In this episode, Yair Klyman shares his remarkable journey from growing up in a financially struggling family to becoming a successful financial advisor and private investor. He opens up about the motivations behind his entrepreneurial spirit and how he has navigated the world of private investing. Listen as he shares valuable insights on taking calculated risks, diversifying your portfolio, and accessing capital quickly.
Key Takeaways
Resources Mentioned
Interested in connecting with other like-minded individuals? Then join our VonFinch Private Capital Network. Learn more at http://www.vonfinch.com/invest.
About our Guest:
Yair Klyman is a successful financial advisor and private investor with extensive experience working with high net worth individuals and families. He has a unique perspective on the intersection of wealth creation and financial literacy, drawing from his own experiences growing up in a financially struggling family.
Are you looking for High-Performance Business & Mindset Coaching? Schedule a call now and see how we can be of service to you. http://www.investormindset.com/discover
00;00;00;17 - 00;00;07;21
Steven Pesavento
Welcome back to the Investor Mindset podcast. I'm your host Stephen Vento, and today I have Yaya Kleiman in the studio. How you doing, Yaya?
00;00;07;22 - 00;00;16;22
Yair Klyman
Thanks for having me, Steve. Doing great. Excited for this conversation. I love what you're doing. Love the impact that you're making, and it's incredible to see what's going on with your life.
00;00;16;25 - 00;00;39;24
Steven Pesavento
Yeah, I'm excited to talk with you because I think you've got a really interesting story. Obviously, you start from nothing. You go through the experience of building a business, and now you're working with some of the wealthiest clients in the world. I mean, people who are millionaires, billionaires and multi billionaires. And it's a different world than most people who are listening live in.
00;00;39;25 - 00;01;04;19
Steven Pesavento
Now we have clients that have hundreds of millions of dollars and billions of dollars. But what I've noticed in spending time with those people is they think differently. They they invest differently and they live their life very differently. So I'm excited to learn from some of your experience in that space. But before we go there, I'd love to start out with by looking back earlier in your life, specifically your childhood, what events or influences shaped who you are today?
00;01;04;22 - 00;01;22;09
Yair Klyman
So I grew up in a in a very wealthy Orthodox Jewish town in new Jersey, and everybody I thought was a millionaire or I didn't even know what the millionaire was, but everybody was wealthy around me. And then I realized that we weren't wealthy. And my dad comes home one day and he says, hey, I had this, we have this issue in the family.
00;01;22;15 - 00;01;37;12
Yair Klyman
I'm like, I'm like ten at the time. And my dad goes in and we're, I'm one of six kids, and my dad goes, yeah, we have this problem. and we were always told, like, we can't afford things because it's a recession and we're like, what's a recession? I'm six. Like, what are you talking about? The camp like, what do you.
00;01;37;14 - 00;02;07;00
Yair Klyman
And everybody else was going to these crazy camps and doing their normal life. And he comes home and he goes, I won the award for the largest stack of maxed out credit cards over $1 million, a credit card debt, which $1 million, 20 something years ago was a lot of money. And he he made the decision not to hide that with my mom and to not hide that from us because he went, I can build some tough, resilient children that actually can have financial literacy.
00;02;07;02 - 00;02;28;24
Yair Klyman
And from there you kind of learn how to think. You learn about money, you learn about making money, you learn about work ethic. You learn about never wanting what experienced happen to you, to happen to your kids, but also knowing the values of the experiences that you had to make sure that your kids don't get stuck in the spoiled life of the can't drive to work because you can't afford a car.
00;02;28;28 - 00;02;48;25
Yair Klyman
Then his son owns a Honda, his son owns a Ferrari, and then he loses it. So you want to make sure that wealth and and real money can pass down. So it was a combination of growing up with nothing when you felt very ashamed and you realize that stick was there to building significant wealth. We now have a super high successful financial advisory practice.
00;02;48;28 - 00;03;12;19
Yair Klyman
I end up bringing my dad into the practice. He's now worth millions of dollars. Well, I'm worth millions like God, worth many millions of dollars. I built a great business for ourselves, and understanding that people who come from nothing and build something have different needs than people who just work in a normal job and just make their normal money, and they put their money into A41K and then they retire.
00;03;12;19 - 00;03;15;10
Yair Klyman
They own their house, and that's the end of it.
00;03;15;12 - 00;03;36;07
Steven Pesavento
Yeah. It's fascinating because, you know, it's going through an experience of extreme hardship that I've noticed a lot of people who are successful and driven and created their own success. that that was a big motivational factor. How much of a motivational factor was that for you or what drove you to do the things most people won't do?
