July 30, 2020 – Opportunity Funds Dr. Jim White, Corporate Welfare Lisa Conyers and SAT Info Lacey Allen

July 30, 2020 – Opportunity Funds Dr. Jim White, Corporate Welfare Lisa Conyers and SAT Info Lacey Allen

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Jim White – President/CEO at Post Harvest Technologies and Best-Seller Author of What’s My Purpose? – Read interview highlights here

I bought and sold companies around the country. I don’t care
what the company is, or was. If its got people involved, you
have got opportunity! In the last 10 years, I bought 23.

Dr. Jim White is Chairman and CEO of Post Harvest Technologies, and Growers Ice Company, Founder and CEO of PHT Opportunity Fund LP, and Founder and President of JL White International, LLC. Jim is also the founder of the customized yearlong, leadership and management transformation process, The Circle of Success®; Jim White’s Classic Movie Series; and The Red Carpet Tour. These innovative events have attracted more than 100,000 participants worldwide, including Fortune 500 CEOs, management teams, entrepreneurs, governments, and trade associations. Throughout his career, he has bought, expanded, and sold 23 companies, operating in 44 countries. Jim has acquired failing businesses to revive and develop them into profitable enterprises using his business turnaround strategy. To date, Jim has generated more than $1.8 billion in revenue. Jim is the author of several acclaimed books, including the #1 Best-Seller What’s My Purpose? A Journey of Personal and Professional Growth, and most recently Opportunity Investing: How To Revitalize Urban And Rural Communities With Opportunity Funds,

Lisa Conyers – Director of Policy Studies at DKT Liberty Project and Co-Author of Welfare for the Rich

Amazon in 2018 paid zero federal tax. How is that fair? 

Lisa Conyers is Director of Policy Studies for the DKT Liberty Project, which provides family planning and HIV/AIDS prevention programs in more than twenty countries in the developing world. Lisa works on ways to tackle inequality, protect civil liberties, and improve welfare systems; for example, by reforming drug law policy, encouraging immigration, limiting federal spending. She has traveled the globe, reporting on welfare dependence and its effects on recipients, the relationship between religiosity and criminal behavior, the role and prevalence of violence in civil society, and the impact of health and family planning programs in the developing world. Lisa also consults on films and documentaries on economics and free markets. Lisa Conyers is the co-author of the forthcoming book with Phil Harvey, Welfare for the Rich: How Your Tax Dollars End Up in Millionaires’ Pockets—And What You Can do About It, which describes and analyzes the many ways federal and state governments provides subsidies, grants, and many other payouts to millionaires, billionaires, and the companies they own and run. She is also the co-author of The Human Cost of Welfare, for which she conducted more than 80 interviews with welfare recipients across the country.

Lacey Allen – Associate Director of Scholarships Strategy at the College Board

The College Board gives $5 million every year to students
all over the country!

Lacey Allen is an Associate Director for the College Board Opportunity Scholarships, a program that awards $5 million dollars each year to high school students. Lacey previously worked at Search Institute, a youth development research organization, as a qualitative researcher and facilitator. She also served in both the Peace Corps and AmeriCorps; while in Morocco with the Peace Corps, Lacey volunteered with NGOs and US-based nonprofits to develop literacy tools, resources, and a library for youth in community centers, and while with AmeriCorps, Lacey worked to improve college access opportunities for first-generation high school students. The College Board has launched a new scholarship program with $5 million of scholarships each year. It started with the class of 2020 and is open now for the class of 2021. Applying to college can be confusing, and too many students don’t get the guidance they need. The College Board Opportunity Scholarships encourage students to take the most important actions on the path to college and turns their efforts into scholarships. The College Board is making a $25 million investment over five years. Half of the funds will go to students who need it the most, but anyone can apply.

