đ Managing Tech Millions by WealthOps đ your go-to source for building wealth with tech equity and managing the money that comes with it.
Every week, we'll deliver a concise and powerful lesson on building wealth working for equity compensation or on managing your seven and eight-figure portfolio.
Today, in 5 minutes or less, youâll learn:
đ The one question to answer before private equity ever goes in your portfolio
đŻ Where Iâd start if I were doing it over, and where I wouldnât
đşď¸ What I look at now when I vet an operator
Hey Family Office CEOs,
Private equity is the one place in your portfolio where a mistake canât be undone with a click.
Sell a stock you regret and youâre out by lunch. Back the wrong private fund and your money can sit there for five, seven, ten years while you wait. So the lessons here cost time, and time is the one thing you canât buy back.
October is Private Equity Month in our community, and Iâve spent a lot of this month thinking about what Iâd tell myself back in 2016, when I wrote my first checks into private funds. I got some things right. I got some things wrong. Here are the three lessons that stuck.
Managing Tech Millions is a Weekly Podcast that gives you deep dive conversations into building and growing wealth with myself and other industry experts.
This week, Iâm breaking down whether a Micro Family Office actually makes sense at $5 millionâand how to run the numbers honestly before you build one.
The Question Everyone Asks: At $5M, most people assume a family office is still out of reach, or that itâs overkill. Both assumptions skip the real question: what does running your wealth like a business actually cost, and what does it return?
What Youâre Already Paying For: Most portfolios at this level already carry advisory fees, tax prep and scattered professional costs. Before you judge a MiFOâs cost, you need to see what your current setup really costs you every year.
Gross Cost vs. Net Cost: The sticker price of a Micro Family Office is only half the picture. The number that matters is whatâs left after you account for the structure itself, and thatâs where the math usually surprises people.
What You Get at $5M: The same 7 MiFO Components that run a $500M Single Family Office, sized down for your balance sheet. You run it with fractional specialists, not a full-time staff, and with operating discipline instead of overhead.
When Itâs Not Worth It: This isnât the right move for everyone. I walk through the situations where the structure doesnât pay for itself yet, and what to focus on first if thatâs you.
The Honest Answer: Whether a MiFO is worth it at $5M depends less on the dollar amount and more on whether youâre ready to run your wealth like a CEO, with a plan, a cadence and a system.
1. Know Why You Want It
âEverybodyâs doing private equityâ is the most common reason I hear, and itâs the worst one.
Private equity is a tool, and you have to know what job youâre hiring it for. One of the core principles of how the ultra-wealthy invest is Diversify Beyond Public Markets. The question is what you need the private side of your portfolio to do.
My why was very specific. After my IPO, I wrote some really big tax checks, and I was angry about it. I wanted income, around 8% cash-on-cash, that I didnât have to hand most of back to the government. Private real estate fit that job, because a lot of the income comes back as depreciation and return of capital instead of ordinary income.
Knowing my why made a lot of decisions easy. It told me what kind of private equity to look at, and it told me what to walk past.
It also showed me my blind spot. I believed real estate was the most tax-efficient income vehicle out there, and for a while it was. But I over-rotated into it. Today the bulk of my income engine still comes from real estate, and most of that money is locked up. So Iâm now moving more of my income into things I can sell tomorrow if I need to, like covered-call ETFs.
Revisit your why every year. It tells you what to buy, and it also tells you when youâve bought too much.
2. Start With Something Simple Enough to Understand
When I started, I went slowly. I invested about $50,000 at a time, and it took me almost five years to deploy my first $500,000.
That pace felt painful then. Iâm glad for it now, because every one of those checks taught me something, and I started with businesses I could understand.
A private real estate fund that owns apartment buildings is a business you can learn. People pay rent. The operator pays expenses and the mortgage. Whatâs left gets distributed, and the building is worth something when it sells. A fund that owns industrial buildings works much the same way. You can get your arms around the fundamentals.
A leveraged buyout fund is a different animal. Youâre betting on a firm that borrows heavily to buy operating companies, then tries to make those companies more valuable. Thereâs a lot to understand there, and you really do need to understand the underlying businesses before youâre in a position to judge it.