00;03;36;10 - 00;03;56;21
Yair Klyman
When you realize that no one's going to make it for you, you have to make it for yourself. Your mindset completely changes when you realize that in order to feel free, you have to do it yourself. So my parents, everybody had a cell phone when I was 16 or whatever it was, and I didn't have a cell phone because my dad said, we can't afford a cell phone.
00;03;56;23 - 00;04;11;18
Yair Klyman
And for some people, $2,030 a month is a lot of money. So we can we can afford a cell phone. So I had to go out and babysit, and I sold sodas and I did whatever I had to do to make money. And I had that mindset that said, you know what? I don't like anybody telling me what to do.
00;04;11;18 - 00;04;25;13
Yair Klyman
I don't like to be trapped. So I'm going to live free and do it myself. So I worked, I bought the BlackBerry. I was like, cool. I had like a full keyboard because I was making a couple hundred dollars a week and for me, I was I was 13 years old, making a couple hundred bucks a week. That was a lot of money.
00;04;25;15 - 00;04;48;29
Yair Klyman
And then one thing led to another, and you start make a couple thousand a week. And then in college, I put myself through college. I was making over 100 grand in cash and working like ten, 15 hours a week when I had trainers. And then I met people. You make more and more money over time and you realize how to preserve money, how to build money, and that's really what these ultra successful people that have gone through obstacles, they all have that same mindset.
00;04;49;01 - 00;05;21;21
Yair Klyman
And those people I work with, okay, I take significant risk in my day to day life, but I'm really, really scared to lose what I have. So the key with those types of people and for people who are building is find the right mentality and find the way to take risk off the table. So if you have a very risky job and you work and a lot of your I know a lot of your clients, I'm sure are business owners, instead of just putting everything into the business and funneling money back into the business, which is the business trap.
00;05;21;23 - 00;05;31;10
Yair Klyman
Take money off the table, put into something else that's that fits your inner anxiety and can cover that in their anxiety. So if you continue to take risks on your day to day life.
00;05;31;13 - 00;05;56;02
Steven Pesavento
Yeah. So ways to take money off the table so you can reduce uncertainty and you can create that diversification of different income streams that can help support where you want to be. And and there's something you've talked about in the past, you know, this idea of smart places to pull capital, you know, a lot of people, or they're running a business, they're making a bunch of money and and they spend what they have and their lifestyle creeps up with it.
00;05;56;05 - 00;06;01;25
Steven Pesavento
talk to me about the idea of smart places to put capital, to be able to pull it when you need it.
00;06;01;27 - 00;06;24;19
Yair Klyman
So main thing that people don't understand is a difference between liquidity, having access to money, and also taking risk with your money. So people think everything is risk versus reward. If I put more into the stock market, I will have more risk. Potential reward than if I put into the bond market or if I put into a read or if I go into real estate.
00;06;24;22 - 00;06;47;19
Yair Klyman
I view risk a little bit differently. Risk I view is when you need money, when there's an opportunity, and opportunities will come throughout every person's life to be able to invest capital, to be able to put money into something. The risk is being able to pull the money out very quickly. So the risk of losing access and losing the opportunity cost of opportunities.
00;06;47;21 - 00;07;05;28
Yair Klyman
So if there's, for example, you, you see deals every single day. Some deals you go, you know what, I really want to put more money into this. But I just I don't have the liquidity or some people have that feeling. If you have places where, number one, you diversify your portfolio in terms of risk, risk reward, more aggressive and more conservative portfolios.
00;07;05;28 - 00;07;26;27
Yair Klyman
But by but diversifying your portfolio with money that's locked up and smart money that you can pull. So life insurance for example is a great a is a great example of money that you can pull in three days. You can borrow against your your stocks, bonds, mutual funds very quickly via an account you can borrow against your real estate via he lock.
00;07;26;27 - 00;07;39;03
Yair Klyman
You want money that you can access very quickly and be prepared for opportunities or for calamity. That's that's where I talk about smart money and being able to access capital quickly.
00;07;39;03 - 00;07;54;24
Steven Pesavento
I think it's super important to be able to understand, hey, where am I going to park this cash? Where is it going to live? Where is it going to earn me some kind of return, but where I can still have the ability to be able to pull it out so that when there is an opportunity, I can jump at it and take advantage of it.
00;07;54;24 - 00;08;22;06
Steven Pesavento
And that's one of the trade offs that is oftentimes misunderstood about private investments, private equity, private real estate, private credit is a lot of the times with a private investment, there's a lockup period. There's a period of time where that investment is not liquid. You do not have the ability to pull it back. And in exchange for that, you often are making a higher rate of return, or you're making a higher rate of return with a lower amount of risk because of whatever strategy.
