326 Christopher Panagiotu

Jeffrey Feldberg: [00:00:00] Before he was a father, husband, author, podcast host, business owner, and certified financial planner professional, Chris Panagiotu was born for the life of guiding others to true financial success. Chris Panagiotu was born for the life of guiding others to true financial success. Chris Panagiotu otherwise known as the CAP in Capitalize, was introduced to investing at the tender age of 10. Fast forward to 18, and he accepted an internship at one of the largest wirehouses firms in the world, UBS. After three quick years of college at the University of Oregon, something was not sitting right with him, so he joined Morgan Stanley for a short stint, where he quickly realized corporate life was not in his wheelhouse.

Chris was extremely blessed to have discovered Lucia Capital Group, and in 2015, he began his journey to grow what is now his business, Capitalize Your Finances, LLC. In his nearly seven years at Lucia Capital Group, Chris built his practice from scratch, going from zero dollars to nearly a hundred billion dollars in a [00:01:00] time span.

Today, Chris proudly runs his financial planning business, Capitalize Your Finances, LLC, Located in Fircrest, Washington, roughly five minutes from where we grew up, and the cap in Capitalize's journey began. Chris is a Certified financial Planner and a Certified and Chartered Retirement Plan Specialist.

Chris holds his Series 7 and Series 66. In 2020, Chris was recognized as a five star wealth manager by the Seattle Times. The CAP in Capitalize is not your average financial advisor or financial planner by any means. 

Chris is the original capitalizer and is absolutely obsessed with profoundly understanding what there is to know about his passion. This translates to a striving push to perfection for client outcomes. And although there's no such thing as a perfect, a capitalizer does not need to justify their knowledge with big words from Wall Street, complicated graphs, charts, or talking over people.

A Capitalizer wins based on loyalty, stewardship, unwavering commitment to their family, friends. [00:02:00] Clients and colleagues, which results in the overall growth and positivity within the capitalizes community. 

Outside of the office Chris hosts the podcast, Capitalize Your Finances, as well as a keynote speaker on a variety of topics such as financial advice, financial planning, sales, health and wellness, and comprehensive life coaching. 

And before we start this episode, a quick word from our sponsor, Deep Wealth and the 90 Day Deep Wealth Mastery Program. Here's Jane, a graduate who says, and I quote, the Deep Wealth Mastery Program prevented me from making what would have been one of the biggest mistakes of my career. I almost signed on the dotted line with an unsolicited offer that I now realized would have shortchanged my hard work and my future had I accepted that offer. Deep Wealth Mastery has tilted the playing field to my advantage.

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And as you're [00:03:00] listening to these testimonials, are you wondering if you have the time? Are you even thinking that you've got this covered, you have the advisors or people in your network? Well, I got to tell you, these myths, they're often behind the 90 percent failure rate for liquidity events. Think about it. You have one chance to get it right for your financial freedom. You really want to make it count.

And when it comes to time, let's hear what William has to say. We just got in this testimonial, William says, and I quote, I didn't have the time for Deep Wealth Mastery. But I made the time and I'm glad I did. What I learned goes far beyond any other executive program or coach I've experienced. 

So what do you think?

As I hear that, that's exactly what gets me out of bed every day. That's my mission. That's the team's mission here at Deep Wealth to literally change the social fabric of society. One business owner at a time, one liquidity event at a time, and my Deep Wealth Nation, what I want you to know, the Deep Wealth Mastery Program, it isn't theory.

It's from the trenches. It's the only one based on a nine figure deal. And that deal, that was my deal. [00:04:00] You know my story. I said no to a seven figure offer. I created the system that later on, myself and my business partners, we said yes to a different buyer, a different offer, a nine figure deal. That's what we now call the Deep Wealth Mastery Program or the scale for ultimate sales system.

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We'll go through exactly where your business is today and what's standing between you and your financial independence and your dreams. So that's where you want to [00:05:00] be. You want to be with other successful business owners, entrepreneurs, and founders, just like you they're looking to grow their businesses, create markets.

Market disruptions and unlock their financial freedom to get what they deserve. And whether you've been in business for three years, 40 years, you're a startup, you're manufacturing you're in high tech, low tech, whatever the case may be, coming in and network with other business owners, it's a safe space.

It's a confidential space with business owners, with businesses just like you, because they all wanna lock in their financial freedom and enjoy both success and fulfillment. So again, the 90 Day Deep Wealth Mastery Program, it has your name on it. All you need to do is take the next step. Please send an email to success at deepwealth.

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Welcome to the Deep Wealth Podcast. Well, you heard it in the official introduction. We have a thought leader, an author, an entrepreneur, a business owner, an all around terrific person. Chris, welcome to the Deep Wealth Podcast. An absolute pleasure to have you with us. And you know what, Chris, there's always a story behind the story.

What's your story? What got you [00:06:00] from where you were to where you are today?

Christopher Panagiotu: Oh my gosh. Well, I know for the constraint of time, I will pseudo bullet point it, but to your listeners I'm kind of a unique cat, I'm 32. I'm still a young guy, but I've been doing this for 22 years. So I started investing when I was 10, pseudo advising when I was 14. I was the youngest advisor in the world for UBS at 18 in and outta college in three years.

'cause I already knew what I wanted to do. Worked at Morgan Stanley for a short stint and then figured out very quickly corporate and working for someone was not for me. So with two non competes and not a lot of hope, but a lot of faith, I started my practice out of my apartment, May 12th, 2015. You fast forward a day, and our practice, we oversee about 140 million dollars for high net worth families that have exited their businesses.

