Giuseppe Grammatico: Welcome to the Franchise Freedom Podcast. I’m your host, Giuseppe Grammatico, your franchise guide and today we have a very special guest. Today’s guest is Jim Oliver, the founder of the wealth coaching company Create Tailwind. Jim founded Create Tailwind in 1988 in Denver, Colorado as a traditional financial planning firm.
But after weathering two major corrections on Wall Street, Jim and his team pivoted the company’s focus to building wealth beyond Wall Street. With the advantage Create Tailwind exploded to become a multi-location nationally-recognized firm that has helped thousands of individuals and businesses around the US create their own wealth and be their own bank. Jim, welcome to the Franchise Freedom Podcast.
Jim Oliver: Giuseppe, thank you so much for having me. Glad to be here.
Giuseppe: Yeah, very excited. To everyone listening, we had, I was actually on your show about a year ago. So been really looking forward to inviting you on my show. So thanks again. So, you know, diving right in, I always like to ask the, you know, all our guests the same question. You could just fill us in on your background and, you know, how did you get into this business and what that journey look like?
Jim’s Entrepreneurial Journey
Jim: Absolutely. So that journey started when I was a little kid actually. And I grew up in Inglewood, California, and it’s an inner-city part of Los Angeles. And we really didn’t have anything. We were very poor and but in LA, things are really are kind of weird because I could drive three or four miles away from my house and I could see houses that are worth millions of dollars and people had a totally different lifestyle. And obviously, it was because they had more money. And I was fascinated by that. And I didn’t want to be poor, I wanted to be like them. I wanted to have money and I wanted to be able to have nice things.
And I just didn’t know because people that are in those neighborhoods, that nobody’s ever taught them how money really works and how things, how you build wealth. So I went to college to learn how to do these things. Got out of college, got a job in the wealth management business, the traditional Wall Street, go find customers that have assets and you go and invest those assets for them in different platforms like mutual funds and wrap accounts and, you know, etc.
And, you know, all of our platforms, Giuseppe, at one point in time, they said, Well, your clients are averaging 9.38%. And I thought, wow, our clients are doing great. But that was a gross number. And so once we figured out what the net number was, and that was closer to 4%, by the way, it made sense that the math, the cager the compound annual growth rate wasn’t anywhere near 9%.
And so then I started looking at all of our clients. How did they make money? Like the ones that really had the most money. And you know what it was? It was they were business owners and they owned real estate, which is a business, right? And some of them had businesses that were family businesses that they inherited but most of them, they started these businesses.
And some of them were just businesses that they had a great idea or they had experience in. And a lot of them were franchises that people thought, hey, I want to be my own boss, I want to be, I have an entrepreneurial spirit. And so we started looking at that and saying, Okay, what do businesses need? Well, businesses need to control the banking function in their lives. But also, shouldn’t we run our family, at least the finances like a business? So we need to control the banking function in our lives personally and as business owners
Giuseppe: Right. I cannot agree with you more. And, you know, we were talking right before the episode here but just in general, just there’s multiple vehicles correct? In investing, and one is not necessarily better than the other. Well, I take that back. With entrepreneurship, obviously, you have a lot more control but there are so many, you know, options and when I, when people speak to me about investments since that was my career, my past life, they talk about well do I buy stocks, bonds or mutual funds? And kind of to your point, people don’t realize that there are other options, such as business ownership.
There’s franchise ownership, non-franchise ownership, there’s ways of owning multiple businesses where you’re more of a semi-absentee. So definitely cannot agree with you more there. You know, what, so if you could talk a little bit more about just what did that journey look like as far as okay, so you had that job, you know, you got into entrepreneurship. What really made you make this the switch? What do you recommend to people looking to make the switch from a corporate exec or someone looking, you know, work in that corporate job to becoming a business owner?
Educate Yourself On Your Opportunities
Jim: So yeah, what I did is I had a lot of people that I knew that own businesses that I was either interested in or not interested in. And I invested in a business with a friend and we grew that business. I thought I had a different skill set than them.
That was like the first step. And then I started looking at, if you look at every single business out there, there’s this kind of thing about once you understand how the business makes money, then you’ll know whether you like that business model or not, right? I mean, if it’s a salon suite type of situation. Well, if you don’t know how a salon suite owner makes money, then you don’t have any idea whether that’s right for you or not. So I started to educate myself for the clients and friends that I had, that were in business.
