Brian Sterz of Miracle Mile Advisors on Money Management for Startup Team Members

Brian Sterz of Miracle Miles Advisors - Podcast Transcript

Scott:	Welcome to Founders and Friends Podcast from Scott Orn at Kruze Consulting, and today my very special guess is Brian Sterz. Brian and I have been friends for 20 years. He is a financial planner, investment guru, and today we’re going to talk about personal finance for founders. I get this question all the time from founders. And, you know, I don’t actually know what to do on this. So then we brought in the expert, Brian Sterz, and he can tell us how founders should plan for their personal finances. Welcome, Brain.
Brian:	Thanks, Scott. Happy to be here. We’ve been having these conversations for 20 years. This could be a very, very long day of talking if you get us going.
Scott:	Very long but exciting.
Brian:	Absolutely, absolutely.
Scott:	So maybe tell everyone where you are. Brian just graduated from UCLA MBA probably, what, a year ago or something?
Brian:	Yeah.
Scott:	And now he’s at another firm. And just give your kind of quick professional background and where you are today.
Brian:	Sure, sure. So Scott and I went to Berkeley together. I worked on the derivatives trading floor coming out of Berkeley. After that, I worked at a firm doing institutional consulting, where I led the fixed income research group and allocated fixed income investments for public pensions. I left that to join a firm back in Los Angeles as a member of our Investment Committee, managing about 500 million dollars when I joined the firm and about 1.5 billion when I left to go back to business school. After doing someone investment banking during business school, I joined up with the firm where I’m at now, where I serve in a similar role as a member of the Investment Committee, overseeing sticks and bonds and alternative investments as well as dealing with the book of business and a bunch of founders and very interesting entrepreneurial clients.
Scott:	You’re based in L.A. But you’re actually in San Francisco right now. But lie the L.A. Tech scene is blowing up, so you’ve been actually started managing a lot of money for tech founders in L.A. We’ve had some informal conversations. Maybe talk about the L.A. Scene there a little bit and what the founders down there are looking for.
Brian:	Yeah, absolutely. So, the L.A. Market is insane. I live in Venice, I’m right in the middle of it. And it’s really great to see, I’m born and raised in L.A. So to watch this transformation, it’s been very, very cool. But there’s kind of like San Francisco, there are the big dollar companies, right. There’s a huge YouTube campus, a huge Google campus, certainly Facebook campus, Snapchat is everywhere, all over Venice. They own probably a quarter of it, it seems.
Scott:	Go Snapchat.
Brian:	Snapchat’s a great company. I know a lot of people there, it’s a great company. And then there is a great startup scene. So there’s a ton of accelerators and incubators. And there’s a real ecosystem being built because we’re starting to get to the next iteration of founders. Where the first ones have now had their liquidity events, now they’re turning around looking to be angels and investors themselves. And so the area is really starting to feed on itself. It’s really cool to watch.
Scott:	That is like the ultimate … That’s when it kicks into high gear. I’ve been watching LA for ten … I used to go down there when I was at Light House all the time. There’d always be a lot of good companies, but the angel in that work, there wasn’t a ton of money floating around. It’s like the founders had to work a lot harder to raise money down there. And, of course, they’d hit the Sand Hill firms as well. But there’s something magical about, you know, there’s actual VCs based in Santa Monica. And now the Angel Network, which is the really important money is flowing. Because people have made money so they can back the next generation. That is super exciting.
Brian:	Yeah, without a doubt. You know, it’s cool where maybe five years ago, maybe seven years ago, it was San Francisco based VC firms or even growth equity forms. Maybe had an office in Los Angeles but now the money is in Los Angeles and they’re running those decisions and they’re playing with all the great firms so it’s really cool to see. And why not? We have beautiful beaches, a great town. Sure, there’s traffic but we’ll take the weather.
Scott:	It’s also the media connection, so many internet companies are media connections these days, it makes so much sense. So today we’re going to talk about what founders should do with their personal finances. And maybe we break this up, I don’t know you tell me. But it seems to me there’s kind of the startup founders, who are doing their first time, not tons of money, you know, not making a lot of money in salary, but have big hopes for the future. What do they do? And then the people who are at the late-stage firm that’s kicking butt, they know their options are in the money and how do they plan for both liquidation and what do they do with their money after? Does that make sense?