And we're just getting started. You know, I also host my nationally syndicated podcast, which you came on and you were a lovely guest, and I'm sure we're going to talk about my best selling book, Capitalize Your Finances, [00:07:00] as well.

Jeffrey Feldberg: Well, a lot to unpack there, and yes, full disclosure for the Deep Wealth community, and we can put this in the show notes, I've been on Chris's podcast, had a blast with him, and Chris, I've got to ask you, though, one of the youngest UBS in the country, doing what you're doing, I mean, you've been doing this for almost as many years as you've been around, kicking on this earth, I mean, what's going on with that?

Did you just wake up one day, or were you born that way? I mean, what got you into the frame of mind that I'm going to be doing what I'm doing at such a young age? That's amazing.

Christopher Panagiotu: So, I didn't know, I knew and I didn't know what I wanted to do. So, I always knew that money was intriguing to me, and investing, I was gifted with the Intelligent Investor when I was 10. Did I read it and understand all of it? No, but I got a pretty good chunk of it for it. For a 10 year old, and I understood the big takeaways, invest in what you know basically live within your means, things like that.

It wasn't until I left the [00:08:00] big Wall Street firms that I understood that True financial planning was my calling, and I say true financial planning because financial planning has been around for a while. But you've got to understand, people get very confused about the difference between investing and planning.

And your listeners, if you're a football fan, this is the best analogy that I have. So, when you have the ball on offense, you're trying to score a touchdown. Okay, every team knows that, but every team has a different core strategy to get in the end zone. So I am from Tacoma, Washington, south of Seattle, and so the Seahawks back in the day had Marshawn Lynch, one of the best running backs the league has ever seen.

So their core strategy was to run the ball. Now, you can't do that every single time, so you have to develop what I call satellite strategies. So when Russell Wilson played, he'd maybe run out of the pocket, he would throw one to Doug Baldwin, he'd throw a deep ball to [00:09:00] Tyler Lockett. So you've got these satellite strategies surrounding the core framework for the overall purpose of scoring a touchdown.

And investing is the satellite. But people think investing is the core framework, and that's not the case. So when I left the big firms, because I saw a lot of people thinking investing is planning, that is not the case. I left, I tried figuring out, okay, is there the Intelligent Investor equivalent on the planning side of the aisle?

And after four years of researching, I realized that there wasn't one. And that's what inspired me to create what is now the business The book, the podcast, and the brand of truly capitalizing one's finances. So that's kind of the history. Have I wanted to do this my whole life? Yes, but I didn't really know what this was until I would say 2015.

Jeffrey Feldberg: Love that and we're going to [00:10:00] unpack that. And for our listeners, I want you just to pick up on this because if you're listening, it may not be as easy as if you were seeing the book and we'll have the book in the show notes by the way. Capitalize Your Finances, the how to financial framework that takes you from compoundly clueless to monetarily magnificent.

Love those words that you're using and you have a play of words because your name. And I don't even want to begin to pronounce your last name, I'm going to botch it, but your initials are CAP, C A P, and I know you have the CAP throughout what you're doing, so you're having a lot of fun with what you're doing.

But let me ask you this, for the listener who's now listening to the two of us talk, okay, Chris, I heard you say that, I always just thought investing was investing, and finance were finances, and planning was planning. What's the classic mistake that you see more times than not when it comes to us entrepreneurs, when we think about our finances, when we think about money?

What's the myth that we're buying into that we shouldn't? 

Christopher Panagiotu: So there's actually a couple that came to mind. One of them, it's actually interesting. So I had a guest on my show a while back, and he sold off his business for let's just say a large sum of money. And [00:11:00] it's interesting talking to people. That have made their money in my industry, like the super investors I've had on my show, and for those of you that are curious what that means, in order to become what we'd call a super investor in our industry, you have to invest and oversee at least a billion dollars.

And, shocker, very few people do that. Most people, when they've made their money in the business, They keep growing their net worth the same way that they got there. People that are not in my line of work, that have the large exit, think that, oh my gosh, I'm going to be able to earn the same return on my investment like I did in my business.

And That's just simply not the case. The best investment you can guarantee in this world is in yourself. And I would like to think that I could just knock it out of the park and earn the Warren Buffett compounded return of 21 percent like he has [00:12:00] over his almost million years on earth. But that's just simply not the case from a reality standpoint.

So, I would say the biggest myth and misunderstanding of business owners, and this is actually a two parter. They think that when they sell out and they invest it, they're just going to keep growing at that same rate. That's actually not the main goal when you have that big liquidity event. Whether you have a liquidity event or you're just trying to retire, what is the main purpose of your finances?

Your main purpose is to keep up with the standard of living that you, and if you're married, spouse, built your life upon. Secondarily, anything that is left over, that is what you can, quote unquote, risk and grow for the actual long haul. And again, it's a psychology shift when you retire and you sell out from that exit.

That's myth number one. And then myth number two is You think you [00:13:00] can continue to run your portfolio like you did your business. I have met so many previous owners that are phenomenal stewards of their business, but they are not phenomenal stewards of their wealth. And that's where, obviously, come in and help out.

people miss the boat on that. And I don't know why.

Jeffrey Feldberg: yeah, you know what, it's so interesting, you're saying the same things that we say here, Deep Wealth, just in a different way. In our Deep Wealth Mastery Program, otherwise known as the Scale for Ultimate Sales System, we actually start at the very end, but that's the beginning for us.

So we have the nine step roadmap. The tenth step, which is really the first step, it's your post exit life. And to your point, one of the classic cardinal myths or mistakes that entrepreneurs believe after they exit and the post exit, it's my responsibility. I've got to figure out how I'm going to be my own investment portfolio manager.