Highlights from Jim’s Interview

To summarize my career, I’ll tell people that I’m 71 years old and I’m going on 28. So I was in the army, I did two tours in Vietnam. After that, got accepted to Georgia Tech and got a civil engineering degree. I worked in the construction business, hired by Ingersoll Rand company, construction, and mining group, as a salesman. Moved very rapidly through Ingersoll Rand, went into an international group, and that’s when my career started to accelerate in the international. I was in Saudi Arabia, became the Middle Eastern Manager for Ingersoll Rand. In those days, when you started making more money than the chairman of the board, you get promoted; that’s normally what happens. So I was promoted to VP of Construction and Mining Group.

To further clarify on that, I was a salesman on-commission that was doing so well that I ended up making more money than the Chairman of Board. I was in Saudi and we were selling drilling equipment, primarily water well drilling equipment: compressors, compaction equipment, excavators, and all this. This was in the late 70s, and I just got on fire and hungry, and that’s when the magic sauce just happened. So in 1978, I made $2.8 million in commissions, which was a lot of money 30 years ago. So that’s what I made, I still have that W-2 today that I often use for my speaking engagements. So they had an opportunity and they said, “Well if you can do this, we’ve got a position. Why don’t we bring you to corporate and you teach everybody how to do this in this division?” So I got promoted to VP of Construction and Mining Group. I often use that pun that I mentioned earlier, when you start making more money on commission than the chairman of the board, they gotta do something with you because they don’t want to continue to pay that amount of money. We had a company that I was very interested in, and that’s when I started my first foray into leveraged buyouts. So I presented a plan to Chairman of the Board of Ingersoll Rand to acquire one of our companies.

I’ve to say, when you start negotiating with your employer and it goes south, you be ready to go to another place. So that’s what happened, the deal fell apart. I resigned, started my first business, and that was in Washington, DC. We’ve become pretty good at finding project financing, if you will: working with World Bank, USAID, how do you put deals together? So I got an opportunity for a company out of Montgomery, Alabama, Blount Construction Company. Winton “Red” Blount was Postmaster General during the Trump administration. They had projects in Nigeria, Venezuela, that were underperforming, and I convinced them that I was the answer to all of their problems. So I got a contract, went to Lagos, Nigeria, never been there before in my life. I spent a couple of years there at turnaround projects and then bought my first company. Then I was the CEO of Blount World Trade, all the international activities under the contract.

But then that contract ended, I started buying and selling companies around the country. I don’t care what your company is or was. If it’s got people involved, you’ve got the opportunity. So in a 10-year period, I bought 23 companies. The last one I bought was in Belgium, and it was a 100-year old manufacturing company that manufactured pumps for the oil and gas industry. We grew it from $25 million when I bought it to under $700 million in seven and a half years, sold it. Moved to Carmel, California, which I retired for 24 hours, and started getting requests from different organizations to speak on how did you do this deal? So that’s really when I realized I had another business and to make it, so I created a JL White International, which is a consulting company; it’s just me sitting in my kitchen table, and I openly grew it to 167 consultants around the world.

So as a business owner, whenever I hired a consultant, I was never satisfied with them. They promised everything and gave me absolutely zero. I know I’ll probably get a lot of calls on that one, which I normally do every time I say that, but it’s true. So I said, what did I do well? So I was a packrat. So I took all the things that I did wrong, I created this curriculum called Circle Success; it’s the most intense one-year program that you’ll ever attend. We go inside the organization, we tear it apart, put it back together. So we started that process. When I turned 65, I started to do divest off the companies and to find my next venture. The next venture led into December 2017, if you will, that’s when the Tax Job Act was passed. I’m one of those people who actually read the Tax Act, and I saw an opportunity. What I found on page 185, paragraph number four of the Tax Job Act was this little carve-out of opportunity zones and opportunity funds; that’s where it came from. So that’s what led to the book, Opportunity Investing. Hopefully, that’s a decent overview.

