Charles:
Welcome to another episode of the Global Investors Podcast. I’m your host, Charles Carillo. Today, we have Mark Miller. He is a Managing Director of the Hilton Family Office, the Hilton Hotels Family Office, and CEO of Hilton Tax and Wealth Advisors. Mark has nearly 40 years of experience helping business owners, executives, and high net worth individuals legally slash taxes, grow wealth, and build lasting legacies. He is the co-founder of Hilton Tax and Wealth Advisors with Bradley J. Hilton, the grandson of the legendary Conrad Hilton. Mark is a bestselling author of Hilton Wealth, How to Invest Like an American Dynasty, has been featured in the New York Times, Kiplinger, and Fox News. Mark, thank you so much for being on the show today.
Mark:
Well, thank you for having me. I appreciate it.
Charles:
So tell us a little bit about yourself, both personally and professionally, before launching Hilton Tax and Wealth Advisors.
Mark:
Yeah, well, Charles, I started out my career out of college in that little tiny firm called American Express and cut my teeth kind of in the financial world and moved into brokerage, learned how to be a broker, did a lot of things on the kind of the retail side of financial services for many years. in the 90s, I kind of pivoted a little bit and I wrote some bestselling books on personal finance and had an internationally published newsletter that I did that for about 10 years or so. And that led into building my own firms. And I’ve had a number, since then I’ve had 21 different companies in financial services. You know, how I got hooked up with the Hilton family, And I am the director of the Hilton Family Office. And that is, and you mentioned the introduction, that is the Hilton Hotels that we all know. So that is the Hiltons, Brad Hilton, who I’ve been known for a long time, very close friend of mine and a partner. And he is the grandson of Conrad Hilton. I met him and some other Hilton family members, oh gosh, around 2010 or so. But the reason I did is because I pivoted towards what we call the smart money or institutional side in this in the industry, as opposed to the retail side, which is where most people kind of play. And then Brad and I started because we had a passion for teaching people that are more on the retail side more the average investors what the wealthiest do on you know in their portfolios and building their wealth that retail investors just don do And that where we formed Hilton Tax and Wealth Advisors which I spend a lot of time doing that. And we’re promoting that a lot lately because it’s just a passion we have to teach people these strategies because not enough people know how to do, truly do what the wealthiest like the Hiltons do when they invest.
Charles:
So before we kind of go any further, can you tell us a little bit about what a family office is and what are the different levels of them from really the virtual to the multifamily to single family offices?
Mark:
Absolutely. That’s a great question. I’m glad you asked it because a lot of people hear the word family office. They’re like, what are people talking about? What does that mean? Well, the original family office was actually the Rockefellers. And John D. Rockefeller was very frustrated because at the time they were the wealthiest family in the world. And it was a mess. They had advisors all over the place. They all hated each other. They wouldn’t talk to each other. And he came with the idea. He said, this is ridiculous. Why don’t we just form our own office, hire the best of the best of these advisors and just pay them enough and bring them on board. And then they can just work for us. That was the original family office. And by the way, over five years, it doubled their wealth in that period of time. So he was right where that collaboration, that synergistic working together meant it made a lot of difference over the years than that. So then a lot of individual, very wealthy families would do that. Then it started going down market a little bit. And then individual families would get involved. And then that became the multifamily office. They would cut costs. Maybe they didn’t have to have billions of dollars like the Rockefellers did. And then that’s moved more into, in the digital world, into the virtual family office where it’s more, and that’s, we’re more of a virtual family office, kind of a loose knit virtual family office where, where you’re going out and you’re finding best in class resources, best in class advisors, resources, vendors, really from all, not just around the country, but all over the world to all come together And what really made that possible is the virtual world we live in now where we can you know we got partners in Dubai we got partners in France we got partners over in Asia and all of those people can collaborate and communicate now. So that’s more of a virtual family office.
Charles:
What are really the wealth levels that make sense for these different tiers or, I mean, really having a family office and what moves you between it, the amount of money you have? What are those kind of money marks that you usually see?
