[EO South Florida] Designing a Life That’s Rich Beyond Money With Noah Rosenfarb

Noah Rosenfarb is the Founder of Wealthrive, a boutique advisory firm that helps high-net-worth entrepreneurs optimize tax strategies, build predictable income streams, and design lives that are rich beyond money. A third-generation CPA, Noah has sold eight companies, taken one public, and completed over 50 real estate investments valued at nearly $1 billion. He is also the author of EXIT: Healthy, Wealthy and Wise and co-hosts the Divestopedia podcast, where he shares insights on business exits and wealth transitions. Through Wealthrive, Noah leads a multidisciplinary team dedicated to empowering founders to achieve financial freedom and a lasting legacy.

Here’s a glimpse of what you’ll learn:

[3:59] Noah Rosenfarb introduces the “Lotto Ticket Method” and how it inspired the founding of Wealthrive
[7:23] Using the lotto exercise to navigate big life decisions like where to live and how to spend time
[16:35] Why entrepreneurs must own their tax strategy and not rely solely on preparers
[19:55] 23 overlooked tax strategies to unlock low-hanging savings
[25:15] Structuring a business exit to generate tax-free income and avoid estate tax using a Wealth Preservation Trust
[30:04] Preventing post-sale regret by preparing purposefully before exiting a business
[34:02] Understanding the consequences of IRS disputes and how tax opinion letters help mitigate risk
[36:17] How Noah’s real estate investing journey began with a house hack and evolved into $900 million in assets

In this episode…

What would your life look like if money were no object? It’s a question many entrepreneurs don’t pause to ask as they chase success. But what if designing your ideal life started with a simple thought experiment and a lotto ticket?

According to Noah Rosenfarb, a seasoned exit strategist and third-generation CPA, you don’t need to hit the lottery to start living intentionally; you just need clarity, courage, and a plan. He highlights a personal exercise he calls the “Lotto Ticket Method,” which helped him and his wife make bold, values-driven decisions about their lifestyle and work. By asking who they’d spend more or less time with and what they’d start or stop doing if they suddenly had financial freedom, they gained clarity on what truly mattered. This mindset ultimately shaped Noah’s approach to wealth creation, from creative tax strategies to real estate investing to structuring exits that go beyond the money.

In this episode of the Rising Entrepreneurs Podcast, Dr. Jeremy Weisz sits down with Noah Rosenfarb, Founder of Wealthrive, to talk about designing a life that’s rich beyond money. Noah breaks down his unique tax strategies, shares his lotto-inspired lifestyle planning method, and explains how to exit a business without regret. He also talks about building tax-free income and preparing emotionally for life after selling your company.

Resources mentioned in this episode:

Quotable Moments

“I realized I didn’t need to win the lottery; I needed to be more thoughtful, more courageous.”
“My goal was always to find ways to support those entrepreneurs because I thought they’re the heroes.”
“You should be generating a higher return on your time outside your business, not a lower one.”
“The way the Earth moves is through the ingenuity and creativity of us as entrepreneurs.”
“Sometimes you have to distinguish what’s fun from what’s profitable, and they’re not always the same.”

Action Steps

Use the Lotto Ticket Method annually: Reflecting on your ideal life helps clarify values and guide bold life decisions.
Build your tax strategy proactively: Taking control before major financial events can prevent regret and save significant money.
Evaluate return on time, not just investment: Measuring time ROI ensures you’re prioritizing work that maximizes your unique value.
Explore overlooked tax strategies with your CPA: Revisiting these tactics can unlock substantial savings your accountant may have missed.
Design your post-exit life before selling: Preparing emotionally and financially ensures your next chapter is fulfilling, not disorienting.

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Episode Transcript:

Intro: 00:03

Welcome to the Rising Entrepreneurs Podcast, where we feature top founders and entrepreneurs and their journey. Now let’s get started with the show.

Dr. Jeremy Weisz: 00:13

Dr. Jeremy Weisz here, Founder of inspiredInsider.com, where I talk with inspirational entrepreneurs and leaders. Today is no different. I have Noah Rosenfarb. You can check him out at wealthrive.com and no, before I formally introduce you, I always like to point out other episodes of the podcast people should check out.

I had, since this is, you know, part of kind of like the EO series I had Rick Rappe on. I was in Seattle. We talked about direct mail. I love direct response marketing and direct mail. We geeked out on direct mail.

Why it still works. How to do it right. Another one, Eric Evans of EO Austin. He talked about transforming lead generation and customer engagement through AI. That was really interesting.

And Roger Einstoss of EO Argentina, and he helps people hire software engineers all over the world. So we talked about that and what he does with that. So and with the advent of AI and other things, he’s become popular among companies. So check those episodes out. You can check them out on Insider.com.

And we have a special podcast, Rising Entrepreneurs, that is really featured featuring different EO members. This episode is brought to you by Rise25. At Rise25, we help businesses give to and connect to their dream relationships and partnerships. We do that in two ways.

One, we’re an easy button for a company to launch and run a podcast. We do the strategy, accountability, and the full execution and production. Number two, we’re also an easy button for a company’s gifting. So we make gifting and staying top of mind for your clients, partners, and prospects easy, simple, and also affordable. So some people even send to their staff from a culture perspective.

So all you do is give us a list of people we do. Everything else we call ourselves kind of know the magic elves that run in the background to make it stress free for companies so they can build better relationships and most importantly, run their business. Right? So for me, the number one thing in my life is relationships. I’m always looking at ways on how I can give to my best relationships, and personally, I found no better way over the past decade to profile the people I admire and share with the world what they’re working on on the podcast, and also sending them sweet treats in the mail.

