Optimizing your Wealth to Achieve Financial Independence

Today’s guest is Keith Blackborg, a CPA and real estate investor who helps his clients achieve financial independence. He believes that cash flow is the leading indicator of success, and that net worth is the lagging indicator. Keith and his wife became self-made millionaires by the age of 30, and they transitioned their active investments to passive income. In 2019, Keith started Financial Journey, a community focused on helping people build wealth and achieve freedom.

 

In this episode, Keith shares how he has transitioned from being solely focused on his business, to also focusing on his family and community and talks about his journey and expertise in the financial and real estate worlds.

 

 

Highlights

 

 

[00:00] – [03:50] How Make the Most of The Obstacles in Your Life.

• Keith Blackboard, CPA, wealth optimizer and tax strategist, started out in San Francisco as a corporate accountant for Deloitte. Then moved to Texas, started buying rental houses, and eventually a CPA firm focused on real estate investors.

• Keith shares his story of how he switched to commercial real estate in 2013, but exited investments in 2016 and traveled the world for 3 years.
• Started Financial Journey in 2019 to help high net worth individuals build wealth and make work optional

 

 

[03:50] – [07:52] Optimizing Wealth to Make the Most of Your Income

• A wealth optimizer offers independent advice on taxes, investments, and life optimization.
• They have experience in the commercial real estate syndication world. This allows them to understand how deals work and what effects they have on the value of an investment.
• They also can offer their services at a fixed monthly fee, which helps clients save money while receiving independent advice.

 

[07:52] – [11:49] Roth IRA Strategies Worth Millions

• Keith explains how a person can save money by doing a rollover of their traditional account to their Roth account
• This can be done with the help of a third party, and if audited, the individual has the option to have an independent tax professional verify the rollover.

 

[11:49] – [15:38] Building a Supportive Community for Wealth Management

• Keith’s motivation for starting their business was to provide a supportive community for wealthy individuals.
• Keith’s business focuses on helping clients optimize their wealth, investments, and taxes.
• Keith recommends seeking professional guidance for wealth management when net worth reaches $200 million.

[15:38] – [18:10] Closing Segment

• Reach out to Keith
  • See links below
• Final words

 

Tweetable Quote

 

“It was no longer about the money. It was more about how do I help and serve others. And that was a paradigm shift for me”. – Keith Blackborg

 

“Life can really take over. Business can take over if you want to, and that’s why anytime think going forward, it really had to be about life. It couldn’t just be about the business”. – Keith Blackborg

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Connect with Keith through his LinkedIn or write him an email at keith@financialjourney.life

Be sure to also check his webpage at https://www.financialjourney.life/about-us/

 

 

Connect with me:

 

I love helping others place money outside of traditional investments that both diversify a strategy and provide solid predictable returns. 

 

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LinkedIn

 

Like, subscribe, and leave us a review on Apple Podcasts, Spotify, Google Podcasts, or whatever platform you listen on.  Thank you for tuning in!

 

Email me → sam@brickeninvestmentgroup.com

 

 

 

Want to read the full show notes of the episode? Check it out below:

 

 

[00:00] Keith Blackborg: Selfishly, I also like sharing wealth and taxes, and Uber drivers can only accept so much of that. And so this for me was a format where it was no longer about the money. It was more about how do I help and serve others? And that was a paradigm shift for me.

[00:16] Intro: Welcome to the How to Scale Commercial Real Estate Show. Whether you are an active or passive investor, we’ll teach you how to scale your real estate investing business into something big.

[00:28] Sam Wilson: Keith Blackboard is a cpa, a proud father, a husband, a wealth optimizer, and tax strategist made wealth of business in reach work optional by age 30. Keith, welcome to the show.

[00:39] Keith Blackborg: Thanks so much for having me, Sam.

[00:41] Sam Wilson: Absolutely. Keith, there are three questions I ask every guest who comes on the show. In 90 seconds or less, can you tell me where did you start? Where are you now, and how did you get there?