Brian:	Right, yeah absolutely. I would actually break it down into probably three categories of founders/entrepreneurs/doing well at a great company. There’s the startup founder, their company has traction, they’re growing, but certainly, no liquidity, maybe not a lot of cash flow coming in. Certainly for the early tech guys. The next level I would say is, you know, people that are very early at the Snapchat’s of the world, you know, Uber’s, all these guys. Liquidity events are few and far between for these big guys these days, with the slowdown of the IPA market so that’s a different sort of animal. And then there’s the intermediary, sort of founder things going well. Maybe they’re at the later stage, fundraising, or they’re going to be [inaudible]. And I think it’s very different strategies for all three.
Scott:	I love that breakdown.Let’s tackle it, man.
Brian:	Alright, let’s do it.
Scott:	So founder, early stage, not making a big salary, no liquidity on their options. This is a series A… Series A, series B kind of founder. And when I say founder, I also mean the early managing team. The founder is shorthand but the early manager team is significant equity.
Brian:	Yeah, absolutely. So these guys, I love starting to work with these guys. I mean, just as a side note, I love what I do, I love the markets. I’m a stock guy, I’m a bond guy, I wake up at 5:00 in the morning. I love seeing what the futures are doing, what the tenure treasuries are doing. Scott and I have spent more hours than we care to admit talking about where gold prices are going amidst, you know, a night at Bar 9 or something.
Scott:	There are some really dorky conversations that it’s probably good you’re not apart of, audience.
Brian:	But that’s the way that I think about things, right? I love working with the entrepreneurs because you’re really building businesses. You’re really building companies. You’re doing real work, as I like to say. And so, it’s my job really to look out for all of these things that maybe aren’t, kind of, in your minds. The reason that comes up, thinking about the early founding guys is they don’t tend to see these things on the horizon quite yet. They’re looking at this thing down the road. The money’s not quite tangible, you don’t know if it’s going to be there.
Scott:	They’re also just working their ass off building the company. So it’s like, there’s only so many hours in the day. But that’s why I think planning ahead and working with someone like you is huge because you do a lot of the work for them, you help them focus on the few things they need to plan for, and then get back to building their business. Cause at the end of the day, if the business isn’t successful, none of this stuff matters because they won’t have a big outcome.
Brian:	Yeah, yeah. Absolutely. So there are a few things. At this stage, you’re kind of looking at the basic blocking and tackling, right? You need to, from a financial planning standpoint, you need to look at getting yourself a trust. Get your assets in order. You may have accounts here, an account there, and things going in different places. Get that consolidated, make it as easy as you can for yourself, for everything to be in one place.
Scott:	What’s the trust component of that?
Brian:	Yeah, so getting yourself a trust. This is going to be the building blocks of how you’re gonna hold your company if and when a liquidity event comes. This is going to be the entity that, you know, all of your cash comes into and this is providing protection for you so that it’s in an entity outside of just yourself.
Scott:	So it’s like a legal entity that is… Is it for tax planning or what’s kind of the… I understand the trust will hold the shares, right? Like of the company that you’ve started?
Brian:	Yeah, yeah.
Scott:	And maybe some of your other assets, maybe your cash or your house or something like that. But what’s kind of the purpose of that trust?
Brian:	A lot of it is, you construct them in different ways. But some of its protection for something going after yourself or your entity. Some of it is for eventual tax planning, and there are different trusts that you’re going to want to get to, which at this point it’s something to be considered… I hesitate because if you have a family that’s one way you’re going to structure these things. If it’s just yourself, you know a young man, a young woman, doing your thing, the family component may not be on your mind. But this is going to be something that is going to evolve.
Scott:	So if someone comes to you and they’re in this situation, you’ll help them pick the right legal structure for their trust and, you know, kind of take everything in consideration.
