How to Build Real Wealth From Nothing (The System a $600M Manager Actually Uses)

0:00Wes Rowlands:Most founders are obsessed with making money. Very few know how to keep it. And almost nobody knows how to grow it into something that outlasts them. Today's guest went from watching his mother raise him on$9 an hour to managing nearly$600 million in assets. His name is Wes Rowlands. And what he is going to share with you today is not a get rich quick story. It is a blueprint for understanding the three phases every dollar has to pass through before it becomes real money. wealth. Let's unlock it.

0:40Today, we got Wes Rollins with us. Wes, I just want to say, welcome to the show. I'm excited to get into this. I know for the viewers that are listening, we're talking about wealth management today and the portfolio you created from being, I think it was from the bottom to the top. So I'm excited to get into your story and actually even get into maybe where the markets are today and what people can do. So, Wes, welcome. Hey, thank you, brother. It's an honor to be here, man. Yeah, I'm down to go down whatever roads you want. So I'm ready for the rock and roll ride, buddy. I love it. I love it.

1:17So just so we're all everyone listening, we're on the same page. Why don't you tell us a little bit about kind of who you are and like a little bit how you got to where you are today? I think you said you're doing almost over$600 million under management. Like that's no joke there. So where do you go from to even getting to that point? Yeah, so I think how I normally kick these things off is I won the ovarian lottery, like Warren Buffett says. So my mother is the best human on the planet. My dad left when I was four years old and left my mother to raise me on$9 an hour. and somehow she was able to pull it off.

1:56I still literally to this day have no idea how she was able to pull that off. Gave me all the gifts from a social perspective that I could have ever asked for. When I was 11, we got another eviction notice from our apartment. So it prompted me to go work. And as the universe gifted me a blessing, I worked at a local country club, like on the rich side of town. because every other business would not hire me because I was too young. I knocked on literally every single business's door that I could. The golf club was the only one that would take me on. And the number one rule of being a caddy was do not speak unless spoken to.

2:34So again, another blessing. So I just got to sit there and absorb all of these conversations. That's where it got planted into my head of getting to Wall Street, investing, and so on. So I kept up that pattern. I worked literally all throughout grade school, high school, and college, and eventually got to Wall Street and then moved on and helped build a firm. And now I own a firm, one of three partners, and we currently manage about almost$600 million. The markets have been down the last couple of weeks, so it fluctuates. But yeah, that's roughly the story. So as you were talking and you were mentioning basically how hard working your mom was,$6,$7 an hour.

3:16I think back to my mom doing the same thing. But what really hit me was I could hear it in your conviction, in your voice. You're like, how did she do it? And right away, I was thinking about my mom. And I was thinking, how did they do it? So this isn't part of the show. But just for all the moms out there, I just want to say we salute you. Thank you for giving us the power and the vision and doing the hard work so we can live the lives we live. To all the great mothers out there, amen. back to back to Wes over here. So Wes, I know you have a firm where you, you know, we talked about$600 million, you know, under, under management.

3:56Where, where did that start? Tell us a little bit about that. Yeah. So I've only done finance professionally for like my, my professional career. So since the age of 18 and the long and short of it is I was able to get to the stock exchange, get to Wall Street, etc, etc. And then I had a another great blessing, a mentor reached out to me and said, Hey, you know, if you come out here to California and help me build my book of business, I'll allow you to build your clientele as well. And that was all I needed. Because on Wall Street, I was doing institutional finance, and I loved it. But I wasn't 100 % infatuated with it.

4:34And the reason I got into finance was because of my story, right like how can i actually impact families so the corny phrase i know it sounds like this but it's what i actually believe is i want to change my family tree and help others do the same yeah when you do that at the institutional level there's you're just several standard deviations away from that sort of nucleus so the writing was on the wall i was like hey i got this blessing from the universe again let's take it and run with it and it was an amazing journey so that gentleman, his name was Dave. He's absolutely phenomenal. And I was able to piece together from the gifts that were given to me on Wall Street and say, Hey, well, let's just apply this over here.

5:15And he was bringing in about$1.25 million of new money per year, which was good. It wasn't, it's not outstanding, but he's been doing it for a long time. And he just needed a fresh pair of eyes. So anyway, it was a really good deal for me. And then to put it in perspective, start building our both of our books of business and then create another company and then create another company after that so now there's attic and wealth partners that's almost a holding company for several other companies and they all all roll all roll up into about 600 million dollars and um to put it in perspective same thing i learned in caddying if you just learn and absorb things and then just apply the things that you learn as easy as it and simple as it sounds it's literally that simple.