So my method was simple. Start small. Take a position. Learn how it actually behaves over a few years, including how and when it pays you and how it shows up on your taxes. Then go looking for lookalikes: other investments that work the same way, run by people who do it well.
Earn your way into complexity, one position at a time.
3. Vet the Operator as Hard as the Investment
This is the lesson I learned the hard way.
In 2016, 2017, and 2018, I invested with a couple of operators who were making money. The returns were good, and I felt smart.
What I didnât understand yet was why they were making money. They were new to the business, and real estate had a lot of wind at its back in those years. Rising values made almost everyone look good.
As my education caught up, I went back and read their underwriting more carefully. I found they were writing in their own assumptions, using numbers that made the projections work rather than numbers pulled from real market data. So as each investment wrapped up and my capital came back, I didnât reinvest with them. I no longer agreed with how they underwrote.
That changed how I vet everything. Anybody can build a financial model now. With AI, you can produce a polished one in an afternoon. So the model tells me very little. What I want to know is where the assumptions come from:
What rent growth are they assuming, and what data is it based on?
What exit price are they assuming, and what has that market actually sold for?
What interest rate are they assuming when the loan resets?
How did this operator do when the market wasnât helping?
Itâs the same rule I wrote about a few weeks ago with AI. The tools can screen and model all day long. The judgment about whether the assumptions are real is yours.
Key Takeaways
Know your why before you invest. Private equity should do a specific job in your portfolio. âEveryoneâs doing itâ isnât a job.
Start with what you can understand. Real estate and industrial funds are learnable. Earn your way into complexity, a position at a time.
Vet where the operatorâs assumptions come from. Anyone can build the spreadsheet. Ask where the numbers come from and how they performed without a tailwind.
Your Move This Week
Before you look at a single private equity opportunity this month, write one sentence:
âI want private equity in my portfolio because ___, and it has to do ___ for me.â
Fill in both blanks. Be specific: income, growth, tax efficiency, diversification away from your public stocks, or something else.
If you canât finish the sentence, youâre not ready to invest yet. Thatâs useful to know too. Bring it to our Private Equity Month sessions, and weâll work on it together.
Completion signal: the sentence is written.
Held beats pretty.
The operators I eventually walked away from were making money when I invested. What I couldnât see yet was whether theyâd keep making it once the tailwinds stopped.
Letâs keep building.
âChristopher
P.S. Private equity is one of the most-requested topics in our community, which is why October is Private Equity Month for our members: expert sessions plus working sessions, so members can understand the categories, the vetting, and the due diligence before they invest. Thatâs all inside the Micro Family Office Accelerator. If youâre not a member yet, start with The WealthOps Way.
đ Start here: The WealthOps Way
Go Deeper
đŻ Start here if youâre new â The WealthOps Way Free, 2-hour live workshop.
The structured build path: Micro Family Office Accelerator â Year 1 of the WealthOps membership.
Recent arc:
One Year In: What 246 Families Actually Built â the member wins (confirm slug)
The Tax Checks That Made Me Angry â the Q4 tax system (confirm slug)
By 2030 AI Runs Your Wealth. Hereâs the Trap. â AI as your operations manager, not your decision maker
Today: three lessons from years in private equity
New here?
Iâm Christopher. I built my Family Office after my 2012 IPO, after googling âhow to build a family officeâ and hitting the $100M wall the industry has quietly agreed on. Now I lead a community of more than 240 practitioners at WealthOps, and weâre building Eterna, the AI platform behind our approach. If this is your first issue, welcome. The best place to start is The WealthOps Way (wealthops.io/go). Free workshop, full rulebook, no pitch.
This is education, not investment advice. Private investments are generally limited to accredited investors, are illiquid, and can lose money. Do your own due diligence with your advisors.
Join me for The WealthOps Wayâour free live workshop designed to help you stop guessing and start running your wealth like a business.
Youâll go from scattered to strategic as you craft your own Portfolio Thesisâthe foundation of everything that follows.
Spots are limitedâand the clarity youâll gain? Game-changing.
Letâs build your portfolio like itâs your next great company!
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Disclaimer: This newsletter is for informational purposes only and does not constitute financial or career advice. Always consult with qualified professionals before making any decisions based on the information provided.