I've got to know what's going on. If I don't do that, then there's something wrong with me. And for most entrepreneurs, for most post exit entrepreneurs, that couldn't be furthest from the truth. Find someone else to do [00:14:00] that, it maybe doesn't inspire you, it doesn't get you excited, and truth be told, you're probably not really good at it, let someone else who does this day in, day out, do that for you.

So let me ask you this, and again, I'm going to go back to the book, and I'm going to go back to what you're doing, in your book, I love how you just broke things out, and you really have Four sections. You kept it really simple. Okay. Let's talk about your finances today. Section one. Let's talk about your finances tomorrow.

Section two. And then we're going to capitalize your retirement section three, and then your legacy section four. So it's really the life cycle of what's going on there. So Chris, as a business owner, a post exit entrepreneur, or maybe my ex is 20 years away, regardless of what's going on, I come to you.

I start working with you and the team. What's your secret sauce? What's your methodology of what we're doing in the early days to make it a, for me, a set it and forget it while you and the team behind the scenes are doing what you do to get some terrific results? What does that look like?

Christopher Panagiotu: So if someone comes to me 20 years out, which a lot of people think, okay, in theory, that's [00:15:00] a long ways away, which, I mean, yeah, it is. So a lot of people assume, oh, I don't need to plan my exit. That's a lie because a lot of people keep reinvesting into their business and all that. I would actually say overall, regardless if you're 20 years out, two years out, Anything in between.

Investments come and go, but the strategy remains the same. And what I mean by that is, and definitely did do your homework and read the book which I appreciate, you'd be stunned at how many shows I go on and people just rip it and go, yeah, I never read it. And I'm like, okay, that's fine, but if we're gonna talk about it, I digress.

So, For me, one thing that I realized was after I left the big firms, there's all of these different tools at my fingertips and your fingertips when it comes to prudently capitalizing one's finances pun intended. So what I mean by that is once you understand [00:16:00] all the different tools and vehicles out there, The next step is to be very nimble within the mind when it comes to what's going on in this world.

So I'll give you just a taste and an example. Let's say that you're 20 years out from the exit, okay? There's the easy wins that you've got to start knocking down. Assuming you're profitable, you need to start Obviously, bringing on great people, that's a must, but then you've got to provide the benefits.

You've got to provide a 401k. If you're doing extremely well, and especially if you're toward the fourth quarter of your career, that's when you could even implement a cash balance plan, where above and beyond me, your 401k of almost 70, 000. You could put it up to another 300 grand and you could also avoid FICA and Medicare taxes on top of federal.

Now, you're not using that strategy, we went from zero to 100 extremely fast. A cash balance plan isn't necessarily designed To grow your net worth from an [00:17:00] investment perspective, because it kind of is a pension, but you're earning the return on the taxes you're avoiding. And so people need to understand that as an owner, before you get into the weeds and minutia of investing, am I getting all the easy tax wins out and basically out of the way, so then I can go to the fun and sexy stuff.

So that's on the. That's on the growth side of things. Another thing I would mention is, it depends on your business. If you're 20 years out, you really need to understand something called Return on Invested Capital. Now, what do I mean by that? Okay? I know we're getting really deep here, but think it's pretty valuable.

So, I'm just going to use my business.

My business is a little unique, we can actually get into that in a moment, but if someone came to me, all things being equal, and was saying, Hey, Chris, what should I do with a business like Capitalize Your Finances to grow the [00:18:00] business in the best way? Let's say that I took 50, 000 and reinvested it into my business right off the top with marketing You get to write off all of that money.

So if you're in a high tax bracket 50, 000 times, you know in our case 40 percent I just earned that in taxes. I'm not gonna have to pay this year Check one. Check number two, the calculation, which is the return on invested capital. Let's say I make that 50 grand back in three years. That's a 33 percent return on my money.

So not only did I earn 40 percent on the taxes I avoided, due to our lovely generally accepted accounting principles, I earned 33 percent on my money by getting all of that back in three years, and then it's just pure profit at that point. Now, I'm a little unique in the fact that Instead of doing that, and this is just the nature of my business. I know that's the best return on my money. However, I've got to look [00:19:00] you, not you literally, Jeff, but any client of mine in the eye, and go, okay, is my money alongside of them? So I would much rather take a distribution, pay the tax today, unless my wife and I have invested in a long term strategy I recommend to clients I will not recommend it. So I've got to have my money in it first, because then when I look someone in the eye, that's just me building my goodwill, and I think it's just prudent business, going, this is why I did this. This is why we allocated X amount to our net worth. Because as you're growing your net worth and you are taking distributions,

For me, I'm alongside my clients.

That's just pretty cut and dry. But for clients that are starting to take distributions, especially early on, think about this for a second. And I tell my athlete clients this all the time. Because for them, are they a business? They are, but they aren't. Okay, what is [00:20:00] the number one goal with their distributional wealth?

Their number one goal is to replace their needed expenses as fast as humanly possible. And that is due to prudent planning, which then involves investing, once you open up each bucket in the strategy in my book. And so, for a lot of these business owners, if you're taking distributions, And you're reinvesting and reinvesting over that 20 year period.

Imagine if you fast forwarded to 20 years and you had enough net worth outside of your business where you could hypothetically sell your business for zero and you're still going to be okay. I can tell you, not quantifiably, but qualifiably, your overall health is going to improve drastically because you have zero risk, you have zero stress, and then what happens is your business will get better, [00:21:00] your people will get better, and your exit will be a whole hell of a lot larger.

