Episode 109: Understanding Business Value with Chris Volk

Announcer:
This is The WealthAbility® Show with Tom Wheelwright. Way more money, way less taxes.

Tom Wheelwright:

Welcome to The WealthAbility Show, where we're always discovering how to make way more money and pay way less taxes. Hi. This is Tom Wheelwright, your host, founder, and CEO of WealthAbility. So most of us listening here and participating are business owners, and our biggest single asset is our business. So, two questions come up. First of all, what's my business going to be worth when I retire, and how do I make it worth more? Or second, how do I access the capital markets, and what are the capital markets looking for in my business, if they want to invest in the business? We've had a lot of investment in small businesses in the last couple of years. I've seen it with my clients, and a lot of this is going on. The valuations are much higher because, of course, cap rates are lower. Interest rates are lower, so that pushes up valuations. But we have an expert on this. We have Chris Volk, whose book is The Value Equation. He's an expert in valuing businesses and accessing capital markets, has experience launching public companies. So Chris, welcome to our show. Really appreciate it.

Chris Volk:

Tom, I'm delighted to be here, and thanks for agreeing to talk with me. It's perfect.

Tom Wheelwright:

No, absolutely. So Chris, if you would, just give us a little bit of your background, and what you've done in the capital markets, and how you came up with this whole idea of coming up with a value equation and analyzing a business this way.

Chris Volk:

Sure. My background is, I came out of commercial banking years ago, and one of my customers was based out in Arizona. I was in Atlanta at the time. So I moved out to Arizona not knowing a soul, and been here ever since, and I know you reside in the same state. And the company I went to work for was the company that owned chain restaurant properties, just the real estate, and rented it to the tenants that were there. If you're a restaurant operator or if you're a real-estate-intensive company, you have a choice of whether you own or rent the real estate. Basically, I've had spent a lot of my life convincing people they're better off having a landlord than a banker.

                We ultimately took that company public on the New York Stock Exchange in 1994, sold it later on to GE. But then the founder of that company and I started another company, and we took that public on the New York Stock Exchange, and sold that one. And then finally, in 2011 I started another company with a group of folks, and we took that public on the Exchange in '14. I was the founding CEO of that company for 10 years, and I stepped down at the end of last year to be able to do things like this. But that company today has an equity cap that's somewhere in the neighborhood of $9 billion, and it's one of the larger so-called net lease real estate investment trusts on the New York Stock Exchange. So I've had a lot of experience raising both private and public equity, private and public debt.

Tom Wheelwright:

Awesome. So, thank you. Oh, this is, this is great. So let's start with the real basics. So if you would, kind of walk through your value equation. Just because I want business owners to understand how important cash is, and how important cash is to the value. So if you just kind of walk through that, because I know you're a big it's cashflow, it's cashflow, it's cashflow basic. How do you value a business?

Chris Volk:

Right. So the book is The Value Equation, and the value equation does exist. It's a six-variable equation. So I started off life as a credit geek, and modeled a lot of companies. I know you've looked at a lot of companies' financial statements, and some companies are just flat better than other companies. I mean, it is what it is. I mean, you have different business models, and some are just better than other companies. So as I was looking at this, I started creating very large, complex models, and then I started distilling them down to simpler and simpler models. And then ultimately the idea was to throw away the spreadsheet altogether and create just sort of a six-variable financial model that is universal. It's a relative thing. The numbers almost don't matter. And if you do that, and it's all based upon, as you said, cashflow. So it's getting through sort of the distractions of accounting and focusing on finance, which finance is sort of like music. It's a universal language. Accounting is not a universal language.

                So you want to get down to the music and really understand it, and it all starts with your current equity return. Your current return on equity. And then if you reinvest that, you can get compounding of return, which increases your growth. So, you have a core business. You have a current return on it. You can reinvest that. You can generate higher levels of growth. And the idea of a business value is, how much would somebody pay for that current return given the risks and growth prospects that your company has? It's pretty much that simple, and valuing a business is equally simple. You're just starting off with OPM, which is other people's money that's used to fund the business. And I'm talking about equity here. I'm talking about borrowings and lease proceeds from companies like the ones I used to run. You're taking OPM and you're saying, “I want to maximize OPM.” And then you plug for equity. I mean, equity is sort of the plug, and you add the two numbers together, and you get business value.