00;08;22;06 - 00;08;39;04
Steven Pesavento
If you happen to find the right one that aligns with you. So talk to me a little bit about your experience in the private markets. Obviously, you're your financial advisor, so you're allocating a lot of capital to the public markets. But how do you look at privates and how can that fit into somebody's portfolio?
00;08;39;11 - 00;08;59;00
Yair Klyman
So I personally for myself and it's disclosed, is that I own a lot of private equity, I own a lot of private property, like investment property, and I have a lot of money in the capital markets. I view the capital markets as my liquid smart money that I can pull out whenever I need to. I view my private equity.
00;08;59;00 - 00;09;16;28
Yair Klyman
So my real estate, my the different deals, different startups, companies, things like that that I have that I get access to as my as my growth money, that's my park it. I'm going to let it do its thing. I'm not going to bother it. I'm not going to touch it. I'm never going to need that money, no matter what happens.
00;09;17;03 - 00;09;36;28
Yair Klyman
So I view that as a diversification tool. Now there is no real in my view. There's very few places that you can put money that you can get 1020 x 30 x return, that can pay a dividend for the rest of your life. You're not getting that in the pre-IPO of an Uber or the pre-IPO of an Airbnb.
00;09;36;29 - 00;10;07;22
Yair Klyman
It just doesn't exist. The people who are getting you the pre-IPO are typically charging you exorbitant amounts of fees. It's very hedge fund based. It's very PE firm. The primarily I find it more on the hedge fund space, but it's very, very expensive to get that capital to, to get to be able to deploy your capital into those spots and at the same time, because their market, it's so well, for example, Reddit was marketed so well, everybody heard of Reddit.
00;10;07;24 - 00;10;26;19
Yair Klyman
That doesn't mean that there's necessarily a lot of opportunity and the fees that you're getting for the market ability of a Reddit that everybody knows about, you're not really doing yourself a favor. So when I look at private private placements and private investments, I go, I don't need the marketing material. I'm looking for the right people. I'm looking for the right investors.
00;10;26;24 - 00;10;48;29
Yair Klyman
You have a little bit more control. You're buying an investment that can be there for the next 15, ten, 15, 20 years or a real estate property that not necessarily the big shops are actually looking at. So there's a lot more opportunity, but you need to make sure that you're properly invested and you're not you're not scared of oh, it's it's not the right market or I never heard of this or I don't know, this region.
00;10;48;29 - 00;10;55;11
Yair Klyman
You can do a lot of research. You can do a lot of work on your own and do very, very well in the private sector.
00;10;55;14 - 00;11;22;19
Steven Pesavento
Yeah. That's a really important thing to understand. I find it with clients. And, you know, obviously you run a private equity real estate shop. So you know, we talk with high net worth individuals that have 10 million or 100 million. We talk with people of 2 million. And what I notice is the less experienced somebody is, the more that they're interested in understanding the specifics of the individual deal, even if they already understand us and our track record and our experience.
00;11;22;19 - 00;11;43;00
Steven Pesavento
And, you know, the decade of returns that we are able to deliver a lot of those people when they're less experienced, they want to know specifically which property, what's the return. And they think somehow that helps them de-risk the deal. But I often find that most of these people don't have the same level of experience, expertise and knowledge to understand the deal.
00;11;43;07 - 00;11;55;09
Steven Pesavento
So from your perspective, what do you think it is that makes people so focused on the individual underlying project over understanding what's most important? The people?
00;11;55;14 - 00;12;17;10
Yair Klyman
Well, the basic side that people, I find when people first start investing into into the private market because you get bored, the capital markets are very boring. I'm sorry to tell Merrill Lynch and Morgan Stanley and my own firm capital markets is boring. There's nothing exciting going on. I don't care how many Teslas you find and the videos there are out there, it is boring.
00;12;17;12 - 00;12;48;18
Yair Klyman
The private market is much more interesting. And in the private market you can also learn. So I find the smaller investors who are first getting into the private market all say the same thing to me. They say, you know, I'm going to put money into real estate and I'm going to learn how to do it. I'm going to put money into this private equity, and I'm going to learn private equity when it's like, okay, well, you've been doing this for, I know, 20 something years, like you've been doing this is your whole career, and they're trying to pick it up in one deal with a with $100,000 check.
