The WAY to WOW Shows
Wealth Without Ownership
August 27, 2025
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[0:02] Who are you? And where are you going? What do you want? [Music] Hello and welcome to People Making Money. I'm your host, Kevin Beml, and I'm here every Wednesday at 10:00 a.m. Pacific time to talk about job hunting, starting a and uh running a business, and building wealth. So, the whole financial side of our lives. So, today's subject is I I I think hopefully will be

[0:40] one of the most useful um that I've ever covered. Um but it's also kind of on the complex side. So there's there's uh not that I'm going to be giving any legal advice, but there is a lot of legal aspects to this um that that have to be dealt with if if you use any of these strategies. Um and and there's just a a lot of of moving parts. uh but it's one of the most creative aspects uh that that we can bring to our professional

[1:15] lives and that is um building wealth without owning things. Okay, wealth without ownership. So I remember starting out as as a young man out of college and you know you hear all kinds of discussions today about student debt. It it is much larger than anything I had. Nonetheless, when I got out of when I got uh when I graduated uh USC uh with my four-year architecture degree, I I think I had somewhere between8 and $10,000 in debt, which

[1:52] probably doesn't sound like a whole lot right now, but this was 1982. That was a huge pile of money. Um, this was at a time when I I I think, you know, people typically earned maybe $34 an hour. Okay. So, if you kind of multiply that out, right? Um, $3 an hour, that's $120 uh a week. Uh, that's roughly what? $6,000 a year. uh you know and and so I

[2:27] owed twice as much as I could make in a year, right? Uh so and and so and I had I did not have any, you know, savings. I you know I had worked my way through college. I did not come from a family that you know could give me money to start a business or anything like that. So I was starting from scratch and the question was how was I going to build wealth uh without owning things without you know having

[3:02] money for example to buy uh uh real estate or to invest in the stock market that those kind of things and so th this is this is a subject that I think certainly for me it's been of interest my entire professional life And for anyone who doesn't have uh you know the the uh capital uh to be making investments and such from day one or uh even if you do u the capital is limited and and you want to grow your wealth greater than what

[3:39] the capital you have would allow you. So this subject of of wealth without ownership I think is is particularly important. So it really comes down to how can we control assets and have leverage over financial decisions and outcomes without having money. Right? That's that's really the crux of the matter. And so, you know, if you have, let's say, a million dollars, okay, so you can

[4:14] go and buy, let's say, a, you know, piece of property worth a million dollars, or you can use the million dollars as a down payment and control a property that's worth $2 million, three million, maybe even four or five million depending on the type of property and the loans that are available at the time. That's a concept known as leverage. And I've I've talked about leverage before, especially when I've talked about investing in real estate. The idea of controlling a much larger asset than you have capital

[4:50] available to buy. That's a fundamental investing principle. But we're going beyond that now with the idea that you're going to in essence control an asset without having any potentially any investment in it. Okay? And nonetheless, you're going to make income or build wealth as a result of that control. Okay? And and it that may sound like, well, why would anybody ever let me do that? And the answer is there's lots of

[5:25] reasons why and that's what I'm going to be talking about today. So the the reality is if you look at a lot of a lot of the people on you know on the wealth list I know Forbes does one various other groups I think do as well. So, uh, you know, someone like, uh, Elon Musk, I don't know his background, honestly, but as far as I know, he didn't come from a wealthy family. So, he was involved with PayPal from the beginning and he made a bunch of money

[6:01] being involved with PayPal and that's really where his initial that's that's from where his initial wealth came, right? As opposed to there's a lot of Waltons on the list. I just happened to see a list this morning on Instagram. So, there's three or four Waltons on the list. Okay. The Waltons who were on the list, they didn't make that money. They inherited it from the original uh I think it was Bill Walton who started Walmart, turned it into a you know multi-billion dollar business, and then his children and presumably at this

[6:38] point grandchildren have inherited that money. Okay. Same with, you know, Rockefellers. Okay. Um, uh, John D. Rockefeller, who made, uh, the original Rockefeller fortune, right? Long since gone. So, the Rockefellers did not make that money. They inherited it. Okay. Uh, you know, as opposed to, you know, a Jeff Bezos. So Jeff Bezos who founded Amazon, I think he did get some small investments from his family members and