                So, it's not that complicated. And the idea is, if you're trying to create wealth … I mean, and I'm talking about creating wealth. Not just assembling wealth, but creating it. The idea is to make a company worth more than it cost to build, and most businesses in America actually don't rise to that level. Most companies in America don't end up being worth more than they cost to build. When you factor in how much you're reinvesting in the business every year and whatnot, most companies just don't rise to that level. But if you're trying to raise money from institutional investors or sell out to private equity firms, it really helps to have a company that could be worth more than it cost to build. And if you look at the richest people on the Forbes 400 list, that's what happened to them. They all created wealth. I mean, the wealth almost just created from thin air and rained down on them. And in their cases, they became worth a lot of money.

Tom Wheelwright:

For sure. So, let's distill this down even more if we can. So let's go as basic as we can, Chris, and I'll give you my theory. And then you can poke holes in it, or you can tell me, “Okay, what do we need to add to this?” So to me, all investing is very similar. Doesn't matter if it's real estate, stock market, business. Doesn't matter, because it's all some kind of a multiple of cashflow. So if I don't have any other people's money, so let's say all we have is our own equity. Okay? That's it. That's the simplest kind of business. You only have your own equity. You boot-strapped and you put all your own money in. It's your money in there. So if you take your cashflow, how do you come up with what that multiple is to come up with what the value is of your company? In other words, what factors are people looking at to determine is that a multiple of 3, 5, 10, 12, 25, like the stock market? What is it?

Chris Volk:

All right. So you start off with what's called operating profit margin, which is a cashflow profit margin. So it's basically an EBITDAR number, or an EBITDA number, as a percentage of revenues. If you're public companies, you got even more non-cash stuff, like-

Tom Wheelwright:

I'm going to stop you right there, because I want to make sure everybody understands everything you're saying, Chris.

Chris Volk:

Sure.

Tom Wheelwright:

So EBIDA, for any of you who are not familiar with that term, is earnings before interest-

Chris Volk:

Taxes, depreciation, [crosstalk 00:07:47].

Tom Wheelwright:

… taxes, depreciation, and amortization. Right?

Chris Volk:

Amortization. Right.

Tom Wheelwright:

It's the operational income, basically.

Chris Volk:

Correct. It's the cashflow for the business. But against that cashflow from the business, you have to subtract … Now, in this case, you're just funding with all equities. So you have no debt, and presumably you have no OPM. It's all equity. Against that cashflow, you have to subtract what I would call maintenance CapEx. Maintenance CapEx is that number where you have to reinvest capital into the business every year. Let's say you're a consumer-facing business, and you have people will coming into your shop, hypothetically. I mean, you have to sort of make that shop look pretty and reinvest in whatever it is that the equipment is. It has wear and tear. You reinvest in that. Every five years, you may do a remodel. I mean, something like that. So, it's not just a one-time thing. So you're trying to average out what the maintenance CapEx is, which-

Tom Wheelwright:

Which actually, so ironically enough, is the whole point of depreciation. We just don't use it that way anymore, but that's the whole point of depreciation.

Chris Volk:

No. I want to back out depreciation, because it's an accounting guess. Right?

Tom Wheelwright:

Right.

Chris Volk:

So for example, if you were looking at the public companies that I ran, so you look at STORE Capital, listed on the New York Stock Exchange, it throws off a flat ton of depreciation. I mean, but nobody who's analyzing that company cares about the depreciation, because they know it's not real. And in fact, this is what happens with real estate. So you're depreciating an asset that doesn't depreciate, because when we sell the asset, it sells for basically what we paid for it or more.

                With many companies, depreciation is absolutely totally real. And sometimes accountants underestimate and sometimes they overestimate depreciation, and depreciation is an accounting convention. It's not a finance convention. So what you're trying to do with your business value is, forget about the accounting and focus on the pure finance. Focus on, “What do I have to invest in this business every year?” One of the things I always just get wound up about when it comes to accounting conventions is, you can't really make an asset worth less money. I mean, if you're an entrepreneur and you spend $1 million of your own money, you know you spent $1 million. If some accountant says, “It's now depreciated to 900,000,” it doesn't matter to you. You still have the $1 million invested, right?

Tom Wheelwright:

Right.

