The Alternative Investor

In this episode, Brad Johnson explains how the financial advice industry actually works behind the scenes. He breaks down how most advisors are paid, where conflicts of interest can appear, and why many portfolios still rely on outdated strategies like the traditional 60/40 stock and bond allocation. Brad also shares how Evergreen Capital approaches investing differently, with a focus on income-producing assets, private markets, and fee structures designed to better align incentives with clients.

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Evergreen Capital
[email protected]
Connect with Brad Johnson
https://www.linkedin.com/in/bradleyjohnson/

Key topics:
• Why most financial advisors rely on the traditional 60/40 stock and bond portfolio
• The biggest problem with the standard assets under management (AUM) fee model
• How uncapped advisory fees can grow dramatically over time
• Where hidden fees and commissions still exist in the financial advice industry
• The difference between fiduciary advisors and broker-dealers
• Why many advisors avoid private market investments and alternatives
• How incentives shape the advice clients receive
• The risks of relying on the 4% withdrawal rule in retirement
• Why income-producing portfolios may be a better fit for many entrepreneurs and business owners
• How AI is beginning to disrupt the traditional financial planning model
Timestamps:
00:10 - How do you differentiate between financial advisors?
01:08 - What’s wrong with the financial advisor business model today?
02:40 - How is your company different from other financial advisors?
03:37 - How do financial advisors get paid? Which payment models do you like and which do you find problematic?
06:11 - Where are financial advisors hiding fees in their contracts?
07:04 - How can clients go about identifying fees their current advisor is hiding?
07:58 - Fiduciaries are typically safer, but is knowing they’re a fiduciary enough?
08:49 - In your opinion, many advisors operate in outdated ways. How so?
11:32 - What is the root of the problem? Why do advisors use outdated strategies?
14:01 - What other conflicts of interest do you see in the most common advisor models?
15:40 - How can clients differentiate between recommendations that are strategy based versus incentive based (favor the advisor)?
17:19 - What questions should clients ask their current financial advisors in their next meeting after having watched this interview?
19:55 - How does your investment philosophy effect the strategies you employ for your clients?
20:58 - What are the most common poor fitting recommendations you see wealthy families pushed into? Why do those pitches work?
23:02 - When should wealthy families consider switching from their traditional advisor, to one with a more customized approach?
24:01 - Do you believe traditional financial advisors are an enemy to wealth generation?
30:08 - What patterns should clients learn to identify in financial advice, that will help them safeguard their wealth?
32:20 - Closing thoughts
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In this episode, Brad Johnson breaks down the recent news of Bill Ackman selling 10% of his hedge fund, Pershing Square, highlighting the strategic reasons behind this move and its implications for GP stakes investing. Discover the key differences between investing in hedge funds and private equity firms and what this means for investors.

GP Stakes Research:
https://www.evergreencap.com/gp-stakes-investing

Evergreen Capital:
[email protected]

Connect with Brad Johnson
https://www.linkedin.com/in/bradleyjohnson/

Key topics - 5-10 bullets:Why Bill Ackman sold 10% of Pershing Square for about $1 billion, valuing the fund at $10 billion
Ackman's growth plans with a potential $25 billion fund aimed at retail investors
The significance of valuation multiples: private equity vs hedge funds
The importance of a fund's longevity, team stability, and strategy diversity in private equity
Risks associated with minority stakes in hedge funds due to key man risk and firm dependence
Comparison of private equity and hedge fund structures for minority investments
How Ackman's move exemplifies strategic growth and capital deployment in alternative investments
Why private equity firms tend to be more stable and less vulnerable than hedge funds
What this case reveals about the evolving GP stakes market and investor considerations
Brad’s perspective on Ackman’s future success with this strategic sale

Timestamps:
00:00 - Bill Ackman’s $1 billion stake sale explained
00:23 - Why hedge fund minority stakes can signal growth, not decline
00:44 - Ackman’s ambitious plans with new funds and growth strategy
01:03 - Valuation implications: what a 10% stake says about Pershing Square
01:56 - How private equity valuations compare with hedge fund multiples
02:21 - The significance of fund longevity and team stability in private equity
02:46 - Risks of investing in hedge fund minority interests
03:23 - Differences between hedge fund and private equity structures
03:46 - The stability and resilience of private equity firms
04:05 - The vulnerabilities of hedge funds in minority stakes
04:57 - Why private equity is a more reliable investment space
06:27 - Final thoughts: Ackman’s future and what this means for GP stakes investing

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In This Episode, You’ll Learn:
The Wake-Up Call: Why a surgeon’s salary wasn't enough to solve financial burnout.
The Hybrid Approach: How to balance index funds with high-yield real estate.
The First Deal: A breakdown of Jordan’s first duplex and his 10% cash-on-cash target.
Tax Alpha: How his wife’s "Real Estate Professional Status" (REPS) supercharged their wealth.
Scaling Secrets: Moving from one property to a portfolio that produces $11k/month in cash flow.
Avoid the "Doctor Trap": The 3 biggest mistakes physicians make when investing in alternatives.