So go to rise25.com if you have questions or support@rise25.com and email us. I’m excited to introduce today’s guest, Noah Rosenfarb. He’s the Founder of Wealthrive, where he helps entrepreneurs generate predictable income, reduce taxes, build their legacy, and create their ideal life. He’s done many talks on this. I’ve, you know, watched many videos, Noah on this and really walking through that ideal life is it kind of starts with that.

We’ll dig into kind of the lotto ticket method, I don’t know, that should be a book that you the next the sixth book you come out with is the lotto ticket method because I love your philosophy, you and your wife’s philosophy around that. But he’s a seasoned investor and exit strategist. He sold eight companies for a combined total exceeding $750 million, taken one public, complete over 50 real estate investments valued at nearly $1 billion. As I mentioned, he authored five books and the latest one, if you haven’t checked it out, Exit Rich Beyond Money. So, Noah, thanks for joining me.

Noah Rosenfarb: 03:22

With pleasure. Glad to be here.

Dr. Jeremy Weisz: 03:24

And we’ll start. And I want a big a big thank you to to two people. John Corcoran, my business partner, who’s like, you have to have known on the podcast also Kevin Thompson, who’s also I think I was hit at all angles. So like you have to have Noah, Adi Klevit, also mentioned Noah as well. So there’s like three people in my universe that I trust and like Noah’s, Noah’s the man.

So Noah, let’s start off with the topic of your next book, which is the Lotto method. Now that we came up with on the and just talk about that concept in in what you do. Around that?

Noah Rosenfarb: 03:59

Sure. And I’ll tell a little bit of an origin story around it, because this actually is what led to the founding of wealth, right? So in 2017, I participated at EO nerve in a short talk speaking competition, which I won, and my presentation was on how I won the lottery and what my short talk essentially revolved around the stories that my wife and I have utilized this tool and strategy where we go and buy a lottery ticket and we answer four different questions. If, assuming we won, who would we spend more time with? Who would we spend less time with, and what are the things we’d start doing and what are the things we’d stop doing?

And throughout my life, when I bought these tickets and thought about winning, I’ve noticed that there were different things that I’d like to accomplish. And yet, when I reflected on what was really holding me back. I realized I didn’t need to win the lottery. I needed to be more thoughtful. I needed to be more courageous, and I needed to be truer to myself and to what I really wanted out of my own life.

And it’s led me to make uncomfortable decisions, impactful decisions, and really put me in a position where I feel really proud of the life that I’ve created.

Dr. Jeremy Weisz: 05:16

Talk about maybe some of those uncomfortable, you know, decisions you mentioned that was kind of the impetus of of Wealthrive.

Noah Rosenfarb: 05:24

Yeah. And so I to tie one to the other, maybe they’re somewhat non-sequiturs. I’ll tell you first about how it led to wealth drive, which is I started speaking after I had sold an opera, my last operating business. So I had a family office for divorced women. That was an evolution of being growing up in the forensic accounting business with my dad and helping him scale and sell his CPA firm.

But I testified in divorce court that that led me to founding this family office for divorced women, which I sold in 2014. And essentially was, you know, I don’t know a better word than retired, but I was a full time investor in businesses, in real estate, and I didn’t have a job to show up to. And so one of the things that I thought would bring me meaning and purpose in my life would be sharing my experience. And so I did that talk. I won that speaking competition that led to more talks.

Eventually I started talking about taxes because lo and behold, nobody in EO was talking about taxes in a way that was intriguing and creating value. And after I started giving those talks, people were asking me for help and I didn’t want a job. And so I wasn’t sure how to help them. But eventually I heeded their call and I built a team of accountants, lawyers and financial planners that can implement the Rich Beyond Money framework that I’ve created On behalf of these entrepreneurs. And so it was really one thing leading to another that kind of evolved into what is now Wealthrive.

Dr. Jeremy Weisz: 06:58

Yeah. And I get that. It’s like, listen, I have passive investments. Do I really want to create another company and, and build a team around it and stress and everything that comes with that. So I’ve definitely avoided things like that in the past.

And it just takes enough people to just demand and ask. How often do you and your wife tend to do this exercise? And by the lotto ticket.

Noah Rosenfarb: 07:23

You know, more recently it’s it hasn’t come up that much because I feel like we’re so in the zone where we want to be. And part of that, I think the constraints that we have now, and really the constraints that we felt for the last number of years have been around our school age children. So the things that we would want to do, they’re not money related. They’re really more the freedom and flexibility. And so thankfully, my son is graduating from high school.

He’s off to Florida State University and my daughter will be a freshman in high school, has agreed to travel around the world with my wife and me and be homeschooled and that, you know, is more aligned, I would say, with one of those things that my wife and I would really like to enjoy. Our son was adamant that that would not be fun for him. And as you know, I would say, kind, loving and generous parents. We’ve often put our kids needs and desires ahead of our own. And and so thankfully, with our daughter’s adventurous spirit, we’ll be able to move one step closer towards life.

My wife and I eventually want to live as empty nesters. We have a plan to be intentionally homeless, and our goal is to live around the world and, you know, kind of blend, blend work and pleasure and in different time and space.

Dr. Jeremy Weisz: 08:32

I want to talk, and I want to go back to the homeschooling thing and traveling around the world, because that’s really interesting. I think if I, if I pitch that to my two daughters, they would reject it. But that’s, you know, it just depends on the personality. But I do want to hear how you’re going to plan that out, because it’s interesting. It’s just a different mindset around education, which I love.