Brian:	Right, right. So, I guess sort of taking a step back maybe, actually just giving a background of… I work at an independent wealth management firm. What that means is we’re not affiliated with the bank, we don’t sell our own products, we don’t sell [inaudible], balance sheet. We’re not trying to get to the founders of the company to lead the IPO down the road, we just manage money for people. And so we’re trying to make sure that all of your financial parts are in the right places, regardless of if that’s a thing for us or not. So, we’re not outright giving trust advice, but we can say this is how it is best structured from our clients that do this, these are the best, sort of tax structures that we’ve seen to get where you’re going to go. And then, either you’ll find a trust and state attorney or CPA or we certainly find a lot of time talking to them all day long and can put you in touch with the ones we really trust. And from that standpoint, we’re trying to be your trusted financial advisor.
Scott:	So you don’t have the kind of, inherent conflicts that an investment banker might have? So you’re actually looking out for the welfare of the CEO, of the founding team, and all that kind of stuff?
Brian:	Yeah. You know, it’s funny I came up through, as I said, the investment ranks on the trading floor and managing money, picking stocks and bonds, and then working with people. You know, the investment banks and these things, they do a good job, they’re smart people without a doubt. But I’ve never been in a position where I sell a product, right? I’ve never been told, we have this IPO coming, get your clients to buy this thing or to fill up this fund or to do that sort of a thing. There is that at these banks and the potential for that, and not to say that they’re all bad or anything like that, but it’s something that someone has to consider. The reason we like our model is that we can say to you the only reason we’re gonna look to do something in your portfolios or etc, is in your best interest, there’s literally no other reason why we would do it.
Scott:	Yeah that’s really powerful. And as someone who worked at an investment bank, I’ve definitely been on the receiving end of those research calls where they’re basically saying like, time to get all your clients to buy this crummy stock. And they don’t say that explicitly, but there’s a lot of pressure to get someone to buy enough of the stocks so that the company can go public so that the bank can get the fees and the clients happy. So I’ve totally seen that it happens. Working with independent is very nice, all they worry about is what’s good for you. So going back to our early founder, not a lot of cash… So they would look to get a trust?
Brian:	Yeah so trust… Trust point one without a doubt. Point two is to simplify your financial life. So, the investments, the things that you do have, get them all in one place, get yourself to a lower cost custodian like a Schwab or a TD Ameri-trade and doing those right things. Make sure you have enough liquidity and things not in, let’s say the market, so you have the money to ride out the wave that you’re already on. As the founder, you guys are going through… People think the market’s crazy, you guys day in and day out is way crazier than anything the SNP 500 is going to do. So you don’t wanna be worrying about that stuff. So making sure you have that money lined up and be realistic with that is big. You can say, the block and tackle are, if you’re going to be invested, let’s say you have retirement accounts, get yourself diversified… Do the boring stuff, because that’s what you’re gonna do. You’re going to start taking advantage of compounding of returns, dividends being paid to you, in a way where you’re so focused on your business you don’t need to spend time figuring out what Apple’s earning and losing sleep over some stock that ultimately… It’s taking away from what you do best, which is creating a company and creating value.
Scott:	Stay diversified, low costs, that’s what I hear you saying.
Brian:	Yeah. You know, there’s maybe more to it but big picture, you want your eye on the ball and I don’t think you wanna be worrying about those things as much.
Scott:	Cool. So then the next, kind of, group you outlined was someone who has a big successful company, maybe like an Uber, that maybe doesn’t have a lot of liquidity right now, Snapchat. What should they be doing? And this is like the whole employee base, really. Early employees at those companies, God bless them, are gonna make millions and millions of dollars. And God bless them, they took the risk, and they jumped on the bandwagon early and they’re building a great company. So, this is not just for the founding team, this is for everybody. What should those folks be doing?