Jeffrey Feldberg: And Chris, a couple of myths with your help, let's dispel, because I know so many business owners, they have the golden handcuffs. They're wealthy, on paper they're wealthy, but it's locked up in the business. And it's a mindset, it's actually a scarcity mindset, which is interesting. They're incredibly successful in the business and in life.

In the back of their mind, the story that they're telling themselves is, yeah, okay, maybe the business has lots of zeros, but my bank account certainly doesn't show it. I need the money in the company, I've got to make payroll, I've got to do this initiative, I've got to do that initiative. And working with someone like Chris, building my wealth today, well, the problem is, they're saying in their minds, the wealth just isn't there, and it's too early for me to start.

I will think about this after my liquidity event, and at Deep Wealth, when we talk about Step 6 Advisory Team, one of the advisors would be someone like yourself, Chris, to bring on board well in advance of a liquidity event, and I'm stealing this from a bank, I love the model that they came out with.

You're richer than you think. And absolutely, we're all richer than we think. We just don't realize it. So for that [00:22:00] listener who's saying, Chris, you sound like a terrific guy. You and the team, what you're doing sound amazing. I just can't do that right now. It's too early for me. My wealth is there, but it's tied up in the business.

I can't unlock it. Please speak to that listener of why that's not the case. And they really are richer than what they think.

Christopher Panagiotu: So, that's a great question, and there's a multi parter. The first answer is one that everyone hates, including myself, but it's the honest to God truth. It depends. So, let's use a real life example. Let's go back to my business, okay, just with easy numbers. So, if someone came Excuse me, if I went to a hypothetical me and asked, hey, what should I do with this cash?

And I start to really learn and understand this business. Because most of these advisors out there, they say they help business owners. You want to know why? They just basically hoard all the dollars after the exit, and they manage it piss poorly, and that's how they get paid. It's an awful way to go.

[00:23:00] For me, we actually charge very similar to how a CPA firm would run their business, and I was inspired by this years ago. Just a quick tangent, my CPA said, people that want to work with me, there's a cost just to dance, just to get in the door. If you have an LLC, or a trust, or a K 1, there are ancillary costs to that, but it's surrounded by the core cost of my services.

I was like, whoa! What a brilliant idea. So for us, we have a flat cost of just coming to the dance. Okay? It's a whopping Comcast bill of 208. 33 a month or 2, 500 a year or 5, 000 a year if you run a business. Because I'm helping with the 401k and retirement plans because I do that as well. And frankly, that's a drop in the bucket for a lot of people we're talking to.

But the reason why I do that Is let's say that in their best interest, it makes sense to take that 50 grand, hypothetically, and [00:24:00] reinvest it to get a better return on their invested capital.

Jeffrey Feldberg: Sure.

Christopher Panagiotu: As a true planner, of course, I'm going to recommend that. But, eventually, I don't care what business you have, there is a maturity point where you just can't get that same return on invested capital.

And it's actually an imprudent investment. So let's say a business came to me and they had that similar circumstance. I'm just going to use the 50 to make it easy. And they are getting their businesses flatlined. They don't really have any growth. They're not profitable, but they go, look, I just don't have anywhere else to go with this cash, so I keep building it up in my business. Then you're stupid for it, right? That's what I would call BS. I wouldn't say stupid, because I'm a nice guy, but you know what I mean. It's imprudent, because now you've gone from being Appropriate with your cash to inappropriate with your cash. In fact, one of the episodes I have coming out later this year is the evolution of the [00:25:00] emergency fund.

Because as your business grows And once you know your business, because I, like knowing these businesses, let's say you need three to six months worth of cash, okay? Three to six months, maybe if you're in construction, maybe a year due to the volatility, or if you're in a service based business, you may not need as much.

But then I look and I go, wait a second, guys, you told me your range is Two to three hundred thousand dollars. Why do you have a million dollars sitting in there? Is there a short term purchase on the horizon? Are you looking to acquire another business? Are you looking to maybe, pay a severance package for that just pain in the butt employee that you can't get out?

Like, why do you have it? And if there's no answer, That's where it would be prudent to go, okay, let's start taking a distribution and building what I actually called Wealth Beta. I researched this years ago, and that's a concept that basically means the lower wealth beta, your number, [00:26:00] the better off you are.

If your business had a bad revenue year.

Jeffrey Feldberg: Okay, so you're going through all these things. I love that. And so for the business owners, what you're hearing, and Chris, I gotta be honest with you, I was not born like yourself with that really smart financial outlook. I've always ensured I'm not the smartest guy in the room because I'm not, and I want to be with people who are smarter than me on the finance side, and I've looked to them to really lead the way.

But for our listeners, Whether you followed Chris a hundred percent or maybe you were like me and it was only just a little bit of what you're following with those complicated strategies, at least for me, the takeaway is you are a lot richer than you think. Why not have someone like Chris today begin to figure out where are you today?

And by the way, when it comes to your post exit, if it's two years from now or 20 years from now, life is different because you don't have the business income coming in, but you still have your expenses. What's that gap? What does that look like? What do you need? And I wanted to spell another myth with you, Chris, and it's two words that both begin with A.

It confuses a lot of people. It's called asset allocation. And you know, what's interesting about [00:27:00] asset allocation, to me, that is the secret sauce to do really well with your portfolio or with your investment advisor, wealth advisor, whatever the case is going to be. Because everyone's different. You may have a higher risk tolerance than I do.

So your asset allocation is going to be different. You're going to have things slated more towards risky things and maybe I won't. So for our listeners out there, why should they care about an asset allocation? And what are you and the team doing to get it just right for the asset allocation?