5:57So last year we brought in, I think it was like close to$80 million. So you go from like $1 million to 80 million of new money. And don't get me wrong. I am not, I'm only responsible maybe for like 2 % of any of the success that I have. And I mean that for all of us. If you think about where we were born, the fact that we are, are whatever race and gender and height and all of these things that contribute to all of our success. All we have to do is just do the last 2%. I mean that sincerely. None of my success is owed to me at all. I'm the minority, you know, impact maker on my success. But I do think that's an important message for everybody here.

6:40I also do think it's an obligation to fully maximize that 2%. That I love. that I that last comment I love it is it is an obligation it's your duty I mean you like with the I don't know what is like one in a billion chances or something like that right of being even born and then you have a duty no matter what background you come from you have a duty to represent that two percent with all the forces of life man I really really really like that because it just changes the perspective of of how you show up every day and it makes it and you kind of take it off you and you make it to the bigger force like this isn't even about you this is my duty to to why i'm here so i really do like that it seems like this was a driven uh factor for you from like from the get-go and and i can tell in your voice when you're talking about not just being you know honoring that two percent but leaving the big corporate world right and trying to help be closer to helping more families never have to go deal with what your mom did or what my on how to go through what what was it that there was always there's always something that changes there's like the thing that goes you just said from like you know a one bill you know 1 million to 80 million in a year like what was going on or what was that change that happened where all of a sudden you just caught fire and everything just started working everything started working smoother and easier so it was actually a psychological change because there was a time where it was just really tough.

8:13So just so everybody has texture, this is not like a sob story. But so when I moved out to California, I put everything I had back into the business, like everything I slept on. I was lucky enough. I actually lived with Dave for a little while. But then after that, I felt like a burden. So I was like, I don't want to do this. Like, you know, I need to, you know, I need to get out on my own. So I slept on the floor, I rented a room that was maybe like eight by eight and I had four other housemates in there and I rented the smallest room. So it was the smallest amount of rent. And I literally stepped on the floor for, I think it was like three or four years.

8:49And, um, and I just wanted it to go down in history of I'm either going to fail knowing that I went all chips on the table or I'm going to be successful. I did not want a failure and it's like oh but i just casually did it so literally dude i bought chicken on sale chicken breast on sale every month at this place called sprouts in southern california uh when it would go on sale it was on sale for i forget what it was like a dollar 20 a pound so i'd buy 180 pounds of chicken per month so that way i save money on my protein and i would buy a 50 pound bag of rice and a 25 pound of black beans that you can get for like 50 pounds of rice.

9:40You can get, I forget what it was at the time, like 15 bucks maybe. And your, and your beans, it was like the same ratio that fed me my calories for minimum an entire month, minimum. So my cost per meal was, I forget what it was at the time, like 24 cents per meal. Wow. So I just wanted zero excuses. My car was a piece of shit car. Sorry, I don't know if you're allowed cursing on here, but yeah, it's all good. Didn't have air conditioning. And I would have to drive three days a week, two hours, about an hour and a half to two hours each way in Southern California. So be sweating my face off to go and consult for a company out there on their finances, etc.

10:21Anyway, I'm not saying that as Oh, Wes is trying to brag or look for any sympathy. No, it's like, whoever is on the journey of success that at least in my opinion is oftentimes what is required and however long you're thinking it's going to take at least for me it took 10 times longer so how long are you willing to suffer for what you want i love wall that that's going to be a quote right there how long are you willing to suffer for what you truly want it goes to the quote, I'll never forget this. When I was, when I first started in commission sales, like first career job, anything out of school in real life, uh, my, at that time, my mentor said to me, Kayvon, what are you willing to do in the next three to five years that most people won't in order to live a life that most people will never have?

11:11And he would just say that to me every single day. And what you just said is it just, it's, it's the testament of that, you know, And people just always think there's some such thing as overnight success. No such thing. You just haven't seen all the beats, like the teardowns and the losses and the long nights and even getting a little bit of success, then losing a little success, then losing a little success. And I love it. It's tenacity and it's whoever stays the longest in the game is going to win. That's for sure. No doubt about it. Duration, man. And it's interesting because it seems like, and I talked to a lot of entrepreneurs, and it seems like a lot of business owners, a lot of entrepreneurs, they have the same story.