Brian:	Yeah, absolutely. Hopefully, when they’re at the earlier stage of those things, they really surrounded themselves with a good team. They found that trusted advisor. They found that right, either trusted state attorney or accountants, so they’re doing good things around the way. There are things that, hopefully along the way, that how you’re reporting your options, what are you paying in taxes… Paying taxes on these options as you’ve got them early, so you’re paying taxes on a lower basis, or if you’ve waited. So hopefully you’ve been doing those things along the way with your trusted team. But now you’ve gotten to that place, right? Now you’re on this unicorn list. Things are big. Well, now you’re gonna start coming up in real problems, and what we consider real problems are tax problems. There’s the state tax gift exclusion, which is 5.45 million dollars per person. Anything you’re going to have above that, to pass along, is gonna go to the government as of now, at 40%.
Scott:	Is this in case you die?
Brian:	In case you die.
Scott:	Okay, okay.
Brian:	So, this is basic, basic stuff. But if you have a family, and you’re starting to think about these things, a lot of this is getting these things out of the tax system. So, there are ways to gift these things to different parts, different members of your family, taking things just basically out of your state and putting them in other places. That’s the trust in the state’s side of things and that can have tax ramifications. I certainly don’t want to over speak about these things on a podcast, but I’ll let you know that when you speak with the trust and state attorney, there’s a lot of things they can do to try to get you ahead of the curve. From a protection standpoint. Same thing on the tax side of things. So, when you’re, as I said, reporting income, these options, you wanna be minimizing these taxes. Working with your CPA along the way is gonna be huge.
Scott:	Along… So meaning like you should do an early exercise if you know it’s gonna be in the money?
Brian:	Exactly.
Scott:	Maybe kind of explain the positives and negatives of early exercise.
Brian:	Sure, sure. Early exercise, the early founders know this as an 83B election, but exercising your options early is for the purpose of, let’s say you’re getting company stock at four dollars a share. You can pay income tax, you have leeway to either pay income tax on that today or you can wait until later when it’s more certain that you’re actually gonna get it and it’s transferrable. But when you elect to do it early, what you’re doing is you can pay income tax based on that, let’s say four dollars a share, rather than waiting down the road to when this thing is 30 dollars a share, and then you’re paying taxes on a much, much higher basis. The downside of reporting early, potentially, is you have to write that check, which is not a good thing. And again, maybe you’re early on, maybe the income isn’t there to support it.
Scott:	Write a check to the tax agency because you basically exercised… So the day you exercise you’re responsible for the difference between what it was issued at and what the fair market value is.
Brian:	Exactly.
Scott:	So in the dot-com boom in ‘99, I’m totally dating myself but there’s a lot of people who were so confident they were doing early exercising and then they’d write this big tax check, or figure they’d have the money later, didn’t have the money later, and the company stock went to zero and all of a sudden they owe Uncle Sam 500,000 dollars without the cash to pay it. There’s a huge risk in early exercising if you don’t have the cash. You definitely want to do it only if you have the cash. But, it’s a way to lock in your cost basis very low, right?
Brian:	Right, and depending on how you’re getting paid out and how bespoke those things can be. They can do them in different ways so that you can potentially do some of it, rather than all of it. So you can even sort of hedge and- [crosstalk].
Scott:	That’s a great point.
Brian:	-Or do just enough where you do have the cash to do it comfortably and not put yourself in a bad position. But that’s a huge one.
Scott:	So if you lock in the cost basis, to use your example, at four dollars a share, and you early exercise, and the stock goes to thirty, the difference is twenty-six dollars a share, right? This is… We’re doing math live here on the podcast. And that twenty-six dollar gain, you’re only going to have to pay capital gain tax on, and that’s [crosstalk].
Brian:	Depending on what year you’re listening to the podcast, you know 15% or 20%, let’s not talk about where it could go but… As opposed to paying it as ordinary income, if it’s inside of a year, which is at your ordinary income tax rate.
Scott:	So it might be the difference between a 20% tax rate for long-term capital gains to like 35% or 40% at your normal income-tax rate. That’s a huge amount of money, you can do the math. That saves you, you know, 20% or so?
Brian:	Way more, then. If you think about, if you’re reporting something paying ordinary income tax of 40% on that as income, and then let’s say somehow you exercise it within a year, you’re gonna pay ordinary income tax on the gain that you got from there, you’re paying double tax. That can really eat into this massive Equity event that you’ve been waiting for for a long time.