00;12;48;18 - 00;13;16;23
Yair Klyman
And they think that somebody is going to walk them through the entire process and they're going to call them every day and go, hey, the property did well, or we lost a tenant, or that the expectations are unrealistic, but it's because the lack of knowledge in the capital markets, no one's calling you, no one's talking. You're going to get your shareholder letter, go, let me know when when you bought your one share of Google, and you can go to the Google shareholder meeting and then talk to talk to Blackstone and Blackrock and all these other companies are investing in Google.
00;13;16;25 - 00;13;35;26
Yair Klyman
No one's going to talk to you. They find that they feel a little spoiled. But the private markets is what my feeling is. And they're trying to get something that isn't they're trying to squeeze water from a rock. Like it doesn't really make sense. The higher net worth clients understand what it means to scale their time and scale their money.
00;13;36;03 - 00;13;51;10
Yair Klyman
When the clients with $100 million and they putting $1 million or $5 million into a deal, they understand that they are paying you to deal with the details. And they don't want to deal with the details. They want to go out and look for their next deal. They want to go out and make more money in their own income.
00;13;51;15 - 00;14;05;23
Yair Klyman
So your income that they're going to pay you is going to be less than their income that they can make in their normal job. So they don't care about the deal. That's your job. They go, okay, I have the right people, I trust you, I like you. I'm going to scale my time by letting you do your thing.
00;14;05;23 - 00;14;14;11
Yair Klyman
Fine. You take your percentage, you're happy. You're making whatever you're making. I'm making the lion's share. And I'm going to go out and find somebody else that I can find to do my next deal.
00;14;14;14 - 00;14;43;15
Steven Pesavento
Yeah, they recognize that what they're doing is they've got to vet you up front, but that they're really hiring you to make the decisions, to do the dirty work, and that in return, you're going to get paid for doing that based on the success of the project and that they're going to let you do what you do. And sure, they're going to have some questions here and there, but they're they're much more focused on the individuals who are making the decisions over the individual project, because they understand that that person has an advantage that they don't.
00;14;43;18 - 00;15;06;17
Yair Klyman
I find, I had this very interesting client. I have these very interesting clients of mine. They're Filipino. They're worth about the quarter billion dollars that they disclosed to me, live in the Philippines. And, and I said to one of their to to one of the the, the spouse, the wife, if we set this up for you, your kids will make sure it'll guarantee that your kids will never run out of money.
00;15;06;19 - 00;15;27;27
Yair Klyman
Here's what I say to them. And in the Philippines, and with a lot of these, let's say, Asian countries, you always have to work through a medium like you have a medium like somebody in the middle in the intermediary. And she says to me that if you ever talk like that to my client again, I will never bring you in for another client.
00;15;27;29 - 00;15;59;25
Yair Klyman
And I said, like what I like. I was just telling them the the benefits of the plan. She says, yeah, these aren't people that are scared they're going to run out of money. these are he goes, you're she goes, you're normal person. Net worth 1 million to $5 million. It's still in the wealth accumulation stage. then you have the people who are the ultra 2.01% of the world at a point, one of the 1% of the world that had this different mindset called wealth preservation.
00;15;59;27 - 00;16;19;04
Yair Klyman
if you said to them, Miss Sylvia, if we do this plan, it will make sure that your money passes down to the next generation without any taxes in an efficient way. We're leveraging your dollars to make sure that that nothing can happen to the 250 million that you had, because they're never going to run out of money.
00;16;19;06 - 00;16;29;19
Yair Klyman
And it blew my mind. The perspective of people. So I find the ultra high net worth are hiring people for wealth preservation, not wealth accumulation.
00;16;29;24 - 00;16;56;08
Steven Pesavento
Yeah, it's super important to understand that as an advisor, as a private equity owner, as anybody who is interacting with these people because they've gone out and they've created the wealth and their focus is now reducing taxes and keeping that wealth. And so they've a very different perspective of what they're actually looking for versus the people who have a million, 5 million, $10 million.
00;16;56;08 - 00;17;12;14
Steven Pesavento
They're still thinking about, hey, how do I grow this? How do I make this bigger? They still might have some of that uncertainty that they have enough and they have a totally different agenda, and desire than the people who, you know, have $1 billion. Yeah.
00;17;12;14 - 00;17;31;28
Yair Klyman
Completely different. I was I was at an event last night and there was Mary Magdalene, and she's worth $30.5 billion. She casually threw a $5 million check, and she said she gave about $120 million to this one organization this year alone, 120 million, which is more than my income. I just want everybody to be clear. It was a very serious number.
00;17;32;00 - 00;17;50;04
Yair Klyman
Bill Ackman was there. There's other billionaires there too. And I spoke to her. I said, how come you're doing this? She goes because it's time for me to give. And she started and her perspective was completely different. A day of her dividends is $120 million. So it's a completely different ballgame. But in the end of the day, she goes, this is my time.