Chris Volk:

You can't make $1 million magically worth 900,000. It just doesn't work this way. So what you're doing is, you're taking your equity in the business, and then every year you're putting more money back into the business to kind of keep it up. That's the maintenance CapEx. Anyway, so when you have that free cashflow after that, there's an amount of cashflow. And that's the cashflow from your business, and that cashflow has certain characteristics. Your business has a certain amount of risk. When people are looking at that business they're saying, “Gee, it's got this risk. I'm nervous about it.”For example, if you have one location in your business, one location is risky. If you have 50 locations, less risky. So, you have a certain amount of risk in your business.

                The second thing is, you have certain growth characteristics. Is your sales going to grow 5% a year, 3% a year? And when you take that free cashflow and you put it into the business again, you can compound that growth. And here's a really important point, Tom, which is that when you're calculating the operating profit margin of the business, it's after your salary. A lot of business owners forget this. They think that somehow the return on equity is their salary. No. That's the investor. I mean, if you weren't there, you'd have to hire somebody else to do this.

Tom Wheelwright:

Yeah. Let me give you an example. So I know somebody who has a contracting business, and they make a net of $60,000 a year, but they do all the contracting work. And I'm going, “So, how much would it cost you to replace yourself? How much would you have to pay somebody?” “Well, $60,000 a year.” I'm going, “So, your business is worth zero.” Exactly. He thinks his business was worth like half-a-million dollars. I'm going, “Why I would anybody pay you for a business when you're really just getting a job?”

Chris Volk:

That's a very common thing, and a lot of times companies that are formed in America, we're a country of small businesses. A lot of those companies are vehicles for people to create jobs, and there's nothing wrong with that. I mean, you could be making $60,000 a year, and you're investing some money, and you're doing all the things that you tell your people to do in terms of trying to have less debt, make your money work for you. You're doing all those right things, so you can actually accumulate wealth doing that. But the people in the United States and around the world, historically, who've made the most money have created businesses that are worth more than they cost to create. And that's hard.

Tom Wheelwright:

Okay. Let me get this, Chris. So far we've got our free cashflow, and we're assessing risk, and we're assessing growth. What else do we need to assess here?

Chris Volk:

Well, then the next thing you need to know is, what would another investor require? What kind of current return would another investor require? So if, for example, you're making 20% on your money. Which, by the way is not unusual. I mean, a lot of people are making far higher than that. But let's say you're making 20% on your money, and a like-minded investor wanting to buy a business with similar growth prospects and risks is willing to make 10%. So now, 20 divided by 10 becomes your equity valuation multiplier. So you take your equity, and now your multiplier's two. So you take the amount of equity you have in cost times two, and that's what your equity's worth. It's not what your company's worth, because you have to add the debt if there's OPM. But in our case you're talking about just equity, so now you've doubled your money.

Tom Wheelwright:

In real estate that would be our cap rate, right?

Chris Volk:

Yeah. Exactly. Right. And to your point, all businesses are very much the same. So in real estate, it's a function of … I mean, the business model is exactly the same. I mean, you're doing the six variables. It's all the same, and you're backing into the returns other people are going to want to have. So if somebody's willing to have, in this case, a lower cap rate, and you've created the property. Maybe you built a multifamily apartment complex, and you've created it from scratch, and your cap rate or the money you're earning on your investment works out to being 10%, but you can sell for a cap rate of 6. Or let's say 5 again. And then you've got-

Tom Wheelwright:

Doubled.

Chris Volk:

You've doubled it. So, you've doubled your money. Right?

Tom Wheelwright:

Exactly.

Chris Volk:

If you're funded with 100% equity. If you're funded with OPM, you've done better than that. Right?

Tom Wheelwright:

Right. Okay. So, we've got the return expectation. What else do we have to factor in?

Chris Volk:

I think that's it. I mean, you've got what you're making. I mean, it's just not that [crosstalk 00:14:21].

Tom Wheelwright:

Not that hard. It's not that hard. Okay. So, let me ask you a question. You're going in and you're analyzing a business. You've built several businesses. You've analyzed probably thousands of businesses. Besides this formula, what are you looking at? For example, not all cashflow is created equal. So, for example, take somebody who sells cars. How important is it to be having recurring revenue from the same customers versus revenue from new customers? As an example. We know it's easier to make money on existing customers and it's harder to acquire new customers, but how important is that when you're looking at analyzing or evaluating the business?

Chris Volk:

Well, the ability to recur revenues is just always important. It takes away the risk.

Tom Wheelwright:

Got it.