[7:14] such to start Amazon, but it wasn't like they they they gave him millions of dollars to get going. He bootstrapped his way in essence starting Amazon and eventually built it up into the I think it's the second largest retailer in the world after Walmart uh by revenue uh and and made him a you know uh 100 plus billionaire or whatever his net worth is. Okay. So the sort of uh Elon Musk, Jeff Bezos

[7:50] uh way of creating wealth is really what we're t what I'm talking about here. Okay? And and look, the reality is most of us are not going to come anywhere close to, you know, the kinds of billionaires that that I've just been mentioning. And I I don't think most of us want to do that. I I don't think we want to have the kind of relentless focus on earning money that one has to have to reach those levels at least to be the one who create initially creates that wealth. Okay, it's different

[8:25] inheriting it but to create it it's a relentless focus on wealth creation. So I think most of us we we have other things that are important in our lives. Getting married, having a family, um you know, building friendships, all all those kinds of things. And and I think that's from my perspective, I think that's good. Uh the relent I don't I don't see where the relentless pursuit of wealth is necessarily leads to a fulfilling life. And I I've been fortunate to know many very wealthy people in my life and some of them were

[9:01] very happy and some of them were not happy at all. So the old adage wealth does not bring you happiness is is certainly true in my experience. So but that but that doesn't mean that financial success isn't important. I think it is. And so how do we achieve financial success? How do we build wealth when we don't have capital to invest? Okay. And that that is the the crux of the matter. So what it really comes down to is developing assets

[9:37] developing I should say non-financial assets and those come down to based just a few okay one is our knowledge another is our skills another is our experience and the fourth and in many ways the most important is our relationships, our network. Okay, those four things will give us the ability to create wealth even though we don't have uh any capital

[10:14] or may have just a little bit of capital to invest. Okay. And and so this is where I think we need to focus. I I was talking with someone on Monday who was um lamenting that one of her children hadn't gone to college and had gone straight into business. And I said, "Well, you know, these days for going into business, college isn't necessarily of any benefit. So really the only benefit for college of going into business is is making

[10:49] contacts. If you can make contacts without going to college, I I don't I I really fail to see the value of a college education these days. It's very expensive, time consuming, and it's it's it may be a a great fun time, but it's delaying by four years getting going on your professional life. So, you know, not a message I think we hear uh too often these days, although more often now than you would have 10 or certainly 20 years ago. Okay. So, the key is to

[11:25] work on those four things, knowledge, skills, experience, and network. And building those four things will give you the ability to build wealth without h to to yeah to uh yeah to build wealth without ownership. Okay. So let's let's talk about um let's talk about first uh the the advantages of of having con of having well actually

[12:01] before I do that you know what let me talk about some of the types of control that you can have without ownership. Okay so uh first of all you can have manage managerial and operational control. Okay. And and for a lot of us and and this is why by the way a after working for someone for a couple years after college I saw to me the path to wealth was in starting my own business. Okay. And I I bootstrapped my first business. It was a real estate

[12:36] uh uh commercial real estate company. I had no money to start the business. I actually used credit cards uh to you know to sort of tide me over until I got my cash flow up. But the you know the nice thing about and I've talked about starting a licensedoriented business. In my case I had to get a real estate license to to to start my business. I ended up getting a broker's license which is what you need to operate a company on your own without another broker's supervision. And there's there's a cost to doing that. At at the time, I think it was maybe around

[13:13] $1,1500 between the the education one needed to get and the license fees and the exam fees and all of that. Once I had that license, I had the ability to have my own real estate company. And I did. I built it up over 20 years and and and did pretty nicely, right? And when I uh eventually uh sold the business, you know, I had built some wealth for myself from essentially nothing. So uh you know, I one of my friends from college

[13:48] talks to me about this u you know from time to time. He says he I just I can't you know like you just went out and started a business. He said I just never would have done that. He he stayed in academia. He did very well in academia. And I think you know he did what suited him and I did what suited me. But the the first way to gain uh control without ownership is is is in a business in particular in a business that you start. And there are many types of businesses that you can start with with very little or even no capital investment.

