like 5%.
12:28.255 --> 12:39.865
[SPEAKER_00]: If you begin this process with these three things in mind it will make the transition from the drawdown to the evergreen portfolio much more
12:39.845 --> 12:45.716
[SPEAKER_00]: This approach isn't complicated, but it's different from what traditional financial advisors teach.
12:45.977 --> 13:01.026
[SPEAKER_00]: Most advisors won't show you this because their business model depends on keeping your assets in public markets and keeping things as copy-paste as possible for them so that they can manage as many clients as possible.
13:01.006 --> 13:13.328
[SPEAKER_00]: I built wealth ops because I was frustrated by the lack of real guidance for high earners with 1 million to 30 million dollars who wanted to take control and manage their wealth like a business.
13:13.748 --> 13:18.036
[SPEAKER_00]: So if you're tired of the wait until 67 advice,
13:18.016 --> 13:26.096
[SPEAKER_00]: I would love to have you at our upcoming workshop where I'll show you exactly how to architect build and run your own wealth as a business.
13:26.437 --> 13:33.274
[SPEAKER_00]: I call this a microfamily office and it's the same framework that took me from stuck with millions.
13:33.254 --> 13:35.557
[SPEAKER_00]: to retire it in financially free at 51.
13:35.998 --> 13:42.427
[SPEAKER_00]: We run these every few weeks so that the next one should be right around the corner no matter when you're watching this.
13:42.627 --> 13:50.217
[SPEAKER_00]: Just head to welphops.io forward slash go or click the link in the description section right below this video.
13:50.598 --> 13:55.545
[SPEAKER_00]: After you do that, if you want to learn more about the micro family office concept, check out this video.
13:56.406 --> 13:57.267
[SPEAKER_00]: Thanks for watching.
13:57.447 --> 13:58.789
[SPEAKER_00]: I'll see you in the next one.
00:00.031 --> 00:08.033
[SPEAKER_00]: If you would have told me when I was 40, that just over 10 years later, I'd be preparing to retire from the corporate world.
00:08.165 --> 00:10.007
[SPEAKER_00]: I would have thought you were delusional.
00:10.207 --> 00:12.389
[SPEAKER_00]: Not because I didn't believe I could build wealth.
00:13.030 --> 00:26.144
[SPEAKER_00]: I'd already accumulated a few million in the bank, but because I was completely clueless about how to turn that big number on the screen into dependable income my family could actually live on.
00:26.164 --> 00:32.991
[SPEAKER_00]: I could build companies, I could manage teams, I could architect complex tech systems,
00:32.971 --> 00:38.643
[SPEAKER_00]: But somehow, nobody had taught me how to architect my own retirement.
00:38.843 --> 00:47.782
[SPEAKER_00]: Today, I'm going to show you the exact framework that took me from stuck with millions to retired in financially free at 51.
00:48.343 --> 00:49.225
[SPEAKER_00]: So.
00:49.205 --> 00:52.710
[SPEAKER_00]: Let's start with the problem most high earners face.
00:53.031 --> 01:06.471
[SPEAKER_00]: You've got $3 million in your portfolio, but your financial advisor says you need 5 million to retire safely and actually probably 7 million with inflation.
01:06.451 --> 01:10.778
[SPEAKER_00]: Hmm, or maybe 10 million if you want to travel and have a summer home.
01:11.159 --> 01:13.363
[SPEAKER_00]: So, the goalpost keeps moving.
01:13.964 --> 01:19.614
[SPEAKER_00]: You save more your portfolio grows, but retirement stays just out of reach.
01:20.014 --> 01:20.696
[SPEAKER_00]: I've lived this.
01:21.337 --> 01:29.050
[SPEAKER_00]: I had a few million in the bank, but with stuck working 60 hours a week in a very stressful, tech executive role.
01:29.030 --> 01:38.751
[SPEAKER_00]: because I didn't think that there was any option besides the standard drawdown portfolio, which has you saving and waiting until I was 67 to retire.
01:38.791 --> 01:45.486
[SPEAKER_00]: The pivot came for me when I realized my three sons were growing up and I was only getting glimpses of it.
01:45.466 --> 01:50.793
[SPEAKER_00]: That's when I started studying how ultra wealthy families actually structure their portfolios.
01:50.993 --> 01:54.297
[SPEAKER_00]: And what I discovered confirmed my suspicions.
