Latest / Financial Planner Search / From Labor to Capital with Eli Mikel | Financial Planner Search
Transcript
- Chase Walters: Eli, thanks for joining me on the show today, man. I've been really looking forward to it. Eli Mikel: Yeah, happy to be here and thanks so much for having us. Chase Walters: Awesome. Well let's jump right in. Tell us about your practice and what you specialize in. Eli Mikel: Yeah, so you know, our practice, we've been around since 2017. So we're coming up on our 10th year anniversary, which we're super excited about. we Chase Walters: Congratulations. Eli Mikel: have thank you. we have been through a, I think, fairly unique journey that got us here that I'm looking forward to telling you about. but our practice primarily focuses on business owners. that is our core of our business. and we focus on them in a very unique way. With respect to how we service business owners, we support other financial advisors that then support business owners. So we're very much a model that focuses on matching the right financial advisor with the right business owner that then clockwise can support at the portfolio and software side. Chase Walters: Interesting. So how does that how does that relationship work on a like from a client side perspective? Eli Mikel: Yeah, so all of our clients come in through one single source. They go to clockwisecapital.com. we have built an AI. So we're very much a technology forward firm that then is very supported by a financial advisor community that we have customized and built. Every single client that we have comes through clockwise capital.com, where they then go through our AI, which we have named Kronos. clockwise is all about time. Kronos is the god of time. And so that fits for us. Every client that comes on board gets matched with a financial advisor that is part of our network. And those clients also get supported by clockwise on both the portfolio end and I think even maybe more importantly, on the AI and technology end. And so I want to talk about how what that support looks like, but that's primarily what we're focused on. Chase Walters: Yeah, I definitely want to get into that. But before we do that, can you tell me what inspired you to to create this business? What inspired you to to do this? Eli Mikel: I started in the industry in two thousand seven, so hard to believe, coming up on twenty years now. it was pre two thousand the two thousand eight crisis. And so you know, I kinda had a unique advantage in being able to see cycles before they actually began. And Clockwise was really born with the idea that every season is not created the same. there are summers and there are winters, and Clockwise really focuses on portfolios that can adapt to that season. And so we built the structure from the ground up with a real focus on wanting to make sure that the client experience was first and foremost the the primary focus. And so When when I started in this business in 2007, having gone through that 2008 cycle, having experienced that firsthand, it was visceral for me in the sense that I saw firsthand how clients would get into markets, be disrupted by a bad client experience, and be taken out of markets. And not just for a little bit, largely for what what was potentially an entire generation where they sat on the sidelines for the next Five to six years, never got back in. and that really left a big impression on me. And so after going through sort of the the corporate upbringing as a stockbroker, I worked with Ameritrise Financial, was a broker with with TD Ameritrade, was very successful all the way up through my 30s. I really wanted to do something different. I wanted to start a company that had that focus on cycles, on seeing how different cycles play themselves out and how to navigate them with a little bit more precision. And so when I left the corporate world, again, very much was happy with my own personal success. but I wanted to make it much more mission-driven. And so ended up taking about a three-year leave. really gave me a lot of free time to really focus on what exactly do I want clockwise to become. And for the most part, that journey was the basis of creating what we think of now as our operating system that goes both on the technology side and on the portfolio side for how we support clients and advisors. Chase Walters: And I like that unique idea as well. Like you talk about, you know, my market cycles and weathering the storms. I like that you've built your practice around that specific idea because it comes across as as unique. We work with a lot of we interview a lot of financial advisors and it's always fun when you can come across a a unique approach like that. Eli Mikel: Yes. Chase Walters: so so when describe the type of person who comes to you, who is most attracted to working with you? Eli Mikel: What we primarily focus on is making sure that business owners are well supported and how they can think about both testing, organizing, and building cash flow. really with the entire purpose of thinking about how the labor problem has really evolved from a problem that primarily had to do with how do we maximize time in order to create income? To how do we reorient that to make time the primary mode that produces said income? And so for us, it's really a focus on business owners because their primary focus is is capital and not labor. And when we focus on capital, what we really do was we focus on cash flow. And that cash flow, the organizing of it, the testing of it, and the preparing of it for multiple cycles is really what Clockwise is focused on. Chase Walters: What inspired you to work with business owners in the first place? Like was there a different client that you used to work with and y you discovered it over time or was it like a I know this is what I wanna do right away? Eli Mikel: Yeah, great question. you know, so clockwise in in 2017, when we first got started, we really wanted to make it about how can we position a firm that primarily focuses on what is the unique nature of what someone can provide to the market that differentiates them from the next person really