But talk about some of the decisions you made differently, because a lot of I know one of them was moving to somewhere warm like Florida. Talk about like throughout the years, what are some of the decisions you made with this lotto ticket exercise?

Noah Rosenfarb: 09:08

So I would say it’s really helped in a variety of phases in our life. So that first one that you referenced, we had a nine month old son. We were walking on the boardwalk in Hollywood, Florida, where my grandfather lived, and my in-laws had a place on the beach, and my wife and I were spending three weeks over the holidays with our newborn. And, you know, I had already left my job and I was independent, working on my family office, but working remotely back then. And we bought a lottery ticket.

And one of the things we were saying is like, well, we probably I think we live here, you know, we want to escape the winter and live in the sunshine. And we could spend our summers anywhere, you know. And what’s the trade off? And and lo and behold, again, that really wasn’t a it was a money decision in many ways, because I gave up a lot of earning potential that I had in the market that I grew up in, where my relationships were deep, where my father was known in the community and left that all for South Florida, where we knew nobody. And so there was a financial element.

But the reality was that the life that my wife and I wanted to enjoy would not be impacted by that move. And so, again, it was more of the courage to make the uncomfortable decision to leave my family, leave my wife’s family back in the home state where we were born and raised, and went to college and had our jobs and had our friends and had our social network. But certainly not a decision that I regret in any shape or form.

Dr. Jeremy Weisz: 10:36

Listen, I’m with you. When Covid hit, we worked remotely from Arizona, from Chicago, and I was like, wait, why do we live in Chicago? This makes no sense. So I it’s definitely in the in the plan to get out of the the winter and not suffer every, every winter. So yeah, I mean there’s been a lot of decisions.

I love that maybe we have a subtitle of your book, The Lotto Method How I Won the Lottery and How You can too, or something like that, because anyone could do this exercise. And I remember, you know, I was at a someone who’s, you know, a really, I guess, well-to-do family. I was having breakfast there and I was asking, oh, what do you normally have for breakfast? And they were saying, I don’t know why. It seemed extravagant to me, but like, would have a like two avocados for breakfast.

At the time I was like, that seems like a lot. I’m like, oh, well, if I was wealthy like them some day I’m like, wait, I don’t need to. I could have an avocado or two a day if I wanted to. So but it’s that same mentality. So Thanks for sharing that.

The the homeschool piece. Yeah. Talk about the the thought process behind, you know, travel around the world. How are you going to manage it with the the education side from from kids, you know. You know, a lot of people who have young kids and, you know, they that seems like an interesting concept, but it seems far fetched, like, how would I even do this?

How would I handle it? So I’d love to see how you’re approaching it.

[Continue to Page 2]

Noah Rosenfarb: 12:07

I think Covid.

Noah Rosenfarb: 12:08

Gave us a bit of an insight into what remote schooling would look like. And here in Florida we have what’s called Florida Virtual Learning School Flvs. And that program has been around, and I don’t know if it’s one of the leading programs in the country, but it certainly is well developed here in Florida. So students that want to learn remotely have been able to do that pre-pandemic. And our goal for our daughter is to utilize and leverage that existing infrastructure so we can travel.

But there’s a basically a fully developed online school for her to attend. And my wife’s an educator. She, you know, when we graduated college, kind of going back to living our true purpose, her parents made her major in business, and she worked for a big four accounting firm. But she really wanted to be a schoolteacher. And so, you know, when we got married, she went and became a school teacher, got her master’s degree, but retired.

And when, when we had our first child. And so I think her being an educator, it gives us a little bit of comfort. Our daughter being a good independent student and someone that did well during that Covid era. And then also, I think for us, my view of education is more related to experience. And I think the experiences that she’ll have visiting different locations and geographies and people and, you know, interesting places to see and conversations to have that, that education can be much more valuable in the long run than any formal education.

And along with her personality, She’s a very outgoing person and she’s not as necessarily like book studious as my son is. You know, who could sit at a desk for hours at a time and study. And so I think to enhance her skills and capabilities, I think this trip will do a lot more than sitting in her local high school for the first year. And the downside, of course, is she’ll give up access to her friends every day. And, you know, that’s her biggest concern is that trade off.

She’s incredibly social and has a great friend group. But, you know, we’ve kind of encouraged her in large part through the conversations we’ve had with adults because the adults all say the same thing, you know, will you take me with you? You know, that’s such a great idea. Oh, your daughter’s so lucky. And so when we share that feedback with her, we say, listen.

Their perspective is they understand what it’s like to give up hanging out with their friends on the weekends, their freshman year of high school. And in large part, those things blend in with your, you know, childhood. They don’t really stand out. Whereas all these experiences are going to really stand out and stay with you for your life.

Dr. Jeremy Weisz: 14:45

What are some must destinations on this around the world journey for you?

Noah Rosenfarb: 14:51

So we’ve actually got the first half planned. We’re going to spend 80 days in Europe in the fall, so we’ll be in the UK, France, Italy, Germany and Switzerland. And then in the spring we’re going to spend 100 days in Asia, part of which is stopping at my office in Cebu in the Philippines to meet my team, some of whom I’ve been working with for 12 years, 13 years, and never met in person. So that’ll be a nice homecoming in a way. As well as hitting my my wife and my daughter have never been to Asia.

I haven’t been since 1996, so it’ll be a great way for us to explore. I’ll hit my sixth continent in Australia and New Zealand. I’ve never been down that far, so we’ll be 3040 days down there And head over to. We’re still working on the other stops in between, but we’ve got Dubai, Singapore, Cebu, as I mentioned, Australia, New Zealand and probably Tokyo and Honolulu.