01:54.658 --> 01:58.823
[SPEAKER_00]: They weren't all tossing their wealth into stocks and hoping that the market goes up.
01:59.143 --> 02:04.290
[SPEAKER_00]: They had architected portfolios that accomplished two goals at once.
02:04.670 --> 02:11.018
[SPEAKER_00]: They were growing the principle and they were living off the income from their investments.
02:10.998 --> 02:13.541
[SPEAKER_00]: while never selling the principle.
02:13.861 --> 02:15.442
[SPEAKER_00]: So I started shifting my thinking.
02:15.823 --> 02:23.370
[SPEAKER_00]: What if my portfolio generated enough income to replace my paycheck at 51 instead of 67?
02:24.071 --> 02:28.455
[SPEAKER_00]: What if my wealth actually grew while I was living off of the income?
02:28.836 --> 02:31.738
[SPEAKER_00]: I called this the Evergreen portfolio model.
02:31.979 --> 02:39.486
[SPEAKER_00]: Right now I'm 56 and my job for the past four and a half years has been running my micro family office.
02:39.466 --> 02:46.216
[SPEAKER_00]: I was able to walk away from a high paying career at 51, not because I'd saved my way to $20 million.
02:46.998 --> 02:53.828
[SPEAKER_00]: But because I restructured my $6 million portfolio to generate income while continuing to grow.
02:54.028 --> 02:55.711
[SPEAKER_00]: Here's the fundamental difference.
02:55.731 --> 03:03.463
[SPEAKER_00]: The traditional model has two components, growth assets like stocks, and capital preservation assets like bonds.
03:03.884 --> 03:06.688
[SPEAKER_00]: The Evergreen portfolio has three.
03:07.310 --> 03:14.267
[SPEAKER_00]: growth, capital preservation, and the critical missing piece income focused investments.
03:14.688 --> 03:24.070
[SPEAKER_00]: The percentage of this third component that you have in your portfolio can very greatly, depending on several factors like age,
03:24.050 --> 03:28.340
[SPEAKER_00]: portfolio size, income needs, and risk tolerance.
03:28.360 --> 03:41.552
[SPEAKER_00]: For example, someone five years out from their target retirement date, you might have 25% of your portfolio allocated to income investments and the majority still compounding in growth investments.
03:41.532 --> 03:50.762
[SPEAKER_00]: Someone retiring tomorrow in exiting their active income source, they might be 50% or more in income focused investments.
03:50.783 --> 03:51.884
[SPEAKER_00]: The goal here is simple.
03:52.184 --> 03:55.368
[SPEAKER_00]: Grow your principle while funding your lifestyle.
03:55.608 --> 04:00.373
[SPEAKER_00]: So let me break down each of the three components in just a little bit more detail.
04:00.634 --> 04:03.557
[SPEAKER_00]: Component one is growth assets.
04:03.537 --> 04:10.489
[SPEAKER_00]: These are your traditional stocks and index funds, but could also include more risk investments like venture capital.
04:10.810 --> 04:16.139
[SPEAKER_00]: A growth investment is anything that has the goal of long-term appreciation.
04:16.420 --> 04:19.926
[SPEAKER_00]: Now, component two, this capital preservation asset.
04:19.906 --> 04:31.203
[SPEAKER_00]: things like bonds, treasuries, gold, and other cash equivalents that act as a ballast during volatility in a safety net in case of a black swan event.
04:31.383 --> 04:32.685
[SPEAKER_00]: But here's where it gets interesting.
04:32.986 --> 04:37.172
[SPEAKER_00]: Component 3 is your income-focused investments.
04:37.152 --> 04:44.701
[SPEAKER_00]: There are options that your advisor might mention to you, such as municipal bonds, dividend stocks, or public reads.
04:45.061 --> 04:55.353
[SPEAKER_00]: And there are options in the private markets that they likely won't bring up to you, such as private credit, triple net leases, or private equity, real estate funds.
04:55.753 --> 04:59.818
[SPEAKER_00]: Let me give you a concrete example of income investments.
04:59.798 --> 05:06.648
[SPEAKER_00]: After I moved to Austin, I bought my primary residence plus five single family rental properties.
05:07.049 --> 05:14.820
[SPEAKER_00]: The income from those five properties covered a substantial portion of my family's essential living expenses.