Chris Volk:

If you have to make a new sale every year … I was looking at a company for somebody recently, and they had a service component where they actually got servicing fees from existing customers for maintaining equipment that they had sold, and then they had revenues coming in from new equipment that they were selling to new customers every year. And the mix was much higher on the new sales of assets, or new sales of equipment to new customers every year, than the ongoing servicing revenues. And that's a much riskier mix, because you have to basically start a start from scratch. You wake up on January 1st in the year, and you've got a blank slate, and you got to do it all over again. So the less you have to do all over again, the better you are.

Tom Wheelwright:

If we look at the risk factor, because that's one of the big ones here. Right? So the less risky the asset, the lower the cap rate, basically.

Chris Volk:

Right.

Tom Wheelwright:

So what types of things, from a market standpoint, what kinds of things is the market looking at that they'd like to see in a less-risky, company other than recurring revenues?

Chris Volk:

Yeah. They're looking for companies that basically have a moat. They have a defense. They have a defensive position, where it's hard for them to lose revenue or hard for them to … They can defend their prices. They can not have a margin erosion. They can keep the customers they have. People are looking for, what is that competitive advantage a company has to be able to do what it is that they do over and over again? Companies are all about addressing a problem. I mean, if you're creating a company, you're solving somebody's problem. I mean, you're providing a service, in some way, is solving a problem. If you're solving a problem, and that problem is a very large problem, and it's universal, maybe it's global, then you have the ability to expand your company in a very large way.

                Most companies are not like that. They're defining more localized problems. But if you're looking at the Forbes 400, the people who started those companies, these are companies that were scalable. They were solving very large problems. They were kind of global that the companies defined. Most of us are not in that ballpark. So, we're at different places. So if you're making an investment in the company, you're looking at, what can you do to expand this company? How can it grow? Especially, when people are buying companies, you can rarely buy a company at a good price doing just what the seller did. I mean, oftentimes the prices that sellers get, and you and I were talking about this before the show, sellers sometimes don't think they're getting enough. But really, from a return perspective, sometimes the sellers are getting return that's so high when they sell their business, that the people buying it aren't going to be satisfied with the return on the money.

                So, they're going to have to take the seller's business and actually find ways to make it better. And the way you look at it in the value equation is, there's six variables to doing a business, and they're divided between operating efficiency variables, asset efficiency variables, and capital efficiency variables. So you've got three types of variables, and pretty much two variables apiece. Six variables total. So people are going to be pushing on those levers to see what they can do to make the business a better business, generating higher returns on equity, and the higher returns on equity create the higher value. That's what people are going to do.

Tom Wheelwright:

Hey, if you like financial education the way I do, you're going to love Buck Joffrey's podcast. Buck's a friend of mine. He's a client of mine. He's a former board-certified surgeon, and he's turned into a real estate professional. So, he has this podcast that is geared towards high-paid professionals. That's who he's geared towards. So if you're a high-paid professional and you're going, “Look, I'd like to do something different with my money than what I'm doing. I'd like to get financially educated. I'd like to take control of my money, and my life, and my taxes,” I would love to recommend Buck Joffrey's podcast, which is called Wealth Formula Podcast with Buck Joffrey. I hope you join Buck on this adventure of a lifetime.

                So I've seen interviews with you where you've talked about the difference between just bootstrapping the company versus going out to the capital markets and accessing capital, and you've done some very serious accessing of capital. You talked about a business where you went out and raised $500 million right off the bat. So, what is it that the business owner … First of all, when does a business owner go out to the capital markets? And second of all, what is it that they need to be able to show in order to access that capital?

Chris Volk:

All right. So again, you're solving big problems, small problems. You're dealing with, how much capital does your business need? So, I've been engaged in the real estate finance business. Real estate is expensive. I mean, you know how expensive it is. I mean, just one apartment complex or one chicken store can cost some money. So, I mean, you're looking at a Burger King or a Taco Bell, it can cost $3 million. So if you're trying to be the landlord to those kinds of companies, you need an awful lot of money. So I couldn't bootstrap it in that sense, because I didn't have the kind of money it takes to really do this. So, what I chose to do was to go to institutional investors and to raise the money. And as you probably know, with the businesses you deal with, there's the art of raising large amounts of money, and I've been involved in raising large amounts of money, and then there's the art of raising small amounts of money.