[00:51] Keith Blackborg: Great question. I started off San Francisco, California. Realizing in corporate accounting for Deloitte that this is not what I wanted to do for the rest of my life. Moved to Texas. It was 2010. There was a apparently a great time to start buying rental houses. So I started off my wife was working in the real estate education group, ended up taking over a real estate business. 2010, I started a CPA firm focused on high net worth real estate investors. If somebody’s a guru or a well-known person outta the Dallas area, there’s a good chance their former client of mine. Grew that up. 2013, we switched to commercial real estate. Syndication, active and passive investments in apartments and hotels. 2016. Fast forward, a few things happened. One, I had a business that was doing great from the external perception. On the inside, my marriage was a wreck. I was on the brink of divorce and I knew some things had to change. Also around that time I thought Hillary Clinton was gonna get elected and the real estate market was gonna crash. I was wrong, but I ended up exiting out of our commercial real estate syndications. Sold the CPA firm, and then just spent the next three years traveling the world. And so we had fun, a lot of healing, reconciliation. There’s just some really great things that came out of it. But life can really take over. Business can take over if you want to, and that’s why anytime think going forward, it really had to be about life. It couldn’t just be about the business. Fast forward to 2019, I got the best souvenir I could have ever had from our travels, and that was our firstborn son. He’s now a three-year-old. And I now have a nine month old along the way that’s been born. Kids have humbled us, so no more kids for us since, that’s as much as we can handle, but we’re so grateful that we have that. In 2019, I started Financial Journey, which is really about helping a community. Build wealth, get freedom. If you already have a three to 20 million plus net worth, if you can live off five to 10% of whatever your net worth is, then you’re the ideal person for me to help you make work optional within three to five years by showing you the right wealth, investment strategies, et cetera. It’s fun for me. I still get to talk wealth and taxes, but it’s more than that. It’s about having life, having fun, and enjoying the journey.

[03:05] Sam Wilson: Man, that is really cool. I like that. I mean, that’s a very colorful journey because you started off in corporate accounting and then you saw the value of commercial real estate. You said: “Hey, we’re gonna go long in that. We’re, you know, passive and active syndications”. You went long in that, so you understand that I think really well. You know, the value of creating income, producing assets. So you’ve got experience on the corporate accounting side, on the accounting side and then you took three years off, which is awesome too. I’d love to, we could probably spend the rest of the show just telling all the cool places you went and saw over the course of three years. 2019 comes around though, and you say: “Hey, look, I see an opportunity to really, I guess take the high net worth individual and become a tax strategist for them”.

How do you build a company around that? How do you hang out a shingle and let people know that you think you’ve got something and you can help ’em?

[03:58] Keith Blackborg: Well, I don’t fit any box clearly well. I’m, in some ways, some people try and describe myself as a financial advisor. If I had the licensure as a financial advisor, I could not talk to people about all the alternative investments. I’d be stuck limited to selling you stocks and bonds and other traditional investments. And my advice would be worth a lot less. And so instead, as a CPA, I get to still talk about taxes, about investments, but it’s worth so much more than that. I love finding ways to really integrate, synergize, optimize your wealth, your taxes, your life. It’s all gotta start with what you want, and then we reverse engineer the wealth that goes around that.

[04:43] Sam Wilson: That’s really fascinating. What are the common problems that you’re solving when someone comes to you and they say: “Hey, I need a tax strategist”. By the time you have reached the 3 to 20 million net worth, you’ve done something right already in life. What do you do differently? Maybe that the other advisors, strategists, CPAs, people who have not done for them previously.

[05:08] Keith Blackborg: So as a wealth optimizer, one: I’ve got a full view of what, how everything looks. So, I officed with syndication attorneys for five years. I’m not an attorney, but I know a lot about areas that a lot of attorneys don’t know. And so when it comes to one independent person who can stand back and look at all the stuff you have going on: wealth, taxes, insurance, risks, life, and really help be that independent voice that’s not really trying to sell anything. It’s just a fixed monthly fee that we work together for. And it means that you’ve got an independent advisor who can help you through all this. That’s invaluable for a lot of people to have and somebody who truly knows more than, at least in taxes and wealth, more than many of the professionals. I’m not trying to get too high and mighty. I’ve just seen a lot. I love learning, I love exploring, and new strategies are like my favorite thing to do. I just geek out on so much. And then I love to take the complex stuff and how do we make it actionable and simple? I speak the technical language and the people language.

[06:14] Sam Wilson: Yeah, and you’ve spent plenty of time in the private placement world to understand, you know, how those deals function as well. Which, I mean, a lot of times your strategists don’t. They may have a cursory understanding of it, but not, they haven’t been in the weeds in it maybe like you have.

[06:31] Keith Blackborg: If I wanted to make as much money as possible, I go back to commercial real estate syndication. My mission is, it is not just be about the money anymore. For me, given the little bit of my story shared, it’s gotta be about helping other people live their life and get the most out of what they have. I know it, it sounds altruistic, but it’s genuinely what I love and value.

[06:51] Sam Wilson: And that’s great. I love that. I mean, there’s so many people that don’t honor what it is that feeds their soul, and it sounds like you found a way to do that. And so that’s really cool. I love that.

Tell me this, you know, you said you love working on the newest strategies, the newest ways of getting things done. You kind of, I think you, the words you use where you geek out on it. When you say that, what are some things that come to mind.