[14:26] And real estate being one of them. Insurance is another. You need to get insurance license, but that's it. But once you have the license, you know, it it's up to you to learn the actual business. And there are companies that will hire you. They're not going to pay you a salary, which is good because you're going to be you're going there's going to be pressure to learn how to sell various insurance products and even some types of security products, things like uh mutual funds and that sort of thing. So

[15:02] getting control either managerial or operational or control or both in running a business without holding any equity in the business or having to make any equity investment in the business. That's one way to uh have wealth without ownership and then you eventually build wealth. Okay. Now kind of a another aspect of that is to work for a business, somebody else's business in a way under an agreement where you get some kind of profit sharing or some kind

[15:39] of maybe stock incentives or ownership incentives that come through your performance rather than through your investing. Okay? And and this this is another common way that people build wealth without ownership or at least without initial ownership. So I know for myself I I I mean at this point in my career I I I wouldn't be an employee for anybody else. I'm fortunate not to have to be. But I think for anyone who is interested in building

[16:14] wealth, being an employee is not going to give you the avenue to build wealth unless there's some kind of incentive plan as part of your compensation uh that is based on your performance. Okay? And I know if if you know if my daughter asked me, you know, daddy, what do you recommend in in that regard? I would say no matter what you do, find if you're if you want to work for someone else, find a job where there at least

[16:49] part of your compensation is is performanced. And that way when your hard work creates value for the company, creates income, creates an increase in in the actual value of a company, you share in that. Okay. to from to my mind that is a fundamental principle of working for someone else. If that other person won't give you that, they're telling you something important, they're telling you that they don't really care about you a whole lot as an

[17:26] employee. Okay? In the end, you're expendable. Okay? They don't want to make you an integral part of the business. Now some companies are huge and they have you know only people at a certain level uh you know get compensation I performance-based compensation right and and that's absolutely the case but then you know do you really want to work for that company and have to work you know years and years and years with hopefully the promise that eventually you'll get some kind of performance-based compensation

[18:01] uh but with no guarantee Right? Because there are no guarantees in this life. Okay? So those are those are all ways of having control without ownership within a from from a a managerial and or operational standpoint. That's one way to do it. Another is through the exploitation of intellectual property. Now the word exploitation has a negative connotation to it. But in in a business sense, exploitation just means that that you are you are using something in a way

[18:36] that is profitable. So, let's say that uh you know of someone who's got a patent for a particular device or they have a copyright on something and they're not doing anything with it and you think you could make money marketing and selling this this patented uh device or or this you know copywritten material. Well, so through a licensing agreement of that intellectual property, and that's what

[19:11] it's called. A license is is is a a a legal way of controlling the exploitation of that property without owning it. Okay. So, uh, music is a is a is a common type of intellectual propertybased business where licensing is is the way that most money is made off of music. So, services like Spotify, Pandora, radio stations, okay, they don't own any of the music that they pay that they play. What they

[19:49] have is a licensing agreement probably through either ASCAP and uh I'm a member of ASCAP but I it's it's the uh let's see American Society of of Composers Producers or Performers and something else but it ASCAP is a music licensing organization. So is um I think it's BMI. Those are the two main ones. Okay. So what happens is uh on Spotify they p play whatever it is you know five billion five billion songs a day or

[20:24] whatever and anytime some uh you know a writer and performer's song is played on Spotify. Okay, which has licensed the use of their music. The composer, the lyricist, the performer gets a fee. the fee may just be a penny. I mean, it's it's it's very very small. But if you've got let's say you have a a hit song and it's played, you know, a million times

[20:59] across Spotify, Pandora, all these music licensing services. So, a million pennies works out to be uh $10,000, right? And what have you what have you done as the owner to do that? Nothing. What has Spotify gotten by licensing the music but not owning it? They've built an enormously profitable business because people subscribe to Spotify. I'm just using Spotify as an example. people subs subscribe to Spotify and so Spotify

[21:36] collects all these subscriber fees hundreds of millions of dollars they pay the license fees to the people who actually own the music and they keep the rest right so they don't own anything I mean they own they may own Spotify but they don't own any of the intellectual property from which they're making their money okay and we don't have to necessarily do it on the scale of a Spotify or a Pandora. We can do it on a smaller scale and we don't ne we don't necessarily

[22:11] have to do it with music. There are other types of intellectual properties. The two main types are patents and copyrights. And like I said, maybe we know of someone who's patented a device and they don't know how to market and sell the device and so we make we license the device from them and we go out and we build a business based on that license. Okay. Now a similar uh a similar arrangement although it's not the same is a franchise a a franchise model.