                And in our world today, almost raising large amounts of money is actually not that difficult. There are a lot of people that have lots and lots of money today. What's more difficult is assembling a good leadership team that's going to do the business, a good vision for how you're going to do it, and a business model that's going to generate returns higher than the expectations of like-minded investors so you can create companies worth more than they cost. Because no investor's going to invest the money unless they think they can make a return that's more than what the company costs to put together.

Tom Wheelwright:

Yeah. I hope everybody replays that piece right there, because I think that's a little piece of magic, Chris, is that an investor is looking for returns higher than the cost. I mean, it's no different than … I mean, if you go to a bank, if you're borrowing money for real estate, you don't want to borrow money at a higher cost than you want to make. I mean, if your cap rate is lower than your interest rate, you're in trouble. Rule number one.

Chris Volk:

And one of the things that people misunderstand, is that an investor … Okay. So if you look at the S&P 500, for its whole lifespan the return's been in the neighborhood of 9 or 10% a year. Obviously, there's a lot of volatility to that, but it's been 9 or 10% a year. So that basically might suggest that your average businessperson is happy making 9 or 10% a year. Right? So that means, if you have a company and it's generating a 9 or 10% rate of return on equity a year … Or let's say a total rate of return. It's a little bit different, but a total rate of return of 9 or 10%, that company won't be worth more than it cost to create because you're hitting what that investor wanted. I mean, nice company. It's generating 9 to 10% a year. Can you make money on that? Sure. Do you invest money? Can you become rich doing that? You become rich doing that. What investors would like to see is a company that's making 20%, because they'd like to be able to not only make that 10%, but they'd like to be able to have the gain on top of that by flipping the company and doubling their investment on top of that 10%. They're looking for a much bigger pop. Maybe its a 15%. So, this is-

Tom Wheelwright:

They want to buy at a 20% cap rate and sell at a 10% cap rate. That's what we all want.

Chris Volk:

Exactly. So, they're not interested in just making a nice return from a passive investment. I mean, when we're all sitting at our desks and we're buying stocks, I mean, these stocks are supposed to pay you a return. I mean, this is what you're doing. I mean, it's part of the corporate cost of capital. But the people that are on the Forbes 400 didn't make that. What they did was, they actually almost created wealth from thin air. This is something only businesses can do. So, there are a number of books. I mean, and I read a lot of your books and stuff, and I love them. And books talk about how people get rich, but the richest people in the world made their money in business.

Tom Wheelwright:

Always. Always.

Chris Volk:

Always, and they made their money by making those businesses worth more than they cost to create. There's no book that I know of written about business that says, “How do businesses create wealth?” So, I decided I was going to write that book. So the book is on, how do businesses create wealth? That's the idea, is basically how do the richest people get there? And that's what you get.

Tom Wheelwright:

I love it. What I love, what you're doing, Chris, is simplifying it. Because business owners, we're so involved in our mission, and we're so involved in our people, and we're so involved in the day-to-day that it's very hard to step back. And it's very hard to just go in and analyze, “Okay, so how do I maximize my business value? How do I get to where I want to go?” As we were talking before we started recording, and you were saying, “Well, look, here's one of the problems. A business owner sells. They're getting 20% on their money. They sell, then they go reinvest it, and they're getting 5% on their money, and they're not living the same. And they're going, “What's going on here?” Well, you're not getting the same return on your investment as you did in your business. Right?

Chris Volk:

No, and I have a very good friend who just sold his construction business, another friend that sold an IT business. Both of them did fabulously well. You would've been proud of both of them, because they both managed to keep their tax bills to a minimum over the years. But then all of a sudden when they sell, they're paying that huge tax check. So, there comes a time where sometimes you just can't avoid taxes. So they're paying a bigger tax check, and then they're having to reinvest those net after-tax proceeds into something that's going to give them a retirement return, and there's no way they can make a return that's equal or even close to what they were making when they ran the business. That's just a reality, and it means that when you're selling a business, it's a very personal decision for people and they're doing it because they don't have successors. They're doing it for lifestyle reasons, for personal goals. So I appreciate all those decisions, but I also appreciate why people never sell too. It's a challenge when you sell to be able to reinvest the money.

Tom Wheelwright:

Yeah. I mean, I look at our business and I'm going, “Yeah, there's no way I'm ever going to make the kind of returns in somebody else's businesses than I' make in my business. And there's no way I'm going to make them with as low a risk.” Because when you're in control of your business, you actually have a much lower risk.