from a first principles perspective. And what we realized is that You know, as the economy evolves, particularly as it evolves through the lens of AI and and the disruption that's likely to take place, what we realized is that you know, that uniqueness of focusing on the individual and wanting to maximize the individual from the place of a of a business really translates really well into how we look at markets, stocks, companies, and build overall portfolios. And so for us. The primary driver behind why Clockwise was started and why we focus on business owners really has to do with taking that core premise and making it something where one operating system can really manage both a portfolio of public companies and a portfolio of private and operating companies under one operating system. And so what what we built that we believe manages client money very well from a portfolio perspective can then also be applied to the individual. And that was the that was really the core premise of of why Clockwise got started and how we built up over time is really that early recognition that everyone eventually in this economy as AI evolves will become a business owner. Chase Walters: Quick question that I'm that that just picked my curiosity. How do you see everyone becoming a business owner as AI improves, evolves? Eli Mikel: Yeah. Well, you know, again, if you if you think about the dynamic of labor and capital, if a technology gets to a point where it becomes competent enough that most of the labor can be done by said technology, the only remaining space really has to do with the human connection, which Ironically enough, humans happen to be actually pretty good at. particularly the advisors that we work with is really maximizing that human connection. And so we wanted to build technology and portfolios about maximizing said connection. And so for us, you know, we really said, okay, if technology will get to a point where labor will really be challenged by AI, what will humans be left to do? It's largely having to do with human-to-human connections. And we want to be the facilitators of that, both from a technology perspective and from an advisor perspective. Chase Walters: How do you see technology affecting the way business owners operate currently at at its current state? Like how how have you seen the changes rolling out? Eli Mikel: well listen, I mean, you kind of have both the ends of the spectrum. I think in many ways, you get many people that are either entering into the workforce, feeling anxiety around, you know, how are they supposed to compete with AI as a technology? To people that have been in the workforce for a long time that are thinking, what is the next 10 years going to look like? And as they're approaching retirement, they might be thinking, should we be retiring sooner? and thinking about portfolios and wealth management finances differently, given the disruptive nature of AI. I think the answer to that is yes. So then you ask the question of what should one be doing as a business owner to make sure that they are orienting themselves around what arguably be will be the most disruptive 10 years that human history has ever faced. Chase Walters: What are some of the questions that your clients typically ask when they meet you for the first time? Like what do you find is keeping them up at night the most? Eli Mikel: Yeah, well listen, you know, we happen to be in an environment where markets at our all-time highs, debt is at all-time highs. you know, you look at debt to GDPs at 100%. We're paying about a trillion dollars in interest payments. And you look at countries around the world, and they're all sitting, you know, to a large degree, the major countries in the West are sitting around the same place, whether it's France, whether it's the UK. We go all the way to Japan, who's the most indebted at 200% debt to GDP. And we clearly have a debt problem, right? We could we clearly are in a position where growth is going to become more and more challenging. However, we're also on the cusp of a period where AI is likely to create more growth than any other time period in history. So we're we're at this sort of crossroads and then where does the individual come in? How does the individual manage this well? My belief is that that really r has to do with making sure that you're oriented around becoming an owner of capital versus an owner of labor. And and so what what we're focused on primarily has to do with owners, both empowering them from a technology perspective and having them set up with a planner and a financial advisor that can really help to support them making that journey, making that transition much more comfortable than I think the volatility would suggest. Chase Walters: And so what is a typical situation that you're seeing with with with these clients? Like what's a are there any very common situations that you're seeing or stories that stand out to you? Eli Mikel: Yeah. you know, we we primarily have two types of business owners. a business owner that is call it five to 10 years out from retirement, and they're gonna be thinking about how do we make sure that my cash flow is sustainable? how do I make sure that the cash flow that I'm managing right now is well organized and that it's stress tested against what likely is going to be a much more difficult 10 years than the previous one. the other type of business owner is a business owner that's just in the accumulation phase, where they're trying to stress test their own business models. They're trying to stress test their own business plan around a tip a similar type of environment question. What is the next 10 years going to look like relative to the 10 years that I've just been through? And there's a lot of uncertainty out there, both in private markets and public markets. There's a lot of uncertainty around how one should be thinking about how do they prepare their business to handle future volatility. That's what our technology and that's what our advisors are designed to answer those questions. Chase Walters: So who do your advisors not work with? Is there someone where you