11:54They have this thing, which I call in my assessment that we do for our company, it's called the athlete DNA. And it's this grit, it's this competitive drive, it's a chip on the shoulder. And the most important one is they hate to lose more than they love to win. no doubt about it i'm 100 in that category yeah i i could tell i could tell you you kind of said it and you went all in so here's something it's not the podcast but i i think it's really important is why why are people so afraid to go all in i see it every day like they have this idea they have these dreams they have these aspirations they want to live more they but they have every excuse in the world except the all in button they're afraid to just burn it all down to build what they actually truly want yeah my hypothesis would be that it's actually the inverse to me why on earth would we go all in when we have immediate comfort like it's a very rare breed who says yeah, you know, I could have this comfortable lifestyle, but I could risk it all and maybe not have my comfortable lifestyle, nor the big grandiose vision.

13:16So I see it as like, yeah, we got to be kind of crazy, which is the prerequisite. In my opinion, the prerequisite for big things happening is having an enormous vision to make it so appealing that it's a no-brainer. I'm going to get through all of the crap because I know it's worth it. So for me, it was that commitment to change my family tree. Dude, literally every single obstacle I encounter, as corny as it sounds, I ask myself, is this going to get me closer to changing my family tree for the better? Yes or no. There is no binary. I'm sorry. There's no spectrum here. It is a yes or no. It's a binary question.

13:57If the answer is yes, I do it 100 % of the time. I love, man, you're talking my language, truly. Everything you're saying, I'm absorbing because what a great question to ask yourself. Is this helping me change my family tree? Yes or no? And what a way to anchor also into the vision because you know what you don't want. See, this is a problem that I see a lot of business owners. they they don't even know what they don't want you don't need to know necessarily what you do want but you got to be so damn clear on what you don't want and that's what i always kind of like what driven me was i'm not sure where i'm gonna go i don't know what the next thing is i don't see i don't i don't have vision like that sometimes but the one thing that i do know is i don't want x and in your case like i don't want to repeat that family that family tree i don't want to repeat what was like the legacy of what was i'm starting my new legacy so i and and again everyone has to have an anchor and it seems like that's your anchor yeah there was a client who just told me about a japanese word or phrase and i totally forget what it was but basically it's a concept of breaking the cycle yeah and when to use your phrasing when you have an anchor that is at a level 10 importance to you, then it gets pretty rational from there.

15:23So when I feel a negative emotion about charting the business forward, I simply look at it and say, okay, well, what did you think changing your family tree would be like? Right? So when you zoom out, it's like, yeah, of course. I mean, dude, our ancestors would probably have to travel, you know, across 3000 thousand miles of mixed terrain to help put their families in a better position. So then when I think that's like, well, what I'm doing is not that hard. Is it uncomfortable? Sure. But it beats trying to, you know, traverse the whole United States to get to California, you know, six generations ago.

16:03Yeah. Perspective, perspective, perspective. I think I, I, it's so easy i feel like when we're when when you're winning and when you kind of get through it it's easy and i just because i i can i just feel people listening be like oh yeah but you don't get my story oh yeah but the whole yeah but and it's and i know it's easy for guys like you and i to talk about that and talk about how easy you know or how much a different life is when you do the trucking through the through all the terrain and you finally get to the destination and things start working. But don't fool for a second that you never get there without the pain.

16:40Like you will not like it. If you expect it to be easy, you'll never get to greatness. And I and I and I don't like saying this, but I'll say it right. I want another quote. I just I love someone said this to me. I'm like, so true. Poor people live an easy life and that's why their life is hard. Wealthy people live a hard life and that's why their life is easy. Yep, no doubt about it. So let's talk about the markets a little bit here because this is your expertise. And I know you can't talk too much about it because you're legally buying to information and whatnot. But there's so much happening in the world right now.

17:16There's so much going on with the markets right now. Any advice, and not advice, but any thoughts of what people can be thinking about at least in the next three, six, even couple years, if they're sitting there worried about the turmoil, worried about the wars, worried. I mean, it's a scary time. If you really look at what's going on in the world, it's a pretty scary time. I'm not trying to do fear mongering or anything, but like, you know, rational, like if you look at it with even just logically, it's a pretty scary time right now. Yeah. So I think a couple of frameworks to sort of get out of the way.

17:48Number one, what I like to think I teach is financial leadership. So you have to decide on, do you want to be a financial leader for you or your family? If the answer is no, then you're probably just gambling. You're going to be blown according to whatever wins of the time or whatever your friend tells you to invest in or whatever, right? But as you and I both know, well, if you step into the leadership role where you have to make decisions for other human beings, well, now that raises the game to an exponential level. Okay, now I got to treat this stuff seriously. and I have to have conviction about my next moves.