[07:13] Keith Blackborg: Ooh, we’ve got one that we’re doing in our community right now. So guess you’re familiar with investing in apartments. So let’s say you’re gonna put a hundred thousand dollars with you and you’re buying something at an 80% occupancy. And as part of that deal, we’re gonna take it down to a 60% occupancy and the NY is gonna roughly drop in half the net operating income, so the department’s value on paper drops in half. So let’s say I did that investment with pre-tax traditional 401K money. I get an independent valuation done when the occupancy is dropped, and now that investment, at least on paper, is only worth $50,000. So I do a rollover of the $50,000 asset valuation from my traditional account to my Roth account.

And because I’ve invested with you. Three years later, it pops up to being worth $200,000, but all within a Roth account. So if we were to back that up, we got a hundred thousand dollars tax deduction per putting it into the traditional account. We offset that with $50,000 worth of taxable income, and then we’ve got 200,000 that’s never taxed again in your life, potentially worth millions of dollars over the course of your life if you’re not never paying taxes on that.

[08:23] Sam Wilson: That’s next level strategy that you don’t hear much about that sort of thing. How complicated is that and what sort of risks are involved in implementing a strategy like that?

[08:36] Keith Blackborg: So for you as the individual very little effort for you. In our community, the way it works, it’s just something that gets included as the package. As a syndicator, if you like to syndicate deals, you’re probably don’t mind spending three to $5,000 on getting the valuation done. And then if you’re able to track additional funds because more people wanna invest with you cuz they can do a discounted rollover, that’s a huge value add for both you and your community.

And so it’s simply a matter of people put in their money, they’ve gotta have their money in some sort of a self-directed account. I like solo 401k.com as who I’ve worked with a lot in the past. They’ve got really favorable fee structure and you can self-direct it. They put the money in. I show them the valuation done by a third party. They get the 10-99 done. If we get audited, you’ve got the independent tax professional who can go back and prove out the audit, prove out the valuation. But beyond that, now you’ve got the money and the Roth and you’re kind of set. So, I’ve got technical guides and stuff to back all that, but that’s a simple version.

[09:41] Sam Wilson: I love it. That’s cool. You mentioned the, you quote your community several times. What is that?

[09:48] Keith Blackborg: So initially when I first started was all about me, my knowledge, my expertise. When you develop a group of people together and you see how much knowledge, I’ve got people with over a billion dollars worth of real estate in the group. I’ve got others, doctors, surgeons, all sorts of people that are all different places. So from the small to the really large. But everybody together, there’s a common theme of life and wanting more of that. And when you get a generous group of people who are willing to help each other, it’s not about me anymore, it’s about unlocking the community or finding the right person to talk to, whatever it is.

So now I don’t have to know everything. It’s just about highlighting the person with the experience and skills in whatever you need help with. And so a lot of our community events are now about connecting people together in different ways and very intentionally. And so it’s now my mission to unlock the knowledge already within the community, and it is just so much more powerful.

People get what they need when they need it from each other, and it’s just a very fulfilling environment when you go from in a community event to actually. It’s nurturing versus you’ve probably been to an event where there’s none of that and it can be life sucking where you’re done within a couple hours.

[11:01] Sam Wilson: For sure. For sure. Was this a community that you built specifically around your kind of tax strategy? Tell me, you know, for listeners are curious…

[11:10] Keith Blackborg: So you say tax strategy, that’s probably about 5% to 10% of what I do. So tax strategy is important. But there’s the wealth, the life, there’s all that stuff that goes beyond that. The legal, the entities traveling together. We’ve got a family trip to the Caribbean here in May, so maybe even her go abundance, but deeper than that.

[11:29] Sam Wilson: Got it. This is awesome. How did you build this community? What were some actionable steps you took? If there’s somebody out there that has, you know, the desire and the capacity to build a community around whatever it is that they’re trying to build it around, how did you do it and what would you recommend someone do?

[11:45] Keith Blackborg: I think you start with what it is that you and your family wants. What it is goes back to that center. For us, when we were traveling the world, it was very lonely to travel by ourselves. So the selfish part of me was like: “Hey, I’d like some friends to be able to travel with other people that can do this with”. Selfishly, I also like sharing wealth and taxes, and Uber drivers can only accept so much of that. And so this for me was a format where it was no longer about the money. It was more about how do I help and serve others? And that was a paradigm shift for me. And so initially it was just started with me sharing, giving yourself away for free. And in time it was like: “You know what I can make a business out of it. I can grow this and let’s have some fun along the way. So, I’ve got my parameters on when I’m gonna work or not gonna work, but within that I’m gonna go as fast as I can as a racehorse around the track to get stuff done. Cuz that’s me, that’s my personality. I enjoy it. But then at the end of the day, I’m gonna come back, connect with my wife at around [5:00] PM and we’re gonna go do something with the kids. And for me, so often balance is not something built because you have balance. We out of imbalance and focusing on different things is how we came together and what feels like a more balanced life today.