Christopher Panagiotu: So you are going to maybe love what I'm about to say, and I'm going to ruffle some feathers. I believe that asset allocation is important. However. I believe it is one of the most overblown topics in the business, as well as risk tolerant. So, poked the bear, and now the bear is awoken from hibernation.

So we're gonna get

Jeffrey Feldberg: yes, let's talk about things we're not going to hear about out there. Yes.

Christopher Panagiotu: so one of the things that I find interesting with asset allocation, and I've interviewed a [00:28:00] lot of these, Billionaire investors out there, and they've actually all become a lot of my friends, and I work with them, which is kind of cool. And there's different flavors to it, so I'm going to give you a couple of the famous investors I've interviewed.

Jeffrey Feldberg: huh.

Christopher Panagiotu: So, Monish Pabrai is one of the greatest investors most people outside of the business have never heard of. He has,

I'll just say it, he's got the cojones. He has the conviction, he doesn't need a ton of businesses, and he's a believer of the ten by ten method. Meaning, you take ten businesses, spread them out ten percent of the portfolio, and then you just let them do business things.

Okay, that's his direct quote. Then you've got a hedge fund manager out of Switzerland who's become a dear friend of mine, Guy Spear. Guy Spear is more of someone where I don't think he can stomach that same type of volatility that Monish is doing. I'm not saying he's better or worse, he just knows his framework.

So he might have 15 to 20 businesses and [00:29:00] then Gautam Bhaid Atlanta, Georgia. He will not. Ever, under any circumstances, have more than 5 percent of his portfolio in one company. If that gets to that point he sells off the top and then he looks to redeploy because he can't stomach it. So, here's my thing. All of these people that I mentioned Our investors, they're not planners. So for the purpose of a plan, asset allocation is bogus because it comes down to how you actually locate your dollars throughout the framework, throughout the strategy. Once those dollars are located accordingly, Then what happens is you break open each box of money within the framework according to my book class and then that's where the risk tolerance and asset allocation actually come into play.

So, for example, let's make it super [00:30:00] easy, and now I'm going to use you. You come to me, Jeff, and you sold your business for ten million dollars. Okay? And I'm going to make it easy because there are some ways to avoid a lot of that tax, but let's just say, and I'm going to go back the napkin math in my head here, 10 million and you are in a tax inefficient state like New York, okay?

you probably should have moved due to the capital gain, but let's say with all of that being said, you're going to owe for all of that gain of the 10 million, 8 million. Let's just round up to three.

Jeffrey Feldberg: mhm.

Christopher Panagiotu: Ouch. Sucks. Well, guess what? That three million, we need to be very critical, first off, on how we need to locate that money within the plan, because you know it's gonna go to the government.

So what if we could squeeze the blood out of the turnip and purchase a short term vehicle that could earn five Maybe even with [00:31:00] interest rates high enough today, six percent, and so by the time that money goes to the government, yeah, you see that three million go by, you didn't risk it, but then you maybe earned a couple hundred thousand dollars on money that you knew was just vanished.

After that, then you have to go through the framework, and you go, okay, Chris, I only spent. And I say only loosely, but I only spend ten grand a month. I really live within my means here. I think, I don't know. Well, one of the strategies we utilize is something called Lifetime Income. it's guaranteed products, fixed income strategies, all that fun stuff.

Well, with a net worth of that magnitude, there's enough to look into that box within the strategy, buy a couple of vehicles that Guarantee that income for you forever, and then, by definition, you can invest the rest of it, however the heck you want. Now, that's where we get [00:32:00] into growing your net worth, whether it's in the market, real estate, private equity, lending, multitude of ideas.

Something I talk about, the endowment model, I'm a big believer of. But my point is As far as like typical asset allocation in our business, dude, I didn't mention it. That goes out the window because it doesn't matter, right? It doesn't matter. We need to approach money in simplistic terms, and the complexity comes as your simplicity builds, as far as the understanding, right?

One more thing, and then I promise I'll pause for a little bit. Let's say that you go, okay, out of that 10 million, all those three of it's going to the government. You've got maybe 2 million left over within these lifetime income strategies that'll pay for that 10 grand a month. And then you've got.

Out of the remaining five million, let's say you split it between alternatives, so real estate, private equity, lending, and then you're reinvesting that income into your stock portfolio. [00:33:00] Whether it's a mutual fund portfolio, index funds, stock portfolio, pros and cons to each. But here's the cool thing, at that point, That's when risk tolerance comes into play.

It's not at the beginning. Because if it's at the beginning, you're setting the stage of emotionally dealing with your money that you just, not inherited, but kind of from your sale of your business. And that is the worst thing to do when it comes to planning money. At the very end, if you come to me, Jeff, and go, you know what, Chris, I get the strategy, but You do know that I'm a little bit more anxious.

I don't even ask clients this because I know the clients well enough. I'm like, all right, you know what, Jeff is more of a nervous Nancy here, so we're going to get super diversified within his stock portfolio. We might even do a blend of mutual funds, ETFs, and stocks. And then as far as the alternatives, I'm throwing the kitchen sink at it because it's going to be so watered down.

On the flip side, you come to me and go, [00:34:00] Chris, taxes are my big thing. I just, I freaking hate it. I get what you did with lifetime income.

But I want to grow this net worth as tax efficiently for my heirs and my foundations and all that. Well, that's where you get into the weeds of utilizing a stock portfolio.

You control the tax basis. You start utilizing real estate because you get depreciated income where you're not paying tax. Maybe you put lending off to the side. Private equity, because you understand that world, because you ran a private business, you get the tax efficiency. And so again, investments come and go, allocation comes and go, but the strategy is where the buck stops.