[22:49] Okay. So uh most of the stores uh most of McDonald's restaurants worldwide are actually not owned by McDonald's. They're owned by franchises. And a franchise arrangement. It's not the same thing as a license, but it's somewhat similar. So, if I become a a McDonald's franchisee, okay, I now have the right to sell, you know, hamburgers and French fries and milkshakes and all that kind of stuff branded as McDonald's.

[23:25] Okay? Without owning any of the McDonald's branding, without owning any of the recipes. I don't, you know, I may I may own my my store, okay? But I may not even necessarily own the land and the building. Somebody else may own the land in the building. And I just rent the space and I put my McDonald's business there. And so I don't own any real estate. I don't own any of the uh branded property, which is the intellectual property of Mcdonald's

[24:02] Corporation. What I have is a franchise agreement that lets me use it and sell, like I said, McDonald's food, which is likely to be more profitable than just starting a burger, you know, a burger and fries restaurant on my own, right? Because McDonald's is so well known. It's been around for decades and decades, and it's it's an internationally known business. that spends probably hundreds of millions of dollars a year on marketing. Now again, McDonald's is a huge

[24:37] franchise. We don't necessarily, you know, there are lots of there are tens of thousands if not millions of franchi if not millions of franchise opportunities. Now, to get a McDonald's franchise actually is very expensive. Last I checked, it was a million dollars just to buy the franchise. that that didn't include any of uh you know any of the investment you need to either own your lo you know the real estate at your location or or the money you need to rent the location or any of those things

[25:12] right so some franchises actually require a huge capital investment but others don't there are franchises available for 10 or $15,000 now you may say well what's the value in you know a franchise that's charging such a low franchise fee. Well, it comes down to what you think you can do with that franchise number one and how aggressive the franchiseor is being in building his franchise network. Okay? So, you could

[25:48] you could find a franchise that's kind of just getting started. the franchiseor has a great idea, has great processes, it's doing really cool marketing and you know, you buy in for 10 or $15,000 and off you go, right? And and you don't own again any of the franchise branded the franchise branding or anything like that, but you're using your knowledge, skills, experience, and network to build your business. Okay. So, franchising is another way to control

[26:25] uh control uh the be the ability to build wealth without actual ownership. Okay. Another way is through partnerships and joint ventures. Okay. So, this is this it used to be a lot more popular in real estate than than I think it is these days. When I started in real estate, there was something known as syndicating. Very, very popular. In fact, my first job in real estate was working for a syndicator. It was someone who basically he would raise money from

[27:00] other people, okay? And they were called limited partners. And he they controlled very little if anything about the investment. and he was the sole general partner and he basically controlled the investment even though he made no monetary investment in the real estate that he bought. So this was it's called a limited partnership. A limited partnership has to have at least one general partner who manages the day-to-day affairs of the partnership.

[27:36] And he can make an an investment as a limited partner too. um but most of the time does not um and then they're the limited partners who have put up all the money right so that the property can be bought um and they have like I said they have little or no uh uh um say in what happens with the investment certainly they cannot be involved in day-to-day operations. The only decisions in which they may be involved are large decisions like will you know is the property going

[28:11] to be sold? Okay. So it is through these kinds of ventures limited partnership other types. So an LLC is another structure where you c you can have members who are the investors and you can be the managing member and make no investment but as the managing member you have the authority and control over the operations of whatever that LLC is doing. Okay. So in my role as a professional fiduciary

[28:48] in many cases I'll be the managing member of an entity owned by the estate. Okay? So the estate actually owns whatever the LLC owns. Maybe it's a piece of real estate. But the control is mine as the managing member. Now you may say, "Well, why do I have why do I have to be the managing member? I'm I'm the administrator of the estate. Well, that's true. In theory, I I suppose I could hire a managing member, but then I've got to pay that person. Why would I do that? So, the way that I exercise my