And then I just asked them either if they wanted to expand their business to more locations, or if they were looking for a partner or what I thought I could bring to the table. And so that was the first step for me to become a multiple, or I mean a multiple company owner. So through that, I bought businesses, bought in the businesses, started businesses, sold businesses, and, you know, currently I own 11 different businesses.
I guess the biggest thing, Giuseppe, was I just started. I just started educating myself. You know, it’s like, you know, you brought up franchises. I mean, unless you’ve been through the process of exploring and understanding or educating yourself about a franchise and franchise opportunities, then how would you know if it’s right for you or not? So the biggest thing that you had to do was, you got to take control and educate yourself about business ownership,
Giuseppe: Right. Yes, yes. And we were speaking earlier and that education, asking the right questions, I believe is key. Because obviously, it’s a big leap owning any business, whether it’s a franchise, non-franchise, and I, speaking with, you know, people every single week, and we were speaking just right before this call, people get nervous, they get fearful, they kind of just, you know, you get that deer in headlights, it just, it’s overwhelming for them and they, you know, a lot of people, I guess the number one comment I get is, well, I can lose my investment.
And I said, Yes, business ownership, you know, is definitely a risk but so is being an employee, right? I mean, you’re kind of one source of income as we were talking about, you know, your salary, there’s no relation between, you know, your hard work and your salary. Sometimes your salary doesn’t change, sometimes your salary is getting cut. And then, you know, after getting your salary, you deduct blindly into a 401k that someone else is managing.
So there truly is no control. You’re just blindly putting money in. I’m guilty of it as well and just investing as much as I could into that retirement fund. And, by the way, not against retirement plans or funds or anything like that, but I wish I had cut back and kept a little bit more in an account looking to find my first business. And I wish I had started, knowing what I know now, I wish I had started a little bit earlier. So definitely good point there. Anything else that you want to add to that?
Three Important Questions Regarding Financial Planning
Jim: Well, yeah, you know, you brought up something, Giuseppe, that’s really interesting. So what we’re told is the goal is that we’re gonna build up all this money in a government plan and then we’re gonna live off of it for the rest of our lives and never run out of money and then we’re gonna die, you know, in Florida or Arizona, playing golf every day, right? And so think about this. Let me ask you three questions about qualified, or just three questions in general and then we’ll relate them to qualified plans like a 401k.
Number one, are taxes going up or down? Taxes are going up, right? They have to go up, especially with this COVID-19 and this bailout, and everything else, taxes have to go up. But even before that, Medicare, Medicaid, social security and the interest on our debt, taxes have to go up. The average maximum tax rate in this country since 1913 is 57%. And right now, we’re in the mid-30s. So they have to go up. Second question. Are the dollars that are in your pocket, are they worth more today or in the future? Here’s a way to answer that. What’d you say? Today?
Jim: Absolutely. So I mean, I’m older than you are, but when I was a kid, I could buy between five and 10 candy bars for $1, right? Now you can’t even buy one. So the dollars in your pocket are always worth more today than in the future because of inflation, right? Last question. Would you rather pay tax on the seed or on the harvest? The seed, right? The little amount. Yeah. So qualified plans like an IRA and 401k and 403 B, depending on what kind of company you work for, they violate all of those questions that you just answered.
You’re going to put good dollars in, dollars today that are worth more, you’re not going to pay tax on the seed, but you’re going to pay it on the harvest. And by the way, Giuseppe, the government would never expect you to put money in an account for 20, 30, 40 years and not know what tax rate you are gonna have to pay when you took it out, would they? Of course they do.
They don’t tell you what the tax rate is. So it’s going to be higher. Now, if you own a business, right? You have all kinds of options when you get into those later years. You could bring on a partner. You could bring on a partner that’s gonna buy you out over time. You could sell the business to somebody else and you could finance it. I mean, there’s a reason why the bank is always the nicest building in town, guys. I mean, the bank financing things, that’s how you make money.
They’re making a lot more money than the interest rate that they’re applying to you. Like, they’re selling you on the interest rate. But it’s not the rate that matters. It’s the volume of interest. That’s how they make money in the bank. And then they loan the money out over and over and over and over again every time you make a payment. That’s, and they create velocity of money. And, you know, we can do that as business owners. And we can do that if we act like our own banker in our lives.
Giuseppe: Right. Taking full control of everything. Absolutely. So, can you talk a little bit, can you maybe dive a little bit more into that? Because, you know, we talked quite, you know, we covered quite a bit so, you know, what does it truly mean to be your own banker? And maybe tied into, you know, what your company offers. So if someone were to give you a call after this show, what does that process look like?