just say, No, we're we don't work with this type of person? Eli Mikel: Yeah, I think for us, we are primarily focused on those that want to become business owners again is is really what we are focused on both from a building perspective in terms of the technology that we have, as well as again, you know, orienting portfolios around that business owner's challenges, whether they be taxes, whether they be organization of cash flows, the management of different considerations that owners uniquely have to deal with. if an individual is not thinking about themselves in terms of an owner, then we probably are not the best fit for them. Chase Walters: And so you also mentioned people who are looking to become an owner. So are is this something that that you coach people through? Eli Mikel: We do. we do. Those that are looking to make a transition to be an owner, we we will guide them in that Chase Walters: No. Eli Mikel: respect. I think the the biggest thing that our technology has been able to do is look at what someone is very good at, sort of what I think of as the raw ingredients that make up what they're doing. and then turning those raw ingredients into use ingredients that Chase Walters: Well, well. Eli Mikel: can potentially be put into a business model. And the same type of analysis that we're able to do on public companies, we're also able to apply to individuals and looking at sort of that business owner that as as that public company that wants to become scalable and efficient and effective. Our technology, our advisors are set up to do. Chase Walters: So what does it look like when you're applying this this methodology to the individual from their perspective? What do they experience in that process? Eli Mikel: Yeah, well, the the cool part about our technology and our advisors is that I use them myself. So I'll tell you from my person firsthand experience. again, our technology, our AI is named Kronos. And every day I get up, I use Kronos to help me understand my business plan, help me understand, you know, where are my inefficiencies, where are my efficiencies, what questions should I be asking? you know. Clock Kronos from time to time will point out things that I had not considered at all, or refine ideas that I had been considering and helps me look at it in a better way. I will then take that business plan and I will say, for me as a as a personal individual and who aspires to always increase my cash flow so that I can do more and more with said cash flow, I'm always increasing my cash flow goals. So if my cash flow goals are to double my cash flow over the next five years, then I have a plan within Kronos that tells me how to do that. but again, as mentioned, the biggest thing with any plan is it's only as good as as how you execute it. And that's really where the advisors come in. You know, and I have an advisor from the Clockwise Advisor Network that I meet with on a regular basis. They take my Kronos AI plan. We sit down and we work through it the exact same way we work through any other client. And again, how I'm applying the operating system to my own business, how we look at companies and analyze portfolios, it's the exact same way that it works for other clients. Chase Walters: This is such an interesting and unique business model. This is we are living in the future here. Like this is Inception, you are your own client, literally. Eli Mikel: That's it. That's it. And it's really just about, you know, I look at it as we want to create more of ourselves. You know, we want to create more business owners. We want people to think about this transition from labor to capital and this AI disruptive moment Chase Walters: Well, whoa, whoa, whoa. Whoa, whoa. Eli Mikel: as a positive thing. You know, I think about the analogy of the the the cashier and the kiosk, right? And and I have this conversation with with my mother all the time who is approaching her 80s. And she will not use a kiosk because she says that kiosk is replacing that cashier's job. And I tell, I say, Mom, listen, that cashier now has the opportunity to now look at what they're good at, what their core skills are, and turn that into a viable business. And she says, Well, how are they going to do that? And I tell her, guess what? Your son happens to have built an AI called Kronos. Give that cashier Kronos the next time you see them. And they will turn whatever they're good at, whatever their core skills are, they will turn that into the business that they're supposed to own. Chase Walters: I love that. This is great. It sounds like this this AI that you've built, this Kronos, this technology that you've that you've put together and you're you're helping people work with is really, really a life changing technology that people can use to really elevate themselves, yeah, not just from from the financial side either. Eli Mikel: Yeah, you know, what I always say is, you know, we want to be in a position where we aspire to turn portfolios into paychecks, where portfolios don't just own public companies like Apple and Nvidia and Google, ETFs, mutual funds, but they also own private companies. They also own operating companies. And again, if they can look at all of those companies under one operating system, that's the aspiration of Kronos. Chase Walters: So when it comes to your business as it sits now, where do you see it going in the next th one to three years? What's your vision? What what what goals are you working on? Eli Mikel: Yeah, well, you know, I think that the interesting thing about this time is that you know, our sort of somewhat boring world of finance is actually becoming kitchen table conversation, right? Where everyone is now trying to figure out should they be, you know, on Calchi. Should they should they should they be gambling their their money? Should they be buying Bitcoin? Should Chase Walters: Embedding platforms. Eli Mikel: should should they buy gold? They've heard about inflation's bad. they they they're seeing the stock market at all-time highs and they're seeing these technology companies leading the way. They're hearing about data centers online, and