18:27This is entirely different. This is so different than the buddy who shows up on poker and I said, oh yeah, I invested in XYZ stock and it went up by 80%. It's like, yeah, you put$25 in the stock. Congratulations, it went up by 80%. You know the reason you need to put all of your bank account into that stock is because you did not have conviction on it. But you like telling the story of the percentage of growth because it's cool to tell stories among buddies and that's fun. But when you're leading a family or leading a business, it's like, I can't play around with my capital. I've got to put in things that I have conviction on.

19:03Okay, that's that's the decision tree part number one. Are you going to be a financial leader? Or are you just going to be a casual kind of player when you want to be? So I just want to speak to the financial leaders. Okay, now for the financial leaders, let's decision tree it out even from there. are you going to be a primarily an owner a lender a spender or a saver well again we're still high level here yeah but primarily that word is important primarily are going to be an owner a lender a spender or a saver you are going to be all four of those most likely but what is your tip of the spear what are you primarily now obviously a spender is not going to build their wealth if they're primarily a spender you're not going to build much wealth if you're a saver to be honest with you you're not going to build much wealth why because money just represents purchasing power and money gets diluted over time via inflation so unless you're a trust fund baby you inherit a bunch of capital and you can sustain the decay over time and you're still wealthy that's probably not any of us on this call and any of us listening right so now we have two more left.

20:12Okay. Are you going to be primarily an owner or a lender? A lender can feel okay because it's kind of short-term stable. Hey, I'm going to lend my money to the bank, right? I'm going to get a CD. I'm going to get, I'm going to, I'm going to buy some bonds, et cetera. That's okay. But if you're primarily doing that, what could be the problem of that? Well, number one, if your personal inflation is at 6%, I don't care about CPI. I care about your personal inflation because it's your personal money if your personal inflation is at six percent and you're lending your money via bonds at three four or five percent you're losing purchasing power this is quite obvious now you still in my opinion should have that or everybody should do whatever their advisor says but for me i still want to have some of that for short-term stability in case i need in case the market takes a dive etc etc but i want to be primarily an owner if you look at any of the people that we admire who built their wealth, not one single time have I said, oh, I want to be like that guy or girl because they were just really good at lending their money.

21:14No, it's always these people have built and or owned the things that are generating their money. Okay. So I love it. I mean, this is great stuff. Owner, lender, spender, saver. Let's talk about the let's break this down a little bit. Like, so when you're talking about owner, You're talking about owner of business, owner of their capital, like owner, you know, an owner, I would think is the guy who's being the financial leader first. Phenomenal question. So now if we look at the owner category, we can now break that into several subcategories. Owner. Okay, well, there's two types of assets down.

21:47There's speculative assets. And then there's something called productive assets. And I didn't make these up. Warren Buffett talks about these a lot and other value investors talk about them a lot. Speculative assets on the one side is where you buy low and sell high. Right. At least that's the goal. It's the only way in which I can make money is if I sell something for a higher price than which I bought it. Now, this sounds amazing, but what's the problem? It's incredibly hard to do. To put it in perspective, I know personally, and I can't name the certain types of assets that are in vogue right now, but you could probably imagine the ones that are in vogue, right?

22:24All about, hey, my cousin bought this coin at X, Y, and Z dollars, and now it's dramatically above that. here i can tell you i do not know anybody who's done that and built substantial wealth you may know but i don't know of them and i've been working in finance for 20 years you would think that i would have come across at least two of them i know zero of them now i do know some people who've made some money but that important part is like some money because i also think people dramatically underestimate how much money it actually takes to reach financial escape velocity. Like, oh, wow. Okay. Let's love it.

23:07Love it. Love it. Financial escape velocity. Massive. I think that I would, I would assume anybody listening to this podcast is trying to achieve that. You're not in business if you're not trying to achieve that. What is financial escape velocity. I mean, when I think about like, what number is that today? And then what's that number in a hundred years from now? Cause those are two different numbers with inflation. So yeah, let's talk about that. So back of the napkin math, it's going to be relatively similar for most people. And it's going to be slightly different for most people. So financial escape velocity as I define it is at what point will my portfolio assets generate me enough income net in perpetuity for me to survive and ideally increase maintain or increase my lifestyle as we go along that number plus having what I call moat money so between two and five years of expenses in short and medium term assets so that way if my long-term assets dip temporarily I have a whole war chest of short, medium term assets that I could live off of in the meantime.