Be Your Own Bank
Jim: So, to become your own banker, we have to first understand the problem, then I’ll talk about how that’s the solution, okay? The average American pays about 34 and a half cents of every net dollar they earn, so after tax, to interest Now, the first thing that you probably think is I don’t pay that much in interest rate. But no, you don’t in rate but you do in volume.
So like on your mortgage on your house, if you paid every one of those payments for 30 years, you’re going to pay about double, approximately, depending on all the terms, but on a 30-year mortgage, it’s about double what the price that you paid for the house. So that means every time you make a payment. Giuseppe, you’re paying 50%, what you’re paying 50% goes to the bank’s benefit and 50% goes to your benefit.
So if you earned $1 and you had to give somebody half of it, you didn’t you don’t care about the interest rate, right? So if we, what if we could recapture that interest, that 34 and a half cents that is going to the bank, we could actually pay it to ourselves. Well, what, I mean, wouldn’t that have a much bigger impact on our wealth than trying to invest in Wall Street and hoping that your money grows in Wall Street and you have no control over it? By the way, hope is not a good financial strategy. So to be your own banker, what you do is you build up this money pool.
So instead of putting your money in risky investments, you put it in a guaranteed vehicle, right? And then when you want to buy things, you collateralize that vehicle, and you get to use the financial institutions’ money at negotiated rates. Now think about that. Your money stays in a tax shelter and grows and you get to use somebody else’s money to go pay for the things that you need to buy. Now, somebody might say, Well, you know, Jim, I don’t finance things. I pay cash. Well, every time you pay cash, you have lost opportunity cost.
So the functioning of becoming your own banker is really simple, but it’s a different way of thinking. And so, the way that we operate, is we just do free coaching. We just educate somebody and we have webinars and we have one on one coaching sessions. And we just do this until somebody decides, is this for them or is this not for them? And we have a lot of videos. We have a YouTube channel for Create Tailwind, you know, createtailwind.com. You can sign up for a free coaching session. I mean, it’s through Zoom, so we’re social distancing as, just naturally.
And we have a podcast, Breakaway Wealth. And there’s a lot of ways to learn more and more and more about this, Giuseppe. But for your audience that are guys that are business owners and entrepreneurs and have an abundance mindset, you know, just start educating yourself. And we’ll help you. we’ll coach you. We’ll be your coach. Just like you coach guys to evaluate opportunities, we coach people to show them how to become your own banker. And then people at some point decide Yeah, I want to do this or I don’t want to do this.
Giuseppe: Right. And yeah, so anyone listening in, that’s, so that’s the best way to reach you, is, if they had a specific question? Or should they go to the YouTube channel first? What do you recommend?
Jim: They can reach out to me and I can probably help direct them on which videos and stuff to watch. I mean, you can send me an email firstname.lastname@example.org. You know, whatever way they’re comfortable reaching out, reach out to us and we’d be happy to help you and show you what this is all about. And like I said, our mentality is we just educate you. Because we know if we educate 10 people, you know, that there’s going to be a majority of those 10 people that want to become their own banker. So that’s our strategy and that’s our model is we just educate you.
Giuseppe: Right. This is, yeah, this is I cannot agree with you more. With everything going on in the world, I know a lot more people are either working from home or unfortunately not working, but definitely have some time to read up. I know I have personally, just catching up on some reading, educating myself on various opportunities. And this is definitely the perfect time to check that out. Jim, anything else you’d like to add before we wrap up here today?
Jim: No, just that, you know, I think that there’s gonna be a boom in this country, and there’s going to be opportunities for business ownership and there are opportunities right now. And I would tell somebody that what I’ve seen in my 32 years in wealth management, both on the Wall Street side and on the beyond Wall Street side, is find a business that you know something about or you have a passion for and you can, and get with good partners that can help you grow your business and show you a model.
And it’s one of the things I love about franchises is there’s a model of success, and just do it. I mean, just do it. And you won’t let yourself drown if you jump in that river. You’re gonna get to the other side.
Giuseppe: Right. Yes, I cannot agree with you more. I did it myself and yes, not easy, but it’s definitely worth it. So, Jim Oliver, createtailwind.com. Check it out. Go to his website. We’re going to add that, all his information on the show notes. So if anyone has any questions, you can contact Jim directly, go directly to his website. Jim, once again, it’s been a year in the making. I really appreciate you on the show. Really appreciate the insight. And thanks again. Hopefully, we’ll talk soon.
Jim: Absolutely. Thank you so much for having me.