they're thinking, are data centers good or are data centers data centers bad? Finance has now become kitchen table conversation. So for us, what that means is that the environment is going to sort of be a rising tide that raises all ships in terms of the attention that is generated towards said goals and aspirations around how do we how do we orient ourselves in a way where we're looking at ourselves as business owners, that conversation is already gonna have be had in a very natural and organic way. The question becomes, how are people going to solve that? and how violent is that transition going to be? And the way we look at it is we say if if people are looking at the disruptive nature of the time that's going on right now, they really need to think about things from a first principles perspective. That's what our Chronos AI helps people to do. And then the second thing is that they should be thinking about not just the current time that we're in, but How does the cycle evolve? Right? How how how is time likely to play out over the next five, 10 years? To your question. And so for us, everything is around business owners, people becoming more business owners. Our personal goal for that is for us to have converted a million business owners by 2035. Chase Walters: One million business owners by twenty thirty five. That is solid. Is there anything right now currently standing in your way between you and there? Here and there. Eli Mikel: I think the biggest challenge is people embracing this moment as something where change is good, while at the same time dealing with very real and and and scary challenges that are are real and and personal problems for them from the perspective of having to figure out how do you deal with this kind of change this fast, this dramatic. Every time period has had significant change. But in many ways, this time period is the most unique in that usually it takes a couple of generations to adapt to that kind of change. Right. So if you think about we went through the Industrial Revolution in the 1920s, we go through a reset in the 1930s. Obviously, we have the crash of 1929. We have the, you know, we have we have disruption in Europe. we get through World War II. And we go through a reset, we digest the industrial revolution. And for the next 20 to 25 years, we get to reap the benefits of that cycle. the difference this time is that what took place in 20 years will now take place in two years or less. So, how how do you adjust to that kind of speed of change? I think that's the biggest challenge that people are gonna have to contend with. But again, we think that the big opportunity. is in leveraging that technology that is causing that disruption to be the answer to that question. Chase Walters: I was gonna ask, how do you see, you know, regular ordinary people who are trying to get through this this huge transition really being able to help themselves and, you know, stay sane and come out on top on the other side through these next few years as technology keeps accelerating? Eli Mikel: I think the most important thing that people can do is build community. build community of like-minded individuals that share their values that can can help them to manage uncertainty. You know, if you think about how these j different generational cycles typically play out, we typically go from an environment where people are very group oriented. so again, that's kind of going back to the post-World War II era where you go through from nineteen forty-five to nineteen sixty-five, people are very much thinking about the group, right? And and and thinking about the group, they're thinking about how does this, how does this, how do my actions impact everyone else? And everyone's thinking about things from how do we make sure that we all win together. that was very much the ethos of the 1940s to through the 1960s. Well, as we go through multiple cycles of this, usually what typically happens is that people go from thinking much more about the group to much more about themselves as individuals. And that's just a part of the natural evolutionary cycle that typically we go through. We we went through that the last 80 years. These cycles typically last about 80 years. we went through that pre- World War II, and that cycle was about 80 to 100 years, starting from you know, really the Civil War and and all the way through. we're going through one of those disruptive moments now. And so the best thing that people can do, build community, build community of people that are being productive. And again, we think that is business owners, we we we think that's people that are trying to build from the bottom up. and looking at their situation as the cashier does and saying, How can I now create Chase Walters: Mm-hmm. Eli Mikel: groceries for grandmas? Chase Walters: I love that analogy. So when a business owner first comes to clockwork, and they you say all of your clients come through your website, right? All of them. All right. Eli Mikel: Correct, correct. Chase Walters: So walk me through the actual process. When someone becomes a client today, or if I let's say I come to clockwork, I'm a business owner, and I come to clockwork, I want to become your client. What does onboarding look like and what happens in the next four to eight weeks? What happens over the next year. Eli Mikel: Yeah. So I'll take you through that question from from my own perspective. so Chase Walters: Perfect. Eli Mikel: if I am a clockwise client, which I absolutely am, I have clockwise portfolios, I have clockwise advisors, and I have a clockwise AI. And as a clockwise prospect initially, I go to our website, I go to clockwisecapital.com. I then first and foremost, I want to test out my current situation. So I get introduced to Kronos, who is on our website, Kronos AI. you are then put into a process that begins with technology, but really ends with humans. And the beginning of technology just gives you a quick score just to try to get a sense of here's your current situation, and here's the big picture risks that you may face. First thing that we want to do is test. Step two