05:15.180 --> 05:23.072
[SPEAKER_00]: This was my aha moment, assets generating actual cash flow I could live on, but here's what really blew my mind.
05:23.052 --> 05:24.194
[SPEAKER_00]: the tax treatment.
05:24.434 --> 05:30.183
[SPEAKER_00]: When I sat down with my CPA to look at the numbers, I realized something most people miss.
05:30.524 --> 05:45.567
[SPEAKER_00]: If I needed $175,000 for living expenses and got it from my stock portfolio, I'd actually have to sell $225,000 worth of stock because I'd lose $50,000 to capital gains.
05:45.547 --> 06:05.935
[SPEAKER_00]: But with my rental properties and the private equity real estate and private credit investments that I've added since, I'd take $175,000 in distributions and most of it comes to me tax advantage or even tax free through depreciation and other strategies, same lifestyle.
06:05.915 --> 06:07.778
[SPEAKER_00]: completely different tax treatment.
06:08.259 --> 06:13.588
[SPEAKER_00]: And critically, my principal keeps growing while I'm living off of the income.
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[SPEAKER_00]: That's when I knew that this wasn't just a better approach.
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[SPEAKER_00]: It was the only approach that made sense.
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[SPEAKER_00]: So,
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[SPEAKER_00]: Let me show you what this looks like with real portfolio numbers.
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[SPEAKER_00]: I'm going to start with a very simple example, a $3 million portfolio with a 50-50 growth in income split.
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[SPEAKER_00]: You allocate $1.5 million to income focused investments at an 8% blended yield.
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[SPEAKER_00]: That's $120,000 in annual cash flow.
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[SPEAKER_00]: Then you add $1.5 million in growth assets,
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[SPEAKER_00]: that's another $15,000.
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[SPEAKER_00]: That is a $135,000 of annual portfolio income without touching the principle.
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[SPEAKER_00]: Now, of course, this is simplified.
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[SPEAKER_00]: You'd also want to add capital preservation assets, but it shows you that you might be closer to retirement
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[SPEAKER_00]: then you think.
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[SPEAKER_00]: Let's look at another example and answer the question.
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[SPEAKER_00]: How would you structure a $6 million evergreen portfolio for someone that is knocking on the door of retirement?
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[SPEAKER_00]: The risk adverse and they want to maintain a comfortable lifestyle with $250,000 in annual burn.
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[SPEAKER_00]: Here's one way to structure it.
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[SPEAKER_00]: Start with your growth bucket.
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[SPEAKER_00]: 30% or 1.8 million dollars.
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[SPEAKER_00]: This continues compounding at market rates and kicks off about 1% in dividends, roughly $18,000 annually.
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[SPEAKER_00]: Next, you're income bucket.
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[SPEAKER_00]: This is the work horse of your portfolio.
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[SPEAKER_00]: That's 50% or $3 million generating an 8% blended yield which produces
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[SPEAKER_00]: Add those together and you're at $258,000 per year, comfortably covering your $250,000 lifestyle.
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[SPEAKER_00]: And here's the safety net.
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[SPEAKER_00]: You still have $1.2 million sitting in your capital preservation bucket.
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[SPEAKER_00]: 20% in low-risk investments keeping pace with inflation there when you need stability.
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[SPEAKER_00]: Now, your specific allocation will look different based on your goals.
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[SPEAKER_00]: Are you legacy-focused?
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[SPEAKER_00]: You're going to reinvest more of that cash flow to maximize compounding on the next generation.
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[SPEAKER_00]: Bullish on the markets?
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[SPEAKER_00]: tilt heavier towards growth, are you more conservative increase your capital preservation bucket?
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[SPEAKER_00]: The right portfolio structure is the one that hits your goals, not some generic formula.
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[SPEAKER_00]: And if you want help establishing these goals and defining your investment thesis, head to our upcoming free live workshop.
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[SPEAKER_00]: I'm going to share the link at the end.
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[SPEAKER_00]: Now, here's why this matters so much.
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[SPEAKER_00]: If you retire using a traditional drawdown portfolio, your success depends heavily on when you retire, not just how much you saved.
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[SPEAKER_00]: This is called the Sequence of Return Risk.
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[SPEAKER_00]: Look at these two scenarios.