Dr. Jeremy Weisz: 15:50

Your next EO talk will be that traveling around the world and with a child and and and that I’m sure people will be interested in that talk next. I know one of the most popular things about your talks is taxes. Shockingly. Okay, but it’s the creativity around taxes, so I’d love to hear some fun stories around the creativity around taxes. I know there’s one story about, you know, wrapping a 401 K.

I mean, I’m not going to steal your thunder with it, but maybe, maybe start with that one.

Noah Rosenfarb: 16:26

Yeah.

Dr. Jeremy Weisz: 16:27

Well, and we’ll talk about some creativity that you’ve seen or done. It could be you’ve done them or you’ve seen it around the creativity.

Noah Rosenfarb: 16:35

I’ll zoom out. To start with, why is taxes interesting when I’m speaking? Because it’s such a dry topic and I’m a third generation CPA. I’m someone that’s taken advantage of the tax code for my own family situation, and when I speak, I share the structures that I’ve used to help my family pay very little in tax and why it’s so important. But really, my message to entrepreneurs is that it’s our responsibility to determine our tax strategy.

And we can’t abdicate this responsibility to our tax preparer because our tax preparers job is generally not to develop your tax strategy. And unfortunately, so many entrepreneurs just don’t even recognize that that’s a problem, that there’s this gap between their tax preparer and maybe their investment advisor, which is what is the tax strategy that you’re going to utilize to pay as little as possible in taxes over time. So when it comes to that discussion, one of the things I think people don’t understand is what’s possible and what happens if you’re wrong. And really, it’s the fear that people have of audits that prevents them from often even engaging in a conversation around what might be possible for them.

Dr. Jeremy Weisz: 17:57

Yeah. And I want to point out, like you do talk about this, about, you know, the saving in taxes allows people to reinvest in their business, grow their business, create more jobs. You know, it’s not just about buying like a nice car, right? And I know that you talk about do you want the hands in the entrepreneur individual, or do you want the hands in the government who’s going to further that money and make more of a difference in the world?

Noah Rosenfarb: 18:24

And I believe.

Noah Rosenfarb: 18:25

You know, I’ve always believed that entrepreneurs are heroes. And that was from a young age. You know, partly, I guess, because I grew up with a dad who was an accountant. And so he instilled in us the value of entrepreneurs and how entrepreneurs are the ones that, you know, are creating jobs and innovating and creating value. And so my goal was always to find ways to support those entrepreneurs because I thought, you know, yes, it’s great for the first responders, you know, the men in blue and red that come and save us when there’s problems.

But really, the way the Earth moves is through the ingenuity and creativity of us as entrepreneurs. And what I’ve recognized kind of, again, through the evolution of business and really having the time and space to do whatever I want kind of post retirement lifestyle, I found that the way that I could leverage my talent, my experience, my skills and support, the vision that I have and the people that I want is through this application of creative tax strategy. And it’s been really rewarding.

Dr. Jeremy Weisz: 19:25

So let’s talk about some of them. I mean, people, you know, maybe start with the Puerto Rico one. I don’t know if that’s that’s always an interesting one. And also I just want to point out if you are we are if you are in the video part, there’s a wealthrive.com we’re here. If you scroll around, poke around.

There is a download our 23 Overlooked Tax Strategies. So you can actually go to their site and actually get. We’ll talk about a few here. We’re not going to be able to go through obviously all 23. But I encourage you to fill out the form.

And they actually have a download here where you can get them.

Noah Rosenfarb: 19:55

So yeah. And that list, just so your audience knows, that list is you print it out and you go over it with your existing tax preparer. This is the low hanging fruit that you may just not have ever had a conversation about.

Dr. Jeremy Weisz: 20:08

Yep. Love it.

Noah Rosenfarb: 20:09

And then what we tend to do. So those I would like to reference as like tier one strategies. Those are all the things that your accountant actually knows about. They just may not have told you that it might apply to you. And so yes, you know, I, I love accountants, I think they do an important job.

They are the most trusted profession for a reason. The average relationship with your tax preparers 19 years. So, you know, there’s a lot of relationship value that’s built with your accountant. But they may miss some things. And so these tier one strategies are just a way to bring up some ideas with them that they will be familiar with.

They may just not have recommended them to you. The second area of planning is what I would call tier two strategies. And these are ideas that if you search in Google, you may find some information about them. Whereas the tier three strategies, they’re not even on Google. They’re the things that we’re creating behind closed doors and we’re innovating and inventing new tax structures.

And so those sometimes we we share the outcomes of what they are, but not necessarily the ingredients to the recipe. And on the tier two side, one of the stories as you referenced is I own a business in Puerto Rico inside of a Roth 401 plan. So there’s a couple of interesting parts to that story. One is, why would I own a business in Puerto Rico? And that’s because the Commonwealth of Puerto Rico, which is a US territory, only charges a 4% corporate tax rate.

So unlike I live in Florida. In Florida we have I have a C corporation in Florida as well that pays 21% to the federal government. It pays 5% to the state of Florida. But my Puerto Rico C Corporation only pays 4%. Wow, that’s pretty cool.

The second piece to it is that it’s owned by my retirement plan, my Roth 401 K. Well, that’s interesting because when I issue a dividend from my C corporation. So C corporations, unlike what most people have is a S corporation. And that taxation is coming through to them personally. So a C corporation pays its own tax and then issues a dividend to its shareholders.