is we really want to then come in with a human and give you much more of a granular view. Current portfolio that you currently have relative to what might be better suited for you. We don't know the answer to that question. And so we want a human actually involved with analyzing your current situation, having an understanding of that, and really most importantly, stress testing that against the environment that we're in. And after we've done that, we then want to say, here's the portfolio that we would recommend. Incidentally, it might be the exact portfolio that you have now. We don't know. We want to stress test that portfolio. We want to stress test those assumptions. Then as as we put Chase, we really want to move on to you as a potential business owner. So we're then going to start to organize you as a as a business owner. And that means your cash flows, if you have one business, if you have two businesses, we want to understand the nature of that business. And so Kronos is actually going to start asking some of those questions. that is really to get you organized, but step three really has to do with building. and the building really comes in where that really comes in is working with a clockwise advisor within the clockwise advisor network. The clockwise advisor network is really a marketplace of other independent financial advisors that we have curated for the benefit of our clients. And again, I personally have my own clockwise advisor that's independent that can look at my situation independently and say, is this the best situation for you? Now, full disclosure, we obviously have our own clockwise portfolios. We call those time portfolios. And time portfolios are something that that advisor oftentimes is going to recommend. The reason why, though, is more has more to do with time portfolios are built to adjust to the season. They're built to be cycle aware as opposed to cycle agnostic. So again, if we're looking at the next cycle in terms of the next 10 years, we want to make sure that both your public businesses and your private businesses are stress tested for that next 10-year period. After we have done that, and after you meet with your clockwise advisor, there's going to be multiple meetings throughout the year for which there's going to be an accountability session based on what are the goals that we have put forth from the initial meeting. And how can we follow up to make sure that we refine those goals? The other thing is going to be that we're going to then look at the situation in terms of a in terms of a clockwise advisor and is going to look at your own personal cash flow to make sure if you're five years out from retirement, if you're 10 years out from retirement, that if we go through one of these cycles where it's 2000 and One 2000, 2008, 2022. we look at what is the stress tested break-even point. How long is it before your portfolio is likely going to have to get back to even? And we want to know that we want to stress test that because we want to compare what you currently have to a cycle aware or time portfolio. And what that's basically going to tell us is that stress test is going to tell us. How many years if we were to go through a 2000 or 2008 or 2022, would it take your portfolio to get back to even? And I can just tell you, if it's the S P 500 and it's 2000, it's about seven years. If if that's 2008, that's about five and a half years. If it's 2022, it's a little over two years. If it's 1929, that's 25 years. Chase Walters: Wow. I like how you have everything in your process very clearly laid out. You have a very specific step-by-step process that you follow and it's all extremely clear and structured. we're about to sign off here, but before I ask my last question, is there something that we haven't discussed yet in this interview that you'd like to touch on before we sign out? Eli Mikel: I think the most important thing that I would like to Communicate slash have people think about is this moment in terms of what we've been able to achieve as a collective is is likely the most impressive moment that one can be alive in. If you think about what are the three things that essentially humans have had to deal with since the beginning of time, it's famine, it's disease, and it is war. Those have been the three challenges, the three risks, the three killers of humans. And we are now at a point where we have essentially solved for famine in the West. Usually, on average, people don't die of famine. With the technology that we have now, we have the opportunity to solve for both famine broadly as well as the other two of disease and war. And that's the real opportunity is really in the technology, the moment that we're in is one where we can reduce suffering like we have never experienced or could have never imagined. And this technology is something that people should be embracing for that reason. Looking at the technology itself and then being optimistic about it for them as individuals, that's the role that we want to Chase Walters: So Eli Mikel: play at Clockwise Capital. Chase Walters: Awesome. Eli, this has been absolutely fantastic. I love learning all about Clockwise and Kronos and the people you help, the business owners, and the evolution that you're helping them through. For someone, for a business owner, or maybe even an aspiring business owner, it sounds like, who wants to get in contact with you and wants to start interacting with Kronos and get in with with with your business, what should they do next? What should they do right now? Where should they go? Eli Mikel: Go to ClockwiseCapital.com, sign up with Kronos. It'll take you less than 30 seconds. You will have a human reach out to you, have a conversation with you. We're all about technology and AI, but we're even more about humans and human connection. We think the real opportunity is the marrying of the two. That's what Clockwise wants to bring. That's the value that we are. Chase Walters: Awesome. Eli you've been a great guest. Thank you so much for taking the time to have this conversation with me. Thank you. Eli Mikel: Thanks for having us, Chase.