[29:26] control over that particular LLC and the assets it owns is by being the managing member. Now, I do that in my role as as a personal representative, but you can do that uh yourself just as an individual and and maybe you you've got a great business idea or maybe some other people have a great business idea and they're and they're willing to invest money in it, but they don't have either the time to run the business or may or the skill to run the

[30:01] business or maybe they they're just, you know, they're they're older, they're retired. Um but but they're willing to, you know, help you out as a young go-getter, right? Help you get started. So through these kinds of ventures, you can have control of of a situation without having ownership. Okay, let's take let's take a break. When life brings unexpected changes, managing inherited property shouldn't add to your stress. Magnum Properties

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[31:12] So this is People Making Money and I'm your host Kevin Bemel. We're talking about wealth without ownership. And I think it's particularly important these days because, you know, for most of us, uh, especially if you're coming out of college with a huge pile of debt, right? You don't have the ability to make big investments to to gain control of assets or gain control of a business, right? So, we need to be scrappy in in how we do this. And it is and and there's and so I I mentioned uh several ways that you can

[31:49] build wealth without ownership. So I'm going to talk briefly about the legal and structural tools for doing so and then talk about the advantages of of building wealth through control without ownership. So uh I mentioned in in in before the break uh that one way to uh control without ownership is is through some kind of joint venture, a limited partnership or an LLC. Okay. So the way that you you gain control of an

[32:26] entity like that is by having some kind of operating agreement or voting agreement. Okay. Now, this is something that you probably will want a lawyer help you draw up, okay, to make sure that it's all done properly and it's legal and and enforceable and all of that. But as part of that agreement, okay, it's going to specify that you have the day-to-day decision makingaking authority that, you know, you control the entity and and that the investors who are either the limited partners or

[33:01] the the members of the LLC who are not managing members, right? it'll specify where they can intervene uh and and make decisions or where you need to get their concurrence on decisions. Right? So, that all happens through an operating agreement or a voting agreement. Uh like I said, for an LLC, you you'll have in a in a limited partnership, you'll actually have something called a limited partners agreement. Okay? Makes sense. It's a different kind of entity, but it basically amounts to the same thing. it's it specifies the rights and duties

[33:36] and authorities of the various parties uh to to the venture. Okay, so that's that's one way. Um if you're going to work for a company and some or all of your uh income from working there is going to be performance-based. So then you're going to have you're going to need to have some kind of agreement that explains what is you know what is the performance required of you and how will you be compensated for meeting the the the particular performance objectives. Okay.

[34:13] So you'll have some sort of profit sharing agreement or you'll have some sort of uh sales agreement if you're if you're a commission salesperson for example. Okay. So again, there they'll an agreement will be necessary so both you and your employer know what the terms of the agreement are. And you want to do that upfront, okay? You don't want to wait until uh you're already working there and you've built up a business because, you know, you can always renegotiate, but

[34:48] um you're you're you're initially not um you you don't want to be in in an ambiguous situation where you're thinking, for example, you know, you get a 10% commission and when your employer sees the money rolling in from your sales decides, I want more of the pie, so I'm only going to pay U5, that kind of thing. Okay? So, you'll need to have some kind of employment contract, profit sharing agreement, th the that kind of thing if you're going to be an employee. If you're going to uh look to license intellectual

[35:24] property, so then you'll need some kind of licensing agreement or a royalties agreement. Okay? Now, you know, if you're using uh intellectual property where the the composer, the lyricist, the producer is uh a member of ASCAP. So, then it's a it's a there's a standard agreement um that that you use. Okay. But outside of a very standardized business like like the music business, there'll have to be some kind of licensing agreement that again it's it not unlike the operating agreement or

[36:01] for an LLC or the partnership agreement for a limited partnership. It specifies the rights, duties and authorities that the various party parties to the agreement have. Okay. And then finally, there are uh roles that you can take in a business that will give you control and can uh give you and can entitle you to compensation uh where again you don't own any part of the business. So you may be on a board

[36:36] of directors, you may be on some sort of uh some sort of advisory board. And in many cases, you don't need to own any of the business to sit in those positions. What you're doing is you're leveraging those four things I mentioned at the beginning of the show, your knowledge, skills, experience, and network. And as a board member, as an advisory board member, you're bringing that to a company, you're making it available to the people actually running the company. Okay? And you're getting paid for that