Jeffrey Feldberg: And speaking of strategy, and I know I'm bouncing around, there's really a method to my madness, I promise you. I want to go back to the book, and if I'm not mistaken, it's section one, and you put two chapters towards debt. You have good debt, you have bad debt, and then I loved how you said, okay, let's talk about strategizing your debt stack.

And so for the benefit of our [00:35:00] listeners, and again, for our listeners, go to the show notes, click on the link, get the book, I promise you, you'll come out better for it than going into it. You're going to learn so much. But for the benefit of our listeners who haven't done that yet, Chris, what the heck is a debt stack and what are you calling bad debt?

And I preface this by saying, up until recently, interest rates were incredibly low. It was really a rounding error that so many people took on debt saying, you know what, I can get a loan or I can refinance my house or I can get a line of credit. It's so low, I can do so many other things with that money that's going to earn me more money, but wow, I have things change in such a short period of time.

That's likely no longer the case. So talk to us about debt because I want to go back to Warren Buffett, who said that when you're looking at compound interest, it's the eighth wonder of the world, but what people don't realize is compound interest, it cuts both ways. Yes, on your investments, and you can talk a lot about that, but also on your debt, when you're paying that interest, or maybe you're not paying it, whatever the case may be, it adds up quickly.

So debt stack, what's [00:36:00] going on with that? What's your view of the world?

Christopher Panagiotu: Debt, let's go. So it's interesting you mention Warren Buffett because probably five or six years ago I was watching an old speech of Charlie Munger, Warren Buffett's old business partner, rest in peace, and he was speaking at the University of Michigan and his thing was my entire life, all I've tried to do was earn net of tax 6%.

I just happened to overshoot it, which is like such a flex, right? Thing was, If Charlie Munger, who I could argue is the smartest investor of all time and philosopher of money of all time, is saying that of tax six, let's use that as a bogey. So for me, I always tell people if you don't know where to go with debt, you've got to think of the number six.

And the reason why is if you have a debt, and this is where the debt stack comes into it, that is above six percent. Let's say you've got a [00:37:00] magnitude of debts. You've got one at 10, one at 15. God help you if you got a debt at 20.

Want to do is you want to align your debts from highest interest rate to lowest, not balances, interest rates.

Because that is the percentage that you are earning on your return when you're buying that debt down. And so once you do that to the 20, again, God help you, then you take all of that income and free cash flow that was paying that debt off and you snowball it into the next highest one, and next, until you get to 6 percent or below, because by definition after that, if you have debts that are below 6%, you can't guarantee it, but you have a relative certainty, given a longer term time horizon, that long term investments will be better off than that 6%.

And again, I get into this in my book, in my course a [00:38:00] ton, and on my show. One thing I'll even add for business owners, because for most people that don't run a business, I think that's enough as far as the debt stack. Business owners know their business. Better than anyone. That's just, it's a fact. And so, I've actually seen business owners where they are trying to expand, and they go, Chris, I've got my bank just down my throat.

I'm taking this million dollar loan out to expand, but you know, the interest rate is nine and a half. What's your take on it? Well, all things being equal, that's not great. However, if you could take that million Earn it all back in three, or shoot even five years, that's a 33% or 20%. If it's five year return on your investment, you just took nine and a half percent money.

Basically earn a 20. You just [00:39:00] earned a spread. That's what we call capitalizing the spread of 11 and a half. That's actually a prudent investment and you can't guarantee it. So that's why I say all things be equal. You want to pay that nine and a half off. As soon as humanly possible, or not even take it in the first place.

But if you know your business, debt can be an extremely valuable tool to growing your net worth and then just building your exit to be that much greater.

Jeffrey Feldberg: Okay, so a lot to unpack there. So for the listener who's more on Jeffrey's side of the fence here, okay, kind of hearing you, Chris, with that, but kind of not, some of it's really going over my head, what would be the simple narrative? In a sentence or two, what would that mean for a listener like Jeffrey?

Christopher Panagiotu: Simple. If you have a debt that is higher than 6 percent or debts, order them from highest interest rate to lowest, take all of your free cash flow, pay off that highest one, keep snowballing that down into the next highest. Once you have debts that are 6 percent and below, instead of [00:40:00] Paying off all of those, it would be more prudent to take that free cash flow and then invest that for the long haul, whether it is in your business, in a 401k through your business, or taking distributions and diversifying.

Jeffrey Feldberg: Love that. And again, for our listeners, yet another terrific case and point from Chris, the cap man himself, of, hey, why not let someone worry about this for you? You have some excess cash flow, terrific. Sure, you could put this down towards getting rid of some of that debt if it's below 6%, but you know what?

You can probably make more money if you work with me. No guarantees, of course, but you can probably make some. Better money, better returns when you have a professional working behind the scenes with you to get that done. And I want to just round things out here. We're going to have to unfortunately go into wrap up mode shortly, but before we do, so we've bounced around.

We've been in section one, today's finances, section two, tomorrow's finances. This is all in the book. Again, go to the show notes, click on the link. It's all there. We've kind of gone a little bit around the retirement and the legacy, but [00:41:00] let's now pull those two together. And if we're looking at retirement, Why not have a legacy during our retirement that we can actually live to see it and not have to have it after the fact?

Between you and me, Chris, when, very sad, you go to these funerals and your heart goes out to the family for the passing of a loved one, you hear all these people give these incredible eulogies, and the thing that I'm thinking as I shed the tears from these beautiful words and I didn't even know the person, I'm thinking, did you tell that person when he or she was alive?

Do they know how you really feel? And so with a legacy, why not the same thing? Why not enjoy your legacy? While you're here, while you can see it. You can see the benefit of it. And in chapter 17, I love your plan words. Are you quote unquote, willing with W I L in quotes. So what should our listeners know about the legacy and about the will?