Well when you own stock in your 401 K and you receive a dividend, you don’t have to pay any tax. So whether that stock is the company that you founded or it’s Procter and Gamble or, you know, Berkshire Hathaway or whatever company you own that might issue a dividend. You would pay no tax. And the really cool thing for me is as my company makes profits and I pay 4% to Puerto Rico, they issue a dividend and pay no tax on it. Now I take that capital, and it’s in this tax free container where I predominantly invest for yield.

So I invest in debt and generate, you know, let’s say 1 to 2% per month in interest. And all of that interest is tax free because it’s in my 401 K plan. And eventually when I take that money out, it’ll be tax free because it’s a Roth 401 K plan. And so there was a creative structuring. I was the first person in the world to create this structure.

It’s a combination of Puerto Rico’s then act 20, now act 60 with something called the Robs plan, Our OBS, which stands for Roll Over Business Startup, along with a Roth conversion. So it’s kind of lining up these different areas of the tax code, weaving them together in a way that satisfied my personal needs to create an incredibly efficient tax structure.

Dr. Jeremy Weisz: 23:43

Thanks for sharing that. No, it’s fascinating stuff. So that’s been kind of the tier two category. Yeah.

Noah Rosenfarb: 23:50

What would I published information about that. I invented that with a another tax strategist who had been working out of the US Virgin Islands. He had moved over to Puerto Rico. It took us two years to come up with this structure. And then we’ve since promoted the structure publicly.

And he implements that as a standalone without necessarily people needing to work with my company. If somebody knows precisely that, that’s the structure and strategy they want to use, they could go right to him.

Dr. Jeremy Weisz: 24:18

Nice. So I’d love to hear an example in the tier one and three category. Obviously the report is kind of tier one. What would be an example in the tier one?

Noah Rosenfarb: 24:28

Yeah, it could be as simple as using the the right retirement plan. So I mentioned I have this quite sophisticated retirement plan structure that owns a business that I control. That’s unusual. But for a lot of entrepreneurs it may be setting up an IRA or a Roth IRA, maybe a retirement account. It may be a 401.

It may be a defined benefit plan. There’s all these different types of retirement plan options that provide different types of tax benefits. And so what you want to make sure is you’re just evaluating them. And if you’re not using them you’re not using it because you know the benefits and the consequences. And you’ve decided that the consequences outweigh the benefit.

Dr. Jeremy Weisz: 25:12

Yep. What about in the tier three?

Noah Rosenfarb: 25:15

So a pretty creative tier three strategy. I’ll give you an example of a kind of a use case. So a client came to me, actually an EU member, and they were thinking about selling their business. They were a founder, one of four founders. They owned a significant minority stake and they wanted to back away from the company.

They still like the company. They believed in the company they like their partners. They believed in their partners. They just wanted to, you know, take their foot off the gas. And they felt like now is the right time in their life.

And so we threw our help. It created a structure that that they participated in, where the outcome of this structure was that they sold half of their interest in the business, and they paid no capital gains tax. They retained half their interest in the business. And that income that they received through their K-1 is not subject to tax. So now they’re getting all their income tax free.

All of the investments that they made with the sale proceeds are not subject to income tax, not subject to capital gains tax. And when we did this planning, we also incorporated their estate tax planning. So had they died last weekend or when they die in 50 years, none of the assets that they currently own, no matter how much they grow into, would be subject to estate tax. So pretty amazing structure. We refer to that one as our wealth preservation Trust that was developed internally by our chief tax strategist, implemented exclusively on behalf of our clients and our Co-inventors clients.

Dr. Jeremy Weisz: 26:50

Yeah, it’s it’s obviously you need a trained professional for these things because it’s a it’s a lot of moving pieces. What would be another tier two. And maybe we could talk about your book a little bit about Exit Rich Beyond Money. And because you talk about some of the stuff in there.

Noah Rosenfarb: 27:06

Well, I’ll share another tier two strategy, which I find that we created also. And this came out of another EU member, actually out of California. He was acquiring his father’s interest in the company that they were in together, and originally they were going to pay a significant amount of tax. And so we showed them how to restructure the transaction and pay no tax. They were very happy in that interaction.

One of the things I noticed was that they donated a lot of their product when it was, you know, essentially stale inventory for them. And when you donate your own inventory, you get to deduct the cost of the inventory. But interestingly, if I were to buy your inventory and I held it for a year and I donated it to a nonprofit, I would get to deduct the fair market value. And many people know if you donate cash to an organization, you deduct the value of the cash receipt. Hopefully your listeners know if instead of writing a check, if you give the charity of your choice stock, let’s say you’ve got some Apple stock or some Tesla stock, you give them $10,000 worth of stock that you paid $1,000 for.

Well, now you don’t have to pay the capital gains tax on the difference between the $1,000 you paid and the 10,000 it’s worth. So you save that money and you still get the $10,000 write off for the value of the stock. Well, in our case, what we do is we buy seeds at 25% of their fair market value. So let’s just say you make $1 million a year, and the government will allow you to deduct $300,000 of this type of asset, 30% of your adjusted gross income. Well, I can sell you $300,000 worth of tomato seeds or melon seeds for 75 grand.

And the reason you’d want to buy them for 75 grand to later donate them at 300,000 is that if you’re in a no income tax state, you’ll generate a 48% return on your investment. If you’re in a high tax state like New York or California, you might generate like an 85% return on your investment. And not to mention, besides making money on this Transaction. These seeds are actually going to get planted in the ground, grown into food and feed hungry people. So we refer to that strategy as Dual Harvest.

Our website’s dualharvest.org because we see that you could do well while you’re doing good.