24:21Yeah. Again, let's break that down because I got that. But just in case someone's not understanding that is basically, I'm going to just tell me if this is correct or not. You're going to take them, you're going to look at your lifestyle and you're going to ask the question, how much more do I want? How much more do I need? And you're going to go, what, what money, what amount of money or that's called purchasing power do I need to be able to sustain that lifestyle a minimum i love what you said for three to five but i would think you know almost you know ideally for the rest of your life depending where you are in your in your life cycle um and that that asset is continuously producing income to support your lifestyle and ideally building as well because you do not want to start hitting that principle because that's where people start losing their shirt exactly so if we look at where let's let's pretend i was retired now Full transparency, I don't want to ever retire.

25:15That's just, it's just not my DNA. Well, let's say if I were to be, my goal of being mathematically able to retire would be that my long-term assets would be able to produce for me enough net income and still grow while simultaneously paying for my expenses. Now, that's the first prerequisite. However, I like to add a buffer to that, which is, okay, but what if my long-term assets are down? What if we have a 2008 or a COVID or et cetera? Okay, I don't really want to be removing my long-term assets during those volatile times. In fact, I'd rather let my dividends and my rental income and my business distributions reinvest when prices drop so I can build up more density and take advantage of pricing opportunities.

26:00But where am I going to live off at that point? Okay, well, I'll go over to my two to five years of capital that are not in long-term assets. Those are in short and medium-term assets. super short-term stable from a volatility perspective, but they don't grow very much over the long-term. So I only have, I want to get scalpel level precision with that bucket of money. Because if I over-index on it, well, now I'm giving up longer-term growth and inflation's a real killer of money. Like to the degree that most people, they kind of understand the concept, but they don't really grasp the magnitude of how much inflation can just murder your money over time.

26:37especially if it's not growing oh my god like especially if you don't have it growing so it's interesting because you just said that the the spender is definitely not going to get there the saver is not necessarily going to get there and i because i always i always lived my life with this you know oh if you save a penny blah blah blah you know and it's like now a penny saved is literally a penny at the end of the day you're just saving it you cannot grow saving pennies like the way you grow you got to go how i live my life you got to go all in if you want to go big and you don't have generational wealth you got to go and you're not going to save your i don't care anyway you're not going to save yourself into wealth like making a couple hundred grand a year with inflation like you got to go in and go hard and then have that money start working for you uh and not be afraid and that's the that's the i think that's the owner um the owner concept is like even understanding as a financial leader and an owner, like you might take some hints and you might make some wrong moves.

27:35But again, are you are you going to stay in the game long enough to get back up and keep moving? Yeah. And this is where that distinction between speculative assets and productive assets is super important. So if we if we backtrack a little bit and say, OK, speculative assets. Well, if the only way in which I can make money is if the price gets higher and I sell it at the right time because the price could always drop after it reaches a peak. Well, that's a really hard game, like really hard game. But if I go on the other side and I have more of a productive asset philosophy, which a productive asset high level is, okay, does the asset itself produce cash and ideally cash flow to the investor?

28:18And then to what degree does it do it? So I'd rather do that. I'd rather buy assets whether it be private business, public companies, or real estate that produce income for me, because at the core, there's a value exchange. The way you make money in an economy is you produce value at a fair margin. The way you multiply that money is, in my opinion, just by investing in value creation. So make money by creating value, grow the money by investing in value creation. The nucleus of both of those is fair money exchange for value created. Now, in a productive asset, you put them all on a buffet and you say, okay, well, here are all the productive assets that I could invest in right now.

29:03Which one do I think is the best? As simple as this sounds, most people just don't do that. They just don't look at all the universe of investments that they could invest in and then select what they think is the best. When Warren Buffett was interviewed one time, It was phenomenal. He said, Hey, Warren, how'd you get so good at investing? He said, well, I would study Moody's manuals and read other books, et cetera. And the interviewer was like, well, Moody's manuals. I mean, those are thousands of pages back in the day. And they said, well, how did you simplify it? And where did you start? He said, well, I started from the letter A and then I read it all.

29:40And it's like, oh, that's what due diligence looks like. But most people don't do it. They just don't. If we're all being honest with ourselves, most of us do not do proper due diligence. Well, and there's companies out there that do the due diligence that you can lean on and trust on. Wow.

29:56Wes Rowlands:Yeah. Man, I think there's so much. I'm just sitting here going, wow. If anyone listened to that and you're wondering what you got, even business owners that are listening to this, you got to make that decision. Are you going to be that financial leader and decide if you want to be the owner, the lender, the spender, the saver? For those who are spenders, let's say, because we live in this world of spending, right? What would you tell the spender to or what's something the spender can think about that maybe stops them from basically making another spending move that's going to get them away from their wealth, you know, well, that wealth escape velocity, let's call that, right?