00;17;50;08 - 00;18;04;14
Yair Klyman
I'm later in life. This is my time to give. And that's all she said to me. And I was like, blown away that she was so humble and kind. And it was really impressive that you get to that point. Hopefully you have a lot of listeners that are at that point or hopefully because of your advice, people get to that point.
00;18;04;14 - 00;18;18;05
Yair Klyman
But that's that was it really. It really woke me up to realizing the perspective and and the way to build wealth. And instead of just looking to take wealth accumulate, you're you're looking to give, you're looking to preserve, you're looking to do more with your money.
00;18;18;12 - 00;18;30;26
Steven Pesavento
And so from your perspective, what is it that people need to be thinking about when they're in that wealth growth stage? And then let's talk about what they need to be thinking about when they're in that preservation stage.
00;18;30;28 - 00;18;38;01
Yair Klyman
So number one is the the easiest way to grow is to not give money to the IRS. That's the easiest way to grow.
00;18;38;03 - 00;18;38;12
Steven Pesavento
Yeah.
00;18;38;19 - 00;19;02;06
Yair Klyman
If you take a penny the classic lines, if you take a pen and you double it every single day, you'll have about $10 million at the at the end of 30 days, if you take a penny and double it every single day, but you pay taxes as you go along because you're doing it every day. So short term capital gains counts as income tax base, basic income tax, then you're going to only have about $30,000 at the end of the 30 days.
00;19;02;09 - 00;19;27;12
Yair Klyman
So if we are constantly putting money into places that are tax inefficient, and I'm not saying to put everything in tax efficient vehicles because it ties up money. But if you are constantly placing money into tax inefficient vehicles and then our wealth is not going to be able to accumulate. So the first thing on any strategy is how do I be most efficient with my money?
00;19;27;14 - 00;19;48;07
Yair Klyman
For people who are just wealth accumulating, who are in the 1 to 5 range, range, putting all your money into Roth 4 or 1 KS or Roth for three BS, or setting up solo KS or something. defined benefit plans, retirement plans, putting money to real estate, borrowing money against real estate. These are tied to putting money into life insurance, deferring the capital gains, annuities, all these different strategies you can you can take advantage of.
00;19;48;07 - 00;20;06;22
Yair Klyman
The IRS is giving us a gift. So first thing is to avoid the tax avoid. There's not much you can do on income tax if you're a W-2 employee. But if you're a 1099, there's a lot you can do on your income tax after that. Now you have to protect your income first. That's your first stage that you're paying taxes on.
00;20;06;25 - 00;20;27;25
Yair Klyman
Then you have growth tax or capital gains tax. As you're building money and as your wealth is accumulating, you're going to pay and you sell a portfolio, you're going to pay anywhere between 20 to 40% on your income. on the, on the, on the money that you're making over time. That is a very, very serious number that sometimes becomes more than your actual income tax.
00;20;27;25 - 00;20;52;22
Yair Klyman
Once you build real wealth, then you have your estate tax. If you're worth over right now, it's about $26 million. A little more than that. If you're worth over $26 million federally, you can be looking at paying 40% of your of your actual estate right back to the IRS. Managing these three tax brackets and these three taxes is going to help you build significant wealth.
00;20;52;26 - 00;21;11;27
Yair Klyman
That is, number one, any advisor that says to you, I'm just going to grow your money and doesn't talk about the taxes, don't find another financial advisor. I'm sorry to tell you, Merrill Lynch, Morgan Stanley, they don't really do that. Finding the right planners and strategic advisors that understand the tax as well. That's why I love real estate so much because there's serious tax savings.
00;21;11;27 - 00;21;14;23
Yair Klyman
I'm sure you're talking to your clients about that all the time.
00;21;14;26 - 00;21;43;26
Steven Pesavento
Yeah. It's a big driver of why people are attracted to real estate in the first place. Is this idea that they can grow their money, they can reduce the taxes on that money, that they grow or that they earn from a dividend perspective. And that can make a huge difference. And oftentimes I do think it's overlooked. It's overlooked the idea that when you invest $1 million, you're you potentially could get 400, 506 hundred, $800,000 back in depreciation, depending on the the type of investment that you're making.
00;21;43;29 - 00;22;09;06
Steven Pesavento
but that's huge because even if you didn't have some other type of big passive gain somewhere else in your portfolio, that means the cash flow that comes off of that specific investment is going to be tax deferred for the life of that investment, as long as you continue to reinvest that money into real estate and continue to, get additional depreciation, you continue to pass that buck along.