[37:14] that board or advisory board position. Okay? Now, often times, well, not oftenimes, but sometimes anyway, if you're if you have if you're a board member, you'll you'll get what are called board fees, which is a form of essentially cash compensation, but you also may get some kind of incentive fees. You may get some stock options or, you know, some options, some, you know, options to buy into the company as a part of your compensation. You know, again, like I said, with with employment, I wouldn't take a board

[37:50] position without there being some kind of performance-based compensation in a in my compensation package, right? because the company presumably is going to benefit from what I'm bringing to the table and I want to benefit concurrently with the effort that I put in with the knowledge, experience, skills that I make avail network that I make available to the company. Okay. So, so those are some legal and structural tools that you

[38:25] can think about to get yourself in a position of control without ownership. Okay. So why is this so advantageous? Well, first of all, as I mentioned at the beginning, you're able to control without having any kind of investment in the venture in which you know you're you're involved. Okay. But also you have reduced financial risk because you have no investment in the venture. So there's you're not going to lose stand to lose any money. You may

[39:02] lose time, right? You may work on a venture and it may not pan out and so you've lost the time that you otherwise might have devoted to working on another venture, but you haven't lost any money. Okay? So to have control without ownership reduces your financial risk um and and it doesn't tie up your capital whatever you have and so you know if you have some capital available you can put it to work elsewhere. Okay. Um while at the same time you're

[39:39] protected from the downside of the venture that that you know for which you're working on some kind of you know performance-based compensation or maybe you're a board member or whatever it is. Okay. So control without ownership reduces your financial risk uh in terms of money that you already have. Okay. Uh number two, um typically you have greater flexibility and scalability. So if you're not the owner of a venture, it's easier to get out of it. Okay? because

[40:15] uh you know unless you have some kind of term contract that requires you to continue being involved with the venture until a certain date. If if you don't like what's happening or you feel like your uh knowledge, experience, skills, network would be more valuable elsewhere. So you're free to make a change, right? and you don't have to worry about what's going to happen to my investment if I leave. You have no investment. So, you have greater flexibility.

[40:51] Okay. Um as well and and I' I've mentioned these four things a few times. Of the four, your network is probably the most valuable. So your ability to connect people so that you know the right person meets the other right person and together they can create value. That's the most valuable skill you can have is to be able to make those assessments and introductions. And so the knowing the people and knowing them well enough that

[41:28] when you make an introduction they they trust you. Okay, that is far and away your most valuable asset. Okay, and so uh one of the advantages of of control without ownership is you can really leverage your network and create a lot of value for yourselves and the and and the people with whom you have relationships, okay, in a much more powerful way. uh generally speaking than when money is

[42:03] required to be involved. Okay. And then um and then finally uh to have control without ownership. There may be some some uh favorable tax benefits to that way. Okay. So uh for example if if you work for a corporation if you invest in that corporation okay so the corporation itself pays taxes assuming it's a Ccorp

[42:38] and then when it pays you the return on your investment in terms in dividends you're going to pay taxes on it again. Okay. So, you have the problem of double taxation when you're an owner of a corporation when you work for that corporation under a compens under a a performance-based compensation plan. So, you are going to get taxed for your income, but you're not going to get double tax the way an owner does. So, and and as well, um, now I I've I've um, you know, when I've had people talking to me or ask me if I

[43:15] would be interested to go to work for them, my general answer is, I'd be happy uh, you know, to consider you hiring my company, okay? And in hiring my company, I'll do work for you, but we'll have a businessto business relationship. And that's a much more favorable way from a tax standpoint for me to run my financial life uh than it is for uh uh than it is for me to become an employee,

[43:50] especially at this point in my career. So uh like I I had a uh um uh they have a different name now, but a head hunter chasing me for a while and he kept asking me what salary do I want? And I kept saying to him, I don't want any salary. I said, if someone wants to hire me as an independent contractor, that's that's fine. I'll I'll examine that, but I don't want I don't want to work directly for the company because uh that is not a favorable tax situation for me.