Scott:	So what’s your core advice on that? Wait until there’s certainty and then exercise?
Brian:	Yeah. Well, you made a great point with the cash flow. So this is where it depends on the person. If your company does have traction and you think that there’s going to be a liquidity event, this is going to be worth something, without a doubt your best off reporting that as income and paying tax on it as soon as you can. You run the risk if it goes to zero that you paid tax on something that you didn’t want, but that’s going to put you in the best situation. If you don’t have the money to pay the tax on that year, then maybe some sort of intermediary play of doing some of it is probably your best bet. But it depends on the person. But minimizing these taxes is… Bigger picture, making sure you take these right steps can save you as much in taxes as, you know, the smartest investment guy is going to make for you on that money over the next five, maybe ten years, depending on how well you’re doing.
Scott:	That’s a great point. If you’re successful enough to be in this situation, it’s fantastic. And your priority shift from trying to make a lot of money off your investments to just retaining what you’ve made. And that’s why the taxes are so… Minimizing taxes where possible, obviously where legal, is super important. And I think, you and I are both… Our body language while we’re recording this is, make sure you consult a professional. Maybe Brian Sturs, hopefully, Brian Sturs.
Brian:	That’d be great.
Scott:	And make sure you are comfortable with the risk you’re taking if you do an early exercise. Because again, I know people who did this in 1999 and lost a lot, lot their whole net worth because they took the risk and the company went to zero and they owed a lot of taxes. So just be very, very careful with it.
Brian:	Yeah, and a lot of this comes down to, you know, difficult conversations you need to have. In terms of this, and some other things we’ll get to in a minute. This is where, when someone comes to me and you get these questions of what about the wealth fronts, the betterment, the rob-advisor kind of things. Okay, that’s interesting, we can talk about business model things. But these kind of decisions and things are, as I was saying, as material if not more than what, quote, “the market” gonna get for you. You better have someone that you really trust and walks you through each one of these levels before you even get to, what should I be investing in? And that’s at the very end of the plan. I have a client I’ve been working with of late, whose referred to me, and he has a business that’s doing very, very well and now all of a sudden he has a lot of cash flow coming in and all these things, and he came to me. We started from the beginning and it was a good five, maybe six weeks before we even got to the point of investing his dollars in things because we’re taking care of all this blocking and tackling upfront and making sure everything’s in the right place before you start doing those things. It’s a lot of work, but it’s great to watch someone really get all their X’s and O’s lined up and take all that risk off the table so they can focus on what they do, and then we can focus on what we do in terms of investing in stocks and bonds.
Scott:	I love it, I love it. So, we’ve got about ten minutes here. What’s that last group of people you were talking about, what’s your advice for them?
Brian:	So through this progression, now you’re looking at the founder, you’ve got this really big liquidity event, this is your company, your shares. Now you’re really going to start talking about advanced state planning strategies. The different trusts and the family limited partnerships are huge. When you start talking to your CPA’s and the trust and state attorney, you’re gonna start looking at, and this is actually only for the next few months potentially, but valuation discount, gifts, and things you can do to effectively lower the basis on your business and, again, sort of get it out of your state even though there’s a lot of considerations there. But that’s the first thing, to make sure that where your shares gonna go, what they’re looking at. Next is getting into things like insurance and life insurance and things like this. Those are difficult decisions to have as well, but there are some very very interesting things people can do with insurance to make sure that you’re taking a lot of risk off the table. There’s death benefit kind of stuff, there are income replacement strategies, different things to make sure that you stay wealthy over time. That’s the next piece. And again, you’ve been investing this whole time, taking some money off the table, you have that strategy. The next point I would make it that you want to be level-headed about what you’re investing in. Because now you’re having, very soon, a lot of money in your hands. Everyone’s coming at you with different things to invest in and I’ve seen this so many times with friends and or [crosstalk] -
Scott:	Everyone has a car wash they wanna start that needs 20 grand.
