How the Top 1% Build Wealth (And Why You’re Not Doing It Yet)

Aviva (00:00)
This week's Listener of the Week is CMBS Direct. CMBS, thank you so much for leaving us a five-star review. And for those of you listening, if you leave us a five-star review below, you might be next week's Listener of the Week. Week. Week. This week on Commercial Real Estate Secrets, we have Dave Wolcott.

Dave is the founder and CEO of Pantheon Investments. Dave, thank you so much for being on the show today.

Dave (00:30)
Yeah, grateful to be here Aviva with you and your audience.

Aviva (00:34)
Dave, let's jump in. Who are you? What do you do? And how can we bring the audience value today?

Dave (00:41)
Yeah, sure. So I was raised in a middle-class family in Connecticut, and I was taught that the recipe for success was go to school, get good grades, you're going to get a job, and life would just work out, right? So I followed down that path and had the opportunity to actually go into the ROTC program and get into the Marine Corps and serve my country. Got to really travel the world, see combat, and really learn some things in the Marines. They don't teach you anywhere else. Things such as leadership.

teamwork and integrity. And then after that, I transitioned into the tech industry, started raising a family. We had an 18 month old and actually in Denver, Colorado Aviva on October 24th, 2000. My wife and I literally welcomed triplets into the world and quadrupled the size of our family like overnight, right?

So the first thing that I did was I went to see my financial planner because all I could think about was how am I going to provide for financial security for my family? You know, I knew that that was really paramount. And he told me to max out my 401k. You've got kids, know, put your money in 529 plans, right? And it was right then that I just knew that, you know, you're not going to grow massive wealth being a retail investor in the stock market.

and following traditional financial advice. So this really put me on this obsessive quest to really figure out, how the top 1%, how the top 0.1 % are really building their wealth outside of the stock market. So I started investing in all kinds of real estate classes, everything from retail, raw land, office buildings, single family, multi-family, you name it.

Also invested in alternative assets, oil and gas and other alternatives. And fast forward 20 years, had a lot of success with that. And I really built Pantheon as a way to really help other people figure out how to build wealth in a holistic manner to actually take all of those lessons that I learned and really kind of put them into a framework that I call the holistic wealth strategy.

so that people can really 10x their wealth and create massive time freedom and money freedom in their lives.

Aviva (03:04)
Dave, thank you for your service. I have no doubt that your time as a Marine is ridiculously invaluable to what you do today. So it's impressive to say the least. Yeah. So tell me about the holistic approach. you're saying a lot of trigger words that I like 10X, top 1%, 0.01. How are we getting there?

Dave (03:06)
You bet.

Appreciate it.

Aviva (03:30)
say as a middle class person.

Dave (03:33)
Yeah, well, it's really interesting Aviva, right? One of the things that I learned and realized like after talking to hundreds of different investors is that most people actually don't have a vision, right? And if you don't have a target, you're going to miss every time. So the underlying foundation to this framework is that you have crystal clear clarity on what it is that you're actually creating. What is the life that you're trying to build? What does it look like?

Who are you with? Where are you? What are you doing? Right? What does that actually look like? Because otherwise most people are kind of walking around actually reacting to the things that are happening them versus creating an intentional life that they want to live. So it all is really underpinned by creating this, you know, super clear vision statement. If you've ever read Cameron Herald's book, Vivid Vision, you know, that's an amazing book to give you clarity on that.

And then we start with phase one, which is really all about your mindset. I can remember to this day, just going back to my family when I invested in my first real estate deal and everyone's saying, well, my financial planner said that that's risky. how do you know what you're doing? Right. You have no idea. And all of these things that, we're really limiting beliefs that other people had things that were inflicted on you.

But it's really our belief system. It starts with our belief system because really your beliefs become your thoughts, your thoughts become your emotions, and your emotions become your actions. Right? So when you can have like a really strong growth mindset, you're developing yourself, literally anything is possible. And that is really truly the foundation of wealth because if you don't have that, you're going to get stuck in this conventional path which is just following what

you know, the other 98 % are doing.