Mark:
Yeah, well, I mean, minimum in our family office, it’s about $20 to $30 million net worth to be part of our family office and plug in, be able to be truly part of it. Now, there’s still levels inside that too, because there’s certain people, even if you have 20 or 30 million, you can’t qualify for certain things. Yeah, maybe you have to have 100 or 200 million plus in our family office. And frankly, I mean, that’s, I think, a pretty good level to be full blown family office. Now, the funny thing is, is that’s where Hilton Tax and Wealth Advisors came from. Brad Hilton and I saying, well, wait a second. What about those people that have, you know, 500,000, a million, 5 million, 10 million? And is there a way, and no one’s really done this. There’s a few folks out there, but I think we’ve done it very efficiently. And that’s why we can continue to grow immensely. Is we basically bring those family office concepts, not the full family office experience, but we bring a lot of the concepts a little more down to Main Street. So then people can qualify and they don’t have to have 20 or $30 million to do it.
Charles:
So tell me a little bit about the difference when you’re saying a family office versus having a wealth advisor. So for, you know, if I have a friend that’s a, he’s a CFP and it’s something that he tells me a little bit about what the services he provides to his clients. And then you have another step further going where you’re having, because he’s probably not doing, he’s not an accountant. So to put you with an accountant, he’s being your CFP. And then you have a, I mean, going the family office route. What are those additional services, what I’m trying to get to, that are offered by a firm like yours to these high net worth individuals?
Mark:
Well if you want to look at it because a lot of the people that are probably listening today are probably you know on the retail side of the business And the retail side of business is very focused on money management on returns building your assets all of that And that has its place. Now, it’s not very efficient. You know, I rail against a lot against the whole structure of that retail side and how much fees and how people are getting, I’m not going to use the word ripped off because you can still make money over time but that retail side is is is a tough side to be on to really accumulate assets but that’s where it’s all focused on making the best returns getting the best investments then you start moving into um and i’ll tell you where maybe a c you know what a cfp or a um did you say cpa also
Charles:
i’m just saying for a normal person that maybe or for a person, let’s say with a million dollars net worth, they might have their financial planner and then they might have, they’re going to have an accountant or something like this, or a couple of million dollars, even up to maybe 5 million. And it’s just basic. Here’s my accountant taxes. Here’s where you’re putting my money in brokerage accounts. And then it’s like for where you guys go with the extra yards for being someone that’s fitting into the family office mold.
Mark:
And a CFP, I maybe heard somewhere in my head, CPA, because I work with a lot of CPAs all the time. So, but CFP, a CFP would be more of a holistic planner. Yes and no. I mean, the CFP designation, good designation, but still it’s utilizing things on the retail side where the cost structures are not as efficient. Often the main thing with the retail side is, you know, putting all the risk upon the actual investor. So for you, like you’ll hear about it all the time, even from CFPs, you’ll hear about, hey, money, we’re worried about or we’re concerned about making returns on your money. But, hey, you need to know that this is going to go up and down. And when it goes down, we’re just going to hold on for dear life and we’re going to wait till it comes back up. And it will eventually. OK, that’s a retail mindset. And there is some holistic planning that goes on on that. But the majority of what happens on the retail side is getting with an advisor. or sometimes people even will even DIY it and just go to a fidelity of Vanguard or whatever, and just try to find the best investments and make the best returns they can. At the family office level, it’s more of a much more collaborative, holistic approach where we’re looking at everything, not only just looking at money management, but we’re also looking at tax planning. Advanced tax planning is a huge deal. That’s really how the wealthy get a lot wealthier is by saving a lot of money on their taxes. We’re also diving into some deep legacy planning as opposed to just doing a little bit of estate planning, regular estate planning. We’re looking at kind of intense risk mitigation as opposed to just making sure we have a 60-40 portfolio or something like that. So it’s a whole other level. And again, we’re trying to bring that higher level more down to that retail level. So folks that don’t have multi-multi-millions or tens of millions of dollars can have access to that type of deeper holistic planning.