00;22;09;07 - 00;22;16;00
Steven Pesavento
If you do that for your life, then you pass along a pretty nice nest egg to kids without having to pay taxes.
00;22;16;01 - 00;22;32;24
Yair Klyman
Correct. You get you get the 1031 exchange is the best thing ever created. The insurance companies got so jealous of the real estate market, they created something called a 1035 exchange that allows you to defer life insurance into life insurance so you can continue kicking the can down the road, and then you get a step up in basis on death.
00;22;32;26 - 00;22;53;29
Yair Klyman
And the goal is it's a very interesting, thing. And follow my my thought process for a second. The government knew that building that real estate allows you to build so much wealth that they allowed for a step up in basis, meaning that you bought a property 50 years ago and it grew to from for $1 million and grew to $50 million.
00;22;53;29 - 00;23;14;12
Yair Klyman
When you pass away, your kids inherit $50 million. They don't have to pay any capital gains tax. It's incredible. And they allow you to do that with many vehicles as you're doing. But they knew that wealth creation was so serious that they added in the estate tax, the estate tax, a death tax that says, okay, you're worth $50 million.
00;23;14;14 - 00;23;35;23
Yair Klyman
We want to get our money. We're going to tax you anything above a certain number. So they, they went it was like a fight against the real estate world to add in the death tax versus the against the real estate wealth builders. Because real estate is such an incredible asset to build wealth. It is the highest. If you look at the Forbes richest people in the country, there's more people who own real estate.
00;23;35;23 - 00;23;55;05
Yair Klyman
There's more real estate professionals in that highest wealth category than any other person, more than hedge funds and more than Mark Zuckerberg and those clowns. But if you look at the real estate people, they actually built serious wealth. And that's why I think the estate tax came in to hit those real estate people so that they can actually get their money from their properties.
00;23;55;07 - 00;24;29;20
Steven Pesavento
Yeah, yeah. And the irony is what people will think is they think, hey, the government's taking my money. But if you just recognize that the government is your business partner and you don't have a choice in it, whether you think about it as a mafia or or some kind of positive thing, they've created incentives. And if we just follow those incentives, and do the things that they want us to do, i.e. create things in the economy that are needed, energy, housing and a variety of other things, they've created incentive that if you do that, you're going to pay less taxes.
00;24;29;20 - 00;24;48;10
Steven Pesavento
And as a result, your money can grow at a much faster rate. So, you know, I think there's a really great example. You have a number of wealthy clients, you know, some of them own real estate, some of them own real estate that's actively operated, like syndication and funds, and some of them just park their money in real estate and they don't even use it.
00;24;48;12 - 00;25;08;12
Steven Pesavento
Talk to me about the thought process there and why somebody would do something like that. Because, you know, when you've got 10 or 20 or $50 million, you don't necessarily think, hey, it makes smart sense that somebody is going to just buy a 3 or $5 million property and never visit it and never have anyone live there. But why do people do that?
00;25;08;14 - 00;25;31;06
Yair Klyman
So, a friend of mine works with David Tepper. It's familiar with David Tepper on the wealthiest people. I think it's apple loses is his hedge fund. And my friends go swimming with him, and he asks him, he goes, he goes, how can we have all these houses? And they're all empty it. And he goes, I realized one day he goes, I actually don't own any houses anymore.
00;25;31;06 - 00;25;49;28
Yair Klyman
I sold most of my my personal homes, because when you have a big house, you have to have nannies and you have to have caretakers. You have to have cleaning ladies and maintenance people to live in your house to take care of it. So basically, I'm paying people to live in my homes. So we sold all the property because you just realize I'm paying.
00;25;50;03 - 00;26;05;22
Yair Klyman
I'm paying half $1 million for someone to live in my home, and I'm never even going there. It was amazing. That's one thing. That's one concept is like, you want to accumulate, you want to get the best assets. You want to be that person who just can, oh yeah, you have a you have a house in Palm Beach.
00;26;05;22 - 00;26;26;26
Yair Klyman
I have a house in Palm Beach. And you're getting into. That's that ridiculous. we call it like it's called dosh means it's like you're getting into, like, the materialism of of the world. It's very like satanic or it's like, it's just the devil's work. Then you have the other side of people, one who try to get money out of their countries.
00;26;26;28 - 00;26;50;02
Yair Klyman
So, for example, they don't trust the Chinese, put a lot of money into the US, into life insurance. The Filipinos put a lot of money into the US and life insurance the Japanese now. But a regulation that you cannot buy life insurance if you are full Japanese, you cannot buy us life insurance or if you are a full Japanese citizen, because so many people are trying to pull money out of the out of their countries and park it into the US.