Dr. Jeremy Weisz: 29:30

So do can people go to that site or do people.

Noah Rosenfarb: 29:33

Can go to that site. dualharvest org. We could share information minimum income there for that transaction to make sense is around 6 or $700,000 for a single in a high income tax state, around $1 million for a couple in any state.

Dr. Jeremy Weisz: 29:51

No, thanks for sharing that. People can check that out. What else is do people find compelling with the book Exit Rich Beyond Money? What else is in there that people should know about?

Noah Rosenfarb: 30:01

Yeah, I think the book’s really the framework.

Noah Rosenfarb: 30:04

For the book is around the concept of not regretting your transaction, and the data is horrific. So 75% of people self-report report regretting some component of their transaction, and typically the regret does not come from the actual amount they sold the business. It’s all the qualitative aspects of being prepared for the cocktail party, where people start saying, what are you doing and not having an answer? It’s, you know, the annual trade show is going on and people are posting the pictures and you’re not there anymore. And, you know, most entrepreneurs, you know, if you look at the people you interact with most frequently and you have to categorize them, are they a deal friend or are they a real friend?

Do I make money with them in some way or do I just socialize with them? A lot of our relationships fall into this deal bucket, where we’ve got something going on in our friendship beyond pure social dynamics. And when we sell our business, that goes away to our status may change our our way of being changes. Our time spent with our spouse changes, our free time changes. And so really the framework that we help entrepreneurs implement is one where they can let go of the branch that they’re swinging on now and be like Tarzan to grab on to that next branch before they let go of their business and prepare themselves and test themselves while they still own their company with what life’s going to look like when it’s when you no longer own it.

And that’s true as it comes to investing and how they’re going to generate passive income and getting that experience before they sell it comes to developing their calendar and asking, going back to those four questions of spending the time with and with the people you want, and doing the things with the people you want and where you want, and giving yourself that time freedom while you own the business, which, by the way, is going to make the business more valuable. And the third piece is where are you going to derive your meaning and purpose if it’s not coming from your business? So many of us are really tied to the value we get from employing people, from dealing with our customers, from solving problems. And interestingly, I was with the creator of Modern Elder Academy, and he was talking about, you know, that we need to in our life. And, you know, when we’re sitting around with nothing to do, we’ve got no agenda.

And that by itself is agitating.

Dr. Jeremy Weisz: 32:35

You know, I know, know for you, you’ve sold companies or sold real estate, you know, real estate transactions. I’m curious. And a lot of entrepreneurs, their, their wealth could be tied up in the business. Right. And so I’m wondering some of the mistakes you see people make when they are selling maybe from a tax perspective.

Noah Rosenfarb: 32:55

Sure. Well, there’s lots of mistakes I see in making if we just look at the tax side of it, the biggest mistake they make is not addressing what it is they want to do from a tax standpoint before they hire their investment banker. Once they hire that investment banker. It’s all systems go. Race to the finish line.

You know, typical owner spending 1500 hours in the process of getting their business ready to be sold and selling it. And so that becomes a second full time job on top of the job they have as founder, visionary CEO of their company. And so they don’t have the space to learn something new, like tax strategy, to deal with the advisors they trust, like their accountants and their lawyers. While there’s not this pressure of closing a deal. And what often happens as a result is if they don’t develop their tax strategy before they hire their banker, they’re only looking at tax strategy after they close, when the options available to them are much more limited.

Dr. Jeremy Weisz: 33:54

What are some of those things that people should consider, let’s say like, okay, in a year from now, I’m planning out what are some things they should be thinking about?

Noah Rosenfarb: 34:02

I think it’s all around whether or not you want to pay the tax and take absolutely no risk that the government’s going to disagree with anything you’ve done, or if you’re open minded enough to look at the math and say, wait a minute, maybe I would do something, even thinking that the government might disagree with. And the reason I would open my mind to that possibility is only because I understand what the consequences are of a disagreement with the IRS, and those consequences are generally three things. One is you’ve got to pay them the tax that you would have paid them if you done it the way they wanted you to do it in the first place. Well, that doesn’t really cost you anything. The second thing is they’re going to charge you interest from the date that you should have paid them until the date that you actually paid them.

And the IRS is a reasonable lender. They charge reasonable interest rates. Hopefully it’s an interest rate that you’re out earning with the money that you’re keeping, and you’re doing smart things with it. Generally for our clients, we ask them to dedicate those tax savings to a special investment account. And that way we could see that money grow independently.

And in the event the IRS comes back and asks for their money. We’ve got it sitting right there. The third thing, which is really the way that people get in the most trouble, is the penalty and the penalties. The IRS charge can be significant, but taxpayers don’t know often that there is a insurance policy you could get, or a way to prevent the IRS from charging you a penalty. And that’s by getting a tax opinion letter from a qualified third party.

So if you have this tax opinion letter, then your worst case scenario is you got to give them the money you would have given them to begin with, plus the interest for the amount of time you had that extra money. And more often than not, people aren’t even asked to defend their position on their tax return. When you report $10 million or more of income on your tax return, you’re audited 10% of the time. So that means 90% of the time you’re not being asked to defend your position.

Dr. Jeremy Weisz: 36:02

Is there suggestions? I know for you. You really? It sounds like, took to real estate after you sold your. Maybe it was before you sold the company.

I’m curious what made you go into real estate and at what point in your journey?