And it really is about estate planning and beyond. What's going on with that? Okay,

Christopher Panagiotu: interesting, I'm actually going to use you as an example with this, and not you like, specifically, but you as in your framework. [00:42:00] You mentioned early in the show how your last step in your framework is technically your first. In my book, the first chapter is what is your purpose, and a lot of people think that's very roo rah, but for me personally, because I don't really care what people think about it or what people think in general, but when it comes to figuring out your purpose, that is what is going to dictate all the quantifiable steps throughout your financial life.

Now I, I bring that up because as you go through that and you truly understand your personal mission statement, your personal value proposition, then you're building something so that by the time you get to that point where you exit, it's going to possibly be painful because you've grown your baby in a way.

But it's not going to be nearly as painful because you know your purpose is going to continue and it's bigger than your business. Now, when it comes to the, are you willing, which is again, it's a play on words with a will and trust in a state plan, [00:43:00] you know, you have this massive liquidity event

Jeffrey Feldberg: Huh,

Christopher Panagiotu: and a lot of people think, okay, what do I do with it?

Well, it kind of goes back to, the book, except you get everything done, you capitalize today, you start capitalizing for tomorrow, slash retirement, because you're already there, but then anything that is left over, above and beyond, that's where the legacy money comes into play. And I am not an attorney, because I am not boring, and I'm way more fun than that, but when it comes

Jeffrey Feldberg: no offense to all the attorneys who are listening.

Christopher Panagiotu: No offense to all the attorneys right, all of my buddies that are attorneys know that, right?

I'm like, dude, I would be fired so fast if I was an attorney. But when it comes to legally setting things up, again, the best investment you can guarantee other than yourself is the taxes you avoid. And so, liquidity event that's, let's say in the 10s. 20s and beyond.

Jeffrey Feldberg: sure,

Christopher Panagiotu: And let's say that one of your biggest [00:44:00] things is giving your heirs, whether it's your kids, grandkids, great grandkids a true legacy of worth.

Well, there's a ton of ways to skin that cat. Whether it's setting up an irrevocable life insurance trust, because what's going to happen, let's say you're worth 30 million, one of my larger clients, congratulations, anything above and beyond 11 million dollars, 40 percent of that goes to Uncle Sam, if you don't plan for that.

So by setting up something like an irrevocable life insurance trust, not a life insurance policy in a trust, you could buy a policy that would pay for the death benefit of your taxes when you die. So to put that in the numbers, you're worth 30, 11 million is tax free to your heirs, basically that remaining 19 million,

40 percent of that, let's just use easy math and call it half,

Jeffrey Feldberg: Sure.

Christopher Panagiotu: okay, like nine and [00:45:00] a half million dollars, It's going to the government, so if you bought a life insurance policy within that trust that is a death benefit of nine and a half million dollars, you just earned your heirs nine and a half million dollars more, and that's what's going to expand your legacy generations further.

and I didn't get into the other trusts that you can set up where, you've got generational skipping trusts, you've got annuity trusts that come into play, there's all this complexity, but due to the constriction of our time, as well as just complexity of the topic, that's an off air description, but Once you get everything set up for yourself and you know that you're good, anything left over, if you are not actively talking with an estate planning attorney, with your planner, that actually knows how to plan, you are doing your heirs and your legacy a tremendous disservice.

Jeffrey Feldberg: And again, such a [00:46:00] not so subtle but subtle reminder of why, hey, as entrepreneurs, as business owners, we don't have to be subject matter experts in every single area. We can't. Who are we fooling? We're really not. We're hurting ourselves, hurting our family, hurting our legacy. Whereas working with someone like yourself, Chris, you and the team, you'll ask these questions, you'll have the strategies, you'll make it easy for us and in the case that you gave or the example that you gave, I mean, my goodness, that check going to the government or that check going to the family or even having to A mechanism to pay for those taxes as opposed to putting that onus on the family.

I mean, that's a horrible legacy to leave. Talk about the pain and the pressure and what that could cause. So yet another reason why for all you business owners out there, members of the Deep Wealth community, if you haven't begun to plan, and you may be saying, Jeffrey, I'm a young person. I got decades ahead of me.

God bless you, and I hope you really do. No one knows what tomorrow brings. Now's the time to plan, when you don't really need to do the planning, it's the actual time to do the planning to get all that going. And [00:47:00] Chris, let me ask you this, and it may be an easy one for you, it may be a little bit of a harder one for you, because coming out of every episode, before we go into the wrap up mode, we like to have one Actionable item.

Even better yet, it's a low hanging fruit, low effort, high impact. We've talked about a lot today and for a listener who's coming out of this, wow, there's so many things here. Where do I start? Where do I begin? So for that listener, Chris, if you had to recommend one strategy, one action item before they go to the next meeting, pick up that next call, that next activity, they could do this one thing as soon as we finish this episode, what would that be?

Christopher Panagiotu: you do not have a true financial team around you, meaning a quality CPA, an actual financial planner, just because they have Certified Financial Planner, CFP after their name, that does not mean they know what they're doing, okay? I will tell you that right now. So if you have your team of a CPA, a quality Certified Financial Planner, not [00:48:00] advisor, a planner, a quality estate attorney, and your business attorney, If you don't have that, you need to fill that roster now.

That is the big action item.

Jeffrey Feldberg: Terrific, actionable advice, and you know what, I'm going to take another quote, Maxwell Maltz, absolutely love it, we embrace this in the Deep Wealth Mastery Program, when the team works, the dream works. And Chris, you're really taking it off the same page as we are, because our thesis is a Deep Wealth, and it's not a thesis, it's a fact.