Aviva (05:28)
I have a deep empathy for, it's like you said, those who don't have the mindset that anything is achievable. Even the American dream today in 2025, I believe wholeheartedly is 100 % possible. As long as you, and it's like you said, the first step is believing it. I grew up in a family where the first,

The foundation was real estate, literally. is, it was everything my family has done and known since they've been in America. And so, that's part of the reason why we're here is because I feel so fortunate to have been instilled with that mindset that I take the time to share with others so they can do the same and build their.

Pantheon, if you will. So tell me about your commercial real estate exposure, what that looks like with Pantheon and personally.

Dave (06:15)
Yeah.

Yeah, so basically our, know, we kind of have five phases in the holistic wealth strategy. And the last one I can kind of jump ahead is really building massive passive income. And so we've developed an investment thesis, you know, over many years. And that includes the good and the bad, right, of investing. And our investment thesis really consists of three different sectors.

We like not only commercial real estate, but we also like energy and we like private credit and debt. And the reason is that all these asset classes are non-correlated to the stock market. They have very strong macroeconomic fundamentals. And we're essentially looking for a three-dimensional return. So anytime you can get actually passive income, tax efficiency, and forced appreciation, which we all know as real estate investors,

That is huge. However, I will tell you, right, that as much as we love real estate, the market, it's been a tough market the past two years with this unprecedented rise in, you know, in interest rates, multifamily has just has really taken a dive. It's been really tough. So this further solidifies our asset, our investment thesis in that.

Okay, now we have other asset classes, Like energy that keep going, right? You know, during this time or private credit and things like that. And energy, for instance, another thing that's really interesting about that is we're all familiar with using cost segregation and depreciation on our assets and real estate, but we're also business owners. A lot of real estate investors don't even realize that when you invest in energy,

you can actually 100 % of your investment can offset active income, right? So that can be huge come tax time to actually reduce your taxes and really put that capital to work for you, right? So we focus on things like that. And then when it comes to specifically in real estate, we partner with family offices.

with PE groups and basically institutional quality assets that we can get involved with. And we're looking for operators that are really, you know, have some really strong competitive differentiation. And just as an example, we did a 380 unit build to rent condo building in South Florida earlier this year, which is really like a one of a kind in its marketplace.

unique business model and value proposition. So we're looking at things like that. The next opportunity that we have coming up is actually medical office buildings, which is super interesting where they'll sign with it's actually we're partnering partly with a PE group that owns dental practices. And so they sign 10 year leases as like that anchor tenant.

in the building, right? So that reduces our risk. They've got a great track record and things like that. So we're looking for those kind of unique opportunities in the space that are really going to help our investors build that 100-year portfolio.

Aviva (09:28)
So in this capacity, are you all the GP and then the folks who are working with Pantheon, they become the LPs? Is that how, is that the structure of this or?

Dave (09:41)
Yeah, so great question. So essentially, we've done a number of different deals, whether we JV with a GP, we co-GP, or we do a fund to funds model, right? Where we're kind of coming in as an individual fund. And I can give you an example of why that that's really interesting is like in the energy opportunity we participated in recently,

you know, the minimum investment is 10 million, right? So what we're able to do is gain access to that opportunity and then basically offer the access as well as the same terms to our investor base for as little as 50K or 100K to get access to that opportunity because we will pool our investors together and then be one investor into that. So.

You know, we're really using that and it's a 506(c) type of offering. So accredited investors can get access.

Aviva (10:39)
Wow. Talk to me about your exposure in oil and gas and what that looks like.

Dave (10:44)
Yeah. So again, we really looking at opportunities that I would say are asymmetric in nature where we can get the highest yield, but also managing to the lowest amount of risk. So our latest opportunity, for instance, invested in 50 different oil producing wells. A majority of those wells are actually already producing from name brand.

people like Chevron, ConocoPhillips, so we know there's production there. And then there's some ancillary drilling into new development that brings in new product as well. But we're diversified, right, across 50 different wells. They also leverage a collar strategy where we're making money from $60 to $85 a barrel. So that's another really cool hedging strategy.

to offset the price volatility, which obviously we can't control, right? So we're kind of looking for those types of opportunities. And then again, from an active income offset, investors are expecting about 92 % tax offset in year one of their active income. So that bumps up your, the IRR on that bumped it up to 62 % in year one, right?