Brian:	And everyone’s got the latest and greatest, but there’s also a desire by founders once they’ve done this, and Scott you made a great point that they wanna turn around and be investors themselves. And maybe they’ve seen people that invested in them and made a bunch of money in what they did and they want to do that as well. But I would say you need to keep that… You’ve taken a big risk, right? But you’ve won, you’ve hit it. Your company’s selling for a bunch of money, you’ve achieved your goals. You wanna make sure that you keep all that. So being careful of where these things are coming from, not that they’re all malicious but they’re not all great investments, and you do want to work with someone who knows investments, who can really point these things out. Another client I have in this same position was, well Brian I want to take some money and do this and I’ve got this other thing that yields 15% and that’s great. And I said, let’s slow down a minute. I can get you five publicly traded stocks that will do that exact same thing without handing a check over to someone that you basically don’t know-
Scott:	And it’s a liquid and you can’t get the money back-
Brian:	Yeah, so not to say those things aren’t good, but you’ve been so focused on your company and building new things you haven’t… And I’m not saying a public stock is the answer, I’m just saying that there’s usually a much broader sphere of investments and things to look at then what’s readily available to you, or who happened to get to you to sell you on the thing.
Scott:	We talked about, kind of the L.A. Ecosystem, with all the angel investing now. It’s why it’s coming alive, but if you were counseling a founder that had success, how much of their portfolio should they be thinking about with angel investing and private company investing?
Brian:	Yeah yeah. There’s different models out there, I would say, on a big dollar value you can think of… You can probably include it in maybe alternative investments. So maybe 20% of someone’s portfolio could be to these kind of things. I would say you probably want a few of those types of investments, it depends on what they are. If you’re throwing money at pure startups that are no cash flow, blue sky kind of things, you probably want a whole bunch of those, if they’re growth equity kind of things, cash loan investments. But I think that’s a pretty good rule of thumb. The other 80%, if you can generate the income you need to live and live well, and you have a lot of risk off the table, then I think that’s probably a good number.
Scott:	You said just their alternatives portfolio would be 20% or so. And then, probably angel investing would be a percentage of that, because angel investing is, we all know, super risky. I really like though, angel came out with this really awesome diversified approach for their 2017 funds yesterday, and its investing in hundreds of startups, which is really how you want to do it. When I do angel investing, it’s like laughable, because I’m usually writing a 10,000 dollar check or sometimes even a 5,000 dollar check, which in the big Silicon Valley world is nothing. But I know personally, that I have to write smaller checks than the average investor so that I can still get diversification. And if you don’t have like ten or 15 angel investments, you’re probably not getting diversification you need and run the risk of losing all your money. Would you agree with that?
Brian:	Yeah, without a doubt. I think one step before that is… You know founders are go-getters, you’ve worked really hard, you’re go go go, you’ve been so focused on this and you haven’t looked at anything else so you get this reward. And I’ve seen it so many times also, so eager to get to the next thing, right? Investing a different beast. And when you’ve done it your whole life, and you see it, it’s one thing. When it’s new, cause I get these questions all the time, it’s very different. So Scott makes a great point in that angel list is a great way to sort of, in a smart way, begin investing in angel investing, kind of see how it works, get a realistic perspective on how much, how often these things actually generate a return. And what that return expectation is as opposed to, boy I got a bunch of cash here, that sounds like a great startup that guy down the street, here’s 250 grand. I just don’t want to have that conversation with you in six months when it’s like, oh that didn’t work out? Wow.
Scott:	You’ve also mentioned, you’ve just talked about this a lot throughout the podcast, what the aspect of sales and financial products. I think the audience should be aware that, just in the same way you may have built the enterprise software company and you have a sales team and those people went out and found customers for your product, the same thing happens with financial serves. Everyone’s got a good way of presenting the data and everyone has their spin on things. And you just have to be really careful and really smart and that’s why I think working with a professional makes so much sense, because they can help cut a lot of that with you. Now, some questions you should ask your professional to make sure they’re in line with you, like how does your professional get comped? That’s a really, really big… Can you talk about that a little bit?