Charles:
What would you say are some of the traps successful business owners find themselves in when they’re trying to do it alone?
Mark:
Well, it’s the traps that most retail investors find themselves in. The average retail investor makes 2% per year. Okay. Now, we see a lot of people that have done better than that because they happen to be the ones that maybe were a little bit more patient, had a little, you know, really have found the discipline to get through that roller coaster ride. And then they accumulated enough assets to come talk with us and work with us. Um, but so the, the biggest mistake I think that people make is they’re very emotional, uh, and they don’t have it. And the reason they’re emotional, we talked just in one of my podcasts in my, our true wealth podcast, Hilton true wealth. Um, I talked about the difference between the truly wealthy and the not so wealthy is that the not so wealthy tend to be much more emotional. They don’t, they often, they just don’t even have a plan. They don’t have a process. They’re just picking investments and hoping those investments will do well. But there’s no overall overarching plan there. When there’s no plan, when there’s no process, when there’s no system, then there’s no discipline. And you break down and you sell at the wrong times and you buy at the wrong times. You probably heard this all the time, you know, buy low, sell high. OK, well, that’s a general term. But when you really look at it, the wealthiest, the wealthies, they put processes in place. So where that automatically happens in their systems they really can buy because they had a system in place They can buy when it high They going to buy you know Warren Buffett I just did a podcast on Warren Buffett. Why is he sitting on a half a trillion dollars in cash right now? People are like, that is weird. Well, part of it is because there’s the discounts aren’t available right now. He’s doing what a disciplined investor does. He’s amassing a lot of cash that also might kind of tell you where we are in the markets right now in investing in general or in bubbles across the board, practically in every area. but he’s a disciplined, the greatest, one of the greatest investors that ever lived. And people think he’s stupid right now for sitting on, look at all this opportunities, missing out on AI and this and that. The markets are still running. What’s his problem? What’s wrong with him? It’s because everything is overvalued and he’s not in his discipline. A strategy is not going to deploy massive amounts of money and then deal with a 20 to 30 to 40% loss in his portfolio. He’s not going to do it.
Charles:
When you say that 2%, is that because just like you’re saying, they’re getting emotional about it? They’re selling when stuff goes down. They’re buying when they see the craze and they’re buying high.
Mark:
Yeah. You know, that’s some of it. The rest of it, I mean, I think the biggest thing is just not having a very disciplined plan in place and system in place. And again, it goes back to, and I rail on the retail side because they’ve taught everyone. And I used to be on that side of the business too. I understand. And I was ingrained in this system. It’s all about finding the right investment. It’s finding the best investment that’s going to make the most money for you and all of that. And that’s really kind of when you think about it in an ADD strategy. It’s like, hey, what looks good today? Well, if a new investment comes along, guess what you’re going to do? You’re going to sell out of that other investment that maybe was just doing average. You didn’t even give it time to do what it’s going to do. You’re going to jump into that other investment, right?
Charles:
Yeah.
Mark:
When you don’t have a plan and the retail side teaches you to do that because frankly, that’s how they make money. They want people to be racing after returns and racing after a different investment because they make the most money and they make big spreads on those investments and they always they want it to be in flux So then they could take advantage of how the retail advisor excuse me the retail advisor I could say But more than that, the retail investor jumps around from investment to investment.
Charles:
That makes perfect sense.
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Charles:
One thing I find with retail investors, some of them will be in index funds, they’ll be in mutual funds, And then you’ll have other ones that maybe make the mistake, I would say, of, and it might be accidental, the high risk trap, where they find themselves in, where they really underestimate their risk exposure. And they find themselves in something that’s a lot higher risk than they really perceived initially. Or even after they’ve made money. I guess I’ve made this mistake too, where, and a mentor of mine tell me once, and even if you made money, like if we were selling a property, we made money, it doesn’t mean it was a good investment. You know what I mean? So, and it’s difficult when you’ve made money doing something that you go back and you’re like, that was, that was, that was pretty high risk. And these things really lined up and I got a little lucky there and I had the market here and stuff like that.