Chris Volk:

You understand the business intimately. You know exactly what you're doing every single day. I mean, most of us are not acclimated to buying stocks and bonds, and investing in things that are going to generate rates of return. And I think there's a certain amount of risk to all of that stuff. I mean, you look at the S&P 500, and the top 20 stocks or something are a very huge portion of the index. So you're really not as diversified as you think, and the dividend yields on the S&P 500 are less than two. So from return perspective, it's just very hard. It's a challenge.

Tom Wheelwright:

Yeah. I mean, and the reality is, I mean, I look at my business, and somebody else looks at me and they go, “How do you live with that much risk every day?” I'm going, “What do you mean? I'm not in the stock market.” I mean, that's risk every day, just being something where I don't control that amount of risk. I don't control what I happens. I don't control the sales. I don't control what goes on in the company, and now all of the sudden you've given up all that control. You really do. I think you've increased your risk significantly, because you don't have control over it.

Chris Volk:

Well, I mean, for me, I've run three public companies. And I never sold a share of stock, ever, when I was running the companies, because I understood them. And they've always been disproportionate shares of my net worth, and I didn't care.

Tom Wheelwright:

Yep. There you go. The book is The Value Equation. Chris Volk. So Chris, if you could, just sum it up. Maybe the top three lessons for business owners in valuing their business.

Chris Volk:

Gosh, there's so many of them. The book is full of a lot of stories, and I would say as you're building companies, you're focusing on trying to manage risk. You're trying to sleep well at night, and no business ever went out of business cause they lost money. They always go out of business because they run out of cash, and that's a different issue. So if you're going to set up a business and you're trying to minimize the risk, you're trying to minimize the chance that you're going to run out of cash.

                The second thing is just the importance of compounding. I mean, if you can refrain from taking dividends. So for example, most of the greatest businesses and the richest people in the world … You take a look at Berkshire Hathaway. It doesn't pay a dividend. I mean, Warren Buffett's a big believer in compounding that interest by reinvesting that cashflow at the same kind of return. So if your company is generating a 20% return on equity, and you could reinvest it and make 20% on that, I mean, it's just an incredible thing. And you look at what Berkshire's done over the years return-wise relative to other companies, it's huge. So, your return on equity is the same thing as what's called a sustainable growth rate. So if your return on equity is, call it, let's say it's 50%. That means that you can grow your business 50% if you reinvest the money every year. Right?

Tom Wheelwright:

Right.

Chris Volk:

You can grow your income 50% if you reinvest the money every year. That's a heck of a compounding number, and that adds to growth, and that's how the people in the Forbes 400 got there. So, they're managing risk. And then the last thing is to focus on the capital stack too, because the capital stack is … And that's being OPM and equity. The mix of the capital stack doesn't fall off a tree. It takes work, and a lot of people need to focus on it, and they don't need to just … The idea is not to minimize the cost of OPM always. A lot of times it's to have the greatest flexibility in your business, again, so you can sleep well at night. I mean, the whole thing is to put it together, and over the years we've taken down equity and debt at prices that people would've shuddered at. But we knew we could put the money together well and make returns on that. One of my former mentors, who used to be chairman of our first company, would say, “Availability capital is everything.” And it is, so don't ever discount that.

Tom Wheelwright:

I love it. I love it. Thank you, Chris. So where would our listeners find more information about you, other than buying your book, The Value Equation? Where else can we get more information from you, Chris?

Chris Volk:

Okay. So, I will have a website up. So it's under construction, and it'll be thevalueequation.com. And today, if they're looking to pre-order the book, it's on Amazon. So it's The Value Equation, and they can look me up, and I'll be there. And I'll be posting to a blog on the website, and I'll be writing articles, and I'm always thrilled to talk to guys like you and your audience.

Tom Wheelwright:

Awesome. Thank you. It's Chris Volk. The book is The Value Equation. Highly recommend this, because for most of us, our business is our most valuable asset. It is our nest egg, and it is our highest rate of return that we're ever going to get. And there's ways to maximize that, and it's not that difficult. And when you do that, one thing I will say is, you don't always have to pay tax on the exit. That's what we're good at. And when you get this information, when you really understand it, you're always going to make way more money and pay way less tax. We'll see you all next time.

Announcer:

You've been listening to the WealthAbility Show with Tom Wheelwright. Way more money, way less taxes. To learn more, go to wealthability.com.