Aviva (12:01)
Can you dive into that a little more?

Dave (12:04)
Yeah, so yeah, a lot of people don't realize this if you've never invested in the sector before. But it's really been around since the 80s, back when Reagan was around. And it's that the government is looking to support drilling and production in this country. And they have what are called intangible drilling costs, which are IDCs.

And there's depletion, there's some other there's basically a couple of different classifications. But all of those intangible, as well as tangible drilling costs can offset your investment into the opportunity, but specifically as it relates to active income. And that can be anything, whether that's coming in for W-2 or any income on your AGI gets offset. And that just comes through in the form of your K-1 statement.

where you'll have, you know, basically what your basis was on the investment and then what that loss comes through as a paper. So similar to passive losses, but in this case, active.

Aviva (13:04)
Fascinating.

Dave (13:06)
Yeah, for real estate brokers, we have a number of brokers. So you've got those high commissions and that income coming in. It's a really great way to offset that. And then you take that capital and now you can put that to work.

Aviva (13:19)
Wow. I selfishly love doing this podcast because I get to learn cool things like that. And I get to bring it to the listeners also. Talk to me about real estate as a hedge against volatility in the market.

Dave (13:34)
Yeah, so I mean, in terms of a hedge, mean, one of the biggest things, especially in this economy, I think that real estate will continue to be a hedge against inflation, right? And with the Trump administration coming in, we know that inflation is going to continue. It's going to be around for a while. So I will all day long be investing in tangible assets, right, that are going to grow.

Aviva (13:50)
Yeah.

Dave (14:00)
And one of the things that people don't also really talk about too much from a real estate investment standpoint, that's pretty slick is you are paying off, I mean, the debt is the biggest component, right, of any deal that goes through. But just think about it, right, you're servicing that debt over the lifespan. So if it's a 20, 30 year note, whatever that might be you're

you're paying that off in future dollars, which are actually in lower value, right at the rate that inflation is going. Right. So it's a really smart move and you can win. mean, everyone on the show is educated. We all understand the benefits of real estate. There's just so many. But the time is definitely right but I think you do have to be smart. Right. We have seen

We actually haven't done anything in multifamily in probably 18 months now because I think we're near the bottom and we're seeing some deals, but we say no to 99 % of the deals that come across our table.

Aviva (15:05)
That's good. You should.

Dave (15:08)
Yeah.

Aviva (15:10)
Dave, what makes you happy about what you do day to day with Pantheon Investments?

Dave (15:17)
You know what makes me happy Aviva is actually creating impact and really serving others. To me, that's the biggest gift that I could get is actually sharing my knowledge, the mistakes that I've had to a much broader audience where people can, I'm literally watching our clients change the entire trajectory of their lives. Thinking that they were on some traditional model of scaling maybe eight to 10 % a year.

and now seeing people 10X their wealth and getting more clarity overall into what does that actually look like for them? How that impacts the relationships they have, how that impacts their time, how that impacts their own purpose. So they wake up fascinated and motivated every day and that is just extremely empowering and yeah, definitely brings me happiness.

Aviva (16:14)
It's crazy to think, you know, if you change one person's life, how impactful that is, you can change more. It's just unbelievable feat. So good on you. Dave, where can the listeners find you, follow you, contact you, et cetera?

Dave (16:33)
Yeah, appreciate that. If anyone likes some of the concepts we talked about with the holistic wealth strategy, what I wanted to do for your listeners is actually offer a free copy of the book. So if you go to holisticwealthstrategy.com, you can download a free copy of the book and pretty much connect with us anywhere from there.

Aviva (16:54)
HolisticWealthStrategy.com, correct? Amazing, go get the free guide. Dave, thank you so much for being on Commercial Real Estate Secrets and for everybody listening. We'll see you next week.

Dave (16:59)
That's it.