Mark:
Right. And the reality is that most investors, like when people originally come to us, usually they’ve had something going on emotionally or whatever. they’re like, I need, you know, we do a very objective kind of risk and wealth assessment where we look at everything. And nine times out of 10, it’s actually kind of shocking. Nine times out of 10 even with folks that have 10 15 million portfolios they are massively more at risk than they thought they were So their advisors telling them oh maybe they in an old you know 1990s model 64 to 40 thing. Well, hey, we got 40% of the money sitting in bonds here and all of that kind of stuff. And they have no idea that at any given year, they could be down 30 or 40% in their portfolio. And maybe they’re, they think they’re 30 or 40 or 50% at risk when in reality, they’re at maybe 70 or 80% risk. Okay. So, so that’s a thing that people just don’t know that. And again, it’s a product of the retail side. It’s just, I mean, what’s crazy about it is the retail, we talk about this, Brad and I, in our book, Hilton Wealth, How to Invest Like an American dynasty is that the 60-40 model, and you may have heard it, and some of your listeners may have heard of this, was a model that was created in the 1970s and 80s and basically started to being outdated in the 90s. But retail advisors still use it because it’s easy to sell and it’s easy to bring the money on me because it’s very simple. It’s just like if you put 60% of your money in equities and 60% or 40% of your money in stocks, I’m sorry, 40% of your money in bonds, then you’ll be protected because they’re not correlated. That’s not been since 2000, they’ve been totally correlated. There’s been three or four years when they’ve gone down together. So how is that protecting you? but yet they still use it because it’s easy to sell. It makes it seem good. And I’ve got clients that come to me with multi-millions of dollars all the time that are still in that model and being told by their advisor, and don’t worry if it goes down. Your real backstop is just sitting around waiting because it will come back up, which is silly, which is ridiculous. Why experience those losses to begin with? It doesn’t make any sense. The wealthiest of wealthy don’t do that. They keep large portions of their portfolio safe, secure at all times. So if something goes wrong, a market collapses or, you know, something goes wrong in the portfolio that you’re still maybe you’ve only lost a little bit, but you’re not down, you know, 10, 20, 30 percent. And it’s going to take you years to get back to where you can make money again.
Charles:
I had this older wealth advisor that I know, and he would tell me that pretty much you shouldn’t be owning any bonds if you’re under 50. You know what I mean? And I don’t know. That’s very subjective. But he was just saying it’s just one of those things where it’s something when you’re getting older, as the 60-40, as you said, kind of washed out years back. What is your take on that for maybe people that are getting started, maybe if you’re just putting money into their retirement? Because you have these target date funds that a lot of people get placed into. And when they get placed into them, obviously there’s bonds and that gets bigger as they get older. What is your thought on that for people that?
Mark:
Well, again, on the surface, it makes sense, right? Even what he said, if you’re younger, be all inequities. You’ve got time. But that goes back to what’s inherently. And by the way, I was taught that on the retail side. Get the money under management and just do your best when things go bad to prepare people and just say, no, no, no, no. Don’t sell. Don’t sell. Don’t sell. OK, so that’s totally the opposite. Even if somebody’s a very, very wealthy person is young, because here’s the thing. Instead of coming at it because that’s coming at it from what my investments are doing instead of what do I need to do? What’s the overall picture? How do I design a plan to get what I want? Let’s say that you want your overall return to be, say, nine percent per year. Well, then we structure a portfolio from that back so we can do portfolios on the smart money side that’ll make nine to 10 percent per year. But you truly maybe only have 30 or 40 percent exposure to at risk assets, believe it or not. And but but people don’t know that they’re just like what that guy said. Well, if you’re young, let it ride. Right. And don’t worry about when it goes down. You got plenty of time. OK, again, on the surface, that makes sense. But in reality, if you want to invest like the best people in the world that invest, that’s not how they invest. Majority of