Brian:	Yeah, absolutely, absolutely. So where someone’s coming from, what their incentivized to do, that drives behavior. And that’s not that any one of these places are inherently bad, but when you’re in a system where you’re incentivized to sell things, those things are gonna get sold, right? And that’s not exactly biased. Rules have changed so that their now fiduciaries, in some respects, as independents have been held for a very long period of time. But yeah, how are you incentivized? Do you work on commission or are you paid based on assets under management? What commissions and things are you paid on the backend, if at all? Ask to see a track record. It’s a great pitch that these guys have that look, everyone’s different and everyone’s gonna be invested in different things, there’s something to that but at the same time, you don’t want different portfolios based on what’s selling that day, right? So what is the performance track record? What are you looking to do? How’s the team structured? Is the person you’re dealing with actually an investor at the firm? Or are they a salesperson mimicking something coming from someone else? It’s all just different ways of looking at it, but you wanna put that stuff on the table. And most brokers at a bank, there’s not a whole lot of consistency. Two guys sitting next to each other at a desk may have vastly different portfolios. And so there might be a fancy name on the door, but it just comes down to whose say or not, and you’re not gonna know that. And so that’s where track records big.
Scott:	Do you prefer, like the just percent of assets-fee structure? Or what are you like?
Brian:	Yeah. So, that’s what makes the most sense to me, that’s what our firm is based on. We just manage assets with a fee on those assets. The way I say it is we get a pay raise if your assets go up, and we take a pay cut if your assets go down. And if you’re not happy, you can fire us at any time and we lose that business. So from that standpoint, we’re really fighting for you everyday. And all the value-add services we provide. I’ve helped startups get their first contracts. I’ve helped them introduce them to other investors. I’ve put them in touch with other post-equity clients I have to give them advice. I’m doing all that to make sure my clients are happy, as opposed to spending time to get them to make commissions. That’s where I’d come from, and I think that’s the best way out there that things are done. The other option that people might hear about is somewhere paying hourly rates for advice, and they’ll sort of tell you what to do on that basis. I think you want to be working with someone whose incentivized to be engaged with you and be proactive with you as opposed to something like that.
Scott:	I think the fee per assets makes total sense to be-
Brian:	Its the way the institution world works. I think it’s how it should work.
Scott:	Cool man, well this has been very… Ton of knowledge dropped here. Maybe can you leave the audience with like a couple tips or the high level advice you would give? Like the big picture.
Brian:	Yeah absolutely. So, high level, we didn’t even talk about stocks and bonds and that’s what is at the heart of personal finance and investing over a long period of time. But really, do think about the planning aspect of these things because it’s more material than you think that it is, and by the time it really is an issue, you get to an equity event, you get to these things, you may have already missed these elections and things you could have done along the way, or been investing along the way and hit the power of compounding working for you that you can’t get back. You’ll probably hear in Scott’s other podcasts about what would you have done differently if you had thought about things ahead of time before your equity event? Or if you built your company differently? The same goes on the personal side. So get people that you trust around you that are gonna grow with you, and think about it that way. And from the actual investing side, if it seems like a bad idea it probably is a bad idea. This is a whole nother podcast but making money in the markets is hard, so your go-getters, your founders, your all these things, but don’t be overconfident in this arena because protecting from those losses is way more important than getting the gains when you think about long-term track record.
Scott:	That’s really good advice. Can you tell everyone where they can find you online?
Brian:	Yeah absolutely. My firm is called Miracle Mile Advisors. If you find me on their website, miraclemileadvisors.com, or you can reach me at bsterz@miraclemileadvisor.com. I’m not real creative on the social media so if it says Brian and there’s a social media thing that’s where to find me.
Scott:	That’s probably you?
Brian:	That’s me.
Scott:	Thank you so much for coming by, this is a lot of knowledge, a lot of good advice. I really appreciate it.
Brian:	You’ve done very well for yourself, it’s fun to do this.
Scott:	Awesome, thanks man I appreciate it. Take care.

Brian Sterz of Miracle Mile Advisors on Money Management for Startup Team Members

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