00;26;50;09 - 00;27;13;07
Yair Klyman
Real estate is a place that people put money in a lot. They don't care about the return. They go, okay, appreciation. But I live in New York City, for example. And what's it what's the comment on New York City, New York City is bulletproof. So for somebody to say, okay, I have $10 million here in China or wherever it is, and I'm scared that the government is going to come in and seize my assets, I need to get the money out.
00;27;13;07 - 00;27;34;04
Yair Klyman
And just in case I have a backup plan, if I run away and I go to the US, I know the U.S. is going to protect me, and I know the I'm not going to lose my money on it. That's very, very valuable to them. So it's a diversification tool in the worst financial way. But for them, they're so scared that their countries are going to come in and take their money.
00;27;34;07 - 00;27;58;12
Yair Klyman
That's their big fear. Another side is they also they they use it as an investment. They're hoping for for growth. And for them it's either leaving the money in the bank earning 0% or putting it in real estate and earning 1% potentially. So it's just like bank money. They never these people never need this money. So it doesn't really make a difference if it's in the property or in the bank.
00;27;58;12 - 00;28;04;15
Yair Klyman
It's the exact same thing for them. And they have more insurance if they're putting in a property because there's actually something physical there.
00;28;04;18 - 00;28;20;04
Steven Pesavento
Yeah. It's just a place for them to park money. And it's a simple way for them to do it. And they don't really care about the outcome. They just want to know that at some point in time they can go and harvest that money, and then it's there, and then it's simple and there's not much to think about.
00;28;20;11 - 00;28;32;04
Yair Klyman
It's the same question is why do people park money in the bank? It's the exact same question. Why do people have $5 million sitting in a checking account at Chase? It's the same answer.
00;28;32;07 - 00;28;55;23
Steven Pesavento
Let me ask you. So you your financial advisor for my perspective, I've met a number of phenomenal financial advisors, and yet there's so many that are terrible. So when somebody is thinking, hey, I need somebody who can advise me on my strategy, I need somebody who can help me understand my portfolio. My over allocated in this area. Am I under allocated in that area?
00;28;55;25 - 00;29;13;15
Steven Pesavento
Well, from your experience, what is it that people should look for when they're actually going to go find somebody who really knows what they're doing and can bring a high level, result for them versus the people who just collect the payment. They do the bare minimum. And, they're not really adding value.
00;29;13;18 - 00;29;34;24
Yair Klyman
Right? It's a great it's a great question. There's two, two answers a long you ask a Jew one question, they give you three answers. So you ask to my dad, we have a podcast together. I do with my dad. You ask us one question. There's like seven answers, but there's two. There's two answers for that. Number one, many financial advisory shops.
00;29;34;24 - 00;29;59;12
Yair Klyman
And I worked at Merrill and I clear through Pershing and all these different places. Many financial advisory shops are sales jobs. they're sales jobs. So these people might not know anything. And I'm not saying they're bad and I'm not saying they're good. They might not know anything, but they're really, really good at golfing. They're really good at golf and they're really good at they're really good at talking.
00;29;59;12 - 00;30;19;29
Yair Klyman
And they're able to bring in the the nerd guy to come in and speak to that person, but they don't really know their job is to just broker. Basically, they're the middle person. They're charging you a fee. They have somebody else coming in and managing the money. That's the first side. So understanding the nature of what a financial advisor is, is, is crucial.
00;30;20;01 - 00;30;34;01
Yair Klyman
There's also people who come from money that go, you know what, I don't have a job. I'm just gonna be a financial advisor. I'm going to call my grandmother. She's going to give me $50 million. I'm going to be the biggest guy in my firm or $100 million. I'm going to be the number one guy in the firm, and my grandmother's going to send me her friends because they don't know either.
00;30;34;03 - 00;30;51;22
Yair Klyman
Do you have that? You have that side. So I don't look at people. I don't look at advisors success based off their asset level. I look at advisors success based off of the value and the and the quality of person they are. So your wealth is going to be directly correlated by the people, the five people you spend the most time with.
00;30;51;24 - 00;31;13;06
Yair Klyman
One of those people are going to be your financial advisor. Financial advisor is going to meet you probably once a quarter. You're probably don't talk to him more than once a quarter. What do they do for themselves? Dude, are they unbiased? How are their values? Do he does your values? And I'm talking about if families value your value or charities, your value or health or happiness is your value.