their portfolio is safe and secure. And then on that portion that they’re at risk on, they’re taking some gambles, but very calculated gambles. And that you know this if you and if you don believe that if you been fed this for years that no no no I just got to let it you know let my equity portfolios do their thing especially where we are right now I just tell everybody to be very cautious If you believing in that philosophy, you better be very cautious right now because we’ve had a run up, the longest run up in American history in the markets right now, the positive run ups. Okay. So what’s going to happen? We know it’s the law. It’s the law of gravity. What goes up must come down and it’s probably going to crash even more and harder this time, the more that it drives up being in the place that we are right now. So then how do you protect against that? Well, the wealthiest always protect against that. They’re like, hey, I’m going to put a big chunk of my money, make it very safe, very secure, no matter what happens. It’s going to get its yields. It’s going to do its thing. And then these calculated risks I take over here, which will be very calculated, they’re the ones that are still going to give me plenty of returns so I can average that 9% to 10% per year. Does that make sense? But it’s a paradigm shift. Sometimes, I mean, we have clients, very successful, very successful business people that have a lot of money. They come to us, they’ll never get it. They can’t make that paradigm shift because for 40 years, they’ve had this advisor at UBS or Edward Jones or whatever. and they’ve made some money with them. Definitely they’ve made money with them, but they’ll never make the shift to, it’s always better to do things like people on the Forbes 100 list does. By the way, you notice people don’t drop off that list, right?
Charles:
Yeah, people don’t drop off that list.
Mark:
But the reason is, is because they’re not, most people think they’re these high risks, they’re at the gambling table every day with their businesses and their make, because that’s what they see. That’s what they see on the surface. They don’t know Warren Buffett, perfect example, like right now sitting on Berkshire Hathaway sitting on, you know, half a trillion in cash. What’s up there? Warren Buffett’s own portfolio sitting on 50 to 60% in cash. Why? How is he going to make money if he’s sitting on 50 to 60% in the retail mindset? There’s no way to make money, right? But in the wealthiest, the wealth, they know how to still make great returns, but protect themselves so they don experience massive crashes and they fall off that Forbes 100 list
Charles:
So you mentioned before that you have a number of business owners that are clients of yours How does a business owner financially prepare themselves to sell their business
Mark:
That’s great. Exit planning is extremely important. One of the things that we do internally is we have some business planning tools and we believe everybody should have a solid business plan so they know exactly what their company is worth at any given time. I’m not talking about, I’m talking about in four or five distinct ways of knowing that. But also, if you know that you’re going to exit eventually to make a plan, plan ahead of time, not just the year before. I think I want to sell my company now. Well, if you would have, if you would have made some plans three or four or five years earlier, even if you didn’t want to sell, but made plans, you could have maybe added, you know, and we see this all the time with the planning we do for our clients, one, three, five, 10 million in value just because you planned ahead of time. So that’s a key, key thing. You should have a solid business plan that’s helping you grow your business for the day you might want to sell.
Charles:
You said putting together plans for new clients when they come in. I would imagine any person, I’ve had it before when we’re raising money for our multifamily deals. How do you deal with people, investors, potential clients that have unrealistic outlooks on what they want to do and returns that maybe you feel isn’t in the best interest or really a possibility?
Mark:
You’re talking about for their business, of their business, returns on their business.
Charles:
If someone’s bringing money to you, for you to manage and for you to advise them on their wealth and maybe you’re putting together a plan for them with what they should do or what you’re saying, and maybe they have returns, they have things that might be a little bit more high risk, might not be the best as you feel for their future. How do you kind of prepare them? And how do you kind of manage that person?