[44:25] nor it it does it give me the kind of flexibility that I want and need to work and build wealth the way that I want to work and build wealth. Okay. So control without ownership there are a number of advantages to it. Now like anything advantages also a sit a situation comes with advantages but it also comes with disadvantages and risks. Okay. So let's talk about more of this the sort of downside of control without ownership. So one of them is that there your your

[45:03] upside is probably going to be limited compared to full ownership. Okay. So if you are the owner of the business and if if you've taken that particular path to control without ownership in the sense of you haven't made any you haven't had to make a a a capital investment or at least a large capital investment to start a business. So I was talking about things like real estate insurance etc. Okay. If if if you own those businesses, obviously you are the owner even though the ownership has no value at least initially, but you will reap the full

[45:39] upside. But when you are say the managing member of an LLC, okay, and you make a lot of money for that LLC while you're, you know, in well hopefully according to the operating agreement, you're entitled to some of that value and upside you've created. It's not going to be the majority of it and certainly not all of it. Your investors, why would they invest at that point, right? So investors will typically get the lion's share of profit

[46:16] and and increased value in a venture that that they own and and as as someone who controls it but doesn't own it, you're not going to get the larger share, but you will get a share, right? And you didn't have to invest any money. So the offset of of you know not getting as large a share having as large an upside is you didn't have to tie up any money or you could get into it when and and and make a lot of money even though you had nothing to invest to begin with. Okay. So that's but that is one of the

[46:52] risks one of the challenges is you have you have less upside than an owner would. Okay. The second thing is um you are going to be dependent on owners decisions especially if you're working for a company under a performance-based compensation plan. So it would be very unusual for you to have just complete control over everything, right? So the owners are still likely to keep control over certain fundamental aspects of the

[47:27] business and you are going to have to deal with that uh and and sometimes it can lead to contention and and sometimes it's going to make your your job harder. Okay, that is one of the risks, one of the problems with control without ownership is rarely are you going to have complete control. And so there's there's going to be an ongoing um issue of how to deal with the split control. Okay. Um there's also uh legal and

[48:02] contractual risks. So, this is why you want to have a lawyer involved and hopefully a lawyer exper an an experienced lawyer involved whenever you're drawing up an agreement related to any kind of control without ownership situation. There's lots of things that can happen. There's lots of things that can go wrong. A good agreement will provide for ways to deal with those. It's you're never going to draft a 100% uh disputeproof agreement. That that's not the goal. But you can draft an

[48:38] agreement that will help you either avoid or at least successfully deal with most disagreements. Okay? And that but the fact of the matter is you're not going to you're not going to draft an agreement that will remove all legal and contractual risks. So that's still going to be there. Okay? Because where the owners have control, if they decide to exercise that control, that's it. You know, they they most likely have the right to do that. In a well-crafted agreement, though, it's

[49:13] very clear when they have the right to exercise control and when they don't, and that helps avoid conflict. Okay? And then finally, you have reputational risk. So, while you may control a business or control a lot of the aspects of a business, uh, again, like I said before, it's unlikely you're going to absolutely control the business when you have no ownership. And as a result, the owners may demand that certain things be done that don't work out well. And as a result, maybe the business fails or maybe the business makes a very negative

[49:49] splash. Uh, and now you're connected with that that negativity or you're you're connected with the un the underperformance that was not a result of of your managerial abilities. It was a result of an a decision that an owner made or the owners made as a group and that could impact your reputation. Okay, that that is a risk. Now again, a a well-crafted agreement can help avoid a lot of that, but it's not going to prevent it's not going to prevent uh you

[50:25] know, all all chance of of some kind of uh reputational risk. Okay. So, how do you take advantage of ownership? I'm sorry, of with control of control without ownership. Well, the first thing you need to do, as I said at the beginning, is build these four things. Knowledge, skills, experience, network. You want to always be building those. Always, always, always. That should always be the focus of your professional

[51:01] life and the time you spend. Okay, so that's number one. Number two is look for these kinds of opportunities within the the categories uh that I mentioned earlier when I talked about types of control without ownership. So opportunities to have managerial or operational control over a venture. Now you don't it doesn't have to be 100% control. That would be very unusual unless you're starting your own business. But you can have you can have