[12:57] Sam Wilson: Got it. That is really cool. I love that. Yeah. The ability to find balance in this is hyper important man, and it’s not something. We can work ourselves to death if we’re not absolutely careful. Let’s talk a little bit about what you guys do on the kind of pre-family office stage. I know there’s like this you get to a stage where you’ve got enough wealth, you can really start a family office. Where is that? And then at what point does somebody in their kind of wealth journey reach out to someone like yourself? Is there, when do you recommend that happens?

[13:32] Keith Blackborg: So full family office where you’ve got attorneys, investment professionals, accountants that work fully for you. The very beginning where it starts to make sense is a 200 million net worth. And then really where you’re hit your stride is 500 million. And so for me there’s a way where people kind of get lost in the middle. You’re probably stuck right now in the place where you talk to the tax professional. You talk to your legal guy, you talk to your broker, you talk to all these different guys, and you’re trying to coordinate that all yourself, and you’re probably not an expert in all those areas and don’t even know if they’re doing a good job. So in, in our case, it’s having somebody that can look over your shoulder and help you make those decisions or work through that. Being in a community of people that is familiar with that and that is able to help guide you, makes all the difference. There’s a key transition most business owners make, and that is they focus on their business, they focus on their work, and they get lost in that career, that work. But somewhere along the way, maybe halfway, two thirds of the way, They need to focus on making wealth the business. So in the beginning, if you had a thousand dollars and you could earn a 20% return, that’s $2,200. So not super exciting, but if you had a million dollar net worth or a 10 million net worth, and with some effort, you can make a 20% of return. That’s $200,000 or 2 million. And often people will have these businesses that they could sell and be worth three to 10 million plus, but they’re often only making a couple hundred thousand dollars a year, and they could do so much more if they spent even just a little bit of time optimizing their wealth situation, their wealth, their investments, their taxes, beyond a traditional financial advisor who’s typically only selling you products.

[15:18] Sam Wilson: That’s a painful lesson. I’m sure you’ve seen many experience, many times where you’re like, you could take what you own, sell it, and then generate passively the same amount and or more income than what it is you’re making right now by running that company. Like, that’s a hard place for a lot of founders. I would imagine. That’s kind of like a founder’s syndrome to not ever want to let go of it.

[15:40] Keith Blackborg: Absolutely.

[15:41] Sam Wilson: Wow. That’s really cool. Keith, I’m enjoying learning from you. I mean, you take a really unique strategy, a really unique take on a lot of the way that people think about money, but then also think about how they organize and set up their life for success. I mean, I know you said tax strategies only about five to 10% maybe of what you actually do, but I mean there’s so much involved here. I know we can’t cover it here in a 20 minute show, but just knowing that there’s people out there like yourself, that handle these things in a really unique and fresh way, I think is yeah, really refreshing. So thank you for taking the time to come on the show today and share with us kind of your history, your work history, and how you’ve came to, it sounds like even through a period of pain and trial that you kind of developed this whole system for yourself and for your own family first. So I think that’s really cool firsthand experience. Thank you for sharing it with us.

If our listeners wanna get in touch with you, learn more about you and what you do, what is the best way to do that?

[16:36] Keith Blackborg: So you can shoot me an email at keithfinancialjourney.life. But probably one of the best ways to experience what I do, to experience the community is join for a quarterly wealth builder experience. So we just hold an event online. It’s about two hours as really a way for you kind of experience to learn some things, get connected with some other successful people, and learn some tax strategies, learn some all strategies, some things you probably never heard of before. Like discounted rollovers. There’s a lot of things that people are not familiar with and I love just adding a ton of value. I start with giving and then it’s just kind of fun to see where people go from there in that community and how they give to each other. That’s a great way to just start off and learn more what where you are at and where maybe you need to go. And that experience will help you understand where you’re at in that journey.

[17:25] Sam Wilson: Is there a website where they can find out more or sign up for that wealth builder?

[17:30] Keith Blackborg: financialjourney.life. And then maybe we can leave a link in the show notes to the page.

[17:35] Sam Wilson: So absolutely will do financial journey.life. If you’re just listening, look that up when you get a second. But we’ll also include that there in the show notes. Keith, thank you again for coming on today. I do appreciate it.

[17:47] Keith Blackborg: Thank you, Sam. I appreciate you having me.

[17:49] Outro: Hey, thanks for listening to the How to Scale Commercial Real Estate Podcast. If you can, do me a favor and subscribe and leave us a review on Apple Podcast, Spotify, Google Podcast, whatever platform it is you use to listen. If you can do that for us, that would be a fantastic help to the show. It helps us both attract new listeners as well as rank higher on those directories.

So appreciate you listening. Thanks so much and hope to catch you on the next episode.