Mark:
Well, it’s about, and by the way, anybody that wants to, they can go to our website at HiltonWealth.com, HiltonWealth.com, and you can get a complimentary, our new book, Hilton Wealth. And it’s about education. And that’s really what Brad and I are doing. That’s why I do these podcasts. That’s why I have my own podcast for our family office, but also to just educate people that there a better way to do things out there And it not just about picking up a book and going well that a great idea and that a great idea It has to be it it there’s complexities and there has to be, and I’m going to go back to what I said, both on the business side and the personal investing side, there needs to be plans. When you put a plan together, then everything and have systems and processes in place, then everything can become realistic. OK. And sometimes when we get into that process, then we can sort out what is realistic. OK. You might have an expectation that you’re going to make 12 percent per year. But but you may say that, hey, on a scale of one to 100, I only want to take 30 level risk. Okay. Well, is it realistic to then say you’re going to make 12% per year? You know, could we do maybe eight in a portfolio like that? Yeah. But we can’t do 12. If you want to go on the side where you want to take a 60 or 70% level risk, frankly, we don’t believe you need to build a portfolio like that. But if you did, then maybe 12 or 13 or 14% is realistic. So we talked a lot about wealth building. The plans and processes. And I started to be a broken record, but it’s about planning. It’s about putting processes in place to where when your emotions come into check and when you start going, I don’t know, I don’t know that. Nope, we got a plan. We’re going to stick to the plan. And then it makes it easy to sleep.
Charles:
That makes perfect sense. Mark, so our last couple of questions before we wrap here. We’ve been talking a lot about wealth building. What would you say on the other side of it, other side of your business, what kind of tax minimization strategies really separate the top 1% your clients from the remaining 99% of retail investors?
Mark:
Yeah, well, first of all, the Hiltons are some of the best in the world at advanced tax mitigation and our clients to almost to the client get into the zero tax bracket eventually with us and not doing anything illegal or immoral or unethical. Obviously, everything’s in the codes and all there, but you have to know where to go. You have to have access to those things, obviously. And that is one of the surest ways to almost guarantee positive wealth building. Because if you’re paying the government every year 20 to 30% in taxes, that’s 20 to 30% percent less that goes into helping build your wealth faster. So again, it goes back to a plan. We usually put tax plans together and say, here’s the plan, here’s the system, here’s the process, here’s how we’re going to do it. And in the next two to three years, we’re going to get you to zero bracket, just like the majority of all the wealthiest in the world are in.
Charles:
So Mark, thank you so much for coming on. Before we wrap up and get more information on your firm, can you tell us a little bit about this 40 plus year career you’ve had and some of the major main factors contributing to your success over those years.
Mark:
Yeah. Well, I think it’s been, you know, when I started opening up my firms in the early 2000s, I also kind of gravitated a lot towards business owners. As a business owner myself, I had run a very successful publication company for a number of years. And I was like, I like working with business owners. We think alike, you know, and investors, people that invest in, you know, a lot of private equity things like real estate. We have a lot of clients that are in that space. And I think just making that mind shift and then also being fortunate enough to meet some ultra wealthy people that explained to me and showed to me, I thought I knew a lot. I thought I knew everything when I was younger And because I had done a lot I had actually done a lot up to that point that I realized my gosh I don know anything about investing And I in that world And making that shift and then starting to meet people on the smart money side, that was probably the biggest shift in my career. You know, focusing more on business owners, and then meeting a lot of very wealthy and successful business owners to say, hey, by the way, This is a better way to invest. And this is a better way to build your wealth over time.
Charles:
So, Mark, how can our listeners learn more about you, your book and your business?
Mark:
Sure. Just again, like I said earlier, go to HiltonWealth.com. HiltonWealth.com. Well, our website has a lot of information on what we do, how we do it, some information on our family office also. And then the biggest thing I do is just invite everybody that’s listening, Go there, jump on there, immediately order our book, our newest book, Hilton Wealth. And Brad and I would be happy to send you a complimentary copy. I think you’ll get a lot out of it for sure.
Charles:
Mark, thank you so much for coming on today and looking forward to connecting with you here in the near future.
Mark:
All right. Thank you so much, Charles. Appreciate your time today.
Charles:
Hi, guys. It’s Charles from the Global Investors Podcast. I hope you enjoyed the show. If you’re interested in getting involved with real estate, but you don’t know where to begin, set up a free 30-minute strategy call with me at ScheduleCharles.com. That’s ScheduleCharles.com. Thank you.