Being an entrepreneur and being a very poor boy growing up in rural South Carolina and Georgia, I always happened to be creative. How do you do deals? How do you structure deals? How do you finance them? Always looking for opportunities that make sense, and that’s what I did when I was buying my companies, doing the finance, and putting the plans together. Actually, to set up these days, in my opinion, you actually do what you say you’re going to do. So I looked at this and I said, well, I’m on a journey again. It was so complex. In April of 2019, I was like, I’m going to write a book and try to make it simple, I think it’s a great opportunity. I wanted to lay the book out at what the QOZ was, what the fund was, and was not, and then a section of the book for any investor entrepreneur that’s looking for investing dollars. Well, here’s a roadmap that you must master because you got to show the investors that you’re worth investing in. I don’t care what the program, if it looks bad and feels bad and tastes bad, it is bad. So you’ve got to make sure you got something good to get the attention, to get investors. There’s no free lunch here, no one’s got in front of the lines or any of those things. So there’s the book.

So now, I want to talk a bit further on the Circle of Success; a one-year program where we go inside your business, tear it apart and put it back together. So we will come into your business, we’re going to look at your financials, we’re going to look at everything that you’ve done historically. We’re going to look at every staff member; we do some behavioral analysis of the staff member. We do a 360° evaluation, it’s very transparent; we call it The Way It Is. We have the staff evaluate their superiors, then we go out and we do some interviews with customers that do business with the business, and then we talk to the vendors. It’s a full circle where we’re trying to find out what the good bad and ugly is of this business, and we present that to the senior management and owners. We say, here it is, now what do you want to do about it? You can remain in denial, or you can do something about it. So if you do something about it, then what I created was the Circle of Success. I will take 16 people off-site for three days, the most intense three days you’re probably ever spent. We’re looking at you in the eye and giving you some of the most dramatic feedback from your staff. You’re having to come to grips as to who you are as an individual, and it’s quite emotional.

Then you got to make some decisions to change or not to change. It is all designed to help you move forward in your career. The way you do that is to create value for your employer, and I use the word employer loosely; that’s anybody that’s paying you for a service or product. We’re here to help people get out of complacencies and different structures, financial structure. Is your board actually adding value? The shareholders, do you have the right shareholder mix, are they high maintenance or what should we be doing? We get your business ready for maybe an acquisition or get your business ready for a merger, get your financials put together, and teach you how to run a consistently profitable business month in and month out, regardless of what the economy is. I get a lot of kickback on that but I believe it, I don’t care. You’re in business, you got to figure out a way to make out. So that’s what we do to people and organizations, and that became our calling card. It’s always like, if you’ve got a business that’s really struggling, you want to go to these guys. That’s what moved me into the private equity side. A lot of the private equity groups that we work with, before they will make a final decision on making the acquisition or investment, we will take their executive team and we will do the evaluation to determine who they are. We’re not talking about private eye stuff or private investigation stuff, we’re talking about do they really have the credentials as they say they have? Can they do the job, and are they willing to grow to be able to scale the business? It’s the greatest thing ever, all rolled into one, and it is brutal. That’s an interesting sales pitch, to say your program is brutal. It is, but if that’s what you want, if you want to get better, we can help you do that. But it’s not for the weak at heart.

Now, it’s time to talk about the book. Here’s the upbeat sales pitch on opportunity zones. 2017, in the Tax Act, I’ll just carve-out, and here’s the carve-out; it’s Section Z. So what qualifies as a Qualified Opportunity Zone? It’s census tract, and it’s the average income of the census tract. If you fall below 50% of that average, then you qualify as a Qualified Opportunity Zone. Then you’re certified by Treasury and the governor of each state, so that’s what sets up the qualification. There’s probably about 8,800 certified zones in the United States today. Now, why is that significant? There are 35 million Americans that live in these zones. This is pre-COVID-19. Well, with what’s occurring right now, I think that’s going to grow a little bit, unfortunately. Then here’s the magic sauce. The Treasury says we’re going to target capital gains. There’s approximately $6.6 trillion of capital gains unrealized, sitting on the sidelines. So if you put an incentive for capital gains, become into a qualified Opportunity Fund. There are tons of rules which would take hours and hours and hours to explain, but you’ve got to put your money into a fund and a fund must invest in a zone. If you are the investor, you put your money in the fund. If you keep it in the fund for five years, you can reduce your basis by 10% and you don’t have to pay taxes due until April 2027. So right now, the clock’s ticking. So if you want to get a reduction of 10%, you got to figure some funds that you’re interested in, an asset class that you’re interested in, and make an investment by December 2021 in order to be able to reduce the tax 10%. But if you missed it, that’s okay, you just missed the 10%. If you invest, say, a day after that, you still would not have to pay the taxes due on the capital gains until April 2027.