00;31;13;11 - 00;31;36;15
Yair Klyman
Do your values align with this advisor? Because I will. The secret's out. All of us do the exact same thing. We all have the same access to platforms, the same mutual funds, the same investment options, the same investment strategies. Everybody does the exact same thing, but our values have to align with yours, because then we can bring in the right.
00;31;36;18 - 00;32;00;13
Yair Klyman
We can marry the right products with the actual person. it's the same thing as a therapist. They all study the same books. Everybody has the same tactics, and they, if they are semi smart or they don't even have to be that smart, they just follow the protocol. but if the therapist actually understands you, you know, when, when you're looking for somebody and you, let's say you come from an Amish community and you're talking about being Amish.
00;32;00;13 - 00;32;18;28
Yair Klyman
And for me, I can never understand what it means to be Amish. I can never go through that. But all of a sudden, you find somebody who came from the Amish community and can really understand you in fits. Then there's something to talk about. So number one, check credentials, check on Finra. There's a huge record that you can see exactly everything that they're listed on.
00;32;19;00 - 00;32;38;08
Yair Klyman
If they have any violations. You've got to always make sure to check that. Do some due diligence. Check their website. Check if they're cutting edge, check other other clients of theirs, see if other clients fit that. But the main thing that I tell people all the time is find out if they have the same values as you, and if there's somebody you can learn from.
00;32;38;10 - 00;32;54;24
Yair Klyman
Not every financial advisor is going to be more wealthy than you. And that does not mean just because, let's say somebody I inherited $100 million and I have more money than you. It doesn't mean I know how to manage money or if I have a yacht, doesn't mean I'm smart at business. So making sure they fit in the same values, making sure that you understand what they did for themselves.
00;32;54;24 - 00;33;16;17
Yair Klyman
And that's a path. And that's a mentorship that you can go with regardless of your age, regardless of your of your wealth. If they if they fit those, if they align with that, that's a good advisor, not just an asset level, which I find, I find, pretty. I find that that's a weak way or a lower quality way of of vetting somebody.
00;33;16;19 - 00;33;37;11
Steven Pesavento
Yeah, a lot of people go by those vanity metrics and they want to be somehow connected to that vanity metric. But at the end of the day, like you said, it's about the person. It's about the values. It's about your connection with them, their understanding of you, and their ability to think the way that you need them to think on your behalf so that you can get where you want to go.
00;33;37;13 - 00;33;56;03
Yair Klyman
100%. It's about and they're part of your family. Like it's it's a serious person. Like the same thing that you are with your clients, I'm sure. Like, yeah, you go to events like you don't want some, some advisor that's hunting your sister at your party, like you just want someone that's a good person that cares about you, that will do everything they can.
00;33;56;03 - 00;34;15;27
Yair Klyman
Yes, they're getting paid for it. Yes. Maybe that helps. But you also want good people like you. Invite them into your life and invite them into your life. See how they are with your people. Like you're kind of getting married to. You're getting engaged. I wouldn't say married. You're getting engaged to somebody you welcome them into your house and see how they are and see how they act and learn.
00;34;15;28 - 00;34;18;14
Yair Klyman
Learn who they are.
00;34;18;16 - 00;34;28;24
Steven Pesavento
Well, yeah. Yeah. This has been super fun diving in with you. before we wrap up, tell people where they can listen to your show or follow along on what you do.
00;34;28;26 - 00;34;50;10
Yair Klyman
Yeah. So we have, we have a show called Resilient Riches, The Resilient Riches Podcast. We have about 1500, five star reviews on Spotify. So those it's done very nicely on Spotify. my website climbing financial.com y man. Not Cly, not kale. Anybody else? Kale y my great great grandfather, when he came into Canada for some reason made it a y.
00;34;50;10 - 00;35;04;25
Yair Klyman
It was because I think you want to be unique. then we're also. I'm right now in the process of writing a book called, The Resilient Riches and the Financial Guide to Financial Freedom and Financial Literacy. so I'm in the process of doing that. And you, you could see me on I've been on Fox and Mean on Newsmax.
00;35;04;25 - 00;35;23;20
Yair Klyman
We write for the Huffington Post all the time, insurance news. And so we constantly get, asked and also, I think it's the best for people to start reading, to start getting yourself educated and getting your kids educated and having conversations with your kids and getting them involved in the money conversations. and that's a way to build financial freedom.
00;35;23;23 - 00;35;29;16
Steven Pesavento
Well, so great having you on. Really appreciate it. And thanks all for listening and we'll see you on the next episode.
00;35;29;22 - 00;35;31;06
Yair Klyman
Looking forward to it. Thanks for having me, Steve.