Noah Rosenfarb: 36:16

So I started investing in real estate at the turn of the century. So 25 years in, I started with a two family house that my wife and I lived in half and rented half. Cute little story back then, there was a 3% down loan that you could get and you were able to generate a seller’s credit. So I bought a new home, new construction home from the developer, and I had him give me a $7,500 credit on my $225,000 house, and that credit reimbursed me for my down payment so I didn’t have to pay anything to get started in real estate. I used that equity in that house after a couple of years to go buy another two family house and another one and another one, and eventually, you know, we’ve done a significant number of large transactions.

And I’ve always liked real estate as an asset class because growing up in the accounting world again, my father, my grandfather were accountants. My dad’s wealthiest clients were real estate entrepreneurs. And in 86, when I was ten years old, a bunch of them had a hard time. And I remember because I was always interested in money and business. So even at a young age, I was talking to my dad about what his clients were doing and how they were making money, and he enjoyed sharing those stories with me.

And he always said, you know, as long as you could survive the downturn and still pay your mortgage, as long as you could wait, you’re going to be okay. And it was only the people that couldn’t cover and service their debt that got hurt. And so I kind of took that lesson with me and decided originally my plan with my wife, who I had the good fortune of meeting when we were in college. The plan was, we’re going to acquire one multifamily property every year. We’ll get ten of them and we’ll retire on, you know, ten rental payments, you know, from multifamily houses.

That was the original plan. The plan obviously evolved over time and became more sophisticated, but I thought it was a great plan and it is a wonderful plan for many people. And and so I would encourage anyone who’s again, before they sell their business, figure out what you like to invest in. Are you going to be a real estate investor? Well, there’s a whole tax strategy associated with real estate investing, but if you’re going to be an early stage venture investor, there’s a different tax strategy for that.

If you’re going to go out and be an acquisition entrepreneur, well, there’s a different tax strategy for that. So you really want to know how you want to invest your capital, because the structure in which you’re going to invest your capital might design the tax strategy you’re going to use before you sell your company.

Dr. Jeremy Weisz: 38:43

Yeah. No, I want to talk about the evolution of your real estate investing a little bit. So like it started with the, the homes. But I know at one point you’re like, I don’t want to get calls about fixing stuff and I don’t want to deal with this stuff. So what was the next phase of your real estate investing journey.

Noah Rosenfarb: 39:03

Yeah, and I’ll share.

Noah Rosenfarb: 39:04

With you how I came to that conclusion through math, because I think it’s a good entrepreneurial hack, which is to measure your return on time in addition to your return on investment. So anytime you’re investing capital alongside effort, you want to measure both the return on investment and the return on your time. So you’re advising that startup in exchange for 5% equity. Well, how much time are you investing and what’s the return you’re generating in as a result? And see what’s my hourly rate and compare that to your hourly rate in your existing business.

You’re making $200,000 a year working 2000 hours in your company. That’s 100 bucks an hour. You’re making $2 million a year working 2000 hours in your company. That’s $1,000 an hour, right? So figure out your current hourly rate in your business.

And as you’re investing your capital outside of your business, make sure that your return on time is the same or greater. Don’t sell your time for less for things that are outside of your core business. Because hopefully if you’re putting your time somewhere, it’s your best time. It’s all your zone of genius time. It’s all the relationship capital that you’ve built.

It’s all the experiences that you’ve accumulated over dozens of years. It’s absent of all the administrative, you know, drama that you have to deal with as the CEO and visionary. So you should be generating a higher return on your time. Well, for me and my rental real estate business, I realized that if I paid myself what I was getting paid as an accountant for the time I was spending managing my properties, my return was negligible. I really wasn’t making any money on my money, so I really was just trading my job.

And the reality was my job as an accountant had a better future than my job as a landlord. So I repositioned and changed the way I was investing from being a direct operator of assets to investing in other Their operators. And so I would aggregate capital from friends and family. I’d say, hey, I’m going to put 50 grand in this deal, or I’m going to put 100 grand, or I’m going to put 200 grand and, you know, come along with me and we’ll pool our money together and we’ll put it together in this deal. And when we had success, I’d make money on everybody’s money.

And that became a a fruitful business kind of side hustle, if you will. And something I enjoyed a lot. It was fun to make money with friends and something that I look forward to enjoying in the future as well.

Dr. Jeremy Weisz: 41:26

So it’s more kind of like a real estate syndicate.

Noah Rosenfarb: 41:30

Correct?

Dr. Jeremy Weisz: 41:30

Yeah. And do you prefer. I’m curious. Is it more still more residential or commercial type of of things that you’re looking at?

Noah Rosenfarb: 41:39

My, the vast majority of my portfolio, I owned about $900 million worth of assets. The vast majority was multifamily housing. But still, you know, $100 million worth of office space, $100 million of retail space. So not not insignificant.

Dr. Jeremy Weisz: 41:56

It’s an interesting this is just an interesting concept because I was talking to someone who’s in professional services. Okay, doctor. And we went to a baseball card show, alright. And they were saying, and we’re spending, you know, they’re spending like, whatever, 45 minutes looking through this person’s cards to save like $20. And afterwards we were discussing this, this return on time and the person will be busy.

At the end of the day, they’ll be tired and they may not see a couple patients because they just want to go home to the family. And maybe they’re foregoing $1,000 or something, but I’m like, you’re that would have taken you like 20 minutes, and then you spent 45 minutes looking through this stash of cards to save $20. Isn’t that interesting? And it’s there’s like a perception there of, you know, similar to what you’re saying. Well, I’ll save money, but are you actually saving money when you calculate your return on time, you know.

Noah Rosenfarb: 42:55

So sometimes you have to distinguish what’s fun from what’s profitable.