Now, the real magic sauce is if you keep your money in the fund for 10 years, all of the appreciation from this time is tax-free. So my message in writing the book, because it’s complex as you know in the Z carve-outs and all the definition, I wanted to be able to explain what it is and is not. As I was writing the book, a lot of the rules and regulations were being developed at that time, so we’re keeping up with it. So then you’ve got to have projects that actually qualify for an investor investment. A lot of people say, well, that’s a tax thing, it’s just for the 1%. Well, it’s really not, it’s for anybody that has capital gains come from any source. You can sell a piece of art, you’ve got capital gains. It’s not just for the buffets of the world, I couldn’t think of anything better than that, it’s for anybody that’s on the street. If you’ve got capital gains, you’ve got an opportunity to make some money and the right investment fund and do some tax reduction. Actually, for me, more importantly, make a social impact in the particular community.

So that’s it in a nutshell, the book is about, this is the rules. This is good, this is bad. Here’s a roadmap that you should take. So I wanted to put the book out there, so people would not have to guess. Because there are limited resources, and not everybody reads tax code like I do to be able to try to understand this. If you do, it’s confusing anyway. So that was the intent of the book, is strictly, if I’ve done anything, hopefully, there’s a tool out there that at least points me in the right direction. Then we’ll say, all right, Circle of Success. I have all the Circle of Success products in there; step one, step two, step three, all the things. So if you’re not interested in the QOZs, then let’s go to Part Four, and we’ll give you a roadmap and checklists on how you might want to reevaluate your companies and what you’re doing to the current company or doing a startup. So that’s the book in a nutshell.

I want to take you through a real example to tell you about the story of what happened and how it helped. One that comes to mind is Newark, New Jersey. The developer is an acquaintance of mine, his name is Ron Beit. He worked with then Cory Booker, the mayor of Newark. Cory as a senator was one of the sponsors of this bill in conjunction with Tim Scott, the Republican from South Carolina. So it was bipartisan support. Cory Booker has really done some great work on this. So when Cory was mayor, and then when the Act came along, Ron developed what’s called a Teacher’s Village in Newark. This was housing strictly designed for teachers, and also a mixed-use community. So that is quite a success story there. Then in Stockton, California, a similar thing going on there. Now from my fund, we have a project in Salinas, California, which is one of our companies. We own 28 acres; it’s a cold storage frequently used for the egg industry, started in 1936. When I started doing the research, I found that this piece of property was in a Qualified Opportunity Zone. It was old and needed to be updated. So the past two years, we’ve been planning, and it’s going to be $160 million dollar project that we’re going to do to rebuild that. We probably would not have been able to have done that project without this particular act. So creating more jobs, upgrading the facilities.

The majority of the projects right now are pretty much real estate forward-looking, but I take a different view. Real estate is good, but you have an opportunity to go into a Qualified Opportunity Zones, one that comes to mind is New York, Brooklyn Navy Yard, for example, and start businesses there: innovation centers, startups. People are looking to raise money, they can do, you issue us a stock, a fund could buy that stock. So there are many ways, it’s just another investment too that will give you an above-average return, which of course, nobody can guarantee. At the same time, we can actually start improving the communities by upgrading them. We know through our research and our work, people start taking pride in their community, they started addressing their drug issues, crime, and I can just go on and on. So it’s pretty dear to my heart, this opportunity to invest in opportunity zones.

To find out more online, you can go to AuthorJimWhite.com and OpportunityInvesting.com.