Resources Mentioned:
The Prudent Plastic Surgeon: prudentplasticsurgeon.com
Strategy Call with Evergreen: Book Here
The Alternative Investor Newsletter: Join Here
Email Jordan: [email protected]

Connect with Brad Johnson:
Website: evergreencapital.com

Chapters:
00:00 – Why financial freedom matters for doctors
03:09 – Index funds vs. Real Estate: The hybrid strategy
04:10 – Breaking down the first duplex deal
06:51 – Systems, automation, and team building
10:26 – Replacing clinical income with passive cash flow
23:25 – Common mistakes doctors make in alternative assets
30:49 – The emotional impact of recurring investment income
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To speak with our team: [email protected]

This episode challenges the common belief that family offices are only for billionaires, explaining how wealth management should evolve as income and complexity increase. It emphasizes the importance of treating personal finances like an operating system, focusing on after-tax cash flow, and integrating alternative investments for better tax efficiency and cash flow management. The discussion highlights the limitations of traditional financial advice and the benefits of a family office approach, which includes private equity, real estate, and private credit to solve problems that public markets and retirement accounts do not address effectively.

Keywords
family offices, wealth management, alternative investments, tax efficiency, cash flow, private equity, real estate, financial advice, operating system, personal balance sheet

Takeaways
Family offices aren't just for billionaires.
Traditional advice often stops working as wealth grows.
Focus on after-tax cash flow, not just retirement accounts.
Integrate private investments for better tax efficiency.
Treat personal finances like an operating system.
Ask how capital should be deployed for maximum returns.
Consider alternative investments for predictable income.
Avoid unnecessary ordinary income tax.
Coordinate investments, taxes, and liquidity.
Build a system, not just a portfolio.
Title Options
Rethinking Wealth: Beyond Billionaire Family Offices
Transforming Personal Finance into an Operating System
The Hidden Costs of Traditional Financial Advice
Unlocking the Power of Alternative Investments
Family Office Strategies for Everyday Investors
Maximizing Returns with Tax Efficiency
Beyond ETFs: A New Approach to Wealth
The Family Office Mindset: Not Just for the Ultra-Rich
Building Wealth with Private Investments
From Retail Advice to Family Office Thinking

Sound bites
Family offices aren't just for billionaires. Traditional advice stops working as wealth grows. Focus on after-tax cash flow. Integrate private investments for efficiency. Treat finances like an operating system. Maximize returns with strategic capital deployment. Predictable income through alternative investments. Avoid unnecessary ordinary income tax. Coordinate investments, taxes, and liquidity. Build a system, not just a portfolio.
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Apply for a Strategy Call with Evergreen: https://bit.ly/4pqK1Kk

The discussion delves into how the ultra-wealthy leverage real estate investments to generate significant paper losses, which in turn compound their wealth and reduce taxes. The conversation highlights the impact of the new tax bill, allowing accelerated depreciation, and emphasizes the strategic importance of choosing the right property types to maximize tax advantages. The long-term strategy of using real estate as a major asset class for tax benefits is explored, showcasing how the tax code rewards ownership of productive assets.

Keywords
real estate, tax strategy, ultra-wealthy, depreciation, tax bill, property investment, paper losses, wealth compounding, tax advantages, productive assets

Takeaways
The ultra wealthy buy real estate for the tax losses.
Large paper losses compound wealth and reduce taxes.
The new tax bill allows accelerated depreciation.
Federal and state taxes can be significantly reduced.
Depreciation is a key concern for the wealthy.
Think of depreciation as a consistent tax strategy.
Real estate is a long-term strategy for the wealthy.
Choosing the right property types is crucial.
Real estate is the only major asset class for tax benefits.
The tax code rewards owning productive assets.

Sound bites
The ultra wealthy buy real estate for tax losses.
Large paper losses compound wealth.
Accelerate everything 15 years or less.
A $500,000 paper loss can translate.
Depreciation is a consistent tax strategy.
The wealthy use real estate for tax benefits.
Maximize tax advantages with the right property.
Real estate shows a loss, reduces taxes.
The tax code rewards owning productive assets.
Real estate is the only major asset class.

Chapters
00:00:08 Introduction to Real Estate and Taxes
00:01:09 Impact of the New Tax Bill
00:03:22 Federal and State Tax Reduction
00:04:23 Depreciation as a Strategy
00:05:40 Long-Term Real Estate Strategy
00:07:06 Choosing the Right Property Types
00:08:31 Real Estate as a Major Asset Class
00:08:48 Tax Code and Productive Assets

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