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[SPEAKER_00]: scenario number one, you retire in 2008 after the great financial crisis with a $3 million portfolio, 60% stocks, 40% bonds.
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[SPEAKER_00]: Over the next 16 years, it almost triples in value while paying you $120,000 to $300,000 annually.
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[SPEAKER_00]: scenario two, you retire in 2000 heading into the dot com crash with the exact same portfolio.
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[SPEAKER_00]: After 16 years, it's worth less than when you started and only paid you $80,000 to $120,000 per year.
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[SPEAKER_00]: Same strategy, same discipline, different timing.
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[SPEAKER_00]: One person retires comfortably for life.
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[SPEAKER_00]: the other might have to go back to work.
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[SPEAKER_00]: This is why I think about portfolios completely differently now.
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[SPEAKER_00]: A drawdown portfolio is like filling a grain silo throughout your career.
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[SPEAKER_00]: Then slowly emptying it in retirement, hoping that you don't run out before you die.
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[SPEAKER_00]: An evergreen portfolio is like planting an orchard.
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[SPEAKER_00]: Your assets produced annual harvest without chopping down the trees.
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[SPEAKER_00]: because you're living off cash flow, not selling assets.
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[SPEAKER_00]: So, how do you actually make this transition?
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[SPEAKER_00]: I break it down into three sequential phases, architect, build, and run.
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[SPEAKER_00]: In the architect phase, you get crystal clear on your why.
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[SPEAKER_00]: define your legacy statement, develop your investment thesis, assess your risk tolerance and timeline.
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[SPEAKER_00]: Most people skip this and wonder why they can't make progress.
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[SPEAKER_00]: The second phase is build.
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[SPEAKER_00]: This is where you create the infrastructure, your portfolio business structure, your team org chart, your systems and technology.
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[SPEAKER_00]: You start making the actual moves,
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[SPEAKER_00]: optimizing your tax structure.
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[SPEAKER_00]: And the third phase is run.
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[SPEAKER_00]: Here you're transitioning into your operating rhythm, monthly, quarterly, and annual reviews.
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[SPEAKER_00]: You're managing your wealth like a business now, monitoring performance and making strategic adjustments.
11:33.031 --> 11:38.878
[SPEAKER_00]: But as you move through these three phases, there are three costly mistakes that you have to avoid.
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[SPEAKER_00]: One,
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[SPEAKER_00]: divesting requires strategy.
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[SPEAKER_00]: You need to have a well-thought-out game plan and engage somebody like a certified tax planner to ensure that you execute this the most efficient way possible.
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[SPEAKER_00]: Number two, over indexing on income investments too early, you still want compounding working for you on your growth investments, especially in your 30s, 40s, in early 50s.
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[SPEAKER_00]: poor investment sizing.
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[SPEAKER_00]: You don't put $1 million into a single investment from a $3 million portfolio.
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[SPEAKER_00]: The rule of thumb I tell people is that no single investment should be more than 10% of your portfolio and for me personally it's more like 5%.
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[SPEAKER_00]: If you begin this process with these three things in mind it will make the transition from the drawdown to the evergreen portfolio much more
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[SPEAKER_00]: This approach isn't complicated, but it's different from what traditional financial advisors teach.
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[SPEAKER_00]: Most advisors won't show you this because their business model depends on keeping your assets in public markets and keeping things as copy-paste as possible for them so that they can manage as many clients as possible.
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[SPEAKER_00]: I built wealth ops because I was frustrated by the lack of real guidance for high earners with 1 million to 30 million dollars who wanted to take control and manage their wealth like a business.
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[SPEAKER_00]: So if you're tired of the wait until 67 advice,
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[SPEAKER_00]: I would love to have you at our upcoming workshop where I'll show you exactly how to architect build and run your own wealth as a business.
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[SPEAKER_00]: I call this a microfamily office and it's the same framework that took me from stuck with millions.
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[SPEAKER_00]: to retire it in financially free at 51.
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[SPEAKER_00]: We run these every few weeks so that the next one should be right around the corner no matter when you're watching this.
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[SPEAKER_00]: Just head to welphops.io forward slash go or click the link in the description section right below this video.
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[SPEAKER_00]: After you do that, if you want to learn more about the micro family office concept, check out this video.
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[SPEAKER_00]: Thanks for watching.
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[SPEAKER_00]: I'll see you in the next one.