Dr. Jeremy Weisz: 43:01

Yeah. Totally.

Noah Rosenfarb: 43:03

Right. And so there’s often things that people do for fun. Like, you know, I remember my mother in law complaining that I had someone hang up pictures in my house. Can’t you hang up the pictures? Yeah, I can hang up the pictures.

I’d rather hang out with the kids. Right? You know, I don’t let somebody else hang up the pictures. And I’ll play with the kids.

Dr. Jeremy Weisz: 43:21

And some people geek out on that. And they love doing Fix-It stuff around the house.

Noah Rosenfarb: 43:25

Exactly. So, you know, to each their own. I think if it’s fun for you, then the measurement on money is irrelevant.

Dr. Jeremy Weisz: 43:32

Yeah. Yeah. It was, I guess I was, yeah, it wasn’t fun for me to do that, but I was watching that. Maybe it was fun for them. I love to talk about niche for a second.

Okay. So it’s interesting when you sold the the family office business and how you came to that specific niche. And, you know, we always hear in a lot of the themes of the episodes, people at least start with a niche, even from the founder of RX Bar, who ended up selling to Kellogg for $600 million. Everyone knows Rxbar. They buy it, but really they started with like CrossFit people as a niche and talk about how you came to the divorced women as a niche for the family office.

Noah Rosenfarb: 44:14

Yeah. So when I joined my dad’s accounting firm, it was 60% forensic accounting revenue, 40% traditional accounting revenue, doing about 2.5 million, a million and a half forensic, a million traditional accounting. And at the time, we were one of probably the top five forensic accounting firms in new Jersey. I ultimately held my father execute a strategy, a roll up strategy. We acquired other forensic accountants, a lot of sole practitioners.

We grew to become the largest forensic accounting firm in New Jersey. And I was part of our divorce practice. So I would testify in divorce court about how much money people made and how much their businesses were worth work. And what I noticed was a few things. One is I didn’t like the business because the more acrimony I created, the more money I made.

And that was the wrong incentive structure, because I was well known for resolving cases effectively and as a whether I was a joint expert or an independent expert. My job, I felt, was to help this family find a resolution where they could both walk away equally unhappy. And I did that very successfully. Right. And and that that was to the detriment of not only my accounting firm, but the lawyers that I worked with.

Because the lawyers bill by the hour also. So the the faster I was resolving these cases, the unfortunate consequence was the people that had referred me the work would be able to bill less in fees. So I didn’t really enjoy that aspect of it. But one of the things that I noticed was that the women predominantly, who were receiving large sums of money from their hedge fund manager Husbands. They’re entrepreneurial husbands.

You know, they were homemakers. They had left the financial responsibilities to their spouse. Very traditional marriages in most cases. And now they were getting this large sum and they had no idea what to do. And they didn’t know who to trust.

And so I saw an opportunity in the marketplace to leverage the relationships that I had with the divorce lawyers and say, listen, you know who I am as a person. High integrity, high trust, high competency. Let me serve these women, and I will essentially be what was effectively their replacement husband for their finances. I file their tax returns. I pay their bills.

I help them figure out, you know, how to lease the next car. I would help them with their when their kids were getting married. You know how much to give them or their graduating college and what’s the right thing and invest their capital and manage the whole thing. And so that was a business I enjoyed very much. It put me on the same side of the table as these people that I cared about helping.

I grew up with a single mom who had very little financial acumen, and from a young age I was trying to teach her how to manage money effectively. Unfortunately never successfully. But it really led me to have compassion for people that were in this situation. And I’m an empathetic person by nature, so it really suited my characteristics and my strengths and the relationships that I had already built within the family law community as someone that could be trusted.

Dr. Jeremy Weisz: 47:16

Yeah, no, thanks for sharing that. I think it’s just an interesting it’s an interesting winding path we take and that you took. Last question. No. First of all, thanks for sharing your expertise.

As you saw, you could check out wealthrive.com to check out the resources and everything they have on there. Obviously we talked about their book as well, which is probably on Amazon or any other place that you want to find it. Exit Rich Beyond Money. Last question is about some of your favorite resources. Those resources could be some of your favorite books, obviously yours or your favorite, but in addition to your yearbooks, podcasts, or just just people that you follow that other people should check out?

Noah Rosenfarb: 47:56

So I’ve been part of EO for 13 years. I know you’re part of EO as well. Entrepreneurs’ Organization I would say that is the single best resource for my career to date. I’ve since joined YPO. I’m a YPO member now.

Five years and again another incredible organization filled with lots of people. I think when we talk about resources, for me, it goes back to the ability to network into a relationship and whether that’s an online virtual relationship or an in-person relationship or a relationship over the screen like we’ve created today. And what I’ve been able to learn over time is that that relationship capital, through the network of EO or now YPO for me has been incredibly valuable. I feel like if there’s a problem in my life, I’m really only one or 2 or 3 phone calls away from finding somebody who’s been there and solved the same problem. And so that’s enabled me to really shortcut a solution to issues that I’m faced with.

So if if a listener is on this here and they do not feel like they’ve built out that network for them, I would encourage you to find it through a community that may be a community like EO or YPO. It may be a smaller community, or one that’s better aligned with where you are in life, or where you are geographically, or where you are in your industry.

Dr. Jeremy Weisz: 49:20

Noah, I want to be the first one to thank you. Thanks for sharing your knowledge, your journey. Everyone check out wealthrive.com to learn more and we’ll see everyone next time. Noah, thanks so much.

Noah Rosenfarb: 49:30

Thanks for having me.

Outro: 49:31

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