[51:36] situations of managerial or operational control where maybe you control 80 or even 90% of the decisions about the venture and that's that's pretty good. Not pretty good, that's very good, right? Look for opportunities to license intellectual property. Look for opportunities to create joint ventures, partnerships, LLC arrangements where you're the one who has control over the venture. Um, and investors are the ones who put up the money to own it, but you make it happen. Look at the opportunity

[52:11] to do some kind of franchise. Okay? All of those are ways that you can take advantage of this strategy across a broad range of potential businesses. So, real estate is is is one way to do it that I've mentioned previously. getting into some kind of license profession is another uh another thing is is to look for a a good idea and find investors to invest in it. And you can initially do it as some kind of side venture if you

[52:47] you know need to keep your job in order to be able to afford to live or support your family or whatever. But look for some kind of side venture. Um I if you can see behind me you see u probate and trust TV. So if you go to the PTTV Instagram feed uh you will see that I've I'm following a number of people who talk about this very subject and they will give you ideas on how you can successfully set up uh a

[53:22] control without ownership venture. and they talk about um business opportunities, real estate, other investment opportunities. They're all there. The main thing is to be as creative as you can. Talk to lots of people. That That's what I do. I I don't know if I've ever told this story before, but actually I think I have, but I was walking to the gym one day when I was in college and a homeless guy started walking with me and we started talking and then and you know a few weeks later um along with my friend Malcolm uh we had an arrangement to help

[53:59] a church uh rebuild itself after it had burned down, right? And all it cost me was walking with a homeless guy. And he was a very nice guy, super smart it turned out, right? And so be open to hearing ideas from other people. Uh people will love to share things with you. By the way, um Probate and Trust TV, which you see over my shoulder, this is a this is a venture of control without ownership. So, if you go to PTT, the PTTV uh channel on YouTube, what you'll see is is roughly a dozen uh

[54:37] content creators aggregated there, all designed to help people stay up todate on estate planning and trust and probate administration. Okay. Now, I am I am one of the contributors. So, I own the content from uh from Trust and Estates Weekly, which is one of the one of the shows that's that's on on PTTV, but it's only one out of like I say 12 or I think it's up to maybe up to 15 now, right? And this venture is purely a control without ownership venture on my part.

[55:13] Now, am I going to make a lot of money off of it? Probably not, to be honest. And that I'm not doing it to make a lot of money. what I'm doing, the reason I'm doing it is to build relationships. Okay? And by but by controlling PTTV, I control who's on the channel and I control who gets the exposure uh you know based on the work that I do. And so that's the basis on which I use it to build relationships. Okay? So look for creative ways to do this. talk

[55:50] to people, work on your knowledge, skills, experience and network, and you will find ways to wealth without ownership. So, thank you very much for joining me today. I you can probably tell I'm very enthusiastic about this subject uh because I I think that it really is a part of the American dream. There a lot of talk in the media these days, you know, is the era of American exceptionalism over? Is the American dream dead? No, I don't think it is. No

[56:26] to both questions. Uh we have the most dynamic economy in the world. We have the most opportunistic economy in the world. And the fact of the matter is if if we if we work on the kinds of things that I've been talking about on today's show, uh we can build wealth without ownership. So, thanks so much for joining me, especially my live viewers. Really appreciate it. Uh comments, criticism, thoughts, please share on social media. All the links will be in the show notes. If you know someone who

[57:01] you think would benefit by hearing about uh wealth without ownership, please tell them about this episode and I'd sure appreciate the opportunity to bring some knowledge to them and have an opportunity to gain another viewer andor another subs and another subscriber. So really appreciate that. So again, thanks thanks for joining me today. And tomorrow, Thursday at 5:00 PM Pacific time is my show, Jiggers's Place. And we're going to have a cocktail and a schmoo, and we're going to talk about non all the on Jig at Jiggers's Place, I

[57:37] talk about all the non-financial related aspects of life. So I hope you'll join me as we head into the end of the week. And then next week, Monday at 10 a.m. Pacific is my show, Trust and Estates Weekly. Tuesday at 10:00 a.m. Pacific, business lessons from the military. And a week from today, I'll be back with the next episode of People Making Money. Have a wonderful rest of the day. Signing off as I always do. Marie darling, you are my bell.