When you prepare well in advance, when you bring on the right advisors at the right time, you're locking in. You may not realize it, but you're locking in your financial freedom. You're having peace of mind. You're having clarity. You're saving your money, your health, your time. So many good things come from that.

That said, all the theories, all the strategies mean nothing unless you take some action. So what a wonderful actionable takeaway for our listeners. Start to build your team and Chris, let me do this. We're going to start going into the wrap up mode. My [00:49:00] goodness, I can go down so many rabbit holes with you.

We could forget this episode. We can have a whole series of these questions that we have, but let's do this. It's a fun question. It's actually a ritual and tradition here in the Deep Wealth Podcast. I have the honor. It's really an honor and a privilege to ask every single guest. Let me set this up for you.

Think of the movie Back to the Future. In the movie, you have that magical DeLorean car that can take you to any point in time. So Chris, the fun part, it's tomorrow morning, you look outside your window, not only is the DeLorean car curbside, the door is open, it's waiting for you to hop on in, which you do, you're now gonna go to any point in your life.

Chris, as a young child, as a teenager, whatever point in time that would be, what are you telling your younger self in terms of Life lessons, or life wisdom, or hey, Chris, do this, but don't do that. What would that sound like?

Christopher Panagiotu: So I had a couple moments pop into my head, and the one professionally that I would say I would go to is I would go back to when I started my practice. [00:50:00] And when I started my practice, I would tell my younger self, enjoy every second. Because it's going to be stressful, and you're going to look back on this saying, you wish you'd enjoyed it.

You see, when I started my business, I didn't have the gift of financial independence that I do now. I didn't have, my book, and my course, and my show, and my boutique firm, and my amazing I didn't have anything.

Can tell you, looking back, some of those moments We're the most enjoyable moments of my life, and you don't get them back, and it sounds, again, it sounds so freaking cliche, however, at the end of the day it's the honest to God truth, and it's taken me all this time to look back and go, man, I should have enjoyed that but I'll tell you the gift of all that is when I wrote my second book coming out later this year, and when I wake up every [00:51:00] day, I actively remind myself to enjoy the process because I can't go back, but I can, improve myself going forward.

So, that's kind of a tangent on where the DeLorean car would take me, but that's the honest to God truth.

Jeffrey Feldberg: Such terrific advice, and Chris, I couldn't agree with you more. Enjoy the journey. Enjoy every second. And it's interesting, the most challenging, the most difficult moments, the moments where we're saying, I don't know if I can do this. Do I have it within me? Am I going to be able to make it? And when we look back, Those were the best times of my life.

That defined me. That got me ready for the next level of success. Yet, at the time, we felt horrible. How am I going to do this? Why is life throwing this to me? It doesn't seem, I'll use the F word, it doesn't seem fair. And then, fast forward all those years later. Yeah, I actually needed that. My success was ready, but I wasn't ready for my success.

That got me ready. So it's a terrific takeaway. Let me ask you this. For our listeners, they have some questions. They want to have a [00:52:00] chat with you. They want to start working with you. Where would be the best place online that someone can find you?

Christopher Panagiotu: Absolutely. So if you are a business owner that is looking to liquidate your business and have the big exit, I would say for sure within two years, but five to two years, if not sooner, head on over to capitalizeyourfinances. com. You can shoot us an email. That's also where you have the link to our podcast.

Website, CapitalizePodcast. com, where you can buy the books, the courses, and kind of learn about who I am before you, you take me for a true run. If you want to cut all of that and you say, Chris, I am ready to capitalize on my finances, shoot me an email, Chris at CapitalizeYourFinances. com. Let me know where you came from, because I always like to give credit where credit's due with Jeff and all of the shows I've been on.

 and then we set up a call. And, you know, the only thing I tell people is, you can always tell me anything, you can be happy, sad, mad, whatever, but you always gotta treat my people with respect. And so, [00:53:00] when you call our office or shoot me an email, you get in touch with my assistant, Betty, who is my professional guardian angel, and anytime you mess with Betty, you're done with me.

So, that's my only ask, but if you are interested in the brand side of things, you can go on to Instagram, CapnCapitalize, X, cap and capitalize, or you can hit me up on LinkedIn, Christopher Paniottu, and it is Paniottu. So that's where you can find me.

Jeffrey Feldberg: Terrific. And again, for our listeners, everything's in the show notes, including, Chris, a link to your wonderful book, Capitalize Your Finances, the how to financial framework that takes you from compoundedly clueless, sounds like me, to monetarily magnificent. I absolutely love that. Well, Chris, this is official.

It's now a wrap. Congratulations. And as we absolutely love to say here at Deep Wealth, may you continue to thrive and prosper while you remain healthy and safe. Thank you so much.

Christopher Panagiotu: Thank you.

Jeffrey Feldberg: So there you have it, Deep Wealth Nation. What did you think? So with all that said and as we wrap it up, I have another [00:54:00] question for you.

Actually, it's more of a personal favor. Did you find this episode helpful? Have you found other episodes of the Deep Wealth Podcast empowering and a game changer for your journey? And if you said yes, and I really hope you did, I have a small but really meaningful way that you can actually help us out and keep these episodes coming to you.

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So all that said. Thank you so much for listening. And remember your wealth isn't just about the money in the bank. It's about the depth of your journey and the impact that you're creating. So let's continue this journey together. And from the bottom of my heart, thank you so much for listening to this episode.

And as we love to say here at Deep Wealth, may you continue to thrive and prosper while you remain healthy and safe. Thank [00:56:00] you so much. God bless.